by BRAD ROLLINS
Kyle property owners would pay a 7.7 cent per $100 property tax increase, to 49.24 cents from 41.5 cents, under a preliminary plan introduced Tuesday by City Manager Lanny Lambert as the starting point for the municipal budgetmaking process.
The proposal also includes an aggressive schedule of utility fund hikes starting next fiscal year with a 30 percent increase in water rates and a 25 percent increase in wastewater rates. The budget also would include a $2 per month administrative fee for trash and recycling customers.
City council members for months have been dreading the fiscal year 2011-2012 budget. A sizable tax increase is all but inevitable as the city makes growing payments on more than $76.5 million in debt – added to as recently as last year with a $3.5 million new library.
But adding new headaches to the mix before outlining his proposed budget at this week’s regular council meeting, Lambert said finance director Perwez Mohet had found hundreds of thousands of dollars in recurring, operational expenses. He specifically mentioned wastewater treatment plant operations and payments to the Hays Caldwell Public Utility Agency that have been paid each year out of fund balances or impact fees, a practice he called “highly irregular” and said should be investigated.
“The problem is, we don’t have money to hire an audit firm to do an investigation,” Lambert said. “The problem is, now all our fund balances are gone and we still have to pay for these operational expenses. This budget is going to be tremendously difficult to balance because we have all these debts and programs we’ve created and now the bills have come due.”
Paying for the proposed budget would require a two-cent increase in the portion of the tax rate used for maintenance and operations and a 5.7-cent increase in the portion used for making debt payments. For the owner of a $127,380 home, the proposed Kyle increase would add about $98 to the annual tax bill.
The utility rate increases he recommends this year – on top of a 20 percent wastewater increase enacted in June – are the first of three phases of rate increases Lambert is proposing to balance the utility fund. In the second year of that schedule, both water and wastewater rates would increase 20 percent and, in year three, water would increase 20 percent and wastewater would increase 10 percent.
Lambert’s proposal includes the addition of one new employee, a city engineer. The city currently contracts out this service. Additionally, Lambert anticipates a $114,000 increase in required funding for San Marcos-Hays County EMS over last year. Finally, the city manager plans to shift only $1.6 million from the utility fund to the general fund, a reduction of about six percent from last year, and the first step in a five-year plan for making the funds self-sufficient.
The council is expected to adopt a budget and set the tax rate next month ahead of the fiscal year which starts Oct. 1.
