State proposes new “good guy’ application fee of up to $250,000 for groundwater oversight costs
The state is proposing to create an entirely new fee to help pay for the massive amount of work it takes to review and police groundwater plans in severely overdrafted parts of the San Joaquin Valley.
Staff with the Water Resources Control Board are seeking approval of a new fee of $50,000 up to $250,000 for any groundwater agency seeking a so-called “good guy” exemption.
Good guy exemptions are allowed for groundwater sustainability agencies (GSAs) found to be in compliance with the Sustainable Groundwater Management Act (SGMA) even if the rest of the subbasin isn’t.
The good guy application fee, along with a proposed change to the late payment deadline, were discussed at a June 12 workshop on fees needed to help pay for SGMA oversight.
Both proposals left water managers scratching their heads.
“The new fee seems like a distraction from the real topic,” wrote Alex Peltzer, Lower Tule River and Pixley GSA manager, in an email. “We were expecting an accounting of the state’s SGMA expenses and anticipated collections at this meeting. We hope future workshops will provide that.”
Peltzer’s groundwater agencies are in the Tule subbasin which, along with the neighboring Tulare Lake subbasin, was put on probation by the Water Board in 2024.
Probation requires farmers to meter and register wells, report extractions and pay a fee of $20 per acre foot pumped to the state.
GSAs in both subbasins applied for the good guy exemption, which was only granted to the Delano-Earlimart and Kern-Tulare agencies.
“We don’t anticipate there being many opportunities to request exclusions in the future, so we’re not sure why this (new proposed fee) is being raised now,” Peltzer wrote.
Deanna Jackson, general manager at Tri-County Water Authority GSA, said she believes the Water Board is trying to dissuade others from applying for future exemptions.
“The whole thing has been very frustrating,” she said. “This is what they set in motion, not us. What are we supposed to tell our growers if they don’t want people to work through the process?”
Brianna St. Pierre, assistant director for the Water Board’s SGMA office, said reviewing the good guy exemption requests took an “extraordinary amount of time.”
If application fees had been in effect, each GSA would have paid between $50,000 to $250,000 per review, or up to $2 million total.
That’s not even half what it costs to fund the 22 positions needed to oversee SGMA each year, $5.45 million.
So far, that funding has come from two separate loans of $5.47 million each from another state fund. Those loans must be repaid using future fee revenue.
Peltzer said he will be requesting a more thorough accounting of SGMA fees and asking for lower fees in the future. He encouraged grower groups to weigh in.
“The growers who will be paying these fees are entitled to that accounting,” he said.
Proposed late fee deadline
St. Pierre also proposed moving the trigger date for late fees from Feb. 1, 2027 to May 1, 2027.
Growers who pay their pumping bills late will be charged 25% of the total per month, up to a cap of three times the total amount.
The Water Board will hold another workshop July 30 to flesh out the proposal before bringing it to the board in September.
“Board staff do not yet have a concrete proposal for how this potential change would affect the two subbasins already required to report,” a Water Board spokesperson wrote in an email.
Tom Barcellos, president of Lower Tule River Irrigation District GSA and a farmer, said piling on late fees in May would hit hard.
“That is a cash flow killer,” Barcellos said. “It’s coming at a most difficult time because we don’t have crop income at that point.”
He asked to spread out late payments over three months and pointed out that neighboring farmers are struggling with the first round of fees expected to hit later this summer for last year’s pumping.
“I’ve got growers in a position they’re not going to survive,” he said. “There are properties for sale for that reason exactly.”
He also pointed out that reporting and fee exemptions granted to Delano-Earlimart and Kern-Tulare have created an unequal playing field as farmers prepare to harvest and sell their crops.
He anticipates paying tens of thousands of dollars in well registration and pumping fees.
“My neighbor across the street is not paying a dime because they have an exclusion,” he said. “I am at a severe competitive disadvantage financially with my neighbor because we both are going to be trying to sell crops to the same individual who is looking to buy, and they could easily undercut me.”
Growers in the Tulare Lake subbasin are not paying fees yet pending the outcome of a lawsuit filed by the Kings County Farm Bureau.
Comments on fees can be sent to sgma@waterboards.ca.gov by July 13.
The public can also provide comment on the proposed fee and deadline changes at the July 30 Water Rights Fund fees meeting. A state water board spokesperson said the final proposal is scheduled for adoption at the Sept. 15 state water board meeting.
