Updated Feb. 10 to include comments from a representative of Magnolia Ridge Development.

A large group of residents filled the Magnolia City Hall chambers Jan. 13 to voice concerns regarding the assessment plan for the Magnolia Ridge Phase 1 public improvement district.

"A PID is similar to a [municipal utility district] except it uses an assessment," City Attorney Leonard Schneider said. "That mechanism was created to assist in the development of the area and to make a nice subdivision. Instead of doing a MUD, [the developer] wanted to do a PID."

Gabriel Silverstein, president of Angelic Real Estate LLC and representative of Magnolia Ridge Development, said officials have agreed to allow PIDs in city limits and have only begun to discuss the possibility of permitting in-city MUDs over the past few months.

The PID encompassing Magnolia Ridge Phase 1 was approved by Magnolia City Council in 2005 and was renewed in 2008, Schneider said. In December, Magnolia Ridge Development announced a need for an additional $15 million from residents to fund the construction of amenities in accordance with the PID assessment plan, such as a clubhouse, streets, utilities, sidewalks and lighting improvements, Schneider said.

"The PID we're talking about is the reimbursement for the developer for the pipes put in the ground and streets installed for Phase 1—the area [the residents] are living in right now," City Administrator Paul Mendes said.

Some residents who addressed City Council pointed out Magnolia Ridge Development presented an assessment plan within the past month designed to span the next 30 years with varying tax increases based on the size of the home lots in the subdivision. Some residents expressed concern that taxes could be increased anywhere from about $2,400 to $4,000 each year if the PID assessment plan is carried out.

Magnolia Ridge resident Kara Isam said she moved to the neighborhood in 2011 and was never notified of the PID agreement when she purchased her house. Isam said she and other homeowners were promised access to a variety of amenities, including sidewalks and a clubhouse that have not been constructed yet due to a lack of funding.

"We went to Magnolia Ridge because it was in the city limits and close to whatever we wanted to do," Isam said. "If I knew [beforehand] that sometime in the future they would make me pay an amount they just pulled out of the clouds, we probably would've lived elsewhere in a different neighborhood. It does impact my family and everyone else."

However, Silverstein said he has a copy of the document Isam signed Aug. 15, 2011 acknowledging she was aware of the PID when purchasing her home.

Magnolia Ridge resident Greg Riley said he was briefly notified of the existence of the PID when he signed the final paperwork for his home in Magnolia Ridge. However, Riley said he feels Magnolia Ridge Development misled many homeowners about the PID and actual amount of future tax increases.

"I'm not sure if I fully understand the purposes of this PID or where all the money is going," Riley said. "I would certainly like to see some sort of public hearing so this is explained and I understand where my money is going."

Schneider said the official public hearing originally scheduled for Jan. 13 was canceled to allow a period of due diligence for city officials to research the background of the PID and whether the developer adequately disclosed potential tax raises to homeowners. However, residents were permitted to discuss concerns during the meeting about the PID with council members as part of an agenda item.

Magnolia City Council took no action on the PID at the meeting. City officials are serving as liaisons to communicate information between residents and Magnolia Ridge Development, Mendes said.

With the assistance of outside professionals, Mendes said city officials are planning to hold a meeting for Magnolia Ridge residents to further discuss the details of the PID at a yet-to-be determined date within the next few weeks.