Pa. Distributing $45M in Grants to Municipalities, Community Anchor Institutions to Expand Internet Access

Reprinted with permission from the April 2, 2024 edition of The Legal Intelligencer © 2024 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved. by Frannie Reilly and Ken Stark The Pennsylvania Broadband Development Authority is currently accepting applications for the multipurpose community facilities program. Funded through the federal capital projects fund established under the American Rescue Plan Act (ARPA), the facilities program will distribute up to $45 million in competitive grants to community anchor institutions and local governments to ensure reliable and affordable broadband internet access. When persons and households do not have reliable internet access, they often rely on community anchor institutions to provide that access. Through this facilities program, the authority is looking to expand broadband access across the commonwealth. The authority defines a community anchor institution as “an entity, including any school, library, health clinic, health center, hospital or other medical provider, public safety entity, institution of higher education, public housing organization or community support organization, which facilitates greater use of broadband service by vulnerable populations, including low-income individuals, unemployed individuals, and aged individuals, that lack access to gigabit-level broadband service.” Created by Act 96 of 2021, the authority is an independent agency within the Pennsylvania Department of Community and Economic Development that serves as the single point of contact for entities desiring to deploy broadband in the commonwealth. In establishing guidelines for the facilities program, the authority is building off its grant administration experience with last year’s broadband infrastructure program, which focused on facilitating last mile service connections in unserved and underserved areas of the commonwealth. In contrast to the broadband infrastructure program, the facilities program applicants do not need to provide matching funds for their projects. The facilities program is expected to be highly competitive, so it is important for municipalities and community anchor institutions to identify their projects for the application submission. Municipalities and community anchor institutions will want to carefully review the facilities program guidelines when conceptualizing a project and conveying that project to the authority to maximize their competitiveness in the application process. Guidelines for Eligibility and Project Costs A successful applicant will need to demonstrate that its project meets the various criteria found in the facilities program guidelines. This involves a building or public space that is open to the public and directly enables and enhances vocational, educational, and health monitoring services at the facility. Eligible project costs include:

• Pre-construction costs, such as data gathering.
• Feasibility studies.
• Public/community engagement efforts.
• Equity and needs assessments.
• Permitting.
• Planning.
• Architectural design.
• Engineering.
• Any necessary environmental, historical, or cultural reviews.
• Repairs, rehabilitation, construction, improvement, and acquisition of real property, facilities, and equipment (such as devices/technology).

Administrative costs are eligible but are limited to 2.5% of the grant award; otherwise, operational expenses are not eligible costs. Further, grant funds may not be used for short-term operating leases, payment of interest on debt or other debt service costs; satisfaction of a legal judgment; securing other financing; lobbying; fines; and general construction projects that otherwise do not meet project eligibility criteria. Compliance and Accountability Measures Emphasizing the importance of a long-term investment, the authority requires applicants to include a sustainability model or long-term plan that demonstrates the ability to cover all necessary costs (including property taxes/rents); a commitment to retain occupancy at the facility for five years; a detailed plan for maintaining the facility without federal funding; and a detailed list of intended project outcomes and means to verify progress, risks, and assumptions. An applicant must provide a final report within three months after project completion. The final 10% of grant funds will be held until after submission of the final report and the authority’s satisfaction of project completion. Compliance with the facilities program is a crucial component to a successful grant. Applicants must provide the authority with access to all relevant records, including data, reports, contracts, and documents relevant to a funded project. An applicant will be required to certify that its expenses were incurred pursuant to the scope of work approved by the authority. The authority may, under its discretion, conduct a formal audit of any funded project. The authority’s guidelines thus reflect the commonwealth’s objective to ensure cost-efficient deployment of the substantial injection of federal funds over a relatively condensed period of time. Per Act 96 of 2021, the authority’s board must issue an annual report detailing funded projects. The accounts and books of the authority shall be examined and audited by the auditor general. The authority will dissolve in 10 years in December 2031 or when all available federal funds have been exhausted, whichever comes first. Presently, the authority is governed by an 11-member board, including six agency heads (or their designees), the executive director of the Center for Rural Pennsylvania (or a designee), two members of the Senate, and two members of the House of Representatives. The governor selects the chair from the authority’s board members. Next Steps The facilities program application period will close on April 20. The minimum grant amount is $250,000 and the maximum amount is $2 million. At this time, the authority plans to announce awards July-August 2024, with construction envisioned to commence in September 2024. All projects must reach substantial completion before Dec. 31, 2026. Facilities program guidance is available at Capital Projects Fund Multi-Purpose Community Facility Program Guidelines (pa.gov). If you have questions regarding the authority and the multipurpose community facilities program, please do not hesitate to contact us.

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Kenneth Stark is an energy and environmental attorney with McNees Wallace & Nurick, practicing from the firm’s Harrisburg office. He advises public and private sector clients on the deployment of broadband services to unserved and underserved areas. He can be reached at kstark@mcneeslaw.com or 717-237-5378. Martha “Frannie” Reilly is co-chair of the firm’s public finance and government services group and chair of the firm’s environmental, social and governance (ESG) group. Serving clients from Devon, she advises businesses of all sizes on the development and implementation of corporate policies, best practices and corporate governance and counsels clients on the use of ESG Bonds and Green Bonds to further their sustainability plans. She can be reached at freilly@mcneeslaw.com or 484-329-8036.