Kyle interim city manager presents structurally balanced $416.97 million budget, suspends some employee benefits

Pervez Mohit, the city’s interim city manager, presented the recommended FY2026–27 operating and capital budget at the special council meeting on Aug. 1, saying the proposal is designed to restore structural balance after months of containment work. The proposed all‑fund budget totals $416,966,023, with the five‑year capital improvements plan showing roughly $288.5 million in year‑one CIP spending.

"I am recommending a balanced budget for fiscal 2627," Mohit told the council, and described a program of line‑by‑line expenditure reviews, organizational realignments and temporary suspensions of some employee benefits to close a previously projected general‑fund shortfall. The presentation outlined temporary suspensions of the leave‑buyback program, tuition reimbursement, city‑paid 12‑week parental leave and the annual $1,000 HRA contribution. Mohit said the sacrifice was intended to preserve jobs and avoid layoffs.

Finance staff emphasized that the proposal funds all essential services and includes contract‑driven adjustments: a 2.5% solid‑waste increase tied to the city’s contract with Texas Disposal System and a new wastewater pretreatment sampling fee to recover direct sampling costs. For utilities, staff recommended no water, wastewater or storm drainage rate increases for FY27, citing improved fund balances after containment.That position drew questions about timing and longer‑term pressures; Mohit said the city will not issue bonds before spending money and warned that planned borrowings next year could affect FY28 tax rates.

The presentation included a five‑year forecast showing a markedly improved balance after the FY26–27 containment measures. Council members requested follow‑up materials — including transfers, detailed staffing schedules and page‑references for placeholder amounts (for example, a forensic‑audit placeholder in the city manager’s office) — and asked staff to provide peer comparisons and additional analysis by email prior to the next budget meeting on Aug. 13.