Local Improvement District (LID)
- What is a Local Improvement District (LID)?
LIDs are a way for property owners and/or neighborhoods to fund public infrastructure improvements such as street and alley paving, sanitary sewers, water lines, street lighting or underground wiring to improve property. LIDs serve as an important financing tool for neighborhoods to fund infrastructure that the City could not otherwise afford to provide. During the past 80 years the City has assisted over a thousand neighborhoods through LIDs. Property owners form LIDs when the benefit to each property from the improvements outweigh the cost. Benefits include added value to your property and quality of life improvements to your neighborhood. LIDs can be formed in two ways:
- The resolution of intention method; wherein the legislative body of a municipality initiates the LID; and
- The petition method; which allows property owners to petition the city to initiate an LID.
- Getting Started
A neighborhood representative contacts LID representative Susie Lorance at (509) 576-6674 or City Engineering at (509) 575-6111. A letter with an Interest Return Form will be sent to property owners describing the LID being requested. If through this process a significant number of property owners express an interest in the LID proposal, an informational neighborhood meeting will be set up to discuss the project and if sufficient interest is expressed a formal petition will be circulated among the property owners.
- What does the interest return form do?
The Interest Return Form provides an indicator to City Staff as to the level of interest among property owners within the proposed LID area. If the Interest Return Forms received demonstrate a sufficient level of support from the property owners, the staff will schedule the informal neighborhood meeting to provide information about the proposed LID and answer questions.
- How are costs determined?The cost to the property owner for an LID depends on the size and type of improvement and the number of properties included. The City uses past competitive bidding experience to estimate construction cost of new projects. The estimated cost will be provided with the formal petition form. For sewer LIDs, a portion of the sewer connection charges may be added to the LID so most costs are included in one LID payment.
- FinancingAn LID allows property owners to pay over time utilizing low interest rates typically available only to government. Property owners may also secure their own financing or pay upfront.
Financial Aid: For qualifying parties, Grants or Loan assistant may be available through City of Yakima’s Office of Neighborhood Development Services (ONDS) at (509) 575-6101.
- What happens at an LID informational meeting?The Informational meeting allows an opportunity for property owners to discuss their support for, or concerns about, the LID. Some of the issues people typically bring up at the hearing include: The need for the improvement, the benefits of the improvement, why is it necessary? Cost? City contribution? How long will it take? In addition, and LID formation petition will be circulated for signatures.
Following the informational meeting, if property owners representing a majority of the assessed land area from within the proposed LID boundary are favorable toward formation of an LID and have demonstrated their support through signed petitions, an LID Formation Hearing before the City Council will be scheduled.
- What happens at the LID Formation hearing?The LID Formation Hearing is a formal hearing before the City Council. Property owners from within the proposed LID area are invited to speak in favor or in opposition to the project. Council will determine whether there is sufficient support for the LID and determine whether there is sufficient support for the LID and determine through legislative action whether or not the LID will proceed.
- What’s next?If the City Council approves the formation of the LID, design of the project will commence, leading to bids for construction, and finally the project is built.
- If I support the LID, am I signing a blank check?No blank checks. Assessments for LIDs generally stay within 25 percent of the City’s original estimate. The cost of an LID may not exceed the benefit value to the improved property.
- When do I pay for the LID?LID’s provide several ways to pay for your improvements, including payments over a number of years with low-cost financing. Once the contractor completes the work, city staff members schedule another hearing to establish a final assessment for each property based upon actual project costs. Once this hearing has taken place and a formal assessment roll has been approved by the City Council, you will be billed for your LID payment. You have a choice of payment methods:
- Make one payment and pay in full.
- Make a simple-interest payment once per year, over a number of years until you have paid off the assessment.
- Pay off the balance at any time during the assessment period as set by an LID bond.
- When does the work start?The actual construction of the improvements generally begins 12 – 14 months after the neighborhood organizer has returned the formal petition of support to the city.
- Steps to completion on a petition method LID:
- Property owners request LID; letters of interest are sent to owners
- Informational meeting is held
- Advisory Petition is signed by the owners of property aggregating a majority of the area within the proposed district
- Resolution prepared
- Council sets date for hearing by Yakima City Council
- Notices are mailed to owners within district
- Preliminary assessment LID hearing, Council confirming or denying LID
- Appeal process
- Council creates LID
- Engineers design LID
- Contract Bid awarded
- Begin construction
- End construction
- Staff assembles total project cost and allocates total cost to final parcel assessments
- Yakima City Council sets hearing date
- Hearing on final assessment
- Appeal process
- Council confirms Final Assessment Roll
- Financial Services sends first bill the following year