STATE WATER RESOURCES CONTROL BOARD
BOARD MEETING SESSION – DIVISION OF FINANCIAL ASSISTANCE
AUGUST 26, 2004
ITEM 1
SUBJECT
ADOPTION OF THE AGRICULTURAL WATER QUALITY GRANT PROGRAM (AWQGP) GUIDELINES
DISCUSSION
The State Water Resources Control Board (SWRCB) was appropriated $11.4 million from the California Clean Water, Clean Air, Safe Neighborhood Parks, and Coastal Protection Act of 2002 (Proposition 40) and $9.5 million for from the Water Security, Clean Drinking Water, Coastal and Beach Protection Act of 2002 (Proposition 50) for the AWQGP. An additional $20 million from Proposition 50 is included in the 2004 Budget for the AWQGP. The SWRCB also anticipates receiving approximately $5.5 million from the United States Environmental Protection Agency (USEPA) Clean Water Act Section 319 (Section 319) that may be used to provide grants to implement Non-point Source (NPS) pollution control projects in federal fiscal year (FFY) 2005. Adoption of guidelines is required to implement the Proposition 40 and 50 programs. Staff prepared guidelines that include eligibility and program requirements for all three funding sources, for more efficient administration of the programs and ease of application for potential grantees.
The purpose of the AWQGP is to provide funding to eligible applicants for projects that reduce or eliminate the discharge of agricultural pollutants and improve agricultural water quality. The Section 319 funds may also be used to address NPS pollution from non-agricultural sources. Public agencies and non-profit organizations are eligible for the funding.
Staff convened a multi-agency workgroup to develop the guidelines. Staff solicited stakeholder input by conducting workshops during the scoping stage of the development. Additionally, two workshops were held following the release of the draft guidelines to obtain input.
The guidelines target funds towards surface water quality problems from discharges from irrigated lands. These are the most widespread water quality problems associated with agriculture in California. In the Central Valley alone there are more than 25,000 operations that discharge wastewater from more than seven million acres of irrigated lands. There are also ground water quality problems associated with irrigated agricultural practices. These problems, however, are widespread and difficult to remedy. Monitoring groundwater is costly due to the need to install wells. The guidelines propose focusing on surface water problems in order to achieve measurable results from the available funds. Also, Propositions 40 and 50 already dedicate significant funds to other groundwater programs.
New regulatory programs are being implemented to address discharges from irrigated agriculture. These programs require monitoring to identify sources of pollutants and implementation of management measures to address the problems. Financial assistance to the irrigated agricultural community can work in tandem with the regulatory programs to enhance compliance and ease the economic burden of implementing the new programs.
The guidelines propose a competitive funding process, with different grant caps and matches for two separate types of projects. The caps and matches were recommended by the workgroup based on the members’ experience with similar grant programs. Stakeholder comments on recommended caps and matches varied widely. In the proposed guidelines, projects that implement management measures and management practices to address polluted runoff (Implementation Projects) can be funded to a maximum of $1 million with State bond funds or Section 319 funds. The proposed match required for these projects is 20 percent of the total project cost. Projects to monitor surface water to further define and identify sources of identified problems and develop solutions (Project Planning Monitoring) can be funded up to $500,000. For those projects, a cost match of 50 percent is proposed in the guidelines.
The guidelines contain proposed ranking criteria for the two project types. The criteria reflect preferences identified in the bond acts, implementing statutes, and SWRCB, Regional Water Quality Control Boards (RWQCBs), and USEPA priorities. The criteria give priority to projects that implement total maximum daily loads. This is also a requirement for Section 319 funded projects.
POLICY ISSUE
- Should the SWRCB adopt the draft AWQGP Guidelines at its August 26, 2004, meeting?
- Should the Proposition 40 and 50 funding be restricted to projects that address surface water quality problems associated with discharges from irrigated agricultural lands?
- Should up to $11.4 million of Proposition 40 funds be dedicated to monitoring projects?
- Should a maximum grant amount and funding match be placed on a per project basis, and should the maximum grant amount and funding match be set as follows?
Maximum
Grant/Project / Required
Funding Match
Monitoring Projects / $ 500,000 / 50 Percent
Implementation Projects / $1,000,000 / 20 Percent
FISCAL IMPACT
The Proposition 40 and 50 local assistance to fund projects have been appropriated to the SWRCB. Additional Proposition 50 funding may be included in the FY 04-05 budget for the AWQGP. The SWRCB and RWQCBs have been provided with state operations funds from Propositions 40 and 50 to administer the programs. Funding for the CWA Section 319 projects and staff is contingent upon federal budget appropriation in FFY 2005.
RWQCB IMPACT
Yes, all RWQCBs.
STAFF RECOMMENDATION
That the SWRCB:
- Adopts the draft AWQGP Guidelines at its August 26, 2004, meeting;
- Restricts AWQGP Proposition 40 and 50 funding to projects that address surface water quality problems associated with discharges from irrigated agricultural lands;
- Dedicates up to $11.4 million of Proposition 40 funds to monitoring projects;
- Places a maximum grant amount and funding match on a per project basis, and sets the maximum grant amount and funding match as follows:
Maximum
Grant/Project / Required
Funding Match
Monitoring Projects / $ 500,000 / 50 Percent
Implementation Projects / $1,000,000 / 20 Percent
Darrin Polhemus – 341-5694
STATE WATER RESOURCES CONTROL BOARD
WORKSHOP SESSIONBOARD MEETING – DIVISION OF FINANCIAL ASSISTANCE
JUNE 17, 2004
ITEM 63
SUBJECT
ADOPTION OF THE SMALL COMMUNITY WASTEWATER GRANT (SCWG) PROGRAM GUIDELINES (GUIDELINES)
DISCUSSION
The State Water Resources Control Board (SWRCB) has been appropriated approximately $20 30 million in grant funds for small communities with a financial hardship from the Watershed, Clean Beaches, and Water Quality ActCalifornia Clean Water, Clean Air, Safe Neighborhood Parks and Coastal Protection Act of 2002 (Proposition 40) and the Water Security, Clean Drinking Water, Coastal and Beach Protection Act of 2002 (Proposition 50). The adoption of SCWG Programthe Guidelines is necessary for the successful implementation of the SCWG Program. The Guidelines include the eligibility requirements and program procedures for communities wish to apply for grant funds.
The SCWG Program is intended to provide supplemental funding to projects in order to make feasible as many projects as possible. These projects would otherwise not be affordable for small communities with a financial hardship. The draft SCWG Program Guidelines have been developed considering the effectiveness of previous small community grant funding cycles, input from various stakeholders, and requirements of the respective statutes.
The SCWG Program provides grant funding for communities that meet the following requirements:
The community must fit the definition of a small community. Public Resource Code Section 30925 states that a “ ‘small community’ means a municipality with a population of 20,000 persons or less.”
The community must have a financial hardship as determined by the SWRCB.
The community must be included on the fundable portion of the SCWG Project Priority List (to be determined following adoption of SCWG Program Guidelines and subsequently adopted by the SWRCB), which will contain proposed projects ranked according to the type of existing or potential, health or pollution problem facing the respective community. The SCWG Project Priority List will be developed following adoption of Guidelines and adopted by the SWRCB.
The Division of Financial Assistance (Division) has encouraged sought participation and input from a broad spectrum of organizations in an effort to include disadvantaged communities in the preparation and development of the SCWG Program. Holding aAs part of this effort, staff and the Board held a Public Hearing, mailing mailed program information to stakeholders and potential beneficiaries, and posting posted documents on the SWRCB web site are some to the activities being performed to reach out to disadvantaged communities.
Section 30925 requires priority be given to projects to install or replace sewer systems in communities that lack adequate sewers, and to assist communities with facilities that are suffering due to population growth pressures. The draft Guidelines incorporate these requirements in the priority ranking criteria.
In the draft Guidelines, financial hardship is defined as having a Median Household Income (MHI) of less than 80 percent of the Statewide Annual MHI. This is consistent with current Proposition 50 implementation legislation from Proposition 50. Division staff performed an analysis of the impact that different funding scales would have on the average SCWG recipients. This analysis shows that developed the funding scale included in the draft Guidelines will to provide an adequate level of funding considering typicalover a variety of project sizes and affordabilitycommunity financial capabilities. The required local participation amount for each project varies on a sliding scale with respect to the MHI of the community, thus local costs are linked to affordability of in the community. The sliding scale requires all recipients pay a minimum of 10 ten percent of their project cost.
In the previous funding cycle (funding provided by Proposition 13), a maximum of $3 million per community was available for project costs. This included construction costs, as well as engineering and administration allowances for planning, design, and construction. Funds were available to communities with a population of up to 10,000 people. Under the proposed funding program, funds will be available to communities with a population of up to 20,000 people. Because the total amount of funding statewide ($20 30 million dollars) is low with respect to the overall needs state-wide, it is important to carefully consider how to most effectively disburse the funds. As the maximum amount of funding per project increases, the number of projects that receive funding will tend to decrease.
Division staff analyzed the data from the previous two funding cycles to develop recommendations on the maximum funding per project for the current funding cycle. This data was analyzed in accordance with the following:
In estimating project affordability, staff utilized data on average current sewer rates from the SWRCB “Wastewater User Charge Survey Report” dated May 2002.
The analysis showed that for the vast majority of past projects, a maximum funding level of $2 million would make most projects economically feasible.
Staff considered that many communities take advantage of several funding sources to complete the project. The leveraging of SCWG funds with other funding sources, including the SRF loan program, will increase the number of projects receiving assistance.
The Division staff analysis concludes that using $2 million as the maximum SCWG funding per project and per agency will create the likelihood of funding more complete projects than would be funded at a higher maximum amount.
Historically, SCWG funding has been supplemented by loan funds received from the State Revolving Fund (SRF) loan program to assist small communities with financing the non-grant funded portion of their project. The SCWG and SRF programs will again be combined to complete many of the proposed projects.
POLICY ISSUES
1.Should the SWRCB adopt the SCWG Program Guidelines?
2.Should the SWRCB determine financial hardship for a small community as having a Median Household Income of less than 80 percent of the Statewide Annual Median Household Income?
3.Should the SWRCB cap the amount of SCWG funding at $2 million per project and per agency?
FISCAL IMPACT
The SWRCB has been appropriated approximately $20 30 million to implement the SCWG Program. Historically, the SCWG Program has combined with the SRF Program to provide the applicants with a loan, for eligible project costs not covered with grant funds, in order to successfully complete their beneficial projects. We will again seek to combine these programs to aid small communities.
RWQCB IMPACT
Yes - All RWQCBs.
STAFF RECOMMENDATIONS
1.The SWRCB adopt the SCWG Program Guidelines.
2.The SWRCB determine financial hardship for a small community as having a Median Household Income of less than 80 percent of the Statewide Annual Median Household Income.
3.The SWRCB set the cap for the maximum amount of SCWG funding at $2 million per project and per agency.
Policy Review ______
Legal Review ______
Fiscal Review ______
STATE WATER RESOURCES CONTROL BOARD
RESOLUTION NO. 2004 -
ADOPTION OF THE SMALL COMMUNITY WASTEWATERAGRICULTURAL WATER QUALITY GRANT (SCWG)
PROGRAM (AWQGP) GUIDELINES
WHEREAS:
the Division to administer approximately $20 million from FULL NAME (Proposition 40) and FULL NAME (Proposition 50),
to small communities with financial hardship
received input from various stakeholder groups
1.The Division of Financial Assistance (Division) has drafted the Small Community Wastewater Grant (SCWG) Program Guidelines, , to enable ;
2.Has reviewed … the language contained in Proposition 50 for disadvantaged communities, the SWRCB has determined that a small community with a financial hardship is defined as one having a Median Household Income (MHI) of less than 80 percent of the Statewide Annual MHI;
3. an Economic feasibility analysis was performed to add in the selection of maximum grant funding in order to maximize the number of projects receiving SCWG funds, while maintaining project affordability, and acknowledging the available funding is not intended to fund entire individual projects
- The Division of Financial Assistance State Water Resources Control Board (DivisionSWRCB) is authorized to administer approximately $23040.9 million in grantsbond funds from the California Clean Water, Clean Air, Safe Neighborhood Parks, and Coastal Protection Act of 2002Watershed, Clean Beaches, and Water Quality Act (Proposition 40) and the Water Security, Clean Drinking Water, Coastal and Beach Protection Act of 2002 (Proposition 50) for the AWQGP;
- The SWRCB will be authorized to administer approximately $5.5 million in federal funds pursuant to Section 319(h) of the federal Clean Water Act for local nonpoint source pollution control activities upon enactment of the federal 2005 budget;
- Surface water quality problems associated with discharges from irrigated agricultural lands are some of the most widespread water quality problems in California;
- Funding is needed to define and identify sources of surface water quality problems associated with irrigated agricultural discharges, and implement measures to address the problems;
- The Division SWRCB has considered input from the U.S. Environmental Protection Agency, a broad spectrum of stakeholders, and the public regarding the development and implementation of the AWQGP; and
- The draft Small Community Wastewater Grant (Guidelines have been distributed for public comment, and the comments have been taken into consideration.
THEREFORE BE IT RESOLVED THAT:
The State Water Resources Control Board:
- Adopts the draft AWQGP Guidelines;
- Restricts AWQGP Proposition 40 and 50 funding to projects that address surface water quality problems associated with discharges from irrigated agricultural lands;
- Dedicates up to $11.4 million of Proposition 40 funds to monitoring projects; and
- Places a maximum grant amount and funding match on a per project basis, and sets the maximum grant amount and funding match as follows:
Maximum
Grant/Project / Required
Funding Match
Monitoring Projects / $ 500,000 / 50 Percent
Implementation Projects / $1,000,000 / 20 Percent
CERTIFICATION
The undersigned, Clerk to the Board, does hereby certify that the foregoing is a full, true, and correct copy of a resolution duly and regularly adopted at a meeting of the State Water Resources Control Board held on August 26, 2004.
______
Debbie Irvin
Clerk to the Board
DRAFT 6/25/04
EXHIBIT A
SMALL COMMUNITY WASTEWATER GRANT PROGRAM GUIDELINES