City leaves thousands on table
KYLE — Businesses who sell alcohol in Kyle will continue to be exempt from the city’s alcohol license fees following a 5-2 vote during the Feb. 7 city council meeting.
This agenda item, which proposed amendments to the city’s alcohol sale permit and license applications and annual fees established by the Texas Alcohol and Beverages Commission (TABC) rates, was postponed from the Jan. 17 meeting and was met with some pushback from local citizens who spoke against the establishment of the fees.
One local business owner who spoke during public comment said, “The greatest cost being added to business ownership in Kyle is in the first year of business ownership by several thousand dollars. The most taxing and difficult part of starting a business is the first year, so I’m a bit disheartened to hear that the city of Kyle is making the largest weight to land on small business owners in their first year of operation. I understand that you want to pass this in some capacity, but I would encourage y’all to consider reducing the barrier of initial business ownership at the very least.”
Finance director Perwez Moheet explained the amount of estimated revenue that would be garnered should the permit fees be implemented. The city analyzed the number of businesses with various types of alcohol permits and estimated the revenue using the maximum amount TABC allows cities to charge for alcohol permits.
“TABC only allows cities to charge a maximum of 50% of what TABC charges,” Moheet said. “Our best estimate at this point based on the data from TABC … if the city of Kyle were to reinstate this permit fee, it would raise anywhere between $25,000-30,000 per year.”
He added that the licenses issued by TABC are valid for two years.
Council member Yvonne Flores-Cale said, “My only hold up is, ‘Is this worth enough stress?' … Don’t get me wrong, $25,000-30,000 is a lot. My thing is, if we have to hire another employee, if we have to do additional stuff, is that money going to be expended in a different way?”
Moheet explained that if the city takes on the responsibility, the “enforcement part comes with it … We would have to invest in a full-time position,” he said. “The amount of money generated if we reinstated this permit fee would not be adequate or sufficient to pay for a full-time employee.”
Flores-Cale made a motion to deny the agenda item, with a second by council member Daniela Parsley.
However, before the vote was taken, mayor Travis Mitchell said, “So, number one right now, there’s 96 checks to collect throughout the course of an entire year and in that, those checks or amounts could equal an FTE [full-time equivalent] that we could get paid for by Twin Liquors and Target and all of these various other places and it would create probably two thirds of that staff member’s time that would be freed up that we could then use for other things.”
“Number two,” he continued, “of all the things for us to subsidize, alcohol sales make no sense to me. That’s just not something that we struggle with.”
This agenda item comes on the heels of council voting to amend the admission fees to city pools, making them free to the residents of Kyle. This will cost the city an estimated $50,000 in unpaid admission fees.
“We made the pool free; that’s a $50,000 whack and now, we’re making alcohol sales free,” Mitchell said. “The better way to do it is to marry those. We make the pool free, but in exchange, here’s a revenue source that can compensate for something like that. Money does not grow on trees. Making the pool free does come at a cost.”
The mayor then outlined other incentive programs offered to businesses in Kyle such as the first-year and restaurant incentive programs, which are targeted and designed to bring about economic development and prosperity within the community.
He argued that the alcohol permit fees would not hamper the restaurant community by comparing the city of Kyle’s restaurant scene to those of other surrounding cities.
“Every one of them [surrounding cities] has a better restaurant community from a standpoint of economic development and tax revenue generation than the city of Kyle and we haven’t even been charging this,” Mitchell said. “So, for all of those reasons, and it’s been on the books, we should have been collecting it all this time and we didn’t.”
Council member Bear Heiser said he would need to know more about the data and how much certain businesses would pay.
“I need to know … I still have questions and it seems like the answers might not be available,” said Heiser. “I would be willing to hedge on this and say that we don’t institute it for a year or something along those lines because people need to know it’s coming. I agree with you [Mitchell] because I sat up here and I asked to make the pool free and to sit and walk away from alcohol sales, which I do agree is something that should be taxed … but with the information we have, I can’t make sense of anything of this when there’s a lack of consistency and we have no idea how much we’d bring in.”
The motion to deny the amendments passed 5-2, with Mitchell and council member Michael Tobias dissenting.
