Brittany Kelley
KYLE — Several amendments were discussed for the upcoming fiscal year (FY) 2026-27 budget at the Kyle City Council meeting held Thursday, Aug. 27. Additionally, council voted on the city’s maximum tax rate.
Budget amendments
Assistant director of Finance Holly Holt-Torres began the amendment portion of the meeting by first sharing the six budget amendments staff is currently working on in fiscal year 2025-26, four of which have already been approved. These include: $100,000 to Public Utility Commission (PUC) water/wastewater rate appeals; $149,500 for rate case support/ cost of services study for Raftelis; $114,600 for the Marketplace waterline project; and $298,773.03 for increased Wastewater Treatment Plant solids volume. Pending amendments include $52,000 for road bond vendor/contract investigation and $100,000 for continued PUC rate appeal legal services.
The total impact for all six is approximately $1,014,873.03, said Holt-Torres.
“It is important to understand how those additional appropriations affect the fund balances that were previously presented to council as part of the interim city manager’s recommended proposed 2026-27 budget,” she continued, explaining that money is being pulled from each of the funds. “When council approves an additional expenditure in the current fiscal year, council is also changing the financial starting point that carries into next year’s budget.”
These six approvals affect the estimated end fund balances as follows:
General fund
• Before: $20,369,970
• After: $20,317,970
Water Utility Fund
• Before: $23,956,417
• After: $23,781,667
Wastewater Utility Fund
• Before: $22,857,434
• After: $22,383,910.97
Water Impact Fee Fund:
• Before: $162,426
• After: $0
“The primary takeaway for council this evening is that fiscal year 2025-26 budget decisions do not end on Sept. 30,” she said. “Should additional amendments be approved between now and the fiscal year end, finance will continue to incorporate those impacts, so that the beginning and ending fund balance estimates presented for the fiscal year 2026-27 reflect the most current information.”
Mayor Yvonne Flores-Cale motioned to approve the six amendments as presented, with a second by council member Melisa Medina. The item passed 7-0.
Next, each council member was able to present proposed budget amendments.
The first amendment was made by council member Michael Tobias, who stated it was “revenue neutral. In other words, I’m not taking any funds from the reserves or reducing other budget items.” He requested the settlement funds — $1,886,545.60 — from the 6 Creeks development that were reserved for Kyle Vista Park at the Aug. 18 council meeting be added to the Capital Improvement Plan.
“I appreciate you bringing that as a budget amendment. I voted against that measure in conjunction with the 6 Creeks agreement because I felt that it was not germane and that it should have been brought as a budget item. So, thank you for bringing that back at the appropriate time,” said council member Lauralee Harris.
The motion passed 7-0.
In an effort to prevent the Kyle Public Library from reducing its services and hours, council member Claudia Zapata proposed a $57,058 amendment to the budget to fund two part-time circulation assistant positions.
“If we are able to have additional people, we will not reduce the hours. This comes from a combination of those evening [and] weekend hours, where we really feel the crunch,” said Leslie Scott, library director. “We do utilize volunteers. I think we had a dozen this summer [and] we have eight more returning back, but what it has to do with is they cannot accept funds. So, anyone that’s going to make a payment, they cannot be inside of patron records. They can shelve … and then, also being another presence, but when it comes to things like programming, especially for children, we need two city employees in there.”
The item passed 5-2, with council members Courtney Goza and Medina dissenting.
Zapta also motioned to have $600,000 for Moreno Street drainage, which she stated had issues first identified in 2015. So, residents have been waiting more than a decade for a resolution.
According to city engineer Leon Barba, the money would go toward engineering studies. This would allow city staff to prepare for future funding, once they are aware of what is needed and the potential costs.
The motion passed 7-0.
Zapata also asked to add the necessary amount of funds to reach the $500,000 necessary for the CR 158 deceleration lane in FY 2028. It passed 5-2, with Goza and Medina dissenting. Goza stated that this is a county road, so she is unsure of why the city is spending money to improve it.
“I’d like to make a motion that in the new budget, we include a 3% raise for our non-sworn employees. I think they take on a huge burden. We’ve reduced staff and to tell them they get no raises in the coming year, I think is unfair to them,” said Harris, adding that it would cost $1.5 million and is “totally appropriate and is within our budget capacity.”
Council member Marc McKinney praised Harris for bringing this forward, as he agrees, though he mentioned that there have been Kyle Police Department staff that has reached out to him concerned with budget cuts to the agency. Because of this, he wanted to suggest a 2% raise and, instead, put $800,000 toward maintaining the fleet of patrol cars and restoring $150,000 for annual training.
“So, council member, this is news to me that we have eliminated or reduced their fleet budget,” said interim city manager Perwez Moheet. “You think your executive team here would allow that?”
He clarified that there was a 10% reduction in line item budgets for every city department, sharing that KPD Chief Jeff Barnett “volunteered to come up with $330,000” in savings, in an effort to offset the potential 10% salary reduction.
Barnett’s reduction identified seven wrecked leased vehicles that were sitting in the parking lot that would not be given replacements, said Moheet. In the $22 million budget, the interim city manager noted that the chief could have found the $330,000 reduction “anywhere he wishes … to avoid the 10% salary reduction. It’s not fair for me to go back to other departments and dip into their budget to make up what he doesn’t think he can deliver after he made that assurance.”
Harris returned the conversation to her initial motion, to which the mayor noted that, sometimes, employees don’t get a raise: “It’s not personal,” she said, emphasizing that, if council passed this, there would only be $1 million left before the city went into a deficit again.
Instead, Zapata suggested completing a one-time “rest and recognition” payment of $1,800.
Because of the hesitation and varying avenues, Harris opted to table her motion until Holt-Torres could bring back options at a later meeting, which passed 7-0.
“I thought when we were bringing budget amendments forward that they were supposed to be revenue neutral,” said Goza. “When you are spending basically all of the cushion above [the reserves], you have nowhere else to go other than into your reserves or you’re going to have to do an emergency cut spending again.”
Continuing on this topic, McKinney questioned why Kyle does not have an emergency fund. Moheet explained that there used to be one, but it was consolidated into the general fund, though it is a policy decision, so it could be brought forward by council to create one.
The mayor’s amendment didn’t have to do with funding, but rather vacation time, as she wanted to offer the KPD employee who acts as The Grinch some time off during the holidays, since he works so often. Moheet stated that KPD has its own rules, but they will bring back information to see how a Grinch allowance would work.
“I wouldn’t be true to myself if I didn’t make this next amendment,” said Zapata as she motioned to reduce the city’s Flock Safety contracts by $432,000 and take the action necessary to terminate the contracts in FY 2027.
Because there was no second, the item failed.
Tax rate
Moheet noted that council needed to provide direction on which maximum tax rate they preferred, as previously presented: voter-approval tax rate at $0.5650, tax rate option one of $0.5600 or tax rate option two at $0.5340.
The average resident home is valued at $301,530, which is a decrease of approximately 5% from last year. So, for option #1, an average resident would pay $1,688.57 or, with the homestead reduction, $1,464,57. This is a 11.44% reduction.
For option #2, an average homeowner would pay $1,610.17 or $1,396.57, after the homestead reduction — a decrease of 15.55%.
All three options are lower than the current tax rate, which sits at $0.5957.
Medina stated that residents reached out to her and shared their enthusiasm on lower tax bills, especially as the county tax rate is currently unknown. So, she advocated for option two, which would be $0.5340 per $100 valuation.
The tax rate can still be lowered, even after this approval, noted Flores-Cale.
Council approved the $0.5600 per $100 valuation maximum tax rate 5-2, with Goza and Medina dissenting.
The first of two tax rate and budget hearings and adoptions will occur Saturday, Sept. 5, followed by the final readings Tuesday, Sept. 15.
To listen to the discussion, visit bit.ly/4qGlYce.
