NEW ALBANY — It will only take a tweak to correct, but a potential change in state guidelines could provide millions of dollars for Floyd County.
State Rep. Ed Clere, R-New Albany, and State Rep. Karen Engleman, R-Corydon, will seek to modify the 2018 legislation establishing procedures for legacy foundations when the Indiana General Assembly convenes in January.
If approved, the spend rate collected annually from a legacy foundation investment won’t just be based on the principal. Instead, the spend rate percentage will include the gains on the principal captured through investments.
So instead of Floyd County receiving a 5% spend rate for community grants annually based on the $13 million principal it invested as part of the sale of Floyd Memorial Hospital, it will garner a percentage factored on the $14.5 million the account holds.
“So you’re talking over a period of time, millions and millions of dollars going back into the community through grants,” said Brad Striegel, president of the Floyd County Council.
The council unanimously approved a resolution Tuesday asking for the state legislature to make the change. Striegel said the Floyd County Commissioners will likely pass a similar resolution next week.
“From a local standpoint, we should have unanimous support for this change,” he said.
Clere said Wednesday that he was surprised to learn that the legacy foundation measure had been interpreted to not include investment gains, but he added he believes the language will be cleared up in the upcoming session either through a standalone bill or as an addition to other legislation.
“It’s a simple fix, but it has pretty significant consequences in terms of the spend rate, especially over time,” Clere said.
If years were to pass without the county capturing investment gains as a portion of the spend rate, Clere said “it would make a big difference in the funds available for the foundation to grant.”
The Floyd County Legacy Foundation’s initial grant cycle concluded this year, as the board announced $240,000 in grants to area organizations and nonprofits funded through the spend rate allocation.
The change would have an impact on that initiative, but would also potentially bolster funding for another recent investment made by the county.
The commissioners and council agreed this year to pay off a bond anticipation note for renovations to the Floyd County Jail with about $15 million in hospital sale proceeds. As part of the agreement, the sides decided to invest another $14.7 million in a second legacy foundation account that will be dedicated to infrastructure improvements.
“So you’re talking about expanding broadband internet, paving roads, fixing bridges, upgrading equipment — these things need to be addressed long-term,” Striegel said.
Through the jail payment, the investments in the legacy foundation and an initial $70 million investment in the Community Foundation of Southern Indiana, Striegel said all of the hospital sale proceeds have been designated for a use or deposited into a foundation.
The Community Foundation of Southern Indiana investment had grown to about $74 million through October.
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