From Paul Wenger’s editorial at the California Farm Bureau Federation:
Local management makes sense in California for the same reason statewide regulation doesn’t: When it comes to groundwater, California isn’t one state—it’s more like 40 states. We have many types of aquifers, each unique and dependent on different conditions—so much so that a one-size-fits-all approach will result in disaster.
I heard this a lot when advocates were explaining to me why agricultural water management plans were pointless. The regions were too unique and every district was special and different and we couldn’t possibly know from a state level what could work. One-size-fits-all would doom us all.
I was too young and naive to understand then that I was being trampled by a metaphor, and that “one-size-fits-all” was a phrase used to cut off discussion. I remember sitting in public meetings, composing an impassioned speech about how agricultural water management plans were not “one-size-fits-all”, but rather pants. You can wear any pants that fit, cargo pants with pockets, linen pants for the heat, ripped jeans for clubbing. Choose the pants that fit, but you must wear them or your ass is hanging out. Now I wouldn’t give that speech because I don’t believe that conversations should take place in metaphor. People trying to use metaphors should instead be coaxed into saying exactly what they mean and the conversation should go from there.
At any rate, I’ve heard ag representatives rail against “one-size-fits-all” for twenty years now. It is true that groundwater basins have unique characteristics. But if the statewide regulation is monitor groundwater levels, measure what you pump, develop conjunctive use, pay for externalities and only take safe yield, that size fits you just fine. There is nothing so precious and unique about your groundwater basin that the same practices that restore other basins won’t restore yours too.
On the public record 
And even if you take Wenger at his word, if Wenger and his colleagues thought local management made sense, the farmers he’s talking about should have, you know, *managed locally*. There are examples of groundwater basins in California where people did that – self-organizing, Ostrom-style, to avoid a tragedy of the commons. The fact that these folks didn’t, despite the Farm Bureau’s enthusiastic support and help Wenger describes, means that in the cases where groundwater overpumping problems are happening now (and most especially the sort of externalities you have described), local management has already by definition failed.
I like the analogy (wear pants of some type) as well as the translation (manage your g/w, as Fleck points out). You’re right that “we need to consider local conditions” usually means “keep doing what we do… until you bail us out.” :(
It is not easy to see how any reconciliation of water law or use will emerge, statewide, unless and until it is agreed that groundwater pumping in the SJV must be regulated and inevitably restricted.