Direct Operation And Maintenance Funding Program

As part of the State Water Resources Control Board’s (State Water Board’s) Safe and Affordable Funding for Equity and Resilience (SAFER) Program, the Fiscal Year 2022-2023 Fund Expenditure Plan (FEP) for the Safe and Affordable Drinking Water Fund (SADW Fund) introduced a priority related to providing direct operation and maintenance (O&M) assistance:

The Fiscal Year 2023-2024 FEP for the SADW fund included Appendix L: The Direct O&M Funding Program Guidelines, to establish the process and criteria for the allocation and administration of SADW funding for O&M assistance projects.

The goal of the Direct O&M Funding Program (Direct O&M Program) is to provide assistance in cases where there is a direct correlation to supporting the affordability of water (as part of the human right to water) while also improving sustainability. In addition to the Groups 1 and 2 funding approaches outlined below, the State Water Board will continue to prioritize direct O&M funding to facilitate voluntary consolidations and provide interim O&M funding for water systems that will be or have been appointed an administrator.

Eligible Entities include:

• public agencies
• nonprofit organizations
• public utilities
• mutual water companies
• California Native American Tribes
• Administrators
• groundwater sustainability agencies

Funding provided to a public utility that is regulated by the Public Utilities Commission or a mutual water company must have a clear and definite public purpose and benefit the customers of the water systems and not the investors or shareholders.

Eligible Water Systems:
In general, the State Water Board will use a streamlined approach to committing O&M assistance for Group 1-Statewide Prioritization projects and a standard approach for Group 2-Case-by-Case.

Specific system requirements to receive funding (e.g., lowering water rates, TMF assessment, conducting a feasibility study on how to improve system sustainability, etc.) are included in the Direct O&M Program Guidelines and will be included as special conditions in each funding agreement. TA may be considered to assist systems in meeting these requirements.

Water systems may request to be added to the Group 1 list by submitting documentation which demonstrates a system’s water rates are above 2.5% of the community’s MHI and that the system would be categorized with a high affordability burden based on the Affordability Assessment methodology.

Group 1 - Statewide Prioritization
The State Water Board will provide each water system that meets the Group 1 eligibility criteria and any subsequent prioritization criteria with a notice that identifies the availability of potential O&M funding for the system. See below for the water systems currently in Group 1. Water systems must respond to the notice, and associated forms, signaling interest in entering into a funding agreement with the State Water Board by the date indicated on the notice. Water systems shall update the State Water Board if revenue or other water system affordability factors have significantly changed since the most recent Needs Assessment results. If interest is shown by the water system and applicable information is submitted and deemed acceptable, the State Water Board will proceed with drafting and issuing a funding agreement.

Group 2 - Case-by-Case
Interested parties may apply for O&M funding by submitting an application (see below).
Funding is through a reimbursement process. It typically takes several months to develop a grant agreement and reimbursements can only be paid out once a funding agreement has been executed. Once the agreement is executed, the Recipient will submit reimbursement requests and progress reports as the project is implemented.

How to Apply
To apply for funding, applicants have the following options:

• Complete the Direct O&M Application form and submit the completed application form and pertinent attachments to DFA-SADW-Fund@waterboards.ca.gov.
• The local DDW District Office can assist public water systems by submitting the application on behalf of a water system.

Governing Guidelines

• Direct O&M Funding Program Guidelines

• Group 1 List - December 2023 Water Systems
• Direct O&M Application Form
• Authorized Representative Resolution Template
• Self-Certification Form
• General Terms and Conditions