FAQs
A Public Infrastructure District (“PID”) is a separate legal entity that is created by a municipality or state agency which acts as a financing tool within defined geographic boundaries. A PID is qualified to issue bonds to finance public infrastructure improvements. Tax revenues and fees generated within PID boundaries may be used to pay bonds.
A mill levy is a property tax. It is applied to a property based on its assessed value. The rate of the tax is expressed in mills and is equal to one dollar per $1,000 dollars of assessed value.
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Developers operate as for-profit businesses with a broad market of options for investing time and capital in exchange for market returns relative to risk. Providing district funding for a portion of the infrastructure results in some combination of:
Projects get built that wouldn’t otherwise be feasible
Homes cost less
Infrastructure can be properly sized
Amenities like parks, playgrounds, trails, recreations centers can be added
Less burden allocated to City and existing taxpayers
Horizontal infrastructure is required before vertical development can proceed and repayment for that infrastructure funding is typically dependent on the timing and value of the anticipated vertical development. Therefore, the funding of new infrastructure requires an assessment of this development risk and a corresponding market return. For the infrastructure not funded by the City, the developer and the district’s bond investors may each take a portion of this risk for a market return. Because the repayment source for the district’s debt is a limited tax, this development risk is not borne by the taxpayer whose annual obligations are limited regardless of the timing or value of the anticipated development. In this way, districts provide access to a large, efficient, tax-exempt capital market for infrastructure without transferring the development risk to the taxpayer.
Visit our Contact Us page, or email ppidadmin@pcgi.com.