Montana Provides Update on ARPA Funding Allocations

HELENA — Montana leaders say they have reached a milestone in allocating the money they received from the U.S. federal bailout law.

State ARPA Director Scott Mendenhall said the first pot of money Montana received through ARPA — about $1 billion — has now been fully allocated. This means that the state has determined the programs the money will be used for, although much of the money has not yet been disbursed.

Mendenhall said the final amount to be directed was just $2 million, approved by a state advisory board last month.

According to a March report by the Center on Budget and Policy Priorities, a national think tank, Montana was among the first four states to take full ownership of its first round of ARPA dollars.

“I think it’s something we can be very proud of,” Mendenhall said. “It’s taxpayers’ money; we are very aware of that.

According to the state of Montana’s ARPA dashboard, more than $1.1 billion had been approved for intended uses as of April 5, including more than $800 million the state has received directly from the federal government. Of this direct funding, $393.1 million has been awarded to specific recipients, and $149.9 million has been disbursed so far.

In some cases — including the $270 million that had been allocated for water and sewer infrastructure grants — the state said very little money has been disbursed because recipients will be reimbursed for their costs a once the work is completed.

Mendenhall says there is always the possibility that money could be reallocated, if it remains unused. For example, he pointed to “minimum allocation” funding for water and sewer projects – money set aside for each local government based on its size. These governments can decide which projects they want to fund, and the state will approve those expenditures as long as the project is eligible under ARPA rules.

“We’re watching this closely, and we know there are a number of cities and counties that haven’t allocated these funds,” Mendenhall said. “If they don’t by the end of the year, they will revert to the central fund and be distributed through an existing program which is competitive. So we already have a contingency plan in place for those.

On Wednesday, the state’s ARPA Infrastructure Advisory Board voted to recommend another set of water and sewer grants for 95 projects across the state. These recommendations would include $118.2 million in competitive grants, as well as an additional $17.2 million in minimum allocation funds. The commission also approved six other projects that were only seeking minimum allocation grants, for another $2.1 million.

During Wednesday’s hearing, committee members heard discussions about why many local governments have not requested their full minimum allocation so far. State and local leaders agreed that many counties had reservations due to complications in how the process worked. County commissioners must approve a project for it to receive funding, and leaders said the county will then receive the money and must enter into a separate agreement to pass it on to the entity actually applying for the grant.

One of ARPA’s largest investments in Montana will be more than $250 million for broadband service expansion. This money comes from the second round of funding, which the state has not yet received. Leaders plan to begin awarding these grants to projects in July.

Mendenhall said ARPA is about long-term investing — compared to the earlier CARES Act, which focused more on immediate economic relief during the COVID-19 pandemic. He said that as water, sewer and broadband projects receiving ARPA grants begin moving forward, Montana residents will be better able to see what the funding makes possible.

“These are very visible, life-changing things across Montana,” he said.

James V. Hayes