Muncie finance committee pins $1.4M shortfall on SB 1; requests insurance savings and revenue documentation

Muncie City Finance Committee members spent their final budget meeting debating how to close a projected shortfall for 2026, focusing on the effects of Indiana’s Senate Bill 1, the cost of employee raises already granted for 2024–25 and a proposed switch in the city’s health-insurance contract that administration says will generate substantial savings.

Council President Mason opened the meeting by saying the committee convened “because we need to discuss the information we’ve received from the budget, from the department heads.” The committee examined numbers the administration provided and asked for outside documentation before amendments are finalized.

Why it matters: Mayor Ridenour’s handout and committee discussion identified a $1,436,096 reduction tied to Senate Bill 1 (SB 1) that must be addressed in the 2026 budget. At the same time, the city is already contractually committed to raises granted for public safety and civilian employees; committee members said using one-time or restricted sources to cover recurring raises would not be sustainable.

Committee members and staff walked through several specific figures during the meeting. Councilperson Basham reported that a packet from staff valued the city’s police and fire contract increase (the non‑salary elements included) at about $500,513.19, and that the combined cost of the police and fire 5% raises for the current year totaled $874,849. Basham further said the city needs roughly $1,035,927 to cover raises it is contractually bound to provide going into 2026 and that Mayor Ridenour has proposed subsidizing the general fund with $900,000 of EDIT (Economic Development Income Tax) funds.

“Even that didn’t cover it,” Basham said, noting opioid settlement funds the city used to pay part of 2025 raises are exhausted. Council members sought clarity about which funds had been used and whether those uses complied with a 2023 State Board of Accounts finding the committee cited that flagged incorrect postings to motor-vehicle-related restricted funds. The committee emphasized that documentation from the State Board of Accounts and the administration is the only basis on which they will rely.

Administration representatives told the committee they expect substantial savings from switching the city’s group health plan from IU Health to Anthem. Committee members said the administration estimated nearly $1 million in savings from the insurance change (not including savings from the city clinic), but the committee asked for a written estimate from the insurance company or broker that the council can verify independently.

Council members discussed several possible budget offsets: • shifting costs for a newly created deputy chief position from the general fund into public-safety LIT and other public-safety revenue streams to free almost $90,000 in the general fund; • removing two back-in-the-budget salaries that had been taken out in an earlier draft (the deputy controller and a channel-60 director line item) totaling about $146,588; • correcting an overtime line item that was misstated (an item the committee noted would save roughly $48,000). Members also discussed, but did not approve, eliminating or deferring department-head raises and voluntarily forgoing council raises as gestures of good faith.

Several council members pushed back on the administration’s public comments and on timing. Councilperson Gullian and others said the information the committee needs to evaluate the budget properly — including the DLGF Form 4B and a formal letter from the insurer or broker detailing savings — must be provided in writing with time to review before the October council meeting. Mason and other members set a target of receiving the insurance documentation and the form 4B by Friday so the finance committee can prepare recommended amendments ahead of the public hearing and the council vote in early October.

The meeting did not produce final budget votes. Committee members agreed they would continue to prepare amendments and that individual council members may file amendments at the regular council meeting even if a finance-committee recommendation is not unanimous.

Public comment reflected similar concerns. Citizen Rick Yentzer urged the committee to limit use of EDIT and opioid settlement funds for operations and to focus on job generation. Sarah Vitale of Muncie Resists and other attendees said online access to Form 4B and clearer public documentation of the numbers would help public participation.

Next steps: The committee requested (1) the DLGF Form 4B used in the administration’s calculations, (2) a verifiable letter or estimate from the insurance company or broker showing the projected Anthem savings, and (3) any supporting documentation about motor-vehicle-restricted funds cited in the State Board of Accounts 2023 report. The committee set a deadline of Friday for the administration and vendors to supply the documents so members can prepare amendments for the council meeting in early October.

Votes at a glance: The committee adopted several sets of minutes at the start of the meeting by roll call (motions and second recorded). These procedural votes were recorded as approved and appear in the official record for the finance committee: suspension of rules to add minutes (mover: Councilperson Basham; second: Councilperson Gullian; outcome: approved by roll call), adoption of minutes for September 3 (mover: Council President Mason; second: Councilman Garrett; outcome: approved by roll call), adoption of minutes for September 5 (mover: not specified in excerpt; second: Councilman Garrett; outcome: approved by roll call), and adoption of minutes for September 9 (mover: Councilman Green; second: Councilman Garrett; outcome: approved by roll call).

The finance committee reconvened with plans to receive requested documentation this week and to meet again to finalize recommended amendments prior to the council’s October meeting.