- All right, so it seems as we are all here, I'll go ahead and call this meeting with the special fiscal
- community to order on March 13th. We'll be soft-spurred on district three. Okay, for all of district
- four. Awesome. It's about the maximum, Mr. Kronk. Jeff McKim, city controller. So it's being looked
- out for its office. That's where we have our council.
- I'm Justin Chang with the Reedy financial group. I'm Tim Schreger with Reedy financial group. Sorry,
- what was that? Tim Schreger. Okay, thank you. Wonderful. Thank you guys for being here tonight. I'm
- just so used to eating meetings, that's all.
- First thing on the agenda is the agenda review and approval. Comptroller McCann just mentioned changing
- the agenda from what was published because the Indiana General Assembly updates are going to come up
- during the reading discussion. So we can just combine numbers two and three into one big kind of presentation
- and question and answer and public comment period and then adjourn. I did realize that
- I didn't put anything on about the calendar, any updated calendaring stuff. And I didn't put anything
- in the packet about that, but does anybody have any updated calendaring stuff about this committee that
- you should put on the agenda? Great, seeing none. If somebody wants to move to approve. I move to approve
- the agenda for 13 March, 2026. Okay. Great.
- We're all here. Can we just, everybody in favor of that, say aye. Aye. Aye. That was great. So at this
- point, I'm going to turn it over to Jeff and to Justin and Tom, right? I'm going to write that down
- right now and take it away. Terrific. Well, I'd love to just set the stage. We have Justin and Tim from
- Reedy Financial Group who are
- financial advisors at the city, and they're going to go over a couple of things that I think are going
- to be really interesting to everybody and very important to us going forward, including our debt position
- and local income tax, particularly with respect to the new LIT system that's right now slated to go
- into effect in 2029, and property tax as well.
- But very much, I think everybody's going to be very interested in what they have to say. So are you
- going first, Justin or Tim? Well, really, he will be, but just to set the stage for what we're going
- to be talking about, Tim's going to start out with kind of the city-wide financials, but what that'll
- look like going forward, 2026 and 2027. But on these expenditures, whether we're surplusing or deficitting,
- and then we're going to go into
- What are the ways we could improve the city's financial provisions? Local income tax, like Jack mentioned
- earlier, is going to be a big part of that. And we're going to build the House Involved Act, 1210, into
- that discussion. And then we're also going to look at other tools, including the debt and potentially
- part of some RDC financing capacities that the city could use to improve the city's overall financial
- situation.
- So I guess a little precursor set the stage to use best in this time. So we have for about a year now
- been developing the city's long-term operating capital green plan. It's a five-year plan. It captures
- all of the funds that we budget and gave rate. And we do revenue projections, expenditure projections,
- we look at the restorable budgets, restorable revenues.
- projections based on that, and we also incorporate any changes in legislation into your long-term plan.
- Having said that, Justin had mentioned the, you know, I guess what is the core term to use, funding
- surplus deficit. Right now in your long-term plan, you have basically for the next two years due to
- SEA 1 and because of some innate choices in the budget, there's
- roughly a $3 million deficit projected in your general fund. Now, as Senator-elect one ramps up, and
- depending on the choices that the council is, for lack of a better term, forced to make, due
- to Houseman-elect 1210 and SCA-1, that deficit could be as much as $9 million a year.
- Now, one of the other things that we've done in your long-term plan is that we've identified about $7.5
- million of capital outlays that the city historically has done using rough estimates. We actually removed
- those capital outlays from your operating funds. So on top of the $9 million potential operating deficit,
- we also have to figure out a way to fund, if it's the city's choice to continue the $7.5 million capital
- outlays on average annually,
- a way to fund that essentially deficit as well. So we're looking at roughly 16 and a half million dollars
- of potential deficit once Senate rolled that one in the hospital, 1210 or fully ranked up, which is
- roughly 2032. So how do we mitigate that and what are our options?
- And Jeff, if you want to pull up to me, how soon will we pack, or how soon will that portend impact?
- It should be the most recent one. Oh, it's the lit document, right? Yeah, it's the one that fades in
- orders that we didn't have that in a different place. Okay.
- I sent that out and well I sent out an email last week because that was what that posted yesterday after
- you may have them. Oh there it is. Sorry this this um may be a problem. Do you want to join are you
- wait for me or
- It's not letting me have administrative access, which apparently you need to be able to share.
- 13th is expected. You know, I think that we haven't been on Friday the 13th last month too, because
- like February. Yeah, I've got it on my screen, it just won't let me share. It's been a really long time
- since I shared my screen on Zoom too, so
- We're going to talk to you as well. OK. Can I ask a question one more? Yeah. So $3 million deficit in
- operation.
- seven and a half to get Broadway's. What's in getting Broadway's interested? There's multiple things.
- I think it's really just like ongoing vehicles, certain spending on infrastructure, just typical thing.
- I do have a list that I could queue up in the long-term plan. Now, it's not always immediately obvious either.
- There we go. The most common items are the road infrastructure and certain buildings. But it isn't the
- same every single year with projects range. Those are the type of projects that we're talking about.
- Most of that is not specific projects because a lot of your specific projects are labeled in your
- in your lawns. It's really just the ongoing stuff that's needed. Deedles, certain road repairs, things
- like that. That Nathan Steinberg doesn't know. Does he? Yeah. Maybe after. Yes. Well, we've got the
- lit documents projected, and this is on the council website. All right, so I don't even know if it's
- proven to discuss the history of Sudendol that one.
- Uh, I guess I can start there. So originally when Senate rule that one became wall, which was not this
- legislative session with the last, so 2025, but there was a, essentially it was separating the county
- services liberate from the city and town services liberate. And also there was a separate fire and that's
- liberate. And also there was an option for.
- units that were under 3,500 in population that the county could set a rate for those units. So House
- Enroll Act 1210 is actually now allowing any and all cities and towns to opt into the countywide services
- loop rate. At the same time, the DLGS produced a different formula to calculate how that's going to
- be distributed to units. I'm sorry, I think you're going to want to spell out the acronyms.
- We have members like DLGF. Yeah, sorry. So DLGF, Department of Government Finance, essentially they
- kind of regulate all the things that you just have to do for the budgets. That's really the best way
- to describe them. They're handing assessments, all that sort of thing. They're basically the enforcement
- wing of the SPOA. State Board of Accounts. Oh my gosh.
- It occurs to me, I have my copy this morning. And when I say LID, I mean local income tax. So if you're
- working, you pay a tax on the local side, and the state side, and the federal side, I hope. Okay, so
- where was I? Okay, HEA, when I say HEA, that just means House Enrolled Act. If I say SEA, that means
- Senate Enrolled Act, which is really just what portion of the
- Indiana General Assembly has signed it and made a beneficial document that's in our law. So House Enrollment
- 1210, again, changed the calculation for any of the units that opt in to what is now being called a
- countywide municipal services local income tax rate. And that's essentially what this sheet is showing,
- how that calculation is broken down.
- I will say right off the bat, the good thing about this calculation is there really isn't a margin of
- error. The calculation is what it is. The only margin of error you're going to see in this is the assumption
- of a 1% annual total debt available in the county, 1% growth every year that we assume in that 2029
- river. So really, that's going to be the only margin of error in the House and Rollback 1, House and
- Rollback 1210 calculation.
- So the way it works now, you will take, now actually, I will also say, I'm fairly certain the statute
- didn't specifically say that it was 2020 census population. So they may be able to use the honor of
- state, whatever those estimates are every year, which is now actually, sorry, the state of comptroller.
- So that's called now. But I would anticipate that these,
- population numbers are not going to be drastically different than the 2020 census amounts. So you take
- the, you take essentially your percent of the population of all of the cities and towns, so that for
- Monroe County, that's Bloomington, Ellisville, and Steinsville. Then you determine, so you determine
- that percentage. And then you take that times one and a half,
- So whatever your percentage is of all the cities and towns, you take that number times one and a half,
- and that essentially gives you more share of that total county municipal services, local income tax.
- That's how it works now. That's how it works under House and Rollback 12-2. That is not how it originally
- worked. Which just passed. Which just passed in the 2026 legislative session. Correct. That will not
- come on board until 2029. At least that's the way it is
- worded in current statute, whether or not that gets pushed out another year, who knows, but we have
- to use the assumption that it's a law, so it's going to go into effect in 2020. And it was 2028.
- It was 2028, but it was pushed back a year in house and electoral activity. So once you do that calculation,
- essentially what you end up with is the city essentially taking 85% of that total pool of open-air loan debts.
- If you wanted to determine, and anyone from the public who has to do this, if you wanted to determine
- how it came up with the total amount available, go to the state board of accounts, so the sba.in.gov
- website, look at the local income tax rates, and essentially you take your current rate,
- divided by, sorry, you would take the dollar amount currently that you have for Litt Certified Shares,
- total county-wide, Seminole County, divided by the rate times the new rate, which would be 1.2%. So
- let's say that, you know, your point, I don't know the exact number, I wanna say it's .9864 is your
- rate for Certified Shares, over and over again, Certified Shares currently. So 1.2 obviously is gonna
- generate more
- than the current total good available for certified shareholders. Wait, the count, the line underneath
- the cities, the county unincorporated. Yeah. So that's 1.5 times 38 percent cannot be 7.64 percent.
- So the county unincorporated area, that would be the county's share. They actually do not get the one
- and a half multiplier. All they get is the remainder that's left after the cities and towns have taken
- their cover.
- So let me just make sure I'm getting this right. Essentially with SEA 1, that formula for the shared
- service rate was only available to very small municipalities. The balance and the county would get to
- keep everything else that wasn't taken up by the small municipalities. With the new formula, now any
- city can opt into it
- And because of the way that the formula, because of the 1.5 multiplier, the county gets a much smaller
- share and the cities and towns get a much larger share compared to the way the formula used to work.
- Is that? Yes, that is exactly how it works, yeah. Okay, can I clarify too for my own understanding?
- So with the original SCA-1, whatever county that they passed, Bloomington would not have gotten any
- of it, but then they changed
- the rules essentially, so now we will. Yes, so this specific type of global income tax, the under $3,500,
- which is what it used to be. There's a lot of stuff to remember here. This essentially used to be the
- lit that was available for the cities and towns that were under $3,500 in population. It's now called
- a countywide municipal services rate. And yes, to your point, going to or not have gotten into that,
- understand that.
- Okay, and so the county gets to decide that, though. And is that up to 1.2%? This is where it gets really
- interesting. This is, yeah, this is where it gets really yes and no that get to decide. There is, as
- a house and roll that 1210, the county and all the cities and towns can form a task force. They don't
- have to, but they can form a task force
- And if there's a unanimous vote on that task force to lock in a local income tax rate for this specific
- purpose, it's locked into that rate until 2031. So wouldn't it just be the county deciding the rate,
- it would also be the other units. Now, whether or not a unanimous vote would be reached, we don't know
- that. So. And so that would be one representative from the county, from Bloomington,
- Yes, it is the fiscal officers of the cities and towns. Um and it is the one council member from the
- county council makes up the voting chair that has for us. And so all of those people have to be in agreement.
- It has to be names. Okay. The fiscal officers in towns. Do you need a controller or do you mean it'll
- be a controller? Yes. Okay. I think there was a question on. Yeah, we were trying to figure out because
- they may not have a for treasurer
- Right. We were thinking they just had a town council. I'm not, don't quote me on this, but I think that
- would be the town council president in that case, but maybe not. So. All right. So. So that would be
- to lock in the brain for five years or. Is that four years, four years?
- But that process has to occur this year. That decision has to be made by October 1st of this year. If
- we don't do this task force thing, then what? You can still opt into it, but here's where it gets weird.
- The way it's currently worded, the city would have to resolve
- So the council would have to vote to want to hop in to this countywide municipal services rate, and
- then the county would adopt that rate, which obviously is risky. So that knowing what it is, we have
- to choose whether we're up to here. Yes. In that circumstance. Now, the other thing to that is, you
- wouldn't have to make that decision until the first of 2028. I mean, that would be the absolute deadline
- to make that decision.
- You don't have to opt into it, but if you opt into it, if it's at the 1.2% rate, which is the max rate,
- you stand to be in a much better position financially. Did you say October 1st? 2028. 2028, okay. And
- that's if this group cannot come to a unanimous decision about it, then they're like, it's like two
- paths. It's two paths.
- Yeah, so it's a little congregated. Yes. So this is a task force. It is calling task force. I believe
- the acronym is must. And they need to agree unanimously on what? The rate? The countywide local income
- tax services rate. Yes, the maximum that rate can be is 1.2%. But the city still has
- If they don't opt-in to the county-wide services, they still have the ability to implement their own,
- their income tax rate on top of Bloomington residents' own. Correct. But you're going to talk about
- the numbers. Yeah. If we opt-in, we would still be able to put an additional? No. No, if you opt-in,
- it replaces it. That's where it gets, yeah. I will say opting in, if you opt-in, let's say the task
- force doesn't go through,
- You can't get a unanimous, unanimous opinion. You would still be locked in for three years. So you don't
- have to make the decision until 2028, but if you do make the decision to opt in, you'll be locked in
- for three years. Now, the county wouldn't be able to change it until 2031. So whatever rate they choose
- would be locked in. But after 2031, every single unit has to readopt the lip rate every single year.
- Oh, my God. That's the way it's worded in statute. There's a de minimis protection in there, where if
- you have obligations to bonds with lit dollars, that exact amount and exact rate is like a minimum that
- the BLJP will forget to adopt a lit rate. I'm sorry, you said in which scenario do we have to approve
- the lit rate every year? After 2031, every unit has to read
- Okay, but and before 2031? Before 2031, whatever decision you made. Task force? On whether, I mean,
- task force or not. If you, essentially, if you opt in, you're stuck in that for three years. The opt
- in language, is that just if we don't have the task force, then each municipality can opt in? All right,
- it means you- That language also comes- It means you can opt in and Ellis will opt in because you have
- a population over 3,500.
- Steinsville cannot. They're under the county's control in this scenario. But when you're saying opt-in,
- is that something we have to decide if the task force can not unanimously agree? Yes. If the task force
- unanimously agrees, it's presumed that we are opting in? Or is that still logistically so? No, that
- would be automatic.
- It's automatic, but that once that decision is made, yeah, once that decision is made and sent to the
- DLJF on October 1st of this year, yes, that would be the DLJF's presumption that you're locked in with
- that. And so it's literally four people, one from Ellisville, one from Wilmington, Steinsville, and
- County Council. That's how the bills were against. And can those folks
- We'll have some conversations. Oh, absolutely. I mean, I'm a full three. And A, accelerate municipalities.
- They want the cities to pass. They've been all over this. They've been instructing local units of government
- to work all of the governing bodies to work together to come to that decision. But one of the problems
- from the way I see it is just that because the county gets less than they would have under the other
- rules, they have less of an incentive to want
- uh you know to bring to the to the higher rate right that is true i will say monroe county um just based
- on because we had to run every single parcel to do the city's impact we also have the county's impact
- and the county is fine with just their own 1.2 percent local income tax rate they can do on top of this
- so so like i said not not as much of an incentive
- County and they add 1.2% above the agreed upon. So if you I keep using work often if you choose to go
- down the path of going with the countywide municipal services rate. You're locked into whatever rate
- that is. The county and then do their own up to 1.2% rating on all the taxpayers in the county.
- that only they do. The city cannot be read. So for us, it's a fork in the road. It's either we opt into
- the municipal, right, the shared municipal services countywide, or the city adopts its own literate.
- But it's not public. Yes. Yes. And are you on? Go ahead. So functionally, the maximum literate
- Countywide is 2.4%. If we adopted the shared 1.2 in the county cap, adopted another 1.2 on top of that.
- It was actually 2.9%. 2.9, it was the other 1.5, the fire EMS. Yeah, so there's an additional 0.4% for
- fire EMS that can go in there. And there's also, I believe it's up to 0.2 for non-musical units. Now,
- obviously that would give us the three, so you have to cut some of them, 5.1.
- And that 1.2, the county can pass on top, that would still be collecting county-wide in every county
- resident, not just one incorporated. Every single county resident that's staying in the compacts would
- pay that amount, and it would go to only the county. So the county, from its motivational perspective,
- with respect to this shared consensus approach, they'd get less, but they have the option to pass additional.
- So they can certainly make themselves whole, so to speak, to whatever level. They get more flexibility
- there. The downside is they have to
- justify and explain to constituents and all the rest that wife total their grade is higher, essentially.
- And so there's a perception also. So yeah, okay. And you refer to making them whole. My understanding
- is in the numbers you're showing is that the county would be more than whole. Yes. No matter what. It's
- a poor phrase I could use, I guess. Go to what they feel like they need. Right. So we go back to what
- we were saying initially about the deficits.
- of the city's general fund. If we do get the opt-in, essentially what this shows is that if we opt-in
- to the 1.2%, we essentially make up for the deficit. It's really close. For the first few years, we
- actually completely make up for it. And later on in the years, we basically break even if we do get
- the opt-in. Currently, we're at this number 41.5. That's our expected. There was no top 10, yes? Correct. Yeah.
- With that, I see a one in the HEA 1210. The local income tax that we were projected to receive in 2029
- is 41.5. We do get the opt-in with a max of 1.2%. We get a 48. That's an over $7 million increase, which
- again, as Tim mentioned earlier, that'll more than make up. That'll just about make up for the city's
- general fund deficits. So where are you doing that? Oh, I'm sorry.
- It's in the very bottom. Yeah, so node five on the bottom. Yes. So, but you're saying that it would be that 1.2%
- service, like income tax service rate, right? But that group could, in theory, make that lower. Yes,
- absolutely. If it was a unanimous vote.
- And then even if it was lower, the city would still not be able to put anything else on top of that,
- right? Like you could opt into a lower rate, then we're still stuck at a lower rate. Correct. So there's
- certainly some risk involved there. And I think it's important to share with them what your numbers
- show if the city went our own way and adopted even to the max, the 1.2% that we're allowed to. Yes.
- I guess maybe that will give me the answer to what I was swelling. Is that what was your, what were
- you going to ask? All right. The last three columns there, that's where the rubber hits the road. The
- city's impact is highlighted in green. Again, to Justin's point, under the countywide services lit in 2029,
- Now remember, we're assuming 1% growth every year, so 26, 27, 28, 29, so that's four years of compound
- 1% growth. We're sitting at about 48.9 million of local income tax that can be projected to receive.
- Now again, the only margin of error in this calculation is our growth factor. The calculation is what
- it is that's provided by the Department of Local Government Finance. We can't change it.
- The reason why I say margin of error is because if you look to the next column, that is your projected
- maximum of 2029 live. If the city does its own local income tax on only its taxpayers within its corporate
- boundaries. Now, there's a margin of error in this calculation because we had to use 2020 census data.
- So back into your adjusted gross income for 2020,
- and then grow that to 2026 and then make an estimate between on top of that. So there's essentially
- three layers of potential projecting margins of error, if that makes sense. But I'm gonna say that during
- this last general assembly session, a lot of us have received information from AIM with just very rough
- estimates of how much we would lose
- under the current system. And we were seeing estimates of around $10 million and you're showing nine
- something. So that, I mean, your estimates are close to the very rough ones that we have seen before
- that. So just for clarity then, us creating our own rate, only taxes that people within our corporate
- boundaries could opt in for county rate, taxes everybody in the county and then spills out the pie based
- on population.
- Yes, and this is publicly available information. The average adjusted gross household income is higher
- in the county than in the city. So what does that translate into as far as lit revenues? Is it more
- beneficial for us to carry opt-in? Yes.
- So that's the opt-in is the $45 million. It's about the non-opt-in is the $32 million. And that non-opt-in
- number also includes that 0.4%. That also includes the 0.4, which is under county's control as well.
- Right, but the county opt-in rate does not include that 0.4%. It does not. Oh. So just so everyone's
- aware, that would be an additional roughly $10 million on top of this $6 million surplus, basically,
- for life, a better term.
- All right, so it could potentially be, you know, as high as a $26 million difference on your local income
- tax. But that would mean also that the countywide rate could be lower than 1.2%. Correct. And still
- it blooms. Yeah, so there, to your point, there is some negotiation room in there, right? Because the
- rate doesn't have, we don't have to max out the rate to 1.9%. So that is a good thing to keep in mind.
- Just to reiterate, the county has total control over the fire EMS for what portion the city gets. The
- portion the city gets is a calculation. The county doesn't have control over the distribution, they
- have control over what the rate is. The distribution is by population? Yes, sort of.
- Really it's the area that your fire protection serves and population. Like it's a combined. It's a combined.
- It's too variable. It's too variable. Yes. Now there was, there was a rescinded rule that one, a 20X
- multiplier on the service area function of that population that has been reviewed. So it's just straight
- up now, 50% of the space and population, big percentage based on
- service area. It used to be much more rural biased and now that bias has been. Yes. For Monroe County's
- case, for the city's case, essentially, I believe it was roughly half a million dollars that would have
- went to you was actually going from Monroe Fire Architecture. I understand it for that one, but that's
- the wrong case. Just while we're talking about that fire EMS rate, that does or does not
- include dispatch. Does anybody have an answer? I don't believe dispatch is included in the language.
- It's just fire area and now emergency medical services area, so ambulance services included in that.
- Which we don't have any MS, right? The county does, right? No. I mean, there's Monroe Fire
- protection district does provide some DNS services. Yeah, so they would probably, so they'd probably
- get a little bit of a boost there in that formula. But I don't know if it would be quite the happily
- dollars that it wasn't for. But it's no substitute for PSList, because that covered the lease and dispatch.
- Correct. Yeah, I mean, we found those from
- either leg or property bench. Yeah. So then the county also coordinated with that. So that's just another
- thing that we need to figure out. And that's a negotiating point. Yeah, that's not a negotiating point.
- It's right now you guys have a state agreement with the county for PSAP and it's untenable under House
- and World Act 1210. You lose $10 million in impacts. Right.
- For the PSAP. For the PSAP, yeah. PSAP is gone, public safety list is gone, non-development list is
- gone. It's all just one. But in terms of the lit number you have down here, which is 41 million, that
- includes- That was all of your- That's all of our lit together, including PSLit. Correct. For lack of
- a better word, shared or county, it was spent on a shared resource. Yes. Just to clarify the terminology we used,
- PS lit is different from PSAP lit. They are two separate rates, and they're two separate funds. They
- both get lost. Yeah. PSAP is new. No. No. We manage a different. It used to get thrown in a PS lit,
- and now it's its own fund. But that, yeah. That's what I meant by new. It gets separated out in a different way.
- I don't know that anyone's mentioned what he said is public safety access point. That's all your dispatch.
- You're not only dispatched. So. So is it advisable to think about unifying the fire department? Please.
- You know, right now. That different fire service service providers become. They've been unifying.
- I mean, one or five protection districts.
- coverage most of it is that Alexville still has their own. Alexville and Richmond Township are still
- out of Richmond. I mean, Alexville provides fire service to Richmond. And then I think Bean Blossom,
- I don't remember where Bean Blossom is. Like, I know there was some developments recently and I don't
- remember whether they're going with Alexville or the district. Bean Blossom has signs, includes signs
- of that. Yeah. Well, it just seems to me, I mean, you're already going about
- population versus area coverage and things like that. And it's been trending more to the population
- since it was the area. So being an incentive for the county, again, another incentive, well, being an
- incentive for them to unify seems to me, it's my opinion. I don't remember the number off the top of
- my head, but the Monroe Fire Protection District does serve a large percentage of county population.
- obviously it's not serving the city. It's serving nearly everyone that isn't in the city. So. Can I
- go back to something we said at the beginning of the meeting? Yes. You said, you've talked about a five-year
- capital improvement plan. You said there's a $3 million deficit projector in the general fund. Is that
- for this year? Yes, that is based on current budgets and current revenue projections we have.
- That's in the general fund overall. Yes. And so we can't really make that up until this list of changes.
- We can and then we will touch on that after after the conversation. There are other ways.
- So we should want to make a note of time right now. Yeah, because we have an hour kind of slotted for
- this kind of this meeting this morning. And we need to have a period of over time. This was all really
- interesting. Yeah, sure. Should I I'm screen sharing this right now. Should I screen share something
- different? Please screen share this.
- Okay, there should be three pages in this one. That was initial. That was what was the original. Yes.
- Okay. Um, so while we, while we pull that up, I think from the previous lit conversation, we can see
- that a lot of it does hinge on the county. Um, depending on our negotiations with them, it could really
- go either way. So,
- What we're going to talk about next is the city's debts and how we could use that to alleviate that
- $3 million deficit this year that we mentioned. And keep in mind that $3 million deficit, like I mentioned
- earlier, that's actually already taking about $7 million in capital out of it. So if we keep $7 million
- in capital within the general fund, that 3 million actually turns into 10 million. And I think it was
- a few years down the road.
- and had $9 million deficit sold out in terms of $16 million. So I want to talk about it with the city's
- debt, which is on the screen now that actually this is all on the city. I believe you guys have all
- done the debt process, right? But you guys are all familiar with the process. Essentially what this
- page is showing is, I'm sorry, I'll try to be fast so we can have public comments time.
- What this is showing is what the city debt limits are. We were limited in how much debt we could issue.
- For each district, it's a third of 2% of net assessed values. Now the city technically has the city's
- geo limit. The city has a park and redevelopment district, so they each have their own separate limits.
- So you see, we have the geo calculation, the park, and the RD.
- follow the same, a third of 2%. So that gets us to the $36.5 million. The city currently has three city
- general obligation bonds and three park district general obligation bonds. And there's nothing in the
- leader moment district. So if we look again, if we go by column, if we take out the three bonds that
- are currently outstanding with the city general obligation, we have $28 million left to spend there.
- The park has twenty three million dollars left and because the district has does not have one issue
- towards it. There are thirty six point five million dollars. So that is to say, if we issue a bond near
- the end of this year, we have total roughly about ninety seven million dollars of limits that we could
- use now. Yes, it's reflected here.
- TIP bond is paid by solely TIP revenues, not property tax backed, then no, they're not. But if it's
- backed by property tax, then they would be included. But most TIP bonds, the TIP bonds are all paid
- for by TIP revenues only. And just to also clarify, the Convention Center, which is the least purchased
- paid for by food and beverage tax, doesn't count towards any of our debt. Correct. It wouldn't count
- towards this. And another note to make is, yes, we have 97
- million dollars in limit, that doesn't mean we necessarily can issue a $97 million worth of bonds this
- year, because there are other constraints, right? If we look under that, we have some rate thresholds
- that we have to meet. The first column right under the $28, $23, and $36 million, you'll see the current
- rate that each of those districts
- Yeah, I was about to say, I think I have to scroll down right now. You can see the first one. So you
- see that 0.053 and 0.0338. So those are the rates that are currently levy on the city's general obligation
- limit and the parts obligation limit. As you know, when I made a change to the thresholds, so the potential
- remonstrance thresholds means that we issue a bond while our rates is above 25 cents.
- there's a petition remonstrance. If it's over 40 cents, then it goes automatically to referendum. The
- news is for the city, we're currently under both those rates for all three of our limits, so we don't
- have to worry about that right now. But let's say we issue a park bond this year, and that rate goes
- up to six cents in 2027. If we were to issue another park general obligation debt in 2027,
- we would have to go through petition remonstrance steps. And the bond council will help the city with
- that. But those are things to keep in mind. Yes, we have $97 million in debt limit. We can't just issue
- $97 million. And on top of this, we also have project control, project thresholds. So a project is over,
- I want to say, $28.6 million. That automatically goes to referendum, even if we're under the debt limit.
- Some other things, some other items to think about when we look at this. Is there any questions on this
- page? I know I went through them really fast. And you can hit those three dots there. And I hate this
- new AI feature. Sorry, I'm taking notes on this on my other page. I actually can't see that. It's a
- really acrobat AI feature. I've been in it. I've gone into studies and pulled it to never do that. And
- it's still sometimes. It drives me nuts.
- So this is a question for probably for Jeff. So the redevelopment, what does CDL say? Institutional
- Debt Limit. So that's the third of two percent I was talking about. We don't have any of those kinds
- of debts. Are we set up that we could? What is that? Why don't we use that? So I'm going to ask Jeff
- to answer that. You go first.
- We can. The city does have a new redevelopment district. Yes, but we haven't used it yet. That's property
- tax backed as opposed to TIF revenue backed. Yes, it will still be property tax backed. The one additional
- step is during the bond process, it has to go through the REC as well. But I was going to say
- the redevelopment commission already has, I mean, they have several
- and they're outstanding. And they have several major projects that they are working on, including Hopewell,
- not just South, but you know, all of Hopewell and Summit District, as well as the police station project.
- Yes. So, you know, I want to specify, if we do an RD bond, it doesn't have to do really deal with their
- revenues. It's just under the reader bond. And in terms of public debt, we have utility funds as well.
- Yeah. I know, but I'm just thinking about that. And we both on those bonds, we both on utilities bonds.
- Well, I mean, regarding expansion of that. I guess I'm not supposed to say any. Yeah. In terms of
- bonds at all, though, as they want to change some of the bond rules. Yes. But are we like kind of good
- with that right now? Like we could issue like a new general obligation bond last year for a bond, but
- we could then share the gap. So one of the changes is actually the rates that I'm showing there and
- I discussed previously. So on that, on that side, we're good. Regarding there's, I believe you're referring
- to like the cooling off period in the next amount of years. So
- a non-legal council, a bond council would be who would, who can answer these questions and give an opinion.
- But what we've seen is if we, if the city issues a debt under one year of maturity, then the next bond
- issue has to be over five years. If that next bond is not over five years, let's say it's three years,
- then that three year bond needs to have a cooling off period.
- But if we issue bonds that are over, so two, three, four, five, six years, right now we do a lot of
- six-year bonds, and then every three years we do another rotating bond, so sort of two six-year rotating
- bonds every three years. So in other words, we could do, say, a six-year parts bond to repair and maintain
- current capital assets. Correct. We could do a six-year, and we could even do a three-year parts bond.
- We could have that discussion as we look into
- Um, any bond issuances, but yes, we'll give you a six year, six year parts loan. Yes. Um, yeah. Yes.
- Uh, Jeff, you were expressing, um, the, the, the number of things that RDC is managing. Was that more
- about the capacity to oversee and administer projects versus the financial component of it? I was extending
- a reservation about it. Oh, yeah, that's, that's different. Well, right. But, um,
- I was I was inferring that you were making the argument that we wouldn't want to do a redevelopment
- property tax backed bonds because of the sheer volume of stuff they're doing. I could have been wrong.
- Another reason you were sharing that. No, I guess I'm maybe not as as I don't have as good an understanding
- of the redevelopment district.
- General property tax bonds. That's not something we've done here as far as I know. So you're just letting
- us know. Here's all the things they're doing. Yeah. Yeah, I'm saying that the tiff revenue was reading
- into it. Okay. The tip revenue is pretty tapped out. Yeah. Yeah. Yeah. Yeah. Um, yes. And again, like
- I mentioned, the real district, it sounds like has already seen different means, but we could, it can
- be set up in a way where it's only
- property tax. So there'll be a new rate, be a rate of non-industry bond rate. So we wouldn't tap into
- any of that. So it doesn't go against the civil city's constitutional debt limit, but it still raises
- taxes for, it still raises taxes. Correct. So yeah, we'll see, right now there isn't any, but if we
- look at that current rate, if we were to issue an RD property tax bond, there will be a rate in their
- tax on the cities.
- You're basically telling us we're nowhere near our constitutional deadline. We're very far off.
- On that note, there's maybe a couple of members of the public online. Let's just take a pause. I feel
- like we've arrived at the stopping point because we really have to stop. But if there is anybody online
- that would like to make a comment, I see somebody already raised their hand.
- Go ahead and start when you're unmuted and you'll have three minutes, but I'm timing on my watch and
- you can't see it, so I'll try to give you a warning. Please state your name for the record. That would
- be helpful. Thanks. Go ahead.
- Kevin Keough, I'm here today to comment on the estimates regarding the debt limits and the tax rate
- using data that's fundamentally stale and to comment on the bond continuing disclosure agreement. As
- we sit here today, March 13th, the city has still not published the 2024 annual comprehensive financial
- report. We are now closing on 15 months since the 2024 fiscal year-end.
- and our most recent ACFR, specifically the Federal Single Audit Report from 2023,
- came with a qualified opinion from the auditors and reported a material internal control weakness. This
- report, for some reason, has gone dark for over a year without public deliberation, seems to have created
- a vacuum of accountability. The city's 2016 GO bond official statement contains a continuing disclosure
- agreement. While there is a technical loophole that allows the city 60 days to post an audit after receiving
- it from the State Board of Accounts, the contract explicitly
- sets a 180-day benchmark for annual reporting, June 30th. State Board of Accounts has stated they require
- a 90-day window to complete the audit by the June 30th deadline, meaning the City must have its books
- compiled and ready to be audited by April 1st. By failing to meet that April 1st readiness date, the
- City is effectively bypassing the primary 180-day transparency requirement promised to our bondholders.
- I believe this is more than an accounting delay. It presents three specific risks to the Bloomington
- taxpayers. I'd like to confirm these potential risks. One, investors may view chronic reporting delays
- and material weakness as high risk. Could this risk premium lead to higher interest rates on the very
- bonds you are discussing today? Is the city acting in good faith?
- Does SEC 15C2-12 rule require us to file a notice of failure to file when we miss these continuing
- disclosures? Basically, asserting the city may not be acting in good faith. Could this lead to enforcement
- actions that damage our reputation for years? The committee cannot track fund balances or improve the
- budgeting process if the foundation for your data, the audited financials, the ACFR, is missing for
- over a year. The data is stale. You are flying blind.
- I'd like to close with a couple of questions. First, what date were the final compiled 2024 financial
- statements delivered to the auditors? Did we meet or even come close to the April 1st good faith window?
- Second, Faridi, how much is our
- market reputation, and these disclosure delays currently costing, and more importantly, what could they
- cost taxpayers in the form of higher projected debt surface interest rates? Process is how we ensure
- outcome benefits the taxpayers. We cannot get our debt limits right if we don't get a reporting right
- first. Thank you. Thank you very much, Mr. Hio. Is there anybody else online who would like to comment?
- I can't tell if there's any actual other people on prevention. No, they're just like AI. Okay,
- coming back, we have about four more minutes left. Could I just ask for a question? Yeah. For response,
- do you have any opinion of the controller or our consultants on the ACFR delay in terms of reputation,
- competencies, potential penalties, and the potential for higher interest rates?
- Yeah, I couldn't answer that one. So if we're talking about these property tax bonds, there shouldn't
- be too much of an impact because property tax bonds are one of the most secure bonds. There's a reason
- if even if we do a revenue bond, let's say a dip revenue bond, like we said, we were mentioning earlier,
- we even do a property tax backup to that revenue bond because property tax is the most secure.
- especially when we're nowhere near our constitutional government, our overall property tax rate environment
- is so low, and we're issuing these shorter term bonds, it wouldn't affect it too much. Maybe, and I'm
- not saying this will happen, but maybe we're looking at a larger, larger project with a 20-year life,
- then maybe there could be an effect there. But with these bonds, we don't really
- see it happening in movement and discuss how financially we're pretty, still pretty healthy. Great,
- okay. Jeff, you really addressed the ACFR in the past and you're still on track to essentially complete
- it. Yeah, I'm just saying that, well, we are waiting for the auditors now. We're not, there are no deliveries
- that are pending from, and we have,
- constant communication with the auditors and individually asked questions and were to arrive and follow
- them for information. And I think I did in, what date was it? I gave, I think, a fairly extensive report
- on the timeline and timing on, was it the fourth? Yeah. Just to counter the statement that there's no
- data permission about that.
- with the actual thing. So I just wanted to ask you a question you came up with. Great. Around two minutes.
- So really quickly, we're having these meetings every two weeks. And the next one then will be more focused
- on the council and things that we need to do. And I haven't really thought quite about that and what
- the specifics will be. But I'm going to gather after our meeting on Wednesday that I'm going to have
- some kind of a draft of some sort of a letter. And that will be part of
- That was special. Last two minutes. Who has something in closing that they want to say real fast? Reedy,
- House Members, Jeff. Are we going to cover more of what we didn't get to in a future meeting? Or would
- we want to just cover at a high level? You can just tell us what's there, how to interpret it, if that's
- possible, in a couple of minutes. Yeah, sure. Without going into as much depth.
- I could do that, yes. So two pages left and what we brought is really two colorful pages, one with a
- chart and one with a lot of rows. The first one is essentially showing the city's current debt rate
- with all the debts listed and their rates. So when we look at 2026, our debt rate's at 84 cents. Our
- total rate is at 84 cents. I'll probably have the legging on the control,
- We're focusing on that in this conversation. So that's why we have all the individual that they listed
- out. At the, in sort of purple pinkish color, what we're showing there is where the city of Bloomington
- has really low property tax rates. We're looking at other low property tax rate communities like Lafayette
- and Noblesville. They're even slightly higher. So that shows we have some room to grow, you know, property
- tax rate without putting butter on our taxpayers, right?
- In that blue, that is what we're saying is, okay, right now in 2026 and that green, those cities tax
- rates at 84 cents. Let's just say we bring it up to $1, which is close to what Noblesville and Lafayette
- is at. If we bring it to $1 using property tax, what does that mean in terms of rates and dollar amounts?
- So you'll see in 2027, if we were to bring it up to $1 by increasing it,
- by issuing a 14 cent increase, we would have an extra $8.2 million in levy. And we remember the numbers
- that Tim gave earlier about the deficits, that can more than cover the deficits in the general fund
- by pulling capital out of the general fund, paying that with property taxes. And my last point is we
- don't have to do this in one year. Let's say on average, we're looking at $8 million increase in levy.
- We don't have to do that one year. We could increase it by
- $2 million every single year I ramp it up over four years. Just so, again, to make sure there's no burden
- on our taxpayers and by ramping everything up instead of doing it all at once. You guys all feel free
- to ask me questions afterwards as well. I know I went through this really fast. I usually give Tim a
- lot one time.
- Yeah. Well, it's one of the last year, like one meeting and we talked about council stuff and city stuff.
- There was never enough time to cover all the things. So, um, yeah, it's, it's complicated. What about
- this last page? So I have up there now, is this just kind of a different way to represent this spreadsheet?
- Yes, this, yes. It really is just the first, the first page of what we show it in a chart form to see
- what the makeup operates are.
- Great. All right. Last questions, last comments. What is CCD then? CCD is cumulative capital development.
- So that would be, we have, that's a rate driven fund. So the Bloomington city's CCD rate is five cents.
- We don't, that doesn't fluctuate. If NABs go up, we'll collect more CCD revenues. If it goes down, we'll
- collect less. There isn't a lot of growth associated with that.
- And just so you know, what you see there listed as max levy weights gets divided up among the general
- fund, the parks and recreation fund. And for the first year this year, you put some of that into the
- motor vehicle highway for behaving so well. Any other last things? A lot of interesting. I mean, there
- are a lot of options.
- I just kind of wanted to make sure everybody knew the big picture and knew some of the big decisions
- that are going to be facing us. And so I appreciate the detail. Actually, one question on that front,
- which is the task force must, must, must, must. Who makes the decision about whether the city participates
- in that process at all? Is that the mayoral decision or is that a council decision?
- I'm not sure that particular bill states what does. I'm not an attorney, but I would imagine your attorney
- would say it would just default whatever the statute overrides it that makes sense. I don't know what
- that is. I don't know if the mayor makes that decision, council makes that decision.
- I mean, I would be the representative as the fiscal officer and I would point to the mayor. So I guess
- that would be my. Well, I guess that would make sense if you look at it from that perspective. So the
- city is the fiscal body. The council is the fiscal body. I think that maybe the longer answer is that
- we need to figure out how to do that together. We need to have our own must process first. It is a bit
- odd that the city fiscal body is involved in that. It is very odd. Yeah. Yeah.
- You gave yourself the vote topped in, right? So the city council would still, or I would, I don't know
- if that particular bill requires it, but if that's your policy, that's your policy, so. I mean, it would
- not make sense. Yeah. Without, without the. Yeah, to the mayoral control to go independently out of
- the city without just the body voting on it. We're, what the policy is going to look like. That's why
- it seems like if the must automatically creates
- an opt-in that it feels like that decision can participate and authorize it would have to be a council
- decision. Yeah, I kind of wonder. I mean, this definitely feels like a conversation that we need to
- continue and it does kind of have to do with both ends of what we're trying to do with the fiscal committee
- this year in terms of the council and administrative end. So this might be something to continue. And
- I was also thinking that this might be another good forum for trying to get some of our county partners
- in to figure out some sort of
- cooperative methods in moving forward and starting smaller on some of those conversations before trying
- to, you know, get 20 people into the same room. So yeah, I think that that's the preview of what I'm
- thinking for the next few fiscal committee meetings in terms of really trying to start that, especially
- considering we have a further deadline. Any other last words?
- I'm going to echo thank you to Justin and get you this overview. It definitely, there's a lot of detail
- and it's challenging, I think, for everybody to really understand and get that. I really appreciate
- you taking the time this morning. So with that, we are adjourned.