1. Community Improvement Districts County Counselors Association of Kansas Annual Meeting
November 15, 2010
Janet S. Garms
Dorothea K. Riley

2. Community Improvement Districts Overview
K.S.A. 12-6a26 et seq. (“CID Act”)
Effective July 1, 2009
Allows cities and counties to levy special assessments or sales tax
Use of assessments and sales tax to finance projects or pay debt service on special or general obligation bonds

3. Community Improvement Districts Formation of Districts
Create either a special assessment district or sales tax district
Special Assessment Districts
Petition signed by owners of all land within the proposed district
Only financing mechanism is special assessments
No general obligation bonds will be issued
Governing body may adopt a resolution or ordinance creating district
Sales Tax Districts
Petition signed by owners of more than 55% of the land area and the assessed value of land within the proposed
May utilize sales tax, general obligation bonds and special assessments
Requires a public hearing before resolution or ordinance creating district
Petition Requirements
Includes nature and cost of project, method of financing, map and legal description

4. Community Improvement Districts Eligible Projects
CID Act contains an extensive list of projects that may be financed
Acquisition, improvement, construction or demolition of the following:
Public and private buildings, structures and facilities
Sidewalks, streets, drainage systems, sewer systems, parking lots and garages
Lighting, awnings, landscaping, utilities and other site improvements
Paintings, sculptures and other cultural amenities
Mass transit and waterways
Payment of certain operating and other expenses including:
Music, security, cleaning, child-care, maintenance and employee training
Promotion of tourism, cultural activities and special events
Promotion of business activity and economic development
Economic impact and development studies
Various soft costs, including development and creation costs
Up to 5% of total cost to municipality for administration/supervision

5. Community Improvement Districts Financing of Project Costs
Projects can be financed on either a pay-as-you go method or by the issuance of bonds, or a combination of both
If special assessments levied, follow assessment statute except:
No assessments levied against city or county
Assessment can be reduced or eliminated to extent sales taxes sufficient to cover DS
Sales tax may not exceed 2% in increments of .1% or .25%
If bonds issued, sales tax shall expire no later than date bonds mature
If pay-as-you-go financing is used, sales tax shall expire 22 years from date tax starts to be collected or when all project costs paid

6. Community Improvement Districts Special and General Obligation Bonds
Must mature in no more than 22 years
Special obligation bonds do not count against statutory debt limitations
General obligation bonds count against statutory debt limitations if all general obligation bonds issued pursuant to CID Act exceed 3% of assessed valuation
Bonds are not required to be sold at public sale
If a protest petition is signed and filed by 5% of qualified voters within 60 days following public hearing for sales tax district, general obligation bonds cannot be issued unless approved by majority of voters at election
Suits to set aside assessments or sales tax or questioning the validity of proceedings creating the district or authorizing project must be brought within 30 days of publication of resolution or ordinance creating district or imposing the tax
Federal and state tax implications

7. Community Improvement Districts Policy Considerations
Many governing bodies have passed resolutions approving CID policies
Limiting eligible projects
Public vs. private
Capital vs. operating
Prior expenditures
Excluding specific types of projects
Target areas or types of projects for development
Requiring funding/development agreements
Consider the administrative responsibilities of County
Provide for a source of payment of County’s outside consultants
Address performance standards, assignments, bankruptcy, etc.

8. Community Improvement Districts Policy Considerations
Requiring evidence of project viability
Minimum equity requirements for developer
Background checks
History of timely tax payments
Evidence of experience/stability
Requiring additional notices
Notice to all existing tenants
Notice to consumers
Requiring bond issuance and pay-as-you go standards
Require or express preference for pay-as-you-go
Minimum threshold for bond issue size or pay-as-you-go project size
Determine availability of GO backing
Require minimum credit standards prior to issuance of bonds
Limit sale of non-GO backed bonds to qualified investors/large denominations ($100,000 or more) 8

9. Community Improvement Districts Legal Questions
5% limit on municipal administrative costs
22 year sales tax collection limit
3% debt limit
Land ownership for petition
State administrative fee
“Value of land area”
Percent required for petitions
Adding or removing property
Estimated cost of project
Impact of future legislation
Combining with other financing tools

10. Community Improvement Districts
Dorothea K. Riley
Janet S. Garms