Copy this link to view the full comment letter: https://wetlandswatch.org/s/Wetlands-Watch-CFPF-Draft-Guidelines-Comments-13121.pdf
ELIGIBLE PLANS, PROJECTS, AND STUDIES
Planning Grants
We strongly support the provisions in the Draft Guidelines allowing planning grants to include “plan[ning] and implement[ing] an education and outreach strategy for communities that have been traditionally underserved or particularly vulnerable,” but can a planning grant include funding a “circuit rider” to both develop and implement this education and outreach strategy? This circuit rider would meet with localities and provide direct assistance, filling a role similar to Virginia cooperative extension. Many communities across the state are not aware of the Fund’s existence. Notifying local and regional staff that resources are available will be a critical first step to ensure equitable distribution of the Fund. Reaching and involving the residents of “low income geographic areas” presents a unique challenge given the state’s existing limited staff capacity to complete outreach to areas unburdened by technological and other limitations present in areas of low income.
We appreciate the Draft Guidelines’ inclusion of staff training in the National Flood Insurance Program (NFIP) and costs associated with obtaining a Certified Floodplain Manager (CFM) certification. Wetlands Watch’s training and outreach experience in both rural and small communities revealed a scarcity of CFM staff throughout the state, despite the high percentage of communities participating in the NFIP. Strict compliance with the NFIP is paramount for all Virginia communities.
Project Grants
The Fund governance documents need to determine eligibility of and additional conditions on projects on private property. In Virginia’s coastal zone, the majority of our shorelines are in private ownership. This presents a challenge for flood protection and resiliency if the Fund is restricted only to public lands. During outreach efforts, numerous stakeholders raised the issue of eligibility of Fund moneys for projects on private property. If private property is eligible for projects, Fund governance documents must develop policies and procedures to ensure transparency as state administered funds will benefit private landowners. This may require Fund governance documents to consider protective measures, in addition to the 25% allocation to low-income geographic areas, to safeguard the equitable distribution of state resources.
Stakeholders emphasized that eligible projects should not be limited to “shovel-ready projects,” but should include the development of final designs, engineering analysis, and permitting. Many stakeholders questioned whether the project timeline will allow for delays due to final design and regulatory approval. The cost and time commitment associated with getting to the shovel-ready phrase are significant.
These issues of time restrictions on grants must be addressed in the Fund governance documents. During stakeholder outreach, there were questions about time limits on the expenditure of funds (e.g., “all funds have to be expended within 36 months”) or the start of the project (e.g., “all projects have to be shovel ready within 6 months of award”). If these conditions are applied, they must be clearly outlined in the Fund governance documents.
A related issue that needs to be addressed is what to do with unexpended project funding. The Fund governance documents need to detail whether unexpended funds can be rolled over to another project if costs are under estimates, or if the money must be returned to the Fund.
The statute requires that “localities shall use moneys from the fund...in areas that are subject to recurrent flooding as confirmed by a locality-certified floodplain manager.” Regarding the first part of this statutory language, the Draft Guidelines do not set a standard for “recurrent flooding” and the Fund governance documents should define and set that standard. The standard must also cover both coastal tidal flooding and riverine flooding, which operate differently. Periodic riverine flooding may occur less frequently than “recurrently,” but needs to be covered by the programs of the Fund. With the statewide focus of the Fund, these riverine flooding issues need inclusion in the definition of “recurrent flooding.”
The second part of the above referenced statutory language requires that “a locality-certified floodplain manager” confirm the recurrent flooding areas. Many submitted comments raise the issue of whether the “locality-certified” designation equates to a Certified Floodplain Manager (CFM), as confirmed by the Association of State Floodplain Managers (ASFPM). The Fund governance documents must clarify the intent behind this designation.
There is also a need to include local officials other than floodplain managers since the involvement of other departments and staff expertise may be equally important. The best plans and planning approaches come from localities that collaborate across departments. The designation of recurrent flooding areas may need approval from multiple departments or elected officials, which could require a longer administrative process for communities.
The statute states that “moneys in the Fund may be used to mitigate future flood damage.” Fund governance documents should mandate that future flood risk be considered in these projects, and in the locality flood resilience plan, to drive adoption of planning standards to anticipate future conditions. However, this raises a number of issues, regarding what standards will be used for future conditions and what methodologies should be used for the future conditions analysis. Final Fund governance documents must decide if project applications will require the consideration of the full suite of impacts - sea level rise, increased rainfall, salinity, and temperature.
Requiring the inclusion of future flood conditions will disproportionately affect smaller, resource constrained, rural communities that do not have funding or capacity to develop those projections. Riverine communities will be further behind than coastal communities because riverine flood models do not include increased rainfall intensity, due to the lack of state standardized estimate. If the Fund governance documents require the consideration of future conditions in Fund project applications, the state must develop state-approved standards and analytical methods, on a regional/local scale, that can be included in project grant applications to the Fund.
The use of project funds as a match for foundation and federal projects should be allowed. Fund Guidance Documents need to address problems around the timing of awards from the Fund and synchronization with project partners’ foundation grant cycles and federal appropriations. Can awards from the Fund be held in escrow until project partner approval and funding is available? Are awards from the Fund contingent upon project partner funding approval and returned to the Fund if that partner funding fails to materialize?
Studies and Data Collection of Statewide and Regional Significance
The statute authorizes the Fund to offer “loans and grants that support flood prevention or protection studies of statewide or regional significance.” The Draft Guidelines indicate what types of studies would fall under this category, but they are silent on how these studies will be identified, prioritized, or funded. The Fund governance documents must detail the process by which these studies are prioritized and awarded to provide transparency about Fund operations and build trust in the administration of the Fund. There must be a separate process with clear prioritization for these studies and for other state expenditures of the Fund moneys, such as financing staff positions at DCR and the Department of Environmental Quality (DEQ) with the administrative overhead funding allowed in statute and through memorandums of agreement. Details on these expenditures should be reported annually, accompanied by a work plan for the subsequent year.
These statewide and regional studies are essential to reduce flood risk in the Commonwealth, as many local plans and projects cannot proceed without the information contained in state-wide and regional studies. We recommend the state release a list of state-wide priorities and initiatives so local government staff can provide input on what information is missing and delaying their own planning and project implementation. The list of priorities in the Coastal Master Planning Framework is a good start, but does not reach non-coastal areas and may not even constitute a thorough list for the coastal region. It would be helpful if DCR created a checklist, based on existing needs, to establish these state-wide and regional priorities.
APPLICATION & SELECTION
Application Process
The application process must be developed and sufficient time allowed for the first issuance of the Grant Manual for stakeholder comment. The timing of the grant/loan application period is outlined in the Draft Guidelines: “[t]he Round 1 application window will run from April 1-June 1, with August grant awards. Round 2 will run from August 1-December 1 with December grant awards.” For the first round of funding this time period may need adjustment, since it is doubtful that sufficient time exists between the closing of comments on these Draft Guidelines and April 1 to develop and issue a Grant Manual, allow public review and comment, publish a final Grant Manual, and allow localities sufficient time to prepare applications to the Fund.
Stakeholder outreach work highlighted the need to provide sufficient advance notice of a grant application period or request for proposals (RFP) and to provide sufficient time after the grant application period/RFP is announced for localities to assemble proposals. During the stakeholder outreach process, localities, especially smaller/rural localities complained that due to communication limitations, they are constantly “surprised” by RFP’s from foundations and agencies and cannot turn around proposals in time. Many of the projects on a locality priority list are not “shovel ready.” As noted elsewhere, good proposals will need time to undergo local government review. Most of those projects need final engineering and design and many will undergo regulatory review, causing more delay. The application period/advance notice period must include time required for internal locality review (program, budget, and legal review). It must also allow sufficient time for city council/county board approval and legal commitment of resources.
Applications for projects in watersheds that flow from or into adjacent localities, or projects that will affect conditions in another locality (longshore drift of sand, transfer of wave energy, etc.), should have an acknowledgement from that adjacent locality that they are aware of the project and give their assent. This is especially important if, as requested elsewhere in these comments, projects are organized on a HUC-10 watershed basis.
Many localities do not have the staff resources to apply for and manage grants offered by federal agencies and foundations. The application and reporting requirements for the Fund need to recognize that fact. Many localities interviewed said they prefer to use their Planning District Commission (PDC) as the fiscal agent for the grant and the Fund governance documents need to allow this relationship. PDCs do not have the authority to conduct every project, therefore a pass through or subcontract with the localities must be permissible by the Fund.
The Fund governance documents need to determine how frequently an eligible entity can apply for a grant/loan, and if there should be a waiting period between awarded grants/loans as a mechanism for spreading Fund moneys in a fair and equitable manner. It should also be clarified whether or not an eligible entity can apply for a subsequent grant/loan before a prior awarded grant/loan project is completed. Some localities are more prepared to apply for Fund moneys than others in the initial years of the Fund, which could leave less-prepared localities behind.
All project applications must contain an operations and maintenance (O&M) plan and dedicated funding. We have observed tens of thousands of dollars in resilience projects that have failed due to a lack of O&M planning and funding.
Match
The Draft Guidelines state that a cost share will be set as part of the Grant Manual. The Draft Guidelines indicate that there will be a sliding scale to prioritize green infrastructure and community-scale projects (meaning a lower cost-share will be required). In the Fund governance documents, definitions of “green infrastructure” and “community-scale projects” are needed to determine which projects qualify for greater local government cost share and which qualify for lower local government cost share. There should be lists of types of projects fitting those definitions to assist localities in developing applications for project funding.
The Draft Guidelines also state that applications involving studies, grants, or projects, for which there is dedicated funding (stormwater, wastewater, transportation, etc.), will “receive a lesser cost share,” although it is unclear how that process will work. A definition of what constitutes “dedicated funding” and/or at least the sources of funding that are defined as “dedicated” must be included in Fund governance documents.
For the low-income geographic areas set aside, the Draft Guidelines state, “[t]he grant awards, in particular, should consider the fiscal capacity of the applying localities and look to fund full project costs where necessary and examine the feasibility of using a sliding scale, based on fiscal health metrics, to determine the final amount of a grant award.” The Fund governance documents must outline how they will evaluate an eligible entity's fiscal capabilities, and what metrics will be used to give less fiscally capable entities a higher cost share.
The Fund governance documents need to determine if project O&M costs can be used as a local match on a project. This is especially important for projects employing nature based solutions. In our experience the continued maintenance of these approaches is critical to their performance.
Low Income Geographic Areas
The statute and the Draft Guidelines set aside 25% of the annual Fund disbursements for projects in “low-income geographic areas,” defined in the statute as, “any locality, or community within a locality, that has a median household income that is not greater than 80 percent of the local median household income, or any area in the Commonwealth designated as a qualified opportunity zone by the U.S. Secretary of the Treasury via his delegation of authority to the Internal Revenue Service.” We support the flexibility provided with the use of “or” in designating these areas because it allows a locality to choose the most relevant locations. Many opportunity zones are in areas that are built out and have fewer/more expensive resilience options, certainly not as many nature-based solution options, so the ability to use an income standard allows flexibility.
The Fund governance documents should clearly delineate the eligibility criteria for this “low-income geographic area” set aside. Is it enough that a project protects an area, but only includes one census tract or neighborhood that is a “low-income geographic area?” Is there a minimum area protected/served by a project that would make the project eligible for this “low-income geographic area” set aside? Without clarity in the Fund governance documents, there is potential for inappropriate use/abuse of this set aside.
The statute states that the 25% set-aside will be calculated as a percentage of the total annual Fund disbursements. Does this total include projects of “state-wide or regional significance?” For example, if the state spends one million dollars on a statewide stream gauge system, or a modeling contract, does this mean that $250,000 (25% of that disbursement) is reserved out of the remaining Fund moneys to be spent in “low-income geographic areas?”
In the stakeholder conversations, the Secretary of Natural Resource’s office said that any unexpended portion of the low income geographic area set aside would be reserved for the subsequent year. In order to implement this provision, the Fund governance documents must define the Fund’s annual operating period (what constitutes a “year” for the Fund?), provide clarity on this carry-over procedure and requirement, and state in an annual report the amount of the carry-over.