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Budget Update: Special District Relief Funding 

AB 128 (Ting), the Budget Act of 2021 – “Budget Bill in Chief,” was signed by the Governor and chaptered on June 28. This version of the budget reflected only the Legislature’s agreement and did not represent negotiations with the Administration. The budget is an urgency measure and went into effect as soon as it was signed.

SB 129 (Skinner), the Budget Act of 2021 – “Budget Bill Junior” significantly amended provisions in AB 129 to reflect general agreement between the Governor and the Legislature and was signed by the Governor and chaptered July 12, going into effect immediately. Not all details were fleshed out in this main budget bill junior and last week the Legislature passed several other budget bills junior and trailer bills pertaining to a host of specific issues that reflected further agreements before adjourning for summer recess on July 16. Funding specific to special districts appeared in the Budget Bill in chief and provisions further guiding some of the details of those funding programs were passed last week. Below is an update on where budget items specific to special districts stand now:

$100 MILLION COVID-19 RELIEF FUND FOR INDEPENDENT SPECIAL DISTRICTS THAT CAN DEMONSTRATE FISCAL IMPACTS DUE TO THE COVID-19 PUBLIC HEALTH EMERGENCY.

• The language has was amended in SB 129 from that which was proposed in AB 128, the package first sent to the Governor, and now states the funding is “available to provide fiscal relief to independent special districts that have encountered unanticipated costs or loss of revenue due to the COVID-19 public health emergency and that have not received other forms of fiscal relief from the state or federal government.”

• The Department of Finance, in consultation with the California Special Districts Association, will develop a plan to distribute the funding by September 1, 2021, and DOF must notify the Joint Legislative Budget Committee of the plan by that date,

• Further, the language provides additional details regarding what the plan for distribution must consider: 

• • “The plan shall provide to each qualifying district that applies for relief a prorated share of the amount appropriated in this item,
  • With each district’s share based on its proportionate share of revenue losses reported by all qualifying districts from all fund sources between the 2018–19 and 2019–20 fiscal years, as reported by the district to the department.
  • Applicant districts shall self-attest to the accuracy of all information reported to the department.
  • Upon completion of application reviews, the department shall order the Controller to remit funds to each county auditor-controller for all qualifying districts in each county. The county auditor-controller shall disburse these funds to each qualifying district within 30 days of receipt from the Controller.”

While CSDA advocated heavily for access to fiscal relief for COVID-19 response impacted special districts, ultimately the proposal and provisional language has been determined in negotiations between the Assembly, Senate, and Administration. CSDA is pleased to be consulted in the final process and has begun initial discussions with the Department of Finance (DOF) to seek clarification as to how they are defining many of the provisions mentioned above.

STATUS: CSDA has posed many questions to DOF staff and hope to gain clarity on their intent and the process moving forward soon. CSDA is ready to be a strong partner to DOF as they work to develop a plan for distribution of funds and will report out on updated information or timelines for applications as soon as it is made available.

As of now, the program has not been finalized and there is nothing for districts to do but wait as the Administration works through their process. Please continue to monitor the CSDA eNews and Advocacy News posts, as we will provide updates through these methods as soon as there is something to report.

$1 BILLION IN WATER UTILITY HOUSEHOLD ASSISTANCE AND NEARLY $1 BILLION IN ENERGY UTILITY HOUSEHOLD ASSISTANCE.

While the budget package indicated agreement for the level of funding for utility arrearage programs, the details of eligibility and distribution are included in budget trailer bills AB 148 and AB 135. These two bills implement the funding appropriated in SB 129 (Skinner). These are understood to be trailer bills in their final form, and we do not anticipate future opportunities to amend the language.

AB 148 is the public resources budget trailer bill and includes the program for distributing just shy of $1 billion for water and wastewater arrearages. The California Water and Wastewater Arrearage Payment Program is established in Section 116773.4 and would require the State Water Resources Control Board (SWRCB) to establish guidelines for application requirements and reimbursement amounts for community water system arrearages and shortfalls. If there are insufficient funds appropriated for purposes of the program, SWRCB would then have to disburse the funds on a proportional basis to each community water system applicant based on reported arrearages and shortfalls. However, if there are sufficient funds appropriated for purposes of the program after community water system arrearages and shortfalls are processed, then the SWRCB would establish a similar program for funding wastewater treatment provider arrearages and shortfalls with the remaining funds no later than February 2, 2022.

Note, this bill also contains drought relief language.

AB 135 is the budget trailer bill dealing with human services and includes the language for distributing almost $1 billion for past due electric and gas utility bills. Article 12, commencing with Section 16429.5, establishes the California Arrearage Payment Program (CAPP) under the American Rescue Plan Act of 2021, which will be implemented by the Department of Community Services and Development (CSD). All residential and commercial energy utility customers are considered eligible for CAPP assistance. Once made available by CSD, to receive CAPP funding a utility applicant will be required to complete both a utility survey and CAPP application including submitting all necessary data and information to support the utility applicant’s request for CAPP funding. CSD will contact any utility company that does not respond during the initial 60-day application period to inquire as to the status of the utility’s CAPP application.

Note, this bill also contains provisions pertaining to The Low-Income Home Energy Assistance Program in Section 16367.51 to prioritize and expedite services that reduce energy arrearages for low-income households. Additionally, it establishes the Low-Income Household Water Assistance Program in Section 12087.2 to prioritize and expedite services that reduce arrearages for low-income households. The state has received $116 million in federal relief dollars to fund this program, which will be implemented CSD according to federal guidelines.

STATUS: No information is likely to be made available on application guidelines for several months, as the administering regulatory agencies will undergo a process to develop the programs.

AB 148: This bill was passed by the Legislature July 15 and sent to enrollment, where it awaits the Governor’s signature. The SWRCB will have 90 days following an appropriation being made to develop the program and pass a resolution detailing application guidelines for community water systems and must start accepting applications for the program within 14 days of adopting the resolution.

AB 135: This bill was passed by the Legislature July 15 and signed and chaptered on July 16. Once the appropriation is made, CSD has an initial 90 day period to survey utility applicants to obtain data pertaining to the total number of residential and commercial customer accounts in arrears to determine the total statewide energy utility arrearage and to develop an allocation formula for determining each applicant’s share of CAPP funds.

As of now, program details have not been finalized and there is nothing for districts to do but wait for additional information to be forthcoming. CSDA continues to work with coalition partners, other stakeholders, and the regulatory agencies to better understand how the process will unfold. Please continue to monitor the CSDA eNews and community Advocacy posts, as we will provide updates through these methods as soon as there is something to report.

OTHER FUNDING OF INTEREST INCLUDED IN THE FINAL BUDGET PACKAGE. 

• $250 million in economic assistance California’s public ports. The State Lands Commission will allocate the funding to California’s public ports based on their revenue losses resulting from the COVID-19 pandemic.
• Significant investment in local priority transit projects.
• Over $3 million in one-time General Fund dollars to support grants to local library jurisdictions to acquire bookmobiles and vans, and provides an additional $439 million on a onetime basis to support an equity-focused matching infrastructure grant program to support local library maintenance, capital projects, broadband and technology upgrades, and purchasing of devices.
• $1 million in ongoing funding for the California Vectorborne Disease Surveillance Gateway (CalSurv) pest abatement program.
• Package addressing environmental concerns, with program details yet to be determined. The spending levels are:
• Wildfire Prevention & Resilience: $258 million General Fund, plus additional special funds in 2021-2022, plus $500 million General Fund in 2022-2023.
• Agriculture Budget Plan: $200 million General Fund plus special funds
• Circular Economy: $65 million General Fund in 2021-2022
• Water and Drought Resilience: $730,700,000 General Fund in 2021-2022
• Climate Resilience: $3.7 billion over three years, $440 million General Fund in 2021-2022
• Cap-and-Trade Spending Plan: $720 million