Disadvantaged Communities

Many state and federal grant programs express preference for funding projects that benefit “disadvantaged communities.” The definition as to what exactly constitutes a disadvantaged community (DAC) for purposes of any particular funding or grant program—and how that definition is applied—is left to the grant administrator, subject to any specific requirements that may have been stipulated by the funding source(s).

Lack of a consistent methodology for defining a “Disadvantaged Community” (DAC) among California state agencies leads to confusion, sometimes thwarting or diminishing the benefits intended for eligible DACs. Confusion increases when different state agencies interpret and apply these definitions differently for various types of state funded programs.

California Policy Overview

In 2006, the passage of the California Global Warming Solutions Act (AB 32) required California to reduce greenhouse gas (GHG) emissions to 1990 levels by 2020. To achieve these targets, the California Air Resources Board (ARB) was charged with developing a Scoping Plan. The first Plan was approved in 2008 and ARB identified the Cap-and-Trade Program as an approach to reduce greenhouse gas (GHG) emissions. The Scoping Plan is updated every 5 years with the most current revision released November 2017, which takes into account SB 32—setting a new GHG emission reduction target of 40% below 1990 levels by 2030.

Photo credit: Water Truck in East Porterville
Photo credit: Water Truck in East Porterville

Energy Commission staff estimated annual savings of water, electricity, gas, and greenhouse gas emissions during the first years of implementation and 2038, the year during which the existing stock of non-compliant plumbing fixtures are projected to be exhausted (referred to as “full turnover”).

Multiple new laws and regulations have been enacted that require Greenhouse Gas Reduction Funds to be allocated to—or for the benefit of—disadvantaged communities (DAC).

directed 25% of the proceeds to fund projects that provide benefits to DACs with a minimum of 10% of the funds for projects within DACs. Under SB 535, the California Environmental Protection Agency (CalEPA) is also given the responsibility of identifying DACs based on geographic, socioeconomic, public health and environmental hazard criteria.

amended the law so that 25% of the funds are used directly in DACs identified by CalEPA. Another 5% of the funds must be used to assist low-income communities or households within half a mile of a DAC.

The CalEPA utilized the California Environmental Screening Tool (CalEnviroScreen) 2.0 to implement SB 535. The tool was developed with public input through multiple workshops in 2014 and ultimately ranks California’s 8,000 census tracts to determine which are considered disadvantaged. Cal/EPA Secretary Matt Rodriquez said: “By identifying California communities with the greatest cumulative exposure to pollution, we can be more effective in directing limited state resources to where they are needed most.”

Federal Definitions

The problem is that the term “disadvantaged communities” has been used by both the federal government and state agencies for many years with an entirely different definition. Prior to CalEnviroScreen, the tool most used to identify communities targeted for specialized assistance was income, in part for consistency with federal assistance programs that co-fund some state programs.

(c) Eligible entities. An eligible entity under this section—

(1) is—

(A) a public water system;

(B) a water system that is located in an area governed by an Indian Tribe; or

(C) a State, on behalf of an underserved community; and

(2) serves a community—

(A) that, under affordability criteria established by the State under section 300j–12(d)(3) of this title, is determined by the State—

(i) to be a disadvantaged community; or

(ii) to be a community that may become a disadvantaged community as a result of carrying out a project or activity under subsection (b); or

(B) with a population of less than 10,000 individuals that the Administrator determines does not have the capacity to incur debt sufficient to finance a project or activity under subsection (b).

Source: State Water Resources Control Board (SWRCB)

Priority point system accords special preference to:

• Small communities with a population of 5,500 or less

• Low-income communities having a median household income below 80% of the state nonmetropolitan median household income.

U.S. Department of Agriculture and Rural Development website: https://www.rd.usda.gov/programs-services/community-facilities-direct-loan-grant-program

DAC Definitions Used by State Agencies

State agencies use different definitions and interpretations of “DACs” for different purposes.

Defining Entity DAC Definition
California Air Resources Board (Cap-and-Trade Auction Proceeds) Utilizes CalEPA’s CalEnviroScreen designated census tracts but also includes geographic criteria of “half-mile zones around these disadvantaged community census tracts” that are applicable to some projects.
California Energy Commission (CEC) Utilizes CalEnviroScreen to guide EPIC investments in “Disadvantaged Communities” in accordance with Senate Bill 535 (De León).
The Safe Drinking Water Act &

Water Code Section 79505.5 (Proposition 1)

A community with an annual median household income (MHI) that is less than 80% of the Statewide annual MHI. The SWRCB determines DAC eligibility on the basis of an entire water agency’s MHI. DWR allows determination of eligibility for DAC status at the level of individual parcels within a water agency’s service.
Drinking Water State Revolving Funds “Small Disadvantaged Community means a community with a population of less than 20,000, and either: (1) a community Median Household Income (MHI) of less than eighty percent (80%) of the statewide MHI; or (2) a community sewer rate of more than four percent (4%) of the community’s MHI.”

Differences in Applying DAC Definitions in Various State Programs

  • Proposition 1. California Water Code Section 79702 employs a further definition: An “’Economically distressed area’ means a municipality with a population of 20,000 persons or less, a rural county, or a reasonably isolated and divisible segment of a larger municipality where the segment of the population is 20,000 persons or less, with an annual median household income that is less than 85 percent of the statewide median household income, and with one or more of the following conditions as determined by the department: (1) Financial hardship. (2) Unemployment rate at least 2 percent higher than the statewide average. (3) Low population density.”

  • CPUC Rulemaking 15-03-010 was opened in March 2015 To Identify Disadvantaged Communities in the San Joaquin Valley and Analyze Economically Feasible Options to Increase Access to Affordable Energy in those Disadvantaged Communities. A Phase 1 Decision was issued May 15, 2017 that ordered a study to be conducted. The study will be reviewed during Phase II. This Rulemaking was established to implement California Public Utilities Code Section 783.5 [Assembly Bill 2672 Perea, 2014] that stipulated the following criteria:

    • At least 25% of residential households with electrical service are enrolled in the California Alternate Rates for Energy (CARE) program.
    • The DAC has a population greater than 100 persons within its geographic boundary.
    • The geographic boundary of a DAC is no further than seven miles from the nearest natural gas pipeline.
  • “Reclaimed water will be used to preserve, restore, or enhance instream beneficial uses which include, but are not limited to, fish, wildlife, recreation and esthetics associated with any surface water or wetlands.”

The CalEnviroScreen Tool

CalEnviroScreen is a mapping tool that “identifies California communities that are most affected by many sources of pollution, and where people are often especially vulnerable to pollution’s effects.”  The tool draws from environmental, health, and socioeconomic information to create scores for each census tract in California. The areas with higher scores (e.g. 100%) have higher pollution burdens and—as mentioned above—communities with a score of 75% or higher are designated as DACs.

The Tool was developed as part of the CalEPA’s 2004 Environmental Justice Action Plan. This plan asked for the development of guidance to analyze the impacts of multiple pollution sources in California communities.

The below table describes the factors that were used to determine “disadvantaged” scores under CalEnviroScreen version 2.0.

CalEnviroScreen Indicators

CalEnviroScreen Indicators Description Data Sources
Ozone (Air Quality) Exposure Indicator: Amount of the daily maximum 8-hour ozone concentration over the California 8-hour standard (0.070 ppm), averaged over three years (2009 to 2011). Air Monitoring Network, California Air Resources Board (CARB)
Drinking Water Contaminants Exposure Indicator: Drinking water contaminant index for selected contaminants. Drinking Water Systems Geographic Reporting Tool, California Environmental Health Tracking Program, California Department of Public Health (CDPH), Public Water System Location Data, Safe Drinking Water Information System, U.S. Environmental Protection Agency, Water Quality Monitoring Database, CDPH, Domestic Well Project, Groundwater Ambient Monitoring and Assessment (GAMA) Program, State Water Resources Control Board, Priority Basin Project, GAMA Program, State Water Resources Control Board and U.S. Geological Survey
Pesticide Use Exposure Indicator: Total pounds of selected active pesticide ingredients (filtered for hazard and volatility) used in production-agriculture per square mile. Pesticide Use Reporting, California Department of Pesticide Regulation (DPR)
Groundwater Threats Environmental Effects Indicator: Sum of weighted scores for sites within each census tract. GeoTracker Database, State Water Resources Control Board (SWRCB)
Poverty Socioeconomic Factors Indicator: Percent of the population living below two times the federal poverty level (5-year estimate, 2008-2012). American Community Survey, U.S. Census Bureau
Unemployment Socioeconomic Factors Indicator: Percent of the population over the age of 16 that is unemployed and eligible for the labor force. Excludes retirees, students, homemakers, institutionalized persons except prisoners, those not looking for work, and military personnel on active duty (5-year estimate, 2008-2012). American Community Survey, U.S. Census Bureau

California Communities Environmental Health Screening Tool, version 2.0 (CalEnviroScreen 2.0). CalEPA and OEHHA. August 2014

The California Environmental Protection Agency (Cal/EPA) acknowledged CalEnviroScreen’s weakness with respect to delivery of community assistance programs:

“The term community has numerous definitions ranging from a neighborhood within a city, to a small town or unincorporated area. In some cases, communities have been identified as an entire region. A few public comments pointed out that the use of census tracts as a proxy for a community might not give an accurate snapshot of an area where people associate with some type of commonality.”

California Environmental Protection Agency. Designation of Disadvantaged Communities Pursuant to Senate Bill 535 (DE LEÓN). April 2017

Fairness and Equity

Multiple stakeholders within Tulare County have expressed concerns about participating in programs that rely strictly upon the census-tract methodology in determining DACs for eligibility. In particular, local governments articulated concerns about fairness and equity to their customers, constituents and stakeholders when census tract level designations are used to design and implement programs that provide assistance to some of their constituents, but not to others that may live directly across the street.

Tulare County’s populated areas are mostly “DAC” as determined by the CalEnviroScreen tool. However, very small patches of light gray (non-DAC) tracts remain.

Red shaded areas are scored as “DACs”, unshaded areas are not. Most of Tulare County’s population lives in the western third of the county, from the plains to the foot of the hills. Most of the populated areas are DACs in accordance with CalEnviroscreen 2.0.

Many Tulare County governmental officials pointed out the inconsistency between an environmental indicator of pollution that presumes one block is “disadvantaged” from an environmental perspective for a particular program, while a block across the street that is subject to the same types of environmental pollution (air emissions, contaminated water supplies, etc.) does not qualify for the same assistance.

At a minimum, program administrators should be accorded the latitude to make better judgments about how these definitions are applied to any particular program. If assistance is clearly targeted to specific tracts, then a census tract definition is appropriate. However, when assistance aims to alleviate environmental pollution that impacts entire communities throughout an entire region, program eligibility should be determined on a basis consistent with the problem that is targeted for remedy.

This challenge became very apparent to one member of the project team, Syzergy, that is a sub-grantee on a Department of Water Resources Water-Energy Grant. This grant is funded with Greenhouse Gas Reduction Fund (GGRF), and therefore has a goal of reducing greenhouse gases. However, when approaching local governments for assistance offering free above-code showerheads and faucet aerators to their constituents, many of the local governments declined to directly offer these benefits on the basis that it wouldn’t be fair to tell their constituents that only people residing within certain census tracts would be eligible to receive these free fixtures.