BEDFORD — Sen. Eric Koch is still working to free up funds for cash-strapped cemeteries.
The issue caught Koch’s attention in 2017 when the Green Hill Cemetery Association reached a financial tipping point caused by low interest rates paid on the cemetery’s Perpetual Care Fund that were no longer keeping up with the cemetery’s expenses.
To combat the issue, Koch pitched a bill during the 2018 session that allows a cemetery owner to access more lucrative investment opportunities, so the principal of the Perpetual Care Fund would yield higher dividends.
It also took out the cut-off date for cemeteries, opening them up to make an application to the emergency Consumer Protection Fund through the state. It increased the cap on the Consumer Protection Fund to $500,000 from $250,000, and it gave township trustees the option of budgeting to help struggling cemeteries. That bill became law as Senate Enrolled Act 246.
But many smaller cemeteries have endowments in the $200,000-$400,000 range, said Indiana Cemetery Association Executive Director Casey Miller. With interest rates hovering about 1 percent, income from those smaller Perpetual Care Funds are simply too low to fund maintenance needs.
Enter Senate Bill 381, which approaches the cemetery funding problem from a different angle, according to Koch, who authored the legislation. The proposal currently awaits a hearing in the Judiciary committee.
“Cemetery perpetual care funds tend to be managed to produce as much interest as possible, but without much concern for making the principal grow,” said Koch, who noted cemetery boards are currently prohibited from using any amount of principal to meet maintenance expenses.
“SB 381 would allow a cemetery perpetual fund to be transformed into a unitrust. This would allow a certain percentage (3-5 percent) of the fair market value of the assets in the Perpetual Care Fund to be withdrawn annually for maintenance and other cemetery needs.”
Miller said SB 381 enhances SEA 246 by giving cemeteries a choice, depending on their needs.
“What it does is it gives cemeteries an option,” Miller said. “It allows them to draw 3 to 5 percent of the principal of the fund, but you can’t do both — it’s an either/or situation. ... SB 381 enhances SEA 246.”
Koch said he believes the bill gives cemetery boards an incentive to invest in order to increase the overall value of the fund instead of focusing exclusively on maximizing the interest.
“This would be better all around,” the senator said. “... The principal of the Perpetual Care Fund would grow more rapidly, allowing cemeteries to use 3 to 5 percent of the fair market value of the Perpetual Care Fund annually would give them more money for meeting maintenance costs, and the growth of the Perpetual Care Fund assets due to the change in fund management would tend to keep cemeteries from defaulting to the care of their township trustees.”
In the case of Green Hill, at no time was the cemetery ever broke or bankrupt. Green Hill has between $300,000 and $400,000 in its Perpetual Care Fund, but the state’s cemetery code currently prohibits cemeteries from spending from the principal, and before SEA 246, the law only allowed cemeteries to use interest dividends for operations and maintenance. In Green Hill’s case, the dividends weren’t enough to keep up with mowing costs.
Green Hill is slowly recovering from its financial woes. Last year, the board installed a columbarium that will hold the cremains of 48 people. With more than 50 percent of all deaths ending in cremation, Miller said columbariums are a good alternative for cemeteries that are running out of ground plots. Green Hill also entered into a mowing contract with the city of Bedford that provides the cemetery with $63,000 annually in exchange for mowing the city-owned Beech Grove Cemetery.