Vermont Legislature SmartTranscripts:

[Rep. Robin Scheu (Chair)]: Good afternoon. This is the House Appropriations Committee. It's Tuesday, 05/12/2026, 01:00 in the afternoon, and we are here with Douglas Farnam, Chief Recovery Officer, to get an update on the ARPA funds. I don't know how all that's going because the deadline's coming up. I know, Doug, you had some reports that was due, so now you have information you can share with us. You're welcome.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Thank you for having me, madam chair. I really appreciate it. So for the record, Douglas Farm, chief recovery officer. Madam Chair, would it be okay if I did just a brief recap in case anyone just watching this

[Rep. Robin Scheu (Chair)]: Absolutely.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Don't mind. So the American Rescue Plan Act of 2021 allocated a broad based grant to every state in the country and also local municipalities. The state portion of that money, the state and local fiscal relief funds, was 1,040,000,000, 1,049,000,000, and the local fiscal recovery was just over a 100,000,000, 120,000,000, I believe. And that local fiscal recovery portion doesn't show up on this. That was the state acted as a check processor essentially, and every municipality now has a direct relationship with the US treasury. And I think most of the activity on those local fiscal recovery funds has has passed at this point. Most of those funds have been gone through, but we do still see activity that there are still municipalities in Vermont that are spending that money and that are filing reports with the Treasury once a year. They only have to file once a year. The state for our $1,000,000,000 portion has to file quarterly, and we had an annual performance requirement. The last year we were required to do that in was 2024. US Treasury eliminated that annual performance report requirement in 2025, and so we won't be doing one in 2026. If anyone ends up wanting to look for that, that was it was an extremely time consuming report, so we are not going to be producing it independently, but it did have a lot of good consolidated information about how the programs were running.

[Rep. Robin Scheu (Chair)]: And would that be difficult for you to continue

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: updating? We might be able to produce an abbreviated version of that report, madam chair. But to take on the full report as it was constructed for US Treasury, that would probably be overkill. Yep. But a version of that we might be able to do.

[Rep. Robin Scheu (Chair)]: I'm not looking to make a lot of overview. I was just curious based on what you just said.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yes. I think the main difference is that the quarterly reports don't have performance measures in them, And I believe the programs are all still tracking and maintaining their performance measures that were created at the beginning. So we might be able to produce just a performance measure related report without too much extra effort, but I haven't checked into that recently.

[Rep. Robin Scheu (Chair)]: Right. That might be something of interest if we're talking about performance measures if we've been spending all this money. Right. Don't lose sight of that possibility.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Right. And so, for example, water and housing, those are some of the broad categories that ARPA was eligible for. So a lot of our performance measures are related to housing units created, or initial additional hookups for a water system or even connections for a water system that are preserved because some of the programs help remediate deficiencies in municipal water systems. And so that's also worth tracking. So this was transmitted only today because the report was being compiled and we converted it into a PDF this morning.

[Rep. Robin Scheu (Chair)]: Hot off the press.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yeah, hot off the press. It's a 15 page PDF, and the first seven pages are a table of all of the programs that were created under the American Rescue Plan Act with those dollars, and then some of those pro and it shows both the ARPA money and any general fund money that was put back into a program to restore ARPA money that was put against another obligation, right? So this gives you the full scope of the $1,049,000,000 and where we are on both the how much ARPA is left to expend for those programs and how much general fund is left to expend. I won't spend a lot of time on this. It is a useful resource for community members, but there is a lot in there. The main thing of concern for this year, because we have a due date coming up on twelvethirty onetwenty twenty six, to have all of our expenditures complete, that also for state bureaucrats, there's a lot of nuance there that's very challenging that the committee should be aware of. It doesn't mean that we can just have a check sent or that the work is done. The entire bureaucratic process has to be complete, meaning the work has to be complete, then the invoice has to be received, then the check has to get sent, then we have to well, when we right before we send the check, we verify the invoice and that the work was complete. So that check getting sent at the last part, if everyone's doing everything properly in proper sequence, that will satisfy US Treasury as long as that happens before twelvethirty onetwenty twenty six. In some of our processes, it can sometimes be two, three, or even more months lag after the work is completed before an invoice is received, and then another thirty days for the state to process the payment. We don't normally dwell on those administrative trivial details, but when millions of dollars are on the table, the timing can matter.

[Rep. Robin Scheu (Chair)]: Yes. Absolutely. Lady, question? And that's because contractors will just not get in person.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: So, some of our contracting structures are somewhat complicated, like the work may be being performed for forest parks and recreation, but the contractor is actually employed by the agency of digital services. So, the contractor performs the work, then they send the work, the invoice to FPR. FPR reviews and approves the invoices, okay, we'll forward it on to agency of digital services, they're okay with it, and then it has another thirty days before it gets processed. So, I think the complexity of some of our multi agency structures can slow things down, and that was one of the things I looked for in 2024 when attempting to reduce risk and spend funds down in different programs, but we do still have a couple of ARPA programs that are in those more complicated areas. Pages eight through 13, in my package, deals specifically with the ARPA state and local fiscal recovery funds, and one of my deficiencies is that I tend to brush by things and not necessarily celebrate success. If you look at the number of blank spaces, the rows with just the check mark or the dash on them, those are all programs that were created in '21 and '22 by the legislature that have successfully completed. So the vast majority of the programs created by the legislature during those two sessions, well, during that one session, the two sessions of the general assembly, many of them have completed. So we have spent out of the 1,049,000,000, we've spent all but $63,000,000 at this point. So we are reaching substantial completion from a macro perspective, and I think that is a huge accomplishment by hundreds, probably not quite thousands, but high hundreds of state staff and municipal staff are involved in a lot of these programs. So it's been a huge effort over the last five years to move that money out.

[Rep. Robin Scheu (Chair)]: It is pretty amazing that people came together and did all this work. It's quite astonishing. Some of the Go ahead, Marty.

[Rep. Martha "Marty" Feltus (Vice Chair)]: Well, I'm just confused. The first seven figures are items that are still not completed, whereas the last group are all all of the items or

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Apologies. Understood. So the first seven pages

[Rep. Robin Scheu (Chair)]: show

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: everything together. If it was an if it was a program that was created due to the American Rescue Plan Act, it'll show up in those seven pages. And the amount of general fund still remaining to that program and the amount of ARPA stateless local fiscal recovery funds will show up. So that's a full view of all the programs, whether they're still considered federally funded or whether they're one time general funded at this point.

[Rep. Martha "Marty" Feltus (Vice Chair)]: It includes the completed ones also.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yes, yes. All of these categories do have the completed. One thing that might have made some of this easier to absorb is to produce one version that had only the open programs on it, because that would have dramatically trimmed down the list, and that would probably be about a four or five page PDF if you trimmed it down to just beyond the programs that are still open.

[Rep. Robin Scheu (Chair)]: But if we look on page one, sort of in the middle is the Community Recovery Grant and Virtualization Program. So that was one of the ones that we converted some to general fund. Yes. And yet, there's still $8,300,000 in general fund that they haven't spent, Right? So there's nothing that we need to return to the federal government because it's general fund?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Correct. That program was largely converted because that program was designed to invest in real property owned by businesses. It could be owned by municipalities as well, but it had a number of businesses and childcare businesses. It was an economic recovery program and a childcare program. And if you invest federal funds in real property, then you must maintain, you must monitor that and you have requirements on that for about twenty years. So that's one reason we converted that to a general fund program was to relieve those uniform guidance requirements.

[Rep. Robin Scheu (Chair)]: So there's still $8,300,000 left in that program, and do we have are there specific plans for that money?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: I believe that all of that is awarded, and because these are all a lot of them are capital construction projects, I think that that that program is still moving along pretty well. We did expect it to take a little bit longer to expend based on the nature of the program.

[Rep. Robin Scheu (Chair)]: So we could get a list of the projects for whom that 8 0.3 is supposed to go to from ACCD?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yes. Absolutely. Alright.

[Rep. Robin Scheu (Chair)]: Well, I would like to

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: do that. So it'll work out.

[Rep. Wayne Laroche]: Don't if you get that quite right. It says, g f expended as of '8 $3.00 1. So that's how much we spent.

[Rep. Robin Scheu (Chair)]: Actually, it's 10,000,000 is

[Rep. Wayne Laroche]: what I Yeah,

[Rep. Robin Scheu (Chair)]: it's

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: just over 10,000,000 remaining in general fund.

[Rep. Robin Scheu (Chair)]: Okay, so we want to find out what that's for. But again,

[Rep. Martha "Marty" Feltus (Vice Chair)]: those general fund items do not have to meet this deadline of twelvethirty one. Correct.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: There is a legislative deadline, but a state legislative deadline for those to be obligated by 12/31/2027 or automatically reverted. And my understanding is that these are all obligated at this point, but I have not because I've been focused on the federally funded programs Before. I haven't been monitoring the general fund expenditures as closely.

[Rep. Robin Scheu (Chair)]: So once if it's if it's general fund money, if it's been obligated but not spent, it could be reverted and re obligated to something else?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yes, state awards all are required to include attachment C, which includes terms saying that if the appropriation underlying or supporting the award is reverted, then the award will be canceled without penalty, right?

[Rep. Robin Scheu (Chair)]: So we get to keep our general fund money.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Right, it is general fund money. Yes, I'm sure. It

[Rep. Robin Scheu (Chair)]: would flow back in next January. Right, well, or whenever, yes. Okay.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Would you like to walk through those first seven

[Rep. Robin Scheu (Chair)]: Well, I don't think we need to walk through all of them. Just was looking back because it seemed like it was a lot of money, and we were talking about general fund. You know, I guess if people have particular questions, John? Yeah, I'm

[Rep. John Kascenska]: just skipping a couple of pages, had to go to page three. Reading this correctly here. So, practical nurse program, money's dedicated to that, appropriation, so the 100%, does that mean there's 100% still remaining?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: So we haven't missed point? We haven't seen any movement in that general fund since the conversion in December 2024.

[Rep. Robin Scheu (Chair)]: So if we wanna find out more, how do we find out more?

[Rep. John Kascenska]: Yeah. Let me

[Rep. Wayne Laroche]: just do this. Yeah. Okay.

[Rep. Robin Scheu (Chair)]: Do we just compile our question, the question, the things about which

[Rep. Tiffany Bluemle (Ranking Member)]: we have questions and send that to you?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yeah, I'm happy to tell. Well, so that

[Rep. Robin Scheu (Chair)]: says Vermont State College is right?

[Rep. John Kascenska]: Right, it does.

[Rep. Robin Scheu (Chair)]: So I would think that people who are trustees might have access to the right people who know the answer.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Well, oh, so that's a good example. For the state colleges appropriations, that is through a grant agreement from agency of administration. So, that would definitely be one that if you have questions, AOA should be the one to dig in and And figure

[Rep. Robin Scheu (Chair)]: I'm looking to more priority capital projects and government priority blah blah blah. The bottom two is yet another $4,700,000 plus the $10,000,000 on the other side. We're talking $18,000,000 same act.

[Rep. Martha "Marty" Feltus (Vice Chair)]: Well, no, they're two different acts. They're different acts.

[Rep. Robin Scheu (Chair)]: Same program. But they have millions outstanding. Yes. So we can go to ACCD and get that information.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yes, I'm happy to help gather information from programs. But if you have questions about specific progress on projects, they're going to be better able to give you the Yeah.

[Rep. Robin Scheu (Chair)]: So we'll we can do that. We'll but we'll let you know if we have any trouble with that.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Then I'm not intending to dig into the general fund programs at this point in time. Okay.

[Rep. Robin Scheu (Chair)]: That's fine.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Oh, no. No. I'm sorry. That that came out poorly. I'm happy to discuss all of this with you right now. Over the next two months, I will be meeting with every program that has remaining ARPA funds, the state fiscal funds, to talk about where they are, what their expenditure plans are, make sure we have a good plan for closeout. So I'm doing a status meeting with every single corporate program that's still operational within in the next two.

[Rep. Robin Scheu (Chair)]: That's that's the priority, and that's the second batch of pages that we should be looking at.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yes, and that is mixed in with the first seven pages, but it is just ARPA programs on page eight through 13.

[Rep. Robin Scheu (Chair)]: Okay, so we should focus on that and congratulate you for all the ones that are done.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: And so, again, with the completed program still in here, there's a lot of blank space. But the landscape hasn't changed dramatically. We did have a fairly solid amount of expenditure, but for the first quarter, it's not a construction season primarily, so we didn't expect to see a major spike in expenditures. And so the roughly, I think, was 12,600,000 that we saw expended. I would love to have seen more, but it's right around what I expected to see.

[Rep. Robin Scheu (Chair)]: So, we're not worried about most of it's wastewater and clean water, mean, that's a large chunk of it.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: There's two big chunks, Madam Chair. There's four or five programs that have significant amounts of funding left at ANR and DEC. And I've been working on scheduling the meeting with them. We don't have it on the calendar yet, but we're working on we're going to meet and discuss their closeout. What we had done was the agency of administration, because we're the prime recipient of the federal award, we told all the programs that you have to have your sub awards done by 06/30/2026 so that you'd have time to do all of that bureaucratic process I referred to earlier, and that closeout would go okay. They've ANR has flagged for us that things are going well, but they anticipate some of their sub awards might need another three months. And so anything we extend past June 30 is going to get riskier and riskier gonna need to be monitored. Right. So we are gonna be looking into options. One of the things that we do receive policy support from Guidehouse because we established that at the beginning of the pandemic. Right. And they support about 21 other states in administration of their state fiscal recovery programs. And there is still an option to reallocate ARPA funds. At this point in time. It has to go to existing obligations, and we did establish some payroll obligations for the state just in case we needed them. Now, unlike 2024, when AOA was able to apply funds, take general fund, and move it back, we no longer have that authority at AOA to do that internally. And the joint fiscal committee has to approve any reallocations that we recommend this year. There will likely be recommended reallocations from AOA in the summer, and we're gonna try to avoid them, but likely in November and potentially December, really hoping to avoid that. Yeah. I would like to mitigate as much risk as possible in the July, August time frame. Mhmm. But the thing there is the joint fiscal committee can approve the reallocation of the ARPA funds. So say we we identify funds that are not going to get spent, 5,000,000 of funds, and AOA says these are the payroll eligible payroll around the state of Vermont that we recommend this these federal funds be applied to. Joint Fiscal Committee approves that, that's as far as it can go before the Budget Adjustment Act. So it would create general fund availability for the Budget Adjustment Act, but it would not be actionable until the general assembly is back in the spring.

[Rep. Eileen "Lynn" Dickinson]: Right.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: So if it was related to an award, even if there was an intent to give that money back to the program, it would interrupt the award.

[Rep. Robin Scheu (Chair)]: They would have to pause until the general assembly came back. Yes. Well, some of the clean water and wastewater things maybe can be delayed. Right. Some other things maybe can't.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: And that's why we want to talk about each project, every program, as it's going into the fall, does it have all the permits? Is construction going to complete? And if not, we might need to recommend pulling the funding, and then it would be up to the legislature if they want to restore the funding for that award or if there is a different higher priority in state government.

[Rep. Martha "Marty" Feltus (Vice Chair)]: Interesting. Wayne, go ahead. So

[Rep. Wayne Laroche]: what's the time frame? When will you know? The thirty first or shortly after the thirty first, you'll have an accounting of everything that was spent, what stayed on the table, what might have to get reverted of the outcome money back, or what money might be still there that you could reabsorb it for payroll. And that we have to can you expend or obligate that money for payroll before the end of it?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: That is very easy. I know that we have the payroll capacity to we might not have the capacity to do all 60,000,000, but we wouldn't even need to at this point. 14,000,000 of the 63,000,000 is with the broadband board, and they're highly confident. I'm going to ask to see the receipts, but they're highly confident that their projects are in line and that they're going to be able to expend, and they've already expended 135,000,000, so they have a good track record as far as expending another 14,000,000 in the last year. So that leaves us down to 45,000,000 that's at play across a number of programs, I think 20 to 30 programs, and the concentration, the biggest conversation is gonna be with ANRDC, and it is on the wet weather sewer overflow that is on page 10, halfway through. That program still has 18,000,000.

[Rep. Wayne Laroche]: You talked to him, I keep asking, I'd really like to know what the nature of the whole health business is in contracting and not being able to.

[Rep. Robin Scheu (Chair)]: Oh yeah, that was one of highlights. And you said that was where? Is that a project or a bunch of projects?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: It's in a large number of projects, but I think there are a couple very large projects that would, if they move forward, would take up a good amount of that funding. So, that's definitely a program where I'll be going through all of their awards, talking through status on every single project they're looking to fund.

[Rep. Robin Scheu (Chair)]: Right, and those are bigger than Village Wastewater's 4,500,000, which sounds small, but it's village, so they're small. Those are pretty important to be doing these days.

[Rep. Wayne Laroche]: Is it permitting, is it contracting, or is it lack of manpower for the contractors? What's the

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: I've seen all of those reasons for different projects at this point, so I think it varies by town. And that's going to be the hardest, honestly, for the administration to recommend pulling funds from a project that we want to see happen, but may not have evidence that it's likely to happen. Some of ones we

[Rep. Wayne Laroche]: need to happen most. Right.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: So the first round that we're gonna look at is oh, sorry. Still ahead. The first round that we're gonna be looking at right now and talking with the agencies about is based on this current data. We're going to look for projects where they agree everything at this this point points to despite our best efforts, we're not going to be able to finish it this year. So we agree to a reversion, and those will be compiled by AOA and presented to the joint fiscal committee.

[Rep. Robin Scheu (Chair)]: Okay. And you're hoping to do that at the July meeting? Yes. Okay.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: And then I've referred to it as the less nice round, where before the September time frame, reallocations have to be done within the quarter. If you have unallocated funds, treasury takes those back. So we need to identify reallocations in the first month of a quarter, so in the July meeting, and then we need the August and September time frame to complete those allocations and make sure all our paperwork is updated and Yeah. We don't end up sending funds back to treasury on a technicality. Right. Because they will take back millions of dollars based on a lack of a signature.

[Rep. Robin Scheu (Chair)]: Yes, we don't want that to happen and we don't. Really free to do it. Know you're capable of doing that, but the detail work is something else. Think, John, did you have another question?

[Rep. John Kascenska]: Yeah, this one was on the last couple of pages. Was a number of girlfriends there that obviously have not received. I mean, some have done quite well, there's not much remaining for sure. The last page, just looking at, like, Public Service Department, they overspent, but that would be a circumstance where perhaps if another area doesn't quite spend what they were allowed to then pick that up. Or is that

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: I've been checking into the areas that there appears on the from the reporting that they overexpended. It didn't show up in the federal reporting as overexpended. It showed up in vision as overexpended, and that's just because of the way the data was pulled. There was not an actual overexpenditure on those programs. It's just accounting and journal entries, and it shows up funny. I'm just curious because it was obvious. Yes.

[Rep. John Kascenska]: At least recorded as an overexpenditure.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Right. Most of our systems are designed for programs to be measured on a single fiscal year basis. And because these are multiple fiscal year programs, when you try to pull a report on them, you can run into issues where the system doesn't represent it properly. And then to some that haven't spent like, you know, percent of what was

[Rep. John Kascenska]: allocated to a particular program. Right here it is, it's May.

[Rep. Robin Scheu (Chair)]: Yeah. So Doug, when I look on page 11, we're in budget session, and I'm looking at mine. About two thirds of the way down is Tree Water Flood Resilient Communities Program, dollars 1,983,000 unspent. We know what that's for off the top of your head.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yes, that some of those are going to buy out, some of it's going to floodplain restoration projects. The last time I checked up on and I approved some reallocations a month or two ago between various projects. Okay. They're still on track to spend that, partially because if you look at it, they started out with, you know, 19.6%, down to 10% of their program. So they're kind of cleaning up the last couple projects at this point.

[Rep. Robin Scheu (Chair)]: Because I'm looking at floods that happened in the Northeast Kingdom and, you know Right. I'm looking everywhere for money here. I think part of that

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: is, some of that might be tied up as match for federal projects that are finished.

[Rep. Robin Scheu (Chair)]: That's why I wanted to I'm not spending it yet. I'm just looking for something. Thank you. And then the other one on the next page, just a question on page 12, almost halfway down, the Tech Mod Fund, PACE Management System Upgrade, it's 1,700,000 and they have 1.5 left.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: I'm definitely going to be checking up on that program because it has it's not always just the dollar amount, but the percentage. At this point, it's it's hard to picture without a conversation with them how they could possibly spend over 80% of their appropriation down in the final six months. It's possible, though, based on if they design their deliverables in certain way.

[Rep. Tiffany Bluemle (Ranking Member)]: Is this the DCF case management?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: No. This is a state's attorneys and sheriffs.

[Rep. Robin Scheu (Chair)]: Oh, state's, I'm sorry. Just lost right over that. Okay.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: And there was a, there's also 2,000,000 in Vidal UI platform modernization. Last time I checked, that project was still progressing on time, on budget, and it might just be that they haven't hit the major milestone for delivery of funds to the vendor. So that's definitely what I'm gonna be checking on because they're, you know, it's about 40% on expended at this point.

[Rep. Robin Scheu (Chair)]: And then I see broadband is a big one. It's 15,000,000. Is that we're just waiting for something, or what's going on there? Do you know?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: So I'm gonna get many more details because even though they have a good track record, 14,700,000 is quite a bit. But when I spoke with the broadband staff on Monday, I'm confident they'd be able to show me the targeted completion dates and when they expect to pay out. For them, it was they just started hitting the road and we've also had a cold spring. So they're starting to get into it now. They are at

[Rep. John Kascenska]: the circuit of my district and they're out there every day.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: So they're pretty confident their July report will look really good.

[Rep. Robin Scheu (Chair)]: Okay. They'll look better. Great. So

[Rep. John Kascenska]: the brown stock is good.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yeah. But the hard part with the broadband board, I do have confidence in their ability to spend money, but they have 95,000,000 from ARPA capital projects. They had, you know, this 15,000,000 left, and then they have over 100,000,000 of the Bead funds that they're working on. So they're working on a lot. A lot of federal funds right now. Well over Right. 200,000,000. Yes.

[Rep. Martha "Marty" Feltus (Vice Chair)]: Because case management is obligated, but it's obviously not expended yet. This is part of the case management system you brought up That has one. Right. So they had to obligate everything.

[Rep. Robin Scheu (Chair)]: It was the expended part. They had to obligate everything by the December '24. So that all should be 100% of the obligated. Right. But the expended is the part that I'm concerned about. Okay, yeah, if you go ahead.

[Rep. Tiffany Bluemle (Ranking Member)]: Well, was surprised to see the missing middle program. That's what page you're on. I'm sorry, I'm on page six. Bottom, from the

[Rep. Robin Scheu (Chair)]: bottom. Do you know anything about that, Doug?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Oh, yeah, that is one I have not been tracking because we converted it to general fund, mostly because the federal requirements didn't align very well with the missing middle program and would have resulted in those real property uniform guidance requirements. So that's why we we swapped it to general fund. So I haven't checked in with that program in quite some

[Rep. Robin Scheu (Chair)]: time. State

[Rep. Martha "Marty" Feltus (Vice Chair)]: general funds, because we've the case management over here on FARPA funds that are expended to the state funds.

[Rep. Robin Scheu (Chair)]: Right, the state funds have not been expended. But it'd be interesting to note that Right.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yeah, think that's

[Rep. Robin Scheu (Chair)]: Well, there wasn't any general fund expenditure on this technology.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: I think one

[Rep. Robin Scheu (Chair)]: That had both general fund and non general fund Okay, I'm sorry, I'm muted.

[Rep. Martha "Marty" Feltus (Vice Chair)]: We're just saying this report.

[Rep. Robin Scheu (Chair)]: We're getting to be oriented, I know. Your reports are different than other reports you've seen. It's very helpful, I like the colors. Yeah. Okay. And so that gets us through page 13, and then there's a couple more pages.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yes. The last two pages are just specifically the general fund status.

[Rep. Robin Scheu (Chair)]: Oh, okay.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: So if you're looking to drill into just general funds remaining to be expended, that is all captured on these last two pages.

[Rep. Robin Scheu (Chair)]: Okay. Oh, that's really helpful. Okay.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: This is duplicative of the general fund that shows up in the first.

[Rep. Robin Scheu (Chair)]: I gotcha. Except you have the column that I wanted, which is dollars to be expended. Yes. That's the most important column. Yes. It is. So now we have lots more. Yeah. So we look at ACCD, we notice community priority capital projects. We have, like, 19,000,000 unexpended.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yes. Yeah. We in December 2024, we converted about 142,000,000 of our program activity to general fund activity. Mhmm. And since that conversion in about a year and a half, about a 100,000,000 of it has been expended. Some of it was already expended when we did the conversion.

[Rep. Robin Scheu (Chair)]: But Yeah. And they also have the seven points housing in this middle. Okay. This is really helpful to see this this way.

[Rep. Martha "Marty" Feltus (Vice Chair)]: This GF to be expended, is there a deadline on that? Is that the

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: As far as expenditure, there's no Deadline. There's no existing statutory deadline.

[Rep. Robin Scheu (Chair)]: I think it would be big to differ. Because last year in the budget, James was not here, but Emily was. But we put something in about funds that were related to these projects that were not ARPA money but were general fund. They had to expend them by December 2027. We gave it, like, an extra year, so it wasn't out there in perpetuity, and then we were gonna call it back. And I don't remember the exact date, but you know what I'm talking about.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yes, madam chair. The exact language is that as of twelvethirty onetwenty twenty seven, the money has to be obligated or it will be automatically reverted. There was no language about expenditure in in that in that deadline. I think there was an intent to begin setting deadlines around expenditure, but there's no automatic reversion based on expenditure. Okay. That might work.

[Rep. Robin Scheu (Chair)]: We may want to do something.

[Rep. John Kascenska]: Some of these? Yeah. About that. Perhaps for some.

[Rep. Robin Scheu (Chair)]: Oh, no. But James knows now. Currently,

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: the administration, based on the original legislative intent of these programs, has been approving automatic carry forwards with this. We created DEBT IDs, and the administration has allowed these programs to roll forward. So, kind of outside of the normal carry forward process, and we'll likely continue to do that unless the legislature gives us different direction. And that and what what you're saying, madam chair, about the 12/31/2027, I think, is a clear signaling that these programs have to start expanding or come to an end. But I don't think

[Rep. Robin Scheu (Chair)]: Tens of millions of dollars out there just because. We other ways to spend it. It's

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: not stated, but from my perspective, and I've been advising programs to make sure you're spending the ARPA state fiscal first.

[Rep. Robin Scheu (Chair)]: Right, exactly. I

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: have been telling people that the intent signaled by the 12/31/2027 language to me reads, there should not be assumed to be an automatic carry forward from f y twenty eight.

[Rep. Robin Scheu (Chair)]: That's right.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yep. That was the between the lines.

[Rep. Robin Scheu (Chair)]: Thank you for reading so well. And we'll probably do some clarifying now that we're getting closer to real dates here. Yes.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: I think FY twenty eight BAA might be a good time to add clarity to that.

[Rep. Robin Scheu (Chair)]: Or even before. So they have time to I mean, some of these, and again, a lot of it's clean water related stuff, but Merck Community Capacity Building Grants for 28,000,000. I don't know what that is.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Municipal Energy Resilience Program,

[Rep. John Kascenska]: which grants all the towns. For energy

[Rep. Robin Scheu (Chair)]: resilience projects. Okay. But that's $29,000,000, $27,000,000 that hasn't been spent. Know I that's not your problem right now, but I'm Well,

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: the programs within AOA I have been keeping a closer eye on, and there is, I believe, an outstanding question of there was clearly an intent to allow those programs to try to expend awards that were generated in the first round,

[Rep. Robin Scheu (Chair)]: but

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: I have gotten the question about reallocations of those general fund programs, and my guidance at this point has been, we don't have a clear answer yet, but at some point, I don't think reallocations are going to be allowed to continue. Correct.

[Rep. Eileen "Lynn" Dickinson]: Ahead. And that one we

[Rep. Wayne Laroche]: were just talking about, what's that? Insulating houses and that sort of thing? It's not a home.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: But for municipal offices. Municipal offices. Yeah. So fire departments, town offices, adding solar panels, but mostly heat pumps, insulation, efficiency measures, replacing oil furnaces, been a lot of it. And that was a program that would not have been possible under the standard federal guidance, so we converted

[Rep. Robin Scheu (Chair)]: it. John?

[Rep. John Kascenska]: When all the towns were awarded this, in trying to get going on this, there was a lag time there just in terms of lighting up contractors, just with my survey of the towns in my area, since I have, like, nine of those towns, and just took time to kind of get that stuff going. Some of the projects are relatively small. They have a small town building. There's not much bigger a bigger than a two bedroom house here for the most part. I'm talking about Brunswick. And it just took time to get that work to be determined. We replaced the front door and the back door, new lights and that kind of stuff. Some are still struggling with that.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Yes. Especially in the energy sector.

[Rep. Eileen "Lynn" Dickinson]: Thank you. One of the things that we had speaking about the small towns that John represents is that we had that technical rural advice through VRCD. Yeah. That we got from HCCD, I believe. Anyway, it was money that we put aside for that to help them come up with projects and get the workforce, the work power and the support that they could do it. So they weren't going to be these three member boards that were going to try to do it all on their own with nothing else. Did that turn out to be successful in this whole effort? I mean, it was money, sometimes controversial, but we did do it.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: I think overall, it was certainly helpful because the regional planning commissions and I think the regional planning commissions were heavily involved in the technical support for this program. I think it was helpful because they know the needs of their area better than pretty much anyone else aside from the the specific communities. I also think it's introduced an odd layer where even when you're talking about reallocations, they're like, well, shouldn't reallocations go back to our region if one of our towns got the original award? It's like, no. That's not not the way it should work, and I'm also not even fully confident that the legislature intended for reallocations to be happening at this point in time. So I think it was helpful, but it brought more people to the table and it brought, like, more perspectives, which leads to more complicated conversations, I guess, I would say. But overall, we have seen a lot of good work done in the municipalities, which will result in cost savings going forward. So that's gonna be helpful for a lot of small communities. And they, I don't think, would have been able to do as much without that additional support.

[Rep. Wayne Laroche]: Thank you. Wayne? So, is everything there again has to be obligated by a certain period of time? So, it's not as if they could be coming up with new projects at any time before the end of this. With

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: the general fund projects, is a little bit so ARPA projects, you cannot create any new ARPA projects. But for the general fund programs, there's authorizing statutory language, and then it's silent on that kind of ongoing creation of new projects. So I think it's silent right now. And I think since it's silent, programs are currently able to award new projects until the appropriation is taken away from them or until the general assembly decides to give them clarity and say no, no new projects after this date. So with the general fund, they can continue to do new awards, which was not discussed to my knowledge over the last couple of years.

[Rep. Robin Scheu (Chair)]: Repurposing money? Well, we've been in different place. Exactly. Right now we're now we're running up on deadlines and we're seeing what's actually being spent and what isn't being spent. So it's a lot easier. We have more information in which to make decisions than we had a year ago, for sure. Absolutely. Lynn?

[Rep. Eileen "Lynn" Dickinson]: Okay, I'm looking at some of these things that seem to have a lot of money left, mostly general fund. But on this page 14, you have, So AHS, Workforce Recruitment Retention Incentive Grant Program, you have the Nurse Preceptor Incentive Grants, which hardly look like they didn't use it all, Nursing Pipeline Apprenticeship, Nursing Faculty Forgivable Loan, Nurse Faculty Loan Forgiveness. And there are some of the beginning parts that also has some of the loans and the nurse faculty loan repayment, mental health things that were actually part of, like the educational higher education DSE or AHS? Practical nurse program seems to have a lot of money that never got used. Workforce upskill jobs, apparently we used all that. Critical occupations. Is the all those have a lot in common, and what was the barrier to getting the money out? Or did you ever know?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: I unfortunately don't know. With those programs, I haven't monitored them for the last year, to be honest.

[Rep. Eileen "Lynn" Dickinson]: Yeah. Because when you came in last session, two or three years ago, you said that, for instance, looking at all of these things and who had a lot of money left, the BSC, which had a lot of these programs, had expended or was all set with 93% of the money early on. And so they really were way ahead of the curve. And I'm just curious, these AHS things or Department of Health, they just seem to be kind of not moving.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: I would just based on just seeing the numbers and vision, I would agree that I haven't seen much movement out of them. I haven't asked AHS for a status report on those simply because we're not at risk of losing the funds to the Fed. So I've been focusing on the Yeah. Federal

[Rep. Tiffany Bluemle (Ranking Member)]: Well, I just you know, I'm wondering

[Rep. Robin Scheu (Chair)]: I mean, 2022 seems so lucky, though. So

[Rep. Tiffany Bluemle (Ranking Member)]: I don't I'm here. I might not remember exactly what we were supposed to have spent the money on and what the expectation was and what we have lost in not doing them and not spending the money down. There was an intention behind the appropriation, right? Or the repurposing, whatever it was, to accomplish some particular thing. And I'm just wondering how we can know what we have not accomplished in advancing this priority or that priority. Just talking about the numbers is one thing, but I don't know how it translates into policy goals and what capacity we haven't developed and still remains versus what we have been able to develop.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Right. Right, I do know along those lines, the last time I checked in with some of the nursing programs, some of the expenditure rate was related to just lack of uptake. You know, they were offering these, they were trying to recruit more nurses, and we just weren't getting it partially because of the dynamics with traveling nurses, and the fact that the traveling nurse structure creates pretty extreme financial incentives for nurses to stay in that status if they don't have roots in a particular area. So, the fact that these numbers haven't moved much since then to me leads me to believe that there's still some challenges like on the recruitment side. But I think with the we did expect when we did the conversion at the beginning, at the 2024, I did expect some of this general fund money to stagnate where it overlaps with the department that's spending their federal funds first. But some of these don't overlap with continued federal programs, so that certainly doesn't explain all the situations.

[Rep. Tiffany Bluemle (Ranking Member)]: Yeah, and I'm not necessarily talking

[Rep. Robin Scheu (Chair)]: about the nurses.

[Rep. Tiffany Bluemle (Ranking Member)]: It's so hard, and I cannot appreciate how complicated your job is, how and difficult it is even to track these things, and to get money out. That said, I just, you know, we will make reference sometimes to, well, we invested in workforce development in these fields, And this is part of the picture in terms of, well, how well are we doing? And it's been difficult to know how our workforce investment dollars have to paid out, you know, but also other things. I mean, I think we get other housing updates, so that's pretty clear, I think. But some of these other things are just where we've lagged, what does that actually mean for us?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: So one thing I can offer the committee is that as I said before, I'm meeting with every program that has outstanding ARPA in the next two months. I can ask any of those programs that are also spending general fund for progress updates at the same time since be collecting information, it won't add any extra effort to collect where they are on their general fund at the same time. And then I intend to meet with every program that expended ARPA dollars before the end of the before the end of the calendar year to make sure there are no close out surprises. And so I can include the general fund programs in that effort before the end of the calendar year and try to bring that information into the next session. I think nothing should prevent you from asking specific programs to explain what's going on, but I will compile that full picture for next legislative session. Just seems appropriate with our book closing out.

[Rep. Robin Scheu (Chair)]: And what's been great is that you've been the person there, right person right from the beginning. So you have all that institutional knowledge.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Probably need to speak to me

[Rep. Robin Scheu (Chair)]: about these numbers and these projects. Okay, any other questions?

[Rep. Martha "Marty" Feltus (Vice Chair)]: So in the meantime, all this unexpended money is sitting in our bank account?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Let me see. What did we have? Yes. Earning interest, we've done rather well, but it's general fund interest, so it flows into that overall number, which has been added to the forecast in the last couple of years because it's substantive now when it wasn't before. One thing to call attention to, I did see much more activity in the last quarter on the general fund side than in prior quarters. If you look at January, February, March's totals, it's right around 26,000,000 of general fund that was expended in these programs in the last quarter. And there were prior quarters where it was less than $1,000,000. Like, I didn't see any activity. So we are starting to see some of it pick up, a $140,000,000, a $143,000,000 is still worthy of a lot of questions.

[Rep. Martha "Marty" Feltus (Vice Chair)]: Oh, yeah, definitely. But my point is, money is sitting there, at least it's earning interest, but we wanna move people to get it out the door because there was a purpose

[Rep. Robin Scheu (Chair)]: for all this. Right. Exactly.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: And especially once twelvethirty onetwenty twenty six is over, there'll no longer be any linkage to the federal funds. At that point, there won't be any reason it shouldn't be moving.

[Rep. Robin Scheu (Chair)]: Okay. This is really helpful. And, frankly, the timing is pretty good right now.

[Rep. Martha "Marty" Feltus (Vice Chair)]: Might be scouring. We

[Rep. Robin Scheu (Chair)]: We have new sofa cushions stolen. So some of us will see you at joint fiscal this summer. Yes. And then we'll get you back here next year to talk about what happens after the '26 and where we are. When is your final report due to the federal government? Like at the March or something?

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: I believe, actually, we have to produce it by January 31.

[Rep. Robin Scheu (Chair)]: Oh, okay. And

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: then if it behaves similarly to the emergency rental assistance funds, we filed our final report, you know, that thirty days after the period of performance ended. And then at some point now I'm hoping to avoid any type of recapture. Mhmm. Right. But with emergency rental assistance too, there's going to be a small relative to the size of the fund,

[Rep. Robin Scheu (Chair)]: it's Yeah.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: Millions of dollars, unfortunately, but there will be some return to the federal government. But we're waiting on them to tell us how much we based on our report, how much we are obligated to send them back. And we filed that last November, I believe, or maybe it was in January. I'm sorry.

[Rep. Robin Scheu (Chair)]: That's okay.

[Douglas Farnham (Chief Recovery Officer, Vermont Agency of Administration)]: It was at least six months ago.

[Rep. Robin Scheu (Chair)]: That's so far ago. That's like a decade ago. All right, Doug, thank you very much. Thank you for hearing updates. Committee, we have It's a great day. We are going to Okay. Yes, we're taking a break, then we are going to look at the sections of the budget related to dispatch that we just learned about when the Senate did something. So I know we're supposed to start at two, and some of you folks are here, but we'll need a break. So we'll probably break for about ten minutes, and then we'll try to convene about