Iowa’s smaller communities face infrastructure funding challenges

Eldy Miller, mayor of Ely, will find out Monday how much American Rescue Plan Act funding his town will receive from Linn County for a critical infrastructure project in the city.

Miller, along with Iowa Environmental Council Water Program Manager Alicia Vasto and USDA Rural Development State Director Theresa Greenfield, discussed the challenges smaller Iowa communities face when it comes to funding infrastructure projects during The Gazette’s Iowa Ideas conference this week.

“Infrastructure is the shared things a community needs to thrive and be successful,” Vasto said. “In addition to the typical things we think of, it also encompasses natural features, the places people go for recreation, other social structures, health care and child care systems.”

For Miller, the issue of keeping up with infrastructure improvements is timely as Ely seeks $1 million in ARPA funding from the county for a city water treatment facility. Miller said the project, which is estimated to cost $3.5 million, is necessary because the city has a hard water issue that sometimes makes the city’s water look yellow.

The Linn County Board of Supervisors will decide where to allocate its ARPA funds during its Monday meeting.

Additionally, the city is seeking $987,000 in funds to cover the added costs for a $2.8 million sewer improvement project that was originally estimated to cost $1.8 million before the COVID-19 pandemic. Miller said the difference in cost was due to material and labor shortages.

“We had to move forward with the project no matter what as it was the third phase of a three-step infrastructure project in our town,” Miller said. “We have already increased residents' utility bills to cover the cost.”

In their discussion about ARPA funding, all of the supervisors said Ely would more than likely receive funding, but probably not its total request. The county received more than 70 applications for the $13 million that’s available. More funding is expected to go toward non profits and other social services, which the county is prioritizing.

Other cities including Marion, Springville, Hiawatha, Central City and Bertram are also seeking county funding for water and sewer infrastructure projects. The total request is $6 million.

“The plan we have right now is whatever funding the city does receive, to apply it towards the sewer project loan to help pay it down quicker. We are aware of a program at the state level with SRF Loan forgiveness that we could potentially use towards the water treatment facility,” Miller said, referring to the State Revolving Fund.

Ely’s example is similar to others across the state of Iowa. Small communities struggle to pay for infrastructure projects because many of them also have been losing population — or, at best maintaining population — and not growing a residential tax base.

Greenfield pointed out that many of Iowa’s smaller and rural communities don’t have full-time staff members dedicated to writing grants and seeking available funding, so the network and connections may be small as well.

“We always say you know you’re in a small town when you don’t have a grant writer,” Greenfield said. “A lot of times infrastructure projects are so complex that you have to get an enormous amount of stakeholders involved. USDA has 50 programs and we have found a lack of capacity in communities as one of the biggest hurdles.”

“Our smaller communities don’t have experts for everything,” Vasto added. “They may not have the capacity to know what funding options are and they may not know where to turn to get assistance for their various needs.”

The panelists agreed that the most successful small towns have people who are engaged and involved with different parts of the community.

“The secret sauce is people,” Greenfield said. “It’s about having folks who love their community and will get involved, help build that road map and plan for the community. And anything we can do to lift people and support them, that’s what we’re interested in working hard to do.”

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