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.
Chattanooga, Hamilton County issues
Senate Finance Committee chair Bo Watson, a Hixson Republican and member of the state's Fiscal Accountability Stimulus Group, said in a telephone interview Monday that he has for years heard a "steady drum beat" on water, wastewater and stormwater infrastructure problems both locally and elsewhere in Tennessee.
"This really for most of us fits the definition of infrastructure," Watson said of the new grant program. He said Lee and state lawmakers hope funding from ARP's Coronavirus State and Local Fiscal Recovery Funds will incentivize local governments and related entities to begin tackling problems.
The city of Chattanooga is under a 2013 consent decree with the EPA, which is costing the city an estimated $250 million to fix its problems.
Hamilton County government is staring down the barrel of an expected EPA consent decree of its own, with a projected $245 million price tag.
Since 2008, the town of Signal Mountain has been under a sewer moratorium aside from a few pre-approved properties and others connected to the mountain's decentralized wastewater treatment facility. Part of Red Bank and between 80% and 90% of Soddy-Daisy has been under a moratorium for almost as long, Michael Patrick, director of the Hamilton County Water and Wastewater Authority, which serves most of Hamilton County outside the city of Chattanooga, said in a telephone interview.
Lookout Mountain and a portion of East Ridge are under a moratorium, as are several unincorporated areas in East Brainerd and Ooltewah.
Hamilton County Mayor Jim Coppinger needs little convincing to participate in the state's effort. The county is faced with spending upwards of $245 million to overhaul its sewage system as part of a pending EPA legal settlement.
It's coming after years of violations and millions of gallons of raw sewage have spilled into local creeks and streams. Treatment and handling of wastewater is becoming "more and more critical" as the county continues growing, Coppinger said in a telephone interview last week.
"Obviously, it's going to be extremely expensive, so anything that we can do with the ARP money, whether it comes from the state or even the money that we got locally from [ARP], that we can put towards wastewater will obviously help in the future with keeping the fees down to the [Water and Wastewater Treatment Authority] users," Coppinger said. "We welcome whatever funding we can have or assistance we can have."
The county's water authority, which provides sewer service to a number of residents in eight municipalities, is eligible to receive $9.08 million in state funding, according to the Tennessee Department of Health and Environment document outlining the plan. The county would be required to kick in an additional $3.6 million under the state's 40% co-funding requirement.
Hamilton County is already getting $71.4 million, half of it this year and the remaining half in 2022, directly through the American Recovery Act's Coronavirus State and Local Fiscal Recovery Funds.
Chattanooga's EPA consent decree came following decades of raw sewage spills into the Tennessee River. The city is eligible for $16.66 million in the new state program's funds, according to the Water Infrastructure Investment Plan document. The city would need to put in $5 million of its own to meet a state co-funding requirement of 30%.
Chattanooga, too, is getting about $38.6 million in direct federal ARP funding, half of that already provided in 2021 and the remaining portion coming in 2022 through ARP's $38.6 million Coronavirus State and Local Fiscal Recovery Funds.
City officials are hoping the state will take into account the tens of millions of dollars it has already spent to address its water pollution problems.
"We are spending a tremendous amount of money on water infrastructure and sewer infrastructure as a community through our consent decree," Joda Thongnopnua, Chattanooga Mayor Tim Kelly's chief of staff, said in a telephone interview last week.
Thongnopnua said the city has already spent nearly half the money required to address problems with sewers and at the city's Moccasin Bend Sewage Treatment Plant on the Tennessee River near downtown.
"I think [the city will be] asking the state of Tennessee to help us evaluate how municipalities under a consent decree and already spending lots of money, millions of dollars, tens of millions of dollars, in fact, on our water and sewer systems, how that might factor into the match," Thongnopnua said.
The state is further seeking to incentivize water and sewer-related activities through some co-funding reductions.
Besides Chattanooga, the city of Collegedale is the only other municipality within Hamilton County that has a wastewater collection and sewer system. Efforts to reach City Manager Wayon Hines by phone Monday were unsuccessful.
According to Tennessee Department of Environment and Conservation figures, Collegedale is eligible for a total state allocation of $1.4 million. The city would have to match that with 30% or $140,000 of its own money or from its share of Coronavirus State and Local Fiscal Recovery Fund dollars.
Water authority seeks aid
Water and Wastewater Treatment Authority Executive Director Michael Patrick said in a Times Free Press telephone interview last week that he hopes local governments keep the authority in mind.
"Apparently, the funding can also apply to stormwater-type projects," Patrick said. "I think some of them [local governments] would want to keep some of their money for that. But I'm asking all of them for as much of an allotment [as] I can get."
Much of Soddy-Daisy has been under a sewer moratorium for years. The city could see $1.7 million from the state's program.
City Manager Burt Johnson said in a telephone interview last week the city's share "would be more likely" to go to the water authority.
"The major part of the city that has development right now is under a moratorium," Johnson said. "Which means they can't get any more sewer taps until they fix the sewer up here where it can handle the flow."
"We'd be willing, obviously, to try to do whatever we can, because we're going to benefit from it in the long run if we get out of the moratorium," he said.
The city would be required to match the state's offer with 30% or $517,000. But again, the state's plan provides for some reductions in the matching funds.
Department of Environment and Conservation spokeswoman Kim Shofinski said in an email Monday that eligible cities are those that are incorporated and operate a drinking water system, wastewater/sewer system or a permitted stormwater system. Based on the published plan, Soddy-Daisy is eligible for a non-competitive grant allocation up to the dollar amount identified in the allocation table as it is a part of a Municipal Separate Storm Sewer System program, she said.
Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.