State Capitol Week in Review – July 30, 2022

LITTLE ROCK –Well-attended meetings at the state Capitol usually indicate that legislators are addressing an important issue.

That was certainly the case when the joint Senate and House Committees on City, County and Local Affairs met to explore methods of funding of much-needed improvements to water and sewer systems across Arkansas.

A room full of local officials, managers of water and engineers asked legislators to open a process that would allow them to apply for grants and relief funds.

Several legislators and many witnesses expressed frustration that no water projects had even been considered by the steering committee that recommends how federal relief funds should be spent.

One senator who is on the steering committee said it was stacked in favor of the governor, because it consists of nine executive branch department heads and six legislators. That means no projects are brought before the steering committee without prior approval from the governor.

The steering committee has recommended that hundreds of millions in federal funding be used for broadband expansion, virtual training and contact tracing. Legislators said it’s just as important to shore up deteriorating infrastructure that delivers clean drinking water to citizens.

The Senate co-chair of the City, County and Local Affairs Committee emphasized the urgency of getting projects funded immediately. The federal relief funds have to be spent by 2026, but water and sewer projects can take years to plan and get “shovel ready” because they are so complex.

Water systems must acquire rights of way and prepare highly detailed specifications before bidding them out. Projects must comply with exacting health and safety regulations.

Even if revolving loans are available, long-term financing is tricky because water systems cannot simply double or triple the rates paid by consumers in order to finance loans. Many of the 650 water systems in Arkansas serve low-income families.

Inflation is a factor, especially in the construction industry. The longer it takes for a water system to bid out a project, the less pipeline it gets for the money. The longer the steering committee waits, the fewer water projects will be funded because of inflation.

Also adding urgency to the debate are this summer’s high temperatures and the lingering drought across Arkansas. As one witness told legislators, even after the drought ends most water systems will need upgrades.

Water managers were hesitant to estimate how much money is needed to upgrade water and sewer infrastructure in Arkansas. For one reason, it is a moving target. A few years ago a statewide study estimated about $3.7 billion in needs, but in more recent surveys the estimates are closer to $5 billion.

The Secretary of Agriculture said that water systems in every corner of the state have needs.

Water managers said that they did not expect to get the entire amount of funding, but that receiving some of the federal relief money would show that the state’s decision makers believe water is a priority.

The governor said $836 million in federal relief funds arrived in June. He told the press that his appointments to the steering committee were working on a plan, and that he had asked them to meet soon.