Audit of Killeen developer fees show at least $30,000 went uncollected

Killeen Daily Herald
By Kevin Limiti | Herald
January 18, 2024

In a news release from the city of Killeen, the city’s auditor said that there was at least $30,000 in Construction Plan Review developer fees that went uncollected between the fiscal years of 2019 and 2022.

However, the audit from the city of Killeen acknowledges that it was not able to determine with certainty the total amount of uncollected fees due to a lack of paperwork.

The city’s audit committee consists of Councilmen Ramon Alvarez and Michael Boyd, as well as Mayor Debbie Nash-King and residents Bob Blair and Jack Ralston. They voted back in September to conduct the audit, which was put together by Matthew Grady, the city’s auditor.

The audit report said that alarm bells were raised in fiscal year 2020 but that “there was no evidence management heeded the alert and took corrective action at that time.”

Killeen City Manager Kent Cagle, who was hired in 2019, said in September that one reason much of the developer fees went uncollected may be that some developers went to engineering with their plans, rather than to building inspection, and no one with the city checked to confirm that the fees had been paid.

He said that it wasn’t common, and likely unintentional, and that ultimately the blame is with the city.

The city claimed at the time it has no records regarding how much went uncollected by the city, or the amount that would have been owed by individual developers.

Some local developers were upset at the time that the city of Killeen was raising developer fees.

According to the audit report, there were “several significant internal control weaknesses over the process, including the absence of standard operating procedures, lack of formal training, and operational silos, all of which were exacerbated by high turnover at the leadership level.

“Taken as a whole, these deficiencies contributed to a dysfunctional control environment that fostered pervasive inconsistencies in the documentation of project files and allowed for the non-collection of fees.”

Some of the issues, like the aforementioned operational silos, came about in 2017 prior to Cagle’s hiring as city manager. During that time, engineering staff was relocated from the Municipal Court Annex on Avenue D to the Public Works facility on W.S. Young.

“The decision made sense organizationally because Engineering fell under Public Works at the time,” the audit report said. “Functionally, however, the decision was counterproductive in that Engineering staff work together with planning staff throughout development life cycle.”

The report said despite the onset of video conferencing and instant messaging, relocating the staff led to a breakdown in communication.

The determination on the missing $30,000 fees came from an analysis of Land Disturbance Permit fees and Construction Plan Review fees.

Since before the audit was conducted, current city management made changes in order to try and solve the problem including implementing an online permitting system and transferring developer fee collections to Building Services.

The report recommends that developer fees are monitored regularly and the city conduct an independent cost recovery study.

Go to https://www.killeentexas.gov/ArchiveCenter/ViewFile/Item/913 to read the entire audit report.