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Staff Report
City Council
Item No. 6.I
Meeting Date: June 28, 2023
From: Deanna Pressgrove, Environmental Conservation & Public Works Manager
Title: 2023 Updates and Proposed Revisions to the Cathedral City WaterSmart Landscapes Grant Program
City Council
RECOMMENDATION:
To approve the updated and proposed revisions to the City's WaterSmart Landscapes Grant Program (Program), including increases to Program rebates for individual properties up to $1,000 and adding Homeowners Associations (HOAs) into the Program with rebates up to $20,000, with herein detailed parameters for the Program; and, direct Staff to amend the Program grant application materials to reflect said revisions and send out notifications to property owners and HOAs within the City regarding changes to the Program.
BACKGROUND:
In 2004, The WaterSmart Landscapes Grant Program (Program) was created to address the environmental issues inherent in the Panorama area’s green landscaping practices. Proactively, the Cathedral City Council approved the implementation of an innovative pilot program to educate, encourage and assist residents in the area to replace their lush landscaping with xeriscape, a more drought tolerant landscaping method. Xeriscape, a source reduction program, can reduce landscape water use by 60% or more. In xeriscape, the traditional expanse of lawn is replaced by drought-hardy plants, low water perennials, organic mulches and water-conserving grasses.
The City’s Environmental Conservation Manager originally initiated a pilot program by creating specific guidelines and a formal application for the Panorama area residents.
Postcards were sent to every household located in the Panorama area outlining the water- saving and time-saving virtues of conversion to xeriscape. To provide further incentive, qualifying residents received matching funds of $500 for their participation in the pilot program.
Inherent in the xeriscape philosophy is the reduction of green waste. So logically, funds for the Program come from the City’s AB 939 Environmental Conservation Fund. This fund was established in response to the State legislature’s passing of AB 939 laws declaring that each community must designate certain monies for source reduction and
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recycling programs. Source reduction programs are an important component of AB 939 programs. Source reduction is defined as any action or process that reduces the creation of waste. The Cathedral City WaterSmart Landscapes Grant Program reduces the amount of waste being generated, thus decreasing the amount of waste requiring disposal. Source reduction programs complement other AB 939 approved programs such as recycling, composting and public education.
In 2006, after the success of the Panorama pilot program, the City Council approved expanding the grant Program to all Cathedral City residential properties. The Program not only eliminates greenwaste but also directly impacts the water run-off onto public streets eliminating unnecessary asphalt repairs, reducing the amount of standing water within neighborhoods and allows the city to sweep the streets more efficiently.
Beginning in 2008, the Coachella Valley Water District (CVWD) and Desert Water Agency (DWA) began analyzing Cathedral City’s WaterSmart Landscapes Grant Program with the goal of developing their own rebate program, with the objective to conserve water. Today, CVWD and DWA offer $2 per square-foot in rebate funds for the conversion of commercial and residential properties (front, side, and backyards).
Per the Program guidelines, Cathedral City residents can qualify and receive rebates from both the Cathedral City WaterSmart Landscapes Grant program and CVWD/DWA Turf Rebate programs.
Cathedral City’s WaterSmart Landscapes Grant Program Activity Recap Below is an activity recap beginning 2004 to current on Cathedral City’s WaterSmart Landscapes Grant Program:
Projects
Completed
Environmental Funds Spent
(reimbursement to Property
Owner)
Total Square Footage of
Greenwaste Eliminated
1,055 $527,500 953,889
•The average square footage of residential front lawns in Cathedral City is 1,000 square feet.
•On average residents have spent $2,000 on their renovation projects. •There are residents that chose to do more elaborate renovations and those costs can range from $5,000 to $12,000. These renovation projects are not as common as the $1,000 to $2,000 projects.
DISCUSSION:
Staff is recommending that the City Council approve the following changes to Cathedral City’s WaterSmart Landscapes Grant Program:
Single-Family Residential Properties
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Currently, property owners can qualify for $500 in grant funds if they spend $1,000 or more on their renovation project. Staff is proposing to increase the residential allocation and allow single-family residential properties to select from one of two grant funding options:
Option 1: Up to $599 per household in grant funds.
•Dollar for Dollar Match: The property owner would need to spend $1,198 on their renovation project to receive the full $599 in grant funds. •Renovation projects that cost less than $1,198 can still qualify and will receive 50% of the total cost. Example: if a renovation project is $800, property owner would receive $400 in grant funds.
•The $599 dollar amount is below the IRS tax limit for issuing a 1099 Form and is not taxable.
Option 2: Up to $1,000 per household in grant funds. •Dollar for Dollar Match: The property owner would need to spend $2,000 on their renovation project to receive the full $1,000 in grant funds. •Renovation projects that cost between $1,198 and $2,000 can qualify for grant funds and would receive 50% of the total cost spent.
•The entire amount up to $2,000 requires an IRS 1099 Form to be issued at the end of the calendar year reporting taxable income for the property owner.
HOA Properties
Staff is also proposing to expand the program and allow communities managed by a Homeowners Association (HOA) to also participate in the City’s WaterSmart Landscapes Grant Program. Under the current City Program, the grant process must be completed by the property owner within the HOA and subsequently the rebate funds are paid directly to the property owner. This process makes it challenging for HOA’s to participate in the Program as most HOA internal property frontages are communal and under the HOA’s purview.
HOA WaterSmart Landscape Grant Process
Staff is proposing that HOA regulated communities can now qualify for a maximum of $20,000 in Program grant funds. The HOA will have the opportunity to complete one (1) grant application for all qualifying properties and receive the rebate on behalf of the property owners under the same HOA. The requirements to receive funds under the Program are proposed as follows:
•Only internal property frontages would qualify.
•Common areas within an HOA community would not qualify for Program grant funds.
•Program grant documents will be required to list the addresses of all properties where internal frontages are proposed to be renovated.
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•Dollar for Dollar Match: to qualify for the maximum of $20,000 in Program grant funds, the HOA would need to spend $40,000 or more on the renovation of at least 20 internal property frontages within their community.
•HOA communities that renovate less than 20 properties or spend less than $40,000 on the renovation project can still qualify for Program grant funds and would receive 50% of the total project cost, max $1,000 per property. •The HOA will receive an IRS 1099 Form from the City reporting taxable income for the Program grant funds received.
Staff forecasts that allowing HOAs to participate in the Program will greatly expand the overall effectiveness of the original Program.
Past Program Success
Below is a recap of the number of single-family WaterSmart renovation projects completed and grant funds allocated from calendar year 2018 to current:
Year Number of
Completed Projects
Grant Funds Allocated
2018 44 $22,000
2019 21 $10,500
2020 15 $ 7,500
2021 16 $ 8,000
2022 42 $21,000
2023 (as of June) 25 $12,500
Since the Program’s initiation, Staff has budgeted Community Assistance funds annually to support the Cathedral City WaterSmart Landscapes Grant program within the Environmental Fund (246).
Recommendation
Staff is recommending City Council approve the updated and proposed revisions to the City’s WaterSmart Landscapes Grant Program (Program), including increases to Program rebates for individual properties up to $1,000 and adding Homeowners Associations (HOAs) into the Program with rebates up to $20,000, with herein detailed parameters for the Program. Staff is also requesting City Council direct Staff to amend the Program grant application materials to reflect said revisions and send out a notification to property owners and HOAs within the City regarding the changes to the Program.
FISCAL IMPACT:
The City’s AB 939 Environmental Funds support the City’s WaterSmart Landscapes Grant Program by educating the public and implementing drought tolerant landscaping methods which is a qualifying program under AB 939.
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The Program grant reimbursement funds to support this Program is budgeted in the FY 2023/2024 Budget under the Community Assistance Fund 246-900-910-911-8650- 8658.
FIVE-YEAR STRATEGIC PLAN:
Council Goal D: Innovation
Objective: Cathedral City continually focusses on improving service delivery and customer experiences by successfully leveraging technology and creative initiatives to improve public services, public safety, and stimulate economic growth.