How did a state board spend $100 million in water conservation grant money?
Arizona's Water Infrastructure Finance Authority has awarded over $100 million to water conservation programs and projects across the state, financing everything from the replacement of turf for artificial grass in a school's athletic fields to lining of miles of agricultural canals with concrete.
A total of 89 projects and programs in all 15 counties received some funding. WIFA must assign the other half of the $200 million Water Conservation Grant Fund by June 2024.
The grant fund helped pay for a wide arrange of projects in different water-using sectors.
All public entities, as well as nonprofits partnering with public entities, were eligible to apply for state grants of $250,000 per project or $3,000,000 per program if they brought a 25% match for its full cost. Water providers, including tribal entities and private companies, were also eligible.
Proposals to install advanced water meters or do system upgrades were the most abundant and received the most funding last year. The greatest water savings and bang for the buck came from agricultural system upgrades.
But all sectors have the potential to save more water. WIFA staff and board members said they want to fund a variety of strategies across Arizona communities, beyond the return on investment a project can have.
"Arizona is at a crossroads; the urgency of our water situation means that every drop counts," said Sam Draper, one of the seven volunteer committee members helping review and select projects for the water conservation grant fund.
"We need to take an all-of-the-above approach, conservation being a key consideration."
Where was the first half spent?
WIFA, an independent state authority, received a total of 273 applications from April to November 2023.
The grant fund committee evaluated about 100 of the received proposals and sent recommendations to the WIFA board on whether to approve, reject or postpone decisions on applications. The remaining applications will be reviewed and selected this year.
WIFA staff sorted applications in seven different categories: advanced meters or system upgrades, efficient fixtures, water recharge or reuse projects, agricultural system upgrades, turf removal, research and education initiatives, and vegetation management for watershed restoration.
They received the largest number of applications from projects that involved the installation or upgrade of smart water meters, or an improvement in water system efficiencies. These types of proposals also received the most grants.
By statute, there is no set criteria for awarding the grants.
The only requirement is that at least a third of the funds go to conservation projects that address Colorado River water shortages, and a third deal with groundwater replenishment.
Committee members take into consideration the water source the applicant depends on, the volume of water the project or program could save, and at what cost, as well as co-benefits beyond water conservation.
Weighing the applications on an individual basis allows the committee and the board to focus on more qualitative aspects, beyond a return on investment, said Draper.
"You can't put a price per acre-foot saved on helping a small community in rural Arizona or on the system reliability that a project could create,” she added.
Applicants could submit requests for funding for the same technology or system upgrades, but the conditions in which those systems operate and the benefits financing could have are unique.
Biggest bang for the buck
Applicants sent WIFA their estimates on the minimum and maximum amount of water their project or program could save. Matched with the amount of funding requested, the biggest return on investment came from agriculture.
Construction projects to upgrade old infrastructure, line eroding earthen canals with concrete, or efforts to install N-Drip irrigation systems ranged anywhere from 500 to 79,000 gallons of water saved per dollar awarded.
Projects involving advanced water meters and system upgrades had a wide range of return on investment.
It's harder to estimate the return on investment of research and education projects, or conservation efforts taking place at a landscape level.
Vegetation management and watershed restoration “is not something that has received a ton of excitement from the board and the committee," said Draper, who is also Audubon Southwest's policy manager in Arizona "They are costly projects with a lot of work to undertake."
Some on the board have questioned whether it is a right investment for the fund. Because it is limited, WIFA will be forced to prioritize some projects over others for the grants.
“Arizona wins at the end," said Draper about the selection and award process. "We have this amazing opportunity to save water through conservation and get it done now.”
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Second and last round of awards
WIFA staff said they don't expect to open more calls for applications.
"We have nearly $300 million in demand for $200 million in funds, so I think we will find that we have quality projects to take up the entirety of (the WCGF)," Chelsea McGuire, assistant director of external affairs for WIFA, told The Republic.
For the evaluation of the remaining applications, WIFA Chairman David Beckham requested a list of how much money each entity has been awarded from highest to lowest to help prioritize future awards and ensure that no one entity or geographic area dominates the process.
Board members said they want to ensure selection is fair to applicants that may be smaller or staffed at a lower level, making sure rural communities are not at a disadvantage.
Most applications related to education and research, as well as vegetation management and recharge projects, are pending evaluation, while other categories have been reviewed on a rolling basis.
“We’re really going to need to prioritize our money because we have a lot more in applications than we have in money,” Beckham said in December.
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Challenges to spread out funding
From the beginning of the conservation grant fund, committee and WIFA board members said they wanted the funds to be spread out geographically.
But so far, over 40% of the funds awarded so far went to projects and programs within Maricopa County. About 30% of all applications sent to WIFA came from that county too. Applicants from Santa Cruz, Graham, Yuma, and La Paz counties were scarce. Only one water conservation project proposal came from Greenlee County. Only three tribal entities applied for funding.
If WIFA does not open another call for applications, committee members and the board would need to limit their selection to a less-diverse pool of applicants.
McGuire said WIFA significantly increased outreach to rural counties ahead of the November application deadline.
"While there were still a few counties that were under-represented in the overall WCGF applicant pool, we are still very happy with the diversity of applicants both from a geographic and demographic standpoint," she said.
"We have awarded applications for projects in all counties, benefiting rural and urban Arizona alike, so I think we are still able to strike the balance with the pool that we have."
Several applicants received approval for more than one grant application; Chandler got approval for four proposals totaling about $5.6 million for turf removal, efficient fixtures and system upgrades. Peoria and Roosevelt Irrigation Districts both got three grants approved. Seventeen other applicants got two grants each.
McGuire said that while they don't expect to open a new call for applications, the grant funding could continue into the future.
WIFA would like to see more dollars in the Water Conservation Grant Fund and asked for an additional $200 million in its annual budget request to the governor's office.
"We believe the program’s success warrants additional investment from the state," McGuire said.
"With just over $100 million currently committed to projects, WIFA anticipates total water savings of between 2.8 and 4.2 million acre-feet. That number will increase as we continue to award the remaining balance of funds."
Rep. Gail Griffin, R-Hereford, has already introduced House Bill 2011, which would allocate $25 million per year of unused lottery money to the Water Conservation Grant Fund.
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WIFA board will discuss new water supplies
The bulk of state funding for water projects will not go to conservation but to finding new water supplies.
Democrats in the Legislature negotiated the Water Conservation Grant Fund in 2022 as a condition to former Gov. Doug Ducey's $1 billion water package, which at the time was aimed exclusively at water augmentation.
The final package included $1 billion for the Long-Term Water Augmentation Fund and $200 million extra for water conservation.
Because both run with money from American Rescue Plan funds, WIFA must follow federal guidelines and assign all funds by December 2026.
Bringing water supplies from out of state has been long discussed. At the top of the list are proposals to desalinate water from Mexico's Sea of Cortez, on the coast of Sonora, pumping it for distribution in Mexico, and taking some of Mexico's share of Colorado River water in exchange.
But WIFA staff said they are looking for a broader landscape of solutions.
From September to mid-November 2023, WIFA staff sought input from private parties and the public on potential opportunities for water augmentation in Arizona, or ideas of how the state could procure new water supplies. Staffers met with 80 industry representatives and received 30 formal responses.
Most of the comments submitted mentioned ocean desalination technologies and public-private partnership models.
A few emphasized the importance of taking care of existing water resources. Audubon, a nonprofit working to restore and conserve bird habitat, expressed its desire for "long-term projects to augment existing supplies and improve reliability through conservation."
Kathy Jacobs, director of the University of Arizona's Center for Climate Adaptation Science and Solutions, highlighted research from the Arizona Tri-University Recharge and Water Reliability Project, which will help identify options for in-state water augmentation through "enhanced recharge projects."
David Rangel, president of Water Train Inc., suggested their railcar delivery system "provide Arizona with as much as 30,000 AF a year or more of spring water from our locations in New York, Kentucky, and Tennessee. " discussed the option of "delivery of water from the southern and eastern United States via rail car."
The formal responses are not a menu from which WIFA will be limited to choose from, McGuire said in the December board meeting. Instead, they show a “universe of options” and will help shape and inform the solicitation process, which WIFA expects to publish in Spring 2024.
Last summer, WIFA hired HDR Engineering Inc., a corporation specializing in engineering services, as a consultant partner to identify long-term water augmentation projects.
Jason Fort, vice president of HDR and team lead, told the board that one of the goals of the request for information is “to make sure we don't have blinders on and that we are open to ideas that others might be interested in bringing forward."
“We want to send a signal to the marketplace both in Arizona and broadly elsewhere of WIFA's intent to move forward with augmentation projects in the near term."
Clara Migoya covers agriculture and water issues for The Arizona Republic and azcentral. Send tips or questions to clara.migoya@arizonarepublic.com.
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This article originally appeared on Arizona Republic: WIFA has $200M to spend on water conservation. How it's been used?
