Pension problems, false alarms and the “silver tsunami” are just a few of the issues plaguing the city of Columbia’s 2018 budget.
At Wednesday’s City Council budget work session, the council spent eight hours hearing City Manager Mike Matthes’ recommendations for the fiscal year 2018 budget, alongside comprehensive fiscal reports and financial proposals from city departments. This meant wading through 142 pages of a 182-page slideshow featuring 20 city departments and 52 separate spending plans.
The session aimed to give the council members and the public a better understanding of the how’s, what’s and why’s of the different departments’ spending. The work session also provided the council members with the opportunity to ask in-depth questions to the various departments in order to return to the next two council meetings with informed amendments to the budget.
In a 19-page public note addressed to the City Council and released in mid-July, Matthes gave his recommendations for the city’s fiscal year 2018 budget. He outlined what he believes to be the most crucial roadblocks the budget faces and made recommendations for how to shuffle the city’s general fund capital in order to fill the gap between the city’s estimated revenue for 2018, about $433 million, and its expenses, about $455 million. In the note, Matthes pointed to low sales tax growth and rising healthcare, pension and transit costs as the biggest issues in balancing the budget.
The proposed budget for public safety is set to take up over half of the city’s overall funds with $41.6 million. Fund allocations for the Columbia Police Department takes up $22.1 million, which sets the police department as the most heavily funded department of the city. However, the police department is still stretching its capital wherever possible. Some of the biggest reasons for this need are employee retention troubles and overcoming past faulty defined-benefit pension plans, Chief of Police Ken Burton said.
According to Matthes’ letter, pension costs are expected to increase for the police and fire departments by $1 million in the 2018 fiscal year.
“While the changes (the city) made to the pension system in 2013 have had a significant positive impact, we still have over $103 million in unfunded liabilities remaining for Police and Fire pensions,” Matthes said in the letter.
When the council inquired about the pension issue, the police department explained that when interest rates on the pension plans go down, it’s up to either the city or the employees to make up the difference. As it now stands, the amendments made to pension plans in 2013 guaranteed a set interest rate, leaving it up to the city to make up that difference when interest falls.
“Cities have gone bankrupt by not paying attention to (pension issues), so I think it’s commendable on the part of our financial staff and city management that we chose to aggressively approach it,” Burton said. “There are cities actually walking away from those obligations and instead of getting a check in the mail, they get a letter saying there won’t be a check.”
The police department is looking to further alleviate that burden within their internal operations, including an intentional shift to the use of civilian officers as much as possible. Over the past 10 years, nine civilian officers have been added to the force, many of whom are retired officers, Matthes and Burton pointed out.
Another move to conserve revenue comes in proposed revisions to the false alarm ordinance, which fines businesses or property owners if their alarm system sends more than four false alarms in a 30-day period. During the session, Mayor Brian Treece reported that between January and August of this year, over 3,000 false security alarms were set off. Answering those calls, often caused by something as simple as faulty equipment or user error, take up the police force’s time and money.
The police department and others are also worried about the number of city government employees becoming eligible to retire this year — or as the council referred to it, the “silver tsunami.”
About 25 percent of all city employees become eligible to retire this year, Matthes said. Although it’s estimated that only about half of those eligible to retire actually will, it still presents a rather formidable problem, he said. This issue in large part comes from the cost of training new employees and then the overtime funds that often have to be paid to employees who pick up the slack in the wake of less manpower.
Although the council didn’t make it to the formal presentation of any possible budget amendments at today’s meeting, a few key topics were mentioned as future areas of debate. Fourth ward Councilman Ian Thomas was adamant on creating a space in the budget for a residential parking permit program.
Fifth ward Councilman Matt Pitzer raised questions about the validity of the self-insurance fund — a fund that’s put in place to cover things such as lawsuits and other liabilities to the city, which Pitzer said appears to be significantly overfunded. In the same vein, Pitzer was also concerned with the miscellaneous contract and services section of the budget, which consists of ambiguous, unforeseen issues.
“It sounded like a black box, essentially a pool of money,” Pitzer said. “I would like an amendment on that to zero that line out.”
Treece asked the council to come to the Sept. 5 City Council meeting with a formal amendment for any changes they wanted to see implemented.
“Just don’t give me an amendment for $50,000 for CAT TV without a pay-for mechanism,” he said.
Missourian reporter Kyle LaHucik contributed to this report.