New fee will charge Paso Robles farmers for water they used last year
People who’ve pumped from the Paso Robles groundwater basin will see a new charge on their property tax bills this year, after a one-time fee meant to help bring the region’s basin back into balance was approved this week.
On Wednesday night, the Paso Robles Area Groundwater Authority voted unanimously to charge of $22.90 per acre-foot of groundwater used by farmers, commercial pumpers and water systems like the city of Paso Robles during water year 2025. An acre-foot is roughly enough to cover a football field in a foot of water.
The fee will fund the agency’s budget as it works to balance the basin in accordance with state law — or risk the state setting its own pumping rules and fees for the area, according to board member Hilary Graves said.
“Agriculture is struggling right now. It’s a really hard time for farmers,” she said. “I’m definitely not eager to add another regulatory cost to the onces that farmers are already bearing, but we were given the job of finding a way to comply with a law.”
Meanwhile, domestic well owners will not be charged water use fees.
The city of Paso Robles is the largest water system that will pay fees, but this wouldn’t impact the city’s ratepayers, board member and Mayor John Hamon said.
When the city adopted its most recent water rates in 2022, it included potential groundwater fees in the budget in anticipation of this process, so the existing rates already cover the new cost, he said. Additionally, the city can only raise rates every five years — so the city couldn’t change its water rates right away even if it wanted to.
However, entities in the city that pump from the groundwater basin, like the golf courses, will have to pay groundwater consumption fees, he said.
Because the basin is considered “critically overdrafted” by the California Department of Water Resources, the Paso Robles Area Groundwater Authority is required to bring the basin into balance by 2040, the staff report said.
The fee will fund the fiscal year 2026-27 budget of $1.09 million, which covers the agency’s operating costs like preparing state-mandated reports and paying consultants, the report said.
The fee only spans one year of water use, and there’s no plan yet to continue it for future years.
What are the rates?
Water systems, farmers and commercial water users must pay the same fee: $22.90 per acre-foot of water consumed during water year 2025.
Water systems that draw from the basin include large municipal users like the city of Paso Robles, along with smaller systems, like a lodge and an elementary school.
The agency doesn’t yet have data on water consumption for water year 2026, so it must apply the tax to last year’s data, which was from Oct. 1, 2024, to Sept. 30, 2025, agency consultant Taylor Blakslee said.
“We’re allocating the costs based on the use that got us to the current state of the basin,” agency attorney Claire Collins told The Tribune.
Farmers at the meeting shared concerns with the fee structure.
Jon Cagliero’s family farms grapes, hay, pistachios and cattle between San Miguel and Paso Robles at Cagliero Ranches Inc. They also lease land to other farmers.
Lots of farmland is leased in California, he said. Under the current rate structure, if a tenant leaves the land, the landlord will be stuck with a fee for water they didn’t consume, he said.
“Billing for the past year doesn’t work well with agriculture,” he said. “You need to be able to bill the current year.”
Additionally, San Miguel farmer Steve Carter said farmers with fallowed land shouldn’t have to pay a fee for prior use.
“You may have a legal basis for doing it, and I wouldn’t want to argue that you don’t,” he said to the board. “But it doesn’t sit right with people that have suffered enough economically.”
Board member Matt Turrentine encouraged farmers to appeal their fees if they encounter these issues, and then the agency will do what it can to improve the fee structure.
“We’re going to learn something through this appeals process,” he said. “The goal here is to be fair and equitable in every way that we possibly can.”
How were the rates calculated?
The budget only covers the bare bones of costs needed to keep the agency running for another year, so it doesn’t include projects that would benefit one type of water user more than another, Blakslee told The Tribune.
As a result, the agency split the operating cost equally among all water users, he said.
Meanwhile, the four participating Groundwater Sustainability Agencies will pay for water used by domestic well owners in their service area. This means the domestic well owners won’t be paying the fee themselves. Instead, the Groundwater Sustainability Agencies will pay the fees from their own budgets.
Those who pump water from a well in the Paso Robles groundwater basin belong to one of the Groundwater Sustainability Agencies.
They cover five geographic areas: The San Miguel Community Services District, the Shandon-San Juan Water District, the Estrella-El Pomar-Creston Water District, the City of Paso Robles, and then all other areas are covered by the San Luis Obispo County GSA. The San Miguel CSD is not participating in the groundwater fees.
Under the proposed rates, commercial, agricultural and water system pumpers will be charged for water consumption rather than extraction. Water extraction is the amount of water pumped from each well. Water consumption — a more conservative measure of water use — is the amount of pumped water that isn’t returned to the basin. On a farm, this includes water that evaporates or is absorbed by the crops.
The majority of water drawn from a rural domestic well makes its way through the pipes, travels to the septic system, then returns to the basin. As a result, the agency won’t charge domestic well owners for water consumption, the report said.
The agency’s consultant, Land IQ, took a series of steps to evaluate the amount of water consumed by a property.
First, they made a map of every field over the basin. Next, they measured the amount of water that evaporates from plants, the soil and other surfaces on certain fields based on temperature, humidity, soil moisture and wind speed data collected at climatic stations scattered around the basin.
Finally, they used a government satellite to collect thermal data from other fields and calibrate that data to the climatic stations to find out the amount of water that evaporates from those properties, too. Land IQ then determined each field’s water consumption based on the crop type and the amount of water that evaporates from the property.
In 2025, 50,363 acre-feet of water was consumed from the basin, according to Land IQ’s report. The consultants anticipated receiving enough appeals to require them to reduce the consumptive water use by 5%, so they used 47,845 acre-feet to determine the fee.
To calculate the fee, the consultants divided the budget of $1.09 million by the consumptive water use of 47,845 acre-feet — landing on a fee of $22.90 per acre-foot of water consumed, the report said.
Property owners can view the consumptive water use per parcel of their property online at bit.ly/4uLvwDS.
The size and water use of each property varies greatly, according to the report.
For example, a 523.13-acre parcel in the Shandon-San Juan area consumed 316.85 acre-feet of water in 2025 with 7.55 acre-feet of water evaporating from its pond — so that property owner will be charged $7,428.74 in water fees.
Meanwhile, a 3.44-acre parcel in the Estrella-El Pomar-Creston area that consumed 1.63 acre-feet of water will be charged $37.28 in fees.
Those who disagree with their assigned consumptive water use can submit an appeal by June 8 by email to info@PasoRoblesAGA.org or by mail to PO Box 82, Paso Robles, CA 93447.
What’s in the budget?
The groundwater authority’s Board of Directors adopted the budget of $1.09 million for fiscal year 2026-27 on March 25, the report said.
The budget allocated $370,860 to state-mandated activities, including assembling the annual report on progress toward implementing the Groundwater Sustainability Plan’s goals, monitoring groundwater conditions and collecting evapotranspiration data, the report said.
The budget also identified $618,000 in administrative needs, including insurance, legal counsel, grant development, technical consultants and public outreach.
The budget allocated $7,000 for coordinating with the county to develops a well verification and registration program. Finally, the draft budget allocated $99,586 to the reserve.
How the board will levy the fees
Last year, the Paso Robles Area Groundwater Authority tried to create a water-use fee through the Proposition 218 process.
The fees would have applied to commercial water users like farmers, brewers and municipalities. Ratepayers would have been charged per acre-foot of water they used.
According to Proposition 218, however, if a majority of impacted property owners protest a proposed fee, it cannot pass.
In August, 689 of the 1,283 impacted parcels submitted protests for the fees — the majority vote needed to stop the Board of Directors from voting on the rates.
That forced the board to look for another funding mechanism — or dissolve by June 30, Blakslee previously told The Tribune.
This new fee is being implemented in accordance with the California Water Code and Proposition 26, he said.
Proposition 26 allows Groundwater Sustainability Agencies to impose fees on “groundwater extraction or other regulated activity, to fund the costs of a groundwater sustainability program, including, but not limited to, preparation, adoption and amendment of a groundwater sustainability plan and investigations, inspections, compliance assistance, enforcement and program administration, including a prudent reserve,” the water code said.
Proposition 26 does not include a protest process, so the board could pass those fees without permission from property owners.
Proposition 26 is also more narrow.
While the Proposition 218 fee could have been in place for five years, a Proposition 26 fee can only last for one year. Additionally, Proposition 26 fees can’t fund large projects like a Proposition 218 fee would have.
Now that the fee is adopted, it will be submitted to the county and placed on the next round of property tax bills for fiscal year 2026-27, which people typically receive in September, agency consultant Ryan Aston said.
The Paso Robles Area Groundwater Authority will receive those funds in January and April, he said.
