A wastewater treatment plant is seen in Phenix City, Ala. on Friday, Nov. 17, 2023. The head of the Alabama Department of Environmental Management said Thursday that ADEM should meet a deadline to spend its share of American Rescue Plan Act (ARPA) funds, allocated mainly to water and sewer projects. (Stew Milne for Alabama Reflector)
The state’s environmental agency told lawmakers Thursday that it has plans in place to spend a tranche of federal money before a coming deadline.
Lance LeFleur, director of the Alabama Department of Environmental Management (ADEM), told lawmakers on the Joint Legislative Committee on American Rescue Plan Act (ARPA) State Funds that ADEM has multiple contingency plans to prevent any loss of federal funding. If these funds are not spent by the end of 2026, the funds will have to be sent back to the federal government.
ARPA, a $1.9 trillion economic stimulus package signed by President Joe Biden in 2021 following the economic downturn due to the COVID-19 pandemic, provided $350 billion to state and local governments. Alabama received about $2.12 billion in two tranches, of which ADEM was allocated $620 million.
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Under the law, agencies have until Dec. 31 to establish agreements for specific projects, known as obligations. ADEM said it has already obligated the entire $620 million to water and sewer projects, with a focus on the Black Belt and rural Alabama. Once the funds are obligated, they must be spent by Dec. 31, 2026.
ADEM will require a project to show its ability to finish construction within the time required by law by June 1, 2026, an internal deadline. If it’s not complete, the department will decide how to reallocate the funds to projects that can be completed.
LeFleur said ADEM will also utilize other federal funds, such as those from the Bipartisan Infrastructure Law (BIL), which has a more flexible timeline, as well as local matching funds that can be used after the federal deadline.
“We can mix and match, if you will, but we will know well ahead of time if there are any potential foreseeable or hiccups in the process, and if some unforeseeable ones come up, we have plans to adjust as necessary,” LeFleur said.
ADEM was the only agency that presented to the committee.
Sen. Greg Albritton, R-Atmore, co-chair of the ARPA oversight committee, initially expressed concern about meeting the deadline as the meeting started. He said that he doesn’t want to get to the point of having checks “written and printed but not mailed” by the construction deadline, risking them being sent back to the federal government.
As the meeting progressed, he seemed to become more comfortable with ADEM’s progress after hearing the agency’s plans if some projects are not able to meet the deadline, saying that “Alabama’s done its job.”
“Alabama put these monies in. We did the appropriation. We handled it all with the existing, current staff that we have, and we handle it correctly. There’s been glitches … The staff handle all that,” Albritton said.
Rep. Rex Reynolds, R-Huntsville, also expressed optimism and said that ADEM had addressed concerns about the progress the committee voiced last year.
“Let’s help these cities be successful, and you’ve done absolutely bad in that,” Reynolds said.
Sen. Chris Elliot, R-Josephine, said that, despite his initial skepticism about getting the projects done in time, he was turned into a “believer” but said to LeFleur that the internal deadline in June for companies to show projects can be complete must be a hard deadline.
“As we get closer to the ‘26 deadline, we’re going to start pushing harder to make sure that it gets to places where it can be expended in time. So, if [project applicants are] lollygagging, quit it and get this man your paperwork,” Elliot said.
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