And why no developer contributions?COLUMBIA, Mo 2/15/14 (Beat Byte) -- Though Tony St. Romaine kept insisting otherwise, TIF Commission members at a Tuesday meeting weren't buying his explanation that downtown Columbia is "out of infrastructure," and the only way to end the crisis is to approve tax incentive financing (TIF).
Commission members also wanted to know why City Hall has not explored other financing options, including tax and fee increases or bond issues. Although a third option -- use existing, unrestricted assets -- did not come up, it may be equally viable.
"What was the plan?" asked retired University of Missouri finance vice president Nikki Krawitz. "Surely you must have had a plan" to handle the inevitable day sewer, water, electrical, and stormwater systems were at full capacity, the TIF Commissioner said.
Almost stammering between "uhs," St. Romaine -- the deputy city manager -- said city leaders have "repeatedly, uh, said, uh, over the years that, uh, we did not, uh, have adequate infrastructure," such as sewer lines over 50 years old.
But if that was so, why keep approving student apartments, other TIF Commissioners wondered. "You knew the age of the infrastructure," Krawitz said. "You should have been building this into your fees" through the years.
Fees developers would have paid, which brought up the next question: Why aren't developers paying for the improvements? Boone County Commission appointee Ernie Wren wanted to know.
"They're willing to pay for improvements on their own property and adjacent properties," but not system-wide improvements far from their sites, St. Romaine explained, pausing and hesitating through much of his presentation.
"They don't see it as their problem," added city attorney Nancy Thompson.
Has the city explored other funding options? Wren continued. Other Commissioners wondered how city leaders could so quickly dispense with higher utility fees or special taxes voters have a long history of approving.
But those options would be a hard sell -- and take too long to prepare, St. Romaine insisted. By the time any plans got to the ballot, developers eyeing downtown would be gone.
A third option would be to use existing, unrestricted water and light assets totalling $77,888,661 according to the city's 2013 financial report (CAFR, page 28) to pay for infrastructure improvements St. Romaine estimated would cost nearly $20 million.
The City Charter grants Council members broad latitude to use surplus water and light utility monies.
Water and light surpluses (aka profits) "shall be paid into the general revenue fund of the city and budgeted like other revenues of the city for any proper municipal purpose," Article XII, Section 102 of the Charter -- Columbia's guiding constitution -- mandates. "Such surplus may also, in the discretion of the City Council, be made the basis for reduction of rates in the future."Across all funds, City Hall reported just over $144 million in 2013 unrestricted net assets (CAFR, pg. 160), up roughly $1 million from the previous year. Unrestricted net assets, as the name implies, do not include buildings or other capital improvements; and are not restricted for debt service, capital projects, or any other legally-mandated purpose.