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Montana gives update on ARPA funding allocations

Montana-U.S. Flags
Posted at 7:34 PM, Apr 20, 2022
and last updated 2022-04-20 21:41:59-04

HELENA — Montana leaders say they’ve reached a milestone in allocating the money they’ve received from the federal American Rescue Plan Act.

State ARPA director Scott Mendenhall says the first pot of money Montana received through ARPA – around $1 billion – has now been fully allocated. That means the state has determined what programs the money will be used for, though much of the money hasn’t been paid out yet.

Mendenhall said the last amount to be directed was just $2 million, approved by a state advisory commission last month.

According to a March report from the Center on Budget and Policy Priorities, a national think tank, Montana was among the first four states to fully appropriate its first round of ARPA dollars.

“I think it’s something we can be very proud of,” Mendenhall said. “It’s taxpayer dollars; we’re very much aware of that.”

According to Montana’s state ARPA dashboard, more than $1.1 billion had been approved for planned uses as of Apr. 5 – including more than $800 million the state received directly from the federal government. Of that direct funding, $393.1 million had been awarded to specific recipients, and $149.9 million had been paid out so far.

In some cases – notably the $270 million that had been allocated for water and sewer infrastructure grants – the state said very little of the money had been paid out because recipients will be reimbursed for their costs after the work is done.

Mendenhall says it is still possible some money may get reallocated, if it remains unused. For example, he pointed to “minimum allocation” funding for water and sewer projects – money set aside to each local government based on its size. Those governments can decide which projects they want to fund, and the state will approve those expenditures as long as the project is eligible under ARPA rules.

“We closely monitor that, and we know that there are a number of cities and counties that haven’t allocated those funds,” said Mendenhall. “If they don’t do so by the end of the year, then those will revert back to the central fund, and those will be distributed through an existing program that is competitive. So we’ve already got a contingency plan in place for those.”

On Wednesday, the state’s ARPA Infrastructure Advisory Commission voted to recommend another set of water and sewer grants for 95 projects across the state. Those recommendations would include $118.2 million in competitive grants, along with another $17.2 million in minimum allocation funds. The commission also endorsed another six projects that sought only minimum allocation grants, for another $2.1 million.

During the hearing Wednesday, commission members heard discussion on why many local governments haven’t applied for all their minimum allocation money so far. State and local leaders agreed many counties have reservations because of complications in how the process works. County commissioners must endorse a project for it to receive funding, and leaders said the county would then receive the money and have to make a separate agreement to pass it on to the entity that is actually requesting the grant.

One of Montana’s biggest single investments from ARPA will be more than $250 million for expanding broadband service. That money is coming from the second round of funding, which the state has not yet received. Leaders are planning to start awarding those grants to projects in July.

Mendenhall said ARPA is about long-term investment — compared to the earlier CARES Act, which was more focused on immediate economic relief during the COVID-19 pandemic. He said as the water, sewer and broadband projects receiving ARPA grants begin to move forward, Montanans will be better able to see what the funding is making possible.

“Those are some very visible, life-changing things across Montana,” he said.