Introduction to Budget Presentation to City Council

Welcome all, and let me begin by thanking the city council for our strong collaboration in stewarding our resources during the current and past recent years. In reviewing and approving the annual City budget, you play the vital role of ensuring that we allocate our resources responsibly and in accordance with our community’s values, and with a view toward helping all our residents thrive and prosper here for generations to come. I want to thank all the community members who participate in the budget process, through boards and commissions, through comments directly to the administration and the council, and through informing yourselves through these broadcasts, live or recorded on CATS. As well, of course, all the budget documents are available online for ongoing review and comment, at the city website.

I’d also like to thank the staff members who’ve worked so hard this year to compile budget reports. Along with the members of the Mayor’s office -- especially Deputy Mayor Renneisen, Elizabeth Walter, and Morgan Wells -- I want to recognize all of the hard-working department heads, who’ve made special efforts over the last year to measure their progress toward goals, and use that information to establish 2019 budget goals and requests. Particular thanks go to Controller Jeff Underwood and his staff for dedicated efforts to assemble this budget. And of course, great thanks to the more than 700 people who work for the City of Bloomington. Your commitment to Bloomington is what makes this city a success story.  We cannot thank you enough for the work you do.

Just a brief preliminary comment about what you will hear and what you will not hear, as we present the 2019 budget proposal. You WILL hear a very focused effort to present this budget in a new format:  ACTIVITY-BASED BUDGETING. That basically means we outline and organize the entire budget around key activities rather than budget categories. For example, you’ll hear what we propose to invest in fire prevention, or in housing inspection, or in arts promotion, or in police patrols, and the affiliated total investment costs. Versus what was typical in the past, with CATEGORY-BASED BUDGETS, showing personnel costs, and equipment costs, services costs, for a wide range of programs, without assigning them by activity. This activity-based budgeting is central to helping all of us identify the real investments and choices we make in the budget. It helps us Say What We’ll Do, as we’re developing and reviewing budgets. (It’s also new -- so be prepared that this is a work in progress, to add transparency and accountability in great detail.)

What you will NOT hear much of as we present the budget, is comprehensive reporting on progress and results from 2017 and 2018 budget years. At the request of the city council, we will report in detail in a separate setting in the coming weeks, on the results of the 2017 budget year as completed, and the 2018 year at the approximate half way point. That’s the Do What We Say part of the budget -- reviewing with transparency and accountability how we did implementing the budget. Inevitably some past efforts will be referenced or highlighted as we present the 2019 budget, but mostly this week will look ahead to 2019 choices, and we’ll review past activities in a few weeks -- still before the vote on the 2019 budget.

Over the course of the next four evenings, we are unveiling the plan to continue Bloomington’s success: our 2019 budget. It is our city’s primary policy document. It reflects our priorities and states many of our goals. It reflects community input from myriad sources, and supports our “small d” democratic mutual commitment to help each other create a stronger, more just, more vibrant, more welcoming community. It includes many specific goals, meant to be transparent and measurable, and to encourage accountability for us all. It also is meant to support the immeasurable, the ephemeral, the magical quality of Bloomington and our people. It is meant to enhance the quality of life that makes Bloomington . . . bloom.

Our City department heads will share specifics with you about the ways we plan to invest taxpayer dollars to take care of our residents’ basic needs, while also enhancing everyone’s long-term prospects, in ways big and small. Tonight I’ll share some major themes, in four basic sections:

1. First, a basic fiscal overview

2. Next, Policies that inform and guide the budget - brief principles, and context

3. Third, several key citywide priorities, reflected in our budget, and

4. Fourth, Closing with some special projects

Section 1: Basic Fiscal Overview...Where we are

So first to a fiscal overview. As a reminder, we’re dealing with 13 departments directly under the mayor’s jurisdiction, with 700 Employees (including CBU). And add 2 affiliated departments (BTransit and BHousing Authority), that we oversee, with another 140 employees.

For the 13 departments, we’re presenting a total operating budget of $135 million, including $45 MM from the general fund, $45 MM from other revenue sources for the city, and another $45 MM at CBU from its ratepayers. Another approximately $20 MM will be presented from the affiliated 2 entities of BT and BHA. Or about $155 MM in annual spending being reviewed over the next four evenings.

It’s important to remember that this operating budget reflects spending to use and enhance and protect over one billion dollars worth of assets stewarded by the 15 departments. On behalf of our community, city government owns thousands of acres of land and parks, our water reservoirs, our scores of buildings, hundreds of street miles and pipe miles, and sidewalk miles and path miles, over 3,000 fire hydrants, and 600+ vehicles and major pieces of equipment. Part of the operating budget we invest together, and review in the coming evenings, maintains, updates, improves and replaces that billion dollar set of assets.

We’re required by law to have a balanced budget, and we DO, with cash balances and projected revenues greater than projected expenses. But more than that, we continue the commitment to keep our general fund reserves -- during these healthy economic times -- at a robust 30% or more of annual operating expenses. This budget increases our reserves by 5% over 2018, and keeps them above that 30% benchmark, as all three of our administration’s annual budgets have done.

To summarize revenue (and you’ll hear more details from Controller Underwood soon)  – revenue from our property taxes is up 3.4% based on the growth in our levy from the state formula, to $29 million (with a caveat about property caps, below). That growth rate in the levy is down slightly from the past two years, but above the ten-year average. For local income taxes we’re still awaiting projection for full information; but we’ve conservatively assumed  a little over $11 million in Local Income Tax (LIT) and another $5.3 million in Public Safety LIT for 2019, or about $17 million in total LIT, an increase of about 6.3% this year. Other major sources include fees and transfers from our own operations and state and federal government.

I do want to highlight as we did last year that the terribly ill-advised property tax caps grafted into our state constitution continue to rise and threaten our long-term prospects. Two years ago in 2016 the projected loss to these arbitrary and draconian tax caps was about $50,000. Last year it was $500,000, and this year it’s projected at $1 million. The 2019 losses are projected at $1.6 million. A thirty-fold increase in three years. I won’t spend a lot of time on that issue tonight, but will say this threat counsels several things:  1) continue to be as efficient as we can be in our operations, which we will do; 2) recognize that increases in assessed value -- from new investments and appreciation -- help reduce the worst impacts; 3) recognize that continuing to diversity our income sources -- such as we have done with the Public Safety LIT -- is important; and 4) encourage our state government to reverse or compensate local governments for this very damaging attack on local fiscal control and accountability.

You will hear many more specific financial details as 15 departments from the mayor’s office and affiliated organizations share their organizations’ overviews in coming presentations.

To close this section, I’ll note that Capital investments are of course fundamental as well, and significant, but generally not as fully reflected in the annual operating budget process, given some of the sources include Tax Increment Financing and proceeds of debt issuance. We have included in the budget a 10-year outline of Public Safety LIT capital needs, and we expect in the coming weeks to share as well an outline of other long-term capital needs. The 2019 budget presentations, of course, do include all annual capital budgets for the departments as part of their operating budgets.

Section 2. Policies, principles guiding budget

Turning to the second major section, let’s consider several key principles undergirding the budget.  

• Invest in our people: Our government belongs to the people, and it is run and operated 24/7, 365 days a year, by our people, our 700 employees. They are our most precious resource, and we continue to focus on supporting all our employees in this budget. Let me highlight three ways:  First, the 2019 budget continues our increased investment in training and certifications for our people. When I took office, approximately one half of one percent of payroll was budgeted for training and education. In 2019 that number is 1.4% or nearly triple what it was 3 years ago. With city council’s support we have continued to invest in our people and I firmly believe that building skills and capacities is a great investment. Second, together we are implementing a $15 minimum wage for every regular employee of city government, including regular part-time employees. This too is the right thing to do, to be an employer that provides decent and living wages as well as benefits to all our regular employees. And third, as you know, we also conducted the first salary survey in 20 years, comparing our employees to similar employees around the state and region, and have provided adjustments in pay starting this year and continuing in 2019, to bring them up to par. These adjustments have been steered particularly toward under-compensated low- and middle-income employees.

• Focus on Transparency and Accountability is another principle. This year, as already mentioned, we are excited to present a City budget that has been developed using a program- or activity-based model rather than a traditional line-item or category-based budget.  

  • Our activity-based budget is far more transparent, as it aligns funding with activities and outcomes. It lists amounts of dollars with projected activities and outcomes that those dollars are paying for, whether street miles paved, or events held, or emergency response times or swim lessons delivered. We work very hard -- and it’s a work in progress -- to identify measurable goals and outcomes for each area of activity. All of this lets the public compare how much we’re spending on various activities, to better insure our values are reflected in our budget.

  • This transparency of directly connecting funding to activities and outcomes also strongly supports accountability, as it’s far easier to track investments with results. That is the purpose of the reporting we’ll provide in coming weeks about 2017 and 2018 performance evaluations. Those performance reports will allow all of us -- the administration, council members, and all community members -- a clear view of each department ‘s objectives, and their results, to hold each other accountable for those results..

  • This commitment to transparency and accountability guides all of our operations at the City.  It’s why we make all of the documents relating to city governance available on our website, from resolutions and ordinances, to the board and commission meeting minutes, to more than 140 data sets about our community -- available at B-Clear, Bloomington Revealed, and why we’re planning round two of the scientific Bloomington Community Survey, first done in 2017 to measure resident opinions about service delivery satisfaction and quality of life issues, which we have budgeted to repeat in 2019. We are committed to making decisions based on publicly available evidence.We intend and believe that the 2019 budget sets a new standard of that transparency and accountability for us all.  

• Another principle is to Regularly Review Efficiency: Government always needs to review its efficiency, which we do in many ways. One specific effort underway that guides the budget is conducting organizational assessments for our departments. We are in the middle of outside, third-party reviews of efficiency for four departments:  Planning & Transportation, Public Works, Community & Family Resources and Information Technology. These reviews have informed the 2019 budget in several ways you’ll hear in coming presentations. And we plan to continue additional department reviews in 2019.

• And finally, as a principle, we want to Get the Basics Right: that is to say: be good stewards of resources, protecting against downturns with healthy reserves, investing in the maintenance and upkeep and replacements of equipment and buildings as needed, and keeping the basic functions of government working well -- public safety, infrastructure, affordability, amenities, and quality of life components -- so our community continues to thrive as a creative, welcoming place to live.  

Section 3. Citywide Priorities

Over the next few nights, fifteen department heads will present their goals and budget requests to you in detail. Tonight, in this third of four major sections, I’d like to speak just a few minutes more broadly, with a reminder of what we’ve done together, and to emphasize our continuing priorities for 2019:  economic health, public safety, affordable housing, and efficient operations. All to lead to better quality of life for all people who call Bloomington home. You will see those priorities repeatedly expressed in the investments we propose this week.  

It’s good to be able to say, during our Bicentennial Year, that Bloomington is flourishing.  We’ve celebrated this year with a street fair with almost 5,000 people jamming on Kirkwood, a fireworks show that brought many thousands downtown for a fantastic evening, essay contests, and art shows, and we even had a Bicentennial song commissioned. As a community, we are in the enviable position of having healthy reserves, and a series of transformative projects, any ONE of which a mayor would be lucky to have during their time in office. We have the Trades District, the chance to revitalize the current 24-acre Hospital site, the Convention Center, and the emerging Switchyard Park. The opportunity to steer this String of Pearls into reality is unprecedented and challenging and exciting. Doing it right can help lead Bloomington to a brighter future. In addition our three largest employers are all investing and expanding, from IU to IU Health to Cook Group. And small employers are growing too, and excited to activate the Trades District, among other places.

We know, however, that the vibrant economy isn’t helping everyone. We know the devastating challenge of affordable housing every day is stopping people from reaching their goals. We know that hunger, and health challenges, including mental health and substance use disorders, are tearing families apart and hurting kids. We know that we must continue to be vigilant to preserve the safety, civility and justice we all want for all of us everywhere in the city. We know that national and state trends, of divisiveness and disinvestment, can cascade down to our community in so many ways, demanding our steady resolve to protect the welcoming atmosphere, the high quality of life, the diverse and creative culture, that we all cherish.

So you’ll see in the budget a continuing emphasis on supporting our economic vitality, with investments in infrastructure, and parks and trails, and art and creativity, and sustainability, all to help keep this a great place to live and work and raise a family. You’ll see we’re continuing our steadfast efforts to improve our digital connectivity for all, and hopefully we’ll learn more specifics in coming weeks. You’ll see continuing efforts to implement the strong recommendations of the Wage Growth and the Innovation Task Forces.

You’ll see in the budget a continuing deep commitment to affordable housing. More on this critical topic later. Suffice it to say that we together are working diligently harder than ever to tackle this challenge we see here -- and across the country -- which MUST be dealt with, to protect a fair and just community.

It’s worth noting that recently we’ve had an extraordinary amount of planning underway, from the Comprehensive Master Plan, just approved this spring, to the Parking Study recently completed, the Thoroughfare Plan and the Sustainability Action Plan, both in draft and under review, to the Uniform Development Ordinance, in process, as well as the ongoing Safety, Civility and Justice Taskforce’s ongoing recommendations, and special area plans underway around Switchyard Park and the Trades District among others. The 2019 budget is designed to implement many of those plans.

You’ll see in the 2019 budget that Capital investments are central, with about $9 million (or 10% of the city budget) allocated to capital like new fire apparatus, other fleet vehicles, paving and sidewalks and trails, building repairs, and the like. That doesn’t include millions more to be invested by CBU, Transit and the Housing Authority.

You’ll see in the 2019 budget 13 net new employee positions, including eight in public safety, to finally fully staff our dispatch center serving the entire county, and to amplify the proactive approach in our police department by bringing on board a full-time social worker and two non-badged neighborhood resource specialists. We’re also proposing an after-hours ambassador to help extend city government’s beneficial impact to those oh-so-many places where Bloomington rocks after regular business hours.

You’ll see in the 2019 budget continued focus on improving our efficiency and delivering better quality services. In the recent past we’ve seen CBU fix challenging water quality issues from Lake Monroe. We’ve seen our whole sanitation department overhauled for more modern and safe operations. We’ve seen our police department earn first-ever national accreditation, and we’ve seen our Parks Department once again be recognized as a finalist for the national Gold Medal awarded to one department in the country. We’ve seen nearly five megawatts of solar power added to city facilities. We’ve seen the fire department implement Quick Response Vehicles to get on accident scenes more quickly and at lower cost. We’ve seen more programming and oversight at downtown parks that has revived their use. We’ve seen a new Bike Share program be adopted in a first-ever joint program with IU. And we’ve partnered with the Community Foundation to attract outside capital from Community Development Financial Institutions into our community, to support housing and community facilities. You’ll see how the 2019 budget will support continued efficiencies like these, like re-launching the matching funds for private sidewalk repairs focused on low-income areas; and downtown alley activation; and a spring clean-up program; and automation of paper-heavy processes in planning and housing departments, and more.

All of this in the 2019 budget will support our priorities and help continue our path toward a city that is more and more vibrant, just, creative, fun, safe, accessible, sustainable, and thriving.

Section 4. Special Projects

I’ll close my portion of the 2019 budget presentation highlighting three special efforts.

First, I want to talk about what we’re doing for the least fortunate, the disenfranchised, our fellow residents who depend on our local government to do our best to protect them and improve their opportunities. I want to encourage your support for what I believe is a growing and more-significant-than-ever commitment to this cause, including the following components:

• A continued expansion of the Jack Hopkins Fund, that very special local government revenue to support so many of our outstanding nonprofit partners in this work, with over $300,000 identified for 2019

• Continued funding of the still-growing Housing Development Fund, with $400,000 requested, but more expected, in funds provided by the private sector to support affordable housing locally. Together we funded and approved more than 400 bedrooms of affordable housing in 2016 and 2017, some 15% of all the housing built and approved those years. Our current and 2019 budgets aim to exceed that for 2018 and 2019.

• Continued funding for low-income Pre-K support. This was new last year, and only a downpayment on what’s needed, but continuing this investment in our youngest residents is the right thing to do at $100,000.

• The newly restored, sidewalk matching-grant program, this time with its focus on improving sidewalks in low-income neighborhoods in our community, with at least $100,000 dedicated in 2019.

• The new investments in public safety with three new positions focused on social work and direct community policing.

• And as you’ll hear from the Housing Authority, a dramatic new investment in public housing is planned, with a restoration and rehabilitation of 312 units of public housing dating back 50 years, to be accomplished in the next 5-7 years, instead of 25-27 years, by implementing the federal Rental Assistance Demonstration program, which the Authority is pursuing in the coming months.

All these efforts, and more, in the 2019 budget plans, embody this community’s values to be a place that embraces all our residents and believes we need always to do our best to support opportunity for all, and I encourage you to support all of them.

Second, it’s very exciting to announce a new pilot program for 2019: Youth Participatory Budgeting. I urge you to support this innovative approach to welcome young people directly into local government. How many of us have been inspired seeing our own youth locally, and those around the country, push for changes in gun laws, or immigration laws, or climate protection? Youth Participatory Budgeting is a concrete step toward encouraging those same young, passionate, civic actors to help direct local resources into the causes and impacts they want to see locally. Our 2019 budget identifies $15,000 for young people, typically junior-high and high-school age, to determine how to invest locally. Based on other programs around the country, including most notably in Boston since 2014, this effort will be coordinated by our Community and Family Resources Department, with the Commission on Children and Youth and perhaps other entities like the Monroe County Youth Council. It’s new, and an experiment -- you know we believe in this administration in trying new things -- it has been shown that the practice gives more community members a sense of ownership, and that young people who participate tend to vote and become civically engaged as adults. I ask you to support this pilot program for 2019. And young people out there -- I hope you’ll keep jumping in with both feet, into your government, and your future.

Finally, I’ll close with a third special project. This isn’t in the budget for 2019, because it will require special revenue, likely from a bond we together could pursue later this fall. As we close this Bicentennial year -- reveling in and relishing the legacy that 200 years of our predecessors have handed down to us -- I believe it is our turn to make a significant downpayment for the generations to come. We’ve talked about trees and trails this year, and made investments in both, and made big plans for the future. I believe it’s our turn to make some major investments in particular in the trails in our community, to leave a lasting legacy in honor of this Bicentennial Year. From expanding existing trails like the B-Line and Jackson Creek trails, to advancing exciting new trail connections and enhancements around Griffy Lake and through Cascades Park, to developing new high-quality greenways east-west through our community, and more, I want to ask you to work with the administration to develop Bicentennial Bonds for later this year, to make those multi-million-dollar investments now that will benefit generations of Bloomingtonians long after this 200th year is history. That would be our thank you gift to the past, paid forward to the future.

It’s time for me to get out of the way and for more details to come. On behalf of 700 fellow employees, I am very pleased to present this 2019 Budget Proposal for your review and consideration. It is an honor to work together with you all to continue the energetic progress we are making as a community, to be the best place we can be for the individuals and families who call this very special Bloomington their home. Let’s keep at it.

I’m happy to take questions or comments, and then hand off to Controller Underwood.