Prop 218 Groundwater Fee

Election Results

The McMullin Area GSA Board successfully passed a Proposition 218 Election to adopt a $19/acre property-related fee in accordance with Water Code section 10730(c). The Public Hearing was held on June 6, 2018 in Kerman, CA. Two valid protests were submitted to the GSA in opposition to the proposed fee that will be levied on landowners within the GSA. A majority protest was needed for the Election to fail. The $19 per acre fee will fund GSA administration and activities related to planning and implementing local projects aimed at achieving State mandated sustainability.

The Board set the rate at $19/acre for the fiscal year 2018-19. The fee will be levied on all landowners within the boundaries of the McMullin Area GSA, excluding parcels of 2 acres or less. To determine if your property lies within the McMullin Area GSA, you can use this CA DWR map tool. Type your address into the search bar at the top of the page to find your GSA.

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 conducted and successfully passed a Proposition 218 Election for landowner approval to levy a fee. The fee will generate sufficient revenue to fund annual Agency operational costs and expenses associated with the development and initial implementation of a Groundwater Sustainability Plan.

The $19/acre assessment will be levied on all landowners within the boundaries of the McMullin Area GSA, excluding parcels of 2 acres or less, via Fresno County tax rolls starting fiscal year 2018-19.

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 Great Cost

The $19/acre will help keep SGMA implementation at the local level. Without funding from the fee, compliance would still have happened but at a much higher cost. The State has introduced a fee structure for probationary basins (those that fail to meet State-mandated deadlines and thus are not in compliance with SGMA) many times more costly than the new McMullin Area GSA fee. 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:

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…[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 instrument – reducing pumping – and we would probably use it.Sam Boland-Brien, Groundwater Management Program Chief of the CA State Water Resources Control Board

Read the full interview with Sam Boland-Brien here: Enforcing the Sustainable Groundwater Management Act

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/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

                              VS.

    • 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 per acre foot and Stat requirements

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 conducted 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.

The affected landowners includes all parcel owners within the boundaries of the McMullin Area GSA, excluding parcels of 2 acres or less. The proposed $19/acre 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.

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 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.

5-Year Budget

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:

Fee Report

To review the presentation on the rate study given at the April 11, 2018 Special Board Meeting, click the link below:

Rate Study Presentation

The Agency has landowner approval via Proposition 218 Election 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:

5-Year Budget