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74 MT water and sewer projects recommended for ARPA funding

HELENA (KPAX) — A state commission has endorsed dozens of water and sewer projects across Montana, recommending them to receive a share of $250 million in federal COVID recovery funding.

On Thursday, the Infrastructure Advisory Commission voted to recommend $125 million in competitive grants for these projects, and to limit each of those grants to $2 million. That would provide at least partial funding for 74 projects. However, Gov. Greg Gianforte will have the final say on whether to adopt the commission’s recommendations.

During this year’s legislative session, lawmakers approved House Bill 632 to allocate hundreds of millions of dollars coming to the state through the federal American Rescue Plan Act. Water and sewer infrastructure were identified as one of the top priorities for that money.

The state received more than 300 applications for grants, from cities, counties, water and sewer districts and other local governments. All together, they were seeking about $900 million – far more than was available.

“The fact that over 300 applications come in in very short order, and the vast majority of those are eligible for funding, I think tells us a huge story about the state of our infrastructure in Montana,” said Darryl James, executive director of the Montana Infrastructure Coalition, an organization advocating for funding infrastructure projects in the state.

HB 632 set aside two large pools of money for water and sewer grants. In the competitive grant program, the state scores each proposed project and determines which should be funded based on that ranking.

In the minimum allocation grant program, the state distributes money to local governments based on their size, allows those governments to decide which projects they want to fund and then approves those expenditures as long as the project is eligible under ARPA rules.

The Montana Department of Natural Resources and Conservation was tasked with ranking the projects seeking competitive grants. The biggest factor in their scoring was the projects’ impact on health and safety.

The top score went to an application from the Montana City School District, which asked for $235,350 to make needed upgrades to its drinking water system. The district’s goals include bringing a new well online and add arsenic removal systems.

The other highest-ranked proposals included:

  • Darby, which sought almost $1.9 million to improve its wastewater treatment system, which discharges to the Bitterroot River
  • The Worden-Ballantine Water and Sewer District, which requested $6.6 million to develop a new groundwater supply to replace a current supply with high nitrate levels
  • Butte-Silver Bow County, which asked for almost $940,000 to eliminate a wastewater discharge to Silver Bow Creek by connecting Rocker to the central water and sewer system
  • Philipsburg, which requested $4.3 million to repair and expand its wastewater treatment lagoons and reduce discharge into Flint Creek

The full ranked list is available here.

The commission heard testimony Thursday from many of the local governments that asked for grants, as they debated whether to give full funding to fewer projects or lower the cap on the maximum grant to fund more projects.

HB 632 already set the maximum competitive grant at $25 million. The Fort Smith Water and Sewer District was one of a number of governments that asked for more than $2 million. Katie Steele, vice-chair of the district’s board, said their project to repair leaking sewer mains was ready to go – but they needed all of the $5 million they requested.

“For us with our project, partial funding means an uncompleted project, and we will have to go out and seek the remainder of the money wherever we can,” she said.

But other projects, like Wolf Point’s sewer main repairs, were ranked lower on the list and wouldn’t receive grants at all if the projects above them got full funding. Wolf Point mayor Chris Dschaak said only a few large projects could use more than half of the available grant money.

“I think, to be fair and equitable to the whole state, that awarding strictly on the amount of the ranking and the amount they have would do a disservice to the whole state,” he said.

The commission also had to decide how much money to allocate at this time. Montana won’t receive the full pot of ARPA money until next year.

Kurt Alme, Gianforte’s budget director, told commission members the administration planned for the first round of competitive grants to use $100 million of the $453 million the state already has.

He said they might be able to free up another $25 million, but it would require negotiations with the other commissions that are distributing the money.

DNRC staff told the commission they could fully fund 29 projects with $100 million or 33 with $125 million. If they capped grants at $2 million, they could fully or partially fund 60 projects with $100 million or 74 with $125 million.

While the commission chose the option that would fund the greatest number of projects, that recommendation is not binding on Gianforte. The governor’s office told MTN Gianforte will carefully consider their input, but there is no specific timeline for when he will make his final decision.

In addition to the competitive grants, the commission signed off on providing $5.8 million to 13 projects that only asked for minimum allocation grants. They also approved minimum allocations for projects that applied for both grant programs and are selected for competitive grants.

$150 million will eventually be paid out through the minimum allocation program, though DNRC had only received applications for about a third of that by Aug. 17.