Local News
City will hold off on hiring CFO
By David Wilfong
Herald-Banner Staff
Due to lower-than-expected revenues related to the recent economy, Royse City council members have indicated that they support the city manager's recommendation to hold off on hiring an assistant city manager to serve as the city's Chief Financial Officer.
Royse City City Manager Bill Shipp told the council that as of the Jan. 7 workshop, he had imposed a hiring freeze on all city employees. He later noted that the new police chief as well as one police officer's position that had already begun the hiring process were exempt from the freeze.
The city had approved a budget for the fiscal year that included the CFO position to be hired as of April 1, but with the economic concerns currently at play, Shipp told the council he was resigned to hold off on the hiring.
"Do we need that person today? Yes," Shipp said. "Would I like to hire that person April 1? Yes. But we have some concerns with the most recent two months of sales tax. We were down 27 percent in December. We were down 16 percent this month.
"We have no reason to believe that anything else in our budget is soft, revenue-wise. But that has the potential to be a little soft, and that concerns me. Even with your approval to hire this person, I will not go out tomorrow and do that. Cause I want to continue to monitor this revenue and see how we're doing."
Shipp said that he could expect to delay the hiring up to six months to push it into the next fiscal year. He said the CFO position was budgeted for around $65,000, which translates to an expense of around $90,000 after benefits.
At the beginning of the workshop, the council was informed of a slipping revenue base in the overall economic picture for the city.
"We're dropping in cash a little bit, yes," reported Stephanie Modisette, the city's financial director. "But we have not had to touch the reserves yet."
Modisette went on to explain that year-to-date, revenues are $20,608 below expectations.
"Primarily that is sales tax," Modisette said. "For the last two months on sales tax is down from what we had projected."
Later in the conversation, EDC President Larry Lott clarified the sales tax issue saying that the drop in sales tax doesn't seem to be coming from regular retail sources. He explained that the restaurants and retail stores were holding their own in Royse City, but that there were manufacturing interests that have had lower-than-normal earnings.
"We have about a half-a-dozen fairly large industrial companies that do collect sales tax," Lott said. "From what we've been able to evaluate, the drop has been there as opposed to retail."
Lott characterized the drop as, "not surprising in the economy that we're in."
Modisette then advised the council that the expenses continued to be much lower as well, to the tune of $397,178 less than budgeted for.
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