By Andy Sevilla.
Kyle property owners can expect increases in their property tax rate and city utility bill next fiscal year as council members prepare to issue $1.866 million in short-term debt for various equipment, system software, infrastructure improvements and vehicles for three city departments this spring.
Kyle – which already has the highest ad valorem tax rate of any other Hays County city – would need to increase the property tax rate by about three cents to cover the debt service payments from the city’s general fund alone, Kyle Finance Director Perwez Moheet told city council members.
Payments, however, will come from both the city’s general fund, and a larger portion from the utility fund – a fund that was largely in the red for which city leaders approved a 70 percent increase in water rates and 55 percent increase in wastewater rates structured over the last three fiscal years.
At top: The Kyle Police Department will receive three new Chevrolet Tahoes, each costing $75,000, per the council approved tax notes, Series 2014. Kyle Police Chief Jeff Barnett said his department already has four Chevy Tahoes in the fleet. He said the cost of the police vehicles are roughly $27,000, but equipping the Tahoe – with lighting, radios, computers, weapons, ammunition, crime scene investigation tools, licenses, striping, etc. – for police-ready use drives the cost up to the $75,000 mark. “It’s an all inclusive price from bumper to bumper,” he said, “The new SUVs will be a benefit to the aging police fleet.” (Photo by David White) |
Kyle City Manager Lanny Lambert said that with the increases to water and wastewater rates, the utility fund is now balanced.
Kyle property owners, however, have time to prepare for the looming rate hikes.
“We would not have any debt service impact in this fiscal year,” Moheet said of the 2014 tax notes; therefore property taxes, water and wastewater rate increases would not go into effect until October 1, when the new fiscal year begins. Of the $1.866 million the city will take on in new debt, $830,000 (44.49 percent) will be paid from the general fund, while $1.036 million (55.51 percent) will be covered by the utility fund.
The council, which could potentially have four new members after the city’s May 10 election, will have to contend with increasing property taxes, water and wastewater rates during budget deliberations later this year.
However, Lambert said Monday that he does not plan on increasing property taxes in the upcoming fiscal year, and said he is confident the city’s operating budget could cover the approximate annual $300,000 to $350,000 it will take to cover the debt service payments for the tax notes over the life of the debt – seven years.
Moheet said that given Kyle’s current property valuations, one cent of ad valorem taxes raises about $140,000. The city’s present tax rate is $0.5483.
“We definitely know that our city is growing. We’re going to need equipment, for example, for the police department. We also know that we have a number of water system reservoirs that need rehab in the future,” Moheet said.
An audit of the city’s water and wastewater systems proved major repairs were needed, including “urgent” repairs to water reservoirs amounting to about $450,000. The city is also in need of water and wastewater system modeling, each expected to cost $150,000. Both expenditures are included in the tax notes.
Through the tax notes, the city will also bring on three new Chevrolet Tahoes for the police department, four new vehicles for public works and a pickup truck for meter reading.
The city is also looking to purchase seven defibrillators to put in different Kyle buildings, a radio system upgrade for police, as well as a radar trailer, and two new toughbook laptops with stands for the public works department.
“This was something that we’ve been discussing for a while. I’m glad we’re using the tax notes as a funding mechanism,” said Kyle Mayor Lucy Johnson. Specifically, she said, to purchase vehicles, which have a seven- to ten-year life span. Therefore, the city will not be paying on the vehicles even after they are not usable.
And though the police department would get three new Tahoes through the tax notes, council member Samantha LeMense was looking to get four more for the department.
Council agreed to remove the $350,000 purchase of the Hays County Health Department building behind city hall from the tax notes list, and with that savings LeMense suggested purchasing four additional Tahoes for police, each at $75,000.
She said council members are poised to increase the police workforce in the upcoming fiscal year, and wants vehicles in place for the new officers to utilize. She was unable to find support from council in her attempt to add the vehicles to the purchase list, and her amendment died for lack of a second.
“You know, I think we went through the budget process with the police department, and I appreciate your spirit, but I want what we need and don’t want to pay for things we don’t need immediately,” council member David Wilson, who made the motion to approve the tax notes, said.
Moheet told council members at their Feb. 18 meeting that after consulting with the city’s bond council and advisors, he would bring a bond ordinance for approval at their second meeting in March.
Council members green lighted the list for the future 2014 tax notes during the current fiscal year’s budget deliberations last September. The council gave final approval to the $1.866 million list last week.
