COLUMBIA, 7/29/16 (Beat Byte) --
National credit analysis firm Fitch Ratings
seems to agree with groups opposing Prop 1, a $10 million airport tax hike voters tackle August 2.
Columbia city government doesn't need more money.
The Fitch report
-- posted June 27 -- claims City Hall has plenty of cash, contradicting city leaders who paint a grim financial picture
City manager Mike Matthes
and Police Chief Ken Burton
, for instance, insist property taxes must rise
to fund public safety.
But Fitch analysts claim city government could use profits from city-owned utilities to pay for more cops and firefighters, which this publication has also reported
"The City Charter authorizes the city to use excess water and electric revenue
to fund public safety expenses. The city has never used that authority and does not plan to do so
"Public safety," the report continues, "is the city's largest expenditure
Other key Fitch findings include:
1) City Hall has higher-than-necessary financial reserves
. "Reserves will remain above the level
Fitch believes provides an adequate cushion in economic downturns," the report explains.
2) Columbia Water and Light -- the city-owned utility giant -- has "surplus net revenues".
3) City revenues will "continue growing at a rate above the consumer price index."
4) Expenditures are unlikely to outpace revenues, partly because City Hall maintains "solid control over expenditures".
5) City Hall has a "low burden of debt and unfunded pension liabilities".
6) City Hall will "continue to maintain reserves well above the level needed to maintain financial resilience during an economic downturn. The city maintained financial flexibility throughout the recent recession, increased reserves in the recovery, and has not deferred required spending."
7) "The city will be able to accommodate potential increases to annual pension costs."
8) Handwringing over loss of sales taxes to the Internet is unnecessary. The city has a diverse revenue stream: 27.2% sales tax, 9% property tax, 14.7% other local taxes, and 18.1% from a "payment in lieu of tax" from the water and electric utility fund.
9) Revenue volatility is low. City government revenues historically rise at a rate higher than the consumer price index, a trend expected to continue.
10) The city gets a "double hit" of revenue increases when it raises utility rates: higher utility bills and
higher taxes on those bills.
11) The city has "ample legal ability to adjust labor expenditures. The city has legal control over headcount, wages, benefits, and work rules."
12) The Police and Firefighters' pension funds are poorly-funded, despite the city's low overall pension debt burden.
13) The city will continue to maintain a "high degree of budget flexibility and strong reserve levels".