Understanding Special District Management for New Residential Developments

When developers look to build a new residential community in a previously undeveloped area, they must navigate a complex web of regulations, infrastructure needs, and operational requirements. One critical aspect that cannot be overlooked is the establishment and management of special districts.

Special districts are units of local government created to provide specific municipal services such as utilities, roads, parks, and other community amenities. These districts are essential for ensuring that new developments have the necessary infrastructure and resources to support the residents who will eventually call the community home.

For developers, partnering with a specialized management company that understands the intricacies of special district operations can be invaluable. Companies like FirstService Residential, in collaboration with firms like Rizzetta and Company, offer dedicated support to developers working with special districts.

"As Florida continues to grow, special districts will play a crucial role in cost-effectively expanding infrastructure and services. We can handle all aspects of the process from initial feasibility studies, financing, and establishment to operations, maintenance, staffing, budgeting, governance, and community voting processes."

William J. Rizzetta, CEO and President, Rizzetta & Company

Establishing a foundation from the initial stages of a project, a management company can help developers establish governance frameworks for the new districts and implement the needed long-term fiscal strategies. This lays the foundation for the district's long-term financial health and operational sustainability, ensuring that the community can maintain its assets and amenities for years to come.
 

Key services that a management company can provide in the early stages include:

1. District establishment: Assisting with the creation of the special district, including the necessary legal and regulatory steps.
    
2. Management: Serving as the chief administrative officer overseeing the day-to-day requirements of the district.
    
3. Assessment methodologies for bond issuance: Developing methodologies for assessing property owners to fund the district's infrastructure through bond issuances.
    
4. Accounting services: Setting up proper accounting practices and financial reporting systems to maintain transparency and compliance.
    
5. Administrative support: Handling administrative tasks such as record-keeping, meeting coordination, meeting minutes and regulatory compliance.

"During our initial meeting, we unpack the project’s vision, enabling the developers we collaborate with to gain profound community comprehension. They grasp which facets of their envisioned concept are desirable, feasible, and sustainable. Simultaneously, they understand which pieces may need further exploration and fine tuning."

Heather Russel, Vice President of Operations, Association Services

Ongoing Operations and Compliance

As the development progresses and residents begin to move in, the management company's role shifts to ongoing operations and compliance. This includes tasks such as:

1. Billing and revenue collection: Ensuring that assessments and fees are collected from property owners, either via the county tax roll or directly from the district, to fund the district's operations and maintenance.
    
2. Amenity services and management: Overseeing the operation and maintenance of district’s amenities like parks, recreation centers, and common areas.
    
3. Landscape and aquatic inspection services: Conducting regular inspections to ensure proper maintenance of the district’s landscaping and water features.
    
4. Web-based reporting: Complying with state statutes that require public access to information about the district's operations and finances through web-based reporting.

By partnering with a management company from the project's inception, developers can maximize the marketability of their development and ensure a smooth transition when the community is eventually turned over to the special district resident board.
 

Tailored Solutions for Success

Every development project is unique, with its own set of challenges and requirements. By leveraging the expertise and resources of a management company, developers can focus on the core aspects of their project while leaving the complexities of special district management to experienced professionals. This streamlined approach not only simplifies the process for developers but also sets the stage for the long-term success and viability of the new residential community.

"In the dynamic realm of special district management in Florida, strategic planning serves as our compass, navigating us through complex challenges and empowering us to seize opportunities for long-term success and community advancement."

Lucianno Mastrionni, Vice President, Business Strategy and Development

FAQs about special districts:

What are the most common types of special districts?

The two types of special districts are dependent and independent. A special district is dependent if a single county or single municipality has authority to do one or more of the following:

• Designate its governing body members to serve as the governing body members for the special district.
   
• Appoint all members to the special district’s governing body.
   
• Remove any governing body member at will during unexpired terms; or
   
• Approve or veto the special district’s budget.

A special district is independent if none of the above apply. Multicounty special districts are independent, unless situated wholly within the boundaries of a single municipality. Reporting requirements vary between dependent and independent special districts.
 

How are special districts typically created?

Special districts are established by general law, special acts, local ordinances or rules of the Governor and Cabinet.  The most common method requires a petition for the establishment of a special district submitted to the general-purpose government having jurisdiction over the land in which the special district is to be located, an alternative is submission to the state if certain parameters are met such as size of the proposed district.  A detailed list of exhibits to be included with the petition are set forth in the applicable state statute.  Typically, the general-purpose government will hold at a minimum one public hearing prior to the adoption of the establishment order.
 

What is the main difference between a county and a special district?

A special district is a unit of local government created for a special purpose.  Special districts operate within a defined geographic area and serve specific functions for that area such as water management, fire protection or community development.   An example of a special purpose may be for the financing, constructing and maintaining public infrastructure improvements in a residential neighborhood or commercial development.  Special districts do not have the power to regulate land use or issue development orders.  Those powers reside with the general-purpose government (county, city, town, etc.).
 

What powers do special districts have?

Special districts have the power to impose and levy ad valorem taxes and non-ad valorem assessments on real property for services provided by the district.  Additionally, they may be provided with the powers to establish and operate their own fire department, provide for garbage collection, manage infrastructure such as roads, waterways, amenities and municipal systems.  Some special districts have the power to issue debt to finance the construction or reconstruction of public infrastructure.
 

Why do special districts exist?

Special districts exist to provide specialized public services in a targeted manner within a limited geographic boundary.  Special districts may provide these services in a more efficient manner than a larger general-purpose government. Additionally, by creating a special district, local communities can tailor the services for their unique needs.  Finally, special districts can adapt to changing needs without affecting broader government structures.
 

Why would a locality choose to create a special district?

Landowners can elect to create a special district to:

• Help protect property values by ensuring that services and facilities are continuously provided and maintained.
   
• Provide governmental services when needs transcend the boundaries, responsibilities and authority of individual counties and municipalities.
   
• Issue tax-exempt debt to finance the construction or reconstruction of public infrastructure.
   
• Establishing an independent special district grants local decision-making power and provides for the control of the purse strings.
   
• Special districts operate “in the sunshine”, which mean all meetings are public, records are available for inspection, subject to an independent financial audit and must maintain an independent website providing transparency and disclosure of its activities.