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Special districts are also reluctant to take on costly projects for small areas. This is because securing bond financing hinges on the ability of rate payers (low-income residents in the Communities of Interest) to accommodate substantially higher rates in order to pay debt service on the bonds that would fund the infrastructure improvement projects. According to Olmstead, who has studied the factors that determine who gets access to water service in the border colonias, “for every $1000 increase in per capita income, a colonia’s probability of water service increases by 2.3%.”58 Olmstead also found that service providers who were not subject to rate regulations (designed to keep rates low) are more “proactive in providing water services to colonias” than municipalities and counties.59 Finally, Olmstead found that price regulations reduce the likelihood of obtaining services by 27% in colonias.60

Given these formidable structural challenges, what are the strategies for finding new public capital and operating funds for unincorporated communities, and how can we emphasize solutions that are more than a “zero-sum game” within local governments? The Alpaugh case demonstrates the value of looking beyond the immediate governance and special district structures to engage state and other public agencies. Focusing organized community leadership on the goal of leveraging new resources from the state, and collaboration among small service districts toward this end, may be important avenues to pursue.

b. Policy Strategies & Levers: Because of the public finance challenges and the extreme fragmentation of local government authority and decision-making with regard to unincorporated communities in the San Joaquin Valley, the policy responses to infrastructure and service deficits will differ for communities with different structural characteristics and for communities with different political/historical circumstances.

Our research and discussions with policy experts suggest a number of possible levers for change in the system of governance. Some of these have been addressed by recent research, lawsuits, legislation or organizing campaigns, but to our knowledge there has not been a comprehensive or widely shared discussion of their future prospects. Some may pertain only to certain types of communities, or to a limited number of counties, while others may be relevant to a state-level strategy. At least nine broad categories of areas for action have already been raised in the early months of this project. We summarize these approaches along with key questions as inputs for the strategic discussion on November 27th:

1. Annexation and Incorporation, to provide the services of city government to unincorporated areas. What are the prospects of developing a viable advocacy strategy to remove the built-in barriers to annexation or incorporation of Communities of Interest? Would our approach be to


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