Lake County Council OKs $15M loan

2012-11-13T16:30:00Z 2012-11-14T12:14:04Z Lake County Council OKs $15M loanBill Dolan, (219) 662-5328
November 13, 2012 4:30 pm  • 

CROWN POINT | The Lake County Council voted reluctantly Tuesday to borrow $15 million to pay for improvements for its county jail, highways, drainage waterways and other services in the face of declining property tax revenues.

A bare majority of four members authorized the Board of Commissioners to obtain the money either from cash-rich Porter County or the private bond market -- where the county usually goes for short-term and long-term credit.

Council members Rick Niemeyer, R-Lowell and Dan Dernulc, R-Highland voted against the measure. Council members Christine Cid, D-East Chicago; Elsie Franklin, D-Gary; Jerome Prince, D-Gary and Mike Repay, D-Hammond supported the measure.

Councilman Ted Bilski, D-Hobart, was out of town.

Wayne H. Wietbrock, a retired Lowell farmer, asked during a public hearing on the issue, "Do we have any other choice?"

Council members said state-mandated limits taxes they can collect from property owners have forced them to borrow.

They said the alternatives would be to impose an unpopular local income tax or reduce spending by $15 million.

"We've already cut 300 jobs and $30 million in recent years," said Prince, the council president.

Council members said cutting more could endanger public safety as well as other necessary services since the sheriff's department, the county jail and local courts represent 75 percent of the Lake County's government's 2013 budget.

Larry Blanchard, an administrative aide to the Board of Commissioners and a former councilman, said the state's tax cap system -- enshrined in the state Constitution -- ensure unbridled spending by the county's largest cities will result in future tax declines for county government.

"We have told the legislature that if this doesn't change, at some point we will be out of business," Blanchard said.

Council members will review requests by county government officials who want to dip into the borrowed funds. Those requests likely will  include capital improvements to county road, bridge and drainage infrastructure as well as expenses linked to U.S. Department of Justice's demand for improvements in the county jail's security and health care for inmates.

The council also will refinance an earlier $5 million loan it took out to make jail improvements to give the county more time to repay that debt.

The council also approved an overhaul of Lake County government's troubled health insurance plan that will maintain generous health benefits to the county's 1,679 full-time employees. But it will also end eligibility -- by April 1 -- for 32 employees who have been covered despite working fewer than 36 hours a week.

They will still receive retirement benefits.

Most of those part-time employees are attorneys employed by four judges in Lake Superior Court County Division as public defenders. At public expense, they represent indigent people charged with minor criminal offenses.

The council will offer public defenders a cash stipend to help them purchase a private insurance plan.

County officials say the generous benefit plan is needed to retain employees, many of whom haven't receive pay increases in years. The changes will go into effect by April 1.

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