Special districts are a tool that can be used to provide public services to designated geographical areas. These districts are independent, special purpose governmental units that have administrative and fiscal independence from general-purpose local governments. Special Districts are flexible and can rapidly address community challenges, like roadways, drainage, utilities, water, and wastewater.
Cities and counties can create Special Districts as a means to provide improvements and services to residents in a practical way. Additionally, developers are able to create districts to begin developing or redeveloping infrastructure and other necessary improvements in areas that may not currently have the resources, tax base, or funding to develop. Jones|Carter currently serves more than 100 districts throughout the state.
Below is a brief overview of a few of the most common Special Districts that Texans have used to aid growth by providing utilities and services to a greater number of residents.
Tax Increment Reinvestment Zone (TIRZ)
A TIRZ is an economic development tool that captures the projected increase in property tax revenue that is created by re-development in a defined area. It is used to reinvest those funds into public improvements and developments that benefit the zone.
TIRZ funds can be used for a variety of public infrastructure projects including but not limited to: roads, intersections, drainage, utilities, street lights, sidewalks, and parks.
Jones|Carter currently serves as Program Manager for City of Houston TIRZ 5 (Memorial Heights Redevelopment Authority) and for the City of Houston’s Tax Increment Reinvestment Zone 11 (North Houston development Corporation)., which includes the North Houston Skate Park and Bike Park.
Public Improvement District (PID)
A PID is an economic development tool used to fund public improvements in a defined geographic area. A PID is used to accelerate development, increase the total tax base, and serve as a potential financing mechanism for necessary infrastructure and capital improvements within a city or county. The city or county within the PID can levy a special assessment against properties within the district to pay for improvements to the area.
PID funds can be used for a variety of projects, including: water, wastewater, drainage, parks, roads, sidewalks, mass transit, libraries, pedestrian malls, and affordable housing.
Municipal Utility District (MUD)
A Municipal Utility District (MUD) is a political subdivision of the State of Texas authorized by the Texas Commission of Environmental Quality to provide water, sewer, drainage, and other utility-related services within the boundaries of the MUD. The infrastructure provided by a MUD is funded by the District’s tax payers that own land within the boundaries of the district. The funding of this infrastructure can come in the form of water and sewer rates, tap fees, and/or through the sale of bond funds.
Municipal Utility Districts provide water, wastewater, drainage, sometimes roads, and other services within the boundaries of a district.
Be sure to subscribe to our blog to as we dive deeper into each of these types of special districts in the coming weeks and learn more about our Municipal and District Services team on our website.