Alabama municipalities request more than $3.1B in water, sewer funding

Alabama municipalities request more than $3.1B in water, sewer funding

By MARY SELL, Alabama Daily News

Alabama municipalities and their utility providers have applied this year for more than $3.1 billion for nearly 600 water and sewer projects. 

The Alabama Department of Environmental Management is reviewing cities’ applications for potential federal funding, including $225 million in American Rescue Plan Act money allocated by state lawmakers earlier this year to water and sewer projects and about $765 million from last year’s $1 trillion federal Bipartisan Infrastructure Law.

The department used the same application process for both pools of money, as well as the state’s clean water and drinking water revolving funds. Those funds allocate low-interest loans to municipalities and are 80% federally funded.

Spreadsheets on ADEM’s website list the water and sewer project applications and notes those that have been granted. They’re being updated regularly, ADEM said.

As of this week, about $188 million in drinking water and $98 million in clean water projects had been approved, according to the ADEM documents.

Agency officials could not say which pool of money was funding each specific allocation and in some cases, projects will receive a combination of money. The spreadsheets also show what if any match dollars the local municipality has to provide in order to get the federal funding. There are more requests for money than available funds and the department prioritizes projects based on health concerns, compliance issues, whether the communities are disadvantaged according to federal guidelines, affordability, and population size with preference to small communities, it told Alabama Daily News. Meanwhile, allocating the funds will be a multi-year process.

“What we are doing is unprecedented in the history of Alabama,” ADEM Director Lance LeFleur told Alabama Daily News. “Never before has the state made investments of anywhere near this scope in water and sewer infrastructure, affecting the lives of hundreds of thousands, if not more, of Alabamians in need. Credit goes to Governor Kay Ivey and the Alabama Legislature for recognizing the needs of communities throughout the state and the unique opportunity to address those needs, with the priority on helping the communities with the greatest needs in our state first.

“ADEM has taken that mandate, and we’re creating what we see as a model program that targets communities with the greatest needs and the least ability to pay, and provides them funding and technical assistance to get these much-needed projects done.”

So far, the ADEM awards range in size from $84,600 for a water line replacement in Walker County to $41 million for a wastewater project in Mobile.

Other large allocations so far include a $39 million water line improvement in Birmingham, $15 million for a water project in Florence, $14 million for a project in Scottsboro,  more than $22 million for Tuscaloosa projects, $13 million for a Mobile water project and $10 million for sewer work in Hayneville in Lowndes County.

Greg Cochran, executive director of the Alabama League of Municipalities, said water and sewer infrastructure needs around the state have been “percolating” for years.

“As we were facing broadband infrastructure needs and road infrastructure needs, we knew that these drinking water and clean water infrastructure needs were out there,” Cochran said.

Cochran said the requests for funding come from both municipalities that are disadvantaged and don’t have the local resources to fix water and sewer issues and fast-growing cities.

“They’re growing at such extreme rates that they’re really having to push the pause button development so that they can catch up on infrastructure,” Cochran said.

The 2022 ARPA legislation that included $225 million for water and sewer projects, to be allocated by ADEM, put the funds into three pools: $120 million for sewer systems for “emergency or high need projects;” $100 million as matching grants; and $5 million for Blackbelt sewer projects.

The department is evaluating proposed projects on a needs-based criteria “and will determine priority based on a ranking system that considers physical plant needs, financial needs, compliance status, demographics, etc,” the agency said.

“Projects demonstrating the greatest need and ranked as high priority will receive the initial funding,” officials said in an emailed response to questions.

The ARPA funds have to be allocated by the end of 2024 and spent by 2026. Separately, the $765 federal BIL funding will be allocated annually over the next five years.

“Over the next several years, the people in Alabama can expect to see hundreds of projects across the state that will help safeguard their health and improve their quality of life,” LeFleur said about the disbursement of funds. “Residents of the Black Belt and other rural areas will especially benefit from this program.”

Sen. Greg Albritton, R-Range, said he understands ADEM is trying to identify and fund municipalities’ greatest needs versus their wants. He’d also like to see the ARPA funds reach local governments soon.

“Every day we wait, the dollar dries up a little bit more,” Albritton said.

Lawmakers likely next year will distribute a second tranche of ARPA funds worth more than $1 billion. More money is possible for water and sewer, but lawmakers will want to see how the first round was used, Albritton said.

“Our goal continues to be what the governor stated — to make sure we’re investing in the future,” he said.