In a solemn State of the City address Friday morning, City Manager Mike Matthes acknowledged Columbia’s commitment to stewardship amid limited resources but warned that unless the city collects more tax revenue, more fiscal woes are still to come.
“Our residents should expect less service from the city government in future years,” Matthes said. “After all, we as a community are not actually buying much of it.”
Columbia is the fastest-growing city in Missouri, but it has the lowest property tax rate of the 10 most populated cities in the state, Matthes said. When it comes to sales tax, Columbia’s rate is average. But, as more and more people buy online from retailers who don’t pay sales tax to cities, less revenue comes in than what’s required to keep the city’s property tax rate “to the minimum.”
Columbia voters rejected a use tax in November, which would have applied to internet sales. City officials said the tax was necessary to make up for the loss in sales tax revenue that came from more shoppers stepping out of brick-and-mortar stores and buying online.
The U.S. Supreme Court has heard a case challenging restrictions on states taxing sales over state lines, including online purchases. The court could rule on that case as early as this month.
Matthes has warned against the city’s reliance on sales tax in previous State of the City addresses.
“That strategy is no longer capable of moving us forward, or even keeping pace with the needs of our community,” he said.
Finding alternative revenue streams, such as taxing internet sales or raising the property tax, was one of three initiatives Matthes recommended to his audience of nearly 60 people — including representatives of the Columbia Police Department, Columbia Public Schools and City Council.
Improvements in infrastructure
Matthes also addressed the need for improvements to the city’s drinking water infrastructure and an expansion of emergency services. Despite overall resident satisfaction with the city’s water service when compared to national and state averages, Matthes said “a fair bit” of Columbia’s water system needs to be replaced. These projects will cost a little over $48 million — an expenditure that would require bonds for which the average resident would pay an additional $3.25 per month, he said.
When it comes to improving infrastructure, Matthes said that funds and staffing already exist for an additional fire station to be constructed in the area east of U.S. 63 and south of Interstate 70.
“It is time to add stations and staff to keep up with the growth the city has seen,” he said.
The Second Ward will also be home to a new police station at the intersection of Range Line Street and International Drive, a project meant to improve overall response times and residents’ proximity to officers, Matthes said. He noted ongoing efforts to address the community’s decreasing confidence in its police, including the Community Outreach Unit and the development of a citywide Community-Oriented Policing program.
Customers generally satisfied
Despite ongoing funding concerns, Matthes said that citizen satisfaction indicates the city is still “setting the bar for high-quality service.”
“City staff is keeping faith with the community to the extent resources allow,” Matthes said.
Seventy-three percent of residents reported being satisfied or very satisfied with the quality of city services, according to the 2017 survey from the ETC Institute. For the Missouri/Kansas region, the average was 46 percent. For the nation, it was 49.
When it comes to how satisfied residents feel with the value they receive in return for city tax dollars and fees, 50 percent reported being satisfied or very satisfied. For the Missouri/Kansas region, the average was 40 percent. For the U.S., it was 38.
Matthes also noted that 68 percent of respondents reported being satisfied or very satisfied with the city’s customer service and that 66 percent agree or strongly agree that it’s easy to reach the right person at the city, compared to 57 percent in 2016.
“So, the state of our city is one where people are generally happy, generally love the service they receive for their tax dollars and know how to get city government’s help if they need it,” Matthes said. “We continue to move the needle of service in a positive direction.”
When compared to citizen satisfaction with the quality of services in Columbia over time, rather than to state and national averages, the results indicate a steady decline. In 2014, 81 percent of respondents reported feeling satisfied or very satisfied with the quality of services provided by the city. In 2015, that number was 77, and by 2016, it was 74.
Less confidence in police
Matthes said in a news conference following the address that the overall decline might be related to decreased satisfaction with policing, though he said he didn’t want to conflate the issues.
“When we look at all the services, there’s only one that’s really dropped,” he said.
In 2005, 87 percent of local respondents reported feeling satisfied or very satisfied with the quality of public safety services provided by the city. In 2017, that number was 61 percent — a 26 percent decrease.
During the address, Matthes outlined ongoing challenges for the Columbia Police Department. Although calls for service have decreased by about 6 percent over the past four years, the police department still receives one of the highest rates of calls per officer per year when compared to departments in cities of similar size. Matthes also noted a citywide increase in homicide and larceny, calling the nine homicides in 2017 “deeply troubling.”
Although public perception of safety, police service quality and ability to thrive have declined citywide, sentiment toward all three categories has improved in the central and east neighborhoods, according to a report on the Community Outreach Unit, which was released Friday on the city’s website.
Central and east neighborhoods are two of the city’s three strategic neighborhoods and geographic focal points for the Community Outreach Unit. Perception of police service quality in the third neighborhood, north, has also improved.
Sgt. Michael Hestir, one of several representatives from Columbia police who attended the address, said he attributes the neighborhood-level improvements to the work of the outreach unit.
“I think that what’s happened is the result of relationship and trust,” Hestir, who supervises the outreach unit, said. “We have had more one-on-one contact. The citizens trust us more, and we’re able to communicate both confrontationally and investigatively better.”
The unit expanded by two officers in 2017 after receiving a grant from the Department of Justice. The city is also in the middle of a six-month process to design a Community-Oriented Policing program, which could expand the philosophy and practices of the outreach unit to the entire police department. But the community policing initiative is a microcosm of the larger theme Matthes presented Friday — philosophy and resources go hand in hand.
“If the City Council places that vision (of community policing) before the voters, it will be the community’s decision whether to pay for that vision or to have us struggle on as we are,” Matthes said.
Not all bad news
But amid mention of those struggles, Matthes highlighted two victories.
From 2009 to 2013, black unemployment in Columbia was 15.7 percent. From 2012 to 2016, that rate dropped to 8 percent.
The executive director of Heart of Missouri United Way, Andrew Grabau, took to the podium to talk about the importance of “showing up” when it comes to reducing the unemployment gap. Heart of Missouri United Way invests in programs that eliminate poverty and empower families and individuals, according to its website.
“This happens in our community every day, but it’s not by luck — it’s due to our deliberate convening and organizing partnerships that must be nurtured and focused so we as a community can act as a force multiplier,” Grabau said.
Matthes also applauded a local program working to expand opportunities within the community.
Community Scholars, created by Assistant City Counselor Rose Wibbenmeyer in 2017, gives kids the opportunity to work in city government.
Community Scholars works in conjunction with the A+ Scholarship Program, which provides state-funded community college or vocational/technical school education to students who meet several criteria, including a 95 percent attendance record through high school and 50 hours of volunteer work. The program helps make these standards accessible for more students and raises awareness about the A+ Scholarship Program.
“(Students) might lose the opportunity before they know the opportunity exists,” Wibbenmeyer, who was recognized by Matthes for her work, said after his address.
Those two moments were brief interludes in an address primarily focused on the city’s need for more funding.
Matthes said he will present budget recommendations to City Council in July that outline his concerns, as well as what the city might do to increase revenue. Options include paying sales tax on internet purchases or increasing property tax. Matthes did not estimate how great a property tax increase would need to be — only that something needs to change.
“Going forward, we may not be able to meet citizen expectations in some areas,” Matthes said. “Our purchasing power does not match demands for service.”