In what has become an annual practice for Gary municipal government, the city will take out loans to ensure it has enough money this year to meet its financial obligations for retired police officers and firefighter pensions.
The Common Council on Thursday voted 8-0, with Councilwoman Carolyn Rogers, D-4th, absent, for the issuance of revenue anticipation notes from the Hammond Local Public Improvement Bond Bank.
Those notes will provide municipal government with $4.1 million total — $2.3 million of which will be used to make payments to maintain the police pension program and the remaining $1.8 million for the firefighter pension program.
Indiana state government is expected to make payments to Gary in July and September that will provide the city with the money needed for 2018.
But Dayna Bennett, the chief of staff to Mayor Karen Freeman-Wilson, said the city really can’t wait so long into the year before needing money for the pension programs.
She said the loans from the bond bank will be repaid in full in October.
The interest rate the city will have to pay on the loans is not yet set, although the agreement approved Thursday by the council says it will not exceed 6 percent.
While Bennett said in recent years, the interest rate has ranged from 3-4 percent, with last year’s loans being just over 3 percent interest.
Gary residents who attended Thursday’s Common Council session, held at the Genesis Convention Center due to a leaking roof in the council chambers, were disappointed the city would once again resort to loans to fulfill its financial obligations.
Council President Ronald Brewer said people will see Gary make harsh spending cuts in coming months, but said. “We can’t cut our way out of our financial problems. We’re going to have to find ways to grow our (local) economy.”
The loans were not the only adjustments to the 2018 calendar year budget. Five other ordinances approved by the Common Council involved making changes.
Those include adjusting salaries to be paid to the Public Works deputy director from $40,000 to $65,000, while also creating a day shift manager’s position at a salary of $40,000. Also, several part-time custodian positions at $12,110 apiece would be merged into a full-time position at $40,220.
Bennett said that will allow for more work to be done by the full-time staffer in-house, rather than having to contract maintenance jobs out to private firms.
In the Police Department, a crime technician position will see its salary reduced from $30,000 to $27,500.
Another ordinance made cuts to assorted printing expenses city government to come up with $10,174 in the budget that was needed to cover overtime expenses for city workers who kept city streets clean during recent snowstorms.
Gregory Tejeda is a freelance reporter for the Post-Tribune.
