Bloomington, Ind., has faced economic challenges in the last several years, including the ongoing recession. To combat those challenges, the city has used creative financing tools for infrastructure improvements that have resulted in strong economic growth.

Just a little more than six years ago, the largest non-governmental employer in Bloomington was a television manufacturer that employed 1,200 residents with an annual payroll in excess of $35.5 million. As the economy changed, those jobs were shifted to Mexico, leaving a huge employment gap in the city and its surrounding area. A few years later, a local refrigerator manufacturer downsized its 3,000-person workforce by almost 50 percent. Those losses forced Mayor John Fernandez to think about how Bloomington could reposition itself to be more economically competitive and participate more fully in a high-tech economy.

To promote and sustain long-term growth, the mayor established a program called Rebuilding Bloomington. The program is made up of public-private partnerships designed to stimulate capital investment in the downtown core. So far, it has provided more than $43 million in direct new investments in transportation, parks and stormwater systems.

In addition to public-private partnerships, aggressive use of non-traditional revenue sources such as tax increment financing (TIF) has begun to re-energize downtown development. Several projects have been completed or are planned for the near future using a combination of parking revenues and TIF. They include:

a new parking garage and a retail center,

the re-development of an older parking garage into a new mixed-used building, and

a new center city greenways trail that will connect existing trails south of the city to the city's north end.

As part of the city's long-term growth strategy, the mayor added technology to Bloomington's list of pending infrastructure improvements. To maximize cost-efficiency, he established a policy to install fiber optic cable conduits wherever and whenever traditional infrastructure projects were taking place.

The city is installing a citywide fiber optic cable loop, which is nearing completion. Much of the cost of that project has been reduced through a partnership with a local Internet services provider (ISP). As the ISP was planning and installing new fiber optic conduits in some parts of the city, Bloomington officials entered into an agreement with the company, allowing the city to bury its own fiber optic conduit in concert with the ISP and share the cost.

The city is using a dedicated telecommunications infrastructure fund to finance its portion of the project. Revenue for the fund comes from a 5 percent franchise fee on all cable television sales in the city. Sixty percent of the fund is designated for operation of community access television, and 40 percent is designated for telecommunications infrastructure projects.

By taking advantage of public-private partnerships, TIF and dedicated funds in lieu of general property taxes, the city has created a strong foundation for private investment while asking residents to pay property taxes below what the state would allow. In fact, the 2002 budget proposal sought a tax levy of about $18.4 million, about $500,000 less than the maximum levy allowable.

Lower overall taxes and creative financing have provided an incentive for businesses to move into the area. An influx of businesses increased countywide income tax collection by about 7.33 percent over the last five years. Hence, Bloomington has been able to hold the line on property taxes while encouraging economic growth.

The author is the city controller for Bloomington, Ind.