TDEC tells Ways and Means it is reallocating stalled ARPA water funds within Tennessee, seeks park staffing from park revenues

TDEC Deputy Commissioner Karen Simo opened the department’s budget presentation to the Finance, Ways and Means Committee on Feb. 24, 2026, saying the agency is “a service driven agency” and thanking lawmakers for recent investments in parks and water infrastructure.

The department answered detailed questions about federal American Rescue Plan Act (ARPA) dollars set aside for water and wastewater projects. Chairman Williams asked for an update on the $1.35 billion in ARPA infrastructure funding originally discussed in the fall and the $150 million set aside for strategic state projects. Deputy Commissioner Bridal Clifford said the $150 million was subdivided – she identified about $40 million reserved for Tennessee State Parks, roughly $18 million for TDOT stormwater projects and multiple regional strategic projects including investments routed to West Tennessee and Duck River area initiatives. Clifford said some local grantee projects were scaled back; TDEC has reduced the list of construction projects from roughly 140 to about 115 to focus on work that can be completed within ARPA timelines.

Why it matters: the ARPA statute and U.S. Treasury rules require work to be completed and invoices submitted on a strict schedule. Clifford told the committee that TDEC is prioritizing projects that communities can complete, and that returned funds are being kept in‑state and reallocated to other eligible ARPA projects rather than sent back to the federal government. “We reallocate it to keep it within Tennessee,” she said, describing collaboration with grantees and noting only about $1.9 million had been returned to date.

Committee members pressed for concrete deadlines and contingency plans. Clifford said construction timelines must generally be complete by July to allow final paperwork and for contracts that expire Sept. 30 to be reimbursed within the federal reporting window; that schedule is intended to enable the state to meet Treasury reporting requirements by the federal deadline.

State parks and positions: Deputy Commissioner Bridal Clifford and the parks team asked for recurring staffing tied to park revenues. The department said Tennessee has 68 state parks included in the budget (62 currently open) and proposed two new parks (one on the Hamilton–Ray County line and one on the Buffalo River in the Perry/Wayne area). Clifford said the department requests 9 new staff at Buffalo River State Park and 11 at the proposed Hamilton/Ray site and that those positions were planned to be self‑funded through hospitality revenues (lodges, cabins, campgrounds and retail). In response to Leader Lambert’s question about safeguards if revenues fall short, the department said it will rely on carryforward funds, perform a detailed revenue analysis prior to future budget submissions and limit future recurring additions based on realized revenues.

Permitting pressures: Deputy Commissioner Atkins told lawmakers that Tennessee’s subsurface sewage disposal (SSDS) permitting workload has surged with the state’s growth. Since January 2025 SSDS staff have issued more than 15,000 permits and nearly 11,000 certificates of completion; the bureau approved nearly 4,000 new subdivision lots this year. Atkins said the department is requesting 14 self‑funded positions from the Environmental Protection Fund to shorten permit turnaround times and improve service across fast‑growing counties.

Next steps: TDEC offered to provide more granular project lists and timelines in follow‑up meetings. The department emphasized collaboration with grantees on reallocations and urged the committee that most returned ARPA dollars could be kept in‑state by shifting them to other eligible ARPA projects rather than being forfeited to the U.S. Treasury.

Ending: The committee moved on after extensive questioning; TDEC pledged to return with additional documentation on ARPA project status and a more detailed list of park revenue projections and timelines.