Despite the City of Columbia projected to have a $3.67 million deficit in Fiscal Year 2024-25, Columbia City Administrator Doug Brimm said he feels the city is in “outstanding financial shape.”

On Monday night, the Columbia City Council approved the budget for the upcoming fiscal year, which runs May 1, 2024, through April 30, 2025.

“Overall, total revenues in FY25 are projected to be $19,000,795, with expenditures of $23,460,000,” Brimm reported. “However, keep in mind this is a worst-case scenario depending on the ability to consummate some ongoing capital developments, capital projects and acquisitions where the city’s end fund balance for all funds is projected to be $19,884,000, or 85 percent.

The 85 percent Brimm referred to is the ending fund balance projected for the close of the upcoming fiscal year.

He explained that ending fund balances are “expenditures divided by the total fund balance projected to end the (current fiscal) year,” with the percentage representing a 12-month period a fund could go without any additional revenues.

“When I say that it’s got a 65 percent fund balance, that essentially means the main operating fund of the city – the general fund where a significant portion of the city’s operations are funded through – could go almost eight full months without any new revenues generated.”

One of the main causes of an apparent deficit are capital development projects which are on the books but have not been completed for a number of reasons. 

“Some projects have been delayed due to actions required by other parties,”  Brimm said, adding the damage from a severe storm June 30 delayed “quite a few” of the city’s planned projects in Fiscal Year 2023-24.

Specifically, Brimm pointed to “carry-forward expenditures” for water line and sewer line improvements.

“Those projects are going to have an impact on that fund to the point it’s going to run a $2.8 million deficit,” he said. “However, the ending fund balance is something we have been forecasting for a while – should the capital projects actually come to fruition – just shy of $1.3 million still in reserves with a 33.4 percent fund balance.”

The water and sewer operations, which Brimm described as two of the “primary enterprise funds,” are projected to create a surplus of just over $554,000, with half of that total being transferred to going to the water improvement fund as a reserve to “offset the impact on rate increases or any capital projects that may be anticipated down the road.”

Brimm explained some of the numbers and future projects hinge on ongoing negotiations with Illinois American Water and its suppliers.

In February, Illinois American Water proposed a $152 million rate-hike, or about 39.5 percent, to the Illinois Commerce Commission.

Illinois American Water says the rate hike would increase residential monthly water service bills by about $24 per month, while the average residential wastewater bill would increase by about $5 per month.  

The City of Columbia is under contract with Illinois American Water through 2028, after which city water rates could increase an additional 30 percent or more.

The City of Waterloo is currently working on a $30 million water plant in order to leave Illinois American Water after its contract expires this October. 

During Columbia’s failed attempt to become a home-rule municipality, a major talking point was creation of a city-owned water treatment plant, which would cost an estimated $20 million to construct but would minimize future costs for residents.

The city’s park improvement fund shows an end balance of 315 percent for FY25, although Brimm explained “a large majority of that will be drawn down in subsequent years with the planned development of Creekside Park.” 

The park project along Rueck Road between the Creekside and Wilson Hills subdivisions has been in the works for several years but was scrapped in 2021 after the COVID-19 pandemic made project completion within mandated grant funding timelines impossible. 

In March 2023, the Creekside Park project was revived with a $600,000 Illinois Department of Natural Resources Open Space Land Acquisition and Development grant.

The new budget shows improvement in the way Columbia EMS is funded.

Brimm explained how the department’s ability to collect its own revenue will impact the overall budget.

“For several years now, the general fund – specifically the corporate program contained therein – has been  subsidizing the ambulance fund to bring it to a zero percent fund balance, but we have been seeing that number trend downward as collections on the ambulance service have fortunately increased,” Brimm began. “Taking the conservative approach that we tend to do when we’re projecting revenues and expenditures, we’ve gone from $507,665 (expected transfer) in FY24 to $399,000, but with expected collections, we should be able to come in far under that amount. That’s kind of a worst-case scenario.”

Significant projects scheduled for the upcoming fiscal year which are funded by motor fuel tax include continued work on Quarry Road and replacement of the Carl Street Bridge. 

While the motor fuel tax fund is showing a deficit of over $850,000, Brimm noted the city will still have a 34 percent fund balance available at the end of FY25.

Columbia City Engineer Chris Smith was on hand to discuss one of the “bigger hits” on the motor fuel tax budget.

The council approved an allocation of $150,000 in matching funds for the Carl Street Bridge project, which won’t begin for at least six months.

“It won’t be before October,” Smith said, adding there is no approved contract from the Illinois Department of Transportation, but once it is approved the city will have a better idea on lead time for supplies.

Regardless of contracts, Smith said now work can begin while Indiana bats are using trees in Illinois as their habitat. 

“The driving factor is going to be the trees,” Smith concluded.

To view a copy of the City of Columbia FY25 budget, visit columbiaillinois.com/508/Budget-Documents.