City manager’s proposed budget reduced to three words: streets, water, wastewater

City Manager Scott Sellers formally unveiled today his $84.9 billion budget recommendation for the upcoming fiscal year — a proposal he described as "fantastic" — that contains (as far as I can see) nothing that could be called frivolous, maintains the current property tax rate but does seek a wastewater service rate increase and concentrates on providing the funds necessary to guarantee the city’s water supply, to expand its wastewater capabilities and accelerate street reconstruction and maintenance.

"Kudos to the staff," Mayor Pro Tem Shane Arabie said at the conclusion of Sellers’ presentation. "What was accomplished through this budget, the amount that we can accomplish because of this budget, brings us to another level of sophistication that we’ve reached as an entity and the high level of service that we are providing."

After thanking all the staff members who worked on the budget, and comparing the budget favorably to earlier budget projections for the upcoming year, Sellers said "We have brought forward a budget that is fantastic."

"There’s no better time to live in the city of Kyle than right now," the city manager said. "The quality of life is extremely high, the ability to fund quality-of-life initiatives is there and we are looking to the future in a way we’ve never been able to do in years past. To maintain the level of service that we are in this budget is truly exceptional."

According to my (albeit, unofficial) calculations, $44,137,063 — 51.99 percent of the total budget — will go towards street maintenance, the city’s water supply and wastewater upgrades in the form of new hires, equipment purchases and capital improvements. These unofficial calculations were, admittedly at a glance, seconded by the city manager just prior to his formal presentation to the council.

In that presentation, Sellers said the highlights of his budget recommendation were:

• $84.9 million total proposed budget for all city funds;
• $45.4 million in planned spending on capital (long-term) improvements in FY 2019;
• $7 million dedicated to accelerate Stagecoach Road reconstruction project;
• $19 million for the wastewater treatment plant expansion project construction;
• $1.3 million for new equipment and vehicles;
• $778,000 for 16 new full-time positions — eight in Public Works, three each in Police and Parks and one each in utility billing and information technology;
• $441,511 for technology improvements;
• A $324,201 increase for employee benefits to cover rising health insurance costs as well as merit and longevity pay increases;
• No change in the property tax, water service or storm drainage rates although, according to Sellers presentation, the current property tax rate of $.5416 per $100 of assessed valuation exceeds the rollback rate by just under a penny, .96 of a cent;
• A 10 percent overall increase in the wastewater service rate that will translate into a 3.5 percent increase — around $3.54 per month — in the average household utility bill; and
• A 3.95 percent increase in the solid waste rates to pay for the annual increases included in the city’s contract with TDS

Of the almost $1.24 million earmarked for new equipment, the bulk of it — $994,500 of it or 80.2 percent — will be going to Public Works for such items as two dump trucks, an asphalt zipper, a street sweeper, a broom roller, a tub grinder, two concrete mixers, a trench shoring box and litter abatement equipment. The total also includes $110,000 for a new radio system.

Although the tax rate remains at 54.16 cents, property owners will face higher tax bills because of an 5.47 percent increase in property valuations this year. One piece of good news for residential homeowners is that it appears Kyle’s economic development efforts are producing dividends as the residential share of the total property tax bill fell from 74.36 percent last year to 70.95 percent this year. Although Finance Director Perwez Moheet said immediately following the budget presentation this reduction was not that big a deal, both Arabie and council member Damon Fogley welcomed the change and did say the 3.4 percent drop in the residential share of the total property tax bill was "of major significance."

The city will enter the new fiscal year with a debt of $80.5 million as compared to $85.6 million at the same time last year, according to the city manager’s presentation. However, the city manager cautioned, that figure does not include the $9.5 million in new debt planned for the wastewater treatment plant expansion or the "debt issued and/or planned by ARWA (Alliance Regional Water Authority) for the city’s share of capital expenditures," namely the pipeline required to bring water from the Carrizo Springs Aquifer to Kyle.