An LID is a specific geographical district formed by a group of property owners working together to bring needed capital improvements such as sidewalks, streetlights, street pavement or water or sewer lines. An LID is a financing method available to property owners for design and construction of those improvements. The City undertakes all aspects of design, financing and construction of improvements and sells bonds to provide cash for the project. Property owners within the benefit district repay the money through special assessments, usually over 10 to 20 years. Neighborhoods should consider forming an LID to fund improvements that would benefit each property owner.
LIDs have several advantages.
Perhaps the biggest benefit to those needing the improvements is LIDs provide a means of spreading the cost of the improvements among several property owners. This reduces the cost of improvements compared to the cost of charging an individual property owner. Property owners are able to spread the cost of the improvements over a period of time and may take advantage of the City's ability to borrow money at lower interest rates than individuals. The larger, more expansive LIDs also allow property owners not familiar with construction, contracting, engineering or financing to depend on the City to undertake the process for them, acting as agent to manage the project's design and construction. The process is long and complex, and may take longer than normal projects, due to public notice requirements, establishment of the Local Improvement District and public hearings.