Brittany Kelley
KYLE — Kyle City Council discussed its current Capital Improvement Projects (CIP) at a special meeting Saturday, June 13, resulting in a delay in spending more than $150 million.
The city’s current approved CIP spending plan sits at $1.27 billion, which consists of 125 proposed projects, spanning from fiscal year 2026 to 2030. This number is further broken down into two categories: $490.1 million of tax-supported CIPs and $781 million non-tax supported CIPs, according to the presentation, though this is not feasible, so staff has proposed an estimated $400 million decrease for FY 2027-2031. This would reduce the CIP total to $838.3 million, comprised of $409.3 million tax-supported and $449.1 million non-tax supported projects.
This new 5-year spending plan would remove several projects, as previously decided by council, including the Old Stagecoach Heritage Tree Pocket Park, Transportation and Public Works and Kyle Water Utilities headquarters, downtown revitalization and roundabout beautification. Despite this cut, multiple projects are still planned to be funded:
Parks and Recreation projects
• Plum Creek east Vybe Trail
• Kyle recreational fields
• Gregg-Clarke Skatepark
• Mary Kyle Hartson City Square Park bathroom
Transportation and Public Works projects
• 2022 Road Bond program
• Street maintenance/rehabilitation and micro surfacing
• Intersections and traffic safety improvements
• Sunflower Circle improvements
• Residential streets maintenance and rehabilitation program
• Sidewalk Master Plan implementation
• Post Oak subdivision improvements
Kyle water utility projects
• Wastewater treatment plant expansion
• Indirect/direct potable reuse project
• Lehman booster pump station expansion
• Wastewater interceptor upgrades
• Pressure plane 3 pump station
• Stormwater/drainage projects
Tax increment reinvestment zones (TIRZ) projects
• Kohlers Crossing roundabouts at Sanders and Benner (TIRZ #2)
• Cromwell extension
The presentation also detailed that despite the long list of ongoing projects, there are still numerous amounts that are now unfunded, such as: County Road 158 and IH-35 improvements; Kohlers overpass project and Marketplace intersection improvements — waiting on grant funding; Kyle Senior Community Center driveway; Steeplechase Park phase 1; Gregg-Clarke Park upgrades; splash pad renovation; Lake Kensington Park; the Kyle animal shelter and more.
“Things didn’t change between October and now. We were broke then; we’re broke now. So, the question is: How did city staff get this far out in the forefront and commit the city, knowing that we didn’t have money? That’s the question y’all should be asking,” said interim city manager Perwez Moheet.
Assistant director of Finance Holly Holt-Torres discussed the CIP financial forecast.
“The purpose of this section is to provide a clear understanding of the following: the city’s current outstanding debt obligations, the annual debt service associated with that debt, the amount of additional debt that would be required if the preliminary FY 2027 through FY 2031 CIP spending plan were fully implemented and the policy decisions that will ultimately be required from council, regarding unfunded projects,” explained Holt-Torres.
Currently, the city has approximately $385.3 million in outstanding principal debt obligations, but with interest, that number rises to $611.3 million, she said.
“Each dollar of principal issued today creates repayment obligations that extend many years into the future,” emphasized the assistant director, adding that these debts are paid through various avenues, such as property tax, water rates, wastewater rates and TIRZ #4.
She also stated that $816.1 million in new debt issuance over the course of the next five years — if every CIP project moved forward — would mean that the debt obligations would exceed $1 billion.
Moheet explained that the bond market is also playing a role in the impending debt, as investors are "impatient" these days and looking for five- and 10-year maturities, rather than the previous 25- and 30-year maturities. This makes it more difficult for the city to backfill, so instead, it has to use money from the general fund.
“I don’t want to leave any false impressions on y’all that we can have this CIP program and not have an impact on the tax rates or on the water and wastewater rates,” said Moheet.
Regarding these projects, Holt-Torres noted that there are two options for council to consider when moving forward with CIPs. The first is general election bonds (GO), which requires voter approval through a public ballot, and the second is council-approved certificates of obligation bonds (CO).
Prior to discussion, council member Claudia Zapata shared that she was informed through an anonymous email of a 10% pay cut for staff members earning more than $90,000 to add to savings. Council member Melisa Medina stated that this was news to her, to which Moheet confirmed that there was never an official announcement, as it was purely internal discussion.
He stated that “65% of our budget is personnel, so I don’t see how I can get around that,” in response to Zapata asking to find other options that would not affect their staff. Furthermore, Moheet said that it is unclear whether he will propose a 5%, 10% or 15% pay cut, as he has to exempt sworn officers from the reduction.
“It’s important to note that today we’re talking about CIP budget. We’re not talking about operating budget. I brought that up, so everybody on council is clear. I brought that up with the department heads as an idea concept to get their feedback,” explained the interim city manager. “I really, honestly don’t know until I put the budget together and that won’t happen until mid-July … So, be patient. If you hear something, don’t run off with it. That is the gospel truth. Wait until I formally hand you a proposed budget for next fiscal year and then, you can shred it to pieces.”
Council member Lauralee Harris countered this, stating that it’s important to know these decisions as these are not in the future; they’re happening now. Despite this, Mayor Yvonne Flores-Cale expressed that in the past, she never questioned the city manager’s decision to hire or fire someone, even if the situation was bad.
“At the end of the day, it is not our say. If there’s a policy or procedure that we’d like to form, we can bring that to the council and we can have a conversation and we can direct our city manager from there. But what we cannot do is question him one by one and give our personal opinion as if it comes from the dais,” said Flores-Cale.
Moving back to the discussion on unfunded projects, the mayor emphasized that there is “no way” she will approve each of the projects, as it would result in a 0.85% tax rate.
One item she was in favor for was the County Road 158 deceleration lane improvements for $500,000, with hopefully county participation. However, Medina, who lives in the area, stated that she would prefer to delay the project until they have money to fund it without taking CO bonds “only because if you’re coming up the IH-35 access road, where they built Waterstone [Crossing], they have that ingress thing to go onto Waterstone, which takes you the same direction as you’re going to go if you’re going on 158. So, I use that now to safely get on Old Post Road to go home the back way. So, we have that option right now.”
Council voted 7-0 to defer the item.
The following items were also delayed with a 7-0 vote:
• Kyle Mobility Plan — since information has not yet been presented to council: $1 million
• Kohlers overpass project — until grant information is available: $35 million
• Chevo Pastrano Senior Parkway extension — due to the large amount of money, the mayor advocated for a GO bond for the extension, but noted that there needs to be firm plans in place, so that the residents are aware of what they will be voting on in the 2028 GO bond: $100 million
• Gregg-Clarke Park splash pad: $1.25 million
• Gregg-Clarke Park playground parking area — delayed until the Park Master Plan can be brought back, but under the assumption that $900,000 will be spent for the parking lot: $2.15 million
• Lake Kensington Park — defer to get a phased plan: $14 million
• Animal shelter — delayed until legal land usage is confirmed at the July 21 council meeting: $10 million
These items will be moving forward unanimously:
• Intersection improvements at Veterans Drive and Jack C Hays Trail — due to nearing 100% engineering designs: $6.25 million
• Kohlers Crossing intersection improvements at Kyle Crossing and Marketplace Avenue — using funding from TIRZ #1: $4 million
• Steeplechase Park improvements — CO bond to match the grant received: $750,000
• Modular buildings for city office space — expansion at city hall and removing administrative staff from the Public Safety Center: $3 million
“As we look at these projects and scrub them a little bit more, if we find some savings, we can just take that as, ‘Yes, we would go back and see if there’s money that we could allocate to other projects,’” said Transportation and Public Works director Mike Trimble.
The timeline for these bonds, he explained, would begin in October 2026, when council would approve a resolution to initiate bond development processes, continue with meetings and clarifications in 2027 and conclude in August 2028 when council sets the ballot for the November 2028 election.
More discussion covering the Public Transportation Program, including Uber 3.14, and special events will continue at the Saturday, June 27, meeting, said Moheet. Then, he will present the proposed budget Aug. 1, followed by proposed property tax rates and water and wastewater rates Aug. 15. Public hearings will be held during the first and second readings of the budget at the Sept. 5 and Sept. 15 council meetings.
For more information on the city’s budget, visit www.cityofkyle.gov/city-hall/financial-services. To listen to the discussion, visit bit.ly/4uz54N1.
