KEY POINTS:
- California has conservation funds—but lacks a delivery system to match the scale of need. New voter-approved bonds and reauthorized climate funds could drive billions toward wildfire, drought, and flood resilience, yet fragmented programs across dozens of agencies prevent timely, integrated impact.
- The Sierra to Sea Watershed Outcomes Bank offers a practical solution to accelerate regional resilience. By aggregating funding, governance, and implementation across the Central Sierra region, the WOB enables partners to coordinate fire, water, flood, and climate outcomes without changing existing agency mandates.
- A pilot has launched with strong partners, proven projects, and momentum for scale. Foundational investments, a master agreement with the Forest Service, and an emerging pipeline of funding-ready projects position the Sierra to Sea WOB to rapidly deploy regional solutions and demonstrate a scalable model for California.
California predicts that the state’s cost of a changing climate will reach $113 billion per year by 2050. This will mean more acres burned by wildfires, more extreme heat days, less snowpack, and less water stored in reservoirs and underground aquifers.
Although these scenes paint a potentially expensive and arduous future, recent funding developments present a unique opportunity to address the problem. California voters approved a $10 billion Bond in 2024, which will direct money to safe drinking water, wildfire prevention, drought preparedness, and clean air over the next several years. Additionally, the State recently reauthorized the $8–9 billion/year Greenhouse Gas Reduction Fund (GGRF), including new authority to fund “nature-based solutions” (NBS). NBS are among the most cost-effective category of investments for GGRF dollars.
Combined, these two developments create the conditions to drive billions more dollars to forest health, drought mitigation, and wildfire prevention activities. However, this money will not find its way to good projects quickly enough to confront these huge issues and growing costs. That is because funding is spread across more than 30 agencies, each with dozens of funding programs that have their own complicated requirements. The result is a disjointed funding delivery and project implementation system with no one responsible for achieving integrated fire, drought, and flood resilience solutions at an effective speed and scale. In response to these challenges, The Freshwater Trust (TFT) and partners have built a data-driven model that efficiently leverages and deploys funds from multiple programs to the most impactful projects to finally achieve regional resilience.
Timely Launch of “Sierra to Sea” Watershed Outcomes Bank in a Geography that Has the Building Blocks for Success
For the past four years, TFT has been working with partners in California to develop a regional framework that is ready-made to efficiently deliver multiple streams of funding to more results-focused projects. We call it the “Sierra to Sea” Watershed Outcomes Bank (WOB).
The goal of the Sierra to Sea WOB is to cost-effectively fund, finance, and implement an integrated portfolio of strategic conservation projects that maximize fire risk reductions, water quality and quantity improvements, flood risk reductions, and greenhouse gas (GHG) emission reductions. To do so, the WOB creates a centralized structure that aggregates otherwise fragmented funding and implementation efforts happening across the region.
“We purposely put ourselves in the position of convincing people to do something different, thereby demonstrating how to solve the complicated problem rather than taking the easiest path,” said Tim Wigington, Vice President of Finance & Policy at The Freshwater Trust.
“Our partners and funders have embraced this approach and are ready to give it a shot.”
Launching the WOB required generous funding to lay the groundwork, including $540,000 from the U.S. Endowment for Forestry and Communities’ Innovative Finance for National Forests (IFNF) grant program (which includes funding from the U.S. Forest Service), $100,000 from Blue Forest, and $75,000 from Resources Legacy Fund. In parallel, TFT has learned from its successful launch and operation of WOBs in other geographies.
In fall 2025, TFT finalized a master enabling agreement for the WOB with the U.S. Forest Service, which includes a partner governance charter signed by partners from the upper, middle, and lower portions of the region. This unique approach brings together a regional coalition that wouldn’t otherwise work together, and creates a connection between rural and urban regions. The initial charter signatories include American Forests, American Rivers, Blue Forest, Calforests, El Dorado Resource Conservation District, El Dorado Water Agency, Georgetown Divide Resource Conservation District, Great Basin Institute, Northern Delta Groundwater Sustainability Agency, and the National Forest Foundation. In addition, TFT is working with several other partners on WOB-related efforts outside the formal charter.
Together, the master agreement and the charter create the streamlined, transaction-oriented governance framework necessary to mix, match, and deliver funds from federal, state, local, and private sources to high-impact combinations of projects across the watershed.
“The Eldorado National Forest (ENF) is excited to launch the Watershed Outcomes Bank,” said Michelle Wolfgang, Partnership Coordinator for the ENF. “The WOB approach helps us formalize partnerships, more efficiently leverage each other’s efforts, secure more funding, and ultimately, get a lot more work done for the health of our forests and the connected ecosystem. By attaching the charter to the master agreement, we also create a transaction vehicle that enables federal funding to support this effort.”
The Sierra to Sea region has a significant set of foundational projects already underway, upon which the WOB can expand:
- In the upper watershed, partners in the Healthy Eldorado Landscape Partnership (HELP) have already secured $43 million to restore the area burned by the Caldor Fire, $12 million to restore and reduce fire risk in the Crystal Basin, and $17 million in the Mokelumne River Basin.
- In the lower watershed, Sacramento Sewer has secured $300 million to implement its $600-million Harvest Water program, which addresses regional groundwater deficits through an innovative use of recycled wastewater and targeted habitat restoration work. This program remains the first and only project to receive 2014 Prop 1 funding from the Water Storage Investment Program.
- National corporations are paying thousands of dollars each year for the Omochumne-Hartnell Water District to divert wintertime peak flood flows to recharge groundwater aquifers.
- U.S. Bureau of Land Management has awarded $615,000 to remove a major fish passage barrier on the lower Cosumnes River and improve streamside forest habitat.
The key now is to better connect these pieces. For example, forest thinning in the upper watershed will reduce fuel for wildfires while also creating more water for downstream areas experiencing drought. Similarly, improving groundwater levels lower in the watershed helps ensure that rivers have sufficient flows to support fish migrating back to the forested headwaters. Moreover, diverting flood flows onto agricultural land in the middle watershed will help reduce flood intensity and risk for downstream urban and agricultural communities. Typically, funding and management of fire, drought, and flood activities are separate. Under the WOB, agencies and partners can instead leverage funds and work together in pursuit of these broadly connected but artificially siloed efforts.
Delivering on this vision at speed and scale requires two critical next steps:
- secure funding at the regional scale, and
- build a queue of high-impact funding-ready projects to fulfill that funding demand.
Building up Priority Project Inventory
With a recent supplemental award of $90,000 from IFNF, TFT will contribute to project development efforts led by the El Dorado Resource Conservation District. Work includes quantifying project benefits—such as fire and flood risk reduction, water quantity, sediment reduction, and GHG emission reduction—and developing a cost-benefit project ledger. The result will be a dynamic menu of funding-ready projects, with multiple quantified benefits, that can be mixed and matched with multiple funding sources. This prioritized slate of projects provides partners with the insights necessary to recruit, pre-develop, and permit projects so that we have a growing inventory of projects that can absorb larger blocks of funding.
Pursuing Funding to Support Regional Solutions
While we build up project supply, we also continue to pursue new funding.
For the past year, TFT has built momentum with a bipartisan group of State legislators around a budget proposal that would direct $50 million from Prop 4 and GGRF programs to the Sierra to Sea WOB. This approach is necessary to demonstrate that regional results can be secured without adding administrative complexity, and to create the applied opportunities to consolidate metrics, eligibility, application, reporting, permitting, and administrative requirements across multiple similar but parallel programs—which sets the stage for easier program integration in the future across the State.
We are also working with partners to consolidate projects into regional funding proposals that can be rapidly submitted in response to agency solicitations pursuant to the WOB charter. In January 2026, we submitted proposals for $4.7 million in additional funding. These proposals include a $1.5-million grant to support groundwater recharge activities in the lower watershed in conjunction with the Harvest Water program and a $3.4-million multi-partner project to implement a package of shovel-ready wildfire resilience and restoration projects in the Crystal Basin to the Wrights Lake zone of the Eldorado National Forest, including fuels reduction work, post-fire aspen stand restoration, and meadow restoration and forest road repairs. TFT will quantify environmental benefits of projects using a common set of metrics; consolidate grant management, reporting, and accounting activities; and support project partners with project financing. The partners are already working on the next round of consolidated project packages to submit.
“It’s essential that we pursue a two-track strategy of building up project supply and funding together. We are advocating for bigger funding commitments, while actively developing and bundling resilience projects across Central California into streamlined proposals,” said Wigington.
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Grant funding provided by The United States Endowment for Forestry and Communities, a not-for-profit corporation that works collaboratively with partners in the public and private sectors to advance systemic, transformative and sustainable change for the health and vitality of the nation’s working forests and forest-reliant communities.
Funding also provided through the Bay Area Conservation Small Grants Program of Resources Legacy Fund, which is funded in part by the Gordon and Betty Moore Foundation.
