Why Use a Sanitary & Improvement District
The SID model has become a sustainable and effective tool to provide financing for the funding of infrastructure improvements…
Benefits
Though all SIDs follow the same process, individual SID timelines may vary. Some SIDs may exist in perpetuity, while others could last as long as 20-30 years before being annexed. The process generally includes the following steps: land is acquired, the SID is formed, improvements are installed, warrants are issued, property is built and sold, bonds are issued, and over time the bond debt is retired or the SID is annexed.
Step 1: Land Acquisition – 12-36 months
- Developer identifies land for potential development
- Developer works with engineer to determine if land has development potential
- Developer works with attorney to get ground under contract
- Attorney, engineer, and municipal advisor work with developer to negotiate subdivision agreement with city or county and terms of inter-local agreements, if any
- Preliminary and final plats are approved
Step 2: SID Formation – 60 days
- SID is formed in the District court
- Professionals hired:
- Attorney
- Municipal Advisor
- Engineer
- Accountant
- Enter into inter-local agreements
Step 3: Installation of Improvements – 12-18 months
- Resolutions of necessity adopted by the SID board
- Notice to contractors defining specs of each contract and bids let
- Engineer makes recommendation of lowest qualified bid
- Award contracts
- Begin installation of improvements
Step 4: Warrant Issuance – 1-7 years
- Coincides with installation of improvements
- Special assessments levied
- Annual Interest warrants issued
Step 5: Lot Sales and Construction – 2-7 years
- Lots sold
- Construction of homes, commercial buildings, and apartments
Step 6: Bond Issuance – 3-7 years
- Taxable valuation is created
- Bonds structured and issued to redeem warrants
Step 7: Bond Debt Retired or SID Annexed – 20-30 years
- Bond debt retired or annexed by city
