A RESOLUTION reaffirming policies regarding the establishment and management of Local Improvement Districts (LIDs) for the City of Seattle.
WHEREAS, the Revised Code of Washington Chapter 35.43 authorizes the establishment of Local Improvement Districts (commonly referred to as LIDs), in order to finance public improvements, such as sewers, sidewalks, street improvements, and utility
undergrounding; and,
WHEREAS, Local Improvement District financing is a useful tool to provide property owners and municipalities with desired capital improvements; and,
WHEREAS, Local Improvement Districts are a means by which property owners in a geographic area pay some or all of the costs of a public improvement that will benefit them; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEATTLE, THE MAYOR CONCURRING, THAT:
Section 1. The City of Seattle hereby reaffirms existing policies regarding the establishment and management of Local Improvement Districts, commonly referred to as LIDs. The policies are contained in Exhibit A (attached).
Adopted by the City Council the _____ day of _______________, 2001, and signed by me in open session in authentication of its adoption this _____ day of _______________, 2001.
________________________________________
President _________________of the City Council
THE MAYOR CONCURRING:
________________________________________
Paul Schell, Mayor
Filed by me this _____ day of _______________, 2001.
________________________________________
City Clerk
(Seal)
Exhibit A: Policies Related To Local Improvement Districts
Clausen/Soohoo/peyer
FinPolicyLIDRES
August 24, 2001
Version 2
EXHIBIT A:
POLICIES RELATED TO LOCAL IMPROVEMENT DISTRICTS
Introduction
Local improvement districts (LIDs) are a funding mechanism for local infrastructure improvements, such as concrete or asphalt paving, sidewalk construction, and drainage, in which property owners who benefit directly contribute to the cost of the
improvements. The amount of the contribution depends on the "special benefit" accruing to the property owners. The benefit is measured as the increase in property value that can be attributed to the improvement and is determined by a professional
appraiser. The formation of LIDs involves the sale of bonds to investors and retirement of the bonds via annual assessments on benefiting property owners within a district. LIDs provide a mechanism for neighborhoods to make infrastructure improvements
with long-term financing and relatively low interest rates.
The legal authority for Washington cities to create local improvement districts is established by Revised Code of Washington (RCW) Chapter 35.43. The RCW states that the legislative authority of any city or town may order any work necessary for the
completion of local improvements, and may levy and collect special assessments on benefiting properties.
Although the City of Seattle frequently used LIDs to finance infrastructure improvements in the past, the City's use of LIDs has declined significantly over the past three decades. The City currently forms approximately two LIDs each year.
ESTABLISHING LOCAL IMPROVEMENT DISTRICTS
Policy 1: The City Council has power by ordinance to provide for local improvements and to levy and collect special assessments on properties that benefit directly. [City Charter Article IV, Section 14, Eighth]
Ordinances related to local improvements require the affirmative vote of at least a majority of City Council members. Unless a petition for an improvement is presented, the improvement shall not be ordered except by ordinance passed by the affirmative
vote of two-thirds of all members of the City Council. No streets shall be ordered graded without petition, except by a unanimous vote of all members present. [SMC 20.04.020]
Policy 2: Every ordinance ordering any local improvement shall declare what, if any, portion or proportionate amount of the cost and expense of the local improvement shall be borne by the City out of its general fund, or other fund, and shall direct
that remaining costs be assessed against the property within the district. [SMC 20.04.260]
LOCAL IMPROVEMENT FUNDS
Policy 3: The ordinance creating any local improvement district (LID) shall also create a fund to be called "Local Improvement Fund, District No._____." All sums from any source intended for use in the prosecution of the local improvement, all sums
paid on account of the assessment, and all sums resulting from the sale of bonds issued for the local improvement shall be placed into the fund.
The moneys in such fund shall be used for no other purpose than the redemption of warrants drawn upon and bonds issued against the fund to provide payment for the cost and expense of the improvement. If the fund is solvent, the Director of Finance may
elect to pay for the cost of the improvement by check. [SMC 20.04.150]
Policy 4: The Local Improvement Guaranty Fund was established pursuant to RCW Chapter 35.54 to guarantee the payment of local improvement bonds and warrants, and for paying deferred assessments. [SMC 20.08.010]
In order to maintain the Local Improvement Guaranty Fund, the City Council shall levy a tax each year upon all property in the City subject to taxation. The levied sums in any year shall not be more than sufficient to pay the outstanding warrants on
the fund and to establish a balance which combined levy in any one year shall not exceed 5 percent of the outstanding obligations thereby guaranteed. The authorized tax levies shall be additional to, and, if need be, in excess of, any and all statutory
and Charter limitations applicable to tax levies of the City. [SMC 20.08.020]
If the Local Improvement Guaranty Fund has sufficient funds to meet all valid outstanding obligations of the fund and all other obligations reasonably expected to be incurred in the near future, the City may transfer assets from the Local Improvement
Guaranty Fund to the general fund. The net cash of the Local Improvement Guaranty Fund may not be reduced by such transfer to an amount less than ten percent of the net outstanding obligations guaranteed by the fund. [RCW 35.54.095]
L: