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.
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