A PID (Property Improvement District) and a MUD (Municipal Utility District) are both special districts that can be created by cities or counties to fund projects.
PIDs are created to improve neighborhoods by building new infrastructure, such as parks, lakes, fountains, and shade structures. PIDs are not political entities and are funded through bonds that are secured by liens on properties. The bonds are paid back through special assessments that are usually levied for a set number of years.
MUDs are created to provide utilities, such as water, sewer, and stormwater drainage, to neighborhoods that are outside of public city services. MUDs are political entities that can levy taxes, such as annual property taxes, on homeowners in the district. The costs of the MUD may be passed onto homeowners, and these fees are in addition to HOA dues and other charges, taxes, fees, and special assessments.