A FINANCIAL PLAN FOR GARY, INDIANA Tonights Agenda City of Gary - - PowerPoint PPT Presentation

A FINANCIAL PLAN FOR GARY, INDIANA

Tonight’s Agenda…

 City of Gary – At a Glance  Review of History  Review of Plan

Measuring the Tax Burden Shift

According to the Indiana Legislative Services Agency, there was a decrease in Lake County Industrial property taxes of $109.4MM and an increase in the Lake County Residential Property Tax Levy of $95MM between FY 2002-2003.

Sources: Indiana Legislative Services Agency

Population and Property Taxes

2003

• Indiana state passes new tax laws that shift

City’s tax burden from industrial base to residential base as a means to encourage industrial businesses to remain in Indiana.

2008

• Property Tax Caps Approved -State

legislature passes laws to limit annual taxes

2009

• Distressed Unit Advisory Board (DUAB)

Relief Granted to Gary – Gary is the only city in Indiana to take advantage of DUAB status.

2012

• DUAB Relief Terminates – Gary must

manage budget without direct relief from tax caps.

20,000 40,000 60,000 80,000 100,000 120,000 140,000 1990 2000 2010 Population

$2.17B $2.06B $2.19B $2.17B $1.98B $1.89B $1.7B $1.8B $1.9B $2.0B $2.1B $2.2B $2.3B

2012 2013 2014 2015 2016 2017 ASSESSED VALUES (in Billions)

Primary ry sources of revenue include property and other taxes, , grants, and casino revenue

Property Taxes; $26.2M Other Taxes; $23.5M Casino; $14.0M Grants; $22.1M Permits, Licenses & Fines; $1.5M LIT; $9.5M Wheel Tax; $1.3M Charges for Services; $5.2M Other Receipts; $7.7M

2017 Revenues (in Millions); Total: $110.9M

Property tax revenue is down 5 percent fr from 2012, , and 16 percent fr from 2014

$27.7 M $26.5 M $31.4 M $30.2 M $28.4 M $26.2 M $0M $5M $10M $15M $20M $25M $30M $35M

2012 2013 2014 2015 2016 2017 PROPERTY TAX REVENUES (in Millions)

Casino revenues have fallen 35 percent since 2012 2012

$21.4 M $19.1 M $16.4 M $15.9 M $14.8 M $14.0 M $0M $5M $10M $15M $20M $25M

2012 2013 2014 2015 2016 2017 CASINO REVENUES (in Millions)

Local Road & Street 1,182,005 MVH 3,040,538 LDA Casino 7,178,378 TIF 4,531,635 ABC Excise Tax 30,921 Cigarette Tax 53,254 Financial Institution Tax 47,832 Aircraft Tax 1,540,713 Commercial Excise 389,757 ABC Gallonage 178,436 CEDIT 4,571,000 Building Community 73,784 (Police community service)

• Nat. Wildlife

187,719 (Grant Green Urbanism) Equal Opportunity Commission 27,300 Emergency Shelter Grant 249,149 (Grant Battered Women Shelter) Redevelopment Operating 104,663 23,387,084

OTHER REVENUE

• 1. Consolidated Area (Fund 823) – encompasses the majority of

the Downtown Gary CBD and finances redevelopment projects therein including the 504 Broadway bank building rehabilitation, various demolition projects, City Hall repairs, Genesis Center and Hudson-Campbell modernization projects

• 2. Madison Townhomes (Fund 824) – finances a bond for

affordable housing on Madison Street

• 3. Lakefront (Fund 826) – finances improvements to the areas

adjacent to GYY and the industrial footprint, including infrastructure improvements and site preparation

• 4. Midwest Center (Fund 828) – intended to finance

infrastructure improvements in the industrial footprint adjacent to I-65 at 15th Avenue

• 5. Lancaster Dusable (Fund 830) – finances the bond for a

Lancaster Dusable project.

• 6. County Market (Fund 833) – finances the bond for a grocery

store project on 25th Avenue at Grant Street

• 7. Dalton Arms (Fund 834) – finances a bond for an historic

rehabilitation of a mixed-rate residential building on 5th Avenue in the CBD

• 8. Kenny’s Ribs (Fund 835) – finances a bond for an

Empowerment Zone restaurant project on 5th Avenue in the CBD

• 9. Truck City (Fund 838) – finances a bond for a commercial

truck dealership on 25th Avenue at Taft Street

• 10. Kirk Yard (Fund 854) – finances expansion of the Kirk Yard

rail yard south of U.S. Steel.

• 11. East Lakefront (Fund TBD) – finances infrastructure

improvements along US Highways 12 and 20, including the Lake Street commercial district, Miller train station, and Melton Road.

• 12. Northwest Indiana Industrial Complex (Fund TBD) –

potential to finance a bond associated with the creation of light industrial, warehousing, and logistics park along Chase Street at 11th Avenue.

Over half of f expenses go towards employee wages, , health insurance, and infrastructure

Wages & Salaries; $42.8M Health Insurance; $14.3M Capital Outlay; $12.1M Contract Maintenance; $7.0M Utilities; $5.0M Professional Services; $4.4M Debt Service Interest; $3.4M Supplies and Materials; $1.4M Judgements; $0.8M Gasoline; $0.8M Property Insurance; $0.8M Other Expenditures; $31.9M

2017 Expenses (in Millions); Total: $124.6M

Outstanding Debt 2012

Description $ Obligation Potential & Outstanding Judgments $3,800,00 Outstanding Insurance Claims & Utilities $2,200,000 Outstanding Bonds – 5th/3rd Bank (Excludes TAWS) $7,300,000 Intergovernmental Liabilities – GSD $7,800,000 Internal Liabilities $11,400,000 Regional Development Authority $6,800,000 TIF Repayment – Majestic Star $3,800,000 Total Debt $43,100,000

Gary’s Balance Sheet

Projected as of December 31, 2011

Outstanding Debt in 2018

Description $ Obligation Potential & Outstanding Judgments $1,000,000 Outstanding Insurance Claims & Utilities $2,764,000 Outstanding External Debt (TAWS & LEASES) $5,400,000 Intergovernmental Liabilities – GSD $5,000,000 Internal Liabilities $7,500,000 Regional Development Authority 11,325,000 Total Debt $26,239,000

Gary’s Balance Sheet

Projected as of December 31, 2011

UNAPPROVED TRANSFER OF EMS FUNDS - $8,160,403.37

USE OF DOLLARS AMOUNT PERCENTAGE GENERAL FUND PAYROLL $4,527,720.79 55% BLIGHT ELIMINATION $1,285,478.86 16% SPECIAL REVENUE $1,940,000 24%

GENESIS, REDEVELOPMENT,GLEASON, MARQUETTE, SECTION 108

$407,203.72 5% Total $8,160,403.37 100%

$132.2 M $133.3 M $148.6 M $124.2 M $127.5 M $124.6 M $126.1 M $121.5 M $131.5 M $110.1 M $108.4 M $110.9 M $0M $20M $40M $60M $80M $100M $120M $140M $160M

2012 2013 2014 2015 2016 2017 REVENUES VS EXPENSES (in Millions)

Expenses Revenues

COST REDUCTIONS

REDUCTION $3,415,000 VALUE TARGET DATE Centralization of Procurement/ Purchasing $190,000 1/1/19 Review of Personnel Policy $200,000 1/1/19 Change in Healthcare Plan $750,000 1/1/19 Reduction in Professional Service Contracts/Fees $150,000 1/1/19 Reduction in Footprint of City- Owned Buildings $1,500,000 1/1/20 Consolidation of Departments/ Functions $450,000 1/1/19

REVENUE GENERATION

SOURCE OF REVENUE DOLLAR VALUE TARGET DATE Legislative Changes $3,750,000 1/1/20 Licensing, Fees, & Permits $640,000 6/15/19 Collection of Outstanding Fines & Fees $800,000 1/1/20 Damage Recovery $100,000 1/1/20 Total $5,290,000

ONE TIME INFUSIONS

SOURCE OF REVENUE DOLLAR VALUE TARGET DATE SALE/LEASEBACK $25,000,000 9/1/18 SALE OF SURPLUS PROPERTY $2,100,000 1/1/19 NEW DEVELOPMENT TBD 1/1/20 PROPERTY TAX AMNESTY TBD 7/1/19 HIRING FREEZE $125,000 PER PAY PERIOD CURRENT COURT AMNESTY TBD 9/1/18

MYTHS

• GARY RECEIVES $200,000,000 IN REVENUE ANNUALLY
• THE MAYOR HAS AN UNLIMITED PROFESSIONAL SERVICES FUND
• HIGH SALARIES DRIVE DEFICIT