Section 10 Neighborhood Improvement District Act

• Library: Urban Development Subdivisions, and Annexations (2011 Ed.)

A NID (neighborhood improvement district) describes a designated area targeted for specific public improvements that are financed by special assessments levied on benefiting properties. On August 7, 1990, Missouri voters approved an amendment to the Missouri Constitution expressly authorizing NIDs. Mo. Const. art. III, § 38(c). The subsequently enacted NID Act (Neighborhood Improvement District Act), §§ 67.453–67.475, RSMo 2000 and Supp. 2010, authorizes any city or county to create NIDs.

Public improvements for which special assessments may be levied include maintenance and renovation of existing public facilities as well as new construction. Section 67.453, RSMo 2000. In addition to labor and material expenses, eligible costs include:

property acquisition; planning and design fees; underwriters' costs; attorney fees; and construction interest.

The city or county may also include its own administrative expenses and project supervision costs.

The NID Act supplies no evidence, however, regarding the eligibility of improvements to privately held property such as private subdivision streets. The few Missouri decisions construing the term "public improvement" suggest that eligible improvements must be publicly owned or, at a minimum, that the governmental entity retain an interest in the property to be improved. See, e.g., Kansas City to Use of Delargy v. Wells Bros. Const. Co., 54 S.W.2d 449, 452 (Mo. App. W.D. 1932).

The NID Act provides two independent procedures for establishing NIDs under § 67.457, RSMo Supp. 2010:

By approval of the qualified voters residing in the proposed district. The required percentage of voter approval equals that required for the issuance of general obligation bonds. Upon petition signed by owners of at least two-thirds of the property (by area) located within the proposed NID. Each owner of land within the proposed NID is limited to one signature on the petition, regardless of the amount of aggregate land or total parcels that landowner may hold.

Upon requisite voter approval or filing of a petition, the governing body, by ordinance or resolution, may establish the NID and direct preparation of improvement plans.

The NID Act permits local issuance of general obligation bonds. Section 67.455, RSMo 2000. Municipalities may combine improvements and individual projects in multiple districts within a single bond issue, thus reducing costs of issuance. Total indebtedness for NID projects may not exceed 10% of the assessed valuation of all...