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Local Improvement Districts

This page provides basic guidance for local governments in Washington State regarding local, utility, and road improvement districts, including relevant statutes, court decisions, and local examples.

For more details, download our Local and Road Improvement Districts Manual. Also see the Local and Road Improvement Districts Manual Appendices. Check with your legal counsel to ensure the currency of all sample documents and related information:


Most municipal governments (cities, counties, water and sewer districts, ports, fire protection districts, etc.) can use the basic LID processes in chapters 35.43 RCW through 35.56 RCW (which directly address LIDs in cities). Counties in Washington State can utilize LIDs for water, sewer and storm sewer system improvements under chapter 36.94 RCW. Procedures under that statute are very similar to LID procedures in cities and towns under chapters 35.43-.56 RCW. Assessment districts for road improvement projects in counties however, must follow the RID procedures under chapter 36.88 RCW. So, while we generally refer to all of these as Local Improvement Districts (“LIDs”) where appropriate we will point out the differences. And, each entity should carefully review its specific enabling statutes.

What is a Local Improvement District?

Local Improvement Districts (LIDs) are a means of assisting benefiting properties in financing needed capital improvements through the formation of special assessment districts. Special assessment districts permit improvements to be financed and paid for over a period of time through assessments on the benefiting properties.

A variation of the LID is the Utility Local Improvement District (ULID). The difference between ULIDs and LIDs is that utility revenues are pledged to the repayment of the ULID debt, in addition to the assessments on the benefiting properties. State statutes provide that an LID can be converted to a ULID after formation. The reverse is not possible.

LIDs are Only Financing Tools

The most important point to realize about LIDs is that the entire LID process is about financing infrastructure improvements, not constructing them. LID processes lead, ultimately, to the sale of bonds to investors and the retirement of those bonds via annual assessments on the property owners within a district.

The goals of the LID process are twofold:

  • To present a bond portfolio to investors that will entice them to invest at as low a rate of return as possible; and
  • To assess property owners as fairly as possible in relation to special benefits received.

Nowhere in the LID statutes will you find information on technical feasibility, design, cost estimates, construction management expertise and project closeout requirements. Good construction management skills are necessary, just as for any other project not financed by an LID.

LIDs as Economic Development Tool

LIDs can be a catalyst for economic growth, allowing private development firms and industries to obtain long-term financing for on-site public infrastructure at relatively lower interest rates.

LIDs, particularly those used to match grants from federal and state agencies, can be used to finance essential city or regional off-site improvements at relatively lower interest rates.

Provision of on and off-site infrastructure improvements through LIDs can also play a key role in securing large industrial plant startups or relocations.

LIDS and Developer Mitigation

Off-site infrastructure improvements for private developments of any scale can be accomplished very readily through LIDs. Developers appreciate the chance to spread their costs out over a longer term at a relatively lower rate of interest. Developers also appreciate the opportunity to spread off-site improvement costs to adjoining property owners who are similarly benefited. The flip side of this is that LID projects cost more to administer and require contracts to be designed and awarded by the city, with prevailing wages and other public works contract requirements to be met.

LIDs and Infrastructure Improvements

LIDs are very well-suited for filling in gaps in a city's existing infrastructure, including:

  • Older plats where the full complement of today's required improvements does not exist.
  • Sewer and water main extensions for health and sanitation purposes.
  • Paving gravel streets or alleys to reduce dust and maintenance costs
  • Undergrounding or relocating utilities.
  • Providing street lights.

LIDs provide a means for whole neighborhoods to improve their quality of life, with long-term financing and relatively lower interest rates. The cities of Tacoma, Spokane, Everett and other cities allocate funds each year to match LID money for neighborhood projects.

Public Relations

LID financed projects test agency public relations skills like no others projects, so a good public relations plan for each project will be needed. These plans will be more effective if drafted in relation to overall city public relations policies, including those for media relations, conduct of meetings, parliamentary procedure and customer service. Public relations plans for an individual project need not be elaborate, but should recognize its unique scope and potential impacts. The plan should be detailed enough to include those steps necessary for notification of property owners, public hearings, review and approval by other city or local agencies as well as the mayor and council.

LID financed projects are unique in that property owners have the power to decide, collectively, whether they will pay assessments for improvements to be built in the project. If they are not convinced that the project is needed and cost effective in the early stages, they may vote against it. An ideal LID financed project would be one in which specific property owner needs and overall city goals coincide precisely at minimal cost to both, with no adverse environmental impacts. Ideal projects are rare though. More common are projects where compromises are needed and in which a certain degree of disaffection exists or is generated between the city and property owners.

Educating the public as to the what, how, when, why, etc., of a project is a never-ending challenge, as new people are always entering the process. In addition, even those who have been previously involved will remember the project as it existed at that slice of time when they were last involved. It is important therefore, in preparation for any meeting or project discussion, to think about the participants in the meeting and where they are in relation to the current status of the project. Spend at least a few minutes at the beginning of each meeting making sure that all participants are aware of the current project status and on the same wavelength as nearly as possible.


Resolution of Intent Method

Under the Resolution of Intention method (outlined in RCW 35.43.140 - .150), the legislative body initiates the LID formation process with the adoption of a resolution declaring its intention to order the improvement and setting forth the territorial extent of the improvement, and setting a date for a public hearing. The resolution must be published in at least two consecutive issues of the city or town’s official newspaper, and the first publication at least fifteen days before the public hearing. The hearing can be held before the city or town council or a committee of the council. At the conclusion of the hearing, the city or town council adopts an ordinance creating the LID and ordering the improvement.

Petition Method

The petition method permits property owners to initiate the formation of an LID. The steps are essentially the same, except that instead of a resolution of intention, a formal petition executed by a majority of the property owners in the proposed assessment district, is submitted to the legislative body. The legislative body then establishes a date for a public hearing, and subsequent procedures are the same as for the resolution process.

Assessment Methods and Criteria

Statutes specify that the assessment per parcel must not exceed the special benefit of the improvement to that parcel, which is defined as the difference between the fair market value of the property before and after the local improvement project. In addition, the assessments must be proportionate to one another. A corollary to these principles is that property not benefited by the improvements may not be assessed. No matter what assessment method is used - per parcel, front foot, area, zone termini, traffic volumes, special benefit appraisal, etc., - the courts will be concerned only with these criteria.

The state statutes describe one or two specific methods of assessing benefited properties, but also allow municipalities to choose any other method which meets the basic criteria.

There are two main assessment methods:

  • Mathematical (relatively inexpensive, easier to explain to property owners)
    • Front-foot (per lineal foot of property street frontage)
    • Area (per square foot of property)
    • Zone and termini - described in RCW 35.44.030 and .040
    • Unit (per lot or parcel)
    • It is possible to use several different types of mathematical assessment within one district.
  • Special Benefit Analysis (safest, but relatively expensive)
    • Certified appraiser calculates the value of each parcel with and without the infrastructure improvement project.
    • The difference between those two values is the special benefit.
    • The portion of project costs assignable to the LID is then divided by the total of all special benefits.
    • This ratio is then applied to the special benefit of each parcel to determine the assessment for each parcel.

Even if an LID lends itself very well to a mathematical method of assessment (e.g., has uniform lots or similar zoning) or is not large enough to warrant a full-blown special benefit analysis, it is wise to check a few strategic parcels with a limited appraisal. This will prevent unpleasant surprises at the final assessment roll hearing.


No councilperson wants to vote for a project that will put someone out of his or her home. Two types of assessment deferrals are referenced in the statutes:

  • Chapter 84.38 RCW provides for assessments to be deferred indefinitely for qualified senior citizens.
  • RCW 35.43.250 and RCW 35.54.100 provide for a deferral of up to four years for economically disadvantaged property owners, as defined in the formation ordinance.

In both of these cases, the deferred assessment does not go away, but becomes a lien against the property.

Other options for property owner relief, including model mitigation and single-family development rights purchase agreements may be developed. Deferrals and other options for relief should be publicized early in the LID process, with a concerted effort made to identify those who may need such relief. Elected officials also need to know these options so that they can advise citizens who may contact them.

Initial Hearing

After the council has either adopted a Resolution of Intention, or accepted a Petition, it will schedule a public hearing. Notice of the hearing must be published in at least two consecutive issues of the city or town’s official newspaper, and the first publication at least fifteen days before the public hearing. The hearing can be held before the city or town council or a committee of the council. At the conclusion of the hearing, the city or town council adopts an ordinance creating the LID and ordering the improvement.

LID Administration & Preliminary Assessment Roll

Within 15 days after the legislative body has adopted the ordinance creating the LID, the LID administrator files with the city treasurer the title of the improvements, the LID number, a copy of the diagram or print showing the boundaries of the district (preliminary assessment roll map), and the preliminary assessment roll or abstract of same showing thereon the lots, tracts, or parcels of land to be assessed. The treasurer then immediately posts the preliminary assessment roll on the index of local improvement assessments against the properties affected by the local improvement.

Restraint by Protest

Also, after the legislative body adopts the formation ordinance, property owners have a 30-day protest period. If, at the end of the protest period the jurisdiction has received written protests from property owners who would pay at least 60% of the total cost of the improvement (including federally-owned or other nonassessable property as shown and determined by the preliminary estimates and assessment roll of the proposed improvement district). The LID will be dissolved. If the protests received are less than 60%, the LID is officially formed. However, any property owner who has filed a timely written protest before the formation hearing may appeal the formation of an LID to Superior Court. See RCW 35.43.180.

LID Closeout

Estimating Total Costs

The LID closeout process begins when construction is completed or almost so and total costs can be accurately estimated. Final costs to be assessed to the properties should be based as nearly as possible on actual costs. Since the costs of closing the LID are included in the final assessment, it is necessary to make some estimates regarding the final financing costs, legal fees and administrative costs. Grant funds and contributions from the city or other sources must be deducted from the total project costs to arrive at the amount to be assessed to property owners. It may be possible to reduce financial, legal and administrative costs to individual LIDs by combining several different LIDs into a consolidated bond issue known as a CLID (consolidated local improvement district). Once the final LID share of costs has been ascertained, this amount is distributed in a manner similar to the calculation of the estimated assessments on the preliminary assessment roll.

If a special benefit analysis method of distributing costs for the final assessment roll is used, this study will need to be completed well ahead of the time to prepare the final rolls since the special benefit analysis can be a lengthy and very detailed process. The LID administrator should arrange several special meetings for the appraiser to meet with small groups of property owners to explain exactly how the special benefit process works. These meetings should occur a month or more before the final assessment roll confirmation hearing to allow property owner concerns to be properly addressed. Unlike the preliminary assessment roll where cities use the county assessor's records, the ownerships for the final assessment roll are determined from the county treasurer's records. In many counties, the assessor and treasurer share a common database, so that the information is identical. It is a good idea to request a letter to that effect from the assessor or treasurer for LID files.

Final Assessment Roll and Hearing

The final assessment roll is filed with the city clerk. A final assessment roll hearing notice, is to be mailed to property owners whose names appear on the final roll at least 15 days prior to the date set for the assessment roll hearing. This notice must state that objections must be made in writing and filed with the clerk on or before the hearing date and that the legislative body will consider the objections and correct or revise the roll as needed and vote on an ordinance confirming the roll. This notice to be published at least once a week for two consecutive weeks in the official newspaper. The last publication must be at least 15 days before the date fixed for the hearing. The assessment roll confirmation hearing should be recorded by a court reporter or continuous video in addition to a tape recording. The final assessment roll hearing should be conducted with possible litigation in mind.

In the final assessment roll hearing, the city council acts as a judge, or - more accurately - a board of equalization, to consider evidence presented by both staff and property owner as to the correctness of the assessment for each parcel. Formal rules of quasi-judicial procedure should be formulated and distributed to the council and LID participants well in advance of the hearings. The hearing must be fair, open, impartial and structured. At the assessment roll confirmation hearing, the LID administrator reports the total final cost, any public participation money paid, or to be paid by the municipality or from grant funds, and that all the proceedings were proper and in conformance with LID statutes, particularly that proper notice has been given.

Testimony protesting the assessment roll should be permitted only if a property owner has filed a written protest prior to the scheduled hearing time. A property owner's appropriate protest is to question the amount of benefit that the property will receive from the improvement. Such testimony must be countered by an expert opinion from the city's appraiser substantiating the benefits of the improvement to that property. The legislative body has authority to revise or amend the final roll as it sees fit. However, if any assessment is raised or if there is a need to include an omitted property not previously on the roll, such property owner(s) are entitled to new notice and a new hearing just as if no hearing on the final roll ever occurred. Those parties originally on the final roll and whose assessments were not raised will have no opportunity to object at a later hearing.

Downward adjustment to any of the property assessments will require additional money from another source to make up for the reduced assessment. The difference could be made up from public funds; or the difference could be made up by re-assessing the remaining property owners in the district which then requires a new hearing and additional interest and notification costs.

The entire legislative body makes the final determination without taking additional testimony. Variations of the confirmation hearing process such as a hearing examiner or legislative committee should only be done with competent legal advice. The assessment roll is approved by the majority of the legislative body (by ordinance) confirming the assessment roll. As with the formation ordinance, the assessment roll ordinance should be prepared or approved by bond counsel.

Post-Assessment Roll Hearing Actions and Appeals

After the final assessment roll is confirmed by ordinance, the roll is transmitted to the city treasurer for collection. On the effective date of the confirmation ordinance, a 10-day appeal period begins. During this period, only those parties who have filed timely written objections to the final roll may appeal to superior court. When the appeal period is over, the treasurer will publish and mail notice that the assessment roll is filed for collection. The notice states that the property owners have an opportunity to pay all or part of their assessments without interest within a 30-day prepay period.

Examples of County RID-LID Programs

Examples of City LID Programs

City LID Statutes

County RID Statutes

Significant Court Decisions

Below is a list of significant court decisions related to LIDs. Some of these cases have been selected from P. Stephen DiJulio's (Firm Co-Chair and Principal of Foster Garvey) presentation, Local Improvement Districts—a Baker’s dozen of cases to read and understand, presented at the Washington State Municipal Attorneys Spring Conference in 2008.

  • Hamilton Corner I, LLC v. City of Napavine, 200 Wash. App. 258, 402 P.3d 368 (2017), as amended (Sept. 12, 2017) - The fact that a well that was connected to water mains with funds raised through the LID assessment did not produce potable drinking water did not materially alter the special benefits provided by the LID.
  • Tiffany Family Trust Corp. v. City of Kent, 155 Wn.2d 225, 119 P.3d 325 (2005) - Procedure to challenge assessment must comply with statute. Collateral attacks are not allowed.
  • Little Deli Marts, Inc. v. City of Kent, 108 Wash. App. 1, 8, 32 P.3d 286, 289 (2001), as modified (July 16, 2001) - Cities may assess such costs before completion of the improvement.
  • Kusky v. City of Goldendale, 85 Wn. App. 493, 933 P.2d 430 (1997) - Special benefit is generally calculated based on the difference between the fair market value of the property immediately before and immediately after the improvement.
  • Bellevue Plaza, Inc. v. City of Bellevue, 121 Wn.2d 397, 851 P.2d 662 (1993) - Assessment methodology. Burden of proof on appeal.
  • City of Seattle v. Rogers Clothing for Men, Inc., 114 Wn.2d 213, 787 P.2d 39 (1990) - Not an LID case – issue was formation of a Business Improvement Area. Court held that “special benefits” could be aesthetic.
  • Doolittle v. City of Everett, 114 Wn.2d 88, 786 P.2d 253 (1990) - Assessment of contiguous parcels must account for use of each of the parcels. Discussion of “larger parcel” vs. “unitary use.”
  • Bellevue Associates v. Bellevue, 108 Wn.2d 671, 741 P.2d 993 (1987) - Assessment may be proportional to the benefit provided.
  • Patchell v. City of Puyallup, 37 Wn. App. 434, 682 P.2d 913 (1984), review denied, 102 Wn.2d 1015 (1984) - Due Process/Appeal Procedure. Substantial compliance with appeal procedures is required.
  • In re Indian Trail Trunk Sewer Sys., 35 Wn. App. 840, 670 P.2d 675 (1983), review denied, 100 Wn.2d 1037 (1984) - Burden of proof.
  • Esping v. Pesicka, 92 Wn.2d 515, 598 P.2d 1363 (1979) - When city by contract does not make otherwise-assessable property pay the assessment, the value of those contract rights also must be excluded from total cost of improvement. Also, formation protests.
  • Abbenhaus v. City of Yakima, 89 Wn.2d 855, 576 P.2d 888 (1978) - Assessment is presumed valid.
  • Berglund v. Tacoma, 70 Wn.2d 475, 433 P.2d 922 (1967) - Assessments are not taxes, LID guaranty fund required.
  • Kasper v. Edmonds, 69 Wn.2d 799, 420 P.2d 346 (1966) - Contribution of city to project is excluded from total cost of improvement.
  • Sterling Realty Co. v. City of Bellevue, 68 Wn.2d 760, 415 P.2d 627 (1966) - Good general discussion about assessments.
  • Heavens v. King County Rural Library Dist., 66 Wn.2d 558, 404 P.2d 453 (1965) - General and special benefits.

Last Modified: January 23, 2023