NASHVILLE – Tennessee officials are putting $1.35 billion of the state’s $3.9 billion pot of federal American Rescue Plan Act funds on the table in the form of local infrastructure grants in hopes of persuading towns, cities and counties to invest millions of their own ARP dollars for drinking water, wastewater and stormwater improvements.
“These funds will help us address critical needs in water infrastructure in communities throughout our state,” Gov. Bill Lee said in a statement earlier this month about the state’s Water Infrastructure Investment Plan. “We are engaging leaders from counties across Tennessee and want to apply these funds with the most efficient and helpful process as possible.”
The proposal was approved in early December by Lee’s Fiscal Stimulus Accountability Group as part of its “Tennessee Resiliency Plan.” It puts $1 billion into the Water Infrastructure Investment Plan and offers the money in the form of grants to the state’s 95 counties and potentially 267 towns and cities. Another $269 million would go toward state-initiated projects, with the remainder going toward a competitive grant program for water-related infrastructure.
The plan, fashioned by Lee administration officials, top legislators and the state Department of Environment and Conservation, requires local governments to offer matches of 20%-40% if they opt to use the program and obtain funding under a formula created for it. It includes awarding base amounts on whether the entity is a county or municipality and other factors, including population. The formula also includes an ability-to-pay index to help poorer counties and municipalities. State incentives could further decrease the local share of costs.
Tennessee Department of Environment and Conservation cites between $5 billion and $15 billion in water infrastructure needs statewide between now and 2040 based on data from the U.S. Environmental Protection Agency, the Tennessee Advisory Commission on Intergovernmental Relations and state government’s 2018 TN H2O report.