Vermont Legislature SmartTranscripts:

[Michael Marcotte (Chair)]: Good morning, everyone. This is the Vermont House Committee on Commerce and Economic Development. It is Wednesday, 05/27/2026 at 09:00 in the morning. So we are here to hear from Doug Fryman from the administration. He's our ACRA guru. He has some information for us on the ACRA funds that we received from the federal government, how they were dispersed, and, hopefully, we didn't have to send any back. Doug, good morning. Thank you for joining us.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: Thank you for having me, mister chair. So for the record, Doug Farnam, chief recovery officer for the state. In August 2023, I was appointed chief recovery officer, but I retained oversight of the American Rescue Plan Act state fiscal recovery funds primarily because I think no one else wanted to do it.

[Michael Marcotte (Chair)]: You're doing such a good job, and nobody wanted to.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: It's I certainly never thought I'd be still doing it in the closeout period. You know, five years seemed like a long time when when it started. So for context, for anyone that's watching this, the American Rescue Plan Act of 2021 allocated $1,049,000,000 to Vermont. The Vermont legislature appropriated those funds primarily because unlike normal federal grants, are single purpose and you don't really have a lot of say over how it's used, these were a very unique award that could be spent in a number of different ways, Broadband, water and sewer, public health investments, IT modernization had, many, many uses, including, kind of a catchall revenue loss classification that allowed states to basically treat it almost like it was their own funds, because of the economic impact of the pandemic. Those were appropriated in 2021 and 2022. Many programs ran to completion in '23 and '24. Those were primarily the human services style programs, the ones that were immediately linked to the short term impacts of the pandemic, and about 70% of the billion dollars was invested in infrastructure style programs, water and sewer, broadband, housing, and many of those dollars are water still being expended at this point in time. So not completely unforeseen, because the permitting process and development in Vermont takes a long time regardless of what type of development you're looking at. It's going to take a long time. So we were always nervous about the five year timeline related infrastructure, but wanted to make smart investments. One thing that happened in 2024 sorry. I think it was in the 2024 session or the '23 session. The legislature gave AOA the authority to reallocate expenditures of ARPA to, the most optimal eligibility category for federal purposes and then take any, displaced general funds and restore them to the original program. So, basically, the deal was you can optimize eligibility, reduce risk as much as possible, but you have to, dollar for dollar, restore funding to the programs that were legislatively created. That also helped with some programs where they weren't quite possible under the federal rules, because exactly what we wanted to do just wasn't didn't quite fit in the box. That was most prevalent in the climate change category where there was no climate change category of the federal rule. So we always had to figure out, okay, is this an income based program or is this some other way to get at the objective of the legislature? But we, in the agency of administration, shifted around about $240,000,000 in December '24. I spent that from a federal perspective in that month and then took the general fund that was freed up and restored it to those original programs. There were also some reversions of programs that were significantly behind their trend lines for being able to expend. Those reversions went to a hazard mitigation, the Community Resilience and Disaster Mitigation Fund to provide funding for hazard mitigation and federal match primarily, but a little bit will be left over to do state funded projects. So that's the general landscape where we had to obligate everything by 2024, the end of twenty twenty four, and we have until the end of this year to expend. And that doesn't mean just send a checkout. It means have the invoice, have the have it fully documented, have everything properly tied up in our state bureaucratic systems, which is sometimes more of a challenge than we would like to make sure it makes its way through all the right processes and approvals in time. So that's what this summer, as I said, I retained the ARPA oversight in addition to high level coordination of our flood response and recovery effort well, recovery, not response. Director foreign at VM does response. I just coordinate recovery efforts with response. So this summer, we're meeting with every program. We've already met with some of them and checking in on where they are, which projects they have, and getting down to the granular level of, is this project going to finish? Does it have all of the permits? Where is it exactly in the construction phase so that we can know, how best to respond in order to, avoid sending any funds back to US treasury? There was in that same, I think it was act one thirteen. In that act, DFM and the agency administration did get authority to revert funds and reallocate them only with the approval of joint fiscal committee. So this summer, agency administration will be bringing proposals for reallocations to, joint fiscal committee. A big difference this time around is that joint fiscal committee cannot reappropriate general fund. So we can ask for permission to take the ARPA and apply it to a different use. But if that use offsets general fund, that general fund will sit on the bottom line until the budget adjustment act of, 2027. So, we'll be able to protect the funds from recapture to make sure we spend them correctly, but there may be an amount of activity that we're forced to make hard decisions on and cut programmatic spending in order to just protect the funds, and then the legislature can decide what to do with that next session. So the spreadsheet and I'm certain community members haven't had time because I only sent it this morning. Just to orient you on the spreadsheet, we have the first seven pages of the spreadsheet are all of the programs that were created with ARPA and their current status, both from a general fund perspective and an ARPA perspective. So some of those programs that were restored with one time general fund, a lot of them haven't spent significant amounts of that general fund, in some cases because they're focusing on spending the ARPA because I'm telling them to focus on spending the ARPA first. So in many cases, it makes sense that they wouldn't really be spending down that general fund yet, but we've also been making sure they know if any any run time past 12/31/2026 is going to be scrutinized by the legislature because these were created as five year programs, and there was never any intent to run these programs through 2028 or 2029. Right? Not that the funds would automatically be taken back, but that it would be, from likely increasing levels of scrutiny. And I am seeing that in house appropriations. They've been kind of digging in much more significantly, trying to see what programs might be they might be able to pull some funds back. Not as a committee yet, but just as individual members looking at things. For the committee's awareness, the program package at the Department of Economic Development is definitely being scrutinized for reversion. The programs at ACCDED, Department of Economic Development, it's the capital investment program, the community revitalization and reinvestment program. Those were the the the only programs that we launched with ARPA that were focused on businesses, really. And, they're still in flight mostly because they are capital investment programs. I haven't met with them yet. We have a meeting scheduled, to talk about their status and where they are. But in order to avoid the real property requirements of uniform guidance, pretty much all of those programs were converted to general fund. So there's no risk of federal loss in those programs based on their run time. The only risk at this point is, people reevaluating policy priorities and deciding to pull funds back from those programs. But I do know a good portion of that funding actually goes to municipal projects that have a co benefit between municipalities and businesses, look for economic development, water system expansions, childcare projects. So they are not, not even largely dollars going directly to businesses. In many situations, they're they're supporting the structures that, allow businesses to flourish and allow them to grow. But commissioner of economic development will be able to speak more directly to the progress there. And like I said, I will be talking to him soon. So then so that's the first seven pages is the blended view where you can see everything. There's a lot of zeros in there. Right? There's a lot of closed out programs that are fully expended and a lot of programs that are kind of reaching the end of the line in a good way. The next page eight through 13, that's ARPA specifically. So the pages eight through 15 are all focused on the amount of dollars that still have to be expended by 12/31/2026. And, that's what I'm most focused on right now is the $63,000,000 as of March 31 that still needs to be expended. And so all of my conversations with programs right now start with that money and then, kind of then check-in on the limited service positions that were created. There were over a 100 limited service positions created with ARPA, and we need to make sure those are sunset appropriately or if they were converted to a new funding source that the legislative approval for that is correct. Because, if a position is created with a federal grant, it cannot it cannot persist after that federal grant expires without the approval of the general assembly. So we're just making sure we're we're not accidentally carrying forward a bunch of, onetime federal funded, positions. The major notes on the ARPA funds that are that have to be expended by 12/31/2026 of this year, so it's in the next seven months. I already met with the broadband, so that is almost a quarter of the money, 14,700,000, but it's also out of a 150,000,000. So they've been on trend to spend that money for the last several years. So they've been doing well there. They're still doing well. We anticipate that they'll have another 10,000,000 spent for the the June 30 end date. So over the next month, they're gonna spend and they'll have about 5,000,000 left to spend in the last six months. And that 5,000,000, they anticipate fully expending in the quarter ending June, September 30. So I don't anticipate any any action necessary there. I'll stay closely in touch with them, but I believe they won't need any reversions. I think they'll fully expend. They also have ARPA Capital Projects Fund, which was a $95,000,000 federal award and over a $100,000,000 of bead funding. So there's still several $100,000,000. And then, of course, the state match that goes along with that, well over $200,000,000 of broadband spending after what they currently have slated. A larger pot than that, if you look it's on page 10, ANR DEC's portfolio, that has more than half of the remaining funds. And so I have a conversation scheduled to them to get detail on every project that they're still running, in about a week and a half from now. Maybe it's maybe it's only a week from now. I'll pause. Sorry.

[Committee Member (Unknown)]: What was that front? What was what was the what was the extent by the category that you were talking about there? The last one that you were just talking about?

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: The last one I was talking

[Michael Marcotte (Chair)]: about was broadband. Well, broadband, but then you mentioned something.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: Oh, ANR is all pretty much in the water and sewer category.

[Committee Member (Unknown)]: Okay. Yeah. That's fair. And

[Michael Marcotte (Chair)]: what are

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: the prospects for that one again? So this one is trickier. Right? This is more than it's I think it's, like, 34,000,000 out of the 63. So more than half of the unexpended funds at this point are in ANR's portfolio. A big concentration in the wet weather sewer overflow, which is the they call it the combined sewer overflow. This is where municipalities have systems that have been failing that during storms are polluting the, lake or other the or other waterways, and ANR has issued them, you know, kind of directives to fix those. And so this program helps fix some of those issues. So that program primarily benefits our larger, more, commercialized, communities.

[Committee Member (Unknown)]: What was its status for spending being able

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: to spend? So that's about one third expended, about 80% into the timeline. So I know the the staff at DC are highly dedicated and and believe that they can pull it off, and I'm not discounting that. But I am going to be if if at this point in time, it doesn't have all of the permits and everything if there is not construction happening, then I think it's fairly likely conversation about those funds being reverted. And then if the legislature chooses to restore those funds, that award could be restored after the, in the twenty seventh session. But that would be a choice for the legislature.

[Michael Marcotte (Chair)]: By reversion, you mean going through the joint fiscal process and stay here,

[Committee Member (Unknown)]: but it would it wouldn't revert to the beds.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: It would just revert from being able to be expended. So there's two primary mechanisms we intend to bring to the joint fiscal committee. We're not really going to be so at this point, we can only move we, being the state of Vermont, can only move money between ARPA projects that were established as of 12/3124. So we can't create any new projects with the money. In the administration, we're also not gonna be really pitching taking dollars from one program and putting them in another policy program of a different type. That's a pretty weighty discussion and something that the joint fiscal committee is probably gonna be a little bit uncomfortable doing on their own since this was an effort of the full assembly. So what we plan to do is, first, there are some small, directly, categorized administrative expenses that we could put the funds against, say, hey. We spent this money administering ARPA, and we should pay for it. And then after that, we would take any other reallocations and put them against Department of Corrections payroll. There's a rehiring of state staff category in the federal rule that we have significant capacity in, and we should be able to take any reallocations, put it against the Department of Corrections payroll, which would free up general fund for the legislature to decide on the best way to deploy. So that that's how we intend to approach it with the joint fiscal committee. I'm not saying we couldn't encounter a situation that causes us to reevaluate and adjust, but that's that's at this point in time how we plan to present on July 28, I believe, is the next joint fiscal committee meeting. So there will be some limited reversions that we propose on July 28. We're not at the point of we have to pull the parachute. Right? We're kind of I was a paratrooper, so you have your main chute and your reserve chute. We're deploying the main chute, right, but we still have time to pull the reserve after the next quarter. So we're not going to push programs. We're gonna say, hey. These ones are flagged. These projects, I don't think are going to go forward. I'll give you three more months. And if they don't if if you if you don't prove it, if it doesn't happen, then in the next quarter, we'll be taking people's money. But voluntary reversions are mostly what we're focused on right now. There's probably a couple million dollars worth of those programs that have finished out. Primarily, the AHS style human services programs have run their course at this point and have some small remainders.

[Committee Member (Unknown)]: Are there any expenditures or allocations, I guess, that haven't been spent but are being hung up at the local level by any chance? Because that might be be interesting to know

[Michael Marcotte (Chair)]: from our perspective.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: So I think the the water portfolio, primarily the one that falls into that category, there's a couple layers of it that that end up just making the project take a long time. Right? There's the funding stack and the affordability. None of these municipal projects are able to go forward with one or two funding sources. They usually have five or six funding source at the end of the day that they have to go out and hunt down. And so I think most of our communities cannot afford to do these projects on their own. Even with the injection of ARPA dollars, they're still relying on other funding sources. And then, of course, the the permitting and the regulation, which is a blend of municipal, state, and federal, that is what has taken a good portion of time as well in those programs. The broadband, no hang up at the local level. The the COD structure, although it has strengths and weaknesses, has been able to build out and focus on deployment. And then the the other programs of the 64,000,000, there's no other really high risk programs at this point that are that are experiencing serious hang ups. So I think we're not looking at broad based reversions right now. Like, BHCV only has a couple million left out of their 119.

[Committee Member (Unknown)]: It did seem like, with the the broadband is a great example of where between BHCVD and the CUDs and the CV Association, there's an awful lot of coordination and hands on energy. A program like another one that I think has more miles to go, MERP, the municipal energy resilience program. One of the cool things about that I found was that we received I received an email when a town in the district that represents had, like, completed a project, and it had quotes from people that had something good to say about it. And it was a really unexpectedly useful email. It was a way for us to engage with what these dollars are doing in all of our towns. And, you know, and and Murphy obviously has regional planning commissions, and and there's a lot of, like, interaction again with that kind of, it isn't just a small scale, just do it yourself kind of thing. There's, you know, there's a great program that's built out there. I just wanted to sort of highlight and share appreciation for getting that kind of information as these smaller projects are completed, as it's something that's really relevant to us in our work in sort of knowing just what kinds of improvements are being made and really who's getting interested in doing this work. So, you know, I just wanted to share some appreciation for that.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: Oh, thank you. I would say MERP, the municipal energy resilience program as well, part of the weatherization portfolio, and that that portfolio, we had to cure almost all of it with general fund because of the it's very challenging to get those weatherization contractors to get the work defined and scoped. I think we have a we still have a statewide resource issue on that front. So anywhere you can get more specific information about what people did and how they did it, it speeds that process up and allows for more rapid launch of projects. And I think that program is still showing, kind of which that's gonna be in the AOAs. That that program is still showing quite a bit of funding on the table.

[Committee Member (Unknown)]: Yeah. So it's you know? About 25 or

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: something like Out of the 36 or so that they started with. And so and then just to make sure

[Committee Member (Unknown)]: that I understand, that because of the way because of that sort of movement in the general fund, there's not the same timetable alarm as other as federal dollars, or is it this program is really supposed to be winding down by 2028 or something along those lines?

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: So last year, the legislature put in language that said if the the if the ARPA programs that were restored with general fund, if any of those funds are unobligated as of 12/31/2027, they'll be automatically reverted. So it's relatively easy to obligate something, right, in an agreement, but that, I think, sends a signal that we're starting to look at these, and and they're not intended to be perpetual programs. Right? So and then if someone of course, after that date, if they lost an obligation, if an award fell through, which often happens in some of these municipal projects, then that would be kind of automatically reverted. Anything that that and I think house appropriations is looking at possibly building on that language and and strengthening and clarifying and kind of expanding that intent to say, yeah, we really mean it. Like, these are, these were onetime programs, and you gotta wrap it up. But there's a lot more flexibility on the state side to to define what wrap it up means. Yep.

[Committee Member (Unknown)]: Thanks, Doug. I appreciate this. I appreciate this format to be able to look at it. It's really helpful to to understand. And as much as I would love to focus and celebrate on all the money that was spent and all the good that happened from there, I think we should do that at some point. Because we're in that time frame today of the money has to be spent, I'm focusing on what hasn't been spent. And I have concerns even though ANR and the DEC money isn't necessarily our purview. It is when it's the villages, and we show all of those. And we know that there are towns that have been begging for help and money and support. How do we make sure I know ANR is understaffed or under resourced. What can we do with these last few hours of session to help the administration make sure that our towns are getting the supports that there's funding for?

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: Yeah. I think that is an excellent question. And I think the the reason I'm struggling to answer it is that it's like death by a thousand cuts with with a lot of these pro with these programs in particular. It's no one thing, and it hasn't even been a staffing issue at ANR. In in many cases, they've awarded the they awarded this years ago, and the municipality is either waiting on army corps of engineers permitting or they're waiting on a public process. They're going through appeals because some members of the community don't support the project. There's for if you have 15 different projects, there'll be 15 different reasons for that project to be delayed in Vermont. The municipalities in general just don't have the ability to push a project through. Like, once they decide to do it and they get a majority vote by the community, it can still be derailed extremely easily and and has happened with most of these projects. And some of them are just through no one's fault where, they applied for the funding stack, and it's just not affordable at the end of the day. They weren't able to secure all the all the funding they need to be able to do the project. So I think

[Committee Member (Unknown)]: I guess Yeah. Just to it would be incredibly helpful for someone who has a three sixty five day a year job, not a seventeen week job. It's a task of the administration without legislation to look at the system that is causing these derailments. Because you don't get this percentage of derailments without a systemic problem.

[Michael Marcotte (Chair)]: I agree.

[Committee Member (Unknown)]: So it's easy to say, it's a one off here, it's a one off there, but there's some systemic problem that's causing this. So I think that's the kind of support that we could partner with you on modifying that system. And so I think you don't get these kind of programs very often. Don't get infusion. So this is the perfect opportunity for us to take really great data to say, this is a space here where all we're doing is causing people to go into this spin and they can't actually get anything done. So how do we build those off ramps so that you can start here and not end up way over there when you're trying to go this way? And so I think it would be very helpful.

[Michael Marcotte (Chair)]: I

[Committee Member (Unknown)]: think that could be part of this wrapping up of this program.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: I do think for the last several years, we've been primarily doing that in the area of housing and identifying the roadblocks and proposing them and having limited success getting those changes through the legislature. When I meet in a week with ANRDC and we talk about each program, I'm gonna be asking them the specific roadblock that's stopping each of these projects. So I'll be collecting that information. And then if we are forced to revert any when we when the legislature convenes next session, any of those reversions will be detailed of, you know, we pulled this much money from this program, and these were the reasons why those projects were unsuccessful. So we are collecting that information this summer, and and we can focus on also a little bit of a historical view from from ANR of, well, why did it take even even for the projects that were successful this year, you know, why did it take four years for this for this project to to land, and what were the things that wasted the most time in that process? So I think the kind of the after action review, we're building that this summer. And and, hopefully, that does provide useful information that helps improve some of these programs going forward. Because, like, I know with, like, our permitting our permitting processes have been tagged as a reason for delay for years now, and we've tried to implement various fixes, and it hasn't nothing has quite stuck. And I think it it often it often links back to the appeal rights and the ability of a very, very small group of people to stop any project from happening. And when we proposed changing that, we've we've been unsuccessful because everyone's like, well, we need to protect the rights of the individuals. And it's like, well, you've got 10 people, and they're outweighing a vote of 600 people. So how do how does that make any sense? So, yeah, I think you're absolutely right that that kind of after action will help.

[Committee Member (Unknown)]: Make better decisions with our data. So

[Michael Marcotte (Chair)]: Well, and are there any issues with technical assistance? We talked a lot about technical assistance. Does that play into any of these issues that municipalities are having?

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: I think most likely, are I I believe that the municipal technical assistance program was helpful and advanced a number of projects and that we had more successful projects than not, because some of them are still in flight. They've progressed, but they're not finished yet. We're trying to collect that information into something that can be a more meaningful report and and less just a couple of anecdotes of success. Yeah.

[Committee Member (Unknown)]: Thank you. This was fascinating. And really, I mean, really honing in on that money that was allocated for ANR and DC, which is fascinating to see how some of those programs, how difficult it has been to spend the money. And so I just kind of want to go off of what Brett Benning was talking about, which is that, and you're sort of talking about doing that to a back after action review, really looking at what are those barriers. And I know DEC is doing their own deep dive on their because just DEC has 15 permits that they issue. And there's all kinds of systemic issues, like each permit has a different number. So it's really difficult to even just track a project between the different programs. So I think there's a ton of systemic work that can be done even without legislative action. And so I think But having that really big picture look at the barriers within the permitting structure, within how permits interact with each other, how the different agency permits interact with each other, and then the federal permitting on top of that. And so where do we have duplication? I think with that comprehensive viewpoint, I imagine the legislature next year would be very interested in be how do more outcomes oriented and less process oriented. So I'm glad to hear you're looking at that as well. I think seeing this data really just puts an extra spotlight on how important that systemic work is. Right.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: Yeah. I think the challenge with our and most of these programs were massive plus ups of, like, the standing programs, the regular programs that ANR already runs. So it's almost like a stress test where you have a leaky hose and you try to force more water through it so you can see the leaks more easily. Interesting. And so, yeah, I think we will have some good lessons learned here, because we've known for years that these wastewater projects take five, ten years to complete. Right? So, yeah, if you have five years to do something, you shouldn't shouldn't be nervous about being able to do it. Right? Should be able to do it. Sure.

[Michael Marcotte (Chair)]: I'm just looking at especially things that pertain to us, but I'm looking at DUI modernization. Mhmm. There's still 2,000,000 sitting there, but I suspect that that'll be expended by end of the year because JobLink is related with that as well.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: Yes. I talked to them, and I talked to secretary of state earlier in the week, which is in a similar situation. That project is going so UI is going live in July. That money has been spent. It's a paperwork issue, and, that will be that will be expended. In both cases, they've done the work already. They just haven't run the invoices all the way through the system, And so I have no concern at all that the that those either of those projects that are IT related will be. I am gonna be monitoring them and and making sure until the paperwork's actually done that it gets done, because the current federal administration is not forgiving in the slightest on any technical issues that cause us to owe them money. They will immediately pursue recapture. In the past, we used to get, like, a little bit of grace from our federal partners if we made a mistake, but there's what we're hearing from all the other states right now is there's zero tolerance for anything. And if there's any excuse for them to to pursue recapture, they will.

[Michael Marcotte (Chair)]: Questions for Doug?

[Committee Member (Unknown)]: Lauren? Back to authorization.

[Committee Member (Unknown)]: Yes. So is my understanding you explain what that reversion process what that was looking like? I think you you had mentioned that there are some dollars floating around there that may be taken down.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: So at this point, there won't be any more taken. It back. But in December 2024, we were at the obligation kind of deadline. Right? And because we could only move money around within established projects, that mean meant our ability to pivot is somewhat limited. And if you go to the last two pages, the PSD programs, that's where most of our weather that's where a big chunk of our weatherization efforts happened. And the efficiency Vermont, the home electrical and heat pump, the clean energy development board projects, some of those had had, you know, over $20,000,000, and they hadn't spent any of it, or they had spent, like, 1 or 2,000,000. So it was not painless, but I negotiated with those programs to determine, okay. What's a what's a fair amount to revert, to put towards hazard mitigation and still roughly achieve the and still try to achieve the legislative intent of the program. Because a lot of those those initial numbers for the ARP allocations, those were done completely under the gun very quickly, and they weren't really based on anything real. They were based on, okay. Well, we have this much money, and this is how our priorities break out. So 20,000,000 here, 30,000,000 here, and it was done very quickly. It was done to the best of everyone's abilities that was involved, but it wasn't, like, based on a needs assessment where a traditional program would be based on, okay. Well, we have this we have 1,500 people that apply for this credit, and and so that's why we're asking for exactly this amount of money. So with the weatherization, it was running very, very far behind, and a lot of it was because the inability to secure weatherization professionals to actually do the work. So we did some reversions in that in that area, but we left, you know, very significant amounts of money over over 50,000,000 in that. And then the DCF weatherization program was in income sensitized, and that one was moving pretty well. We didn't revert any funding from that program. That one kept the full 40,000,000 that it started with. So we still invested, like, over 80,000,000 into weatherization. Those reversions were done at the time, and there's no because it's now general fund, it's not on the table for anything that happens this year.

[Committee Member (Unknown)]: Right. So the total of that, you said that there were there was 80,000,000 done in weatherization. What was the total kind of amount allocated for weatherization?

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: I I'd have to go back and look at the and we prepared some summary. So after we did the reversion in December '24, we presented on that in the twenty five legislative session. And so we have some packages that lay out these are all the reversions we did, and and it was also done early in the session so that if the legislature said, no. We don't agree with that reversion, they could reverse

[Committee Member (Unknown)]: it. And do you my last question. Do you know of any other issues that came up other than the workforce issues that caused a slow deployment of the dollars?

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: Some of the programs took several years to even launch. There was some, like, structural things that slowed it down, you know, very bureaucratic things of, like, whether it's a grant or a contract. So that was kinda disappointing to see some of those delay launch. So, yeah, some of a couple programs had a much slower launch than we would have liked to see, and then most of it, I think, was just the uptake of individuals. Because one of the things we do for good policy reasons is income sensitize a lot of these credits and incentives. But often, the people that can take advantage of those credits don't have the disposable funds to actually do the work. There's, like, a a fairly a smaller overlap of, like, obviously, the full if they're low income population, as by and large, they're not gonna have a lot of disposable income. Mhmm. So I think that affects the uptake and getting that right balance of the income limits, it's tricky. Right? Because you don't wanna just blow the doors wide open and then have people that can afford to do it anyway getting the credits because then you're not changing behavior at all. So I think that that balance between income limits and, uptake, that probably slowed down the distribution a little bit.

[Committee Member (Unknown)]: And do you know if

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: the the programs were, like, well Oh, yes. Yeah. Efficiency Vermont, absolutely saturated. Once the programs were launched, they were very well marketed. Yeah.

[Committee Member (Unknown)]: I think I would say just as a consumer, one of the issues with efficiency in Vermont is that it's very cumbersome and hard to use.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: I won't comment on that.

[Committee Member (Unknown)]: That's wrong. I'm saying. Yeah. Yeah. So program structure and also.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: Right. And I think that's, again, the urge to get the most up from a policy perspective always leads to higher complexity. So in Vermont, we tend to overengineer programs, and then they're harder to run. They're clunkier. They're harder to use. And if we simplify things, yes, we may not hit our policy goals as squarely on the nose, but we'll get things out faster and we'll get things out more, like, more cheaply or cost effective. So

[Michael Marcotte (Chair)]: I can say that it was something that we struggled with, and not just this committee, but every committee. It struggled through from the eyes of the auditor as well. Is trying to craft these programs so that they were more nimble and easier for people to access, and especially in here for our business community, and not trying to put too many guardrails around it, that was really a tough tightrope to walk

[Committee Member (Unknown)]: and doing it fast. Question about that. Were there any limitations in the program design based on the federal guidelines and mandates that also made it difficult to design?

[Michael Marcotte (Chair)]: I think the federal guidelines weren't very stringent. It was guidelines that we were placing on top of that, that that made at times made things harder than they should have been or could have been.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: And in most cases, the legislature expressed what they wanted to build. I would come in and testify on how close that was to the federal rule. But then at the end of the day, there was language that allowed AOA to modify the programs to make sure that they were federally eligible, and then we would only do the minimum necessary to adjust the program from the legislative intent on the Vermont side to make it federally eligible.

[Michael Marcotte (Chair)]: And I was gonna say, as I recall the process, federal guidelines weren't really hard, fast with they were they were sort of being on hold while we were having these discussions.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: Half of these programs were launched before the rule came out.

[Michael Marcotte (Chair)]: Yeah. And we were scrambling to readjust them. It's an interesting time.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: And then of the 240,000,000 of general funds that we converted, a 143 at this point is still waiting to be expended. And I think that's one reason that's also drawing house appropriations attention. That's a lot of money.

[Michael Marcotte (Chair)]: Yeah. Other questions for Doug? Think Edye and I will have a chat with with the Chair of Appropriations to see if there's areas that they would like us to delve into. Right now, we're on the floor, we're off the floor, we're on the floor, I think we have time to maybe start digging in a little bit, that might help everybody, if we can better understand what's happening and where the monies are and what the thoughts are and how we're doing appropriate. So stay tuned, the committee will this morning there's only one zero, that's 03:13, and then we're back on at one and see how things go. There'll be time built in, see if we can bring people over, if we can find, if they have time to come over and chat with us. Doug, thank you very much. We certainly appreciate your and great thank you for bringing this spreadsheet to us.

[Doug Farnam (Chief Recovery Officer, State of Vermont)]: Yep. I'm happy to come in. Any ends up having any other questions, and then as I said, there will be it it will be interesting. I'm hoping that I'll be able to report that we didn't have to send any funding back. On the rental assistance programs, those were so narrow. We did have to send a small percentage of those funds back, because they were only allowed to be used for rental assistance for a certain population. And, but with these funds, I'm really hoping, be able to report to the legislature next year that we fully expended. Just like we did with coronavirus relief fund, we didn't end up sending any of those funds back.

[Michael Marcotte (Chair)]: Yeah. Great. Thank you very much. Alright. We're on the floor. And or Joe, and I'm on the right now, nothing scheduled, but I think as always, when we finish the floor, come back here, just find out if there's anything happening, let you know. I just check your Yeah. Check your forms. You need to text out if need something. Actually, you can take this offline.