The PIDs are in, but...

...I did find one aspect of the bill a bit surprising.

These happy green pieces of paper.  You'll find them in your mailbox right about now. 

According to my bill, the new interest rate is 4.53%, compared to the 2013 assessment, when it was 5.03%. 

Don't get my wrong - I'm not knocking the reduction that did occur.  It saves my family about $230 on our annual bill.  I'm grateful that someone took the time to make this happen. 

But my question is - why is that interest rate still as high as it is?? 

In 2012, my husband and I were able to refinance our mortgage at 3.25%.  Presumably, we are a bigger default risk than the public entity carrying the PID loan.  Furthermore, our mortgage is for a longer period of time than the PID loan, and shorter loans tend to be associated with lower rates.   Further still, our refi rate was not the lowest achievable because, while my husband is a conventional salaried employee, I am self-employed, which is the kiss of death from a lender viewpoint.  My financial profile tilted the bank's assessment away from what otherwise might have been an ideal risk rating for us. 

I am ignorant of the financial realities behind this kind of municipal tax-like transaction.  I have no idea why a robust public entity would not be capable of securing interest rates approximating what a couple of old fart homeowners could qualify for.  Is it a function of the size of the loan, perhaps?  But as we all learned during the 2008 financial crisis, loans get pooled to effectively become very big loans, and the rate of 3.25% was widely available across the board to high-scoring homeowners, so I don't know what the deal is. 

If anyone has any insight on this issue, please comment or email. 

The PID predicament

People want information about what's happening with our PID - I can tell this from my search stats.

I had to put a redirect on my original post because the older post ranks highest in Google and will continue to do so, given the way that Google works. 

Here is a synopsis of the available information. 

The PID, if you recall, is an infrastructure cost which is attached to each property as a separate assessment, rather than being rolled into the initial purchase price of the real estate.  It differs functionally from a MUD tax in that it has a finite lifespan: we only have to pay it for a certain number of years until the debt is satisfied. 

At some point and for reasons that aren't clear to me, it came to the attention of the powers-that-be that we were paying a higher-than-necessary interest rate on our PID assessments.  That set the wheels in motion for steps to be taken to get it reduced.

GCDN ran this story (paywalled) explaining the mechanism by which lower payments could be realized.  Screengrabbed from a GCDN search. 

So where are we now?  Here is a status report from the most recent POA email blast:

Screengrabbed from an email.  

The corresponding Mayor's report for October 22 didn't provide much lay language: "Council considered and took action on an ordinance levying an assessment against properties located in the City of League City Public Improvement District No. 3 (Centerpointe). This item passed 8-0 in a first and final reading." 

This explains why I'm getting so much search traffic - as stated and without elaboration, the situation is now as clear as mud to the average reader (get it?  As clear as MUD?). 

Basically what I suspect it means is that the City has leveed against us so that the original debt can be disposed of in a pending reciprocal transaction. 

In other words, you'll have to wait a little bit longer for the other shoe to drop.  Everyone wants to know how much less they'll be paying this year, but that information apparently isn't available yet.  It ought to be soon, though, because this is the time of year when our happy PID bills arrive in the mail.  I myself have a seventy-foot lot, so my assessment is usually a large, sucking number.

Many lots in Centerpointe are 60 footers or 50-ish footers, and their corresponding assessments are almost certainly lower. 

Screengrabbed from this Galveston Central Appraisal District map. 

I'll post again when we know more about the new calculations.  Sorry I can't be more specific at this point. 

EEEeeeeee!!

I'vE rEquestEd both via Email and commEnt that it bE corrEctEd in thE E-vErsion, although thE frontpagE itsElf is obviously a lost causE:

Low-resolution screengrab of today's front page, Galveston County Daily News.  Look at the article in the lower right hand corner. 

Yes, that article refers to us, but you wouldn't think so from simply reading the title.  It sounds like homeowners in Centerpoint's service area are getting some kind of a tax break, which might make a lot of readers unrealistically joyful until they discover the actual truth of the matter. 

This is not us.  This is not related to us.  We have nothing whatsoever to do with this corporate entity. 

Screengrabbed from Centerpoint's homepage. 

There is an "E" on the end of Centerpointe.  EEEeeeeeee!!!  I've noted on previous occasions what a pain in the rear end this name similarity is.  It causes routine confusion on a variety of matters.  If nothing else, maybe today's article will serve to raise awareness of the fact that we are a distinct legally-defined and unrelated entity, not some spin-off of a utility corporation analogous to what Exxon did in creating Friendswood Development Company. 

And oh - the article itself refers to a tax refinancing deal that may lower our PID payments.  More on that later.

PID Practicalities

For those of you Centerpointers who, for whatever reason, may need to obtain a PID payment receipt or conduct some other transaction at the last minute (as we did pursuant to a mortgage re-finance with a lender who did not tell us up front about our requirement to do this), here's some info for ya.

There is almost no information about the relevant taxing office on our PID invoice (League City PID 3 Phase 4).  There's only a post office box with no phone, physical address, or name of the corporate oversight entity.  The only clue as to which office administers this tax was the individual name of the current Assessor, Thomas W. Lee, who I zero'd in on via Google:

This smiley guy was located via the Association of
Water Board Directors website,
http://www.awbd-tx.org/advisory.html

Again, no physical address listed, and upon phoning, I discovered that both listed lines were connected to FAX machines.  But the staff responded promptly to my email and I was able to confirm that the curious web-listed address "#5 Oaktree" refers to a tiny street on the northeast side of FM 518 about a half mile north of its intersection with FM 528.

Here.
Just before you get to this street, you'll also see a business called "Copy Doctor".
http://www.maps.google.com/

Anyway, the staff was extremely helpful and efficient in processing my payment right before the Christmas break.  Very nice folks.  And here is a list of the League City PIDs that this office represents as of the date of this blog post, and if I'm understanding things correctly here, this should include all build phases of Centerpointe:

From http://www.aswtax.com/districts/PID.pdf

And in case you're still wondering what a PID even is, this strangely-undated but recent news article in Austin American Statesman explains some of the rationale.  It's not out of the question that you might be wondering about it; as I noted in a blog post about a year ago, my husband and I were never able to determine where in our house build contract or closing statement the PID tax had been disclosed to us.  The first time we found out about it is when our bill arrived in the mail.  As I mentioned at the time of that previous blog post, nearby subdivision Victory Lakes as a concise explanation of the PID on their website. 

In case you're wondering why I'd bother to post something like this on December 25, well, life often takes on some strange scheduling when one is parent to a teenager.  There are few things that teens do as skillfully as sleeping late, and so Christmas morning festivities can sometimes turn into Christmas afternoon festivities, as those of us who maintain culturally-normal sleep/wake cycles sit around waiting for the rapidly-growing adolescents in our lives to regain consciousness. 

Have a great holiday week!
:-)

Nothing piddly about the PID

October 2013:  If you are looking for information regarding recent developments in the PID interest rates, click this URL. 

Original post:

This post may not be of much interest to residents who have lived here for years and are already well-versed in the property tax structure, but for those of us who have invested in Section 9 (which is the active construction area south of Centerpointe Drive) or who recently purchased homes in the older sections, this topic definitely deserves a few words.

My introduction to the PID came a few weeks ago in the form of a fellow new resident shouting, "What the FFF&@% is this huge bill that I just found in my mailbox?!?!"

I was unable to answer their question and, oh joy, it turns out that we received one quite like it: an invoice assessing substantial fees by "League City Public Improvement District (PID) 3".

My better half (a meticulous engineer) actually possessed the superhuman patience required to review the approximately three thousand pages of our closing documents to see if the existence of this financial obligation had been disclosed to us at any point.  He found nothing.  Perhaps this occurred because we had checked the box indicating we'd be responsible for direct payment of our own taxes (i.e., no escrow - if you pay into an escrow, this thing may be invisible to you), and therefore the onus was on us to discover what exactly those taxes are?  I don't know, but I DO know that having a surprise invoice show up in your mailbox is a highly efficient form of education.

The PID fee appears to be essentially a means of trading up-front lot costs for twenty years of tax-like installments.  The clearest explanation of PIDs that we have found was actually written for nearby Victory Lakes, which is in a separate PID with a slightly different assessment structure but, boy, I bet they hired a nice PR firm to write their blurb, because it's a work of sugar-coated art.

I have no issue with the payment of any fee that is rightfully owed, as this one appears to be.  However, it would have been nice to:

(a) have received prior information about it.  I can perceive no reason why it would not be revealed during the sales process. Given that other neighborhoods such as VL pay the same type of fees, there's no competitive disadvantage incurred by admitting to it.  Some buyers are on tight budgets and I could see where this thing could come as a nasty shock to them.

(b) it would also have been nice to have NOT been misled by the "NO MUD TAX!!" siren song.  Seriously, a rose by any other name is still a rose.  To the layperson, there's no material difference between a MUD tax and a PID assessment - the distinction is perceptually semantic (as the VL summary says, "you can compare it to a city MUD tax in that it is part of the total cost of ownership of your home"). 

This is a screengrab from a current Centerpointe sales listing.  It may be perfectly legal to advertize like this, but the best I can say about it is that I think it's bad form.

Aaaaand here's a snippet from another active listing by a realtor who appears to be a fan of implanting oversized, uh, expectations in peoples' minds about the magnitude of taxes and fees associated with purchasing here.

Bottom line:  It appears to be a legitimate annual assessment of fees quite similar to those in other local new neighborhoods.  If you didn't know about it in advance, you are by no means the only ones, but it is what it is.