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Fee Study for the Merced Subbasin Groundwater Sustainability Agency

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Fee Study for the Merced Subbasin Groundwater Sustainability Agency FEE STUDY FOR THE MERCED SUBBASIN GROUNDWATER SUSTAINABILITY AGENCY INTENDED TO COMPLY WITH PROPOSITION 218 PROCEDURES FOR ESTABLISHING GROUNDWATER SUSTAINABILITY PLAN CHARGES MAY 2019 Prepared for: Prepared by: Provost & Pritchard Consulting Group Clovis, California MERCED SUBBASIN GSA FEE STUDY TABLE OF CONTENTS INTRODUCTION AND EXECUTIVE SUMMARY ............................................................ 1 1. PURPOSE OF THE REPORT ................................................................................. 1 1.1. General .............................................................................................................. 1 1.2. Sustainable Groundwater Management Act ....................................................... 1 1.3. Agency’s Authority to Charge Fees .................................................................... 2 1.4. State Intervention Alternative ............................................................................. 2 1.5. Proposition 218 Requirements ........................................................................... 3 1.6. Limitations of the Fee Study and Revenue Objectives ....................................... 3 2. MSGSA BACKGROUND INFORMATION ............................................................... 3 2.1. Location ............................................................................................................. 3 2.2. History ................................................................................................................ 7 3. AGENCY FINANCIAL INFORMATION .................................................................... 7 3.1. Programs/Projects .............................................................................................. 7 3.1.1. Prior Expenditures and Current Budget ....................................................... 8 3.1.2. Annual Administration ................................................................................ 10 4. BENEFITS DETERMINATION ............................................................................... 12 4.1. General ............................................................................................................ 12 4.1.1. MSGSA Formation and Annual Operations ............................................... 14 4.1.2. Groundwater Sustainability Plan Development .......................................... 14 4.1.3. GSP Implementation ................................................................................. 15 4.1.4. No Agency/GSA Alternative ....................................................................... 15 5. PROPOSED FEES ................................................................................................ 15 5.1. General ............................................................................................................ 16 5.2. Proposed Budget Funding and Fee Design ..................................................... 16 5.2.1. Fee Roll ..................................................................................................... 17 5.3. Conclusion ....................................................................................................... 17 6. IMPLEMENTATION PROCEDURES ..................................................................... 17 7. REFERENCES....................................................................................................... 18 LIST OF FIGURES Figure 1. Member Agency Location Map ......................................................................... 5 Figure 2. GSA Map.......................................................................................................... 6 Figure 3. MSGSA Lands Subject to Fees ...................................................................... 14 LIST OF TABLES Table 3-1. Prior Expenditures and Current Budget ......................................................... 9 Table 3-2. Projected Three-Year Annual Budget .......................................................... 11 Table 4-1. Acreage Subject to MSGSA Fee .................................................................. 12 Table 5-1. Proposed Three-Year Budget Summary ...................................................... 16 Table 5-2. Proposed Three-Year Fee Schedule ............................................................ 16 Provost & Pritchard Consulting Group Page i P:\Merced Subbasin\Merced Subbasin GSA\Prop 218 Fee\Fee Study Report\Prop 218 Fee Study FINAL APPROVED 06.05.19.docx MERCED SUBBASIN GSA FEE STUDY APPENDICES Appendix A – State Intervention Fee Structure Appendix B – MSGSA 2019 Fee Roll ACRONYMS AF........................................................................................................................ acre-feet CASGEM ............................................ California State Groundwater Elevation Monitoring DACs .................................................................................... Disadvantaged Communities DWR ............................................................... California Department of Water Resources GSA ............................................................................ Groundwater Sustainability Agency GSP ................................................................................ Groundwater Sustainability Plan JPA ................................................................................................. Joint Powers Authority MIUGSA .............................. Merced Irrigation-Urban Groundwater Sustainability Agency MSGSA ......................................... Merced Subbasin Groundwater Sustainability Agency SGMA ............................................................ Sustainable Groundwater Management Act SWRCB ................................................................. State Water Resources Control Board TIWDGSA ..................... Turner Island Water District Groundwater Sustainability Agency Provost & Pritchard Consulting Group Page ii P:\Merced Subbasin\Merced Subbasin GSA\Prop 218 Fee\Fee Study Report\Prop 218 Fee Study FINAL APPROVED 06.05.19.docx MERCED SUBBASIN GSA FEE STUDY INTRODUCTION AND EXECUTIVE SUMMARY The Merced Subbasin Groundwater Sustainability Agency (MSGSA or Agency) is the Groundwater Sustainability Agency (GSA) responsible for implementation of the Sustainable Groundwater Management Act (SGMA) in the Merced and Mariposa County portion of the San Joaquin Valley-Merced Subbasin (5.022-14) outside of the boundaries of the Merced Irrigation-Urban Groundwater Sustainability Agency (MIUGSA) and the Turner Island Water District Groundwater Sustainability Agency (TIWDGSA). Member agencies of MSGSA include the County of Merced, County of Mariposa, Le Grand- Athlone Water District, Merquin County Water District, Plainsburg Irrigation District and Stevinson Water District. Participating contracting entities include Lone Tree Mutual Water Company and Sandy Mush Mutual Water Company. For the purposes of this Fee Study “member agencies” includes both member agencies and contracting entities. As a GSA, the Agency may develop, adopt, and implement a Groundwater Sustainability Plan (GSP) for sustainable management of groundwater underlying MSGSA. MSGSA member agencies agreed to fund MSGSA for the first three years of operation, after which a proposed landowner fee is to be initiated to cover everyday operations of MSGSA. These operations include administration, legal services, insurance, office and outreach materials, accounting, monitoring and reporting to the California Department of Water Resources (DWR), and potentially some special studies. GSAs in the Merced Subbasin together have received Proposition 1 grant funding to cover a majority of the work to develop the GSP. However, costs for GSP preparation and initial implementation that can’t be covered by grants will also need to be covered by the fee. If any unforeseen management actions resulting from GSP implementation cause a funding shortfall, such actions will need to be funded by separate fees or assessments. MSGSA, in coordination with MIUGSA and TIWDGSA, is developing a GSP that provides a path for achieving groundwater sustainability in the entire Merced Subbasin by January 2040. Because the Merced Subbasin is considered by DWR to be a high priority and critically overdrafted basin, SGMA requires that a GSP be submitted to DWR by January 31, 2020. MSGSA has developed a budget of up to $750,000 in annual expenses spanning fiscal years 2019/20 to 2021/22, and the Agency Board of Directors is seeking fees to generate sufficient revenue to fund MSGSA operations. GSP development is scheduled to occur by January 2020, with GSA operation expenses on-going during that period and beyond. The Agency Board of Directors have determined to follow a Proposition 218 process before implementation of the proposed fees. The Agency Board of Directors has determined that the proposed fees will be charged on a proportional scale, whereby all parcels in the MSGSA pay a minimum amount, and those parcels dedicated to Irrigated Agriculture in the MSGSA pay a premium to account for their direct impacts to the aquifer. Provost & Pritchard Consulting Group Page ES-1 P:\Merced Subbasin\Merced Subbasin GSA\Prop 218 Fee\Fee Study Report\Prop 218 Fee Study FINAL APPROVED 06.05.19.docx MERCED SUBBASIN GSA FEE STUDY The phrase “Irrigated Agriculture” is defined as those parcels identified as being used for farming, trees and vines, poultry, dairy, and refuges according to land use code or land use types attributed to the parcel
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