1. January 6, 2010

2.  INTRODUCTION  BACKGROUND  SUMMARY  QUESTIONS  SUPPLEMENTAL INFORMATION ◦ PROPOSED BUDGETS, LEVIES AND CIRCUIT BREAKER 2

3.  The Gary Storm Water Management District (the “GSWMD”) is seeking assistance from the Distressed Unit Appeals Board pursuant to I.C. 6-1.1-20.3-6.  We are seeking assistance to ensure continuation of storm water management district services to users of the systems.  Under the provisions of I.C. 6-1.1-20.3-6, GSWMD would be required to reduce its tax levy in the amount of $158,727 in 2009, $474,278 in 2010 and $470,607 in 2011. 3

4.  To comply with the circuit breaker legislation, GSWMD respectfully requests that the DUAB grant a continuation of its financial plan covering the next 3-year period and allow GSWMD to phase-in the tax caps.  The Storm Water Fund is funded from property taxes: o O & M expenses of storm water management district o MS4 expenses o Capital improvements to storm water system 4

5.  The USEPA Storm Water Phase II Final Rule regarding certain separate storm sewer systems was published in the Federal Register in December of 1999. The Rule provides that states adopt rules requiring municipalities and other governmental entities with non-CSO, separate storm sewer system populations under 100,000 and institutions of higher learning, to comply with the Rule’s provisions. The non-CSO population refers to areas under a separate storm sewer system known as Municipal Separate Storm System (MS4). 5

6.  Under these new State and Federal regulations, the City of Gary is required to establish a regulatory mechanism for regulating storm water quality as well as storm water quantity within it jurisdiction to provide for the health, safety, and general welfare of the citizens through the regulation of storm water and non-storm water discharges to the storm drainage system and to protect, conserve and promote the coordinated development of land and water resources within the City of Gary. 6

7. Program Mission  Limit storm water runoff to the extent reasonably possible.  Clean up runoff as much as possible before it discharges to streams and rivers  Improve drainage in areas that flood  Maintain existing storm water infrastructure 7

8. Under the IDEM Approved Part C of the Gary Storm Water Management NPDES Permit the District is required to Implement 6 Minimum Control Measures MCM 1 – Public Outreach & Education MCM 2 – Public Participation & Involvement MCM 3 – Illicit Discharge Detection & Elimination MCM 4 – Construction Site Storm Water Run-off Control MCM 5 – Post Construction Storm Water Run-off Control MCM 6 – Pollution Prevention & Municipal Good Housekeeping 8

9.  In 2009 GSWMD had foregone circuit breaker relief for property tax-based funds.  GSWMD requests to phase in its circuit breaker credits in 2010 and 2011.  Without relief in 2010 and 2011, GSWMD will not be able to implement its Federal and State mandated MS4 Program requirements and maintain and improve its storm water system. 9

10.  GSWMD is considering implementing a storm water user fee in 2011. ◦ Due to recent increases in sewer user fees and garbage fees, additional time is needed before implementing storm water fees to prevent further hardship on Gary residents. ◦ Storm water fees may be more difficult to collect. GSWMD does not have good recourse to collect for non-payment (IURC may not allow water shut-offs for delinquencies). Property taxes have been a more–reliable source of revenue. 10

11. QQUESTIONS? 11

12. SUPPLEMENTAL INFORMATION

13.  Population – Gary’s population in 1960 was 178,320. The 2000 Census reported 102,746.  Median Income - $26,725 in 2007  Unemployment – Gary, August 2009 - 12.2% Indiana, August 2009 - 9.7%  Poverty – Below poverty 2007, 31.6%  Ethnic Race 2000 – African/American 84% Caucasian 11.9% Hispanic 4.9% 13

14.  GSWMD SYSTEM ◦ PIPES = 39.02 MILES (6%) ◦ MANHOLES = 697 (6%) ◦ COLLECTION DEVICES = 1,086 (17%) ◦ DITCHES & CULVERTS = 18.2 MILES ◦ OUTFALLS = 86  RIVERS = 80  NOT ON RIVER = 6  TOTAL MS4 CONVEYANCE = 57.22 MILES 14

15. Circuit YearBudgetLevyBreaker (1) 20091,740,292938,852 (2) 158,727 20091,630,796821,746 (3) 158,727 20101,530,0001,100,000474,278 20112,000,000627,888470,607 20122,000,000627,888N/A (1) Circuit Breaker per Legislative Services Agency, December 1, 2009. (2) Certified Levy per Pay 2009 1782 Notice. (3) Levy per DUAB Final Determination. 15

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