Best Practice Recommendations + Things To Consider

If your community is considering making use of a public infrastructure district, carefully consider the following:

  • PIDs work well when used in large or well-established areas. They can help the community attract new residents and improve the quality of the neighborhood by providing financing through taxes and fees placed on property owners in the area. But if residents aren’t committed to the neighborhood, the increased financial burden might eventually drive them to sell their homes and move away (decreasing home values, tax revenue, and the atmosphere in the community). Residents who have deep roots in the area and district borders that disburse fees over a large area can both help ensure the success of a PID.
  • One downside of PIDs is potential abuse by the majority of property owners. Utah law does limit the likelihood of this happening, but it’s possible that a small group of majority property owners (such as developers) might gain control of a PID and use it to subsidize the cost of their projects. In theory, this is fine as long as potential residents are well aware of the higher property taxes in the area; it will be reflected in the market price of the dwellings. But sadly, some PIDs have been less than forthright about the cost of living in their communities, and residents have found themselves trapped paying more than they anticipated. 
  • Once a property joins a PID, that property is stuck with its debt for (almost) forever. In an ideal world, the infrastructure built by the PID pays off greatly. It causes property values to go up, and the debt gets paid off quickly. Everyone’s happy. But as long as the debt exists, the properties in the PID are tied to it. 
  • Tax collection and enforcement is hard, so contract with the county to do it for you. PIDs can outsource their tax and fee duties to counties and municipalities. This saves the PID money because it (a) doesn’t have to sue people all the time and (b) people are used to paying bills that come from the government.
  • Take time to construct a thorough governing document. Start well, finish well. A poorly constructed constitution could mean huge problems down the road.