After the coronavirus pandemic threatened to shutter Bloomington’s Motor Vehicle Office last April, the budget planning for 2021 and beyond proved to be its death knell.
The Motor Vehicle Office, a city enterprise fund providing licensing services, will close March 31, due to both the city’s budget deliberations and the ongoing challenge of operating the enterprise profitably. The end result, and how the Bloomington City Council arrived at is, has been a source of disagreement among councilmembers.
The council approved its 2021 general fund budget and tax levy last month by a 6-0 vote, a meeting that Councilmember Dwayne Lowman did not attend. There was discussion of maintaining the office through the end of June, but City Manager Jamie Verbrugge recommended setting the end of March as the closing date for the city’s enterprise. Lowman expressed his disagreement with the decision during the council’s Dec. 21 approval of the Motor Vehicle Office’s enterprise fund budget.
Lowman supported keeping the office open through June, and expressed concern about losing a city service that provides value to many residents. He agreed with Councilmember Shawn Nelson’s comment during the previous meeting, that the city’s budget process is the wrong way to determine the city’s values.
Councilmember Jack Baloga piggybacked on Lowman’s concerns, saying that closing the office is a disservice to the city’s senior population.
The city discussed the operational costs of the office extensively in April. The state determines the licensing fees and the city’s commission for handling the transactions. As operational costs have increased, the city’s licensing revenue has not, requiring Bloomington to subsidize the operational cost of the enterprise fund in recent years. With a closure looming, keeping the office open for six months may be difficult, as employees may find employment elsewhere prior to its closing, Verbrugge explained.
Services are available in neighboring cities, including Edina, Richfield and Burnsville, and vehicle license tab renewal is available online, he noted.
The goal in closing the city’s enterprise is to find a private operator to take over the service. That may not happen by the end of March, but Mayor Tim Busse expressed optimism that it would occur, noting he had received inquiries about the availability of the enterprise since the council first discussed closing it last April.
The council approved the plan to close the office as part of its budget and tax levy approvals during the Dec. 7 meeting Lowman did not attend. The enterprise fund budget for 2021 was approved by a 4-3 vote at the Dec. 21 meeting, with Baloga, Lowman and Nelson voting against it.
The city is receiving millions less in lodging and entertainment taxes due to the pandemic, and that decrease in revenue is expected to continue well into 2021.
“COVID-19 has had a major impact on the city’s budget,” said Kari Carlson, the city’s budget manager.
The council considered multiple scenarios for its 2021 property tax levy, and in April relied upon the recommendation of the Community Budget Advisory Committee, which met most weeks through the fall and provided scenarios and recommendations for the council. The council chose a property tax levy increase of 2.75% for 2021.
The budget includes a variety of steps to offset expenditures for the coming year, such as reducing staff positions, freezing wages for many city employees and using fund reserves when possible, Carlson noted.
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