Gary, Ind. Mayor Cites Network Financial Model as Key to Future Success
In the wake of major financial decisions and an imminent change in Finance Department leadership, the City of Gary applied to the National Resource Network (the Network) in 2017 seeking assistance in developing a multi-year financial plan to give them the tools they need to manage their budget effectively and proactively.
The City’s 2017 application served as the entry point for a year-long partnership between the City and the Network. Together, the Network agreed to assist the City’s new Controller transition into her role and ultimately provided the City with an operational assessment of the Finance Department in August 2018. The Network’s report outlined a number of recommendations to improve processes and the department’s organizational structure.
Upon conclusion of the Finance Department report, the Network extended the partnership to assist the city by creating a multi-year forecast of the city’s General Fund. This model provided two key insights to the city. First, it established a baseline projection that reflects Gary’s current fiscal condition, absent significant policy changes. But it also allowed for city leadership to make informed decisions on corrective actions to change the city’s anticipated trajectory and structural budget gaps. The dynamic forecast was built to be easy to update and serve as an essential tool for city decision-makers to balance policy and operations goals in future years.
The Network completed their work with the City in February 2019. The Network’s analysis found that without corrective action, the City of Gary, is projected to end FY2025 with a General Fund deficit of $7.6 million and a cumulative deficit of $46.9 million. Knowing they are facing serious challenges, the City developed a list of initiatives to close current and future year deficits and free up funds to make strategic investments.
When presenting her State of the City Address in February 2019, Mayor Karen Freeman-Wilson acknowledged that the city’s crushing structural deficit is no easy fix. But she also stressed a reason for residents and business leaders to be hopeful: “The good news is we have a plan. We’re making five-year projections, which is something new for us.” The mayor said that the city has “an invaluable tool” in the Network’s five year forecast model, and believes it will be a key resource as the city focuses on reducing its debt and generating revenue with the goal of balancing its budget by 2021.