The Kyle Report

The Kyle Report

Sunday, April 3, 2016

Conversations with City Council candidates begin tomorrow

I’ll be kicking off the 2016 Conversations with the City Council candidates tomorrow with a conversation with Place 1 incumbent Diane Hervol. The series is designed to provide more of an in-depth look at the four candidates seeking the two available spots on the council. The format of the series is a simple Q&A without any editorial interpretations. They are, in fact, actual transcriptions of recorded interviews I conducted with each of the candidates.

All the candidates were asked the same battery of questions, although each of them said something that led to at least one question that might not have been posed to another candidate.

Two of the questions asked each of the candidates were designed to test their knowledge of the current political landscape. One of those questions was a variation of this one: "Everybody talks about the amount of traffic on Center Street. Most of that traffic could be alleviated by spending $2 million. Do you think the city council should approve a $2 million item to fix those traffic problems as part of the fiscal year 2016-17 budget and, if so, where should that money come from?" This question was asked in such a way to determine if the candidate was aware of an offer from Southern Pacific to relocate the switching station that currently causes trains to come to a stop blocking Center Street in order to allow trains coming in the opposite direction to pass. Southern Pacific has agreed to move that switching station to a location closer to the Kyle Parkway overpass but only if the city pays the $2 million cost for the move.

The second question was a version of this: "Because of policies outside city government’s direct control Kyle will never be in contention to land businesses like the Amazon distribution center that recently located in San Marcos or that new Samsung facility that went to Manor, of all places. But do you think the city should exert pressure to get those policies changed and, if so, what form should that pressure take?" This is a somewhat more complicated matter involving tax exemptions governments can offer to attract new business development. The state allows local government entities to declare themselves as "freeports," which means the value of any property, other than petroleum products, that enters a facility is not subject to taxation if it leaves that property within six months. For example, an Amazon distribution center will take in products from manufacturers and then ship them out to end users upon request. In a freeport, these products are not taxable if they do not remain within the facility for more than six months. The Samsung plant in Manorn takes in semiconductors which are assembled into integrated circuits used in HVAC and similar applications and then shipped to end users. Each locality has at least three government entities which may grant freeport tax exemptions: the city, the county and the school district. Areas where all three have provided freeport exemptions are known as "triple freeport" areas. In Kyle, both the city and the county allow freeport exemptions, The Hays Independent School District has refused to do so, however. The San Marcos school district has approved the exemption, however; hence the Amazon facility being located there. So has the Manor school district, hence the Sam Sung facility located there. When an out-of-state company comes to the state of Texas looking for recommendations for the possible site of a new facility, if it is one that would profit from a freeport exemption, the state will only recommend those communities with "triple freeport." That’s one of the reasons so many businesses have recently located in Round Rock. Here is a map of the Austin area displaying which governmental entities have provided freeport exemptions. The question, then, was designed to test whether the candidate was aware of the "triple freeport" issue and, if so, whether they felt it was ethical for one government entity to apply pressure to another one if it meant possibly promoting business development.

The complete schedule of the conversations is:

  • Monday: Place 1 incumbent Diane Hervol
  • Tuesday: Place 1 challenger Travis Mitchell
  • Thursday: Place 3 incumbent Shane Arabie
  • Friday: Place 3 challenger Randall Lloyd

The Wednesday open date is because that’s the day I’ll be writing about Tuesday night’s City Council meeting.



1 comment:

  1. Why in the world would the taxpayers of Kyle want to "grant" $2 million of their tax dollars to a private corporation, Union Pacific, to move their tracks? They should do it themselves - because it's the right thing to do and it might save them on liability down the road. Kyle has paid too much in the past in terms of "more than our fair share" to federal roads and private development. Many of us are just tired of it. And by the way, I doubt many people have even heard of this proposal. You must have an inside scoop at City Hall Pete.
    Lila Knight

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