SIDs Low Cost Benefits Everyone
SIDs are in reality a public private partnership. Because of the tax-exempt instruments used to finance SIDs, the cost of development is lower, which benefits both the builder and the buyer. If developers had to finance the installation of improvements, there could be a tendency to do no more than the minimum required and future needs might not be adequately planned for. By passing along the cost of these general benefit improvements through general obligation taxes, the developer is more willing to install improvements for the future.
Learn About Sanitary & Improvement Districts
An SID is a limited purpose political corporation and one of the primary tools to facilitate urban development in Nebraska. Unique to Nebraska, SIDs have proven to be an efficient and effective way for municipalities to grow at a market driven pace.
The History of Sanitary & Improvement Districts
In the 1940's the Nebraska legislature established SIDs. SIDs would provide capital to development projects, through the issuance of tax-exempt publicly financed debt , to make the necessary infrastructure improvements.
Why Use a Sanitary & Improvement District?
SIDs finance public improvements such as streets, sewers, parks and utilities including water, power and gas. An SID's geographic and political boundaries must be located outside the city (or village) limits.
Who Is Involved in the formation of an SID?
SID –Debt Issuance Process
Construction Fund Warrants are initially issued to cover work-in-process payments. These are short-term instruments with a statutory maturity of five years, paying interest annually. They are redeemed with the payment of special assessments and from bond issuance proceeds. Bonds can have a final maturity of up to 30 years, with a five-year non-redemption provision.
Taxes are levied on the assessed value of all taxable property within the district sufficient to pay the principal and interest on the bonds and to create an operating fund for repairs and maintenance. Special assessments are levied on parcels that benefit from the improvements.
Eventually most SIDs are annexed by the city with zoning jurisdiction. Once annexed, the SID ceases to exist.