Shortening the application process and early funding for environmental documents among the modification to be considered at the June meeting
With the passage of Proposition 1 in November of 2014, voters approved $7.5 billion for a variety of water projects and programs, with $2.7 billion of that set aside to pay for public benefits of water storage projects. The California Water Commission is the state agency tasked with disbursing the funds and has been developing the regulations that will determine how eligible surface storage and groundwater storage projects will be funded.
On January 29th, the first set of draft regulations for quantifying public benefits were released for a 45-day comment period. At the May 18th meeting of the California Water Commission, Supervising Engineer Jenny Marr updated commission members on potential modifications to the draft regulations, and the proposed timeline for their completion.
Since the close of the public comment period, Commission staff have been going through the comments received and have been working on responses to comments. “Some common themes are starting to emerge and we’ve been starting to formulate some potential modifications to the regulations in response to these comments on the draft,” said Ms. Marr.
Modifications to the general selection process
One of the common themes emerging from the comment letters is to simplify and streamline the process to get state bond funding out the door sooner so projects can be implemented and move forward. One of the possibilities staff is considering recommending for accomplishing that is to eliminate the peer review process.
“There have been several considerations of what that peer review process could look like,” said Ms. Marr. “They all add time to the process, not all of these different options that we looked at really added a lot of value. When we stepped back and asked why the peer review is included in the draft regulations, it became apparent that the peer review was kind of a legacy. It was put into the process very early on at a time when DWR technical staff were leading the program, and these happen to be the same technical staff that had worked in partnership with many of the CalFed programs, and so the peer review process provided that independent review aside from a DWR technical review. At this point of time, the Commission has developed a technical competency, we’ve made sure that we’ve put in some sort of firewall as we’re calling it between DWR staff that are working on the surface storage projects and DWR staff that are supporting this program, so we think we’ve isolated that potential conflict and that’s no longer an issue.”
Commission staff have been fleshing out the technical review process with their agency workgroup, discussing the process that Department of Fish and Wildlife and State Water Board will use to look at the applications, and identifying how many levels of technical reviews the applications will have. “They will have a multi-layer review process of the applications while they are looking at the public benefit quantification and the management of those public benefits, so at this point in time, one of the recommendations for modifying regulation is to remove the peer review process. We think there’s not a lot of added value and is a little bit duplicative of the technical and management review that the agency partners are recommending for putting in place. It affirms that the process that we put in regulation is transparent and will be consistently applied across projects.”
Ms. Marr noted that by removing the peer review, they could save about three months in getting the Commission ready to make a decision.
Commissioners then briefly discussed whether or not to keep the peer review process in the regulation. Comments are mixed with some commissioners wanting to keep the peer review process and others thinking it is not necessary. Chair Joe Byrne reminds the group that this will come back to them as a recommendation to remove it, so there will be further chance for discussion before a decision ismade.
The next consideration for streamlining and shortening the process is to remove the preapplication process. “We looked at the purpose of the preapplication process was, and that was really most simply a red flag review to hopefully catch potential eligibility or project issues early on before an applicant went through the effort and expense of putting together a full application,” said Ms. Marr. “There is value to that process, but we think we can provide that provide that value during technical workshops that we intend on having leading up to and during the application solicitation process. If we remove the preapplication process from the total timeline, we were gaining about 5 months of getting the Commission applications to make decisions.”
Ms. Marr said they are also considering recommending shortening the solicitation period for applications by one month.
Another theme emerging from the comments is to get a bit more funding out the door sooner. Currently, the regulations allow for projects to request early funding for permitting, but the statute allows the Commission to provide early funding for projects to complete environmental documentation as well as to obtain permits. Staff is recommending that the Commission include back in the regulation the completion of environmental documentation for consideration for early funding.
Ms. Marr noted that completion environmental documents are already reimbursable costs, so someone could include that in their cost estimate and there would be a commission cost share. “What we’re recommending is to pull funding for the completion of environmental documents out early, so this provides helpful early funding to applicants, and we’ve heard from several that this would really help them,” said Ms. Marr.
When the Commission discussed the issue in June, some of the concerns voiced at that point were about the potential for sunk costs, which is the risk of projects receiving early funding which don’t go through to implementation. “We think that potential is reduced by the process we’ve laid out as the Commission would not be making a decision on early funding until after some level of technical review,” she said. “In the regulations, we’ve already put a cap at 10% of the project cost share is the maximum they can request for this early funding. I think we can further cap that to a dollar amount, say 10% or $5 million, whichever is the least amount and cap it that way.”
Timeline
Ms. Marr presented a modified schedule, noting that the changes she’s discussed results in a couple of key changes to the timeline. “The location of the yellow star is where the Commission awards early funding; that’s at least 6 months earlier than what we were anticipating before,” she said. “The biggest change is that the application deadline has moved from December of 2017 now to June of 2017, and I think there will be a challenge for many projects to get from regulation adoption, through the analysis to a completed application and completed feasibility study in that five month window, but we haven’t had any comments to this point, at least written, that say how long people need, so we’re not going to get comments until we throw it out there and see if we can shorten and move up the application deadline. At this point in time, it is a modification being considered and being written as modifications to the next draft.”
She then presented a larger and more detailed schedule and timeline for the upcoming months up to the adoption of the quantification regulations. Staff anticipates bringing draft changes to the regulation for consideration at the June meeting and again in August. The August meeting will include recommending changes that include incorporating by reference the technical reference document that staff are currently working on.
Ms. Marr noted that there are several flow paths in October. If there are no more changes after the public comment period in August, the Commission can adopt a final regulation in October; if changes do result from comments or recommendations made after the August public comment period, there will be a third comment period in October, and that would then push adoption of the regulations to the November meeting, she said. “We want to make sure we hit that October or November deadline, but as you can see, there are a lot of things going on between now and November and things are going to move fast. We’re going to have several iterations of public comment and we can’t really deviate from this schedule without potentially missing the deadline.”
Commissioner Orth asked about the timeline. “This schedule is targeting completion of the quantification regulations that we approved earlier this year and put through OAL and are now going through a redraft and the procedural steps to finish them out ideally in October. Layer on top of that the evaluation regulations. Am I missing them in the schedule … ?
Ms. Marr said that they haven’t been added to this timeline yet. “We’re still working through how that process is going to layer on to this. We’re definitely working with the agency team to figure out how applications are going to be evaluated and what potential scoring criteria will be, so these things still need to be brought forward to the Commission. Because we’re heavy into this quantification regulation modification and consideration, we’re really looking at getting a better handle at what those modifications will be to see how that would influence the amount of information that would need to be in a second set of regulations. If there is opportunity and the initial statement of reasons was written with enough broad language to potentially roll the evaluation regulation into maybe round 2 of this process, that’s probably the easiest than starting a new process. We are working with Commission counsel on the initial statement of reasons that we had with the quantification regulation and if it was broad enough in scope that we can include the evaluation text as a modification to those, rather than starting a new process.”
Climate change and sea level analysis under development
The staff is working on adding climate change and sea level analysis. “We didn’t want to be silent on that as that of course was the number one area of comment,” Ms. Marr said. “So we’re working very hard right now to really hone in on what scenarios we’re recommending, the year of analysis, what points in time are we recommending the applicants look at sea level rise and climate change, and then putting together a model package so applicants can use models that we know work with the scenarios that we’re recommending, and provide that technical assistance with those models. This is work that still has to go under a few months of development, so there will be no modifications to the climate change or sea level rise analysis in round 1, but we anticipate including those changes with the technical reference document in August when we get to round 2 changes.”
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