Capital Improvements in Monroe County TIF Districts

This past Wednesday (4/25), Monroe County Highway Engineer and Public Works Director Bill Williams gave a presentation to the Monroe County Redevelopment Commission on the capital improvements that have occurred in the three Monroe County Tax Increment Finance (TIF) districts to date. This report is the best summary I have seen to date of all of the work that has been done in these three TIF districts, and is probably the only source that the public has to actually see what work has been financed by the districts, and what is still planned.

The report is available here: 2012 Capital Improvement Report

Just a reminder, there are 3 TIF districts in the unincorporated part of the County. They are:

  • Westside Economic Development Area — also sometimes called the Richland TIF or the Westside TIF
  • 46 Corridor Economic Development Area — also sometimes called North Park, the Bloomington TIF, and, more derisively, “Criderville”
  • Fullerton Pike Economic Development Area — the smallest TIF district in the state, and encompasses primary Monroe Hospital

The current members of the Monroe County Redevelopment Commission are:

  • Don Moore (Council Appointment)
  • Keith Vogelsang (Council Appointment)
  • Barry Lessow (Commissioners Appointment)
  • Doug Duncan (Commissioners Appointment)
  • Vacant (Commissioners Appointment)


Press Release – McKim Calls for Increased Funding for Services for People with Developmental Disabilities

The Herald Times printed part of this press release in today’s paper here (subscription required).  I’m including the full press release here, along with some calculations that illustrate what I’m proposing:

Press Release:

Monroe County Council President Geoff McKim calls for increased funding for two local organizations that serve county residents with developmental disabilities.

“We have a responsibility to build a community that is inclusive to all” said McKim. “And these two organizations not only help care for individuals with developmental disabilities, but help them care for themselves, hold jobs, volunteer in the community, and lead independent lives.”

Monroe County Government currently provides $300,000 annually to LifeDesigns (formerly Options for Better Living) and $400,000 to Stone Belt. These appropriations are provided by a special levy allowed by state law that is dedicated to services for individuals with developmental disabilities.  However, unlike other tax levies that Monroe County Government uses to fund basic services, this one has not seen a cost of living increase since 2006. At the same time, other funding for services for people with developmental disabilities are declining dramatically; these two organizations have lost over $3.5M in Medicaid revenue alone since 2009.

McKim proposes that the Council increase the levy each year by the annual cost of living increase that other tax levies that the County uses are allowed to increase by. This increase amounted to 2.9% in 2012, and is based on a six-year statewide average of economic growth. “I know it isn’t a lot of money,” said McKim. “But for these important organizations that are taking hits from the state and the federal government, every little bit helps.”

Normally, this increase would be handled during budget hearings in the fall, McKim explained. However, an advertising error from the auditor’s office last year led to the levy for 2012 being cut by $67,000. “We need to communicate clearly the intentions of the Council to correct that error and make good on the shortfall so these organizations can adjust their budgets appropriately. A Council resolution is the best way to communicate this intention – and at the same time we can indicate our intention to give them a cost of living increase.”

McKim said that he would be presenting a resolution at the next Council work session. “This an opportunity to deliver tangible results to people with disabilities and the organizations serving them” McKim concluded. “It Is the right thing to do.”

Example Levy Growth Calculations

Stone Belt Life Designs Total Notes
2012 Appropriated  $400,000  $300,000  $700,000
2012 Levy Shortfall  $38,286  $28,714  $67,000
2012 Actual  $361,714  $271,286  $633,000
2013 Levy Growth 2.20% 2.20% 2.20% Assumes 2.2% is the levy growth; would substitute the actual levy growth
2013 Baseline  $408,800  $306,600  $715,400
2012 Shortfall Addback  $38,286  $28,714  $67,000
2013 Total  $447,086  $335,314  $782,400
2014 Baseline  $408,800  $306,600  $715,400
2014 Levy Growth 2.20% 2.20% 2.20% Assumes 2.2% is the levy growth; would substitute the actual levy growth
2014 Total  $417,794  $313,345  $731,139

Additional Revenue to Local Governments After Correction of State Error

I have previously posted about the recently discovered error by the state in distributing local option income taxes collected on behalf of location governments (see the previous posting here).  This error means that each unit of local government in Monroe County that receives County Option Income Tax (COIT) will receive additional COIT for 2011 and 2012 that was erroneously withheld by the state.

The payments will be made in the form of lump sums paid to each unit for all of 2011 (plus interest), and from January – April of 2012 (again, plus interest). The additional COIT that the state owes to local units for May – December of 2012 will be paid out monthly, simply by increasing the normal monthly COIT payment that each unit receives.

The following table shows the approximate amount that each local unit of government, including Monroe County Government, will expect to receive:

Unit Name Additional 2011 Distribution Additional 2012 Distribution Total Additional COIT  2011-2012
Monroe County  $1,076,351  $1,437,093  $2,513,445
Bean Blossom Township  $3,423  $5,386  $8,810
Benton Township  $6,210  $7,882  $14,092
Bloomington Township  $45,181  $59,551  $104,732
Clear Creek Township  $6,751  $9,089  $15,840
Indian Creek Township  $2,580  $3,392  $5,972
Perry Township  $20,216  $27,557  $47,773
Polk Township  $1,673  $2,278  $3,951
Richland Township  $24,910  $33,258  $58,168
Salt Creek Township  $2,188  $2,968  $5,156
Van Buren Township  $46,666  $59,548  $106,214
Washington Township  $2,734  $3,732  $6,466
Bloomington Civil City  $1,019,514  $1,387,680  $2,407,195
Ellettsville Civil Town  $53,845  $75,213  $129,058
Stinesvill Civil Town  $307  $411  $718
Monroe County Public Library  $286,697  $377,509  $664,206
Bloomington Transportation  $41,706  $56,941  $98,648
Perry-Clear Creek Fire Protection  $54,019  $71,451  $125,471
 $2,694,972  $3,620,940  $6,315,913


Reactions to Stormwater Credits Proposal

I of course read the various press releases from candidates for County Council, and one of them that came out recently is about a topic that is near and dear to my heart: the new stormwater fee (link to the press release behind the HT paywall is here). That candidate endorsed the fee, which I definitely appreciated. The stormwater management program is an enormous leap forward for Monroe County in protecting the quality of our water supply and in providing a funding source for flood control.  I also agree that the program should support and encourage sound stormwater management practices by individual property owners.

But unfortunately the proposal would cost more in administration than would actually be collected in fees — and the whole purpose of this stormwater management program is to get work done in the field, not to have people sitting in desks at the office.

This press release called for credits on the individual homeowner’s $36/year stormwater fee based on sound land management practices like having a stone driveway rather than an asphalt driveway. And it further stated that the county assessor takes pictures of properties all the time, and their staff could be trained to identify and document stormwater features.

I think the proposal is a nice thought…but these issues have already been discussed and analyzed extensively, and there are better ways to encourage good land management practices.

  1. First, there is the issue of the stone driveway vs. asphalt.  Athough stone can be superior to asphalt or concrete, in order to allow stormwater to infiltrate, the stone driveway must both be specifically designed and very well-maintained to be permeable. In practice, once compacted by driving over them, most stone driveways perform very similarly to asphalt driveways – that is, they shed most of the water and allow it to run off to the surrounding property.The stone driveway would have to be very well-maintained to be worth crediting; and it would likely cost more than the $36/year to verify that the driveway was being maintained properly – certainly more than can be verified by a photograph.
  2. Second, the Assessor’s Office typically only takes pictures every 4-5 years normally (during a reassessment). And further, these pictures are not of the scope and level of detail that would be required to efficiently determine stormwater mitigation. They take pictures of the house, not necessarily of the grounds and the pavement. For example, see the Assessor’s new picture of my house: In the 2012 picture at the top, my driveway isn’t visible at all.   This proposal would put much larger demands on both the staff of the assessor’s office and their assessment contractor – and really just increase administrative costs with very little additional benefit.
  3. A large number of residential credits, particularly given for activities that don’t make much of an overall difference in water quality and flood control, would decrease the resources that the stormwater management program would have to do its work, or would increase the costs and rate on other property owners.It doesn’t make any sense to give incentives for things that are already done – and a $36/year credit is not going enough of an incentive to influence the driveway design choices of a homeowner.
  4. Very early on in the deliberations on the creation of the program, the decision was made to bill residential homeowners a flat rate, rather than base their rate on the impervious area of their properties, while billing commercial/industrial properties based on their actual impervious area. This was a balance between complete fairness (everyone billed for the amount of runoff their property actually generates) and administrative efficiency (everyone billed the same amount).It would not be any more fair than a flat residential rate to arbitrarily pick out one feature (stone driveways) out of many that would generate credits. Under this proposal, for example, a small compact house with very small impervious surface area and a small asphalt driveway would actually be billed more than a sprawling ranch house with a much larger impervious surface, but a crushed stone driveway.

    The alternative is to start measuring the actual impervious area of residential properties – and this means measuring patios, barns, sheds, sidewalks, etc. – not just driveways. And once again, the administrative costs shoot up.

The County has set up a Stormwater Advisory Committee as part of the ordinance that created the stormwater management program that is tasked specifically with coming up with a credit system, and they are certainly looking at the issue of credits for individual homeowners.  But to be honest, the individual credit has been tried in a few other jurisdictions (Newberg, Oregon, for example), and there is not one single example of success anywhere. The cost of compliance and of verifying compliance is inevitably much higher than the relatively low monthly fee.

The underlying point – that the stormwater management program should encourage sound stormwater management practices – is of course well-taken, though. While costly and inefficient credits on a $36/year fee are not an effective way to encourage those practices, there are things that can be done; in fact, encouraging sound land management practices is one of the primary reasons I have advocated for the stormwater management program since the beginning.

A much more effective and efficient way approach is to use the resources of the stormwater management program to provide technical advice, education, and support to the homeowner. The program could provide literature and consultation on creating a rain garden, a green roof, or a permeable driveway, for example. The program can partner with other organizations like the Solid Waste Management District and the Soil and Water Conservation District to coordinate education and outreach to all sectors of the community. The program can even negotiate discounts and/or grants on project supplies, like rain barrels, native plantings, pavers, etc.

Personally, we have some drainage issues in our own front yard. I have often thought that a rain garden might be a good approach to dealing with them. But a visit from an expert along with some advice on how to create it would be much more of an incentive for me to actually take the plunge and install the rain garden than a credit on a $36/year bill.

Impact of the Error in State Distribution of Tax Revenues in Monroe County

This story, in which the State just recently had to eat crow and admit to an error in which it had underdistributed $206 M of local option income taxes to 91 counties across Indiana, has been widely reported on in the Indianapolis Star here and in the Herald Times here (I was quoted extensively in the article; unfortunately it is behind a paywall) and on Channel 6 WRTV in Indianapolis here (I am also interviewed briefly in that broadcast).

Local option income taxes are income taxes that are paid by residents of a county (individuals only, not businesses). Monroe County’s local option income tax rate is 1.05%, with 0.05% earmarked for juvenile services and facilities, and the other 1% to the general fund. These taxes are paid to the state, which then collects them in a trust fund for a period from July 1st to June 30th, and then pays those collected taxes directly back to each county in 12 approximately equal payments (although there is usually a midyear adjustment in there) from the following January through December. These funds are not part of the state’s budget — they are simply being collected by the state and then distributed back to the county.

The county is then responsible for distributing the income tax down to all of the local units of government within the county that receive income tax. The following units in Monroe County receive a share of the income tax collected:



An earlier post that I made with more detail on COIT distributions can be found here.

The total amount that the state understated Monroe County’s income tax revenues for 2012 is:

2011: $2,821,726.19

2012: $3,801,187.21

Total: $6,622,913.40 (Source)

The total amount from 2011 ($2,821,726.19) and the 2012 amount from January – April ($1,267,062.40), for a total of $4,088,788.59 will be paid out in a single lump sum (Source).  In addition, the county will receive interest on the 2011 amount and the January-April 2012 amounts. The remaining 2012 underdistribution will simply be paid out monthly as normal from May – December.

I am going to be recommending to the Council that we  transfer the extra COIT from 2011 (once we know exactly what the County’s share is) to the Rainy Day Fund.

As for the 2012 amount?

We actually have a budget deficit on paper in the general fund of almost $2.8 M for 2012. That means that if the County spends exactly every penny that is currently appropriated, no more and no less — and all revenues come in exactly as projected, we would deplete our cash reserves by $2.8 M.

In particular, the 2012 budget includes:

$29,373,803 in appropriations (planned expenditures)
$12,089,919 in planned miscellaneous revenues (including income tax, excise tax, fees, etc.)
$14,518,778 in property tax revenues
For a total of $26,608,697 in projected revenues

This leaves a planned deficit of $2,765,106 for 2012.

However, in reality, the county will not spend all of its appropriations. It never does (or at least not in recent memory). Positions left vacant, for example, even temporarily, will cause appropriations to be unspent. Based on past trends, we would expect to see around $800,000 of unspent appropriations at the end of 2012. If past trends continued, this would have seen us depleting our reserves by about $2M in 2012. This is the $2M I was talking about in the article.

Of course, this news from the state will necessitate a (welcome) change in the revenue projections for 2012. Once we find out (after the homestead credit and the Juvenile COIT are removed) Monroe County’s share of 2012 revenues, we’ll add that to the revenue projections. Let’s say for the sake of argument that we will see an additional $1M in revenues for 2012 than projected. This would leave us a budgeted deficit of only $1,765,106, and if past patterns of unspent appropriations hold, we would deplete our reserves by about $1M in 2012.

Now obviously, although depleting our reserves by $1M a year is much better than depleting them by $2.7M, it still isn’t sustainable indefinitely. However, the 2012 budget includes a one-time expenditure of $634,000 for the reassessment. This expenditure will never again come out of the general fund (future reassessment comes out of a separate fund). So going forward to 2013, if all of the costs of and revenues to county government are the same, except that the reassessment expenditure drops out, we would be talking about depleting the reserves by less than $500,000 in 2013. Still in deficit — but starting to seem much less daunting to the departments that will have to be making cuts. While it will still be challenging to make the cuts that we need to, this recent news combined with our healthy reserves, will make a “soft landing” and a sustainable budget over the next 2-3 years much more achievable.

Personal Use of Take-Home Police Vehicles

An article in today’s Indianapolis Star describes changes in the Marion County Sheriff’s Department policies on personal use of take-home police vehicles by deputies, in order to help close their budget gap.

According to the article:

“Deputies assigned office vehicles that they use for personal errands will pay a monthly fuel charge of $75. Those who use office vehicles for off-duty employment will be charged $150 a month, according to a Sheriff’s Department news release.”

This seems like a reasonable compromise, especially as fuel costs rise and county revenues fall. The surcharge for use in off-duty employment is particularly appropriate. But it is important to remember that take-home marked law enforcement vehicles are not primarily a perk for the officer — they are a benefit to the public. Having additional police cars out on the road effectively increases the perceived size of the police force at minimal additional costs. The officers can be dispatched quickly. And potential law-breakers don’t know that the officer is off-duty — they just see an additional sheriff’s vehicle on the road.

Just as a point of comparison, Monroe County’s policy on take-home vehicles for law enforcement officers reads as follows:

Law enforcement officers may exercise de minimis use of county vehicles that are assigned as take-home vehicles for reasonable and limited personal transportation within the county. During such use, the officer shall maintain radio contact with Central
Dispatch at all times, and shall respond to emergency situations when requested by Central Dispatch. The officer shall not substantially use a county vehicle in his or her business pursuits, or to perform another job. The officer may use the vehicle to drive to and from other employment, but may not use the vehicle to perform substantial duties at that employment. The Sheriff shall monitor use of such vehicles to assure compliance with this policy and report such use to the Monroe County Commissioners.

Source: Monroe County Personnel Policy Handbook

YMCA Economic Development Bond Clears Another Milestone

The Monroe County Economic Development Commission (EDC) today approved a resolution (EDC Agenda YMCA Bond 2012-04-02) supporting the issuance of revenue bonds to finance renovations at the Monroe County YMCA at 2125 S Highland in Bloomington. The EDC resolved that the project consists of “economic development facilities” to promote the “health, safety, morals and general welfare of the citizens of the County.” The project will provide jobs during the construction, and provide a quality of life amenity for the residents of the County at no cost to the taxpayers.

The following is the description of the project from the resolution:

The proceeds of the Bonds will be used by the Borrower, at its 2125 South Highland, Bloomington, Indiana location, to replace the current small pool and both hot tubs with a new multi-use family/therapy pool and hot tub. The scope of the Project will include the demolition of the current small pool, hot tubs and mechanical room space. The Borrower will then construct the new aquatic facilities in a space that will be approximately 9,000 square feet and house the new pool, hot tub and mechanical room. All necessary equipment such as plumbing, HV AC and mechanical equipment will be included in the Project. In addition to the new pool and hot tub, the Borrower will be replacing the HV AC unit that currently services its main pool area. The new unit will provide air conditioning, heating and dehumidification. The Project also includes all costs of issuance with respect to the Bonds and any reimbursements to the Borrower for expenses incurred on the Project prior to the issuance of the Bonds.

The bond will raise up to $2.75M. As a revenue bond, it is backed only by the revenues that the project itself will generate (i.e. revenues from membership fees at the YMCA), and does not obligate the County or the City at all.  However, the statute that enables this type of revenue bond requires approval from the County Economic Development Commission (EDC), the Bloomington City Council, and the Monroe County Council. Primarily, these bodies are certifying that the project will not have an anticompetitive effect on the local marketplace.

The Bloomington City Council will consider the bond on Wednesday, April 4, 2012. The Monroe County Council will vote on the bond on Tuesday, April 10, 2012.