A legislative panel endorsed nearly $125 million in federal American Rescue Plan funds for rural broadband installation grants Tuesday.
No member of the Arkansas Legislative Council's Performance Evaluation and Expenditure Review Subcommittee could be heard voting against the request from the state Department of Commerce, but some lawmakers expressed concerns about internet service providers receiving funding before they complete the work.
The request for funding for the 32 "shovel-ready" projects goes before the full Legislative Council for approval Friday.
The Arkansas Rural Connect program has awarded $279 million in grants to provide high-speed broadband service in rural areas. The 132 projects have been financed with $157.5 million in American Rescue Plan funds; $118.1 million in federal Coronavirus Aid, Relief and Economic Security Act funds; and $4 million in state funds, documents show.
The program has received more than $400 million in additional grant applications, though not all applicants are qualified for the program.
The largest proposed grants include $11.3 million to Ritter Communications to provide service in northwest Jefferson County, $8.9 million to Hillbilly Wireless to provide service in south Sharp County and $7 million to Ritter Communications to provide service in southwest Pope County, according to the Commerce Department.
[DOCUMENT: List of proposed grants for broadband projects » arkansasonline.com/1117grants/]
Sen. Bill Sample, R-Hot Springs, said he believed it would be prudent to implement a drawdown system for paying internet service providers, wherein they would be paid throughout the project based on how much work they complete.
Currently, broadband grant awardees are paid in a lump sum as an advance, said Jim Hudson, the Department of Commerce's director of strategy and operations. The companies submit invoices and receipts for expenses incurred into a portal that is monitored by the University of Arkansas for Medical Sciences. The portal tracks those expenses against the project timeline and details provided in the application, according to Hudson.
Sample, the owner of a pest control business who previously worked in the construction industry, said, "You do run across some people that get in a bind and then next thing you know, you're on the hook for the money."
Senate President Pro Tempore Jimmy Hickey, R-Texarkana, echoed Sample's desire for grant awardees to be paid as work is completed.
"I think that's something that we need to be doing not only for a good business practice, but because these are rescue funds. If we ever have an audit on that, I think we need to be able to verify exactly where that money has went and spent correctly," he said.
Hudson said the grant application process includes a "due diligence component" on the financial health of the internet service provider.
Hudson said that while the department uses the system Sample described for other grant programs, but the department faced a tight deadline to allocate CARES Act funding by Dec. 31, 2020.
He added later that the department did not want to prohibit smaller companies from getting grants because they might not have as much capital as larger companies.
"We need to probably have more conversation to make sure we're not missing something here at the table," he said.
Department of Commerce spokeswoman Alisha Curtis said Tuesday evening that officials are working on the issue with legislators and will present multiple options for a drawdown system at Friday's meeting.
The providers and the service areas are:
• AVECC-Wave Rural Connect, Charleston.
• AVECC-Wave Rural Connect, rural Crawford County.
• CableSouth Media 3, Lincoln County.
• HillBilly, south Sharp County.
• Indco Cable TV, Newark.
• Mountain View Telco, Stone County-Mingues Turner/Arkansas 87/Pleasant Grove.
• Premier, Mineral Springs.
• Premier, Stamps.
• Ritter, central Craighead County.
• Ritter, east Craighead County.
• Ritter, Cross County, Crowley's Ridge.
• Ritter, west Cross County.
• Ritter, northeast Jefferson County.
• Ritter, northwest Jefferson County.
• Ritter, north central Poinsett County.
• Ritter, south central Poinsett County.
• Ritter, Pope County, Appleton-Hector- Scottsville area.
• Ritter, southwest Pope County.
• Ritter, north central St. Francis County.
• Ritter, northwest St. Francis County.
• SATCO, Bradley County.
• SATCO, south Warren.
• SWAT, Blevins and McCaskill.
• SWAT, Columbia County.
• Walnut Hill Telephone, Ebeneezer.
• Walnut Hill Telephone, Falcon.
• Walnut Hill Telephone, Medlock.
• Walnut Hill Telephone, Oak Grove Road.
• Walnut Hill Telephone, Shiloh.
• Walnut Hill Telephone, South Lake Columbia.
• Windstream, Cleburne County.
• Windstream, Dallas County 2.