The State of Colorado has legislated detailed procedures to be used in creating an LID, constructing the improvements and assessing the property owners benefiting from the improvements. The LID program has been set up to follow these legislated detailed procedures set forth in Section 30-20-602, et seq., of the Colorado Revised Statutes (“State Statute”).
The LID program allows County staff to work with property owners to define LID boundaries, develop construction cost estimates and estimate assessments for the lots within the LID. State Statute requires a petition, public hearings before the Board of County Commissioners (“Board”) and an election. The LID program also allows County staff to procure tax-exempt bonds or local bank construction loans to finance the cost of the improvements constructed within the LID and collect special assessments over a ten (10)-year period to pay for the improvements.
LID BONDING/FUNDING:
The bonding limit for an LID is two million dollars ($2,000,000). This bonding amount may limit the size of the LID, requiring phasing of improvements. Local bank construction loan amounts are only limited by the local banks willingness to provide loans for an LID.
The payback period for the LID is normally ten (10) years. Property owners within the LID pay 1/10th of the principal, plus interest and a County collection fee, each year for the ten (10)-year period. The interest rates on the bonds or local bank construction loans are market driven and set at the time of closing on the bonds or the Douglas County loans. The special assessments are shown on the property tax statements and collected when the property taxes are paid. The special assessments start the year after construction is completed. Property owners may pay the entire assessment, plus collection fee, within thirty (30) days of the public hearing, which is held to set the final assessments based on actual cost, without incurring interest cost. The principal balance of the assessment can be paid at any time during the ten (10)-year repayment cycle.
The Board, at times, may elect to participate in funding of a portion of the costs associated with the LID. County financial participation depends on budget availability and Board approval. If the County is not able to participate financially in the LID, the Board may elect to finance the LID costs incurred until the bonds or local bank construction loans are in place. This would depend on budget availability and Board approval of a reimbursement resolution prior to the petition for creation of the LID.
ELIGIBILITY:
Existing neighborhoods that require improvements to, or the addition of, certain infrastructure relating to streets, drainage, water supply, dry utilities and/or sanitary sewer improvements may be able to use the LID program for construction and financing of those improvements:
1. The requested improvements must be allowed by State Statute.
2. Street improvements will only be considered for public streets.
3. Any proposed paving project must connect to an existing paved road (maintained by the County) to provide continuity of travel and maintenance.
4. Property ownership by any individual, corporation or trust shall be less than twenty five percent (25%) for all properties located within the LID.
5. Land developers are not allowed to use the LID program for construction of infrastructure associated with new land development or redevelopment projects.
