Public Finance


By: Lucosky Brookman


As an attorney specializing in public finance law, I have witnessed the immense value that special assessment districts (SADs) can provide in financing public infrastructure. When properly structured and implemented, these districts offer a powerful tool for communities to fund vital projects. This article will explore the key factors in structuring SADs for public infrastructure financing.

The Role of Special Assessment Districts in Public Finance

Special Assessment Districts are established by local governments to finance improvements that directly benefit a specific geographic area. Properties within these districts are assessed a fee or tax, the proceeds of which are used to finance public infrastructure projects, such as roads, parks, utilities, or other improvements, that directly benefit the properties.

Key Factors in Structuring Special Assessment Districts

1. Statutory Authority: The first step in structuring an SAD is to ensure there is statutory authority to do so. State and local laws govern the creation and operation of SADs. Working with legal counsel knowledgeable in public finance is crucial to navigate these legal requirements.

2. Defining the District: The geographical area that comprises the SAD must be carefully defined. The area should be those properties that will directly benefit from the financed improvements.

3. Benefit Analysis: The assessments levied must be proportional to the benefit received by each property in the SAD. A thorough benefit analysis must be conducted to justify the assessments and to withstand legal scrutiny.

4. Public Participation: Public participation is typically required in the creation of an SAD. This may involve public notice requirements, public hearings, and in some cases, a vote by the property owners in the proposed district.

5. Assessment Methodology: The methodology for levying assessments must be clearly defined and consistently applied.

6. Financing Structure: Bonds issued by the SAD should be structured in a way that provides for the timely repayment of principal and interest while maintaining a reasonable assessment level for property owners.

7. Disclosure and Compliance: Compliance with disclosure requirements under federal securities law is critical when bonds are publicly offered.

8. Ongoing Administration: Once the SAD is established, it must be properly administered. This includes levying and collecting assessments, managing project funds, and meeting continuing disclosure obligations.

Strategies for Effective Special Assessment Districts

1. Early and Comprehensive Planning: Engage in early and comprehensive planning involving all stakeholders. This includes local government officials, legal counsel, financial advisors, engineers, and the public.

2. Clear Communication: Communication with property owners and the public is key. Clear, transparent information about the benefits of the project, the costs, and the assessment process can help garner support and avoid misunderstandings.

3. Compliance Management: Establish systems for managing ongoing compliance obligations. This includes tracking continuing disclosure deadlines, managing project funds, and fulfilling audit requirements.

4. Legal Guidance: Consult experienced public finance legal counsel throughout the process. They can provide guidance on the legal requirements and help avoid potential pitfalls.


Special Assessment Districts, while complex, can offer a viable solution to financing public infrastructure projects that directly benefit specific areas. By considering the key factors in structuring these districts, local governments can harness their potential effectively. As a public finance attorney, it's my mission to guide clients through these complexities, ensuring that SADs are structured and implemented in a manner that serves the best interests of the community, and advances public infrastructure development.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Non-profit organizations should consult with qualified legal professionals for specific guidance tailored to their individual circumstances.