McGregor’s City Council voted Monday to approve a negotiated settlement with the Southern Trinity Groundwater Conservation District, closing out a three-year legal standoff over illegal groundwater extraction. The city will pay a one-time penalty of $50,000 by November 1, 2026, followed by quarterly payments of $1,250 for the next 25 years. These funds will finance a new monitoring system for the specific well used by SpaceX’s McGregor site.
The financial burden falls on McGregor because the city owns the land and the wells, even though SpaceX is the entity doing the pumping. Over the past three years, the district issued violation notices to both parties, documenting that SpaceX extracted 128 million gallons more than the permitted allowance. City Manager Kevin Evans stated that the settlement resolves immediate legal threats, noting that SpaceX has already reduced its groundwater consumption at the facility.
Residents are not buying the narrative that this is a fair trade. Danny Campbell, a local resident who placed a $1,200 full-page ad in the McGregor Mirror to protest the deal, argued that SpaceX should bear the cost of the violations, not the taxpayers. “SpaceX is the primary driver for overpumping these wells, and they're not responsible for the litigation,” Campbell said. “Every dollar that goes towards things like this is one dollar taken from our community.” Evans countered that the city will cover the costs using proceeds from the sale of city property, not tax revenue.
Beneath the legal settlement lies a deeper, more dangerous conflict: how much water is actually left. McGregor Mayor Jim Lilley dismissed fears of depletion, telling reporters after the meeting that the aquifer still holds substantial water. Rodney Kroll, president of the groundwater district, rejected this optimism. “Our aquifer does not recharge,” Kroll said. “What that says ultimately is that the water level is going down annually, and some day, we’ll reach a point where there’s no (ground)water.” Kroll estimates that critical depletion could occur within 50 years.
The city is now exploring alternative water sources, including purchasing groundwater from neighboring communities or tapping into Belton Lake via the Bluebonnet Water Supply Corp. While the settlement may end the immediate litigation with the district, the 25-year monitoring commitment ensures that the consequences of this overpumping will remain a line item in McGregor’s budget and a point of contention for decades.