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HomeMy WebLinkAbout26-6397 - City Council - ResolutionA Resolution NO. RESOLUTION 26-6397 ADOPTING REVISED POLICY FOR OPERATING PUBLIC IMPROVEMENT DISTRICTS WHEREAS, the City Council is authorized to create public improvement districts ("PIDs") pursuant to Chapter 372 of the Texas Local Government Code; WHEREAS, the City is ultimately responsible for administration of PIDs created by the City Council; WHEREAS, the City Council has established the following three types of PIDs to benefit defined areas: (1) Operating PIDs, which fund improvements and services solely out of current assessment revenue or accumulated balances from past assessments; (2) Capital PIDs, which fund capital improvements, often with debt -obligation financing; and (3) a Tourism PID, which funds hotel -and -tourism promotional activities; WHEREAS, the City Council adopted the original Policy for PIDs in September of 1991, with subsequent amendments in March of 1999, July of 2004, February of 2009, and January of 2018, all of which were intended to address Operating PIDs; and WHEREAS, the City Council wishes to adopt a revised and updated policy regarding standards for establishment, management, operation, and administration specific to Operating PIDs in order to give all affected and interested persons and entities a clear understanding of the City's expectations regarding its Operating PIDs; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS THAT: 1. The attached revised Policy for Operating PIDs is hereby adopted, and all previous policies related to Operating PIDs created by the City Council are hereby repealed; and 2. This resolution shall be effective from and after its passage by the City Council. Adopted this October 13, 2026. ATTEST: /IC ZQiL4 By: Jannette S. Goodall, City Secretary ,o IrrORr 27 00000000004 0 00 O 0 YO 00y OOO p 1EXA o�� FORT WORTH Policy for Operating Public Improvement Districts (O-PIDs) I. OVERVIEW Operating Public Improvement Districts ("Operating PIDs" or "O-PIDs") are development financing tools authorized pursuant to Chapter 372 of the Texas Local Government Code ("Act"). O-PIDs allow for the costs of certain public improvements and supplemental services in a designated area to be allocated to and paid by the owners of the parcels that actually benefit from such improvements and services, which are generally paid for solely out of current assessment revenues or accumulated balance from past assessments. Debt -obligation financing is not available as a funding option. This Policy is intended to (1) set forth the guidelines and considerations that the City of Fort Worth ("City") will use to guide the establishment, management, operation, and administration of O-PIDs and (2) serve as a supplement to all other applicable City rules, regulations, and policies. Specifically, this Policy addresses petition requirements, assessments, the contents of an O-PID's annual service and assessment plan, the annual budget, and administration requirements. The guidelines and considerations set forth herein are not intended to be all-inclusive, and City staff is permitted to exercise reasonable and prudent judgment where issues arise that are not covered by this Policy. Certain requirements of this Policy may be in addition to those of the Act and other state laws. PIDs created for the specific purpose of funding capital improvements benefiting a defined area ("Capital PIDs") are governed by a separate policy. The Act, this Policy, and City staff are the primary sources of information regarding O-PIDs in the City. II. MINIMUM REQUIREMENTS FOR CONSIDERATION OF CREATION 1. Proposed O-PIDs must generally be located entirely within the City limits before consideration will be given to establish the O-PID. The City will consider the creation of an O-PID that consists of or includes land in the City's extraterritorial jurisdiction only if such property is subject to a development agreement or other concrete and binding plan for the voluntary annexation of all land within the proposed O-PID with a schedule for annexation agreed to by the City. 2. O-PIDs must be financially self-sufficient and not adversely impact the ordinary service delivery of the City. Page 1 of 13 3. O-PIDs must be established carefully and only when related to a public purpose to avoid a proliferation of special districts. a. The Director of the FWLAB, or their designee, (the "Director") shall consider whether the services or purpose identified in the petition could reasonably be achieved through existing private mechanisms, including a homeowners' association or private maintenance agreement, or through an existing City service. b. The Director shall evaluate whether the proposed O-PID's service area overlaps or is adjacent to an existing O-PID, and whether the requested services could reasonably be incorporated into that district's existing service and assessment plan rather than through formation of a new district. c. A petition limited to a single, non -capital maintenance service (e.g., landscaping, general upkeep, or similar amenity -only services) will generally be viewed less favorably as justification for a standalone district unless the petitioner demonstrates, consistent with Subsections (a) and (b), that the requested services cannot reasonably be provided through an existing private mechanism, an existing City service, or an existing 0- PID 4. O-PID petition signatures should reflect that a reasonable attempt was made to obtain full support of the O-PID by all property owners. 5. Priority consideration will be given to proposed O-PIDs that demonstrate substantial district -wide public benefit, financial viability, meaningful service impact, and administrative feasibility, including the following: a. Improvements in the public right-of-way (e.g., entryways, landscaping installation and maintenance, fountains, specialty lighting, and streets and sidewalks); b. Improvements that meet community needs (e.g., drainage improvements, parks and off-street parking facilities); and c. Improvements related to operations and maintenance expenses (e.g., sidewalk and street cleaning). 6. Secondary consideration may be given to supplemental services otherwise authorized under the Act that align with City goals and strategic priorities. 7. Where a residential O-PID is determined to serve a valid public purpose and is otherwise appropriate, the City Council will consider the governance structure of any associated homeowner's organization when evaluating the petition. Petitions may be viewed more favorably where the homeowner's association is controlled by individual property owners rather than a developer, demonstrating long-term resident governance and accountability; if a district is formed which does not correspond exactly to the properties overseen by the existing board, additional representation will be needed so the board does not exclusively represent one group's interest at the expense of other property owners. Page 2 of 13 III. PETITION REQUIREMENTS 1. In addition to the requirements set forth in the Act, all petitions requesting establishment of an O-PID must include the following: a. Specific language outlining the O-PID's stated goals. b. Evidence that the petition's signatures meet the requirements of the Act and this Policy. i. If the proposed O-PID is an expansion of an existing O-PID, a petition for the new segment of the proposed O-PID must identify each subdivision, or portion thereof, within the proposed boundaries of the expanded portion of the O-PID, and each subdivision or portion thereof that is not currently in an existing O-PID shall individually satisfy the requirements for a petition under the Act. Subdivision has the meaning assigned by §232.021 of the Texas Local Government Code. c. Contingency plans to address how, if an O-PID is dissolved, the maintenance or disposition of O-PID improvements and property that has not been dedicated to the public will be maintained or disposed of. d. Descriptions of the O-PID boundaries, along with a map outlining said descriptions. e. A section that clearly identifies the benefits of the O-PID to the affected property owners and to the City as a whole (i.e., public purpose). f. Identification of all land owned by the City or other exempt jurisdictions, and all other public land within the O-PID, including whether such property is expected to receive a benefit from the proposed improvements or services and whether any voluntary contribution, participation, or offset of City Services is proposed. g. Types of improvements and services that will be undertaken within the 0- PID and who will determine those improvements and services. h. A budget that includes all of the O-PID's projected revenue, including, without limitation, assessments revenue, and how all funds will be managed. i. Specified procedure for eventual termination of the O-PID. j. Specified assurances to the City that the construction of improvements in the public right-of-way, on public property, or in other publicly accessible areas will be maintained by assessments from the O-PID and in no way obligates the City to future maintenance or operational costs, unless otherwise stated in a subsequent agreement. k. Statement that the applicant understands that the annual budget, service and assessment plan, and assessment levy for the O-PID are subject to Page 3 of 13 review by the Director of the (or that person's authorized designee) ("Director") with final approval by the City Council. 1. A notation that it is the City's right to internally manage the activities of the O-PID or to hire a management firm to perform such activities. 2. In addition, the following issues must be addressed before the City Council will take action on a petition: a. Applicant must pay an "application fee" of $5,000.00, or $10.00 per parcel, whichever is greater, for all new, renewing, or expanding PIDs to reimburse the City for the cost of evaluating the petition. i. Application fees are intended to pay for all costs incurred by the City that are associated with establishing the O-PID, including, but not limited to: salaries for City staff, consultant fees, attorney fees, independent appraisal fees, and all other reasonable and appropriate expenses. b. To ensure adequate time for statutory verification, administrative review, and fiscal year planning, all petitions seeking the establishment, expansion, or renewal of an Operational Public Improvement District (O-PID) must be submitted to the Director no later than April 30 to be considered for a levy in the following fiscal year. Petitions received after April 30 will be carried to the next annual cycle. i. For clarity, consider the following: A petition submitted on April 27 meets the deadline and is eligible for consideration in the levy that becomes effective on October 1 of the next fiscal year. A petition submitted on May 2 does not meet the deadline and will be carried forward to the next annual petition cycle. c. All estimated costs related to establishing and maintaining the O-PID, including, without limitation, costs for maintenance, operations, and administration; and costs for later maintenance, repairs, or replacement of any public improvements. d. The petition must identify the proposed management structure for the O-PID, including whether the petitioner intends the O-PID to be managed by a third - party management company or another appropriate organization. Detailed management responsibilities, performance requirements, and procedures for addressing performance or service issues will be established through the applicable management agreement or other governing document following establishment of the O-PID. Page 4 of 13 IV. ESTABLISHMENT 1. The Act provides the City Council with the authority to undertake an improvement project that confers a special benefit on a definable area of land if certain procedures in the Act are met. In establishing an O-PID, the City will comply with all mandatory procedural requirements set forth in the Act; provided, however, that the City reserves the right to invoke any permissive procedural requirement as it may deem necessary on a case -by -case basis. 2. The applicant must submit a proposed service and assessment plan to the City. The City reserves the right to have its own O-PID consultant finalize the service and assessment plan should the City decide to move forward with the O-PID. The cost of finalization must be included in the O-PID budget. 3. There is no requirement to establish a statutory advisory body to oversee the development and recommendation of a service and assessment plan. In the absence of a statutory advisory body, the Director may approve of an informal advisory committee that is representative of the property owners within the O-PID. The function of the informal advisory committee will be to provide comments and recommendations concerning the O-PID to the Director and City Council; however, final decision -making power will lie with City Council. The composition of an informal advisory committee may vary. The committee members could include a mix of individual property owners and representatives of homeowners associations, business associations, historical associations, and similar organizations with a direct interest in property subject to assessment within the O-PID or could consist entirely of the governing body of an association or organization having direct interest in property subject to assessment in the O-PID. The City reserves the right to review and revise the criteria for informal advisory committees. V. ASSESSMENTS 1. The City Council will adopt assessment rates, which apportion costs of improvements and services to property in an O-PID. 2. If an O-PID features assessments against multiple property types (such as residential and commercial), the apportionment of costs between types will be made on the basis of special benefits accruing to each. The costs of the improvements and services will be assessed in accordance with the Act and this Policy. 3. By ordinance, the City annually levies the assessments on the properties in the O-PID in accordance with the adopted Budget and Service Plan. 4. The City may contract with the Tarrant County Tax Assessor/Collector's Office for billing and collecting of O-PID assessments. 5. The City Council will have the final authority on the assessment methodology. 6. An O-PID assessment will generally not be allowed if it causes the total City assessment rate, including all City property taxes and special assessments, to exceed $1.13 per $100 of property valuation. Page 5 of 13 7. The O-PID assessment is billed on each property owner's annual ad valorem tax statement, unless supplemental billing is necessary. 8. All out-of-pocket (non -personnel) costs incurred by the City that are associated with the administration of the O-PID will be paid out of revenue generated from the special assessments levied against property within the O-PID. 9. Through approval of this Policy, the City Council delegates authority to City staff to collect assessments in any manner authorized by the Act and all other applicable law, which provides that assessments may be collected in the same manner as the collection of ad valorem taxes. To the extent permitted by law, such authorized collection efforts may include the initiation of foreclosure proceedings on any lien for an unpaid special assessment, interest, and collection and attorney's costs, if any, associated with the 0- PID. VI. O-PID MANAGEMENT The City may contract with a separate entity to manage an O-PID ("Management Company"), subject to administrative oversight by the Director. Under rare circumstances, City staff may directly manage an O-PID, but this will normally be considered a temporary solution only. Costs associated with the management of the 0- PID will be paid from annual assessment revenue; costs associated with the management of the O-PID include all City staff salaries and benefits plus an allocative proportion of managerial oversight for any O-PID managed directly by City staff. 2. Either the Management Company or the Director, as applicable, will perform the following: a. Prepare the annual budget and five-year Service and Assessment Plan within the timeline published by the City on an annual basis to coincide with the City's annual budget process; b. Hold a public meeting with owners of property within the O-PID to review the proposed budget and assessment plan and to seek input regarding the needs of the O-PID; and c. Submit the budget and assessment plan to the City Council for consideration following a public hearing conducted in accordance with the Act. 3. The Management Company or Director, as applicable, will communicate to all property owners within the O-PID regarding special events, activities, or other pertinent news concerning the O-PID. 4. The Management Company or the City, as applicable, will perform, or ensure the performance of, the improvements and services specified in the applicable service plan for each O-PID and coordinate, or ensure coordination of, such work with property owners within the O-PID. 5. The Management Company or City staff, as applicable, will attend all O-PID meetings. 6. The Director must be notified at least 72 hours in advance of the time and place of all 0 - Page 6 of 13 PID informal advisory body meetings and of annual budget -and -service -plan review meetings if a Management Company is in place; otherwise, the Director will call such meetings and notify the property owners within the O-PID of the time, location, and agenda for the meeting. 7. Informal advisory committees associated with O-PIDs are informal and non -statuary in nature and serve in an advisory capacity only. a. Although advisory committee members are not City officers or employees, they are expected to conduct themselves in a manner consistent with the City's expectations for ethical, respectful, and professional conduct while serving in an advisory capacity. Conduct which is deemed unethical, disrespectful, or consistently detrimental to the smooth functioning of O-PID operations is grounds for temporary suspension from meeting participation and/or removal from advisory board. Such corrective actions may be taken with agreement from City staff and the Management Company. 8. The Management Company or the City, as applicable, will ensure that the annual budget and five-year Service and Assessment Plan are approved by the applicable advisory body for the O-PID. 9. The Management Company must provide the Director with documentation of liability insurance that provides adequate protection, as determined by the City in its sole discretion, for risks associated with the types of improvements and services being proposed. 10. Except as set forth below, if a Management Company is in place, no cash or assets of the City (which includes the O-PID) will be held by the Management Company. All financial resources will be administered on a reimbursement basis by the Director and the Department of Financial Management Services. 11. Annually, the Management Company shall hold a public meeting for property owners within the District for the purpose of reviewing the proposed Budget and Service Plan, receive public comments, and encourage participation in the annual City Council public hearing prior to Council action on the Budget and Service Plan. Written notice of the Annual Budget Meeting shall be mailed to all property owners of record within the district in substantially the same manner as notice provided by the City under Section 372.013 of the Texas Local Government Code. 12. As a general rule, the City will not provide monetary advances to a Management Company to carry out its management obligations. However, the Director may consider written requests for such advances from a Management Company only in the circumstances set forth below. Any monetary advances must be documented in writing and include the reasons for the request, the proper accounting methodology, and the terms for repayment. a. Operating Cash Flow Advance (i.e. seed money): i. The Director may consider a written request for an advance of operating cash flow (i.e., seed money) from a Management Company if (1) the advance is requested as part of the establishment/creation of the O-PID, or (2) when a new Management Company begins Page 7 of 13 managing an existing O-PID. An operating cash flow advance is subject to approval by the Director of Finance and City Council. b. Short -Term Advance (less than one month): i. The Director may consider a written request for a short-term monetary advance of less than one month from a Management Company if the Management Company lacks sufficient cash -flow to pay invoices for the improvements and services pursuant to its agreement with the City. City may provide an advance prior to the end of the month reimbursement cycle. An advance would only be issued on PID funds already held by the City. VII. SERVICE AND ASSESSMENT PLAN 1. A Service and Assessment Plan sets out the improvements and services to be provided within an O-PID and the costs associated therewith. Each applicant is responsible for submitting an initial Service and Assessment Plan that complies with the Act, with annual updates to be completed by the Management Company or Director, as applicable. All Service and Assessment Plans are subject to review by the Director and approval by City Council. 2. Annual budgets may be adjusted by submitting requested adjustments at least sixty (60) days prior to their proposed effective date for approval by City Council. The Director may approve minor administrative reallocations within an approved Service and Assessment Plan budget category without City Council action where the reallocation does not exceed the lesser of 20% of the category line or $5,000 cumulatively per fiscal year, does not introduce new services or improvements, does not transfer funds between major categories, and does not affect the total assessment levy. Such reallocations require prior written Chief Transformation Officer approval and shall be logged in the O-PID administrative record and reflected in the monthly report. For Operating PIDs located in residential areas containing HOA-managed common areas, PID-funded maintenance shall be limited to improvements that are (i) located within the PID's boundary, (ii) identified by the City as an Eligible Location, including on a map or other record maintained by the City, and (iii) determined to function as authorized public improvements that confer a special benefit on the PID, consistent with Chapter 372 of the Texas Local Government Code. This policy establishes the City's sole authority to determine, maintain, and update Eligible Locations for each applicable O-PID. a. The basis for identifying an area as an Eligible Location is that it is sufficiently public in nature and accessible to all PID assessment payers, distinguishing it from privately restricted or HOA-exclusive amenities. b. Identification of an area as an Eligible Location establishes potential eligibility only and does not create an automatic funding obligation. All expenditure remains subject to annual budget approval and City Council authorization. Any HOA-owned or privately owned property not identified as Page 8 of 13 an Eligible Location, or located outside the PID boundary, remains the responsibility of the HOA or property owner. 4. O-PIDs may be used to finance the costs of any authorized improvement or service allowed by the Act and approved in the Service and Assessment Plan and the annual budget, provided, however, that no debt -based financing shall be allowed for such improvements or services. 5. Budgets must be developed and funds allocated so that all improvements and services in the O-PID confer a special benefit on the property within the O-PID. 6. Annual budgets must be supplemented by a detailed, line -item explanation of the various components and how the amount was derived. 7. The City's Payment In -Lieu of Services is intended to act as a supplement to the 0- PID budget and provide for the standard level of improvements and services as comparable to what would be provided by the City for the taxpayers generally. 8. Annual budgets may be altered by submitting requested adjustments at least sixty (60) days prior to their proposed effective date for approval by City Council. 9. An O-PID's budget must include sufficient funds to pay for all costs above and beyond the City's ordinary costs, including, but not limited to, additional administrative and operational costs incurred, as well as additional maintenance costs resulting from the operation of the O-PID. VIII. EXPENDITURE REIMBURSEMENTS 1. In order to minimize the cost to the City of O-PID administration, the City will charge a fee to each O-PID for the annual costs associated with administering the 0- PID. This fee will generally be calculated annually for each O-PID to be the greater of: a. 2% of the projected externally generated revenue for that year, to include special assessments and any City contributions; or b. $10,000.00. c. Existing O-PIDs. Any O-PID established before [effective date] will keep the administrative fee that was in effect before this policy took effect. Any renewal, repetition, or expansion of that O-PID will be assessed the fee under this Section 1. 2. The City will pay all approved and qualified expenses of the O-PID in accordance with the adopted Budget and Service and Assessment Plan, including invoices submitted by the Management Company, with such approval and payment to occur in a timely manner. For purposes of this Article VIII, an expense that is included in the then - current Budget and Service and Assessment Plan approved by the City Council is considered to be an "approved and qualified expense" eligible for payment or reimbursement. 3. If a Management Company is selected to perform administrative duties of the O-PID, the following provisions will apply: Page 9 of 13 a. By the 10t1' business day of each month, the Management Company must submit the following to the Director: i. All receipts or invoices for approved and qualified expenses incurred by the O-PID that were paid in the prior month; ii. ii. Proof of payment for each expense submitted for reimbursement, in a form sufficient to verify that payment was made by the Management Company or other authorized party; iii. A monthly report detailing activity and work performed during the prior month in alignment with the Service and Assessment Plan; and iv. An invoice for the Management Company's services for the prior month. b. The City will reimburse the Management Company in a timely manner for 0- PID management services in accordance with the terms of a separately executed contract and within the limit of assessments actually collected. c. Management fee payments will not exceed 20% of the current year's budgeted assessment revenue, including any City contributions. i. Administrative costs include, but are not limited to, rent, office supplies, salaries for management and clerical staff, and other expenses necessary for the administration and oversight of O-PID projects. ii. Management fee payments under this provision are for the payment of oversight and expenses incurred in the establishment, administration, and operation of the O-PID under §372.003(b)(14) of the Act and are separate from payment for special supplemental services that may be authorized for the improvement and promotion of the O-PID under §372.003(b)(13) of the Act. d. The methodology used to allocate expenses shared between the Management Company and other entities to the O-PID must be fair and equitable, as agreed upon by the PID Management Company and the Director. The approved allocation methodology should be documented in the annual contract. e. Management Companies are responsible for complying with the Act concerning the expenditure of any O-PID funds. f. Management Companies should adhere to the Capital Improvements Application process as defined by the City's Park and Recreation Department. 4. The Management Company shall conduct procurement activities in a manner consistent with City principles related to fairness, competition, transparency, and fiscal responsibility. a. Unless otherwise specified, Management Companies are not required to Page 10 of 13 follow all City purchasing procedures but must maintain documented procurement practices appropriate to the size and nature of expenditures, as approved by the City. The City may require Management Companies to certify compliance with their approved procurement practices and reserves the right to audit procurement records at any time. b. At minimum, the Management Company's procurement practices shall reflect the following thresholds: Under $10,000 (per vendor, per fiscal year): No documentation required. ii. $10,000 to $99,999.99: Documentation sufficient to show the price paid was reasonable, including a minimum of two vendor quotes or documented price comparisons. iii. $100,000 and above: Documentation of a competitive review, including a minimum of three vendor quotes or proposals, when reasonably available, with a documented rationale for selection. If three quotes or proposals are not reasonably available, the Management Company must document the basis for proceeding with fewer. These thresholds are minimums. A Management Company's procurement practices may require more, but never less, documentation than specified above. c. Compliance with this Policy is subject to review by the Director. d. Care should be taken to classify expenditures. Routine repairs and maintenance should not be classified as capital improvements. Capital improvements involve the construction, purchase, or substantial renovation of buildings, parks, streets, or other physical structures that will either enhance a property's overall value or increase its useful life. A capital improvement must have a useful life of five or more years. e. An income statement comparing the annual budget to the projected year end line item balances must be prepared and submitted by the Management Company to the Director by the 10' business day of January, April, July, and October, which are the months following the end of each quarter in the City's fiscal year. f. The records maintained by the Management Company for the O-PID are subject to review and audit by City personnel and external auditors at any time, provided that reasonable advance notice will generally be provided. g. The Management Company is subject to the City's Record Retention Schedule for any O-PID related records. h. The Management Company is subject to the City's Donations Policy for any O-PID related donations. Page 11 of 13 IX. FINANCIAL RESERVES 1. Reserve funds must be maintained in accordance with the City reserve policies that are included in the City's Financial Management Policy Statements. a. Reserve Levels — The City will maintain a combined Restricted and Assigned Fund Balances in Special Revenue Funds equivalent to two months (16.67%) of the next fiscal year budgeted operating expenditures. b. Reserve funds shall not exceed 50% of the prior year's assessment without advance written approval from the Director. 2. The annual assessment rate should be supported by the required Budget and Service and Assessment Plan. If a Management Company is selected, an explanation in writing of the reason for delaying or cancelling a project or expenditure in a given year that results in the increase of fund balance shall be provided by the Management Company to the Director prior to the submission of the next year's budget. X. DISPUTE RESOLUTION To address complaints within an O-PID, property owners within an O-PID and any advisory board or committee must provide written communication of an initial complaint to the Management Company, if one exists, or to the Director if no such Management Company exists. 2. Property owners who are dissatisfied with the decision of the Management Company may then submit such written complaint to the Director. 3. Property owners who are dissatisfied with the decision of the Director may appeal such decision to the City Manager (or that person's authorized designee). The decision of the City Manager is final. XI. DISSOLUTION An O-PID may be dissolved in accordance with the procedures set forth in the Act. If an O-PID is dissolved, the O-PID will remain in effect for the purpose of meeting unpaid obligations for improvements and services. Page 12 of 13 FORT WORTH. MAYOR AND COUNCIL COMMUNICATION 7.1.4 REVISE OPERATING PID POLICY DATE: 10/13/26 M&C FILE NUMBER: M&C 26-1062 DEPARTMENT: FWLAB SUBJECT (ALL) Adopt Resolution Revising the Policy for Operating Public Improvement Districts RECOMMENDATION It is recommended that the City Council adopt the attached resolution revising the policy for Operating Public Improvement Districts. DISCUSSION The purpose of this Mayor and Council Communication (M&C) is to adopt the attached resolution revising the policy governing the establishment, management, operation, and administration of Operating Public Improvement Districts (O-PIDs). Public Improvement Districts (PIDs) are authorized pursuant to Chapter 372 of the Texas Local Government Code and allow the costs of certain improvements and supplemental services within a defined area to be assessed to properties receiving a special benefit. The City administers three types of PIDs: (1) Operating PIDs, which primarily fund ongoing improvements and supplemental services through annual assessment revenues; (2) Capital PIDs, which primarily finance public infrastructure improvements, including through debt obligations; and (3) the Tourism PID, which funds tourism -related marketing and promotional activities. Capital PIDs are governed by a separate City policy. The City's current Operating PID Policy was adopted in 2009 and has been updated from time to time as the program has evolved. Staff has conducted a broader review of the existing policy and current administrative practices to identify opportunities to streamline administration, strengthen financial and management controls, clarify existing requirements, and better align the City's administrative fee structure with the resources required to administer the program. The proposed revised policy maintains the overall framework of the existing policy while incorporating updates to clarify requirements, strengthen administrative standards, and reflect current program needs. The primary revisions include the following: 1. Minimum Requirements for Consideration of Creation. Establishes clearer criteria for evaluating the creation of new O-PIDs, including public purpose; availability of existing 1 of 16 FORT WORTH. Home Owners Association (HOA), private, or City service mechanisms; proximity to existing O-PIDs; and the scope and benefit of proposed services. 2. Petition Requirements. Establishes an April 30 petition deadline for new, renewing, or expanding O-PIDs seeking a levy in the following fiscal year and clarifies petition requirements and administrative timelines to allow sufficient time for statutory verification, City review, fiscal planning, and Council consideration. 3. Service and Assessment Plan Administration. Provides limited administrative authority for minor reallocations within an approved budget and establishes clearer Eligible Location standards for O-PID-funded maintenance in residential and HOA areas. 4. Annual Property Owner Budget Meeting. Enhances the existing requirement for Management Companies to conduct an annual property owner meeting on the proposed budget by requiring mailed notice of the meeting to all property owners within the PID. The notice requirement is intended to provide property owners with advance notice and an opportunity to review and provide input on the proposed budget before it is presented to City Council for consideration and action. 5. City Administrative Fee. Updates the annual administrative fee to two percent of projected externally generated revenue, with a minimum annual fee of $10,000.00. The minimum reflects the baseline level of City administration required for each O-PID, while the percentage -based fee allows the fee to increase as district revenue and administrative activity grow. The revised Policy also provides a transition period for existing O-PIDs. 6. Reimbursement and Procurement Requirements. Strengthens financial and management requirements by requiring proof of payment for reimbursable expenditures, establishing minimum procurement and expenditure -documentation standards. The revisions are intended to provide a more consistent administrative framework across 0- PIDs while maintaining appropriate flexibility for differences in district size, services, and operations. The proposed revised Policy will be effective upon adoption. This M&C does not request approval of a contract with a business entity, therefore, a Form 1295 is not required. FISCAL INFORMATION/CERTIFICATION The Director of Finance certifies that approval of this recommendation will have no material effect on City funds. SUBMITTED FOR CITY MANAGER'S OFFICE BY: Christianne Simmons, # 6222 2 of 16 FORT WORTH. ORIGINATING BUSINESS UNIT HEAD: ADDITIONAL INFORMATION CONTACT: Christianne Simmons, # 6222 Brady Kirk #8712 ATTACHMENTS 1. Resolution Revising Operating PID Policy [7.1.4.1 - 1 page] 2. P1 D- 0- PID Policy update Final [7.1.4.2 - 12 pages] 3 of 16