When they approached county supervisors 14 years ago asking taxpayers to, in effect, co-sign on a $27.7 million loan to build Galleria Parkway through their land opening up vast swaths for development, private property owners in the now failed Parkway East Public Improvement District (PID)?weren’t bashful.

These property owners stood to get rich, along with the lawyers, bond attorneys, bankers and contractors. But they needed the full faith and credit of Madison County in order to get a better interest rate and more favorable terms.

They received the county’s backing, unanimously, in the form of a contribution agreement that officials said at the time it was signed in 2005 limited taxpayer liability to two years, which sounded reasonable.

After private developers defaulted on the loan in 2011, Madison County made over $2 million in shortfall payments up until 2013.

When an October 2013 payment was due, the county invoked the 2005 contribution agreement, saying taxpayers had fulfilled their obligation.

The bond insurer sued seeking reimbursement from the county.

Last week, U.S. District Judge Carlton Reeves, an Obama appointee, ordered Madison County to pay a minimum $3.1 million in reimbursements to the insurer — mind you taxpayers already having ponied up $2 million.

And if the judge has his way, it’s not over. Madison County is on the hook for the whole amount of the loan.

But the assurances about Parkway East’s viability in the beginning were grand. This was a safe bet.

Madison County’s participation would “allow the cost to the landowners to be more reasonable,” Canton Attorney Bob Montgomery, representing the PID, wrote in a 2004 sales pitch to supervisors.

Gov. Ronnie Musgrove had signed the Mississippi Public Improvement District (PID) Act in 2002 making defrauding taxpayers legal, Montgomery might as well have written.

Not only could the county back the bonds under the law, taxpayers could also share in the cost, proponents argued in trying to convince supervisors in  2005 to sign the contribution agreement. (Ironically, that board had been elected with a voter mandate to cleanup “widespread corruption” in county government.)

And so the supervisors in February 2005 signed the contribution agreement — unanimously, but not without expressing most of the fears that have now been realized.

The PID law states that no debt or obligation of a district “shall constitute a burden on any local government without its consent.”

Sounds good.

Another section specifically states that all financial obligations issued by the PID “shall not be secured by the full faith and credit of the state or the county or municipality that created the district.”

Sounds even better.

However, the act goes on to say that the governing body of a county “may enter into contribution agreements with the district” — which Madison County did.

The county made its first shortfall payment of $374,021 on Oct. 24, 2011, and followed up with a $464,376.60 payment on April 25, 2012. On Oct. 24, 2012, another payment was made in the amount of $518,401.44 until the final payment of $676,514.19 on April 16, 2013.

The Parkway saga, which stretches over a decade and a half, is far more convoluted than illustrated here and we’ll do our best to lay out the facts in the coming months.

Hopefully, the PID can be salvaged, the land developed and everyone, including taxpayers, be made whole. At least we got a road!

But let this be a lesson. Creative financing mechanisms like PIDs,  — while seemingly good economic development tools — are concoctions of bond attorneys, bankers and Wall Street, toxic mixtures which in the end are guaranteed only to enrich a few.

In the Parkway East case, short of a successful appeal, taxpayers have been left holding the bag.