Introduction to Special Districts
Special
Districts are forms of local government created by the State,
Counties, and Municipalities in order to provide a specific service
or services to a defined area. Special Districts are often referred
to as special-purpose governments, since the law authorizes them to
provide only those services that are specifically defined in their
enabling legislation. Conversely, the State, County, and Municipal
governments are called general-purpose local governments and are not
specifically limited in what services they can provide to their
residents.
The reason for Special District creation is to provide the
permanent administrative structure for financing and maintaining
services or infrastructure traditionally provided by general-purpose
governments when these governments are unwilling or unable to
provide the service or capital improvement. Consequently, Special
Taxing Districts are frequently substituting and/or complementing
the capabilities of general-purpose governments. For instance,
Special Districts provide water management in multi-county
jurisdictions, public infrastructure in new developments,
streetlights to neighborhoods without them, and fire protection for
Cities and Counties. Special Taxing Districts are governed by an
appointed/elected board and are empowered to serve as a public
financing mechanism that provides accessibility to the tax exempt
bond market to fund public infrastructure improvements.
History of Special Districts in Florida
The
history of Special Districts in the State goes back to 1822 when
Florida was still a territory. That same year when Tallahassee was
established as a half-way point between the territory's only two
cities of Pensacola and St. Augustine and Territorial legislators
met in a log cabin marking the future capital, one of the first
pieces of legislation passed was the Road, Highway, and Ferry Act of
1822. Realizing the importance of transportation for a growing
territory, the act authorized the creation of the first Special
Districts. Created to establish and maintain public roads, the first
road districts had no taxation authority and solved their labor
needs by conscription. Men failing to report to work were fined one
dollar per day.
Soon after Florida became a State, in 1854 the Legislature
created its first Special District by a special act. Established to
drain the "Alachua Savannah", the District had a five-member
commission and had the authority to finance its activities by
levying special assessments on owners of benefited property with
assessments based on the number of acres owned.
The popularity of special districts to fund public works
continued throughout the end of the 19th century as more settlers
came to Florida. By the 1920's, the population had increased
substantially in response to Florida's land boom. Many special
districts were created to finance large engineering projects. Some
of these special districts are still in existence today, such as the
South Florida Conservancy District and the Florida Inland Navigation
District.
By the 1930's, the surge of new residents created the need for
the first mosquito eradication district and other very specialized
districts. After World War II, the baby boom and Florida's growing
popularity created the need for a variety of new special districts,
such as aviation authorities and hyacinth control districts. Soon,
beach erosion, hospital, and fire control special districts grew
rapidly along with the traditional road, bridge, and drainage
special districts.
Community Development Districts
In 1984, the State Legislature passed the Uniform Community
Development District Act, which was codified as Chapter 190, Florida
Statutes, and created Community Development Districts in the State
of Florida. The intent of the legislation was to establish a growth
management tool which ensured that growth paid for growth and
provided incentive for planned community development. Unlike Special
Act Districts which are created by the State Legislature through the
passage of a local bill which defines the Special Act District's
unique powers, Chapter 190 Community Development Districts under
1,000 acres are created within the County and/or Municipality it is
located (the exception being Miami-Dade County whom establishes all
Community Development Districts) and those over 1,000 acres are
established by the Florida Land and Water Adjudicatory Commission.
Chapter 190 Florida Statutes dictates the general and special powers
available to Community Development Districts and the establishing
entity reserves the right to grant or restrict any of the special
powers. Currently, there are over 275 Community Development
Districts located throughout the State of Florida and their
continued proliferation and growing popularity among the development
community demonstrates their effectiveness.
Today, Special Districts are the most common and numerous form of
local government in the State. As of September 20, 2000, there were
1172 Special Districts in Florida.
Benefits to Landowners and Developers
At
the onset of development projects, special taxing districts can
issue bonds in an amount necessary to finance all or a portion of
the cost(s) of construction of the public infrastructure
improvements. Once the District issues bonds, it can either
construct the improvements or purchase the finished improvements
from the developer provided the construction is certified by a
registered engineer. After the District acquires the improvements,
it can either keep the improvements or deed them to another
governmental entity. In order to retire the debt associated with the
financing, the District levies an assessment against each property
in the District each year that represents the annual benefited
pro-rata share of the cost of the publicly financed infrastructure.
If the District assumes the obligation to maintain some or all
public infrastructure improvements, the annual assessment will
include an amount for maintenance of budgeted administrative,
operational, and maintenance costs. The total assessment will appear
on the property tax bill that property owners receive in November
each year.
This special assessment program ensures that current and future
property owners benefiting from such newly constructed public
improvements pay for the improvements over the life of the bond
issue/debt obligation. Therefore, a bond issue(s) with a typical
thirty year maturity will finance the eligible public infrastructure
improvements, and a benefited pro-rata share of the annual debt
service obligation will be paid by the property owner until the debt
is retired. Moreover, the liability associated with the debt service
obligation is tied to the assessed parcel and should the
developer/landowner sell the parcel(s), then the debt obligation and
responsibility to pay the annual debt service assessments pass onto
the new property owner; thereby relinquishing the developer from the
debt obligation.
In addition to infrastructure financing benefits, special taxing
districts are empowered to operate and maintain publicly financed
infrastructure and are able to maintain the public infrastructure
improvements and provide services at levels dictated by the
governing board of the district. Therefore, special taxing districts
are frequently utilized as a service delivery tool to provide
property owners within its boundaries higher levels of service than
those typically provided by counties and/or municipalities due to
their obligation to serve a larger constituency with limited
resources. Many premier communities located throughout the State of
Florida are located within Community Development Districts as well
as Special Act Districts.
