Two reports and City Charter suggest  utility funding system fundamentally corrupt

COLUMBIA, Mo 6/6/14 (Beat Byte) -- Two reports about Columbia's public utilities and the Columbia City Charter suggest major reforms must occur to correct a system that delivers a king's ransom to City Hall; heavily subsidizes well-connected developers; and burdens the public with higher rates and higher taxes that have yet to rehabilitate Columbia's notoriously poor infrastructure grid. 

The city's latest Comprehensive Annual Financial Report (bottom pg. 28) shows that despite tremendous unmet infrastructure needs, city administrators have salted away over $85 million in so-called "unrestricted" utility funds:  $73,888,661.00 in the city's unrestricted Water and Light fund; and $11,733,871.00 in the unrestricted Sewer Utility Fund.

Sometimes called "slush funds," unrestricted funds represent cash on the books that is not required to pay debts, make payroll, buy new equipment, or held in reserve for emergencies.  

The unrestricted funds accumulate over time as surplus revenues:  more money is brought in through taxes, rates, and fees than goes out to maintain and expand the sewer, water, and electric utility systems.   

The unrestricted water and light utility funds violate Section 102 of the Columbia City Charter, which mandates such monies must be returned to customers as lower rates; and/or be deposited into the city's General Fund, which pays for fire, police, health, and other critical city services.   The unrestricted sewer utility funds, meanwhile, could pay for unmet downtown sewer needs -- estimated at roughly $6.5 million -- almost twice

In addition to building City Hall's oversized piggy bank, Columbia residents subsidize a whopping 88% of the costs City Hall incurs to expand sewers, roads, electricity, and water lines to new development, 4th Ward Councilman Ian Thomas has found.  

He compared new development charges to infrastructure expansion spending during the ten years 2005-14, and broke down his findings in the following categories:   

• Water:  $7.0 million developer fees; $24.3 million public payments
• Sewer:  $6.5 million developer; $59.9 million public
• Storm Water:  $3.4 million developer;  $5.2 million public
• Electric:  $0 in developer;  $23.9 million public
• Roads:   $7.6 million developer; $73.9 million public

• TOTAL:   $24.5 million in development fees to pay for $197.8 million total cost 

"This means 87.6% of the cost of Infrastructure Capacity Expansion was paid for by the community in utility rates and taxes," Thomas explains

A 2007 study found that Columbia charges one-half as much as Lawrence, Ks. in new development fees; one-fifth as much as Iowa City, IA; and one-­twentieth as much as Boulder, CO.   City staff will present updated comparisons at the July 7 Columbia City Council meeting. 

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