There are a wide variety of federal and state-level grants in existence to fund major investments in water infrastructure. However, it is difficult to identify the most appropriate grant for a given project, to prepare application materials in a thorough and timely manner, and to draw up a successful application. That is where Dig Deep Research steps in. A boutique consulting firm founded in 2010, Dig Deep focuses on helping agencies pursue funding options for infrastructure projects. In this interview, Tia Cavender, chief executive officer (CEO) of Dig Deep Research, speaks with Irrigation Leader Managing Editor Joshua Dill about how her company helps municipal agencies successfully obtain grant funding.
Joshua Dill: Please tell us about your background and how you came to be in your current position.
Tia Cavender: I was trained as a clinical researcher, and later decided to specialize in capital funding research. I founded Dig Deep Research in 2010, when I recognized a need in the industry for expertise in pursuing funding options for capital and infrastructure projects. Ever since, the company has helped clients identify creative funding solutions for capital improvement projects throughout the West.
Joshua Dill: Do your clients hire you to look at specific projects that they are considering, or do they work with you on a longer-term basis?
Tia Cavender: Typically, clients bring us in for one specific project that needs funding, but they quickly see the value
of these services and decide to invest on a long-term basis. Nearly all clients receive a 100 percent return on investment within 12–18 months, and those that hire our firm for multiple years average an annual rate of return of 4:1. Many times, the costs of our services either count as matching funds or are eligible for reimbursement as a grant-funded planning expense, which makes for an excellent investment of water revenues.
Joshua Dill: You founded your company to help agencies find funding. What is the main obstacle that you help them overcome?
Tia Cavender: I would say the main challenge municipalities and water districts face is coordinating the timing of everything. Specifically, they must successfully manage the time it takes to find the right grant, to pursue and win the grant, and then to make sure that the design and construction of the capital project coincides with the timeline trajectory of the grant program.
Many agencies that have unsuccessfully tried to secure capital grants eventually give up trying because of the complications. Even more common is that the agency ends up spending more money to pursue, secure, and manage a government grant than the amount of cash the grant brings in, which dissuades them from pursuing grants altogether. The result is often that agencies go back to relying primarily on cash revenues to finance projects.
Alternatively, we help introduce clients to public financing options that provide lower interest rates (e.g., annual percentage rates of 1–2.5) than what is currently available on the municipal bond market. With this approach, we can help communities leverage their projected revenues to qualify for low-interest loans and then use their revenues to pay back the loans.
Once they secure the public financing to continue the design and permitting phase, we help secure grant funds for the construction phase, which decreases the amount of loans they need to finish the project.
Joshua Dill: What kinds of entities and agencies are your clients?
Tia Cavender: We work with municipalities, water districts, county agencies, and park districts. We also work with engineering firms, environmental firms, and businesses that work in research and development. We haven’t worked much with irrigation districts yet, but that’s mainly because there is such a high demand for services in the municipal sector. However, we are certain that the Dig Deep model for capital fundraising can be applied to irrigation districts to help them find and secure untapped sources of capital funding.
Joshua Dill: Which grantmaking entities do you work with?
Tia Cavender: Mostly government entities, including state agencies, like state departments of environmental quality and water resource departments. For instance, in Oregon we work with the Oregon Water Resources Department, the Office of Emergency Management, and the Department of Environmental Quality. At the federal level, we work the most with the Federal Emergency Management Agency (FEMA) and the Bureau of Reclamation.
Joshua Dill: What is the biggest misconception about applying for grants that you have to correct?
Tia Cavender: People think grants are free money. Although some of it is free in a certain sense, there are often many strings attached—grant requirements, expensive monitoring requirements, or additional planning activities that need to be conducted or committed to before agencies can pursue the funding. It often ends up costing too much money to pursue, secure, and administer a grant. We spend a great deal of time talking our clients out of pursuing grants they are not competitive enough to win. Just because an agency is eligible for a grant doesn’t mean that its project is competitive enough to beat out the competition. For instance, one of our clients needs to build a new dam and was thrilled to learn about a couple of new grant programs recently announced by FEMA that fit with its project. But because the evaluation criteria are linked to planning documents that haven’t been prepared, the client must carefully consider the time, energy, and resources it would take to even be eligible for funding.
Joshua Dill: Would you go into more detail about how you give recommendations about what a plan should include?
Tia Cavender: We use a membership model. Clients start
out with our basic membership package, which allows us
to evaluate the funding potential of a multiyear capital improvement plan or one particular project in need of funding. First, we determine which aspects of the project or the capital improvement plan are the most fundable. Next, we evaluate the government grant programs that are most likely to yield success for the client. Our deliverables provide a roadmap for the client so they can plan ahead and know which grants to pursue before the funding cycles are publicly announced. This approach affords them the time to engage with the funding agency, craft a competitive application, and program matching funds into the next capital budget.
Joshua Dill: Please tell us about the importance of relationships in the work you do.
Tia Cavender: A large component of achieving success with grant-related strategic planning involves establishing and cultivating relationships with funding agencies during the early phases of a project. Engaging the funders in the planning process before asking them for money is the best way to start. That way, the funder can become an informed advocate from the ground up. We coach our clients to understand that funding agencies want the same thing that they do: to produce a good project they can showcase to constituents.
Joshua Dill: What developments do you see today in the grant-making field?
Tia Cavender: Recently, we have seen more new grants intended to address resiliency issues than in previous years, although unfortunately what exists is still only a fraction of what is actually needed. Perhaps the resiliency trend is in response to the increasing awareness of aging infrastructure, which is a critical issue that every single city in every single state must address and finance independently. Unfortunately, however, there are few federal funding sources available to help replace aging infrastructure, which puts substantial pressure on local water providers.
While national news often conveys the idea that funding for infrastructure is an important bipartisan issue at the federal level, it is important to note that the focus of federal infrastructure is on transportation infrastructure (highways, bridges, railways, and byways) rather than water infrastructure. With this in mind, communities must continue fighting for water infrastructure funding through whatever means as possible.
Joshua Dill: If you were giving advice to an irrigation district, what would you identify as the one key factor that would make a grant application successful?
Tia Cavender: I would say having enough time to plan, because that’s often where things go wrong. Applicants may only have 45–60 days to prepare a grant application, and they’ll invest a few weeks throwing together the best application they possibly can, but it’s unlikely to be strong enough to beat out the competition. More time to plan means more competitive grant applications, which is imperative in the current funding climate.
Joshua Dill: What is your vision for the future?
Tia Cavender: My vision for the future is that more communities will consider implementing water reuse and recycling programs. Especially in the West, we need to consider innovative ways of building new water supplies and eliminating the stigma associated with using recycled water. Water reuse projects are fundable, especially if the project involves monitoring data about the quality, cost, and outcomes of using reclaimed water. Although there are really smart solutions to addressing drought and depletion of water supplies, they are expensive, which is another reason Dig Deep is so committed to helping people learn how to navigate the world of capital grants.