City View: Balanced budget requires balanced strategies

by Bill Watkins

August 22,2008

August and September are key times for Columbia citizens to engage with local government. The City Council is considering the City Manager’s FY 2009 budget proposal and will make its decision before the end of September.

Between now and then, I encourage you to inspect the budget and connect with your elected council representatives either in person, in writing, by telephone or at a public hearing. The council will hold two more public budget hearings during its regular meetings Sept. 2 and Sept. 15. Please review the budget at our local libraries or online at www.GoColumbiaMo.com.

The budget sets spending and program goals for the period between Oct. 1, 2008 through Sept. 30, 2009. In my June 27 column, I prepared readers for what I thought would be, fiscally speaking, a very tight year. A few weeks later, the local news media quoted me as saying, not only is this a tight budget…”it’s squeaky.”

We project total city revenues to be 7.6 percent lower in FY 2009 than in FY 2008. This assumes one percent growth in sales tax revenue; about eight percent growth in gross receipts taxes; and significantly decreased grants and capital funds, as we spend down resources for non-motorized transportation projects (bikeways, trails, etc.).

We expect total city expenses to grow about 1 percent. Although spending from our enterprise and internal services funds will increase, we expect a 19 percent decline in general government funds-the resource that supports city services such as public health and safety and other traditional local government functions.

That’s where things get “squeaky.”  Operating costs will grow by 0.9 of 1 percent, but expenses for major equipment and vehicles will plummet by one-third. The things that affect the city budget are the same ones hitting your family checkbook or business ledgers: higher energy costs, higher product costs, and  restricted spending to stay within available resources.

While the City’s fiscal position is stable and sound, I am recommending that council adopt a balanced set of strategies suitable for the coming year. To beef up our base for jobs, family security and community safety, I recommend actions to create long-term, wide-spread benefits:

• Refocusing our regional economic development partnership to exploit the new job potential at Discovery Ridge. To do this, we’ll work closely with the University of Missouri, reduce staff now on board at REDI Inc. and use freed-up resources to hire an executive director with skills in attracting high-tech employers.
• Creating a more nurturing environment to help current employers save and create jobs. A business ombudsman, budgeted in the city manager’s office, will coordinate a one-stop approach to issuing business development permits. My goals are to reduce the amount and cost of wasteful time spent with bureaucracy without cutting corners or sacrificing safety.
• Expanding the official mission of our public health department to include “human services,” an area where we’re already investing $900,000 annually to address the needs of families suffering economic losses. To make sure our investments provide as much benefit as possible, I want to work with local partners like the United Way to use revolutionary, new decision-making software developed at our Mizzou flagship campus.
• Funding additional staff, vehicles and communications software for our Police, Fire and Joint Communications agencies.

On the fiscal management side, we’re budgeting about $10 million just for higher fuel costs and purchased electricity. That limits what can be done next year for city employees and affects choices about the programs we’ve been proud to offer as a “full-service city.”

• All city employees will receive a 25 cent per hour, across-the-board increase and, where warranted, the potential to earn another 2 percent over that. Other modest enhancements are offset by higher health care service deductibles and prescription drug co-payments.
• We will lose or not fill several positions, end the recreation program at Paquin Tower and end swimming at Lake of the Woods pool. These recreation services are not self-supporting. The $100,000 saved will be redirected to higher utility and maintenance costs at other recreation facilities.
• I propose adding 24 new positions, with most of them paid by funds other than the general fund. These are needed positions, but they don’t keep up with service demands or population growth.

What does this mean to Columbia citizens?  As in the past, we don’t need to raise any city taxes in FY 2009, but the budget proposes rate increase for water, sewer and electric rates for all customers. Commercial customers will see increased refuse rates. The average monthly increase for a residential customer is projected at $7.55.

I’m also proposing increased fees and user charges for several public health services, rezoning requests, water and sewer connections, sports programs, transit and parking services and solid waste removal. All these fee and rate hikes are dedicated solely to the purposes for which they were established, and they include the cost of capital improvements that voters authorized through bond issues.

I thank city staff for identifying spending needs and restraints, and I look forward to working with citizens on these tough decisions. These are choices that all of us will make.

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