So what’s the PID about anyway?

Following is a conversation with Steve Kosek, a former PID 6 Representative, conducted on August 10, 2002.

Steve Kosek is one of the original PID 6 Board Members. He got involved when he received a PID expense breakdown in the mail. He wanted to know how and why his annual tax payment was being used. The PPNA asked to meet with Steve today, and so he could share with us his view of the PID and answer some questions that many of our residents have been asking the PPNA Board. While the questions have been consolidated to make them flow together, the content remains the same.

Can you tell us a little bit about what the PID is, and how a homeowner's annual payment is used by the City of Fort Worth?

S.K.: The first clarification that should be made is that, the PID is not a homeowners association. It is a city funded Public Improvement District (PID). Each homeowner makes an annual tax payment (this is based upon a predetermined value the PID designates and is spelled out in each owners home purchase contract). The city in turn sets aside a guaranteed portion of their annual budget that is distributed back to the PID. From that amount, the PID determines what each association within the PID is given (usually based upon each association's budget).

Is the amount the PID issues to each association based upon the size of the community?

S.K.: Yes, except for the largest community, Park Glen - they actually receive less on a percentage basis. Here's how it works: PPNA has 292 homes. The PID currently consists of 4339 homes total. Thus PPNA actually makes up 7% of the entire PID, but they receive 11% of the total money set aside to cover each associations projected budget. On the other hand, Park Glen makes up 77% of the entire PID, yet they only receive 52% of the total money set aside to cover their budget.

Not all of the money each resident pays comes back to the community, right? And, of the money that doesn't come back, how is it being spent?

S.K.: Correct. The money that stays with the PID is budgeted and used on a variety of expenditures, namely: Capital Improvements (fences, landscaping, parks, signs, etc.), mowing, utilities, additional public services, and administrative fees to pay the independent management company.

The common complaint that our association receives is: I'm not getting my money's worth. How would you justify the price each resident pays to live in our district?

S.K.: Well, the percentage that each homeowner pays is based on a calculation: The total assessed value of all the homes in the District, divided by the total budgeted expenses that the PID will incur, divided by 100. This year that percentage is .19. In fact, that percentage has decreased over the past two years (it was .20 for 2001 – 2002; .21 for 2000-2001) and is projected to decrease to .17 by fiscal year 2007. Keep in mind, the rate being charged doesn't mean what you pay will necessarily go down. For example: if your house was assessed at $100,000 and the rate was .20 then you pay $200. However, if your house is reassessed at $120,000 and the rate stays at .20, then you end up paying more - $240. Many homeowners don't understand the difference.

Is there any way for the percentage that our homeowners pay to decrease even further?

S.K.: Yes, in fact over the next couple years were going to see just that. As the community matures, and the capital improvements decrease, our expenses will go down. Also, certain sections of our PID are undeveloped and have been zoned commercial. Once those areas get developed, then we're going to see the revenue side increase while the expense side simultaneously decreases.

Thus, there's really not much an association can do to reduce that .19 percentage rate considering our expenditures are very small in comparison to the entire PID budget?

S.K.: That's true. We're all in it together. As the costs go down and revenues go up for the entire neighborhood, then the cost per homeowner to live in this district will fall.

Obviously, this won't happen overnight particularly since the northeast area of the PID is still under development. What can you tell us about the Beach Street, Tarrant County Parkway construction?

S.K.: The Beach Street project is expected to be completed ahead of schedule (end of December) and it looks like they'll meet that goal. And once they finish with that, the PID is going to be landscaping and improving the fence work along the east side of Beach Street, and we'll do the south side of Tarrant County Parkway when that's complete. Keep in mind that there is one small section right along Beech that we will not work on. That's the section along Parkview Lane (with the overgrowth and redwood fence that's falling down) they did not join the PID - that section will be the most noticeable when we replace the perimeter PID fence. Our neighborhood will be beautifully landscaped and fenced, and theirs will looks pretty bad.

The bottom line on the fencing and landscaping is that the PID will pay to maintain the perimeter boundaries. Will this include the median on Beach?

S.K.: Yes. Keep in mind, the PID will not necessarily upgrade the fencing (i.e., to immaculate stone or brickwork). However, we will be reimbursed by the city to maintain the medians (mowing company and irrigation expenses).

This may be an obvious question, but for a new homeowner, why should we have a Public Improvement District (PID)? And, how did this come about?

S.K.: State law created the statues that developers can make their areas public improvement districts. In fact, they were initially designed and utilized for commercial interest - the Bass family put this to good use with the revitalization of Downtown Fort Worth. Then the other real estate developers caught on to the idea, and used it as a way to "sell" people on buying homes in their well maintained and managed communities.

Perhaps, the best way to explain why you should have a PID is to demonstrate what happens when you don't. In all fairness, the Summerfields Neighborhood was a big development that blossomed in the late seventies early eighties. They aren't a PID, and as anyone can see, they are having a very difficult time maintaining their neighborhood's appearance, not to mention, keeping the property values up.

More importantly, being in a PID, our community is guaranteed "X" number of dollars back from the city. There is no haggling, there is no annual approval, and it's guaranteed. What that means for every homeowner is they are guaranteed to live in a planned, funded, and well maintained community, which in turn will assure the value of their home (as well as the increase in the value). A PID also takes the burden off of the homeowner, especially five to six years down the road when the developers are gone, and the area needs maintenance and improvements - which is always the case. The other difference here is that what is being paid to the city is also tax deductible, where a homeowners association fee isn't.

Why doesn't the PID have its own police and fire department?

S.K.: The PID is not designed to be an independent city. The PID is a managed extension of the city. We are granted the same public services as everyone else, but we also pay to have extra, undercover police patrols. These were initially used to protect the assets of the construction crews. Now we use uniformed, off-duty police officers to monitor the neighborhood during irregular hours. Sometimes they are in marked vehicles, other times they're not. It's an additional security service that the PID pays to have, and it does not override or retract from the standard police service.

I know you've heard arguments about taxation without representation, or there's a lot of money coming in (that people can't see) and want to know how it's being used. We even hear, from time-to-time, from residents complaining about how strict the deed restrictions are, and we don't have a right to say what kind of door they can have or paint color, etc. What can you say about these claims, and how do you justify what the PID is about?

S.K.: Generally, we hear these complaints from new residents – folks who just bought a home in the PID. Perhaps their real estate agent wasn't as well read about the PID as they should have been and simply didn't make the buyer aware of the deed restrictions. Then the new buyer gets mad because they got an unsuspected notice or the infamous tax bill at the end of the year. These are all legitimate reasons to be frustrated. I had the same questions. I also realize that your association is probably getting its fair share of questions now that your association has become more organized.

Each association has a designated representative for the PID. The PID's job is to take the funding that the city puts into the PID account, and use it to maintain the district – nothing more, nothing less. It is a non-partisan entity. Every penny the PID receives goes to pay the expenses incurred to maintain the district. Neither the representatives, association board members, nor association chairpersons receives a penny for their time or services. Every resident receives the same overall benefit - a beautifully maintained community.

How each board chooses to govern its individual association is set up in the by-laws for that association and enforced by board through its hired management company. The deed restrictions are what they are. Part of each association's budget goes to enforce the deed restrictions. That's the only fair way to make sure the residents are maintaining their property to the standards that they agreed to when they bought their house. Granted, there are neighborhoods such as yours, that were, in effect, annexed into the PID and they have resident didn't want to be part of the PID. These homeowners, begrudgingly, have to abide by the same standards. Nonetheless, the dissenters are receiving the same benefits whether they want them or not.

That brings up a stickier topic - deed restriction violations and subsequent compliance notices. Many of the dissenters grumble at these notices - some even flat out refuse to comply. As an association, PPNA has decided hold back on enforcement until we've provided the much-needed improvements to the community. Now that the projects are well underway, what's the bite to the bark (so to speak) when it comes down to enforcing the deed restrictions?

S.K.: here are three penalties that a homeowner will face if he/she chooses to ignore a final notice, or warning - so to speak. Again, the action taken is based upon what that association's board decides to do. Each of these actions is legal and fully enforceable by each neighborhood's board. Many residents scoff, but when it comes time to sell their house, they are faced with a bit of a challenge. First is a title lien, which is is self-explanatory. You can't sell your house until the lien is removed. Second is a Notice of Noncompliance (NON). These are generally issued for repair items. A slat is missing in your fence, it costs $1.50 to replace, but for whatever reason, the homeowner doesn't want to comply with the notices or replace the slat. A NON is issued and filed with the city. The owner can't sell the house until the item is cleared. In this case, it will cost the owner $1.50, plus the cost to file the NON—$100. In the end, a stubborn it costs a stubborn owner $150 to replace a $1.50 slat. The third action is when you turn the item over to the city. The city will send the homeowner a work order notice (one notice is good for a year), and they will have a lawful right to make the repairs or do the lawn work any time during that year. The city will do the work, and then send the homeowner the bill. If the homeowner doesn't pay, then the city will take the necessary action to collect.

It would seem like folks who choose not to comply are those who want all the benefits without any of the work. Do you have many homeowners that fall into any of the three categories? And what are their reactions?

S.K.: Not many – and you can imagine their reactions. They think we're threatening them, or we've stepped out of bounds. But in the end, once they understand the restrictions, they see the light and realize we're doing what's right.

What have you heard about the housing programs that show an interest in being part of or near the PID?

S.K.: There are two types of Public Housing options: Section 8 (rent vouchers) and Housing Authority assistance with an individual home. As far as our PID goes, there isn't any area left in the PID that is zoned for multifamily development. The Housing Authority can still purchase individual homes. There are two nearby multifamily housing developments that aren't in the PID (Watauga and Garden Gate), and each is have had opposite results. Crime reports seem to be high for the Watauga development, but low for Garden Gate. I'm not sure what is the exact reason for that.

Do you know what is going to be developed near Basswood and 377 (there's a lot of excavation going on over there)?

S.K.: Yes. That area has been rezoned for single family homes, and we expect a developer to come in and build individual homes on that site.

Steve, thanks for spending a good part of your morning with us; it certainly has been very educational; and we look forward to sharing this good info with our residents.

S.K.: You're welcome, it's been my pleasure.