By Jon Seidel, Post-Tribune
jseidel@post-trib.com
GARY -- Shutting down Gary's city court and the Genesis Convention Center, laying off firefighters and eliminating other "cherished" services are among more than 100 initiatives offered by Gary's fiscal monitor in a report obtained Thursday by the Post-Tribune.
Philadelphia-based Public Financial Management also suggests using the Gary Sanitary District's tax revenue to supplement the city's general fund, leaving GSD to operate exclusively on user fees.
Overall, the state-mandated review of Gary finances found Northwest Indiana's largest city must swiftly shed its traditional spending methods to become a "leaner, more effective government" and survive beyond 2012 within the confines of new property tax caps.
"Gary's financial crisis did not arise quickly and will not be solved in short order," PFM wrote.
City Controller Celita Green declined to comment on the report Thursday. It arrived at City Hall and the Statehouse over the weekend, but its official release is not expected until later today. It has been delayed by the need for an "addendum" to correct and clarify some information.
However, the public can expect to see the original report in its entirety. It cost Gary taxpayers $320,000, and its goal is to offer a roadmap to help the city survive under the new tax caps. If the caps are fully implemented, PFM says there would only be enough revenue to pay the salaries, but not benefits, of police, fire and EMS workers.
Spending cuts plentiful
The caps were raised for local property owners in 2009 by the Indiana Distressed Unit Appeals Board, and PFM recommends two more years of higher tax caps for Gary. If the caps are placed in the state's constitution, as Gov. Mitch Daniels proposes, the DUAB would be powerless to raise them by 2012.
Gary is not necessarily bound by PFM's report, but the DUAB will look to it for guidance when making future recommendations for the city. Gary's next appeal to the DUAB will be made Jan. 6, and PFM representatives are expected to testify.
PFM notes in its report that its suggestions are "predominantly, but not exclusively, spending reductions." It says shifting GSD money to the general fund, which might require legislative approval, could create $5 million in additional revenue annually. It also recommends new fees for electrical service turn-on, fire reports and false fire alarms.
New and higher fees could be used to support the Hudson-Campbell Fitness Center, South Gleason Golf Course and the Genesis Convention Center. Each of these, which aren't considered self-sustaining, are offered up for privatization. In the case of the Genesis Center, closure is also suggested.
Immediate staff reductions aren't suggested for the Gary Police Department because a federal grant requires GPD to maintain its current staffing level until 2013. However, the Gary Fire Department would face a loss of 54 firefighters if the initiatives are followed, a drop of 22 percent from its 241 sworn positions. Fire station closures and consolidations are also recommended.
Monitor: Park the perks
Overall, PFM said Gary's operations "need greater direction." It says Gary should consider hiring a managing director or chief operations officer for $80,000 annually to coordinate major public services. This would leave Mayor Rudy Clay free to work on "strategic objectives and economic development initiatives."
PFM said Clay and the City Council should cut back drastically on long-held practices allowing elected officials to travel to seminars and use city-owned vehicles for personal purposes. Those policies have consistently drawn public ire.
"Training and professional development are important and desirable for governments that have financial resources," PFM wrote. "When a government consistently runs deficits and must curtail services to the public, however, less critical activities must be eliminated.
"The city should simply stop most discretionary spending and curtail or eliminate spending in categories such as conferences, travel, fuel allowances, take-home vehicles, and other benefits."
Employees not covered by unions should take a pay cut of 5 percent if they make more than $50,000, PFM said. Stipends for various board and commissions members, totaling $59,000 annually, should be eliminated.
Overall, PFM's initiatives set the stage for a scenario where Gary's overall revenue drops from $84.3 million in 2010 to $69.3 million in 2014. Property tax revenue would drop from $52.7 million in 2010 to $37.2 million in 2014.
PFM also said it found several individuals and organizations around the region willing to help Gary. Communication and community outreach could help develop a base of advocates, according to the report.
"Some do not feel welcome, others are not sure of the city's direction, and many express concern about a lack of transparency," PFM wrote.