Brittany Kelley
KYLE — After months of discussion, Kyle City Council approved its budget and tax rate, which was ultimately lower than previously anticipated, at its Sept. 15 meeting.
Budget
According to interim city manager Perwez Moheet, the operations and maintenance expenditures amount to $419.9 million, but the total budget is $437,639,029, as it includes $17.7 million of transfers out.
This also includes the $2,942,349 in amendments — library positions, Kyle Police Department fleet, Moreno Street drainage project and neutral funding for the Kyle Vista Park project — approved by council at prior meetings.
“Tonight, I’m going to request council to make another amendment for the police department,” said Moheet. “That amendment totals $169,467 and let me explain what that is about. So, additional funds are needed to fund next year’s budget for the animal shelter services that will be provided to the city of Kyle through the city of San Marcos’ animal shelter facility.”
When the budget was initially drafted, an estimate of $299,336 was used, but actual numbers amount to $468,803, which leaves a difference of $169,467, said Moheet.
Council member Marc McKinney motioned to add the money to the police budget for the upcoming fiscal year, with a second by council member Michael Tobias. The item passed 7-0.
Before approving the overall budget, council had the opportunity to make last minute comments.
Council member Melisa Medina suggested having a structure for legal services, rather than using multiple outside firms, to save taxpayer dollars in the future.
Broaching the topic of staff raises again was council member Lauralee Harris, whose amendment to change this failed at a past meeting: “It would cost $1.5 million to provide a 3% raise for our staff. Our city is growing. They’re working longer hours; there are fewer of them. I think that is a disservice to them.”
Agreeing with this sentiment was council member Claudia Zapata, who suggested considering incentives in the coming months for staff.
Mayor Yvonne Flores-Cale stated that, “as a city, we have a finite amount of funds because it’s what we can collect from our residents, what we collect in sales tax, and to just keep saying, ‘Oh, well, we’ve got it; we’ve got it; we’ve got it; we’ve got to spend it.’ I think that that is not being necessarily a good steward.”
Zapata then asked KPD Chief Jeff Barnett for an update on the artificial intelligence (AI) Axon contract that she wanted amended. She noted that the Hays County Commissioners Court decided to not move forward with its $4.5 million, 10-year contract and that, actually, Kyle has a $7 million, 10-year contract.
“I did reach out to Axon. I made the request, if they would try to separate out the individual components of our contract. They said that they would, in fact, do that, that they would try to provide the best they could. They did caution us [that] prices have gone up since we negotiated that contract about a year and a half ago because we’re now entering year two,” explained Barnett, adding that this meant that Axon didn’t foresee any cost savings from it.
Although he requested the itemization, he said that he has not received it yet.
“Thank you; I appreciate that. I think it’s necessary for council to be able to decide what sorts of tools it is that we want to use and probably get some better explanations behind some of those different AI tools that Axon is providing currently,” said Zapata. “I think it just baffles me that we are spending more money on the city of Kyle through this Axon contract than the entirety of Hays County for the sheriff’s department.”
Additionally, she recounted the fact that she has continuously brought motions forward to cancel contracts with Flock Safety that have failed. So, she motioned once more to cancel the 2024 and 2025 contracts through non appropriation in the amount of $381,000 and for the city attorney to bring back information on canceling the 2023 contract. It failed for a lack of second.
Flores-Cale stated that she has an agenda item coming up that will hopefully allow for more discussion and information on the Flock Safety contracts.
She then motioned to approve the budget, which passed 4-3, with Zapata, McKinney and Harris dissenting.
Tax rate
At its first tax rate reading, council approved a tax rate of $0.5600 per $100 valuation 6-1, with council member Melisa Medina dissenting. She noted during her vote that this is because she would have preferred the $0.5340 tax rate, as it would provide more relief for residents.
Agenda documents state that an average homeowner, with a home valued at $301,530, would pay $1,464.57 after the homestead reduction — $189.19 less than in 2025 — with the $0.5600 rate.
Although this would be $0.0357 lower than the current tax rate of $0.5957, council began having discussions about an even lower rate at the Sept. 15 meeting.
Moheet shared that the $0.5600 tax rate was chosen because, at the time, council was discussing pay raises, so the rate was chosen to recover the amount of money needed to provide a general wage increase for all employees.
The second option, which was preferable to Medina, was $0.5340 and would recover close to the proposed budget, without a raise to employees. It would leave a buffer of approximately $53,000 extra, he said.
He then provided a new, third option of $0.5460, which would bring the city’s reserves to the $2.5 million that was present before council’s budget amendments.
Harris mentioned the raises again, since the $0.5600 would provide the money to do so, while still having a lower rate than the current tax rate. However, Flores-Cale said she began second guessing the $0.5600 number, despite approving it before.
“I like option number three, where it puts us back at least where we were projected to be before our amendments. It still produces a lower tax rate than we initially talked about, but I like keeping that cushion [of $2.5 million] in there in case we need to go over budget on something,” said council member Courtney Goza.
Medina was also amendable to this number, as it still provides more of a tax break for residents, which is what she was striving for.
Also appreciating the option was Zapata, though she was concerned about residents having a shock when the tax rate has to “inevitably” increase next year, due to debt being issued.
Ultimately, Flores-Cale made a motion to approve $0.5460 as the tax rate. It passed 6-1, with Harris dissenting.
To listen to the full discussion, visit bit.ly/3Vn9pqJ.
