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City of Kyle faces $14.2 million budget shortfall, implements hiring freeze

On May 16, city staff presented the council with a detailed budget presentation outlining the multiyear causes that have resulted in a projected $14.2 million budget shortfall by the end of the 2025-26 fiscal year.

The two-minute impact: The city must maintain a reserve fund that is at least 25% of operating expenses. The required reserve fund balance for fiscal year 2025-26 is approximately $19.8 million. The estimated fund balance total for the end of the fiscal year is around $10.3 million.

With an additional $4.68 million operating shortfall, city staff projects a shortfall of $14.2 million in the general fund at the end of the fiscal year.

How we got here: Multiple factors contributed to the city’s budget shortfall building over the past three fiscal years, interim City Manager Perwez Moheet said, including:

  • Incline in expenditures
  • Decline in revenue
  • Economic conditions
  • City growth
  • Expanded staff
  • Rising operational costs

Some city projects may be delayed, spending may be reduced and priorities will be evaluated, Mayor Yvonne Flores-Cale said in a social media post.

 
Around Town
O’Reilly Auto Parts to develop 3rd San Marcos location

Editor's note: This article is based on a Texas Department of Licensing and Regulations filing. Community Impact will provide updates as more information is available.

An auto parts store will develop its third location in San Marcos on the city’s south side near San Marcos High School.

The details: O'Reilly Auto Parts will build a new location at the intersection of State Highway 123 and Rattler Road, near the high school, Bowie Elementary School and Rattler Stadium.

Construction on the 7,225-square-foot store will begin on Nov. 1 and be completed on Mar. 1, 2027, according to the filing.

What they offer: The store sells a variety of auto parts, including brakes, automotive batteries, motor oil, filters, cooling spark plugs, alternators, shocks and struts.

  • The intersection of Hwy 123 and Rattler Road, San Marcos
 

Your Weekend To-Do List

Check out these weekend events across the metro area.

7th Annual Austin Greek Festival

Summer Classic Film Series opening weekend

May 22-24, times vary
Austin

May 22-24, times vary
Austin

More info

More info

 

Dripping Springs Fair and Rodeo 2026

7th Annual Antique Barn Sale & Artisan Show

May 22-24, 7:30 p.m. (daily rodeo performance)
Dripping Springs

May 23, 7:30 a.m.
Cedar Park

More info

More info

 
To submit your own event, click here.

CI Texas
Cost to prevent a Texas water crisis has more than doubled to $174B, state says

Texas officials released a draft of their next state water plan in April, projecting that state and local governments will need to spend $174 billion in the next 50 years to prevent a water crisis.

The details: The three-member Texas Water Development Board voted April 16 to publish an initial draft of the 2027 State Water Plan, laying out what is needed to prepare for a future “drought of record,” when water demands are highest and supplies are lowest.

The $174 billion price tag is more than twice the cost projected in Texas’ 2022 state water plan, which was $80 billion.

The context: As Texas’ population continues to grow, water restrictions and shortages are becoming more common in areas throughout the state. At the same time, major companies are moving to Texas and communities are contemplating large data center projects, with some residents expressing concerns about high water use in the already drought-prone state.

The proposed plan includes 3,000 proposed water management projects and 6,700 strategies to increase Texas' water supplies through 2080.

 

Your local team

Sierra Martin
Senior Editor

Heather Demere
General Manager

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