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Like hula hoops, martinis, and freeways, special districts became an art form in California.Special districts first arose in California to meet the water needs of farmers in the San Joaquin Valley. Frustrated by an inconsistent water supply and widely varying prices, farmers in Stanislaus County organized the Turlock Irrigation District under the Wright Act of 1887. The Wright Act allowed a majority of residents in an area to form a public entity for water delivery, and to finance its operation through bond sales. The Turlock Irrigation District made it possible for San Joaquin Valley farmers to intensify and diversify their agricultural activities.

Following the development of districts such as the Turlock Irrigation District, new water district formation shifted away from rural, agricultural lands, towards water-deficient communities in urban areas. In the early 1900s, water districts were primarily located in northern and central California. After 1950, they spread to Southern California to satisfy the suburbs' growing demand for water.

In the 20th Century, special districts increased dramatically in both number and scope. The prosperity that followed World War II increased the demand for public services of all kinds and, consequently, special districts. Special districts became a popular way to meet these incremental needs because, unlike complex municipal bureaucracies, special districts were flexible and provided desired services quickly and efficiently.

The decade after World War II saw an expansion in district activities for fire protection, sanitation, and water supply. Mosquito abatement districts, though first formed in 1915, multiplied to combat diseases inadvertently imported by returning soldiers. Hospital districts arose in 1945 because of a statewide shortage of hospital beds. Population growth in unincorporated areas spurred the development of recreation and park districts. Created to address individual service needs, special districts grew to encompass multiple needs as well. The Municipal Utility District Act of 1921 allowed special districts to diversify and address multiple needs ranging from water, power, transportation, and telephone service, as well as "all things necessary and convenient."