The Lake Holiday Sanitary district (LHSD) was established by the Circuit Court of Frederick County on October 29th, 2009 in response to a petition filed by landowners within Lake Holiday. The LHSD encompasses all the land within the Lake Holiday community. The Sanitary District was created as a means of financing the required improvements to the Lake Holiday Dam spillway and can be thought of as a special taxing district. The cost of the required spillway replacement was paid for by a tax on the land owners within the LHSD and was satisfied in 2024.