On that note, I'll call this meeting of the Special Fiscal Committee into order on Friday, July 24th
at 8.30 a.m. Survey will be stopped by Mr. Brady, Chair. We do introductions right now. Mr. Shaker,
we do introductions. Justin Chang, we do an introduction. Isabeth Yamaht-Smith, City Council,
District 1. Sophia McDowell, Clerk's Office.
So today our meeting, if you recall, is going to be a little bit longer because of the buffer of information
and the never-in-a-time problem that we get into these serious financial reports. So we're going to
start with the controller with semi-quarter reports and then have questions and comments about that from
the committee, go to public comments on the reports, and then we will take it away with our more long-term
financial information and challenges. Any questions or concerns about rates? Thank you very much. What
you have in your packet and also on screen here is the second quarter reports.
And just to kind of remind everybody how it's structured, we have two revenue reports, which are the
same. We're just at two different levels of detail, the same numbers. And then we have two expense reports,
which are the same. They're the same data, but at different levels of level detail. And then we have
a fund balance with it. And I'm happy to take questions about any of them. I'm just going to point out
a few things. This is to kind of tell you about things I looked at when I get reports like that.
First, let's talk about the expenditures. When we look at the expenditure report, one of the things
I always look at is just that what percentage of the fund department's lines have been spent by this
time of year. What we would expect is about 50 percent if the budget is being spent down completely
in a straight line. I tend to look at the big operating funds, primarily the general fund and the economic
Development Lit Fund. So if I look at the General Fund, and by the way, I added these percentages just
as I was looking at these. They're not in the version I gave to you. Obviously, percentages would be
useful, so we'll just add that to this addition of the report. But you can see that for the General
Fund, for example, we've got 48.81% of the appropriated expenditure spent so far.
And then for the economic development lit, we have 8.5%. So in general, that would tell us that we're
on track to spend near 100% of the budget with some small reversions at the end of the year. However,
there are a couple of large expenditures that aren't paid out evenly in these funds, but instead are
paid out at the beginning of the year.
So for example, the almost $4 million in ED lit that's paid out in the ESD budget for Bloomington Transit,
that was paid out at the beginning of the year. We also have all the, which we talked about at the last,
or one of these previous meetings, transfers to other funds like alternative transportation, Jack Hopkins,
sanitation, et cetera. Those were also paid out at the beginning of the year.
Actually, what that tells me is that although we're seeing nearly 50 percent of the budget appropriations
being spent down at the midpoint, then in reality, because some big expenses were frontloaded, that
actually we would expect to have some reversions at the end of the year. I don't know a good way to
try to indicate that without literally going through every line and doing a projection.
What was the other one you said, Bloomington Transit, Jack Hopkins, what was another example? There
were a couple of transfers that are done at the beginning of the year. Sanitation. Sanitation.
Also fleets, because the way we manage our fleet is that each of the operating budgets transfer money
into the fleet to manage other vehicles associated with that fund. So yeah, there were a whole bunch of
kind of large frontload of expenses, which indicates that we're in good shape to have some decent versions
by the end of the year in our major operating funds. A couple things when there is a...
Did you cross the number on if that might look like? Well, I mean, we've got so the economic development
lit is or the economic development lit payment to Wilmington transit is nearly $4 million. So I would
say, you know, because that's all front loaded, I'd say $2 million of that we would have expected in
the second half if it had been evenly paid out. So, you know, there's $2 million there and the transfers
I think were about $2 million. So you expect another million dollars.
just back of the mapping calculations. When you see a negative, so in other words, more has been spent
than was in the appropriation, usually what that would mean, well, that could mean a couple of things.
It could mean that we've done an additional appropriation, but we haven't done any additional appropriations
yet since you haven't seen any of those before you. But what that usually means then is that there was
an encumbrance from a previous year.
And I know a lot of, you know, encumbrances are kind of weird. Basically, they're appropriations that
are held over from a previous year. And encumbrances can only be held over if a P.O., purchase order,
and a contract are in place. And they're only valid for that contract. So you can't then repurpose that
appropriation, that encumbrance for something else. And you can't encumber salaries.
But they do constitute authorized and potential spending beyond that you actually appropriate it for
that budget year. We've been informed by the Department of Local Government Finance that it is best
practice for us to present the City Council with a list of the encumbrances at the end of the year,
so it becomes a part of the public right, just to get it on the record of a public meeting.
expect to see that probably at the last meeting of the year. A record number, which is just so you know
what they are and so that the public has a way to trace that and see what those impacts. Any questions
about that? I know that's always something people ask about why are they are the negatives. One other
comment on the housing development fund.
that you'll see that very little of that has actually been spent of the appropriations there have been
spent and you'll hear more about this in the director Killian Hanson's budget report when their budget
one on one she makes a presentation but there's a lot in progress and also this is a situation where
the city has received far more requests than available funding and support and sometimes
To make a project work, they need full funding. Partial funding doesn't help, because it doesn't advance
the project forward. So there's just a lot of work to be done, and that money doesn't necessarily get
spent down in an even pattern. But I know that that's often a question for that particular fund. So
moving on from any other questions about the expenditures. I just want to say you answered my question,
so good job.
Revenues, and the revenues, unlike expenditures, the budgeted revenues are not legally binding. They're
just estimates. Sometimes revenue comes in for which there was no estimate at all ahead of time. That's
why when you look at these reports, you'll sometimes see a zero or a blank in the amount of budgeted
amount, and that's just because there was no revenue that came in.
that hadn't necessarily been anticipated. In this case, there are intergovernmental agreements. Maybe
there was an agreement between, just as an example, the county and the city that hadn't been anticipated.
Yes. I have clarification before you go further about the revenue because usually rent means that we
owe something.
But in this situation, when the remaining amount is in the red, the negative, it's actually positive
thinking. That's the actual, like what we actually thought was more than we thought we were gonna get.
Unlike expenditure that was more than we thought we would get. In this case, the revenue is more than
we thought we would get. I just wanted to make sure, clarify that I was thinking about that, right?
Because that's kind of an awkward way to think about it and make sure the public realize what's happening.
Yeah, I might wanna not do it that way.
I just used a standard formula for an Excel that uses the counter formats. Yeah. I guess that's the
end of the question I have for clarification. Okay. Just a couple of things to mention. Let's see. We
have in taxes,
As an example, normally with taxes, you would expect by this time to have received 50 percent of the
taxes. Actually, a better example is with economic development lit, because that's the only funding
source for the economic development lit. We anticipated our certified lit was about $2 million,
But we, and local income tax is normally paid every month, it's paid monthly. So by this time, we would
expect to have received exactly 50% of our lit. But you'll see that we've actually received more than
50% in our budgeting amount. And the reason for that is the supplemental, because we get the supplemental
that this year, 2026 was not budgeted for. So you're actually lining up with more lit than we had anticipated.
And then finally, the other thing I want to call attention to because this will matter in the future
and then during budget is actually a bit of a revenue detail, which again, it's the same as revenue
only more, only a lower level detail. So it's planning. We have a bunch of revenue sources like application
fees, inspection fees, intergovernmental.
House Enrolled Act 1001 puts some new requirements on planning revenue. And in particular, this planning
revenue, the planning revenue in particular for permits and building. The building and planning permits,
which include inspections, now have to be deposited in their own set of funds. So they will no longer
be as 2027. That revenue will no longer be in the general fund. It will instead be in a new fund that
we have to create.
Then we can only expend out of that fund for the actual costs of providing those building and funding
funds. The reason for that is the General Assembly was convinced that local units of government were
using planning building fees as a profit center. Bloomington is not by a long shot using that as a profit center.
As you know, our planning expenses are far lower than the fees are, but this is now kind of an additional
accounting step that we have to go through and segregate those fees. So from now on, in fact, when we
present the budget to you, there's gonna be a new fund that's created that for getting the name at the
moment, but it's like budget and plan or something like that. A building plan that will be segregated
for permits and building fees,
along with the expenditures associated. And so to clarify, like that will have to come before capital
degree on because we have to be there. Or is that the difference? Yeah, we will be creating it in the
system now, basically, because we have to include in our budget proposal. But yes, you'll essentially
be doing it closer to when you approve the budget for that. OK, so that will be far as the whole budget
package is posted. It's on separate legislation. Right, correct.
And it will not, you know, it really ultimately shouldn't result in any change in either expenses or
revenue. It's just, it's almost just a lot of our accounting work and not just in our office, but also
in the department. So it's just extra work because the department is required to reconcile their actual
expenses in granting these permits with the fees that are brought in. So it's just more work for them.
Jeff, I know that one of the felt for, because of, you know, is building public services, roads or detention
points or something like that, they pay a bond to ensure that they fulfill that obligation. Where is
that apart? Where does that money get from? I mean, I mean, so generally the bond, we don't actually cash the,
You know, it's usually down in the form of an insurance policy that just sits on a shelf unless it actually
gets called. We did actually have a fairly recent instance where we had a developer long call and it
went into the general fund where the engineering department was essentially used the money to do the
remediation of what they had to fix, but the developer wasn't able to do anything.
Okay. So, I mean, that's generally the idea. We're also not supposed to make a point that I'm wrong,
but we're supposed to use it to cover the costs of doing what the developer showed them. Just curious,
was it covered? There were actually two different instances, one of them more than enough, which actually
created a problem because we didn't have to figure out what to do with the rest of it, how to get the
rest back to the insurance company and the other metal.
Yeah, the bond doesn't always cover that cost of remediation. Was that the digital installation for
fiber? No, that's another thing. You will be seeing just a sneak preview in the budget presentation.
The budget proposal will include a $500,000 transfer out of that fund to the digital
the fiber connectivity fund, which is used to defray half the costs of connecting low-income houses
with the fiber network. No, I was just thinking the bond that there were so many company names, I can't
keep track, but that the company had that was supposed to install the fiber that actually- It was Orinium
Fiber, some contractor, AEG. Right, that made a lot of
mistakes and caused a lot of cleanup work. Yes. And that bond was tapped, right, to pay for that. They
paid for that, but the bond was also, they also had to deposit a million dollars into this fund that
I was that I was telling you about, we call the surety bond proceeds fund. You all created that last
year. But that was, that was insurance, that wasn't the low income access or was it
We are proposing to transfer $500,000. I'm kind of giving you a seat. The real question here is that
has the city had any un-recarb expenses related to having to clean it? That would be an engineering
question. My understanding is that some of the repair work will be done by the company that takes on
the new contract.
There were some repairs that we might have made, but then some that whoever assumed the next phase of
contract also assumes a portion, and I don't know any of the details on this, of the actual repair of
problems that might be possible. So it's sort of a package deal. You want the opportunity to go forward,
you also assume some of the problems that have to be solved.
And just FYI that I'm pretty much done with my report. But if you go to the fund balances report, you'll
see the fund name, the surety bond proceeds fund. That's the fund that you all created last year to
receive that million dollar bond. But that's, as you can see, none of that money has actually been spent
yet. Again, we will be making a proposal during budget.
So I think that's all I've got. Do you all have any other questions? Questions on the right-hand side?
I have a couple of questions. One is, I'm wondering if there's any consequences that we're considering
with regards to the fuel tax cost of many of them. I mean, I know we financially pay local units. Actually,
we've already received the first payment back from that.
Right now, our gas tax revenue is looking good. All right. Then I had another question while we're on
the front page about 2416-0 starts here, Safer Streets, which has a zero balance. I'm wondering if that
is a new or old fund because, of course, we have the Safe Streets for All on a Shed. I guess I'm just
wondering. I've never noticed that.
I actually don't know what that is. I've never had to touch it, so I'm going to guess it's an old fund.
It's definitely not long ago created. One of the frustrations with our system is that we can't create
a favorites list. We basically either select individually or we get them all. Some of these tools had
just not been used in years. I guess I'm curious about that because what it says might be useful.
I'm thinking about our safe streets for all action plan. I don't know if there's any way to utilize
that at all for anything. But I just saw that and I made that relationship and I thought, interesting.
Of course, there's no money. Right. There's no money. But that's why I'm like, sometimes we create more
funds with the idea of using some.
some fund that's already in existence or it is in the process. Like alternative transportation is the
fund that would logically. Yeah. Combine for me for funding. Yeah. And that's true in banking buildings.
Okay. Then I think I have more. There's a lot of cases.
I did think of a question. Yeah, I got that. You mentioned that the ED lit total was about half, but
I noticed that the public safety lit was far less than half.
What's going on with our public safety? The public safety lit fund has tended to be used more for capital
expenses, and capital expenses are always more lumpy. They're not paid out over time. I think that's
shifted over the years, and this year there are some more operational expenses being put out of it,
but they're still. I meant on the revenue side. On the revenue side,
But we budgeted 4.8 million and then we've only received 1.4. And then the summary, the revenue summary
on public safety. Yeah, that right there, that 4.8 versus Florida's next to it. Oh, yeah. I think that
was budgeted incorrectly, honestly, because the
the public safety answer point revenue comes out of that. And so if you copy the wrong number, if you
look at the wrong number for public safety, you might be including some of that revenue rather than
only the money that's supposed to come in from public safety. That's my guess just right off the bat
and look at that.
whether we could maybe look into that a little bit because that's significantly less than half. We do
receive all of the payments for LIT on a monthly basis. Those should be in terms of actually bringing
in revenue should be totally caught up. Jeff, you're saying that the budgeted revenue for LIT public
safety of 4.8
million is incorrect, including PSAP. Let me look into it before I say that firmly. That was my guess
when Council member Stasco brought this up. Let me look into it. Isabel, what was your question? The
ARPA COVID funds, they have to be spent by the end of this year, don't they? Yes.
There's a lot of effort spent and meetings with departments and our office and departments and the attorney
from Barnes and Thors that we've used as a consultant. Those discussions are very active. Let's go up to
public comment then around any of these reports. If there's a member of public who would like to comment
on our setting for reports, please raise your hands. There's nobody in the room still. I'm not seeing
any hands go up. Great. Thank you very much. Jeff, that means that you were so complete with
your presentation that nobody knows any
additional questions. So now we're on to Reedy. Perfect. So the next kind of heavy-hitting detail piece.
Take your way. Well, it's just, sorry, let me just make sure it's the... Tim, right? Okay, let me just
make that sure. Try to keep it sweet from the inside forward, because everything else is just gonna
have to work.
We're going to go through the presentation, but as we go, there's certain topics that we will need to
dive further. There's three other handouts that we've provided, and we'll let you guys know which ones
we've got. But just as we go through the presentation, most of the talking points are going to be focused
on work on the tax, property tax, the general fund, which Jeff really just talked about, and property
tax, debt-related debt.
Again, we'll record these as we go. Are there any questions? Please go to your office and we'll be happy
to answer any questions. For the sake of the public, this presentation did go out and it didn't end
on a packet. I believe that the additional keys we have here are also in amendment one.
The data should be now, as I mentioned, I don't know if that would help to the public, but the presentation
is clearly glitched. So it did not import cleanly into Google Sheets. It's a power plant. So we're going
to have to fix that. All right. So I was looking and I saw that some question was asked about the public safety.
uh for those in the public and everyone here you want to see what the department of public government
finance has certified for the city for 2026 you can actually go to the blgf website and type it up down
slash blgf um you're certified in public safety distribution for 26 is $4,875,557 yeah that's thanks
for having me the whole thing
That's just a number. Just a number. For public safety, it's 4,875,567. That's their estimate. Certified.
The income tax basically comes in exactly as it's certified. So that's plus a certain cap in the budget.
To me, that just seems like a piece of public safety access point was promoted out of the public safety
front. Back to the presentation. So first bullet point there, capital plan and bond timing. I will say
right now, I guess we're technically on draft two,
of the long-term capital improvement plan. That's going to be five years of capital outlays plan alongside
your operating expenses as well. So that's actually tied to individual bonds within the financial plan.
The financial plan should be part of the packet. Correct. Okay. Really with a big part of the capital
plan is just going to kind of depend on the council's appetite for bond sizing and the timing.
and I'll let Justin get to that when we get to that. There is, just so everyone's aware, there's a pretty
significant opportunity if you wanted to keep the property tax rate similar to the next closest city
because it'd be off debt. You're about 20 cents lower currently than long yet. So, and a 20 cent debt
rate, not that you have to or even need to be a full
Any questions on that? Yeah. And just something to keep in mind there, depending on the length of the
bond and the issuance costs and all that stuff, they did that, they did that, they did that,
they did that, they did that, they did that, they did that, they did that, they did that, they did that,
they did that, they did that, they did that, they did that, they did that, they did that, they did that.
A lot of what you can flush in the middle of the net. So it would be helpful maybe. So this is the next
comparable city, Lafayette, but you know, it's nice to have a visual of where we lie within other cities. Yeah.
I don't know if you guys heard from the county, if there's any updates on that.
Just know that we, our firm, has prepared an analysis of impact projections based on the statute as
it currently reads. So, and I say that because it may change. They technically haven't until the 28th
General Assembly to change it because they think 29th is going to be the first year where the income
tax impacts. So, we may have changes next year and changes in 28th, so. Yeah, yeah. That's how we're
supposed to play. Okay.
just kind of on that same point, the entire plan really hinges upon how that income tax situation with
the SEA-1 slash mutual investment play out. So just keep that in mind as we go through the plan. I think
we covered this slide last time, but just, I don't know if anyone needs a recap, maybe for the people
that are on, for the public need a quick recap here.
Essentially, the city can either choose to do its own local income tax rate under the statute, the way
it currently reads, and that will start in 2029, or the city can opt into a countywide, what's called
a municipal services rate, which would go to primarily just cities and towns within the county. But
those are the last two calls, right? Those are the last two calls, correct.
The rest of those columns really don't matter to the city so much unless it gets to a point where that
actually affects the rate that the county will adopt for the city, for that instance. Because everything
in the city has no control over that. And really you don't have control over that first blue column
either. You only have control over that last cities and towns under 3,500 people. I will say the fire
in EMS does matter to us. The fire in EMS does matter to us.
or we don't have any control over it. Correct. So the first blue box, that's like the Musks committee
thing to have control over that, right? Correct. And the Musks committee really isn't leading by me
either. So, I mean, it really just comes down to the county council having that time of the day.
The way it's, the way the statute currently reads is county council will have that vote reported. So
any questions on the sort of how it works?
No, I do want to say, though, for the sake of maybe my committee members, you know, we get these emails,
I assume that you all get them too from me about different workshops and things related to- Various
things. There's one related to the must committee stuff on Monday, and I did sign up to go and IDN forward
that to anybody else who was interested in coming here for them. It's like in the morning. I don't know
if anybody works here. And assuming- Yeah, yeah.
And I think that they often record those students without a recording afterwards too. So I can find
that in my L4 class. If I don't do that, I didn't say it, but it reminds me. The only point I'm going
to make on that is I agree that the AEM presentations are great and they're really not ideal. It's really
interesting to see, kind of from the county side, their lobby group, AIC, has their own set of presentations.
And it's just interesting to see
the difference in the way that they spend these various rates. The AI aim is very much, do this must
process, do it early, participate widely, and AIC is basically telling the counties to hold back and
that there's really not a lot of benefits to them going forward with it. It'll be interesting to see
how that goes.
The AM workshop on Monday had somebody from the AIC that's going to participate in that group. I can't
actually remember. I was like on vacation. I think it's good for us to keep remembering and saying in
public also that in three of the four county districts, the majority of their constituents are also
city residents. Since out of seven county council members, the majority were constituents for city residents.
That's an even better, yeah. I'd say there's, there's merit to both sides, right? I think definitely
for the public and everyone involved in the community needs to kind of get together to know how this
thing's going to work at a high level, right? But to AIC's point, you're not going to have, we don't
have adjusted dressing count basis for any of the cities and towns. So there's really not like a, an
ideal way to project your impacts. So.
That's a huge point, actually, and that's is that for counties, we know exactly what their AGI is. We
know what counties, what income tax counties bring in, but for cities, it's a guess. It's just a projection
based on, you know, I don't know what data points we use to project, but it is just a guess. Yeah, the
method we use to do the city's impact is American Community Survey, which is census data. We get that
on census.gov.
and everything's noted in the SCA-1-size HGH work and analysis of the links. Essentially, you just take
the 24 data, which is really 23 data inflated to 24, and then you inflate that to the current 26 data,
and then inflate that further to 29. So I mean, there's, it's a logical mathematical method, but it's
a projection, honor projection. So it's about the best method you can come up with.
So any questions on that? All right, so where the river meets the road here, and this is why I said
that everything in the financial plan hinges upon how this burns out. So if the city were to do its own 1.2%
live, which would only be on the city, people living within the corporate boundaries of the city,
Based on the HDI method that I was just talking about, you would be about $18.4 million less net property
tax levy and global income tax total. Then you would be under current system in 2019. Can you just clarify
that first column is what would happen if there was no SBA one? Yeah, the first column was pretending
like none of this stuff ever happened and it would just be the current system. So that's in our current
system, that's what we would have expected.
Yeah. Okay, so this is no, that's the one. And first of all, this graph did not transfer into the packet,
but I feel like I remember seeing this graph somewhere else in some of the documents that got spent
in the original one. There was a lot of pages of stuff. Yeah. Yeah, so 29 pretty much in the words,
her statute pertains like we're under the system of
work. Anyway, um, that's what a 6% max levy growth quotient and a 1% local income tax growth per year.
Those are the big assumptions that are using that. Um, and those same assumptions. So 6% max levy growth
and 1% local income tax growth per year is in the other three examples as well. Just to keep it as similar
as we could.
So yeah, the next scenario is right now based on the information that we have, doing a parcel by parcel
analysis, getting every single unit's property tax impact, basically, but they're losing property tax.
That includes the county, township's library, all that stuff. That's the breakeven analysis. So that
right now is what is in the plan.
not the best case scenario, not the worst case scenario, just kind of the hopeful scenario is what I'm
going to call it. So that's the third column. That's the third column, yes. Okay, so you already found
out the second column. Second column, that's just the, yeah, that's just the city list. That's how you
do it. So just to put that into perspective. Yeah, that's terrible.
I'm just trying to line up the bullet points on the side with the fallen like the turn. So that's the
first bullet point. Yeah. So, and the one next to that is just the maximum useful services only. And
the reason why we want that in there is to see how dramatically different that is the city hopping in
to a county wide rating.
That's not even, that doesn't even include fire made mess. That's just, hold on. So that's not even
the rosiest. So that's not the second. That's the last column. Right. But, but that's not the second
bullet point. The second bullet point is a little, a little more confusing because it includes a little
bit of fire made mess and a little bit of misconservative. Okay. And is that the third, the fourth column?
The fourth column is just even misconservative, max out. Oh. Yeah. So the third column doesn't have
a bullet point over here?
The bullets don't line up with the columns. They're general. Yeah. I'm sure that you'll be heard. So
the yellow. So the best case scenario,
is actually more than that last column. Yes, it would be more than the 99. Because it would have some.
Yeah, it would have the entire AMS and the full maximum. Well, yeah, there's no actual yellow column
in the 99, but there's some, there should be yellow. Yeah, there's, well, there's kind of a dual reason
why the fireman has to live in there. It's because the county has complete control of that. And if the
county sees that they can make you to hold with just the maxing out the municipal services lid,
They may decide to lower fire now to, you know, give Monroe County fire protection to break even and
then not get the city in. Right. I mean, it's fully in the county's control to do with fire and that's
what they want to do. Right. So there's no, that's like maxing out the municipal services lit, but not
having any fire, any of that threat to the city. Now for maybe starting other units, but right.
Yeah, that is kind of odd that the city, the county is required to consider service area and population
served, but it doesn't give them an actual formula to use those. They can say, oh, we've considered,
we duly considered it and the city doesn't. I will say that the AIC presentation that I saw the city
or AIC give the county council on this, they seem to be,
supporting the fire DMS rate rather than the municipal services rate. They were still very much pinching
the municipal services rate as a small municipalities rate, which it was before HTA 1210. So I'm not
sure how that would go. And actually thinking about it may make more sense to look at the Senate rollback
going on House rollbacks 1210 handout right now before we
Does that make sense, Jeff? Why won't the yellow line go across it? Oh, and this is somewhere in one
of our cabinets. I was also going to have to take the front of the room. Is it on this? Yeah, it's the
one with the yellow line. It's the expected front. It's the next page, so I retract my line. And these
were provided as part of that. So we're going to keep that to the side? Yes. Unless people have questions
about this slide.
I think that these are out so far. I think everyone here in the room probably knows this, but those
in the public have been listening. The reason why it's so much more favorable for the city to hop in
is because cities and towns get one and a half multiplier on their population. Cities and towns are
always essentially going to get more global income tax, hopping into a pool of taxpayers, that's the
entire county,
than they would occupying their own home. So the county the county doesn't get much of that useful services
right they only get what's left over after the cities and towns get their allocation. So I think we
also get well I'm sorry I didn't realize they wanted me to project this one so it's taking me a second
to fund that.
I don't think we need it to jump. It's just the next table. Yes. Sorry. All right. The next two tables.
Yes. Even though Justin and I, so we're kind of staging together. I forgot that the very next slide
is what I was getting ready for. There's a lot of information. Like, this was pretty massive. Thanks
for trying to digest this too. All right.
There's a wall. There's a wall of numbers on this slide, which I don't know. This may have been one
of the things that wish knowing that actually did not. OK. This is. The breakdown to each unit. Based
on that break even. With so that would be the third graph, third column that graph. So you can see the
city here.
And the rates get a little bit weird because it's not a full amount of rate intention due, so it's kind
of buried in there. You can see the top example of the county, their break even amount, because they
get a little bit of municipal services lit, and you can see at the 1.03% rate that we're showing there,
the county get about 3.7 million of that. But the county to break even, and that factors in their property
tax loss based on the parcel data that ran.
Now that's probably going to change in 29-2. It's just the best guess. They're going to need about .8706
out of their maximum 1.2 to break even. And the reason why that's important is because that will keep
the overall local income tax rate, the taxpayers pay lower. And that's something I think we need to
keep talking about the public as well.
is what is the overall tax rate for the public versus the benefit that we all get is county and city
governments. Sounds like you're saying, Tim, that one rate will give a better result to everybody than
finding out multiple smaller pieces that ultimately residents would pay more and we would receive less.
Yes, yes, correct. Yeah, I think it's
roughly 52 to 55 percent of the total population of Monroe County lives within corporate boundaries
that are born with them. To your point, having different rates, if one has to max out their own rate,
and then the county still does the same, I mean, people are paying a much higher rate on average in
the county, just because most of the county lives in Brooklyn. Lots to take in on that.
you can see here the city. So you got an excellent down. How do we do it in yellow? It's about 42 million
that you received. That's using 26 certified numbers and then adding one percent per year on top of
that. And this is just Matt medical really the only thing that you're on here is the growth. What one
impacts growth assumption. And these are 20.
29, this would be 29 assumption areas. And then you can see you lose operating property tax levity and
then you lose debt capacity as well just because your net assessed value is going to be lower, understand
what that one would have been without and send a real bad one. Because. Because this is why, right?
like statewide. Yeah, that's statewide. That's not anything the city controls. That's statutory. It's,
it's probably taxed stuff. So it's probably not going to change. We'll sort of throw that out there
too. So, and you can look at those, let that last column and see who the real losers are from this today.
And who, who don't have the power to make up the difference. And that's cool. Yeah. So when you have
the library, so when you say break even, there's, there are units in here that you, that really cannot
be made whole.
under a direct local impact structure. It would have to be a very difficult inter-local agreement process
and then that just gets way too in the weeds. It was way too complicated. So schools cannot get any
direct local impact under the system. And I just want to throw out there that one of the things that
that means for
our community is that our schools are probably not gonna be able to provide all the services that they
kind of provide, which means that either our community members just do without, or they need to like
backstop that in some other way, which may be other units of government, it could be nonprofits, those
services, and it's gonna be a loss and a struggle.
I'm going to get a little bit deeper than that. I'm going to go to operating costs. I think we're not
going to be able to be on special services. This will mean deep cuts. Can I go back to how did the county
with a county services only with a municipal services tax rate of 1.03 percent.
How did the county only get 3.7 million of that? And the city got clearly 2 million of that.
What is the math, I think? Yeah, so under House Bill 1210, the municipal services lid, that's taxed
on every single income taxpayer in the county. But the cities and towns within that column get a 1.5x
multiplier on their population. So really that means there's less
population based math on for the unincorporated area of the county, if that makes sense. So the cities
and towns, basically, they get more. They get a bigger share than they would normally. So if everybody
in the county gets taxed, then it gets distributed to different units based on the population size.
So we would get the most of that than any other piece in the county because Bloomington has the highest
population.
Well, I understand that, but it's the multiplier that makes such a difference. It's the multiplier that
makes the entire difference, yeah. Yes, I will say that I, when I first saw that number, I didn't believe
it either. And I went to the statute and literally followed all about like step one, divide this by
this, and it comes out exactly right. That's the way the statute is written. Yeah, so the only thing
goes from 52% to, what was that, 70, 75.8% or something like that of the total distribution.
stuff that, you know, if there's any key games out there looking at this, there's some weird routing
stuff with the rates because you can't, we don't want to go to like a million decimal place. It's really
just four decimal places. So when you do that, some of these units end up with weird round. It's like,
oh, it's still, it's a little more in the room. Sometimes it looks a little more. So yeah, that's the
reason for that. If there's any math nerds out there, so. There are. There are. Okay. I saw who was on.
Any questions on this giant fortress of numbers? Well. And so I have a question. So that really like
in terms of the 29 circle steps that you basically like tried to match from the page before what we
would have expected without SCA one in terms of matching those rates. Yes. So that's
I mean, it's just the theoretical what could happen in terms of those percentages. Yes. It's going to
the county and say, hey, we want to keep people at an even keel or we want to let people eat a property
tax loss, what's the, what are we going to do? This is like a middle growth scenario. It's not the best
case scenario. It's certainly not the worst case scenario.
The second to last column where you're adding a fire EMS lit braid. Yes, why are there numbers for the
school corporations in the townships? So there should only be surely be on townships. Yeah, yeah, yeah.
So that's again the fire EMS that is completely discretionary to the county, but the townships don't
have their own fire departments.
maybe one if they do, but. Yeah, contract and stuff like that they can. This is just. Again, this is.
The county if you read if you read the statute, it doesn't really. It doesn't really even. Yeah, most
of these are provided by protection or by Allen. So yeah, it doesn't really even limit it to firing
mess and that was actually one of the points that represented Thompson. I think probably wants to fix.
Yeah, you're not you're not predicting what
the county's going to do. You're saying what do we need? This is this is what each unit needs. Yes,
yeah, yeah, not just. Yeah, it's it's. Will the county go once again to the sling to get the exact?
Exact percentages of wood that everyone needs. Maybe you can. Maybe not. It's again, it's up to their.
Scratching and this would also allow the county government to break it in. Yes,
So we should probably. Yeah, there's probably nobody. Sorry. Yes. There's never enough time. We have
to attend, correct? Yeah. OK, yeah, there's still part of it. Yeah, there's a lot. But you've gotten
justice. So the next slide, please, which you can't really see unless you're swimming. This would be
the impact to homeowners. Now, this is not going to be the impact at all with the taxpayers. It's just
the homeowners beat that line.
under that scenario, the breakeven scenario, which follows the previous slide. So you can see for the
most part, because of the property tax savings to homeowners, in most of these tax and commission rates,
people are actually going to be saving money, even with an increase to the overall level of the tax
rate. And that is one thing I didn't mention. In the breakeven low income tax scenario,
We're going from a 2.14% current low-income tax rate to 2.4512, which is about 0.3112% increase. And
that's tackled into this slide. So you can see on average, taxpayers save roughly $657 in their property
tax bill. That would be the old system. So no SBA 1, no HTA 12, none of that.
And then with SCA-1, because of the deductions and the straight-up credits that homeowners are getting,
on average, we're saying about $660 on property tax bills. Where did 660 come from? So it's 1, 2, 3,
4. The fifth column, SCA-1, mean property tax bill increase slash increase. And we have all the way down.
the bolded 657.6. The important thing to note on this. And so this is what taxpayers say? Yes, this
property taxes. Yes, and this is the average based on the average homeowner gross assessed value running
that through the property taxes. Every single parcel has been ranked on this. This is just the average.
Now this is going to vary wildly depending on the gross AP of your home, but this would be the average
of all homes.
And what we can see is that this is basically shifting some of the costs of local government on from
homeowners to work. Correct. We're shifting it from wealth to income, essentially is what we're doing.
So do not all of these columns talk about, you started saying that it was all talking about homeowners,
but is the list talking about all
people who are paying income tax? This would be anyone that's paying income tax. And this, we just use
up the average household income on this. Okay. So, so in the next column here, it says 2020 projected
median household income. That's not just for homeowners, that's for everybody, every household, regardless
of? It would be more just for these households, right? Because that's not going to cover the other things
that are paid. And this isn't even, I mean,
no actual household income is going to be in 2019. This is just using the census data, the best knowledge
that we have currently. Right. I'm just trying to understand the next columns after that average property
tax savings. If the average person is saving the $657 in terms of through the whole county on their
property taxes, is one or the other
columns like what they would be paying in lit and how much more they might be paying in lit? Yeah, so
going from the 2029 rejection in the household income, the next column immediately is what you, is what
that household income would pay under SCA 1. So the 2.4512% lit. Okay. So you can see there, let's just
take, you know, let me count you, for example, average household income, $77,728.
Under SEA-1, that household would pay roughly $1,905 of income tax under SEA-1. And next column is the
comparison to what they would pay without SEA-1. So that's the current local income tax rate of 2.14%.
Right, but that's also what they're paying in 2026, not 2029. Well, it's grown 1% per year. Using the
rate. Yes, using the rate.
Okay, yeah. So this is also, then, a 2029 estimate? Yeah, the 2029 mean household income, that is taking
the 24 census data and growing it to what we think it's going to be in 21. So it's the same base for
each scenario. The only thing that's changing is the rate, the local income tax rate. Does that make
sense? So the projected mean household income in Bloomington Township in 2029 is only $77,000.
Yes, and you can see it varies very significantly from tax industry to tax industry to tax industry.
And most of your income in Monroe County is outside of the city limits like look at richer average,
right? So. That's just another reason why the city makes less low income tax due to its own. Because
on average outside of the incorporated area of the city, the household average income is higher. So.
And so then continuing down this, the next, so it appears as though under SEA one, most units are paying
more lit. Yes. And so then that second to last column is how much more that they're paying.
how much more you're paying versus the property tax. It's netting. Well, no, the second to last column.
Second to last column is, yes, you're correct. That is the increase or decrease, which in this case,
it's an increase for the payment of the charity fund. Then the last one is the property tax savings.
Netting gets the increase in the lower unemployment tax. Right. Then on average, just to really make
sure the public hears is what the state just did is,
potentially save the average homeowner $350 at the expense of our school systems right now, and potentially
at the expense of our other local units of government, and at least at the expense of a whole lot of
time right now that's being spent by local units that are figuring this out. Yes. This is for an average
of $353 per year, projected savings per year. At the expense of our children.
except in Steinsville, they just end up paying more. Sarah. Oh, right. Sorry, Steinsville. Oh, yeah.
Steinsville doesn't have to pay more. Yeah. There's... Yeah. So, sitting in the left one, it's kind
of aggressive in the property tax savings, as in the higher your home value, the more savings you have.
Uh, the people that are, because there's a fixed portion now. Yeah, because there's a, there's a fixed
portion that you get now on your deduction. If you own a home and a sudden little portion, because the
fixed portion of that is for more of you if your home value is lower, that goes away. So actually the
people that have, and it's something like if your home is less than 150,000 or such value, I think on books,
you actually end up paying more property tax under SEAM than you would without SEAM. So it's definitely
regressive. The regressive thing. We're looking at the household income in Steinsville average of 76,000
and that they're paying more. I would say that's demonstrably regressive. Yeah. Yes.
To your point, the average home value in science schools is lower. It's under that roughly $150,000
threshold. So that's why they're paying more. Yeah, I mean, they're almost saving an average of $24
and 74 cents on their parking tax bill. Like, it's really... Anyway, I think we all understand this
chart. Thank you. It leads it out very nicely.
Um, I may try to put together some kind of group work about this. So, I got Robert to set up with me.
Yeah, we can do that. Yeah, we can do that. Yeah, you can go ahead and speak about that. Um, Voltaire
Path of Planning, Path of Planning, we sort of put this together because the way our practice works
really well, although we can
control is the debt tax rates, the maximum money funds are the same, the maximum rate funds are the
same. So what we can control with our tax rate binding really is the debt portions, the debt funds.
And in order to fund all of our long-term capital plan items, a lot of that has to, or most of that
has to come through debtors' issuances. So we actually worked with Jeff and all the department heads,
and we worked with Jeff
to come up with this long-term capital plan. This is actually, I want to say like a 10-page capital
plan that we just shortened into half a page. But to give you guys just a general idea, if you look
at that grand total, all departments has shown. Relatives, a green and a red. Green is how much that
we are currently funding even through for our property tax bonds that we've
previously issued and still have cash on hand or bonds that we are looking to issue and that we will
talk about those potential bonds builder as well. When we look at point 27, we have 77 million dollars
in total capital requests. Currently we are funding 65 million dollars of that and we are 12 million
dollars unfunded even with
the potential bond issuances that we're talking about. So when we go on to the next pages, I would just
keep those numbers in mind because what we're going to talk about doesn't solve all of the capital funding
issue right now. Now I will also say in 2031, that $26.4 million, those numbers will likely go down
as we look at further bond issuances. So this is a long-term capital plan that goes out five years from our
We don't well, we can't look out that far, but we haven't yet. So can I just mention that these numbers
that go into here as far as capital needs from the department heads who have gone in a fair amount of
detail and projected out the request. That does not mean that any of them have been approved. They're
not part of the mayor's budget at this point necessarily, and some might be, but just just to be clear,
these are based on expert.
estimation of what's needed. And for the benefit of the public, could you just say a few words, Jeff,
or somebody about what kinds of things those are? So if you're on the public and you're listening to
your capital projects, what is that? Some things that that would include would be vehicles, which can
be cars for hand inspectors all the way up to garbage trucks and snow plows.
In particular, the public works department, as I think you all know, is very interested in the new ops
center to replace some seriously aging and decrepit facilities. That's one reason why the 2027 numbers
look so big because it doesn't include that request. Vehicles, improvements to building, capital improvements
to buildings, engineering. For example,
You'll see some budget requests this year for safety related improvements to pedestrian infrastructure
and new signals and signal modernization in the streets. So those are the, and then just other public
works, other street expenses. Parking meters, new parking meters. The parks of Arkansas might include
some other things today. I have a master plan in this meeting.
Yeah. Yeah, I didn't include you right now. That's that didn't include parts of us. But for everyone,
I'll get everyone listening, but included in your packet within the financial plan in the packet. In
the capital plan section, you will see each individual thing that is right now funding at the discretion
of the administration wasn't so it has everything individuals.
Okay, somewhere in the packet. Yes. Yes. So we can go on to the next helpful pages. The next two to
three pages are actually on the general point, which I don't know how much we need to go into because
I know Jeff just sort of just discussed that at the very beginning of this meeting. Is there anything
that you want to point out here too? I think just the big thing on the general fund and then the next
page. Yeah, Jeff, if you don't mind going through the next page. Really the
The big thing to look out for here, just keep in mind that until we get a lift structure in place, there
actually is an operating deficit currently within the general fund. So now there's ample cash in the
general fund, I will say perhaps with that. But as you can see, so if you go down to the very bottom,
revenue over, under expenditures, purple, pink, yeah, pink down there at the very bottom,
So you can see we have about a $7.8 million deficit built into this year. That's just based on current
spending, current budgeting projections. That's probably no change by the time you do third quarter,
second quarter on what's up. And then you can see in 27 and 28, there's also deficits planned in most
years as well.
How do we get a $16 million? Yeah, overage in 2029 that is slightly complicated. Yeah, so because the
local income tax structure as you know, completely ceases to exist in 2029. This is assuming that we're
no longer funding any of your local economic development. Public safety with it or piece app within
those funds.
So because we're doing that, these are the cash balances, the end, the year in cash balances for 28
or beginning cash balance for 2029, whichever way you want to look at it, that we're, that we're essentially
giving to the general fund because we're no longer funding. Those funds won't exist. So in essence,
it's not new money. It's not new money. It's a new framework.
Yes. And that's why you see the revenue over under goes way down in 2030, 2031. Well, three transfer
items, transfer of PESA, transfer of one of the two transfers already, those add up to almost the exact
$16 million. So that was that perspective. Can you talk about the interest on investments? You've got
to highlight in yellow because we've talked about it and because it's big.
Yes, so important thing to keep in mind on interest that we want investments. If we're lowering our
cash balances overall, we're not going to generate as much interest revenue, right? And we're also going
to assume that that's probably going to lower the reserve rate in the future, which they may or not
do. So that's just another assumption to keep in mind in the brain. That's why we're going from $3.8
million projected in 26,
to roughly 1.9 million cash in 2017, because we're spending down roughly $8 million cash plus ARP, plus
ARP like this. And then you can see, because we spent out more cash in 2017, we're going to be in 2018.
We're about to get back up in 2019, because that's based on the break even with, assuming that we're
going to get the list scenario and have more cash to build.
I find it notable that we're assuming we're going to end the Bloomington Transit interlocal agreement.
I mean, that's something we may have to do fiscally, but it's a big policy choice that we should think
about. They are certainly aware that the money isn't there to continue doing that. They all have a change
in leadership or courses that they don't learn there.
And certainly until now, it's been very clear that that was one time money and that it's highly unlikely
that there would be a source to contribute that. And just to sort of ease maybe some of that anxiety,
in 2019, the county does, under House No. 12, then have the ability to give women in transportation
a significant amount of local tax revenue. And they've been working, and they're multiplying, they've
accounted for
their vision of expansion and where that funding would come from. And you can see the impact on that
same one, HH 1210 analysis, that's included in this packet. I will ask, why do you show the
end of Bloomington Transit kind of as a revenue? Yeah, that's a big question. Yeah, because it's,
I mean, we were paying for it out of LIT, so. Yeah, it's certainly LIT and that's an expense, so it's
It's either we show it as like a negative, essentially negative expense or we show it as 11, right?
It's kind of paper poison. It's just that we're getting that 3.81 back. We're not. But you're not double
counting. We're not double counting. Right. We did not, we did not lower the, yeah, we did not lower
the expense in the, in the lift funds. Got it. Right. Yes.
I just I do want to make note that we need to be sure about that. Okay, that based on who I saw there
earlier, maybe three minutes or so. Okay, um, actually, I think this was mentioned under the question.
I want to see sort of a chart. We have made projections out for the city's tax rates going out to 2030.
This is assuming the current
The current box still exists and levy still exists without adding anything new. In 2026, we're at 84
cents and that stays relatively in that area. It goes up a little bit because we're not expecting SS
values to grow as much. It all goes from 84 cents to 87 cents in 2030. As Tim referenced earlier, for
us to get to that next closest, next comparable city of La Jolla and Elvisville in that green box down
near the bottom,
For Novosibirsk, sorry, for Lafayette, if we want to get to that same tax rate in 2026, we can potentially
increase our rates by 20 cents. Or to get to Novosibirsk tax rates, we can increase it by 13 cents.
Now we're not saying we should or need to, that's really depending on the city council's appetite and
the mayor's administration. But just to give you guys an idea of what that could mean for this city's funding,
finances. In that blue box, I can put in the amount of debt levied that would mean every year if we
raised our rates from where we currently are to one dollar. And that gives us about eight to eight and
a half million dollars every year in debt levied that we can use to pay for the capital funding. Now
we go to the next page, we sort of
put together the. That's that we're looking to exposing within this year or potentially first half of
next year. The two big ones are the part of 2026 Geo and the city 2026 Geos. If you remember the capital
improvement plan that we showed earlier. Those already incorporates those these two fundings. So these
don't actually help with that 10 million, 10 to 12 million dollars in unfunded capital. That's something
to keep in mind. And the DPW building bond that Jeff mentioned earlier, that's also included in the
capital improvement plan as well. But very much not confirmed, that's what I'm saying. Very much not
confirmed. That's just, we need to show that otherwise that unfunded amount will increase by 33 million
dollars and that's a huge supply. But I do want to,
point that out. Um are we able to go to these handouts? Jeff, do you think it'd be possible for us to
go to them? They're just they're not on the presentation. They're not on the presentation. Unfortunately,
it's this one. We have 10 minutes left. Yes, I will make this really quick. Um I just and this one is
just to show what the impact of issuing those bonds are on the city. Um
Which? It's this one and we could just go to second base shuttle. I'll make it. Yeah, cuz it looks like
the first page or which didn't convert into Google also best. So which which favorite one? It's the
second one. It'll say city general obligation that passwords. This one right here. Yes, correct. So
the yellow the first
three rows are the current bonds and the tax rates on those bonds and what they're projected to be.
The green are the potential bonds that we're looking at issuing, and if we issue them, what will we
expect those tax rates to be? So we look at the 2026 GEO bond, that's about 2.4 cents. And that DPW
building, even those larger bonds, we're issuing that over a longer term. That's going to be at about
2.9 cents. So that's almost five and a half cents
increase to the city's tax rates if we were to issue those bonds. Now, the 2026 bonds, those will last
us forever. The current conversation that we're having with Jeff is that we're looking at six-year bonds
by rotating every three years. So if we issue one in 2026, we'll have to issue another one in 2029 to
fund those capital items with another rate
going on in 2030. So you see the bottom right corner of that green, that's another nearly 2.4 cents.
So all in all, you'll see our total debt tax rates from issuing the City Geo Bond will be from the 4.39
cents all the way up to 8.9 cents. And that'll be about a 4.6 cent increase. Now we do have time to
go somewhere.
No, we don't have time. It's okay. So 4.6 cents apart. I'll just quickly, the park will increase by
about 2.7. So that's just, that's just over seven cents increase in the total tax rates. And we remember
that the tax rates tab that we looked at previously to get to one dollar, we'll need to increase it
by 14 cents. So we have another about seven cents, you know, even with the implementation of these bonds,
if they do decide to go through. And I'm done.
That is an awful lot in a short period of time. I should go first next time. I should do that. I should
maybe work with you a little bit on talking about those bonds and maybe including those in some kind
of report because it would be good to develop that sort of bond, some potential bonding requests that
may be coming up.
Let's go ahead and move on to public comments. So if there's anybody, there's still no public members
of the public in the room. But if you're online and interested in making a public comment, please raise
your hand. And please just be mindful of time, because Councilmember Rauhl has hard stop at 10. That
means we all do, because we'll lose more. So Mr. Keogh, go ahead. I'll have a timer on my watch going
for about three minutes, but I would appreciate it if you were as efficient as possible and there immediately.
You ready? Yep. All right. I'm Kevin Keough. Page 15 of the Reedy Financial Group's presentation today
highlights the fundamental requirements for sound municipal management, the minimum yearly review of
the formal financial policies, specifically regarding debt investments and cash reserve, along with
a formal public review of long-range operational planning and the annual comprehensive financial report.
explicitly notes the rating agencies like the S&P evaluates these practices during their credit reviews.
While the fiscal committee itself is not yet a year old and the city has not historically aligned with
the GFOA best practices, the focus represents a necessary step forward. The city seems to be currently
working with outside advisors to draft these policies, but policy adoption without regular
legislative reviews is incomplete governance. This ongoing review mechanism is something critical that
should be codified. For the past year, there have been public comments about the consistent—consistently
pointed out the glaring vulnerability in our financial governance. Our ACFR is routinely taking over
16 months after the close of the year to be published. Let's be clear about
what a 16-month delay actually means. First, it severely diminishes the practical utility and value
of the audited figures. Trying to build a budget, a reviewing budget to actual performance without timely
audited numbers means you're flying blind during the most critical period of the fiscal decision-making.
Secondly, and most critically to Reedie's point regarding the credit evaluation, it undermines market trust.
Municipalities have continuing disclosure agreements that expect annual audited financials to be submitted
to bondholders on the EMMA within six months after the fiscal year-end. Taking 16 months and routinely
filing notices of late submission strains the principle of good-faith disclosure to the municipal market.
Bondholders and rating agencies expect timely, reliable data when a city repeatedly misses those windows
by nearly a year
it risk extending with the very entities that price our debt. I urge the fiscal committee and City Council
to take two concrete actions. Establish a formal annual calendar item dedicated to specifically reviewing
and reauthorizing the city's debt investment and reserve policies. Institute formal
oversight of multi-year operational and capital plans, the ACFR completion timeliness, and standing
annual review of the completed ACFR as a direct responsibility of the fiscal committee if it continues,
or by all means, the city council. Codifying this regular review mechanism will protect the city's credit
rating, build institutional memory, and ensure our financial management matches professional standards.
Thank you. Thank you very much, Mr. Pierre.
Are there any other members of the public online that would like to make public comments? I don't see
other hands going up, so that means we have three minutes to mention that our next fiscal committee
meeting is in fact two weeks from today on August 7th. We already probably said that we were going to
follow-up again or continued follow-up related to the official salary stuff at that meeting. So we'll
be in touch about that. I want to send a huge thank you to the folks that read for coming and for all
of this information that you shared. Any other last words from anybody? If we have follow-up questions
related to the reports from reading, should we send them to Jeff? Please send them to me.
Great. Any other last, last things? I always really appreciate it when you comment. I'm always extremely
sorry that it all, I mean, we had our turn off now. There's just so much information. And I think that
this committee acts in a really important way right now, which may be the council had before to delve
deeply into some of these matters, not certainly far.
Approach to this, but that also means that we have a lot of questions about brains. You get a lot of
problems. So anyway, thank you. And we are.