Even with the help Gary requested from the Indiana Distressed Unit Appeals Board, the municipality would need to cut $17 million from its bottom line to make ends meet, Gary Mayor Rudy Clay said Thursday.

In his annual State of the City address, Clay struck a chord, at times bleak and at times optimistic, when describing the fortunes of the largest and most beleaguered city in Northwest Indiana.

"Our mettle is being tested," Clay told the crowd gathered for his address at Gary's Genesis Convention Center. Clay said officials would need to make painful and important decisions this year regarding city spending to avoid hitting "a financial iceberg."

Clay said Gary faced many of the same challenges as other urban areas in 2009, including dwindling revenue and increased demand in services from residents. In 2009, Gary was the only Indiana city to go before the state's Distressed Unit Appeals Board, seeking refuge from statewide property tax caps that are sapping scores of municipal budgets.

Still, Clay said bright spots for the city's future remain, including initiatives by U.S. Sen. Evan Bayh and the U.S. Department of Housing and Urban Development to help Gary tear down blighted buildings and start over with clean lots ready for development.

He also touted the Chicago-based Metropolitan Planning Council's efforts in attempting to bring in development and municipal finance experts from throughout the country to design a clearer economic road map for Gary. The Times has partnered with MPC in this endeavor.

Clay also cited a number of businesses that opened in Gary recently, including a Little Caesars Pizza restaurant employing 28 people.

Clay admitted that many people chuckle when he mentions the opening of the pizza franchise as a win for Gary.

"But the people who got those 28 jobs didn't chuckle," Clay said.

Clay also hailed plans for a $7.2 million mixed-use facility for storefronts and housing at the corner of Seventh and Broadway as a major win for the city.

And he underscored the need for all Gary citizens to fill out U.S. Census Bureau forms that will be arriving in the mail this year. The federal government will use the forms to determine municipal populations and ultimately to calculate many federal grants and other funding.

"Everyone should be counted, and everyone should be registered to vote," Clay said. "They go hand in hand."