The City of Roy is desperately scrambling to scrounge together revenue sources for its general fund, which is facing another deficit in 2025.
In fact, the city’s certified public accountant Tara Dunford told the Roy City Council during its Monday, Nov. 4, special meeting that the city’s general fund will be out of money by the end of 2026 if it can’t find revenue or make deep cuts.
According to the city’s preliminary budget, the beginning general fund balance for 2025 is projected to be $298,780 while the projected ending fund balance is $160,996. Revenues are projected to be $714,200 while expenditures are $851,984.
One miniscule option for the city would have been a 1% property tax levy that would have produced less than $2,000, but the motion to approve the levy was shot down by city councilors, 3-1, with Councilor Edmund Dunn giving the lone vote to approve.
The City Council also opted not to move forward with its ordinance to adopt the city budget for 2025, as Dunn’s motion was not seconded. Opposing councilors cited the lack of a line item budget rather than a summary to see what the city’s full expenditures would be.
For the second straight budget session, Councilor Yvonne Starks considered reducing the cost of medical coverage for families of city employees. She repeated her request to look at contracting out the city’s police services, among other ideas.
“Maybe we even need to look at a hiring freeze. It says in our financial policies that if we are running in a deficit that we need to look at these things,” Starks said. “I know that these are hard things to look at, but maybe that’s what we have got to do because if we’re going to run in a deficit every year … we’re going to be bankrupt at this point. We need to look at some hard numbers here, and we can’t do it on a summary. We have to have a line budget.”
Mayor Kimber Ivy said it would take several weeks for a fully fledged line item budget to be produced.
Dunford told the council that revenues are projected to decrease from 2024 to 2025 based on a couple of factors and that the projected numbers will be consistent with the 2024 actual numbers.
“For one, the 2024 budget included some one-time grants totalling $70,000. Investment interest is projected to be lower than budgeted, and our year-to-date actuals for charges for services, licenses, permits and fines and forfeits are lower than budgeted,” she said.
The preliminary budget draft presented to the council did not assume any changes to the staffing level but did propose a 5% cost of living adjustment and a 5% proposed increase for all staff. Dunford gave an outsider’s perspective of the city’s dire financial situation.
“As an outsider, the city desperately needs new sources of funds. You cannot continue to operate based on the numbers. The general fund is going to be out of money by the end of 2026, so something needs to give here in terms of new revenue sources or cutting costs drastically,” she said.
Dunford provided some options to the council, including the 1% property tax increase, which she said would have been a “very small drop in the bucket” if approved, or other utility tax increases or a levy lid lift.
The preliminary budget also proposed using nearly all of the water capital fund balance as a placeholder for critical water infrastructure, but the exact projects would be voted on by the council on a case-by-case basis. The city street fund included a $206,000 Transportation Improvement Board grant for chip sealing.
Additionally, the real estate excise tax funds were not proposed to be used in 2025, preserving approximately $400,000 in cash for future projects, Dunford said.
The Nisqually Valley News reached out to Ivy for comment on the next steps for the budget process but did not hear back before press time.
In other council news, Ivy broke a 2-2 council tie to add two new planning commissioners into the city, with Dunn and Ryan Muller voting to approve and Yvonne Starks and William Starks voting to deny.
Ivy also proposed that the council reallocate over $77,000 in American Rescue Plan Act (ARPA) funds from the water fund, which has over $1.2 million in it, to pay for a planner, engineering and legal services as well as to help fund the comprehensive plan. Dunn’s motion to approve the reallocation was not seconded.
Since the city doesn’t have a planner, permits for home updates will have to wait until 2025 when it can allocate enough money to BHC Consultants, its previous planning consultant. When William Starks asked about legal services and why the ARPA funds would be needed for that, Ivy spent 11 minutes reading through public records requests, many of which needed to be reviewed by their legal team.
“That is why we need legal, and not to mention the continued contracts that need review and lease agreements that need review, entering into other code questions with citizens and permitting questions that staff has because they have not gone through proper training and haven’t received resources for that permitting process,” Ivy said. “We do have to contact legal on some of those outside of BHC, which we can’t contact right now. That’s why our legal fees are so high.”
The City of Roy will also nearly avoid a notice of default with its lease agreement with the Roy Pioneer Rodeo Association (RPRA) for the property that the well contaminated with per- and polyfluoroalkyl substances (PFAS) sits on. The city voted unanimously to pay the RPRA $13,000 per year for the lease agreement as well as a payment of $4,000 to cover the RPRA’s legal costs. The city currently pays $2,300 per year for the lease, and after it was unable to meet the RPRA’s request for it to pay the same amount in the water bill, the city agreed to pay $5,600 annually for the lease. According to Ivy, there was no contest from the city on the RPRA’s request.
Ivy added that, in waiting for the lease to return from the RPRA, the association sent the city a letter that it had 15 days to vacate the premises. The default was set to take effect Wednesday, Nov. 6, if the city didn’t agree to RPRA’s terms.
“Per our lease agreement, we will need to look into how to remove all of our well stuff because all of that was added after the agreement and the lease. They also requested that they would be willing to take the default away if we pay them $13,000 a year,” Ivy said. “With that being said, we now have the option to continue our leave, which isn’t up until 2033, with the new payment of $13,000 or we get kicked off the property.”
