Assembly Standing Committee on Water, Parks, and Wildlife

We'll call this meeting to order. Welcome Assemblymember Bennett. Have a seat. So nice to see you. Okay, so welcome everybody. We're glad to see you. And welcome to this informational hearing where there will be no votes. I just have a few opening remarks and then I will defer to Assemblymember Bennett for some opening remarks. So it's been nearly 10 years since SGMA was adopted and we still have extreme weathers.

And so I think the importance of managing our groundwater has become even more important than it was probably 10 years ago. So we're sort of at a pivotal point. We're at a critical juncture in that DWR has done its assessments and for both the high and medium-priority basins and with these initial assessments complete, we are in full implementation mode.

And I think that's a large reason why we wanted to have this Joint Hearing, so that we can take a look and see how the implementation is going to take shape after the plans have been submitted and where the state may be helpful and useful in that implementation. So I appreciate the large tasks that the DWR and the State Water Board and local agencies have done, and we will work collaboratively as we go forward.

I think it's also that it's critical that we ensure that all groundwater users are considered as we move forward. I want to thank in advance my colleagues for making the time to be here and to thank the witnesses who are about to engage in this important discussion. And with that, I'd like to turn it over to Assemblymember Bennett.

Well, thank you. Thank you very much.

There, There. Thank you very much. Co-chair Papan, I guess I would say, for co-hosting this with budget sub four Committee, as Chair Papan was talking about. SGMA has had its 10-year sort of implementation phase and this is really the appropriate time for us to stop and start to ask these questions, particularly as DWR has been producing a report for us to try to analyze the impact so far of this great SGMA effort that's out there.

So with that, I won't repeat some of the other things that she talked about in terms of this being appropriate, but I do want to emphasize that these groundwater agencies have a special responsibility to those people who have the least advantages and the least ability to try to deal with the impacts of depletion of our groundwater and the overdrafting that's out there. So the thousands of domestic wells that go dry, causing farm workers and low income people to be disadvantaged, is a particular concern of mine.

And the State of California has invested millions and millions of dollars in trying to make sure that SGMA works and the groundwater agencies function properly, and we want to make sure we're getting a good investment for those dollars. And that's the budget sub-four approach that I think we're most interested in. So thank you very much, Co-chair Papan.

Thank you so much, Assemblymember Bennett. Any other opening remarks? Okay. With that, let's have the first panel come forward. And when you begin, if you could tell us your name, where you're from, and just give me one sentence about what you're going to testify to, because I think that will help as we go forward. Go ahead. Who's going to go first? Sonia.

Yeah, Okay, well, thank you. Good morning, Madam Chair, Mr. Chair Members, I'm Sonia Pettick from the Legislative Analyst Office, and I've been asked today to provide a brief overview of SGMA to talk about state funding provided for SGMA implementation to date. And then we offer a few issues and sort of questions for the Legislature to consider as it listens to the other panelists and as it thinks about implementation going forward. Okay, you should have a handout that our office prepared.

And for those of you in the audience, there are copies of this handout in the back. And for those watching online, you can find this handout at our website at LAO.ca.gov. So if you turn to the first page of actual content, I just want to provide a bit of context for the Sustainable Groundwater Management Act, or SGMA. First, we would just note that groundwater is a very important component of the state's water resources.

In any given year, groundwater can make up 40% to 60% of water supplies. Obviously, reliance on groundwater increases during dry years, and in some regions of the state, groundwater makes up 100% of water supplies. But there is severe groundwater depletion in some areas of the state and this is because, on average, the state extracts more groundwater than is replenished, and this causes underground basins to become gradually depleted or overdrafted.

Overdraft can have serious consequences, including failed wells, deteriorating water quality, collapse of groundwater basins, and serious land subsidence. And interestingly, and sort of in retrospect, it's almost hard to believe, but before 2014, groundwater was not regulated on a statewide basis. And this is sort of in contrast to how the state has regulated and managed surface water over time. If you turn to the next page, three laws were approved in 2014 that together make up what we know as SGMA.

The goal is really to achieve long term groundwater sustainability by 2040. And this really, as I noted before, this really makes up the first time that the states had a comprehensive statewide requirement to manage and operate groundwater basins. Notably, SGMA's requirements apply to 94 of the state's 515 groundwater Basins, and these 94 basins, along with 2029 basins that have been adjudicated, are considered or represent about 98% of the state's annual groundwater pumping.

These 94 basins have been determined as high or have been prioritized as high or medium priority basins by the Department of Water Resources, and of these 94 basins, 21 are considered to be critically overdrafted. An important component of SGMA is that control and management of groundwater basins really happens at the local level, and by 2017, local public agencies were required to form groundwater sustainability agencies, and these agencies have broad management authority to define the sustainable yield in a basin, to limit extraction, and to impose fees.

SGMA also requires these local agencies to develop what are called groundwater sustainability plans, or GSPs, and these, of course, govern groundwater management in the basin. As was already noted by Madam Chair, all of the GSPs have since been reviewed by the Department of Water Resources. There were deadlines for submission by 2020 for the critically overdrafted basins and by 2022 for the other high and medium-priority basins.

And an important note about the submission of the GSPs is that groundwater sustainability agencies were required to start actually implementing these plans upon submission, even as the Department of Water Resources was reviewing these plans. SGMA implementation is overseen by two state agencies, the Department of Water Resources, which really led the early implementation phase of SGMA, as well as the State Water Resources Control Board.

DWR's responsibilities included defining and prioritizing the groundwater basins, collecting and providing data, and then, importantly, reviewing the GSPs, as has already been noted. And DWR would make determinations about whether the GSPs were adequate to comply with SGMA's requirements and to actually achieve sustainability. But we did want to note that this process is sort of an ongoing living process.

These plans are sort of living documents in the sense that the Department will be reviewing annual reports from the groundwater sustainability agencies and will be reviewing updates to the plans every five years. If you turn to the next page, I don't want to steal Mr. Goslin's thunder, but we did just want to note where we're at with the current groundwater sustainability plan determinations. So you can see in the pie chart that about two thirds have been approved, another 13 have been deemed incomplete.

Those were more recent determinations, and those agencies have 180 days to address the deficiencies in those plans and resubmit. Six have been deemed inadequate. We'll talk about those in a moment. Nine alternative plans have been approved, and then an additional four are sort of in another type of status. So the other agency involved the State Water Resources Control Board. The Water Board steps in when the Department of Water Resources has determined that a groundwater sustainability plan is inadequate to achieve sustainability in a basin.

Intervention can include holding probationary hearings requiring types of reporting, issuing fees, and in the worst case scenario, actually temporarily sort of taking over management of a groundwater basin. And it's our understanding that the first probationary hearing for one of the six inadequate basins that's been determined to have an inadequate GSP will take place on April 13 of this year. Turning to the next page, we have a timeline for SGMA implementation, and I have to apologize for the small font.

If you're like me, you're going to find it hard to read. But the important thing about this timeline is a lot of the milestones have already been reached, and where we're at today is really at the bottom of the timeline. The GSPs have been submitted and reviewed, and now, as Madam Chair noted, we are in full implementation mode with the goal of reaching sustainability by the 2040 and 2042 dates. Next, I'm going to address some of the state support for SGMA implementation.

As you'll see on page five of the handout, the state has thus far provided more than 900 million for SGMA implementation. The majority of this funding has been provided in the form of local assistance grants, both planning grants for the groundwater sustainability agencies as well as implementation grants. And all of the information about these grant awards can be found on the department's website.

And just to provide a couple of examples of what the implementation grants are supporting are things like developing groundwater recharge basins or developing the conveyance that would actually get the water to those groundwater recharge basins. Turning to the next page, the rest of the funding has really gone to support state operations to implement SGMA. And most of this, because of DWR's role in the early days of SGMA, has been to the Department of Water Resources. Currently, DWR has 80 authorized positions for SGMA implementation.

However, a number of additional positions the Department will sort of loan positions from other program areas as needed on a temporary basis. So there's currently about 50 additional staff. The Department has about 40 million in annual funding to support its operations, which not only includes staff, but other things like the Department manages the California Statewide Groundwater Elevation Monitoring Program, otherwise known as CASGEM. The Water Board has currently about 10 million in funding in 23-24 and about 40 authorized positions for SGMA activities.

However, some of this funding is limited term and will expire, and the Water Board hopes to begin using some of its fee revenues as soon as 25-26 to support some of its state operations costs. I also wanted to draw your attention to the sources of state funding for SGMA implementation. In the early days, there were bond funds available both from Proposition One and Proposition 68. These funds primarily supported local assistance grants.

As those bond funds were exhausted, the state has come to rely more heavily on General Fund, and you can see that, in fact, the majority of funding has come from the General Fund. I'd note that the governor's current budget proposal for 2024-25 does not include any new requests for funding for SGMA, but it does include about 50 million of previously authorized funding from the General Fund for state operations.

And then I'll just close I wanted to raise a few fiscal and policy issues and questions for legislative consideration. So first, to implement SGMA, local agencies will, in fact, farmland, some amount of farmland will have to go out of production or have to be fallowed in certain years. And so we raise a couple of questions related to that. I'm sorry, I'm getting ahead of myself. That's a policy question. Well, let's go through policy questions first, and then I'll go back to funding.

So, page nine what are the impacts on the agricultural sector of taking farmland out of production or having to fallow farmland? For example, what should be the state's role in helping farm workers transition to other types of jobs? What steps could the Legislature consider taking? Another issue related to taking farmland out of production has to do with the toxic dust that can become airborne as farmland is fallowed.

And we wanted to raise this because, especially in the areas where farmland will be fallowed, there are already serious air pollution problems and serious public health impacts, including high rates of asthma and respiratory diseases. So a question for consideration is whether the local agencies are requiring dust suppression techniques or measures, and whether the two state agencies are considering these impacts in their oversight roles. We also wanted to ask whether any statutory changes are needed at this point.

At this sort of milestone in order to smooth SGMA implementation. Just to name a couple of example or a few examples, are any changes needed statute to address some of the various legal challenges that have been raised against local agencies, to establish a groundwater trading framework, or to institute any changes to water rights? Another question, speaking of groundwater trading, is just how can the state help facilitate groundwater trading? This could be a very important activity to help bring limited groundwater supplies and demand into balance.

I would also note that the Department received $900,000 in the 23-24 budget to develop an implementation plan based on recommendations from the California Water Commission and the Legislature could ask about the status of that plan. And then a final policy question for your consideration and a very important question is how the state can help ensure equitable implementation of groundwater sustainability plans and help avoid negative consequences for vulnerable communities.

We would note that some community groups have raised equity concerns about how SGMA is being implemented in certain areas, for example, when it comes to the composition of boards of local agencies, and there also are going to be potential impacts on drinking water supply and quality. And so how is the Administration monitoring and regulating local agencies to ensure that pumping and future practices do not negatively affect communities who really rely on this water?

Okay, so keeping you on your toes, we're going to turn back to page eight to go over some funding questions. So the first one we wanted to raise is sort of what is the appropriate role for the state as compared to local agencies in terms of funding SGMA implementation? And, and specifically, how much responsibility should groundwater users, particularly those who are responsible for some of the overdraft and groundwater contamination, bear in funding activities, to implement these plans?

A second question is when the state does want to provide funding to support implementation, what sources of funding should it rely on? As we all know, the General Fund is facing some serious challenges, not only this year, but expected over the next several years. Does the Legislature want to consider asking voters to approve another bond, or does it want to rely on General Fund, in which case it may have to consider reductions in other budget areas?

Next, we wanted to raise the question of whether fee revenues at the waterboard imposed by the Water Board will be sufficient to cover their state operations costs, and if not, what other sources of state funding might be needed to help cover their operations costs at the local level. How are local agencies doing in terms of funding their own implementation activities? They have the authority to raise fees. Have those fees been sufficient?

What do we know about the amount of fees that have been raised or fees that have been issued and amount of revenues raised? And then finally, how can the state ensure that agencies in disadvantaged areas are well-positioned to achieve their SGMA goals? Some GSAs in disadvantaged communities have not only financial challenges, but technical challenges in implementing sustainability plans. And so to what extent should the state target state funding to help those particular agencies? So thank you very much.

Up next, please.

Thank you. Is this one? Yes. So thank you,Chair Papan, Chair Bennett, Committee Members, I'm Paul Gosselin. I'm Deputy Director at the Department of Water Resources over the Sustainable Water Management division. So I'm going to give a brief overview of kind of where we have come to this point and give a little taste of what's going to be on the plate for SGMA implementation as we get full bore into implementation.

Up until now, I've been saying that using Winston Churchill's quote, that we're nearing the end of the beginning. And I think now that plans have been reviewed and determinations made, we are done with the beginning. Now we're in full bore on implementation. So I think significant progress has been made to date to bring basins into sustainability.

And I think highlighted by the response for the resources that have been provided to the state agencies, local agencies, as well as the response to hitting all the deadlines really shows the commitment both at the state and local level to make this work. And it's not going to be easy.

And I think this past winter really reflected the heightened need to really move SGMA forward with, hard to remember we were staring down at the fourth year of the most severe drought period we've ever seen or experienced, and then the atmospheric rivers came in at the same time. And this is just highlighting what the Governor came out with. His hotter dryer strategy really foretold what we're going to experience and have been experiencing the last four or five years with just the advancement of climate change.

I should note, even though we're looking at surface water supplies and reservoirs looking better than in the past, groundwater basins are still in drought condition even after this. 2021 and 2022 water year, we saw over 15 million acre-feet of lost storage. Later this spring, we're going to come out with update for the past water year, that heavy wet precipitation, snowpack, and we'll see what the change in storage was that past year.

And I suspect we'll still have a long way to go to bring basins back. So I think as much as there's been a lot of good advancement, there's a considerable amount of work ahead. And so I don't want to reiterate sort of the status we had. I do have a couple of slides. Pitches are worth 1000 words. So I think besides the deadlines, having the determinations completed on the reviews, with 71 basins right now, I can advance cool.

And again, it's the review of the initial plans as they were submitted two years prior to us reviewing it. And we focused on what was submitted for one: completeness. There's a number of requirements and sections that they needed to submit, and we made sure it was complete. But primarily, what we focused on--and these got into the deficiencies--was how the sustainable management criteria was established in the basins, in the plants.

And that was probably the biggest change for water managers, that it was more than just ending the overdraft, which was still a considerable effort, but they needed to look at how all the groundwater uses and users in the basin was going to be affected when they ended overdraft to avoid undesirable results from the six indicators. We've been messaging to the basins that their responsibility is more than just a statutory paperwork. They are stewards for all the groundwater uses and users in their basin.

They need to account for all of them. And so what we looked at and what we found was a number of common themes and deficiencies, and I think the committee report did a good description of that. But really lowering groundwater levels and affecting drinking water wells was a very common deficiency we had, as well as subsidence and lacking of taking action to address subsidence, water quality, and then for the multiplan basins, there are a number that didn't use the same data and same methodology which was required by the act.

Looking at the deficiencies, one is to make sure that they're on track with the promise of SGMA about avoiding undesirable results for all groundwater uses and users, but it was also a feedback mechanism for us. It really told us where they understood what was required and also pointed out areas that we needed to provide better guidance and assistance for those common themes.

And I think the drinking water deficiency was one that really got us focused to come out with a guidance document on addressing drinking water just about a year ago. And that has been really instrumental in helping agencies avoid the mistakes of other basins and actually get their plan aligned with what the act and regulations require. So as we go forward on implementation and we do oversight of basins, it is going to also be a feedback mechanism for us as to what assistance and other things we need to do to help basins stay on track and achieve sustainability.

And now it was mentioned funding is an issue, and this is just looking ahead at sort of the challenges on basins in implementing. Funding has been an issue, especially for some basins that are small and don't have the economies of scale to implement their plan. So we've been providing some workshops and webinars and gathering information.

We're going to come out with some guidance, but really it's their fee responsibility that is posing a lot of difficulty. A lot of agencies have not gone through a Prop 218 before, so this was a new experience for them. You're having constituents in the basin who may like or not like the fees or how it's structured, and there's a lot of challenges there.

And this is really at the heart--the balance we have on implementation about maintaining that local discretion but providing oversight and guidance to make sure that they're keeping track of what they need to do for compliance. So when they run into these challenges, let's say on fees, that's where we try to provide guidance, but also some of the support we have largely through facilitation services, to try to have good dialogue locally and help them resolve those issues at the local level.

But again, as we move forward, we are going to keep track of fees. It's one of the criteria we have to look at with agencies. Do they have the means of carrying out implementation of the plan? So in their plans they did indicate what they expect the cost to implement the plan is, and we'll be tracking fee issues in their annual reports where they have to discuss progress on implementation.

I do want to talk--besides the regulatory oversight--I do want to talk about the assistance we provided and continuing to provide. Again, facilitation services has been real instrumental from everything on how to establish governance or develop the plan, and sometimes they're using it to resolve issues within the basins and hopefully avoid lawsuits and other trouble and get to a good point. Translation services has also been something we've really advanced, written, and we've piloted and now we're implementing verbal translation services available to GSAs.

And that's been really helpful in some of the pilots we've done. And when we do that, we also want more than them just getting a translator at a meeting. We want a plan on how they're going to do outreach to bring in community members into that and make it meaningful, and then technical support services, well installation, and other means that help fill data gaps for agencies as well as this last budget, the authorization of funding to allow us to do what we're calling basin characterization.

And this is going to allow us to build upon the AEM work. That's the helicopter that does the geophysical measurements as well as other data we have to characterize, basins for local agencies. This is important for a couple of reasons. One is, it's a major data gap for a lot of agencies, and so even though funding has been right now short, without grants and General Fund short, we can target our assistance to help foster the implementation at the local level.

And this is going to be important. One from a consistency standpoint; agencies are going to go do this and by us doing it, it's done in a consistent way at a high standard and is going to allow agencies to know for recharge where the best places to put water that's going to get into the basin, as well as well installation. And again, other assistance we have is webinars, guidance documents, and there's more to come on guidance documents.

So now that we're leaving the planning phase and implementation, we're making a transition within the Department to what we're calling Basin Stewardship. It's going to be an ongoing responsibility to assure that basins are on track for sustainability and are coming into compliance. So our basin stewardship is going to maintain our role to provide assistance and regulatory oversight. So we expect to engage a lot more with local agencies on a routine basis.

And so if we do find issues, let's say a monitoring well location gets swapped out and it's not consistent in the thing, it might be something--we might make a phone call and work it out, or issues may--through our review of periodic evaluations, the five-year evaluations--they may be issues that are raised that are real concerning and we're going to need to elevate it similar to what we've done in plan review that could lead to a basin being deemed incomplete or inadequate at any time.

So we do have this range of engagement and our goal is to one: make sure that we are clear and direct with local agencies as to what they need to do to stay in compliance and provide assistance. But again, it's also a feedback to us if we're starting to see common problems out there, that we need to be mindful to put some guidance documents out. I do want to talk a little bit about annual reports. We are going to start doing the reviews of them.

They've been coming in, just workload priorities. We've been reviewing them, they're posted, but now we're going to do a review and feedback to agencies on consistency and again, having change in storage information, groundwater extraction information, annual reports and their progress is going to be good, important for us to survey how implementation is going to feed in, where we need to target our efforts. But we're probably not going to use annual reports as the means of regulatory response, but unless there's something really hugely troubling.

But the periodic evaluation is going to be that major compliance check. We have issued last October a guidance document for agencies on what we expect in the annual report and periodic evaluation. One: to make their work consistent and at least efficient and get it in a format that we can utilize and evaluate. And again, as we go through this review, basins could be deemed incomplete or inadequate depending upon the circumstances. So I think the next five years of implementation are going to be rather difficult.

To some extent this has been the easy part so far, not for local agencies. It's considerable amount of work, but now we're talking about really hitting the ground on implementation. Agencies have been at it for two to four years right now, but a lot of those efforts are starting to really come into place, particularly on land use, and we're starting to see loss of production.

So Department of Conservation's Multibenefit Land Repurposing Program has been enormously helpful for those basins, as well as the Department's LandFlex Program, which we piloted, provided some transition for those acreages that were going to be short of water and potentially go out. And I think the transition to future land use is going to be critical for a lot of these communities, and CDFA has also been very helpful and supportive.

So as agencies are starting to implement their projects and management actions, especially when they start getting into setting allocations--which a number of them, almost up to 20 have some allocations in place--to some extent, it's going to get more challenging.

But real--two components on project management. Actions recharge: a lot of effort work with us and the State Board, CDFW last year on flood diversions as well as streamlined 180-day permits is starting to ramp up, and agencies are really looking first at supply augmentation, which makes a lot of sense. But basins aren't going to be able to recharge their way out of the overdraft. So there is going to--need to be, in many basins, allocations. It's still in early stages and there's a variety of them.

They may lead to water markets and as was mentioned, the California Water Commission did prepare a white paper on implications of water trading, and again, and we've seen this. An unregulated market can run into a lot of problems, and I think that was the highlight of the California Water Commission. So we are in the process now of taking those recommendations and developing an implementation plan on next steps to ensure that, and largely our oversight--that a lot of it we can build into our existing program, but that's going to be something we're going to take a very close look at.

And again, we're going to continue to work with GSAs on their implementation. And something we've noted in some basins, particularly the current ones that are incomplete, they didn't have a huge repository of projects and management actions that appeared like they were going to end overdraft, which is a major issue. But as much as the effort has been really successful so far, there's a lot more to do.

So the plans, even the ones we have approved right now, are not going to look remotely the same in 2040 or 2042. And that has a lot to do with some of the work that we have yet to put on the table. One is depletion of interconnected surface waters, which is one of the six indicators. Largely, that's a new area for a lot of water managers, and there's not an off-the-shelf methodology for that.

So we're developing guidance this year. That's going to cause some changes in a lot of basins to address that. Subsidence: this has been a common deficiency in many basins, not just in the Lower San Joaquin. We've seen it up in Sacramento Valley, which was kind of alarming because it was an area that we never thought we'd see it. And we're going to be developing a best management practice later this year to explain how agencies need to address subsidence.

And it's something that is probably one of the most important things we need to take on as quickly as possible. And then climate change analyses. As water supply availability declines because of climate change, we're going to be advancing information out to agencies for them to adjust their water budgets and project management actions if they're assuming a greater supply from surface water, which is probably going to be offset for groundwater, as well as watershed studies.

So all of these are going to result in change in basin plans as well as interbasin interaction. And this is something that the statute called for, that one basin's plan can't impede an adjoining basin from achieving their goals. Now that plans have been approved and minimum thresholds have set, we're going to--probably in 2025--start that process, which is probably going to cause some basins to have to readjust their minimum thresholds and plan to avoid an adjoining basin from not achieving their goals.

So there's probably a lot more ahead that is going to surprise us that we're going to need to address, but in the end, I'm very confident we're going to achieve the promise of SGMA and have basins sustainable by 2040 and 2042. So thank you.

Thank you so much, Mr. Gosselin. Mr. Nachbaur--or were you planning? I had Nachbaur next.

Yeah. Thank you. Yeah. Good morning, Chairs and Members. I'm James Nachbaur. I'm the State Water Board Director of the Office of the Research, Planning and Performance, and I'm joined today by my colleague, Tina Cannon Leahy from our Office of Chief Counsel, who will kick things off.

Yes. So, good morning, Chair Papan, Chair Bennett, Members of the Committee staff. I'm going to start by saying it's really an honor to be here today. Ten years ago, I was the Water Policy Consultant for Assembly Water Parks and Wildlife, and I was working with Assembly Member Dickinson and his Legislative Director Lez Spahnn on AB 1739, one of the bills that would become SGMA. And of course, we were working with Senator Pavley's staff and Dennis O'Connor.

So to be here today, ten years in, and to see what's been happening, it really, truly is a pleasure to be here. About the State Water Board's role, SGMA, it's such an unusual law in that it has a role for the Department of Water Resources and a role for the State Water Board. You know, the State Water Board's role is when the local groundwater sustainability agency is not managing its groundwater sustainably.

Once that determination has been made, is for the State Water Board to come in temporarily because we recognize that SGMA is a locally-driven law, and so our role is a temporary one until the basin can be handed back to the locals for sustainable management. And that has always been the goal of the Sustainable Groundwater Management Act. Just a moment. So the Board's role, of course, it begins with a triggering event, and we've mentioned what the triggering events were.

There can be a triggering event if an agency isn't created, if a groundwater sustainability agency wasn't created. The agencies--99 percent compliance, 100 percent compliance on the creation of agencies. So that trigger had never happened. So now we're at the point where if the Department of Water Resources refers a basin over to the State Water Resources Control Board, then it's for the State Water Board to exercise its discretion on whether it would take that basin into probation.

And some stakeholders have said they don't like the word 'probation,' but probation is the word in the statute. So the State Water Board's intervention role is discretionary, and it relies on if one of these triggering events occurs, and that's when we come in. So proceeding to that first phase, which would be for the State Water Board to determine in a public process whether or not probation is warranted for the basin.

And the State Water Board identifies what those deficiencies are and has suggestions for correcting those deficiencies in that process, which involves a public hearing. I want to make a note that by the time of the public hearing, the State Water Board has already been working with the basins, and the basins are already working hard to try to correct deficiencies that have been identified. So there's a lot of work that is occurring before a hearing ever happens.

And of course, there isn't a determination in advance of what is going to happen at the hearing. That's for the members to determine whether or not that probation would be warranted. So the consequences of probation are that that first step. So the state intervention is a two-step process, and the first step would be for the State Water Board to determine whether that probation is warranted.

The consequence of bringing a basin into probation would be that pumpers in the basin--so not the groundwater sustainability agency, but the pumpers--and I think this is what makes SGMA kind of an unusual law--the pumpers in the basin would need to report their pumping and then they need to pay fees. So that's that first step, and that would be the consequence of probation. And there is some flexibility in the statute. For example, generally domestic use of two acre feet or less.

And in water, we always use the acre foot, which is like a football field, about a knee deep. Two acre feet or less of domestic use is generally exempted. Although if you had a basin where that pumping was really the problem contributing to the lack of sustainability in the basin, it could be required, but generally it can be assumed that it would not be required. I think it's also important to note, you know, when groundwater sustainability agencies approve their plans, they immediately begin implementing.

So that's even before the Department of Water Resources finishes its review. And during--if a basin were to be brought into probation, they continue implementing and they continue to exercise all of their authorities, even in probation. So I think that's a very important point because, of course, the goal is for them to fix those deficiencies and then to be able to return to that local management. And with that, I will turn it back over to James. I guess if you have any questions, you'll ask afterwards? Okay. Thank you.

Great. Yeah. Thank you. Yeah. As my colleague mentioned, this is a very new process, and we're working hard to be sure it's clearly understood by our board members, by GSAs, by members of the public, by all interested parties. And we're doing that in many different ways. So a main focus of ours has been drafting reports for our Board, for the public about the basins that may be coming up for probationary hearings.

And in those reports, we're going into detail about possible recommendations the staff may be making to the Board. I say 'possible' because at this point, these reports are--we've issued one as a draft, we held a workshop to discuss it, we solicited comments on it, and we are now in the process of revising that. And that is one of the documents that would assist our board members at a probationary hearing in making their determinations.

In addition, we hold consultations with California Native American Tribes on their request and other discussions as well. We've had a robust series of meetings with groundwater sustainability agencies, nongovernmental organizations, and other parties. And throughout this, we are intentionally creating as accessible a process as possible. We're creating opportunities for input from the public and from affected communities, and we are conducting targeted outreach to local communities. We proactively offer Spanish language materials and interpretation at all of our public workshops and at any hearings.

And so a hearing--this is a new thing for the Board. The Board has not held hearings for the consideration of making a basin probationary under SGMA before. At one of these hearings, though, we're expecting that the Board will be hearing from board staff who have completed these analyses from groundwater sustainability agencies for the basin, from interested parties and members of the public. I will note, DWR we're expecting will be there, but they don't have a formal role in these hearings.

And we've been working really closely with DWR through all stages of SGMA implementation. So at the end of these hearings, the Board may decide to place a basin on probation, may lay out criteria for probation to end, and may determine how specific requirements of probation play out. So, for example, requirements related to metering certain wells or requirements related to reporting of groundwater extraction. And the Board's role here is intended to be temporary.

And so let me speak for a moment about how a basin gets out of probation. The first step would be that a groundwater sustainability agency proposes changes to their efforts at basin management to address the deficiencies, and they revise and submit their plan. Board staff would then review these revised plans and the Board would hold a public hearing--could hold a public hearing to evaluate conditions and efforts in the basin.

So this is a huge amount of work, as everyone has mentioned, predominantly at the local level, which is where all of this is being led from. The Board team, as LAO mentioned, is 40 positions currently. Those are not all filled at the moment, but we have engineering geologists, water resource control engineers, environmental scientists, attorneys, specialists in public participation and communication, and analysts.

We've also entered into contracts for assistance with engagement, data collection, facilitation, and engineering, and to date, all of this has been funded through the General Fund. Work has included developing tools to facilitate compliance by GSAs, support for courts in some cases as they've grappled with technical groundwater issues, and hosting lots of SGMA discussions with GSAs and other parties. As basins may move into possible board jurisdiction, we shift gears and develop these staff reports.

We meet regularly with the GSAs in those basins, and we draft possible recommendations for the Board to consider. If a basin was on probation, the team would then shift again into a different mode of working to reduce data gaps and making recommendations to GSAs--or making recommendations to the Board on GSA requests for probation to end, or making recommendations to the Board about whether it would be appropriate for the Board to move the basin into the second step of state intervention and consider imposing an interim plan.

And then finally, in that last stage, if a basin reached it while a basin was subject to an interim plan, board staff would be working to manage groundwater extraction and then would be making recommendations to the Board regarding GSA's requests for the end of the imposition of that interim plan. Each basin is different and so the work will be different. The work is very case-specific, very basin-specific.

This will reflect the number of pumpers in each basin, the degree of overdraft, the specific undesirable results in each basin, how long issues are going on, what level the Board's involvement is, and many other factors.

And we're very aware that the board placing a basin on probation would have impacts on many people in the basin. One impact is that groundwater extraction starting 90 days after a probationary hearing would be subject to be reported to the board. Although exceptions to this are possible, and there are state board SGMA fees associated with that groundwater extraction reporting.

Extraction reporting is based on the water year, which runs October 1 through September 30, and fees related to pumping in the prior year are due annually on February 1. Sorry, reports are due annually on February 1. Fees would be invoiced about a month after that, and the fees are due after the invoice.

And again, all this discussion about fees and reporting or anything in the board's preview here, this is only for basins that the board has determined are on probation or are subject to an interim plan. If a party was excluded from having to report their extraction, they would not have to pay these reporting fees.

For example, in many basins where it's possible the board may exempt households that are using small amounts of water from any kind of reporting, they would not be paying any kind of groundwater extraction reporting fees to the board. There's also waivers of the fees possible.

Our fee regulation allows people who do report their extraction to not have to pay the fee in the case of them being a low income resident, being a public water system or state small water system serving a disadvantaged community, or in the case of a public school. And the fees we have today were based on 2017 assumptions regarding what the board's work would be under Chapter 11, under probation, or under interim plans. The fees as currently structured for basin subject to probation have two main parts.

One is a per well charge that's $300 per well and a $40 per acre foot fee. There's also a provision for late fees if people are late in paying. The timing here gets a little tricky. As I mentioned, extractors pumping starting 90 days after a probationary determination become subject to reporting and subject to fees.

But I also mentioned this is on the water year basis, so if a basin were put into probation relatively soon, there might only be a few months between when the end of that 90-day sort of window ends and also when the water year turns over. And so what we would be expecting, if a basin were put into probation relatively soon, that the revenues, the special fund fee revenue the board would be getting would be relatively low in that first year.

If a basin stayed in probation for a full water year, though, the fee revenues would be higher. So, for example, if the Tulare Lake sub-basin were put into probation for a full year, fee payments might be around $11 million, under various assumptions. And there are a lot of different uncertainties here around what the fees will be, and I'll touch on that more in a second. But our main point here is that SGMA allows the board to change this fee structure.

And, in fact, the board has actually asked staff to reevaluate the fee structure and report back to the board. That evaluation is underway, and we may make a recommendation to the board at a board meeting that a different fee structure might be warranted. Any changes to the fee structure would happen at a board meeting, following opportunities for comments and discussion. So, yeah, let me speak just briefly about the fees and the whole system here of funding this kind of work.

It's a very challenging system to use fees for. From a budgeting perspective, the fee revenue the board can expect is pretty volatile. It will depend on, for example, how many basins are in probation, how long those basins are in probation, how many extractors are in that basin, how much they're extracting. So this will depend on many, many factors, including board decisions, but also GSA efforts, weather, many other conditions and factors.

And this does make it challenging to assess what level of fees might make the most sense. Also, the board can assess all of its fees annually, and so it may be prudent to lower these fees in the future, depending on how many basins there are subject to these fees. So, so far I've spoken about process and structure. I'll just close with our schedule looking ahead.

The Tulare Lake sub-basin is actually scheduled for a board hearing for the consideration of putting that basin into probationary status on April 16. Tule comes before the board or may come before the board in September of this year. Kaweah could come before the board in November of this year, and we're looking at January 2025 for a possible hearing for the Kern County subbasin.

Delta-Mendota may come before the board in the first quarter of 2025, and Chowchilla may be in the second quarter of 2025. That one has a bit of an asterisk on it. We're saying that one is if needed, pending our state board determination of an updated plan that those GSAs submitted in May of 2023. So all of that schedule is proposed and subject to change, but those are the general time frame for the hearings we may be having, and with that, I will conclude.

Excellent. Thank you to each of the witnesses, we really appreciate it. I'm going to turn to my colleagues to see if they have questions. I would venture to guess Assembly Member Bennett's got some questions.

I certainly do. Thank you very much. I really appreciate it. First thing I'd just like to start off by saying is this is really an important topic for the state of California. We were slow getting after our groundwater basins and I appreciate your comments, one of the last in the country to do this. And we're seeing now the tremendous impacts on the state of California. If we lose the recharge capability because of subsidence, that's like wasting your future for generations and generations to come.

So I can't emphasize enough, and I know I'm talking to the choir here when I say how important it is, but because it's this important, I want to start by saying I really appreciate what DWR has done in terms of trying to pull together this challenging task of implementing the law written 10 years ago in very politically charged atmosphere. And I don't think anybody would say, hey, everything was thought through, everybody was able to anticipate all of the challenges.

And so it's our job, it's incumbent upon us for the next five years or so to make sure that we do whatever tweaks need to be done to make sure that we can handle this enormously important challenge properly. So just overall, I see the spirit of DWR and the State Water Board in terms of trying to say we have to do good work to make this happen, number one. Number two, this report written by LAO is just another example.

I mean, I continue to be really impressed when I come to these meetings and LAO just captures the whole issue and it's like, well, I wonder if they covered that, and they did. So you just consistently keep doing a great job. And so it really helps set the framework for this conversation and hopefully keeps all of us on our toes as we go forward.

The next thing I'd like to address is to go back to, because this is so important, the role of the state backdrop. It is absolutely essential for this to work and it is an interesting dance that we're trying to engage in. We want the locals to be in control because of the way SGMA was written and because it makes a lot of common sense.

They know the issue and all of that, but at the same time we want to make sure that they do it in the way that it works for the State of California. That will only happen if the locals genuinely believe there really is a state backstop, that the state is really going to do something if you drag your feet. And I will talk about the experience, we'll talk about it more later. But I'll talk about the experience that I have down in Ventura County.

In 1982, the state created a special groundwater agency in Ventura County because of saltwater intrusion. And they gave them from 1982 to 2010, very similar to SGMA, to get the basin into safe yield to stop that saltwater intrusion, right? And there was a state backstop there, but it didn't have anywhere near the visibility of SGMA now. And when we got to 2010, they were still pumping way over safe yield. And it's partially because they didn't take the state backstop really seriously.

And so it was just really easy to come up with another reason why you can't, another reason why we shouldn't, and the pressures that you're going to face at the State Water Board. 'How could you charge them money for pumping' and that money is going to go to the state, et cetera. It's enormous pressures for the state backstop to not be appropriately applied.

But the average person who's not at the table, the average person that doesn't have the high priced lawyers to come in and put pressure on you, those farm workers whose wells are going dry, they absolutely depend upon you being the appropriate backstop to really motivate all of the local agencies to get it done. So I can't emphasize that enough. The other thing I would point out is the GSAs have significant conflicts of interest associated with them.

It's just inherent to the nature of this because the people who wanted to make sure they had a voice at the table as GSAs reformed, it was very much who wants to play, who wants to get involved? And the people who had the most at stake wanted to make sure they had really strong voices in there. And so there's the potential for conflict of interest and therefore the potential to drag your feet.

And so I would hope that you look at agencies, if they were given one shot to write their plan properly, and they didn't. You gave them another shot and said, you didn't do this right, you got to do this right, and they still don't. Then I would suggest that from the state standpoint, there needs to be a consequence, or else everybody's going to go, well, let's drag our feet.

If we get three or four shots at it, well, that's a long time to keep over-pumping or benefiting from over-pumping, et cetera, and postponing as we go forward. One question. So now I'm at my questions after my editorial is over with. Thank you. One question is that when an agency is put into probation and you talked about fees that will be charged. It implies to me that the wells must be metered.

But does the law say the wells have to be metered for these fees to be applied in probation?

No. Thank you for the question. Now, there are different ways of assessing how much water someone is using, and so the fee and reporting structure the board envisions would allow multiple different methods for estimating that money or that pumping. However, in some cases, the staff is recommending that the board require meters be installed on some wells, and that could capture the bulk of the pumping and give a lot of clarity here.

Data gaps around how much the degree of overdraft and where pumping is occurring are a major problem that prevent effective management. And so the role of probation is to gather a lot of that information and to support better management.

The perspective I'd offer from Ventura County was there was nothing more accurate than actually putting the meter on the well and identifying which pumper was doing what. So I would offer that although there are other methods, they just were not as accurate, as effective, and as directly related to making sure a pumper is paying the proper charge, if there's a fee for over-pumping, et cetera, that's out there.

Funding for the GSAs; what kind of records do you have in terms of how many GSAs, do you have the records on how many GSAs are charging a per acre-foot pump fee, a well fee, and what their situation is. How murky is that and how accurate?

I think somewhat, I would say more on the murky side right now. I mean, they're putting some of that information in the annual reports on progress. And generally in discussions we have with GSAs, we have a general idea as to who's doing it, but we have not yet captured that list of who has allocations, how they've put them in place.

Again, some of them are still in early stages, but as we go through this basin stewardship, that's going to be one of the things we're going to capture, keep track of is what the fees are. In revenue generation particularly, it's going to be important when we start to look at how a basin is actually improving conditions, and it's going to be based upon empirical data in the basin.

And if things are not progressing, that's where we're going to start posing questions about where they are on projects and management actions. Do they have the means to carry it out? And again, even for fees, too, one of the reasons why we came out with annual guidance on how to do annual reports and periodic evaluations, there was a lot of discussions in basins that they were thinking it was going to cost them $300,000 to do an annual report.

And I think they were told sort of it had to be bigger and more involved than otherwise. Sometimes we were getting the kitchen sink thrown at us. So we narrowed it to what they're actually required to do in a format that made sense, that also avoids them doing unnecessary costs. So cost is going to be a big thing we're going to keep track on, one, to make sure they're efficient, and two, they have the means to carry out their plan.

I want to go back to the point about the potential conflict of interest out there, and that is that. Over and over again in the history of the United States, we've seen the regulatees try to make sure, and this isn't in all situations, but there's an inherent interest to make sure that the regulator is starved for resources and you starve the GSA for resources, and they can't do a good job of monitoring the pumping and monitoring the things that have to be done.

And so I would encourage DWR and the State Water Board to make sure that part of the annual report is robust analysis so that it's not murky as to who's charging fees. Are they charging sufficient fees to be able to actually do the job? And as lawsuits pick up, the GSAs have to defend themselves in terms of lawsuits also. And that's a whole other complicated issue.

But generally, the principle should be that the people who are profiting from taking the publicly identified resource, the groundwater, should be the ones to be funding the appropriate regulatory effort. That's on top of that. So I would offer that. Then, to jump to funding for the role of 218, could you expand on that? Just very briefly, in terms of do all the fees have to be approved by 218? Are there ways to get around that? How difficult is 218?

A lot of basins have imposed fees through Prop 218. There's a protest process, and that makes it challenging. There's also, again, it's a circular thing. You need funding to develop the documents to be able to do the 218, and especially in agencies that are short staff, that also created a challenge for them and the challenges that are in basins regulatory fees. I believe some basins use Prop 26 regulatory fees, not for projects management actions, but I think just keeping operations going and 1the regulatory compliance.

So it is running the gambit. And I do agree largely when SGMA went in, they have a lot of authority, a lot of fee authority, and this has to be and should be built upon local fees. I think we're going to provide, again, continued assistance along the way as we can if there's availability of state funds. Bonds have been enormously instrumental, but we've reached a point where basins need to really stand up on their own two feet and take this on.

The more they stand up, the more they can do supply projects, which could actually decrease the need for cutbacks in terms of allocations and hope that they would view it positively that way. So funding for the state overall, you talked about the variability of fees for the State Water Board.

We're going to have an interesting question, and that is, as we face budget deficits here at the State of California, how important is funding the regulatory aspects of the groundwater agencies relative to all the other priorities out there? And so it'll be a question that I think we'll be turning to you guys over and over again in terms of asking, but I think that it certainly is one of the major priorities is for us to make sure we're appropriately doing that.

And the final theme that I want to cover is how aware are we of the makeup of the GSAs in terms of who is being represented, how much are disadvantaged communities being properly represented, how much is the most powerful, having an inordinate amount of impact? And what kind of role is the state able to play?

And do we need any legislation to make sure that the most disadvantaged are both well represented at gsas and also are protected by the state if they're not. Any thoughts on that?

I think the beginning part about how GSAs, and even within basins, different gsas are formed is really at the heart of local discretion and really in the act. So we have taken, although the eligibility is there in statute for us, it's a ministerial role when they do form. Before I came to DWR two and a half years ago, I worked for a county and we had three sub-basins, and they all had different makeups of how the agencies were formed.

And it really, in my mind, really stuck out, knowing these basins really well, that, yeah, the demographics, culture and sort of expectations within the same county were vastly different and they needed to reflect that. And so you're right, there's a range of agencies. Counties play a big role in many basins, as well as water districts and some municipalities. I think for some water districts and irrigation districts, it's a new role.

Being a GSA, it's not the same traditional role they have looking at their landowners for water supply delivery. And I think some of them are, I think, through the evaluation process are starting to come to grips that this is a different world than just regularly managing their basin. So we've heard a lot of concerns about how agencies have formed their makeup, which we don't track because that's, frankly outside of our responsibility. That's a local responsibility.

And again, we provide facilitation on governance, but what we do do, and this is the point, irregardless of how agencies are formed, and they could be formed in a very nice way, if they're not doing their job, we're going to hold them accountable. So they may have perceptions or histories of how well they embrace this or how well they work. We're going to hold them accountable for what actions they take and provide assistance to provide access for community members' involvement.

So we keep comment periods open at any time on plans, and we encourage people to supply comments as well. Outreach and engagement is also another major component of plan implementation. And so we're going to keep pressing that with agencies on how they bring people to the table and engage. So that's going to be ongoing work. A lot of agencies have asked us for assistance because they've tried traditional things and they're having difficulty. So there's a lot of good dialogue and aspects going on with that.

But in the end, we're going to keep focused on what they do and hold them accountable on track for sustainability.

Thank you.

I'm interested in the local implementation grants. It sounds like as time has gone on, agencies have been looking for financial help from the state and have applied for these funds. We had bond revenues available for that purpose, now have kind of shifted to the general fund as those other sources have been used. With the constraints on the general fund going forward, seems likely that that's going to be difficult to continue to make that kind of level of investment.

How critical is that to the water agencies making progress and looking at where those grants went, did they keep agencies from getting into places where there are inadequate plans or incomplete plans? Are they concentrated in those areas to help bring them up? What's the general tenor and your experience with those locally?

Yeah, and I'll start with the early implementation grants. And I mean, the timing of having the funds available for these grants was incredible. The timing couldn't have been better. So agencies got formed in 2017 and started to develop their plans. The grants, the implementation grant was instrumental in getting plans crafted and submitted in, as well as facilitation services we provided with public engagement.

So I don't know, and I know from the county I work, it would have been enormously difficult, if not impossible, even for a county that had a pretty good makeup to do the plans. They were enormously complex, over 1000 pages with a lot of data and information. So the implementation grants really, I think were instrumental in actually meeting the mark and getting plans in.

Now, the implementation grants that have gone out, all the critically overdrafted basins got $7.6 million, which they're spending and working on now, whether even the ones that are inadequate, and they still have grants and are implementing away. We just issued our last round last fall for 187,000,000 for implementation, largely. A lot of it's for recharge projects, supply augmentation programs. That solicitation, we had over $800 million in requests, and that's probably a fraction of what really the need is out there.

But there was also projects in there about doing well, inventories and other things that are going to refine mitigation and other aspects, so, real important. I think it is grounded, but again, there is a balance with reliance on state dollars, and we can guide that. And I think even the grant process does have its own cost for local agencies, because you do need to expend money to prepare the grant application, which is costly. and submit, and then there's the contracting.

And so time and money gets eaten up through the grant process as efficiently as we run it. But it is important that agencies do have the means to Fund their program and their plan because it is locally driven. And I think we, again, are looking with the resources we have, ways to augment the work we do to help support local agencies, removing data gaps and providing other assistance. So without having grants, there's data and things we can do to help bolster local agencies.

So I hope that helps.

And that's a perfect segue to the other question I have is that the budget proposal has cuts to the forecast informed reservoir operation and snowpack surveys.

And so those are kind of the critical data collection efforts that the state does that helps inform everybody down the line and ultimately informs groundwater recharge strategies. Are we at risk underfunding those programs, of being able to give the agencies the information that they need to manage groundwater recharge? And is there anything else we can do to supplement that or assist them to make that work better?

Yeah, I think given the difficult budget challenges, we'll have a lot more to say during the budget hearings on that. But I think we're looking to work with the legislature on budget fixes and trying to balance the budget availability with the immediate needs we have. But we'll be able to continue with SGMA implementation on an ongoing basis and achieve sustainability.

And then the last question I had to do is, in regards to the adjudicated basins. And are they problems that are anomalous to the process of having plans and the different values and the goals of the groundwater sustainability plans versus what was done previously through adjudication? And is there a conflict there that has to be addressed?

We may get more into this, but if you can give us a brief answer, that'd be great.

Yeah, I think ideally, adjudications could work compatibly with GSPs. I think we've seen some people wanting to use it for different means, not liking the process. I'll defer to colleagues Tina and James if you want to weigh in on adjudications, but it's something we're keeping a close eye on.

Think, you know, adjudications could be helpful in that they determine all the water rights. And so one thing that GSAs have struggled with, some GSAs, is they don't have, under SGMA, the authority to determine water rights in a basin. So if that's determined, that could actually help. On the other hand, of course, there have been equity issues raised about the adjudication process. It's an expensive process. It can be long.

Following SGMA, we tried to streamline the adjudication process as well with the Alejo Bill, as I'm sure you're aware, and with Senator Pavley's amendments, the chapter 12 into SGMA. So there was a thought in how to mesh those two together. But like all things, it could be very helpful or it could pose challenges, as my colleague Paul Gosselin has identified.

Thank you.

I just want to say we've got limited time, so.

Yeah.

Brief for the question. The brief for the answer would be great.

To the chairs, thank you for being here today. As a former county supervisor, it seems like sometimes we get this information late. The state already had implemented what they wanted to do, and just going back really quick to public hearings, those are very important. I know you mentioned you guys are rolling those out, but how are they really coming out?

Yeah, great question. We've only done, well, one basin, the one coming up for an April scheduled hearing. The Tulare Lake Subbasin is the one where we've come furthest along in sort of defining our process. As I mentioned, we put out a staff report, a draft staff report laying out deficiencies that the GSAs, that if the Board adopts those in a probationary hearing, would be sort of the criterion that the GSAs would have to meet to get out of probation.

So we put those out in public. We discussed those in the basin at a staff-led public workshop. We discussed those online in a public, staff-led workshop. The probationary hearing, like I said, these are the first of their kind.

The Board hasn't established a clear process for how every one of these will go, but the plan is that board members would hear from staff about their recommendations, their assessments of basin conditions, basin efforts, and they would also hear from the groundwater sustainability agencies and other stakeholders and interested parties before asking questions or making any decisions. We have tried to be as clear as possible with the parties who could be affected by a probationary determination about what's at stake and how they can get involved. We really do want comments and input as much as possible.

And I was just going to add really quickly, I think you've come to the heart of what makes it a very unusual statute in that the State Water Board, when it comes to the State Water Board in that intervention role, the reason the State Water Board is chosen for that role is it does its work in public.

So it's a five-member board and it holds public hearings, and all of that work happens in public, which I think can look awkward to the public because the board members--they're not discussing that amongst themselves in private. All of that work is happening in public with the ability for public input. So that was chosen on purpose.

Thank you.

So I've got a few questions and a couple comments. First of all, thank you all for your testimony, and I concur with Assembly Member Bennett. This is tremendously important to the sustainability of the state as a whole. So, number one: the state has spent about one million dollars in SGMA so far. Do we have any idea how much the localities have spent?

Not offhand, but we can see if we can gather that.

And let me just tell you, the reason why I asked that--and I was pleased to hear you say, Mr. Gosselin, that you are worried that we become so oppressive in reporting and creating plans that the money isn't left over to do the work. So as we go forward, I implore you to keep that in the back of your mind. We all know that these agencies run on a shoestring as it is, and I don't want to--

I've seen what happened at HCD and Housing Elements and what they're doing to municipalities. I don't want to see that play out here. And so that brings me to another question for you, Mr. Nachbaur. In the event that you are monitoring and then collecting fees, where will that money go? I'd like to see it go back to the localities to do the work that the probationary basins are required to do, but I didn't hear where that money is going. Can you enlighten me?

Sure. Thank you. Great question. So yeah, as SGMA is structured, the State Board's actions under Chapter 11 of SGMA, which cover basins on probation or basins subject to an interim plan, that work, the Board can recover the costs of doing that work from the population of basins subject to Chapter 11, subject to intervention, or subject to an interim plan or probation. To this date, all State Board work has been funded through the General Fund.

And so it may be a mix of those funding streams that fund Board efforts here. The goal here, through intervention, through State Board intervention, is to benefit the people in the basin by keeping them on track for sustainability.

And would that include some of the money going back to help them do the work?

No. As currently structured, the fees collected by the State Board are just to cover State Board operational costs of implementing Chapter 11 of SGMA. We would not be trying to raise additional money.

Okay. Because I want to keep that in the back of our mind as we create these bureaucracies and we impose a whole bunch of stuff on folks. Very important work, no question about it, but I don't want to see the pendulum swing so far that the compliance is burying folks. And I know we're probably on the same page, and it sounds great to say at a hearing today in Sacramento, but I'd like to see that play out ultimately, just so you know.

So I have another question for you. Is it--Mr. Gosselin--that as we go forward with some of the more five-year reporting and the repeat performing, do you see it becoming more pro forma? I mean, you mentioned that there's a lot of things that change along the way, but I was wondering, do you see that there might be some--it gets easier as we go along and less expensive with consultants and whatnot.

Right. And that's our desire, I think. Fair point about this cannot be a paper process. Even discussions with basins on issues we've had with their plans, and they were like, do you want us to rerun the groundwater model, which will cost hundreds of thousands of dollars? It's like, no. If you want to do that at some future date, but focus on what it takes to improve basin conditions and achieve compliance.

And just knowing the cost and the shoestrings, we need to make it very efficient for local agencies. And again, we're shifting over to empirically how basins are improving, and the agencies have a lot of means to get there. I'm hoping it's going to get a lot more routine. I wouldn't say routine, but I think the focus where agencies are really directed is, what can we do on the ground to do projects and actions to achieve sustainability? That's what agencies want to do.

This planning process is logically done. So again, I think it's going to enter a new phase, and hopefully we're just going to help ramp up and support those agencies that have been really aggressively trying to put projects and management actions in. And again, our assistance and guidance is hopefully going to help support their efforts.

Good. And I know we'll all keep an eye on equity as well. So thank you so much for your time, and we're going to move to the second panel. Oh, I'm sorry, Steve.

Just as we've moved to the second panel, I just find it this is the value of having a Joint Hearing between a Policy Committee and a Budget Oversight Committee, and it's interesting. I asked as many Policy questions as Oversight, and she asked as many Budget questions in terms of doing that, but I do want to--from the budget standpoint--point out that we really have a number of different and separate expenses here.

One: you have to have enough resources at the state level to actually do the backstop that is absolutely essential or else people won't do what they need to do at the local level. And that is my understanding what the fees are going for is if somebody has failed to do what they're supposed to do and they get put on probation, then you're going to charge them just like we charge people who have to--

You get an ankle bracelet because you did something wrong and you have to pay for the ankle bracelet. That's sort of the same thing because we have to staff up more, because we're putting, because we have these probationary agencies that are out there, et cetera. When it comes to getting money back to these agencies for--that's where we come up with the bond money, the grant money, to do projects, to be able to do the plans, all of that other stuff.

This is all in short supply, which is why I'm looking for every resource possible. All of that's in short supply right about now.

Exactly. I just would make that distinction, and I think that's important for us to point out. So, yeah, the fees are not to fund projects. They're to discourage people from encouraging fees in the future. But we're going to use those to pay for the regulatory oversight that is now required because somebody put themselves into that situation. But with that, we're going to switch over and go to the next part of our panel.

And so I'd like to call up Jennifer Harder, Professor of McGeorge School of Law, and Jeff Pratt, Executive Officer of the Fox Canyon Groundwater Management Agency, to enlighten us on the topic of the adjudications that have been taking place. Now that these groundwater agency plans are out there, we're now starting to see adjudications pop up. I might point out here in my introductory comments, there are five ongoing adjudications in the state. Three of them are in Ventura County, the county that I represent.

And so it's pretty appropriate to have the Ventura County Executive, Fox Canyon Groundwater Management Agency Executive Director here with us to talk about that. And so we've talked with Professor Harder to try to give us an overview of sort of this whole issue of the adjudication and the laws, et cetera, and we will hear from you. Then we'll ask you a couple of quick questions, and then we'll go to Mr. Pratt. Thank you.

Thank you. Good morning, Chair Papan and Chair Bennett and Members. It's my pleasure to be here. I'm Jennifer Harder from McGeorge. And as Chair Bennett noted, I was asked to give about 15 minutes overview of groundwater adjudication, of basics of groundwater adjudication. I do have some slides up on the television screen, if those are helpful. Let's see if I can--there we go. Okay. So the basics of adjudication, what is a groundwater adjudication? Where does it come from?

Well, groundwater adjudications essentially come from the fact that there's no state--as you've heard--regulatory system for groundwater up until 2014, and there is to this day, no permit system for groundwater. Groundwater rights are a matter of common law. Typically, you have a couple of kinds. One is overlying rights for landowners. Those are typically your irrigators. Then you have appropriative rights, which are typically your public water suppliers.

And those rights, when basins are in a condition of shortage, can become prescriptive, meaning that they can acquire some of the rights of the overliers. And so when a basin is in shortage, the water right holders want to settle who has which water rights and who can pump how much. There were some attempts to have special districts manage some of these basins, and some of those special districts did it very well and others did not.

And so adjudications are used to help create a manageable basin and to bring the basin into something called safe yield, or today's sustainable yield, which I'll talk about in just a moment. Now, as Tina Leahy from the State Board noted, the Sustainable Groundwater Management Act does not give the GSAs authority over water rights. So those water right holders, if they want to have certainty, have to go to court to have those rights adjudicated. So adjudications have a time-honored, long-standing history in California.

The first adjudication goes back to the 1940s in Southern California. Many basins in Southern California have been adjudicated and are operating well under those adjudications. So far in California, there are approximately 29 adjudicated areas, and as the Chair noted, there are about five adjudications still pending. One was recently entered as well. So somewhere around early 30 in numbers that we have. When we get into adjudications, we have two major issues. One is this question of overdraft. You hear about overdraft a lot.

Overdraft occurs when you have the average annual amount of pumping that exceeds input to the basin on a long-term basis. So a single year of shortage in a basin does not equate to overdraft. It has to be a long-term trend. So if you look at the graphic on the slide, the trend, as the basin goes up and down, each of those downward spikes is not overdraft, but the long-term trend--that equates to overdraft.

The other key factor in an adjudication is the question of what the courts have traditionally called safe yield, what SGMA calls sustainable yield. Some folks would argue there's a distinction between the two. I'm not sure I buy that, but from here on out, I'm going to call it sustainable yield for ease of reference. And the idea of sustainable yield is that there is a quantity of water that can be pumped from the basin that if you exceed that amount, you cause undesirable results.

And SGMA lists the undesirable results. These are largely collected from the cases that predated SGMA, the adjudication cases. So they look at things like lowering of groundwater levels, reduction in storage, water quality, subsidence, and then SGMA expressly adds the idea of the pumping's impact on interconnected surface waters and the beneficial uses of surface waters like fish and wildlife. There's an argument that that actually would be part of a safe yield calculation under the common law anyway today, but that's a bigger conversation.

So with these concepts of overdraft in sustainable yield, the adjudication happens when pumpers invoke the judicial power to determine the rights to pump, and as part of that process, establish a method for achieving and maintaining safe yield, sustainable yield. So the idea is that the adjudication is supposed to be comprehensive, all of the pumpers in the basin are supposed to be part of this litigation, and then the judgment will bind all pumpers in the future.

Now, in the past, before SGMA, before 2015, adjudications were--there were no clear statutory standards for adjudications. So each adjudication was managed sort of differently in terms of process, and they often took a very long time, and in 2015, the Legislature adopted some laws to streamline the adjudications, provide some clear processes, and integrate the adjudications with SGMA.

In those standards, they specify when the court can impose an injunction, basically an order that halts pumping for some short period of time or a long-term period of time in accordance with the interim findings or the long-term solution. So the statutory goals in an adjudication, the statutes now clearly spell out what is supposed to happen in an adjudication.

One of the statutory goals in the adjudication is to protect water rights to the extent those water rights are being used, consistent with the California Constitution, and to provide the water right holders with due process. The adjudication is supposed to promote efficiency, avoid unnecessary delays, redundancies, and unnecessary costs in developing technical information and the ultimate outcome, and that is, in part, a way of integrating the adjudication with SGMA, which I'll talk about specifically in just a moment.

One of the statutory goals is to encourage compromise and settlement and that consistency with SGMA, SGMA timeframe, achieving sustainable groundwater management within that time frame, minimizing interference with GSP Implementation--that is specifically in the statutes; also to ensure equity for exempt in non-stipulating parties, small farmers, and disadvantaged communities. And I'll talk about all of that in just a moment. Now, note that some of these statutory goals may be in tension with each other.

For example, encouraging compromise may not always encourage further equity in a particular case. So the court has the very difficult job of managing the litigation to seek to protect all of these values at the same time, which is a tall order for the court. Go to the next slide. So when we talk about adjudications, one of the important things to understand is that comprehensive adjudication is complex litigation. That means that the adjudication is managed in phases.

The issues are divided up and one issue is determined before other issues are tackled. And I've got a list of potential phasing here on the slide. It talks about identifying the geography for the hydrologic model, the model of how the basin works. This is less intense now than it used to be, with some improvements to SGMA and identification of basin boundaries.

But other phases focus on things like determination of the long-term sustainable yield, comparing that to pumping, evaluating the undesirable results, reviewing, confirming water rights, assessing the consistency with SGMA and the GSP, and approving what's called a physical solution. I'm going to talk about physical solution in just a minute. Now, in these phases, they don't need to occur in this order.

And in fact, the statute has some direction that says certain issues should be decided early on, like water rights, prescriptive water rights, for example, decided early on. Importantly, the parties may stipulate to certain facts and outcomes of these phases along the way or at the end. And I want to keep that in mind as we go forward and talk about adjudications. I think that's a really important thing to understand.

And we have five minutes left for your presentation.

Okay, thank you. So the physical solution seeks to achieve sustainable yield. Physical solutions are required by California Constitution, Article Ten, Section Two. The court has the authority and the obligation--even if the parties don't agree--to implement the physical solution. This is typically going to create not only an allocation methodology, but also a plan for potentially bringing supplemental water into the basin or reducing pumping and how to pay for those.

The physical solution will also create a management framework called a watermaster, which is often appointed in the adjudication. So this is one of the other things that happens with a physical solution that's important, is the court will reserve jurisdiction. So the watermaster will decide lots of issues along the way, but the court will also have the ability to weigh in down the road. Finally, the important thing about adjudications, before I get to some big picture issues, is that they're often resolved.

They're always resolved by court decree, but they're often resolved by stipulated judgment. The statute provides that the court can approve a stipulated judgment, which is essentially a settlement of the parties if certain criteria are present. They have to meet these mandatory statutory criteria, and you have to have a certain amount of pumpers agree and the parties have to be responsible for a certain amount of pumping in the basin, and there's a formula in the legislation for that.

Now, the mandatory statutory criteria is that the court must find that the judgment is consistent with the Constitution, and water right priorities must treat non-stipulating parties and exempt claims--which are small claims under five acre feet per year--equitably, consider water use and accessibility for small farmers and disadvantaged communities, and not substantially impair the ability of a GSA, the State Board, or DWR to comply with SGMA and achieve Sustainable Groundwater Management Act. So adjudications have a lot of benefits.

They provide certainty on water rights and allocations, clarify unexercised rights, establish a clear management framework, improve the efficiency of water use, develop a pathway for supplemental water and long-term sustainability, and they create a clear governance structure and can institutionalize sustainability in important ways. Happy to talk about that more later. But adjudications also have challenges. They're very time-intensive, they're very costly, and here, really important, there's significant influence in the adjudication from parties that have certain resources.

Certain water rights may be located in certain areas and therefore have negotiating power, and there's a lack of access to the process for others who don't hold those water rights or have those resources. And some of the things that tend to get left out in this process are the public interest--looking at environmental impacts--disadvantaged communities--small farmers--and sometimes integration with SGMA.

Now, what happens when you have that phasing and an adjudication is that the parties will form coalitions--sometimes formal classes, sometimes informal coalitions based on their water rights or their geography--and then they will promote their interests within those coalitions. They will develop a proposed physical solution and present it to the court. So the court has a number of statutory obligations to make findings about equity and these other factors. The fact is that the court is just one judge. The court has some resources.

They can appoint a special master. These also have time and cost, and the court is also encouraged to promote efficiency. And so when the parties come to the court with solutions, stipulations, there is a big incentive for the court to adopt those solutions. And any review that comes later is really the closing the barn door right after the horse is out. There's a lot of momentum toward a particular physical solution, and that's where you get some inequities.

And so as we move forward and we think about the court's resources, it's important to consider the critical roles of parties in this matter. The court only knows what the parties tell it and what's in the record. So it's important to have the right parties in front of the court. And that often will mean creating stronger standards that allow more people to intervene to represent the interests of those who are not present at the table.

This can also require not only stronger statutory standards, but funding to support those people in participating in the litigation. So I would offer that there are three areas where I'd suggest focus going forward. One is to continue to provide meaningful direction and support for the judges in their complex litigation task. The California Judicial Council has done some wonderful work lately and provided a lot of support.

I think there's more that can be done in terms of providing clear statutory standards to ensure appropriate integration of the Groundwater Sustainability Plan by making sure that the court hears about the plan early in the process enough for it to make a difference and isn't left to a later phase in the litigation, at least so that the court has the information.

The court may not--may decide that the physical solution is better than the solution in the plan that's allowed under the statute, but at least the court should have the information. The other thing is to develop that realistic pathway for ensuring public engagement and representation of those unrepresented interests, perhaps through intervention standards, perhaps through additional funding. Thank you for your time.

Right on time, too. Impressive. Thank you very much. I think we'll consolidate our questions because I think there's going to be significant overlap here. So why don't we turn to Mr. Pratt for your 15 minutes.

Thank you, Chair Bennett, and good morning, Chairs, Committee Members, and staff. For the record, my name is Jeff Pratt. I work for the Ventura County Public Works Agency. I've been with Ventura County 24 years. In that position, I'm the Chief Engineer of the Watershed Protection District. I'm the Chief Engineer for four water districts, and I am the Executive Officer for the Fox Canyon Groundwater Management Agency. And we staff several of the groundwater sustainability agencies.

That's important because I'm here today speaking for the resource and all the interests that those different tasks represent. I'm going to describe our experience with our first completed adjudication and talk to you about some of the things we see as challenges. As Chair Bennett talked about, I won't go into this in much, but Fox Canyon is very similar to what a GSA is. It was formed more than 40 years ago under the same circumstances.

The state came to town and said, 'take care of it or we'll take care of it for you.' So in response to that, the act was created and the Board was formed, and it turned out that they chose the county to staff the agency because they were determined to be the least conflicted of all the conflicted parties around water. And we have staffed that agency up to this current point. The basin stakeholders are all represented on that board.

They're open, frequent, and, all things considered, Brown Act meetings that run that board, the board is governed by. The Fox Canyon Board has no authority to set water rights, they only set allocations, and they were created to address an undesirable result, seawater intrusion, which had been going on since the 1940s. The Fox Canyon Groundwater Management Agency's mission was to bring all basins a safe yield by 2010. That was considered enough to address the seawater intrusion. We have failed miserably. The safe yield was at one time 120K, another study determined it later to be 100K, and we continue to pump well in excess of that, as much as 140 or 150K.

Mr. Pratt, will you make sure your--

Microphone is on? Do I need to be closer? Sorry. So switching to the Sustainable Groundwater Management Act shows up 2014. It designates the GMA as first right of refusal for the GSA, and so the GMA opted to become the GSA for the three basins under its control.

Three DWR-defined basins. It also provided the GMA with new authorities that it didn't have elsewhere. And those new authorities made everyone uncomfortable because previously, for 40 years, the GMA had been comfortably constrained. And as I said before, no meaningful reductions in pumping had really occurred. Under the state, once the Groundwater Management Act hit, we started preparing our GSPs immediately. We did so before there was any grant money available.

We spent millions on their development, and it had a robust stakeholder input, as you can see on the slide. They were submitted timely. There were 47 submittals. I think the reason Paul said 46, one of ours wasn't critically overdrafted. But of those 47, there were eight approvals given. Three of them were the GMAs. So not only were they submitted timely, millions were spent, they were thoroughly vetted by stakeholders, and they were good science. By the way, I'm an engineer, so I apologize for my style.

The Los Posas Valley adjudication was broken into three phases. The first phase was a safe yield determination. We argued it should be sustainable yield, and we do believe there's a difference. You can have safe yield without sustainable yield. It's a nuanced difference. An example would be the inputs and outputs are safe yield, but you can have undesirable occurrences like higher salts in pumping from the basin at a safe yield number. So it's a very nuanced, but distinguishable thing.

But they insisted safe yield be kept in the adjudication language, and I'll get to that more in a moment. They were filed, by the way, the lawsuits, while the GSPs were under development, before they knew what would be in there. And we were taken with it, too. Our board had always thought that the court was the right place to determine water rights, and that would take a big task off the table for them.

Unfortunately, it proved to be a lot more than that, and it may present some problems later. Another surprise to the Board was the physical solution process, and I'll get to more of that in a moment. The reason for the initial lots posts is one of the three basins in the GMA, and the reason for the initiation of the adjudication was really a dispute between mutual water companies and their servicees.

People would come to the GMA on a frequent basis, wanting the GMA to remove whatever allocation they were being served by the mutual and put it on their property or in a new well. GMA said, 'we're not getting into mutual. That's between you and your mutual.' So when it started, it was between the mutuals, but it ultimately spread.

What actually happened in the court, even though the phasing was scheduled that way, was that in Phase One, there was a termination of safe yield and the M&I percentage share, and I'm going to use M&I and landowners to describe the two basic interests in each of the basins.

On Phase Two, which was supposed to be the individual water rights, it expanded and started stepping into Phase Three, which was a physical solution, and that presented some problems, and I'll talk about that more in a moment. It determined all the water rights in the basin. That was a great relief to the GMA Board. It appointed the GMA's watermasters. The judgment is still out on whether that's going to work or not. And it spoke to the GSP and the SGMA goal, Sustainable Groundwater Management.

I'll talk about that more in a moment. It also created something that--oh, thank you. Sorry about that. It also created something that we were already familiar with. It formally created--thank you.

There's a sustainability fee being charged for that.

I hope this doesn't put you in overdraft. They created two committees, formal committees under the judgment: the Technical Advisory Committee and the Policy Advisory Committee. These were the vehicles substituted for what was previously our stakeholder input formally in the judgment. And note that neither one of these are Brown Act Committees. There's a nod to Brown Act compliance in the judgment, but it stops short of the Form 700 and the conflict of interest statements, which I'll talk about more in a moment.

We anticipate that this committee consultation process--because we've been at it in many years before--will be used to challenge the GMA science and technical conclusions. Likely, the way we calculate sustainable yield and the way that we calculate basin management objectives and minimum thresholds, that's where the attack will come. It's already come before. It was happening in the stakeholder process with these committees.

And now, the same ten people who can afford to do this are going to be the ones with the majority of the voice. In the judgment, the physical solution allocated 42,000 acre feet to people to get them to the table. You can think of the physical solution--as an engineer, I think of it as a big basket full of chips you share with everybody to get them to come to the table and that we'll force the 850 cram-down rule. Jennifer alluded to it in her presentation.

It was the 75 percent of the water, 50 percent of the landowners. It's in the code. If you can get that, then the judge jumps. And the attorneys called it the cram-down rule. I didn't make that up. And it was very important to the attorneys. They thought it would shorten things if they could get to the cram-down. But it took them a long time to get to the cram-down because they had to make so many side deals. Initially, they weren't sure they could get that number.

But when they started the trade-offs that they called 'physical solution,' they got there. It also created some new yield calculations, operational yield and basin optimization yield. I'll talk about those. They are both different from sustainable yield. And it virtually eliminated the possibility of an open and public water market, something that we had to--in that case--committed more than one million dollars to developing. And the water market development started long before SGMA hit. It started with the drought.

Anything that GMA or the watermaster does as a basin management action is subject to the court's continuing jurisdiction. So that means you put the science in the hands of the court. We'll talk about that in the GSP and any party that has the money can challenge an action and take it to court. And most importantly, the GMA, in the judgment, gave away their abuse of discretion authority. Normally, when the Board, like the GMA, goes to court, the court holds it to an abuse of discretion standard.

If you don't abuse the discretion, you typically defer to the agency. That's gone. It's De Novo review. Everybody goes with the documents they create during the argument or the discussion on whatever the base management action is, and the courts get to determine what happens. Another thing, I'll talk about basin optimization yield here, I guess. It is something that is--let me see if I. Sorry. I'm jumping around. Basin optimization yield is a yield that includes the yields that were included in the GSP.

It includes two additional factors: any reasonable project that might be done over some time period--and it's not clear what those time periods are, to my way of thinking--and any change conditions, and those conditions can be anything from adjusted mason management objectives or thresholds to new ideas about projects or programs or something. An important thing to note here is that you don't subtract carryover from that yield. Once you get carryover here, carryover is carried on forever.

Now, if I might digress just for a moment--oh. Thank you. When the GMA was operating, everybody up here thought, GMA is doing a great job. And what I found out was, hey, the reason they thought that was because we had created this thing called credits. And if you didn't pump up as much as your allocation, you got a credit for what was left, and it went on the books.

So we started amassing these credits, and by the time I got there in 2004ish, 2005, there are something like 700,000 credits on the basin at that time that had 120,000 safe yield. So it was a lot like confederate money. And the credits were created, were amassed against paper water, artificially high allocations based on artificially high pumping numbers.

And so carryover, in the case of this, is very similar, that we will start artificially high because the basin safe yield--I think I told you 42, and we think on average it's about 31--people will be collecting credits on that. They will call it carryover, and they will be able to use it before there are any cuts. You have to cut other things to ramp down.

So that's why it's important that you knew that carryover is not included in that and why it may present a problem later. So I think I covered everything I want to cover on that slide. So just in summary--

So now you're at the five minute mark. Yeah.

So this is the summary. So, okay. So I didn't put them in any--but these are the overarching questions and issues raised by the outcome of this adjudication, and we think this adjudication is going to be used as a model for the future adjudications of Ventura County. It's already been discussed--yes--for the next adjudication, which is the Oxnard Pleasant Valley Basins, and so we're concerned about that because it's a very different basin, and there are a lot of people who won't be well represented.

There are a number of disadvantaged communities solely reliant on groundwater and who do not have the ability to stand up for their own rights or financial ability. But I'm going to go in sort of the order, I think, of importance. The De Novo standard, that was, in my mind, probably the worst outcome of the adjudication. There's a potential for just endless arguments. The Technical Advisory Committee, again, which will attack the science, is appointed by PAC, and there is no Form 700 conflicts required.

And in our previous experience, the Technical Advisory Committee put us in endless loops of discussions and studies and so forth. The second thing I would note is it's not a Brown Act Committee, and so therefore there's no Form 700 required, and the conflict of interest can't be determined. So you can't really tell where folks are coming from. We're still wrestling with that because we haven't finished the rules, watermaster rules. It was supposed to be considered in the rules, but some think it's a done deal.

And then the 850 cram-down deals, now, that took the most part of all this adjudication and tens of millions of dollars spent. We spent six million on this, and we were told that the landowner spent tens of millions, and this took the most time because it was that big basket of deals you could make to get people to come to the table. And it involved everything from administrative rules, stakeholder processes, programs, projects, everything is on the table.

It's not what you would normally think of--or at least as an engineer, you would think of as a physical solution. And then I think after that, I would say with the court deciding the science, I think that creates a real potential for conflict with the approved GSP, which just means more time in the courts.

The points I made to you about initial operating and the judgment allocation and the basic operation yield--I mean, the way the basin and operation yield, operational yield work is you subtract the basin, take the basin operation yield with those two extra characters, which is likely projects and changes in condition, you subtract the operational yield, you divide it by the years left, and you get your ramp down. Theoretically, conceivably, that can be zero.

Because if you say, 'I'm going to get this many projects done,' and you can include those as an increase in your sustainable yield, your operational yield will be equal to your base and optimization yield. So your numerator will be zero or it could be very minimal, depending upon what that is. And so I think that's quite consequential and very deliberate on the part of the folks who develop this. And then the carryover is not subject to ramp down. We talked about that.

I think another thing is that the GSP--and I think Jennifer said this--should be heard first. There were challenges to the GSP. The court refused to hear it first. The GSP, if heard on its own merits in front of all of this, should put sufficient constraints on that physical solution to minimize costs to everybody involved in the litigation. That's my own considered opinion and the considered opinion of the attorneys I worked with. And then just some--one observation.

We've gotten a lot of complaints since this passed. A lot of the people who were subject to those deals now claim they didn't understand the deals. They thought the deals they made to join into the 850 were going to get them variances. So they've come to us with variances. We say, 'no, you get what you got.' That's all it is. And then there have been a number who have claimed that they were never notified. And that concludes my presentation.

First, I appreciate the speed with which you covered a lot of information. A good engineer can do that. So I want to try to clarify some things that I heard there to make sure that we have it, and for both of you--so I'm going to start with both of you on the one thing that you talked about.

You talked about if a certain number of landowners get together, then the courts, in the interest of efficiency and the tradition of the court, is to go with that settlement position that comes from that gathering of all of those parties. And I'm just asking the attorney, correct that you were referring to that it's either 50 percent of the--

50 percent of the owner, 75 percent of the water?

Yeah.

Yeah. And that's actually in statute.

Exactly. And that risk, if that settlement proposal conflicts with sort of the GSA--with the groundwater plan, the GSP, with the groundwater plan--that's the nuance. That's what's difficult. And so are you saying, Mr. Pratt, that you think that the first thing that should happen in these litigations is they should sit down and say: is the safe yield number that is in the groundwater sustainability plan, the right number? Is that what you mean when you say that bids should go first?

It is. It's two things. It is that. As Jennifer said, it exposes the court to what's in the GSP, which might not happen otherwise.

So that way the court knows what's in the GSP as they're looking at the settlement, right? And I'm going to ask the attorney, do you generally agree with that?

I think that we want to keep in mind that every adjudication is different and every GSP is different. And so it'll be important to retain the discretion of the judge in conforming the phasing and the timing to the specific circumstances. That being said, I think there could be significant value in hearing about the GSP early in the phasing process. The GSAs, if nothing else, have invested a lot of time, technical expertise, money, and sometimes significant public involvement. And so bringing that up early in the process, that could be encouraged and that could be worthwhile.

Right. Thank you. I want to go to the statement of my Co-Chair here about trying to have the resources go to improving the supply, the recharge, and all of that other stuff. $16 million on one litigation. That's a lot of recharge. A lot of things could have been done for water supply with that. So I know that as the GSPs--I've talked to Senator Pavley and Senator Dickinson about this.

Their intention was to try to have the GSPs decrease the amount of adjudication that was going on out there because of this. So the concerns that I have here are one: the public hearings under--now with the litigation that's happened, in your judgment, Mr. Pratt, is the GSA in a more difficult position to meet the goals of the state in terms of SGMA? Is it going to be more difficult for the GSAs to meet those goals because of--

In my opinion, it will be, given our past experience with the same structure prior to it being formally adopted in a court order.

So I'd like you to go on to the--what did the judgment do in terms of the Brown Act? Does it not formally require the Brown Act? Does it just informally suggest there should be open meetings?

Informally, in the judgment to date, the rules will become part of the judgment, and they're not finished yet. We're in negotiations. The Board decided to appeal on the rules, and so there's a negotiation, but in the judgment itself, it gives a nod to the--it says something like, shall conform, generally conform to, with the exception of it has that language in the judgment.

Great. The reason I want to try to drill down on this for just a minute is this has the potential to become the template for litigation against all of the GSAs, all the GSP plans that are out there in the State of California. If this is viewed as favorable to the large pumpers, then we have that potential. And I think that's why there's a state interest in sort of what's happening with this one, if it is going to be the template.

And there was significant state--around the state, there was significant interest by major water law firms in terms of this particular settlement, in terms of that. So, one: I'm really concerned about whether the public will know about the conflicts of interest if there are no Form 700s out there, and two: the public will actually be able to do the proper appeals. So, as you pointed out, Professor, you said, develop realistic pathways for protecting the public and the unrepresented interest.

I think we have a responsibility. Looking at this template, we have to do something at the state level to make sure that aspect is taken care of. Because if we don't have official Brown Act, if we don't make it clear that everybody has the right to appeal, if we don't create some resources for low-income people to do that, we're going to have a problem. So that's one. Two: this idea of deference being lost.

In other words, you described that, currently, if any local agency makes a finding and somebody doesn't like it, the burden is on them to prove that the local agency abused their discretion. But now with this litigation, that deference for the groundwater agency has been lost. And now, they don't have to prove that the groundwater agency or that the local agency abused its discretion. And instead, the local agency has to defend themselves to say they haven't abused their discretion.

So consequently, the local agency has to spend more money in terms of legal fees more often, and will be less likely to actually do the vigorous things they need to do to bring the groundwater basin into compliance because people will sue them and they won't have the resources to be able to counter that. Is that the point you were making, Mr. Pratt?

It will definitely slow things down. That was a pattern with the GMA as well.

Okay, great. Thank you. And then trying to determine whether the settlement is consistent with the sustainability plan is a difficulty, and I think that's another area of legislation to try to make sure the judges have the information they need to know whether this is particularly consistent or inconsistent. And then the final thing I want to cover is this carryover. So sustainable yield, you're saying, is about 31,000 acre feet in this basin. They're starting with 42,000. So more than a 30 percent increase in sustainable yield, right?

And then they're going to give people credit if they don't pump some of that here, which is actually more than what sustainable yield is. But then that credit will carry over indefinitely.

Well, not indefinitely. Five years.

Oh, for five years, right? So that credit will carry over and they'll have built up this credit. So when they get down to the cuts 20 years from now, when supposedly everybody's supposed to be at this, when they say, 'you've got to cut 1,000 acre feet,' you can say, 'I'm not going to cut anything because I have a credit or I have this much in the credit.' Is that what--

May I give you a little more definition?

Yeah.

So we will, at least on a five-year basis, calculate what the new pumping has to be. So in theory, there might be a ramp down at that time. The carryover will not be subject to the ramp down. The 42,000 is the starting, and we have to take 2,000 right off the top because the judgment says we'll start--that's what they allocated. The judgment says you get 40. So we have to go figure out how to cut 2,000 immediately. But I think everything else--so depending upon where you develop that credit, it carries out five years. It could go right across the five-year period or it could end at the same as the five-year period.

Got it. Okay. So bottom line is the GSA came up with roughly 31,000 acre feet sustainable yield. But because of this litigation, you're starting at the 42,000 in terms of allocation. You have to cut to 40. You have this responsibility.

And as you make these judgments over this next 20-year period to get to 2040--or actually 16-year period to get to 2040--at any point in time, those judgments could be challenged by the two advisory committees, which would then--how much time does the GSA have to respond to that challenge?

I couldn't answer that question right now. Each time there's a submittal, there's a time in the judgment we have to respond, but then we go to mediation, and if it goes to court, then it all goes.

But then it goes to court, and when it goes to court, the GSA can't do the thing that most local governments can do, which is say, 'hey, we did not abuse our power, judge, this is appropriate.' Instead, the GSA has to just say there's a reason why this shouldn't go to court.

That's correct.

So those are the major things I just want to review that I'm hearing here, is that not having the complete public hearing, therefore not great representation in terms of the less powerful people, all right, not having the Form 700s and not knowing what the conflicts are. Having deference lost for a local agency is huge, for those of us that have served on local agencies.

You know how many times we could get thrown into court and not be able to just say, judge--the judge should not be sort of repeating what the local agency does. The ability to have a settlement agreement that conforms with the cram-drown rule that some lawyers use that could be inconsistent with SGMA and sort of no ability to try to point that out and the carryover.

If those become the templates for future legislation against groundwater agencies in California, sounds to me like we have real problems there and stuff. So thank you very much for letting me do that. I'll turn it over to my Co-Chair.

Thank you so much. So I've got a question for you. As one attorney to another, maybe we speak the same language. So my question is this: I did not understand that it's always a De Novo review. Is that correct?

I'm sorry, what was the first part of the question?

I think that it was determined in this case there would be De Novo review, but that is not always the standard. Am I correct?

Yeah, you're correct. There has been a question about the review standard for GSA actions. And so we're just starting to find out how the courts are going to approach these issues. There is a spectrum of what we refer to as deference or respect. So depending on any given local agency's action, in any different number of circumstances, they might get some degree of respect, a lot of respect, or the court might look at it anew, right?

And we have, as you know, different legal terminology to reflect all of those standards. Then the California State courts have a very different approach to deference than we might see at the federal level. So if people are trying to compare the two, they're very different. So I think it's useful to think about: does the court have the opportunity to learn about what the GSA did and the solution it put together and the technical basis for that?

The court should be able to review that information and take into account the work that the GSA did and not ignore it, and perhaps depending on the robustness of the process, give some degree of respect to that. So I would say it's not necessarily all or nothing, and it's not necessarily De Novo all the time or abuse of discretion all the time. I think we're still working that out.

I mean, it would seem to me there should be a set policy one way or the other. The GSA is basing their decisions on data. So hold on one second and I'll get right to you. Go ahead.

I think the courts would be going in that direction to develop a standard, and I'm unaware that there's been one that all the courts are now following, but I do think that when an agency engages in process and has technical work, that the court's standard of review should be one that allows the court to review that work and decide whether it's deserving of respect or not. Yeah.

You wanted to add something, sir?

Thank you so much. In our case, it's written into the agreement or the judgment, and the way it will work is there'll be three experts against our expert, and that will confuse the courts.

Sure. Whether your situation becomes a template may be circumvented here at the state level. So that's why I was trying to get at, 'hey, how does this work?' Because there are varying standards of view on the books for many different things.

Many different things.

Yeah. Sorry. Wasn't too sure. So I got another question for you, and that is, have you ever thought about the courts referring the matter to the Water Board?

Yes. That's one option that's available to the court to refer the matter to the Water Board, in which case the statute provides that DWR will then get involved in that reference process. That's a valuable tool that's available to the courts in this process. One of the issues, of course, is that the reference will cost time and money, and the Water Board itself, its costs are paid in this process, and they're paid, I believe, by the parties when the reference happens.

And the Water Board has a significant work agenda already, and so you have to balance all of those factors. But in many cases, references can be very useful and the Water Board's input can be very useful.

So it won't be the be-all, end-all. Okay. All right. And then another thing I wanted to talk about is pre-SGMA adjudications. And what did those look like in comparison to the adjudications that were seen? And I recognize yours started before the SGMA plan had been enacted, but as we now have so much approval that's already taken place, do they look any different? Is it that they're much more inequitable at this point? Was it more equitable in the old days when they adjudicated things and all the parties were there?

I think that pre-SGMA, the adjudications often took longer and--years and years and years. The time and cost associated with adjudications, pre-SGMA was legendary. We are just now seeing some of the first post-SGMA adjudications. I think a couple of things have happened.

One is that even pre-SGMA, some of the adjudications, 2005, for example, the parties have started--the attorneys involved and the people that are involved in adjudications have started to become more sophisticated about how to put together physical solutions and more efficient with how they conduct the negotiations. And so we were seeing some shorter adjudication timelines even prior to SGMA, but the streamlining statutes in 2015, the streamlining they created is invaluable, and so we're seeing a lot of efficiencies from that process.

So that is shortening the timelines and creating more sophisticated physical solutions, for sure. But on the equity point, I think the equity point was always an issue, even with pre-SGMA adjudications. It's always been the water right holders driving that process, and no involvement from anybody who would be advocating on behalf of the environment, disadvantaged communities, small farmers. Instead, you had all of these forces coming together around resources, money, location, water rights, and they were the ones that were driving the adjudications.

And this question of equity, this question of public interest, was just simply not in front of the court. And I would say, I don't want to suggest that people were necessarily acting maliciously. This was the system that was set up, and there was no entry point for these concerns in the litigation. And as I said, the court is left with the information placed in front of it. And so that's why it's so important to find a pathway to get this information in front of the court going forward.

So you suggested intervention, and you talked a little bit about intervention. Other than intervention, what else you got?

I think intervention is useful in part because it's important to retain the court's discretion and its ability to be neutral in these circumstances and the important role of parties in driving the litigation. These interests need to be part of that party discussion. So they're part of those early discussions about modeling and data and physical solutions and phasing and stipulations along the way, right?

All of that you don't want to present at the end of the process, somebody to come in and think about equity at the end of the process. They need to be part of it from the beginning. There might be other models. I'm sure a lot of great thinking has gone into this as to what other models might be. One of the things I considered was whether there's an opportunity for the state to play a role in representing some of these interests.

But I've hesitated a little bit, in part because I know the state agencies that are engaged have multifaceted statutory mandates where they have to balance a number of interests. They also have heavy workloads. But maybe there's a way to integrate some degree of state role in this process. But again, I really think the strength of the intervention is that you get parties engaged in this model very early in the process, and part of all those key decisions. Phasing, physical solution modeling--all of that matters.

And what was it, 50 percent are there? Remind me, what are the percentages?

It's supported by more than 50 percent of the parties and supported by parties responsible for at least 75 percent of groundwater pumped five calendar years before the complaint is filed. Now this is permissive for the court. The statute says the court may adopt a stipulated judgment if those conditions are met and the mandatory statutory criteria are met.

It's not mandatory, but there is a strong incentive for the court to adopt under those circumstances because the court is trying to manage this complex litigation efficiently and to bring it to a close, right? So there is a strong incentive, even if it's not mandatory.

Got it. Okay. Thank you so much.

If my two colleagues will indulge me, I just want to follow up real quick so that I think it just is appropriate. And I appreciate your comments to the attorney. And she has three recommendations for us in terms of or three key opportunities that she's identified. I don't know if she put them down. I'm going to take them in a different order, but assure appropriate integration of GSPs is one of the opportunities that we should do.

And I would just point out that there is a current bill that the Assembly passed last year and is in front of the Senate right now that would require all the settlement proposals to go in front of the State Water Board for the State Water Board to review, to offer an opinion as to whether the settlement is or is not consistent with the Groundwater Sustainability Plan so that the judge has some of--some of this.

So when we talk about provide meaningful direction and support for a complex judicial task, that seems very appropriate and that's what the bill would require is that before the judge could enter into the settlement, it needs to be considered, and before people should offer it to the judge, they should offer it to the State Water Board. Now, that is an issue of resources that is out there for the State Water Board.

But again, instead of spending 16 million dollars on litigation, we may be able to decrease that if we know we're going to be consistent with the Groundwater Plan. So that's one. We have that current bill out there. The second thing I would point out is your third bullet point: develop realistic pathways for protecting the public and the unrepresented interest. And those are environments, small farmers, disadvantaged communities.

Essentially, it seems to me that it is incumbent upon us as--my Co-Chair, talk about this--that perhaps we should do something to make sure we create legislation to make sure that we don't have this current litigation settlement become the template for the state. And one of the things that we could do with that is to not have it be just a pay-to-play system.

Because right now, as you alluded to in previous litigations also, disadvantaged people, people that don't have resources don't have much of a voice at these settlements. And so perhaps--I'm just throwing out possibilities. Perhaps we have a public specialist who steps in to represent--just like we have a public defender--a public specialist to represent the disadvantaged people in these agreements. We come up with some resources or some level of expertise that would be able to help protect them as they move forward.

But it seems that there is something that needs to happen. And the final thing I would say is, if these three people here are all landowners and they're fighting with each other and they decide they want to file a lawsuit, and that includes calling the GSP in, I'm not sure that state law should say, 'oh, they're all equal.' Those are people that are individuals, parties, and now you have a local government agency that has a responsibility. It's done its job.

And yet, if they're just treated equally with everybody else, and there's no deference given to them, and a lawsuit can force them to give away their deference, then that does not seem to be in the public's interest to treat the GSA as the same as everybody else, and that they should not have this deference.

And it should be that courts should not be able to take that deference away from a GSA without some compelling reason or the GSA shouldn't be able to just sign off to a settlement agreement. But with that, I want to turn it over to my colleagues. If you have questions or comments that you'd like to make, right. Great. And turn it back to you. Do you have anything else you want? And I won't turn back--anything else on this? Right. Okay. All right.

So we're going to turn it now over to public comment on both these things. I want to thank both Mr. Pratt, who came up with--a little bit sick, you could hear it in his voice--and Professor, really an excellent job in terms of this presentation. Thank you.

Chairs, Members.

Please go ahead.

Yeah. Dave Runsten, Community Alliance with Family Farmers. So, Legislature appropriated $10 million a couple of years ago to try to help small farmers in the SGMA process. And so we have worked through DWR, and most of the money has passed to the water foundation to put out. So our organization and UC ANR small farm program and DUDEC, the consulting firm, we're working together to try to educate and involve small farmers around the state in this process.

But we also provided $1.0 million to UC Davis Law School to set up a legal clinic to try to help small farmers in the adjudication process. And the University has now hired a DWR attorney to run that clinic. And so we're hoping that we can create some kind of class counsel in these adjudication processes, because we saw in Cuyama, for instance, that the people were spending all the money that they had to hire attorneys, and they just don't have that kind of money.

And so what we've been talking about here, the equity issues are really quite extreme in these adjudications. So that's our solution so far. We're going to see if it works, but it will have to be funded going forward, as well as the outreach to small farmers and disadvantaged communities. And so we don't need the money this year, but we'll probably be back next year asking for additional funding so that this program can continue. So that's really all I wanted to say. Thank you.

Good morning. My name is Nataly, and on behalf of Leadership Council for Justice and Accountability, I'm here to provide the following remarks regarding SGMA implementation. Leadership Council, in partnership with CWC and CWA, have provided extensive comments to GSAs and the state regarding the continuation of critical overdraft. As currently written, GSPs continue to have sustainable management criteria that is not protective of all beneficial uses and users of groundwater. And as a result, domestic wells have continued to go dry at concerning numbers.

Even during last year's historic storms, domestic wells were dewatered. The state must direct GSAs to set sustainable management criteria that protects groundwater levels from continuing to drop and protects groundwater access for domestic wells and drinking water systems.

Additionally, the state should pay close attention to the existing gaps in monitoring networks and ensure GSAs are proactively addressing gaps, that GSAs are using the best available data for climate change analysis as they make critical decisions on water budgets and hydrologic models, and that both the state and GSAs are monitoring addressing groundwater quality impacts related to continued depletions of groundwater or GSAs activities like recharge. Regarding fees and SGMA implementation, the state has provided substantial resources to GSAs thus far to support SGMA related activities.

The statute provides broad powers to GSAs to enact fees. As such, GSAs should work to fund SGMA activities locally and not actively depend on state funding for implementation. Last, we'd like to echo Assemblymember Bennett's concerns regarding local governance. GSAs continue to fail to equitably engage all stakeholders, which is reflected in GSP's emphasis on protecting groundwater interests above all other groundwater users. If GSAs are to truly take on the stewardship role that SGMA envisions for them, there are critical changes to local engagement that need to take place. Thank you.

Abraham Mendoza with the Community Water Center aligning our comments with our colleagues with Leadership Council for Justice and Accountability. Also just wanted to thank the panelists for the robust discussion on SGMA as we try and make sure that the future of groundwater management in California doesn't look like the past. It was aptly noted by the LAO earlier than this hearing how many rural areas of the state groundwater makes up 100% of the drinking water supply.

GSPs, as proposed, would have allowed for 1200 wells providing water for over 127,000 people to go dry, which would have required significant state resources to address. So we personally feel that probation is appropriate. And that being said, as our colleagues mentioned, 1600 wells were reported dry in 2022, and even in a wet year like 2023, 400 wells were reported dry.

These numbers do not include the number of contaminated wells where communities are facing health risks from drinking water contaminated with nitrates, arsenic, 1233 TCP, hex chrome, PFAS, pesticides and other contaminants. And as one of the organizations that provides direct aid and technical assistance to many communities at ground zero of the water crisis, we call on the State Water Board, DWR and our legislative partners to ensure that drinking water well mitigation remains a priority during plan review and during probationary hearings so that GSAs are addressing the dry and contaminated wells caused by continued over pumping, not the state or impacted communities. Thank you.

Good morning, Madam co Chair, Mr. co Chair. Ivy Brittain with the Northern California Water Association. Thank you for the opportunity to provide public comment this morning and your staff's great work on pulling together such an important hearing. We really want to express our gratitude towards Deputy Director Paul Gosselin and his stellar team. They've really put in a lot of effort to implementing the successful implementation of SGMA. Not only in the state, but especially in the Sacramento Valley.

With our experience, we really appreciate the time and the accessibility to their expertise that we've been able to utilize to work through our Members in the Sacramento Valley with Member managers and also really important stakeholders to collaboratively develop pragmatic and responsive GSPs that meet the letter and the intent of SGMA. And as most associations do, we have a lot of literature and handouts that dive into more detail about how we're doing this.

So I look forward to following up with your respective staff and sharing that information and really sharing the story of the Sacramento Valley when the time is appropriate. So thank you for your time this morning.

Good morning. Chair and Members Chris Anderson with the Association of California Water Agencies also want to extend our thanks for holding this important hearing. When SGMA was passed in 2014, I think there was some level of skepticism about locals ability to come together and put basins throughout the state on a path towards sustainability. And as we've heard today, 10 years later, GSAs have accomplished a lot in a relatively short amount of time.

Whether that's GSAs forming all on time and medium and high priority basins that were required to be covered by SGMA, submitting plans on time, DWR providing determinations for all basins that were required to submit plans. We've seen the incredible amount of work that's already been accomplished, and then obviously, as we also heard today, I think these numbers are important.

To reiterate, 62 basins have plans approved, only six plans have been deemed inadequate, and 13 basins with incomplete plans are working with the state to hopefully bring them into compliance again. So, want to note that these GSAs are doing a lot of work to correct decades of overdraft, and that's not a chore that's accomplished overnight. Also want to thank DWR, the State Water Board, for the incredible amount of work that they've done to help GSAs throughout the state and obviously the Legislature.

For the significant appropriations that you all have provided in recent years. At this stage, it is critical that the state continues to give locals the time and resources necessary to successfully implement SGMA. One way to do that which will be considered this year is a resources bond. AQUA continues to advocate for 7.85 billion bond investment in water infrastructure.

Among other things, we're requesting $1 billion related to groundwater, including money for DWR, competitive grants for groundwater storage projects, groundwater banking recharge and other groundwater projects to improve water resilience. This will obviously be critical as we deal with climate change going forward. So again, thank you and yeah, appreciate the hearing.

Oracio Gonzalez, on behalf of the Coachella Water Authority. We are one of four GSAs that manage the Indio sub basin and are exclusively responsible for managing six wells that supply the water needs of the City of Coachella, a small, disadvantaged community in the eastern Coachella Valley.

The requirements of SGMA result in fixed administrative and reporting costs that, for a small GSA like ourselves, are unsustainable because we lack the economies of scale to spread out fees in a way that doesn't result in exorbitant costs on the end customer. We certainly look forward to working with the Committee, both committees, as the budget is developed, as well as a potential climate bond so that we could potentially address this issue that is very unique to small GSAs. Thank you for your time. Buh-bye.

Good morning. Thank you to both chairs for convening this hearing about such an integral topic. I am Lily Mackay on behalf of the United Water Conservation District and I just wanted to share very briefly a few items about showing significant progress within our service territory. Number one, groundwater use in both the Oxnard and Pleasant Valley basins has declined approximately 20% across sectors since 2009, thanks in large part to local conservation efforts as well as pumping limitations imposed by the FCGMA.

The pace of design and construction for United Waters recharge, conjunctive use and seawater intrusion mitigation projects have increased rapidly following implementation of the GSPs for Oxnard and Pleasant Valley basins, and the GSPs now include a suite of projects that mean that we can achieve sustainability years before the 2040 deadline via SGMA.

And finally, United has had a record year for managed aquifer recharge operations in 2023, partially due to wet conditions, of course, but largely also as a result of focused efforts to optimize recharge operations with investments in key infrastructure improvements. So thank you so much for your time today. Continue. Look forward to continue discussions as we attempt to achieve sustainability. Thank you.

Good morning, Madam and Sir Chair, Mr. Chair. I'm Brenda Bass with California Chamber of Commerce, and I just have a couple of high level comments on what has been a very interesting and in depth discussion today on groundwater management in California, where we sit today in 2024.

Businesses have a really high incentive to know exactly how much water they're using, particularly in the groundwater sector and particularly for AG, because plumbing groundwater requires energy and energy and water are some of the highest and most important costs in that sector. I would also just like to agree with Mr. Gosselin that SGMA can't be a paper process and that we really need to make sure that we are focused on making the system work for water users of all kinds.

At the World AG Expo recently in Tulare, it was reported that the most recent estimate is that about 900,000 acres of agricultural production will come out of production as part of the continued implementation of SGMA. And while it needs to happen, and this pain needs to occur in order to achieve sustainability, that's a significant amount of jobs and economic loss, especially in the Central Valley, which is dependent on AG as a keystone in their economy.

So I just want to say that we're here to work toward a future where we can get to sustainability in a way that ensures that AG business and communities can continue to exist in California, particularly in the Central Valley. And thank you again for the time and the hearing today.

Chair Papan and Chair Bennett, thank you for holding this important conversation today. Really appreciate it. My name is Tim Parker. I'm a consulting hydrogeologist, and I'm here on behalf of Sonoma Valley GSA. I'm here to kind of echo what was heard earlier from Coachella. We're one of those basins that is pumping a relatively small amount of groundwater. And as a result, we are faced with passing along high cost, inequitably high costs to our residents and customers, because SGMA implementation comes with fixed costs.

And these fixed costs, I think, as you know, are administrative and reporting tasks, including maintaining monitoring networks, data management systems, budgeting and legal review. And they're unavoidable. But for large basins, they come off as minimal. But for us, they are quite large. And I think by example, I'd like to share that our annual fixed cost equates to about $87 per acre foot in the Sonoma Valley. For Petaluma Valley, a neighbor, it's $189 per acre foot.

But you go to the Santa Rosa plain and it's $41 per acre foot. So we're working at this on a local level, but we really need state assistance to have a viable pathway forward. And SGMA implementation is a shared state local responsibility. So we need to have the state's continued support to make this success a reality. Thank you so much for your time.

Good morning. My name is Jennifer Clary, California Director for Clean Water Action. Thank you for holding this hearing today. I always love talking about groundwater. I've been working on this for a very long time, way before SGMA. Just have a few comments. First, thinking about the plans and local control, our organization read every single plan, and let me tell you, a lot of them sounded very much alike. So what I would say is there's local control and there's consultant control.

And maybe what we're all talking about here is kind of taking out that consultant middleman and having DWR step up and do some of that work, because where DWR provided data or specific directive, the GSAs did it. And so what we want is for DWR to have sufficient funding and staffing so that they can continue to do that work. Second, we really appreciate DWR's emphasis on annual reports because this every five year update, they're a long way apart.

But on an annual basis, we can look at monitoring wells and proximity to dry wells and say, okay, are we monitoring, do we know as part of your sustainable management criteria, if those dry wells are being captured in your monitoring network? And in fact, a lot of the monitoring network wells aren't actually being monitored. And that's something we want to understand as well. So just kind of want to ping that.

And finally, for adjudication, yes, the equity question is a big deal and the stipulated judgment, the things I've seen so far kind of suck because the whole idea of adjudication is you end up, everyone gets to reduce by the same amount and nature kind of gets left out altogether.

So whatever we can do to make the GSAs and the GSPs a bigger player in that, and to not say to something like Borrego Springs, a disadvantaged community, that they need to cut their water use by 65%, even though they only use 10% of the water in the basin, while AG at 70% has the same 65% cut. I think that we can all agree that we need to fix that a little bit. So look forward to working with all of you. And I also forgot to say everything my colleagues at Community Water Center and Leadership Council is super important and I totally agree with it. Thank you.

Good morning. Chairs Papan and Bennett and Members of the Committee. Pleasure to be here. My name is Chris Sunley. I'm the Sacramento County Department of Water Resources Groundwater Sustainability Manager. With over 25 GSAs in Sacramento County, our regional partners have worked very hard to successfully get over the first GSP hurdle, and all four of our local GSPs were successfully approved conditionally, of course. As we enter this implementation phase, some of our partners have successfully obtained state DWR grant support to work on boots on the ground projects to help move towards groundwater sustainability.

Three local examples include a new aquifer storage and recharge well pilot test at our Sacramento County Water Agency's surface water treatment plant, a local water district's Flood-MAR project, and a separate GSA's innovative approach of building a large monitoring well in a region of groundwater depletion that can later be converted to a future supply well, should that need arise. One related effort I'd like to share is a multi agency effort for our local Cosumnes River.

This watershed resiliency project partners with local stakeholders in a state DWR modeling effort and hopes to find a solution to our feast or famine water environment that we live in that will incorporate some groundwater recharge components. While we recognize there are significant challenges with GSP implementation, including funding, as discussed today, there are many tangible and successful groundwater projects occurring statewide. I really appreciate the opportunity to share and thank you for your time and effort.

Okay, I don't see any other public comment. I would note that our colleague, Senator Hurtado is in the house. Thank you for being here. And with that, unless there's anything else, we will stand in adjournment. Thank you so much.