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A little more than five months after the American Recovery and Reinvestment Act (ARRA) of 2009 was signed into law by President Obama, dollars have begun to flow to water and wastewater agencies, municipalities and utilities around the country. A total of $6 billion has been pledged to clean water and drinking water infrastructure—$2 billion specifically for water treatment and distribution systems and $4 billion for wastewater infrastructure and surface and groundwater quality improvements. As of July 15, nearly $4.85 billion (82%) of that money has been made available, with only $18 million actually having been paid out.
At the State Level
The intended goal of the ARRA was to have 50% of all allocated funds in construction by June 17, 2009, making it the states’ priority to give preference to shovel-ready (ready to proceed within 120 days) projects.
States also must have a list of their “green” projects—no less than 20% of their total money—ready by Aug. 17, 2009, or notify the U.S. Environmental Protection Agency (EPA) that they have insufficient applications for green projects. If that occurs, the state can either opt to use funds for non-green projects or keep searching for green projects.
“For ARRA funds, each state agency must provide at least 50% of the funds made available by ARRA for additional subsidization. Additional subsidization can be in the form of principal forgiveness, negative-interest loans or grants,” said Enesta Jones, an EPA spokesperson. “Additionally, each state must use at least 20% of the funds made available, so long as there are sufficient applications, for green projects. Such projects must fall within the following four categories: water efficiency, energy efficiency, green infrastructure or environmentally innovative projects.”
States’ intended-use plans must be submitted to their state revolving fund (SRF), describing total number of projects, amount needed and descriptions of projects. On a weekly basis, states need to report project data to their SRF, including financial terms, jobs created and retained and environmental benefits.
By Feb. 17, 2010, all ARRA funds must be in construction or have signed contracts, while states need to keep reporting their progress on a weekly basis to the appropriate SRF.
“This means that by Feb. 17, all state awards must be made, all funds must be allocated to projects at the state level and each assistance recipient must have all funds under contract for the construction of the project,” Jones said.
Timeline Challenges
Lori Beary, community development director for the Iowa Finance Authority, the state agency that oversees funding for water and wastewater projects, said that her agency is used to the application and approval process necessary for distributing money for various projects, but this time around things are a little different.
“There a bunch of steps we would have to go through anyway, but this time we’re dealing with a very tight timeline,” Beary said. “We’ve had to accept projects that are far along in the design and planning process. A project couldn’t just be starting from scratch in March in order to be under construction by February 2010.”
Beary said the timeline has been challenging to work with, but beneficial as well.
“We’ve had some hiccups with provisions like Davis-Bacon and the Buy-American clause because they’re brand new,” Beary said. “But EPA has been a big help with explaining these provisions to us.”
What’s beneficial, though, Beary said, is that ARRA funds come in the form of grants or non- forgivable loans.
“Normally a state revolving fund only gives low-interest loans, so it’s kind of nice to have this infusion of federal money that we can use to give cities and municipalities,” Beary said. “This has definitely sped up a lot of projects here in Iowa.”
Funds Spur a Variety of Projects
Around the country, a wide variety of water and wastewater upgrades and projects are being infused with cash, with the hope of creating jobs quickly. Some examples are as follows:
The city of Wewahitchka, Fla., received $5.44 million to provide funding for a centralized water system for the residents of the Stone Mill Creek community and to replace a 30-year-old storage tank.
The centralized water system will ensure quality drinking water and provide adequate water pressure for fire protection.
Johnson City, Tenn., has received $869,000 to provide reliable, clean water to areas outside the city limits where household wells and springs have tested positive for bacteria and other contaminants.
The state of Delaware received $19.2 million for various water and wastewater projects. Gov. Jack Markell announced that the money will create 450 jobs and fund five large sewer or wastewater collection system projects. It is hoped that these upgrades will increase wastewater treatment capacity, prevent installation of 3,000 new septic systems and reduce nitrogen and phosphorus levels in the Inland Bays.
The EPA and Indian Health Service announced that $90 million in ARRA funds will be used for 94 wastewater and 64 drinking water projects in Indian country across the U.S. With the money, failing septic systems will be repaired and new treatment facilities will be built for tribal communities, of whom 10% do not have access to safe drinking water or septic water.
New Provisions
The three main federal provisions within the ARRA that are most likely brand new to state and municipal officials are:
Buy-American clause. It states that, “assistance recipients use domestic iron, steel and manufactured goods that are produced in the U.S.”
Davis-Bacon provision. All federal government construction contracts and most contracts for federally assisted construction exceeding $2,000 must include provisions for paying workers the locally prevailing wages and benefits paid on similar projects. These wages are set by the Wage and Hour Div., U.S. Department of Labor.
Green project provision. As stated earlier, 20% of a state’s allocated money from the ARRA must be directed toward green infrastructure projects. This means that a state as large as New York, which has been allocated $518 million for its SRF from the ARRA, will have to direct a significant $103 million toward green infrastructure projects.
Beary said that the green provision in the ARRA has been beneficial for the state of Iowa because usually storm water retention, energy efficiency or green streets projects would not be so heavily favored with state SRF loan money, but they are getting the necessary sattention now.
For more information, visit www.epa.gov/ow/eparecovery.
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