BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Bob Wieckowski, Chair
2015 - 2016 Regular
Bill No: SB 208 Hearing Date: 4/15/2015
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|Author: |Lara |
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|Version: |2/11/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Rachel Machi Wagoner |
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Subject: Integrated regional water management plans: grants:
advanced payment
ANALYSIS:
Existing law:
1. Under the Regional Water Management Planning Act,
A. Authorizes a regional water management group,
as defined, to prepare and adopt a regional plan, in
accordance with certain procedures, that addresses
programs, projects, reports, or studies relating to
water supply, water quality, flood protection, or
related matters, over which any local public agency,
as defined, that is a participant in that group has
authority to undertake.
B. Establishes the Integrated Regional Water
Management Program (IRWMP), which encourages the
development of integrated regional strategies for
management of water resources by providing funding,
through competitive grants.
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C. Requires that not less than 10% of IRWMP funds
be allocated to address the critical water supply
needs of disadvantaged communities and to facilitate
the participation of those communities in integrated
regional water management planning.
2. The Water Quality, Supply, and Infrastructure
Improvement Act of 2014 (Proposition 1) authorizes $7.12
billion in general obligation bonds for state water supply
infrastructure projects, such as public water system
improvements, surface and groundwater storage, drinking
water protection, water recycling and advanced water
treatment technology, water supply management and
conveyance, wastewater treatment, drought relief, emergency
water supplies, and ecosystem and watershed protection and
restoration.
This bill: Establishes a process whereby the state agency
administering an IRWMP grant 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:
1. Within 90 days of receiving notice that it has been
awarded an 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 about each project.
2. 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
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one million dollars.
1. 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.
Background
Numerous water bonds, including most recently Proposition 1,
provide funding for projects and programs through the Integrated
Regional Water Management Program (IRWMP). The Legislature has
appropriated bond funds to the Department of Water Resources
(DWR) to be distributed by DWR or DWR and the State Water
Resources Control Board 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
reimburses 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.
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Comments
1. Purpose of the bill.
According to the author, the current IRWM funding mechanism
created through past water bond measures reflects a
pay-as-you-go system where groups with approved plans provide
funding for water projects up front and are reimbursed later.
This mechanism is intended to save state general funds, but
instead threatens the success of regional programs and
continued participation of interested stakeholders. Smaller
communities and non-profit organizations are
disproportionately impacted by the pay-as-you-go system as
pre-financing water projects requires a larger budget than
these stakeholders are often able to fund.
The author further states that delays in reimbursement
payments burdens and threatens the successful participation
of smaller non-profits and disadvantaged communities.
Whenever the processing of an IRWM project invoice
reimbursement is untimely, as is sometimes the case, the
delay disenfranchises the groups that can least afford it.
These challenges further impact the credibility of the IRWM
process as smaller non-profit organizations and disadvantaged
communities who have viable project plans become less willing
and able to apply for funding for projects, creating an
inequity in the funding process.
The author believes that current policy disadvantages certain
integrated water management groups from providing the water
security voters intended to establish through Proposition 1.
SB 208, the Water Equity and Access bill, will improve equity
by advancing grant funds to non-profit organizations and
disadvantaged communities under limited circumstances. The
author believes that as California is heading into its fourth
drought year and in need of 11 trillion gallons of water, the
state must support smart water initiatives that can improve
our current drought situation as well as water quality.
2. Addresses a real problem.
As noted by the Senate Committee on Natural Resources and
Water, the reimbursement process has been a real problem for
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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.
The IRWMP process is notoriously difficult and costly for
non-profit organizations and disadvantaged communities.
Despite statutory requirements that not less than 10% IRWMP
funds be granted for the benefit of disadvantaged
communities, the program application process and approval
process is not designed to accommodate those communities or
organizations that do not hire a costly consultant to apply
for funding and negotiate the process for them.
Additionally, challenges like that identified by this bill of
not receiving funds to pay contractors for many months have
added to the difficulty of pursuing projects even if the
community or organization successfully navigates the IRWMP
application process.
In hearings on Proposition 1 legislation, it was discussed as
to whether the IRWMP was the appropriate program for
distribution of bond grants to disadvantaged communities
because of the historic difficulties for these communities
and the organizations that represent them to access funds
through this program. In the end, it was decided to continue
to fund projects through this program.
3. What about accountability?
The Senate Committee on Natural Resources and Water analysis
notes that 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.
The Senate Committee on Natural Resources and Water analysis
stated that should this bill move forward, the committee may
wish to encourage the author to work with the DWR to ensure
DWR has effective remedies in the event of improper expenses.
4. Could the process be streamlined?
The bill provides the regional water management group 90 days
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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.
The Senate Committee on Natural Resources and Water analysis
stated that 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.
Related/Prior Legislation
The Safe Drinking Water, Water Quality and Supply, Flood
Control, River and Coastal Protection Act of 2006 (PROPOSITION
84) included funding for the IRWM Grant Program administered by
DWR.
The Water Security, Clean Drinking Water, Coastal and Beach
Protection Act of 2002 (PROPOSITION 50), passed by California
voters in November 2002. Implementation of Proposition 50
Chapter 8 included IRWMP funding, jointly administered by the
Department of Water Resources (DWR) and the State Water
Resources Control Board (State Water Board).
SOURCE: San Diego County Water Agency
SUPPORT:
Association of California Water Agencies
California Association of Resource Conservation Districts
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
Lakeside Water District
Leadership Counsel for Justice and Accountability
Pueblo Unido Community Development Corporation
Rural County Representatives of California
San Diego County Water Authority
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San Jerado Cooperative, Inc.
Sierra Club California
The Nature Conservancy
Valley Ag Water Coalition
OPPOSITION: None on file
ARGUMENTS IN SUPPORT:
According to the San Diego County Water Agency, "Administration
of the state's Integrated Regional Water Management program
(IRWMP), 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 IRWMP relate to delayed or untimely processing if
IRWMP 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 IRWMP 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 IRWMP process. For these reasons, we
strongly support SB 208."
ARGUMENTS IN OPPOSITION: None received.
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