GARY — Mayor Karen Freeman-Wilson has offered her vision to get control over a $17 million structural deficit and put city government on stable, financial footing.
Through a combination of aggressive permit and licensing fee collections, department consolidation, revenue generators and economic development, she said she hopes city government can match spending levels with revenue in due time.
"Yes, we have challenges, but there is a plan to address those challenges. And we are committed to making this plan work," Freeman-Wilson told a crowd of about 50 people in attendance at ArtHouse: A Social Kitchen.
The mayor’s financial presentation essentially kicked off Gary’s budget approval process. According to state law, municipal budgets are due to the state for review by Nov. 1.
Revenue vs. spending
The city spends a little more than it takes in every year, Freeman-Wilson said. In 2017, the city spent about $124.6 million, but only took in $110.9 million in revenue, including $26.2 million in property taxes and about $9.5 million in local income taxes.
City government wages and salaries account for $42.8 million in 2017 expenses. Of that, about $27 million goes towards police and fire. Capital projects and health insurance accounted for about $12.1 million and $14.3 million, respectively.
Freeman-Wilson said the city could save $3.24 million annually if officials were to cut down on professional service contracts, centralize the procurement and purchasing departments, consolidate other departments, reduce footprint of city-owned buildings and change the city's employee healthcare plan.
She told The Times she said she is not considering layoffs at this juncture as part of department consolidation.
"It means people may be reassigned," she said.
Streamlining the city’s permit process will not only save the city money but also make doing business in Gary easier.
“You’ll be able to get everything in one place. General business licenses. Special business licenses. Special event permits. Pet licenses,” she said.
About $640,000 could be added to the city’s annual revenue by more aggressively collecting licensing and permit fees, and $800,000 from fees associated with outstanding municipal or code enforcement tickets. In all, Gary has about 1,200 businesses operating without proper licensing or permits.
A change in personnel policies could also save the city an estimated $200,000 annually, she said.
"I'll give you an example. Extended sick leave. The fact that it exists (in Gary's policy) is just not consistent with what they do in other cities," Freeman-Wilson said after her presentation.
A hiring freeze is underway, which equates to $125,000 of savings per pay period, she said.
Despite progress, the city continues to struggle with property tax collections due to population losses, inability to collect on unclaimed estate properties and from property owners that outright ignore their tax bills after purchasing properties for cheap at tax sales or auction.
“(The bottom feeders) are holding onto (these properties) with the hope someone will want to develop and get a big payday,” Freeman-Wilson said. “We are trying to address the work of those serial tax delinquents.”
For years, the city has routinely relied on inter-fund loan borrowing and tax anticipation warrants, or temporary loans, in light of distribution delays and declining values, to make due.
Gary’s outstanding debt is down to $26.2 million from $43.1 million in 2012, but there’s much work left to do, she said.
“This is a proposal from the executive branch. We propose it, and the council, they have the final word," Freeman-Wilson said.
During a Q&A after her presentation, Freeman-Wilson called the Gary/Chicago International Airport a big revenue-generator for the city.
One attendee, Carolyn McCrady, an activist from Gary, shot back, saying the mayor has been complicit with the Gary Jet Center contracting with the U.S. Immigration and Customs Enforcement to deport undocumented immigrants.
"It pains me to know that the Jet Center is getting money for the suffering of people," McCrady said.
The mayor responded by saying that while her administration may not agree with ICE and the Gary Jet Center's operations, the deportations are legal.
"I’m not denying the validity of your point. Nobody is pleased deportations are occurring at the airport. But they are a part of legal activity of a fixed-based operator at the airport," she said.