A joint meeting was held between the Pilot Point City Council and the Capital Improvements Advisory Committee on June 11.
Both the council and advisory committee discussed and acted on the 2020-25 Impact Fee Audit.
“A new piece of legislation passed that requires cities that are adopting impact fees before they can move forward with adopting or updating their rates to go through an audit by a third party for the previous five years of impact fee collection and expenditures,” said Michele Sanchez, assistant city manager and chief financial officer.
Joining virtually to explain the roadway, water and wastewater impact fees was Baker Tilly principal Justin Hoagland.
“The intent of the legislation is to say, before you go adopting new impact fees or increase your current ones, are you recording your impact fees appropriately that you have already, or are you not in compliance with the legislation in one way or another?” Hoagland said.
He described the process as a city’s “report card” and shared the 10 things a CPA has to look for, which include properly charging impact fees, whether they are properly recorded and whether the money is being used on allowed projects.
There were five findings in their report, three of which, Hoagland reported, were missing information in the audited financial statements for the year.
Another finding was that interest income was not recorded for the fiscal year ending Sept. 30, 2022.
However, he said, in the years that followed, interest income was properly recorded.
The final finding was that impact fees were not properly tracked for the 10-year requirement.
He said it’s a common finding in other cities and that Pilot Point has not collected impact fees for 10 years yet.
Sanchez noted that the five findings occurred before 2024, before the city changed auditing firms.
Both the council and the Capital Improvements Advisory Committee approved the audit.
Afterward, Kimley-Horn’s Project Engineer Mason Shoaf gave an overview of the basics of impact fees.
“[It’s] a one-time development fee to capture the growth that’s going to happen over the next 10 years,” Shoaf said. “[It’s] a mechanism to recover infrastructure costs required to serve future development, … and it’s a legal way to collect a flexible fee for infrastructure.”
Some of the benefits, Shoaf said, are that it ensures accountability, it has a public fee schedule along with all the plans, and, if funds are not spent within 10 years, it must be refunded with interest.
“The role of the advisory committee is really to advise the council on what to do with all these details for these projects,” Shoaf said, along with monitoring the projects and filing semiannual reports.
The City Council is responsible for setting fees at or below the maximum fee, which is determined and may be adjusted through financial calculations.
After Shoaf concluded his presentation, the advisory board was dismissed, and the council resumed its meeting.
The council approved the city’s recommendation to reject the three bids it received for solid waste and recycling services.
“The reason we are recommending this is solely due to the pricing we received,” Sanchez said.
She shared that one bid did not meet the criteria and that the two other options would have increased residential trash by over $11 or $14 for a three-year contract.
She added that readvertising the bid for a five-year contract, rather than a threeyear one, could lower service costs.
Although prices will still increase, they are expected to be significantly lower, she said.
Sanchez noted that five years is the norm for other cities, and if the five-year contract goes well, there is the possibility of two optional two-year extensions, totaling nine years.
Also at the meeting, the council approved the resolution for the Municipal Development District to sell debt.
