Royse City residents now face their first tax rate increase since 1993, now that growth in the community has suddenly slowed to a trickle of new homeowners.
The City Council has proposed a 17 cent increase to 66 cents per $100 valuation of each home.
A public hearing to discuss the proposal has been scheduled by the Royse City City Council for Sept. 10 at 7 pm at city hall.
Posted in Royse City
Tagged City of Royse City, public hearing, Royse City, tax rate increase
Twenty seven employees at the City of Royse City were laid off during the past week as a result of the City’s sudden and unexpected financial crisis.
The layoffs were the first round of budget cuts required to deal with the City’s $1.9 million cash shortfall discovered last month, according to Larry Lott, who was appointed by the City Council as an interim co-city manager with city attorney Jason Day.
The first employee to be let go was City Manager Karen Philippi last month, when the financial problems were first discovered. She is not accused of stealing any money and has appealed her suspension.
Other changes are also beginning to take place at the City.
Last week, city hall calls were being answered by an telephone answering machine. The staff at the library in city hall has been reduced to volunteers, except for the director.
On the other hand, apparently the Public Works and Animal Services departments will continue to be funded without disruption.
A special meeting has been scheduled for tonight by the City Council to consider additional cuts, including reducing or suspending pay for the Mayor and Council members.
A public hearing regarding the proposed new tax rate of 17 cents, to 66 cents per $100 of taxable value,has been scheduled at city hall for Sept. 10 at 7 pm.
Another public hearing to discuss the revised 2008-09 city budget will be Sept. 17 at 7 pm.
Posted in City of Royse City, layoffs, Royse City
Tagged City of Royse City, Larry Lott, layoffs, Royse City
Royse City City Council members revealed in their Aug. 21 meeting that the City’s cash shortfall is actually $1.9 million – rather than the $1.3 million previously stated – plus that amount must be cut from its $8.5 million budget for the next fiscal year, which begins Oct. 1.
They also explained that the City has only enough money to pay employees for the next two pay periods.
Royse City Mayor Jim Mellody said he fears the City will have no choice but to begin laying off City employees, although no specific cuts were announced.
Most of the 50 people who attended the meeting were City employees who are worried about whether they still will have jobs and were seeking clues.
“We’re trying to figure out if we still have jobs,” said Travis Kimber, who works for the city’s water department.
The cash shortfall news was first reported at the City Council meeting Aug. , when City Manager Karen Philippi was suspended.
City officials said no money is missing, and that Philippi is not suspected of committing any crimes.
According to Jim Carbonies, a financial advisor for the City, she made revenue forecasts that fell short of expenses, based upon a lot of assumptions that Royse City would continue rapid growth, but she didn’t inform the City Council of the growing gap.
Royse City’s population more than tripled between 2000 and 2007.
“They predicted another 500-plus homes being built, but growth almost shut down.”
The shut down has resulted in significant drops in construction fees, fewer homes than expected on the tax rolls, plus a loss of water service fees because demand has decreased.
Mayor Mellody said new interim management now must complete the new City budget in one week, rather than the typical period of three months.
A budget presented to the council Thursday required issuing $1.2 million in tax notes – essentially a bank loan that the city must pay off within a year.
The modified budget also requires raising Royse City’s property tax rate from 49.45 to 65.86 cents per $100 valuation, the first increase since 1993.
The City of Royse City is facing a one million dollar cash shortfall and perhaps as much as $1.3 million, it was revealed last week by one of the city’s new interim co-managers Larry Lott, who is also the director of the Royse City Economic Development Corporation.
He and City attorney Jason Day were appointed co-city managers by the Council last Tuesday after they suspended City Manager Karen Philippi from her position as City Manager.
In a hastily-called City Council meeting Aug. 16 to discuss the unexpected financial crisis which is suddenly facing the City, Lott outlined the shortfall facing the City.
“I think that $1.3 million is the greatest shortfall we will see,” he said, noting that the city currently has enough funds available to make payroll for the next two week period. Most of the current shortfall is vendor-related debt, he explined.
The amount is even larger than the City Council suspected at the Aug. 12 meeting , according to Royse City Mayor Jim Mellody,
“All I can tell you is that it was never reported to the city council the way it is,” Mellody said.
“As far as my personal feelings, I can tell you I’ve never been more embarrassed in my whole life. I feel like I’ve really let my citizens down, but this is not something we can’t overcome.”
At the Saturday meeting, Mayor Mellody told the Council that he, Lott and city staff have been working overtime since last Tuesday to learn how severe of a financial crisis the city is facing. He added that the research was ongoing and that the full documentation on the issue would be presented as soon as possible.
“The recovery from this is not going to be easy and we’re continuing to work on this,” he said.
According to Lott, the city faced default on two bonds if payments totaling $810,385 were not made by Friday. He explained that the city was able to utilize three non-encumbered bonds to make the payment in the emergency situation.
He added that the City will attempt to arrange a special emergency bond option through the Texas attorney general’s office. If accepted, the bond would cover the $1.3 million discrepancy, but would be issued at a higher rate of interest, would be tax exempt and would have to be repaid within 365 days.
The City is going to have to take a two-part approach to solving the current dilemma, he concluded.
“We’ve simply got to cut our budget as thin as we can and then we’ve got to have a tax increase,” Lott said. “We’re basically going to have to set an amount for these different department heads and they’re going to have to work within that budget. It’s not going to be easy, and it’s not going to be very popular but our options are very limited.”
The council also voted unanimously Saturday to hold investigative hearings to learn whether Philippi broke her contract.
Royse City City Manager Karen Philippi was suspended from her duties at the Royse City City Council meeting Aug. 12 after a potential shortfall in funds was discovered that had not been reported.
“It was due to concerns raised in executive session that are not for public record yet,” said Royse City Mayor Jim Mellody, when asked about her suspension.
The council also voted unanimously at the meeting to hold investigative hearings into whether or not Philippi broke her contract in her capacity as city manager. During the interim, the City appointed a two-man team of Larry Lott and Jason Day to act as city manager. Lott is the director of the Royse City Economic Development Corporation and Day is the city’s full-time attorney.
At Tuesday night’s meeting, Lott briefed the council on a serious shortfall in funds for the running of the city.
More details are forthcoming.
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