Section 16.10 Neighborhood Improvement District Act

• Library: Local Government Deskbook (2017 Ed.)

H. (§16.10) Neighborhood Improvement District Act

A NID (neighborhood improvement district) describes a designated area targeted for specific public improvements that are financed by special assessments levied on benefiting properties. A 1990 amendment provided the constitutional basis for creation of NIDs. Mo. Const. art. III, § 38(c). The subsequently enacted NID Act (Neighborhood Improvement District Act) authorizes any city or county to create NIDs. Sections 67.453–67.475, RSMo 2016.

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(4), RSMo 2016. In addition to labor and material expenses, eligible costs include property acquisition, planning and design fees, underwriters’ costs, attorney fees, and construction interest. Section 67.453(3). The city or county may also include its own administrative expenses and project supervision costs. Id. 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 a property interest in the items to be improved. See, e.g., Kansas City ex rel. 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:

1. Approval of the qualified voters residing in the proposed district with the required percentage of voter approval equal to that required for the issuance of general obligation bonds (four-sevenths at general municipal election day, primary elections, or general elections and two-thirds at all other elections, Mo. Const. art. VI, § 26(b))

2. Petition signed by the owners of at least two-thirds of the property located within the proposed NID

Section 67.457.2 and .3, RSMo 2016.

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. Section 67.457.4. When utilizing the petition route, each owner of land within the proposed NID is limited to one signature, regardless of the amount of aggregate land or total parcels that landowner may hold. Section 67.457.3.

When an owner seeks to subdivide real properties subject to NID assessment, each parcel in existence at the time of the initial NID assessment is recognized as the “baseline” for...