CROWN POINT | Lake County government soon may be indebted to Porter County, literally.
Lake County Commissioner Gerry Scheub, D-Crown Point, announced Wednesday he has been in discussion with Porter County Treasurer Mike Bucko and others about borrowing as much as $15.5 million to keep Lake government spending at current levels without having to go into deficit or pass a new tax.
"It's very unique situation. Porter County has money from its hospital sale. I've met with Mr. Bucko. We think we can negotiate a lower interest rate than any bank," Scheub said.
Bucko said Wednesday, "We have an opportunity here. If it benefits us, we'll do it, and if doesn't work for us, we won't."
He said Porter County has been looking for ways to better invest the $173 million it received from the sale of the Porter Memorial Hospital to a private health care firm several years ago. A change in state law and a county ordinance allows Bucko to extend loans for a period of up to five years to other local governments.
Lake officials faced with declining tax revenues and higher operational costs only could pass a balanced 2013 budget recently by severely cutting some budgets, such as those for bridge repair and flood control work, and borrowing to make up the difference.
Lake officials said they couldn't cut deeper and retain essential government services, and Commissioners Scheub and Fran DuPey, D-Hammond, said the alternative of passing a local option income tax is something they refuse to countenance.
Bucko said, "I have been reading in your newspaper (The Times) about their need to finance municipal debt, and I contacted them."
He said he may be able to offer Lake County a favorable interest rate and received in return an investment yield from Lake's loan repayment that is greater than the private bond market can offer.
"If it works out well for us as an investment and for them as a borrowing mechanism, then it's good for everybody," he said.
Bucko said Porter County already has provided loans to two Lake County school districts.