$10M in new bonds part of Bloomington mayor’s pitch to city council to adopt 2022 budget this week

In a news release issued early Tuesday afternoon, Bloomington mayor John Hamilton has made a pitch to the city council to adopt his proposed 2022 budget.

B Square file photo. City council president Jim Sims (left) and Bloomington mayor John Hamilton chat before the celebration of the fire department’s top ISO rating at Switchyard Park on Oct. 15, 2021.

After expressing discontent with the mayor’s 2022 budget at their Oct. 13 meeting, and before voting on it, councilmembers recessed the meeting until this Wednesday, Oct. 27.

Tuesday’s news release raises two topics that have been sources of discord between the mayor and different groups of councilmembers: police pay and climate action.

Based on Tuesday’s news release, it appears that there might be a little bit of movement on the question of police pay.

But the news release does not describe any inclination to reopen the current collective bargaining agreement with the police union, one year ahead of the normal cycle. That had been the specific request from the council.

On the climate front, there’s a proposal in Tuesday’s release to issue $10 million in bonds next year—half through the general fund and half through parks—to undertake various climate initiatives. The pair of $5-million bond issuances might be repeated in five-year increments, according to Tuesday’s new release.

The news release also describes an additional staff position within the economic and sustainability department. But there’s no announcement of a position at the level of a climate action director, as some councilmembers want.

The possibility of general obligation bond issuances is new to this year’s budget discussion. In last year’s discussions of a possible countywide local income tax increase, the alternative of general obligation bonds, serviced just with city property taxes, was essentially dismissed by the administration.

The pitch from the administration for the council to adopt the 2022 budget comes with a looming deadline—before Nov. 2.

The impact of the council’s failure to adopt the budget, with its associated tax rate and levy, would be about $1.2 million less revenue to the general fund in 2022 than is called for in the mayor’s budget.

That’s because under state law, if the council were not to adopt the mayor’s 2022 budget before Nov. 2, the city would have to use the tax levy from the preceding year, which is 2021.

Police pay

On the question of police pay, the mayor is still not willing to reopen the current collective bargaining agreement with the police union to give sworn officers a $5,000 increase to their base salary. That’s the move councilmembers Dave Rollo, Susan Sandberg and Ron Smith called for—with a resolution that in September got seven of nine votes.

The interest among councilmembers for implementing an increase to base pay for police is based on the challenges that Bloomington’s police department faces in retention and recruitment. The department is authorized for 105 sworn officers, but currently has just 89 on its force.

In late September, as part of the lead-up to the Oct. 13 vote, Hamilton announced his intent to give sworn officers a $1,000 retention bonus each of the five quarters from now through 2022.

The end of 2022 is when when the current collective bargaining agreement (CBA) ends. That was not good enough for some councilmembers, who want to see the current CBA reopened, in order to add $5,000 to 2021 and 2022 base pay.

What Tuesday’s news release announces is this week’s start to talks between the sides on the next CBA, which term begins in 2023. The news release states that Hamilton is committed to “reaching a deal that will incorporate into a new 2023 base salary the $5,000 one-time retention bonus being provided through 2022 for sworn police officers.”

That means the retention bonuses will be still be implemented in the short term, and a better base salary will be negotiated for the new CBA.

Climate action

On the climate front, one of the key demands some councilmembers have made is to hire a new position: director of climate action. The budget requests settled on by councilmembers Matt Flaherty, Steve Volan, Isabel Piedmont-Smith, and Kate Rosenbarger were:

  • hiring a director of climate action, which would be a new position;
  • following through on the non-motorized path through Lower Cascades Park that was supposed to be constructed with a 2018 council-approved bond issuance;
  • implementation of a parking cash out program for city employees; and
  • substantially more investment in bicycle-pedestrian infrastructure.

In Tuesday’s news release, there’s no explicit mention of hiring a climate action director. But there is mention of hiring additional personnel in that general category.

Described in the news release is “a new position in the Economic and Sustainable Development department to accelerate the work of the Assistant Director for Sustainability, funded with general funds currently in the Sanitation Department.”

What about the other three items on the councilmembers’ list, besides hiring a director of climate action?

The general obligation bonds described in the news release are typically used to pay for the kind of capital projects that are reflected in some of those items.

Monroe County government routinely uses general obligation bonds to pay for capital projects in any given year. This year’s county bond issuance was for $3.1 million, and included $250,000 for design and construction of a sidewalk along Rogers Street in the vicinity of the planned new branch of the public library.

Last September, in the context of the debate over Hamilton’s proposed local income tax increase, county councilor Geoff McKim weighed in during public commentary for general obligation (GO) bonds as an alternative. (The LIT increase failed on a 4–5 vote.)

During last year’s public commentary time, McKim disavowed support for raising taxes in the middle of a pandemic. But if taxes were to be raised, he wondered why the alternative of GO bonds had not received any serious public discussion.

McKim sketched out how some effort would have to be made, to ensure that just capital projects were funded with the GO bond proceeds. McKim said, “I could easily see a one- or two-year GO bond to raise enough revenue to make the climate change investments that I believe many on this [city] council support.”

An additional argument made by McKim for GO bonds, instead of a LIT increase, was based on whose taxes would be raised. If Bloomington issued a GO bond, the related tax increase would apply only to property owners in Bloomington, not countywide.

On that occasion, Bloomington mayor John Hamilton responded to the idea of issuing GO bonds, first by giving an argument against them: Because issuing GO bonds would increase property taxes, the cost would be passed along to renters.

Last year, Hamilton also noted that not climate action needs are not limited to capital projects. Hamilton said at the time: “Much of what we’re talking about in the needs here [i.e., the proposed use of the additional LIT revenue] are not long term capital.”

The $5-million for each of the two bonds that was suggested in Tuesday’s new release are right at the amount, over which the bond would become a “controlled project” under state law.  In 2017 the threshold for controlled projects was raised from $2 million to $5 million plus a growth quotient each year.

They’re called “controlled projects” because any greater general obligation bond issuance would be under the control of potential remonstrators, who could push the issue to a referendum.

Last year’s failed local income tax increase would have generated about $4 million for the city of Bloomington every year. That’s about twice as much as a pair of $5-million bonds—one for general fund and one for parks—would generate, if they were issued every five years, as described in the news release.

Bloomington city council’s Wednesday meeting

The continuation of the city council’s Oct. 13 meeting is set for 6:30 p.m. on Wednesday, Oct. 27.