With the home rule referendum failing earlier this month, the City of Columbia is moving ahead with preparations for its Fiscal Year 2024 budget without the benefit of additional revenue options which would have been available if the city were a home rule unit. 

Columbia City Administrator Doug Brimm and city officials reviewed the tentative budget for the upcoming fiscal year beginning May 1 during a Committee of the Whole meeting on April 13.

Citing “significant expenditures” Columbia will incur in coming years, Brimm expressed a need to begin building a reserve which he anticipates will be generated from the city’s enterprise or general funds.

One of the major projects which was frequently discussed in regard to the proposed home rule plan is a new sewage treatment plant.

The current estimated price tag for the new treatment plant – which must be operational by 2035 per an Illinois Environmental Protection Agency mandate – is $25 million, but will likely cost more when the city is finally ready to break ground.

In order to begin generating funds for the project, Brimm said city water and sewer customers should expect a 5 percent minimum increase in rates during the upcoming fiscal year.

The 5 percent increase may only be a baseline, however, as Ward IV Alderman Steve Holtkamp pointed out during Thursday’s meeting the city had recently been notified of a water rate increase of just over 4.95 percent for the upcoming year.

Brimm explained the move to begin funding and planning the sewage plant now is also a hedge against inflation, noting the city is currently completing some preliminary requirements for the sewage plant project.

The city also has funds budgeted for bio-augmentation at the current sewage lagoon, which will save the city money on the cost of decommissioning the current plant in the future.   

“If we start now, paying today’s prices… hopefully the city will be able to save over higher future prices,” Brimm said, adding price increases seem inevitable in almost all areas of the economy.

Another fiscal “wild card” facing Columbia in the near future is the city’s current agreement with water provider Illinois American, which expires in 2028.

Brimm told the Republic-Times that Illinois American has already increased rates to some nearby municipal customers as much as 30 percent, but the current contract ties Columbia’s rates to City of St. Louis rates for the time being.

As a way to gain clarity on the city’s financial plan moving forward, Brimm introduced a project in which he and Columbia Treasurer Linda Sharp will develop a “financial policy manual.”

The document will establish “targeted fund balances” for different areas of the city budget. 

The target balances will be established by aldermen as a way to maintain a “minimum” or “ideal” balance for different city departments.

Brimm explained having the policy in place will also authorize the city to withhold funds or freeze expenditures entirely. 

He elaborated the financial manual will allow for a clearer understanding of how city money is spent.

One goal of enacting the policy is to give city officials “an idea what revenues (it) needs to increase or scale back on,” Brimm said.

Overall, the FY24 budget shows what Brimm describes as a “planned” deficit.

In addition to having line item expenses on the ledger which may or may not be expended in the upcoming year, Brimm said funds from projects in prior budgets will be disbursed in FY24. 

He explained the nearly $2 million deficit in the capital development fund is the result of a major project budgeted for FY23 being “rolled over” into the upcoming fiscal year in addition to the cost of other projects slated for FY24.

Another deficit item involves expiration of the Admiral Parkway Tax Increment Finance District. 

The budget line shows a loss of nearly $870,000 due to unspent TIF funds being used for projects in FY24.

The upcoming Valmeyer Road project will use $856,000 of the remaining TIF funds with the other $15,000 being used to complete the Carl Street bridge  project this summer.

Brimm said the city is still in a relatively good shape, pointing to an expected $170,000 surplus in the city’s general  fund. 

He described that fund as the best overall indicator of Columbia’s financial position.

The budget is expected to be passed at the next Columbia City Council meeting April 24.

The meeting was moved from its original date of April 17 to allow further examination of the proposed budget.

A public budget hearing will be held at 6:45 p.m. April 24 at City Hall.

A copy of the proposed FY24 budget and past years’ budgets are available on the city’s website.