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How Local Governments Plan to Spend Infrastructure Funds

Roads and water infrastructure top the list of local priorities, but broadband expansion and clean energy projects are proving popular as cities face increased demand for these newer technologies.

aerial view of construction worker in construction site
Officials in Pueblo, Colo., a mid-sized city 115 miles south of Denver, want to modernize and electrify its transit fleet. City officials are hoping to use funds from the Infrastructure Investment and Jobs Act (IIJA) to make it possible.

But they aren’t focusing on vehicles yet. Instead, they’re hoping to start with a new facility.

“You’re fighting a losing battle if you’re trying to transition before you have that infrastructure in place,” said Benjamin Valdez, Pueblo’s transit director. “You have to have the back-end electrical infrastructure.”

Valdez said the IIJA funds won’t cover the cost of a full transition, but the influx of cash will ease the process. He estimates a fully electrified fleet in Pueblo will take at least five to seven years.

Pueblo's work is emblematic of the path local governments across the country are headed down. It is among the 26 percent of cities planning to use IIJA funds for electric vehicles and electric buses, according to a survey of officials from 153 cities conducted by the National League of Cities (NLC) and Polco, the results of which were released on July 19.
When the IIJA became law in November, it was the green light for federal agencies to start putting together grant programs for local governments. The $1.2 trillion spending package includes provisions for broadband expansion, improvements to infrastructure resilience, roadway upgrades and more.

Much of the law’s funding is planned to come through direct grants to local governments across the country.

This comes at a time when the United States’ transit infrastructure needs upgrading. In its most recent report, the American Society of Civil Engineers gave the country’s transit systems a grade of “D-,” citing the 19 percent of transit vehicles that were rated as being in poor condition, with a growing $176 billion backlog in funding, among other issues.

The most popular areas for investment are also areas of concern for ASCE, which rated the country’s roads with a “D” grade and its bridges with a “C” grade.

The money from IIJA is also not as straightforward to receive as some other programs. Valdez warned of the need to mind these grant programs carefully, as the requirements for these notices of funding opportunities (NOFOs) can be very precise.

“Do your homework,” said Valdez. “There’s a lot of fine print in every NOFO out there.”

Another key area of interest among cities, thanks to a mix of demand and funding availability, is broadband expansion. Communities in Michigan, New York, Virginia and other states are rolling out various models for broadband access.

David Armstrong works with cities on utility and transit projects as vice president of Hexagon’s safety, infrastructure and geospatial division, and he has noticed the interest in broadband increase in recent years.

“Fiber network design and implementation is complex, so communities should leverage funding by looking for network providers that deploy advanced GIS and asset management solutions through the design and implementation process,” Armstrong told Government Technology in an email. “This will help them get the most out of their project funding.”

Armstrong added that broadband is an area where resilience is key, alongside traditional utility and transit services.

“During incidents, such as weather and terrorism, that can affect the responsiveness of the grid. Utilities and telcos need to serve clients, and transportation agencies must provide efficient and safe mobility for residents and visitors,” he added. “Overcoming these obstacles requires coordinated action between all parties to restore services and resolve incidents sooner.”

The need for partnerships between multiple stakeholders, and the cost of some infrastructure projects, has led some to bring different agencies to the table from the start of a project.

More than three-quarters of cities actively seeking IIJA funding, 78 percent, said they are very likely or somewhat likely to collaborate with neighboring cities or regional authorities to maximize the benefits of grant money, according to the NLC survey.

Having more stakeholders can also allow communities to attempt more ambitious projects, since the price tag may be distributed among stakeholders.

IIJA grants are cost-shared with local governments, unlike some pandemic-era federal programs. This has forced cities and other local governments to consider where to find matching funds for infrastructure projects. The most popular option is to use leftover funds from pandemic-era funding programs. Almost half of governments seeking funding, 49 percent, plan to use money from the American Rescue Plan Act (ARPA) for their portion of IIJA-funded projects.
“These once-in-a-lifetime investments from the Bipartisan Infrastructure Law allow communities across the country to tackle infrastructure upgrades and badly needed infrastructure projects to improve the lives of residents,” said NLC CEO Clarence Anthony in a press release. “From coast to coast, from the biggest cities to the smallest towns, local governments are leading the way in rebuilding and strengthening our nation’s infrastructure.”

Editor's note: David Armstrong's role within Hexagon has been corrected.
Government Technology is a sister site to Governing. Both are divisions of e.Republic.
Andrew Adams is a data reporter for Government Technology. He holds a bachelor’s degree in communication from the Illinois Institute of Technology and a master’s degree in public affairs reporting from the University of Illinois Springfield.
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