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portfolio, I nsteaa of by an underwriter. Though this is less otten the case, it sometimes produces a lower cost of funding for small LID projects, particularly if the term is 15 years or less. Throughout this chapter the term underwriter will refer to either the underwriter which in turn sells bonds to investors, or a bank which purchases the bonds for its own portfolio. When referring to construction or interim financing, only the term lender will be used, referring to a bank. Put a Financing Team Together Early An essential feature of the planning process is to put a team together consisting of those that will be a party to the financing. The financing team includes the municipaiity, its bond counsel, financial advisor and even the investment banker representing the underwriter or the lender that will be providing the interim financing when the project is constructed and permanent financing when the project is completed. !n many cases, those providing the financing should be involved even if completion of the project and the permanent financing is over a year away, particularly for developer projects (significantly undeveloped properties). Additionally, a n MAI appraisermay be needed on the team if it is suspected that some of the properties may not benefitfrom market value increases equal to or greater than the assessed cost of the improvements, or if the ratio of the market value of the properties to the estimated assessment on the properties might be less than would be acceptable to the underwriter or lender. Using an experienced financing team will help make the financing process as smooth and trouble free as possible. It will also assure that the project can be financed and at favorable rates for the property owners. Prior to formation of the LID the financing team will help determine the financial risks for the project as originally envisioned and any difficulties there may be in obtaining funds for construction or permanentfinancing. if the project is a developer LID, one in which there are few property owners or largely undeveloped land, special considerations might be required of the property owners in order to make the financing a success. The considerations may consist of letters of credit, accelerated foreclosure agreements, deposits to special reserves, project contributions, ora combination of these or others. To be fair, the property owner needs to know these requirements and their resulting costs prior to formation, not after construction. The owners may be unable to pay for or unwilling to agree to add!tional considerations. Alternately if, in order to make the financing a success, the municipality must improve the security for the financing by increasing the balance in the guaranty fund or by contributing funds to the project, it must know that prior to formation so that it can determine the method of increasing the fund's balance or whether to withdraw support for the project. Roles of Financing Team Members The financing team is responsible for developing a financing plan that balances the risks to municipa!ity and to the financing provider with the costs to the property owners. If a proper balance is achieved, the project can be financed and at favorable rates. If the risk is too high or the cost too great, the financing will fail and the project should be abandoned. Members of the team contribute expertise related to their responsibilities that help assure success forthe project financing even before the legal formation of the district. 1. The municipality provides key information about its willingness to be involved and the importance of the project to the community and the property owners. This information includes: Local and Road Improvement Districts Manual far Washington State Sixth Edition 43