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Kuehl Capital Kuehl Capital
  • ABOUT KUEHL
    • Meet the Team
    • Contact Us
  • ABOUT SIDs
    • District (SID) Participants
    • District Timelines
  • OUR SERVICES
    • Strategic Services
    • Transactional Services
    • SID Post-Issuance Services
  • OUR DISTRICTS
  • OUR PARTNERS
  • RESOURCES
ABOUT SIDs
Home ABOUT SIDs

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

The need for SIDs began after World War II, when the demand for housing increased as soldiers returned home.  It was apparent that there was inadequate infrastructure (e.g.- publicly paved roads, water, sanitation and drainage) to serve the needs of these growing communities.  Nebraska needed a mechanism to facilitate these much needed infrastructure improvements.

    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?

The SID model has become a sustainable and effective tool to provide financing for the funding of infrastructure improvements for new residential, commercial and industrial developments. SIDs allow cities to control the specifications and scope of improvements without requiring direct investment by local municipalities/governments.

    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?

One of the most important factors to ensure the success of an SID is the team of professionals involved in its formation. The parties initially involved include an SID attorney, engineer, municipal advisor, CPA and developer (board of trustees). Read More

SID Governance

All SIDs are governed by a five-member Board of Trustees. The Board makes decisions utilizing the advice of legal, financial, and engineering professionals.  SIDs do not have the statutory authority to make laws or pass ordinances.

SID –Debt Issuance Process

SIDs have the power to borrow money by issuing warrants and general obligation bonds.

    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.

A Look into an SID Timeline

Though the same process is followed for all SIDs, each individual SID timeline 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 annexed.

SID PROCESS

Land Acquisition

Land Acquisition

  • 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

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SID Formation

SID Formation

  • SID is formed in district court
  • Professionals hired:
    • Attorney
    • Municipal Advisor
    • Engineer
    • Accountant
  • Enter into inter-local agreements

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Installation of Improvements

Installation of Improvements

  • Resolutions of necessity adopted by 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

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Warrant Issuance

Warrant Issuance

  • Coincides with installation of improvements
  • Special assessments levied
  • Annual Interest warrants issued

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Lot Sales & Construction

Lot Sales & Construction

  • Lots sold
  • Construction of homes, commercial buildings, and apartments

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Bond Issuance

Bond Issuance

  • Taxable valuation is created
  • Bond size and issued to redeem warrants

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Bond Debt Retired or Annexation

Bond Debt Retired or Annexation

  • Bond debt retired or annexed by city

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  • 1414 N. 205th St. Suite 1
  • Omaha, NE 68022
  • (402) 391-7977

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