After TIF district defeat, city manager outlines options

Wednesday, February 19, 2014 | 5:51 p.m. CST

COLUMBIA — With six high-density housing projects halted by inadequate infrastructure, City Manager Mike Matthes said Wednesday he sees three remaining ways to pay for $19.75 million in sewer and electric projects needed to accommodate additional downtown development.

On Monday night, the Columbia City Council, in a 5-2 vote, dismissed a $70 million proposal to fund downtown infrastructure and other city projects with a tax increment financing district.

Matthes said the council's decision killed the tax increment financing plan he, Mayor Bob McDavid and city staff had been promoting as the solution for downtown development. 

Moving forward, none of the remaining solutions might be able to reach the nearly $20 million in estimated infrastructure costs — including $10 million for three electric lines and $6.75 million to enlarge sewer pipes, Matthes said.

To accommodate additional development, he said, the council will have to decide between raising utility rates, asking residents to vote on a tax or postponing previously planned projects to shift money toward downtown. 

Matthes said city staff considered all of those options previously, but concluded they wouldn't provide enough revenue. 

"We can't get $20 million from switching out other projects," Matthes said.

Several council members expressed their thoughts on how to move forward now that tax increment financing was off the table.

Fifth Ward Councilwoman Laura Nauser said Tuesday she had considered funding the electric utility upgrades by including those projects on a scheduled bond in November. She also suggested that a portion of the sewer projects could be funded by reserve funds. 

But reserve funds would only cover a small portion of the needed projects, Matthes said. In the case of Columbia Water and Light, the reserve funds are meant to cover operations in case of an emergency. 

"We can't look to our reserves to solve this problem," Matthes said.

Water and Light only has enough reserves to cover two months of operations, he said. There could be up to $1.6 million in reserves for sewer projects, but even if that money was used, developers still wouldn't be able to build downtown, according to Matthes. "We might be able to put the sewer in, but that won't do much good if they can't turn the lights on."

Third Ward Councilman Karl Skala said the council could consider funding from bonds and tax increases, though those solutions would be unpopular with the public.

Skala also said funding for the sewer projects could also come from the bond issue for the sewer projects that voters approved in November an approach Nauser opposes.

While most of the intended projects in the sewer bond should not be changed, Skala said, he would propose to the council to move money allocated for the Midway and Hinkson Creek sewer extensions to expand sewers downtown.

Skala and Fourth Ward Councilman Ian Thomas said other changes need to be made before the city decides how to fund downtown infrastructure. 

Skala and Thomas are advocating for a review of development fees, a reassessment of utility connection fees and changes to the city's downtown zoning rules, which is being studied by Clarion Associates, a consulting firm based in Denver. 

Skala said there needs to be a realigning of private-public cost-sharing for development, and residential and commercial building projects should not be assessed the same development fees.

But even without changes to the city's development fees or zoning rules, Matthes said, the dismissal of the tax increment financing plan could set downtown development back by years. 

"We don't have a plan B at this point," Matthes said. 

Supervising editor is John Schneller.

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Mike Martin February 19, 2014 | 10:37 p.m.

I have grave concerns -- as do many people -- about leaving downtown infrastructure planning to the city manager, especially after the defeat of his ill-conceived TIF plan; and the debacle he and his deputy finance manager, Lynn Cannon, made of the city's financial report during the TIF hearing.

It starts at roughly 2:18:45 on this video, after Councilwoman Nauser asks for answers about how much money the city is stocking away in unrestricted sewer utility funds:

The answer -- $11,733,871 -- never emerged, lost in so much hemming, hawing, shuffling, and obfuscating it had audience members gasping and giggling.

Moreover, the three "options" Mr. Matthes cites in lieu of TIF -- raising utility rates, asking residents to vote on a tax or postponing previously planned projects -- are needlessly painful.

They ignore a Council-recommended alternative with significant support -- developer impact and usage fees -- and reflect the same stubborn defense of large, unrestricted fund balances -- I've called them "slush funds" -- that could and should be used to pay for basic community needs like sewer infrastructure.

City government has some $144 million (up $1 million from 2012) in its "unrestricted and unassigned fund balances" according to the latest Comprehensive Annual Financial Report (CAFR), a document I analyzed many times as chair of the City's Finance Commission.

This quote from the 2013 CAFR sets the tone:

"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."

And that's just one of several funds with large unrestricted, unassigned balances WELL ABOVE what the city needs to function comfortably and judiciously.

If one message emerges from the glowing financial picture painted in the 2013 CAFR, it is this: city management should cut the crap.

1) Total assets for the City are $1,329,233,294.00 -- an INCREASE of $21,678,240 over 2012.*

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.*

6) Total investments as of 9/30/2013: $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*

*2013 Comprehensive Annual Financial Report

(Report Comment)
Bill Weitkemper February 19, 2014 | 11:01 p.m.

Before user rates are increased all users should be charged the same rate.

If the monthly sewer base charge for multiple-unit residential property provided water by a master water meter was charged correctly - as it was being charged between March 2008 and March 2011 and if multiple-unit commercial property provided water by a master water meter was charged correctly - in the same manner, sewer revenue would be increased by over $1,000,000 a year.

However, in March 2011 Public Works Director John Glascock recommended the sewer ordinance be changed. This was shortly after the owner of a multiple-unit residential property threatened to sue the city because Mr. Glascock had not charged any owner of a multiple-unit commercial property provided water by a master water meter in the same manner as he was being charged and because Mr. Glascock had given the University of Missouri 10 years to pay what they owed for multiple-unit property served by a master water meter.

(Report Comment)
John Schultz February 20, 2014 | 2:30 p.m.

Does Matthes still do coffee hours? Someone needs to take a video camera and ask him about these fund balances, then place the resulting conversation on YouTube. No one in the press has hounded him on this as far as I'm aware.

(Report Comment)

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