(Bloomberg) — Crystal City, a small Texas town known as the spinach capital of the world, has missed debt service payments due at the start of August after severe flooding added to ongoing financial strains.
The city failed to meet the payments due on Aug. 1, according to an Aug. 12 securities filing. Crystal City said it will make a $31,000 pro rata payment on Aug. 15, and expects to become current on the delinquent payments by Nov. 1.
The city attributed the missed payments to emergency expenses stemming from recent flooding, lower-than-budgeted tax collections following layoffs at the local school district — which the city called its largest employer — and higher-than-expected maintenance costs.
In July, Crystal City and surrounding Zavala County were hit by severe flooding as the Nueces River brought a flood wave downstream, following heavy rains. According to the Texas Tribune, the July 17 flood forced evacuations and damaged 183 properties as the water rose from roughly eight feet to 30 feet overnight. After the flood, Zavala was among several Texas counties approved for Federal Emergency Management Agency relief.
Crystal City, which hosts an annual Spinach Festival and has an iconic Popeye the Sailor Man statue outside its City Hall, has also faced other pressures lately.
Its Crystal City Independent School District laid off 72 employees, or about a quarter of its staff, earlier this year. According to the school district’s announcement, the layoffs are part of a sweeping financial recovery plan as it struggles to remain financially solvent.
In its Aug. 12 filing, the city said officials are now hoping to adjust property-tax and utility rates as they work toward a balanced budget and adequate reserves.
The city didn’t immediately reply to Bloomberg News to provide the total amount of debt service that was due Aug. 1 or the total cost of the flooding to its finances.
More stories like this are available on bloomberg.com
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