Pure Water Antelope Valley: A Critical Water Supply Project for a Large Disadvantaged Community

This presentation will describe how Palmdale Water District is successfully navigating the federal and California funding landscape to secure capital for an innovative, regional recycled water program. Content will cover the funding approach, coordination between key stakeholders and team members, integrating compliance into project delivery, and lessons learned. The Pure Water Antelope Valley program is a regional recycled water program to improve water supply resiliency for a large, disadvantaged community of over 125,000 people in Los Angeles County. Securing external funding is critical for the implementation of Pure Water Antelope Valley, as affordability is a top concern for PWD's low-income customer base. To continue to meet current capital and operational needs, Palmdale Water District (PWD) has raised water rates by 5.5% annually from 2014 to 2019 and by 8.1% annually from 2020 through 2024. PWD has been proactive in securing external capital for this critical project. The team has reviewed viable funding opportunities, analyzed trends in funding priorities and strategized how multiple opportunities could be phased together to fund the planning, design, and construction of the various components for the Pure Water Antelope Valley program. The Infrastructure Investment and Jobs Act, Inflation Reduction Act, California AB 179, and other recent federal and state policies were integrated into the analysis, including weighing the pros and cons of federalizing the program to be able to leverage federal funds. PWD met with funding program administrators to review upcoming funding sources and discuss the competitiveness of the project. To increase project competitiveness, PWD's funding team provided the mapping materials and census data needed by the California State Water Board to secure disadvantaged status for the program for a period of three years. Other differentiators of the project were also identified by the team, such as its use of natural infrastructure, multi-stakeholder partnerships, and ties to decarbonization and climate change resilience. As a result of the analysis, Pure Water Antelope Valley has a plan for building a capital stack for 100% of capital expenditures through a combination of grants, subsidized loans, and revenue bonds. Since 2022, the PWD funding team has developed and submitted five grant applications and an EPA WIFIA loan application and worked with the engineering team to integrate federal compliance requirements into design and bid documents. Making sure that PWD has the latest information related to funding, the team also tracks funding-related legislation such as the federal Inflation Reduction Act tax credits and the California climate bond. The funding team is largely successful because they have the technical and financial expertise to smoothly coordinate across engineering and finance teams alike including PWD's financial advisor and bond counsel. To date, PWD has been offered more than $20 million in grants and up to 49% of total project costs in low-interest loan financing that will save PWD ratepayers millions of dollars. By the end of this presentation, attendees will be able to: Evaluate their priority projects' competitiveness and key differentiators for federal and state funding programs Strategize ways to combine multiple federal and state grant programs to build a capital stack for a project Discuss the technical and financial expertise required to compile competitive grant applications