FY21 Budget Overview by Mayor Hamilton to City Council

Welcome all, and thank you City Council members for the opportunity this evening to give an overview of our proposed 2021 budget. Welcome to the public as well. As we gather about this time each year, we discuss the most important policy document in city government -- the annual budget -- that converts our values into investments. The budget embodies how we serve the public, how we help more people live better, fuller, safer lives in Bloomington. Thanks for your attention.

This fifth budget that I have presented to Council is unprecedented. The times demand it. As we’ve discussed before, the year 2020 has brought four extraordinary challenges. The once-in-a-century Health Pandemic. An historic Economic collapse. Horrific events that amplified and broadened attention to the racial injustice that persists in our country and community. And the relentless, stubborn challenge of our Climate Emergency.

We have already together responded in many ways to these crises. Community-wide stay-at-home orders helped flatten the curve; millions of dollars invested locally helped respond to the economic collapse; new levels of collaboration and investments protected our social safety net; unprecedented activism has focused attention on racial injustice. And all across the community we have marched and installed solar and scooters and electric bikes and green infrastructure for climate action. Just last week, you approved phase one of “Recover Forward,” looking ahead, to point us toward more Economic, Racial, and Climate Justice, to build a better Bloomington. 

Over the next four nights, we present the city administration’s operating budget for 2021. Because of our collective fiscal stewardship -- and I’ll pause particularly to thank past and present council members -- because of good stewardship, we can respond to these crises and do two very important things in 2021: first, in the midst of these challenges, we can maintain basic services that our community depends upon; and second, we can invest to Recover Forward and help our reeling community.

Let me also say thank you to our city employees -- 850 who have done exceptional things this year. Thank you to our cabinet leadership, every one of whom has given their all, to help city government meet very big challenges. Thanks to the staff in my office, including particularly Deputy Mayor Mick Renneisen, all of whom have weathered many storms. And thanks directly to our Controller Jeff Underwood and all of his staff who have burned the midnight oil again and again.  

To maintain our basic services -- Public Safety, Infrastructure, Quality of Life programs -- the 2021 budget tightens our belts. This is a smaller budget than 2020, by 4%. And in order just to deliver the basic services, we are investing two million dollars of rainy day reserves to avoid major program cuts, or other drastic actions affecting our people, like freezes or layoffs. For 2021, despite the continued growth of the city, we are asking only for the growth of one and a half new staff positions, compared to the past four years, when we have averaged between 7 and 8 new employees from general funds. Although smaller than 2020, the 2021 budget continues to support our outstanding employees, who have never worked harder, and often at personal risk. Surely the COVID19 pandemic has reminded all of us of the importance of government, literally to save lives, our economy, and our social fabric. 

This budget had to cut some things besides needed new positions, such as paid family leave or encouraging public safety employees to live in the city. We will not repave Rose Hill Cemetery’s roads or launch a scatter garden in White Oak. We had to reduce money for new greenways. We’ve hit pause on the convention center and other capital investments.

Beyond the basics, you also know that I have proposed to Recover Forward -- to help our community recover more quickly, and in the right direction. Unspent money from 2019 covered this program for 2020, as you just enacted in a special appropriation last week. The 2021 budget earmarks another two million dollars from reserves, to continue Recover Forward for 2021, investing in sustainability and quality of life, in jobs, and in housing. 

To help keep all this transparent and easy to follow, the budget presents the basics, all the core operations, as usual, by the department. New this year, several departments will include a separate section in their presentations entitled “Recover Forward,” to specify where that two million dollars is proposed, and for what purposes.

Eighty-eight years ago, amid the horrors of the Great Depression, Franklin Delano Roosevelt said “The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it. If it fails, admit it frankly and try another.” As America did in those years -- trying new programs, focused on helping ordinary families to weather a terrible storm -- so should we in these years, not shrink from being the active, innovative, experimenting government, to do whatever we can to confront the extraordinary threats of the pandemic and the challenges of advancing economic, racial and climate justice. Try things out, and if they work, do more; if something fails, admit it and try another. 

The remainder of tonight’s presentation includes 3 sections: first, an overview of our fiscal situation and actions; second an outline of the policies animating the budget; and third, key specific goals and programs included in the budget submission.

I.

First to a fiscal overview. Sixteen departments in the administration with about 850 employees include all the civil city departments (including the new proposed engineering department) and 3 departments affiliated with the city proper: City of Bloomington Utilities, Bloomington Transit, and the Bloomington Housing Authority.

For these 16 departments, we’re presenting a total of 2021 annual operating budget of about $166 million. That all-in operating budget of $166 million is 4% below this year’s $173 million. Removing the 3 affiliated departments, the city proper’s $95 million operating budget is funded about half from the general fund and half from other revenue sources. The City of Bloomington Utilities will present its $44 million ratepayer supported budget. And Bloomington Transit and the Bloomington Housing Authority will present another $28 million in revenue and expenses between them in their own operations. 

The 2021 civil city budget has higher expenditures than revenues. It is a rainy day budget. Intentionally. It is responsible and countercyclical, to support our economy. It is designed to maintain reserves of at least 25% of annual operating expenses as of year-end 2021 and year-end 2022. 

You will hear more details from Controller Underwood shortly, but at a high level, our budget picture is sobering. Property tax revenue is projected to rise by 4.2%, the highest percentage growth in the levy in 15 years, and compared with this year’s 3.5% increase. But property tax caps eliminate some of that growth -- this year to the tune of about three-quarters of a million dollars. The recession will likely reduce revenues from our local income taxes, but mostly in years ‘22 and ‘23. For the 2021 budget, we have assumed basically flat income tax receipts. We have already seen major reductions in gas tax revenue, significantly affecting the Street Department. And major revenue loss in parks programming. As well as continued slippage of the telecom fund.

Besides revenues, we project serious expense pressures, as well as our population, continues to grow, as labor expenses continue to rise, and as special needs arise, like the Waldron or IT infrastructure. More on that later.

The 2021 budget includes many more specific financial details, including a 10-year outline of Public Safety LIT capital needs, and annual capital budgets for each individual department. But in sum, we’re presenting a rainy day budget focused on maintaining basic operations and investing in our community’s recovery, in part by using prudent amounts of our surplus.

II.

I’ll turn to outline briefly the key policies that underlie our 2021 budget. These are not new. They are consistent, and they are important. 

First, we invest in and support our employees. We are continuing to invest at least 1.5% of payroll for training. This year and next, we’ll have special emphasis on anti-racism, and other diversity training. The 2021 budget proposes a 2% increase in compensation for all non-union personnel, continuing a pattern of 6 years, for cost of living adjustments. Union contracts direct that police officers in the bargaining unit will receive a 2.8% increase and AFSCME bargaining unit members will receive a 2.5% increase. Firefighters are in labor negotiations presently for the 2021 terms and conditions. Our employees have invested great energy and planning to deal with and adjust to COVID challenges while continuing all our city services. I thank again our employees, a little over 1 percent of whom -- eleven employees -- have been diagnosed with COVID during the past five months, all of whom thankfully have recovered.

Second, we continue our commitment to Transparency, Accountability & Engagement. We’ll conduct the third biannual, scientific City survey next Spring, to continue to inform our choices. We’ll continue publishing hundreds of public data sets on B-Clear and developing and sharing our annual goals and performance reports. I’ll continue my own open door / open zoom policy, hosting meetings weekly with residents who want to share an idea or concern with their mayor. Tonight I can announce a new step in transparency and engagement: we’re launching tomorrow our Open Financial Transparency Portal, a portal to better visualize five City financial data sets, including expenditures, payroll, vendors, budgeted expenses and budgeted revenues.  

Third, we believe in innovation. Our director of innovation spurs all of city government to evolve and improve. This year in particular we’ve learned to change. We’ve moved enormous amounts of work online, from parking permits to utility payments to the Farmers Market and board and commission meetings. We’ve begun regular pulse surveys of our employees’ well being. Our Continuity of City Government very rapidly coordinated enormous challenges over the past 5 months, as every department and every single employee changed how they work, to keep both employees and the public safe. We’ve piloted closings of Kirkwood, and lower Cascades, and new parklets, and pick up/drop off zones. We’re exploring better alternatives to our leafing program and CBU is experimenting with COVID testing of our wastewater, to monitor for outbreaks of the virus, at the plants, and at selected sites around town. Third-party organizational assessments have helped us review and change how we do our work. 

Innovative efforts like CDFI Friendly Bloomington continue, with two deals closed, and ten more in the pipeline. In its first year, this new organization tripled the CDFI investments in Bloomington compared to the previous 15 years and also was a key partner in the Rapid Response Fund to COVID this spring. 

Fourth and finally, as we discussed last year, we aim high. We know from our city survey and from our constituents, that Bloomington has high expectations and aspirations for our community. Our administration seeks always to reflect those high aims in our budget.

III.

I’ll conclude this evening outlining specific priorities in the 2021 budget related to the two big goals: sustaining the basics and investing to Recover Forward. 

First, focusing on our basics -- public safety, water, infrastructure and mobility, parks and recreation, planning, housing, and quality of life components -- in 2021 means maintaining these core functions amid unprecedented challenges. I want to thank again the leadership of our 16 departments. We in Bloomington, and I as mayor, are amply blessed and very fortunate to have the combination of skills, perseverance, dedication, and integrity that we have leading these departments. I am very proud to serve the public with them, and I am pleased you’ll be able to hear from each of them directly this week. They and their fellow employees make sure all of our basic services get delivered, 24/7. Neither rain nor snow nor heat nor gloom of night, nor the coronavirus, stays these public servants from their appointed duties.

Among the most basic of services is Public Safety. We know this year we have welcomed energetic activism calling for continued review of how police departments operate in our country, in part based on horrific examples around the country of police officers gone wrong, and in part based on generations of structural racism in our country that have been reflected in law enforcement, with its special relationship to our people. The Bloomington Police Department is one of the most progressive departments in the nation, with a proud history of innovation and community policing for many years. When I took office, I brought with me a history of working on civil rights, racial equality, and combatting structural racism in housing and economics. When I took office, I directed that police cars remove dark tinting of their windows, to reduce the barriers between officers and residents. I directed a review and BPD affirmed their compliance with the vast majority of the scores of recommendations in the 21st Century Policing Report from the Obama Administration. We’ve added national accreditation since then, and a full-time social worker, and Neighborhood Resource Specialists, to enhance and improve community engagement. We train 5 times the state minimum, including intensively on de-escalation and implicit bias training.

As your Mayor, who along with the resident members of the Board of Public Safety, oversees the BPD, I am very proud of, and thankful for, the dedicated professionals of our department. Every day they put themselves at risk, for our safety. Every time a new officer is sworn into our department, in front of their families and fellow officers, we are reminded of the awesome responsibilities and risks each of them -- and their families -- assumes on our behalf. 

For 2021, we are proposing continued evolution of the BPD. We recently received the third-party review we engaged for our public safety operations, and it recommended a significant increase in what they called proactive policing. That is, doing things other than responding to calls for service. Our Downtown Resource Officer program is a great example of a more proactive approach. Increasing proactive policing -- also known as community policing -- is BPD’s history and the right thing to do. For 2021, we’re taking a major step forward by reallocating funding from 5 unfilled sworn officer positions and directing it toward 5 new non-sworn positions, adding two new Neighborhood Resource Specialists, two new social workers, and a new data and public information specialist. We know we can fill these positions quickly, and they will quickly add proactive capacity to BPD. We are also moving the DRO grant funds to the Community and Family Resources Department, where they can be integrated with CFRD’s holistic engagement with our diverse community. We’re moving parking enforcement to the new Parking Division at Public Works. In addition, I’ve asked the resident-led Board of Public Safety to undertake two steps. First by the end of the year, review again the pillars of the 21st Century Policing Report as well as programs such as 8 Can’t Wait and Campaign Zero, to ensure our continued compliance with the very best national standards. And second, convene a new community-wide advisory group to do a high-level, comprehensive review of how we do law enforcement in Bloomington -- to think about what BPD ought to look like in ten years, including all community voices in that conversation, and to review best national models and share any recommendations and observations by next summer.

2021 also debuts a Fire Department pilot program for mobile integrated healthcare, focused on community members who have been heavy users of emergency services, to do health checks, manage medications, and connect with other service providers. You’ll see that program in the Recover Forward section of the BFD presentation tomorrow evening. 

To improve other basic services, we’re implementing recommendations to create an independent engineering department, sitting alongside Public Works and Planning, with autonomy and accountability directly to the Mayor. We’re also following recommendations to assemble and better coordinate parking services, in a new division of Public Works.

Still on basics, in 2021 we’ll do whatever we can with city projects that encourage jobs and economic recovery. We’ll continue planning for re-use of the current hospital site. We continue development of the Trades District, including with its new garage. We support downtown investments, with a redone Kirkwood, a replaced Fourth Street Garage, and other private projects. We’re facilitating private housing development, including significant new affordable developments, both ownership and rental. 

And finally, 2021 will bring new demands for our basic services. Besides the impact of regular population increases, our spectacular new Switchyard Park has new operation and maintenance requirements; the soon-to-be-returned Waldron brings unplanned but essential maintenance and operation expenses; and we see continuing recycling cost increases, annual workforce health and labor cost increases, and significant information technology infrastructure needs.

Meeting all these basic service needs is a heavy lift, and of course dominates the 2021 budget. But as you know, we aim high, and the second key area in 2021 is to continue to Recover Forward. This effort to build a better Bloomington as we recover from the challenges of 2020 is critical. As we set our course in the decade of the 2020s, we affirm three guideposts of Racial, Economic, and Climate Justice. The recently passed John Lewis wrote: “Democracy is not a state. It is an act, and each generation must do its part to help build what we called the Beloved Community.” Democracy is an act. And Recover Forward is a series of acts, acts toward a beloved community, characterized by racial, economic, and climate justice.

Racial Justice means being an anti-racist community. We’ll be engaging anti-racist training yet this year. We’ll be implementing the Divided Communities community-wide task force now and into 2021, through which our community may engage with many potential topics around race and racial justice: from public education to housing, health care and jobs, criminal justice and public safety, and more. Our Recover Forward 2021 program in the budget includes specific new investments related to racial justice, in affordable housing and homeless relief, in jobs programs and public infrastructure, in digital equity and local agriculture, in health care and expanded Jack Hopkins social service funding, and more. 

Economic Justice means fair opportunity and economic dignity for all. Our Recover Forward program for 2021 includes jobs programs to open up better paying jobs to people too often left out. It includes energy efficiency investments to lower the cost of living in moderate and low priced housing. It includes funding to support often low-wage workers in the arts and in local agriculture. It includes those investments to support home ownership and to help those experiencing homelessness. And it includes investments to expand public infrastructure like sidewalks, trails and bus stops, for all of us to use.

Climate Justice means doing our part to address our planet’s climate emergency in equitable ways. Our Recover Forward program for 2021 includes those investments in building public improvements for lower carbon footprint and costs. It includes the support for local agriculture and non-automobile transportation options. It includes support for the sole new FTE to be hired in 2021: a Transportation Demand Manager to collaborate in reducing single-passenger car trips. And we’ll continue our citywide efforts with a Climate Action cabinet group and our Sustainability Action Plan. 2021 will also see significant climate related action from the Housing Authority, our Utility Department, and perhaps you saw today the announcement that Bloomington Transit won a major grant to purchase 4 new electric buses, on order for 2021.

Surely 2020 has taught us how important good government is to our lives. Our 2021 budget with its $2 million for Recover Forward is designed to help us use our government to help people live better lives, and to help our community move toward more justice.  

IV.

I hope that like me you are very proud of the performance of our city government during unprecedented times, and of the dedication and professionalism of our hundreds of employees, public servants doing the public’s work in very challenging circumstances. To our council, and to all of you watching and listening, I urge you to reach out to a city employee, the next time you see a police officer, or firefighter, a sanitation worker or animal control officer, a bus driver or utility worker, someone filling a pothole or sweeping a street, or when you call or email and talk with an employee of the parks department or planning or housing or community resources or economic and sustainable development, please just thank them and let them know you appreciate their service and their dedication to our community. Thank you for that, because such a word can mean a lot to a city employee in these tough times.

So we are submitting our proposed budget for 2021, to invest in these hundreds of employees and the programs and efforts of city government, to help Bloomington. To be good stewards of our community -- our natural world, our infrastructure, and our people. And to Recover Forward, to build a better Bloomington, by focusing on the core values of economic justice, racial justice, and climate justice, and to invest consistently with those values. We are marching into this so-important decade of the 2020s. Our commitments and our actions in the coming years will dramatically affect how well those shared values become reality. How well we will walk the walk and not just talk the talk. I believe the 2021 budget we have presented to you puts us on that critical path, responsibly, energetically, and effectively, to walk that walk. I urge you to support it, and welcome any of your questions or comments.