The purpose of this Mayor and Council Communication (M&C) is to adopt the attached policy to govern the creation and administration of Public Improvement Districts (PIDs) that exist to fund capital improvements and that may involve issuance of PID-revenue-supported debt (Capital PIDs or C-PIDs).
Capital PIDs are development financing tools authorized pursuant to Chapter 372 of the Texas Local Government Code. C-PIDs allow for the costs of certain capital public improvements in a designated area to be allocated to and paid for by the owners of the parcels that actually benefit from such improvements. By assessing charges to owners of property that directly benefits from capital improvements, a C-PID can provide a means to fund capital improvements that meet community needs and that might not otherwise be constructed as quickly or at all. Capital PIDs are distinct from Operating PIDs, which are aimed primarily at funding on-going operations and supplemental services and governed by a separately adopted policy (M&C G-16451).
In late 2016, the City authorized the creation of its first two Capital PIDs centered around the initial phase of the Walsh Ranch development (Quail Valley PID) and around the development of the local campus for Tarleton State University (Rock Creek PID). Because of the unique attributes of these two developments, Staff supported the creation of the respective PIDs although a policy had not yet been created.
Given the current highly active development environment, Staff anticipates an ongoing and growing interest in the creation of more Capital PIDs. To ensure that Capital PIDs play an appropriate role in the City's overall development strategies and to avoid over-proliferation of these entities, Staff felt it prudent to develop a policy to govern the establishment and administration of future Capital PIDs.
The attached policy outlines conditions that must be met for the City to consider the creation of a Capital PID and sets forth guidelines for how the City will utilize and administer Capital PIDs once they are created. Highlights of the policy include the following:
1. Establishment of a minimum number of developable acres required for a Capital PID;
2. Parameters around when the City will entertain a debt issuance and under what terms;
3. Rules governing the on-going administration and costs;
4. The requirement of Capital PIDs to support City operations;
5. Management of Capital PIDs; and
6. Application fees and deposits against costs.
The policy also acknowledges that in adopting each assessment ordinance, the City Council will be authorizing use of all collection and enforcement measures, including, but not limited, foreclosure for unpaid assessments. The proposed PID policy will be effective on adoption, but will not be retroactively applied to the previously created Rock Creek and Quail Valley PIDs.
This M&C does not request approval of a contract with a business entity.