Mayor, city officials call for audit on developer inspection fees

Killeen Daily Herald
By Kevin Limiti | Herald
August 27, 2023

Some Killeen City Council members and city officials are calling for an internal audit of uncollected developer inspection fees.

The Herald asked for the following information in an Open Records request to the city of Killeen:

• How much money the City of Killeen is owed by developers for inspection fees (total sum)?
• How much money the city of Killeen is owed by developers for inspection fees, broken down by year, going back to 2015?
• How much money each developer owes the city for unpaid inspection fees?
• When was the last time the city increased inspection fees for developers? What was the fee increase?

Of all of those questions, the Herald only received the answer to the last one. The rest of the questions — according to a letter received Wednesday from Asha Pender, deputy city attorney for Killeen — could not be answered in any documents that the city had in its possession.

What does that mean?

Mayor Debbie Nash-King said it means “simply that the city doesn’t have them.”

Which is why she is now calling for an internal audit.

“If the developers don’t know they have to pay, the only solution to resolve it is to do an internal audit,” Nash-King said Wednesday. “And when the audit committee meets, I will be requesting from the city do an internal audit on development services related to the fees.”

Nash-King likened the missed fee collections to a broken system.

“Either we’re wrong with our system or they’re wrong,” she said. “One way or the other something went wrong.”

She said the only way to find out is to look at the system by conducting an audit.

“Is the system broken? You have to have checks and balances in that system to catch everything,” Nash-King said. “To be transparent you have to put it all out there.”

City Manager Kent Cagle clarified that the system is no longer broken from his point of view because the developers were now expected to show a receipt to prove they paid the inspection fees.

“I don’t think there’s any doubt that sometimes the developer just went out to engineering and turned the plans in, and we started reviewing,” Cagle said Thursday. “And so it’s a coordination problem on our part. They know now they’re not taking anything in there unless there’s a receipt that it’s been paid for.”

Long-term, however, Cagle plans to implement an online system called My Permits Now, which would track everything on the web.

He said this would take about a year to implement.

But in the meanwhile, he thinks that an audit will answer a lot of the questions.

“I feel like the council will ask for that from our internal auditor, because what he’s going to have to do, you’re going to have to go back to each individual subdivision, you’re going to have to look at the plans, and then you’re going to have to try and match those submissions up with payment,” he said.

He said he is not sure whether that will be easy or difficult.

“My gut feel is it’s not a lot of money because the fees are so low,” Cagle said. “They are incredibly low. So it can’t be a lot of money. But … that’s the only way I know to get the answer.”

Councilman Riakos Adams said he is also planning on requesting an audit.

“There was an issue that was brought up and I don’t think there was an answer,” he said Wednesday. “There was an issue that was brought up that needs to be discussed in council. I would use that process … I do intend to delve into that matter more.

Councilwoman Jessica Gonzalez said she doesn’t think an internal audit for the inspection fees is necessary because she said there is no mechanism for one, especially now with the new rates being set.

“Now it makes sense moving forward, but there’s no moving back,” Gonzalez said.

Councilman Ramon Alvarez is on the Audit Committee and could not be reached for comment, but in the past suggested that an audit was not likely.

Councilman Jose Segarra also could not be reached for comment, but earlier this month said an audit would be a good idea.

Councilman Michael Boyd, who is also on the Audit Committee, could not be reached for comment.

City Auditor Matthew Grady said this is something that will likely be brought up at the next Audit Committee meeting.

“There’s a process with every audit and it begins with preliminary planning, so I get in and get educated on how the process works and then I go from there,” Grady said Wednesday.

He said the process of conducting an audit will vary according to what he is looking for and what he finds.

“It could be relatively focused and short and it could be more complicated and long,” he said. “Hopefully the audit will reveal as to what breakdowns in the process there were and how to fix it going forward.”