Fee implementation and use yielding progress.
City Auditor Matthew Grady performed an independent examination of the Street Maintenance Special Revenue Fund. An annual internal review of the fund is prescribed by the ordinance which established the Street Maintenance Fee. He has published his findings for public review.
City Council established Street Maintenance Fee with a vote December 11, 2018. The fee took effect July 1, 2019.
The audit set out to evaluate the fee’s implementation, review expenditures and to evaluate the incorporation of best practices. In summary, the auditor found that the implementation of the fee was generally well-executed but that the inclusion of General Fund activity in the special revenue fund was problematic. He also found that progress was being made toward utilizing better pavement treatment products expected to yield better results.
A review of the fee’s six-month implementation process showed it was completed on schedule and with very few errors. Of approximately 50,000 utility accounts to which the fee was applied, only 27 customers submitted requests for fee reviews. Of those 27, 16 resulted in fee adjustments for an overall adjustment/error rate of 0.03 percent.
A special revenue fund was created to account for funds collected by the Street Maintenance Fee accurately and transparently. The auditor found that while fee collections were correctly placed in the fund, the prior city manager had directed General Fund monies related to street operations into the fund as well. This proved problematic in that it lowered the fee’s transparency by making it just 24 percent of the overall fund. The current city manager recognized this issue and addressed it in the Fiscal Year 2021 Budget.
An examination of the fund’s Fiscal Year 2020 accounting for revenues and expenditures related to the Street Maintenance Fee showed appropriate activity. Fee collections were ahead of projections totaling $1,779,596. A sample of 10 expenditures totaling $1,339,497 showed all were properly authorized, accurately recorded and directly related to pavement treatments.
Finally, Grady looked at the integration of industry best practices in street maintenance. New methods are widely embraced and provide diversity in maintenance programs. He says Killeen “took an important step forward when it expanded its ‘toolbox’ of pavement treatments beyond traditional seal coat treatments to include the HA5 High Density Mineral Bond treatment.” He recommends that staff identify and consider emerging best practices in annual work plans moving forward.
“Overall, the implementation went quite well, and fee collections and expenditures were accounted for accurately,” said Grady. “The City’s challenge now is to continue to expand its ‘toolbox’ of options to ensure limited fee revenues are spent as effectively and efficiently as possible.”
The entire Street Maintenance Fee Special Revenue Fund Audit is available at KilleenTexas.gov/Auditor.