PORTER COUNTY BOARD OF COMMISSIONERS
REGULAR MEETING
FEBRUARY 4, 2003, 10:00 A.M.

The regular meeting of the Porter County Board of Commissioners convened at 10:00 a.m. on Tuesday, February 4, 2003 in the Commissioners' Chambers of the Administration Center.

Those present were Com. David Burrus, Com. John Evans and Com. Larry Sheets and Attorney Gwenn Rinkenberger.

President David Burrus called the meeting to order with the Pledge of Allegiance.

APPROVAL OF PAYROLL

Com. Evans moved to approve the payroll of January 27, 2003, Com. Sheets seconded, motion carried.

APPROVAL OF CLAIMS

Com. Sheets moved to approve the claims of February 4, 2003, Com. Evans seconded, motion carried.

APPROVAL OF MINUTES

Com. Sheets moved to approve the minutes of January 21, 2003, Com. Evans seconded, motion carried.

COMMISSIONER TAX SALE SERVICES ADDENDUM-SRI
Holly Theyssen, SRI representative
Jim Murphy, Porter County Treasurer

Com. Burrus, "This is for a contractual agreement with a firm known as SRI that the Commissioners have put forward to hold Commissioners sales on an annual basis for property that has either reverted back to the county or that has been taken by the county for non-payment of taxes."

Atty. Rinkenberger, "One of the reasons that Jim Murphy is here is because this is something that Porter County has been talking about and working on for several years and that is a way to sell all the property that is in the name of the Porter County Board of Commissioners and do so on an annual basis in an attempt to get it back on the tax rolls to be taxed and generate revenue for the county. Be advised that SRI has had a contract with us for several years and this is an amendment to that contract which is designed to move Commissioner properties. I think it is distinguishable in the fact that we will be able to do all legal work in house. We have a specific list of the properties that the Auditor's office came up with two or three years ago that we have reviewed and are assessing the value of the property. We don't put them up for Commissioner sale if they are not of value or profit. Then we are going to review our list before we do the work to make sure the property's value is such that it will be worthwhile."

Com. Burrus, "I would like to point out at this time that this is another of a number of efforts of the Commissioners to generate revenue or to decrease lost revenue. Again, this is something that has not been addressed for a number of years. This is part of our efforts to find some of these oversights. The idea of a sale is appropriate but beyond that, the idea of an annual event is even more appropriate so this is not allowed to accumulate over a period of time and the losses of revenue to accumulate."

Mr. Murphy, "I think Gwenn hit most of the high points. I think the most important part is selling the property that you as Commissioners, and we the as the County, do not need. And there are abutting properties out there that the taxpayers would like to formalize the arrangement and they want to pick up that strip of right of way or small piece of property or a vacant lot adjoining theirs. Getting them back on the tax rolls, and get them off of the County's inventory so the Auditor's office does not have to continuously have to account for them on the assets and inventory each year. The nice part about this is that with SRI doing all of the legwork and those things that the departments that are understaffed and working under pressure of other deadlines are going to be relieved of some of that administrative workload. This is a concept that I first approached the Commissioners 3 or more years ago when I was Auditor and found that many properties on the inventory and decided that we could .... (inaudible) there are a lot of these old fragments of properties that we have no use for and this just seemed like the right thing to do. Not specifically for generating revenue, although there will be a positive cash flow, but simply to get these pieces of property out of your name and back on the tax rolls."

Ms. Theyssen, "Basically, we handle 75 counties in Indiana for tax sales. I believe we are close to 20 counties per year that we do commissioners sales for. For the most part, the majority of our commissioners sales contracts are the same. I believe on this contract we just stipulated where the money was going to be held for each commissioners sale. The majority of our contracts are the same but Lake County changed a little bit because they have attorneys outside the county that work, but we have a pretty good working relationship with the rest of the counties and I don't believe there are any additional fees that will be needed, just what is on the contract. They are pretty much the same for every county."

Com. Burrus, "There was an understanding that I had that the procedure for disposing of property like this is always fairly extensive even if it is a small piece of property and often the process of disposing of it may cost more than the what the property is worth."

Atty. Rinkenberger, "If we were to try this on our own, parcel by parcel, the fees for getting title work done, legal descriptions, public notices, for each parcel would cost more than the parcel. So doing it one time a year with one notice for all the parcels is the only way to do it. The way we have this set up, with special amendments we made to this ordinance for this addendum which is different from other counties, is that we have the property disposal fund so in this contract, we have designated that all the money from the sales go into the property disposal fund and then SRI's payment will be made out of the property disposal fund so we know that we have a balance of the money in that fund to pay them and that they will be paid from the funds generated from the sale of the property. It is just a county tracking tool that makes it a safer and cleaner procedure."

Com. Sheets, "Will there be a clearing house, somebody that the individuals can call? I have had several people over the last several years have been trying to buy a very small piece of property that may be worth $100.00 or less. We need to make sure once this list is compiled, that this is on there."

Atty. Rinkenberger, "We have all the property listed. The burden is going to be on the people who are interested in purchasing it because there is no feasible way to give notice to every specific individual who may be interested. So they are going to have to watch the papers for the date of the sale. We are hoping to have it around August."

Ms. Theyssen, "Yes, we are looking at August. Also, with your question, SRI handles most of that. If you received letters from someone saying I am interested in the tax sale, if you keep those letters and give them to us, we will mail them out a letter just letting them know that there is going to be a sale with the date and time and they can come in and research from there. That is something we do."

Com. Sheets, "That answers my question. If the people send me a letter with the description of the property, I will send it to you. I appreciate that."

Com. Burrus, "I hope that the press will take note of that and be sure, if you could, to make as good as explanation as was presented here as to how people could contact a representative of county government to inquire about a piece of property."

Atty. Rinkenberger, "We have been telling people over the past two years to write a letter and I have a file started for this documenting the people who are interested in purchasing property."

Com. Evans, "We are going to save a whole bunch of money by keeping it in house with our attorney fees and this is a very worthwhile project and we need to get going on it."

Com. Evans moved to approve SRI to sell property for the Commissioners' Sale, Com. Sheets seconded, motion carried.

PORTER COUNTY BAIL OUT UPDATE
TAX ANTICIPATION WARRANTS
David Hollenbeck, attorney

Atty. Hollenbeck, "Good morning. Two matters I bring to your attention and also get your
acquiescence in. First of all, I reported to the County Council on Tuesday night that due to delays in the state's processing of the third installment of the Porter County Bail Out Bill, the auditor informed me late last week, and I believe Commissioner Evans was involved in these discussions, that the coffers were again dry and you had to defer some payments in order to make payroll. I am still in the process of finishing up the new requirements that the attorney general's office has placed on the third component of the Bail Out Bill, so hopefully that money will be expedited. In the interim, and in lieu of writing checks for which we don't have money, it was my recommendation that we again authorize the auditor to borrow on an as needed basis up to $2 million dollars from your Cumulative Bridge Fund, I believe, in order to pay bills that some of that may have already occurred and I apologize that your meeting schedule was such that I wasn't able to get before you until now to ask for your acquiescence. This time, it should be a short term interim bridge type borrowing because as soon as the $1.8 million dollars comes from the third component of the Bail Out Bill then the Bridge Fund money will be able to be returned."

Com. Sheets, "My comment would be that we have bridge inspections and those inspections show that we do need some maintenance and we do need some repairs. I am not alarming anybody but it is just maintenance. We need to get in and take a look at some of these bridges and the work we are accumulating could be $400,000.00 to $500,000.00. It has to be done. So, that is normal traditional county highway bridge department work. I am just bringing it to your attention so you can take it to the Council's attention. The other project is 149 and I have enough projects there but if the county needs that money to continue to operate, that is fine, I will step back from that project. I do want you and the Council to know we do have every day maintenance that is up to about $500,000.00. And we do need that money."

Atty. Hollenbeck, "Commissioner Sheets, that is an excellent point. I think everyone realizes that to the extent that borrowing from the Bridge Fund has been a component of our patchwork effort to keep ourselves afloat. That is going to come back to haunt us eventually as you people have to defer needed bridge projects because the money was needed to pay the electric bill. The consequences of the short term solution we are aware of that and hopefully on the horizon, there can be some options other than continually deferring bridge expenditures. I am going to tell you as I told the Council Tuesday night, and as the most recent Umbaugh cash flow statement shows, we are right back in the soup again this Fall if this legislature doesn't respond to the issues associated with the new reassessing process and the corresponding delays and the issuance of tax bills. Our financial situation is as bad if not worse than it was the day after Bethlehem declared bankruptcy."

Com. Sheets, "My comments were not meant to be critical at all. As far as I am concerned we have to pay the bills. You need to be aware that there is maintenance that needs to be done on these bridges."

Com. Evans, "If indeed the bridge projects that have already been approved go through and your $2 million dollars is withdrawn, we are about $500,000.00 overdrawn in that account so I think we need to be a little bit more cognizant of thinking that it is always there as a rainy day fund because it is not always there. Hopefully, we can get Highway to pull back so we don't start bouncing checks. It is a problem."

Com. Burrus, "The issue that comes to my mind here is procedural, how do we do business, how are we supposed to do business, how are we obligated to do business. It bothers me that on one hand the Commissioners are committed to cooperating with the Council on this financial issue but at the same time we have an apparent ignorance or avoidance of the procedures to let us know in advance what they intend to do and what they need to do. Even an informal understanding in advance would have been appropriate. At this point in time, hearing this for the first time and not knowing what the balance of the Bridge Fund is, not knowing the obligations to the bridge fund and then hearing $2 million had been usurped by the Council, I think we need to have better coordination. It seems to me that when we appear before the Council on our business, there is a pretty strict adherence to the formalities and the rules of business and I don't see that going both ways. I think if this Commission is going to be responsible for administering the safety of the bridges and the disbursement of the bridge fund, then they are going to have to comply with our requirements. Under those kinds of understandings, we will cooperate. But it is not working the way it is supposed to work and we are not happy with it."

Atty. Hollenbeck, "I accept that criticism and take partial responsibility for your frustration, not by way of justification, but by way of explanation. I have every reason to think, and I had been told that the third installment of the Bail Out Bill would be here by the end of January. When that didn't happen, we had to make a decision at Tuesday's meeting as to what was going to happen so the bills could be paid. I am not sure this particular case is indicative of manifestation of the frustration that the three of you obviously have with this issue. Not to say the frustration isn't legitimate. In this case, I don't know what we could have done other than to say to the Commissioners you can't make payroll; you can't write these checks."

Com. Burrus, "I think what we are asking for Dave, is the opportunity to sit down and discuss the relative needs and relative balances in advance of the event taking place."

Atty. Hollenbeck, "And I totally agree, David. Again, this truly was crisis management. I don't know what else could have been done and you didn't have a meeting between the time. . ."

Com. Burrus, "I mean either formally or informally, being aware of the balances would have been a step in the right direction."

Com. Evans, "I appreciate the predicament you have been put in and I understand there was a need to act that caused it so the procedure, if you will, got reversed. But I recall at your Council meeting, the very first one you had this year, Councilwoman Knoblock demanded that the office holders show up to question the 144. We never get to see any of your clients here. I think we need to get the same respect that they demand and that is to have your clients quit putting you in the position of having to deliver their news."

Atty. Hollenbeck, "I will take that information and request back to them."

Com. Burrus, "What action do we need to take here?"

Atty. Rinkenberger, "As far as I am concerned there is not $2 million in here so they can't transfer it so we need to . . "

Com. Evans, "There is, actually the transfer has already been made and there is about $1.2 million balance in that fund."

Com. Burrus, "Then there is no point in taking any action on something that has already been done."

Atty. Hollenbeck, "That is why I said I was here seeking your acquiescence from that action."

Com. Evans moved to acquiesce Atty. Hollenbeck's request, Com. Sheets seconded, motion carried.



ISSUANCE OF $10 MILLION TAX ANTICIPATION WARRANTS

Atty. Hollenbeck, "The second thing I have to bring to your attention has not yet occurred, and that is the County Council authorized the issuance of $10 million in tax anticipation warrants. We had a bid opening and the successful bidders on the tax warrants was again the three banks who stepped up and helped us last year, that being First National Bank of Valparaiso; Centier Bank; and Mercantile Bank. The interest rate they bid was 1.95%. It won't be long before we will need to be accessing the tax anticipation warrants even if I am successful tomorrow in bringing home the $1.8 million of the third installment of the Bail Out Bill and if we pay back whatever we had to borrow for the bridge fund, we will be needing some of this tax anticipation warrant money by March 1. We need to close on that and I am here today asking for your authority to close on $10 million worth of tax anticipation notes. The County would issue them at 1.95% interest and they are what are called draw notes. The auditor will be able to call the bank and say I need part of this and so that will save us some interest cost. Again, I would emphasize this is cash flow money, tax anticipation warrants by law we must pay back by December 31, which makes problematic the whole issue of when the tax bills are going to go out. The Commissioners yourselves actually sign the warrants. We have three warrants because there are three banks and I would ask your approval of the closing on the tax warrants and then I have the documents for you to sign."

Atty. Rinkenberger, "I guess if we are signing the warrants, are we sure we are able to pay them back under the current money situation we find ourselves in."

Atty. Hollenbeck, "Again, the law requires us to pay them back by December 31st. Once the taxes are collected there will be more than enough money to pay back the tax warrants. The only problem with this is the whole issue of the reassessment. This is every unit of government in the state of Indiana is facing the same dilemma and is borrowing tax warrant money. If we don't do it, Commissioner Burrus and I will be pulling that plan off the shelf again and there will be no money in March."

Com. Burrus, "You and I had talked about the differences between cash flow concerns and budgetary concerns for several years. Over the years, have we not seen a record of increasing amount of borrowing on the tax anticipation warrants in Porter County?"

Atty. Hollenbeck, "For many, many years we were in a very unique situation. We carried significant operating balances from one year to the next and did not have to engage in any tax warrant issuances. That is an unusual situation. Best example is school districts. I think every school district in the state has borrowed tax anticipation warrants for twenty or thirty years. Again, it is a cash flow problem. No matter what your revenue is, if you only get paid twice a year, in June and November, you are going to have trouble paying your bills. We did not have to do this at all until, in the early ‘90's was the first time we did it, 1993 or 1994 and then we didn't have to do if for a couple years again. But over the last five years, those cash balances that we have carried forward have dwindled down to the point where as you recall at one point last year, we were projecting less than $100,000.00 carry over. As it turned out, because of other things that happened, we did carry over a little over a million dollars into this new year. But when your budget is $2 million a month, and you have a million dollars in the bank on January 1st, do the math, you don't make it through January. The only source of revenue we have is the little bit that comes in as the form of miscellaneous revenue on a monthly basis from fees we charge and some monies we get from the state. We basically have to survive until property taxes are paid, again, when you rely on property taxes as your principle source of money, you only get paid twice a year and we have to make it until the property tax payments come in. The way we do that is borrow money; tax anticipation warrants. So in that sense, there is a linkage between the two; the budgetary issues have meant a dwindling cash balance as we enter the new year which in turn causes the need for the county to have a solution to the cash flow problems that causes and issue tax anticipation warrants."

Com. Burrus, "The reason or the implication for the reason is pretty well understood. What I was trying to get at is, we have seen this situation maybe ten or fifteen years ago, where we were able to carry money forward. You said that was no longer the case and then we had a period where we were issuing tax anticipation warrants occasionally and now we are issuing them continuously and for greater amounts. What my point really is, for the period of time now where we have been issuing them continually, we have been seeing an increasing number of dollars each year being borrowed through these warrants. How much did we issue last year for example versus this year?"

Atty. Hollenbeck, "It is a little difficult because we issued them on a draw basis. Last year we got the authority to loan us up to $10 million. I am going to have to have the auditor's help, was it a little over $5 million? We only had to access about half of that."

Com. Burrus, "We don't have an anticipation exactly on how much of this issue we will need to draw yet?"

Atty. Hollenbeck, "I would be astonished if we didn't have to draw more this year."

Com. Burrus, "Well, that is the trend I am trying to develop."

Atty. Hollenbeck, "You talk in terms of trend, that is an honest statement that the trend would be . . . again, I showed people these cash flow statements, it is 2005 without any change in the revenue stream. It's 2005 before we are not keeping government together with baling wire, band-aids, and bubble gum. Then we begin the cash flow trend- begins to show some improvement in terms of that and we start getting some balances that we are carrying forward."

Com. Burrus, "I know there are critics and I know that we will never convince everybody but I know this Board has been intent for the last two years in trying to find every available means of savings and reducing costs. At least for John and I, I don't want to speak for Larry because I don't have his opinion yet, but with that effort of saving and that effort of reducing costs and reducing scope continuing, as we look at the things we are doing on the agenda today, we are having a Commissioners' sale, and we are going to have another contract with a projected $40,000.00 savings on a NIPSCO agreement and so on. These are on going efforts that we are looking at all the time. I would like to emphasize to the critics that these kinds of savings and reductions are going on continually. In view of all that, we are still not able to come up with sufficient savings of dollars that will balance this budget. In face of these trends, we are seeing continued potential increases of these tax anticipation warrants. This was not a necessity 15 to 20 years ago. I would like to take this opportunity to reinforce to the public to the extent I can, yes we are looking at cost savings; yes we are trying to reduce and yes we've taken some fairly major steps in the past two years. We are now working on some of the more minor ones, but it is still being worked on. It still leaves us with the conclusion that the budget will not be balanced properly. With that in mine, John and I have concluded that some form of income other than real estate tax is going to be necessary. Whatever the Council decides on would be satisfactory but we want to reinforce that position."

Atty. Hollenbeck, "As you know, the Council has embarked upon that arduous task."

Com. Evans, "Just once for the record, I would like for you to say to the general public that the Bail Out Loans could be repaid if Bethlehem makes its sale and that goes through, but we are not going to be whole. That is what the conception is that if Bethlehem sells and we have a new landlord on the lake, that everything is going to be fine and we are going to go along our merry way. That is not going to happen and I appreciate hearing it from you also."

Atty. Hollenbeck, "I would echo what Commissioner Evans just said. The future in terms of what real estate property taxes will be generated from that facility is still an exceedingly struggling crystal ball. What I am telling people is depending on how this all shakes out for planning purposes, if we get 50% of what Bethlehem has paid in the past from the new owner out there, that is probably pretty predictable as to what it will be. In the interim, although the results of our efforts in the bankruptcy court proceeding, I think have been very good, we're still only recovering only about 47 or 48 cents on a dollar through 2004 before a new buyer would be on line in 2005."

Com. Burrus, "We stand to recover approximately 40 some cents on the dollar of delinquent taxes."

Atty. Hollenbeck, "Defining delinquent as bankrupt Bethlehem Steel's obligation through 2004? That is correct."

Com. Burrus, "Then the other part of the equation is under the new owner. The tax revenue that we can expect from them in the future is only going to be approximately 50% of what Bethlehem had been paying in the past."

Atty. Hollenbeck, "Realizing with the precondition that no one's crystal ball is perfect, if I am pressed on the issue that is what I have told people, my best estimate would be that we would be looking at about 50%. That is because of the combination of the real estate property tax issues, and more so the personal property tax issues on this equipment and what we are going to end up getting back in taxes."

Com. Evans, "All that being said, what happens if we don't approve your warrants?"

Atty. Hollenbeck, "Well, the first week of March, we would have no money."

Com. Sheets, "I hate to ask this, but with the new assessment rules is there a probability that we may not receive our funds because assessment isn't done by December 31st?"

Atty. Hollenbeck, "Well, I see the county assessor is here and I have heard her say this 100 times, the state required new assessing process in half the counties in the state simply isn't done. When it gets done is a variable of a lot of factors. Another variable is the legislature may decide to do something about that; either delay it in its entirety for a year or allow us to send out the first half of the "A" statements on the old system. But if the status quo remains, meaning that the bills must go out on the new system, the cash flow statement that shows that we need that money coming in by August and September is in jeopardy. Shirley and the assessing people are telling me that is not a realistic assumption for the cash flow statement, that they will probably go out later than that."

Com. Sheets, "I am aware of the difficulties we are having. What happens if we don't get out and we are required to pay this $10 million we borrow back by December 31st and there is no money coming in. Now what does the county do?"

Atty. Hollenbeck, "I was quoted Tuesday night as saying my bag of tricks is getting low. There is not a lot of other options that are available to us."

Com. Evans, "Indiana still has debtors prison and we are the three guy that will go."

Com. Sheets moved to approve the tax warrants up to $2 million,

Com. Evans, "I would like to wait until this afternoon and make a decision then."

Com. Sheets withdrew his motion.


OFFICE HOLDERS\DEPARTMENT HEADS
Mutual aid agreement
David Lain, Chief Deputy, Porter County Sheriff's Department

Chief Lain, "This is a mutual aid agreement that fleshes out what has long been done in public safety circles and that is a gentlemen's agreement that if a neighboring agency needs some special assistance that they don't have in house or they have a greater than anticipated need for law enforcement issues or public safety issues, then traditionally law enforcement agencies help one another out. Good example, if you will remember the Ku Klux Klan rally several years ago in Portage. More recently we had the Rave. Other local agencies and federal agencies helping out we respond in kind. Our bomb squad has helped out neighboring agencies in Lake County most notably and in return Lake County has always sent their helicopter when we needed it for a search. So what this in effect does, agencies in Northwest Indiana and Northeast Illinois have formulated a coalition that when issues of violent crimes that might exceed one particular agencies' in house assets, they can call on their neighboring agency to help out and respond. Something that has already been done but again, this is a mutual aid agreement that really puts in writing what has already occurred."

Com. Burrus, "Is this in part as a result of the regional conference that was held recently on emergency response coordination?"

Chief Lain, "Yes, I think that is fair to say. This is a group of not necessarily focusing on terrorist activities, which is also another involvement of public safety agencies throughout the state and for that matter the country. This is, I would describe it as more traditional law enforcement concerns; violent crimes issues, sharing of information, sharing resources for things that really effect people where they live."

Com. Burrus, "Does this affect not only the Sheriff's Department but Emergency Management or any other organizations that respond?"

Chief Lain, "Right now, I am not sure if Russ has been apprized of this, but this is essentially a law enforcement issue although it certainly can encompass and be expanded to other signatories such as Emergency Management, Hazardous Materials, etc."

Com. Burrus, "Russ, you have your own mutual aid agreements, don't you?"

Russ Shirley, "Yes, I do."

Com. Evans moved to approve the mutual aid agreement, Com. Sheets seconded, motion carried.


APPROVE CONTRACT FOR PHYSICIAN'S SERVICES AT PORTER COUNTY JAIL

Chief Lain, "This is a renewal of the doctor's contract, the medical director of the Porter County Jail, it is for Dr. Jerry Back, who has been the director for the last number of years. Essentially it is the same contract. He's agreed to the same salary. It does add some scope and some delineation of his duties and responsibilities, but essentially it is the same contract."

Atty. Rinkenberger, "One change we made is we are making it an annual renewal instead of a longer term contract so we can review services and the service provider and the costs annually."

Chief Lain, "The fees are the same although his patient population has increased."

Atty. Rinkenberger, "His fee is $36,000.00 per year."

Com. Evans, "Will a portion of his medical malpractice insurance be paid?"

Chief Lain, "We don't pay that directly, we reimburse him. It is up to him to pay but the county does agree to reimburse him for his cost for that addition to his medical malpractice insurance for when he operates in the Porter County Jail. It states not to exceed $1,500.00 which again, has remained the same."

Com. Evans, "No other physicians have expressed an interest in pursuing this position?"

Chief Lain, "Not that I know of."

Com. Evans moved to approve the contract for Dr. Jerry Back to remain as the physician for the Porter County Jail at a salary of $36,000.00 per year, Com. Sheets seconded, motion carried.

PRISONER TRANSPORT SERVICE, TRANS COR COMPANY

Chief Lain, "This third item will be put on hold. Porter County has been approached by a prisoner transport company. All jails have to transport and expedite people who have been arrested in other jurisdictions, many times crossing state lines. It is not cost effective for the Porter County Sheriff's Department to assign officers to travel to other states beyond 100 mile radius, but beyond that radius it is more cost effective hire a company such as this one, to pick up those folks where they have been arrested in another jurisdiction and bring them to Porter County Jail. Conversely, prisoners are cris-crossing all over the country. Trans Cor has asked that we consider temporary housing of folks they are transporting from one part of the country to another. Typically, they need to lay over for a period of 12 hours up to 72 hours so they can change drivers, drop them off here and another bus going in an opposite direction can pick them up. They want to utilize Porter County as a hub. That is just to explain what this is about. We have some issues we want to finalize but it would be a financial contract that they would pay for the services of the Porter County Jail. We can finalize this in the future."

NIPSCO\Nicor contract

Com. Burrus, "This is something this Board has been involved with also. It has to do with the provision of NIPSCO utility services to the new jail facility. We have been paying bills out there for over a year now and there has been a recommendation to review the rate structure that we are under in calculating out utility bills with NIPSCO. It turns out that any major new facility such as the new jail has to initially go into a rate structure that is essentially one of the least advantageous to the customer. We have been in that rate structure for a year now and that qualifies us to negotiate or discuss a better rate structure with NIPSCO based on a year of operating history. We have done that and if we choose today to enter into a contract with NIPSCO, we will be placed in a much better rate category that between the electric and the gas should generate a savings of approximately $40,000.00 per year. Is that the information you have?"

Chief Lain, "Yes, it changes essentially what we are charged per therm or per kilowatt hour. We are not going to the competition to search out a better rate."

Com. Burrus, "Under the terms of NIPSCO's service agreements, we have all been involved in an effort to qualify for the most economical rates and we think we have reached that at this point and indicated savings based on our history should be about $40,000.00 per year. This would be in agreement with NIPSCO signed by this board if we approve it and will apply to both gas and electric at the new jail facility only. We have similar efforts in the past on other major buildings."

Com. Sheets moved to approve,

Com. Evans, "I just wanted to note the current rate we are on and it is considered to be rate 321 for the gas and this would change to 325 and for the electric from rate 821 to 824. Those are the identifying categories that we are under for the record."

Com. Evans seconded, motion carried.

Preservation of Public Records contract
Jackie Sterling, Porter County Recorder

Ms. Sterling, "Back in 1995, the general assembly passed a law that the recorder's office be
approved by the county commissioners to charge $3.00 per document to be recorded. That fund is to be used for the preservation of records in Porter County and every other county in the state of Indiana. With the hiring freeze we are under, we have looked things over and wanted to share some of the information in reference to how our work load has increased. In 2000 we recorded 34,456 documents, in the year 2001 we recorded 42,293 documents, in 2002 we recorded 48,041 documents. When you record a document it just isn't taking and receiving that document over the counter, there is many things that have to be done; indexing, imaging, referencing and so forth and the ordinance was passed back in 1995 for this fund and we don't want the quality of our work to decrease. We want it to stay as it has been in the past. But with this extra workload, we are getting kind of overwhelmed. So what we would like the Commissioners to do is to approve an agreement for an independent contract where we can hire someone not to be a county employee, just on a contractual basis at the hourly rate set by the County Council and not for more than 25 hours per week. That person would be responsible for their taxes. They would not be considered a county employee and I believe you may have a copy of that contract in front of you. We are just trying to continue to have the quality of work that we want to have in the recorder's office."

Com. Evans, "Do you have someone in mind?"

Ms. Sterling, "We have a former employee, her name is Jane Kwasnuski. She worked for the county in the recorder's office shortly after I took office but because of personal reasons she had to quit and take care of some grandchildren and now she is available to come back to work for 25 hours. As the contract reads, if we don't need her, we wouldn't have her in. We can terminate the contract at any time as she can also. The compensation would come from the Porter County Recorder's Perpetuation Fund and that does have a good balance. It is realized from that $3.00 per document and also our copy money. That is the amount we charge for a copy is set down by the Indiana Code and is $1.00 per page. That is from the deeds and mortgages we have on file."

Com. Burrus, "Based on the number of documents you recorded for last year, that should generate somewhere in the vicinity of $150,000.00. What else does that money go for?"

Ms. Sterling, "That $150,000.00 is just from the $3.00 fee but we have a quite sizable copy request that comes in from the title companies and so forth. That fund right now has $300,000.00. That money goes for everything in our budget. The only thing that is budgeted out of county general is our salaries which is $152,000.00. We have one person that does imaging and scanning that we are paying out of that fund and we are also picking up the Medicare and the insurance that the County Commissioners would be paying for that person. We pay our service contracts; everything other than those six people."

Com. Burrus, "Now the person for this contract would not be entitled to county medical benefits, is that correct?"

Ms. Sterling, "No, they would not."

Com. Evans moved to approve the contract for an independent employee in the Recorder's office, Com. Sheets seconded, motion carried.

Employment contract for Lonnie Steel, Expo Center

Mr. Steele, "I think you have my contract before you and if you will notice, it has a change of date only. Everything else is the same as it was in 2002. This is an annual contract and this is for 2003."

Com. Sheets, "Has the attorney looked at it?"

Atty. Rinkenberger, "Yes, the only thing that did happen is the co-payment for insurance went up."

Mr. Steele, "Yes, this is in the contract and I agree that I have to pay that difference."

Com. Sheets moved to approve the employment contract for Lonnie Steele for 2003, Com. Evans seconded, motion carried.

Com. Burrus, "I think for the record, the amount of the contract should be announced and it is for $37,779.00. We thank you for another year of service. Now you have your catering contracts?"

Catering contracts for Porter County Expo Center

Mr. Steele, "Yes. Catering contracts are entered into on an annual basis and this past year in 2002 we had seven different caterers that served us well. Some having more business than others. And so a couple of those are not renewing. So you have a list of 6 caterers that have currently applied for a contract with us. We have reviewed their ability to perform and we recommend that those 6 be approved today. I apologize, we are going to go with 5 and the 6th one, Kelsey's, has not gotten their contract agreement back to us so I am not recommending their approval today. We would not let them go to work until after your March meeting."

Com. Burrus, "Okay, the 5 that would be subject to approval today, would be Strongbow's; Birky's; Master Caterers; Billy Jack's Café and Fazoli's."

Com. Sheets moved to approve the 5 caterers for the Expo Center, Com. Evans seconded, motion carried.

Revisions to contracts

Mr. Steele, "What the situation is, we found ourselves because of the language of the previous
contract with some limitations that once we entered into an agreement, then we found it difficult to deal with some situations that arose so with the support and help of Gwenn, I compliment her and her ability to put together the words that are necessary for us to protect ourselves in cases of entering into contracts. You will see that there are differences in the contract about some conditions that must be met by our customers and that we have the ability to cancel events with a very short notice to the individuals that have signed on. Those agreements include liability insurance being provided to us in a timely manner and also security being dealt with by us knowing exactly who the security is well in advance of the event. John, I think you mentioned the "Rave" concert, that is the one that brought to our attention the need to tighten up our contractual agreement. So I believe this is one both Gwenn and I would recommend for your approval."

Com. Evans, "I looked at it earlier and I think it is a good idea and you should be highly commended for your handling of that situation because it could have been very out of hand very easily and the Sheriff's Department pitched in and the only people that suffered were the neighbors with the noise level, but it was unanticipated."

Mr. Steele, "We have learned a great deal about future events such as that and know that neighbors are concerned about the noise situation and have every reason to be and we are going to work very diligent to see that those kinds of things don't happen again."

Com. Evans moved to approve the revisions to the contract, Com. Sheets seconded, motion carried.

Mr. Steele, "My assumption is that this goes into effect immediately. All future contracts from
this point on will be the new contract form. Thank you for your help."

Com. Sheets, "We appreciate all you have done out there, Lonnie."

Juvenile Probation-Amy Beier

Ms. Beier, "I apologize for getting this on your agenda at such short notice. At the last meeting of the County Council I was before them requesting to transfer $200.00 so I could pay the maintenance agreement on our copy machine. They denied the request because they felt the maintenance agreement was expensive and given the age of the copier that it was probably not a prudent thing to do. So they suggested I just drop the maintenance agreement all together. That creates a problem for us because obviously we don't have a maintenance agreement. So I asked our administrative assistant to contact Adams Remco to inquire about the details of the agreement and the cost of a new machine. At that time they told us they could reduce the base charge on the agreement given the fact that the amount of copying produces no where near what was written into the terms of the agreement. So the amount we have in the line item now is enough to cover that. The old contract was for $2,233.80 at 180,000 copies and the new contract would be for $1,750.00 at 140,000 copies. We presently have about $2,000.00 in that user fee. The cost to replace the machine is around $6,000.00. I would have enough to replace the machine if I had to transfer funds, I could do that. I would prefer not to but the copy machine is 6 years old and we were told by Adams Remco that we should get another 3 or 4 years out of it. The contractual agreement as it is written now includes the cost of all repairs and all parts including the drums and things like that. They are saying the chances of it requiring some sort of repair is slim to none."

Com. Burrus, "What was the restriction the Council put on you?"

Ms. Beier, "They asked me to do some investigation and they suggested we drop the contract all together."

Com. Evans, "We asked for all those contracts to go to those departments and it is kind of like going without insurance; if you don't have it, something will happen."

Com. Burrus, "There is a school of thought that says that all maintenance agreements be consolidated under one big contract and administrated in the Commissioners' office. We found out that we are not in a position to have the information necessary to know whether a machine was worth maintaining or not. It was our conclusion to distribute these maintenance agreements out to the various departments and they then would be the front line people who knew what they needed and could make a recommendation as to the expected life duration of the copier. You find that you have 3 or 4 years left on your machine, you are able to negotiate a cheaper contract. The overall objective has been played out here and it is another effort in trying to keep these maintenance costs in line."

Com. Evans moved to approve the maintenance contract for Juvenile Probation, Com. Sheets seconded, motion carried.

PTABOA APPOINTMENT
Shirley LaFever, Porter County Assessor

Ms. LaFever, "I just came in today to ask about my PTABOA member. I was at a conference downstate and I understand it was put on hold."

Com. Evans, "We tried to contact you a couple different times. We were under the impression that the appointment that was made by the Council was actually our appointment according to the list."

Ms. LaFever, "I had to switch people around. The Council this year appointed James Lewis and Jeanine Christman. I had to switch them around because John Demerico passed away last year and I have to have a Level II from the Council and a Level II from the Commissioners."

Com. Evans, "How many people total make up that board?"

Ms. LaFever, "Five."

Com. Evans, "And how many appointments?"

Ms. LaFever, "Four all together, I am still short one since John Demerico passed away. I will come back for your recommendation to fill that one. I am still short one PTABOA member."

Com. Evans, "So the Council appoints two, we appoint two, and he was the fifth member?"

Com. Burrus, "Who are you recommending for us?"

Ms. LaFever, "James Koch, because he was on the County Council's appointment last year as a Level II but John Demerico had a Level II. I had to switch them around because of the Level II."

Com. Burrus, "Well, the delay was caused because we were confused as to the recommendation. So the recommendation is James Koch."

Com. Sheets, "I know he has been on there and he has done an excellent job. I think he is an accountant and lives in Ogden Dunes."

Com. Sheets moved to appoint James Koch to the PTABOA board, Com. Evans seconded, motion carried.


CORRESPONDENCE

Weights and Measures monthly report for January 2003 is on file.
Clerk's monthly report for December, 2002 is on file.
Building Department Annual Report for 2002 is on file.

Appointment to Center of Workforce Innovations Board

Com. Sheets moved to appoint Jean Phelps of Express Personnel Services to the Center of Workforce Innovations Board, Com. Evans seconded, motion carried.

Executive Deputy Auditor to accept pension liability

Com. Evans moved to approve the authorization of Sheila Riley, Executive Deputy Auditor, to accept pension liability on behalf of Porter County, Com. Sheets seconded, motion carried.

Com. Evans, "I think this was necessitated due to her accepting a new position in the Auditor's office."

AMENDMENT TO THE PORTER COUNTY GOVERNMENT EMPLOYEE HEALTH CARE PLAN

Com. Evans read the following amendment:

Whereas, the Porter County Health Care Plan was established; and
Whereas, the plan documented provides for amendment thereof,
Now therefore the plan is hereby amended as follows under the eligibility effective date section:
effective date of newborn children: a newborn child will become effective from birth if dependant children(child) coverage is in force at the time of birth. The employee must enroll the newborn child and make an additional contribution if needed for the newborn within 31 days after the date of birth. Coverage will be provided to the same extent as for other covered dependants. If at the time of birth, the covered employee is acquiring the first dependant child (and has not previously declined dependant child(ren) coverage), the employee must enroll the dependant and enroll for dependant child(ren) coverage within 31 days after the date of birth. The employee must make an additional contribution for the newborn from the date of birth as required by this Plan. If this is done, dependant coverage (for the newborn only) will become effective as of the date of birth. Failure to enroll newborn could jeopardize coverage.

Com. Burrus, "This is actually a change in our employee health care plan and as John mentioned it addresses the enrollment of newborn children as dependants."

Com. Sheets moved to approve the amendment to the Porter County Employee Health Plan, Com. Evans seconded, motion carried.

COMMISSIONERS' REPORTS

Center District: Larry Sheets

1. Utility Agreement for NIPSCO to set a pole approximately ½ mile north of Division Rd on the east side of Sturdy Road. Recommend approval.

Com. Sheets moved to approve, Com. Evans seconded, motion carried.

2. Windsor Park Subdivision, Phases II, Maintenance Letter of Credit #419 from DeMotte State Bank in the amount of $19, 200.00. New expiration date is January 28, 2005. Recommend approval.

Com. Sheets moved to approve, Com. Evans seconded, motion carried.

3. Windsor Park Subdivision, Phase III, Maintenance Letter of Credit #420.00 from DeMotte State Bank in the amount of $5,120.00. New expiration date is January 28, 2005. Recommend approval.

Com. Sheets moved to approve, Com. Evans seconded, motion carried.

4. Windsor Park Subdivision, Phase IV Maintenance Letter of Credit #421 from DeMotte State Bank in the amount of $17,000.00. New expiration date is January 28, 2005. Recommend approval.

Com. Sheets moved to approve, Com. Evans seconded, motion carried.

5. Washington Minor Subdivision 2632-B-1 Road Agreement, located on the east side of CR 450 East between CR 300 North and CR 400 North. Offer to contribute $750.00/lot for a total of $2,250.00. Owner and subdivider is Michael Zosso. Recommend approval.

Com. Sheets moved to approve, Com. Evans seconded, motion carried.

6. Meadowbrook Subdivision Performance Letter of Credit extension from the Peoples State Bank of Francesville, is reduced to $97,000.00 with a new expiration date of February 15, 2005.

Com. Sheets moved to approve, Com. Evans seconded, motion carried.

Com. Evans, "Before we get any farther, I thing we kind of glossed over those bridge things
and that is what we were berating Attorney Hollenbeck about. I think those numbers ought to be mentioned anyway. We need to approve Dave Schelling's request for the FA3's for the following:

CR 100 South, Phase 1, Lake/Porter County Line to CR 600 West
$2,187,000.00 Total Cost
$1,749,600.00 Federal Funds
$ 437,400.00 Local Funds

CR 100 South, Phase 2, CR 600 West to SR 2/CR 300 West
$3,281,000.00 Total Cost
$2,500,000.00 Federal Funds
$ 781,000.00 Local Funds

Com. Burrus, "Those are projects that are identified and submitted to the state but those two that you mentioned are road and not bridge. The remainder will be bridge."

Bridge 1014, Calumet Road over CSX, rehabilitation
$ 380,000.00 Total Cost
$ 304,000.00 Federal Funds
$ 76,000.00 Local Funds

Bridge 58, Baums Bridge Road over Kankakee River, rehabilitation
$ 265,000.00 Total Cost
$ 212,000.00 Federal Funds
$ 53,000.00 Local Funds

Bridge 23, CR 500 East over Kankakee River, replacement
$ 900,000.00 Total Cost
$ 720,000.00 Federal Funds
$ 180,000.00 Local Funds

Com. Sheets moved to approve the FA3 project requests,

Com. Evans, "It should be noted that the costs do not include design and right of way costs which will be additional."

Com. Evans seconded, motion carried.

Com. Burrus, "Our afternoon session will commence at 1:30 and we have a rezone issue from R1 to PUD and also it has the follow up topic of tax anticipation warrants that we moved to the afternoon session."

Com. Evans moved to recess until 1:30 p.m., Com. Sheets seconded, motion carried.

AFTERNOON SESSION-PLAN COMMISSION
Steve Nigro, interim Plan Commission Director

Com. Burrus, "The first item on the agenda was a requested rezone from R1 to PUD. It is a parcel that is owned by Jeff Bann. There has been discussion prior to this meeting on how to proceed with this and I believe the consensus we have reached is to continue this to the next scheduled meeting. Is that correct, Todd?"

Atty. Leeth, "Yes. I am Todd Leeth on behalf of the petitioner. I have been in discussions with your attorney and I think that is probably the best procedural matter is to continue to the next meeting which I understand is the 18th."

Com. Burrus, "We think that is the best approach also and we hope that this is not putting any undue inconvenience on you or your client. Therefore, we will continue this until the next meeting."

Com. Evans moved to continue the rezone until February 18, 2003, Com, Sheets seconded, motion carried.

Com. Sheets, "We have only had a couple PUD's where we have had to go into an additional meeting to get it through, for lack of a better term, legalities. There is some communication we need to get it straightened out, Steve, we hoped we would get it straightened out so we don't do this again."

Kevin Breitzke, "We actually have a meeting scheduled on Thursday, unfortunately it wasn't preceding this meeting, with the attorneys, we invited Mr. Leeth to join us. It is a procedural thing, it involves some legalities that add some confusion over how we performed this in the past and hopefully we can come to terms, amend the ordinance. In fact, we are going to have a few more PUD's this year. This is very timely that we can sort this out and enforce your decisions."

Com. Burrus, "I think Larry's point is well taken and I think we have to be satisfied with here is whatever reaches this point is thoroughly and completely staffed through and we don't necessarily have that comfort level now. We hope the effort you are speaking of will address those issues."

Mr. Breitzke, "And largely that is due to the changes that were brought up or the effects of the PUD that was discussed."

Com. Sheets, "I will be at the next meeting but at the first meeting of next month, I anticipate not being here. This is my district and I would like to be here to get done at the next meeting if we can."

Com. Burrus, "Next issue continued from this morning's session, the discussion brought to us by Attorney Hollenbeck representing his client, the Porter County Council. The topic being a request to issue $10 million in tax anticipation warrants. I think some preface might be appropriate and we have taken this topic under some serious discussion in the interim hours since we talked last and I think John has some points he would like to make."

Com. Evans, "First of all, I want you to know we are not here shoot the messenger, that is not our intent but we have some very serious concerns. We have been asked to sign tax warrants for $10 million. Truthfully, there is the possibility of default. We need to know what the liabilities are; what our liabilities are as county commissioners, if a default occurs and what is the default process itself. Default is a very real possibility because the reassessments, we are all aware of them. We have no idea what direction we are going with reassessment. We have escalating debt and we can't even get the last of our bail out money and the debt just keeps rising and rising. There is absolutely no plan. I think we need the Council, we need your clients to come to us with a plan for getting out of this. You called it this morning crisis management. They are not supposed to be in crisis management. They are supposed to be in fiscal management. We have been in a constant state of crisis. We need a plan from them with new revenue and without new revenue, not just to placate us but to run county government. We have no plan. All we get is, you have to cut more, you've got to do this, but we have been doing that. We have been diligently doing those things but yet we still have to put our name on the line when it comes to borrowing the money. It's something we need to have a good understanding of. If we sign those notes and the county goes belly up, what is going to happen, how does that process work? Are we going to jail? This is $10 million. True, we might not borrow all of it and probably nothing will happen but nobody has given that any thought. It is us that always has to be out there. We have always acquiesced to any request the Council has made of us. We have always said, okay, lets do this, we need to do this, we are all in this together. But every time we show up at the Council, we are reminded very sternly that we need their authority or permission to do whatever it is we are asking. But we end up signing the bonds. I think a plan is needed, and until we can see that plan, I am going to make a motion that in an effort to insure the fiscal responsibility, we defer this judgment until our next regularly scheduled meeting."

Atty. Hollenbeck, "Is that motion made before I attempt to answer the questions? There is no sense in me answering the questions, John, if you make the motion. If it is in the cards, I am not going to waste my time."

Com. Evans, "I will hold off on the motion."

Atty. Hollenbeck, "If it is in the cards, then I am not going to waste my time."

Com. Sheets, "I agree with what John is saying and when he mentions crisis management, that was the thinking in my head when I made the motion this morning to approve it because if we are in the position where we got it, that is where we have been for the last one or two years. We got it. I have been around long enough to know we have time constraints and time frames when you are dealing with banks. How long is this good for and things like that. I think John makes a great point in that we are too cavalier when you just come and tell the commissioners we are going to borrow this $2 million from the bridge fund. I am not sure that is the right word, but it seems like a too easy of a task and part of the easiness of that task is that seven members of the Council that spoke to their attorney and said okay, go do it. Again, we are not attacking you, Dave, we are attacking the process. Another point is the more we talk about this in public and the more that the press prints it, that is part of the education process that is missing in this county as far as revenue and why we need revenue and the real seriousness of the situation. I am greatly concerned and these two guys are too, but you have to deal with this thing in a more responsible way."

Atty. Hollenbeck, "I would believe to adopt Commissioner Evans' motion, I don't know if it has been withdrawn or is it still on the table, would be incredibly irresponsible at this point. The bids have been let, the banks have stepped forward, if we do not do this today, we are back to ground zero, I have to readvertise for bids. I don't know what bankers are going to do the second time around. They have stepped forward and offered us a 1.95% interest rate; the three banks together. I don't know whether we can get another bank. These three people may say they are looking a gift horse in the mouth at this point. We are not going to step forward and make a bid next time. If that happens, then you can look at the cash flow statement as well as I can. We are out of money. As long as we are taking the gloves off, I didn't want to say this this morning, but I will say it now, the truth of the matter is there is absolutely no legal obligation that the County Council get the County Commissioners' approval to borrow money from the bridge fund. We have done that as an effort to be on the same team and come to you and say we would like to do this; we don't want to get in the way of the bridge projects that you are doing and we would like you to get on board and do this."

Atty. Rinkenberger, "I don't think they can transfer money out of a fund although it doesn't specifically state in the statute they must come to us for approval. There is 3, 4, or 5 elements that must be met. One of them is there is money available and this is appropriated funds and they borrow $2 million without taking into account the money we have already appropriated, then they are violating the statute."

Atty. Hollenbeck, "I disagree, Gwenn, but this is not the time or place to do that. It is exactly why we need to be communicating and we need to be discussing these things and why we do need to be coming to you for your acquiescence as I mentioned this morning. I will try to answer John's questions in the order he posed them. I am not aware of any legal theory that could put any personal liability on you. You are signing this a member of the Board of Commissioners, nobody is going to jail. The issue you raise is a very important one. It is being faced by over 50% of the counties in Indiana who have to issue tax anticipation warrants."

Com. Evans, "But they are not in the severe borrowing stance that we are. They don't have $10 million bail out."

Atty. Hollenbeck, "John, Marion County is borrowing $70 million; Lake County is borrowing that much."

Com. Evans, "But they don't have outstanding debt for a bail out loan that we may not be able to repay. . . "

Atty. Hollenbeck, "We pay it back over ten years and in principle and interest, about $300,000.00 a year. That is on a $28 million budget, so I am not sure where that falls in the urgency schedule. Any concern about if it is already there of any personal exposure on this, I think is not a realistic concern. That is not a possibility. I certainly understand your frustration on the issue of plan, is there a divergent opinion on the County Council as to how to solve this problem? I don't have to tell you that yes, there is. It is hard to build a consensus with a plan. President Carmichael has shown the leadership of next Monday convening a meeting to try to focus us on the revenue side of the equation to see what the options are and you two especially, John and Dave, have been forthright and honest with coming forward with your view and opinion as to what should happen. I don't have to tell you that everyone on the County Council doesn't share that belief and I know how frustrating that is. The plan is to look at the revenue side, unfortunately depending on what option is chosen. Other people other than the Council have to agree on that and there hasn't been a ground swell of public support from the other units of local government as to that being an option. At the County Council in 1993 the County Council did bite the bullet and attempt to enact an local option income tax. Then they were left out of the lurch and no one came forward and it died. One of the criticisms I hear is we had to borrow the money to build the jail. If either Portage or Valparaiso had chosen to follow the lead of the county in 1993 which included an element of _______, we could have built that jail with cash in the year 2000. In that sense it is not the County Council's fault that there hasn't been leadership. In 1993 they tried to focus people on these things. There was no one following them. We have been struggling with this since before Bethlehem Steel declared bankruptcy. It was a month ago that two of the Commissioners got in the fray here in terms of what the solution was to the whole process."

Com. Evans, "We have been in the fray from the beginning."

Atty. Hollenbeck, "Publically took a stance as to what the plan should be."

Com. Evans, "The first action that Commissioner Burrus and I had before your Council was to try to alleviate a position in our office and they wouldn't let us do it. From the beginning we have come to you to implement cost saving and money saving measures and have been gotten stone walled at every one because we didn't pass muster or something, I don't know."

Atty. Hollenbeck, "Do you receive mixed signals? Absolutely, that comes with the territory when you have seven people trying to build a consensus to solve a very serious problem. The plan is to look at the revenue side of the equation, see what the options are, determine what kind of support there may be countywide, but again, the Council can look at solutions till the cows come home and if there isn't support in the rest of the county for it, they have wasted their time and spun their wheels. There is support on the Council to address the financial shortfalls by taking the axe to the budget and cutting more. There are those on the Council who firmly believe that is the right solution. I understand that when the pot shrinks the acrimony and the mean spiritedness grows and that is human nature. Those of us who try to keep our eye on the ball, which is finding a solution to this have to try to stay above the fray we find ourselves. If the Commissioners are going to take the position they are going to delay this then fine, but candidly, I am not sure what my role is going to be at that point in terms of going back and doing all this over again, trying to get the banks that I had to try and convince last time, to come to our aid and help us with these tax warrants. I don't know if I am prepared to do that again. I have spent the amount of energy I have the time or inclination to spend on tax warrants issues and if the answer is that this isn't the right time or other issues that need to be addressed, then fine, so be it. We will have to see what happens. Accountability then becomes an issue if instead of running out of money in September, we run out of it in March."

Com. Burrus, "What struck me, Dave, was in the past year and a half or two, we have been right on board with all of the various documents of loan requests, whether it is from the state or tax anticipation warrants or whatever. At least in previous years there was some sense of stability on the revenue side with respect to May and November. Often times it wasn't adequate and we had a firmer figure to deal with then. My concern is what might shake out at the state level but to be comfortable with another set of tax anticipation warrants with the uncertainty that exists in the real estate tax side. I think one thing it does is illustrates the stance we have been taking on the outside revenue, the income tax and that is we would not be so dependant on one source, particularly a dynamic and unpredictable source. So, I don't think we are trying to put ourselves in the position of a martyr but I would like to have one thing clarified about our contingency plan. What actually does take place when there is default on some of these?"

Atty. Hollenbeck, "That takes probably a crystal ball that is clearer than mine. All I can tell you is the state statute that allows units of local government to issue tax anticipation warrants says they shall be paid back entirely in the year in which they are taken out. If that doesn't happen and a bank were to renew that note on December 31st, the answer would be nothing. Simply, in terms of the way you and I would borrow money, the bank would roll over the note. I am not going to sit here and tell you that is going to happen. I can say forget about our financial problems to the extent that any of this is precipitated by the reassessment and the delay in taxes over half the counties in the state are in the exact same position. So, are half the counties in the state going to be allowed to fall upon tax anticipation warrants? I doubt it. Do I have a remedy in place? No, but that is being debated as we speak in the legislature."

Com. Burrus, "This is probably more appropriate scenario, and that would be that whatever tax revenue does come in would be first placed against these warrants. They would have the priority in repayment. It would also be conceivable that we might be looking at literally nothing left after the warrant payments are made. You have a financial statement I am aware of that."

Atty. Hollenbeck, "No, because remember this is simply replacing cash that doesn't come in. For instance, if you go six months and spend $2 million a month that you don't have. Then your debt would be $12 million. Then the $12 million comes in and you pay off the debt."

Com. Burrus, "At that point in time you have no cash in the bank and you have to start over again. My objective is to draw serious attention to our concerns about the situation we are in now."

Atty. Hollenbeck, "Rest assured, on a personal level, and I have told all of you this, I sincerely appreciate the fact that you have looked at these issues as hard as you have and have had to live with these issues."

Com. Burrus, "Where we are sitting today is maybe a little more frustrating and a feeling of helplessness to the extent we can apply the appropriate amount of pressure. We don't want to obstruct anything."

Atty. Hollenbeck, "To me, to not go forward with this at this point would be obstructionistic. I think there are other ways that we can bring these matters to the extent that they need to be higher up on people's priority list. There is no consensus on the County Council as to how this should be resolved."

Com. Burrus, "We are taking some awfully strong criticism from a lot of members on the Council. I have not seen any suggestions, or any kind of solutions or any kind of plan whatsoever that is going to say do it our way and it is going to work. This is a one way street; it is a finger pointing exercise that carries no merit. I don't think that is a significant thing to be engaged in if they are on that board."

Atty. Rinkenberger, "I don't want to down play the concern I have with the possibly liability that falls on the executive with their signatures on the warrant, if the warrant defaults. Now as their attorney I can't sit here and act like the legal concerns that would occur; what are the ramifications?"

Com. Burrus, "We know those concerns and that is part of our decision. We are going to be voting here in a moment. Going back to the issue John mentioned also, we kick the word ‘plan' around a lot. But this lack of consensus you mentioned, Dave, that could be converted into a lack of a plan, at some point in time, that board is going to have to come together, at least with a majority vote that says, this is the way we want to go. I really strongly feel that something of that nature is going to be necessary very soon."

Atty. Hollenbeck, "Up to this point there are some things they have done in terms of telling everyone to cut their budgets and we have all lived through that by cutting the budgets 10% and doing what they could on the expense side of the equation. That is really the philosophical debate that is going on. You have struggled with that and at what point do you say enough is enough, we can no longer cut realistically to solve this. That is the debate that is going on."

Com. Burrus, "I can tell you firsthand; we have dealt with that and I can accept other people might come to the same conclusion sooner or later, but in our case it has been a least a year and a half, maybe two years, of diligent effort towards responding to cut requests and initiating cut requests and we feel like we have done everything we can that is going to be able to do the big dollar savings. This morning we had two events take place that are going to save $40,000.00 on one and something else on the other; those are big dollars for a lot of people but no where near enough to balance the budget. I guess I am just frustrated and disappointed that we don't have some kind of glimmer of light at the end of the tunnel that says if we keep going in this direction, we are going to get out of this versus looking at the big black hole that we are digging ourselves in deeper and deeper. I would look to the Council to give us some kind of assurance that we will have the light versus the dark. I think that kind of message is missing."

Atty. Hollenbeck, "On a personal level, in terms of my commitment, if the revenue side of the equation is unsuccessful and we reach March 31st and the revenue side has not been resolved, I am going to tell my client to focus every ounce of energy they have on April 1st on the other side of the equation. What will they do then in terms of salvaging what is going to be left of that skeleton of county government?"

Com. Burrus, "We have a plan for that kind of activity. It is the kind of thing I don't want to see happen either but if we find ourselves in that predicament, I think the people of Porter County are going to find themselves a lot worse off than having actively supported a solution that would have been able to stave this off. I think we pretty well aired our concerns and my opinion is in view of the facts, I don't want to obstruct."

Com. Sheets, "My comment is we need an airing of this and it has happened. The comments made are genuine and to the point. I don't disagree with anything you two guys said. I am concerned about jeopardizing the county with the loan, and I would support it, but I think we filled the attorney's ears with enough that something has to change between the Council and the Commissioners. It is tough enough for the executive to do what we need to do and plan without them planning and giving us some idea what that plan is."

Com. Burrus, "I hope this opportunity to air this hasn't been taken negatively. At the same time, I appreciate the fact that the press is here and they need to be aware of our concerns and our feelings of obligation. Any further discussion?"

Com. Evans, "No."

Com. Evans moved to approve the warrants, Com. Sheets seconded, motion carried.

Com. Sheets, "It would have been nice if there were one or two Council people here. I don't
want to say where are the Council people as they say where are the Commissioners when we are not at one of their meetings. But they should be here to take part in this."

Com. Burrus, "Let them know after all this heartburn, it was a unanimous vote."

Atty. Hollenbeck, "Last year we received $5 million from the bond bank because they were the only people who would deal with us. They put so many constraints and limitations on what we were going to do, once we saw a little bit of light, we decided to try again in the bond market and that is when we convinced the three local banks to come out. What we did was we got $5 million from the bond bank, we then issued $5 million to pay off the bond bank. We only had to draw less than $1 million of additional money. The total last year was $5,800,00.00."

Com. Burrus, "Are you at liberty to discuss anything regarding the timing of any potential effort with respect to income tax?"

Atty. Hollenbeck, "Sure, it depends what option they are looking at. With the CAGIT form, which is adopted solely by the County Council. They could convene a meeting on March 31st, the last day and pass it and that would be effective. If they are looking at COIT, which necessitates an action by units of government other than the county, but that is where the timing becomes problematic. If they hear the presentation on Monday, and do develop a consensus as to what to do, then if it is COIT, we have to put a legal notice in the paper that it is our intention to do and then we have to convene another meeting and adopt it and then that adoption resolution gets distributed to all the other units of local government and they have thirty days in which to respond by either saying they are for it or against it. Once the resolutions in favor of it are received from 50.1% of the fiscal bodies of the population, then it would become law. So, COIT is more problematic in terms of all that timing."

Com. Evans, "Would the ordinance be written asking for COIT and failing the 50.1% CAGIT tax will be enacted?"

Atty. Hollenbeck, "Yes, I told them that yes that can happen. In further reflection, I am going to change that by saying I suspect that no matter what we do, it may well be challenged in the community and I want to be sure we do it perfectly right. A smarter thing to do is to not have a contingent resolution but because we can meet on March 31st and adopt CAGIT so if they are going to look at a COIT form I am probably going to suggest we go ahead and run that up the flagpole and see who salutes and if by March 30th people haven't saluted, they can call a meeting of the County Council and adopt CAGIT. I emphasize CAGIT is a property tax replacement program. I will tell you the Indiana Association of Counties has accepted our offer to be the presenters Monday night and there will be a staff person from there and also an attorney from Ice Miller who works with the Indiana Association of Counties on these matters. I had a discussion with Prof. Larry Deboer at Purdue, he originally thought he might be able to be here, he can take the legal issues and crunch numbers and show us what it means in Porter County. Vigo County is in the same situation we are in and he is going to have to be down there. He promised he would get me his figures for Monday night that will hopefully accurately reflect and answer some of these questions. Other figures we will have will be the two NIRPC , IRS return filings that show 60% of the returns filed in Porter County have an adjusted gross income of $40,000.00 or less. So 2/10's of 1% COIT would mean an annual tax for 56% of the people of less than $80.00 a year. Also with COIT you have a homestead credit tax relief. I am now trying to get the figures that will enable us to talk about what Homestead credit increase that will accompany COIT and still leave some money at least the first couple of years. Hopefully many of these questions will be answered Monday night and the Council will have a much clearer picture of what the options are for those on the Council who are willing to look at the issue of revenue enhancement as being part of our solution."

Com. Evans, "Dave and I have talked about this before but suppose the Council bites the bullet, passes the COIT, and with the anticipation of the other municipalities voting on the ordinance, that ordinance cannot contain any language that says if you don't pass it, you don't get it, right?"

Atty. Hollenbeck, "Right, I wish we could but we can't. The other issue is to what extent could that ordinance mandate property tax relief in a form other than a homestead credit."

Com. Evans, "If you don't vote for it, then you should return 100% of it to the property taxes."

Atty. Hollenbeck, "As you know we voted against casino gambling and the legislature now has passed a budget rule that we are going to get some casino gambling money. At this point, Ice Miller is finishing their research on that and it is not looking good. The only property tax relief that can be mandated with the adoption of the COIT is through use of the Homestead Credit. Part of that problem with calculating the figure is the Homestead obviously only applies to residences. I am trying to have the auditor and assessor pull out of our assessed valuation figure, how much of that is residential. We don't want to get in a situation where we pass COIT and then give everybody an 8% homestead credit and it turns out COIT isn't generating enough money to even give the tax relief. Have to find that balance."

Com. Burrus, "It is important for other landowners to have that same kind of consideration."

Atty. Hollenbeck, "There was a press release from the County Council office from Farm Bureau supporting and advocating the adoption of CAGIT with a second sentence saying for new money, just cut all unnecessary expenses. I felt like calling up the Farm Bureau office and saying is the secretary for the 4H coordinator a necessary or unnecessary expense?"

Com. Evans, "Your Council said it was necessary at their last meeting."

Atty. Hollenbeck, "Gentlemen, I hear you and I feel your pain."

Com. Evans moved to recess, Com. Sheets seconded, motion carried.

With no further business to conduct, the meeting was recessed.

BOARD OF COMMISSIONERS
PORTER COUNTY INDIANA

David L. Burrus
John A. Evans
Larry D. Sheets

Attest: Sandra K. Vuko