For the second time in three years, city officials are preparing to make almost $150,000 in refunds to property owners in a neighborhood overcharged for Public Improvement District fees.
But residents of Park on Clear Creek say they’re frustrated with the process, and some have even questioned the accuracy of the calculations determining how much they are owed.
“We notified the city in February that we believe MuniCap made errors in the revised assessments, but in 10 weeks they have been unable or unwilling to provide an explanation for their calculations,” said Evan Watkins, an official with the current developer behind the neighborhood.
While this latest dispute only affects residents in Park on Clear Creek, League City’s use and handling of Public Improvement Districts has long been a source of controversy.
A public improvement district is a geographical area a city establishes to provide improvements and maintenance, financing those by levying an assessment on the homeowners based on square footage of the property to pay the developer.
“It seems like we spend so much of our time fixing issues with these,” Councilman Nick Long said. “I’d estimate problems with special districts take up about 50 percent of all of our time spent in executive session.”
A district court judge in 2017, for instance, ordered the city to disburse almost $1.4 million in refunds for people who owned residential property in the Magnolia Creek subdivision on the west side of town.
Issues arising out of districts like that have become so common that League City is renowned for originating much of the case law on the subject, Long said.
The district governing the Park on Clear Creek neighborhood, Public Improvement District No. 5, was created in 1998, said Sarah Greer Osborne, spokeswoman for the city.
Initially, the city created an authority to manage the district, but in 2013 dissolved it and assumed its powers and duties, Greer Osborne said.
Since its creation, property owners in the neighborhood have the option to either make annual payments into the district or else pay it off early, said Evangelina White, a resident for about two years.
But the payments are based on an estimate of what it will cost to build improvements, and the actual construction costs for the Park on Clear Creek haven’t been as much as expected, according to a letter sent out by the city’s public improvement district administrator, MuniCap.
The city, after earlier controversy over the Magnolia Creek improvement district, in 2018 hired MuniCap to regularly calculate and monitor the city’s public improvement districts, Long said.
As a result of the firm’s work, the city must now reimburse 12 property owners who paid off their assessment early for a total of $143,235, Greer Osborne said.
That would mean a reimbursement of about $20,000 for White and her husband, White said.
But several residents have questions about the firm’s calculations and how interest payments and actual construction costs might figure into how much they are owed, White said.
“Based on an audit, it turns out they’d paid off the PID when they sold us the house,” White said.
Officials with the current developer, Clear Creek Development Co., in a letter to residents disagreed about the district being paid off, but did acknowledge they had questions about how the city calculated its most recent assessments.
“In 2018, MuniCap prepared a revised service and assessment plan that was adopted by city council on Nov. 13, 2018,” Alan Watkins wrote in the letter. “The developer was given no notice of the revised SAP and to my knowledge none of the homeowners were given notice.”
The new assessment used project costs, but didn’t include interest, Watkins said.
Residents, frustrated by the process, spoke about the controversy at an April 23 council meeting and the council subsequently approved issuing the refunds, Greer Osborne said.
The city has contracted with a forensic accountant to calculate the distribution of the refunds, hoping to issue them in the next 60 days, Greer Osborne said.
“This all just seems not quite right,” said Lauren Molis, a resident of the neighborhood for about five years.