About Special Districts

Special districts are units of local government established by the residents of an area to provide some service not provided by the county or city. Within California there are 58 counties, 468 cities, and over 3,400 special districts, exclusive of school districts.

Some special districts are located within cities. Many are located just outside city limits, in the unincorporated areas where one-quarter of the state's population lives. Suburban residents have often chosen to form special districts to provide needed services rather than form a city or annex their area to an existing city.

The size of the area served by a special district can vary tremendously. A lighting district, for instance, can be as small as one square block, while some water districts encompass several counties. Residents of many unincorporated areas are served by numerous special districts, each with its own set of boundaries.

In contrast to the broad constitutional and legal authority under which counties and cities operate, the authority of special districts is restricted to specifically enumerated powers and purposes. Special districts are limited in activity, in their ability to raise revenue, and in their power to regulate planning and land use.

The first two special districts established in the state were irrigation districts, stemming from a need for affordable irrigation water in the San Joaquin Valley. By 1900, almost 50 irrigation districts had been formed to serve agricultural areas. Today, close to 900 special districts supply water to rural, suburban, and urban areas throughout the state. In 1989-90, special districts engaged in 32 categories of activity. The frequency and variety of services provided by special districts are illustrated in Figure 1.

Some special districts are authorized by law to perform a single function, others, to perform many activities. The vast majority are single-purpose districts: only ten percent, or about 500, are multi-purpose districts.

At one end of the spectrum are those districts which are exclusively single-purpose, such as street lighting districts. At the other end of the spectrum are districts whose permitted functions cover a full range of services, from safety and recreation services to water, sewage, and street lighting services. County service areas and community service districts which can provide a wide variety of services.

In between are many types of districts limited to a small set of closely related services with a concentration on just one of them. A familiar example is the fire protection district, formed primarily to prevent and suppress fires, but also authorized to provide ambulance service.

Government activities are classified as either enterprise or non-enterprise, depending on the source of their funding.

Enterprise activities are financed entirely or predominantly by user fees set at a level to cover costs. Airports, harbors, hospitals, and water and sewer utilities, among others, are operated as special district enterprise activities. Special districts' enterprises generated over $6 billion in revenues in 1989-90.

Non-enterprise activities are supported primarily by generalized revenue sources. This form of district activity usually relies heavily on the property tax as a major source of revenue. Fire and police protection services are examples of non-enterprise activities.

As the figure Special District Characteristics illustrates, slightly more than half of the activities performed by special districts are enterprise in nature. Prior to 1978 both types of activities were growing at a six percent rate. When Proposition 13 caused a reduction in property tax support, the growth rate for non-enterprise activities slowed to four percent. Meanwhile, the number of enterprise activities continued to expand at the six percent growth rate, as districts turned to charging fees to cover costs, wherever possible.

A special district is classified as either independent or dependent, according to the type of governing body under which it operates.

• An independent district operates under a locally elected, independent board of directors. About 66 percent of California's special districts are self-governed, independent districts.

• A dependent district operates under the control of a county board of supervisors or a city council. On a statewide basis, 34 percent of the special districts are dependent in their governing structure. Most of these are governed by boards of supervisors. City councils and county supervisors often appoint local advisory boards to assist and advise them in governing dependent districts.

Some counties encourage unincorporated communities to form independent districts when services are needed, so that local responsibility is maximized. Other counties prefer the formation of dependent districts, so that provision of services remains more firmly under county policy direction. Still other counties discourage the formation of special districts altogether, preferring that an area either annex itself to a city or form a new city to obtain needed services.

No special district may be formed without authorization by the state. The state legislature has authorized 55 general types of district formation and operation. Each type has its own unique subset of features in terms of the number and type of activities authorized, funding and taxing authority, and governing body. Figure Special District Characteristics illustrates the prevalence of the major characteristics on a statewide basis.

The procedures for defining and changing special district and city boundaries were standardized and consolidated by the legislature in to the 1985 Cortese-Knox Local Government Reorganization Act. This law sets out uniform requirements for organizing a city or special district or initiating boundary changes. The act specifies what needs to be included in an application and petition, how many signatures are needed, how much public notice must be given, and when and how elections must be held.

Every county except San Francisco has a local agency formation commission. The LAFCO generally has five members: two county supervisors, two city council members, and one at-large or public member. Some LAFCOs add two representatives from independent special districts, for a total of seven members.

Formed by the legislature in 1963 to apply state policies and regulations, LAFCOs are legally independent of county, city, and special district governments. The legislature established a LAFCO in each county in an effort to discourage urban sprawl and ensure orderly formation and development of local governments.

To carry out this purpose, each commission has two main functions. One LAFCO responsibility is to determine the sphere of influence for each city and special district within the county. The sphere of influence is the delineated area into which each local agency can extend its services. This information helps a commission decide which configuration and type of agency is best suited to provide public services to a particular area.

The second major function of LAFCO is to review and act on requests to form or dissolve a local agency or to change the organization or boundaries of an existing agency. LAFCO must review any formal proposal for a new or reorganized unit of government or a boundary change.

The LAFCO staff considers the impact the proposal might have on the environment, on the residents of nearby areas, on other local agencies, and on the distribution of property tax. After evaluating costs, benefits, and public comments, the commission can take one of three actions: it can reject the proposal, approve it outright, or approve it subject to certain conditions or modifications.

Upon approval by LAFCO, a proposal to form or change a local government's boundaries or structure is sent to the county board of supervisors. The supervisors hold a public hearing and review any written protests. If there are no protests from a majority of the area's voters, the board places the issue on the ballot. Majority voter approval is required.