In July, 305 public entities — cities, water and sewer districts, towns, state agencies, counties, irrigation districts, school districts and others — submitted applications to the state totalling $919 million for water and sewer infrastructure projects. The state had received $250 million in federal American Rescue Plan Act funding earmarked for water and sewer projects. The state then promulgated rules that instructed public entities to submit applications for grant funding of up to $25 million per project.
The city of Choteau submitted a grant application for $5.8 million in ARPA funds to pay for half of an ambitious $11.6 million water and sewer project that would provide the city with an additional water source, would connect city residences currently on wells to the water system and would repair the sewer lines on the northeast side of town, among other improvements. The city saw this as a one-time chance to get significant grant funding to do these critical infrastructure projects all at once, rather than painstakingly phasing them in over years and years (with the projects becoming more expensive each year they are deferred). The city put together a funding package that relied upon the ARPA competitive grant funding.
Personnel with the Department of Natural Resources and Conservation then reviewed all 305 grant applications and ranked them based on criteria established by the U.S. Treasury. The DNRC ranked the grants from those scoring the most points to those scoring the least. Choteau’s application ranked 13 (in a five-way tie) out of 241 ranked applications. Based on the dollar amounts requested, the state could have funded the top 60 or so projects with the $250 million.
With the initial ranking done, DNRC then submitted the projects to one of four commissions established by the 2021 Legislature to review the applications and make recommendations to Gov. Greg Gianforte on which will receive funding. The Infrastructure Advisory Commission, meeting Aug. 26, could have approved the top 60 grant requests in order of rank. Instead, however, the commission decided to junk the ranking system and give the top 74 applicants $2 million each for partial funding of their projects and to only award $125 million of the total available, preserving the balance for a second round of grant applications.
It appears that the legislators and administration personnel who serve on this commission wanted to stretch the ARPA funding as far as it would go, providing the maximum number of grant requestors at least a pittance of funding for their projects. Unfortunately, this approach will doom many of the 241 ranked projects whose success depended upon full funding from the ARPA competitive grants. For others, the $2 million grants will mean that they have to downsize their projects to bring the cost in line with the available funding. Choteau Mayor Chris Hindoien says downsizing the planned $11.6 million project could cost the city $100,000 or more in engineering and review fees and bond costs.
Fortunately, the Infrastructure Advisory Commission does not have the final say on how these grant applications are funded. Gov. Greg Gianforte has the option to accept or reject the Commission’s funding recommendation. The city of Choteau submitted a great grant application, one that ranked in the top 20 of all those submitted. The city paid engineers to develop the grant application. The city had public hearings on the proposed projects. Citizens spoke in support of the improvements. The $5.8 million the city requested in ARPA competitive grant funding would allow the city to take care of decades of deferred infrastructure investment and would position the city to accommodate business and residential growth with adequate, safe and effective public water and sewer services at rates that are in line with wages and salaries in this small rural city.
Governor Gianforte should stand by the original grant application rules: That requests could be submitted up to $25 million per project and grants would be awarded based on the scores given by experts in public water and sewer projects. The highest ranking grant applications should be fully funded. The Infrastructure Advisory Commission’s recommendation is based on trying to make everyone happy, not on the merit of the projects or how important those projects are to the entities that submitted them. The state should not put cities, counties and special districts in the position of having to re-engineer their projects because the commission changed the rules. The governor should fund the top 60-plus ranked applications and invest this $250 million in getting major projects finished.