Fox Canyon board extends $20/acre-foot legal reserve fee to maintain legal-defense fund

The Fox Canyon Groundwater Management Agency Board of Directors on Sept. 24 voted to extend a $20-per-acre-foot reserve fee to maintain the agency’s GEMS legal fund, which staff said is projected to run a negative balance without the charge.

The fee was originally created in 2006 and was adopted in a 2020 resolution to provide revenue for legal expenses. Staff told the board the fund has seen heavy expenditures on two ongoing adjudications and a challenge to the OPV allocation ordinance. Updated projections in the staff presentation showed legal expenses in excess of $1.5 million for the current year and continued substantial fees for the next two years unless the fee continues to be collected.

Agency staff said the 2024 extension of the reserve fee included a stipulation to review the assessment annually in a public hearing; staff presented updated figures that showed a deeper deficit than the numbers in the mailed board letter. After a brief public comment period with no speakers, a board member moved to adopt staff’s recommendation to extend the fee by adopting the cited resolution. The motion carried by voice vote and a roll call was taken; board members voting in favor recorded their support and the chair announced the motion carried.

The board’s action maintains the $20-per-acre-foot surcharge as a dedicated revenue source for legal expenses and keeps the GEMS account in place. Staff said the surcharge is restricted to the payment of “costs and expenses of legal actions and proceedings.” No changes to the fee rate were proposed.

Board and staff comments emphasized the ongoing nature of litigation and the need to preserve the legal fund so the agency can continue to respond to adjudications and ordinance challenges. No amendment to the fee level or sunset schedule was made at the meeting; staff noted the annual public review will continue.

The board moved on to other items following the vote.