3 Special Districts That Improve Infrastructure & Public Services
12.14.2021
DURATION 3 minute read
Special districts are a great financial tool that can be used to provide essential communities services and infrastructure, including roadways, drainage, utilities, and water and wastewater. They are independent, special-purpose governmental entities with administrative and fiscal independence from local general-purpose governments.
Cities, counties, and developers all have the power to create special districts. The improvements and services you can provide depend on the special district you create. Our team serves more than 100 special districts throughout Texas and has experienced first-hand how they can enhance our communities.
Below is a brief description of a few of the most common special districts that our team has seen used to aid Texas communities in the creation and management of essential services and infrastructure.
Tax Increment Reinvestment Zone (TIRZ)
Tax increment reinvestment zones (TIRZ) capture the projected increase in property tax revenue that is created by re-development in a defined area. This type of special district is used to reinvest funds into public improvements and developments that benefit the zone.
The TIRZ acts as a type of financing incentive that reimburses developers for eligible costs for certain infrastructure improvements. TIRZ funds can be used for a range of improvements, including roads, drainage, utilities, street lights, sidewalks, and parks.
Our team currently services as Program Manager for the Memorial Heights Redevelopment Authority (TIRZ 5) and the North Houston Development Corporation (TIRZ 11), which includes the North Houston Skate Park and the Rockstar Energy Bike Park.
Public Improvement District (PID)
A public improvement district (PID) is an economic development tool used to fund public improvements within the district. It can be used to accelerate development, increase the total tax base, and serve as a financing mechanism for certain infrastructure and capital improvement projects.
To be used as a financing mechanism, a city or county within the PID can levy a special assessment against properties within the district to fund projects. The funds can then be used for mass transit, libraries, affordable housing, parks, roads, water, and wastewater – to name a few.
Municipal Utility District (MUD)
A municipal utility district (MUD) is an alternative financing method that creates an independent, limited government authorized by the Texas Commission of Environmental Quality (TCEQ) to issue bonds and levy taxes to provide utility services and infrastructure.
The infrastructure provided by MUDs is funded by the taxpayers within the district via water and sewer rates, tap fees, or through the sale of bond funds. These funds can then be used to build infrastructure and provide services for water, sewer, drainage, and other utility-related services within the district’s boundaries.
Whether you’re thinking about creating a TIRZ, PID, MUD, or other special districts, our team has the experience necessary to help community leaders and developers establish such entities so they can continue providing for Texas communities. Be sure to check out our Districts & Authorities page to learn more about our services and special district projects.
