THE COST OF GROUNDWATER MANAGEMENT
An unfunded California law, the Sustainable Groundwater Management Act requires better management and balance of groundwater supplies in a groundwater subbasin through the creation of local Groundwater Sustainability Agencies (GSAs) with extensive powers to manage groundwater.
A fee is necessary to cover the costs to follow the new State law within its stipulated deadlines. Based on the Agency’s needs, the McMullin Area GSA Board of Directors is seeking to levy a fee to generate sufficient revenue to fund annual Agency operational costs and expenses associated with the development and initial implementation of a Groundwater Sustainability Plan. However, the fee will not be imposed if a majority of landowners within the McMullin Area GSA formally protests.
Compliance with the State law is not optional. SGMA stipulates that local GSA’s must develop a Groundwater Sustainability Plan by January 31st 2020; failure to do so will trigger State Intervention. Funding the development and implementation of a GSP through the proposed fee is crucial to achieving compliance at the local level.
The McMullin Area GSA Board is dedicated to navigating SGMA together as a local community of stakeholders. Implementing SGMA at the local level allows stakeholder input and provides for solutions that carry benefits to our region.
Failure Comes at a Greater Cost
The proposed fee must be supported by landowners within the McMullin Area GSA territory. If the GSA is unable to fund its efforts to comply with the regulation, the State will intervene and implement the law at a much higher cost. The first trigger for State Intervention is failing to meet the deadline of GSP development by January 2020. Follow the link below for an overview of State Intervention triggers:
In the case of State Intervention, the California State Water Resources Control Board (SWRCB) would impose a fee structure on groundwater pumpers many times more costly than what is proposed by the McMullin Area Groundwater Sustainability Agency, and is likely to impose unfavorable restrictions without providing local benefits.
“Basins run the risk of state intervention if they miss the deadline for plans or don’t have a plan that DWR thinks will be sustainable…the [State Water Resources Control] Board will proceed with its own plan until the issues are fixed…That kind of interim plan wouldn’t have much flexibility: we’d require monitoring, collect pumping data, and set a schedule for certain corrective actions – likely reduced pumping. SGMA gives us that blunt intstrument – reducing pumping – and we would probably use it.“
– Sam Boland-Brien, Groundwater Management Program Chief of the California State Water Resources Control Board
Read full interview with Sam Boland-Brien here: Enforcing the Sustainable Groundwater Management Act
McMullin GSA fees vs. State fees
If the McMullin Area GSA is unable to fund its efforts to comply with SGMA through the proposed fee, the State will intervene to implement the law. The cost of State Intervention far exceeds the cost of local implementation, and without carrying the same benefits for the local community.
McMullin Area GSA fees at $19 per acre versus the State fees
- 50 acre ag parcel, 1 well pumping 3.5 AF/ac: annual payment to the State = $7,300 for the first year
- 50 acre ag parcel flat $19/acre: annual payment to the McMullin Area GSA = $950 per parcel per year
* State fee for ag parcel can range from approximately $5,000 to over $8,000 depending on crop water use/acre foot and State requirements.
State Intervention Fee Structure
Funding the Local McMullin Area GSA
The McMullin Area GSA Board is committed to retaining local control over SGMA implementation, where landowner dollars are utilized most efficiently and beneficially. To fund these efforts the Board has approved conducting a Proposition 218 majority protest election for approval to levy property-related water service fees on landowners within its jurisdiction.
Proposition 218 is a Constitutional Initiative approved by the voters of California in November 1996. It requires new or increased fees and assessments be approved by affected landowners.
Absent of written protests from the majority of landowners upon which the fees are proposed to be imposed, the McMullin Area GSA may adopt the proposed maximum fee of $19/acre. The affected landowners includes all parcel owners within the boundaries of the McMullin Area GSA, excluding parcels of 2 acres or less. The proposed fee has a lifetime of 5 years, at the end of which the GSA will need to hold another Proposition 218 election for additional funding needs. A majority of affected parcel owners within the McMullin Area GSA would need to protest in opposition to the fee to prohibit the Board from collecting the fee. If the fee is protested by the majority of parcel owners, the GSA will be unable to fund local efforts to comply with SGMA and State Intervention will inevitably follow.
At the March 7, 2018 Board meeting, the Directors of the McMullin Area Groundwater Sustainability Agency approved hiring a rate consultant to analyze and calculate a fee to cover the costs associated with developing and implementing a Groundwater Sustainability Plan and ongoing agency management.
The fee considered is a property-related water service charge governed by Proposition 218. Proposition 218 requires fees be based on the reasonable cost of providing service, in this case the cost of the McMullin Area GSA’s 5-year annual budget (click link below to view). Fees must proportionally recover costs from ratepayers and were calculated on a per acre basis.
The rate study prepared by Lechowicz + Tseng Municipal Consultants was adopted at the April 11, 2018 Special Board Meeting. The study includes two options for the McMullin Area GSA’s annual fee calculation. Option 1 set the fee at a maximum of $18.95/acre and Option 2 set the fee at a maximum of $19/acre. Option 2 excludes all parcels of 2 acres or less within the McMullin Area GSA. Option 2 was selected by the Board of Directors and as such, parcels of 2 acres or less are excluded from the Proposition 218 majority protest process.
To review the full fee report, click the link below:
To review the presentation on the rate study given at the April 11, 2018 Special Board Meeting, click the link below:
The Agency is seeking landowner approval to adopt a fee up to the maximum amount shown in the table below, specifically $19/acre per year for parcels greater than 2 acres in size. The 5-year budget totals are shown in the graphic below (click to enlarge). Note that the fee amount levied by the Agency will not exceed the maximum amount unless an increase is approved through a subsequent Proposition 218 proceeding. The necessary funding for the Agency will be reviewed annually by the Board and, depending on the funds projected to be needed for the year, may be approved up to the maximum $19/acre.
For a detailed overview of budget components, click the link below:
Proposition 218 Next Steps
Proposition 218 Schedule
April 11 Board adopted rate study, set Public Hearing for June 6, 2018 April-May Conduct public outreach and education April Prepare and mail ballots June 6 Public Hearing, Board will hear and consider all written protests and consider adoption of the proposed charges.