California Air Resources Board

California's climate investments are intended to deliver meaningful benefits to communities throughout the State. The funding structure should support that objective by enabling organizations with limited financial resources to participate fully and effectively. A program intended to advance climate equity should not place organizations serving the most financially constrained communities in the position of having to finance eligible public projects until reimbursement is received.

We support efforts to reduce unnecessary administrative burdens while maintaining accountability, transparency, and appropriate oversight. We recommend that the guidance clearly distinguish duplicative requirements from those necessary for monitoring and public accountability, and that requirements be proportional to the size and complexity of the project. The State should prioritize standardized application and reporting requirements, better coordination among agencies, clear implementation timelines, and technical assistance. Importantly, streamlining should not create additional barriers for disadvantaged communities, smaller local governments, or community-based organizations with limited administrative and financial capacity. The State should also establish measurable goals to evaluate whether the guidance is actually reducing administrative and financial burdens while preserving equitable access to California Climate Investments.

We recommend that the proposed guidance explicitly address the financial and cash-flow burdens that reimbursement-based funding can place on disadvantaged communities and the community-based organizations serving them.

Under a reimbursement model, organizations may be required to incur significant project expenses before receiving funding from the State. This can create a substantial barrier for smaller organizations and organizations serving disadvantaged communities that may not have sufficient unrestricted funds, reserves, or access to affordable financing to cover project costs in advance.

This issue is particularly important in the context of California Climate Investments, where the State seeks to direct resources to communities that experience disproportionate environmental and economic burdens. A funding structure that requires these communities and the organizations serving them to finance project activities upfront may unintentionally limit their ability to participate in and successfully implement CCI-funded projects.

We therefore recommend that the final guidance encourage administering agencies to consider funding mechanisms that reduce upfront financial burdens, including:

Advance payments for eligible project costs, particularly for disadvantaged communities and smaller community-based organizations;

Milestone-based or phased payments tied to clearly defined project activities;

Partial advances to support project startup, staffing, procurement, and other necessary initial expenses;
More frequent reimbursement schedules to minimize the amount of time organizations must carry project costs;

Flexibility regarding matching-fund requirements where such requirements create a barrier to participation;

Technical assistance to help organizations understand and manage applicable funding and reimbursement requirements.
Administrative burden should not be viewed solely in terms of paperwork, reporting, or application requirements. The timing of funding and the financial capacity required to front project costs can itself constitute a significant administrative and financial burden.

We recommend that agencies evaluate the potential cash-flow impacts of reimbursement requirements when designing and administering CCI programs and consider whether those requirements disproportionately affect smaller organizations and disadvantaged communities.

Thank you for this opportunity to comment.