Local Improvement District (LID)
What is a Local Improvement District?
A Local Improvement District, often referred to by its initials LID, provides a way for property owners to get together to pay for improvements such as: street and alley paving, streetlight installation, sanitary sewer lines, changing overhead utility wires to underground lines in view-sensitive areas, and safety measures required for train horn quiet zones. An LID may only be created if the benefits of added value to the individual properties outweighs the cost of the improvement. Benefits include added value to your private property and to your neighborhood.
What an LID is:
An LID is a financial instrument that provides a long-term payment plan, with relatively low interest rates, which allows property owners to fund the improvements to infrastructure in their neighborhood. Each property owner will be assessed according to the benefit to their respective property and the amount each property owner pays must be proportional. The cost of administering an LID, including interim financing and bond sales, are part of the project and the shared costs. LIDs are started by citizens and created under the sponsorship of a municipal government, such as the City of Vancouver. The entire LID process is about financing infrastructure improvements, not constructing them.
What an LID is not:
LIDs are not self-governing special purpose districts. In accordance with the appropriate statutes, they must be approved by both the local government and benefitted property owners. There are other strange creatures that look like LIDs in that assessments are levied against property in a specially benefitted area but whose formation does not follow LID statutes. These include latecomer assessments, sidewalk assessments and parking and business improvement areas. LID Special Assessments are not “taxes” and not subject to uniformity requirements of Washington Constitution, Art. VII,§9. Local governments may levy assessments for local improvements according to special benefits, which will vary from one tract or lot to another.