HomeMy WebLinkAbout03.b. Board Policy No. 049-GrantsPage 1 of 4
Item 3.b.
DCENTRALSAN
MEETING DATE: MARCH 22, 2023
BOARD OF DIRECTORS
POSITION PAPER
DRAFT
SUBJECT: REVIEW DRAFT POSITION PAPER TO CONSIDER ADOPTING NEW
BOARD POLICY NO. BP 049 — GRANTS
SUBMITTED BY: INITIATING DEPARTMENT:
KEVIN MIZUNO, FINANCE MANAGER ADMINISTRATION -FINANCE
PHILIP LEIBER, DIRECTOR OF FINANCE AND
ADMINISTRATION
ISSUE
Adoption of new Board policies requires approval of the Board of Directors. Staff is proposing adoption of
a new Board policy over grants.
BACKGROUND
I n recent years, Central San has actively pursued federal grant opportunities for various purposes.
Specific recent examples of this effort include the securing of financing for the large Solids Handling
Facilities I mprovement Project through a federally -funded state revolving fund (SRF) loan from the
California Water Board as well as seeking the reimbursement of eligible costs associated with Central
San's response to the COVID-19 pandemic from the Federal Emergency Management Agency (FEMA).
While such funds are a useful mechanism for financing large or unexpected costs and activities, federal
grant awards are generally accompanied by numerous compliance requirements and sometimes include
requirements to continue specific activities after the completion of the initial project. Given the risks of
non-compliance and the potential long-term obligations associated with grant monies, roles and
responsibilities associated with grant administration should be clearly understood prior to the acceptance
of grant funding. Accordingly, during FY 2022-23 Central San implemented an internal administrative
procedures document over grant management (AP 049). While the development and implementation of
an internal administrative procedures document is a crucial first step, given the relative importance of the
topic, it would also be prudent to adopt an overarching Board Policy outlining policy and strategic
objectives associated with grants. Accordingly, the attached draft Grants Policy (BP 049) is presented for
Board consideration and approval.
The draft policy outlines the following important strategic policies and objectives related to grants:
• Encourages grant funding in -lieu of local funding (customer charges) for capital projects,
emergencies, operational initiatives, and other appropriate needs;
• The alignment of grants with Central San's Strategic Plan;
March 22, 2023 Special ADMIN Committee Meeting Agenda Packet - Page 23 of 77
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• Requiring Board approval of grants in excess of $100,000;
• Designating grant funding as "non -recurring" in nature, not to be relied on for ongoing operational
needs;
• A requirement to assess the risks associated with non-compliance as well as long-term obligations
associated with accepting grant monies prior to executing grant agreements;
• Consideration of any potential operational burdens may result from local match requirements
stipulated grant documents;
• Establishes an expectation that the costs associated with applying for and administering a grant
should not outweigh its benefits;
• The assignment of roles and responsibilities for grant administration.
By adopting the proposed grants policy, the Board will be providing direction to staff on expectations
regarding grant management. Additionally, the higher -level policy document will provide a strong
foundation from which administrative processes (spelled out in AP 049) can be developed.
ALTERNATIVES/CONSIDERATIONS
The Board of Directors may choose not to adopt a policy on grants, or may choose to revise the proposed
policy.
FINANCIAL IMPACTS
There are no direct costs associated with adopting the proposed policy.
COMMUNITY OUTREACH
Not applicable.
COMMITTEE RECOMMENDATION
The Administration Committee reviewed the proposed new policy at its March 22, 2023 and
recommended
RECOMMENDED BOARD ACTION
Adopt new Board Policy No. BP 049 — Grants.
Strategic Plan Tie -In
GOAL FOUR: Governance and Fiscal Responsibility
Strategy 1 - Promote and uphold ethical behavior, openness, and accessibility, Strategy 3 - Maintain financial stability
and sustainability
ATTACHMENTS:
1. Proposed new Board Policy
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Number: BP 049
Related Admin. Procedure AP 049
Authority: Board of Directors
Adopted: TBD
Revised:
Reviewed:
Initiating Dept./Div.: Administration/Finance
BOARD POLICY
GRANTS
PURPOSE
To set forth policy direction for grant management at Central San.
POLICY
The Board recognizes the strategic value of pursuing grant opportunities to
supplement or replace local funding sources for capital projects, emergencies,
operational initiatives, and other appropriate needs.
2. Grants should be in alignment with objectives and initiatives set forth in Central
San's Strategic Plan document.
3. Grant awards exceeding $100,000 must be authorized by the Board.
4. Funding from grants shall be considered one-time or short-term funding sources and
should not be the basis for ongoing increases in Central San's cost structure.
5. Prior to award, grant opportunities shall be carefully evaluated to identify and assess
any unprecedented permanent or long-term obligations that may result from grant -
funded activities.
6. Local matches of funds required in grants shall be evaluated to ensure they do not
diminish resources for current budgetary or contractual commitments.
7. The costs associated with a grant (i.e., penalties for noncompliance, additional
administrative efforts, etc.) should not outweigh the benefits of the grant award.
8. Given the significant compliance requirements that accompany grants and negative
consequences for failing to meet those requirements, each awarded grant shall be
assigned a Grant Executor responsible for monitoring the grant -funded project,
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Number: BP 049
GRANTS
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compliance with grant requirements, and ongoing communication with the grantor
agency. Independent from the Grant Executor role, the Finance Division shall serve
as Central San's central grants management function, overseeing accounting,
financial reporting, and audit compliance.
AUTHORITY
The General Manager has the authority to execute all grant documents once the
necessary Board authority to proceed is obtained, if applicable, based on the amount of
the grant. The General Manager shall establish and implement administrative
procedures to support this policy.
POLICY REVIEW
This policy shall be reviewed at least biennially to ensure alignment with current
strategic priorities set by the Board. Any changes must be approved by the Board
following initial review by the Administration Committee.
[Original retained by the Secretary of the District]
March 22, 2023 Special ADMIN Committee Meeting Agenda Packet - Page 26 of 77