Kyle City Council holds second budget workshop to discuss tax rate, other finances

KYLE — Kyle City Council held its second budget workshop of the year on Saturday, July 8 at city hall to hear a presentation on the proposed FY 2023-24 budget and to direct staff with comments.

According to Kyle City Manager Bryan Langley, there were seven budget focus areas, including the following: increased community engagement; economic development and small business retention; enhanced public safety; market-based employee compensation and benefits program; increased street maintenance and rehabilitation; organizational excellence; and strategic planning.

The city’s fund structure, as it stands, totals $275.93 million, which includes $176.62 milion in governmental funds and $81.32 in proprietary funds.

“To give you a scale of this, larger cities have more funds; we are kind of in the middle,” said Kyle Finance Director Perwez Moheet.

The total projected property tax rate for the city of Kyle FY 2024 is $0.5699, up from $0.5082 in the FY 2023 approved budget.

“We’re in a hot market,” Moheet said.

In FY 2023, total sales tax collection will be $16.56 million and the projected total sales tax collection is $17.5 million in 2024.

“Sales tax is a double-edged sword. We are neck and neck with property tax revenue. The reason I say it’s a double-edged sword is that during good economic times, we’re making good money, but when they slow down, it’s one of the first things we see come down. Sales tax revenue is a very volatile source of revenue,” he warned. “So, as we grow, we have to keep that in mind that the dependency shouldn’t be so much on sales tax as it should be on property tax.”

In the general fund, total revenue (which includes property tax, sales tax, development revenues and other revenues) is projected to be:

• $64,075,676 in FY 2023-24

• $67,880,154 in FY 2024-25

• $73,004,527 in FY 2025-26

• $78,579,249 in FY 2026-27

• $84,671,515 in FY 2027-28.

Expenditures (which include operations and maintenance, future supplemental, cash funding - Capital Improvement Projects, or CIP, and cash funding - equipment/other) are projected to be:

• $68,665,004 in FY 2023-24

• $$69,237,540 in FY 2024-25

• $71,258,255 in FY 2025-26

• $74,078,919 in FY 2025-26

• $76,820,616

“In year one, we are estimating $63 million in total revenues from all sources in the general fund and expenditures will be around $68.7 million and then the total expenditures and transfers-out is $70.5 million; that leaves us an estimated projected fund balance of $22.9 million,” Moheet said. “The city’s general fund is in a very healthy position and the city, in general, is an envy of other cities in the state of Texas. It’s a very strong financial position … We are basically exceeding the city charter on that level.”

The general fund revenue and transfers-in preliminary proposed budget for FY 2023-24 totals $63,075,676. The general fund expenditures and transfers-out preliminary proposed budget for FY 2023-24 is $70,509,664.

The city is also looking to add 25 new positions across various departments.

Next steps include the following dates:

• July 25 - Deadline for chief appraiser to provide certified property tax valuations to the city

• July 27 - The city manager sends proposed budget and CIP spending plan for FY 2023-24 to city council

• July 29 - Council budget work session #3 at 8 a.m. when the city manager will present the proposed operating and CIP budgets for FY 2023-24 to city council

• Aug. 15 - Budget work session #4, public hearing on budget and tax rates and first reading for adoption of property tax rate and budget ordinances

• Aug. 24 - Council budget work session #5, which includes a public hearing on budget and tax rates and second reading for adoption of property tax rate and budget ordinances

To view the budget presentation, visit bit.ly/3pQuIS5.