Porter County leaders watch bill that would level out funding

A bill that has passed both houses of the Indiana General Assembly could provide Porter County’s nonprofit foundation with more consistent income each year, which is critical as the county relies on the funding for a host of needs.

Scott McClure, the county attorney, told the foundation board, comprised of the County Council and Board of Commissioners, at a recent meeting that the bill is not a law yet but it would give the county the ability to set a spending policy based on the foundation’s earnings.

County officials established the foundation, the first of its kind in the state, five years ago from the proceeds of the 2007 sale of the county hospital after a change in state legislation allowed it to do so. Previously, those funds earned less than 1% a year in interest. Officials set up the foundation with the goal of reaping 5% in interest.

The amount generated by the foundation over the years has fluctuated with the stock market, with 5% of the proceeds going back to the county and anything beyond that returning to the foundation’s principle.

While the county is reaping $8.3 million this year from last year’s investments, a few years ago it received nothing because of a bad market year, forcing the county to turn to a reserve for funding proceeds to help support county government.

The proposed legislation calls for an averaging of quarterly market values over the years. The county, said Amanda Black, CEO of Capital Cities, the Indianapolis-based

investment firm for the foundation, would see more than $6 million every year, with the amount creeping up over time.

“You’re shaving off the highs but you’re also shaving off the lows,” McClure said during the March 30 meeting.

The switch, if county officials opted to do it, would allow for creation of a spending policy going forward, Black said, adding, “I think this board gets that extra step that right now is really hard to do.”

The county has $9 million in a holding fund from past earnings and budgets $5 million from the foundation earnings every year. With the switch, McClure said, “we wouldn’t need to be stockpiling every year.”

The funds, said Commissioner Laura Blaney, D-South, who serves as the foundation’s president, are used for medical care at the jail; health insurance; 911 Central Communications; and for nonprofits.

“We would have a real problem” if the money wasn’t available consistently, she said.

Commissioners President Jeff Good, R-Center, said the change is “a natural evolution” for the state’s first nonprofit foundation funded with proceeds from a hospital sale.

“Anything that brings more consistency to your plan, I’m all for it,” he said.

The foundation ended last year with just over $188 million, representing a gain of $62.6 million since its inception, Black said.