Alabama senators fear state might miss ARPA deadlines

Several legislators said Tuesday they feared the state might not spend money from the American Rescue Plan Act (ARPA) in time to meet key deadlines.

The concerns came at a meeting of the Joint Legislative Committee on American Rescue Plan Act State Funds, after speakers said some projects remain in the preconstruction stage.

Much of the committee’s concern lay with Lance LeFleur, director of the Alabama Department of Environmental Management (ADEM), and how the department is handling money headed for water and sewer projects.

“We have got a timeframe to get this money spent, and you are including BIL (Bipartisan Infrastructure Law) money and other funds,” said Sen. Greg Albritton, R-Atmore, the committee chair.

ARPA requires the state to commit funds to its chosen projects by the end of 2024, and to spend the money by the end of 2026. The Alabama Legislature has approved $1.06 billion in spending but needs to allocate it to specific projects.

The Legislature last year allocated about $774 million of ARPA funds to health care, broadband and water and sewer projects. About $225 million of the funding is going to water and sewer projects, money that went to ADEM. Most of that funding ($220 million) will be awarded through grants, based on need or COVID-19 impact. Another $5 million will go to wastewater demonstration projects in the Black Belt.

But ADEM says there is more need than funding available to meet it. According to the presentation, the department got roughly $3 billion in infrastructure requests.

For 2022 allocated projects, ARPA will fund $225 million. Another $127 million will come from the Infrastructure Bill, including a state match. $111 million will be paid through the department’s revolving funds, which provide loans to fund water infrastructure projects.

Albritton asked LeFleur if the construction projects were ready to be funded. LeFleur said they were not ready yet. The Department has committed the funds but that there are supply chain problems that have hindered progress.

“Our objective was to get (the projects) in the queue earlier so that we could eliminate the supply chain problems that are here,” he said.

LeFleur said the department was still soliciting bids. The proposed projects will also have to be analyzed to ensure they are completed in a cost-effective manner.

“Every single system has to have an audit,” LeFleur said. “We have to know the true financial picture of each one of these systems.”

LeFleur also said he is unable to bring in additional contractors for submitting bids because each one must be certified before they are qualified to work on any construction project in Alabama.

Sen. Chris Elliott, R-Fairhope, said his coastal district has not received the funding it needs to manage its growth.

“The fastest growing county in the state, that sees 8,000 new people a year,” he said. “At one time, in a snapshot after the 2020 census, it represented 48% of the state’s entire growth. My district received no funding, zero projects. That is unacceptable.”

Elliott then suggested the state change the formula for allocating funding.

LeFleur said he cannot factor future growth into calculations for projects, and that there are limits on how the funding can be used.

“We will comply with the Legislature’s instruction on that,” LeFleur said.