Statutes authorize the creation of authorities and districts with independent legal existence, governance and financing.

Why they are used. Debt capacity outside the parent unit’s limits; governance spanning multiple municipalities; a dedicated revenue stream; and insulation of an enterprise function from general government.

Formation. By resolution or ordinance under the enabling statute, with articles of incorporation filed, publication, and in some cases a referendum period during which electors may petition for a vote.

Governance. A board appointed by the creating units, with terms, removal provisions and conflict rules set by statute and by the articles.

Powers. As granted — to acquire property, to construct and operate facilities, to charge rates, to issue revenue bonds, and in some cases to levy.

Financing. Revenue bonds secured by the enterprise’s revenues, sometimes with a limited guarantee or a contractual commitment from the creating units that itself must be analyzed against debt limits.

Contracts with member units for service, cost allocation and capacity reservation, which are the operative documents and outlast the officials who negotiated them.

Dissolution and the disposition of assets and liabilities, which should be addressed at formation rather than discovered decades later.