Utah Special Service Districts 101

November 26th, 2018

We’ve always heard that special service districts are the forgotten middle-children of government.  It’s accurate, and it hurts. We looked for information about why they exist (vs. why a city doesn’t just provide services directly).  It took more digging than we thought it should because SSDs don’t tell their story much. Here’s the highlights of what we found-out:

  • The whole idea of a district is to establish an organization that provides a public service, without a lot of the political issues that tends to come with it. Imagine a city council meeting where you always had to reserve agenda time to talk about how well pump #3 is working…
  • SSDs are kind of like nonprofit organizations because they have a narrowly-defined mission. They are kind of not like nonprofit organizations because a lot of them provide a monopoly service that the public depends on.
  • There are two kinds of districts – independent and dependent.  Independent districts can have the same political standing as cities. Dependent ones are created and overseen by the local government.
  • Districts have taxing authority, which means that they can also bond for their projects without affecting the city’s credit.
  • SSDs are created to be very good at a very specific thing. The independent ones are not limited by political boundaries, they can do it in a geographic area. This would create an economy of scale for a series of bedroom communities that are right next to each other, but it seems like it would be redundant for those towns that don’t have neighbors.

The big takeaway seems to be that regardless of whether they exist or not, all public entities need to operate transparently in order to maintain their credibility.