Community Improvement District

A Community Improvement District (CID) is a non-profit corporation or a separate political subdivision of the state that may be created for the purpose of issuing bonds, levying taxes, and applying special assessments to finance public improvements, public services, and blight removal within a defined area.

Authorization

Section 67.1401 to 67.1561 RSMo.

Eligible Activities

Public improvements and services and blight removal may be financed by a CID. The improvements or services must be located or provided within the district boundaries. Eligible public improvements and services include, but are not limited to the following:

Improvements

• Parks
• Convention centers
• Parking lots
• Sidewalks
• Streets
• Bridges
• Storm Water Facilities
• Sanitary Sewer

• Economic, Planning, Marketing or other Studies
•  Waste Collection/Disposal
•  Recreational and Cultural Activities
•  Special Events
•  Cleaning and Maintenance of Public and Private   Property
• Security
•  Facility Operation
• Blight Removal – CIDs may pay for the costs of demolishing, renovating, and rehabilitating structures (either public or private) that are located within blighted areas.

Financing

The following sources of revenue may be utilized by CIDs organized as either political subdivisions or nonprofit corporations:

• Special Assessments - if approved by owners collectively owning more than 50% of the assessed value, and by more than 50% per capita of property owners in the district
• Fees and rents for district property or services
• Grants, gifts, or donations

The following sources of revenue are available only to CIDs organized as political subdivisions:

• Property Tax - may be imposed if approved by majority vote of qualified voters in the district.
• Sales Tax - may be imposed in 1/8% (0.125%) increments up to a maximum of 1% if approved by majority vote of qualified voters in the district.

Qualified voters are defined as registered voters living in the district or, if there are no registered voters, the property owners within the district.

Bonds

Community Improvement Districts may issue bonds, notes, and other obligations. Such obligations shall mature within 20 years of the date they are issued.

Approval Process

A Community Improvement District is created by petition of the property owners. The petition must contain the signatures of property owners collectively owning more than 50% of the assessed value of real property, and more than 50% per capita of all owners of real property within the district. The petition must also contain the following elements:

• A 5 year plan that describes the purposes of the proposed district, the proposed public improvements and services, and the estimated costs of those improvements and services
• Information on the type of district being proposed and its governance. CIDs may be organized either as a separate political subdivision of the state or as a nonprofit corporation (this affects how the district may fund improvements and select its board of directors)
• The maximum rates of property taxes and special assessments, if any, that may be imposed
• A statement concerning whether a sales tax will be sought
• A statement of limitations on the borrowing capacity and revenues of the district
• The period of time the CID will exist

State Law

State law provides specific direction concerning the elements that must be contained in the petition. The City of Springfield has adopted a form petition and cooperative agreement that developers are strongly encouraged to use in drafting documents for establishment of a Community Improvement District.

State law also provides specific direction concerning the time period for certification of the petition by the City Clerk and for notice to property owners and the public. After giving proper notice, City Council shall hold a public hearing. Following the public hearing, City Council may adopt an ordinance establishing the district. The process for creating a Community Improvement District is relatively short, usually taking no longer than 2 months.

Board of Directors

Political Subdivision - The petition specifies whether the Board of Directors will be elected by qualified voters or appointed by City Council. The Board of Directors shall consist of at least 5 but not more than 30 members. Each director must either be a registered voter or an owner or authorized representative of a business or property in the district.

Nonprofit Corporation - Directors are elected in accordance with Chapter 353 RSMo.

Community Improvement District Policies

• The City of Springfield will consider the establishment of Community Improvement Districts to finance public improvements and/or public services that will directly benefit the property owners, business owners, customers, and residents of the district.
• Community Improvement Districts formed for the purpose of financing public improvements will terminate when the public improvement expense has been reimbursed.
• Perpetual CIDs are discouraged.
• The developer and/or CID will be responsible for paying for the district public improvements and seeking reimbursement through district revenues. The city will not typically provide upfront financing.
• CIDs established to provide additional funding to expedite retiring Tax Increment Financing (TIF) districts are encouraged, especially when non-captured CID revenues are pledged to assist the payment of TIF obligations that CID eligible.
• The developer and CID will enter into a cooperative agreement with the City of Springfield detailing the eligible CID projects and reimbursement schedule.
• The CID petition must contain a provision that terminates the district after 6 months if a cooperative agreement acceptable to the city and the district has not been executed.
• To ensure consistency and ease of administration, developers will use the city’s preferred petition and cooperative agreement forms.
• The city may charge an administrative fee for work performed by the city for the CID. This is typically 1½% of district revenues.
• The CID will comply with all applicable open meetings and open records laws.

General Policies

All projects will be reviewed for consistency with both the policies for the desired incentive as well as the general policies listed on the Overview and General Policies page.