Council gives city manager 8-year extension, pay cut, new house

The City Council announced today it had concluded two months of contract negotiations with City Manager Scott Sellers that has culminated in the city’s CEO agreeing to remain in the position until Dec. 31, 2025, a salary reduction of almost $30,000 a year and a half-million-plus dollar new home in the Cypress Forest subdivision that will be owned by the city and become the residence of all future city managers, but which will be significantly financed through Sellers’s salary cut.

The council voted 6-0 to approve the contract (council member Becky Selberra was excused from attending the meeting for medical reasons).

The news that the city plans on keeping the person most government officials I’ve talked to outside the city rank as one of the four or five best city managers in the state overshadowed the other major news coming from the city council’s meeting, which included council member Travis Mitchell’s "First Year On Us" plan to offer tax reimbursements as an incentive to attract more small businesses to Kyle and an emergency meeting held today after the regular one adjourned to set aside $25,000 to cover the costs of emergency repairs for the bridge failure that has closed Lehman Road between Goldenrod and Steeplechase Park.

And, no, that wasn’t a mistake when I said the council made its announcement today. It came shortly after the council emerged at 1 a.m. today from a three-hour and 32-minute executive session.

"This is going to be a very good deal for the city and it’s also going to be a very good deal for Mr. Sellers," Mitchell said in outlining some of the terms of the deal which includes the construction of "an executive-level house not to exceed $550,000" and a reduction in the city manager’s annual salary from $181.000 to $152,459, beginning with the next fiscal year, which kicks off Oct. 1, 2017, and is also when the new city manager’s residence is expected to be ready for occupancy. I’m assuming Sellers agreed to that reduction largely because that difference is what he would pay in total housing costs per year anyway, costs neither he nor any future city manager who decides to live in the home, will have to incur. The new contract does include a built-in 5 percent per year performance increases.

"Our desire was to extend him here through his retirement so we can have some stability," Mayor Todd Webster said. As part of this, the city agreed to pay for Sellers’s gap insurance, the health insurance he would need to fill that period from when he retires as Kyle city manager to when he is eligible for Medicare. Those payments, Webster said, would be in lieu of some future salary increases.

The contract includes provisions for future extensions as well as a 12-month salary severance package and a 12-month continuation of health benefits should a future council decide to terminate Sellers before the end of 2025, both of which the mayor described as "pretty standard arrangements."

Webster added the contract included "a market adjustment in 2021 where there will be an analysis performed related to the total compensation, including the value and benefits as compared to surrounding cities and an adjustment in 2021."

"It’s a real solid deal," Mitchell said, "and I’m excited about it. I’m excited about the possibility of keeping the city manager here for the long term."

"Scott, from where I sit, you’re a very good city manager," Webster said. "My objectives were I thought it was important to have that security for the long term, knowing the planning the city needs and the kind of stability that the city needs in the long term that continue to take the city in the direction that it has been going since you have come here.

"I am very happy that you were willing to do this,’ the mayor added. "I know it’s a pretty serious thing talking about the entirety of your career into retirement. I hope this sends a message to staff that the stability and the direction that we’re taking Kyle will continue."

Later the mayor added "This is very much a win (for the city manager) and a win for the city." He called the city manager’s future residence "an investment property that’s going to be the only asset that we have that appreciates" in value.

Council member David Wilson called the contract "a public handshake that we have with you that we want to keep you long-term and we believe Kyle is going in a positive direction. Anybody who looks around knows that is happening."

Is Sellers worth all this fawning praise? Let me try to answer that by mentioning something that transpired earlier in the evening and that was the council approving a deal Sellers initiated and stitched together that saved the city almost $1 million in infrastructure costs relating to a significant new business development being located just north of the Home Depot.

After the Sellers contract extension was announced, the council adjourned at 1:22 a.m., and immediately reconvened in emergency session to discuss what actions could be taken to fix the Lehman Road closure. During the discussion over possibly expediting the Lehman road bond project, Sellers and Public Works Director Harper Wilder huddled and came up with the idea of either installing a rail car or some unused box culverts to serve as a temporary bridge until a more permanent fix can be arranged. I have tried to contact the city today to learn which, if either, of those alternatives were employed and when Lehman may be reopened, but, unfortunately, I’m stuck with Spectrum as my internet provider and its local email server, like Lehman Road, is currently closed for repairs.

In his presentation on small business incentives, Mitchell said "Commercial incentives paved the way for us to reshape I-35 and because of these partnerships I think we have the nicest interstate corridor when compared to our neighbors to the north and to the south." There was a "however," that accompanied his praise. "With all the good brought about by Kyle’s economic development policy, I believe we failed to place enough value on smaller businesses."

Mitchell said master-planned commercial districts compels developers to ask "top dollar" for the pads and so they only seek out the chains, like Wal-Mart, H-E-B, McDonalds, etc., who can afford to pay those high amounts to fill those pads.

"Just look at those developments and ask yourself how many mom-and-pop small businesses are there," Mitchell said, "versus how many national brands and chains. These chains can afford to pay for the premium sites and reap the rewards through their economies of scale."

He claimed the successes of those business attract additional chains which drive land costs even higher.

"That’s good for them and good for the city but it creates a barrier to entry for small businesses who perhaps have a good model but are woefully under-capitalized and inexperienced," he said.

He said he spent months looking at what other cities have done and even programs Kyle once had in place and concluded they were either "ineffective, ceremonial or not so much partnering with small businesses as much as subsidizing them."

"So, my primary goal with this proposal is not to subsidize the small business community," Mitchell said. "Rather I want to give them a square deal, something like what the major developers get and something measurable in terms of ROI to the city. If they invest in us, I want to invest in them.

"So the conclusion I’ve come to is that I think we should build a program that is essentially a mini-developer agreement using the same type of reasoning we apply for large developers only super simplified on a much smaller scale outside of our already-incentivized development areas. The first and most logical phase of this plan and the one thing I’m going to propose tonight should be a property tax-based incentive that is measurable in terms of ROI to the city."

Mitchell said under his "First Year on Us" plan, "owner-occupied businesses may apply for a one-time tax credit of up to $5,000 for improvements on real and personal property calculated on a one-to-one basis. Non owner-occupied businesses and developers may apply for the same credit up to $2,500 calculated on a one-to-two or 50 percent basis."

Mitchell’s colleagues greeted his plan favorably and recommended that staff immediately begin to draft ordinances that would incorporate his ideas.

In other action that took place earlier in the session, the council:

• Approved and adopted an updated Parks and Recreation Master Plan noting that while the plan rises to the expectations of the quality of life the council desires for the city, cost factors will limit just how much of the plan can and will be implemented. "My major worry is the expectations of the community that will arise from this," Mayor Webster said.
• As predicted, voted 5-1 to approve funding preliminary engineering studies required to possibly, at some time in the future, moving a rail siding, the current location of which causes trains to stop and block traffic on Center Street.
• Also as predicted, postponed three zoning proposals until the Planning & Zoning Commission can bumble its way through them.
• Approved amendments to the section of the vendors ordinance that regulates food trucks and vans but not before reducing the required minimum square footage for a food truck park in Kyle from 30,000 to 20,000 square feet.
• Approved amendments to the local pet ordinance that gives the government more control over how individuals can deal with such problems as rattlesnakes on their patios, a more common occurrence than one would expect, especially in and around my neighborhood.