Vermont Legislature SmartTranscripts:

[Rep. Michael Marcotte (Chair)]: Good afternoon, everyone. This is the Vermont House Committee on Commerce and Economic Development. It is Tuesday, 02/10/2026, 02:00 in the afternoon. So during this hour and fifteen minutes, we'll be having a conversation with our agency of commerce and economic development on the FY27's budget. And so we have Secretary Kerley with us.

[Lindsay Kurrle, Secretary of Commerce & Community Development (ACCD)]: And also for the record, Lindsay Kerley, secretary of commerce and community development. I am with our fiscal director.

[Dan Dickerson, Director of Administrative Services, ACCD]: Dan Dickerson, director of administrative services for ACCD.

[Rep. Michael Marcotte (Chair)]: Thank you for joining.

[Lindsay Kurrle, Secretary of Commerce & Community Development (ACCD)]: Yeah. Thanks for having us and for the opportunity to walk you through our FY twenty twenty seven budget and priorities. I mean, most of you know this. This is a second time around, so to speak. But the purpose, the mission of the Agency of Commerce is to improve the quality of life for Vermonters by building strong, resilient communities across all 14 counties. And we do this through three core areas of work, you'll hear from the commissioners of each, economic development, housing and community development, and tourism and marketing. Our programs and services support employers, entrepreneurs, municipalities, communities, and families. We help businesses navigate the challenge of starting and growing businesses, including helping with their workforce needs. We promote Vermont as a place to visit and to live, and we work with towns to expand housing and strengthen their downtowns overall. And at the end of the day, our job is to grow Vermont's economy in a way that improves affordability and supports the people who live and work here. So today, you're going to hear a brief overview of the agency and our department's budget, outline of the governor's recommended FY twenty seven budget for our agency, and we'll highlight a few of the investments that we are requesting. We're building on our programs that are already delivering results. These requests are designed to address Vermont's most pressing needs, particularly, and you won't be surprised to hear this, housing supply, community revitalization, and economic growth. Also, and this is important, our budget proposal is just one part of a broader housing strategy that the administration is working towards advancing this session. And you'll hear more about that from Commissioner Farrell. In that, just to kind of give you a high level overview on that, we are working on some policy changes intended to lower the cost and complexity of building homes and expanding housing opportunities across our state. Some of the changes that we are looking or we are aiming for is to provide small scale developers and builders with open source home building designs through something called the eight zero two Homes Initiative, expanding by right housing to every state municipality relating to regionally reviewed housing designs, preapproved designs, and broadening local pathways to housing by incorporating housing targets within municipal zoning, and continuing our homes for all trainings to expand expand the bench of small scale developers and homebuilders. Before we get into the details, I wanna acknowledge the broader fiscal environment that we're operating in. As the governor highlighted in his budget address this year, the state's primary financial pressure point is in the education fund. And that reality is really shaping budget decisions across all of state government. So our proposal is intentionally restrained and focused on targeting a small number of investments where we know that they will unlock housing, supporting employers and communities, and delivering critical economic returns for Vermonters. So with that, our f y twenty seven budget is approximately 75,200,000.0. That includes base funding and limited one time investments. The primary new request that you'll hear about today is 4,000,000 that we're asking for for the Vermont Housing Improvement Program, VHIF, to go into base funding. As many of you know, it's been one time funding in the past. It's proven to be very successful. And without the base funding, we are at extreme risk of not being able to continue this program. So permanent funding is critical to sustain the staff, the staff who administer it and provide predictability and stability to the community partners that help us deploy it. Again, I mentioned commissioner Farrell will be here to talk more in detail. Another thing that we're asking for is a one time investment focused on workforce expansion and long term economic community resilience, improvements to manufacturing manufactured housing communities, which, again, commissioner Farrell will talk about. And then also another onetime investment we are seeking is international business development efforts. And commissioner Jefferson will talk about that when he is in the seat. With that, I'll turn it over to Dan, and he can probably walk us through the agency budget. And also, again, as I mentioned, I just wanna share who else is in the room. We have Commissioner Farrell over here, Commissioner Jefferson, Economic Development, Commissioner Pelham, Tourism and Marketing, and our newest employee. This is Kevin Lambert, and Kevin joins us from He was formerly at the USDA Rural Development, and he is joining our senior leadership team, filling a vacant position there. So we're really excited to have Kevin on board, I wanted you all to know why he was in the room with us. Dan, take it away.

[Dan Dickerson, Director of Administrative Services, ACCD]: All right. Good morning, everybody. Good afternoon, everybody. Excuse me. So I'm gonna start. I've got a printout. And if you're following along electronically, I'm gonna start at what would be slide four, which should look roughly like this. And so ACCD is broken down among four separate individual operating appropriations. We have the Department of Administration, which is the secretary, the deputy secretary, finance and admin staff, and then our contracts and grants team. And then the three departments that have the programs that are working directly with the Department of Economic Development, Department of Housing and Community Development and Department of Tourism and Marketing. As Secretary currently noted in FY '27, as far as our new, what we would call base initiatives or ongoing funded initiatives, we are requesting 4,000,000 of ongoing money to support the Vermont Housing Improvement Plan. As I get further into the weeds on the budget, you'll see that that's roughly broken out about 250,000 for staffing and administration to support the program within the agency. And then the remaining 3,750,000.00 we would intend to grant out to our partners who have been working with us on that program and then further out to the individuals that are providing the units. And so that leaves our total base budget request, and this is slide five at 74,210,000.00. We've got a little pie chart explaining how that's broken out. We're 37% general funds as an agency, 19% special funds. And as we get into the departments, I'll break out what those various special funds are. 43% federal funds, still a very substantial part of of our funding picture. And then as of FY '27, we would be receiving a very small amount of transportation fund, and I'll go into detail on what that means going forward. So also Secretary Curley alluded to two one time expenditures that we're requesting funding for. This would be slide six. So within the Department of Economic Development, over the past several years, we have supported an office in Montreal that's working as an in market representative to communicate with businesses that are interested in establishing a U. S. Foothold and doing that sort of groundwork on behalf of Vermont. That contract and the funding for that contract would be up at the end of FY twenty six. So we're looking for funding to continue supporting that office. As Commissioner Jefferson comes up, you can ask questions on what that means and what that office has done. And then another one time expenditure would be 800,000 to continue supporting the manufactured home improvement and repair program. And I'll just step back for a moment and I want to clarify that the program does receive base funding in the DHC budget. This is sort of a supplement to that. It's money that we had received from the emergency board following, I believe was that the twenty fourth? The '23. Okay. So we received funding after the twenty three flood to basically for manufactured home lots that had been damaged extensively by flooding. This was to buy out those lots and remove those homes. We had some money left over, but we couldn't really do anything with it. And so we thought if we could offer that money back and get a new appropriation to help with the MER program, that could put it to some good use. And so that's we're essentially swapping one set of money for another set of mine, if that makes sense. So it's like a reversion? Mhmm. So okay. So it's not new money in the budget. It's just

[Rep. Michael Marcotte (Chair)]: from last year's budget.

[Dan Dickerson, Director of Administrative Services, ACCD]: This would be from Years. Y would have been the f y twenty four. Yeah.

[Rep. Michael Marcotte (Chair)]: Which money you've been holding on to?

[Dan Dickerson, Director of Administrative Services, ACCD]: Yes. Yep. So it's kind of And

[Rep. Kirk White (Ranking Member)]: is that that for the same purpose or for a different purpose?

[Dan Dickerson, Director of Administrative Services, ACCD]: It's a different purpose. Okay. And that's because the the way the money had previously been sent to us, it was pretty limited. The scope of the program had ended. And so we were just sort of sitting on this and we could have gotten it back and had to go to sort of general use, but we thought, well, if we put it to MER, it sort of keeps it in the same universe, but it broadens the scope and would allow us to continue working within that realm.

[Rep. Michael Marcotte (Chair)]: There's language in the budget document for that.

[Lindsay Kurrle, Secretary of Commerce & Community Development (ACCD)]: Yes. And I just wanted to add, I mean, commissioner Farrell can talk more about it. But one thing about MER is it really helps us keep maybe folks that are housed a little bit vulnerably from losing housing and contributing to our houseless population. So again, we're oversubscribed every year in that program. And so we feel that this money will be best used to put toward this program, not creating a new program and not just dumping it somewhere else. Commissioner Farrell will talk more.

[Dan Dickerson, Director of Administrative Services, ACCD]: Slide seven is basically the same as slide five, except we've added in a little bit of one time money that we're asking for. And so that takes our budget up to the 75,160,000,000.00.

[Rep. Michael Marcotte (Chair)]: What's the increase to your base budget, 3%?

[Dan Dickerson, Director of Administrative Services, ACCD]: It's it ends up being on the on the general fund side, I think we're closer to I think we're closer to 4%. And that's simply because we had put together a budget that that kept us at 3%. And then in December, we always find out about health benefit changes and internal service fund changes like fee for space. So that drove it up a little bit higher. So with that, I'm going move into the administration division. So just to give you a high level overview, as I noted, this is where the secretary and deputy secretary reside, and then also our administration team. So finance and contracts and grants function. We have 15 for FY '27, we'll be at 15 total positions. One, you know, as I go through this presentation, I'll note that this agency has been very reliant on many, many limited service positions that were created when the ARPA funding came through to implement those programs and those positions will begin phasing out in FY twenty seven. So the staffing that I show here basically shows where we are after those positions expire. So currently we have two limited service positions that are supporting the important work that we're still trying to get to the finish line on.

[Rep. Edye Graning (Vice Chair)]: Before you move on, how much of those positions are vacant right now?

[Dan Dickerson, Director of Administrative Services, ACCD]: We have one vacant position. It's an exempt position, and it's sort of been a little bit of back and forth with the folks that approve of the filling in those positions and then finding the right person to fill it. But we do have one vacancy currently.

[Rep. Edye Graning (Vice Chair)]: How long has it been taking?

[Dan Dickerson, Director of Administrative Services, ACCD]: It's been about six months.

[Lindsay Kurrle, Secretary of Commerce & Community Development (ACCD)]: Can add a little bit about it. We've made a couple offers and just haven't been able to meet at least one official offer, meet the salary demand. And another one just was not looking to go in that direction, so to speak. So it's not for lack of trying. Still very valuable position to us that we plan to fill it very soon.

[Dan Dickerson, Director of Administrative Services, ACCD]: Yeah. By and large, at least with our permanent positions, when we have vacancies, those tend to fill very quickly. And so as an agency, we have the one vacancy within admin. We have a vacancy within DED. I think that's it. I think DHDD is fully, as far as permanent staff, fully employed, and tourism marketing is as well. So we're in good shape. Yeah. So, this is a sheet that we always walk through every year with the Appropriations Committee. This is our quote unquote ups and downs. And so, I'll just sort of go through this quickly for administration, and then we'll have the different departments or the different commissioners come up and go through and then I'll go through the subs and downs. So what you see on this general fund column, starting from salary wages to really workers' comp, those are all increases that are completely out of our control that are driven by, you know, the folks that are here long term, they get a cost of living increase each year, they get step increases each year that recognizes their time in service. Our health premiums typically go up every year, sort of out of our control. Retirement is changing a little bit. And then our workers' comp premium, that's driven by decisions made at the agency of administration. So also out of our control. When I build the the ACC administration budget, I usually assume roughly 2% of our salary benefit costs as vacancy savings. So I basically subtract that out of our costs, assuming that we will have a vacancy during the year and that would save us a little bit of money. So that's why you see a little bit of movement there. You know, one miscellaneous change. There's this new allocation that now goes to the governor's office. If you asked me to explain what it was for, I would have no idea. Maybe we get donuts if we show up there at some point in time, but I don't know. I don't get to go there. And then finally-

[Rep. Edye Graning (Vice Chair)]: So one thing, sorry, one thing we've been hearing is that as the federal positions contract, the jobs that people have in Vermont, they're changing their insurance choices to cover more families rather than individuals. I'm curious if you're seeing that.

[Dan Dickerson, Director of Administrative Services, ACCD]: That is a really good question, and it's the the disconnect between when we're building the budgets and when those decisions were made is significant enough that if it's something that I could analyze now because we're past January 1, but when people make those decisions in December, in November, we've already got the budget done. And so we can't really account for that until the following year budget. So it's

[Rep. Edye Graning (Vice Chair)]: not reflected in this, but information

[Dan Dickerson, Director of Administrative Services, ACCD]: is out there now. I could it's something that I probably should look at and just see like, okay, where did those health change? But but this reflects where they would have been in calendar year '25. But that is a good question. And I suspect there probably will be some of that within our agency. So this larger, this negative 34,000, we had partnered with the Department of Labor for a few years to contract. They held a contract with Dun and Bradstreet, and that firm provided us some information on, I believe, demographics and housing information. And then starting in FY twenty six, we actually budgeted to share half of the cost for this contract. And after that, Department of Labor did not renew it. And so now we're dropping those costs out of the budget. And that's all the information I have on on that, but it's just something where, you know, we had partnered with them and then they they didn't renew the contract.

[Rep. Michael Marcotte (Chair)]: You're looking elsewhere to gather that information, that data?

[Dan Dickerson, Director of Administrative Services, ACCD]: The Department of Labor has they have their labor market information division. Matt Barowitz leads that. And and so I think I think they're able to access a lot of the data and analyze it in house. I can you. Yeah. We've actually not shown here. This is something that we had built in that's not actually changing, but we have set aside some money in our budget in the event that we ask the Department of Labor to do some work for us, we could then pay them for it as a courtesy. On the operating side, I mean, most of these numbers once again are things that are out of our hands as far as the insurances, what we pay for the vision accounting system, what we pay for our human resource services. You know, I will note that the monies that we pay agency to ADS for technology services have gone up a lot. And I get that because it's a complicated universe and there are a lot of security issues and a lot of technology issues that we're And I wouldn't call them issues. Just technology is constantly changing and we have to make sure that we keep up. But it definitely, you know, when we're told to stay within the 3%, it's tough when a big chunk of that goes to another agency. But like I said, that is what it is. So that's a piece of the growth here. Our rent goes up annually on the space that we rent at National Life. And then finally, under grants, we have an ongoing grant agreement with the UVM Census Data Center. They requested a minor increase. And when we did look back, we hadn't actually adjusted for inflation since 2020. So we gave them additional. We're offering we're budgeting an additional 10,000. So currently, the grant is 50,000. They would go up to 60 per year. Yes. Yeah.

[Rep. Monique Priestley (Clerk)]: I have a question. And then I know you said it's another agency, so it might be hard to, but the, the 80, all the ADS line items, and I saw it throughout the entire presentation, but, and also I think when, just anecdotally heard from members of the digital infrastructure committee that when they saw the ADS budget this year, was much lower than in the past. And they explained that they were basically disseminating all bunch of different chunks of their own budget to other agencies. So I'm guessing that's like what we're seeing here. But I'm just curious if you guys could talk through who decided that, how has decided communication of that and, like, especially as I'm assuming we're gonna keep seeing this on other people's budgets too.

[Dan Dickerson, Director of Administrative Services, ACCD]: I'm I'm going to approach this very delicately because, you know, ADS is our state government partner and they do great work. But as a finance person, the communication as to what was changing with the budget was minimal. And so it all sort of came to us at the last minute and then we we were told to build it in. But the way our relationship with ADS works is sort of in a few ways. So one is we pay what's called a standard charge that gets applied to all agencies based on their staffing. So a per person charge for using Microsoft three sixty five, a lot of the standard platforms that we have access to. And then on top of that, there's what's called a service level agreement where ADS would incorporate other needs that may be more specific to a given agency. And then on top of that, they would charge for their hours that were sort of above and beyond. If we called and had a help desk request or if we said, Hey, we're looking at making this investment in a grants management system, then they would bill us hours for those types of things. So there's really like multiple ways that we could pay ADS for either services or software. And what I can't tell you at this point is what I can tell you for FY '26, but what I can't tell you for FY twenty seven is where where those costs are in those three buckets. We just never really got that communication. And it's it is a little frustrating, but I also understand, like I said, it's a it's a rapidly changing universe and they're obviously our partners. And, we want to make sure that we have the technology support we need. But think that's probably about as much as I could tell you without having more information from the source.

[Rep. Monique Priestley (Clerk)]: One follow-up. And thank you. And I understand this is, like, yeah, a little bit of an unfair question, but also just trying to make sure we're having this conversation. So for the ADS stuff, like, had asked joint fiscal to look into how much our tech budget was across state government, and they're actually not able to come up with that because it's dispersed throughout so many different areas. So I'm just curious if you're maybe even just thinking about past budgets, I assume it makes it much harder for you to be able to actually budget what your expectations, especially future projections. I'm just curious, would it be easier in your world if there was an ADS budget and then your budget wins, everybody knew what was going on in tech?

[Dan Dickerson, Director of Administrative Services, ACCD]: Yeah. I mean, without I don't try to speculate on Sure. Complexity of of ADS and how they build their budget. And so I would just say that, I mean, the positive is when we get the number for the ADS allocated charge and the ADS self agreement charge, that's static and that's a good thing. I think the uncertainty is around the time sheet, like the hours that they would spend doing other work. And I think that's where they've tried to make an adjustment to their model to make that a little easier to predict. But because we're only going into that for the, I don't know where it's going to weigh. I feel good about where they're trying to go and that they're trying to make progress and serve the other agencies better. So I appreciate that. That's the Oh, yes.

[Rep. Edye Graning (Vice Chair)]: We move on. I know you don't have a giant department and not so many employees. But with the return to work, did you have to get more space? Is there additional rent costs or anything like that? Or how has that I mean, you don't have a lot of vacancies, which tells me that it didn't impact that. Or if it did, you were able to hire effectively. So just I'm curious how that has impacted.

[Dan Dickerson, Director of Administrative Services, ACCD]: So at this point, we've largely not been impacted by the return to office. I will note that there's substantial backlog of folks that may or may not have requested either exemptions or other things that those get sorted out through the agency of administration. So I mean, I think, I don't know how many folks within ACCD asked for that, and it's something that I probably shouldn't be privy to. But to the extent that folks did and those decisions haven't been made, that could be a future impact that we don't know yet. But as it stands, we're constrained by, we're one floor of one building on the National Life campus. And so grow outward without taking space from ADS who shares the floor with us. And I think they're dealing with their own challenges as far as like they've got a huge workforce and they definitely did not have the space for everyone. So I think we're the space we have is the space we have. And what we have explored is going forward, where can we modify our existing space to maximize number of folks that we can fit? And we've got some plans that we've explored, although we haven't made any firm commitments just because there's some budget uncertainty and there are other things that we're focused on making sure that, you know, all this housing work, has the resources that it needs to be successful. We've built out or we're in the process of building out or incorporating many of our programs into a new grants management system called Intelligrants or IGX. And so that's been a pretty big investment. So we're at least for my putting my my hat on of being the the responsible person for ACC finances. It's something we've certainly explored. It's like, how can we fit better within our existing space? But we haven't made any firm commitments yet because by and large, we're okay right now. So that doesn't change.

[Rep. Edye Graning (Vice Chair)]: So I'm not You didn't directly answer. So I wanna just Okay.

[Rep. Michael Marcotte (Chair)]: I'm sorry.

[Rep. Edye Graning (Vice Chair)]: Is there money built into this budget that is an increase in rent costs? Nothing.

[Dan Dickerson, Director of Administrative Services, ACCD]: Nothing in this budget. Any we we have some we have some carry forward funding that we've relied on to, like I said, build out this grants management system. And we've got a little bit of money that we could use if needed for space modifications, but nothing that would be ongoing in nature.

[Rep. Edye Graning (Vice Chair)]: Okay, thank you. And then you mentioned the grants management system. Are there other systems that you're currently building? That's the kind of thing that I don't have.

[Dan Dickerson, Director of Administrative Services, ACCD]: Sure. That's the only one. So we've and the reason it's not in here is because we've we've tried to we've tried to find other ways of paying for the work so that we're not hitting the budget on an ongoing basis and requiring ongoing general fund. And so to the extent that we've had a little bit of leftover money here and there, we also received substantial ARPA funds that have helped us build out this grants management system. So that's been the primary source. But we're in the process of getting four existing programs onto that platform. So our Vermont economic growth incentive, our Vermont training program, the the CDBG program, and then the municipal planning grant program. So those are the first four that'll be on this platform. And then the new chip program just was just the application just went live is on that platform. They're still building out some of the back end pieces for reviewing the grants. But we more accurately, we just started that work of getting Chip onto that grants management system in October. And the fact that we got to January and we were able to do it, you know, get this done that fast is just, I mean, it's great testament to the help that ADS has provided to get us to that point. The folks within Betsy, Jess Hartley, who you've probably seen in here and her staff. And then support staff within the agency. I mean, it's been an all hands on deck effort to get Chip to a place where we could start receiving applications. But I would say without having the ARPA money that helped us get those first four programs onto the Agate and Telegrants platform, I don't know that we could have gotten there in the speed that we did with with Chittenden. So it's really wonderful. And I appreciate the fact that the legislature gave us this money to start this grants management system work. And it should simplify the user experience for folks that are applying to our programs because they'll now get sort of one user experience as opposed to different grant programs having different applications. Makes it a little messy. So that's the that's the administration budget. If there are no questions, I think

[Lindsay Kurrle, Secretary of Commerce & Community Development (ACCD)]: can jump out.

[Rep. Edye Graning (Vice Chair)]: Who's in?

[Dan Dickerson, Director of Administrative Services, ACCD]: With commissioner Jeffson to

[Rep. Michael Marcotte (Chair)]: Right.

[Dan Dickerson, Director of Administrative Services, ACCD]: Up and go through the.

[Rep. Michael Marcotte (Chair)]: Thank you.

[Commissioner Jefferson, Department of Economic Development]: At the easy task of basically thanking you for what you've already done and only asking for one thing. So we'll leave everything all the asks to someone else, but sorry. So Nick Rimbley is the deputy commissioner, and hopefully, he'll be able to come in. And maybe you've met him in the past. We have 21 staff members in our department. Of those, there are four that are limited service. And I'll explain what they're using their limited service time on. But if you go to page 11, hopefully, it's you're seeing the money there and some numbers. To the left is the CRRP and CIP awards that was during COVID. There was a lot of money and there were lots of grants given out to the tune of 155 grants. Those limited service positions have been working on those grants. They be sunsetting at the end of this year. So we'll be losing those staff members as they go out and monitor. There's a lot of monitoring. You think you've given out all the money. Now we wanna make sure the money was used as expected. So now those folks are going out and they're actually doing site visits, and they're making sure everything has happened the way we expected it to. The next piece of that is 421,000,000. And At

[Rep. Michael Marcotte (Chair)]: what point will we get a report back on how on what they found, that making sure businesses apply correctly. That's my homework. I

[Commissioner Jefferson, Department of Economic Development]: can answer for that. I would say I've seen their spreadsheet. It's great. So the next piece is $421,000,000, which is Brownfields funding that has gone out over the past several many years. This past year, we had 23,000,000 that went out. Having come from an RDC in the Rutland area, if there was not Brownfields funding, a lot of the projects would not be happening. We need to clean up the dirt before we can do the housing or whatever the other projects are, and that is what the that program does and has done an amazing job at it.

[Rep. Michael Marcotte (Chair)]: Some of that money used for the redevelopment of Rutland? Yes. Yep.

[Commissioner Jefferson, Department of Economic Development]: $18,300,000. It's it's very interesting to see how much money is coming into the state from exports. And those exports, a lot of them go to Canada. If you look at that number, you'll see 5,900,000,000.0 in parentheses there. And you might say to yourself, well, what what is that? Services is primarily intellectual property sales, our captive insurance industry, which is huge in the state of Vermont, the travel industry, engineering services, education services, those types of things. 1,200,000,000.0 is the, the VEGI program, and that is capital investment. Not only does VEGI work to increase jobs, but it also increases the equipment that is brought into the state. And that investment is very large over the last many years. The VEGI program hopefully will be sunset this year if that, or is the sunset will be eliminated this year so that we can continue that program. Better say that right. Yeah. Please no sunset,

[Dan Dickerson, Director of Administrative Services, ACCD]: Maggie. So,

[Commissioner Jefferson, Department of Economic Development]: we would like that to continue well into the future. And the Vermont Training Program, probably the easiest program that businesses can use to support education and training that I have seen ever. There are over 15,000 folks who have been trained or retrained since 2007. So this is the ask, the 150,000 for the International Business Development Program. We hire a Montreal based firm that is in the business of directing investment and getting lead generation for us. So they've put together a report, which I can share with you, that points out just how many leads they have, who they are, are they following up? And the question you might ask is, Well, is it working while? And the answer is yes. So we have businesses in Waterbury, in Burlington, and in other places around the state that have moved in from Canada. And this firm has helped us do that. Quite worth continuing. So is that report available now? That's something we'd like to see. Absolutely. You'll see several years on that report.

[Rep. Michael Marcotte (Chair)]: Yeah, I think it'd be good for us to see when we started the office and then all the leads and then leads that came to fruition. Kind of looking for an ROI on it.

[Commissioner Jefferson, Department of Economic Development]: Where's the data? If you go to the next slide, you're gonna see some of the program highlights as it describes it there. Going back to the Veggie program, you'll see the number of jobs that were created in just 2023. You've probably heard a lot about TIFF in the past, so I will just pause to see if you have any questions. You're probably wondering, is there another community out there that is is trying to get one? The answer is yes. Newport is actively working towards a TIFF project. Every community has a pit, and they're ready to get rid of their pit just as Rutland is getting rid of theirs because of brownfield money and because of TIFF the tip.

[Rep. Michael Marcotte (Chair)]: How many how many tips are available left?

[Commissioner Jefferson, Department of Economic Development]: So I think there are four left. They're they're testing me. I'm sorry. I think there are nine active, and there are four left. Thank you. Just hardly been would know that like that. Okay. And the CHIP program, you've heard a lot about that. Jess may have been in to talk about it. It's gone live. And we're very excited about that. You're aware that $2,000,000,000 worth of potential housing infrastructure will is has been made now made available because of that $200,000,000 a year. And the economic assistance piece, that's the CERP and CIP money that came as a result of COVID and flowed into the state. Those are where those temporary positions are now working through that process. Going to the next slide, this is the Vermont Training Program funding that's gone out in FY20.

[Rep. Edye Graning (Vice Chair)]: Before you move on, ARFRA money all has to be spent by the end of this year.

[Commissioner Jefferson, Department of Economic Development]: It does.

[Rep. Edye Graning (Vice Chair)]: And it's in the middle of our fiscal year. So we're gonna see some money in the budget, but it's just it's winding down. Are we gonna have it all spent? Is that Our

[Commissioner Jefferson, Department of Economic Development]: goal is to have all of it spent. So we have actively reached out to make sure that projects that said they're gonna use the money are gonna use the money. If they're not using the money, then we're clawing that money back. Then we go to people in finance and say, can we put that to a different project that's already been approved? We're not going out looking for new projects because that would take

[Rep. Michael Marcotte (Chair)]: too long.

[Commissioner Jefferson, Department of Economic Development]: We don't have time to do that. But because of tariffs and other issues for construction costs, there are some businesses that are saying if we had $50,000 more, we could now do this. So we will be repurposing that money so that we can use it.

[Rep. Edye Graning (Vice Chair)]: And that's what these limited service physician folks are focusing on in this.

[Rep. Michael Marcotte (Chair)]: That's correct.

[Dan Dickerson, Director of Administrative Services, ACCD]: And I'll note that back in this was the end of calendar year 2024, we worked with the recovery office to gonna use a recovery office term, but they helped us cure many of our remaining ARPA dollars and swap them out with general funds. So speaking specifically for DD, they're at the point where that money is gone and all that's left now is general fund, which is a good thing because now, you know, I mean, the hope is we complete everything by the 2026. But to the extent that, maybe a project goes a little bit long, which could happen, and I think that's a part of that exploration that's happening, it's not a hard and fast anymore. Maybe there's some flexibility because it is state funds. So that's a real positive for DD is that within the CRP universe, there's no ARPA money left. It's really just state general fund dollars now. And I think that's a great thing. And within DHPD, I think they're down to their last maybe 500 or 600,000. So I think I'm pretty confident that the ARPA will be gone. We're still certainly figuring out, okay, can we also get these state funds out the door in a timely manner? And that's, I think, like I said, we're still working on that. But ARPA is almost entirely smack at this point across the agency.

[Rep. Kirk White (Ranking Member)]: Thanks very much. Question for you, I think is similar to a question I had for other folks. I'm having trouble understanding. I mean, I understand for each of the departments, there's an increase or a decrease overall. I'm having trouble sort of fitting in the various programs we're talking about in terms of what the change is, I guess, and it's sort of either up or down or whatever. And also, sort of within the context of what the priorities of the agency are. Obviously, some departments are seeing increases. But it's hard to see from the spreadsheet, you know, how much. And some have seen decreases and without giving any opinion on any of that, it'd just be nice to what those numbers were by program as opposed to these kind of categories. And maybe that's something that you're gonna develop later on.

[Dan Dickerson, Director of Administrative Services, ACCD]: I guess to step back for a moment, I think the tough job of communicating all the different moving pieces is that, you know, what's what's under I guess what's primarily under consideration is we've we're requesting funding in state fiscal year '27 to support our ongoing operations. But in a lot of cases, like with CRP, this was a one time appropriation that we received many years ago. We're not really asking for a change up or down one way or the other. It's money that exists that we've received that we're trying to just slowly, actually rapidly spend down. And so it's, you know, other than us giving you sort of a status update of where things stand with that program, you're not gonna see any numbers one way or the other, just because we're not asking for any changes to that one time appropriation.

[Rep. Kirk White (Ranking Member)]: Right, some of them are changing. Some of the program amounts are changing.

[Dan Dickerson, Director of Administrative Services, ACCD]: Yeah, and you would see those in the spreadsheet. It's just most of those, I've only gone through administration at this point. We only do very limited granting and I guess programmatic work beyond supporting other agency staff within that budget. So once we get into the ups and downs for DED, DHCD and tourism and marketing, you would see how some of those programs may be changing in our ongoing annual operating budget.

[Rep. Kirk White (Ranking Member)]: I'm just interested in sort of how you how you made your priorities in terms how you develop your priorities in Flint. Our

[Commissioner Jefferson, Department of Economic Development]: current priorities are to maintain the programs that are working and that are in place and the new one, Chip. So we're looking at supporting housing. And a lot of what we do is supporting that. So and part of that is workforce training and education, which is part of the the Vermont training program. When you go through our budget, you won't see a lot of increases necessarily. We're not adding staff, but we are maintaining the programs that are on on these slides. There's a lot of federal money that comes in as a result of the programs that we offer. For example, the APEX program that is later in the slides, that 60% of the funding comes from the federal government for that, which is a really good slice of the pie. And I'm not answering your question. I'm just talking around here.

[Rep. Kirk White (Ranking Member)]: Thanks, Jack.

[Commissioner Jefferson, Department of Economic Development]: So Vermont Training Program, we've talked a little bit about that.

[Dan Dickerson, Director of Administrative Services, ACCD]: I got one more question on the hypofranny.

[Rep. Michael Marcotte (Chair)]: If we, or is it too early to know if the federal government's gonna try to claw any of that back?

[Dan Dickerson, Director of Administrative Services, ACCD]: It didn't happen in the recently passed federal fiscal '26 appropriations bill. So unless the majority party in Congress decides to do another, I think what they call reconciliation bill that can pass on a party line vote. Maybe they try to claw back money then, but I don't see another vehicle presenting itself immediately. So I I mean, I think we're gonna get most of the way to the finish line before there would be a risk.

[Rep. Michael Marcotte (Chair)]: I think, you know, the fallback would be if we agreed something that shouldn't have been appropriated. Just thinking back of the days when we were pushing this money out the door, there were some concerns from some that we may be pushing it too fast and we didn't meet the

[Dan Dickerson, Director of Administrative Services, ACCD]: Yeah, that's haven't heard anything. It's quite possible that the the federal auditors come calling have been you know, the hope is that across state government enterprise, we've got the support that we need to So far, we justify those expenditures that we need.

[Commissioner Jefferson, Department of Economic Development]: Thank you. And as we've seen, anything's been possible. But we're trying to get the money out so that there isn't money in that pot to claw back. And we also paid Guidehouse a

[Dan Dickerson, Director of Administrative Services, ACCD]: lot of money to help us think through those challenges. Remember that. What complies with the the ARPA legislation doesn't. Yes.

[Rep. Michael Marcotte (Chair)]: Thank you.

[Commissioner Jefferson, Department of Economic Development]: Another federal program is the international trade program, the STEP program. And that you'll that supports, businesses with marketing and international trade. And you'll say, well, is it working so that when they go overseas to these trade shows, is it actually working and how much are you giving them? It's not a lot of money when we're giving $5,000 or $6,000 to a business to go overseas to do work. And you'll recognize businesses such as in Rutland Town, Ann Clark Cookie Cutters, 7,000,000 cookie cutters a year. The only other competitor they have is the entire country of China, and they have used this program. Cabot Hosiery, which is in Northfield, Liquid Measurement Systems in Fairfax, Vermont, Natural Coatings, and Hardwick. So there are a lot of different companies in a lot of different sectors that are using that that funding. And then there's Northern Borders. You probably saw recent, announcements that came out. We are very fortunate to receive the amount of money we received through the Northern Borders Commission, Regional Commission. The governor has worked very hard and is on that, task force, and he works hard to bring money to Vermont. Then you'll see the captive insurance industry. Another announcement went out. We have 707 active captive companies, in the portfolio in Vermont. There are 500 jobs that have been created. And in just one year, $33,000,000 worth of fees came into the state of Vermont to pay the staff who's doing that stuff. But also, there's money left over. And so that goes back into the the general fund.

[Rep. Michael Marcotte (Chair)]: There's dollars that we received that are going to the ED as well to Britney's.

[Commissioner Jefferson, Department of Economic Development]: Money to deep Britney's salary. For Britney's salary, her marketing. And quite frankly, she's amazing at that, and that's why a lot of this is happening. Yep. Then there's Apex, and that is the connector between government contracts and Vermont businesses. And you'll see the amounts of money there that are brought in just in one year through government contracts and the number of businesses involved. So the money that is in the budget right now supports these programs, and we would like to have those continue. And was that the last slide, Dan? I believe so. Can we jump to the DED ups and downs?

[Rep. Edye Graning (Vice Chair)]: I was gonna say, so, Dan, the kind of thing that's going to be in the book that we'll see tomorrow is gonna show us how these programs are broken out, how much increase year on year, all of the pieces. Because one of the questions that's really hard for us to evaluate is which programs are being run, how their return on investment is. Are there duplicative programs? Maybe not within ACCD, hopefully not, but maybe they are. But are they across government? And those are the kinds of things. ACCD is running a program that is working really well and giving a great return on investment, but one of the other agencies has a similar program that isn't quite doing that well, why aren't we using the program that's doing well and making sure everything is going through that, simplifying rates. So those are the kind of things that are really hard for us to even know when we get a budget that looks like this.

[Dan Dickerson, Director of Administrative Services, ACCD]: Yeah. So I can say that the documentation that you will receive tomorrow will have additional detail on the breakout by program of how we allocate funds, especially as far as it concerns granting. So we do a separate breakdown of here all the different grant initiatives that we have, here's how they're funded compared to the prior year. Here's how we requested it be funded this year. And I mean, the one thing that that wouldn't show you is, I mean, we do work within the ACCD universe. I know the commissioners are all working across state government on coordinating how we, you know, speaking of housing specifically, how do we as an entire state of Vermont government do everything we can to get more housing online. And so I know those conversations are happening, but what those documents are gonna show is us making a recommendation on here's what we think is duplicative and here's what we think isn't duplicative. Because I think that wouldn't, for ACCD to say that it wouldn't necessarily be fair to other agencies that maybe think their work is important. I think that's a decision that's made at the 5th Floor Level within the pavilion of, by its management looking across the state of Vermont and supposed to be reviewing those types of redundancies and eliminating them or proposing, I guess, to eliminate them. And so what I provide you isn't necessarily gonna tell that story, but you'll at least be able to see this is what we do on a more granular level and hopefully allow you to at least Maybe it won't give you all the answers, but it could trigger questions that I'm certainly happy to answer if you have follow-up requests for info. So I don't know if

[Commissioner Jefferson, Department of Economic Development]: that's helpful. And and we call that braiding funding. So if we're looking at the Vermont VTrans and our department and marketing and housing, we we create a stack. And that stack gets things done. And so it is important that communication happens, and it's happening.

[Rep. Edye Graning (Vice Chair)]: And then those federal programs that you mentioned, I'm assuming that the federal money is covering all of that, or is there state money covering some of that? Those pieces too is hard for us.

[Dan Dickerson, Director of Administrative Services, ACCD]: Yeah, and some of that you will see filter through here in this ups and downs we get to, well, we're on DD now, but also for DHCV. So what I can say at a high level is at this time, there's only one federal source of funding that's going away in FY '27, but that's not so much driven by changes with this administration. It's something that was sunsetting to begin with. And so that's the office of economic advancement, it's initiative within the department of defense. So that's a program that DD was managing. And so you'd see within this ups and downs where some of that OEA spending authority is falling out because that program has ended. But other than that, what we know or what we're assuming at this time is our federal funding, our other sources of federal funding will continue. However, all those sources are flat, Flat as a pancake. And so the challenge that creates is when there's staff managing those programs, obviously those costs and benefits continue to rise and those have been pressures on our general fund dollars. And so when we work on the budget year over year, we now have to, you know, not only for our 100% state funded staff initiatives, have to figure out how to budget those, but also any growth in staff and administration costs for federal initiatives that we think are important to continue. We now have to support those with the limited pool of general fund dollars. So that's something challenging that I've certainly dealt with. I mean, I've only been at ACC for a few years, but I think every year I've been there, it's been pretty stagnant as far as the federal funding that's coming in, at least for ongoing programs. I'm certainly thankful for CDBG disaster recovery money that we got. That's fantastic. It's going to make a huge difference. And there are some other sources that are new, but more one time in nature that we're fortunate to have received. But as far as our ongoing federal programmatic dollars, those are flat and it's a challenge for us.

[Rep. Michael Marcotte (Chair)]: Commissioner Harold?

[Dan Dickerson, Director of Administrative Services, ACCD]: Well, if you want to stay up here, I'll go through these and if they have questions that I programmatically that I can answer, then I can't answer. So I'm going to focus on one column at a time and just work my way down. So on the general fund side, just like with administration, we've got costs that are sort of, you know, cost pressures that are sort of out of our hands as far as salaries, benefits. Moving down to, there's a line that says negative 130,000. This is what we what I'm calling a technical correction to what ended up in the final DD appropriation last year in Act 27. If you recall, we had come to the legislature requesting 350,000 of base money for international business recruitment. And that sort of came out, went back in, came out, went back in, and then finally ended up as a smaller one time appropriation. But when it came out of the operating budget, the budget conference committee took 150,000 out of our grant funds when really they should have taken 150,000 out of personal services and operating. So this negative 130 and then a negative 20 and a plus 150, that's basically recalibrating that funding to where it needs to be. So it brings the 150 back into grants and takes it out of where it should have. So it's, yeah, it's just a technical correction. Moving down, with the general fund that we were, or general fund growth that we were allotted, DD has been able to increase a little bit of its budget for, you know, attending travel and trade shows to network and work with other, you know, potential business partners, a small increase in our miscellaneous operating on general fund side. And that's really it substantively for the general fund. So I'll move over to this special fund category. And there, I'll just say that there are sort of two changes happening under special funds. So going back to the captive program that Brittany Evans manages, Her program is funded by the captive insurance regulatory special funds. And that's fed by the, I think the captive insurance premiums tax. Over the past few years, what has occurred is the funding that comes to DD for the work that we do in the captive universe has been relatively flat, which has been a little bit of a struggle because Brittany obviously wants to be able to maximize the impact that she can have on marketing. Vermont is a great place to do business for captive industries. So this year we were finally able to convince the fifth floor to allocate a little bit more money for her program. And so on the salary wages side, and then down here, this 10,968 for captive, that's that little bit of increase that we got to do a little bit more to market Vermont for captive industry. And it's about it's I think it ended up being about a 3% increase over over last year. So but we'll take it. And then the big number, this 150,000 under the statute that authorizes the TIF program, we, as part of a TIF application, we are able to contract with an entity that could do an economic analysis of a specific project and sort of ascertain whether it makes sense financially or doesn't make sense financially. And so we're now extending that to the CHIP program, which we anticipate will be a much busier program as far as the number of applications flowing in. And so this $150,000 essentially money that we'll bring in, we're asking spending authority to then send it back out the door. And so when a municipality applies and submits a CHIP application, they're essentially going to pay us a flat amount of money that we expect that they would end up paying for this economic analysis because we can bill that to the applicant. And then we pay it to the person that or the entity that does the analysis. In this case, we've been working with Jeff Carr, who's our executive branch economist. So this is simply money that's coming in and going right back out the door again. Yeah. On the federal side, two things changing. So most of this decrease is just the OEA funding falling out. And then one thing I had failed to mention is on the brownfield side, the federal program isn't ending completely, but we don't currently have an active grant award with the federal government. And so at this time, we are not in need of spending authority, which I Sorry, I say that like it's a good thing. We're not asking for spending authority because we don't currently have an active grant award. The hope is, is that later in calendar year '26, we can send an application to EPA and hopefully get some new money coming in to support that program. But currently, I think we're on the cusp of obligating the last bit of federal money that we have, and then we don't have an active board to to keep spending. So in the budget state dollars for brownfields? Not this year. And then and then interdepartmental transfer, you know, the only thing I'll note here is when with these ARPA positions, we had been receiving some money from the recovery office to support the cost of the position, I believe the money that they had to support limited service positions statewide that were doing ARVO work ran out. And so we then had to bring those positions onto what remained of our CRP, our programmatic dollars to support the cost. So we no longer need that interdepartmental transfer spending authority because we're not getting money from recovery officer. That's the DD operating budget.

[Rep. Michael Marcotte (Chair)]: Are there any reversions in DD's budget that are going back to to to new budget? They're not being spent within I mean, reversions that are being spent within your own budget, DD's. I'm wondering if there are any other reversions that are going in building this new budget outside of DED.

[Dan Dickerson, Director of Administrative Services, ACCD]: Yeah. That's a good question. So we between DED and the administration division, there was leftover money from the BGAP program that will be is proposed to be reverted in the governor's budget and put back to use, you know, statewide as part of the general fund bucket.

[Rep. Michael Marcotte (Chair)]: But that BGAP money was supposed to go to BETA.

[Dan Dickerson, Director of Administrative Services, ACCD]: Some of that remaining money did go to VITA, but we had more than that. And so the remainder, I guess sorry. I I'll correct. So 2,000,000, I believe, went to VITA, but we had, I think, I'll have to get the number for you, but we had more than that 2,000,000 left. And so that money is being reverted in the governor's budget construct and would be deployed elsewhere. At the time that we built last year's budget and proposed capitalizing VIDA, we we thought we would have spent more of what ended up remaining, and so we only asked the 2,000,000 go to VIDA.

[Rep. Michael Marcotte (Chair)]: Because there was there was some I think there were some awesome I I think you thought that money was encumbered and it didn't be and then it didn't pan out or

[Dan Dickerson, Director of Administrative Services, ACCD]: Yeah. I think we still we were still dealing with active applications and receiving applications. So we want to put ourselves in a position where we wouldn't have enough after sending the money to beta to support grants. And so we were conservative with what we allocated for beta, but we ended up we had more. So that will be reverted in end of the spectrum.

[Rep. Michael Marcotte (Chair)]: Yeah. We'd be interested to know what that amount.

[Commissioner Jefferson, Department of Economic Development]: So I think Yeah.

[Rep. Edye Graning (Vice Chair)]: No. I think I think this is exactly right.

[Rep. Michael Marcotte (Chair)]: Kirk, did you have a question?

[Rep. Kirk White (Ranking Member)]: No. So that information will be in the budget document we'll get tomorrow? Type of information?

[Dan Dickerson, Director of Administrative Services, ACCD]: For each department, I have So we submit a It's essentially a spreadsheet that we submit to the 5th Floor as far as carry forward requests. So any monies that we have left over and they say yes or they say no. And in the case of BGAP, they said no, we're going to refer that. So you'll see that document.

[Rep. Kirk White (Ranking Member)]: We'll see that in that document. You.

[Rep. Michael Marcotte (Chair)]: Hey. How are you? Good.

[Alex Farrell, Commissioner, Department of Housing & Community Development (DHCD)]: Thank you for having me.

[Rep. Michael Marcotte (Chair)]: I think this is the first time that we've had you come in Oh, great. Talk to us about your budget. Well, usually, really we didn't have housing as our purview, but I think that's changed with all the issues of workforce and how we intertwined now with general housing. So welcome. Glad to have you here.

[Alex Farrell, Commissioner, Department of Housing & Community Development (DHCD)]: Thank you. Thank you, mister chair. Yeah. For the record, Alex Farrell, commissioner at the Department of Housing and Community Development. And I've interacted with a lot of you in the housing space because housing does touch your jurisdiction. It touches really everything that we're doing right now. And so just like to give a little bit of a caveat that when I end up in a committee that isn't directly a housing committee, I don't have the opportunity to cover the whole world of what we're doing in housing. So I don't want you all to have the impression that what I'm gonna talk about today is everything we're doing, but always more than happy to come back and keep talking about where our work intersects. So I'll touch on a couple places where I do think that this committee will have some interest. But first, I'll cover the department at a high level. So are a team of looks like in FY twenty seven will be about 40. That is reflective of losing what we anticipate to be seven limited service positions, and that is spread across all four divisions in our department. So you're looking at the slide deck, you'll see an organizational chart which shows you the four divisions of our department. You know, folks do forget that historic preservation and the state owned historic sites are within our departments and we have a great diversity of activities in our portfolio. It's a lot of fun, as well as a substantial amount of federal funds that we administer through the Vermont Community Development Program. The slide after that, there are some names that I'm not going to walk through but are good for you to have for your reference. This is the leadership team in our department, and we're all eager to help if you ever reach out. Now the next slide is our our primary budget ask, one of our two budget ask, but this is our base funding ask, and it's VHIP. Before I go into VHIP, do wanna pause. So you in in your inboxes, you'll see a stat sheet, one for VHIP and one for MER, just to give you some background data. But I like to always say at a high level, programmatic investments aren't necessarily where we move the needle in terms of the number of units in housing. It is really where we can round out the hard edges of the market or maybe correct for some of the flaws in our housing stock. Where we really move the needle truly in housing is things like, well, federal monetary policy, we can't influence, but things like land use and permitting, substantial changes there is where you can really move the needle in terms of hundreds of thousands of units. Same thing with the scale of investment that was enabled with CHIP. Obviously, we'll have to see. We're enabling investment, not making it, so we'll see what happens there. But that can move the needle. When we talk about programs, we're really trying to target a specific problem within the housing market. These investments will create dozens or hundreds of units in a year, but it's not necessarily the investments that are going to close our housing gap. Just for frame of reference, we produce in the neighborhood of 2,500 units per year, and what we need to be producing is more like 7,500 units per year, just to give you a sense of scale. Now the reason the Vermont Housing Improvement Program, VHIP, has really risen to the top of the administration's interest in wanting to make this a permanent program with base funding is because it's a recognition that it addresses a few of Vermont's unique housing challenges, which is we have a very old housing stock, and we have a lot of communities in Vermont with housing stock that is no longer adequate or safe to live in. What VHIP has done is said, let's look at the housing stock we already had, knowing we need to build new. We know that we need to build thousands more units every year, but we have communities like Rutland, Newport, Brandon. I'm sure everybody can think of that broken down house that once housed somebody, which no longer is because it's just not in any condition to house folks. 1,200 units over the last five years have been produced because VHIP has provided an incentive for property owners to either bring those units back online that have fallen into disrepair. It's given them the ability to split up their big farmhouse or Victorian from a big five bedroom single family home, split it up into a bunch of one bedrooms and two bedrooms. So that hits on another unique Vermont housing challenge. We're overhoused. Used to be in the sixties and seventies, our most common housing type sorry, household makeup was four people in in a home. By far, the most common household makeup in Vermont now is one in two people, and our housing stock doesn't reflect that. So VHIP has actually made more out of the housing stock we already have. That checks a lot of boxes for preservationists, for environmental conservationists, for private property owners, and for folks in need of affordable housing. VHIP caters towards folks who use housing vouchers by following HUD fair market rents. And if somebody chooses our five year covenant option, property owner is going to be rehousing somebody exiting homelessness, working with a coordinated entry provider. What has been great about VHIP and some of our early exit data has shown, these are property owners who would have never considered being affordable housing providers before. But because of this incentive and because it let them invest in their property, they are affordable housing providers now and they're staying affordable housing providers. Ninety six percent of those whose five year covenants are going to expire this year are going to keep their tenants and they're going to keep the same rent. Well, that's fantastic. They're under no requirement to do that, but the relationship has been built. And so VHIP is bringing more people into the universe of who is developing housing, who is an affordable housing provider, which is going to be my segue into the next thing I'm going to talk about. But before I do, I'll wrap up the VHIP topic just to say we have made do with one time funding tranches for a few years now because with ARPA we were able to make such substantial investments that with 10,000,015 million dollars coming in at a time, we could push a lot through and we were given limited service staff so that we could keep the program running. With limited service from the ARPA era expiring, we are now at at the maturity phase of this program where we need to put it in the base. We need to do that for a couple of reasons. One, Dan or Secretary Curley alluded to earlier, which is that we want to give predictability to our partners, to applicants, to municipalities, to communities who want to know on an annual basis can they rely on VIT and to what extent can they rely on VIT. The other is just the reality, it's staffing. There are now over a thousand covenants out there that we need to monitor and administer. And so without staff to do that, we're reliant on, I guess, the goodwill of folks to make sure that they adhere to these. We cannot seek permanent staff without base funding. This base funding will provide us an opportunity to go to the position pool to seek permanent positions. That's not a guarantee, of course, but it at least gives us the pathway to get this, and this base funding makes VHIP permanent. A onetime appropriation this year means VHIP is done after this year.

[Rep. Michael Marcotte (Chair)]: How many positions are you asking for?

[Alex Farrell, Commissioner, Department of Housing & Community Development (DHCD)]: It will be two. The manufactured home improvement and repair program made its way into the base budget last year, So we don't we don't have a new base ask for that this year. I'll cover that in a minute with our one time, but we were successful in getting a position from the position pool, one position to administer Merck, the manufactured home improvement repair program. So that that was a great success. I'm going to deviate from the budget conversation just for a minute to give you all a little bit of information on where our efforts intersect with your jurisdiction and where I think we are trying to answer the question of who is creating housing. So I'll hand these out if you want to take one to pass or maybe just split the deck here. This question of who is developing affordable housing and how we're trying to answer with our Homes four All initiative. Hopefully some folks here have heard of the Homes four All Toolkit, which was published in the 2024. If you haven't seen the Homes four All Toolkit, Chair Mahali is hogging several on his bookcase, and so I encourage you to go look at those, maybe even bring one down here. Homes four All Initiative is a three phase initiative, and what you're looking at right now is a description of phase two of Troll, which is let's bring that toolkit to life and let's build curriculum around what it means to become a small scale developer and to operate as a small scale developer. When I say small scale, we're talking about is ADUs up to four unit multifamily buildings. What we see a lot of in Vermont right now, we see large single family homes, right? So we see custom builders who do high end single family homes, or we see large developers who do big multi family development. What doesn't happen as much in Vermont is this small scale development. This is what we're trying to enable with this multi phase project. Phase two launching in a couple weeks at launching next week, I'm sorry, with our first training is this hands on training of folks who want to become small scale developers, giving them the tools and the knowledge to do that. In person workshops as well as online curriculum. So you can learn more about that here. The third phase, which I won't dive into much today, is bringing those to life with a catalog of designs that are going to be open source designs, 10 designs that any builder can choose to use. So save 10% off their budget right there by using our designs. And we're working with three pilot communities who are going to adopt those designs as preapproved in their residential areas. We are also proposing in our housing bill this year to make that statewide so that in residential districts across the state, those 10 designs will be preapproved for any small scale developer that wants to fill with those. So that's Homes For All in five minutes. Any questions before I move on?

[Rep. Michael Marcotte (Chair)]: They're always zero eight seven seven five tied into those. Right? That

[Alex Farrell, Commissioner, Department of Housing & Community Development (DHCD)]: that's right. Because elements of Homes four All touch off-site construction because we're asking for the designs to be both eligible for on-site and off-site, so we are very interested in that. I'm going to move on to our only one time funding request, is the Manufactured Home Improvement and Repair Programmer. Again, there's a stat sheet in your inbox if you want to look at more specifics on where those investments go. But again, this is a program that made it into the base budget last year. We are repurposing $800,000 that had been to essentially supplement FEMA investments where FEMA was coming up short and we're using this for essentially the same population, manufactured home communities across the state. The reason these are so important, it's for an average of just $7,000 per grant, we're able to keep precariously housed households a unit and make that unit last several more years. Right now, when we're in a race to get enough units online to safely house these precariously housed folks, buying four or five years in a unit and making that unit safe, healthy for these families is tremendous, especially in many parts of the state that are suffering from the greatest housing shortage, especially when it comes to homeownership. This is a path to homeownership for a lot of people who can't get a traditional mortgage. These are chattel loans who wouldn't be able to afford the mortgage for traditional stick built home. So this creates a lot of opportunity, but this also invests in manufactured homes communities itself to make the whole community healthier, safer. I've listed here other efforts that are underway. I'm not going to walk through the list. Some of them, in fact, one of them you're going to hear about tomorrow, the Virta report, but more than happy to

[Dan Dickerson, Director of Administrative Services, ACCD]: come back and talk about more of our efforts another time. Dan, ups and downs. Sure. So the DHC, the ups and downs, because there's a lot going on, it's broken up over two pages. I think you're probably pressed for time. So I was just going to focus on page two and really just drill down on some of the grant changes because that may be what you're more interested in seeing. But if you have questions on other pieces of this, I'm happy to answer them. But I just know you guys have a lot of things to do with. So I want to be quick. So on the grant side, for general funds, DHC has, over the past several years, been issuing what's called downtown vibrancy grants for municipalities that join the downtown program. We anticipate four new designated downtowns in FY '27, and we intend to provide $25,000 grants to each one. So that's there. The big number here is the new base money that we're requesting for VHIP, 3,750,000.00 to issue grants, paying 250,000 is for staffing. And then MER, we got 2,000,000 total for MER. In order to staff that, we shifted 100,000 of that money from granting to personal services so we could support the position costs. On the transportation fund side, we have been issuing grants for EV support equipment build out, primarily I think around residential units or within residential units. Those grants have been We've had funding for those grants courtesy of one time appropriations that have come to us, But the statute now dictates that fees tied to EV vehicles and to some extent hybrid vehicles are supposed to go from the T funds to DHCV to continue providing these grants. And so what we have here is an appropriation from the T fund to back up basically what the statutes directed. On the special fund side, the the latest revenue forecast for the state did anticipate some increase in the property transfer tax revenues. Those revenues, to some extent, feed grants that we provide to the RPCs and to municipalities. So you see this 161,000 that's supporting some ingredient and increased granting activity. And then the big number here, this 18,000,000, this is the remaining money from disaster recovery award that we plan to grant out. Yeah, we have planned to grant out in FY twenty seven. Although the reality is there's gonna be a meeting in April to pick basically who will receive the funds, but then those grant agreements have to be drafted. That will probably stretch into the next fiscal year. And so the spending authority is to to tie those funds up in FY '27. And then the interdepartmental transfer side, you you heard a little bit about our homes for all eight zero two homes. The only reason we've been able to perform this initiative or implement this initiative is courtesy of one time money that AHS was kind enough to pass along to us. It was about $1,500,000 We've spent some of it in prior years. We had anticipated spending $600,000 in FY '26, and so that money will be gone in FY '27. And then finally, EVSE, the way we, I guess, constructed the budget in FY '26 for this money, it was essentially gonna go to to AOT, and then they were going to transfer it to us to then provide grants. We're no longer gonna do it that way because it's a little bit cumbersome. So instead, we're now getting a direct appropriation from the transportation funds. So the funding, the spending authority comes directly to us. I know that was very fast. Any questions on all of that?

[Rep. Edye Graning (Vice Chair)]: Have a question that you didn't say. Commissioner, you've said you had seven limited service positions that are going away. Were any of them unfilled? Were any of them vacant? And are any of them, they were all filled? Are any of them converting to longer firm positions?

[Alex Farrell, Commissioner, Department of Housing & Community Development (DHCD)]: So the pathway for that is to go to the position pool to seek a permanent position. In order to do that, we need to point to permanent funding. That doesn't exist yet. So if we get the HIP funding, we will seek two.

[Rep. Edye Graning (Vice Chair)]: For that. Okay. That's that two fifty.

[Dan Dickerson, Director of Administrative Services, ACCD]: Although one of those limited service positions is for the MER program. So now that we do have a permanent, we can transition. That's true.

[Rep. Edye Graning (Vice Chair)]: Position will become permanent. So if all the stars align, three of the seven positions are going to become permanent.

[Rep. Michael Marcotte (Chair)]: That's right.

[Rep. Edye Graning (Vice Chair)]: You have any vacant Of the 40 positions in your department, do you have any vacant positions?

[Rep. Michael Marcotte (Chair)]: Any again, in in your department, any reversions that are going into not staying within your department, but going into general to build the budget?

[Alex Farrell, Commissioner, Department of Housing & Community Development (DHCD)]: I mean, technically, the funds that we're requesting for MERT was was a reversion.

[Rep. Michael Marcotte (Chair)]: Yeah. But that's that's within but Yeah.

[Dan Dickerson, Director of Administrative Services, ACCD]: That stays within the HDD. Yeah.

[Rep. Michael Marcotte (Chair)]: Versions that are going now being qualified.

[Dan Dickerson, Director of Administrative Services, ACCD]: So we we had a couple of very small unspent amounts. Think in one in one one time bucket, it was, a thousand. I think in another, it was 5,000 that we just weren't gonna spend. So other than that, it was just the 800 and it ended up being 831,000. 800 that will come back to us from 31 will stay. We graciously donated 30,000. Yeah. To the cost.

[Rep. Michael Marcotte (Chair)]: I think we've gotta move on to our next. So we'll bring you back next week, and we'll have all the numbers. That's I I this was very good. This is probably one best one that I've sat through in this committee. So thank you for that, and we'll come back and look at the numbers after you presented them to the appropriations.

[Dan Dickerson, Director of Administrative Services, ACCD]: And I and I apologize for not having all the the detailed information for you today, but but I look forward to giving it to you ASAP.

[Rep. Michael Marcotte (Chair)]: Well, I'm happy with it. So thank you.

[Dan Dickerson, Director of Administrative Services, ACCD]: Thank you all for your time.

[Rep. Michael Marcotte (Chair)]: Informative. Thank you. So

[Commissioner Jefferson, Department of Economic Development]: we have no time for Heather?

[Rep. Michael Marcotte (Chair)]: Not today, next week.

[Commissioner Jefferson, Department of Economic Development]: I will sharpen my pencils.

[Rep. Michael Marcotte (Chair)]: Alrighty. Well, I think we'll have more numbers then too.

[Commissioner Jefferson, Department of Economic Development]: Hard to have fewer. Okay.

[Rep. Michael Marcotte (Chair)]: Noted. Do have anybody else that's

[Rep. Edye Graning (Vice Chair)]: Susan's out there. Who's out there? We wanna come in. It's just Susan. Don't know. Todd's coming back. Why

[Rep. Michael Marcotte (Chair)]: don't why don't we go off live for five minutes? Everybody take a five minute break. Five minutes? Look. I don't