Neighborhood Improvement District (NID)
Community or Neighborhood Improvement Districts (CIDs or NIDs) can help organize multiple property owners to turn an unattractive area into a restored or improved neighborhood asset.
- What is A Community or Neighborhood Improvement District?
Community or Neighborhood Improvement Districts (CIDs or NIDs) can provide property owners in business or residential areas with an innovative way to fund and enhance services and capital improvements. The establishment of a NID allows property owners to collectively organize and coordinate efforts to beautify and improve their community. Projects adopted by NIDs are basically funded by imposing special assessments on the property owners.
- Establishment of the Neighborhood Improvement District
In U City, the property owners must file a petition to create the Neighborhood Improvement District. The petition must state the improvement(s) to be made, the estimated cost of the improvements and specify the maximum rates of special assessments that may be imposed on each property owner within the district. Public Works and Parks will help the neighborhood develop the petition, obtain property ownership and lot dimension information, estimate the project cost and calculate the maximum assessment per property owner. The petition must be approved by at least two-thirds of the property owners collectively owning real property located within the district.
- Verification of the Petition and the Public Hearing
After the initial petition is received, Public Works and Parks verify whether the petition meets all requirements of the Community Improvement District Act, Section 67.1400 et.seq. of the Revised Statutes of Missouri (RSMo). It is then filed with the City Clerk who gives proper notice of a public hearing, usually by mailing the notices to the affected property owners and posting the notice of the public hearing in a local newspaper. The City Council holds the public hearing, after which, the City Council adopts a resolution approving the proposed petition, including the estimated project cost and establishing the NID as set forth in the petition. Public Works is then authorized to prepare the plans and specifications for the project.
- Public Works Oversees the Project
Once the first resolution is passed, Public Works will ensure that the project plans and specifications are developed. The project is advertised for bid for a minimum of two weeks. The lowest, responsive bid is selected and the work begins. Public Works and Parks oversee the project from inception to completion.
- Who Pays for the Project?
The City pays for the project up front. When the project is completed, property owners are billed for their share of the costs. Property owners may elect to pay the entire bill at once. Property owners may also elect to repay the City over a 10-year period, subject to an interest charge, which is currently eight percent per annum. Other payback periods and interest charges may be established, if approved by the City Council. In private subdivisions, future maintenance costs remain the responsibility of the property owners, unless the improvements are accepted by the City for public use. In this case, the City incurs all future maintenance costs just as it does with improvements in unimproved public areas.
- What are the Benefits?
A NID is an excellent vehicle to enhance residential and commercial areas. Through its available funding options, a NID or CID can help organize multiple property owners to turn an unattractive, economically underdeveloped or under serviced area into a restored and improved community that will attract homeowners and business owners. The flexibility of the Community Improvement District Act allows it to be custom designed to meet the municipality’s unique needs and the individual resources of each neighborhood.
STEPS TO FOLLOW – NEIGHBORHOOD IMPROVEMENT DISTRICT
1. Property Owners Submit A Petition to City Clerk. Adjacent property owners must submit a petition in favor of the project to the Public Works Department (The City Council prefers that at least two-thirds of the adjacent property owners agree to the project. A neighborhood representative helps gather this information. The petition is reviewed by the City Council.
2. First Resolution: The Council passes a resolution establishing the District and commissioning preliminary plans and specifications.
3. Second Resolution: using revised cost estimates, the City Council passes a second resolution preparing an assessment roll for public inspection, along with plans and specifications.
4. Public Notice: The notice should be published in a newspaper of general circulation within the City for a public hearing to consider the proposed improvement and assessment.
5. Property Owner Notice: The City Clerk mails the notice to the property owners informing them of the open hearing and the proposed cost to be assessed against their property.
6. First Ordinance: if there are not objections, the improvement is ordered to be made and financing obtained.
Construction: At this point, the project should be advertised for bids, a contractor is selected and the work completed.
7. Second Ordinance: the adjacent property owners are billed for their share of the project costs.
- If all of the owners do not sign in favor of the petition, the City Council can decide to proceed with the project and require all owners to pay.
- By law the property owners cannot “borrow” more than 25% of the total estimated improvement cost. Otherwise, a new petition should be filled.
For more information, contact the Public Works Department at 505-8560.