National Definition of Special Districts
Special districts are community-based and locally organized political subdivisions of a state formed by a community to provide specialized public service(s) that other forms of governments do not. Despite the important role special districts play in the daily lives of millions of Americans in providing a variety of essential services, including critical infrastructure, “special district” is not adequately defined in U.S. Code. The top priority for the Coalition is to define “special district” in federal law to ensure special purpose governments have clear access to applicable federal programs. NSDC will continue to collaborate with special purpose government stakeholders across the country to ensure all independent, permanently established special district governments are adequately reflected in the definition.
Defining “Special District”
NSDC collaborates with members of Congress to pass legislation defining special purpose units of government. NSDC also actively seeks input from special district stakeholders to ensure this definition broadly represents special districts’ diverse structures and organizations across state lines.
A special district is an independent political subdivision of a State, formed pursuant to general law or special act of the State, for the purpose of performing one or more governmental or proprietary functions. Aside from “special district,” these local governments may also be known as “special purpose district,” “authority,” “municipal authority,” “special purpose governmental entity,” or “special taxing district.”
Preserving Locally Led Services
NSDC advocates favor legislation fostering special districts’ access to resources and supporting their operations that would strengthen the communities they serve. Likewise, the Coalition opposes policies that would degrade the value of districts’ services to their communities or create obstacles for community-formed governments to operate effectively, govern efficiently, exist, and preserve local control.
Special districts are the most local of local governments, established by the will of a community and led by locally elected or locally-appointed boards that answer to a constituency. NSDC supports a healthy legislative and regulatory environment that facilitates robust, local public services. In doing so, the Coalition seeks to preserve local control of public services and prevent privatization, which leads to community disenfranchisement over its collective services.
Collaboration with the U.S. Census Bureau
The U.S. Census Bureau is the clearinghouse of information on state and local government organizations, and routinely measures the American population and local government services. Through efforts to define “special district” in federal law, NSDC is a willing partner and collaborator with the U.S. Census Bureau to ensure the nation’s special purpose governments are accurately counted in represented in local government data. The Coalition seeks to work with the U.S. Census Bureau and Office of Management and Budget adopt definitions of individual district services to improve federal accounting of local governments. NSDC’s ultimate objective is to secure special districts’ designation as a geographic unit of local government, which would allow for special districts to obtain official population figures.
Climate Adaptation & Community Resiliency
Special districts provide services susceptible to the effects of adverse impacts of climate change. Special districts, like many other local government entities, are taking steps to build resilient infrastructure to withstand extreme conditions. NSDC’s priority is to enhance special districts’ position as local government stakeholders in climate policy discussion. In general, this section looks at special districts’ priorities covering adaptation, resiliency, and emergency preparedness.
Wildfire Mitigation and Forest Management
NSDC’s mission is to support policies and develop partnerships with stakeholders to achieve common goals for all disaster-impacted and disaster-prone special districts.
Many special districts provide essential services in communities prone to wildland fires, operating in the urban-wildland interface and in rural areas. Catastrophic, year-round wildfire risk is an increasing phenomenon resulting from climate change, forest management issues, and failures in utility infrastructure. Many special districts operate in urban-wildland interface regions facing direct wildfire threats to critical infrastructure. Further, water and irrigation districts sourcing water from fire-impacted watersheds are impacted due to contaminants and soil erosion these events create.
With direct and indirect impacts on services, NSDC is focused on furthering policies providing U.S. Department of Agriculture, Department of Interior, and other federal agencies with tools for appropriate forest management, forest restoration, and post-fire/water quality mitigation efforts.
Drought Impacts and Regional Considerations
Drought impacts districts providing irrigated water for agricultural use, drinking water, natural resource conservation, wastewater, fire protection, and more. NSDC seeks to support districts’ drought-related adaptation and resilient infrastructure needs, including programs assisting special districts’ preparation for and response to extreme drought.
NSDC recognizes that certain types of special districts are more reliant than others on water resources to ensure delivery of quality services. Irrigation districts, primarily in the Western U.S., depend on water allocations to provide drinking water for communities and to grow the food and fiber America and the world depend on. Some irrigation districts produce electricity, offering a supplemental source for the power grid. Furthermore, some port and navigation districts are located on rivers to move commerce and drive local economies.
As the federal government is ingrained in much of the nation’s water resources through the U.S. Army Corps of Engineers and Bureau of Reclamation, NSDC broadly advocates for sound policies and investments in solutions facing drought-stricken, major river basins and watersheds. In all, NSDC supports and encourages programs that enhance water infrastructure, conservation, groundwater recharge, recycling, and storage.
Addressing Extreme Weather Events
The special districts services communities rely upon often become even more essential during extreme weather events and disasters. Special district facilities not only provide critical infrastructure – such as emergency response and rescue, healthcare and hospital, drinking water, wastewater treatment, stormwater capture, flood control services, and more – but are also serve as central hubs for resources and refuge. Special districts’ community facilities are prime locations for community cooling stations, emergency shelters, safe rooms, and more.
As such, NSDC supports efforts to harden infrastructure and mitigate the impacts of extreme weather events. Programs designed to ensure local governments, including special districts, can adequately prepare for and efficiently respond to crises are critical. The Coalition supports development and implementation of programs meeting this need, and, accordingly, advocates for eligibility in the same fashion as other units of local government.
NSDC seeks to cultivate partnerships and communication with key federal agencies administering these programs, such as the Federal Emergency Management Agency and the Cybersecurity and Infrastructure Security Agency, to ensure districts are considered for relevant programming.
The nation’s special districts are no exception to the rising threat of hacks and ransomware attacks on critical infrastructure. Many special districts operate critical infrastructure on connected systems vulnerable in similar fashions as city, county, and state counterparts. Special districts deliver public services to millions of Americans and utilize online software to conduct financial transactions. NSDC supports policies bolstering programs to enhance readiness, threat assessment, and response capabilities for public agencies. The coalition works to enhance special districts’ awareness of programs addressing cybersecurity policies and to connect special districts with federal resources addressing cyber threats.
NSDC promotes measures special districts are taking to ensure continuity of services, respond to community needs, and take proactive measures before a crisis unfolds. Likewise, the Coalition supports programs to enhance public programs providing resources for agencies to adequately prepare for emergency. This includes, but is not limited to, ensuring special districts are considered in Federal Emergency Management Agency (FEMA)’s intergovernmental collaboration efforts as well as collaboration efforts from other federal agencies administering readiness and residency programs for public agencies. Furthermore, NSDC advocates for federal decisionmakers to consider special districts in guidance for critical public programs including FEMA’s risk management and resiliency programs, as well as to be stakeholders in development of future public emergency preparedness programs.
Investments in Water Infrastructure for Firefighting
Historic authorizations were made law in the early 2020s for the nation’s drinking water and wastewater treatment infrastructure in response to the COVID-19 pandemic and with the Infrastructure Investments and Jobs Act. While these measures have enhanced the nation’s health, safety, and quality of life, there remains a gap in assistance for local infrastructure development to achieve adequate resources for fire suppression.
While all types of local government are responsible for fire protection and water services, special districts are vested in this policy issue, as more than 6,000 special districts provide fire protection services and more than 4,500 provide water services to millions of Americans every day. NSDC produced a 2022 report addressing this policy issue and proposed sets of legislative and stakeholder recommendations to close these gaps.
NSDC seeks to collaborate with a broad range of partners in advocacy to pilot a stand-alone, cost share grant program to directly aid all types of local government to address infrastructure gaps for fire suppression needs. As a function of mitigation, NSDC recommends the program to be housed within FEMA. Ideally, this program would (1) be flexible with consideration of regional geographic factors driving a heightened need for fire suppression infrastructure investments, (2) be locally driven based on collaborative solutions, and (3) provide opportunities for technical assistance and cost share.
Special districts exist to provide various elements of infrastructure filling gaps in services other units of governments do not provide. As such, special districts have a major stake in federal infrastructure initiatives. Among the Coalition’s top federal legislative priorities is the passage of policies investing in the nation’s physical and natural infrastructure and assuring special districts have definitive access to infrastructure programs, thus bettering district operations and services to millions of Americans.
Special districts provide millions of American households, businesses, agricultural enterprises, and a variety of institutions with drinking water, wastewater treatment, and irrigation services. Ensuring the integrity of water infrastructure for a supply of safe, clean drinking water is critical to the safety and viability of the communities that rely on their services. NSDC advocates for policies and inclusive implementation of programs enhancing these services
Special districts house many primary community facilities essential to the vitality of rural and urban communities alike. These services include, but are not limited to, fire stations, healthcare centers such as hospitals and medical clinics, libraries, parks and recreation, public water resources, and the buildings housing the staff to implement these programs. The coalition works to secure special districts’ access to programs and funding that enhance these community facilities.
Electricity Grid Reliability and Renewable Energy
Special district services rely on a steady flow of energy for the continuity of critical services. The Coalition advocates for electrical grid enhancements and investments in grid security, not only for those special districts responsible for the generation, transmission, and delivery of public electricity but also those that rely on stable and consistent sources of energy to operate. This includes water districts that require pumping facilities for deliveries, healthcare districts that need power to operate lifesaving equipment, and emergency responders such as fire protection and ambulance providers to maintain communication during events. Further, to accommodate 21st Century energy solutions, NSDC supports programs fostering the development of renewable energy and the ability for special districts to utilize renewable energy to execute their essential services.
Recreation and Natural Infrastructure
The Coalition’s platform includes support for policies investing in natural infrastructure such as the maintenance of federal forests and federal lands, enhancing watershed quality, flood control, flood plain management, and fostering quality development of recreation and open space. Many special districts offer, broadly, natural resource conservation services and, more specifically, essential services to communities in areas prone to natural disasters. These districts are stakeholders in natural infrastructure and mitigation activities. The Coalition embraces programs to address reasonable natural infrastructure investments with direct and indirect benefits for special districts.
Park and recreation districts are independent agencies with the same infrastructure needs as their local, state, and federal government counterparts, including irrigation for water access; multimodal forms of transportation including bridges, roads, local and regional trails; wildfire and flood mitigation; stormwater management; climate resiliency programming; urban greenspace and heat island mitigation; carbon sequestration; and provide safe locations in times of emergency or disaster – from reunification locations for school shootings to post-disaster shelter locations. NSDC strives to ensure park and recreation districts are seen as equitable and meaningfully considered for resources that benefit this public service type.
Unfortunately, many park and recreation districts struggle to access popular federally sourced programs that could advance community association with green spaces, natural infrastructure and recreation services. This is due to their status as a special purpose unit of local government, whereas other recreation services are commonly viewed as exclusive departments of a town, city, county, state, or even federal government. NSDC supports efforts to elevate awareness of special districts as a specialized public provider of essential park and recreation services and to enhance access to programs aimed to connect people to the natural environment.
Transit, Roads, and Bridges
Special districts provide urban and regional transit services that keep many of America’s commuters on the move. The Coalition supports programs that strengthen district-provided public transportation options and expand services into rural communities. Further, the Coalition supports programs investing in the nation’s roads and bridges, and for the special districts providing these services to have access to such infrastructure funding.
Ports, Harbors, and Airports
Special port, harbor, and airport districts share in the responsibility for the import and export of goods and services, as well as the movement of passengers, upon which entire regions and the nation depend. Many port and harbor special districts play an important role in their local economies, providing jobs, supporting businesses, and serving important coastal industries such as fishing and tourism. Airports also contribute to economic development and foster wide impacts on regional commerce. The Coalition recognizes the significance these districts play in regional and state economies, and likewise supports policies to ensure the operational integrity and enhancement of these districts.
Many special districts provide essential services in rural and remote communities that lack reliable internet access. This ability to connect to the worldwide web is critical for communities’ sustainability, modernization and economic development. Special districts are uniquely positioned to offer – or facilitate – broadband services to communities currently lacking access and provide avenues to help close the digital divide. NSDC is a proponent of additional funding to proliferate reliable high-speed internet access to communities across the nation and is an advocate for districts capable of provide these services to receive the support needed to successfully connect all Americans.
Park and Recreation for Complete Communities
More than 1,400 special districts provide communities across the nation with park and recreation services. This sector of special districts provides unique, diverse programs to enrich their communities based on the needs of the community – including hosting sports tournaments that boost local economies, maintaining multi-use defensible space to protect communities from fire and flood, providing environmental education, and more.
Park and recreation districts provide a critical community touchpoint for public gathering, improving mental health and wellbeing, and other community assistance-oriented programs. The COVID-19 pandemic pronounced the vitality of these park district services. These local governments have flexibility to provide free or low-cost programs fostering community health and wellbeing for all generations – from creating early memories of learning how to ride a bike to offering space for seniors to socialize and after-school programs that enrich childhood learning, association, and quality of life.
Just as park districts operate in metropolitan and urban areas, many of the nation’s park districts provide services in smaller, rural communities – oftentimes providing a forum for recreating in disadvantaged communities and providing green space in “park deserts.” As cost/benefit calculations for federal programs often deter investment in recreation services in smaller communities, NSDC advocates for broader population considerations for pertinent federal programming to ensure small and mid-sized communities have access to services similar to their large-community and urban counterparts.
The nation’s park and recreation districts see the Land and Water Conservation Fund (LWCF) as the most reliable, accessible federal source of infrastructure assistance. As such, NSDC supports full funding of the LWCF as an excellent conduit for park district needs while also supporting reforms for more efficient program administration, such as streamlining awards to ensure smaller park and recreation districts may fully benefit from the program.
In all, NSDC considers park and recreation districts as part of the nation’s critical infrastructure fabric, supporting health and economic development, the Coalition advocates on relative policies to ensure park and recreation districts’ needs are met
Public Hospital and Healthcare District Infrastructure and Services
According to the 2017 Census of Governments, more than 1,500 special purpose districts provide approximately 33 percent of all local public health and hospital services, by expenditure, in the United States. These units of local government are public health operations that are locally governed and are close to their communities. Healthcare and hospital districts are locally trusted and have flexibility to tailor their programs to specific community needs – from wellness campaigns to alternative response to mental health emergencies and more.
Many public healthcare and hospital districts provide services to rural and urban communities that are often considered to be medically underserved and socioeconomically distressed. Especially in rural areas, many of these operations are designated as “Critical Access Hospitals,” and “Rural Healthcare Clinics.” NSDC is interested in special districts’ access to the Federally Qualified Health Center (FQHC) program, as districts operate with similar models and have demands for services FQHCs must deliver. NSDC supports full funding and simple administration of authorized programs to support community-centered healthcare solutions – especially in rural, relatively vulnerable communities.
Many special districts providing healthcare report struggles to recruit and retain a medical professional workforce, largely due to economics of housing in the communities they serve. Rural healthcare districts predominately experience difficulties recruiting physicians and staff due to the remote nature of the location and/or limited housing supply. Similarly, public healthcare and hospital districts in more urban communities face factors of high housing and excessive capital costs, which challenge their sustainability. The wages needed to recruit and to retain employees in these high cost of living locales further strain the ability to invest in real estate and capital equipment to offer quality healthcare services. Urban and rural healthcare districts, alike, are increasingly finding themselves at the intersection of public housing as they offer rental assistance/coverage as employment benefits. As such, NSDC supports sound solutions to assist recruitment and retention of healthcare workers – especially in underserved communities – and opening direct access to additional programs where necessary and advance recruitment solutions.
Special districts providing public healthcare services report they are often met with restrictions on access to finance capital projects. This, despite bearing 51 percent of all public hospital capital expenditures, as reported in the 2017 Census of Governments. NSDC supports policies to breakdown these barriers to capital grant and low-interest finance programs. Beyond financing barriers, most special districts struggle with staff capacity to identify, write, and administer – if successful – grant opportunities. NSDC not only supports measures for healthcare and hospital districts access to programs, but also to enhance technical assistance for local public health agencies’ grant preparation and administration.
Public Infrastructure Financing Tools
To ensure special districts can successfully secure financing necessary to complete infrastructure projects, the Coalition is committed to advocacy supporting public infrastructure finance programs. Examples of such policies and programs including, but not limited to, the Water Infrastructure Finance and Innovation Act, Clean Water and Drinking Water state revolving funds, and the U.S. Department of Agriculture Rural Development Communities Facilities Loan & Grant Program. The Coalition considers priority legislation that would reinstitute, amend, and expand provisions within the Federal Tax Code for private-activity bonds; advance refundings; increasing the limits on bank-qualification pursuant to Section 265(b) of the Internal Revenue Code of 1986, as amended; and special tax credits or federal subsidies for either the bond issuer or the bondholder, similar to Build America Bonds, and Recovery Zone Bonds created under the American Recovery and Reinvestment Act.
Further, NSDC works to ensure special districts have equitable access to present and future municipal finance tools cities and counties use to plan for, execute, and complete public works and infrastructure projects.
NSDC supports policies that uphold the integrity and use of tax-exempt municipal bonds as a tool for special districts’ long-term financial success. The Coalition also advocates for tax incentive programs that encourage private investments in infrastructure, such as Opportunity Zones and the New Markets Tax Credit Program.
Streamlining Regulatory Processes
NSDC advocates for flexible and streamlined federal regulatory processes to enhance efficiencies and prevent hinderance of projects critical to executing the essential services special districts provide. The Coalition supports positive, balanced, and coordinated state and federal regulatory processes that would not threaten special districts’ projects, prevent increased financial burdens on local government finance, and would not compromise environmental laws.
Workforce Development and Retention
Special districts employ a diverse range of employees to meet service needs, and the examples are endless. Special districts providing hard critical infrastructure services often need certified, skilled workers to lay and repair pipes, operate water treatment systems, and maintain new-generation fleets of electric transit vehicles. Hospital and healthcare districts need physicians to care for patients where they live. Park districts provide jobs for high schoolers, college students, adults, and seniors. Fire protection districts have demanding positions that involve advanced skills and trainings for public health and safety, and mosquito abatement districts need scientists to monitor for next potential public health concern.
NSDC advocates for sound public policy to invest in skilled workforce development and for policies that boost the ability for special districts to provide good jobs for members of the communities they serve. NSDC wholly supports special districts’ access to tools for workforce retention, including smooth access to programs such as the Public Service Loan Forgiveness program and hazard pay in times of crisis. The Coalition also strives to ensure special districts understand the availability of these resources and how to access them.
Aside from employment opportunities, special districts also provide a wide variety of community service opportunities – especially park and recreation districts – from leveraging AmeriCorps volunteers and providing programs for special needs children and adults to volunteer firefighters. NSDC seeks to ensure the ability for districts to uniquely leverage these community resources goes unhindered.
Access to Federal Funding
Of utmost importance is special districts’ access to federal funding programs intended to assist local governments. Special districts have long experienced barriers to funding opportunities, often required to seek access from other eligible units of government to acquire adequate resources to provide services. This is not always guaranteed. NSDC is devoted to collaborating with federal legislative representatives to ensure “special district” is defined in federal statute while also working with the U.S. Census Bureau to achieve special districts’ recognition as a “geographic entity.” Success of this key platform item will be measured in newfound eligibility for a variety of federal and state formula funding opportunities.
Grant and Formula Funding
Upon successful efforts to secure a federal definition of “special district” and to gain status as geographic entities, NSDC will focus on securing special districts’ direct eligibility for fundamental local government programming, such as the U.S. Department of Housing and Urban Development’s Community Development Block Grant or population-based funding opportunities within U.S. Department of Agriculture Rural Development, U.S. Department of Transportation, and other departments that may execute funding opportunities of interest to special districts.
NSDC also supports amplified access to grant opportunities for rural, underserved communities, and to ensure these communities continue to have a voice in urban and rural funding opportunities.
Opportunities for Technical Assistance and Grant Administration
Many special districts operate on relatively small annual budgets with few paid staff. Staff at these lean agencies face hardships in submitting robust, competitive grant applications to aid in achieving their infrastructure needs. Furthermore, staff may lack qualifications or expertise for effective grant writing and contracting grant services can be costly.
NSDC strongly recommends federally funded infrastructure and community programs include, in general: user-friendly approaches, allow for a lengthy submission timeline, and provide streamlined, direct opportunities to review comments on unsuccessful grant applications. NSDC especially supports this type of assistance for special districts serving disadvantaged communities, which often grapple to pursue opportunities directed at their communities.
Finally, small districts with budget and staff constraints often struggle with regulatory reporting, which can be burdensome financial risk for small special districts most in need of assistance. NSDC also recommends any existing or new programming keep complexities of reporting requirements relatively simple and extend technical assistance to special districts with low capacity to accomplish heavy reporting requirements.
Encouraging Intergovernmental Cooperation
Special purpose units of local government are part of the local government landscape in America, company to their town, township, borough, village, pueblo, city, parish, and county counterparts. NSDC seeks opportunities to collaborate and partner in non-legislative forums to strengthen ties among classes of government, and within the legislative arena to foster cooperative local efforts to invest in local programming, boost resilient infrastructure, enhance community resiliency, and to support legislation authorizing programs that foster intergovernmental cooperation when doing so would enhance cost-effectiveness and efficiency for services, when appropriate.
Congressionally Directed Spending & Community Project Funding Opportunities
Congressionally Directed Spending and Community Project Funding programs, also known as earmarks, made a comeback for Fiscal Year 2022. Absent the ability to readily access other federal program funds, these congressional requests pose a unique opportunity for special districts to request specific project funding. As long as the earmark program is active, NSDC is committed to providing members resources needed for crafting and submitting projects to members of Congress including program guidelines, timelines, and access to consultation services. NSDC does not endorse specific projects.
Access to federal COVID-19 financial assistance for state and local governments was the issue compelling the Coalition to unite in advocacy. NSDC is committed to advocating for special districts’ inclusion in federally funded pandemic responses, measures to address major disasters and national emergencies, and economic recovery initiatives. As a national issue with many federal touchpoints, Coalition members have access to legislative advocacy resources created for state and local grassroots efforts.
COVID-19 relief advocacy priorities include special districts’ access to state and local government relief programs that (1) reimburse expenditures made to respond, mitigate, and prevent the spread of the coronavirus, (2) address fiscal impacts stemming from low-income households’ hardships to keep utility payments current, (3) cover revenue loss due to the pandemic, (4) support frontline workers responsible for continuity of critical public services, and (5) support economic stimulus and job programs, such as infrastructure investments, related to federal pandemic recovery efforts.
Special districts serve communities of all types, but many provide services to what could be considered a “disadvantaged community.” This term is not yet formally defined at the federal level. As federal policies begin ushering in the use of this term, the Coalition seeks a seat at the table to refine future legislative or regulatory actions setting the scope and meaning of “disadvantaged communities” and advocating on policies impacting special districts serving such communities.
NSDC monitors and acts upon major federal regulations that broadly impacts special districts within policy areas deemed of significance for special districts. Regulatory topics of interest include water quality, the ability for special districts utilize federal funding, and other designated items the Coalition may deem significant for specific industries and types of districts. NSDC will continue to develop regulatory advocacy as the Coalition develops.