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Bloomington unveils 2025 budget with $10M general-fund gap and plan to study short-term GO bonds
Summary
City officials presented a $145 million proposed 2025 budget that includes a $6 million placeholder for salary-study implementation and a $10 million general-fund shortfall; the administration asked council to include a levy to allow study of short-term general obligation bonds to fund capital without sharply lowering the tax rate.
Deputy Mayor Gretchen Knapp and City Controller Jessica McClellan outlined the City of Bloomington’s proposed 2025 budget, describing it as an investment in the city’s organizational foundation and a plan that anticipates a $10 million gap in the general fund.
"The civil city budget is a $145,000,000 proposal," Controller Jessica McClellan said, noting that the general fund budget totals $68,451,000 while recurring general-fund revenue is projected at $58,497,000, creating a $10,000,000 difference. McClellan said 13 city funds would be balanced in part by dipping into reserves and reminded council of best-practice reserve targets set by the Government Finance Officers Association.
Why it matters: McClellan emphasized Bloomington’s strong reserve position — a projected general-fund balance of about $51,000,000 for 2024 — and said reserves and a growing assessed value give the city options for financing capital and personnel needs without sudden tax-rate spikes.
The administration also proposed a short-term approach to managing a falling tax rate after a large assessed-value increase. Matt Frisci, municipal advisor with Reedy Financial Group, told the council that Bloomington’s assessed value rose roughly 12.8–13% while the statutory cap on annual levy growth is about 4 percent. "This is an opportunity to issue short-term general obligation bonds that have a minimal interest rate because of the short-term duration of the financing," Frisci said, recommending that the council include a levy in the 2025 budget so the city can study the option and, if warranted, return with a detailed bonding analysis.
Administration’s safeguards and timing: McClellan stressed that including a levy does not obligate the city to issue debt; it simply preserves the option while staff and advisors analyze specific projects, tax-rate impacts and resident fiscal effects. The administration also proposed putting $6,000,000 in the budget as a lump sum to be allocated later to implement the city’s classification and compensation study, with a commitment to return with a completed salary ordinance and transfers before year-end.
What councilors asked: Members pressed for clearer documentation (several items were not in the packet), requested details about which capital items would be eligible for bonding, and asked for follow-up information on rainy-day and reserve accounting. McClellan said she would provide written clarifications and more detailed tables.
Next steps: The administration will continue the technical work — identifying capital items, producing a bonding analysis, and modeling resident tax-rate impacts — before bringing any bond ordinance to the council for a formal vote. The budget hearings continue across consecutive evenings to allow further questions, public comment and subsequent ordinance drafting prior to the formal budget votes.
