A Local Improvement District (LID) provides a way for property owners to get together to pay for street and alley paving, sanitary sewers, street lighting or underground wiring. Property owners agree to form LIDs when the benefits from the improvements outweigh the costs. Benefits include added value to your property and improvements to your neighborhood. You pay an amount proportional to the benefits you receive for each property you own.
An LID is a financial instrument that provides a long-term payment plan, with relatively low interest rates, which allows property owners to upgrade various infrastructure in their neighborhood. Such improvements may include: permanent street and alley paving; streetlight installation; sanitary sewer extensions; and the undergrounding of overhead utility wires in view-sensitive areas.
An LID may only be created if the benefits of added value to the individual properties outweighs the cost of the improvement. Each property owner will be assessed according to the benefit to their respective property and the amount each property owner pays must be proportional.
Tacoma created its first LID in 1895 to pave a section of Pacific Avenue
A property owner, or other interested party in your neighborhood, contacts the LID department (Ralph Rodriguez at (253) 591-5522) and requests a neighborhood advisory survey form and an information packet to circulate among the property owners within the proposed improvement district. The informational packet will contain a list of property owners of record within the improvement district, as shown in the Pierce County tax records. We will also provide the telephone numbers of each owner of record when possible. The requestor then contacts all of the affected property owners on the list and solicits their support for the desired improvement. When signatures of property owners representing 50% or more of the property frontage abutting the improvement have been gained, the neighborhood advisory survey form is then returned to the LID office.
3) What does an LID neighborhood advisory survey form actually do?
A neighborhood advisory survey form returned to our office containing the prescribed percentage of signatures signals to the City that there is enough support for the project to proceed to the next level, which is to schedule a public hearing.
NOTE: Signing the petition is not binding upon the persons signing it.
The City has limited funding available through an LID Assistance Program for residential LIDs if a property owner meets certain federal guidelines related to income. The property in question must be owner occupied. A sample of the LID assistance form will be included with the petition packet and LID representatives will be glad to answer questions relating to this application process.
The cost of an LID assessment depends on the type of improvement requested. Some LIDs are full-cost to the property owners (street lights for example) and some improvements have City participation available (such as residential permanent street and alley paving), where the property owner pays a percentage of the paving costs, with the City being responsible for the balance. The City will provide an estimate of cost to each property owner with the petition form. The size and shape of a property and its proximity to the improvement are the factors that usually determine individual assessment amounts.
NOTE: There may be additional costs for supplemental work requested and/or required in addition to the fixed rate for the basic street/alley improvement, such as cement concrete driveway approaches, asphalt pavement tie-ins, sidewalk removal and replacement, etc. Supplemental costs are also incurred with sewer-main extensions and the undergrounding of overhead utility wires when connecting individual properties to the sewer main and when connecting to the main electrical line.
There is no blank check. For all LIDs that are created, an estimate of the cost is provided. If the lowest bid received exceeds the City’s estimate by more than 10 percent, the property owners will be notified.
For any supplemental work requested/required, owners will be contacted if the supplemental rates exceed the estimated costs of said work by more than 10 percent.
Pacific Avenue's LID paving project consisted of fir blocks set on a concrete foundation
This hearing allows interested parties to ask questions and make statements, pro and con, regarding the proposed improvement.
A brief description of existing conditions, a description of the improvement requested, the estimated costs and related construction methods of the requested improvement are presented before the Hearing Examiner, as well as the methodology used to calculate the property assessments. The amount of City contribution, if any, is stated and a general time-frame for engineering the project and an estimated time period to begin construction will be discussed. Interested parties may ask questions and state their opinions about the proposal.
Property owners within the proposed LID may state their opinions in writing instead of making an oral statement at the hearing if they so choose. No statement, written or oral, needs to be made. All remonstrance must be in writing. A non-response is counted as being in favor of the improvement.
A statutory appeal period follows. If property owners representing a majority of the total project assessment are in favor of the LID, the Hearing Examiner makes a recommendation to the City Council to create the LID by ordinance.
If the Council creates the LID, a City staff engineer will design the improvement and then publish a notice opening up the project for public bid. A contract is awarded to the lowest bidder who is able to meet City requirements.
The actual construction of the improvement begins approximately 12 months after an adequate support for the project is submitted to the LID department, provided that the City Council adopts the LID ordinance.
After the LID has been constructed and a close-out process is accomplished, a final hearing is scheduled where each property assessment is finalized. After this hearing has taken place and the City Council has affirmed the final assessment roll, the City Treasurer will send out billing notices. You will have the following payment options:
Pay off the assessment in full during a 30-day interest-free window and receive a reduction in administrative fees and costs
Pay off part of the assessment during the interest-free window and pay the balance owed over a defined number of years
Make a payment once a year, which includes simple interest, over a defined number of years, until the assessment is paid in full
The first payment utilizing any of the above options is not due for at least a year or two after the improvement has been constructed.
NOTE: No payments for any improvement may be made until after the improvement has been constructed; the final assessment hearing has been held; and the 30-day interest-free period is available.
Once the City Council has passed an ordinance creating an LID, it becomes a public record, and it is noted by title companies that at some future date an improvement will be constructed and monies will be owed to pay for the improvement. Title companies often consider the future assessment amount a lien against the individual properties within the LID even before construction begins. Choosing a knowledgeable real estate representative would be very beneficial to you when negotiating any future, unpaid assessment amounts with a prospective buyer.
A property owner requests a neighborhood advisory survey form for a specific improvement
An LID property-owner list is created by City staff and sent, along with the neighborhood advisory survey form, to the requester of the improvement
An adequate neighborhood advisory survey form is returned to the LID staff
A resolution is prepared for the City Council to create the LID
A formation hearing is scheduled
There is a statutory period to appeal the formation of the LID
The City Council approves an ordinance creating the LID
A City staff engineer designs the improvement then advertizes the project, soliciting for public bid
Each property owner is contacted during the design process if supplemental work is required or requested relating to the improvement
The contractor that provides the lowest bid, and meets City contract requirements, is awarded the contract to construct the improvement
The improvement is constructed by the private contractor and is overseen by City staff
A close-out process after construction is complete examines all material quantities, construction quality and related costs and issues in order to finalize the project
The City Council sets a date for a final hearing
Notices are mailed to all assessed property owners identifying the time and location of the hearing
A final hearing is conducted, which sets the assessment amount for each property and allows a legal process to challenge any contested assessment amounts
An appeal process exists per state statue
The City Council affirms the assessment roll
A 30-day window exists to pay all or part of the assessment, thus avoiding or reducing interest and other charges
The City Treasurer sends out the first annual billing notice
Please call LID representative Ralph Rodriguez at 591-5522 or Michael Garrison at 591-5338 for answers to your questions that are unique to your neighborhood.