Nearly 500 water and sewer projects totaling about $1.27 billion are in various stages of planning and construction across the state, a result of federal American Rescue Plan Act funding and local matches.
The Legislature and Gov. Kay Ivey allocated $615 million from the COVID-19 relief funds in 2021 and 2022 for water and sewer projects to be distributed by the Alabama Department of Environmental Management.
Separately, more than $500 million in ARPA funds was dedicated to broadband expansion.
The money must be spent by the end of 2026, per federal rules.
Though there have been some “glitches,” lawmakers at a Thursday Legislative ARPA Oversight Committee meeting praised various state bodies for their work in turning federal money into infrastructure.
“We have construction going on in the state that’s creating jobs, that’s creating opportunities, that’s improving the lives of Alabamians,” said committee chairman Sen. Greg Albritton, R-Range. “Frankly, I think we, the state of Alabama, need to be proud of what we’ve done.”
For the water and sewer money, communities had to apply for the funding and some of it required them to contribute local money. On Thursday, ADEM Director Lance LeFleur told the committee that in all, communities were investing $663 million in matches, for a total of $1.27 billion.
With additional federal Infrastructure Bill funds, a total of about $1.7 billion is in play, LeFleur said.
But applications from cities and counties totaled $3.4 billion, signaling a significant need around the state.
“We’ll be able to satisfy about one-half of the requests that are out there for water and sewer systems,” LeFleur told lawmakers.
Citing the need for funding, and a late 2026 deadline to spend all ARPA funds, lawmakers asked LeFleur, as they have for more than a year, how his agency will keep the projects and spending on track.
Like all the more than $2 billion in ARPA funding the state received, the funds must be allocated by the end of this year and expended by the end of 2026 or risk the U.S Treasury Department taking the money back.
Of the 498 agreements for projects ADEM has entered with local communities, money is already being spent on 188 of them, LeFleur said.
“Not a single penny will go back to the Treasury,” LeFleur said. “We are in lockstep with you on that.”
Starting in August, fund recipients who have not yet bid their projects will have to submit monthly status reports to ADEM.
If in June 2026 a project is unlikely to be completed by the end of the year, funding can be reallocated, LeFleur said.
Several lawmakers praised LeFleur and the department for its handling of the applications and funds.
“I was a skeptic,” said Sen. Chris Elliott, R-Josephine, “But you’ve turned me into a believer.”
Elliott and others had previously questioned the distribution of funds and the ability to spend them by the end of 2026.
Asked if there are enough companies bidding to do the projects, LeFleur said so far there are.
The Alabama Department of Economic and Community Affairs is overseeing the more than $500 million in broadband expenditures. There was no public update given on those projects, but some lawmakers again expressed frustration that Starlink, a satellite-based Internet provider owned by Elon Musk, is not being considered as an alternative to in-the-ground fiber, especially in rural areas where miles of fiber is more costly per home.
Albritton noted the point is moot because satellite internet doesn’t qualify under the federal rules for spending the money. And ADECA had previously said fiber is a better investment.
Elliott said he knows fiber is considered the “holy grail” of internet, “there are some folks in Alabama who would settle for a red Solo cup because they are dying of thirst.”
Sen. Bobby Singleton, D-Greensboro, and others suggested satellite should be considered for state-funded expansion efforts in areas where it makes more sense than fiber.