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Gary school district requests additional state loan to meet operating expenses

Peggy Hinckley, the state-appointed emergency manager for the Gary Community School Corp., speaks last month to the Indiana Distressed Unit Appeals Board.

Dan Carden, The Times

INDIANAPOLIS — The Gary Community School Corp. has 535 fewer students attending classes compared to the prior academic year, according to preliminary student count data presented Wednesday to the Indiana Distressed Unit Appeals Board.

The pupil decline means the cash-strapped district will receive approximately $4.25 million less funding from the state, because education money in Indiana "follows the child."

That likely complicates the work of the district's state-appointed emergency manager to balance the badly out-of-whack Gary schools budget and begin paying off the district's more than $100 million debt burden.

But despite those challenges, MGT Consulting Group CEO Trey Traviesa said his team on the ground in Gary, led by emergency manager Peggy Hinckley, remains focused on turning the district around.

"We are as committed today on Day 72 as we were on Day 1," Traviesa said.

To that end, DUAB and MGT have agreed to a tentative contract. The details of the deal were not announced at the DUAB meeting, and DUAB officials said the contract's terms won't be made public until it is signed by the relevant parties.

However, it was revealed that MGT has created a wholly owned subsidiary, known as Gary Schools Recovery LLC, that will be the legal entity in charge of operating the school corporation in lieu of its elected trustees who were displaced by Senate Enrolled Act 567.

That law, enacted in April, also requires the emergency manager to hire for the district a chief financial officer and chief academic officer, with preference given to Gary residents.

Applications for those posts are available on the district's website at garycsc.k12.in.us. Interviews are expected to begin later this month.

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Dan is Statehouse Bureau Chief for The Times. Since 2009, he's reported on Indiana government and politics — and how both impact the Region — from the state capital in Indianapolis. He originally is from Orland Park, Ill.