There are two directions the in which the city can direct itself for the upcoming budget. It can decide to spend new-found money without having to raise the tax rate or it can ignore needs to satisfy those demanding a tax-rate cut. And if the city council ultimately decides on the latter option, then the question becomes will that cut be sufficient enough to avoid an overall property tax payment increase for Kyle property owners.
The public may get a hint on which direction the city is going when the council meets at 8 a.m. Saturday at City Hall for its first workshop and public discussion of the FY 2017-18 budget.
Another issue sure to be raised and discussed at the workshop is the funding of unfilled positions.
According to preliminary valuations released by the Hays Central Appraisal District earlier this week, the taxable values on homes in Kyle increased 9.97 percent. And Kyle Finance Director Perwez Moheet told me during a break in Tuesday’s city council meetings he doesn’t expect the certified numbers this year to vary that much from these initial estimates. If anything, he said, they may even go higher.
"I have seen instances where the preliminary numbers were lower than the certified (valuations) in July," Moheet said. "Based on the numbers I’ve seen this year, I think it will stay about the same. Right now, when I compared the numbers, it was 11.9 percent change. We’ve added new properties."
But assuming HCAD’s 9.97 percent increase is close to the certified valuations, that means the council would have to set a tax rate, according to my calculations, of $.5226 per $100 valuation, which is a little more than a five-cent reduction in the current rate, to keep residents from having a higher tax bill than this year’s. In other words, a tax rate of $.5226 would be the maximum allowable to provide an actual tax cut, Anything between that and the current rate of .$5748 would merely be a reduction in the increase, but not an actual tax cut. It would also mean the city would have to hope for another 10.6 percent increase in sales tax collections as the main source for additional General Fund Revenues and that may not be nearly enough to meet the city’s needs.
Exactly what those needs are remains to be seen. Hopefully, Saturday’s workshop will provide a clearer picture of the actual needs inventory.
Sources have told me City Manager Scott Sellers will propose keeping the tax rate exactly where it is, at .5748 per $100. That position could be welcomed news for Police Department advocates who are demanding the construction of a new, high-tech, police headquarters building, a position, according to the results just released of a city survey, that does not have much public support. Such a project would have to be funded by a bond sale and keeping the current rate might provide the cushion needed to finance that sale without an additional property tax rate increase. It should be noted that along with this idea having litte public support, I have not seen the endorsement of a new KPD headquarters from a majority of council members either — at least, not at this time.
The current budget focused its spending priorities on one-time purchases (i.e., vehicles, other heavy equipment), so it’s likely that this year could begin a cycle of recurring expenditures such as devoting more funds to street maintenance and repair. According to the results of that survey commissioned by the city, 91.5 percent of all respondents said "routine street maintenance and repair" should be a high priority for the city, with more than a quarter of them — 27.48 percent — saying it should be the city’s highest priority. That’s a pretty clear message. On the other side of that same coin, more than half — 56.82 percent — of the respondents said they were either very dissatisfied or dissatisfied with the city’s routine street maintenance and repair. No other subject received more than a 50 percent dissatisfaction rate.
On the other hand, three quarters of the respondents — 76.46 percent — said the construction of a new police headquarters should be a low priority item. In fact, more respondents ranked a new police headquarters as the city’s lowest priority than any other item. So clearly, the public does not appear to be supporting the police on this issue and that fact will resonate with political leaders.
One other result of the survey I found interesting was that 45.75 percent of respondents complained the city provided "too few services" (49.56 percent said city services were "about the right amount.") The question not asked was whether that 45.75 percent would support a property tax rate hike to improve the amount of services provided.
The unfilled positions issue is slightly trickier. If the city intends to higher someone, it obviously must not only pay that person, but provide all such ancillary benefits as health insurance, retirement funds, etc. Thus, if next year’s budget calls for adding a new code inspector to the staff, it should, in theory at least, set aside the money for that position’s salary/benefits. But what happens to that money if the position is not filled? That’s a question that might be up for discussion at Saturday’s workshop as well. Sources close to the budget process have said, for example, there’s more than $1 million sitting in the city’s treasury that can’t be touched because it’s specifically designated for police officer positions that have never been filled.
Although the meeting is scheduled to last four hours, Sellers said during Tuesday's council meeting he hoped to end the workshop at 10 a.m. because of other activities scheduled for Saturday, including the Hays school district's anniversary parade that's scheduled to begin at 10 a.m. and school bond/board election. There's also a little matter of the Kentucky Derby.
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