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.