I'd missed this South Dakota News Watch story on Thursday. It's good to see the Rushmore State seeking to free these federal dollars for infrastructure projects.
Use it or lose it: SD rushing to invest $700 million on water projects
By Bart PfankuchFederal money would improve 207 water and sewer systems across the state but must be spent: 'An investment in our future.'
PIERRE, S.D. – South Dakota lawmakers, state agency leaders and water system managers are hustling to spend roughly $700 million in COVID-era funding on water and sewer projects before the federal government claws it back.
The money was part of the American Rescue Plan Act (ARPA), a $1.9 trillion aid package Congress and the Biden administration passed in 2019 to help states recover from the pandemic.
ARPA rules require states to allocate all the funds by the end of this year and spend it by the end of 2026 or ship it back to Washington for possible usage by other states.
The deadlines, coupled with difficulty in completing large-scale water and sewer projects during labor and materials shortages, have instilled a sense of great urgency among the Legislature and the state Department of Agriculture and Natural Resources (DANR), which is responsible for permitting water and sewer projects.
“Hundreds of millions of ARPA dollars are still unspent, so until it’s done, none of us can feel comfortable,” said state Sen. Helene Duhamel, R-Rapid City, a lawmaker leading the effort to get projects completed. “It’s caused me some sleepless nights. And until everything is resolved at the end of the session, it’s a nail-biter.”
The state has allocated $600 million toward more than 200 one-time individual water and wastewater system upgrades and expansions, but less than a third of it has been spent. The remainder is in jeopardy unless state lawmakers take fast action and those who will use the money spend it before the deadlines.
South Dakota lawmakers are currently debating how to allocate the remaining $94 million of ARPA water funds. At the start of the legislative session, $131 million of ARPA funds overall were unallocated.
State agency officials confident money will be used
But those working on water and sewer system improvements are heartened by a new spending approach unveiled by DANR this legislative session.
Rather than accept proposals for any new qualifying projects at this late date, the agency instead proposes that the state use the final $94 million to boost spending on projects that already were approved in the original 2022 spending plan.
Andy Bruels, financial and technical assistance director at DANR, said he is confident that the strategy will enable the ARPA funds to be spent on worthy projects before the federal deadline.
"We’re not really concerned at all in getting those done," Bruels said in an interview with News Watch. "There would be a concern if we were taking on a whole bunch of new projects with this additional $94 million and getting things allocated. … But by working with existing projects, there’s no concerns in my mind."
Bruels, who informs the Legislature on DANR issues, noted that while ARPA funds must be spent by the end of 2026, the projects funded by those dollars don't necessarily have to be completed by that deadline. As a result, the state is urging project managers to spend the federal funding first on those projects before tapping any state loans or local investments, Bruels said.
The 2022 investment of $600 million in ARPA funds into the state's water and sewer systems was the single largest spending bill in state history outside of an annual state operational budget. When complete, the 207 projects will affect an estimated 85% of the state's population, Bruels said.
"It's an historic investment in the water and sewer infrastructure across the state and it’s got long-lasting impacts," he said.
Other projects proposed in 2024 session
Two other water-related funding measures are moving through the Legislature this session.
Senate Bill 66 would allocate $13 million in ARPA funds to improve or upgrade water and sewer systems at state-owned facilities, including replacing aging sewer lines at Sylvan Lake Lodge in Custer State Park and fixing a retention pond at Mitchell Technical College that is prone to overflow.
Senate Bill 7 and Senate Bill 16, which are similar, would provide funding from fees and other sources to complete up to a dozen water, irrigation and flood control projects at a cost of nearly $20 million. Those measures are part of the annual state water project proposals known as the State Water Resources Management System, or SWRMS. Gov. Kristi Noem signed SB 7 into law earlier this session.
Among those projects are an irrigation upgrade in Belle Fourche and flood control projects in Sioux Falls, Vermillion and along the Big Sioux River corridor. Partial funding is also included for studies of three projects that would tap the Missouri River for drinking water for northeastern South Dakota and the greater Sioux Falls and Rapid City regions.
Long list of ARPA projects
The DANR's 2022 ARPA spending plan included 207 water and sewer projects that so far have used about $180 million of the $600 million in federal grants allocated, Bruels said. Those projects, which also will be the focus of the proposed $94 million in Senate Bill 53 from the current legislative session, have been provided with more than $1 billion in low-interest state loans to reach completion, he said.
Comments