Bloomington city council, mayor fight: Can legislative body raise pay grades without breaking state law?

At its Wednesday meeting, Bloomington’s city council approved three salary ordinances for 2025—one for the city’s police officers and firefighters,  one for the city clerk’s staff,  and one for the other employees of the city, including the members of AFSCME (American Federation of State, County, and Municipal Employees).

The bitter deliberations on two of the three ordinances revealed a rift between Bloomington mayor Kerry Thomson’s administration and at least some of the councilmembers. The almost five-and-a-half hour meeting did not end until just before midnight.

The one uncontroversial ordinance was about pay for police officers and firefighters. The recently ratified collective bargaining agreements with the two public safety unions gave police and firefighters alike substantial increases.

Despite the rancorous debate, there was no dissent from any councilmember on either of the two other ordinances.

The acrimony stemmed from proposed amendments to the ordinances, which were provided to the public and the administration just 90 minutes before the meeting started at 6:30 p.m.

Towards the end of the meeting, the elected city clerk, Nicole Bolden gave the city council her take on the proceedings: “I have been been horribly disappointed by the dog whistles, the impugning of people’s motives, characters, capacity, competence, intelligence, that have happened this evening and other evenings by members of the administration, by members of council.”

Bolden continued, “I think we can all do better, and we all started this year with such hope and excitement looking at what we could do with the new administration and new council members.”

Bolden added, “We still have the opportunity to do better, and I would really hope that moving forward, we can at least trust in each other’s good motives and skill sets enough to disagree without making it personal.”

Salary ordinances are normally routine approvals for Bloomington’s city council. And they’re normally handled at the same time as the appropriations for the next year’s budget, which this year took place on Oct. 9.

But this year, the salary ordinances were approved for next year with only two days before the Nov. 1 deadline under state law. That was a timeline driven by the Thomson administration’s effort to overhaul the salary grade system, increasing it from 12 to 14 grades. The work was not yet far enough along earlier in the month, to ask the council for a vote at that time.

A point of friction for both controversial ordinances involves the council’s legal authority under state law—to set, increase, or reduce compensation.

There was plenty of council-versus-administration friction evident for the ordinance that set the clerk’s office salaries.

But things did not get really heated until amendments were proposed to increase compensation for planning and transportation department staff, and for council office staff. Those are positions that are in the salary ordinance that is put forward by the mayor.

Salaries set by city clerk

For possibly the first time ever, a Bloomington city clerk this year exercised the statutory authority given to a clerk, to set the salaries of the deputy clerks in their office. In any case, The B Square could find no prior record of it.

On Wednesday, the city clerk Nicole Bolden’s legal authority to set the salary of their deputies was not controversial. It’s spelled out in the same state law, [IC 36-4-7-3] that lays out out the role of the mayor (the city executive) for most positions:

IC 36-4-7 Appointive officers, deputies, and other employees; compensation
Sec. 3.
(a) This section does not apply to compensation paid by a city to members of its police and fire departments.
(b) Subject to the approval of the city legislative body, the city executive shall fix the compensation of each appointive officer, deputy, and other employee of the city. The legislative body may reduce but may not increase any compensation fixed by the executive. Compensation must be fixed under this section not later than November 1 of each year for the ensuing budget year.
(c) Compensation fixed under this section may be increased or decreased by the executive during the budget year for which it is fixed.
(d) Notwithstanding subsection (b), the city clerk may, with the approval of the legislative body, fix the salaries of deputies and employees appointed under IC 36-4-11-4.

The reference to another part of state code [IC 36-4-11-4] in point (d), says that the clerk can appoint the number of deputies and employees that are authorized by the city council, and that they serve at the clerk’s pleasure.

What became a question on Wednesday was whether the council could increase the compensation specified in the ordinance that the clerk had put forward. That idea was tested by a proposal from councilmember Sydney Zulich, to amended the ordinance to give extra pay for the achievement of various certifications.

Could the council, through such an amendment, increase the clerk’s staff compensation?

It was a question mostly because of a statutory prohibition against the council increasing the compensation for city employees whose pay is set by the mayor.

The key sentence from the statute quoted out above is this:

The legislative body may reduce but may not increase any compensation fixed by the executive.

There’s no corresponding prohibition against the city council’s increasing compensation fixed by the clerk. But to the extent that there was any question about it, the advice from new city council attorney Lisa Lehner on Wednesday night appeared to be: If the clerk agrees with the amendment, then the council has the legal authority to enact the amendment increasing the compensation.

But the amendment failed on a 4–4 vote. Not participating in the vote was Andy Ruff, who was attending the meeting remotely by video conference, and had by that point in the meeting dropped out of the call.

To pass, any vote of the council needs a 5-vote majority. Voting for the amendment were: Matt Flaherty, Sydney Zulich, Kate Rosenbarger, and Courtney Daily. Voting against it were: Dave Rollo, Isabel Piedmont-Smith, Hopi Stosberg, and Isak Asare.

The amendment to award more pay for achieving certain clerk’s certifications did not not fail because councilmembers had any doubt about their legal authority to increase the compensation. Instead, the four who dissented seemed persuaded at least in part by the energetic turn at the mic taken by deputy mayor Gretchen Knapp, opposing the amendment.

Knapp said, “So you’ve proposed something that is very contentious and does not exist for any other employee in the civil city—the only employees who have certification pay in the city are union employees.” Knapp added, “Those certifications are very carefully negotiated, and they are quite contentious. They’re the subject of continuous complaints and renegotiations regarding which certifications are the most important.”

Asare explained his vote against the amendment like this: “My soapbox says that every single thing that we do should be tied to an outcome. And I don’t think that we’ve been very clear here about stating what the outcome is, for us to hold ourselves accountable to it.” He continued, “Whereas with fire and police and otherwise, I think there’s a clear outcome there that we’re talking about competitiveness, we’re talking about retention.”

Asare said he thinks it’s a good idea to reward people for being outstanding, but was not sure if bonus pay for achieving certifications is the right mechanism to do that. Asare said, “As much as I very much support this, I’m not convinced yet.”

Salaries set by the mayor

The new 14-grade system, to replace the 12-grade system, was approved by the city council in mid-June.

Like the other salary ordinances, the one for employees who are not firefighters or police, was given a first reading on Oct. 16. But any discussion of an ordinance at first reading is prohibited under Bloomington’s local code.

Separate amendments were proposed by councilmembers, to increase the pay grades for several planning department employees  and to increase the pay grades for the staff in the council office.

Salaries set by the mayor: Administration’s amendment

But the friction was already evident when—ahead of those two council-sponsored amendments—an amendment was proposed by the administration, to revise some of the new salary grade assignments that the administration had put in the original draft of the ordinance.

The administration’s proposed five changes dealt with salary grades that, as deputy mayor Gretchen Knapp put it, “we knew looked wrong to everyone when we looked at it.” The five grade changes were some that could be implemented “without impacting that rolling equity wave across other departments, because it didn’t involve reporting structures or changing job descriptions,” Knapp said.

Knapp continued: “There is more work to do,” adding that the “appeals process” was not over. Knapps said the additional work to handle all the appeals could not be accomplished in time for that night’s meeting.

Human resources director Sharr Pechac described the process that led up to the development of the salary ordinance, and how the appeals process factored into it. Around July, all the department heads used the same “work form” to evaluate all the positions in their departments. Then, the HR compensation and benefits specialist Erica De Santis did her own evaluation to determine if she felt like those grades were fair recommendations.

Pechac told the council she had also contracted with Kelsey Gregory, who is an independent compensation consultant, to review the salary grades. The city of Bloomington’s online financial system shows just one payment to Gregory so far, on Oct. 25, for $3,850.

Pechac said they received a lot of feedback and concerns and had one-on-one meetings with managers and department heads, as a way to have another chance to have “some checks and balances.” It was the last week of September when the one-on-one meetings were held. That led up to the ordinance for which the deadline was Oct. 7, Pechac said.

The Oct. 7 timeframe squares up with the requirement in city code that says materials for an ordinance have to be submitted to the city council office 10 days ahead of the council meeting when it is first introduced. In this case the first reading was on Oct. 16.

There was an appeals process after the salary ordinance was submitted to the council. Pechac indicated that there were around 50 appeals received.

Based on Wednesday’s discussion it sounds like that information about the possibility of an appeal of a salary grade determination might not have been evenly distributed across city departments. [Added Nov. 1, 2024 at 12:31 p.m. Individual employees might not have been aware of the possibility of an appeal, because appeals to the human resources department about salary grade assignments could only be submitted by the department head (not by individual employees).]

The administration’s proposed amendment was approved by the council, but by then, nerves were already frayed, on the side of some councilmembers and the administration alike.

For the city clerk’s office salaries, one of the criticisms from deputy mayor Knapp had been the short notice of the amendment—just 90 minutes ahead of the meeting. The administration’s proposed change to five of the salary grades arrived on the same schedule.

Zulich, who had sponsored the amendment to the clerk’s office salary ordinance, asked HR director Pechac: “Why is it only acceptable for your department to submit things day of, but it’s not acceptable for council?”

Pechac told Zulich: “I feel like that’s a fair question, but I don’t think it should be directed at me,” adding, “I didn’t say anything about it.” It had been the deputy mayor, Gretchen Knapp, who had complained about the short notice of the council-sponsored amendment.

Salaries set by the mayor: Planning and transportation department

Leading the effort to amend the planning and transportation department salary grades was councilmember Kate Rosenbarger, who was joined by Hopi Stosberg in sponsoring the amendments.

Stosberg is the city council’s appointee to the city plan commission.

Based on the back-and-forth, the number of appeals that had been received from the planning and transportation department was around 15 of the 50 total—that is, more than in other departments.

Some of the grades sounded like they were decided based on a misunderstanding on the part of planning and transportation director David Hittle, about how the regrading process was supposed to work. Hittle was appointed to his job in April of this year, after leaving his position as director of the area plan commission of Tippecanoe County, which includes West Lafayette.

Hittle described how he had offered to reduce the grades of some positions in the department in exchange for increasing the grades in others, a kind of “zero sum game” that he thought would benefit the department. About that strategy, Hittle said, “That was my error, and again, the zero sum strategy was not a good one ”

Rosenbarger said that when she looked at the salary grades for the planning and transportation department, she thought the grades “looked low” based on her experience “working with city government for a long time and looking at the descriptions of grades 1 to 14.”

Rosenbarger then described how she ran into Hittle in the parking lot after a meeting the previous day, told him she had questions about his department’s salary grades, and got a briefing from him on the appeals process.

The appeal that Hittle had submitted to HR was included in the  packet addendum that contained Rosenbarger and Stosberg’s proposed amendment. The two councilmembers were effectively championing the appeal that Hittle had already made.

When Hittle himself spoke to the council, he said that he thought the grades needed to be increased, but echoed a similar kind of sentiment from Asare in connection with the clerk’s office salary ordinance, saying that an amendment by the council was not the “right mechanism.” Hittle said, “We did have our appeal process, and we were denied.” Hittle continued, “And I’m disappointed by that, and I’m hopeful that, because the process is still ongoing and there’s a lot more to happen that we will reach…the right pay grades.”

But Hittle said, “I’m very uncomfortable with the idea of plucking my department out of the body of departments and giving it its own set of treatment, whether it’s favorable or unfavorable.”

Hittle called it “a very awkward position.” He wanted to counter any perception created by comments from councilmembers about his treatment by the administration: “I’ve not received any mis-treatment or disadvantage, being a new director.”

It was apparent from the start that the administration was against the amendment to the planning and transportation salary grades. Corporation counsel Margie Rice made clear that the administration’s position was grounded in the wording of the statute, which prohibits the council from increasing compensation of employees that was set by the mayor:

The legislative body may reduce but may not increase any compensation fixed by the executive.

Later Stosberg seemed to question whether Hittle was actually against the proposed amendment by saying: “Director Hittle is appointed by the administration and serves at the will of the administration, so I’m not sure that the director would say anything different.”

The height of Wednesday’s heated talk came between deputy mayor Gretchen Knapp and councilmember Matt Flaherty, when Knapp pointed out the former family connection between Rosenbarger and the planning department, as well as Flaherty’s former connection to the planning department.

Knapp said, “I’m sorry that I have to point out for the benefit of the public, that one reason perhaps why councilmember Rosenbarger is so interested in this department is that her sister [Beth Rosenbarger] was the former assistant director until a few months ago, and that person [Beth Rosenbarger] was also councilmember Flaherty’s wife.”

Knapp continued, telling Rosenbarger: “So obviously, you have deep connections to planning. You know how hard the struggle has been for them. You’re invested in their outcomes.” Knapp added, “I understand that, but I do think the public needs to be aware that that might be a reason for the extra attention and concern for this department over all the others.”

Flaherty followed Knapp immediately: “Point of order. Actually speculating about the motivations of other people and the rationale in their positions is not appropriate. It is out of order.”

Flaherty continued, “I also resent that assertion.” He added, “I lost a lot of respect for the deputy mayor just now. Unfortunately.”

The legal question that some councilmembers tried to explore was whether it would violate the statutory prohibition on the council increasing the compensation, for the council to increase the salary grades. The reasoning is based on the idea that the salary grades are defined in terms of ranges.

The one time that Bloomington mayor Kerry Thomson addressed the city council on Wednesday night was to make clear what the advice was that she had received from corporation counsel Margie Rice.

Thomson put it like this: “If this ordinance is passed with an amendment, it will be in violation of the code. And there will be no way for me to sign the salary ordinance without signing an amendment which is in violation of the code, which will mean that we will have to revert back to the 2024 salary ordinance for the entire staff.”

Rosenbarger still eventually pushed the idea that if the administration were to agree to sponsor the amendment, then that would satisfy the legal question.

Rosenbarger asked: “Would the administration sponsor this amendment so we don’t have that problem?” Knapp indicated from the audience that the administration would not sponsor it. But Rosenbarger insisted: “Can you come to the microphone?”

From the mic, Knapp pointed to the mechanism that the administration intends to use across all departments to address problems with the re-grading project. “We wouldn’t sponsor the amendment, because it is singling out one department for a change in process that is already planned to happen in 2025 for any department that is doing org changes and job description updates.”

When it was clear that there was not much appetite on the council for the prospect of living with the 2024 salary ordinance, the council did not actually vote on the amendment to raise salary grades in the planning and transportation department. Instead, Rosenbarger and Stosberg were allowed to withdraw the amendment.

In the same way, the amendment that would have increased the pay grades for the council’s three staff members—legal research assistant, deputy administrator/attorney, and administrator/attorney—also did not get a vote.

But that was not before, councilmember Courtney Daily repeated the gambit that Rosenbarger tried, asking if the administration would be willing to sponsor her amendment to increase the salary grades for council staff. Daily asked: “Would the administration want to sponsor this amendment, to help try to take it out of the legal gray area?”

When Knapp took the mic to respond, she was brief: “Gretchen Knapp, deputy mayor. No, thank you.”