The activities of special districts in North Carolina are diverse, just like the communities they serve. Different types of special purpose districts play different roles in the community they serve. With about three thousand and three hundred special purpose districts, it may seem very overwhelming to understand the function and purpose of special purpose districts.

To simplify the work, we will break down the districts into some categories. One way to understand special purpose districts is to look at their contrasting features such as enterprise versus non-enterprise, single function versus multifunction, and dependent versus independent.

Multifunction versus single-function special purpose districts

Most special purpose districts do a single function. Single function special purpose districts deliver one service such as sewage, water, or fire protection. On the other hand, multi-function special purpose districts provide more than one service. Some multi-function special purpose districts only offer a few of the services that they are authorized to offer. The powers that state law authorizes but special purpose districts don’t provide are known as latent powers. Before a special purpose district can activate one of its powers, it requires approval by the LAFCO.

Protects may require the special purpose district to get the approval of its voters. If the new service needs new revenues from the special taxes or benefit assessments then the special purpose districts should get the approvals from property owners or voters.

Non-enterprise versus enterprise special purpose districts

Over a quarter of the available special districts are enterprise districts. This means enterprise districts deliver unique services that are run the same as business enterprises – they charge for the services of their customers. For example, hospital districts charge room fees that are paid by patients and not the other residents of the districts. Water special purpose districts charge water rates to their clients. Nearly all wastewater, water and hospital special purpose districts are enterprises.

On the other hand, non-enterprise special purpose districts provide services that do not lend themselves to fees. Mosquito abatement programs and fire protection services benefit the entire community and not just individual residents. No direct benefit/cost relationship exists in the services provided by non-enterprise special purpose districts.

Consequently, non-enterprise special purpose districts do not charge user fees for the services they provide. No one wants to put meters on a park district’s swings or even charge residents to put out a fire. Non-enterprise special purpose districts rely on property tax revenues to pay their expenses. Services provided by non-enterprise special purpose districts include firefighting, cemeteries, police protection and libraries. Although non-enterprise special purpose districts rely on non-free revenue, some services such as park districts’ swimming pools, recreation or soccer programs can raise fee revenue.

Dependent versus independent districts

About 2/3 of the special districts are independent. Independent special purpose districts have their separate governing boards that are elected by the voters of the districts. For example, local voters will elect the board of directors that runs a park district. Independent special districts in North Carolina, including where the appointed boards of directors work for fixed terms.