FOR: Water Subcommittee Meeting [March 27, 2024]
TO: Honorable Water Subcommittee Members
APPROVAL: Stephen Dopudja, P.E., Interim Utilities Manager
Toyasha Sebbag, Assistant to the City Manager
...Title
Southern California Association of Governments (SCAG) Regional Early Action Planning (REAP) 2.0.
(ACTION)
RECOMMENDATION
Request that the Water Subcommittee provide feedback to the City Council sending a letter of advocacy for state budget reconsideration of REAP 2.0 program funding.
...Body
BACKGROUND
In April 2023, the City received notice of a grant award for $2 million from the U.S. Department of Interior, Bureau of Reclamation (USBR) to fund the Rialto City 3A Groundwater Well Treatment Facility.
On January 4, 2024, the City received notice of a grant award for $2.5 million from the Southern California Association of Governments (SCAG) Regional Early Action Planning (REAP) 2.0 Applications for the Regional Utilities Supporting Housing (RUSH) Pilot Grant Program to fund the remaining construction cost of the Rialto City 3A Groundwater Well Treatment Facility (ATTACHMENT 1).
The grant funds would be used to equip an existing well and install an ion exchange treatment system that would remove arsenic from the groundwater thereby bringing City 3A Groundwater Well (Project) online to provide an additional source of potable water for the city’s residents. Together, the grant funds were for $4.5 million and would fully fund the City 3A Groundwater Well Treatment Facility.
On January 25, 2024, staff received notice from SCAG that the REAP 2.0 Program Funding was cut in Governor Newsom’s proposed FY 2024/25 Budget (ATTACHMENT 2).
Well City 3A Project
The Water Supply Well City 3A for Regional Housing Project involves constructing critical water utility infrastructure to supply up to 2,750 acre-feet per year of new water supply and to meet the additional water supply needed for up to 4,994 additional housing units across six general development areas within the Rialto Water Service Area to support mixed-income housing. The construction of housing in the downtown area will help to meet local housing needs, which includes affordable housing and a mix of housing types to increase housing supply, choice, and affordability.
ANALYSIS/DISCUSSION
On January 10, 2024, Governor Gavin Newsom announced a proposed budget that would cut $1.2 billion in funding for housing programs, including $300 million for the Regional Early Action Planning (REAP 2.0) program. REAP 2.0 has awarded millions of dollars to the Southern California region for planning and capital improvements that realize the region’s mobility, environmental, and housing goals. Reducing future funding will have a devastating impact on cities and counties across Southern California and the entire state.
Through the REAP 2.0 program’s allocation to SCAG, the City of Rialto/Rialto Utility Authority (RUA) was awarded $2.5 million for the Water Supply Well City 3A for Regional Housing Project.
Without the SCAG funding, the City/RUA’s 3A Groundwater Well may not come to fruition and the city may be at risk to return the $2 million funding from the USBR since the City/RUA no longer has an identified funding match available.
The governor and the legislature must take further steps before finalizing the fiscal year 2024/25 budget. As legislative budget hearings continue through the May 14, 2024, deadline, the first major update will be the governor’s updated budget proposal, known as the “May Revision.”
SCAG is encouraging the governor to reconsider these cuts during the May Revision and has submitted an official letter to state legislators and the Senate Budget and Fiscal Review Committee (ATTACHMENT 3). SCAG is asking local and county governments to partner in the advocacy for the governor to reconsider these budget cuts to the state’s FY 2024/25 Budget.
Attached, is a draft letter to be presented at an April City Council Meeting for staff recommendation to send a letter for state budget reconsideration (ATTACHMENT 4).
FINANCIAL IMPACT
Operating Budget: None.
Capital Improvement Budget: The Rialto City 3A Groundwater Well Treatment Facility's total construction cost is $4.5 million with $2 million funded by USBR grant monies. Should the City of Rialto not qualify for $2.5 million in RUSH Pilot Program Grant monies then the $2.5 million match must come from another funding source that has yet to be confirmed. If funding is budgeted in the FY 2024/25 state budget, then Rialto City 3A Groundwater Well Treatment Facility will be fully funded.