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City manager presents FY27 proposed budget with $82 million in water capital projects; council presses on debt and deferred maintenance
Summary
City Manager Jurgens and Finance Director Scott Ratburn presented the FY27 proposed budget emphasizing an $82 million water capital program that drives an overall capital plan of about $111.7 million; council members asked about debt, deferred maintenance and timing of a possible bond issuance.
City Manager Jurgens and Director of Finance Scott Ratburn presented the formal FY27 proposed budget to the Bloomington City Council.
Jurgens said the proposal matches the preview presented previously and complies with city code’s requirement to present a formal proposed budget. He said staff prepared two budget books (general fund focus and capital/enterprise funds) totaling roughly 600 pages, which are available online. Jurgens said the budget emphasizes public safety and infrastructure, and that the city plans a modest salary increase (about 2.6%) while catching up on deferred equipment purchases.
Ratburn highlighted that the principal driver of the year’s capital increase is the city’s water program: the proposed FY27 budget includes nearly $82,000,000 in water capital projects (a stated increase of 281% in water capital investment). Staff tied that spending to an earlier water-rate structure put in place to finance an estimated $400,000,000 of long-term water-system work. Ratburn said the capital projects total about $111,700,000 and that water, sewer, storm and solid-waste funds make up a large portion of citywide capital spending.
Staff noted other cost drivers including large utility and health‑insurance increases (health insurance increases cited at about $2,200,000) and general inflation. Jurgens and Ratburn said earlier bond timing for a public-works campus will be delayed to ensure revenues are available for debt service; that bond consideration could be revisited in FY28. The FY27 schedule includes a public hearing on March 23 and possible adoption as early as April 13.
During Q&A, Member Montney asked what portion of increased costs the proposed rate changes will cover; Ratburn said charges for services are increasing by about $10.8 million citywide, with water accounting for over $8 million of that figure. Montney pressed for a deferred‑maintenance inventory; staff said one is being developed and that they will provide updates. Council discussed the arena debt and historic borrowing; staff said cross‑fund use of rate revenues (e.g., water revenue to pay other fund debt) is not permissible and explained constraints on interfund financing.
Council debated waiting a year to issue a bond for a public-works campus and certain facilities; staff said the recommendation to pause was tied to ensuring debt-service revenues and possibly achieving lower interest costs while catching up on deferred equipment spending.
Jurgens also gave a drought and water-conservation update: lake-level deficits had reached about 11 feet earlier in the month and improved slightly after rainfall; staff urged continued conservation and said they are monitoring daily.
