BILL ANALYSIS Ó
SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
Senator Fran Pavley, Chair
2015 - 2016 Regular
Bill No: SB 208 Hearing Date: March 24,
2015
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|Author: |Lara | | |
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|Version: |February 11, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Dennis O'Connor |
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Subject: Integrated regional water management plans: grants:
advanced payment
BACKGROUND AND EXISTING LAW
Numerous water bonds, including most recently Proposition 1,
provide funding for projects and programs through the Integrated
Regional Water Management Program (IRWMP). Typically, the
Legislature appropriates bond funds to DWR for a competitive
grant solicitation. DWR then issues guidelines for a round of
IRWMP funding, and regional water management groups submit their
list of local projects. DWR ranks the projects and makes the
awards within each IRWMP funding region.
In many cases, regional water management groups contract with
their local entities to carry out the projects. The typical
reimbursement process is that the local entity submits invoices
to its regional water management group, who then submits the
invoices to DWR. Upon review of the invoices, DWR then
reimbursed the management group who then reimburses the local
entity. Depending on the specific details of the funding
agreement and the administrative processes of the management
group, a number of months may pass between the time the local
entity incurs the expense and the time they receive
reimbursement from the management group.
PROPOSED LAW
This bill would establish a process whereby the state agency
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administering the grant (typically DWR) could provide advance
funding of IRWMP grants where the project proponent is a
nonprofit organization or a disadvantaged community, or the
project benefits a disadvantaged community. The process would
be as follows:
Within 90 days of receiving notice of that it has been awarded
in IRWMP grant, the regional water management group would be
required to provide the administering agency with a list of
projects to be funded by the grant funds where the project
proponent is a nonprofit organization or a disadvantaged
community, or the project benefits a disadvantaged community.
The list shall specify how the projects are consistent with the
adopted integrated regional water management plan and shall
include specific information each project.
Within 60 days of receiving the project information from the
regional water management group, the administering agency would
provide advanced payment of 50 percent of the grant award for
those projects that satisfy both of the following criteria:
The project proponent is a nonprofit organization or a
disadvantaged community, or the project benefits a
disadvantaged community.
The grant award for the project is less than one million
dollars.
The recipients would be required to place the funds in a
noninterest-bearing account until expended.
The funds would be required to be spent within six months of
the date of receipt, unless the administering agency waives
this requirement.
The recipient shall periodically, but not more frequently than
quarterly, provide an accountability report to the
administering agency regarding the expenditure and use of any
advanced grant funds in a format as determined by that state
entity.
If funds are not expended, the unused portion of the grant
shall be returned to the administering agency within 60 days
after project completion or the end of the grant performance
period, whichever is earlier.
The provisions of this bill sunset on January 1 2025.
ARGUMENTS IN SUPPORT
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According to the San Diego County Water Agency, "Administration
of the state's Integrated Regional Water Management (IRWM)
Program, which is funded through state general obligation bond
proceeds, has created challenges for implementation at the
regional level that threaten the success of regional programs
and continued participation of all interested stakeholders,
including smaller nonprofit organizations, watershed groups, and
disadvantaged communities. Specifically, issues and concerns
related to the IRWM Program relate to delayed or untimely
processing if IRWM project invoice reimbursements, resulting in
significantly delayed reimbursement payment to those smaller
nonprofit organizations and disadvantaged communities that can
least afford it. On occasion, it has taken anywhere from 60 to
330 days to process regional invoices for payment. This invoice
payment delay disenfranchises smaller nonprofit organizations
and disadvantaged communities, which could become less willing
to meaningfully participate in the IRWM process due to
reimbursement delays."
"SB 208 would focus on removing these administrative challenges
and allow for the continued meaningful participation of all
regional interests in the IRWM process. For these reasons, we
strongly support SB 208."
ARGUMENTS IN OPPOSITION: None received.
COMMENTS
Addresses a real problem. The reimbursement process has been a
real problem for some nonprofit organizations. While water
agencies can usually carry the invoice billing as a receivable
for a few months, many nonprofit organizations, which often have
meager reserves, cannot.
What about accountability? One advantage of the current
reimbursement process is that the state can ensure that it does
not pay for any non-eligible expenses. Providing funding in
advance reduces the state's ability to ensure bond funds are
only expended on eligible expenses.
Should this bill move forward, the committee may wish to
encourage the author to work the DWR to ensure DWR has effective
remedies in the event of improper expenses.
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Could the process be streamlined? The bill provides the
regional water management group 90 days to provide a list of
projects to be funded by the grant funds where the project
proponent is a nonprofit organization or a disadvantaged
community, or the project benefits a disadvantaged community.
DWR would then have an additional 60 days to approve and provide
the advanced funding. This means the funds may not be available
until 150 days (or nearly 5 months) after the grant was awarded.
Should this bill move forward, the committee may wish to
encourage the author to work the DWR to determine if a more
expedient process might be possible.
Why a 10 year sunset? According to the author, "we originally
included a sunset with a longer period of time to allow for a
meaningful evaluation and assessment process to ensure the
advanced payment model is successful and working properly."
Double-referral The Rules Committee referred this bill to both
the Committee on Natural Resources and Water and to the
Committee on Environmental Quality. Therefore, if this bill
passes this committee, it will be referred to the Committee on
Environmental Quality, which will consider the issues within
their jurisdiction.
SUGGESTED AMENDMENTS: None
SUPPORT
California Municipal Utilities Association
Clean Water Action
Coachella Valley Regional Water Management Group
Coachella Valley Water District
Community Water Center
Environmental Justice Coalition for Water
Leadership Counsel for Justice and Accountability
Pueblo Unido Community Development Corporation
San Diego County Water Authority
San Jeardo Cooperative, Inc.
OPPOSITION
None Received
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