Alabama lawmakers express concern over spending deadline for COVID relief funds

Members of a legislative committee overseeing Alabama’s share of COVID-19 funds had one focus at a Wednesday meeting: getting the money spent on time. 

The American Rescue Plan Act (ARPA) requires that funds are assigned to projects by Dec. 31, 2024 and that they are “expended” by Dec. 31, 2026. Alabama State Finance Director Bill Poole and Deputy Director of the Legislative Services Agency Kirk Fulford told the Legislature’s ARPA Oversight Committee that “expended” does not have a clear definition from the federal government.

“There’s different interpretations of what obligation and expended and if you ask — I’ll say it because I don’t have to answer to them — if you ask two different people in the Treasury, that same question, you get two different answers,” said Fulford.

In a special session in March, Alabama legislators voted to spend up to $400 million of an estimated $1 billion in ARPA money on water and sewer projects; up to $260 million on broadband expansion; up to $100 million on nursing homes, and another $100 million for hospitals. 

Legislators who expressed concerns in February about deadlines wanted to hear assurances Wednesday of checkpoints and backup plans for funds. Sen. Greg Albritton, R-Atmore, the chair of the committee, told the Alabama Department of Economic and Community Affairs during a presentation on Internet access that he wanted to see a timeline. 

“I saw your timeline here but what I’m looking for is for the lights to go on,” he said.  “Can you tell us when people will be able to see a difference?” 

Maureen Neighbors, chief of ADECA’s digital expansion division, said providers working on “last mile” coverage — aimed at reaching those furthest from broadband coverage — would be able to enter into agreements in July 2024.

The Legislature in 2022 appropriated about $774 million in the first round of ARPA funds to water and sewer projects, broadband, and hospitals for expenses during the COVID-19 pandemic. The state has also used $400 million in ARPA money toward the construction of two new men’s prisons.   

In all, the state needs to spend around $2.1 billion in fiscal recovery funds by the end of 2026.

Lawmakers asked the various presenters about checkpoints they have in place to make sure the money is spent. Alabama State FInance Director Bill Poole said that they require, in contracts with ARPA funds recipients, reporting of any unobligated funds by June 2024.

“So we got about six months deadline on the obligated funds now,” he said.

Poole said that the process of getting the funds out to communities is complicated and not very neat. 

In response to a question from Senate Minority Leader Bobby Singleton, D-Greensboro, Poole said that the state government provides funds to state entities, such as the statewide boys and girls programming, slated to receive about $2 million according to a presentation. Local affiliates then apply to the state entity explaining how their request fulfills one of the allowable categories for funding. Small groups need to apply to their state affiliates, not the state. 

Singleton, who lives in predominately rural district, asked about groups that were not affiliated with state entities. 

“Where’s that pile of money and where’s that application?” he asked.

Fulford said they need to fit into a category.

“It’s going be messy, because these are all being administered by different entities,” Poole said.

Sen. Chris Elliott, R-Josephine, asked Lance LeFleur, director of the Alabama Department of Environmental Management (ADEM), which oversees water and sewer projects, if there were plans to reallocate funds if projects were not completed. He cited a drinking water emergency and environmental concerns in Fairhope, a city in his district.

“So in my district, I look at check, check, check, check,” he said. “Now, what’s the issue? The issue is there are areas that are more financially needy but certainly the growth is there. The problems are there, it’s the same problems that are faced everywhere else.” 

LeFleur said that there were ways to reorganize the funds if needed.

“They are, in fact, one of the places where we can get funds expended with short notice along with others,” LeFleur said.

After the meeting, Albritton said that he thinks all of the money will be spent by the deadline.

“If we have our way and that’s what our job is to make sure that it does,” he said.