State invites S.D. water projects to apply, because they might be funded by COVID-19 aid

Capitol News Bureau
KELO Money

PIERRE, S.D. (KELO) — State government is looking to spend a chunk of federal coronavirus money on South Dakota water projects.

The governor and the Legislature now need to decide how much and how fast. The catch: The federal government says the money must be spent by the end of 2026.

The call went out Tuesday from the state Department of Agriculture and Natural Resources for potential projects to apply to be put on the state water plan.

The timing coincided with a same-day meeting between the Legislature’s recently created COVID Relief Liaison Committee and two of Governor Kristi Noem’s top officials.

State Finance Commissioner Liza Clark and DANR Secretary Hunter Roberts sat down with lawmakers to talk about using some of the state’s latest pool of coronavirus aid for long-term benefit.

Secretary Roberts delivered a presentation specifically on how his department, through its engineers and the state Board of Water and Natural Resources, currently funds water and sewer projects through a combination of low-interest loans, grants and loan-principal forgiveness.

The lawmakers also received a briefing from Legislative Research Council staff looking at federal guidance on state and local fiscal-recovery funds; a 61-page summary of COVID-19 funding in South Dakota; and a 3-page look at state funding for drinking-water and wastewater projects.

State government distributed nearly all of the $1.25 billion in 2020 federal COVID-19 aid that South Dakota received from Congress through the CARES Act. This year, Congress handed out another round of coronavirus relief through the American Recovery Plan; South Dakota state government got $974.5 million, counties $171.8 million and cities $103.8 million.

Senator Lee Schoenbeck, the COVID committee’s chairman, said he knows of legislators who plan to submit spending requests for water projects during the 2022 session.

Commissioner Clark said the governor hopes to work with the Legislature on a process and direction for the 2022 session on coronavirus spending: “I would hope we’re not testifying on 50 bills saying, ‘That’s against the law.'”

Secretary Roberts said state government buildings that need water-system replacements are eligible for coronavirus funding, too. He said DANR received or is aware of several billion dollars of possible water projects. “We know there’s a lot of unknown funding requests out there,” he said.

Senator Schoenbeck asked whether the need to spend the coronavirus money by the end of 2026 would affect how many water projects can participate. Secretary Roberts said it depends how much the Legislature gives his department. He said $50 million would be gone quickly.

Schoenbeck said “it’s pretty clear” that the Legislature’s leadership and-or the co-chairs of its appropriations committee need to sit down with the governor’s top administration. Clark said the meeting could be in mid-November. The governor’s budget address is in early December.

Schoenbeck asked whether the Legislature would be hindering the process if the spending authority isn’t granted until March, when lawmakers amend the current state budget and approve the next year’s, rather than January. “Obviously the earlier the better,” Roberts replied. He noted that two tranches of federal aid money are coming.

“Normally people don’t ask for things until they’re shovel-ready,” Roberts said about the current state water plan. Clark said she needs to know more about how many water projects there might be, and how much they potentially would cost, before she could recommend whether spending authority should be done in one year or spread across several years.

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