Vermont Legislature SmartTranscripts:

[Alice M. Emmons (Chair)]: Welcome, folks. This is House Corrections and Institutions Committee. It is Tuesday, January 20. We have just completed hearing the governor's fiscal year twenty seven budget request. And part of that, it has been is our capital budget. We're in the middle of a two year budget that we put together last session, and we call this our budget adjustment. And it's a mid mid year review. And it's an opportunity to get caught up on projects we've already funded, projects that we proposed to continue funding in FY 'twenty seven. The administration is presenting to us some changes in dollar amounts and moving money around and possibly new projects or maybe not going forward with some projects. So I'm gonna turn it over to the agency administration. We have Nick Kremer with us. So welcome, Nick. And if you could identify yourself for the record.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Of course. Thank you, Madam Chair. So for the record, my name is Nick Kremer. I'm the Chief Operating Officer of the Agency of Administration.

[Troy Headrick (Ranking Member)]: The

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: office that pulls together the capital bill across the enterprise. Obviously, the capital bill features heavily apartment buildings and general services, but also agency of natural resources, the agency of human services, and a whole host of other entities. So it flows through our office, and we work with the governor to settle on his priorities for capital biennial budget proposal, which is what we reviewed in detail last year. And this committee worked diligently on throughout the session. And now we're back, as the chair said, discussing the budget adjustment. Unlike the operating budget adjustment doesn't happen annually because it's a biennial bill, we're back in the interim year, the second half of this session, to make some tweaks to the bill that was passed last year. So I'll start by, hopefully everybody has had a copy of one of these delivered to your desk, capital budget adjustment fiscal years 2026 and 2027. I'll start by walking folks really quickly through the governor's letter. I'm not gonna read it obviously, but just underscore a couple points that are made. As the chair said, so last year, the capital bill in total was about $127,000,000,000 Of that spending, about 87% of that was spending that's backed by bonds, general obligation bonds that we issue for a period of twenty years generally, and about 13% was supported by appropriations from the cash fund, which folks will remember. We had spent a lot of time talking about the cash. From the administration perspective, the primary difference between the two funding sources to illustrate and underscore is the lack of interest on cash fund appropriations. You're not paying back a loan for over twenty years. So the savings there can be pretty significant over the life of the bond. This year in the capital budget adjustment, I guess I'll start by saying typically, and Chair Emmons will recall this from her many years, typically the funding sources for new capital spending in an adjustment year are limited to two things, one being reallocations that are identified, so prior year appropriations that either have finished the project and have a balance remaining or aren't moving forward for some reason or have kind of timed out, there's an opportunity to take that prior authorized spending authority and redirect it to new projects. That's one possible bonding funded source in a capital adjustment year. And the other has to do with our actual bond issuances. When we go out to bond, which is typically every year, though the timing varies a bit, often will generate a premium on our issuance. That's an amount that investors are willing to pay above and beyond the asking price, if you will. And that additional funding raised is available to fund capital projects, and it displaces spending authority that was authorized in prior capital bills because we have a new funding source to fund those projects. So that additional bonding capacity is no longer needed. So it kind of gets freed up for new capital spending in the current adjustment year. So those two fund sources typically make up the entirety of an adjustment year for as long as I've been doing this, they've ranged somewhere between 10 and 20,000,000 total. It's not a massive amount of new spending compared to the biennial bill itself. I think to the points the chair was making right before we got started, this year is a little different in that this is a little bit more of a substantive bill in terms of new spending or new authorizations, and it's thanks largely to the cash fund, right? So I mentioned a moment ago that the biennial bill was 87% bonding, 13% cash fund. This adjustment, which totals about 33,500,000.0 total, is just 30% bond funded and about 70% supported by the cash fund. So that's a big flop in terms of the makeup of the funding next year. The governor's letter goes on to underscore, you know, we've been trying to make this point for a couple of years that this just really illustrates the importance of the cash fund, right, and that we're moving into a reality where a big chunk of our capital projects are not going to be solely supported by general obligation borrowing. So thankfully, we have the cash fund. We have its statutory transfer. This recommended budget fully funds the 4% statutory construct in '52 BSA 1001 B. No surprise to anybody in this committee. And that amount is around 17,000,000. The remainder of the cash fund sources are reallocations, which I'll talk about in more detail in a second. I'll pause there if there's questions.

[Alice M. Emmons (Chair)]: Just to be clear, when you say the breakdown, 30% is bond funded and 70% supported by the cash fund, that is not for the total budget. That's for that $53,000,000 increase.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Of the new amount we're talking

[Alice M. Emmons (Chair)]: about this year. It might be good to go to the back spreadsheet to show the money. Right?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: He said of that was the where did the 17,000,000 come? That's the 17 through this bridge. Statutory transfer amount for. 4%

[Alice M. Emmons (Chair)]: of the general fund budget, not not the total general fund budget, but that piece of the general fund budget that is funded strictly by general fund. It doesn't include the federal dollars. So maybe the best thing to do is go to

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Are you ready to go there if there's no

[Alice M. Emmons (Chair)]: The last spreadsheet.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: So if committee members will turn not to the very last page, which is a report on prior year appropriation balances, but the second to last page, which is a fold out, the last page of this, what we call the capital bill spreadsheet.

[Troy Headrick (Ranking Member)]: It'd be the page before this, the third page in.

[Alice M. Emmons (Chair)]: No, I'm sorry. Well

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yes, it's page.

[Alice M. Emmons (Chair)]: Never mind. Second page. Yeah, he's right. Second page. It

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: should look like this for everybody. Two big highlighted yellow sections, and it says page four in upper left hand corner. So I'd start by drawing everyone's attention to Well, I'll just orient to the spreadsheet generally. So columns B through F, which have a light blue banner that says Act 33 has passed. Act 33, of course, was the capital bill last year. Those just give for everybody's reference the totals of what was passed last year by this committee and Senate counterparts and the Committee of Conference. So this is the final bill as it emerged from this building. Column B gives the appropriations that were made in FY '26. Column C, though it's on this page we're looking at is blank. You'll see on prior pages would give the appropriations made in FY '27. The reason it's blank here is because there were no FY twenty seven bonded reallocations last year. Column D gives the total of all the bonded appropriations or actions. Column E, which should be in red, gives cash fund appropriations that were made last year. So FY '26 cash fund appropriations or actions. And then column F gives the total across all funding sources. Continuing to the right, the columns G through M are all of the new governor's recommended adjustments. FY '26 should be unchanged from column B, what was passed in Act 33. We're not recommending any changes to FY '26 appropriations. All of the action, so to speak, is in the second half of the biennium, either amending, adding appropriations to the FY27 bonded appropriations, which we'll talk about in a second, and that's in column H, all of those new actions. The total in column I. Column J is just a repeat of FY 'twenty six cash fund appropriations. And K is balance. I'm sorry.

[Mary A. Morrissey (Member)]: Nick, will you be explaining what the various projects are when you go through it? Instead of just various projects, we'd like to have a list of what they

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Of course, representative. Probably not today, just in the interest of time, but we'll definitely be providing that breakdown. And some of those titles, by the way, have to do with the way that those are entered in our financial accounting system so that when our folks go through and make these appropriations, they know exactly which debt ID, but we'll certainly open up the Yeah. Give the breakdown.

[Alice M. Emmons (Chair)]: So for folks, this is the reallocation piece. These are dollars that have been bonded, so now cash, in previous capital bills. Neither the project has been completed and there's a balance at the end or the project hasn't gone forward or there's other nuances to the project and the timing of the dollars. So this isn't talking about the projects in a regular spreadsheet like this. This is a validation piece. So the repo committee, pay attention. So

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: that's exactly right, Madam Judd. This last page that we're starting on is really all of the sources of funding into the capital bill, which as I just walked through, of reallocations, premium, and then cash fund in this case. The first part of this, like the columns that are not or the lines that are not highlighted in yellow should match the last page of your capital bill spreadsheet last year that gave the reallocations that Scott worked up. And so I'll start with directing folks to column H, FY 27, starting with the block of yellow highlighted numbers that starts with 43,190. Again, just in the interest of time representative, I won't probably go through each line today, but just say that these are all of the reallocations that the administration identified. These are, as the chair said, either projects that have been completed and had a balance remaining that they didn't need, projects in some cases, like the various projects line, those are debt IDs containing all of the section two spending authority for BGS in that capital year. So there are a lot of different projects in there. So we'll, as we all work through the process, untangle exactly what's there, but these are the totals. They come out to a total of $3,300,000 and that's, again, already authorized in prior capital distributions. We're proposing to reallocate and redirect to new or similar items this year.

[Mary A. Morrissey (Member)]: And not to be this this one question. You've got five various project sections, so do they fall into a particular grouping?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: So these would all be appropriations from different capital bill years. For fear of getting too far in the weeds, the numbers that are given before the words various projects, you see how it says like BGS 20042, etcetera. There is a certain amount of decoding that can happen from those. Those reference the year and the act and the section. So there's a trail. Won't unpack in detail right now, but there's

[Mary A. Morrissey (Member)]: a certain Sounds great.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Thank you. So I'll pause here. I didn't hear Mary's question, but I think I have an idea what she said. So these, for those of us who've never done this before, the ones in yellow are the projects that were already funded and that you're going to eventually

[William "Will" Greer (Member)]: take the money away from

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: because they are left over. So in general, anything in yellow in these spreadsheets is meant to highlight actions that we're proposing to take in this capital adjustment So as compared to say the non highlighted ones in the column to the left, all of these in that top section, so the top half of your page here, yes, these are all reallocations of prior capital appropriations that have been sort of swept, for lack of a better word, to be used elsewhere in the spreadsheet. They'll show up as new appropriations for a new project. So this 3,300,000.0 that I'm highlighting is part of what will be 10,000,000 in new bonding capacity that we are proposing to direct to a number of new projects. Does that answer your

[Troy Headrick (Ranking Member)]: question? Gina?

[Alice M. Emmons (Chair)]: There are projects that either have been completed and there's a balance on that invoice or the project has changed, hasn't gone forward in a certain way. So we're reallocating that money.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: I will flag, because I think this is a good time. There are statutory limitations on how long capital project appropriations can exist. For bonded appropriations, after two years, the requirement is that we start reporting on them in a comprehensive list to this committee. Then the repo committee, among other entities takes a good look and starts asking questions about cash flow and making sure the projects get out the door. And I'll just note the final page of the booklet is exactly that report pursuant to 32 BSA seven zero one AD. That's a list of all bonded capital appropriations that are two years or older with outstanding balances. That's a high level overview meant to give this committee and the repo committee a start on looking at what's sitting out there and what could we be reallocating. So that's after two years. After five years, technically capital appropriations are not supposed to carry forward at all after five years. And so there have been instances like in last year's capital bill where the committee made the choice to not withstand that language and let funding carry forward. But generally, we try to reallocate if it's been sitting for five years, something's going on, right, that we should be reinvesting that capacity elsewhere. And so there are only a couple here, but like the ones that start with eighteen and twenty, for instance, those top two, that means the referencing fiscal year that's past. So a lot of detail there, but I hope that's helpful orientation for folks. Are there questions? So the 3,300,000.0 in bonded reallocations combines with a total that's kind of hard to see, but it's four lines down, 6.858156, which is the amount of bond premium we generated on our most recent issuance in December. So as I had mentioned, that is also available to reinvest in the bonded section of the capital bill. Those two items together total about $10,000,000 so that gives a total of about $10,000,000 in new bonding capacity that we'll be proposing elsewhere. Pause there in case there's any question on

[Troy Headrick (Ranking Member)]: that. Is the bond premium right there considered bonded dollars? So what

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: it is representative is it's bonding that we didn't wind up having to issue that was authorized by the legislature in prior years. So it sort of makes that available for because the authorization is already out there in prior legislation, we're just now redirecting it. We didn't need to issue it to support the capital expenditures intended for. It's On a premium? Yeah. It's gonna be invested.

[Troy Headrick (Ranking Member)]: 100%. 20

[Alice M. Emmons (Chair)]: So it's 6.5 it's 6,800,000.0 that we got this year. Last year, we also had 6 sometimes it's only a couple million. Sometimes it's 4,000,000, one year it could be as high as 8 or nine. 6.8 is pretty high. That's not usually the norm. Usually it's anywhere from two to four.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: And if the committee is looking for a testimony at some point, I'm sure folks from the treasurer's office would be glad to come in and talk voluminously about what has happened in the bond market for Vermont. We, despite being not the highest credit rating, which we are striving towards all the time, and that's a big part of our push for the cash fund, we have been seeing really favorable results, I guess, is the way to say it. When we go out to issue, people really wanna buy Vermont bonds, whether that's because of our perception, our fiscal discipline, which we certainly have in spades, or it may just be that there's not that many Vermont bonds issued compared to some of the big states. So there is more of a premium, at least in recent years, that investors have been willing to pay, which has benefited the capital.

[Troy Headrick (Ranking Member)]: If we get a primer on that anyway, all kinds of interesting stuff like debt per capita and so on and so forth.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yeah, the CDAC, the Capital Debt Affordability Advisory Committee, who sets the recommendation for how much we should be borrowing, they issue a report annually every year. I think in some years we've been included in this as an appendix. It was like 56 pages, so I saved a couple of trees. But I would encourage community members to take a look at that. There's a lot of really good detail there in terms of the considerations that go into how much we should bond.

[Alice M. Emmons (Chair)]: So to sum it up, we have about $10,100,000

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: in bonding

[Alice M. Emmons (Chair)]: capacity that's being added to our $50,000,000

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: That's right, Madam Chair, yeah. And in total, since there was also bond premium and reallocations last year, this new amount brings the total bonded appropriation component of the biennial bill up from it was $111,000,000 last year. That's at the very bottom of column D, and now it's up to 122,000,000. That's the very bottom of column I. So moving over to the cash fund, any cash fund item on this spreadsheet should be in red, so little color coding to help there. I would direct folks to column K, which is the new the FY '27 cash fund actions. Column J, just for reference, is the same as column E. Again, those are the FY twenty six cash fund actions that already happened in the bill last year. It's just there for reference. Really, we're focusing on column K. So starting at the top, the 17,016,160, that is the statutory maximum for the 4% transfer in 32 VSA 1,001 B.

[Alice M. Emmons (Chair)]: How many times have you said that to Charlie?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Every night before bed. I think it works on other people, too. So we're recommending that be fully funded. As always, we feel pretty strongly about that. The next line down is PY2 fund interest. That stands for prior year two prior fiscal years ago, the fund interest. So that's in reference to the FY 'twenty seven budget that we're talking about. So two fiscal years before FY 'twenty seven is FY 'twenty five, which is the fiscal year that just finished in June 2025, June 30. And so that's the last completed fiscal year at this point for which we have complete financial data, so we know to the penny how much interest we earned, and so we budget, we include that amount of interest that was earned in the fund in the total available for appropriation. So we add up a little under a million dollars there, 965,000. Those are kind of the only two statutory, I would say, funding sources starting on the line that reads $119,114.6 From there down to the bottom, those are all cash fund reallocations. So very similar to the bonded reallocations we just discussed, except the original appropriation was a cash fund appropriation. I'll just flag there, because committee members with good memories will remember that I was in here last year talking about cash fund reallocations generally, because the statute for cash fund appropriations is different from the statute for bonded appropriations. And I had just walked the committee through bonded appropriations. After two years, we start reporting on them. After five years, they turn into a pumpkin. Cash fund, last year, it was after two years, they just turned into a pumpkin. There's no reporting. The spending authority does not carry forward. We had some concerns about that because we had projects we knew were ongoing. We wanted to make sure that they could be finished. We asked for parity between cash fund appropriations and the bonded appropriations, they would just be treated the same. I think in the end, the committee elected to extend the pumpkin deadline by one year. So now they have three years to spend the fund, but then after that, the spending authority does not carry forward. So for the first tranche of cash fund appropriations, which were made in the 2023 legislative session, so for FY24, that first batch of cash fund appropriations, their new pumpkin deadline is 06/16/2026. So a lot of these items here that are in this list are items that we identified working primarily with BGS, trying to take a look at cash flow, at project anticipated spend timeline, and asking that question, will we be able to get these funds either fully expended or encumbered before June 16? If not, let's have a conversation about possibly reallocating them, either reallocating them and reappropriating them to the same purpose or reallocating and maybe shuffling to a new priority. Because the last thing we want, I think any of us in this room, is to have spending authority that's authorized for a project, but that's just inaccessible because of accounting. So we're just wanting to make sure that everything is being fully refreshed and recycled. And so that, in aggregate, all of the cash fund reallocations this year total, I think, about 6 point something million. So it's not itemized here.

[Alice M. Emmons (Chair)]: It's around 5.2. Because you've got 17.9 of the 23,000,000 that is the statutory. So that's about 5,200,000.0.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yeah. I'm sure that somebody with a good abacus can

[Alice M. Emmons (Chair)]: help us. Just to rip me in.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: How much of that is going back to the same just being reallocated to the same project? Not much of it, representative. And I'll try to highlight those as we go through the

[Alice M. Emmons (Chair)]: first. So

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: the total then for new cash fund sources in FY '27 is given the third from the last number in column K and also the last two numbers in column K, twenty three million four hundred and eighteen thousand four hundred and fifty five. So you add that together with the 3,300,000.0 in the yellow highlighted section above, the bond premium of 6.8, and that gives you the total of 33,500,000.0, which is all the new capital PAA action we're talking. Any questions on any of that?

[Conor Casey (Member)]: I gave a thumbs up. That was a good explanation. So

[Alice M. Emmons (Chair)]: then we shift to find out where the administration We're going to fill to put the 33 Right.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: So I would invite members to go back three folded pages to the first page of the spreadsheet. It should say page one in the upper left hand.

[James Gregoire (Vice Chair)]: Give folks a moment to get there.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Which one? Okay. So I'm gonna walk I'm gonna walk from top to bottom. Again, the columns that we're going to focus on are column H, which is new FY twenty seven bonded appropriations. Not everything in there is new. Anything that's not highlighted in yellow should be the exact same as was passed in the as passed capital bill, because this is giving everything, but any yellow highlighted items represent changes from the bill as passed. So nothing to speak of there in the BGS section, but with, I'm going to take major maintenance and physical security enhancements. Those are the top, the first and the third line respectively. Those both have new FY twenty seven cash funding proposed, about 1,200,000 for major maintenance and 225,000 for physical security enhancements. Both of those line items are kind of annual line items. I mean, nothing is guaranteed, obviously, in the capital bill, but these are appropriations that have happened for a long time to BGS. They're somewhat flexible in that they don't call out in the appropriation language a specific project, but they're kind of pots of money that are used to fund a lot of different things. Major maintenance in particular is a big pot that across the enterprise we go to when we want to fund capital improvements that aren't necessarily large enough to merit their online, but can be significant costs that departments can't cover. So what has happened in recent years is the capital bill, the overall size of the capital bill has shrunk, which thank goodness for our SEED Act recommendations and our rating agency progress, but that's obviously put constraint on the bill. One of the places we've shaved historically is in major maintenance appropriations. As BGS is looking at the pipeline of projects, they have a very long list that I'm sure they'll be happy to walk through in detail. We just realized that it was time for a bit of a rightsizing of that appropriation. We had some additional capacity, so we're beefing up both of those lines. There's a long list of projects that are in the queue, so to speak, that that could find it.

[Mary A. Morrissey (Member)]: So to come up with those numbers, they had to have somewhat of an idea of some of the projects, yes? Yeah. So there will be a list of those as well. Thank you. Of course.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: A detailed list. Sure.

[Alice M. Emmons (Chair)]: So when we do test, folks, we will really be looking more at the column that is highlighted in yellow, not just you know, we're not gonna look previously as well. Mhmm. But whatever columns are highlighted in yellow, be it in the cat or be it in the bonded, that is where administration is proposing to make some BAA adjustment to what we did last year.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Indeed, Madam Chair.

[Alice M. Emmons (Chair)]: That makes sense.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: So moving down the column, the next item is 3,600,000.0 for the Asa Bloomer Building in Rutland. Folks will recall last year there was money appropriated for sewage system upgrades. We talking about that a little bit before we got started here. When that project was originally scoped and and assessed, it was known that there was also going to be some work needed on the skylight and the replacement of the rubber membrane roof on the building. That has since I think the urgency for that has increased. We've we've had some active leaks in the last year, and so it's something we feel strongly is important to address right away. 3,600,000.0 is our best estimate for the cost of finishing that project. Underneath Rutland multimodal garage renovation, that is a component of the structure that's attached to the state building. It houses, I think, a variety of functions. There's some parking. There's also the transit center there. There were appropriations made last year for that project to do kind of critical life safety shorings up of things and remediation. This additional funding would carry the work through a ten year fixed horizon and make some more investments in reinforcing concrete and replacing joinery that's coming apart. I mean, I was joking earlier with Madame Chair, the parking garages in Vermont do not get along very well. The combination between salt and studded snow tires can really pick up, and you'll see that theme emerge later down on this list. So this is our estimate for that ten year fixes there. Just going to keep moving, and if folks have questions, please jump in. Second, well, I guess the last non total item there is 3,000,000 for 32 Cherry Street parking garage repairs, which is another parking garage into which we've been making some investments in recent years, kind of building momentum on that project. This 3,000,000 I'm given to understand, represents the cost to finish the project as specified in a guaranteed maximum price in an executed contract. So we've been building towards this one for a while. This really should be final push to the end zone.

[Mary A. Morrissey (Member)]: Oh, thank god.

[Troy Headrick (Ranking Member)]: Yeah. You and me both. Hopefully, nobody says perhaps.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Well, what I what I will say in defense of my BGS colleagues, what I've come to appreciate in my time working on the capital bill is just how complex and how fluid pricing can be in this space. You really just never know. And I would love to, right on the spreadsheet guy, to tie everything out and get it locked in, hold Joe Age's feet to the fire. But there's so many variables that can impact price, and it's just always a moving target, which is why, among other things, we're here talking about a budget adjustment. Certainly appreciate the surnames. So the total of new cash fund for BGS in our proposal would be a little over $9,000,000 That's given at the bottom of that section. Any questions on that before I keep going? Okay. So the next section is the Agency of Human Services, primarily Department of Corrections. The first line is where we are so committee members will recall, we were just talking about the total bonded amount available was around 10. Of that, about 8.4. So the majority of that we are putting towards HVAC systems and correctional facilities across the state. That I think continues to be a shared priority of both this legislature and the administration. We know that that's something we really have to keep pressing forward on. It's slow work. It's involved. Those are hard facilities. Anytime you do construction, there's often costs with relocating incarcerated folks. It's just these are complex projects, and they take a while. But we've been continuing trying to chip away at it. I think the last one that's under, I believe, under construction right now is Southern State Correctional Facility in Springfield. A small portion of this would help finish out that project, but then the bulk of the new money, the 8,400,000.0 in new bonded appropriation combined with the slightly more than 1,000,000 in cash funding would give us the total amount we need to fund Northern State Correctional Facility in Newport. That's next up on the list. I've seen 9.4. So 9.4 is the new total above the 1,000,000.

[Alice M. Emmons (Chair)]: Oh, 6,000,000 more, 0.4.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Confusing. And maybe Scott, in his spreadsheet wizardry, can figure out a good way to show a delta column. I couldn't fit it on here without this getting insanely small, but it's hard to track.

[Alice M. Emmons (Chair)]: The bulk of this new addition, which is about 9,450,000.00 total, because you've already got a million bonded in FY '27, so there's an additional 8.4 So if you go to column c, FY '27 bond, we put in a million dollars bonded for the HVAC system. The administration is proposing in column H to increase that by 8,400,000.0. So it's 9.426. Plus they're saying they'll add over 1,000,000 of cash to that. So we have a total new money in f y twenty seven between bond and cash of 9.45. Yeah. New money. Some of that will go to finished Springfield, but the bulk of that's to go as well to do Newport.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yeah. So Joe and BGS can speak in more detail in which appropriation will be tapped at what point, but my understanding is the total cost to do Newport is around 10.4. And so the 4,000,000 that was appropriated in FY twenty six and bonded, that's the money that's being spent, being burned through to Finnish southern state. And then the 9.4 combined with the 1,000,000 gives 10.4, which would be the cost to do Newport. Oh, that would we can come in and provide a more detailed breakdown.

[Alice M. Emmons (Chair)]: So what you're saying is the 4,000,000 in FY '26 covers Springfield.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: It's my understanding.

[Alice M. Emmons (Chair)]: Then the 1,000,000 that we put aside for FY '27 In combination with the 8,400,000.0 in new bonded dollars gives us a 9.4. And then you add a million plus in cash that completes the Newport.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: That's my understanding. Yep. And I think this is a good illustration, Madam Chair and committee of why for some appropriations we lump them together as statewide appropriation. Like in case of the correctional facilities, this often makes sense. You'll see it next up down, well, second to next up down below statewide door controls. When there are upgrades that we need to make in every facility, it's very helpful to have a statewide appropriation. So as soon as we know we have to do it everywhere, as soon as we finish the one, any balance left over, we can just go to the next one. And so that's the only reason I may be hedging a little bit, Madam Chair, when you say, well, the 4,000,000 for Southern State, I think roughly speaking, but it might be a little more.

[Alice M. Emmons (Chair)]: Then we're still waiting to see what we do with St. Albans.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yeah, so again, my understanding of the last two, I think that haven't been addressed yet are St. Albans and Chittenden Correctional Facility.

[Alice M. Emmons (Chair)]: Chittenden has it.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: That's it.

[Alice M. Emmons (Chair)]: St. Johnsburg.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: St. Johnsburg. Okay. And maybe I'm getting mixed up. But yeah, St. Albans, as we've known for a long time, is going to be a significant cost based on the configuration of the building. So that's been last on the list for now. But I expect we'll be having more discussions about this next year. Any other questions on that? So the next one down, correctional facility safety and security upgrades. This is a similar appropriation to the BGS security appropriation, only in that it's a pod of funding for a variety of projects that don't, in and of themselves, merit aren't big enough to have their own line. It says safety and security upgrades. I want to emphasize the safety. I mean, this does fund things like camera replacements, fencing, but also suicide prevention efforts, prison rape elimination act compliance. There are a lot of investments that need to be made in facilities to keep correctional facilities as safe as they can be, and this is a pot of funding that DOC goes to to fund those things. So based on their anticipated needs, we're proposing some additional funding here. And I'm sure they could, representative, provide a list of projects. The 2,700,000.0 in the next line for statewide door controls, committee members will notice and observe that there were a couple of door control appropriations, specific door control appropriations in the bill last year for St. Johnsbury and for starting the work at Marble Valley and Rutland. This would, I believe, continue the work at Marble Valley in Rutland. That sort of 500,000 that's in columns C and D was just the beginning there. This would keep that work going. And then like I was just describing, if we finish that at that facility, there would be funding available to move on to the next one, which I can't remember off the top of my head which facility that is, but they could speak to that. So there's a queue here that we've been trying to work through. And these are replacing legacy relay switch system doors with more modern digital systems that have remote capabilities and more secure and just different functionalities that are really important for safety and operations. The $2,000,000 beneath that is to finish the project at Newport, at Northern State Correctional Facility, to replace the boiler there. They, for years, had a chunk wood boiler system that had to be manually loaded by incarcerated individuals. There are a variety of reasons that that wasn't working well. And so they're updating to a more, I think it's an auger fed wood chip system now. And that's been a project for which there are prior year appropriations. This is sort of getting us across the finish line.

[Alice M. Emmons (Chair)]: Did that in FY '24 and '25. It didn't go along as far as we had hoped. That's why there's no appropriations in '26 or '27.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: By the way, mean authorize the change?

[Alice M. Emmons (Chair)]: We put in money to go forward with it in a fly. To a wood chip. Right.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Okay.

[Alice M. Emmons (Chair)]: To do the boiler, to do the changeover, and it didn't go as quickly as we had hoped. I think they had to get involved in some of the road to go up there. So there was nothing '26 or '27, and we knew last year in conversations that we'd be revisiting. So this is to complete it, the 2,000,000 in addition to what we've done in the past. Correct?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: That's my understanding with all the typical asterisks about our current best estimate. I I believe this is to complete the project. The last line in this section is this is an example of representative Headrick of partially some of this is a reallocation that we're reappropriating that timed out. There was an appropriation for this purpose for a youth stabilization facility made in, I think, FY24 out of the cash fund. So about 372,000 here is a reallocation and appropriation, on top of which we're adding another 400,000. This is for estimated permit costs for facility. This is an item that's been long in the works. From the state's perspective, there have been a lot of different roadblocks and twists and turns in the road. We have just issued an RFP for a design, a build to lease facility. We've received responses to that RFP in the last month or so and have been in the process of reviewing and entering contract negotiations. And so this would be funding preliminary work that has to do with permitting related to a site.

[Alice M. Emmons (Chair)]: Where is the site? Yeah.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: I think we're still in the final processes of negotiating the contract, so I can't speak at this moment to specific sites, but would hope hope soon we have more information to share.

[Alice M. Emmons (Chair)]: So part of this is really about $3,400,000 on top of what's already there. It's just because the 300 or so thousand of the 700,000 was previously appropriated, hit that three year mark. We have to reallocate it. So we're just reallocating it to the same project and then adding 400,000 to that.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: That's exactly right.

[Alice M. Emmons (Chair)]: That's your bookkeeping. For us, we don't get into quite that.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: It'll show up in console.

[Alice M. Emmons (Chair)]: It's in the repo.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: It'll be reallocation.

[Alice M. Emmons (Chair)]: In the repo. It's three seventy two by five.

[William "Will" Greer (Member)]: That's right. It shows up the clock's going to reset.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: We did it last year too with my two projects in VGS. We just put some language in. My name's my question is, so even if we do a build lease, they don't pay for it. Like, we're we're we're putting in cash advance, like this money or permitting costs specifically. Those are excluded from the development agreement. Everything else would be part of the development agreement.

[Alice M. Emmons (Chair)]: So for the lease payment for this building, what department pays for that lease payment? Is it DCF or is it BGS?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: So I believe typically the operational cost would be borne by DCF, by the entity that's

[Alice M. Emmons (Chair)]: The facility. So that's true for all of our leases that we have out there for state

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: function. No, I don't know that that's necessarily the case. Think Eric Pembroke would be a good person to speak to this and others from BGS. We have a state property management fund, which is sort of an internal service fund that pays for a lot of our leased space costs. What and maybe I misspoke a little bit, and I guess I don't want to lead the committee astray. The operational costs of the facility would be out of DCF's budget. I don't know with certainty how internally we would account for the lease cost, but they would be eventually recouped from DCF's budget. That makes sense. An internal service fund being an accounting mechanism to pay upfront, say out

[Alice M. Emmons (Chair)]: of And then get reimbursed by the department in that fund. So let me be a little bit more specific here. So the return to work for state employees, we ended up having to lease space in Waterbury for is it DCF? Is it damage?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: A variety of AHX. It's Diva. Diva.

[Alice M. Emmons (Chair)]: Yeah. Fair health. So is that coming out of Diva's operational budget to pay for that lease? Or is that

[Troy Headrick (Ranking Member)]: BGS enters into the lease, and then they bill back to the department that's occupying it.

[Alice M. Emmons (Chair)]: It goes back into the management funds. So does BGS pay the money upfront and then they get reimbursed by DAPE? Now is that the case with everything that we lease out for our state functions? Like in Chittenden County, when we closed 108 Cherry, we had DCF. We had some direct services departments in there. They got moved into lease space. So it's those respective departments that are paying that lease as a build back.

[Troy Headrick (Ranking Member)]: Right. Right. In the same way that deeper space, like, when we owned it, there there was a deeper space built back to apartment for the state owned building as well.

[Alice M. Emmons (Chair)]: So that question has come up.

[Conor Casey (Member)]: It's

[Alice M. Emmons (Chair)]: circulating in the building. So I just wanted so ultimately, whatever department is housed in a building or facility that the state leases, that particular department pays it.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: That's ultimately the case, yes.

[Alice M. Emmons (Chair)]: So we're clear. Kevin? I have

[Kevin Winter (Member)]: a much more mundane question. On the DCF youth stabilization, I think I heard you say permitted costs. Roughly how much of the 772,000 is permanent? All of it or just portion of

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: We're anticipating all of it. All of it.

[Alice M. Emmons (Chair)]: Because if we were to pay to build that facility, we're talking about 20 to 24,000,000 Yeah. To build a 16 bed facility. Right.

[Kevin Winter (Member)]: So hypothetically, we don't move forward, that is some cost that we can't take advantage of. Yes? No? How long is the permitting valid?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: I'm just curious. I don't know the answer to that question, representative. Am You might have some BGS could I mean, I think permitting My understanding is there are multiple components to this. I mean, this is a significant facility or really sort of campus that we're contemplating. And Bennington is designed to fund wise or to design cost.

[Troy Headrick (Ranking Member)]: That's not part of

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: the overall

[Alice M. Emmons (Chair)]: We can't get into who's doing it because they went out for an RFP. If you remember, we had the commissioner in the first week to give us an update on the replacement of the juvenile center as well as the correctional facility. At that time, she said they were out of an RFP for a design build model to see who could bid on it who would bid on it.

[Troy Headrick (Ranking Member)]: I know it's a little bit out of our purview, but it would be interesting to see the the the the the net benefit of that, if any, between just buying the thing a bond of dollars versus going out and having some kind of capped lease with a private party. One isn't necessarily better than the other.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yeah. I I think those financial analyses can be illustrative representative. Yeah. And that's certainly something we we

[Alice M. Emmons (Chair)]: think We do a design build to take the pressure off the capital build when you've got some big projects. On the other hand, it puts the pressure onto the general fund because you're paying for a lease, and then you don't own that bill.

[Troy Headrick (Ranking Member)]: Yeah. It depends what the cap rate is on on on the lease, and maybe there's some benefits to a third party building thing. But, anyway

[Kevin Winter (Member)]: one more on this one. So because we haven't proposed or allocated any future funding, we're spending almost $1,000,000 for permitting something that may or may not be done in the future.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Well, I would say representative this

[Kevin Winter (Member)]: I mean, dollars 24,000,000 project is a sizable project. So governor must be fairly confident that he's gonna get approval in coming years for twenty five million dollar project.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Me too.

[Alice M. Emmons (Chair)]: It you gotta put the money in there for our next fiscal year from July until June in case this project does go forward. There's a lot of permitting that there'll be a lot of local permitting because you're gonna have to deal with sewer. You're gonna have to deal with water, maybe some zoning permits that you have to do. It's not all state permitting. Most of it is municipal. If they find halfway through '20 halfway through, like, say, December year, we're not going forward with this project. There'll be money left over to be reallocated. Yes.

[Kevin Winter (Member)]: Yeah. I'm not saying it's right or wrong. I just want to understand. We're we're spending a million bucks with the anticipation. We're gonna be able to spend 25 more million.

[William "Will" Greer (Member)]: We're not out of the capital.

[Alice M. Emmons (Chair)]: We're not spending 25 more million because we're doing a design build, which means we don't pay.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Capital bill doesn't pay for the construction. I would say, representative, it's accurate to say that this request is aligned with good faith assumption that we're moving forward. I'll sort of zoom out and put on my best AHS hat. I mean, this is a priority project that we've needed to move forward for a long time. And in the absence of action here, there are some not great alternatives, which I'm sure this committee has heard about. Like, so we've been pushing really hard. This has a tale of a long time. But I'd be your points are

[Kevin Winter (Member)]: I just don't understand.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yeah.

[Kevin Winter (Member)]: All of sudden, we have a total changeover in the the house and the senate and they don't want to support this.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Like all things in this facility.

[Kevin Winter (Member)]: I just wanted to understand what I'm looking for. That's all.

[Troy Headrick (Ranking Member)]: Points points well made. Is well taken. We were prioritizing project in for this facility, and we were working with a developer, same concept lease, rent to lease, our zoning request to be zoned was denied and that's why we're back out with an R and D looking for insurance. So we did spend some of the money that's been appropriately in the acquired capital to all those efforts.

[Alice M. Emmons (Chair)]: I was just trying to understand the process. We also did put, I believe, almost 2 to 3,000,000 capital dollars to build the new facility for the juvenile center, then halfway through decided to do a design build, and we reallocated those monies.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: So things shift. It's a temporary facility in Middlesex, right, to which their appropriations have gone,

[James Gregoire (Vice Chair)]: which is serving part of this need. But this is really a longer term solution. Okay,

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: so that would bring us to the bottom of the A. H. S. Section for a total of about 8.4 in new bonded authority. That's the HVAC we talked about up top, and then 6.747 in new cash funding. Any questions on that section? Other questions? Okay. The rest moves a little quicker. Those are the two biggest sections. At the bottom of this page, the Agency of Commerce and Community Development, the Division of Historic Preservation, they're responsible for those lovely roadside historic markers you see peppered around the state. They have a project queue. Those get cast by a foundry. We order those based on what's in the order queue. They need some more funding there, so we're adding $20,000 in FY27 bonded. This is in column H at the second to last number highlighted on the first page in column H, 45. That's up from the 25, which is in column C. So that's an addition of 20,000,000 or 20,000. Excuse me. Yep. 20,000,000 would buy a lot of historic curtailments. Remember I remember the beef and the gap beating there. But does that make them whole? I believe this fully funds their current they would anticipate spending in FY '27 just

[Troy Headrick (Ranking Member)]: Or it gets here, too. There's a question about maintaining a replacement of of the existing ones.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: That's Doesn't mean a good question.

[Alice M. Emmons (Chair)]: Okay, go ahead.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Sure they would be happy to speak eloquently about that $20,000 on the next page, page two, there's no adjustments we're proposing to section five. That's the building communities grant section. To the vet's home, there's one adjustment proposed or one new item really, which is for the sewage system overhaul there. The vets home experiences challenges similar to those experienced by our correctional facilities, where if there's material that's flushed down the toilet that's not really designed to be flushed, it can cause serious blockages in the sewage infrastructure. This at the vet's home is exacerbated by the fact that they have these cast iron pipes that have eroded quite a bit and the interior and so things get stuck in there. They have some lovely pictures I'm sure they could share with the committee if they're interested. I'm just saying the governor did want to see it. This was a topic of discussion. So this is a placeholder amount to start that work. This was sort of a late breaking need. Obviously, when you have sewage issues, it's a pressing priority. We wanted to get this in here because it's urgent. The cost, I think, is still being refined a bit. BGS folks have been working with the vets home to do a more comprehensive assessment. This may not represent the full cost of the project, but this was kind of our best estimate at this point to get us started and certainly a number we thought would make sense for this fiscal year. I

[Mary A. Morrissey (Member)]: was just going to say

[Alice M. Emmons (Chair)]: that we're getting lots of heat.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: I actually had the same thought representative. Again, I defer to my more technical colleagues here. I think there's a distinction between the configuration of where a Muffin Monster lives in the sewage system for the correctional facilities. It's either like a point of entry into the municipal system or it's a point of it. There's a difference between the way the vets home is plumbed and the way the correctional facilities are plumbed such that it may not make sense, but I have the same exact part because I love the word.

[Troy Headrick (Ranking Member)]: I do. There

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: it is.

[Troy Headrick (Ranking Member)]: It's just a real thing. It's a token.

[Alice M. Emmons (Chair)]: It's an

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: industrial masticator.

[Alice M. Emmons (Chair)]: And we've revamped the one every facility. Every correctional facility has revamp. I wish

[Mary A. Morrissey (Member)]: I could have shown this to you when you

[Alice M. Emmons (Chair)]: were You're

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: probably gonna tell us this, or Alice wanted to this. So you have 1.5 for Pitsel's 26 and then 500 for '27?

[Alice M. Emmons (Chair)]: We did the 1.5 last year.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Oh, from last year. So since that's not highlighted in yellow, representative Oh, wait. Yeah. I just caught up on red. Sorry. It's confusing. Yeah. No. I just got silly. Thank you so much. We're just proposing the 500 ks. Any other questions about that? Okay. So I'm gonna nothing for UVM or state colleges. No requests received. Section nine, the Agency of Natural Resources. So starting at the top, there's a little under 2,500,000.0 for drinking water state revolving fund match. This is the state 20% match to leverage an 80% federal drawdown, so this 2.5 leverages quite a bit more in federal funding. The reason that we need more funding both here and in the Clean Water State Revolving Fund, which is in the next section, is a little complicated. DC can walk you through it in detail, but there was some action last year at the federal government to eliminate congressionally delegated spending or earmarks for federal fiscal year 'twenty five, and the way I understand it, the amount of earmarks that goes to a certain state gets subtracted from these two grant programs or these two revolving fund programs typically. So when they eliminated the earmark, the amount of federal funding available went back up, which, of course, means we needed more state match to match those available federal funds. So that's why there's an increase here, or at

[James Gregoire (Vice Chair)]: least that's substantially why there's an increase here. There might be some other reasons around wages. Yeah. Representative. I guess my only question would be right now, do you know if the match stays the same when talking with the governor, or has that not been determined?

[Alice M. Emmons (Chair)]: You mean the total? It's five to one net. So for every dollar we put in, we get five dollars So that dollar amount of the $5 we get, is that your question? Yes. It's the same amount.

[James Gregoire (Vice Chair)]: Okay. That didn't change. Okay. But it's just the source of the money is what changed from my understanding of what you just said.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: The available federal funding that we needed to find match for increased. So we thought that there was less federal funding available. So if we thought there was 8,000,000 to draw down and we only set aside two, these aren't the real numbers, That's what we did. But all of a sudden, through some changes, there's now $15,000,000 available at the federal level to draw down. We do not. I'll take down the actual amount

[Alice M. Emmons (Chair)]: of Some of that would have been earmarked.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Right, because the way I understand it, and I don't have this maybe perfectly, is that the federal thinking is that, well, if Vermont was getting earmarked money, money that's going directly towards similar projects, earmarks, then that should be offset against the amount of competitive grant funding money that they get in these two lines. But since those earmarks weigh, the competitive total. But Neil, it's a little convoluted. I think folks from DEC would be well equipped to walk the committee through. I think the thing I would underscore here Well,

[William "Will" Greer (Member)]: I think it's an overly facile question. So there's always more need in this area. So we get the chance for this advantageous match. So we put money there. Is there a different area from which we're taking the money? That's probably

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: too difficult. No, it's a fundamental budgeting question representative. I think all of the funding here, anytime we fund one thing, it's an opportunity cost that we could have funded somewhere else. I would say, I think interpreting your question specifically, it's not like this appropriation is coming out of some more narrow bucket for similar purposes. It's all part of the capital construct. There's nothing everywhere, so get the most account. That's right. And we, I think, and we and the Agency of Natural Resources would be first to underscore, you know, 20% to 80% match rate is pretty good in the world of government. So these are high return dollars. Thanks. Question. And what did you ask? It is

[William "Will" Greer (Member)]: too simple, but if you're going to pump up the state money here because there's this new ability to get more federal dollars in an advantageous match, where is it coming from?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Thank you. It is too simple. I think we all just listened to a long speech about that.

[Conor Casey (Member)]: Yeah,

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: yeah. I wasn't calling it simple. No, I appreciate the question. Any other questions on that? Okay, so the next items are a little more straightforward from an accounting standpoint, at least. Waterbury Dam, Penstock Project Cost overruns. There's been work ongoing at the Waterbury Dam for some time. There have been some prior appropriations there. Is another one where DEC will tell the story better than I can, but my understanding is actually based on the drought conditions this year, there was some phases of the project that necessitated a certain amount of water flow that they weren't able to complete because of the drought. So they had to push that phase a couple months forward into wintertime conditions. So I think there is actually occurring as we speak. There were cost increases associated with that, and they had to do the work, so they ate the costs. But in order to stay within budget and appropriations, what they would have to jettison from the project are remote monitoring equipment for the dam levels in the event of emergencies, which is not something we should be jettisoning from that project, given all of the serious safety concerns for these major dams. So this $150,000 is essentially a cost overrun backfill for the project to make sure we can do all the things that we need to do. But that's kind of the history of how we got there.

[Mary A. Morrissey (Member)]: Those damn dams.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: That's right. So then the next one down is for FPR. This is kind of their general appropriation that funds a lot of different types of projects, park infrastructure generally, and also three acre rule compliance, which has been a big item in recent years. Another area where they have a long list of projects they need to complete, There's always need. We had some capacity. We wanted to keep on top of needs here and not get too far behind the eight ball, so to speak. So we've added $400,000 here. The last line in this section, 200,000 would fund the development of dam safety and maintenance plans for about half of the dams that are owned by Fish and Wildlife. Fish and Wildlife owns about 70 dams, which is actually, given to understand, the majority of the dams in ANR's portfolio. Of course, they're not the biggest ones. It's not the Waterbury Dam, the Wrightsville Reservoir. These big industrial dams are generally within DEC, but the little ones that we drive by and sometimes don't even notice, the old stone walls that are overflowing type thing, those are often owned by the Department of Fish and Wildlife. Even though they're smaller, they can pose significant safety hazards. In some cases, saw in both floods, these present issues. So this work would be really assessing the status of each dam and coming up with a plan. Does it make more sense to decommission it in the long run, take it down completely? Does it need structural reinforcements? Is it ecologically significant? Sort of all of that work. And I would say dam safety and dam maintenance generally is going to be a significant area of ongoing need for capital bills in future. The Flood Safety Act that passed in recent years increased a lot of requirements. And so this is the beginning of that work and specific to fish and wildlife, helping them get a handle on it. No recommendation that we're funding any fishing derivatives for fish and wildlife?

[Alice M. Emmons (Chair)]: That, I guess. Or walleyes.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Or walleyes. No. Was thinking here too is fishing dervies.

[Alice M. Emmons (Chair)]: Yeah. That's right. Sister.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Historically representative, that recommendation has not come from the administration. Told you.

[Alice M. Emmons (Chair)]: You're so straight faced.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Appreciate the context. So the total of new funding for in ANR in section nine is 3.2. The next section, clean water, then we're on to the home stretch. This one, I think, is pretty uncontroversial. There's a $10,000,000 placeholder in original capital bill for the second fiscal year. Clean Water Board meets. They make recommendations on how to allocate that. We adopted their recommendations. And so this just distributes that $10,000,000

[Alice M. Emmons (Chair)]: So was the same true for the clean water revolving loan fund as the drinking water revolving loan fund in terms of earmarks going away?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yeah, astute question, Madam Chair. Yes, my understanding is both suffer from the same fate. Okay, so then we're on to what is the penultimate page of this spreadsheet, page three. But we have already talked about page four. So for our purposes today, it's the alternate page of the spreadsheet. This is the last couple items. Nothing changing in military, nothing changing for ag. For the Department of Public Safety, we've got $500,000 for a USAR facility. That stands for Urban Search and Rescue. They perform a variety of really important functions, especially in times of crisis. This has been a priority of the department for some time to identify space that can be kind of a hub for those services. There have been a variety of conversations over the last couple of years about this. We are feeling confident that we have identified some unused existing space that can be retrofitted and fit the need for this program. We're still sort of in the final stages of determining specifically which site. We're looking at a couple of different options. And so this funding would really be for that design, that planning, that assessment, and then getting started with the work. We think this could be the most cost effective way to do Judiciary, there are a couple of items, 500,000 for the Essex County Courthouse Connector project. Folks will remember there was 3,600,000.0 last year for that project. This relates to this is an additional cost for a standalone well and pump system to service their fire suppression needs. They are on municipal water served by the municipality of Guildhall. Given But I understand failed a couple of tests to determine that they had the adequate PSI for fire suppression. Pressure supplied by the municipality doesn't serve, it isn't high enough. So they need to create a standalone well and pump system to meet code to be able to proceed with construction. This is a placeholder. I would encourage testimony from the judiciary. I think they were still refining their estimate at the time we developed this. So they've got some ongoing assessment and engineering looking at exactly what they need. So I'm sure they'll have a more dialed in number by the time they come in and testify to this.

[William "Will" Greer (Member)]: Perhaps I'm misremembering your misunderstanding, but this need is not based on the connector itself. It's just that by doing a product that large, you have to

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: bring the other part up to code. Right. And I think there may be there's new construction involved with the expansion, which both spaces need to be serviced undercover by the.

[Kevin Winter (Member)]: Thanks. The

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: White River Junction Courthouse renovation, we are adding $1,600,000 in FY27. That's for bank stabilization behind the courthouse. Folks will recall we've been putting, made significant investments in that building in recent years. This is to ensure that if, God forbid, we had another one hundred year flooding event, all of those investments don't wash away down the river. So this is to shore up that bank.

[Alice M. Emmons (Chair)]: Why wasn't that taken into account at the very beginning?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: I believe it was, Madam Chair. It was part of the original assessment, and I think it was a capacity constraint.

[Alice M. Emmons (Chair)]: Capacity of the capital bill.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: And in terms of the sequence, that's something that could be completed. So in Newport, community regulars will remember this has been a conversation topic for a long time. The judiciary will certainly speak to the need for updated courthouse space up in Newport. They have a variety of challenges currently in the existing space. This money, so there's some bonded money and some cash fund money, and it's a mix, I think, in both cases of some reallocations and some reappropriations, but the net impact is about $2,500,000 in new funding for this project. And the context that I think is important to give here is that there appears to be a lot of momentum in Newport currently. The municipal leadership and the local economic development folks have really coalesced around a vision for Newport in the downtown. And they are pursuing a TIF district, and they're really thinking about the future of downtown space. So there's a lot of moving pieces at play. We don't, at this point, I think, know exactly how every single thing is going to land, but PGS has been actively involved in those conversations. And we've discussed with the governor and we're feeling optimistic at this point that there may be enough soon to really make some progress on this project. And so there are some prior appropriations out there for this. There was an appropriation for land acquisition a couple of years back.

[Alice M. Emmons (Chair)]: It's 3,000,000. Do you know?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Not off the top of my head, but I'm sure we can make sure.

[Alice M. Emmons (Chair)]: It's around 3,000,000.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: So we wanted to make sure that as things move forward,

[Alice M. Emmons (Chair)]: that we were positioned to make speedy progress here. We've done this. It was an FY '22, FY '23, FY '24. I mean, we've put money aside thinking we could purchase a piece of property and then possibly start some design documents, but that has kept falling by the wayside. The money has stayed as far as I know.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: There's been a lot of shifting currents and land searches that were completed that didn't necessarily yield viable results. So it's been a dynamic process. So that brings the total. There's a new $1,700,000 in bonded for the judiciary plus a new 2,800,000.0 in cash fund. The final item on the list is $566,724 for the Vermont Historical Society. As everybody I'm sure knows, they house a variety of really important historical artifacts. And many of those are housed in a climate controlled vault. The unit that services that vault is called a Munters unit. There's this old and certainly past its warranted life, they're having trouble getting parts for it. And it's functional currently, but of course, the concern is if that very specialized piece of equipment goes, we could lose some stuff we don't want to lose as a set of valuable artifacts. And so this would help them purchase the new unit and install it.

[Alice M. Emmons (Chair)]: So is this also the berry one? Is this a silling berry?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: So if there's no other questions there, I will just take very briefly two or three more minutes, if it please the chair, highlight the policy sections of the bill. Those were the numbers. There's just three, and they start on page seven and eight of the bill language, which is a couple of pages back from where we were. Give folks a moment to get there. Sections nine, ten well, guess, sorry, one starts one page before that on six of eight, sections eight, nine, and 10. Sections eight and nine both come from the Department of Environmental Conservation. Again, something they can walk through in more detail when they're in, but essentially these are statutory changes that do a couple of things. They give the agency a little bit more discretion, a little bit more flexibility in determining eligibility for drinking water revolving state funds. They categorically define manufactured housing committees as eligible for these funds. And then there's a specific call out I think this is in section nine for water line extensions. So the net impact and the intention here is all about expanding eligibility to these federal funding sources, was asking about earlier, to facilitate more infrastructure and housing development, the overarching goals that we all have. So somewhat technical. And then section 10 is a small change, but it gives the agency of commerce and community development, specifically the vision of historic preservation, the authority to solicit grants, gifts, and donations, funds, etcetera, so effectively to fundraise for projects for maintenance. There is one large project this committee has discussed before in particular, for which we think fundraising would be one helpful tool in the tool belt. I'm, of course, referring to the Bennington Boutland, which I had the pleasure of going up the other day at Capital September. You go out on top. Early December, it was pretty chilly.

[Alice M. Emmons (Chair)]: It was chilly. Yeah.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: I didn't, though I was we got pretty close. They just changed it. But anyways, so that's one piece of a multifaceted approach there.

[Alice M. Emmons (Chair)]: Start with me, Peggy.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Peggy was one on with me. Time. Yeah.

[James Gregoire (Vice Chair)]: I'll just I I have two questions. So the first one in section nine about the Tama pollution control priority system rule. So I just wanna understand a little bit more what that language is. Is is it making an exception for new housing units coming online if there is an application for a wastewater facility to to get an expedited application through for that for that reason? So I don't know with certainty, representative. I think this is one that would probably be best if I punt to my colleagues at DEC who could speak in detail.

[Mary A. Morrissey (Member)]: I wonder if it's

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: have an assumption,

[James Gregoire (Vice Chair)]: but Well, that's because my next question is gonna be PFOAs and phosphorus, because I know those are two issues that a lot of municipalities have to deal with. So I'm just and it and it states that rule in that context, so I'm assuming municipal pollution would probably fall under that, but we'll get DC and hopefully because that's now two questions I've asked that apparently they'd have the best knowledge on.

[Alice M. Emmons (Chair)]: Yeah. I mean, that's

[James Gregoire (Vice Chair)]: And then my next question's also on section 10 because that's where I assumed you were going with it, but I'm assuming with opening up solicitations for fundraising, it's not just an exemption for the battle line that's opened up to other projects.

[Alice M. Emmons (Chair)]: But they have to specify.

[James Gregoire (Vice Chair)]: Yep. Let's yep.

[Alice M. Emmons (Chair)]: They have to specify the project.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yep. So it would be targeted campaigns representative for a specific historic site. They would go out and but I'm picturing, like, a beam thermometer. I'm sure they wouldn't. Then Beam thermometer? Yeah. You know where they fill up the beams and say, oh, look. This close to our goal.

[Mary A. Morrissey (Member)]: Probably not as important to me. Yeah.

[James Gregoire (Vice Chair)]: No. But so I guess that leads to my maybe the question you could answer best, if a specific project or a list of projects were to take that fundraising goal and they do receive money, would that be you would write the check to that specific project, or would it be to just a general pool of money that would then be easily distributed to all?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: If it would be earmarked for that specific project as to whether they'd have to make the checkout to the project, I think they would probably, a donor would make it out to the Division of Historic Preservation, not the State of Art. That's really like a treasury question almost, but I think the intent of your question, representative, is it just going into the slush fund and no, it would be for a specific campaign.

[Conor Casey (Member)]: Yeah, good presentation. Was surprised I was able to follow it actually.

[Alice M. Emmons (Chair)]: It's getting used to us.

[Conor Casey (Member)]: Yeah, that was good. I wonder, I could probably ask the question of ourselves as much. We got some heavyweight projects coming down the pike here, right? I'm thinking women's prison specifically. And if I look at what we have in the bank, I think it's like 16,000,000,000 there. And the prices are just growing every year we push this out. I'm worried it's gonna overwhelm the capital bill in future years if we don't start storing a few of this away now. So you might just talk about your thoughts on?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Sure, representative. Yeah, it's certainly something we've talked about every year for the last couple of development cycles. The 16,000,000 matches my understanding in terms of what was originally appropriated. Think point of clarification, I think it's down to like 14 ish because we've spent something on this, but there's a significant amount out there. I've talked a bit today about some of the statutory expiration dates on appropriations. Some of the original appropriations for the Williams Correctional Facility are going to start bumping up against those statutory expiration dates. In other words, if we don't spend them, they'll go away. I think we are also tracking the overall cost, taking it really seriously, knowing it's going to be a significant ask. There's always a tension, I think, between that strategy of trying to bank money and put it away and recognizing that every time you do that, that's money that's not funding all the things that are in this bill. So we could have taken $33,500,000 and set it aside for the one inspectional facility probably would have gone a long way, but then we wouldn't have been able to do any of this other stuff. So it's a constant balancing act of do we have enough money set aside such that, let's say tomorrow we identify a site, the community rallies behind it, everybody's happy, we're moving forward. That's now $14,000,000 that's sitting there, we feel very confident would be enough money to get the work moving and start all of making the progress we want to see, and then we would be back here to have a conversation about that. But yeah, to your point about how much do you set aside in anticipation, how much do you wait, it's complicated, dynamic thing to balance. And I'm sure this committee will be weighing that as you these recommendations and making your own determination. But we just have felt, based on the status of the project and where we see things, that there is adequate funding available to move if we needed to move. And in the meantime, we have all these press release priorities that we wanted to fund. Yeah,

[Conor Casey (Member)]: yeah. So like you said, we all have to struggle with that, right? Well.

[James Gregoire (Vice Chair)]: Going on Conor's point as well, did the governor or did the administration release an update to their ten year plan that they gave us last year based on the numbers for with this, Jesse?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: So so typically, representative, we update the ten year plan on a biennial cycle. So next year, when we're in here presenting the f y twenty eight, y '29 capital bill, we'll be updating.

[Alice M. Emmons (Chair)]: So one project that was not included in the governor's rec now is life and safety upgrades to this building. Could you weigh in at all on thinking of why that was included?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yeah. So I'm probably not the best to speak to the specifics, madam chair, of the project. I've not been close to the discussions. I mean, I think that we certainly all support life and safety upgrades and critical I guess that's the right phrasing, life and safety upgrades. I think it's been unclear, at least from our perspective, exactly what the time frame for that project will be. There's been a lot of ongoing deliberation from folks in this building about the size and scope and cost and the time frame. So it felt like since it was really a legislatively driven initiative that it would be perhaps more appropriate for the legislature to take their reins on identifying that cost. And does that speak to your question?

[Alice M. Emmons (Chair)]: It does. But the state the state house is under BGS. It is a state building and is where Vermonters access state.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: So

[Alice M. Emmons (Chair)]: it's very important for Vermonters to have access to their government. Believe me. Regardless if it's executive branch, legislative branch or judicial branch. So yeah. Anything else from the committee? That's it. Thank you, Nick.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: You,

[Conor Casey (Member)]: Shawn. Very much.

[Alice M. Emmons (Chair)]: I actually

[Kevin Winter (Member)]: I do have another question. I only saw additions to the funding that we are looking at.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: So I'm assuming that other committees are seeing where the governor has suggested reducing their spending. So I would just qualify representative to say that the reallocations that we walked through, those are in a sense reductions to prior year appropriations. Right. Money that was set aside. And so we're in some cases deciding, yeah, we didn't need as much. Talking about cuts or reductions is a little bit different in the capital context than the operating budget context because there's no real base construct like there is in the operating budget where every year it's the same amount. But I would say, to Representative Casey's question, to Representative Emmons' question, this bill is not without hard decisions and not without prioritization that's had to happen to say, we're going to fund this instead of this. The capital bill is an exercise of you have so much funding, how do you spend it? So a lot of those reductions and principles of fiscal management really enter into the frame in terms of what choices you make in terms of what you find. I don't know if that addresses your question or not. Certainly, yes. I think other committees, the colleagues will, I'm sure, in the coming months, have plenty to say about changes and reductions in operating budgets elsewhere. But this is a little bit

[Alice M. Emmons (Chair)]: of a different animal, if that

[Troy Headrick (Ranking Member)]: makes sense. There's also the presumption that the cash allocation stays here, when there's no rule that says that it will.

[Alice M. Emmons (Chair)]: Wait until that But conversation also, we made the balancing act with the replacement of the Woodside facility, the juvenile facility. We knew that there wasn't the capacity then our bonded amount or even within our cash amount to build that building on our dime. And that's why we decided to go to design build. But we know that that puts pressure on the general fund for that department to pay lease costs. So there's a trade off.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Or potentially other funding sources exactly that it would be the general funds. That's certainly a likely outcome, but could be some portion of special funds, hypothetically, or other funding. I just take the opportunity. I've been light, comparatively light, as compared to last prior years, as the committee will remember, on cash fund philosophy and cash fund sermonizing generally. But since it's come up, think every and I don't have my son to be my mascot this time.

[Troy Headrick (Ranking Member)]: Do it for Troy.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Every decision that this committee makes, as you're all weighing the important priorities and thinking about every dollar that doesn't get fully funded, that cash fund transfer that doesn't get fully funded and gets directed back into the operating budget, which is a balancing of priorities, is directly taking away from these capital priorities that I know some of us are tracking very closely as really important investments. So it's all part of the lovely sausage grinding that gets to happen in this building and balancing priorities. But my perennial plug that both from a we know we have capital needs like women's correctional facility, dam stabilization, all of these things I've highlighted as big things on the horizon. We know we're going to need capital funding. This is saying nothing about school construction, which is other big that's probably not ever going to land in the capital Belt. Construction needs are out there. To the degree we all and I'm appreciative, I think we're all appreciative of the fact that the cash fund exists, and it's been at least partially funded in prior years. I think the more we can all align and coalesce around that as a concept, we as the administration and the governor really firmly, firmly believe that that's the future of capital funding or a big part of the future of it. And so anytime we weaken it, it weakens that long term outlook and this virtuous cycle of saving interest costs and reinvesting those transfer and such. So again, that's my perennial plug. I know that committee will have a lot of thoughtful deliberations on the topic, but we do continue to believe it's really, really important. And I want to call out Scott, I think, did a really great job with his report on the cash fund this year. A lot of really good factual information about how it got started. Some of the players, it was a collaboration between then Trevor Pierce and this administration and some really bipartisan support that went into incepting the cash fund. And so we're excited to keep pushing on that front. We really

[James Gregoire (Vice Chair)]: think it's an important piece of policy.

[Alice M. Emmons (Chair)]: Good luck saving for Charlie's college.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: And pennies in the

[Alice M. Emmons (Chair)]: Speaking of cash, Anything else?

[Troy Headrick (Ranking Member)]: Sorry for putting that in your

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: I don't like that.

[Alice M. Emmons (Chair)]: Well, thank you, Nick.

[Mary A. Morrissey (Member)]: Thank you very much.

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Appreciate it.

[Troy Headrick (Ranking Member)]: It's been a

[William "Will" Greer (Member)]: few. Sorry.

[Alice M. Emmons (Chair)]: Next well, we'll start taking some testimony on this too, particularly more so next week, but we'll start. Thank you. Thank you very much. So for the committee, one thing that we have to do, and I wanna get it done tomorrow, possible is going up those ports. Yes. We gotta do that. We need to spend some time with Nick doing some scheduling, so I don't wanna get on on the reports. But government operations always puts out a list to all the committees. There's these yearly reports that come out. We go through this and say, do we need this report? Do we not need the report? We gotta get that done. Wanna get that done. Anything else before we finish up for the day? Because we've got to do scheduling for Ray and James Tate and I for next week. We've got to do that. Anything else?

[Conor Casey (Member)]: Oh, good. I was just gonna remind, we met with the smaller group on the budget items there. So I told Kate we'd like to request some of the materials ahead of time. So before we hear what their budget presentation is, we can gear up some questions for them.

[Alice M. Emmons (Chair)]: And then we've got some other little committees going. Anyone working on the commissary? Anyone on the telecommunication? Work

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: on it. No, not in the

[Alice M. Emmons (Chair)]: past weeks. Gotta get on it. You gotta work on it.

[Troy Headrick (Ranking Member)]: On me. If

[Alice M. Emmons (Chair)]: we wanna work on that bill and get it out, you gotta do it.

[Mary A. Morrissey (Member)]: Can we say at one point with the with all the different committees we have on it?

[Troy Headrick (Ranking Member)]: So

[Alice M. Emmons (Chair)]: then I'm a question to John, age 50. Mhmm. Are we we're scheduled on that tomorrow. K. We'll work on that. See what we can do.

[Troy Headrick (Ranking Member)]: With governors. Mhmm. What? Never

[Alice M. Emmons (Chair)]: And so we're not really doing too too much with the capital bill per se this week. That's not to say we won't because there's times here and there that we might be able to particularly on Friday might be worthwhile to do something. So normally what we do with budget adjustment, we're really focusing on those pieces where the dollars are moving, But that's not to say that we don't get into f y 26 and $27 that haven't changed because there are some projects that now the problem are interested in getting an update. So we don't spend as much testimony as we did last year as we're establishing the two year budget. But that's not to say that we don't look at some of the things we're gonna be Mhmm. And get updates in terms of what's going on. So it'd be really great to hear from committee members what you'd be interested in that's not has not been subjected to the governor's budget adjustment

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yes.

[Alice M. Emmons (Chair)]: So we can figure out the What

[James Gregoire (Vice Chair)]: is schedule. Write our ideas down.

[Alice M. Emmons (Chair)]: Write them down for what's made, whatever. That makes sense to folks?

[Nick Kremer (Chief Operating Officer, Vermont Agency of Administration)]: Yeah. It does. And

[Alice M. Emmons (Chair)]: I'm sure we'll have some requests for add ons. Sure. So let's call it a day. And, Troy and James, if you could Mhmm. Take so we can get some scheduling done. Anything else?