Weissert - Hidden in Plain Sight

This document is an executive summary regarding special districts and community development districts (CDDs) in Florida.
Research conducted by the LeRoy Collins Institute, authored by Dr. Carol S. Weissert, Director, with contributions from consultants Sarah Ayers, Dr. Robert Eger, and Dr. Joe Vonasek.
Data pertains to fiscal year 2011-12.

Florida’s independent special districts exist somewhat out of the public eye (termed the 'shadow world').
Key reforms in the 1980s aimed to increase disclosure and accountability, establishing authority based on general law for independent and dependent districts.
Despite reforms, issues of obscurity remain.
Independent districts serve specialized purposes (e.g., mosquito abatement, children's welfare) and operate in designated areas.

Election of Officials: Some district officials are elected (often at the end of ballots), while others are not.
Citizens tend to overlook special districts until relevant statements or elections prompt their attention.
Special districts play a crucial role in providing services; residents can petition to form new districts for desired services.

Operational Management: Boards of special districts hire staff to manage operations.
Funding Mechanisms: Common mechanisms include property taxes, bond issuance, assessments, service charges, and fees.
Accountability Issues: Concern arises over whether property owners hold districts accountable for imposed costs.

Many special districts are linked to residential developments, which were particularly impacted by the recent economic downturn, leading to financial distress.
Over one-third of CDDs are identified as being in some form of financial distress, raising concerns for local governments and citizens.

Historical context: Reforms initiated in the 1980s aimed to curb unnecessary fragmentation and duplication in local governance.
General Laws and Establishment: Establishing districts can result in redundancy, questioning the efficacy of current legislative policies.
Summary of reports conducted by the Collins Institute:
- “Piecing Together the Governing Puzzle” analyzes the formation, operation, and finances of Florida’s special districts.
- “Florida CDDs: Financial and Accountability Issues” focuses on CDDs specifically.

Despite reforms, confusion persists due to contradictory laws and processes governing district establishment.
Board Composition: Varies in terms of appointment methods and the number of seats; voting methods differ (one person/one vote vs. landowner voting).
Revenue Sources: Majority of independent districts issue bonds (85%); only 14% rely on ad valorem taxes.
Growth Trends: CDDs were rapidly established until 2008 when the housing market crisis significantly slowed growth.
- Annual new establishment peaked from 2004-2007 with 77 new CDDs, dropping to 25 in 2008 and then to single digits.

As of 2012, Florida had 1,007 independent special districts providing a broad range of services, with CDDs being the most common (579 established).
Special districts also involve fire control, water management, healthcare, and various services to meet community needs.

Various statutes govern special districts:
- Chapter 187: Establishes state policy for districts; wants to maintain standards and prevent over-proliferation.
- Chapter 189: Requires financial reporting, defines creation procedures, and establishes criteria for management.
- Chapter 190: Addresses community development districts specifically with rules for management, elections, and financial assessments.

Oversight: Shared among multiple state agencies; financial definitions often ambiguous.
Financial Performance: Financial viability varies — significant struggles observed post-2007:
- CDDs demonstrate dropping cash reserves and balance sheet insolvency for at least 50% during studied years.
- Fire districts show greater stability compared to CDDs.
Future Implications: Need for increased clarity in laws governing special districts is acknowledged; they remain vital entities in providing essential governmental services.

Special districts, though critical, often lack clear definitions and oversight.
Further study and recommendations are warranted to enhance accountability and ensure effective delivery of services.