What is the Typical Lifecycle of an SID?
The district lifecycle below shows the different steps of the SID process and what can be expected.
Pre-Formation of District:
Month 1– Month 19
- Developer identifies land for development
- Developer engages engineer to determine preliminary costs to develop
- Developer engages SID real estate attorney to assist in finalizing purchase of land and to begin entitlement process
- Developer engages municipal advisor (Kuehl Capital) to take initial look at financial feasibility and come up with initial thoughts on a financing structure
- Development team meets with authorities to refine required infrastructure improvements and costs
- Development team negotiates subdivision agreement and, if necessary, inter-local agreements
- Kuehl Capital refines feasibility analysis and drafts write-up to secure purchase agreement from an underwriter or for direct placement
- Project is approved through city departments / planning board / city council / county board
- SID attorney forms the district through district court
Installation of Improvements & Warrant Issuance:
Month 20 – Month 72
- Engineer defines specs and quantities
- Engineer drafts bid requests
- District formally publishes bid requests
- Engineer review bids and compiles tab sheet
- Engineer recommends lowest qualified bidder
- District awards contracts
- District adopts Resolution of Necessity for each improvement project
- Kuehl Capital and disclosure counsel draft disclosure documents
- District reviews and adopts disclosure
- Contractors begin installation of infrastructure improvements
- District issues warrants to contractors for work performed in progress payments
- Kuehl Capital reviews minutes and registers warrants with county
- Bond counsel reviews meeting minutes and issues tax-exempt legal opinion
- Kuehl Capital coordinates payment to contractors
- Purchaser writes checks to contractors in exchange for warrants
- Kuehl Capital coordinates transfer of warrants from contractor to purchaser
- Engineer certifies that installation of improvements is complete
- Engineer compiles “Final Statement of Costs”
- Engineer calculatess breakdown of special assessments and general obligation costs for proposed levy of special assessments
- Kuehl Capital reviews final statement of costs and proposed levy of special assessments, and recommends adjustments if necessary
- District levies special assessments
Buildout & Bond Issuance:
Month 60 – Month 72
- Kuehl Capital tracks buildout, the collection of reimbursables and the collection of special assessments to identify bond and cash call opportunities
- Kuehl Capital recommends warrant calls with cash and the issuance of bonds to redeem warrants as taxable valuation is established
- Kuehl Capital periodically runs analysis to determine tax levy for the following year and confirms ongoing feasibility
- Kuehl Capital assists the district and works with Disclosure Counsel to periodically update warrant offering disclosure
- District annually issues warrants to pay interest on outstanding construction fund warrants
- District issues general fund warrants to fund operating costs and maintenance on improvements, eventually getting on a cash basis
- At fiscal year-end, accounting firm performs audit for financial statements
Post Issuance & Ongoing Compliance:
Month 36 – Month 72
- Kuehl Capital runs analysis to set the levy for the following year and confirms ongoing feasibility
- At fiscal year-end, accounting firm performs audit for financial statements
- Kuehl Capital assists the district with post issuance tax-exempt compliance
- Kuehl Capital assists the district with continuing disclosure obligations
The SID Process

- 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

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

- 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

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

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

