How Small Players Can Leverage Infrastructure Funding

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| By Robert Sheets

Last summer, Ellory Monks and Shalini Vajjhala writing for the Brookings Institute, noted that $850 billion of funding is coming from the Infrastructure Investment and Jobs Act (IIJA). They rightfully note that funding like this typically goes to larger, wealthier communities. This is partly because those communities often have shovel-ready projects. Granting authorities are comfortable with their track record. These communities have the human and capital resources necessary to get the grants, edging out “first-time, low-capacity or smaller-scale applicants.”

There is plenty of guidance available about how to apply. You can be very sure that there is guidance on how the money can be used, dispersed, accounted for, and audited. Monks and Vajjhala note that the feds are aware of the large community bias, and federal agencies are working to simplify funding while at the same time protecting public dollars. The application process is still onerous for small, low-income and rural communities.

In fairness, some funding has been set aside for small, rural, and Native American projects. Previous grants like the American Rescue Plan Act (ARPA) can be leveraged for infrastructure investment. Better still, the funds can be used to hire the necessary expertise to help secure federal funding. The questions are, what expertise, and how do you find it?

Communities should be looking for something more than a company that writes grants. Disadvantaged communities need people who understand the federal grants system, the application system, and the accountability systems. Projects need to be structured to pass end-of-project audits. These management skills are quite specific and necessary for success. You also need a team that knows the social aspects of prioritizing projects, should you seek public input for priorities. You want – you need – a support team that can ensure that the project is technically, administratively, and demonstrably good for the community.

Federal agencies understand that reaching small, rural, and economically disadvantaged communities is a shared challenge. While virtually every community can put funding to good use, the application process is more challenging for those who need funding the most.

Collaborate to Leverage the Funding Maze

As for water projects, there may be a lot of funding available, but even a lot doesn’t go as far as it used to. These days, even larger utilities find collaboration better than going it alone. Identifying suitable water sources, applying for permits, and land acquisition, among other steps along the way to a project, are increasingly costly. As a result, even larger utilities are coordinating their water supply development instead of competing.

Collaboration makes smaller, rural, and poor communities more competitive, and the cost of projects can be spread over a more extensive customer base making the water more affordable for ratepayers. Better still, the feds and many states (Florida, Texas) look favorably on projects based on partnerships.

Disadvantaged communities need people who understand the federal grants system, the application system, and the accountability systems.

Such an approach is a game-changer for disadvantaged communities. It’s an intentional leveling of the funding beyond the set-asides. Unlike the ARPA funding, the Infrastructure Investment funds are competitive. Every advantage matters.

Funding Strategy is the First Step

It’s not just water, though much money is available. It’s also roads and internet access. It’s streetlights, stormwater management, public transportation, workforce housing and more. There is a lot to get done. There are several ways to begin the quest for funding:

  • Apply on your own, then find expertise.
  • Find your experts and share your vision.
  • Prioritize your needs.
  • Seek public input but tell the public what you’re doing and why.
  • Develop a plan including performance measures and full compliance with federal spending guidance and implement it.

Keep in mind that you don’t have to go alone, and it’s advantageous not to. Find like-minded communities to join you because it’s better to cooperate than to compete. Cooperation makes you more competitive.

Robert Sheets is a senior vice president at Anser Advisory. Sheets has spent his career helping advance the goals of civic life including local, regional, state and federal governments. He has been instrumental in establishing public-private partnerships with a triple bottom line: good for the community, good for business and good for the environment.

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