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Peggy Hinckley

Gary schools emergency manager Peggy Hinckley meets with the public Sept. 28 at Trinity UCC Church, 1276 W. 20th Ave., Gary.

The Gary Community School Corp. emergency manager firm can earn up to $3.9 million during the current academic year, and similar amounts in subsequent years, if the school district meets specific performance targets.

The tentative contract between Gary Schools Recovery LLC, a subsidiary of MGT Consulting Group, and the Indiana Distressed Unit Appeals Board sets a $3.25 million base payment for the 2017-18 school year.

Another $550,000 in incentive pay also is available if Peggy Hinckley, and her Gary Schools Recovery team, deliver a viable structural deficit reduction plan by Jan. 31, 2018, improve student achievement on state tests by 10 percent, resolve specific audit findings and establish internal controls for major financial systems.

According to the contract, the emergency manager firm already has earned a $100,000 bonus for achieving a "smooth start" to the school year by ensuring classes started on time in clean, safe and well-supplied buildings with minimal bus transportation issues.

For the 2018-19 school year, the base amount paid by the state to the emergency manager firm will decline to $3 million, but with the possibility of another $800,000 in incentive payments.

Should the emergency manager firm continue supplanting the elected school trustees for a third consecutive year, the manager will receive $2.75 million and up to $950,000 in incentives, subject to appropriations by the General Assembly.

The agreed contract still must be approved by the State Budget Agency, Department of Administration and the attorney general.

Gary is the first school district taken over by the state after operating for years with an unbalanced budget and racking up more than $100 million in debt.

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Statehouse Bureau Chief

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.