The Royse City city council members had a tense meeting last Thursday night as they debated whether or not to issue bonds for the completion of Erby Campbell Boulevard. At stake was the issuance of $535,000 in debt, which would require an increase of 0.6 cents per $100 valuation in ad valorem for Royse City residents.
On one side of the equation were Councilmembers Bill Bell, Brooks Williams and James Branch who were adamantly opposed to any increase in taxes; while Royse City Mayor Jerrell Baley wanted to approve the issuance of bonds for approximately $1.5 million to cover the completion of the Erby Campbell overpass as well as funding other needs for the city which he addressed in council.
The voting went through five motions before being resolved, with a decision to bond out only the $535,000 for the completion of the overpass. The council deadlocked 3-3 with Baley casting the deciding vote to pass the motion.
The financing projections provided to the city council by Royse City Manager Bill Shipp were based on a 2 percent decrease in property values for the next year, a zero percent growth rate for two years, then a 2, 4 and 6 percent growth rate. The Royse City portion of the finishing cost for the overpass is $500,000 with an issuance cost of an additional $35,000.
Shipp said that by 2015, the interest and sinking (I&S) rate would be less than what it is today, barring any other debt and under the assumptions presented to council.
Shipp presented three options to the council, with the first option being not issuing any debt at all.
The second option — the one finally passed — was to issue debt for the completion of the overpass alone. The third option was to issue $1.5 million.
Shipp had originally also proposed an option that would have allocated $950,000 for Circle Lane, but he advised the council that he was retracting that request.
“(It’s) not because I don’t believe the need exists,” Shipp said. “The need exists, but I’m uncomfortable at this point with the dollar amount on it. And I’m uncomfortable primarily because of the possibility of having to relocate some utilities which could be significant. It may not be, we just don’t know and that’s the problem right now.”
Shipp recommended that the upgrade of Circle Lane be delayed until 2014, after the construction of the overpass. Part of the reason was to avoid having construction occurring at both locations at the same time.
The recommendation for $1.5 million was to be used for the purchase of property for downtown parking, renovation of city hall and the city animal shelter.
No one on the council disputed the need to issue the $535,000 debt for the completion of the overpass, however, Branch, Williams and Bell all stated that they wanted the Royse City Economic Development Corporation to issue the debt instead of the city.
Though the option for $1.5 million was scrapped, Baley introduced an adjusted option for $1 million flat. That would have included the funds for the overpass plus an additional $465,000 for projects the city deemed necessary in the next year.
“Some of the things I feel like we need to move on now before the opportunity is gone is that there is a lot beside the fire station that is for sale,” Baley said. “It’s for sale to the city for 45 percent of the asking price if we’ll buy it to expand the fire station. Also, if we expand the fire station and build a nice big new one like they did over in Fate, we’re gonna need parking and there’s also a lot behind the fire station — which is north of the fire station — for sale for a reasonable amount of money. Another thing I talked to Bill about is right now the fire department is packed in there like a can of sardines and they need to expand their apparatus room into the current dining room, which is the dining room for the senior citizens center.
“We talked about moving the senior citizens center to the back of city hall, which would require some drastic makeover of the kitchen facilities back there where it would meet commercial standards. And in the same process there’s a house and a vacant lot west of city hall on Elm Street for sale. I thought about the possibility of buying those two pieces of property and making parking for the senior citizens where they could just walk across to the dining room. They wouldn’t have to walk all the way from the parking lot, across the street and to the back of city hall.
“The total cost on all those projects would be somewhere in the neighborhood of $200,000 to $250,000.
“We have an animal shelter situation. We need to increase the size of the animal shelter to meet the minimum standards. These are things that are not budgeted, and would require more money. And ... it would be a 1.14 cents increase in your taxes to do all that. Which, to me, sounds very minimum.”
Beginning with Councilmember Tom Crowley, the hoped-for arrival of a Wal-Mart at the corner of Erby Campbell and Interstate 30 entered the conversation. Crowley said he was for moving forward with even the $1.5 million amount, because the city could expect to receive $50,000 or more per month in sales tax revenues if a Wal-Mart were to locate in the city.
Branch challenged the optimism, looking to the back of the chamber and asking, “Is anybody ready to announce today that Wal-Mart is coming?”
There was no positive reply.
“Didn’t we bond — several years ago — $4 million for Erby Campbell?”
Shipp confirmed that the city had, but for the four lane road from IH-30 to State Highway 66.
“Right,” Branch continued. “So we’ve already indebted ourselves $4 million for Erby Campbell — to this project. The county also indebted themselves $4 million ... now last time we talked, you told us the money was there. Several projects came under budget in Rockwall. The money was there, ready to go, no problem. Now, they want us to put up another $500,000.
Shipp explained that the total cost of the overpass was $19 million, and of that, the local contribution was $4.5 million, with the county willing to pay $4 million. The North Texas Council of Governments (NTCOG) was paying $10 million, with the remainder coming from budget surpluses from other projects.
Branch stated that the $500,000 was “more or less an insurance policy; they may use it they may not.”
“I suspect they’ll use it,” Shipp said. “That would be my suspicion.”
“So in essence,” Branch continued. “We’re going to raise taxes for money that may not even be used, but we’re going to tax the people from now on?”
Branch then stated that parking lots and the construction of a future fire station would then require a further bond and an additional tax increase down the road. Shipp replied that it depended on the situation and Baley noted that tax revenues from a potential Wal-Mart changed the picture as well.
Branch then suggested getting the RCEDC to bond for the money.
“This is the biggest economic development project that this city’s probably ever seen,” Branch said.
Williams took exception to the growth projections as outlined to the council. He reminded the council that the projections for this year had been projected to be a positive 2 percent and that they had ended up being negative.
“It could be right on,” Williams said. “It could be way off. We don’t know. We could go down again. So I guess my concern with that is we’re assuming something that we do not know.”
Williams added that he’d been told approximately a month ago that the city shouldn’t be comfortable with bonding more than $800,000 until some growth had occurred, and that now he was being asked to consider up to $1.5 million. He also recalled bonding for water improvements and remembered being told that the city would not need to bond again “for several more years.” Williams then question RCEDC President Larry Lott about the EDC’s revenue stream and asked if the EDC could bond the overpass funds.
Lott said that bonding the overpass contribution would take up about 19 percent of the EDC’s annual budget.
Williams asked why the EDC shouldn’t fund the amount if it meant avoiding impacting the taxpayer while still maintaining a positive revenue stream.
“We’ve got an economic development corporation, let’s use it,” he concluded.
Bell said that he agreed with Williams and Branch but his concern was for homeowner escrow.
“The last time the city upped the tax rate people got hit in this town,” Bell said. “Not by the tax increase, they got hit by the loan companies. If your taxes go up to $25 a month, your escrow payments go up from $75 to $100.”
Branch said that his house payments had gone up by $100 per month this year, while Crowley said that escrow increases were only temporary. Bell said that nothing was for sure because a future lawsuit had not been filed yet.
When questioned by Councilmember Janet Nichol, it was stated that the average house in Royse City would see a tax increase of $7.50 per year if the $535,000 bond was passed.
Nichol also called Lott to the floor to answer questions pertaining to bonding and the arrival of Wal-Mart.
As for the bonding, Lott said that he was hesitant because there were further needs down the road that he was already budgeting for, and that bonding the $535,000 would restrict the EDC’s ability to do that.
As far as the arrival of Wal-Mart, Lott said that the company had representatives at all the government meetings having to do with the overpass, and that it was a large company expense to pay their people to be there.
“Is that a guarantee?” Lott said. “No.”
The council heard motions for all three options, and each option failed. Going through the options a second time, Baley changed his vote to pass the bonding of only the $535,000 (the first time through he voted against it hoping to pass the $1 million amount).