Vermont Legislature SmartTranscripts:

[Robin Scheu (Chair)]: Morning, this is the House Appropriations Committee. It's Wednesday, 02/11/2026. It's just happened 10:15 in the morning, and we're continuing with the FY27 budget, and we now are delighted to have the Agency of Transportation with us, quite a few members of the agency of transportation. Candace, Chief Financial Officer, if you want to introduce yourself, we have some stuff in

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: front of us, but lead us on. Thank you, Chair. So good morning, everyone. For the record, my name is Candace Omquist, Chief Financial Officer for the Agency of Transportation. And I'm joined in the room with me by the AOT Executive Leadership Team, Ernie Patno, our Maintenance Director Jeremy Reed, our Chief Engineer Jayna Morris, Director of Administration Andrew Collier, DMB Commissioner Renee Cota, DMB Financial Operations Michelle Buhlmhauer, Director of Policy Planning and Intermodal Development Trini Broussard, Assistant Director, Policy Planning and Intermodal Development Dave Thurber, Central Garage Fleet. I think back half everyone.

[Robin Scheu (Chair)]: Anyway, welcome to all of you.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: So the secretary sends his apologies on a family emergency, but I'll be presenting on the agency's budget and how we created that budget today. So thank you. We're going to start with the Secretary's budget opener presentation, and halfway through, I'm going to shift to my slide deck, which is how we created the budget, because I think that gives important context to how the agency approached this budget cycle. And as we're going through this opener slide deck, I think it would be a good idea if committee members wanted to have the budget on a page. It's our 'twenty seven budget on a one pager. It looks like Budget on a page is on the screen now. I'm going to flip back to the slide deck. I think the budget on a page provides me full context as we're going through the slide deck.

[Robin Scheu (Chair)]: All

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: right. So this is an all funds budget of $934,000,000 We have a trend over the last five fiscal years here or sorry, nine fiscal years here. This is the highest in AOT's history. It is $15,000,000 higher than last year, primarily due to the administration's purchase and use proposal, which allowed AOT to match $9,300,000 in highways projects with $52,000,000 in federal FHWA funds.

[Robin Scheu (Chair)]: Say that again, 9,300,000.0

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: is the new The administration's proposal provides less dollars for the education fund. Yeah, now

[Robin Scheu (Chair)]: I know that part. So the 9,300,000.0 leverage is how much in federal? $104,000,000

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: to be clear, the full $10,000,000 is being used. Only $9,300,000 can match to federal dollars because the remainder is put towards maintenance, tree trimming projects. So we could see this large increase in federal dollars here on this slide. This is a comparison against the FY 'twenty six as passed. We also see here that even with the administration's proposal of the additional $10,000,000 in transportation fund, it's still a down from last year in transportation funds. The change in local and other here is primarily attributed to fewer July 24 blood project costs. We're at a point now where most of these projects have completed and those that haven't during longer term work. What were the projects?

[Robin Scheu (Chair)]: We have a big blower back here.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Oh, no. This negative $11,000,000 here in local other is primarily attributed to the FEMA interdepartmental fund code, and that's just because we have less projects going on related to the July twenty twenty four flood. Oh, to the flood. Okay. This negative $2,400,000 in TIB is rightsizing the TIB fund to consensus when we were here last year and presented the FY26 governor's recommended budget. That was based on the July '4 consensus. And then when there was a downgrade in TIP for January '5, we did a fund transfer from transportation funds to TIB. So this reflects what the TIB fund consensus actually is. We'll get into comparisons in the future, further in the presentation of last year to this year. I like this slide because it reminds us that our primary revenue source is federal dollars. More than 50% of the budget is federal, and 85% of the federal is the Federal Highway Administration. Our other federal fund sources are primarily US DOT divisions the Federal Transit Administration, Federal Aviation Administration, Federal Railroad, the National Highway Traffic and Safety Administration, and a few other non DOT federal fund sources. One second here. So our federal dollars are primarily matched by our state transportation fund, also our state transportation infrastructure bond fund for our bridge projects that last longer than ten years. We have our own internal service fund whereby our divisions pay for services provided by Central Barrage Fleet. And our local and other sources of funding include $4,000,000 of clean water funds, 19,000,000 of local match, 19,000,000 of that FEMA interdepartmental fund code, which is used for FEMA disasters, and $2,000,000 from a non FEMA interdepartmental fund code, which is just typical MOUs with other state agencies and departments. This is a slide on the administration's proposal, which we've talked about at length in the policy committees. But just to recap here, the governor's recommended budget language proposes to not withstand language and statutory language and cap the amount of purchase and use tax deposited into the Education Fund at fixed decreasing amounts over the next four years, such that in five years, all of the purchase and use tax will be deposited into the transportation fund. For FY '27, the amount gained by the transportation fund against the January 26 consensus is $10,000,000 AOT used this additional $10,000,000 to fund bridge paving and maintenance cutting projects. Again, that 9.3 is for the bridge and paving, and then $678,046 for maintenance tree cutting. And I do have those exact projects later for Great. We want to go ahead, Tom.

[Thomas Stevens (Member)]: Can you just remind me why money was being put into I mean, why the money was from purchase and use tax was being put into the education fund? Do you recall the political or governmental reasons for using that money in that way?

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: I was just saying that was before my time, so I'm not sure. But I might put in a friend here if anyone who knows. So do you have that?

[Robin Scheu (Chair)]: So Court of Director, Gina Morris, Director of Administration, my understanding is historically the fund balances were were essentially split, so general fund had less revenue and the transportation fund had more revenue coming in, so there was an opportunity to then take transperson funds to the education fund. And I hope to take a if there's

[Wayne Laroche (Member)]: anything else to you'd do. Like.

[Jeremy Reed (Chief Engineer, AOT)]: Sure. Lovely to over the whole details of you've been making about clinic and cost transportation. Essentially in Act 60 in like 1998, when Ed Fund was created, was established to include, at the time it was one sixth of purchase and use, and then they also got gas tax. And then over time that changed, the gas tax no longer went to the Ed Fund and they got one third of the purchase and use tax, and that sort of continued since now 2004. But this sort of purchase and use portion going to the Ed Fund has occurred since Act 60 created the Education Fund in the first place, and I have a presentation that they're all interested in diving into that, but

[Wayne Laroche (Member)]: I sort of walk through the details on all that.

[Thomas Stevens (Member)]: I think it's something that's understanding because we also removed a couple of years ago, we also removed, if I'm not mistaken, transportation funds going to state police at some point.

[Robin Scheu (Chair)]: That was last year. We had a $20,000,000 Jane Todd transfer. Transfer.

[Thomas Stevens (Member)]: Right. So that was pretty regular for a long time. And I'm not able to pull up how we're replacing that money when at the same time we're making point of saying, oh, our education taxes are going up.

[Robin Scheu (Chair)]: Well, anything we take. So doing this will raise property taxes. Taking away the purchase and use raises property taxes in the Ed Fund. And the only way to stem that raise is for general fund to go take good place in the education front.

[Thomas Stevens (Member)]: Right. So it's a shell game

[Robin Scheu (Chair)]: It is.

[Thomas Stevens (Member)]: In a lot of ways. Some people will say that using the purchase and use tax was a shell game. But the idea here is, you know, we're all when we do this work about what taxes get paid for water, what taxes are going up, a lot of the public doesn't see the shell game that we're trying to fix here. Right. And so when I see another chunk of money being put aside without it being acknowledged by in our negotiations, I'm just a little curious about how we're going settle that.

[Robin Scheu (Chair)]: Think we can get Autumn, why don't we arrange to have a faculty meeting next week and talk about this? That would be great. Wayne?

[Wayne Laroche (Member)]: Well, we're on the topic of transfers out of there. I was up in corrections institutions yesterday. There's a transfer of 4,900,000 that goes from transportation to BGS for the kiosks and everything on the interstate. And those are all set up to promote economics, actually, for transportation needs. So it's a funding stream thing. That money, if they generate economic revenue, it's taxed, goes to the general fund. So we're taking money out from transportation, pay for something that's not directly or it's not causing any heck enough benefit from there. It's just keeping the funding stream so that your funding streams match up with your spending streams. It seems in the long run a wise thing to It

[Robin Scheu (Chair)]: doesn't. Everything's so interconnected now. And it's everything to trade off. So do we want our property taxes to go off? Or do we want the T fund to be in the red? So decisions are going to have to be made because we've launched that.

[Unidentified Committee Member]: Yeah, I mean, I think that what we have is that there have been cash cows in revenue sources. And the key fund was the cash cow for many, many years. Then we got more efficient vehicles and we paid less for gas. And We use less gas. We have electric vehicles and all that other stuff that goes into it. And so money was taken out of the T fund to do all kinds of things because it was there. And now then we created the Ed Fund. The Ed Fund was the cash cow. Touch the Ed Fund and such, but things kept coming out of that. And then we put more stuff to sales, all the sales tax that used to go to general fund now goes into the Ed Fund. I mean, is a shell game, but sooner or later it catches up with you.

[Robin Scheu (Chair)]: It does and that's we're reaching that point. I mean you know it can take We're any

[Wayne Laroche (Member)]: at that point you know because construction costs are increasing over time here as well. Things we have to maintain and replace.

[Thomas Stevens (Member)]: And I just want to just say, understand, we should all understand, I think we do, that nothing is static. So the needs of, I we're still, I imagine, going to have a slide that talks about needed cuts because the transportation fund is going down anyway. All of this, I mean, it's not robbing Peter to pay Paul. I mean, That's not assigning the right phraseology to it. It's just not static. Nobody expects a COVID. Nobody expects a session. Nobody expects a vast increase in medical insurance that's sucking the life out of other budgets as well. So it's just being flexible and whatnot is necessary, but it is kind of frustrating to see, okay, we're going to take this money and we're going to put it where it belongs, and then we're not going to talk about

[Robin Scheu (Chair)]: The impacts of doing that. Yeah. Exactly. Anyway, now that we've had a little side trip, we

[Thomas Stevens (Member)]: just got off with the tourism kiosks.

[Robin Scheu (Chair)]: That's all. I

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: think that was a great discussion, and I'm going to flip to how we created the budget slide deck, because I think that'll continue. Okay. I'm on page two of the '27 budget creation buyback. Yeah.

[Wayne Laroche (Member)]: You.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Last year, on February 25, I was in this committee with chief engineer Jeremy Reed, and I presented a five year outlook that showed even if we were able to have the JTOC appropriation sunset and have that $20,250,000 be available for AOT use, we would still have a $30,000,000 hole in FY 'twenty seven. In September 2025, I did an update to that outlook, which was presented to the Joint Transportation Oversight Committee and the Joint Fiscal Committee. That was in combination with our precision plan or our expenditure reduction plan. And it dialed that hole into 33,000,000 So that was the agency's starting point for this budget build cycle. Some of that $33,000,000 was known last session. Again, I was here in this committee last year. So of the $33000000.12.5 was from one time funds that we used to balance the FY 'twenty six budget. Talked about a lot of this last year in the policy committees, but that $12,500,000 was a transfer from a cash fund for capital and essential investments from, I think, two years ago. So we considered that a one time funding use because we didn't know that we were going to have a cash fund transfer in the future. We also considered the amount that we budgeted for reversions at closeout to be a one time funding source, and that was $5,400,000 The agency has historically found reversions at closeout to keep our transportation fund reserve balance at that 5% maximum. We have heard from finance and management this year that their preference and all future years, actually, that their preference would be underperform consensus, we would dip into our transportation reserve balance and then make it up in a future year budget or future year BAA. So one of the things that happened with the January 2026 revenue consensus forecast, there was a 1,500,000.0 reduction in transportation funds. That will the budget that's being presented here has us dipping into the reserve at the '26, and the 'twenty seven budget fully funds the reserve back up to its 5% maximum. Sorry, I got a little off topic from what the components of the 33,000,000 are. But we have $12500000.0.5400000.0 Other components that we came to know about in September, dollars 7,800,000.0 from the downgrade in July 2025. And the remaining $7,500,000 that was a point and time estimate of what I thought could be the cost of payroll benefits from the collective bargaining agreement, internal service fund charges that we receive from finance and management from the agencies and departments that are internal service fund driven, and we receive bills from them, our central garage internal service fund, our town highway statutory increases, and backfilling the town highway non federal disasters appropriation. Because if we recall, that was transferred to pilot funds last year by the Senate in the as passed. So all of those numbers together comprise of a $33,000,000 transportation funds full going into this year's budget. This slide here is really the bread and butter of what we did for '27. This is a summary of our traditional ups and downs. So I have also submitted the ups and downs to the committee, and we'd be happy to walk through that if we'd like. But this is giving you a summary of additions to our budget, reductions to our budget, and then another item that's on the operating statement. So we can see here that we took $21,000,000 worth of reductions. That's this number in green. We also took a $12,000,000 revenue item that's reflected on the operating statement because we plan to implement an FHWA approved indirect cost rate on July 1. Tell us what that means. Of course. So our indirect cost rate is associated with an indirect cost plan that we always have on file with FHWA. The Agency of Transportation historically has not chosen to use such a plan because it doesn't increase our apportionment value. The way that FHWA funds come to the agency of transportation is that it's a set value. We can choose to use it on direct costs, or we can choose to use it on indirect costs. If we choose to use it on direct, we could say it's coming from what could have otherwise gone to direct highway project costs.

[Robin Scheu (Chair)]: So this is like administrative and overhead? Yes, eligible. And you can use some of the money you get from federal funds to cover Yes. And you haven't been doing that?

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: The last time that we used this was in recent history, actually, FY22. But before FY22, we hadn't fiscal twenty twenty four. So the General Fund has been paying for the direct costs, or the T Fund has been paying?

[Robin Scheu (Chair)]: We've been paying the indirect costs, if it hasn't been. T Fund has In

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: the state. The T Fund has been those indirect costs that are federally eligible for the years other than FY 'twenty two and then before to FY 'twenty four.

[Wayne Laroche (Member)]: So this allows you to leverage federal funds to do that?

[Robin Scheu (Chair)]: Yes.

[Wayne Laroche (Member)]: Maybe it's too early to ask the question, but are we leaving any federal money on the table because we don't have enough cash? No.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: The $10,000,000 infusion to the AOT budget borrows against a future apportionment. So we are fully using our current apportionment, and you could say that we are borrowing against a future.

[Robin Scheu (Chair)]: Or you're paying for a future bond?

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: You're drawing down federal dollars that will be made available to us in a future fiscal year. That concept is called advanced construction, and it is one that is part of the agency's budget every year. The reason why I'm asking if you forecast or do you

[Wayne Laroche (Member)]: predict if you're going to have any problems with the cash revenue from the state's revenue matching the federal value of revenue such that we won't be able to draw down more federal money in the future relative in the next one, two, three years.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Right. No, we monitor our apportionment and our advanced construction number every year, and we're comfortable with what has been proposed.

[Robin Scheu (Chair)]: Right.

[Wayne Laroche (Member)]: And maybe I don't know enough about this topic to ask this right, but it so if we're using federal funds for indirect costs that we hadn't present previously been using them for, does that come at are those federal funds that otherwise would have been used for direct costs? Okay. So okay. Got it. Okay. Sorry. Thank you. In

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: in the absence of this proposal, those federal dollars would have

[Wayne Laroche (Member)]: been made available to highway projects, direct costs. So this is a loss to to those highway projects?

[Robin Scheu (Chair)]: I do have a little question on this. I'm wondering what You've got position management changes savings, so that means it's a reduction in salaries for management. I'd like to know a little bit more about that. And then pass credit card processing fee to the customer of $1,900,000 Thanks.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Okay. So the reductions of $7,400,000 in position management savings are the estimated savings from the September reduction in force, which was part of our rescission plan responding to the July 2025 consensus, and also future position eliminations, which have been reported on. And I have Director Morris, Director of Administration, here to talk further about that.

[Robin Scheu (Chair)]: And that is the 31 position, it's the second round? Yes. And I'm well versed in the first round, but the second round, there are positions, but then how many were actually filled positions of those 31? So in the second round there's 31 positions, 19 are which are filled and 12 are abatement. Okay.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: And have

[Robin Scheu (Chair)]: those changes happened yet for those 31, or they're just, do the people all know about, okay, do the people all know if they're affected? The employees have not been notified yet. Oh, okay. And will you do the same process that you did with the first round where people have an opportunity to look for other work, depending on their status and all that stuff. We will be following the provisions, whatever that is. Bargaining agreement is the vice president provisions. So basically the same as what you did the last time? Essentially, yes.

[Wayne Laroche (Member)]: Okay, great, thank you.

[Robin Scheu (Chair)]: And then the DMV?

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Yes, I may call on my DMV colleagues here for your specific questions, Chair.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: Eileen Colligan, Commissioner of DMV. So working with credit card fees, we are we historically since 2008 started charging or absorbing fees for credit cards. We are now going to switch that and have the customers pay on the credit card fee side. Customers can still pay cash, check-in ACH online. Through our current vendor with the Monarch Vision our ACH fee is obviously free, we've been more conservative, but free as a free option for consumers.

[Eileen Colligan (DMV official; identified as Commissioner in transcript)]: So giving three options for Monarchs to pay and not have to go to credit card to be, but we feel as you can look at the landscape in the private sector,

[Jeremy Reed (Chief Engineer, AOT)]: a lot of companies are moving to show them that hypertrophy and

[Eileen Colligan (DMV official; identified as Commissioner in transcript)]: making consumers aware

[Wayne Laroche (Member)]: of that.

[Robin Scheu (Chair)]: So that you're proposing

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: to have that start when?

[Eileen Colligan (DMV official; identified as Commissioner in transcript)]: We have it showing for July 1. If we're able to get the implementation started sooner we would be able to move on it before but there's the IT work behind the scenes that's trying to catch

[Robin Scheu (Chair)]: up to And what's the fees, the percentage of?

[Eileen Colligan (DMV official; identified as Commissioner in transcript)]: It's 2.3%.

[Wayne Laroche (Member)]: Coming out of the value. Okay, great. Thank you.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: We can see here this $21,000,000 plus 12,000,000 makes up that $33,000,000 budget hole that we were talking about back in September. In the ups, we can see the $10,000,000 invested from the administration's proposal. And I'm going to skip here to slide five, because this shows us exactly which projects are being funded by the $10,000,000 We have also reviewed this with house transportation, in case you were interested.

[Wayne Laroche (Member)]: What's the usual issue? I know I made a very but what's your federal match? What's the federal match? How much you

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Okay. I'm going ask Chief Engineer Jeremy Reed to tell us the federal match to these specific projects.

[Jeremy Reed (Chief Engineer, AOT)]: Sure, Jeremy Reed, Chief Engineer. So it varies by location and type of project. Typical state system or it's going be an eightytwenty split, interstate is ninetyten, so I think the majority of the projects that are to be all aligned with the exception of some of the feeding projects, so right hand column, if they have a high impedance in the project name and number that would be interstate and that would be a 90 slope.

[Robin Scheu (Chair)]: So these are new projects that are going be happening as a result of the transfer of $10,000,000 That is correct. Nobody's looking to see if it's near death.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Okay. The last slide on this slide deck recaps what I was talking about earlier about how the agency will approach the January 2026 forecast. So there was a $1,500,000 transportation fund impact for the January 2026 forecast. This will be temporarily shouldered by the Transportation Budget Stabilization Reserve at the '6. And then the 'twenty seven budget fully funds that reserve back up to the 5% maximum. The impact to the TIB fund, Transportation Infrastructure Bond Fund, was down $200,000 in this fiscal year and $100,000 next fiscal year. And we confirmed with finance and management that this could be shouldered by the unallocated fund balance of the Tier one.

[Robin Scheu (Chair)]: Do you know how much is in the unallocated balance?

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Yes, at the '27, it will be 2.6.

[Robin Scheu (Chair)]: So, makes sense. Okay. So you have a bunch in there to take care of that. Have you drawn from the stabilization reserve

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: in the past to? No, this is a new concept. We typically take reversions at year end. My understanding from finance and management is that we're the only agency that really does that, and they would prefer that we propose reversions in the BAA, like all other agencies and departments.

[Wayne Laroche (Member)]: Wayne, sorry. And you notice under your appropriations, the money I talked about going to BGS, B114 of your appropriations. And I'm curious why it's appropriation rather than transfer.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: It has historically been an appropriation representative.

[Wayne Laroche (Member)]: So they're appropriating it from

[Robin Scheu (Chair)]: EGS

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: information centers is an eligible use of transportation funds. Under federal? No, under our internal statute.

[Wayne Laroche (Member)]: So there's no way to capture any federal funds that way? Correct. Those dollars are not matched. Martha, interagency transfer is not I assume you're doing this interagency transfer. Because they mentioned transfer at BGS, that's why I didn't just trying to line up the dots.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: The governmental accounting term is appropriation. It's not a transfer. This actually brings us to some of our FY 'twenty seven budget language. We are amending the statute that talks about allowable uses for the transportation fund to allow a direct appropriation to DHCV. Have historically held funds for ACCD, DHCD, for electric vehicle supply equipment charging. And then we have sent it to them via interdepartmental fund code. And instead of doing that, we would all much prefer if they were able to receive transportation funds directly for this project. Is that language in any presentation? I didn't submit the budget language, but it is a part of the finance and management's budget language. Right.

[Robin Scheu (Chair)]: Now I saw that, I just didn't know if it was because you pulled out the purchase and use and that was in the governor's budget also, but this part wasn't.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: If we have the budget language document, or I could stop sharing and find it on finance and management's website quickly, I know what section number it is.

[Robin Scheu (Chair)]: Just let us know what the section number is so we can Okay.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Yeah, it is E923.1. Okay. Some other interesting language that relates to AOT in the 'twenty seven budget. Finance and management has submitted language that allows interest to accrue to the transportation fund starting this July 1. Currently interest only remains in the transportation fund stabilization reserve. So this would allow the transportation fund to retain interest rather than just the stabilization reserve. Does that assume the stabilization is up to 5% and then the

[Robin Scheu (Chair)]: rest goes into the T fund?

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: I'm not sure. Finance and management or the treasurer's office would do the interest there.

[Robin Scheu (Chair)]: Looks like you've got two people going out to quiet the town. Hopefully it's mentioned. They all stand around the quiet peace sign.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Another interesting piece of language this year is our Central Garage Pane Turnpike project. So we can see a one time appropriation in the fee 1,100 secondtions for Central Garage Pane Turnpike. And the submitted gov rec is for 1.36 of transportation dollars, and that's the exact amount that the transportation fund is going to receive from the insurance reserve fund. Oh, okay. And that's moving into higher ground after the floods?

[Robin Scheu (Chair)]: Yes, but if we want to talk

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: about paying Turnpike, I have a subject matter expert. So the full amount of that project in fiscal twenty seven is expected to be the $16,000,000 not just 1.36.

[Robin Scheu (Chair)]: So are you looking at something

[Wayne Laroche (Member)]: we should be looking at?

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: It would be the language sections. Oh, okay. The full amount is 16,000,000 The full amount is $16,000,000 but the governor's recommended language is 1.36. So the remainder is going to hit the FEMA interdepartmental fund code. And we've confirmed with finance and management that their preference on the FEMA interdepartmental fund code is to follow the excess receipt process for '27.

[Robin Scheu (Chair)]: That they have funded the full $16,000,000 from that FEMA interdepartmental fund. But is this a special fund, is this

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: a carry forward? It's a FEMA interdepartmental fund, which is a type of special fund. My understanding is just the chief recovery office would prefer to manage all of the appropriations from that fund code via for 27.

[Wayne Laroche (Member)]: Do

[Robin Scheu (Chair)]: you know what the depth ID is or any of that?

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Or if you could get that for us? So it is a part of the B1100 secondtion.

[Robin Scheu (Chair)]: Yeah, no, mean, they're taking money from this fund, FEMA fund. I'm wondering if you know what that

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Oh, fund code is 21501, but it's not an appropriation. It's a BUN code number.

[Wayne Laroche (Member)]: And this is

[Robin Scheu (Chair)]: yeah, I'd like to also clarify that we did accept the theme of fixed cost offer. So we have four, there's two components to the fixed cost offer that are related to septal garage. There's one component for the pain permeating project, and then there's a second component for the cancer prevention aspect of the work that we could do at the Route 302 Complex, so that's the complex that we're vacating. So the FEMA fixed cost offered for the paid from Pike Project is $18,400,000 in FEMA's federal funds, which requires a state match. So that state match of 10% is approximately $2,000,000 Our load there came in at $16,900,000 for the project, so that's where that $16,000,000 number is coming from. And then the FEMA dollars and the state match would still apply. Between that 16.9, we could apply a certain amount of FEMA and then a certain amount of state match. All flowing through is the fund code that Candice is describing. And then secondary to that, we have the four twenty eight project. It's all part of the four twenty eight project that has a litigation component, it's about $4,500,000 which also has the same match component, the 10% there. And those monies cannot be used for the paid term type project for several reasons, but we don't need them for the Paycheck Protection They couldn't be billed because the bid price came in lower than the amount that was granted the vast under the FDA program. So the 4.5 is for what then? Hazard mitigation. Hazard mitigation. Yeah. Okay. You. The 302 site with contingencies as specified through the Hazard mitigation program. Okay. But are we vacating the 302 site? We are vacating the 302 site. We have a provisional allotment to stay there until the pediatric setting is developed, and then staff and equipment and functions will all move, those that are still there provisionally, will all move to the pain care site. At that point, the state will be able to determine what the response will be in the future use of the three or five are going to mitigate the hazards at that site. We have yet to make information on what we can do there. Yeah, as we want do we have monies available that are criteria around how we can use those monies that are placed on us by FEMA. So we may be able to do the things that we would like to do once we determine, I should say we don't have a plan yet that's fully specced out, so we don't know what we can use those monies for Great.

[Wayne Laroche (Member)]: Thank you.

[Robin Scheu (Chair)]: One

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: time, when you're looking at the language here, it's B1100H1. Yes.

[Robin Scheu (Chair)]: That

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: is our budget in a nutshell. I'm happy to take any questions or turn it over to DMV to present their budget now.

[Robin Scheu (Chair)]: Through this quickly and wondering, I see public transit over here. I'm wondering how that works with I thought they were separate organizations. What is it? I don't know about your relationship with public transit. Sure. We

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: do have a public transit division, and I'm going to defer to Michelle Bloompower to talk more Hi,

[Michele Boomhower (Director of Policy, Planning & Intermodal Development, AOT)]: Director Michelle Bloompower, Director of Policies and Records with the agency. And on the public transit front, the AGC Transportation receives a significant amount of federal funding that we pass through to the regional public transit organizations on a contract basis. We've had an extensive amount of monitoring that we have to do in terms of federal funds and management of the system itself that we do in concert with the integration of transit organizations. The only entity that receives direct federal funding on its own is the non transit authority for their urban based transit operations. Oh, so you don't give them any money or have any oversight over the night? We do, we do, but actually there's a transit plan which is in process right now. Green Mountain Transit has over the past several years managed both urban and rural districts in Franklin, Grand Isle and San Diego Vermont areas as well as in the Weld County. Those areas are being transitioned to other adjacent rural providers. So we've had the oversight related to other rural operations, but we also have some of the funding for their urban operations and their state, some of their state match come through us for the urban operations and therefore we do a management engagement with them as well. So you'll be working strictly with the urban operation and then the others are being parsed out to Tri Valley Transit and whoever else is around. So they won't have one. If you're not interested, they won't have those other rural operations, where it'll be the rural community transit transportation that does Franklin, Reddial, and Memorial, and then Pride Valley Transit will take the Central Vermont, but you know, Washington, Georgia. Okay. And do you think that will be more effective for everybody and helpful for the riders? I know Green Mountain, for instance, has had its finance woes over the past few years. I think it will certainly stabilize and enhance the operations for the rural parts of their entities that are going to the other providers. I think they'll continue to hear from Green Mountain Transit they're facing fiscal issues. And I was in the news the other day, I believe they're coming into house transportation next day to talk about what they foresee for 2018 and no potential additional cuts in 8000. Okay, Okay. Thank you.

[Robin Scheu (Chair)]: You're welcome. Okay. DMB, is that what you want think That's a great knowledge. Thank you.

[Wayne Laroche (Member)]: Thank you. We've got an electron clear.

[Robin Scheu (Chair)]: That's great. Punch it over to your pocket as well. So About 8%. About 8%. I'll need that.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: Good morning. Well, Renee fires us up. Again, Andrew Peller, your commissioner DMV. And this is Renee Cota, our director of finance for department. We're here to talk about our f y twenty seven.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: So our first slide. This slide highlights key areas of expenditures and remaining funds for fiscal year twenty six. Our total budget for fiscal year twenty six has been partially expended, with approximately 40.9% of the total budget spent as of twelvethirty one. While it may appear that a significant portion of the budget remains, it's important to note that this is largely due to the timing of contract billing, as many contracts are billed based on specific dates rather than evenly throughout the year. So for payroll and benefits, nearly half of this category's allocation has been spent.

[Renee Cota (Director of Finance, DMV)]: The remaining funds are earmarked for ongoing payroll commitments. So I think your standard stuff, we don't need

[Robin Scheu (Chair)]: to worry about. I would really like to know what new initiatives, how your IT project is going. I think it's unusual kind of things. Yeah, absolutely.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: Jump ahead. So as the committee knows, and we touched on this last year, our million dollars over $50,000,000 core modernization project finished up in the end of this middle December. We came in on time and just under budget with it, which was for state government, as you imagine, was phenomenal. And that was no small part to our contractor, state ADS, then obviously the team at DMV, which we had our team was embedded with the contractor team to get this over the finish line. This has really moved us ahead to the forefront with the DMV IT world. And we're able to now have that customer experience really be where it should be. And so right now we're in the process of learning that system, seeing what processes we can change to fit the system now internally. So we're seeing that shift with mail as being a big one, right? Traditional mail and how we handle mail now because a lot of we're on that progression on people moving more and more towards our online services, which is great, which is where we would like to. So we're trying to change our policies and figure out how to kind of meet in the middle on where we're going and where this new system is. With that, don't have it in here and I wish we had our e permitting, which is for the commercial heavyweight trucks, went live back in December as well. That was a $3,000,000 initiative that was primarily all grant funding. And that took a process that was manual, took hours, days even for truck companies to get a permit through us to be able to these are for your heavyweight, when you're moving equipment for construction sites, modular houses coming in state or from out of state. And it puts it all online now. So this is an instantaneous process, with the exception of when there's an engineering component, which is Jeremy Reed's section will help out. That's the only time we'll have a human contact with these permits. And now it allows us to have an instantaneous delivery of these permits for companies so they can move equipment. They're more nimble, agile, and it's less time, less contact points on our end. So that has been a great rollout. We're in the last phase of that, which is going to wrap in local municipalities for the local yearly permits. So we're gonna have the ability to for local towns to utilize the service. We'll take the payment. We're still working. We're building out how it's gonna actually work, but we'll take the payments and and towns will be able to issue the permits now online as well. And that gets rid of, you know, town clerks having to deal with this process as well. We're excited

[Robin Scheu (Chair)]: to that that could be a real benefit. Is there any risk to the public in terms of safety? If they're just doing stuff online, do you know the equipment's okay and that it's all

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: Absolutely. So this runs through the state five eleven. They the contractor pulls in all of the town roadway dimensions, bridge measurements. So when they file the permits, it's I don't even know if this correct number, but say £80,000. Yeah. They'll mark where they want to go. It'll mark their route. It'll know what bridges they go over, which roadways might have restrictions. It'll map the route for them and send the permit. This is also in place with our neighbors in Maine and New Hampshire, so it's not new. We're just finally catching up with

[Robin Scheu (Chair)]: And it will help avoid covered bridges? Yeah.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: Cannot fix bad decisions by try it. But the system Yes. The system knows bridge dimensions. Okay. Go ahead. So

[Robin Scheu (Chair)]: That's not a big deal.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: It is driver awareness. It just won't be able to

[Robin Scheu (Chair)]: How about Snugglers touch? Yeah. We

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: will get there to on no, in short, joking aside, it will not route a truck through Smuggler's Notch. Again, that is an area where just awareness by operators will go a long way. We're working on that. We have some language to up the fines.

[Robin Scheu (Chair)]: They can miss all the stuff you've done before you can get through is beyond me. I mean, you

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: have to work pretty hard.

[Robin Scheu (Chair)]: You do. Do. Wow. As the

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: signage starts on 89, just up the road here and by the Canadian border.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Whatever to Canes. Yeah.

[Robin Scheu (Chair)]: Mean, hello. I'm not thinking how to get to here. Sure. The

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: trouble is they're buying or they're utilizing vehicle GPS, not truck driver specific GPS units.

[Robin Scheu (Chair)]: When I lived in Boston, every year this radio station would have a contest over Labor Day weekend and all the college students were coming back for when the first moving truck would get stuck in Starro Drive in one of the tunnels because it couldn't get there. Austin has its own version of Smuggler's Notch. The date and the time didn't win, it was just a signal. So could have a contest. Something to think about.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: A revenue source I guess.

[Robin Scheu (Chair)]: Yeah, it could be.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: So that's about it. We're not with exception credit cards. It's no big changes from last year. We are again trying to get used to the system, see where we can change our processes in house. That's going to be an ongoing this year, next year endeavor.

[Robin Scheu (Chair)]: Where are your locations, physical locations? Because didn't you close a few of them last year or the year before? I've kind of lost track.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: So we haven't closed any. So St. Albans, the lease ran out last year. We were kicked out of our lease. The landowner, think, was selling the property and going different directions. So we are St. Albans location was closed for a couple months. We took over the old District 8, AOT Admin building in St. Albans. We just took down a wall and we're able to fit in and it's a beautiful location. Actually, the team did a great job. So we are now operating a lower new industry in St. Albans. In the year, just over a year that I've been there, haven't had any other closings. We had We had the closing when we brought the system live. We were shut down for a few days. But we are down in Dumerson, Bennington, Rowland Springfield, White River Junction, St. Jay, Newport, St. Albans, and Burlington.

[Robin Scheu (Chair)]: It was Middlebury a few years ago. That was before

[Jeremy Reed (Chief Engineer, AOT)]: my time.

[Wayne Laroche (Member)]: Paper plates and registrations. How big is that issue? Is there a real issue there? What's it fixed?

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: Yes. There is an issue there. I end of last year, I had paused the program. We've worked with our legal, we're able to pause it while we worked on a correction for it. We found just in our rough calculations, about two thirds of the plates that were issued or the temporary license plates that were issued never translated into an actual registration fee or purchase and use tax being paid. So we had, since the inception of that program, well over 200,000 paper plates issued. So about two thirds of those never that we could tell using VINs translate into a registration or purchase CEUs transaction on on that. We also Ancidolia, we started seeing front page forum posts and post that where people are selling these vehicles saying, I just got a paper registration for this, so you're good to for a good amount of time.

[Wayne Laroche (Member)]: On So vehicle sales. Yeah.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: And then we started hearing from out of state or law enforcement from New York, Massachusetts asking us, can you help? Because we're seeing an influx of these happening. So we have paused that program. We're we're looking at doing an IT fix so that you would pay your purchasing use in tax in order to print off the $6 plate. I know there's legislation on the wall, I believe, in house that looks to just repeal the language. We haven't got to house yet, so

[Jeremy Reed (Chief Engineer, AOT)]: we haven't chatted with them.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: But I would say yes. Up until we pause it, there's there was an issue with that. And it it was creating a two user system for Vermonters. One that said you're okay to operate and not pay your fees, and one that's saying for the other people that's saying, hey. You need to go pay registration and fees.

[Wayne Laroche (Member)]: So

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: I have a couple of constituents who are particularly focused on tinted windows. We do. I

[Robin Scheu (Chair)]: bet you're not the only one.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: The prevalence of tinted windows in the face of state limitations, and that there are service stations that will agree to tint your windows, even if and there are inspection stations that will approve cars for inspection with tinted windows. I just wonder what conversations have you had about Absolutely. So we

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: we this came up last year in our miscellaneous bill between senate and house, a long conversation around tinted windows. Inspection or

[Robin Scheu (Chair)]: we

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: can't regulate, I guess, what private industry is selling in that respect with 10 windows. It is flagged at the inspection station that this is, you have 10 windows, it's not, you can get stopped and get ticket for it. And that's on the operator kind of taking that risk risk. Right now we are going through the inspection manual and center right now and really pulling out non safety related items and trying to simplify the inspection manual. So this is a big conversation. We're a little bit different, but on the same thread. We're also people are starting to tint their license plates. And so we're we have language now to also correct license plates. There's a a loophole with the license plates that we don't, I guess, say that it has to be what we issue. So we are

[Robin Scheu (Chair)]: Is some language to

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: fix So we have language in our miscellaneous bill right now working through it.

[Jeremy Reed (Chief Engineer, AOT)]: You do. Fix that.

[Robin Scheu (Chair)]: So transportation committee is looking at this. Yep.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: But something that just recently popped up that law enforcement has been seeing.

[Robin Scheu (Chair)]: I'm still seeing those faded license plates from like ten years ago that people could get free replacements and they're still out there.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: Yep, and you have wallows out there.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Well, thank you. I will speak to a member of the community to see what is being contemplated in the bill.

[Wayne Laroche (Member)]: So, tinted windows out of state vehicles you wouldn't be able to we

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: don't enforce out of state vehicles.

[Thomas Stevens (Member)]: Yeah, so it

[Robin Scheu (Chair)]: can't be bad. Dave, did you have a question? Could you speak a little bit to your average wait times,

[Wayne Laroche (Member)]: and anything you might be doing in terms of process management? Yeah, so we

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: highly advocate and ask for people to make appointments to come in. When you have an appointment, we're seeing wait times as low or in and out of the door within twenty minutes. We just I just received an email, just prior to when I was doing our budget in front of house. Someone faking us saying they found parking, went inside, did their transaction, and we're out the door in twenty minutes here in our Montpelier office. And that's not out of the norm now, which is phenomenal. When you're walking, we're seeing probably anywhere from forty five minutes up to our South location. It could take a couple hours.

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: Where in Lublin?

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: South Burlington.

[Robin Scheu (Chair)]: Our

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: lowest usage of appointments, we've been trying to find ways to increase that. For some reason, every morning there's a line out the door there. People just want to come in when they want to come in and won't wait. But we are trying to think of ways we can also improve that and open up more time slots. Our staff goes through the line, reminds people, hey, can make an appointment, you can come back and get you in. Whether or not people take that opportunity or not,

[Wayne Laroche (Member)]: it's not.

[Robin Scheu (Chair)]: Do you have a big telephone wait times? Do you monitor that?

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: We do. I get a weekly printout of that. We average about twenty five to twenty six minutes. I was just looking at our last weekly in current week one. We have about 2,600 calls for about twenty minute wait time almost. We do have the callback feature, which if you don't want, you will get a callback once the team frees up. But we're about at that twenty minute to twenty five minute wait time. I experienced that recently.

[Robin Scheu (Chair)]: Right around twenty six, yeah.

[Wayne Laroche (Member)]: Thank you. You're welcome. For good news, I drive over to Mount Newport to make an appointment first.

[Robin Scheu (Chair)]: I made my appointment on the way down. Everything's now an hour for me to get to it. But it is nice that we don't have to go every time our licenses are needed to get a new photo.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: Every eight years,

[Jeremy Reed (Chief Engineer, AOT)]: photo piece.

[Robin Scheu (Chair)]: It's time for me. Mike?

[Michael Mrowicki (Member)]: Just to give credit, credit's due with the times, I've had to

[Jeremy Reed (Chief Engineer, AOT)]: call Joe Flynn, call Andrew, and it

[Michael Mrowicki (Member)]: feels great to see how you're ready right there to help anytime. Glad that state government is as efficient and effective and friendly as it is too. It's appreciated.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: All the credit goes to the team, Waltme. I'm just the face when things go wrong, so I'm okay with that.

[Robin Scheu (Chair)]: Any other big initiative? Mean, whole IT thing, modernization has been sort of your big initiative for the past few years.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: It has, and the staff has finally kind of taken a deep breath, so try not to layer on too much, and they're gauging the system and really leaning into it. We're nothing big on our

[Robin Scheu (Chair)]: horizon. No big changes or anything else. I'm not seeing any other questions. I was just going to comment. We have two

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: or three bills, I think in the Taxification Committee regarding inspections. Yes. Discontinuing inspections or doing them less frequently or any of that. Do you have any comments from our side as appropriations? It could affect us.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: If you did get away with it completely, there would be a revenue Yes,

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: there would be a revenue hit of

[Robin Scheu (Chair)]: approximately $4,000,000 And then every other year, so it would be half? So we

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: do have a plan to mitigate that. So if we started on a January 1 date for the first year of a two year cycle with an increased rate from $8 to $16 per inspection, that would mitigate the lag of that second. Oh, I see. So you pay double,

[Robin Scheu (Chair)]: but you only have to do it every other year. So it's sort of the same amount as if you did. I

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: will say we are working with Senate right now and then we're going to be moving to the House, but we have a plan, at least in the short term, to make some immediate changes to inspection manual, kind of the areas where we see the greatest friction with Vermonters. So we hope that will be a good pressure relief valve in the short term while we look at this two year, moving out to two years or other kind of initiatives.

[Wayne Laroche (Member)]: Do know. Brakes, you can go a while with your brakes not being too good before you figure out to be serious if you went for an inspection that cut side things like that.

[Robin Scheu (Chair)]: I'm not afraid of that.

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: Want to get to a place like, I won't become south, but you go through South Carolina or Carolina, there's all the cars broken down and parts on the side of the road. We don't want to get to a place like that, but there are some friction points that we have seen that could be improved within the spectrum manual. And we hope by doing that, we can kind of make it a little bit smoother for homeowners because transportation is that you know, we're a real estate, so we wanna make sure people have that ability to utilize good vehicles and not fail things that probably shouldn't get failed.

[Wayne Laroche (Member)]: You could stagger it. If it's a brand new car, don't have to

[Robin Scheu (Chair)]: do it as frequently as if the car's

[Andrew Peller (Commissioner, Department of Motor Vehicles)]: I don't think we would wanna Too complicated? Yeah. Don't think we wanna get into a position where we're saying, because you have a means, don't have to get it inspected. You should you know, two years should be for everyone and not kind of create that separate user experience, if you will. Amazing

[Robin Scheu (Chair)]: how many controversial issues there are around cars. License plates, and what is that, tinted license plates, that's great. So look at that. Great. Well, you very much. Congratulations on a successful modernization. Thank you, thank you. And we appreciate your work. I think we're definitely gonna get all of you guys ready on our way. Okay. We appreciate all of you. Thank you for the work you're doing. Great. So, committee, they're going to be back at one with the agency of commerce community development. They're going to do their whole thing with economic development and housing and all of that. That's what we're going to see at first

[Candace Omquist (Chief Financial Officer, Agency of Transportation)]: at 05:00.

[Michael Mrowicki (Member)]: So let's

[Robin Scheu (Chair)]: talk live