City council approves budget

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COLUMBIA - The city council voted on Columbia's 2018 fiscal year budget Monday night after a work session and public hearing. In order to increase general fund revenue, the city will make departmental budget cuts worth $1.1 million.

City Manager Mike Matthes submitted the budget to the city council in July. The Columbia City Council held four public hearings on the budget.

“We are looking at lean years ahead. We will have to change how we have always done things if we want to thrive as an organization dedicated to the service of others," Matthes said in his budget message.

The city council faces reductions in Columbia's general fund because of less revenue but also is planning for less spending. 

The city council voted not to raise utility rates as planned. It wanted to increase the electric rate by 1 percent and the water rate by 4 percent, but expressed some concerns with the Columbia Water and Light Advisory Board. It approved the water rate increase but denied the electric rate increase.

Third Ward council member Karl Skala said there was controversy over whether the board turned in financial reports on time. 

“We’ve all been in this boat because of the switch over to a very expensive but comprehensive new software system for billing," Skala said.

Second Ward council member Michael Trapp said he supported the electric utility increase because it was necessary to pay for operational expenses and needed capital investments.

"Delaying them will require steeper rate increases in the future and risk the city's bond rating. Even with the rate increase we are projected to fall short of our financial targets for reserves," Trapp said.

The city council has also made cuts in the IT and custodial departments and will continue a hiring freeze for the city's fire and police departments. One of the city's goals for 2018 is to avoid laying off full-time employees.

Matthes said the city's biggest challenges are low sales tax growth, rising health care and pension costs and high transit costs.

The city planned to raise paratransit costs per ride and eliminate three public bus routes since current transportation costs are exceeding revenue by $600,000.

Columbia's sales tax growth has also steadily declined since the 2011 fiscal year, when it was 5.8 percent, to a projected 1 percent for 2018. Skala said this is due to a large increase in online sales. 

Skala said a use tax voted on in November could recover up to $1 million per year.