(A) The Board of Commissioners determines that it is of public benefit and use to establish a charitable nonprofit foundation for the deposit of a portion of the hospital proceeds. The name of the foundation shall be the Legacy Foundation.
(B) The Board of Commissioners adopt I.C. 36-1-14-5 as the controlling statutory provisions under which the Legacy Foundation will be established.
(C) The Board of Commissioners approve and adopt the Legacy Foundation Document as the basic charter for the Hospital Sale Proceeds Legacy Foundation, as set forth in division (E) below.
(D) The Board of Commissioners and the County Council shall designate, by resolution on an annual basis, the amount of hospital proceeds that are deposited to the Legacy Foundation.
(E) This section shall govern the conduct of the affairs of the county’s Legacy Foundation (the “Foundation”), if, and when, any money or property is transferred to the Foundation in accordance with I.C. 36-1-14-5.
(1) Governing law. The affairs of the Foundation shall be conducted through a Board of Trustees, as required by I.C. 36-1-14-5, and as the same may be hereafter amended in a manner made applicable to the Foundation, and pursuant to the terms of this section, as in effect from time to time.
(2) Board of Trustees. The Board of Trustees shall be comprised of the following five members:
(a) One member of the County Council, approved by the County Council and appointed by the President of the County Council;
(b) One member of the county executive, approved by the county executive and appointed by the president of the county executive;
(c) One individual who has at least five years of experience as a certified public accountant, a financial adviser, a banker, or an investment manager, approved by the County Council and appointed by the President of the County Council;
(d) One individual who has at least five years of experience as a certified public accountant, a financial adviser, a banker, or an investment manager, approved by the county executive and appointed by the president of the county executive; and
(e) The County Treasurer.
(3) Meetings of the Trustees. Meetings of the Trustees required by I.C. 36-1-14-5(j)(8) shall be held in conjunction with the regular meetings of the fiscal body held in February, May, August, and November, unless the Trustees, acting in accordance with I.C. 36-1-14-5(j)(8), shall determine a different date or place. A special meeting of the Board of Trustees may be called by the President or by request of three or more Trustees.
(4) Election. The Board of Trustees shall annually elect officers for the offices of Vice Chairperson and Secretary. Pursuant to I.C. 36-1-14-5(g), the County Treasurer shall serve as the Chairperson of the Board of Trustees.
(5) Term.
(a) The term of each elected trustee shall coincide with the individual’s term of office as a qualified member of the county’s legislative body, fiscal body, and Treasurer.
(b) Non-elected members of the Board of Trustees shall be appointed pursuant to I.C. 36-1-14-5(f)(3) and I.C. 36-1-14-5(f)(4) during the annual organizational meetings respectively held by the county’s legislative body and fiscal body.
(6) Notice of meetings. Notice of meetings shall be provided in accordance with the State Open Door Law pursuant to I.C. 5-14.5-1 et seq.
(7) Quorum. A quorum of the Board of Trustees at any regular or called meeting shall be a majority of the duly qualified members of the Board of Trustees.
(8) Decisions of the County Council and Board of Commissioners. The County Council and the Board of Commissioners shall perform the following actions:
(a) Formulate an investment policy that ensures that money held by the foundation is invested in accordance with I.C. 30-2-12;
(b) Establish a policy pursuant to I.C. 36-1-14-5(i)(2) concerning distributions of income and principal from the foundation. “Policy” shall be broadly interpreted to include use of the funds as jointly determined by resolution of the Board of Commissioners and the County Council;
(c) Determine the amount of the proceeds from the sale of the county hospital that shall be transferred by the County Fiscal Officer to the Legacy Foundation;
(d) Establish a policy pursuant to I.C. 36-1-14-5(j)(4) et seq. to set the annual rate of spending from the foundation; and
(e) If the County Council and county executive wish to access an amount from the principal amount of the donation that is more than the amount available under clause I.C. 36-1-14-5(j)(6)(A), but not more than 50% of the principal amount of the donation, the Board shall proceed as follows:
1. Five of the seven members of the County Council and a majority vote of the county executive at a joint meeting of the County Council and the county executive must vote in favor of accessing the principal amount of the donation.
2. The votes of the County Council and the county executive at the joint meeting must occur on two occasions, as provided in item division (E)(7)(e)3. below;
3. The votes described in divisions (E)(8)(e)1. and (E)(8)(e)2. above must occur on two occasions that are at least one year apart, but not more than two years apart; and
4. The votes described in divisions (E)(8)(e)1. and (E)(8)(e)2. above must be based on identical language in an ordinance that sets forth the approved use of the funds accessed from the principal amount of the donation. If the language in an ordinance under this clause is different from the language used in the first vote, the process to vote on accessing the principal amount of the donation must start over.
(9) Decisions of the Trustees.
(a) The Board of Trustees shall contract with a financial institution eligible to receive public funds of a political subdivision under I.C. 5-13-8-1 to assist the Board of Trustees in its investment program. Additional decisions requiring the approval of the Board of Trustees of the Foundation shall be made in a manner herein-below described in this division (E)(9).
(b) The approval by the Trustees of any expenditure or transfer of money described in a majority vote of the Trustees shall also, within the vote of the Trustees, require the affirmative vote of the Trustees representing each of the following:
1. The fiscal body; and
2. The legislative body.
(10) Principal deposit. The principal amount of the Foundation (“principal deposit”) should be comprised of the donation by the county, and donations, gifts, or money received from private sources. The principal of the Foundation shall be deposited with an investment firm under an investment agreement. The principal deposit may only be spent pursuant to the requirements of I.C. 36-1-14-5(j)(4), I.C. 36-1-14-5(j)(5), and I.C. 36-1-14-5(j)(6).
(11) Investment income. The investment income may be held by a trust company, deposited with a bank, or deposited with the County Treasurer.
(a) Deposits with the County Treasurer will be held in a restricted fund, unless otherwise determined by the Board of Trustees.
(b) Investment income may only be used for the purposes of the county. Investment income may be pledged to expenditures approved by the Board of Trustees, including debt service on obligations issued by the county.
(c) Expenditures of investment income shall be limited to investment earnings up to 5% of the beginning balance of the principal deposit at the beginning of the calendar year. Further, funds shall be distributed as directed by resolution of the Board of Commissioners and the County Council by resolution pursuant to division 8(E)(8)(b) above excepting those funds restricted by contractual obligation of the Board of Trustees as described in I.C. 36-1-14-5(h).
(12) Investment firm. The investment firm shall designate a trust company for the deposit and security of the principal deposit of the Foundation funds and any balance of investment income that has not been expended or transferred to the county. The selection of the investment firm shall be based on the stability of the institution, handling of similarly sized trust deposits, fees, and experience.
(13) Investments.
(a) The Foundation shall have the right to retain all, or any part of, any securities or property acquired by it in whatever manner, and to invest, sell, and reinvest any securities or property held by it, as determined by the Board of Trustees, except to the extent that responsibility for making such determination is delegated to a committee of the Board of Trustees or to a third party investment advisor.
(b) Investments may be made in any legal or marketable securities after the adoption of an investment policy statement, as provided by I.C. 36-1-14-5(m).
(14) Investment advisor.
(a) The Board of Trustees shall contract with a competent investment advisor to advise the Board of Trustees as to investment strategies and procedures.
(b) The selection of the investment advisor shall be made after solicitation through a request for proposals submitted to three or more entities conducting services of an investment advisor service based upon those services to similarly sized trusts.
(15) Contracts.
(a) The Board of Trustees may authorize any officer or agent to enter into any contract or execute and deliver any instrument in the name of, and on behalf of, the Foundation, and such authority may be general or confined to a specific instance; and unless so authorized by the Board of Trustees, no officer, agent, or employee shall have any power or authority to bind the Foundation by any contract or engagement, or to pledge its credit, or render it liable pecuniary for any purpose or to any amount.
(b) The Board shall comply with the procedures described in I.C. 36-1-21 respecting contracting with the Foundation.
(16) Compliance with tax laws. The following provisions shall apply to the conduct of the affairs of the Foundation.
(a) The Foundation shall be operated exclusively for charitable nonprofit purposes.
(b) No part of the net earnings of this Foundation shall inure to the benefit of any private person or any other individual in contravention of I.R.C. § 501(c)(3), as may be in effect from time to time. Within the meaning of I.R.C. § 501(c)(3), no substantial part of the Foundation’s activities shall consist of carrying on propaganda, or otherwise attempting to influence legislation.
(c) The Foundation shall not participate in, or intervene in, any political campaign on behalf of, or in opposition to, any candidate for public office (including the publishing or distributing of statements). Notwithstanding any other provision hereof to the contrary:
1. No power given to the Trustees, or accorded to Trustees generally, shall be construed to enable the Trustees or any other person to purchase, exchange, or otherwise deal with, or dispose of, the Foundation property, other than in furtherance of its charitable purposes as set forth in Section 4(a) of the state statute, for less than an adequate consideration in money, or money’s worth, or shall permit the Trustees or any contributor to the Foundation to borrow any Foundation property, directly or indirectly;
2. No person other than the Trustees shall have, or exercise, the power to direct the voting of any stock or other securities of the Foundation; to control the investment of the Foundation, either by directing investments or reinvestments, or by vetoing proposed investments or reinvestments; or to reacquire or exchange any Foundation property by substituting other property of an equivalent value; and
3. The Trustees shall not use the Foundation property to pay premiums on insurance on the life of any Trustee, or any contributor to the Foundation, or for his or her spouse; or to provide support or maintenance for any person whom any Trustee or any contributor to the Foundation is legally obligated to support.
(d) Any restriction or declaration required by the code to be contained in the organizing documents of a Foundation exempt from tax under I.R.C. § 501(c)(3) that does not appear herein is hereby incorporated by reference.
(e) Notwithstanding anything to the contrary contained in this section, in the event and if for any reason the Foundation is classified as a private foundation, as that term is defined in I.R.C. § 509(a), then, and in such event, and in order to comply with I.R.C. § 508(e) and for so long as the Foundation may be deemed to be a private foundation, the powers and activities of the Foundation in accomplishing the foregoing purposes shall be specifically subject to the following requirements, restrictions, and limitations:
1. The Foundation shall engage in no act of self-dealing as defined in I.R.C. § 4941(d);
2. The Foundation shall distribute so much of its income, and, if necessary, its principal, for each taxable year, at such time, and in such manner, as to prevent the imposition of the tax for failure to make minimum distributions imposed by I.R.C. § 4942;
3. The Foundation shall retain no excess business holdings as defined in I.R.C. § 4943(c);
4. The Foundation shall make no jeopardizing investment that will subject it to tax under I.R.C. § 4944; and
5. The Foundation shall make no taxable expenditures as defined in I.R.C. § 4945(d).
(Ord. 2018-8, passed - -)