Analysis: Will Bloomington’s city council, mayor mend discord in time to adopt the 2025 budget?

Bloomington mayor Kerry Thomson’s formal presentation to the city council of the city’s 2025 budget will be made in about three weeks, on Sept. 25. The vote on the budget is currently scheduled for Oct. 9.

It is the first city budget for Thomson, who was sworn into office at the start of the year.

To prepare for that presentation, over the course of four days last week, Bloomington’s city council heard roughly 16 and a half hours of presentations from different heads of departments and offices across the city, about their respective parts of a draft 2025 spending plan.

The final councilmember speaking turn on the final night of the week’s meetings went to Sydney Zulich, who echoed some of the same sentiments heard from a few other councilmembers during the week.

“I’m a bit frustrated that this budget is one that pretty blatantly lacks collaboration and compromise,” Zulich said. She added, “I will not be voting in favor of this budget unless there are some serious changes that are made prior to our final vote.”

If a 2025 budget is not adopted by Nov. 1, that would leave in place the 2024 budget, including the property tax levy for 2024.

In raw dollars, that would mean about $1.4 million less revenue for the city from property taxes (general fund and parks), compared to the amount the city would get if the property tax levy of $35.7 million for 2024 were increased by the 4 percent that is specified in the planned budget.

That means between now and around Sept. 10, when the final numbers are advertised for the Sept. 25 public hearing, the council and the mayor could sort out their differences at a public meeting, or engage in one-on-one behind-the-scenes political horse trading—or simply play a game of chicken on Oct. 9.

The options for a public meeting to hash things through include this Wednesday, during the regular council meeting—it could be added as a discussion item under “Reports” from the office of the mayor.

A special meeting could be called by any three councilmembers, the council president acting alone, or the mayor acting alone. There’s nothing on the calendar yet to suggest that this is the option that will be pursued.

Why the rift?

For some councilmembers, the discord can be pinned on the fact that not enough items on the council’s list of important items to be included in the 2025 budget are actually funded in the budget. The list of items was conveyed to the Thomson administration labeled as “priorities” in a June 18 letter.

This exchange on Wednesday, between councilmember Kate Rosenbarger and city engineer Andrew Cibor, about the engineering department’s budget, illustrates the irritation that some councilmembers experienced:

Kate Rosenbarger: Is there funding for the Indiana Avenue redesign in 2025?
Andrew Cibor: Not in this budget.
Rosenbarger: Thank you for that quick answer. Is there funding to build out the priority bike network, as outlined in the transportation plan?
Cibor: It’s not in this budget. I will note that we had a recent conversation with a couple council members about sidewalks. Specifically, I know that’s not directly answering your question, in which there is definitely an interest in exploring and recognizing a need to want to support these kinds of projects, and wanting to look at other funding sources, like potentially GO [general obligation] bonds or other things.
Rosenbarger: OK? And then…from our council memo, is there funding for the engineering designs for the College Avenue Walnut corridor improvements?
Cibor: The corridor study that’s underway will take that project to 30-percent design, and we do not have anything budgeted for taking it further. I think once we know what that design is and what the funding strategy is, and what grants we’ll be securing, we’ll be able to make a more informed decision on that.
Rosenbarger: OK, but no money in the 2025 budget beyond that 30 percent?
Cibor: Correct.
Rosenbarger: OK. And then the conceptual and engineering design for Kirkwood Avenue shared street conversion. Any money in this budget?
Cibor: No.
Rosenbarger: No. And the conceptual design for East 3rd–Atwater corridor study—any money in this budget?
Cibor: No. I do, on that project, just want to note that there’s, of course, opportunities and a desire for multiple departments, including transit, to coordinate on the Green Line project, which is going to have significant infrastructure impacts as well.

Later in the evening, responding to councilmember Hopi Stosberg about why the items Rosenbarger had asked about had not been funded in the 2025 budget, Cibor pointed to the big push that Thomson’s administration has made to improve compensation for staff.

In the proposed 2025 budget, there’s a 3-percent cost of living adjustment, but there’s also another $6 million set aside in the budget for implementation of a salary study, which will increase the number of pay grades from 12 to 14.

Cibor put it like this: “I think the city administration is—even as an engineering department—my number one priority is trying to take care of our staff.” Cibor added, “Because none of this stuff happens without them. So just fully supporting that and recognizing that’s consuming a lot of this year’s budget.”

In his remarks during the planning and transportation department presentation, councilmember Matt Flaherty was pointed about the lack of adequate funding for the Safe Streets for All program and the city’s transportation plan.

Flaherty put it like this: “We’re not funding the plans we’ve passed. We’re not building in funding for the plans that we have yet to pass.” He continued, calling the failure to fund the projects in the transportation plans “the biggest challenge with this budget, the biggest dis-alignment with what the council unanimously approved and cited as its priorities.”

Flaherty said there needs to be “a lot of movement” in order to get his support for the budget.

What led to the discord?

During Wednesday’s meeting councilmember Isak Asare called for a “reframing” of the issue that his colleagues had identified about their dissatisfaction with specific aspects of the mayor’s proposed budget, and the lack of compromise and negotiation on the budget.

Asare began by saying, “I think it’s important for us to note that we were the ones who literally said at an open meeting that we did not want to have further meetings with the mayor, because of other reasons.”

That was an allusion to the conversation between the mayor and councilmembers at a so-called “budget advance meeting” held on June 11.

Here’s how the June 11 conversation unfolded between council president Isabel Piedmont-Smith and Bloomington mayor Kerry Thomson:

Piedmont-Smith: And I’m not sure how to move forward, especially given that the council is going to recess in a week. Kerry?

Thomson: Do you have a consensus building activity in July?

Piedmont-Smith: No, we do not. We’re on [summer] recess until the 31st [of July].

Thomson: My suggestion was going to be that one of those consensus building activities [CBAs] could be to have an open door discussion, but just really a…work session with the administration and Council, to look at budget priorities. And really be able to have an open conversation with some structure intended to get to, hopefully, some level of consensus about what those priorities are, knowing that it will be a prioritization at that point, and not allocating dollars or even saying that we can meet all of these priorities.

The council’s June 18 letter with its “priorities” was sent to the mayor a week after that conversation at the budget advance meeting.

Even though the council had earlier put some CBAs on its calendar, the topics had not been determined. The first one had been set for Aug. 14—which avoided the council’s summer recess.

By way of background, the concept of a summer recess is not a part of Indiana’s state code for city councils. In Bloomington’s municipal code a summer recess is optional: “The council may choose to schedule a summer recess, provided the council meets at least once a month.” The once-a-month requirement is part of state code.

This year, the council’s summer recess lasted from June 19 through July 30.

At the city council’s first meeting after the summer recess ended, on July 31, council president Piedmont-Smith announced that the topic of the council’s first ever “consensus building activity” (CBA), on Aug. 14, would be street homelessness.

Already on the first day of the week’s worth of budget hearings, deputy mayor Gretchen Knapp alluded to the unavailability of the city council to meet about the budget during their summer recess. Knapp put it like this: “I think there was a timing challenge, in that council is out in July, and we start working on the budget towards the end of July and in August.” Knapp continued, “So it was too late after July, and before July, we may not have been quite ready…”

There was some pushback from councilmembers on that point. Councilmember Hopi Stosberg put it like this: “Just because we did not have council meetings on Wednesday nights through most of July, it does not mean that we were completely out of touch as individuals or as a body.”

Thomson was not able to attend last week’s budget hearings due to illness.

Additional revenue streams to fund council priorities

While some council commentary during the week was critical of missing funding in Thomson’s 2025 budget, there was not much in the way of commentary on significant elements of the proposed budget that should be cut.

Nor was there a lot in the way of suggestions for generating additional revenue streams.

But one example of a suggestion for a kind of priority that should receive more funding, with a named revenue source, was more money to support pedestrian safety.

Council president Piedmont-Smith told public works director Adam Wason: “So I’m looking forward to hearing more about the GO [general obligation] bonds and putting some money behind our stated goal of pedestrian safety.”

A proposal to issue around $6 million in GO [general obligation] bonds was unveiled on the first day of budget week by city controller Jessica McClellan.

The proposed $145-million budget for 2025 relies on tapping $10 million in general fund reserves, which would still leave the city with around $41 million in general fund reserves at the end of 2025. But McClellan floated the idea to the council of issuing some GO bonds, instead of reserves, to help balance the budget.

The idea would be to move capital expenses out of operating budgets, to be funded through the bond issuance. On Monday, when McClellan unveiled the idea, Matt Frische, with Reedy Financial Group, the city’s consultant, told the council he’d done an initial analysis of the administration’s proposed 2025 budget. Frische had identified roughly $6.7 million in capital expenditures that are in operational accounts. That would mean issuing around $6.7 million in GO bonds.

One point of conversation between Thomson and the administration between now and Sept. 10 would be whether to plan on tapping $10 million in general fund reserves and issuing GO bonds to take capital expenditures out of operating budgets.

If $6 million in GO bonds were issued, that would mean just $4 million of general fund reserves would be needed to balance the budget, with an additional $6 million available for funding identified council priorities.

When he alluded to the fact that the council had passed up the chance for a July consensus building activity with the mayor, focused on the 2025 budget, councilmember Isak Asare said, “We still have 10 days to make improvements [to the proposed budget].” Asare said he thinks the council should spend the next 10 days finding ways to fund the council’s priorities that are not yet in the proposed budget.