The American Rescue Plan Act (ARPA) of 2021 was passed to infuse substantial funding to eligible state, local, territorial, and tribal governments to help recover from the economic hardship created by the COVID-19 pandemic.
One aspect of ARPA is directed at nation’s infrastructure: drinking water, wastewater, and storm water related infrastructure. With the advent of the ARPA, a level of flexibility was given to the individual states to decide the way these funds would be distributed and utilized.
During the 2022 legislative session, lawmakers decided to create two pathways for public drinking water systems to obtain these grant funds. House Bill 1421, known as the ARPA Rural Water Associations Infrastructure Grant Program (ARPA Rural) established under the Mississippi State Department of Health (MSDH), was developed for private, non-profit water associations and water utilities. The Mississippi Municipality and County Water Infrastructure (MCWI) Grant Program, as set forth in Senate Bill 2822 and managed by the Mississippi Department of Environmental Quality (MDEQ), provides the opportunity for grant funding for counties, municipalities and public utilities that are not regulated by the Public Service Commission for qualifying drinking water, wastewater and/or stormwater projects. The MCWI program will require the county, municipality or public utility to match the MCWI grant funds with local ARPA funds.
For ARPA Rural, the bill as signed by the Governor requires a significant ranking process to be instituted that includes accounting for system non-compliance, economic impact of the project, environmental impact, timing of project, and several others. It is our intent that all systems that meet the rural water association definition have an equal opportunity to receive some of this once in a lifetime funding. Our hope is that many systems will see this as an opportunity to make much needed improvements to not only achieve compliance but also make them a sustainable entity moving forward. Additionally, with this level of funding, options such as regionalization or consolidation are now within reach. Neighboring systems with capacity to spare could reach out to supply system that are in distress with no cost burdening that connection.
Important Planning Elements
As the regulations are proposed, MSDH anticipates the funding process as follows: Application with supporting documentation, grant award based on submitted application, engineer developed plans and specifications, bidding with construction phase, reimbursement of funds, and finally project closeout. Your planning will be crucial to ensuring some level of funding is secured for your needed project. Please consider the following moving forward:
- UPDATE: Anticipated professional services (engineering and legal) costs in excess of $250,000 will need to be procured using federal procurement procedures. This ideally would be done prior to application preparation to help identify the costs of your project. Professional services below that threshold can be obtained directly at the discretion of the water system’s governing body through a selection process for small purchases mirroring that of the Mississippi Department of Transportation’s Small Purchase Procedures. Guidance for systems seeking to follow this procedure will be available on the agency’s website.
- UPDATE: Timing of disbursements for an awarded grant will be on a monthly basis for completed invoiced work by the contractors through the payment request process. This process will mirror the current payment request process performed on loans provided through the Drinking Water State Revolving Loan Fund. It will not require a project component to be fully completed before disbursement.
- UPDATE: Based on the change with regards to timing of payment, it appears that the need of interim financing won’t be necessary to support work performed through funding obtained from the grant.
- Initial application will not require an engineer to be involved, but it will help greatly in your preparation of the application supporting documentation.
- Association entities will be limited to a maximum grant amount of $2.5 million.
- Projects that are resolving a primary Safe Drinking Water Act issue will be given greater consideration
- Projects that consider regionalization or consolidation will be given greater consideration
- Projects that are in or close to being construction ready will be given strong consideration
- Technical assistance will be offered to systems to navigate the application process.
As the regulations are still out for public comment, some elements mentioned above may change to certain degree.
This is a historic opportunity to make an impact for long term resilience and sustainability. While the funding is plentiful, it is still limited to $300 million for the state’s rural water systems and we hope every entity will have an opportunity to receive some portion of this funding. It should also be noted that while it historic, it is also time sensitive. All obligations to projects have to be in place by the end of 2024 so that all funds can be spent by end of 2026.
Municipalities and County Water Systems
As a reminder for counties, municipalities, and public utilities: The Mississippi Department of Environmental Quality (MDEQ) is responsible for implementation of the Program and is in the process of drafting regulations that will set requirements for applying for MCWI grant funding, as well as the process for submitting applications. MDEQ expects the regulations to be completed before their statutory deadline. MDEQ plans to provide additional information, to include public outreach sessions and workshops that will outline the application, selection, and implementation process. Currently, MDEQ anticipates receiving the first round of applications in the fall of 2022. MSDH will have an advisory role in the process in line with the state statute.
More information will emerge over the next several weeks and months to begin the process of navigating this funding.
The first application cycle for the ARPA program ended on September 16, 2022.