WHAT IS A SPECIAL DISTRICT?
Texas has four types of local government. Most of us are familiar with are municipal and county government. A third form is the local school district. The fourth form is unique and not readily understood; the special district.
Because of the inability or unwillingness of local government to provide the broad range of necessary services to meet public needs, a wide range of special district governments have been evolving over the last several decades.
Special districts are political subdivisions of the state. Where state, county, and city governments are multi-functional and provide a wide range of services, a special district usually performs just one function.
Special districts were created to address needs at the state, county, and municipal levels to undertake large scale public improvement measures. The most common of the special districts are the water districts.
As first authorized by the Texas Constitution, water districts were used to simply provide water to outlying areas where it was unavailable. The House Committee on General Investigating, Texas House of Representatives, Interim Report, 2002, gives us a good history lesson.
Because the state, cities and counties were limited in the rate of tax that they could levy, the Texas Constitution was amended in 1904. Article 3, Section 52, was modified to allow for the creation of special taxing districts which could issue bonds and levy property taxes to pay for conservation and reclamation projects.
Following severe flooding in 1913 and 1914, the State Constitution was again amended in 1917 with what is commonly known as the “conservation amendment,” found in Article 16, Section 59.
In 1987, the Constitution was again changed to allow for the making of loans and grants of public money to encourage economic development (Article 16, Section 3-a). Legislation creating special districts that deal with water cites these articles as the facilitators for special district creation.
The most common special district is the Municipal Utility District (MUD). A relative newcomer, the MUD was authorized in 1971 by the passage of Chapter 54 of the Texas Water Code.
According to records of the Texas Commission on Environmental Quality (TCEQ), special districts include 18 water improvement districts, 25 irrigation districts, 26 navigation districts, 31 river authorities, 55 special utility districts, 42 municipal management districts, 46 levee improvement districts, 48 drainage districts, 66 fresh water supply districts, 91 groundwater conservation districts, 221 Water Control and Improvement Districts (WCID) and nearly 1,000 Municipal Utility Districts (MUD).
In practical terms, both are nearly identical, but there are distinctions. A MUD can become a municipality with all the powers that municipalities have. They can provide water and sewer service, as well as their own police, fire, EMS, and garbage collection service. A WCID is generally concerned only with the furnishing and disposing of water.
It is important to note a WCID can be easily converted to a MUD. Less than six months after the City of McKinney negotiated a development agreement and approved an ordinance giving the City’s statutory consent to the formation of a WCID, the developer proposed, and the city consented to the creation of 2 MUDs.
In addition to constitutional and statutory powers, additional powers are included when created by legislative action. The powers of a WCID can be expanded greatly through its enabling legislation.
The development known as Esperanza is enabled by Kendall County WCID No.2, a special district created by the Legislature. At full build-out, a population comparable to the size of Boerne will exist on the city limit of Boerne.
As an independent political subdivision of the state, with wide ranging powers, this form of government demands a watchful eye. This begins with negotiation of a development agreement between the city and the developer.
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