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.