* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [00:00:05] HELLO EVERYONE. UH, [1. CALL TO ORDER/ROLL CALL] WELCOME TO THE, UM, JUNE 15TH PUBLIC HEARING FOR THE PHASE TWO FUNDING MECHANISM OF THE MERCED SUB BASIN GROUNDWATER SUSTAINABILITY AGENCY. UH, I'LL, UH, CALL THE MEETING TO ORDER. UM, DANIELLE, WOULD YOU CALL THE ROLE BOARD MEMBER PARK HERE? BOARD MEMBER GIAN POLLY. HERE. BOARD MEMBER KELLY HERE. VICE CHAIRMAN MARTINI. PRESENT CHAIRMAN PEREIRA, PRESENT BOARD MEMBER GALLO DID, EXCUSE HIMSELF. AND MR. CHERRY OF A QUORUM. THANK YOU VERY MUCH. UM, IF YOU'D BE WILLING TO STAND AND JOIN ME IN THE PLEDGE. UH, GEORGE, WOULD YOU LEAD THAT PLEASE? I PLEDGE ALLEGIANCE TO THE FLAG FOR THE UNITED STATES OF AMERICA AND TO THE REPUBLIC FOR WHICH IT STANDS, ONE NATION UNDER GOD, INVIS, LIBERTY AND JUSTICE FOR ALL. OKAY, WE [2. INTRODUCTION OF PHASE 2 FUNDING MECHANISM] WILL GO TO ITEM TWO, WHICH THE, IS THE INTRODUCTION OF, UH, PHASE TWO FUNDING MECHANISM. UH, LACEY MCBRIDE. WOULD YOU GIVE US AN INTRO? THANK YOU. A QUICK INTRODUCTION. THIS IS THE PUBLIC HEARING FOR THE PHASE TWO FUNDING MECHANISM. THE AGENDA THIS EVENING WILL INCLUDE AN INTRODUCTION OF THE PHASE TWO FUNDING MECHANISM, A PUBLIC HEARING DURING WHICH THE PUBLIC MAY PROVIDE TESTIMONY LIMITED TO THREE MINUTES, A RESPONSE TO SUBMITTED OBJECTIONS BY GSA LEGAL COUNSEL AND CONSIDERATION OF ADOPTING THE PHASE TWO FUNDING MECHANISM BY RESOLUTION OF LESS THAN 15%. 50% PROTESTS ARE RECEIVED. THERE ARE 1,920 ELIGIBLE PARCELS. SO IF LESS THAN 961 PROTESTS ARE RECEIVED, THE BOARD MAY CONSIDER ADOPTION OF THE FEE. AT THIS TIME, 153 VERIFIED PROTESTS HAVE BEEN SUBMITTED. UM, IF THE FEE IS ADOPTED, THE BOARD MAY THEN CONSIDER APPROVING THE FISCAL YEAR 20 26, 20 27 BUDGET AND SETTING THE PER ACRE RATE FOR FY 26 27. ONE. CHANGE TO NOTE ON THE AGENDA, THE PUBLIC HEARING WILL STAY OPEN THROUGH THE RESPONSE TO SUBMITTED OBJECTIONS, AND THE CHAIR MAY CLOSE IT AFTER THAT AGENDA ITEM. SO NOW I'D LIKE TO HAND IT OVER TO GREG YOUNG WITH Z HARROW FOR THE INTRODUCTION OF THE PHASE TWO FUNDING MECHANISM EVENING BOARD. THANK YOU, UH, FOR THE OPPORTUNITY TO BE IN FRONT OF YOU AGAIN AND DISCUSS, UH, THE PHASE TWO FUNDING MECHANISM. WE'RE GONNA GO THROUGH A QUICK OVERVIEW. UH, SO LET'S GO AHEAD AND JUMP INTO IT. NEXT SLIDE. WHO'S, OH, I'M CLICKING, NEVERMIND. SO WE'RE GONNA TALK ABOUT THE, UH, FUND TWO FUNDING MECHANISM, THE PHASE TWO FUNDING MECHANISM, AND WE'RE GOING TO BE DISCUSSING THE PROPOSED FUNDING MECHANISM ITSELF, THE OVERVIEWS OF THE STEPS COMPLETED, AND THE OVERVIEW OF THE NEXT STEPS. FIRST OFF, THE PHASE TWO FUNDING MECHANISM ITSELF IS IN A REPORT THAT WAS MADE AVAILABLE, UH, BY YOU AS AN ADOPTED DOCUMENT, UH, OFFICIALLY ON APRIL. UH, THE FIRST VERSION WAS MADE AVAILABLE AS A PUBLIC DRAFT IN MARCH. WE'LL TALK ABOUT THAT IN MORE DETAIL IN A MOMENT. AND IT DESCRIBES THE FUNCTIONS THAT ARE PROPOSED TO BE, UH, FUNDED BY THE, THE FUND, UM, THE ME, THE FUNDING MECHANISM. IT, UH, ALSO WILL SUPPORT THE ANALYSIS USED TO DEVELOP THOSE BUDGETS, INCLUDING IDENTIFIED IMPLEMENTATION NEEDS AND REPRESENTATIVE COST BENCHMARKS. AND IT MOST IMPORTANTLY, IT TALKS ABOUT THE, UM, PARCELS THAT ARE SUBJECT TO THE PHASE TWO FEE AND PROVIDES THE COMPLIANCE FOR PROPOSITION TWO 18 REQUIREMENTS. AND ASSEMBLY BILL 2257. THAT ASSEMBLY BILL IS A NEWER, UM, ASSEMBLY BILL THAT PRIOR, UH, CONSIDERATIONS BY THIS BOARD OF FEES HAVE NOT, UH, HAD BEEN, HAVE NOT ADDRESSED BECAUSE IT DID NOT EXIST UNTIL, UH, BEGINNING OF LAST YEAR. SO FIRST OFF, THE PHASE TWO FEE WILL BE IMPOSED ON PARCELS ELIGIBLE TO RECEIVE A GROUNDWATER ALLOCATION AS SPECIFIED IN SECTION 2.1 OF THE GROUNDWATER ALLOCATION RULE. THE IMAGE ON THE RIGHT HAND OF THE SCREEN OUTLINED IN THE LIGHT TURQUOISE IS THE ENTIRETY OF THE MERCED SUB-BASIN. GSA BOUNDARY AND THE AREA THAT IS SHADED IN GREEN ARE ALL OF THE PARCELS THAT ARE CONSIDERED ELIGIBLE PARCELS PURSUANT TO SECTION 2.1 OF THE GROUNDWATER ALLOCATION RULE. CURRENTLY, THE GSA HAS 186,315 ACRES THAT ARE ELIGIBLE TO RECEIVE A GROUNDWATER ALLOCATION, WHICH AS LACEY JUST NOTED, WAS, UH, 1,920 ELIGIBLE PARCELS. THOSE ARE ALL CONTAINED IN APPENDIX A OF THE ENGINEERS REPORT. THE MECHANISMS THAT ARE GOING TO BE FUNDED INCLUDE THREE DIFFERENT CATEGORIES WITH AN ESTIMATED ANNUAL MAX BUDGET [00:05:01] FOR EACH OF THE CATEGORIES. THE FIRST CATEGORY IS ADMINISTRATIVE AND GOVERNANCE FUNCTIONS, THE DETAILS OF WHICH WERE IN THE ENGINEERS REPORT, BUT INCLUDE THINGS LIKE STAFFING, OFFICE SPACE, UM, LEGAL FEES, AND SOME OTHER CONSIDERATIONS THAT ARE ANTICIPATED TO BE, UH, A PART OF THE GS A'S OPERATION INTO THE FUTURE. AGAIN, THIS WHOLE FEE STRUCTURE IS BEING PUT IN PLACE TO FUND THE GSA GOING FORWARD FROM HERE, IT IS NOT HA, IT DOES NOT HAVE A SUNSET. SO THIS IS SOMETHING THAT WE WILL BE WORKING WITH FOR THE NEXT 5, 10, 15, 20 YEARS AS YOUR BUDGETING MECHANISM. CATEGORY TWO, MONITORING DATA MANAGEMENT AND TECHNICAL STUDIES. THIS CATEGORY, UH, PROVIDES FUNDS TO ADDRESS SOME OF THE DATA GAPS, COMPLETE ADDITIONAL MONITORINGS NECESSARY, UH, OTHER DATA MANAGEMENT FUNCTIONS AND TECHNICAL STUDIES THAT WILL BE REQUIRED AS PART OF THE IMPLEMENTATION OF THIS, OF, UH, THE GSP. THE FINAL CATEGORY IS CATEGORY THREE, DOMESTIC WELL MITIGATION PROGRAM, AND IT INCLUDED ADMINISTRATION FUNCTION, A TEMPORARY WATER SUPPLY FUNCTION, AND THEN, UH, THE, UH, FUNDING FOR PERMANENT SOLUTIONS AS, UH, IDENTIFIED IN THE DOMESTIC WELL, UM, MITIGATION POLICY THAT YOU AS WELL AS, UM, MERCED IRRIGATION URBAN GSA AND TURNER ISLAND, ALL COLLECTIVELY ADOPTED EARLIER THIS YEAR. ALTOGETHER, THIS, UH, WOULD GENERATE A MAX BUDGET OF 2,815,000 WHEN DIVIDED BY THAT TOTAL ACRES REPRESENTED OF A HUNDRED EIGHTY SIX THREE HUNDRED FIFTEEN. THAT IS A MAX DOLLAR PER YEAR PER ACRE CHARGE OF $15 AND 11 CENTS. LET'S LOOK AT, UM, IN CONTRAST TO SOME OF THE HISTORIC PER ACRE FEES CHARGED, AND THEY'RE AUTHORIZED. MAXIMUMS AT THE TOP OF THIS CHART ARE THE MAXIMUM ANNUAL FEES THAT WERE INCLUDED AS PART OF A COUPLE OF DIFFERENT PRIOR FEE STRUCTURES. THE CURRENT ONGOING 2019 FEE HAS AN IRRIGATED AND AN UN IRRIGATED ELEMENT. THE IRRIGATED ELEMENT MAX IS $4. THE UN IRRIGATED MAX WAS 50 CENTS. YOU CAN SEE OVER THE MULTIPLE, UH, FINANCIAL YEARS, FISCAL YEARS HOW THAT, UM, FEE WAS MODIFIED OVER TIME AS CONSIDERED BY THIS BOARD TO FUND THE NECESSARY ACTIVITIES THAT THAT FEE WAS ADDRESSING. IN, UM, 2021, THERE WAS A PHASE TWO, OR WAS IT 22? NOW I'M FORGETTING 22. THERE WAS A PHASE ONE FEE THAT WAS ADOPTED, AND THAT FEE HAD TWO DIFFERENT PRICE ELEMENTS. ONE WAS RELATED TO THE PRIMARY FUNCTIONS OF THE PHASE ONE FEE, AND THAT MAX WAS $24 IN 94 CENTS, AND THEN IT HAD AN ELEMENT FOR WATER RIGHTS APPLICATION TO SUPPORT AN APPLICATION WORKING ON, IN CONJUNCTION WITH MERCED URBAN IRRIGATION, URBAN GSA OF A DOLLAR AND 67 CENTS. YOU CAN SEE OVER TIME HOW THE, THIS BOARD ADMINISTERED THAT COST AND WHAT IT SET AS THE COST RATE FOR EACH OF THE YEARS. FUNDAMENTALLY, THAT PARTICULAR FEE HAS NOW SUNSET AND WILL NO LONGER BE CHARGED. UH, SOME OF THE REVENUE IS VALUE, UH, IS AVAILABLE GOING FORWARD BECAUSE IT WAS, UH, COLLECTED AS PART OF THE PHASE ONE FEE FOR SOME THINGS THAT WILL STILL BE IN PLAY WITHIN THE PHASE TWO, SUCH AS EXECUTIVE DIRECTOR AND, UM, THE DOMESTIC WELL MITIGATION FEE. ADDING ONE COLUMN HERE, WE HAVE THIS NEW, UH, PHASE TWO FEE. UM, APOLOGIES. LET'S SEE. SORRY, I GOTTA FLIP MY SLIDE HERE. SO THIS IS THE NEW PHASE TWO FEE WE SEE AT THE MAX $15 AND 11 CENTS IS UP AT THE TOP IN COMPARISON TO THE OTHERS, AND WE SEE THAT, UM, DOWN IN THE BOTTOM RIGHT HAND CORNER, THERE'S A CURRENT PROPOSED ESTIMATE BASED ON FUNDING NEEDS EXISTING, UH, BUDGETS COMING FORWARD FROM THE PHASE ONE FEE OF A $5 AND 2 CENTS CHARGE PER ACRE. FOR SOME COMPARISON, THE FUNDING PRIORITIES WILL LIKELY SHIFT OVER TIME AMONGST THESE CATEGORIES. AS IMPLEMENTATION PROGRESSES AND PROGRAM NEEDS EVOLVE, THE EARLY YEARS ARE EXPECTED TO REFLECT CARRYOVER FUNDS FROM THE PHASE ONE FEE. THAT'S WHAT IS SHOWING RIGHT NOW IN THAT CURRENT PROPOSED ESTIMATE. AND THE ACTUAL ANNUAL CHARGES WILL BE SET THROUGH THE BOARD'S BUDGETING PROCESS EACH SPRING PRIOR TO THE FISCAL YEAR DECISION BY JUNE, AND FOR, TO START ON THE JULY ONE OF THE NEXT FISCAL YEAR. AS THIS, UM, BOARD HAS REPRESENTED IN PRIOR DE UM, DELIBERATIONS, THEY WILL ONLY COLLECT WHAT IS NECESSARY RATHER THAN COLLECTING THE MAXIMUM. YOU CAN SEE THESE BAR CHARTS ON THE SIDE HERE. THE MAX BUDGET IS SPLIT ABOUT 44% OF THE MAX FOR THAT CATEGORY, ONE 30% FOR CATEGORY TWO AND 26% FOR CATEGORY THREE. OVER TIME, WE ANTICIPATE WHAT IS NEEDED IN THE FRONT END OF THE YEARS VERSUS WHAT'S NEEDED AT THE BACK END WILL [00:10:01] VARY ACROSS THESE, UH, CATEGORIES. UM, AND SO THAT'S JUST DISPLAYED HERE ON THE SIDE. I WILL NOTE THAT AGAIN, THIS REPRESENTATION WAS SHOWING A LITTLE OVER $10 AN ACRE POTENTIALLY IN THE EARLY YEARS. THE CURRENT, UH, PROPOSAL FOR, UH, CONSIDERATION SHOULD THIS FEE BE, UM, UP FOR, UH, APPROVAL WOULD BE $5 AND 2 CENTS. SO LET'S GO OVER THE STEPS. COMPLETED DATE, MARCH 12TH, THERE WAS A PUBLIC DRAFT OF THE PHASE TWO FUNDING MECHANISM ENGINEERS REPORT RELEASED, AND WE HAD THREE PUBLIC WORKSHOPS, UH, HELD ONE ON MARCH 26TH AND TWO ON MARCH 31ST. UH, ONE WAS IN LA GRANDE, ONE WAS OUT AT THE, UM, BY THE AIRPORT AT THE, UH, UC EXTENSION. AND THEN THE FINAL ONE WAS OUT AT THE, UM, STEVENSON SCHOOL FACILITY IN THE EVENING OF THE 31ST. UH, EACH HAD, UM, SOME GOOD ATTENDANCE. THE MIDDLE ONE WAS AVAILABLE ALSO ONLINE AND RECORDED FOR PEOPLE TO LISTEN TO AFTERWARDS. UM, AT THE APRIL 9TH BOARD MEETING, THE MARCH 12TH, UH, PUBLIC DRAFT OF THE FUNDING MECHANISM ENGINEERS REPORT WAS ADOPTED BY THIS BOARD, AND PURSUANT TO THAT NEXT ACTION, PUBLIC HEARING WAS SET FOR TODAY AT 6:00 PM WHICH WE ARE GOING TO BE OPENING HERE. UH, AND THEN STAFF WAS DIRECTED TO MAIL THE 45 DAY HEARING NOTICES TO EACH ELIGIBLE PARCEL. UH, SO EACH OF THOSE 1,920 PARCELS WERE GIVEN A, UM, MAILING. UM, SO ONE OWNER THAT MIGHT HAVE MULTIPLE PARCELS GETS A MAILING FOR EACH OF THOSE PARCELS, EVEN IF IT'S THE SAME OWNER. UM, WE ALSO, UH, THIS BOARD SET A DEADLINE FOR SUBMISSION OF WRITTEN OBJECTIVES UNDER ASSEMBLY BILL 2257 TO BE MONDAY, JUNE 1ST, 2026 AT 5:00 PM AND THERE'LL BE MORE DISCUSSION ON THAT SOON. SO, OF NEXT STEPS, UH, THIS BOARD WOULD, UH, OPEN THE PUBLIC HEARING, RECEIVE TESTIMONY FROM THE PUBLIC WRITTEN PO PROTESTS ARE REQUIRED, AND AS LACEY HAD INDICATED, THERE WAS 153, I THINK, WRITTEN PROTESTS SO FAR, UH, YOU ARE NOT REQUIRED TO PROVIDE TESTIMONY TO SUBMIT A PROTEST AND OBJECTIONS TO THE PHASE TWO FEE WERE REQUIRED TO BE SUBMITTED BY 5:00 PM ON JUNE 1ST, AND TESTIMONY WILL BE LIMITED TO THREE MINUTES WITH REGARD TO A RESPONSE TO SUBMITTED OBJECTIONS, UM, PRIOR TO CLOSE OF THE PUBLIC HEARING, THERE WILL BE, UH, DISCUSSION OF THOSE, UH, RESPONSES TO THOSE SUBMITTED OBJECTIONS, AND THERE WILL BE A TALLY TO SEE IF THE 961 WRITTEN PROTESTS NEEDED TO MEET A 50% PROTEST HAD BEEN RECEIVED, IF LESS THAN 50%, THEN THIS BOARD CAN CONSIDER ADOPTION OF THE PHASE TWO FUNDING MECHANISM. ALSO, IF LESS THAN 50%, THIS BOARD CAN CONSIDER ACTION TO APPROVE THE PROPOSED PHASE TWO FEE FOR THE 26 27 BUDGET. THAT IS THE SUMMARY OVERVIEW. ALRIGHT, THANK YOU, UM, GREG. SO AT THIS TIME, UH, I WILL OPEN [3. PUBLIC HEARING ON PROPOSED PER-ACRE CHARGES TO FUND PHASE 2 OF SGMA IMPLEMENTATION] UP THE PUBLIC HEARING. UM, IF YOU, UH, YOUR PROTEST MUST BE IN WRITING, UH, SO THAT YOU KNOW THAT, UH, BUT YOU'RE WELCOME TO COME UP AND GIVE, UM, ALSO, UH, VERBAL COMMENT, UH, AT THIS TIME. BUT THE, BUT THE ACTUAL VOTE WILL BE OFF OF THE WRITTEN PROTEST. SO, UM, I'LL, UH, UH, YOU HAVE, UH, OH, AND WE'RE, UH, YOU HAVE THREE MINUTES TO SPEAK ON PUBLIC COMMENT. UM, AND, UH, SO I'LL OPEN UP THE PUBLIC COMMENT. UH, IF THERE'S PEOPLE THAT WOULD LIKE TO COME UP AND SPEAK, YOU'RE WELCOME TO GOOD EVENING BOARD. UH, MY NAME'S BEN CRANE, AS YOU'RE AWARE, AS YOU GUYS ARE AWARE, UH, BUR AND I FLEW OUR COUNSEL, UH, JENNA AKOS AND JUSTIN BODA TO MEET WITH YOUR COUNSEL IN A GOOD FAITH EFFORT TO RESOLVE OUR CONCERNS WITH THE PROPOSED PHASE TWO FEE. WE REQUESTED A MEETING BEFORE YOUR CLOSED SESSION SO THAT WE COULD EXPLAIN THE FACTS, IDENTIFY THE CONSTITUTIONAL FLAWS THAT WE SEE IN THE ENGINEER'S REPORT, AND REVIEW OUR PRACTICAL SOLUTIONS AND EXPLAIN THESE ISSUES. THE GSA WAS UNWILLING TO MEET BEFORE ITS CLOSED SESSION, SO WE MET AFTERWARDS. WHAT BECAME CLEAR TO ME DURING THAT MEETING WAS THAT THE GSA COUNCIL HAD NOT FULLY REVIEWED, NOR DID NOT FULLY UNDERSTAND OUR LETTER AND THE SERIOUS CONCERNS WE RAISED REGARDING THE PROPOSITION TWO EIGHTEENS CONSTITUTIONAL REQUIREMENTS AND ITS DEFICIENCIES. IN THE ENGINEER'S REPORT, [00:15:01] WE CAME PREPARED TO EXPLAIN OUR POSITION AND THE BASIS FOR OUR CONCERNS. THE RESPONSE WE RECEIVED WAS, QUOTE, I AM UNPREPARED TO DISCUSS THIS TODAY, WE CAME TO THE GSA WITH A REASONABLE OFFER. WHEN THE OFFER WAS DECLINED, WE ASKED ABOUT OTHER SOLUTIONS THAT COULD BE CONSIDERED. THE RESPONSE FROM STAFF WAS ESSENTIALLY THAT THEY COULD NOT THINK OF ANY. AND IF WE FELT THAT, AND IF WE FELT WE NEEDED TO SUE, THEN WE SHOULD GO AHEAD. STAFF FURTHER REFUSED TO ENGAGE WITH US WHEN WE TRIED TO DISCUSS OUR CONSTITUTIONAL CONCERNS. I WANNA REMIND THIS BOARD THAT THERE IS $175,000 BUDGET FOR LEGAL EXPENSES. THIS IS NOT ABSTRACT MONEY THAT IS GROWER MONEY, THAT IS OUR MONEY. AND FROM WHERE WE SIT, IT APPEARS THE GSA WOULD RATHER SPEND GROWER MONEY FIGHTING GROWERS THAN SIT DOWN IN GOOD FAITH TO WORK TOWARDS A SOLUTION. WE WERE VERY INTENTIONAL IN OFFERING THE GSAA PATH FORWARD THAT WOULD ALLOW THESE ISSUES TO BE ADDRESSED, TO BE ADDRESSED WITHOUT SETTING PRECEDENT AND WITHOUT OPENING THE DOOR TO ADDITIONAL LITIGATION FROM OTHERS THAT SHOULD NOT BE OVERLOOKED. IN A MOMENT, YOU GUYS ARE GONNA HEAR A PORTION OF OUR LEGAL ARGUMENTS FROM JENNA AND JUSTIN. THEY'RE ON ZOOM. THEY'LL EXPLAIN WITH SUPPORTING CASE LAW WHY WE BELIEVE THE ENGINEER ENGINEER'S REPORT IS LEGALLY AND FACTUALLY UNACCEPTABLE. I STRONGLY URGE THIS BOARD TO LISTEN CAREFULLY, TAKE THESE CONCERNS SERIOUSLY, AND RECONSIDER WHETHER LITIGATION IS TRULY THE BEST USE OF GROWER FUNDS, WHEN A GOOD FAITH, WHEN A GOOD FAITH RESOLUTION IS STILL POSSIBLE. THANK YOU. OKAY. ANYONE ELSE? WE, WE DO HAVE TWO HANDS RAISED ON ZOOM. OKAY. UM, JUST, UH, BEFORE YOU, UH, UM, JOHN, UM, SO NORMALLY WE DON'T TAKE PUBLIC COMMENT ON ZOOM, BUT SHOULD WE TONIGHT? YES. OKAY. GO AHEAD. JENNA, CAN YOU HEAR US ONLINE? HELLO? CAN YOU HEAR ME? YES. WELCOME, JENNA, GO AHEAD. GREAT. THANK YOU SO MUCH. IF YOU DON'T MIND, UM, JUSTIN WAS GOING TO SPEAK FIRST, IF THAT'S OKAY. COULD YOU UNMUTE HIM FOR HIS COMMENT? SURE. THANK HI EVERYBODY. CAN YOU HEAR ME? UH, YES, WE HEAR YOU. JUSTIN, GO AHEAD. THANK YOU. MY NAME IS JUSTIN BTA SPEAKING AS COUNSEL FOR THE CRANES. UH, LET'S START WITH WHERE WE CAN AGREE FIRST, MSGS MSGS A'S PROPOSED. PHASE TWO FEES ARE PROPERTY RELATED FEES BEING PROMULGATED UNDER WATER CODE SECTION 1 0 7, 3 OH 0.2, WHICH EXPRESSLY REQUIRES COMPLIANCE WITH THE PROCEDURAL AND SUBSTANTIVE REQUIREMENTS OF PROP TWO 18. SECOND, PROP TWO 18 REQUIRES THAT THE COST TO EACH PARCEL OWNER BE PROPORTIONATE TO THE COST OF SERVICE ATTRIBUTABLE TO THE PARCEL, AND NO FEE MAY BE IMPOSED FOR A SERVICE NOT IMMEDIATELY AVAILABLE TO THE PARCEL OWNER. THIRD, THE SERVICES TO BE FUNDED BY THE PROPOSED FEES INCLUDE ADMINISTRATION COSTS, GROUNDWATER MONITORING AND DATA COSTS AND COST ASSOCIATED WITH THE IMPLEMENTATION OF THE DOMESTIC WELL MITIGATION PROGRAM FOR THE EXPRESS PURPOSE OF IMPLEMENTATION AND ENFORCEMENT OF THE GROUNDWATER ALLOCATION. HERE'S WHERE WE DON'T AGREE. THE ENGINEER'S REPORT CONCLUDES THAT ALL ELE PARCELS ELIGIBLE TO RECEIVE A GROUNDWATER ALLOCATION MUST PAY THE SAME PER ACRE FEE REGARDLESS OF A PARCELS MAXIMUM ALLOCATION UNDER THE ALLOCATION RULE, MERELY BECAUSE EACH PARCEL WOULD BENEFIT FROM SIGMA COMPLIANCE. THIS IS NOT WHAT IS REQUIRED BY ARTICLE 13 D AN ANALYSIS OF THE PROPORTIONATE COST OF SERVICE ATTRIBUTABLE TO THE PARCEL. IT IS NOT ENOUGH TO MERELY SEPARATE THE PROPORTIONATE SHARE OF THE MERCED SUB-BASINS COSTS FROM BASIN-WIDE COSTS. THE FOURTH DISTRICT COURT OF APPEAL IN CITY OF SAN JUAN CAPISTRANO HAS CONFIRMED THAT TO DEMONSTRATE THAT A FEE DOES NOT EXCEED THE PROPORTIONATE COST OF SERVICE M-S-G-S-A MUST SEPARATE THE ASCERTAINABLE COSTS ATTRIBUTABLE TO SPECIFIC PARCELS WITHIN ITS JURISDICTION, AND CANNOT CHARGE USERS THAT CONSUME LESS WATER FOR COSTS ASSOCIATED WITH HIGHER WATER USE. THE FACT THAT CITY OF SAN JUAN CAMPO AND PALMDALE OVERTURNED TIER RATES DOES NOT CHANGE THE APPLICABILITY OF THESE HOLDINGS. M-S-G-S-A STILL MUST DEMONSTRATE THAT THE COSTS ARE PROPORTIONATE TO THE COST OF SERVICE ATTRIBUTABLE TO EACH EFFECTIVE PARCEL. AS STATED IN GRIFFITH, AN AGENCY MAY [00:20:01] GROUP SIMILAR USERS TOGETHER AND CHARGE USERS ACCORDING TO THEIR USAGE, BUT IT IS NOT REASONABLE TO GROUP DIFFERENTLY SITUATED USERS TOGETHER AND CHARGE THEM THE SAME AMOUNT REGARDLESS OF THE MARGINAL COST ASSOCIATED WITH HIGHER USE. MSGS A'S ALLOCATION RULE SEPARATES PARCELS ELIGIBLE TO RECEIVE A GROUNDWATER ALLOCATION INTO TWO LAND USE CLASSIFICATIONS WITH IRRIGATED PARCELS BEING ALLOCATED NEARLY DOUBLE THE AMOUNT OF WATER PER ACRE IN 2026 AND OPT-IN PARCELS TO ME MSGS A'S BURDEN TO PROVE THAT THE PROPOSED FEES ARE CONSTITUTIONAL, THEY WOULD NEED TO PROVE THAT THE MARGINAL COST OF SERVICE ATTRIBUTABLE TO THE ADMINISTRATION ENFORCEMENT AND MONITORING OF AN ADDITIONAL PUMPING ALLOWANCE OR THE MORE MARGINAL COST ON THE GROUNDWATER WELL MITIGATION PROGRAM THAT CAN REASONABLY BE ASSOCIATED WITH AN ADDITIONAL PUMPING ALLOWANCE IS ZERO. NOWHERE DOES THE ENGINEER'S REPORT UNDERGO THIS ANALYSIS INSTEAD, FOR THE FIRST TIME, ONE HOUR BEFORE THIS PUBLIC HEARING. M-S-G-S-A PROVIDED LAST MINUTE RESPONSES TO OUR WRITTEN OBJECTIONS THAT MERELY ASSERTS THAT SIGMA COMPLIANCE BEING FUNDED BY THE PROPOSED FEES ARE, QUOTE, NOT RELATED TO OR INCREASE IN COST BY REVENUES. BUT WHERE'S THE PROOF THIS ASSERTION STRAINS WHAT ANY REASONABLE PERSON COULD ACCEPT, MUCH LESS ME MSGS A'S HEIGHTENED BURDEN TO PRO PROVE COMPLIANCE WITH PROP TWO 18. THANK YOU. UM, THANK YOU FOR YOUR COMMENTS. JUSTIN. HELLO, THIS IS JENNA AKOS. CAN YOU ALL HEAR ME? WE HEAR YOU GO AHEAD. GREAT. THANK YOU SO MUCH. SO, AS I SAID, I'M JENNA ACOS. I'M ALSO COUNSEL FOR THE CRANES. I'LL JUST JUMP RIGHT INTO MY COMMENTS HERE. SO, A AS JUSTIN SUMMARIZED AND AS STATED IN ITS OWN REPORT, M-S-G-S-A IS SEEKING TO IMPOSE THE PROPOSED PHASE TWO FEES PURSUANT TO THE AUTHORITY UNDER SECTION 1 0 7 3 0 0.2 OF THE WATER CODE. AND LIKE I SAID, THIS IS ALL TAKEN FROM YOUR ALL OWN REPORTS DOCUMENTATION, YOUR RECORD, AS JUSTIN ALSO HIGHLIGHTED, FEES ADOPTED PURSUANT TO THIS SECTION OF THE WATER CODE EXPRESSLY REQUIRE COMPLIANCE WITH BOTH THE PROCEDURAL REQUIREMENTS SET FORTH IN SECTION SIX A AND THE SUBSTANTIVE REQUIREMENTS OF SECTION SIX B OF ARTICLE 13 D OF THE CALIFORNIA CONSTITUTION, WHICH IS WHAT WE ALL REFER TO COLLOQUIALLY AS PROP TWO 18. SO PAGE TWO OF THE STAFF REPORT FOR TODAY'S PUBLIC HEARING, AS I'M SURE YOU'RE ALL, UH, FAMILIAR WITH, INDICATES THAT THE PROPOSED FEE IS BEING CONSIDERED PURSUANT TO, UH, AND THIS IS KIND OF IMPORTANT, I THINK ONLY THE PROCEDURAL REQUIREMENTS OF PROP TWO 18. IT'S SILENT AS TO COMPLIANCE WITH THE SUBSTANTIVE REQUIREMENTS, AND THAT'S REALLY WHERE WE HAVE OUR BIGGEST CONCERNS. WE'D LIKE TO CLARIFY FOR THE RECORD THAT, YOU KNOW, AS FEES IMPOSED UNDER SECTION 1 0 7, 3 0 0.2 OF THE WATER CODE M-S-G-S-A HAS TO ALSO COMPLY WITH THOSE SUBSTANTIVE REQUIREMENTS OF ARTICLE 13 D, SECTION SIX B OF THE CALIFORNIA CONSTITUTION. SO WATER CODE SECTION 1 0 7 3 0 0.2 SAYS THAT THIS FEE SHALL BE ADOPTED PURSUANT TO ARTICLE 13 D, SECTION SIX A AND B OF THE CALIFORNIA CONSTITUTION. SO THAT'S TALKING ABOUT BOTH COMPLIANCE WITH THE PROCEDURAL REQUIREMENTS AND THE SUBSTANTIVE REQUIREMENTS, MOST IMPORTANTLY OF WHICH IS THAT THE PROPOSED FEE HAS TO BE PROPORTIONATE TO THE COST OF SERVICE ATTRI ATTRIBUTABLE TO EACH PARCEL. THAT'S SIX B THREE OF ARTICLE 13 FOR ANYONE FOLLOWING THE LAW. SO IMPOSING EQUAL FEES TO FINANCE THE ADMINISTRATION AND PRIVILEGES OF AN ADDITIONAL PUMPING ALLOWANCE OR AN A PA THAT IS ONLY AVAILABLE TO OVERLYING OWNERS ALSO VIOLATES PROP TWO 18. IN ADDITION TO VIOLATING PROP TWO 18, IT'S PROVIDING DIFFERENT ALLOCATIONS TO OVERLYING OWNERS WITH EQUAL CORELATIVE RIGHTS TO THE NATIVE GROUNDWATER SUPPLY, WHILE CHARGING THE SAME FEE FOR THAT DIFFERENTIAL ALLOCATION, IT THAT VIOLATES THE CORRELATIVE RIGHTS WHERE PARCELS IN CERTAIN ZONES HAVE CAUSED DISPROPORTIONATE GROUNDWATER DECLINE. AND CONSEQUENTLY, DOMESTIC WELL FAILURES WHILE PARCELS IN OTHER ZONES HAVE NOT. A FLAT FEE EFFECTIVELY REQUIRES THOSE NON CAUSERS TO SUBSIDIZE REMEDIATION OF HARMS THAT THEY DIDN'T CREATE. AND THIS RAISES ADDITIONAL EQUITABLE AND CONSTITUTIONAL CONCERNS, AND WE WOULD ARGUE DOESN'T PASS MUSTER UNDER EITHER PROP TWO 18 OR PROP 26, WHICH STILL [00:25:01] REQUIRES A FAIR AND REASONABLE ALLOCATION OF BENEFITS AND BURDENS, AND WHICH THERE'S CASE LAW OUT THERE, PARTICULARLY COACHELLA, WHICH MAKES A POINT THAT WITHOUT HAVING SIGNIFICANT OR SUFFICIENT DATA OR FACTS IN THE RECORDS, IN THE RECORD, IN THE AGENCY'S RECORD, THE BOARD, YOU KNOW, OR THE COURT FOUND THAT THE THE AGENCY WAS UNABLE TO MEET ITS BURDEN TO SHOW COMPLIANCE WITH THESE CONSTITUTIONAL REQUIREMENTS. I'LL JUST END HERE WITH SAYING THAT, YOU KNOW, WE HOPED AND WE STILL HOPE TO WORK WITH THE MGSA TO FIND A FAIR AND CONSTITUTIONALLY DEFENSIBLE PATH FORWARD. UM, AND YOU KNOW, UNTIL THEN WE'LL HAVE TO END UP CONTINUING TO MOVE FORWARD TO CHALLENGE THE UNCONSTITUTIONALITY OF THESE PHASE TWO FEES AS PROPOSED. APPRECIATE THE TIME FOR YOU TO LISTEN TO OUR COMMENTS. THANK YOU, UH, FOR YOUR COMMENTS. JENNA, ANY OTHER PUBLIC COMMENT? GOOD EVENING. UH, MY NAME IS DARRELL SOUZA, MERCED PROPERTY, LLC. UM, WE OWN 15 PARCELS OF LAND IN THE SANDY MUSH AREA, UH, BY HIGHWAY 99. UM, IT'S A LARGE PART, UH, IT'S A LARGE PIECE OF LAND OF WHICH THERE'S A, UH, ALMOST 2000 ACRES OF NATIVE PASTURE THAT HAVE NO WELLS ON IT. UH, I SIGNED UP FOR THE ALLOCATION LAST OCTOBER TO, TO ENSURE THE RIGHTS OF OUR WATER, UH, USERS. WE HAVE TENANTS ON THE PROPERTY. WE DO NOT FARM IT OURSELVES, BUT WE DO HAVE TENANTS. UM, THIS PROPERTY IS NOT IRRIGATED AND REALLY MERCED PROPERTY'S ONLY QUESTION HERE IS OUR ALLOCATION IS 50% OF THE WATER THAT THE FARM GROUND RECEIVES AT THE SAME, UH, FEE STRUCTURE. OUR FEELING IS THAT IF WE'RE GONNA HAVE A 50% ALLOCATION, WE SHOULD NOT BE HAVING THE SAME FEE STRUCTURE THAT THAT DOESN'T, THAT'S NOT EQUITABLE IN OUR OPINION. UM, DON'T, DON'T BELIEVE THAT'S PROBABLY WHAT'S INTENDED HERE. UH, YOU KNOW, WE JUST FEEL THAT IF IT'S A DIFFERENT ALLOCATION, BASICALLY IT'S 50% OF THE IRRIGATED FARMLAND AND WE'RE ADJOINING, I DON'T KNOW HOW MANY PARCELS I, I KNOW HOW MANY ARE IN THE BASIN. I DON'T THINK THERE'S A LOT OF PARCELS, UH, BESIDES OURSELVES THAT FALL IN THIS CATEGORY. UM, WE JUST FEEL THAT IF, IF WE ARE GOING TO BE ASKED TO PAY THE FULL PRICE, WE SHOULD EITHER HAVE AN ALLOCATION THAT IS EQUAL TO THE COST OR A DIFFERENT, A, A DIFFERENT FEE STRUCTURE FOR A 50% ALLOCATION. AND MERCED PROPERTY IS FINE WITH EITHER ONE, BUT IT APPEARS THAT WE WANT IT BOTH WAYS, UH, RIGHT NOW THROUGH THIS ALLOCATION. AGAIN, THAT'S MY STATEMENT OF WHERE WE'RE AT ON THAT. THANK YOU. AND, UH, THANK YOU FOR LISTENING TO ME. THANK YOU. YOU'RE WELCOME. ALL RIGHT. ANY OTHER PUBLIC COMMENT? OKAY. UH, ANY ONLINE? NO. OKAY. UH, WITH THAT WE'LL MOVE TO ITEM FOUR. WELL, ACTUALLY, UM, DO WE, DO WE NEED TO TAKE PROTE? UH, UH, CAN PEOPLE STILL GIVE US PROTEST VOTES OR, THAT'S RIGHT. SO WE DO THAT NOW, IS THERE ANY OTHER PROTEST VOTES THAT PEOPLE WOULD LIKE TO PRESENT? IF YOU WOULD BRING THEM UP TO THE FRONT PLEASE. OKAY. UH, SEEING NONE. [4. RESPONSE TO SUBMITTED OBJECTIONS] WE'LL MOVE TO ITEM FOUR, WHICH IS RESPONSE TO SUBMITTED OBJECTIONS. WE HAVE OUR LEGAL COUNSEL, UH, JOHN LUBER KEY. DID I GET THAT RIGHT? THAT'S RIGHT. THANK YOU. OKAY. OKAY. THE PURPOSE OF MY DISCUSSION HERE IS TO, UM, GIVE YOU AN OVERVIEW OF THE WRITTEN RESPONSES TO COMMENTS THAT WE PROVIDED, UH, THAT WERE PUBLISHED THIS, UH, THAT EVENING. I'LL BEGIN BY DISCUSSING THE STRUCTURE HERE. WATER [00:30:01] CODE SECTION 1 0 7 3 OH AND 1 0 7 3 OH 0.2 PROVIDE AUTHORITY FOR THE FEE, UM, THAT YOU'RE CONSIDERING THIS EVENING. AND WE DO ACKNOWLEDGE, AS THE COMMENT ARE MENTIONED, THAT WE ARE REQUIRED TO COMPLY WITH BOTH THE PROCEDURAL AND SUBSTANTIVE, UM, OBLIGATIONS UNDER PROPOSITION TWO 18. THAT'S ARTICLE DA AND B. THE SUBSTANTIVE REQUIREMENTS ARE STRAIGHTFORWARD. UM, ESSENTIALLY THE FEE CANNOT BE CHARGED THAT IS IN EXCESS OF THE FUNDS REQUIRED TO PROVIDE THE SERVICE. REVENUES CAN'T BE USED FOR OTHER PURPOSES THAN THOSE FOR WHICH THEY WERE IMPOSED. THE FEE MAY NOT BE IMPOSED FOR GENERAL GOVERNMENTAL SERVICES, WHICH IN THIS CASE, BECAUSE YOU'RE A DISTRICT THAT'S A SINGLE PURPOSE, THAT'S REALLY SORT OF SELF-EXPLANATORY. THE AMOUNT OF THE FEE MUST BE PROPORTIONAL TO THE SERVICE AVAILABLE, UM, UH, ATTRIBUTABLE TO THE PARCEL, AND THE FEE MAY NOT BE IMPOSED FOR SERVICE UNLESS IT IS ACTUALLY USED OR IMMEDIATELY AVAILABLE TO THE OWNER OF THE PROPERTY IN QUESTION. OKAY. NOW, IN THIS PARTICULAR CASE, YOU'RE CONSIDERING A FEE THAT'S LIMITED TO, UM, ELIGIBLE PARCELS THAT RECEIVE AN ALLOCATION UNDER YOUR, UNDER YOUR ALLOCATION RULE. THERE'S CURRENTLY ABOUT 186,000 PARCELS THAT ARE ELIGIBLE, OR 106 86,315 ELIGIBLE ACRES. THE PROCESS TODAY IS FOR YOUR BOARD TO CONSIDER, UM, PURSUANT TO, UH, GOVERNMENT CODE SECTION 5 3 7 5 9 1, UM, WHETHER TO PROCEED OR IN WHAT WAY TO PROCEED, THE WAYS THAT THE, UH, STATUTE LAYS OUT FOR YOU TO PROCEED INCLUDE, NUMBER ONE, YOU COULD ASK FOR CLARIFICATIONS AFTER, AFTER, UM, YOU, YOU HEAR MY RESPONSE TO THE, UM, OBJECTIONS, YOU CAN REDUCE THE PHASE TWO FEE. IF YOU FIND THAT THAT'S, UM, AN APPROPRIATE THING TO DO, YOU CAN FURTHER REVIEW THIS, MEANING CONTINUE IT FOR CLARIFICATION, OR YOU CAN PROCEED WITH THE PROTEST HEARING, WHICH IS THE STAFF RECOMMENDATION. NOW, I'M GONNA GO THROUGH SEVERAL OF THE OBJECTIONS. THESE ARE THE ONES THAT WERE WRITTEN OBJECTIONS THAT WERE TIMELY RECEIVED BEFORE JUNE 1ST, AND I'LL GO THROUGH THEM, UM, IN ORDER. UM, THE ONE POINT I WANTED TO MAKE AT THE BEGINNING OF THIS IS THAT THE SERVICE IS DEFINED AS SIGMA COMPLIANCE. AND THIS IS VERY CRITICAL BECAUSE THERE IS A BASELINE COMPLIANCE, UM, STATUS THAT MUST BE ACHIEVED IN ORDER FOR ANY OF THE FURTHER ACTIONS THAT YOU MIGHT TAKE, UH, REGARDING, UH, SUSTAINABLE, UH, GROUNDWATER, UH, POLICIES, PRACTICES, WHATEVER YOU MIGHT DO IN THE FUTURE. THE BASELINE IS THAT YOU MUST FIRST HAVE SIGMA COMPLIANT STRUCTURE IN PLACE, AND THAT'S WHAT THE SERVICE HAS BEEN DEFINED AS. UH, WITH REGARD TO THIS, UM, UM, FEE. SO THE FIRST COMMON IS THAT, THAT, UH, OPT-IN PARCELS ARE DISPROPORTIONATELY SUBSIDIZING IRRIGATED PARCELS. WELL, RIGHT NOW WHAT WE'RE LOOKING AT IS SIGMA BASE COMPLIANCE, AND SO ALL PARCELS BENEFIT FROM THAT EQUALLY, REGARDLESS OF, UH, WHAT EXTENT THEY HAVE OR WILL PUMP GROUNDWATER IN THE FUTURE. UM, BY THE SAME TOKEN, THE DOMESTIC WELL PROGRAM, UM, ASSESSMENTS THAT'S BEEN ARGUED SHOULD NOT BE APPLIED TO ZONES THAT HAVE, DO NOT HAVE DOMESTIC WELL ISSUES. WELL, AT THIS POINT, THE STRUCTURE OF THE PROGRAM HAS TO BE ESTABLISHED FIRST FOR SIGMA COMPLIANCE, DECIDING WHAT OR TO WHAT EXTENT, OR WHETHER AT ALL TO ENGAGE IN ANY ACTIVITIES UNDER THAT PROGRAM COMES LATER. RIGHT NOW, YOU'RE JUST PUTTING IN PLACE THE STRUCTURE OF THAT PROGRAM, AND THAT EQUALLY BENEFITS ALL PARCELS. THE NEXT OBJECTION IS THAT ACREAGE BASED CHARGES ARE NOT ALLOWED UNDER 1 0 7 3 0 0.2. WELL, IN FACT, UNDER BOTH 1 0 7, 3 OH AND 1 0 7, 3 2 FIXED FEES, UH, MAY BE IMPOSED. THERE'S NO RESTRICTION AS TO THAT, UH, SPECIFIC PROCESS IN TERMS OF, UH, YOU KNOW, THAT THAT BEING AN ALLOWED, UH, METHODOLOGY. THE NEXT OBJECTION IS THE REPORT DOES NOT ANALYZE THE COST OF SERVICE REPORT, UH, PER, UH, PROVIDED TO PROPERTY. WELL, THE COST OF SERVICE IN THIS CASE IS SIGMA COMPLIANCE, AND THAT BENEFITS EACH PROPERTY EQUALLY AND IS REQUIRED AS A BASELINE TO DO ANY OF THE OTHER ACTIVITIES. AND THAT ALSO ANSWERS THE NEXT OBJECTION, WAS THAT, IS THAT THE REPORT DOES NOT COMPLY WITH THE PROPORTIONALITY REQUIREMENT. AGAIN, THE ISSUE IS THAT WITHOUT HAVING BASIC SIGMA COMPLIANCE, YOU CAN GO NO FURTHER AND YOU'LL BE SUBJECT TO STATE INTERVENTION. SO [00:35:01] TO THE DEGREE THAT YOU'VE ESTABLISHED THROUGH THIS FEE, SIGMA COMPLIANCE ED BENEFITS EVERY ELIGIBLE PARCEL EQUALLY. THE NEXT OBJECTION IS THAT THE FEE IS NOT FOR WATER SERVICE AND REQUIRES A VOTE. HOWEVER, UNDER SIGMA, UM, SECTIONS 1 0 7 3 OH AND 1 0 7, 1 0 7 3 OH 0.2, UM, THE PHASE FEE, UH, TWO, IS SPECIFICALLY REQUIRED TO COMPLY WITH THE CONSTITUTIONAL ARTICLE SIX A AND SIX B, AND THAT REQUIRES ONLY A PROTEST VOTE. SO IN THAT SENSE, THIS, THIS ARGUMENT IS MOOT BECAUSE UNDER THESE SECTIONS, YOUR COMPLIANCE WITH SIX A AND SIX B, WHICH IS THE MAJORITY PROTEST HEARING AND THE SUBSTANTIVE REQUIREMENTS MEETS THE, UM, THE STATUTORY OBLIGATIONS THAT YOU HAVE FOR THIS FEE. THE NEXT OBJECTION IS ALSO ESSENTIALLY THE SAME AS THOSE BEFORE. THE PHASE TWO FEE DOES NOT MEET THE PROPORTIONALITY REQUIREMENT. HOWEVER, WHEN YOU THINK ABOUT IT, LIKE I SAID BEFORE, SIGMA COMPLIANCE IS THE BASELINE. YOU HAVE TO ACHIEVE IT TO ENGAGE IN ANY OF THE OTHER ACTIVITIES AND AVOID STATE INTERVENTION THAT BENEFITS EACH PARCEL EQUALLY. THE NEXT OBJECTION IS THAT THE PHASE TWO FEE FUNDS, UH, SERVICE THAT IS NOT IMMEDIATELY AVAILABLE. AND I WOULD RESPOND TO THIS IN TWO WAYS. FIRST OF ALL, GROUNDWATER IS IMMEDIATELY AVAILABLE, BUT ALSO THE SERVICE OF SIGMA COMPLIANCE WILL EXIST AND BE IMMEDIATELY AVAILABLE AS A BENEFIT TO EACH ELIGIBLE PARCEL. ONCE YOUR FEE IS IMPLEMENTED AND YOU GO AHEAD AND UNDERTAKE THE ACTIVITIES THAT THAT FEE WILL BE FUNDING, AND IT, IT REALLY DOESN'T MAKE ANY DIFFERENCE ABOUT THE AMOUNT OF GROUNDWATER SIGMA BASIC SIGMA COMPLIANCE IS, IS, IS NOT A, IS NOT BASED ON USAGE, IT'S BASED ON JUST ACHIEVING THE PARTICULAR GOALS REQUIRED. UH, IT FROM THE ADMINISTRATION SIDE, THE NEXT SUGGESTION IS THAT IT VIOLATES THE SIGMA SAVINGS CLAUSE. HOWEVER, AT THIS POINT IN TIME, UM, WHAT YOU'RE DOING IS YOU ARE ESTABLISHING YOUR SIGMA BASELINE. WHILE THERE WILL BE, UH, UH, YOU KNOW, POTENTIALLY ACTIVITIES IN THE FUTURE THAT WILL REGULATE GROUNDWATER USAGE TO OB UH, OBTAIN SUSTAINABLE YIELD AT THIS POINT IN TIME, THAT IS NOT THE SERVICE THAT IS BEING PROVIDED. INSTEAD, IT IS SIGMA COMPLIANCE AS A BASELINE. AND SO REGARDLESS OF, UM, OF, OF WHETHER ONE PARCEL MAY HAVE AN ADDITIONAL AMOUNT OF GROUNDWATER INITIALLY ALLOCATED TO IT, THE BENEFIT OF THIS PARTICULAR FEE THE SERVICES PROVIDED ARE EQUAL. OKAY, NOW, UNDER GOVERNMENT CODE SECTION 5 3 7 5 9 0.1, SUB FIVE, THE, YOUR BOARD MUST CONSIDER AND RESPOND IN WRITING TO EACH TIMELY WRITTEN OBJECTION. UM, THE RESPONSES, THE WRITTEN RESPONSES WERE POSTED THIS AFTERNOON, AND THIS DISCUSSION IS SIMPLY A REITERATION FOR, FOR PURPOSES OF, OF, OF JUST, YOU KNOW, UM, SETTING FORTH A, A STRAIGHTFORWARD, UM, ANALYSIS, UM, AT THE HEARING TO, UH, TO FURTHER RESPOND TO THOSE OBJECTIONS. BUT THE WRITTEN OBJECTION RESPONSES WERE ACTUALLY POSTED THIS AFTERNOON. NOW, WHEN CONSIDERING THESE WRITTEN OBJECTIONS, AS WE'VE TALKED, WE TALKED ABOUT A MOMENT AGO, UNDER SECTION 5 3 7 5 9 0.1, YOU MUST CONSIDER EACH WRITTEN OBJECTION AND THE RESPONSE AND DETERMINE WHETHER, UM, THE WRITTEN OBJECTIONS AND RESPONSES WARRANT CLARIFICATIONS OF THE RATES, WHETHER TO REDUCE THE RATES, WHETHER TO CONTINUE AND FURTHER REVIEW THEM, OR WHETHER TO PROCEED WITH THE PROTEST HEARING OR BALLOT TABULATION REQUIRED UNDER PROPOSITION TWO 18, I BELIEVE THE STAFF RECOMMENDATION IS TO PROCEED WITH THE BALLOT TABULATION, AND I'M, I WILL ANSWER ANY QUESTIONS YOU, YOU MAY HAVE IF YOU, IF YOU HAVE ANY, DO ANY OF THE BOARD MEMBERS HAVE QUESTIONS? NO. OKAY. THANK YOU. ALRIGHT. AT THIS TIME, I WILL, UM, CLOSE THE PUBLIC HEARING AND WE WILL TAKE, UH, TIME TO COUNT THE VOTES. UM, CHAIRMAN, THERE ARE TWO HANDS RAISED ONLINE, AND IT'S THE TWO, UH, PARTICIPANTS WHO SPOKE EARLIER. I WANT TO ALLOW THEM TO SPEAK AGAIN. UM, I DON'T KNOW. [00:40:05] YEAH, I'LL LET 'EM SPEAK. YEAH, I'LL, I'LL REOPEN THE PUBLIC HEARING. GO AHEAD. HELLO, CAN YOU ALL HEAR ME? YES, WE CAN HEAR YOU. UM, APPRECIATE YOU LETTING ME SPEAK AGAIN. SO THESE, THIS JUSTIN COUNSEL FOR THE CRANES. UM, THESE COMMENTS ARE ON AGENDA ITEM NUMBER FOUR. UM, LISTENING TO GREG'S RESPONSES TO OUR OBJECTIONS. I, I REALLY APPRECIATE, UH, YOU ALL TAKING THE TIME TO GO THROUGH THEM, BUT I STILL THINK IT BECOMES VERY CLEAR HOW THIN THE MSG SSA'S REASONING IS WITH RESPECT TO ITS CONCLUSION THAT DIFFERENT LEVELS OF GROUNDWATER USE HAS NO RELATION TO ACHIEVING SIGMA COMPLIANCE OR THE COST OF SERVICE OF PROVIDING THE ACTIVITIES TO BE FUNDED BY THE PHASE TWO FEES. THESE RESPONSES ARE NOTHING MORE, DO NOTHING MORE THAN REPEAT THE ADAGE THAT THE SERVICE IS SIGMA COMPLIANCE. BUT THIS DOESN'T CHANGE THE FACT THAT THE FEES STILL MUST BE ALLOCATED BASED ON THE COST OF SERVICE ATTRIBUTABLE TO EACH PARCEL. THE ONLY COST OF SERVICE STUDY IN THE ENGINEERS REPORT SEPARATES SUB-BASS AND SPECIFIC COSTS FROM BASIN-WIDE COSTS. THERE'S NO ANALYSIS THAT THE M-S-G-S-A CAN POINT TO IN A COURT OF LAW TO JUSTIFY ITS ASSERTION THAT HIGHER WATER USE HAS NO CORRELATION TO THE COST OF ACHIEVING SIGMA COMPLIANCE OR THE COST OF IMPLEMENTING ANY OF THE THREE CATEGORIES OF ACTIVITIES TO BE FUNDED BY THE PROPOSED FEE. THIS REASONING STRAINS CREDULITY AND WORSE, IT'S, IT'S NOT ON THE PAGE, IT, IT, THERE'S NOTHING, YOU KNOW, THERE'S NO REASONING REALLY TO FOLLOW. MOVING ON. UM, AS STATED IN THE PUBLIC HEARING NOTICE AND THE STAFF REPORT FOR TODAY'S PUBLIC HEARING, YOU INTEND TO, UM, APPLY AB 2, 2 5 7 PROCEDURES TO LIMIT THE ENTITIES THAT MAY BRING A LEGAL CHALLENGE TO THE PHASE TWO FEES. UM, TO THOSE THAT TIMELY SUBMITTED WRITTEN OBJECTIONS, OUR CLIENTS HAVE COMPLIED WITH OUR SIDE OF THE WRITTEN OBJECTION PROCEDURES AND TIMELY SUBMITTED THEM IDENTIFYING THEIR PARCELS AND STATING THE GROUNDS ON WHICH WE ALLEGE NON-COMPLIANCE WITH THE CALIFORNIA CONSTITUTION. AND THE PURPOSE OF AB 2 2 57 IS I QUOTE, TO PROVIDE A MEANINGFUL OPPORTUNITY FOR A RATE PAYER TO PRESENT AN OBJECTION TO A PROPOSED FEE AND ALLOW THE LOCAL AGENCY THE OPPORTUNITY TO RESOLVE THE OBJECTION BEFORE RESORTING TO LITIGATION. YOU HAVE MADE EVERY EFFORT TO NOT PROVIDE US WITH A MEANINGFUL OPPORTUNITY TO ENGAGE. WE'VE MET WITH MSGS A'S COUNSEL AND STAFF TO DISCUSS OUR CONCERNS, BUT WE'RE MET WITH AN UNWILLINGNESS TO DISCUSS ANY OF OUR SUBSTANTIVE CONCERNS WITH THE PROPOSED FEE AND UNDERLYING THE ENGINEER'S REPORT. WE'VE ALSO REQUESTED WRITTEN RESPONSES TO OUR WRITTEN OBJECTION LETTER AND MSG SSA'S COUNSEL INDICATED, BLESS THAT WRITTEN RESPONSES WOULD BE MAILED ON FRIDAY, JUNE 12TH AND POSTED TO MSGS A'S WEBSITE THIS AFTERNOON WHEN WE STILL HAD NOT RECEIVED ANY WRITTEN RESPONSES. WE EMAILED MSGS A'S COUNSEL AND STAFF TO REQUEST A COPY OF THOSE REPLIES ONLY AFTER 5:00 PM TODAY. ONE HOUR BEFORE THIS PUBLIC HEARING, DID YOUR STAFF POST WRITTEN RESPONSES AND REPLY TO OUR EMAIL UNDER GOVERNMENT CODE SECTION 5 3 7 5 9 1 C5, THE EXHAUSTION OF REMEDIES REQUIREMENTS IN AB 2 2 5 7 ONLY APPLY IF M-S-G-S-A CONSIDERS IN RESPONSE IN WRITING TO ANY TIMELY SUBMITTED WRITTEN OBJECTIONS PRIOR TO THE CLOSE OF THE PROTEST HEARING. YES, TECHNICALLY YOU ALL COMPLIED WITH THE LETTER OF THE LAW, WHICH AS WE ALL KNOW HAS NOT YET BEEN TESTED, BUT WE THINK YOU FELL SHORT OF COMPLYING WITH ITS INTENT. AS A PUBLIC AGENCY, YOU HAVE A DUTY TO ACT IN GOOD FAITH TO ALLOW AFFECTED LANDOWNERS TO MEANINGFULLY ENGAGE WITH YOUR YOU PRIOR TO THE ADOPTION OF THE PROPOSED FEE. HOLDING YOUR RESPONSES TO LANDOWNER'S WRITTEN OBJECTIONS UNTIL THE FINAL HOUR DOES NOT ALLOW US TO MEANINGFULLY ENGAGE. JUSTIN, YOUR, UH, TIME IS UP. THANK YOU FOR YOUR COMMENTS. THANK YOU. UH, THIS IS JENNA ACOS AGAIN. THANK YOU AGAIN FOR LETTING US HAVE ANOTHER CHANCE TO TALK. I'LL JUST, I, I THINK I KNOW WHERE JUSTIN WAS GOING THERE. UM, I THINK IT JUST, YOU KNOW, IT'S IMPORTANT TO NOTE THAT YOU ALL YOUR STAFF HAD TWO WEEKS TO REVIEW AND CONSIDER LANDOWNERS COMMENTS, AND YET THE M-S-G-S-A ONLY GAVE LANDOWNERS ONE HOUR TO DO SO. RIGHT? AND THIS IS WHAT WE ARE ALL TRYING TO ENGAGE IN THE PUBLIC PROCESS HERE, EXPRESS OUR CONCERNS, AVOID COURT AND AVOID LITIGATION. AND SO THE FACT THAT WE WERE TOLD THAT WE WERE GOING TO BE SENT COMMENTS ON FRIDAY AND THEY DIDN'T SHOW UP UNTIL AN HOUR BEFORE THE HEARING STARTED THIS EVENING IS A BIT DISAPPOINTING AND FEELS A BIT SNEAKY AND DISINGENUOUS. SO WE, WE DID WANT TO, UM, LET YOU ALL KNOW THAT YOU AS BOARD MEMBERS MAY NOT KNOW, YOU [00:45:01] KNOW EXACTLY, YOU KNOW, WHEN SOMETHING WAS POSTED, BUT JUST FROM LANDOWNER'S PO POINT OF VIEW, THIS WAS, YOU KNOW, IT, IT'S DIFFICULT TO GET THROUGH 23 PAGES OF RESPONSES TO WRITTEN OBJECTIVE OBJECTIONS IN A IN AN HOUR. I'D ALSO LIKE TO RAISE AN ADDITIONAL CONCERN. SO GOVERNMENT CODE SECTION 5 3 9 5 3 7 5 9 1 C SIX STATES THAT AB 2 2 5 7 ONLY APPLIES IF M-S-G-S-A INCLUDES THE WRITTEN OBJECTION PROCEDURES IN THE WRITTEN NOTICE OF THE PUBLIC HEARING SENT PURSUANT TO PROP TWO 18. UM, WHICH YOUR COUNSEL HAS, YOU KNOW, CONFIRMED THAT YOU'RE, UH, INTENDING TO COMPLY WITH THOSE REQUIREMENTS. WE HAVE BEEN AWARE THAT CERTAIN AFFECTED LANDOWNERS NEVER RECEIVED WRITTEN NOTICE OF TODAY'S PUBLIC HEARING OR OF THE AB 2, 2 57 PROCEDURES. AND SO THEREFORE, THEY COULDN'T MEANINGFULLY ENGAGE IN THE WRITTEN OBJECTION PROCESS. UM, YOU KNOW, THAT BEGS THE QUESTION OF WHETHER YOU'RE OUT OF COMPLIANCE WITH AB 2 2 5 7, AND WE WOULD ARGUE THAT, YOU KNOW, SUBJECT TO LEGAL CHALLENGE BY AFFECTED LANDOWNERS, UM, REGARDLESS OF WHETHER THEY SUBMITTED A TIMELY WRITTEN OBJECTION OR NOT. SO WE WANTED TO, TO RAISE THAT FOR YOUR CONSIDERATION AS WELL. ONCE AGAIN, THANK YOU FOR LETTING US, UM, HAVE THIS CHANCE TO COMMENT BEFORE YOUR BOARD THIS EVENING. THANK YOU. WE DO HAVE ONE ADDITIONAL, A NEW PERSON. A NEW PERSON. OKAY. GO AHEAD, KEVIN. HI, THIS IS KEVIN BUREY. CAN YOU HEAR ME? YES. OKAY, GREAT. THANK YOU. UH, MY NAME'S KEVIN BUREY AND MY FIRM REPRESENTS BULL FIELD, LLC, COLBURN HILLS RANCH, LLC, AND THOMAS AND FARMS LP. UH, SOME QUICK COMMENTS ON ITEM FOUR. UM, THE WR WRITTEN RESPONSES FROM COUNSEL, UH, THAT WERE JUST PRESENTED TO YOU ARE, UH, JUST SOME QUICK NOTES HERE. THEY'RE JUST FAR TOO GENERALIZED AND IN GENERALIZING OUR OBJECTIONS, UH, THEY'VE TOTALLY BEEN MISCHARACTERIZED, WHICH I THINK SKIRTS THE INTENT OF AB 2257. UM, A QUICK POINT. ONE THING THAT IS SORELY MISSING FROM, UH, THE RESPONSES AS WELL AS THE REPORT IS ANY EXPLANATION AS TO HOW SIGMA COMPLIANCE, UH, WHICH IS A BIT OF A NEBULOUS CONCEPT. HOW, HOW THAT IS A SERVICE THAT IS EXPERIENCED AT THE PROPERTY LEVEL. UH, THE, THE REPORT GOES ON ABOUT, UH, ALLOCATIONS RECEIVED FOR ELIGIBLE PARCELS, BUT IT NEVER TIES, UM, THE REMAINDER OF THE CATEGORIES, UM, AND THE COSTS ASSOCIATED WITH THOSE CATEGORIES TO ACTUAL SERVICES RECEIVED BY PROPERTY OWNERS. UM, WE ALSO DIDN'T KNOW UNTIL JUST NOW THAT, UM, RESPONSES WERE APPARENTLY PUBLISHED, UH, BEFORE THE MEETING. SO I THINK THAT ALSO SKIRTS THE PURPOSES OF AB 2257, AS WELL AS, UH, YOUR OPPORTUNITY AS THE BOARD TO HEAR OBJECTIONS, UM, AND RESPONSES FROM, UH, THE REGULATED PUBLIC PRIOR, UH, TO THE MEETING OR AT THE MEETING. UM, AND LASTLY, WE, WITHOUT REPEATING THE PRIOR COMMENTS AND OBJECTIONS BY, UH, THE PRIOR COUNSEL THAT HAD JUST APPEARED BEFORE YOU, WE ALSO JOIN, UH, IN THOSE OBJECTIONS AS WELL. THANK YOU FOR THE TIME. YOU'RE WELCOME. ALL RIGHT. I'LL CLOSE THE PUBLIC HEARING FOR THE FINAL TIME. UH, WE'LL MOVE ON [5. PHASE 2 FUNDING MECHANISM ADOPTION] TO, UH, ITEM FIVE, WHICH IS THE PHASE TWO FUNDING MECHANISM ADOPTION. UM, ARE THERE ANY, ANY COMMENTS, UH, FROM THE BOARD MEMBERS BEFORE WE CALL THE ROLL OR QUESTIONS? I, I JUST WANNA CON PARDON ME. I JUST WANT TO CONFIRM THAT THE PROTESTS, THE VETTED PROTESTS THAT WERE RECEIVED, OH, IS AT 153 OUT OF 1,920. ALRIGHT, THANK YOU. YEAH, I GUESS WE NEED TO COUNT, DON'T WE? QUESTIONS OR COMMENTS? NO, NO, NO. OKAY. UH, DANIEL, WOULD YOU PLEASE CALL THE ROLL FOR THE, UH, RESOLUTION VOTE BOARD MEMBER PARK? YES. BOARD MEMBER GIAN POLLY? YES. BOARD MEMBER KELLY? YES. VICE CHAIRMAN MARTINI? YES. CHAIRMAN PEREIRA. AYE. DO YOU HAVE A QUORUM? [00:50:01] OH, MOTION CARRIES. MOTION CARRIES UNANIMOUSLY . ALRIGHT. FIVE, FIVE TO ZERO. OKAY. AND THEN WE'LL [6. PHASE 2 FISCAL YEAR 2026/2027 BUDGET] MOVE ON TO ITEM SIX, WHICH IS THE 20 26, 20 27, UH, PROJECTED OR, UM, UM, PROJECTED BUDGET FOR THE PHASE TWO FEE. THANK YOU. WITH THE ADOPTION OF THE PHASE TWO 22ND, I IS YOUR MIC ON? YEAH, SORRY. WITH THE ADOPTION OF THE PHASE TWO FUNDING MECHANISM, STAFF IS PROPOSING THE FOLLOWING BUDGET. HERE WE GO. FOR FISCAL YEAR 20 26, 20 27, THIS BUDGET FUNDS THE THREE CATEGORIES IN PHASE TWO IN THE ADMINISTRATIVE AND GOVERNANCE FUNCTIONS. THIS BUDGET PROPOSES FUNDING FOR AN ENTRY LEVEL STAFF AND NECESSARY OFFICE EQUIPMENT, UH, REGULATORY COMPLIANCE AND LEGAL DEFENSE AND WEBSITE UPDATES. EXECUTIVE DIRECTOR, THE GROUNDWATER ACCOUNTING PLATFORM AND GRANT GRANT WRITING HAVE EXISTING FUNDING ALREADY COLLECTED THROUGH PHASE ONE OR THE SIGMA COMPLIANCE LANDOWNER FEE AND ARE NOT INCLUDED THIS YEAR IN THE MONITORING DATA MANAGEMENT AND TECHNICAL STUDIES CATEGORY. THE BUDGET REQUEST 400,000 IN, I'M SORRY, 300,000 IN TECHNICAL SUPPORT AND STUDIES, AND 320,000 FOR ADDRESSING DATA GAPS AND ALTERNATIVE REMOTE SENSING SERVICES FOR THE GROUNDWATER ACCOUNTING PLATFORM IS NOT NEEDED THIS YEAR. AND FINALLY, IN THE DOMESTIC WELL MITIGATION PROGRAM IMPLEMENTATION CATEGORY, THE EMERGENCY WATER ASSISTANCE LINE ITEM AND PROGRAM ADMINISTRATION ARE FULLY FUNDED AND FUNDING FOR DOMESTIC WELL MITIGATION LONG-TERM SOLUTIONS HAS BEEN COLLECTED THROUGH THE PHASE ONE FEE AND IS NOT INCLUDED THIS YEAR. SO THE TOTAL PHASE TWO BUDGET IS 935,000, WHICH IS A, A RATE OF $5 IN 2 CENTS PER ACRE ACROSS THE ELIGIBLE ACRES LISTED IN THE PHASE TWO ENGINEERS REPORT. I'M HAPPY TO ANSWER ANY QUESTIONS. OKAY. ANY QUESTIONS? OKAY. I'LL OPEN UP FOR A PUBLIC COMMENT ON THIS ITEM. SEEING NONE, I'LL CLOSE PUBLIC COMMENT AND I'LL BRING IT BACK TO THE DAIS. WE MIGHT HAVE ONE. OH, DO YOU HAVE PUBLIC COMMENT? YEAH, SURE. SO, FOR YOUR PHASE TWO, THESE HERE, THIS WAS POSTED TO THE WEBSITE A MONTH, UH, A COUPLE WEEKS AGO. 'CAUSE I, I'M KINDA GETTING CONFUSED HERE. WE HAD AN HOUR TO RESPOND TO YOUR GUYS' WRITTEN OBJECTIONS. I DON'T KNOW IF WE'VE SEEN THIS OR IT'S BEEN POSTED TO THE WEBSITE YET. SO WAS IT POSTED ON FRIDAY? OKAY. OH, WITH THE AGENDA. THANK YOU. ANY OTHER PUBLIC COMMENT? SEEING NONE, I'LL BRING IT BACK TO THE DAIS. WHAT'S THE PLEASURE OF THE BOARD? I'LL MOVE TO APPROVE OR TO, UH, ACCEPT THE FACE TO, TO BUDGET. OKAY. IS THERE A SECOND? I'LL SECOND THAT. ALL RIGHT. I HAVE A MOTION BY DIRECTOR PARK AND A SECOND BY DIRECTOR MARTINI. UM, ALL THOSE IN FAVOR SIGNIFY BY SAYING AYE. AYE. AYE. AYE. ANY OPPOSED? MOTION CARRIES UNANIMOUSLY. FIVE ZERO. OKAY. UH, WE'LL MOVE TO ITEM SEVEN, WHICH IS, UH, BOARD REPORTS FAIR. OH, CAN I, I ASK, CAN I CLARIFY, UM, WHO MADE THE MOTION TO ADOPT THE RESOLUTION? OH, DID I? YEAH, I DID. I DIDN'T GET A MOTION. I JUST, YEAH, WE, WE ROLL WE'LL BACK UP AND DO RIGHT THROUGH THAT. PERHAPS OVER. WE SHOULD DO THAT ONE OVER. DO THAT AGAIN WITH A MOTION AND A SECOND AND ANOTHER ROLL CALL VOTE. THANK YOU. LACEY . NICE CATCH. ALRIGHT. WHAT'S THE PLEASURE OF THE BOARD? I MAKE A MOTION TO ADOPT THE, UH, UM, THE UH, UH, PHASE TWO RESOLUTION. PHASE TWO FEE. YES. I'LL SECOND. OKAY. ALRIGHT. I HAVE A MOTION BY DIRECTOR KELLY AND A SECOND [00:55:01] BY DIRECTOR GIAN POLLY TO APPROVE THE RESOLUTION. WOULD YOU PLEASE CALL THE ROLE BOARD MEMBER PARK? YES. BOARD MEMBER GIAN POLLY? YES. BOARD MEMBER KELLY? YES. VICE CHAIRMAN MARTINI? YES. CHAIRMAN PEREIRA? YES. ALRIGHT. MOTION CARRIES UNANIMOUSLY. FIVE ZERO. ALL. NOW WE'LL GO TO BOARD. REPORTS. ANYTHING? NO. DID WE DO THE BUDGET? DID WE REDO THE BUDGET BILL OR NO? NO, WE HAD A MOTION AND A SECOND FOR THAT ONE. THAT WAS PARK AND MARK MARTINI. ALRIGHT. AND WITH THAT WE WILL ADJOURN THE HEARING. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.