Pros and cons of PIDs

After recent discussion about developing a PID policy at the June 2nd City Council meeting I took the initiative to read up a little more on PIDs and put down on paper what the advantages and/or disadvantages are for the community. I approached my look at these financing instruments with some skepticism because of the recent history here in Kyle with home owners that have suffered as the result of a poorly managed program from years ago. Having heard first-hand the challenges these homeowners have faced with a similar program years ago brings to reality that while these may be attractive mechanisms to provide additional infrastructure and amenities, reducing the financial burden on all taxpayers in the city, any PID policy should be carefully written to ensure that mistakes from the past aren’t repeated.

Like quite a few city issues, I often move towards making a list of what I like and don’t like about a particular issue facing the city and I would like to do so now, it generally comes down to two on each side of the issue.

Pros:

1. Reduces the amount that developers have to raise via construction loans, and thus charge afterwards, for development within the city by allowing some of the cost of the development to be paid for with bonds that are backed by proceeds from assessments on those that buy within the district (or already own property and agree to the PID (Assuming 100% approval). 

2. Potentially takes the city off the hook for the cost of development of the city in the form of infrastructure (water, sewer, etc) as the developer often rolls these costs onto those that purchase in the PID area voluntarily.

Cons:

1. Those that are impacted by the PID must approve either by buying property in the PID area after it is established, and live with the extra cost of living in that district, or if they live in that district approve of the PID being established after they have set their budgets and have to pay more than expected. Without 100% approval, or at least a huge majority (say 90%) this is unfair and isn’t what they expected when they purchased the home; forcing them to make a decision to stay and pay or move elsewhere.

2. It potentially raises the overall price for purchasing property (both residential and commercial) which could be a deterrent to businesses and future residents moving to Kyle.

You may note that I haven’t included one single figure in this list. I did so on purpose, because I believe that any discussion about a PID ordinance should first come with what is the concept (something I am struggling with and will continue to because it isn’t something within my expertise), then a separate discussion on what the financial aspects of what the PID could save or cost taxpayers and finally a discussion of how it will be administered.

I encourage the City Council to hold some public forums and let folks come and learn both the pros and cons of PIDs, from people that don’t have an interest in benefiting from a particular wording in an ordinance. I have quite a few more questions and would greatly welcome this opportunity to learn more.

Respectfully,

Brad Growt

Kyle

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