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Concerns grow about available engineering, contractor services for ARPA projects

Alabama agencies plan to put more than $900 million in COVID-19 relief dollars in the ground in the next three years in the form of water, sewer and broadband infrastructure.

However, there’s a growing concern among state leaders about the availability of engineers and crews to get these jobs done by the federal 2026 deadline as other states and communities also look to spend their federal infusions.

“This is more than we’ve ever done in the state of Alabama, getting this infrastructure in the ground,” Sen. Greg Albritton, R-Range, said Thursday at a meeting of the legislative oversight committee for American Rescue Plan Act funding.

Lawmakers in the last two years have allocated more than $2 billion in the federal funding to dozens of state agencies and other entities. This year, a significant portion went to broadband and water and sewer infrastructure.
Albritton said he’s been told by engineers that completing the number of planned projects within three years is “an impossibility to achieve.”

“Do we have the services, not just the materials, but the services to make sure that we get this done and get it done correctly?” Albritton asked Alabama Department of Environmental Management Director Lance LeFleur.

“That’s the $395 million question,” LeFleur responded, referring to the amount of ARPA funds allocated this year to his agency for new water and sewer projects around the state. About $220 million was allocated the year before.

“There are legitimate questions as to whether we have the capacity, engineering-wise,” he said.

Federal ARPA rules say the money has to be committed to projects by the end of 2024 and spent by the end of 2026. If it’s not, the state risks having to return it to the federal government.

Local communities had to apply for ARPA funding and applications far exceeded available money. LeFleur said that as of this week, ADEM had signed agreements with 202 communities and expected finalizations with 254 more by the end of the year.

“Our strategy is to push this money out and get it obligated as early in the process as possible so that we’re ahead of other states and our folks are first in the queue both for engineering services and for equipment and materials that are needed …

“We have big concerns about the supply chain issues that are looming ahead of us.”

Albritton said if the money can’t be spent because of a lack of professional resources or supplies, lawmakers may need to reallocate funds. The ARPA spending bills approved this year and last allow a group of legislators and the Alabama Department of Finance to move funds around if they can’t be spent as originally allocated.

According to Finance, money can’t be reallocated after 2024.

Albritton told Alabama Daily News that serious reallocation conversations probably wouldn’t happen until spring or early summer of next year.

LeFleur said that by June 1, 2026, local officials must be able to demonstrate that their projects will be complete by the end of that year.

Rep. Andy Whitt, R-Harvest, asked LeFleur what would happen if in mid-July of 2026 the department realizes a project can’t be completed by the end of that year and the federal deadline.

“What happens with a project that’s 60% complete and it’s not going to finish,” he said. “We’re pregnant with a sewer system. How do we give birth?”

LeFleur said funds could be pulled and given to another project that’s already underway. The incomplete project would then be in line for later funding sources.

“We will not leave a project in-complete,” LeFleur said.

Whitt said he didn’t want to see the “rug pulled out from” communities on projects.

Lawmakers had the same questions to Maureen Neighbors of the Alabama Department of Economic and Community Affairs about the more than $300 million in ARPA funds it will spend on broadband expansion.

“We have a lot of concerns about all areas of the workforce, whether it’s on the professional side or the labor side and supply chain with material, but we’ve been having these conversations with our (internet service providers) for two years now and we’ve been working with them to hear what their plans are, how they are addressing these issues and we are watching it very closely.”

She said providers in their funding applications have to spell out how they’ll get the jobs done in the timeframe.
Kirk Fulford, deputy director of the Legislative Services Agency, told lawmakers that while there are requests to the federal government to extend its deadlines, state leaders shouldn’t count on that.

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