Columbia City Council Pre-Council Meeting: General Fund Outlook and Revenue Proposal – February 17, 2026
Columbia City Council Pre-Council Meeting: General Fund Outlook and Revenue Proposal – February 17, 2026
The meeting focused on the city's general fund financial outlook, a detailed breakdown of expenditures and revenues, and a proposed 1% city sales and use tax increase dedicated to public safety (police and fire). The presentation was led by Matthew Liu (Finance), with contributions from City Manager De'Carlon Seewood and Police Chief Jill Schloody and Fire Chief Brad Schafer. No formal votes were taken; the session was informational for the council to consider next steps toward a potential August 2026 ballot measure.
Discussion Items
General Fund Expenditures and FTE Breakdown
- Public safety (police, fire, municipal court) constitutes 48.1% of general fund expenditures (FY26 budget), followed by health and environment (including the health department) and general administration.
- Public works (streets, engineering, parking enforcement) is funded approximately 70% by the transportation sales tax. Parking enforcement moved from police back to public works, but its funding source (general revenue) did not change.
- Health and environment departments grew from 128 FTEs in FY19 to 170 in FY26, with a budget increase from under $14 million to over $25 million. Approximately 33% of health expenses are offset by the county, and $4.4 million comes from state/federal grants. The Office of Sustainability receives $635,000 from utility transfers.
- General administration (city clerk, manager's office, finance, HR, law, public works admin) increased from 93 to 109 FTEs (largely due to PMO moving from IT to CMO) and budget from under $10 million to $15 million. About $2.4 million of costs are offset by intergovernmental revenue from other city funds.
- Supporting activities (facilities, creative services, contact center) budget grew from under $4 million in FY21 to over $5 million in FY26.
- Public safety FTEs (police and fire) increased by 40.5 (fire) and 43 (police) from FY19 to FY26 (budgeted). The police increase was predominantly civilian staff; sworn officer count has not grown significantly since 2019. Police budget is $35.1 million, fire $30 million, municipal court ~$800,000 in FY26.
- Council members questioned the source of budget increases, which staff attributed to the pay and classification study, higher health insurance costs, and inflation. The rise in personnel and salary costs was noted beginning in FY23–24.
Revenue Outlook and Sales/Use Tax Trends
- General fund revenue is composed of: sales and use tax (~30%), PILOT payments, other taxes, intergovernmental transfers.
- Sales and use tax projections: 1% city sales tax yields ~$32 million; total city sales and use tax estimated at $63 million and $10 million respectively in FY26.
- Year-over-year sales tax growth turned negative in FY25 (-1%) after strong growth during pandemic years. The trend is flat, with recent Christmas season receipts flat.
- City use tax (introduced in FY22) helped stabilize but did not boost overall revenue; from FY24 to FY25, total sales+use tax saw no growth.
- Columbia’s current city sales tax rate is 2% (out of a permitted 3% under state law), with an overall combined rate of 7.9% (including state and county). This rate is compared to other Missouri cities; Kansas City, St. Louis, Springfield, and Independence have public safety taxes.
- Projections for FY26–31 assume 1% growth per year, but staff cautioned that the low-growth scenario (0%) is current reality. The budget for FY26 assumes flat revenue from FY25.
- About 68% of sales tax receipts come from local residents (within a 10-mile radius), 26% from in-state visitors, and 5% from out-of-state visitors.
Proposed 1% Additional City Sales and Use Tax for Public Safety
- The proposal is to ask voters for an additional 1% city sales and use tax (on top of the existing 2%) dedicated solely to police and fire services. This would increase the city portion to 3% and the overall combined rate to 8.9% (similar to or lower than Kansas City, St. Joseph, St. Louis, and Independence).
- The tax would be placed in a new special revenue fund, separate from the general fund, to ensure funds are only used for police and fire.
- Estimated revenue: $38.6 million per year (partial in FY27 if passed in August 2026, with collections starting January 2027).
- Impact on residents: $0.04 on a $4 coffee, $0.12 on a $12 meal, $1.00 on a $100 non-grocery retail purchase (groceries taxed less, e.g., ~$0.75 on $100 of groceries).
- Staff noted that this tax is within the city’s existing capacity (up to 2% general sales tax; only 1% is currently used), so no new state legislative approval is needed. The city simply needs voter approval.
- Council members discussed alternatives: a property tax increase (currently 43 cents per $100 assessed valuation, generating ~$11 million) was considered but deemed insufficient and politically difficult because of competition with school funding. A combination of property and sales tax would require two ballot measures; staff warned that one might fail. Historical example: both a property tax increase and a development fee failed on the same ballot in November 2014.
- Council member Valerie expressed a preference for property tax due to predictability and differing impact on residents, but acknowledged the challenges. Other members noted the volatility of sales tax and state-level threats to grocery taxation (potential loss of 17% of city sales tax from food items).
Priorities for the Additional Revenue
- Pension stabilization: Police and firefighter retirement funds have unfunded liabilities: police 51%, fire 57%; total unfunded liability of $156 million ($66 million police, $89 million fire). The tax would allow contributions to reduce this gap, though full stabilization depends on market returns and actuarial analysis.
- Staffing: Add 50 police officers and 40 firefighters over four years (20 per year for first two years, then 10 per year). Attrition and retirements are factored in. Police hiring cost per officer (wages, benefits, equipment but not vehicle) is ~$135,000; police vehicle cost ~$80,000 per 25 cars for 50 officers. Firefighter costs and equipment are similarly detailed.
- Facilities: Build a new police station (estimated ~$36 million for an existing south building project, with annual debt service ~$1 million), two new fire stations, renovate three current fire stations (House Five needs major work). Bond issuance of $50 million anticipated for these facilities.
- Technology and equipment: Create a police and fire technology plan to budget for ongoing costs (e.g., Flock and Axon systems ~$1.2 million/year) and a building maintenance plan to avoid deferred maintenance.
- Long-term projections: A 15-year projection shows that if all planned expenditures (personnel, debt service, maintenance) are implemented, the fund may approach balanced by FY33–35, indicating need for continued revenue growth or economic development. The fund would build a reserve in early years.
- The city manager noted that this is an introduction; more detailed implementation pipeline will be developed for council and public review.
Next Steps and Logistics
- Council direction is required to proceed. A formal proposal, ballot language, and detailed spending plan will be brought back to council.
- Deadline to place on August 2026 ballot: first reading at first meeting in May, vote at second meeting in May.
- City staff can provide informational presentations to community groups but cannot advocate; a campaign committee would be needed for advocacy. Council members and unions may play roles.
- Staff distributed a flyer explaining city cash fund balances to counter public misconceptions about available reserves.
- Additional work: A cost-of-service study and a review of business license fees are underway to maximize current revenues.
Key Outcomes
- No formal votes or binding decisions were made. Council members expressed general support for exploring the 1% sales/use tax for public safety and requested a more detailed spending plan, timeline, and implementation pipeline before public presentation.
- Staff will prepare detailed projections for pension, staffing, facilities, and technology spending, and bring back ballot language for council consideration by May 2026.
- The discussion clarified that the tax is within existing city authority and does not require state legislative approval.
- Note: The transcript references a meeting date of February 16, 2026, but the provided meeting date is February 17, 2026; the summary uses the latter per instruction.
Meeting Transcript
All right, I'll go ahead. Oh, I'm not close to that. Go ahead and call our February 16th, 2026 pre-council to order. Our main topic today is the general fund outlook and revenue proposal. So I'm assuming I just kick this over to you, Matthew Liu. Is that correct? Yes, that's correct. And can I ask before we get into it? Do you want us to ask questions as you go through the slides or wait until the end and then discussion? If if you have questions, we'd be happy to answer them as we go. Perfect. Thank you. So we have a few discussion points for uh today, and they are here as follow. We're gonna talk a little bit about the general fund, uh FTEs, and the expense breakdown. And when we do this, we'll do this for each of the functional groups within the general fund. Uh then we'll look at the revenue for the general fund. We'll look at sales and use tax outlook, uh additional general sales and use tax, and then uh what the priorities would be for that additional uh sales and use tax or additional revenue. So here you have a breakdown of general fund expenditures for the uh fiscal year 26 budget. Uh as you can see, public safety makes up almost half of our expenditures in the budget, uh, followed up by uh health and environment, which includes uh the health department. Here's what the FTE count looks that looks like for that same uh breakdown within the general fund. So public safety makes up over half of that of the general fund uh full-time equivalence, and then again that's followed by uh health and environment that includes the health department. So for public works, uh public works, and uh and this in our definition within the general fund uh has streets and engineering and then parking enforcement. Uh the changes for fiscal year 26 or through this time period. So the time period we're looking at is basically 19 through 26. And so uh we've had the addition uh addition of administrative uh supervisor and and 26 and then parking enforcement. Uh it went to police and then it went back to uh public works within this time period as well. And so uh looking at the funding for public works, about 70% of our funding for public works comes from the transportation sales tax. So uh the funding mechanism for each of these functional groups is very important, uh, and you'll see why when we come to public safety. Yeah, thanks. Uh Matthew, when public when parking moved from police to uh public works, the funding follow it, or how is how is that work? Uh so parking is has the enforcement feats. Is it in like are you asking about the funding for parking? Yeah, uh parking enforcement and how you know personnel we paid for previous too. So uh most of that funding came from just uh general revenues or wasn't a specific uh funding source for parking enforcement, so that didn't really change when it moved to public safety from part for public works, but it was more just moving it from one category to the other. Thanks. So here are the FTEs for public works. So it's kind of up and down, and uh you can see that movement and 21 was that shift uh back to uh the police department, and then uh you see they they came back, I believe in 25 is when it when it came back. Here's the budget breakdown uh for that same time period. So we increased from a little over 11 million uh to just under 17 million within that time period. Just quickly just to point out on all these slides, the the blue is gonna represent salaries and weight and wages and then other expenditures are in order. So just kind of that's kind of a key color uh combination throughout these uh slides going forward. And just to clarify, other expenditures, especially for um general fund also um would be things like contractual services, fleeting yeah, basically it's traveling training, uh materials and supplies, contractual services that makes up the bulk of that. Basically, it's traveling training, uh, materials and supplies, contractual services that makes up the bulk of that. Thank you. So health and environment, uh the offices or the the uh departments that are within health and environment are uh public health and human services, community development, housing neighborhood programs, economic development, cultural affairs, and the office of sustain sustainability. Uh the changes within this time period uh where the additions of code enforcement specialists and fiscal year 25. Uh the funding, so 33% of all health expenses are offset by the county, and then health also receives around 4.4 in state uh and federal grants, and that's for fiscal year 26. It's been more in some years, it's been less than some years. So and then sustained sustainability receives their funding from the utilities. So you want to make the distinction that we talk about health and net narrative, it's the public health department.
openpublica.com