MARC CHASE: Council president thumbs nose at struggling Gary by not paying taxes

Gary Common Council President Ronald Brewer

GARY — City Council members will consider a pair of ordinances this month designed to help the cash-strapped government meet its police and fire pension obligations and to cover payroll and health insurance costs. 

One ordinance was assigned to the council’s Finance Committee meeting, scheduled this week. That would authorize the city to borrow up to $4.1 million against anticipated future revenue to meet its financial obligations toward its police and fire pension funds.

The ordinance states the City Council has determined there is an ”insufficient amount of money” in the police and fire pension funds to meet the current obligations, and that “an emergency exists to borrow money.” The interest rate will not exceed 8 percent, the ordinance states.

The Gary City Council last week assigned a second ordinance to the Finance Committee authorizing the transfer nearly $4.5 million in local income tax dollars — now earmarked for economic development — to the General Fund to cover payroll and health insurance.

As the 2018 fiscal year wound down this past October, Gary Mayor Karen Freeman-Wilson proposed to the Council that the city sell and then lease back its public safety building as a last-ditch effort to stay afloat. The move would allow the city to borrow up to $40 million, giving officials time to implement a financial recovery plan, she said.

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At the time, the latest cash flow analysis showed the city would be broke by Oct. 31.

It’s now February and the sale/leaseback deal still has not been finalized.

While the city continues to do what it must to meet payroll, Freeman-Wilson said at last week's council meeting deciding which vendors get paid on time and which payments become delinquent is a constant struggle for the administration.

The mayor could not be reached for further comment.

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