Final Budget Approved After Council Votes to Increase Water Rates

Sep 19, 2017

The city completed its budget process Monday night, and Columbia residents can expect to see a slight increase on their utility bills next year.

The Columbia City Council voted 7-0 to approve the fiscal 2018 budget, approving a 4 percent increase in water utility rates and rejecting a 1 percent increase for the electric utility.

Credit Meiying Wu / KBIA

  Around 85 residents showed up to listen to the discussion and weigh in on the budget before it was passed by council after a three-hour discussion and several amendments.

During work sessions and previous meetings, the council went back and forth on the rate hikes, at times questioning the need for them. The water rate hike passed by a 5-2 vote, with Mayor Brian Treece and Fourth Ward Councilman Ian Thomas voting against them. The electric rate hike failed by a vote of 1-6, with Second Ward Councilman Michael Trapp as the sole vote in favor of the increase.

The budget also included a 5 percent operating increase to sewer utility rates and 4 percent increase to trash and recycling collection fees. Both passed unanimously.The council had been split on whether to raise utility rates since discourse began on the budget at an Aug. 23 work session.

Treece had voiced his displeasure with the rate increases at previous meetings, saying the Water and Light Department has failed to provide a monthly financial report since the beginning of the year. Treece was also concerned with constituent complaints about billing errors and poor customer service.

Trapp has been a strong supporter of the rate hikes. He said that they are standard procedure for the city and necessary to keep Columbia running, adding that any opposition to approving the hikes was most likely a political move, according to previous Missourian reporting.

Both stuck to their opinions on Monday night.

”I think frankly the larger discussion here is how we set these rates,” Treece said. “A utility rate increase is like a tax increase, and it ought to be deliberate and justified.”

The decision to pass the water rate increase came down to what Fifth Ward Councilman Matt Pitzer referred to as the city’s “precarious position.” He pointed out that if the council did not pass the water rate increase now, the water utility would be down to only $1.6 million in reserves, which is far below the city’s target cash reserve.

Sixth Ward Councilwoman Betsy Peters added that falling below the target reserve could affect the bond rating of the Water and Light Department, which is determined by how fiscally conservative and financially robust the department is.

City Manager Mike Matthes confirmed Pitzer and Peters’ estimations and said that if the rates were rejected, the water utility would run out of cash by 2019 or 2020 at the latest.

These points ultimately swayed Third Ward Councilman Karl Skala, who was on the fence about voting for the water rate increase. Skala, along with Thomas and Treece, was initially hoping to hold out on raising water rates until a study could be done to determine how to update the city’s current tiered rate structure.

The rest of council agreed that the studies needed to be done but that passing water utility rates was essential in the meantime.

As for the electric rate increases, Pitzer said that he had less confidence in the numbers supporting the increase in electric than he did in water. City staff estimated that not increasing the electric rates would result in a need to cut about $2 million in order to keep cash reserves at $31 million.

Several council members questioned staff’s estimates and voted not to make any cuts to programs or delay capital improvement projects.

Parking fees

The council also voted to raise parking fees in parking garages as a means to implement a residential parking permit program in neighborhoods surrounding MU’s campus.

Thomas has been pushing the plan as a means to reduce street congestion in neighborhoods such as East Campus, which he said fill with commuter parking by MU staff and students during the work day.

Thomas originally proposed either a 10-cent per hour increase to parking meters or a $10 per month increase in parking garage permits. The council compromised on the plan, approving a $5 per month increase to downtown parking garage permit fees.

The $5 increase was approved in addition to a $20 increase at two specific downtown parking garages — at Eighth and Cherry streets and at Eighth and Walnut streets — to pay for garage maintenance. That would bring the cost of those garages to $100 per month. All other garages would cost $80 per month with the $5 increase.

Trapp and Pitzer voted against the $5 increase, while council unanimously approved the $20 increase to the two specific garages.

Trapp said that increasing the fees downtown for a parking permit program would be taxing the people who are doing the right thing by finding legitimate parking spaces.

Pitzer said he didn’t want to vote to raise rates on a plan that didn’t exist.

“I think we’re going about this backward.”

Supervising editor is Tyler Wornellnews@columbia, 882-7884.