In 2021, under the American Rescue Plan Act (ARPA), Congress authorized funding for State and Local Fiscal Recovery Funds (SLFRF) to support a wide range of state and local infrastructure projects. A significant portion of these funds has been directed toward local water infrastructure efforts, including the construction and repair of water towers, water pipe systems, and wastewater infrastructure.
Under ARPA, states and localities were required to obligate funds by December 31, 2024, with all unobligated funds to be returned to the U.S. Treasury. Additionally, all obligated funds must be fully expended by December 31, 2026.
However, our members—who are under contract to complete many of these water infrastructure projects—have recently been informed by several state and local government partners that, in practice, the deadline for expending funds is effectively September 30, 2026. This is due to the time required (typically 2–3 months) to close out projects with the federal government by year-end.
Our members are increasingly concerned that, given the limited number of highly specialized companies capable of executing these technically demanding projects—and the ongoing challenges in workforce availability—the backlog from bidding to project completion may prevent many projects from finishing on time. As you know, water infrastructure, such as towers and piping systems, is often the critical first step in enabling broader economic development initiatives, including new manufacturing plants, commercial ventures, and housing developments. In many areas, without these foundational water projects, future development will simply not occur.
On behalf of STI/SPFA and our members, we respectfully urge Congress to extend the deadline for expending already obligated SLFRF funds. We want to be clear: we are NOT requesting additional funding, nor are we seeking to alter the existing December 31, 2024, obligation deadline. We are simply asking for more time to ensure that previously obligated funds can be used to complete these vital infrastructure projects—projects that serve as a cornerstone for long-term economic growth in communities across the country.
