Downtown Grant Spends Twice What it Should

Wednesday the Kyle City Council unanimously agreed to dole out $31,015 in grants to four businesses located in Kyle as part of the Downtown Revitalization Grant Program. This money, which is thought to come from Kyle’s Hotel Occupancy Tax, is intended to “promote the economic vitality of existing buildings and property within designated downtown areas in the city of Kyle.”

Some of the dollars do just that. Others emphatically do NOT.

The money is allocated as follows. These are the exact reimbursement amounts to be issued from the city:

The first two applicants, Milt’s and Lone Star, are doing it right. They are using the money exclusively to beautify their storefronts by resurfacing the stucco, adding cedar posts, painting murals, installing creative signage, and giving the outside of their property a look and feel that will absolutely beautify and stimulate the downtown economy.

However, as a local business owner, resident, and taxpayer, I was confounded by the Kyle Economic Development (ED) board unanimously recommending the second pair of applicants to City Council. On Centre Street Realty is redoing their existing pylon sign, yes. But over half of their budget is for electrical improvements and a new roof. Roger Falk’s grant is simply to replace his roof.

I have a real problem with the city of Kyle giving taxpayer money for roof replacements and electrical repairs. That is not at all in the spirit of the grant. This is routine maintenance, not economic revitalization. The city reaps exactly $0 return on investment. No new customers. No new tax revenue.

Looking for answers, I reached out to Brian Ziegler, Chairman of the Kyle ED, and spoke to him about these grants for thirty minutes. He did a great job of explaining to me why the board voted the maintenance in with the improvements. Their hands were basically tied, he said, because the language in the application is written loosely and allows for nearly any type of improvement to fall within the grant’s purview. That includes routine maintenance. Furthermore, he said, the application was copied from a 2005 version of the program, and some of the grants awarded in those days established precedent they could not ignore.

Which means the Kyle ED did what it was supposed to. The City Council did what it had to. And I certainly do not fault Mr. Falk or Centre Street Realty for taking advantage of a program. I would do the same. The problem is with the language of the application itself. We should have re-written the program to include only those projects which materially benefit the culture and vibrancy of the area.

The reason this matters is that Kyle has the highest taxes in all of Hays County, and a city debt at an all time high. This is 2015, not 2005. We have doubled in size. To me, that means we should be extremely selective in the way we spend our money. Every year we elect officials who bemoan the heavy tax burden on our community. The way they propose to reduce the burden is by tapping our rainy day fund or attracting high-wage industry to Kyle.

But I think differently. Rainy day funds are for floods. No high-wage industry is an excuse. I say we exercise diligence in terms of the way we spend our dollars. There are places all over the budget where we can make our money work harder and return back to the taxpayer.

In this case, if we had been more careful, we could have prevented these two properties from receiving unfair financial assistance from the taxpayers of Kyle. On Centre Street Realty should have been told they could not include a roof and electrical repairs, but only their sign. This would have dropped them from a 50% match to a 40% match, and reduced the grant from $13,675 to $4,600. Roger Falk’s application should have been denied flat out.

So a $31,015 city expense should have been reduced to a $16,464 expense. Let the property owners pay for their own maintenance, let the businesses who want to beautify downtown receive assistance, and let the city be more responsible for the money it spends.