Proposition 218 Phase 2 Funding Mechanism

The Merced Subbasin Groundwater Sustainability Agency (MSGSA) has prepared an Engineer’s Report describing the proposed Phase 2 Funding Mechanism to support the functions and activities necessary to operate the GSA and continue implementation of the Merced Subbasin Groundwater Sustainability Plan (GSP) in compliance with the Sustainable Groundwater Management Act (SGMA). The Phase 2 Funding Mechanism was contemplated in the MSGSA’s Two-Phased GSP Implementation Approach Resolution and is intended to replace the Phase 1 Fee, which will sunset at the end of Fiscal Year 2026, while the 2019 SGMA Compliance Landowner Fee (2019 Fee) will remain in place. The MSGSA held public workshops on March 26 and 31, 2026 to discuss the proposed fee prior to consideration of final adoption of the Engineer’s Report and initiation of the Proposition 218 process.  A recording of the March 31, 2026 workshop held in person in Merced and virtually as a webinar is available below.

The MSGSA Board approved the March 2026 version as the final approved Engineers Report at the April 9, 2026 Board meeting.   The public hearing to consider adoption of the Phase 2 Fee Funding Mechanism was set for Monday, June 15, 2026 at 6PM at the Merced County Administration Building Board Room, 2222 M Street, Merced, CA 95340.  On June 15, 2026, fewer than 50% protests were received and the Board adopted the Phase 2 Funding Mechanism following the public hearing.  

Phase 2 Funding Mechanism Engineer’s Report – March 2026 Public Draft

Phase 2 Funding Mechanism Engineer’s Report – April 2026 Final Draft

Phase 2 Fee Public Workshop Webinar Recording – March 31, 2026 

Phase 2 Fee Public Workshop Slides 

Objection Letters Received by June 1, 2026:

MSGSA Response to Objections

Phase 2 Funding Mechanism Public Hearing Slides– June 15, 2026

Resolution 2026-01 Adopting the Phase 2 Funding Mechanism

 

Proposition 218 Phase 1 GSP Implementation

Under the Sustainable Groundwater Management Act (SGMA), the Merced Subbasin Groundwater Sustainability Agency (MSGSA) is obligated to manage and balance groundwater supplies in the Merced Subbasin through a variety of activities.  In 2019, the landowners within the MSGSA approved the adoption of an Administrative Fee through the Proposition 218 process (2019 Fee). Since passage in 2019, that fee has funded, and will continue to fund, MSGSA administrative activities. 

On July 19 2022, the MSGSA Governing Board held a public hearing and adopted a Phase 1 Fee, through a Proposition 218 proceeding.  The Phase 1 Fee is in accordance with the Two Phased GSP Implementation Approach Resolution to fund mechanisms for implementation of the Water Year 2025 objective.  The elements funded by the Phase 1 Proposition 218 fee are detailed in the Engineer’s Report linked below.  The Phase 1 Fee will sunset in at the end of Fiscal Year 2026, the final Fee will be collected in Fall 2025 to fund the FY 2025/2026 budget. 

The MSGSA Governing Board is developing a Phase 2 Fee funding mechanism to replace the Phase 1 Fee, targeted for adoption in 2025 or early 2026.  

FINAL Engineers Report

    • GSA Board approved May 12, 2022

FINAL Resolution Approving a Phase 1 Funding Mechanism Landowner Fee

    • GSA Board approved July 19, 2022
Phase 1 Funding Mechanism Fee Appeal Process
Phase 1 Funding Mechanism Fee Appeal Form

The Phase 1 Funding Mechanism Fee Appeal Form can be submitted to contact@mercedsubbasingsa.org

Proposition 218 Landowner Fee for SGMA Compliance

The Merced Subbasin GSA collaborated with other GSA’s in the Merced Subbasin on the development of a required Groundwater Sustainability Plan (GSP) which was submitted to the California Department of Water Resources in January 2020 and approved in 2023. The MSGSA is required to implement the Plan and manage the Merced Subbasin in a manner consistent with the GSP and that achieves groundwater sustainability by the year 2040.

To sufficiently fund the essential activities required to comply with SGMA’s unfunded state mandate and to maintain local management and control of the groundwater basin, the Merced Subbasin GSA has developed and implemented a fee structure within the GSA’s management area, referred to as the SGMA Compliance Landowner Fee.

Public workshops were held in Planada on Wednesday, April 17, 2019 and in Atwater on Wednesday, April 24, 2019. 

          The two meetings had presentations regarding the Proposition 218 landowner fee. The presentations included:

FINAL Fee Study Report

    • GSA Board approved June 5, 2019

FINAL Resolution Approving SGMA Landowner Fee

    • GSA Board approved July 23, 2019