How EMWD Successfully Pursues Grants and Loans

How EMWD Successfully Pursues Grants and Loans

Eastern Municipal Water District (EMWD) supplies municipal water, wastewater, and recycled water services to nearly 900,000 residents of Riverside County, California. It frequently engages in major projects that include infrastructure construction and water quality improvement. EMWD is in a growing region that is currently only about 40 percent built out, which means that it is under a continual demand to expand its plants and other infrastructure. In order to do this in a cost-effective manner that does not burden existing rate payers, EMWD has a well-developed grants and loans team that researches and vets around 1,800 funding opportunities a year, determines which ones are appropriate for EMWD’s projects and schedules, and follows through on awarded grants with rigorous post-award compliance reporting.

In this interview, John Ward, EMWD’s director of engineering services, and Bonnie Wright, the district’s grants and loans manager, tell Municipal Water Leader about the grants and loans program and how it benefits EMWD’s vital programs, customers, and bottom line.

Aerial view of the area of the Perris North project.

PHOTOS COURTESY OF EMWD.

Aerial view of the area of the Perris North project, with March Air Reserve Base.

PHOTOS COURTESY OF EMWD.

Municipal Water Leader: Please tell us about your backgrounds and how you ended up in your current positions.

John Ward: I’ve worked at EMWD for over 30 years and have held a number of positions, including design engineer, project manager, and program manager. I am now the director of engineering services. My duties include the management of EMWD’s capital projects controls and the oversight of grant management, including grant pursuit and grant compliance. My background in project design, project cost tracking, and project management positions me well to support these efforts.

Bonnie Wright: I joined EMWD 12 years ago after working for a member of Congress. In that position, one of my duties was assisting nonprofit organizations and municipalities with funding opportunities released by federal agencies and foundations. That role prepared me to serve as EMWD’s grants and loans manager.

Municipal Water Leader: Please tell us about EMWD.

Bonnie Wright: EMWD is a municipal water, wastewater, and recycled water service provider serving close to 900,000 residents in southwestern Riverside County in Southern California. EMWD serves more than 150,000 water connections, approximately 246,000 sewer connections, and nearly 600 recycled water connections.

Municipal Water Leader: Please give us a sense of the overall role that grant writing plays in EMWD’s operations.

Bonnie Wright: EMWD’s board of directors has established a strategic goal of aggressively pursuing external funding for critical district projects. EMWD’s aggressive pursuit of outside funding is a key strategic initiative to reduce the financial burden on EMWD’s customers. For example, EMWD’s 5‐year capital improvement program totals $470 million for fiscal year end 2020 to fiscal year end 2024 and currently includes EMWD’s largest construction project to date, the Perris II desalter, which has an estimated total project budget of $63.4 million, 40 percent of which is grant funded. Over the past 5 years, EMWD has received a total of $238 million in grant and loan funding.

Municipal Water Leader: How many grants are applied for per year, and how many are usually awarded? What percentage of EMWD’s funding comes through grants?

Bonnie Wright: We research approximately 1,800 funding opportunities a year from all different sectors. Approximately 10 percent align with EMWD’s projects and are further considered. These opportunities are presented to a senior management grants and loans committee for further discussion. The committee decides which to pursue based on actual program funding, the number of anticipated awards, and the alignment of the project schedule with the funding schedule. In total, we pursue 8–12 funding opportunities each year and achieve a 96 percent success rate. Anywhere from 25 to 50 percent of EMWD’s total funding comes from grants and low-interest loans.

Housing developments in Quail Valley.

PHOTOS COURTESY OF EMWD.

Municipal Water Leader: How big is your grant and loans team?

Bonnie Wright: On the pre-award side, there is my grants and loans analyst and me. The post-award team is a little larger. Both teams are supplemented by consultant services as needed.

Municipal Water Leader: Would you tell us a bit more about the importance of aligning the project schedule and the funding schedule?

John Ward: The key is to get early notice of EMWD’s needs relating to conservation and capital projects and to keep in mind that the majority of our funding supports the capital projects. Having a long-range perspective on up-andcoming capital infrastructure needs allows us to coordinate with external funding schedules. It can sometimes take several years to develop the planning and preliminary designs for large-scale water or wastewater facilities, and it’s critical to align the funding needs with the funding schedule so that they coincide.

Bonnie Wright: We also need to comply with the grant requirements. For example, can we complete the project in the required time frame? We find it necessary to look at projects 2–3 years in advance, since applications and funding agreements can take up to 18 months to be completed, reviewed, and agreed to.

Municipal Water Leader: What is the breakdown between the grants and low-interest loans that EMWD receives?

Bonnie Wright: We apply for more grants than low-interest loans. However, in terms of dollar amount, it all depends, since most grants have maximum award amounts. The funding agency decides on the breakdown. For example, if a funding program has a maximum award amount of $15 million and project costs are $30 million, you can obtain a low-interest loan to offset the remaining amount.

Municipal Water Leader: Which organizations or bodies does EMWD apply to for grants?

Bonnie Wright: EMWD reviews all potential funding sources. Most EMWD grants are awarded through State Water Resources Control Board’s (SWRCB) Clean Water and Drinking Water State Revolving Funds, the U.S. Environmental Protection Agency, the California Department of Water Resources, the Bureau of Reclamation, and the U.S. Army Corps of Engineers.

Some of the most crucial funding programs for us are the SWRCB’s clean water and drinking water programs as well as Reclamation’s WaterSMART and Title XVI programs. Those programs fund projects related to desalination, water recycling, storage, critical infrastructure, and treatment.

Municipal Water Leader: How do you find out about new grant programs?

Bonnie Wright: We use web research tools, participate in funding agency webinars and funding fairs, and stay in regular direct contact with funding agencies.

Municipal Water Leader: Please tell us about the Perris North program and the role grant funding played in it.

John Ward: The Perris North groundwater basin underlies March Air Reserve Base (MARB) and much of the Moreno Valley area. The region has experienced a historic transition from agriculture to urban land use, and due to the extensive contaminants in the basin, groundwater pumping has been significantly reduced over the last several decades. As a result, this region is experiencing a rise in groundwater. The Perris North project will have a number of benefits, including contamination remediation in the basin; protection for noncontaminated areas of the basin; and the development of a secure, local, and reliable water supply of up to 6,750 acre-feet a year. As the largest agency that serves the area, EMWD led the pursuit of external funding, which will play a crucial role in this project. EMWD is especially appreciative of its positive relationship with the SWRCB’s Division of Drinking Water, which is providing 50 percent of the $90 million needed for the project.

Municipal Water Leader: Please tell us about the Quail Valley sewer system project and the role grant funding played in it.

John Ward: For many years, failing septic tanks in the Quail Valley community resulted in groundwater pollution within the community and downstream in Canyon Lake. Many properties within Quail Valley do not have the land and leaching capacity necessary to accommodate the volume of wastewater produced. As a result, during extended rain events, septic wastewater would surface and threaten to contaminate Canyon Lake, which is under the jurisdiction of the Elsinore Valley Municipal Water District and serves as a drinking water source for the region. Installing a sanitary sewer solution became a priority for the state and regional boards. In the first phase of this extensive project, EMWD partnered with entities including the Santa Ana Watershed Project Authority, the City of Menifee, and the property owners and developers to extend sewer service to the most southerly, downhill side of the Quail Valley community, which is closest to the city of Canyon Lake’s drinking water reservoir. EMWD secured $19.6 million in grant funding to cover all the costs related to this initial phase.

Municipal Water Leader: What are the most important elements in a successful grant application?

Bonnie Wright: Understanding the grant objectives; following exact funding guidelines; addressing all categories; and ensuring that district commitments are realistic, reasonable, and achievable. Additionally, it is important to provide prompt responses to questions the funders may have. Finally, teamwork within your organization is necessary to produce an outstanding proposal. Grant staff, project engineers, subject matter experts, senior management, our board of directors, and the consultants chosen to assist with the process have all played important roles in our success.

John Ward: Equally as important as the grant program are our post-award compliance activities, in which staff provide regular progress reports as well as accurate and concise funding reimbursements to funding agencies.

Municipal Water Leader: What sorts of post-award compliance activities are required?

John Ward: In general, those compliance activities concern the reasonableness of what we proposed in our grant application and the commitments we made to the funding agencies. Every penny that has been requested can be validated and invalidated via an audit. We are often required to submit quarterly progress reports on our efforts. Many times, we are required to engage in performance reporting for decades after the facility is brought online—typically on an annual basis at first and then every 5 years. We have to prove that we are responsibly operating and maintaining the funded facilities and meeting funding program objectives. This is all part of maintaining and building relationships with the funding agencies.

Bonnie Wright: One of the reasons we have such good rapport with the funding agencies is that we have consistently met all the objectives and compliance requirements of the funding agreement in a timely manner. EMWD appreciates and values the respectful partnerships we have developed with funding agencies. Adding to that, we have an incredible post-award team that does all the accounting and reimbursements. These grants are all given on a reimbursable basis. We’re proud of the fact that we often get 100 percent claim reimbursement.

Municipal Water Leader: What advice do you have for other agencies seeking grant funding?

Bonnie Wright: Have processes and procedures in place for vetting and pursuing external funding, prepare realistic and reasonable proposals, touch base regularly with funding agencies, and staff appropriately.

John Ward is EMWD’s director of engineering services and Bonnie Wright is EMWD’s grants and loans manager. For more information about EMWD, please visit www.emwd.org.