Columbia City Council will hold its final hearing and vote to approve the fiscal year 2023 budget at its regular meeting on Monday.
Council has already held two public hearings on the budget. The last meeting saw dozens of amendments discussed and approved, mostly by city staff.
However, the most notable amendment from the September 6 meeting concerned the proposed water rate increases.
City staff previously proposed water rate increases as shown below, according to the budget proposal released by City Manager De’Carlon Seewood in July:
- 10% increase in base usage fee (meter)
- 5% Increase in Level 1 Residential User Fees
- 15% Increase in Level 2 Residential User Fees
- 30% Increase in Level 3 Residential User Fees
- 15% increase in commercial usage fees
Fifth Ward Councilor Matt Pitzer proposed an amendment that would instead increase water rates for all levels by 24 cents per CCF (one hundred cubic feet) and add $2 to the base charge when the second round of bonds of the 2018 issue would be sold.
The board voted unanimously to have staff draft a formal amendment containing the increases Pitzer outlined.
Pitzer said he felt the staff’s proposed rate increases “were designed more to solve a mathematical problem” than to reflect increases in the cost of providing the service.
He said there were two elements to his proposal.
“The first is a $2 increase on the monthly base rate, and that’s pro-rated based on meter size.” He said the increase covers the cost of financing and upgrading the water treatment plant, which will be paid for by a bond issue already approved by voters.
“This is to ensure the reliability and quality of our drinking water,” he added, “and that is the benefit shared by all members of the community.”
Chief Financial Officer Matthew Lue said at the Sept. 6 meeting that approval of the base rate change would likely come by December, when the Board is expected to approve a bond issue.
The other thing, Pitzer said, is the 24 cents per CCF (one hundred cubic feet) increase across the board.
“If you use more water, you’ll pay more because you’re using more CCF,” he said, “so you realize the increased cost more.”
The board will also vote to approve the amended water rate increases on Monday evening.
Commercial license fees
Columbia’s business license fees will increase under the FY23 budget for the first time since the schedule was established in 1975. A proposed city code amendment would increase annual flat rates for business licenses by 5 $. It would also increase licensing fees for the city’s most profitable businesses.
The city expects the increased fees to generate an additional $300,000 per year in general fund revenue.
If the proposal passes, companies reporting gross receipts of up to $25,000 will pay $20 for their annual licenses instead of the current price of $15.
Businesses that claim to earn more than $25,000 but no more than $100,000 per year will pay $30 instead of the current $25 annual license fee.
Businesses reporting revenue over $100,000 per year will also pay a flat rate of $30 instead of $25. The additional fee for this level of 25 cents for every $1,000 above $100,000 will remain unchanged. But the current maximum fee of $750, reached at $3 million in gross receipts, will be increased to $3,000, which would be reached at $11.98 million in gross receipts.
About 8% of Columbia businesses could see license fee increases of between $5 and just under $2,250, according to a memo to city council. About 2% of companies could see licensing fee increases of $2,250, according to the memo.
Recreational activities, land rental fees
Another proposed change would increase fees for several recreation programs and rental facilities. The increases are intended to cover increases in the minimum wage, supply costs and utility expenses, according to a memo to council.
These fee increases are expected to bring an additional $25,000 each year to the city’s parks sales tax fund.
The recreation staff is proposing a $50 increase to the high end of the fee range for certain activities and classes for children and adults.
There is a proposed increase of $170 to $250 for daily rentals of marked baseball and softball fields and $200 to $250 for daily rentals of fields with temporary fencing.
While tournaments held at these grounds help meet cost recovery goals, the events have become so large that maintenance, utility and concession stand staffing costs have increased, according to the memo.
Camp CoMo Kidz would see a weekly camper fee increase of $10, from $125 to $135 per week, under the proposal. This increase would cover salary increases for part-time staff.
The Activity and Recreation Center (ARC) would also see a “minimum daily admission fee increase” as the fee is currently below market value, according to the memo. With gyms with lower monthly membership rates having opened in recent years, the only increase in the daily admission rate is intended to keep ARC competitive, the memo says.
Sales tax boosts city finances
According to the monthly financial report the Department of Finance will present to council on Monday, the city projects an increase of at least 10.57% in its sales tax revenues for this fiscal year.
Due to increased sales tax revenue, the city expects an overall increase in revenue in fiscal year 2023, according to a staffing budget amendment the council accepted at its meeting on Tuesday. September 6.
The amendment council passed provides for the allocation of 48% of revenue to the general fund, 2% to the public improvement fund, and 12.5% to the capital improvement sales tax and tax funds. sales in parks.
According to the monthly sales tax report for fiscal year 2022, the city saw an increase of more than $5 million in sales tax revenue in that fiscal year compared to this point in fiscal year 2021. It also hit its expected revenue every month this fiscal year except June, when it exceeded its minimum expectation by about $1.7 million.
Lue, the city’s chief financial officer, said during a budget working session on June 16 that the city could expect additional revenue of $5.6 million to $5.8 million per year. Colombian voters passed a 2% use tax in April that applies to online purchases from out-of-state vendors.
Lue said Columbia won’t be generating full use tax for a while due to a state law that won’t go into effect until Jan. 1, 2023.