Porter County foundation discusses options to finance airport request, no loan approved

The foundation's board discussed whether to provide up to $5 million to the local airport but did not approve any loan or binding action.

The discussion centered on three options presented by Attorney Scott McClure: proceed under a home‑rule argument despite statutory limits; create a revolving loan fund under existing statute (described in the meeting as “5-1-14”); or seek legislation to explicitly allow the foundation or county to make such loans. “I don’t think the formal interpretation of marketable securities is advisable,” Attorney Scott McClure said, arguing that the foundation statute’s fiduciary language and investment rules limit direct lending under current law.

Why it matters: board members said a locally issued loan could save municipalities on underwriting and legal costs and keep interest paid to local taxpayers, but they also flagged legal, fiscal and practical barriers. The board discussed how any transfer from the foundation would trigger internal voting and statutory procedures and how funds sourced from Local Income Tax (LIT) would impose further constraints.

Board members and staff emphasized legal risk and operational capacity as constraints. The board’s president described a “home rule” approach as risky because it could conflict with the foundation’s fiduciary standards and the foundation’s investment consultant would likely object. McClure outlined the revolving loan option as an existing statutory mechanism that would require moving foundation assets into a revolving fund and setting loan terms; doing so would, in the attorney’s words, likely require a 10‑vote approval because the foundation currently holds the bulk of available capital.

Members discussed practical details and tradeoffs, including whether principal taken from the foundation could be required to return automatically when repaid. McClure said the typical process for returning funds to the foundation would require following the same formal steps used to remove funds, so “once it’s out, it’s out,” and returning principal would require additional approvals. Board members also noted that the foundation’s long‑run withdrawal policy (the discussion referenced 3.25% versus 5% withdrawal scenarios) and a 20‑quarter smoothing average are important to any decision about taking principal.

Several board members urged preparing concrete financial scenarios for Capital Cities, the foundation’s investment consultant, to model: how much principal could be moved without harming operating budgets, what the 20‑quarter average balance implies for sustainable withdrawals, and what short‑term versus long‑term tradeoffs would look like. “If we were at 3.25, that could be a viable option for a few years,” one member said while describing potential short‑term transfers of earnings rather than principal.

No vote was taken on any loan or statutory change. Several members recommended pursuing legislative language to create a clear statutory path and directed counsel and staff to draft possible statutory language and financial scenarios for future discussion. One member suggested engaging regional development authorities as an interim financing source while seeking state legislative changes.

Ending: The board closed the discussion without authorizing funds. Members asked counsel and Capital Cities to return with modeled scenarios and draft legislative language for subsequent meetings so the board can weigh legal risk, fiscal impact and administrative capacity before taking formal action.