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Oak Point council approves PID assessments, authorizes $10.49 million in special assessment bonds for 0.720 development
Summary
At a July 31 special meeting the Oak Point City Council unanimously approved updates and assessments for two public improvement districts and authorized the issuance of special assessment revenue bonds to reimburse developer infrastructure costs tied to the 0.720 PID Improvement Area No. 1.
The Oak Point City Council on July 31 unanimously approved a suite of actions to support infrastructure for the 0.720 Public Improvement District, including an annual service-plan update for PID No. 2, the service-and-assessment plan and levy for Improvement Area No. 1, authorization to issue special assessment revenue bonds, a developer reimbursement agreement, and an interlocal agreement assigning water and sewer improvements to Mustang Special Utility District.
Mary Petty of P3, the PID administrator, told the council the PID No. 2 update is an annual, statutory requirement and that the district is nearly built out and already has bonds outstanding. “We are your PID administrator,” Petty said, describing continuing disclosure obligations and confirming there had been no full or partial prepayments or extraordinary redemptions reported in the current year.
During a presentation on Improvement Area No. 1 staff explained why the improvement area boundary appears irregular: construction began from an internal roadway and costs were allocated to reflect which lots benefit now and which will be part of future development. Staff said the currently levied assessment applies only to the colored lots shown in the plan and that certain future costs could be reimbursable to developers later if those areas are levied at that time.
The council opened a public hearing. A speaker identifying an address in Dallas and saying they represent the landowners CK Redond LC voiced support for the assessments and thanked staff and developers for their work.
Council then moved to adopt the 0.720 Public Improvement District service and assessment plan, including Improvement Area No. 1; the motion passed unanimously.
On the financing item, bond counsel and staff presented bond pricing and mechanics. The service-and-assessment plan lists infrastructure costs of about $8.6 million; staff said the total par amount of the bonds is $10.49 million, which includes issuance costs and a debt-service reserve. Morning pricing produced a stated interest rate of 5.77%; staff said the bonds will close in about three weeks and that the trustee will hold proceeds until developer-submitted, eligible invoices are presented for reimbursement. “If they submit an invoice that’s not eligible we have to return it to them,” a staff member said, explaining eligibility is limited to public infrastructure such as roads, water, sewer and drainage, not private costs.
The council approved an ordinance authorizing the issuance and sale of the City of Oak Point Special Assessment Revenue Bonds, Series 2024, and approved a separate reimbursement agreement that allows the developer to construct and dedicate improvements now and receive reimbursement later consistent with state law. Council members noted general unease with PIDs as a mechanism in some cases but said the process reflected the requirements of the development agreement and state statutes.
Council also approved an interlocal cooperative agreement with Mustang Special Utility District to accept, operate and maintain the water and sewer improvements for the improvement area. Council members asked whether Mustang has capacity amid drought conditions; staff said confirmation of Mustang’s ability to serve is part of the financing and offering diligence and that Mustang holds the necessary certificated area (CCN) to provide service.
All motions on the PID updates, the bond ordinance, the reimbursement agreement and the interlocal agreement passed unanimously. The meeting adjourned at 6:27 p.m.
Votes at a glance: ordinance approving Oak Point PID No. 2 2024 annual service plan — approved unanimously; approval of 0.720 PID service-and-assessment plan including Improvement Area No. 1 — approved unanimously; ordinance authorizing issuance of Special Assessment Revenue Bonds (Series 2024) — approved unanimously (total par amount noted in staff materials: $10.49 million; infrastructure cost in plan: approx. $8.6 million; priced interest rate reported at 5.77%); resolution approving PID reimbursement agreement — approved unanimously; resolution authorizing interlocal with Mustang SUD — approved unanimously.
