Two groups of local decision makers will be meeting this week, and their actions could have a significant impact on Killeen-area taxpayers.
One of these groups — the Killeen City Council — will decide whether developers and builders should share the cost of new infrastructure, or if taxpayers will continue to foot the bill.
The other group — the KISD Bond Steering Committee — will determine the scope of a prospective construction bond issue that would go before district voters next May.
However, in both cases, several financial questions remain unanswered, and they must be resolved before taxpayers or developers are asked to part with their money.
For the Killeen City Council, Tuesday’s decision on impact fees will be the culmination of more than nine years of discussion on the subject. A water, wastewater and road impact fee ordinance has been drafted by city staff, and it is ready for council consideration.
If the council gives its approval, developers would pay an average of just under $2,300 per residential home. When spread across the length of a 30-year mortgage, it would equate to about $76 per year, or $6.39 per month for the initial homeowner. Since the fee structure is based partly on square footage, larger homes and many businesses would be assessed higher rates, accordingly.
Developers have spoken out against the one-time fee, contending that it might serve as a deterrent to city growth. None of the other cities in the Killeen-Temple area assess impact fees, and developers have argued that imposition of the fees would cause developers and builders to take their business elsewhere.
Without impact fees, however, Killeen’s taxpayers will continue to be on the hook for new water and sewer infrastructure, as well as roads to serve new residential and commercial developments. And because these new developments are popping up so quickly, the city simply can’t accommodate them without additional funding.
Given that reality, imposing impact fees would seem to be a logical step.
There is one sticking point, however. Killeen’s proposed ordinance contains a 20 percent increase annually for five years — and that doesn’t sit well with developers, or some council members.
Using the city’s figures, the low end fee of $1,769 would rise to $3,666 over five years. Of course, fees that start out higher — such as those assessed for large commercial businesses — would see an even bigger jump in terms of dollars.
However, even with the built-in increase, Killeen’s impact fee would be far lower than the base rates in Round Rock and Georgetown — which charge about $6,800 and $10,000 per service unit, respectively.
The council was evenly split last week on the question of moving forward with impact fees. That same split is likely to decide the fate of the proposed ordinance. Perhaps the best outcome would be to approve the ordinance as written with the intent to adjust some details later.
Across town Tuesday, the Killeen ISD Bond Steering Committee will be working toward a proposed bond package that could total more than $300 million.
Under consideration are construction of three new elementary schools, a middle school, renovation or rebuilding for two of the district’s oldest elementaries and stadium improvements at four high schools.
Tuesday’s meeting at the new Maude Moore Wood Elementary School will be the committee’s fourth, but it’s possible the group will need another meeting after the holidays to finalize a package to present to the school board. At that point, it will be up to board members to decide whether to make changes — or even whether to call a bond election at all.
For now, though, the spotlight is on the steering committee, and the projects they choose to include will dictate the proposed bond’s final price tag.
Will committee members go big and propose all of the construction projects on the district’s wish list? Or will the committee scale back the proposal and shave the bond’s price tag?
Several factors may come into play. Chief among them are whether district voters will be receptive to a second large bond issue in 24 months, and the district’s long-term financial outlook.
KISD hasn’t spent all the money in the $426 million bond that district voters approved in May 2018. Yet just 18 months later, the bond committee is assembling a second bond that could be nearly as expensive. In going large again, the committee would take care of most of the district’s immediate needs — but then, most district voters may have believed the last bond would do that.
While the KISD’s building needs — especially the new elementary schools — may be legitimate, hitting local taxpayers up for nearly three-quarters of a billion dollars in the space of two years may not be the wisest strategy to pursue.
Just as importantly, the committee should demand solid answers regarding the district’s long-term financial stability before signing off on a bond issue.
Committee members already are aware that KISD stands to lose $30 million in federal money over the next five years, as the district’s military-connected student population falls below the percentage required for heavy Impact Aid.
But committee members also should know that the funding boost the district received through House Bill 3 is not guaranteed after 2021. The measure and its funding must be renewed by the next session of the Texas Legislature. That money this year allowed the district to drop its tax rate by 7 cents, meaning KISD taxpayers are not feeling the full impact of the 2018 bond. If HB3 is not extended, the property tax would rise accordingly — and that’s even before factoring in the rate needed to support a second bond.
Finally, the state’s so-called Robin Hood funding, which redistributes property tax money to poorer districts, including Killeen, is unpopular with richer school districts, and the plan’s future is uncertain.
With lower state and federal funding anticipated, the district will have less money to dedicate to its strategic facilities fund — and consequently less leeway in district-funded building projects.
If funding falls off precipitously, the district will have to make difficult decisions on where to make budget cuts. And the district may also have to raise taxes to compensate for some of the drop-off.
With that possibility in mind, the bond steering committee should choose carefully and limit bond projects to those that are absolutely necessary to provide quality education to our local students.
Both the city council and bond committee have their work cut out for them Tuesday — and residents should take time out this holiday season to attend one of the meetings.
What these deliberative bodies decide will go a long way to determining what taxpayers will pay for, and how much they’ll pay.
It all comes down to money — your money — but then again, it usually does.