After voting down TIF, Columbia council explores alternative funding

Tuesday, February 18, 2014 | 10:17 p.m. CST; updated 8:30 a.m. CST, Wednesday, February 19, 2014

COLUMBIA — City leaders started exploring alternative funding solutions for downtown projects and infrastructure renovations after City Council rejected the proposed tax-increment-financing plan Monday night.

The council voted 5-2 against moving ahead with a plan that would use a tax-increment financing district to pay for the $19.75 million in sewer and electric upgrades needed to accommodate new development downtown, along with $50 million for other projects.

The decision eliminated the only proposed solution to address the city's infrastructure problems and could halt any new downtown development for months. But some council members are ready to propose other funding options. 

Fifth Ward Councilwoman Laura Nauser said the $10 million needed for electric infrastructure improvements could come from a scheduled bond to be voted on in November, and the estimated $1 million in water projects could possibly be covered by Columbia Water and Light's reserve funds. 

"Our city isn't going to cease to exist if we pull this process back some," Nauser said. "I'm quite confident that we can come up with a plan B."

During Monday's meeting, many members of the public criticized tax-increment financing and the speed and transparency of the plan, which was supported by City Manager Mike Matthes and Assistant City Manager Tony St. Romaine.

Fourth Ward Councilman Ian Thomas said that while he appreciated Matthes and city staff for coming up with an infrastructure solution for downtown, he didn't think a TIF district was the right choice.

Thomas said he would propose that the City Council create a task force to oversee changes in downtown development and review all alternative funding options.

Thomas said that residents should form neighborhood planning groups to provide input and that development fees and zoning rules would need to be changed before any development could occur.

Thomas said that developing the task force and neighborhood planning groups could take six to nine months and that council's funding solution should include public input at every stage.

Those months could halt development in the district, however. Matthes told the council Monday night that the city would not issue any additional building permits downtown without a way to finance the needed infrastructure improvements.

Several firms have expressed interest in high-density residential development downtown, but a number told city officials that they would pull their building plans if the council did not find a way to fund the needed infrastructure soon. 

Without a solution, developers would not move forward, Robert Hollis, an attorney representing three of the companies, said during the council meeting.

Second Ward Councilman Michael Trapp said he was concerned the council's decision would hurt Columbia, not only because downtown development would be stymied but also because sewer overflows and urban sprawl would continue. But Trapp said he was open to hearing other people's solutions to downtown's infrastructure problems.

Only Trapp and Mayor Bob McDavid voted for the proposed projects Monday. 

Nauser said that while she was initially on the fence, the lack of information provided by city staff at the council meeting and her constituents' opposition to a district-wide TIF led her to vote against the plan. Of many Columbia residents who contacted her, Nauser said, only one supported the proposed downtown tax district. 

"There were too many questions that I needed answered," she said.

Nauser said she considered supporting the use of the tax district to separately fund the $19.75 million in sewer and electric upgrades, as McDavid offered in an amendment that was later voted down. But she said she could not support funding all of the projects with the tax district.

"I was not surprised by the issue's defeat," Nauser said Tuesday. "There was no way I was going to support something worth $70 million."

Trapp said he was disappointed that his fellow council members did not voice their opposition to the TIF earlier.

In the future, Trapp said, he would recommend that council members communicate more openly and make their concerns known before the city spends money and staff time on a long-term project. 

Supervising editor is John Schneller.

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Bill Weitkemper February 18, 2014 | 11:06 p.m.

The money needed for infrastructure improvements does not have to come from a single source.

The money can, and should, come from many sources (except for taxes).

Increase revenue without increasing rates, increase impact charges, increase and establish connection fees, establish allocation charges, increase master meter charges, collect more delinquent charges, establish availability charges, increase revenue by increasing rates, cut expenses, reduce consultant fees/charges, reorganize departments/services, use money generated by 2013 Sewer Bonds, reshuffle FY 14 CIP, use money from reserve funds, hire better management.

(Report Comment)
Dave Overfelt February 19, 2014 | 9:06 a.m.

While all those sound like possibilities, it sounds like council is probably going to do the only thing they know how, punt to ANOTHER new task force. Maybe they forgot about the comprehensive plan... or even better, maybe they didn't read it anyway.

In case the council has forgotten, this comprehensive plan emerged from the visioning process so it really started in 2006. So council members, just so you don't have to work too hard, the plan is here:

You will particularly want to review the materials around page 128.

You may also note that you already created an Infrastructure Task Force! I am not entirely sure what they are up to but I am sure you can find out, you are our city council after all.

(Report Comment)
Mike Martin February 19, 2014 | 4:09 p.m.

City government should use some of the $144 million (up $1 million from 2012) in its "unrestricted and unassigned fund balances" to pay for the $20 million in downtown infrastructure.

Even though I chaired the City's Finance Commission for a few years, don't take my word that the money is there.

Break out your PDF copies of the Columbia 2013 Financial Report (CAFR) and search on the words "unrestricted" and "unassigned." (Be sure to read the definitions of what these terms mean).

One of the first things you'll find sets the tone for everything to follow:

"The unassigned General Fund balance is $26,350,897. This is 34% of expenditures and transfers of $77,581,172, WELL ABOVE the 20% target set by Council policy in August 2012."

In other words, the fund balances you will find sitting without purpose in the "unrestricted" and "unassigned" categories (and there are many) are WELL ABOVE what our city government needs to operate as good stewards of our money -- and our lives.

One relevant example: $11,733,871.00 in the Sanitary Sewer Utility Unrestricted fund balance, almost double the $6.7 million City Hall insists should be spent on downtown sewer work.

2013 CAFR

(Report Comment)
Mike Martin February 19, 2014 | 4:20 p.m.

A few more facts about our struggling, strapped, and nearly broke city government that can't afford to do anything without a TIF, or a fee hike, or a tax hike, etc.:

"A review of the government-wide financial statement of net position reveals the following:

1) Total assets for the City as a whole are $1,329,233,294.00 -- an INCREASE of $21,678,240.

2) The City experienced a DECREASE in total liabilities of $10,564,954.

3) Net investment in capital assets INCREASED $13,072,262.

4) Total Pooled Cash as of 9/30/2013: $249,670,673.00

5) Total Police and Firefighters’ Investments: $104,198,515.00 as of 9/30/2013.

As of September 30, 2013, the City had investments totalling $364,737,679.00, in the following:

U. S. Government and Agency Securities
U.S. Treasuries
Taxable Municipal Bonds
Corporate Bonds
Money Market Accounts
Mutual Funds
Common Stock
Exchange Traded Funds
Guaranteed Investment Contracts

-- From the 2013 Comprehensive Annual Financial Report

(Report Comment)

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