Special Districts Summarized

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Special Districts Summarized

• Limited-purpose governmental units that exist as
  separate corporate entities and, theoretically,
  have fiscal and administrative independence from
  general-purpose government.
• A governmental entity qualifies as special
  purpose (Census) when it exists as an
  independent, separate entity with 1) fiscal
  independence 2) administrative independence
• SDs typically rely upon pricing mechanisms to
  finance infrastructure improvements --User
  fees --Impact fees/Hookup charges --Special
  assessments/Beneficiary fees
• Examples --Special Assessment Districts (TIF
  Districts) --Port Authorities --School
  Districts --BIDs, LIDs (Business/Local
  Improvement Districts) --Utility, Fire, Parks,
  Urban Renewal Districts --Community Development
  Districts

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Special Districts on the Rise

• Special Districts are on the rise nationally
  since the 1950s.

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Special Districts on the Rise
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Special Districts by Function
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Why Special Districts?

• What are the primary reasons for the creation of
  SDs?
• 1) Formed to provide urban services to
  unincorporated areas 2a) Created to solve
  problems extending over several jurisdictions
  2b) Created to solve problems in a small area of
  a jurisdiction 3) Created as quasi-public
  agencies with broad public powers, but
  limited accessibility to voters (can circumvent
  limitations on the public sector) 4)
  Created as another means to fund and provide
  infrastructure 5) Created to provide a specific
  service or function
• Special districts fundamentally are financing
  mechanisms. Their foremost advantages are 1)
  An ability to generate financial support from
  direct beneficiaries of services. 2)
  Individual access to debt financing/bond markets.

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Special District Powers

• SDs are typically given very specific powers by
  state enabling legislation. These powers include
• 1) Construct, operate, repair infrastructure
• 2) Enter into contracts and expend monies for
  any purpose related to the provision of their
  infrastructure
• 3) To sue and be sued
• 4) To employ staff and consultants
• 5) To enter into agreements/contractual
  arrangements with other local governments
• 6) To exercise powers of eminent domain and to
  use public easements and rights-of-way
• 7) To levy and collect fees, ad valorum taxes,
  and assessments
• 8) To borrow money and incur indebtedness

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Special District Financing Approaches
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Special Districts Financing Approaches
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Important Special District Terminology

• Hookup Fees (aka Impact Fees)
• Special Assessments (aka Indirect Fees or
  Beneficiary Fees)
• District Dissolution
• Dependent Districts versus Independent Districts

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School Districts

• School Districts are independent special-purpose
  units of local government established to provide
  public elementary, secondary, and/or higher
  education.
• As of 2002, there were over 13,500 independent
  school districts in the United States, down from
  over 20,000 in 1967 and 65,000 in 1952.
• There were roughly 1,500 dependent school
  districts in the U.S. in 2002. In these cases
  schools are administered by a branch of the city,
  county, or state government.
• Advantages
• School districts provide local jurisdictions with
  the opportunity to tailor their curricula and
  their school offerings to the local setting,
  local values, local taxation levels, etc.
• School districts allow for a governance
  structures focused solely upon one of the most
  important services that the public sector
  provides Education.

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Community Development Districts

• Community Development Districts are independent
  special-purpose units of local government
  established by a developer or landowner with
  government approval (in Florida).
• CDDs offer an attractive and cost-effective means
  of providing for the financing and management of
  major infrastructure systems and services to
  support the development of new communities.
• When used effectively, CDDs help spread out
  development costs, utilize tax-free financing
  methods, meet the concerns of permitting agencies
  with respect to long-term maintenance of
  infrastructure and address the concerns about
  politically unpopular property tax increases.
• There are roughly 200 CDDs in Florida (including
  ones for Piney-Z, Southwood, and Fallschase).
• Advantages
• CDDs provide landowners with high levels of
  public facilities and services managed and
  financed through self-imposed fees and
  assessments.
• CDDs help ensure that community facilities and
  services will be completed as required by the DRI
  Orders.

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Business Improvement Districts

• Business Improvement Districts are areas
  designated to receive improvements, projects, and
  services funded through a special assessment on
  commercial properties in the district.
• Funds from annual assessments are typically used
  to provide professional planning, promotional
  support, design assistance, public improvements,
  and business recruitment and retention within the
  district. Funds are also often used to address
  traffic management, parking, maintenance,
  security, and other public issues.
• Approximately 1,500 in the United States.
• Advantages
• BIDs can provide higher levels or different types
  of public facilities and services in the district
  through self-imposed fees and assessments.
• It is designed and created, established,
  governed, and implemented by those who will pay
  the assessment.

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Special Districts and General Gvt

• Despite their independence, Special Districts
  are still tied to general government(GG)
• 1) Often appointed by GG
• 2) Reversion of responsibilities to GG
• 3) Require approval of GG
• 4) They have very specific missions that cannot
  be expanded without approval of the GG
• 5) They require state enabling legislation

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Assessing Special Districts

• Advantages
• 1) Local control of systems, but still with
  economies of scale 2) Efficient service
  provision 3) More efficient consumption that
  matches local needs 4) Logical geography of the
  district 5) De-politicize infrastructure
  systems 6) Can raise private capital (PPP) 7)
  Can go beyond local debt limits
• Disadvantages
• 1) Fragments government 2) Unresponsive to
  public (unelected quasi-governments) 3)
  Potential increases in costs of government 4)
  Poorly coordinated/connected to local government
  5) Can go beyond local debt limits

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Leon County Special Districts