Killeen council to vote on slimmed-down developer fee increases

Developers are upset over increased inspection fees. The Killeen City Council will vote on a modified version of the proposed fees on Tuesday.
File Photo

Killeen Daily Herald
By Kevin Limiti | Herald

Local developers expressed frustration over large increases in city inspection fees at last week’s Killeen City Council workshop.

The fees, under the heading of development services, were included in the proposed 2024 municipal budget submitted by City Manager Kent Cagle, which will be voted on at Tuesday’s regular meeting.

At the Aug. 1 meeting, Councilman Jose Segarra made a motion of direction recommending these fee increases be slashed in half.

Cagle told the Herald on Monday that if the proposed reduction is approved at Tuesday’s meeting, it will result in $90,000 in lost revenue in the category of subdivision development inspections alone.

Even with the full proposed increase factored in, the city wasn’t recouping the cost of services rendered from the fees. The proposed budget had estimated the loss at $145,971.75 in the development inspections category.

According to the original proposal, subdivision inspection fees for developments between 10 to 50 acres would incur a $15,000 fee, up from the previous $5,000 — for an increase of $10,000.

However, a 50-acre development can accommodate 200 homes on quarter-acre lots.

Using that equation, the subdivision inspection fee of $15,000 would average out to $75 per house.

The modified version proposed by Segarra would be a $10,000 subdivision fee, for an increase of $5,000.

Under that fee structure, the cost per home would be $50 in a 200-home subdivision — hardly a significant difference compared to the original fee proposal.

These fees are based on per permit, not per acre, as originally written in the proposal.

Subdivision inspections over 50 acres would have incurred a $20,000 fee, doubling from $10,000, for a $10,000 total increase.

Segarra’s motion is for a $15,000 proposed fee, for a change of $5,000.

Right of Way permits were originally $70 and would’ve risen to $85.

Segarra’s motion is $77.50 for a change of $7.50

The Preliminary Plat Application for between one to 10 acres was proposed at $500, rising from $300. Segarra’s motion calls for a $400 fee, for a change of $100.

For 11 to 50 acres the original proposal was for $500. Segarra’s motion it is $450 for a change of $50.

The Final Platt Application for one to 10 acres was originally $500, but under Segarra’s motion is now $400 for a change of $100.

For 11 to 50 acres, the original proposal was for $500 but went down to $450 for a change of $50.

The Subdivison Variance, based on per request, was $300 but Segarra’s motion its $250 for a change of $50.

Order of Design Compliance fee goes from $35 to $17.50 making it a change of $17.50.

City Engineer Andrew Zagars said during last Tuesday’s city council meeting that the city had undercharged for developer fees for the past several years.

According to Trading Economics, the national interest rate has averaged between 3% and 3.5% over the last seven years.

Several developers spoke out during the citizen comment period last Tuesday, one of whom called the fees “astronomical” and predicted they would “kill development.”

“This does not make sense. Who and how did they come up with these increases?” asked Anca Neagu.

Segarra and Councilman Ramon Alvarez argued during the meeting that the increases should be made incrementally.

“I don’t want to see people get priced out of our market,” Segarra said.

Segarra in an email to the Herald last week said the staff were not intimidated by the developers.

“If any other fees were to be raised by 200% or 500% in a single year, I would also be in disagreement, as it could burden residents and businesses disproportionately,” Segarra said.

Cagle remarked during the meeting that even with the new fees that were being proposed, expenses still outstripped revenue.

He was adamant that the fees were going to affect either residents or developers, one way or the other.

Tuesday’s Killeen City Council meeting begins at 5 p.m. at Killeen City Hall, 101 N. College St. The meeting also will air on Spectrum Cable Channel 10 and livestreamed on the city’s website: https://www.killeentexas.gov/281/Council-Live-Streaming