By BILL PETERSON
Editor at Large
KYLE – For the last 11 years straight, Kyle has dropped its property tax rate every year, all the way down from 53.36 cents per $100 of taxable value in Fiscal Year 1997 to 27.07 cents in FY 2008.
During the last five years, Kyle has borrowed $60 million, addressing six-fold growth since 2000 with a variety of public works. Among the new amenities are a half-dozen road projects, such as Kyle Parkway, Kyle Crossing, the expansion of Kohler’s Crossing, the expansion of SH 150, road improvements around the burgeoning Seton Hospital development and a streetscaping on Center Street. The city also has built a municipal swimming pool, a new city hall and a new fire station.
So, the city has cut its property tax rate almost in half during the last 11 years while borrowing $60 million for improvements to accommodate a population that’s up to nearly 30,000.
How does it add up?
It adds up to a proposed 26.3 percent property tax rate increase on the city’s preliminary budget for FY 2009, presented by City Manager Tom Mattis Tuesday night to the Kyle City Council. The increase would raise the city’s property tax rate to 35 cents.
Primed for sticker shock in recent meetings, councilmembers raised no immediate objections. Councilmembers will debate the budget and tax-rate proposals during a series of meeting, workshops and public hearings over the next six weeks. The council is scheduled to adopt a budget and tax rate on Sept. 16.
Looming in the background is an Aug. 9 special election to fill a seat left vacant by Mike Moore’s retirement from the council in April. The race is contested between Ron Barrera, Chad Benninghoff, Lucy Johnson and Robert Straub. If one of the hopefuls wins a majority on Aug. 9, that new councilmember will debut in September, just in time for the budget vote.
Mattis proposed a total budget of $33.3 million, of which more than half ($17.5 million) involves the expenditure of debt already issued and service on that debt. Much of the debt expenditure is going towards road improvements to facilitate the Seton project.
Of that $33.3 million, the smaller portion ($15.8 million) is the operating budget, which faces growth pressures of its own.
Among those pressures is the Kyle Police Department, which stands to add ten patrol officers and two sergeants under the new budget. Five officers and one sergeant are already approved by the city, but they haven’t yet been hired because the city is transitioning to civil service rules. Another five officers and one sergeant are new on the FY 2009 budget.
The police department, which stands to grow from 19 sworn officers to more than 30 under the budget, will account for 36 percent of the city’s $8.5 million administrative budget.
“Simply put, the city is in the service business,” Mattis told the council. “… We’re at an historical time and we continue to hear the demand for more services from our citizens.”
That in mind, Mattis asked the council for an additional 26.5 full-time equivalent employees, including the police officers. The increase would take the city’s employment roll up to 156.5 full-time equivalents, about three times its 55 employees as of 2003.
Mattis also proposed a four- percent cost-of-living increase for city employees, based on a 4.14 percent increase in the Consumer Price Index (CPI) during the last eight months.
Not included in the FY 2009 budget are big-ticket amenities discussed in high profile during recent months, including a proposed recreational center ($18-20 million), a new police station ($4-5 million) and a new library ($4-5 million). All those projects are on the city’s five-year capital improvement program for consideration in future budgets. Also not included is $11 million Kyle would use to partner with Hays County in an initiative to convert Interstate-35 access roads through the city to one-way traffic an re-route a portion of SH 150.
The proposed tax rate calls for 20 cents on the debt service side, up from 15.07 cents on the present rate. The operations side of the tax rate calls for 15 cents, up from 12 cents on the present budget.
Mattis said the city staff contemplated a 39.71 cents tax rate, of which 24.71 cents would go to debt service. However, the staff is recommending instead that the city apply interest earnings on unused debt to defray debt service, which lowers the proposal to 35 cents.
While acknowledging that a tax rate increase stands to be a jolt, Mattis said Kyle’s proposed rate still is lower than the rate in other comparable cities Kyle uses to target its various rates and wages. Mattis said the group of eight comparable cities – including San Marcos, Georgetown, Schertz and Universal City – average a tax rate of 47.35 in FY 2008, leaving Kyle’s new proposal 26 percent beneath that average.