City controller asks council to authorize rollover of 2024 interfund loans amid audit findings

City Controller Salita Green told the Gary City Finance Committee that the administration is asking the Council to amend CPO 2025-12 to authorize the rollover of temporary interfund loans due between City of Gary funds for 2024.

“This was submitted in November, and we have since paid off additional loans,” Salita Green said, describing a schedule the administration provided that shows which loans were repaid and which balances remain.

The amendment would formally roll over loans that are not repaid within 18 months, Green said, a step she described as addressing a record-keeping requirement that has led to audit findings. “It does not. It assists us in the requirement, which is that any loans that are not paid off in 18 months have to be rolled over and approved by the council,” Green said, explaining that the city will still receive an audit finding for unpaid loans but that the rollover approval avoids an additional finding for failing to roll the loans.

Committee members and staff reviewed the repayment schedule Green provided. Items identified in the schedule included:

- Media Fund: originally owed about $1,000,000; $300,000 was paid in 2024, according to the schedule given to the committee. - General Fund to Encoding Fund: $500,000 owed and reported as paid off. - Gary Sanitary District: $2,900,000 owed; $1,700,127 was paid in 2024 and the controller said the balance was paid in January so the city no longer owed that amount as of the schedule. - General Fund owed to Consolidated TIF: $640,800 owed; $200,000 was paid in 2024. - Parks tax obligation: $240,329, reported as completely paid off.

Green said the schedule shows other payoff activity for 2024 but added that future repayments depend on the city’s revenue outlook under pending state action. “We have not paid anything since we paid Gary Sanitary District in January because at this point, we are not sure what our finances will look like with House Bill 1448,” Green said.

A councilmember asked about consequences for failing to repay loans. “What are the consequences of not paying these loans?” the member asked. Green replied that the city would continue to receive audit findings and would need to explain to the state why loans were not repaid.

Committee members also discussed the repayment schedule’s target dates. The controller said, based on current schedules, the loans were expected to be paid off by 2027 if the city follows the repayment plan. “By 2027, they all should be paid off,” Green said, adding that if cash is insufficient the city would continue to make payments as funds become available.

No formal vote on CPO 2025-12 was recorded in the transcript of this meeting; the controller presented the amendment and answered questions from committee members.

The committee moved on to the next agenda item after the controller concluded her overview.

Votes at this meeting: none recorded for CPO 2025-12.