Monroe County plans $6M bond despite ‘cooling off’ period

In 2024, the city of Bloomington, as well as Monroe County government, leaned on general obligation (GO) bonds to finance capital improvements for 2025. But for the 2026 budget year, it looks like only the county government will be moving forward with a new bond issuance.

It’s not business as usual for the county government, either. Instead of the typical $3 million annual bond issuance, with a one-year term—which the county has used over the last several years—this year’s plan is to use a 6-year term, but to double the amount, to around $6 million.

The reason for the difference is connected to a change in state law, SEA 1, which impacts how local governments are able issue GO bonds.

Cooling off period for short-term debt

At a departmental budget hearing on Aug. 18, 2025, Bloomington’s controller, Jessica McClellan, told the city council about a new limit on general obligation (GO) bonds stemming from SEA 1. The city can’t issue a new short-term GO bond until 2027, because of a “cooling off” period that is now a part of state law.

Bloomington issued its 2024 GO bonds for not more than $4.3 million, repayable over two years. The bond proceeds were earmarked for a slate of projects in parks and recreation ($333,500), engineering ($3.75 million); and facilities ($215,000).

The new state law describes the cooling off period like this:

If a qualified political subdivision … has issued general obligation bonds before May 1, 2025, for a period of two (2) years or less, then at the expiration of those general obligation bonds, the qualified political subdivision must wait one (1) year from that date before … may issue general obligation bonds.

The two-year term starting in 2024, with a one-year cooling off period added to the timeline, makes Bloomington’s next chance to issue a short-term GO bond in 2027. As McClellan put it in mid-August, “We have a lot of work to do with our bond consultants, to figure out how we can layer and ladder different types of bonds to meet our needs in this new, newly defined bonding environment.”

The same kind of cooling off period restriction looks like it would apply to Monroe County government, too, which last year issued $3.1 in general obligation bonds last year with a one-year term. The 2024 bond issuance by the county government was slated to cover: administrative building and equipment; airport improvements; park upgrades (Flatwoods Park restrooms, Karst Athletic Complex); jail repairs; highway trucks and generator; a Youth Services Bureau generator; protective vests, roofing, and law enforcement vehicles; and emergency sirens.

With just a one-year term, the county government’s timeline for the cooling off period looks a little different from the city of Bloomington’s. It looks like the county government would have to forgo short-term bond issuance for this year, but would have its next chance in 2026.

Issuing GO bonds despite cooling off period

Yet a current proposal, which will be taken up by the Monroe County council at its meeting on Tuesday (Sept. 23), would see the county government issuing a GO bond this year, for $6 million.

According to the county council’s agenda, the bond proceeds would cover a wide array of needs: design work for improvements at the Monroe County Airport, renovations to the Showers Building for voter and election services, vehicles, Youth Services Bureau improvements, nature preserve upkeep, courthouse and courthouse grounds, body cameras and non-lethal equipment for the sheriff, airport furniture and tools, and emergency management equipment and sirens.

Monroe County government is taking advantage of the way that the new state law confined the cooling off period to just those bonds with terms that are shorter than five years:

As used in this section, ‘general obligation bond’ means a bond issued for a short term period of not more than five (5) years and payable from property taxes for a purpose or project that is not a controlled project …

By giving the bond issuance a six-year term, Monroe County would not be subject to the cooling off period. Monroe County government is also choosing a dollar amount that is under the threshold that defines a “controlled project” which would otherwise make it subject to remonstrance or even a referendum.

The Monroe County council’s Tuesday (Sept. 23) meeting starts at 5 p.m.