Now that your plan is in place, how can you fund it?

Groundwater Sustainability Agencies (GSAs) are on deadline to develop an official plan to understand, manage and maintain groundwater as a long-term resource. While January 31, 2020 was the date for critically over-drafted, high- and medium-priority groundwater basins in California to develop their Groundwater Sustainability Plan (GSP), remaining high- and medium-priority basins are approaching the next deadline of January 31, 2022. But drafting a GSP is only half the battle – funding it can be a challenge as well.

A GSP is a detailed roadmap of how groundwater basins will reach long-term sustainability. In order to accomplish our sustainability goals, the Groundwater Sustainability Agencies managing the GSP’s need to determine how to fund these plans. The funding mechanisms selected will play an important role in developing the GSP because administering plans, building projects, and providing the necessary services all require money. There are various funding mechanisms available and careful consideration should be given to implementing one, or more.

Prior to approving a GSP, fees can be adopted to fund general administrative costs and the cost to develop the GSP itself, such as:

  • Permit fees, groundwater extraction fees, fees for other regulated activities, and fees to cover the cost to prepare, adopt, and amend a GSP; and,
  • Fees associated with inspections, compliance, enforcement, program administration, and establishment of a prudent reserve¹

Specific projects cannot be funded with “pre-GSP” fees; therefore, the GSA will need a “post-GSP” fee to fund operating, maintenance, and capital project costs.

Once the GSP is adopted, ongoing funding will be needed to implement the GSP. Post-GSP fees can be adopted to fund costs such as²:

  • Administration, operation, and maintenance, including a prudent reserve
  • Acquisition of land or other property, facilities, and services
  • Supply, production, treatment, or distribution of water
  • Other activities necessary or convenient to implement the plan

Post-GSP fees can be structured as fixed and/or volumetric based on the quantity of groundwater produced and are typically property-related fees subject to the substantive and procedural requirements of Proposition 218. However, as previously mentioned, GSAs have at their disposal a variety of revenue mechanisms to fund operating and maintenance activities and capital improvement projects, including taxes, fees, and assessments. Within each revenue mechanism are various types and nuances of what activities and facilities can be funded, and what the property owner, or voter, approval thresholds are. Over time, as a GSA evolves and fine-tunes its funding plan, it may be necessary to implement different revenue mechanisms to fund the various needs of the agency. It is also possible for a GSA to maintain its pre-GSP fees, once the GSP is adopted, if it continues to be used for the original purpose for which it was intended.

¹Per California Water Code 10730
²Per California Water Code 10730.2