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Demand outpaces funding for one state COVID aid program, but not others

Demand outpaces funding for one state COVID aid program, but not others

While local governments and agencies around the state have applied for $13.7 million more in water and sewer projects than the Legislature allocated earlier this year, the demand for rental assistance and a return-to-work bonus has lagged behind available funding.

But administrators say they're looking at other ways to use the rental money and that the worker bonuses still need time to play out.

The state said Wednesday 320 applications have been made for water and sewer grants totaling $919.7 million. The Legislature, through House Bill 632, put $906 million toward those types of projects from the roughly $900 million it divvied up in federal American Rescue Plan Act funding. More than $2 billion is coming to the state under the law Congress passed earlier this year.

“The sheer volume of applications for water and sewer grants underscores the importance of applying ARPA funding toward responsible, long-term investments which the state has not made before,” Republican Gov. Greg Gianforte said in a press release. The funding and applications are in addition to projects the Legislature put money toward in various infrastructure bills that also passed earlier this year.

Similar to the infrastructure funding process that happens through the Legislature in odd-numbered years, the Montana Department of Natural Resources and Conservation will review the applications to ensure projects are eligible and then rank them. The list then goes to the Infrastructure Advisory Commission for further review. It's one of several committees set up by legislators to recommend how to spend ARPA funds. Gianforte has final say over which projects get money.

Grants will be prioritized to address the most urgent issues for drinking water and wastewater systems, the press release said. Local governments can also use the funding for water and sewer infrastructure.

The applications came from 98 cities, 66 water and sewer districts, 63 towns, 32 state agencies, 25 counties, 16 irrigation districts, seven water use associations, six consolidated city-county governments, four regional water authorities, two school districts, two conservation districts and one local government.

The press release said that the infrastructure committee "has indicated there will likely be a second round of water and sewer grants," though it's not clear if that's because not all projects will get funded in the first round and there will be money left from the $906 million pot or if more money could be made available.

While the demand for the water and sewer funding has outpaced supply, the opposite is true for rental assistance funds and incentives for people to leave the state's unemployment system for jobs, though administration officials emphasized efforts to increase uptake are ongoing.

There was a total of $352 million in federal money sent to Montana for emergency rental assistance. Under a program the Department of Commerce launched April 5, renters with incomes of 80% below the median who can demonstrate financial harm from the pandemic and that they're at risk of housing instability are eligible for help.

Through 15 weeks, $12.5 million has been awarded to about 2,000 households with an average award of $5,700, according to Cheryl Cohen, administrator of the Montana Housing division in the state Department of Commerce. That's up from $10 million earlier this month. A previous rental program in 2020 directed $8.4 million to about 2,500 households.

Cohen said it's not clear exactly what the full demand is for the aid could be, but some estimates have shown there might be between 7,000-8,000 eligible Montana households.

The state has until September 2022 to spend the first round of funding and September 2025 for the second.

Cohen on Wednesday acknowledged not all the funds will likely be spend on rental aid and the commerce department is working to transfer some money to the state health department. There it could be spent on housing stability projects like eviction prevention, mediation and housing counseling and navigators.

"We want to maximize the use of these funds for all eligible purposes," Cohen told an ARPA commission focusing on the economy and workforce development.

Cohen said places like Montana that received the minimum for rental assistance are also watching to see if Congress might allow the money to be used for things like affordable housing construction.

"Three-hundred-and-fifty-two million dollars for renters under these narrow parameters is a significant amount of money given our population and just the number of renters we have in Montana at that income level," Cohen said.

She added the department entered a marketing contract to raise awareness for the program and is working to ramp up its application review timeline in an effort to get more money out the door.

Another program with $15 million in ARPA money to pay $1,200 bonuses to people who go back to work after receiving unemployment benefits has paid out $77,800 to 65 applicants. At the end of last month Gianforte announced those bonuses along with the end of expanded unemployment benefits in Montana.

Scott Eychner, the administrator of the Workforce Services Division in the commerce department, told the ARPA committee in a Wednesday update that number is likely to rise. A total of 3,196 applications have been made and 41 have been denied.

"That is admittedly a little bit lower than we had anticipated or hoped at this point, but there are a couple things that factor into that," Eychner said. The state previously estimated about 12,500 people would seek benefits.

Validating employment through pay stubs is taking longer than expected, Eychner said. And employees need to show four weeks of wages to receive the bonus. Anyone who was receiving unemployment payments as of May 4 could apply for the bonus.

Eychner also said approving applications is taking about a week, which is double what the department expected, though it's working to speed up that process. The program runs through Oct. 31.

"It's still too early probably to draw any conclusions or make assumptions," Eychner said.

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Montana State Bureau Chief

State Bureau reporter for Lee Newspapers of Montana.

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