Wednesday, April 1, 2009

Cender and Company in the news

As the distressed unit board in Indiana continues it's review of the City of Gary and entities affiliated with Gary, we were mentioned in recent news. We do not advocate for any specific position with regards to the analysis we were asked to undertake, as the State's Distressed Unit Board asked, we complied.

A plan to eliminate the Gary Sanitary District's property tax revenue and run the agency strictly on user fees is among the records under review by a state tax appeals board.

If implemented, the plan shows, GSD's property tax levies would be eliminated but its customers' user and trash collection fees would rise once again.

The analysis, prepared by GSD financial adviser Cender & Co., was requested in a letter in January by Cristopher R. Johnston of the state Office of Management and Budget.

Johnston sent his letter to Gary controller Celita Green after the Indiana Distressed Unit Appeals Board toured the city.

GSD faces a possible $4 million deficit this year, a state report shows, because of new property tax caps. GSD, the city of Gary and several other Gary taxing units are asking the distressed board to raise those caps for local businesses to make up for the deficit.

According to Cender & Co.'s analysis, GSD would need to increase monthly user fees from $6.50 per 1,000 gallons to $8.06 per 1,000 gallons if the sewer operating property tax levy was eliminated.

If the sewer operating and debt service property tax levies were eliminated, GSD would need to increase that fee to $8.85 per 1,000 gallons.

An 85 percent user fee increase was implemented at the district in June 2008. GSD also started charging customers a trash collection fee for the first time this year after Gary privatized its trash service.

That monthly fee would need to increase from $12 for residential customers to $24.39, according to the plan, if property taxes were no longer available to fund the work.

Right now, according to Cender & Co.'s documents, the current cost of trash collection is $5.7 million, and $2.8 million of that is funded by the trash collection fee. The rest is funded by property taxes.

Several community groups are protesting that fee because a Lake County judge voided the contract it funds.

Distressed board chairman Ryan Kitchell didn't return calls about the plan, nor did Richard Comer, president of GSD's board of commissioners.

A final date for the distressed board to consider Gary's petition has yet to be scheduled.

Contact Jon Seidel at 881-3148 or Comment on this story at