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# Bloomington Transit looks to $37.6M budget vote amid pending management shakeup
- URL: https://bsquarebulletin.com/bloomington-transit-looks-to-37-6m-budget-vote-amid-pending-management-shakeup/
- Published: 2026-08-27T19:47:03.000Z
- Updated: 2026-08-27T20:34:56.000Z
- Description: Bloomington Transit’s proposed $37.6 million 2027 budget is almost twice the size of this year’s, driven largely by a $20 million first phase of a new operations complex. The budget approval by the city council comes amid a management change as well as a potential new board appointment.
- Author: Dave Askins
- Tags: Local Government, #no-inline-feature

![](https://storage.ghost.io/c/20/6f/206f9007-c0a7-47d4-b87b-686c21961f22/content/images/2026/08/featured-3-BT-bus-file-image-bsquarebulletin.comwp-contentuploads202403bus-pan-PXL_20240320_184202129.ACTION_PAN-01.COVER_-1--1--1.jpg)

B Square file photo of a Bloomington Transit bus.

A formal hearing on Bloomington Transit’s 2027 budget is expected to be held by the Bloomington city council in about a month, on Sept. 23.

The local public bus agency’s spending plan for 2027 is nearly twice the size of this year’s budget. But that is mostly because it includes the first $20 million construction phase of a new administration, operations and maintenance complex west of Bloomington at Curry Pike and Profile Parkway.

The [$37.59-million budget](https://bloomdocs.org/wp-content/uploads/simple-file-list/2026-08-18-Bloomington-Transit-August-Board-Packet-OCR.pdf#page=6) for 2027 compares with $19.38 million approved for 2026, an increase of about 94%. 

The increase looks much less dramatic, if capital spending is set aside. Bloomington Transit is budgeting $15.05 million for operating expenses, up from $14.13 million this year, an increase of 6.5%. Capital spending, by contrast, jumps from $5.25 million to $22.54 million.

The official legal name of Bloomington Transit is the Bloomington Public Transportation Corporation, which reflects the fact that it’s a separate municipal corporation, with a five-member board. Two members are appointed by the mayor and three by the city council.

The board already unanimously approved the 2027 budget, at its meeting on Aug. 18.

But the city council still has a formal role in BT’s budget approval process. Under Indiana [state law](https://iga.in.gov/laws/2025/ic/titles/6#6-1.1-17-20 ), the fiscal body for a taxing unit such as Bloomington Transit has to review the proposed budget and property-tax levy and adopt the final budget and levy. The city council can reduce or modify what BT submits, but cannot increase it.

### Diesel down, electricity up

One of the sources of revenue for Bloomington Transit each year for the last four years is about [$3.8 million in economic development local income tax (ED LIT)](https://bsquarebulletin.com/bloomington-transit-oks-5-year-deal-will-get-3-8-million-annually-from-citys-local-income-tax/) from the city’s share of that tax. That transfer shows up in the budget for the office of the city controller. On Wednesday night (Aug. 26), the city council was reviewing the controller’s office proposed budget for 2027.

With the fifth and final installment of $3.8 million to be paid to BT in 2027, councilmember Matt Flaherty on Wednesday night asked what the impact on BT would be when the annual payments from the city end. Deputy mayor Gretchen Knapp told Flaherty that the money had mainly been used to purchase battery-electric buses, not for ordinary operations expenses.

By way of followup, Flaherty wanted to know how many buses in BT’s fleet are now battery electric. The deputy mayor didn’t have the number at her fingertips, but it’s 18\. That’s 45% of the 40 total buses in the fixed route fleet, which includes three new diesel [articulated buses](https://bsquarebulletin.com/bloomington-transits-first-60-foot-articulated-bus-arrives-at-grimes-lane-depot/). BT is on its way to a [targeted all-electric fleet](https://bsquarebulletin.com/bloomington-transit-all-in-for-electric-buses-expansion-of-service-adopts-35m-budget/) by 2050.

The progress towards that goal of an all-electric fleet, can be seen by putting two expense lines in the 2027 budget next to each other.

For 2027, BT is budgeting $692,500 for fuel and oil is down $177,750 (20%) from this year’s $870,250\. At the same time, the electricity line goes from $250,000 to $575,000, which is an increase of $325,000 (130%).

The budget assumes diesel will cost $4.50 a gallon and unleaded gasoline $3.50\. During the board’s preliminary budget discussion on July 21, general manager John Connell said the diesel assumption was difficult to make because of uncertainty in the fuel market. Staff indicated that last year’s diesel assumption had been about $3.50 a gallon, even though BT expects to buy fewer gallons as more buses run on batteries.

The relationship between those two budget lines got some scrutiny before the board adopted the final budget on Aug. 18\. BT controller Christa Browning said the electricity estimate had been increased as the budget was fine-tuned because of the new electric buses. Charging equipment is separately metered, which means BT can measure how much electricity is going specifically to bus charging.

Board chair James McLary asked whether the increase in electricity costs was being offset by a corresponding reduction in diesel expense. Staff said there was not yet a full year of data for a clean comparison. Connell also noted that electricity prices vary depending on when buses are charged. But he told the board that the operating expense of a battery-electric bus is “significantly less” than a diesel bus, when fuel, oil and other fluids are considered.

The 2027 budget includes another battery-electric replacement bus. Together with two support vehicles, that line is budgeted at $1.63 million. The budget also assumes $1.125 million in federal Section 5339 funding toward the electric-bus purchase. Connell told the transit board in July that if the expected federal grant money does not materialize, BT will not buy the bus.

### New operations center: $20 million now, $55 million total

The biggest number in the 2027 budget is the $20 million first phase of the new transit operations complex, where the buses are stored overnight, serviced, and administrative offices will be housed. Not affected is the downtown transit center.

That first phase is supposed to produce a roughly 32,000-square-foot fleet-maintenance building, along with grading, stormwater infrastructure and utility work for the entire site and about 100,000 square feet of concrete paving. Later phases would add the administration and operations portions of the complex.

But the total possible cost of the project caused some sticker shock at the board’s July 21 meeting.

Connell said BT had roughly $16 million in accumulated federal Section 5307 money available for the project, although it cannot yet be placed into the grant for construction until the required environmental review is completed. He then said the plan would be to seek another $35 million for the remainder of the project.

“So we’re looking at $55 million?” McLary asked. “Yeah,” Connell answered.

McLary said his recollection was of a project costing around $35 million. Board member Don Griffin likewise said the $55-million figure was new to him. Connell stressed that $55 million was not a fixed final price. It represented something close to a full wish-list version of the project, with items such as solar panels, water reclamation and enough large maintenance bays to accommodate 60-foot articulated buses. The project is being designed so features can be removed and later phases added as funding permits, Connells said.

The $35-million figure that might have stuck in the memory of board members does not seem like it was for the full project cost. The $35 million was the amount BT was [seeking from a competitive federal grant](https://bsquarebulletin.com/bloomington-transit-looking-for-35m-from-feds-to-build-43-75m-new-facility-for-operations-bus-storage/). At that point, estimated construction was $43.75 million. Including a then-assumed $10 million for land and $600,000 for architectural and engineering work put the overall project estimate at about $54.4 million. The federal grant application was unsuccessful.

So the current $55-million construction scenario is still a substantial increase from the earlier $43.75-million construction estimate. BT has also since acquired the Curry Pike/Profile Parkway property [for $3.6 million](https://bsquarebulletin.com/bloomington-transit-board-oks-3-6m-land-buy-for-ops-center-after-getting-idem-comfort-letter/), far below the $10-million land placeholder used in the 2024 estimate.

### $5 million from reserves

On the revenue side, federal money makes up the biggest share of BT’s 2027 spending plan. BT is budgeting $20.4 million in federal operating and capital assistance, compared with $6.4 million in the 2026 budget. Most of that increase is associated with the new facility.

Other significant revenue includes $2.61 million from Indiana’s Public Mass Transportation Fund, $1.85 million in property taxes, $1.25 million from the Indiana University contract and about $1.3 million combined from ordinary passenger fares and partnership-fare agreements.

BT also plans to use $5.03 million from reserves to balance the budget. That compares with about $825,000 budgeted from reserves for 2026\. BT finished 2025 with about $16.6 million in reserves.

Also a part of revenue counted in BT’s 2027 budget is the $3.8 million payment to BT from Bloomington’s share of the economic-development local income tax (ED LIT).

The $3.8 million was [highlighted in a conspicuous way](https://bsquarebulletin.com/mayor-transit-payment-election-costs-account-for-nearly-all-of-bloomingtons-2027-budget-gap/) for the 2027 budget presented to the city council by mayor Kerry Thomson. She has pointed to the $3.8-million BT payment, together with $650,000 for next year’s municipal election, as accounting for nearly all of the city’s general fund operating gap. 

Among other operating assumptions, BT is allowing for a 25% increase in health-insurance costs. Personnel spending rises 6.3% to about $9.65 million. Bargaining-unit wages increase 2% under the union contract, while other staff increases are budgeted at up to 3%.

Included in BT’s budget are two $75,000 administrative positions—assistant controller and assistant human resources manager. Connell said BT does not intend to fill those jobs at the beginning of the year. They were included in the budget, so the positions would be available if the agency’s strategic-plan update recommends that kind of organizational restructuring.

Other items include $350,000 for microtransit services involving Uber and Lyft, $300,000 for traffic-signal-priority equipment intended to help buses stay on schedule, and $200,000 for another year of bus-stop and shelter accessibility improvements.

### Budget arrives during management transition

The budget hearing will come with Bloomington Transit in the middle of a separate and unusually consequential management dispute.

On July 21, the transit board voted 3–2 to select Keolis as its management firm, replacing RATP Dev, whose predecessors have managed the Bloomington system for roughly 35 years. Because BT obtains its general manager through the management company, completing the switch would also mean Connell’s departure.

The Keolis contract still requires a final board vote. Its ordinance received [an introduction on Aug. 18](https://bsquarebulletin.com/bloomington-transit-board-pick-hangs-in-balance-before-sept-15-vote-on-management-firm/), with a vote is expected at the board’s Sept. 15 meeting. 

Longtime board member Kent McDaniel will likely still occupy one of the five board seats for that Sept. 15 vote. His term expired July 31, but state law allows him to remain temporarily while the council considers a new appointment. McDaniel voted against switching to Keolis in July and has said he intends to vote against the contract Sept. 15 assuming he is still on the board.

A city council committee has now interviewed four applicants for the seat, but put off making a recommendation after completing the fourth interview on Aug. 19\. The three-member committee consists of Isak Asare, Hope Stosberg, and Kate Rosenbarger.

The candidates are McDaniel, the incumbent with 36 years of experience on the BT board; Zachary Ammerman, a regular BT rider with a data and mapping background who serves on the city’s commission on sustainability and resilience; Hank Duncan, Bloomington’s Safe Streets program manager, who told the interview committee about his own experience living in Bloomington without a car; and Perry Maull, a longtime transit professional who retired in 2019 after more than a decade managing operations for Indiana University’s Campus Bus system.

### Three big dates on the horizon for Bloomington Transit

On Sept. 15 the BT board is expected to vote on the Keolis management contract.

The city council has a [regular meeting set for the following day](https://bloomington.in.gov/council/meetings/2026), on Sept. 16\. It’s somewhat unlikely, but not impossible, that the interview committee would have been able to meet after BT’s Tuesday board meeting, but before the council’s Wednesday meeting to make a recommendation on a board appointment on Sept. 16.

That could set up a board appointment for one of the next two council meetings, which will each have at least one BT-related item on the agenda no matter what. On Sept. 23, the city council is expected to hold a hearing on BT’s $37.6-million 2027 budget, with a final budget approval vote scheduled for Oct. 7.