Kyle City Council hears five-year financial forecast

KYLE — Kyle City Council received a report on the preliminary five year financial fiscal forecast for the city’s general fund for the fiscal years 2024-25 through 2028-29 at its April 16 meeting.

Director of Finance Perwez Moheet said that this is part of beginning the city’s budget process: “The purpose of the financial forecast is to evaluate current and future fiscal conditions to help guide policy, which is council, to measure the program service delivery decisions.”

In the FY 2023-24 budget, the beginning balance of the general fund was $34.2 million. The general fund source is about $63.2 million in the approved budget. Property tax makes up 29%, 28% is sales tax and 18% is from development revenues, such as building inspection fees, etc., along with other sources.

On the general fund expenditure side, there is $71.9 million in the approved budget. Police makes up 25% of the requirements and then, there are facilities and beautification, parks, etc.

Revenues and transfer-ins to the general fund are expected to range from $72 million in FY 2025 to $99 million in FY 2029. The beginning balance fluctuates year to year, sitting at approximately $20-$25 million, making the total estimated funds available $97.4 million to $121.5 million.

The expenditures for the upcoming five years vary from $72 million to $97 million. After these expenses, there will be a fund balance of $25.4 million in FY 2024-25, $21.8 million in FY 2025-26, $21 million in FY 2026-27, $22.4 million in FY 2027-28 and $24.5 million in 2028-29.

The “Key Assumptions” for the general fund revenues have the next five years at the same level for new construction taxable value at $350 million, sales tax growth at 12.5%, development revenue growth at 5% and other revenue at 3%. There are varying amounts for the following categories:

Existing properties value growth

• FY 2025-26: 10%

• FY 2027-29: 15%

Existing properties taxable value

• FY 2025: $5.96 billion

• FY 2026: $6.55 billion

• FY 2027: $7.53 billion

• FY 2028: $8.66 billion

• FY 2029: $9.95 billion

The “Key Assumptions” for the general fund expenditures also hold steady for operations and maintenance at 8%, compensation at 4%, healthcare costs at 10% and economic development incentive payments at 12%. The following have varying numbers:

Cash funded CIPs

• FY 2025-26: $10 million

• FY 2027: $9 million

• FY 2028: $8 million

• FY 2029: $9.6 million

Cash funded fleet and equipment

• FY 2025-27: $1.5 million

• FY 2028: $2.5 million

• FY 2029: $3 million

Moheet also noted that by conducting building inspections in house and releasing contracts, there will be savings of $1.75 million a year.

“We’ve definitely grown and that doesn’t just happen,” said council member Robert Rizo. “That happens with good planning and bringing in good retail.”

The budget is being prepared around the following council priorities:

• Implement customer service initiatives, including 311 program

• Optimize funding capacity for city’s infrastructure projects, such as street maintenance and reconstruction, sidewalk improvements, parks system enhancements, etc.

• Community center project options and cost evaluation

• Sportsplex utility design and cost evaluation

• Downtown development options and cost evaluation

• Economic development projects

• Citywide beautification enhancements

• Maintain competitive compensation and benefits program for city employees

• Incorporate revenue enhancement and cost savings

A park improvement presentation will be shown in June, said city manager Bryan Langley. On the same note, council member Miguel Zuniga wished to see equity when it comes to enhancing older parks, as well.

“I think it would be great if there’s other topics that [council] wanted to put on the list, we can certainly bring those to you,” said Langley.

Council member Michael Tobias stated that he would like to add verbiage to address sidewalk lighting, restriping and street improvements in sections throughout the city. Staff confirmed a sidewalk study, including lighting, will be completed in approximately six months.

The next date for the budget process will be May 7, where compensation and employee benefits, property tax rates and debt defeasance will be discussed.