Killeen releases audit report on abandoned properties

KILLEEN, Texas (May 21, 2024) - City of Killeen Auditor Matthew Grady's review of the City's inventory of abandoned tax-delinquent properties with outstanding Code Enforcement liens has found that the City currently maintains at least 37 tax-delinquent abandoned properties, with outstanding Code Enforcement liens, some dating back more than two decades. The abandoned properties, comprising about 10 acres collectively, mostly fall within the boundaries of the North Killeen Revitalization Area and impact the City on several levels. The tax-delinquent properties represent lost property tax revenue of $58,000, collectively.

The number is low when compared nationwide to several cities that are currently addressing hundreds of abandoned properties.

The objectives of the audit were to determine the inventory of abandoned tax-delinquent properties with outstanding Code Enforcement liens, determine the financial impact of the properties in uncollected taxes and unpaid liens, and assess the feasibility and benefits of implementing a land bank-type program to acquire and sell or repurpose abandoned properties. The purpose of the audit was to follow up on select areas of the City Auditor's prior audit of Outstanding Code Enforcement Liens, issued August 2021.

The review also found that unreimbursed maintenance costs for Code Enforcement's abatement of code violations totaled over $200,000. Additionally, abandoned properties and accompanying blight contribute to lower property values for adjacent properties, which averaged $109,000, as comparted to the citywide average home value of $246,000. Finally, the abandoned properties contribute to a public safety issue and a diminished quality of life for residents living in the blight-stricken areas.

The City relies on Bell County to initiate foreclosure on the City's tax delinquent properties. The Bell County Tax Appraisal District holds tax sales during the year, which includes properties from all of Bell County, including Killeen. Over the past three years, Bell County has foreclosed on and sold at auction 31 tax delinquent Killeen properties, about half of which were abandoned properties.

The auditor's report concludes that over the past half-century, local governments across the country have successfully used land bank-type programs to address neighborhood blight. While the City's inventory of abandoned properties is comparatively small, it nonetheless could benefit from such a program by increasing its tax revenue, reducing its maintenance costs and boosting its revitalization efforts.

The audit was completed in accordance with the City Charter. The full report can be viewed on our website at www.KilleenTexas.gov/Auditor.