Annual Property Assessments Reduction
The City of League City received a petition in 1999 from the then owner of the Victory Lakes Subdivision requesting the City create a public improvement district (PID) encompassing the entire subdivision to assist in financing various public improvement projects in the subdivision.
Public Improvement District No. 2 (PID #2) was created by the City on December 14, 1999 in compliance with Chapter 372 of the Texas Local Government Code.
The City adopted a service and assessment plan for the PID on March 13, 2001. The Plan, as required by Chapter 372, identified the estimated total costs of the public improvements and explained how the properties in the PID would be assessed.
The original plan provided that bonds would be issued and money raised from those bonds would be used to finance the cost of the improvements. PID assessments would have then been used to pay-off the bonds over a 20-year period. Therefore, when the Plan was adopted, the total project costs of approximately $15 million included approximately $6 million in bond interest.
The PID assessment rate, based on the estimated project costs of $15 million, was set at $2.40 per square foot to be applied to each property in the subdivision.
When the PID’s public improvements were actually constructed, however, the developer paid those construction costs with its own money, instead of using bond money. Thus, the City never issued bonds and the developer was reimbursed those construction costs over time with PID assessments.
The Developer, to date, has completed and been reimbursed for the improvements in sections one through six of the PID. The last section of the PID, section seven, remains undeveloped.
As a result of how the improvements were financed, the actual project costs of the PID are substantially less than the original estimated project costs. However, the initial assessment rate of $2.40 was not adjusted to reflect the lower total project costs.
The City concluded that the assessment rate should be significantly reduced during a recent analysis of the project costs.
City Council reduced the property assessment rate from $2.40 to $1.27 during a meeting on November 24, 2015. The reduction in the property assessment rate will result in a reduction in the amount of the annual property assessments for most property owners.
For some property owners, the annual property assessments will be eliminated altogether.
Currently, there is still a section of the PID that has not been completed by the Developer. City Council will make all determinations regarding how the remaining balance of PID funds will be spent, including whether the funds will be reserved for the costs associated with the remaining section or whether the funds will be returned to some of the property owners.