The Challenges of Mandated Coordination: SGMA & the Paso Robles Groundwater Basin

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Olivia Molodanof
J.D. Candidate (2019) UC Hastings College of the Law

The Sustainable Groundwater Management Act (SGMA) was signed into law in September of 2014 with the goal of improving groundwater management in California by compelling local agencies overlying groundwater basins to create plans to manage their local groundwater supplies. SMGA requires cooperation amongst local agencies because the entire groundwater basin must be covered by one or more management plans. SGMA has created a major challenge for local agencies struggling to cooperate and work together on groundwater management.

The recent coordination efforts within the Paso Robles Area Subbasin (Paso Basin) exemplify the challenges inherent in cooperatively managing a groundwater basin. Six separate entities have filed notices to be a Groundwater Sustainability Agency (GSA) for the Paso Basin — San Miguel Community Services District, City of Paso Robles, Heritage Ranch Community Services District, Salinas Valley Basin Groundwater Sustainability Agency, Shandon-San Juan Groundwater Sustainability Agency, and Paso Basin — County of San Luis Obispo Groundwater Sustainability Agency.1 With six GSAs all seeking to manage portions of the Paso Basin, the required coordination in developing Groundwater Sustainability Plans (GSP) for the basin is becoming much more complicated.

The SGMA Legislation

SGMA created a framework for sustainable, local groundwater management for the first time in California’s history, defining “sustainable groundwater management” and requiring local agencies to adopt management plans for medium- and high-priority groundwater basins. SMGA aims to enhance and empower local management of basins by providing local agencies with the authority and financial assistance to maintain groundwater supplies, improve data collection of groundwater resources, and ultimately increase groundwater storage.2 Governor Jerry Brown has emphasized that the legislation will be best accomplished by local efforts, since local agencies have the greatest ability to adequately assess the state of their basins and take the necessary steps to balance groundwater overdraft.

SGMA required that by June 30, 2017, locally-controlled GSAs in the State’s high- and medium- priority groundwater basins and sub-basins file a GSA formation notice with the Department of Water Resources.3 The GSAs are responsible for developing and implementing GSPs to ensure that the basin is operated within its sustainable yield.4 Under SGMA, a GSP may be any of the following: a single plan covering the entire basin developed and implemented by one GSA; a single plan covering the entire basin developed and implemented by multiple GSAs; or multiple plans implemented by multiple GSAs and coordinated pursuant to a single coordination agreement that covers the entire basin.5 All basins designated as high- or medium-priority basins must adopt a GSP by January 31, 2020.6

The Paso Robles Groundwater Basin

The Paso Robles Area Subbasin of the Salinas Valley Groundwater Basin, referred to as the “Paso Robles Groundwater Basin” (Paso Basin) lies in northern San Luis Obispo County and extends into Monterey County.7 It is a 505,000-acre area that supplies water to cities, unincorporated communities, rural home sites, and agriculture in the northern portion of San Luis Obispo County, with an estimated safe yield of 2,000 acre-feet per year; although nitrate, PCE contamination, and drought make groundwater a less than reliable source in the Paso Basin.8

A hydrological study of the Paso Basin conducted in 2011 calculated that the basin was over-pumped by an estimated 2,473 acre-feet per year (AFY) from 1981 to 2011.9 Groundwater basins like the Paso Basin can be depleted by over-extraction — when more water is withdrawn from aquifers per year than the average level of replenishment. In addition to hydrogeological and pumping evaluations, San Luis Obispo County produced a Resource Capacity Study (RCS), which established “levels of severity” for resources and services.10 The RCS addressed water demand, future water demand projections, and established a Level of Severity III — the highest level, representing the most serious resource problem — for the Paso Basin.11

With the demand for water by rural residents and agricultural entities persisting and the region struggling to get the basin back in balance, in 2014, a moratorium on new wells in the city of Paso Robles was extended for two years, in response to falling water tables in the region — meaning “the city shall not accept, process, approve, or issue any permit application for the construction of a new well within the boundaries of the city … or approve any permit application for the modification, rehabilitation, or reconstruction of an existing well that would increase the amount of groundwater capable of being extracted from the Paso Robles Groundwater Basin.”12

Attempted Basin-Wide Water District Formation

Following the passage of SGMA, local agencies faced the questions of — who will manage the groundwater basin and how will they manage it? The formation of a water district is one type of institution for sustainable groundwater management. Their purposes include to gather data, acquire supplemental water, finance and distribute water, recharge projects, and balance water supplies and demand; and certain legislatively formed districts can also regulate the amount of water pumped. The recent water district formation vote in the Paso Basin exemplified a push by local government to form a single GSA to manage the basin in compliance with SGMA.

On March 8, 2016, the vote took place and an overwhelming majority of property owners rejected the proposed formation of a water district for the Paso Basin; only 22% of voters supported its formation.13 Proponents argued that a locally managed district would ensure fair allocation of water, while opponents argued that the district would unproductively increase management by the County, add another expensive layer of bureaucracy, and disproportionately benefit the larger water users.14

Although Paso Basin residents voted against formation of a countywide water district, two areas within the basin decided to seize the opportunity to emerge “from the ashes”15 to create their own water districts. With the June 30, 2017 SGMA deadline for GSA formation quickly approaching two water districts were formed — the Shandon-San Juan Water District, composed of 144,000 acres, and the Estrella-El Pomar-Creston Water District, composed of 45,000 acres.16 Multiple GSAs could prove to be beneficial for the Paso Basin, but too many management groups might lead to further turmoil surrounding groundwater issues.17

A Polycentric Management System

On May 16, 2017, the San Luis Obispo County Board of Supervisors, after a public hearing, adopted a resolution to become the GSA for the portions of the Paso Basin within the County of San Luis Obispo, with the exception of the portions of the basin located within the boundaries of the City of El Paso de Robles, the San Miguel Community Services District, the Heritage Ranch Community Services District, and the Shandon-San Juan Water District.18 Including the GSA created by San Luis Obispo County, there are six potential GSAs overlying the Paso Basin that must work together to coordinate one or more GSPs for the Basin. At this time, there are plans to develop a Memorandum of Agreement for a single GSP to manage the basin, which would establish a Paso Basin Cooperative Committee to consider the interests of all beneficial users of groundwater in the basin.19 This future management vision for the Paso Basin is a polycentric approach, in which multiple agencies would have regulatory power over managing portions of the basin.

While a polycentric management approach to managing the Paso Basin may seem complicated, literature regarding management of common resources illustrates how a polycentric public-enterprise system, rather than one central governmental authority, can emerge to achieve an effective management system to restore groundwater basins.20 For example, Elinor Ostrom’s literature discusses the primary drawback of the modified doctrine of correlative rights, which limits landowners to taking water for “beneficial” uses — the pressure to pump water quickly and often i.e the “pumping race” results in higher pumping costs with each pumper’s withdrawal of groundwater.21 Without a change of the foundation of institutions, pumpers in this situation acting independently severely overexploit the resource. Ostrom’s case study describes how diverse public and private entities removed themselves from the pumping race and transformed the structure of the incentives they faced. The solutions to the pumping race were not imposed on the participants by external authorities, but rather, participants used public arenas to impose constraints on themselves. Special water districts were established to obtain surface water, levy pump taxes on water production, and replenish the basin through artificial means.22

The SGMA framework seems to follow Ostrom’s approach by requiring enhanced groundwater management systems and improved community collaboration. Ostrom notes that although the solution to the problems did not involve either a central regulator or a private-property system, it did involve institutional cooperation — voluntarily sharing the costs of providing information to accomplish joint objectives.23 After several decades of major investments and institutional change, the result was a dramatic change in the incentives and behaviors of participants and outcomes. Groundwater management under SGMA could follow a similar pattern to that observed by Ostrom — of local organization, collaboration, and institutional change.

The Future of SGMA

SGMA is a technical and institutional solution — it is logical in nature and assumes that people will act rationally in accordance with its guidelines. However, coordination between multiple entities to manage a shared resource is not easy. SGMA represents a shift in groundwater management that is essential for combating serious groundwater overdraft issues and sustaining long-lasting groundwater supplies in California. However, throughout California communities and public agencies, places like Paso Robles are struggling to develop coordinated and comprehensive solutions to groundwater challenges. The Paso Basin is just one example of a basin that is facing the coordination challenges of basin-wide management.

While no governance solution is ever perfect, the basins will have a greater chance of governing fairly and effectively if their design anticipates some common challenges of shared resource governance. As Elinor Ostrom reported, the effectiveness of institutions depends upon cooperation and a mutual understanding of the proposed benefits for a community. Local agencies may benefit from implementing these principles as they seek to develop groundwater sustainability plans.

1 See SGMA Portal, search “Paso Robles” under “Basin”,

2 Cal. Water Code § 10720.1 (West 2015).

3 Cal. Water Code § 10724(b) (West 2015).

4 Cal. Water Code § 10727(a) (West 2015).

5 Cal. Water Code § 10727(b) (West 2015).

6 Cal. Water Code § 10720.7(a)(1) (West 2015).

7 Paso Robles Groundwater Basin, San Luis Obispo County Water Resources, Public Works Department.

8 County of San Luis Obispo Board of Supervisors, Revised Resource Capacity Study — Water Supply in the Paso Robles Groundwater Basin, PASO ROBLES GROUNDWATER BASIN MANAGEMENT PLAN, Mar. 2011,

9 Id.

10 Id.

11 Id.

12 Scott Bennan, Moratoirum on new wells in city extended 2 years, Paso Robles Daily News, Mar. 5, 2014.

13 David Sneed, Voters reject Paso Robles groundwater basin district, The Tribune, Mar. 8, 2016,

14 John Diodati, Deputy Director of Public Work and Transportation for the County of San Luis Obispo, personal communication, February 2016.

15 Lindsey Holden, North County landowners want their own water districts. But the clock is ticking, The Tribune, Feb. 4, 2017,

16 Monica Vaughan, Who should pay to manage groundwater? SLO County supervisors will revisit the question, The Tribune, Apr. 1, 2017,

17 Frank Mecham, San Luis Obispo County Board of Supervisors, District 1, personal communication, February 2016.

18 Department of Water Resources: SGMA Portal, Paso Basin — County of San Luis Obispo Groundwater Sustainability Agency, Section (B)(3), EXHIBIT C: RESOLUTION FORMING PASO BASIN COUNTY OF SLO GSA, May 16, 2017,

19 Department of Water Resources: SGMA Portal, Paso Basin — County of San Luis Obispo Groundwater Sustainability Agency, Section (B)(4), FORMATION NOTICE PASO BASIN, DEPARTMENT OF WATER RESOURCES NOTICE, May 17, 2017,

20 Elinor Ostrom, Analyzing Institutional Change, Governing the commons: The evolution of institutions for collective action 133 (Cambridge University Press 1990).

21 Id.

22 Id. at 119

23 Id. at 126

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