Located 12 miles south of Minneapolis, the City of Bloomington has a population of 89,987 people, according to the 2020 Census. It is home to the Mall of America and strategically located near Minneapolis-St. Paul International Airport.
Transforming Public Engagement Amid a Budget Crisis
From crisis can come an opportunity to do things differently. This is what the City of Bloomington, Minnesota learned when, in mid-March 2020, its revenue forecasts changed dramatically as the pandemic crisis unfolded. Pre-pandemic, Bloomington drew about 13% of its general fund revenues from its robust hospitality industry, given its strategic location near Minneapolis-St. Paul International Airport and the Mall of America. These revenues immediately declined as businesses shut down and travel plummeted. Suddenly, Bloomington was forecasting a multimillion-dollar budget shortfall for 2021—and, to add pressure, it was facing an economic environment in which the City Council did not want to raise property taxes. To engage its community and understand its priorities, the city transformed its approach to public engagement in the budget process. Here’s what happened.
Changing the process
In the years prior to 2020, public engagement in the budget process was mainly limited to one state-mandated Truth in Taxation Public Hearing. Held during a City Council meeting in early December, this session came near the end of the budget process, right before approval of the final annual budget and tax levy.
Then March 2020 hit. Bloomington’s local hospitality and entertainment industry generates lodging and admission taxes that help to fund city operations, including police, fire, and public works. When businesses were shut down and travel suddenly stopped, these tax revenues plunged. Bloomington’s mayor and city council members knew that the tax base would be slow to recover, and so they needed to make significant changes quickly.
Forming a committee
In this emerging crisis, Bloomington’s mayor Tim Busse appointed a Community Budget Advisory Committee (CBAC) of nine residents with knowledge of local government and finance to meet weekly from June to October 2020. Their mission was to study the city’s services and budget to prioritize potential reductions as well as to ensure budget discussions reflected community preferences.
In addition, Bloomington hosted four community engagement budget listening sessions with residents and business leaders. It also created a new CBAC website and launched a digital engagement platform, “Let’s Talk Bloomington,” with a dedicated section for survey questions to poll residents about city services and budgets. This data could inform potential cuts under consideration by the city council in the various budget scenarios it was developing.
“We were facing a difficult situation,” said Karina Carlson, Budget Manager for the City of Bloomington. “Things were changing rapidly, often overnight.” As she noted, the city wanted to engage residents and businesses in its evolving budget and tax levy discussions. “There were some difficult decisions that needed to be made, and it really helped to get the community’s input to make more informed decisions about cuts. In the end, the committee and our increased public engagement really opened the door to the public in a new way.”
Engaging the public
All CBAC meetings were held publicly as well as televised and streamed live on the website. Minutes were recorded and all detailed materials were published via the city’s public agenda software, so residents could follow along. The city also held Zooms for members of the community beyond the committee.
In addition, CBAC members were encouraged to reach out to their networks to inform them of the public sessions and encourage involvement. The city’s new Community Outreach and Engagement division also championed maximizing inclusivity under the circumstances through regular meetings with community groups throughout Bloomington. This helped to bring in perspectives outside those residents who had attended the previous December meetings.
The CBAC was tasked with presenting three budget scenarios to the city council in early November 2020. They analyzed 2021 revenue forecasts, especially considering lodging and admission tax revenue to create a worst-case revenue scenario based on a slow recovery for the hospitality industry. They also focused on lowering the tax levy through, for example, keeping the debt service amount relatively flat and freezing cost-of-living increases for non-union employees, among others.
Yet it wasn’t enough. The city faced nearly $5 million in reductions to balance the budget if there was to be no increase in the tax levy. To address this, the committee developed three scenarios:
- Budget reduction of $1.57 million with 5% tax levy increase
- Budget reduction of $2.87 million with 3% tax levy increase
- Budget reduction of $4.81 million with 0% tax levy increase
The CBAC prioritized over 100 budget reduction options, which were shared with the public, as well as details on property tax increases for each proposal. Through the community listening sessions, the committee and city council heard community support expressed for the police and fire departments—and ultimately for the proposal that involved the fewest cuts. In the end, the city council selected this proposal, which involved minimal impact to city services. A combination of budget cuts, fund reserves, and a modest tax increase were used to balance the 2021 budget.
Some of the budget reductions incorporated in the 2021 budget include:
- Elimination of 23 full-time positions
- Closure of one motor vehicle office
- Reductions in travel and training budgets
- Cancellation of right-of-way mowing contracts
- Fee increases, including for parks and recreation programs and golf
- Reductions in overtime budgets
- Postponement of upgrades to the city website
As Carlson noted, “Because we were very public and transparent about why cuts needed to happen, the public was very understanding. This carried over to understanding why in the end we did need to have a tax levy increase of 2.75%—smaller than other years, but still an increase.”
Carlson noted that public interest was high, measured by web traffic on the dedicated Community Budget Advisory Committee site. As a result of the initial public engagement, the city has now created a city budget page on its website, where it shares information on the budgeting process to make it easy for residents to access at any time in the process.
Initially, staff expressed some concern with the transparency public discussions would bring. Ultimately, though, both the staff and the public had positive reactions to the increased engagement. “Many staff, especially those who don’t typically work closely with the budget, learned a lot about how the city operates and how services are funded. The public had a sense of deeper engagement in budget discussions, which came from seeing what goes into decisions,” said Carlson.
With the 2022 budget process, the city isn’t facing the financial strain of 2020. In fact, it is restoring about $450,000 of the 2021 cuts in its 2022 budget as the hospitality industry has recovered.
Yet Bloomington is still embracing public engagement through community sessions and continued process transparency on its new city budget page. Efforts also include newsletters, social media channels, and outreach to residents and community groups. The city is in the process of deciding whether to make the CBAC a permanent standing committee, which would follow established processes for applications and communications. In addition, the city is using its newfound public engagement strategies to explain funding increases and to keep citizens dialed in.