a financial plan for gary, indiana -...
TRANSCRIPT
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A FINANCIAL PLAN FOR GARY,
INDIANA
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Tonight’s Agenda…
City of Gary – At a Glance
Review of History
Review of Plan
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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
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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.
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
1990 2000 2010
Population
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$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)
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Primary 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
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Property tax revenue is down 5 percent from 2012, and 16 percent 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
Mill
ion
s
PROPERTY TAX REVENUES (in Millions)
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Casino revenues have fallen 35 percent since 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
Mill
ion
s
CASINO REVENUES (in Millions)
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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
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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.
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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.
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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.
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Over half of expenses go towards employee wages, health insurance, and infrastructure
Wages & Salaries; $42.8M
Health Insurance;
$14.3MCapital 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
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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
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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
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UNAPPROVED TRANSFER OF EMS FUNDS -$8,160,403.37
USE OF DOLLARS AMOUNT PERCENTAGE
GENERAL FUND PAYROLL
$4,527,720.79 55%
BLIGHTELIMINATION
$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%
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$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
Mill
ion
s
REVENUES VS EXPENSES (in Millions)
Expenses
Revenues
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COST REDUCTIONSREDUCTION$3,415,000
VALUE TARGET DATE
Centralization of Procurement/Purchasing
$190,000 1/1/19
Review of PersonnelPolicy
$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
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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
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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
NEWDEVELOPMENT
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
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MYTHS
• GARY RECEIVES $200,000,000 IN REVENUE ANNUALLY
• THE MAYOR HAS AN UNLIMITED PROFESSIONAL SERVICES FUND
• HIGH SALARIES DRIVE DEFICIT