Kyle hones contract for city manager: Compensation to include up to $550K home

The city of Kyle is looking to invest in its future – literally.

An eight-year extension and an executive level home that will be a city-owned asset are two provisions within a new contract for Kyle City Manager Scott Sellers that was approved by the Kyle City Council this month, 

Sellers’ draft contract, which is in the editing stage and has not been finalized by the city’s legal team, calls for a $20,363 base salary reduction on the first day of the 2018 fiscal year. That amount goes to payment of a home that Kyle Mayor Todd Webster said would be owned by the city.

The home, a 4,100-square foot unit located within the Cypress Forest subdivision, will cost up to $550,000. The Kyle City Council will meet in a special called meeting Friday at 9 a.m. to decide on an agreement with Scott Felder Homes to purchasing the residence. According to city documents, funds to purchase the home, which would be owned and managed by the city, will derive from the city’s general fund. 

According to the contract, the monetary value is equivalent to a $2,454 mortgage payment based on a 30-year amortization based on 3.45 percent interest. It reflects the “estimated amortized value of the housing the city expects to construct.”

Once notified the city owned housing is available, Sellers would have 60 days to move in and must remain in the housing until no longer employed by the city. The city and Sellers would enter into a separate lease agreement prior to move-in. Sellers would be responsible for utility payments, purchasing insurance for contents of the house and routine upkeep and maintenance.

As Seller lives in the home, Webster said the city-owned home, which would a city-owned asset, would appreciate in value. According to city estimates, the home would appreciate by $227,000, and have cumulative lease revenue of $487,500 by the end of the 30-year period. When Sellers’ contract ends in 2025, the city would see cumulative lease revenue of approximately $235,000.

Webster said city leaders agreed the deal was the best way to compensate Sellers in order to retain him despite the “optics” of how the deal could be viewed.

Webster said it was done after other communities were interested in hiring Sellers.

Webster added the appreciating value of the city-owned home was a smart investment and that funds accrued from the appreciating value would go back to taxpayers.

“This was the smartest decision to compensate him,” Webster said. “The taxpayers of Kyle are only going to make money from this.”

But during the last Kyle City Council meeting on Dec. 6, council member Daphne Tenorio expressed concern over the length of Sellers’ new contract.

While she said Sellers has “done a good job” and she wanted to keep him on, Tenorio said she believed the contract exceeded her desires.

“This contract is difficult for me because of the length of it. It’s too long,” Tenorio said. “I’m binding the hands of future councils by doing so. That’s my biggest objection to this.”

“To me, it seemed like a good thing to do and lock him down for the long term. It’s going to help the city reach the potential it has,” Webster said. “Sellers has the staff believing in him and council is believing in him. The city is getting a lot done.”

Sellers’ contract also includes a 5 percent base pay salary increase on Oct. 1 of each year. After the fourth year, the city will complete a salary market analysis and use its “best efforts and reasonable cooperation” to get within 5 percent of the market salary and execute a new agreement incorporating the adjusted salary.

The market analysis includes housing benefits, deferred compensation, health benefits, car allowance and any other benefit.

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