The state legislature has made it harder for cities to impose development rules that give communities a cohesive, appealing look, but Granbury might snatch back some of that control – and fund infrastructure, to boot - through Public Improvement Districts (PID).

The City Council recently heard a presentation on PIDs by Trent Petty of Petty & Associates.

No action was taken. The presentation was an opportunity for the council to receive information and ask questions.

A PID is a special district created by a city or county under the authority of Chapter 372 of the Texas Local Government Code. The statute allows for a city or county to levy a special assessment against properties within the district to pay for improvements within those boundaries.

A PID can be created not just within city limits but within a city’s extraterritorial jurisdiction (ETJ).

PIDs are a way to help local governments grow the tax base, fund infrastructure without burdening taxpayers, and broker agreements pertaining to amenities, building materials, annexation and other matters that forward the city’s Comprehensive Plan, Thoroughfare Plan and Parks Plan.

“It’s an important negotiating tool,” Petty said.

For a city, the PID process begins with a developer submitting a petition to the City Council. A variety of processes occur after that, including public hearings. The entire process usually takes 4-6 months, Petty said.

Project components such as design, architecture, accessibility, color palettes, landscaping, and open spaces “comes back to council’s control” through PID negotiations, he stated

Assessments are added to the “tax stack” of property taxes assessed by the city, county, and school district, but anyone who buys property within a PID is aware of the extra costs when they sign on the dotted line.

“The PID law requires multiple levels of disclosure to the homebuyer before they ever purchase a home,” Petty said. “They have full knowledge that they’re going to be paying an additional cost.”

PID assessments pay for such improvements as roads, water distribution lines, wastewater collection lines, drainage improvements, landscaping and irrigation, trails, parks, open space, monuments, and entry features.

Assessments can be paid in full or annually over a period of 20-30 years. Administrative expenses are included in the annual installment.

Assessments are used to fund a reimbursement agreement with the developer, including interest, or the debt service on non-city, tax exempt bonds. Bond documents are approved by the City Council.

Tax-exempt notes associated with PIDs are “very attractive to the marketplace,” Petty stated. “There is a huge number of investors that love buying municipal bond debt.”

Petty said he believes the city will soon start receiving PID requests, which are growing in number throughout the state.

“I have a pretty good feeling that’s going to occur,” he said. “You are a very, very popular area to develop.”

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