Gov. Scott's latest target in the coming in the New Year: Florida's taxing districts:

Posted by John H. Burton

Written by
JOHN KENNEDY
Palm Beach Post Staff Writer

TALLAHASSEE — One of Gov. Rick Scott's first moves in the new year will be to call for a sweeping review of some of the state's oldest governments - Florida's more than 1,600 special districts.

Palm Beach County, with 94 special districts, has among the most in the state. That means county taxpayers are shelling out more every year for services on top of their school and property taxes.

Aides say Scott plans to sign an executive order in January, launching a weeks-long examination of whether these districts are still meeting the missions they were enacted to perform. He also wants a better handle on how districts are spending the $15.5 billion in taxpayer money they command.

The first-year Republican governor said last fall that he was "shocked" when he learned that Florida's wide variety of special districts controlled such money through the taxes and fees they collect. "On behalf of the citizens of the state, we have to look at what return we're getting for those dollars," he said at the time.

Special districts trace their roots to pioneer days in Florida, and provide environmental, health care, fire control, port, community development, and urban renewal services.

But forging a common path for these agencies to follow won't be easy, said Terry Lewis, a West Palm Beach lawyer who represents the Florida Association of Special Districts and a dozen special districts. More than 30 state laws govern special districts. What works at the Port of Palm Beach might not apply to the Lake Worth Drainage District, Lewis said.

"We've strengthened the consumer protection aspects of state law governing special districts over the years," Lewis said. "Every special district, like every city or county, has to have annual audits. There already is a lot of oversight."

Water district a harbinger

Scott's first foray into special districts came when he signed into law legislation that reduced property-tax revenue by $210 million at Florida's water management districts. The South Florida Water Management District, the state's largest, took the biggest financial hit, which also cost almost 400 employees their jobs.

Special district proposals (SB 192, HB 107) have been introduced for the legislative session that begins Jan. 10. Sponsored by Rep. Matt Caldwell, R-Lehigh Acres, and Sen. Mike Bennett, R-Bradenton, the measures are relatively modest - making it easier for neighboring districts to consider merging to save money or improve efficiency.

Florida's 30 or so hospital taxing districts, scattered around the state since the 1920s, are the subject of a review by a 10-member commission appointed by Scott. Its recommendations, released Thursday, include giving voters a chance to decide whether to pull the plug on an existing district.

It's possible that Scott's special district review could yield calls for eliminating some districts. More public disclosure requirements and limits on borrowing and spending also could emerge, say those involved.

Still, the governor's top lobbyist, Jon Costello, told a House committee, "The governor is not looking to take an ax to special districts."

Hard times for districts

Scott, who had been a tea party favorite his first year in office, also has backed away from his earlier criticism that "not a single voter" gets to shape special district policy.

Some districts are led by appointees of the governor, or of other boards. Others are run by county or municipal commissions, and many have supervisory panels elected by property owners within the district's boundaries.

But special districts periodically come under fire, often because of scandal or the free-spending habits of administrators.

Community development districts are among those needing the strictest oversight, critics say.


Close to 600 CDDs have been established in Florida. Fees assessed on homeowners' lots allow the districts to issue tax-exempt bonds - so-called dirt bonds - to finance roads, utility lines, sidewalks and other needs to prepare land for building.

But the state's housing crash has hit some of these development districts hard.

The state's auditor general this year urged that lawmakers make it tougher for CDDs to borrow, after finding that almost one-third were behind in bond payments and many others were using reserves to make payments on their debt.

More transparency urged

Richard Lehmann, a Miami Lakes investment adviser who publishes the Florida Community Development District Report (floridacddreport.com ), said that more than 400 of these CDDs were started between 2003 and 2008, as Florida's housing market boomed.

"There's definitely a need for some legislative reform," Lehmann said. "There needs to be more transparency - we get calls from homeowners all the time who say they didn't know they were going to be assessed fees, or that they're even in a CDD."

My notes: from John Burton
"It's about time, the governor is just the man to our state on track."

Pete Pimental, whose Palm Beach Gardens company, Special District Services Inc., manages and administers 72 special districts across the state, said the trouble with CDDs is "probably what's caught the eye of the governor."

Pimental said state law requires those buying lots in a development district to receive plenty of notice about their responsibilities. But he expected there could be a new push to limit the bonding authority of districts.

"But I think the market is taking care of that already," Pimental said. "You're seeing investors take a much harder look at these deals."