Vermont Legislature SmartTranscripts:

[Julie Moore, Secretary of the Agency of Natural Resources]: But turn off all my speakers first for your Zoom's voice.

[Unidentified Committee Member]: Good

[Julie Moore, Secretary of the Agency of Natural Resources]: morning, everyone. For the record, I'm Julie Moore. I'm the secretary of the Agency of Natural Resources, and I'm joined this morning by Steve Gomez, who's our Chief Financial Officer. I have just a small number of slides to talk a little bit about sort of the agency overall, but then get into the Secretary's office budget. And then know that you're going to hear from the two of our three departments that fall under the jurisdiction of this committee. So, as I noted, a little bit of an agency overview, just a quick refresher on the mission and organizational structure of the Agency of Natural Resources, updates on some of the prior fiscal year appropriations, and then talk a little bit about this year. There are a lot of slides in the deck we provided to you that I'm not going to touch on today, given finite time available, but please don't hesitate to reach out with any questions you might have. So just starting at the biggest picture, the agency of natural resource budget for the coming fiscal year is just shy of $300,000,000 This is about a $42,000,000 reduction from our current fiscal year budget, and almost all of that change is in the federal grants, contracts and loans section of our budget. As you may recall, the agency has been given the opportunity to deploy hundreds of millions of dollars over the last several years between ARPA and the bipartisan infrastructure law. And I have another figure in just a second that'll show that those those federal dollars are starting to decline at this point. If you look across our budget by department, you can see that the Department of Environmental Conservation is the lion's share of the agency's $300,000,000 budget. About two thirds of it is within DEC. That's really a reflection of where those large federal grant and loan programs live. Fish and Wildlife's budget is about $33,000,000 And then in the secretary's office, we're managing a budget that's just shy of $11,000,000 That includes my team, our legal services division, the civil rights and environmental justice unit, the climate action office. But we also administer pilot payments, the payment in lieu of taxes for state owned properties. The agency, I think, has profound impact on the Vermont economy in the dollars that we are passing through. We do about $40,000,000 in contracted business each year, more than half of which goes to Vermont owned businesses. We issue about $60,000,000 in grants, almost exclusively to Vermont organizations. And then we make about $65,000,000 worth of loans. The vast majority of those loans are going to municipalities for drinking water and wastewater improvements. But we have other programs through our solid waste side of the house that are also in play. This is the figure that I think starts to get at that dramatic increase in federal funding we've seen since the passage of ARPA in 2021. And then the fact that we've kind of crested and are now coming down the other side. So this stacked graph shows each of our primary funding sources. The bottom segment of this graph is the general fund appropriation to the agency. The olive green section above that is our special funds. So permit fees, fishing and hunting license fees. It also includes gate receipts from parks. Those types of things comprise those special funds. The turquoise block represents the sort of what I would call our base federal funding. So we have a performance partnership grant, for example, with the Environmental Protection Agency that's reflected in that blue bar. The skinnier olive bar on top of that is interdepartmental transfers. But what I would really draw your attention to is that dark green wedge at the top, which represents the bipartisan infrastructure law funding that the agency has benefited from enormously over the last several years. We hit the peak in FY '26, and that will now taper over the next couple of years, but had had sought to look for a way to sort of tease that out. So it doesn't look like that it's our overall federal funds that have kind of grown and shrunk. Really is what was intended to be time bound money. In terms of sort of what's new in the FY '27 budget, as I noted, we're seeing an overall decrease of about $42,000,000 But that really is being driven by the bipartisan infrastructure law and where we are in the arc of that work. Other significant budget changes I would point to include increases in salary, wages and benefits. We do have about six eighty full time year round staff at ANR, and then add over 400 seasonal staff during the summer. So we're a pretty big organization. We have seen increases in our internal service funds. So that's the money we pay to human resources for fee for space, for vision, for workers' comp to the tune of about $350,000 in the coming year. We did see a decrease in our insurance costs. This is our property insurance costs as opposed to health insurance costs. If you have questions about that, I would gladly defer to Steve. As you may have heard in other aspects of your work, ADS has changed the billing model the way they charge state agencies, and we've seen a rather significant increase as a result of that billing change. Our budget reflects the fact that the Forest Legacy projects were which were being funded under the Inflation Reduction Act have really sort of also passed peak. And so it shows up in our budget as a decrease in what we're anticipating from the Federal Forest Legacy Program. We are recommending or proposing to decrease the draw on our petroleum cleanup fund to maintain solvency. We will continue to do the core work required there, but just recognizing that the gas tax isn't generating the same kind of revenue it used to in that space. And then we've made a couple smaller changes in our air quality division that I'm sure Misty and Yale can speak to when they are in front of you in just a short while. So I can pause there with the agency overview before I jump quickly into the secretary's office if there are questions.

[Representative Amy Sheldon, Chair]: Representative North, it's been very quick. Thank you, secretary. Very brief question.

[Julie Moore, Secretary of the Agency of Natural Resources]: What is ADS stand for? The of digital services. So it's the IT services for state government. Sure. All right. So moving into an overview of the secretary's office. So of the six eighty full time year round staff, 43 of those positions are actually in the secretary's office, largely in the legal counsel side of things. So we do have a deputy secretary, Charles Martin, who's I'm sure a familiar face to many of you. Our civil rights and environmental justice unit reports directly to Charles. The rest of our office is organized under three senior staff members, Billy Coster, who's our Director of Policy and Planning. So he manages the agency's engagement in Act two fifty and Section two forty eight, as well as the work of our Climate Action Office. Katherine Gessing, who is our general counsel for the agency and supervises the legal services that are in each of the three departments, as well as our litigation team. And then Kim Greenwood, who's our chief operating officer, the financial administrative services team that Steve leads reports to Kim in that space. There were specific questions put to us by the joint fiscal office in terms of things they wanted highlighted in our budget presentations. And one of them was about federal grants. So just a couple of words about the Climate Pollution Reduction Grant program. So this is a program that's part of the Inflation Reduction Act. Every state that put their hand up received a $3,000,000 noncompetitive planning grant award. We are in the middle of that. It'll wind down by June 30. Whereas the Trump administration has canceled some of the implementation funding that was also part of the Climate Pollution Reduction Grant Program, they have not rescinded these planning grant awards. We have worked hard to sort of build to the federal account first in all instances and hold general fund in reserve out of concern that at any moment they might pull back on this award, but so far so good. DEC actually pulled this grant down for us in part because they have that standing relationship with EPA. And so it made it administratively much simpler. But our climate office is the team that is administering these awards. We were able to take great advantage of this money in the update to the Climate Vermont Climate Action Plan that was adopted by the Climate Council this past July. We're also using it to make some improvements to our greenhouse gas inventory, as well as do additional outreach around climate and climate needs. To date, we've expended just about half of that $3,000,000 and the bulk of what remains is is encumbered. It just hasn't fully gone out the door. And we do have a complete plan for the balance in that account. There was also questions regarding some of the prior year appropriations. In this instance, we did receive $300,000 in FY24 to support the climate super fund bill. As you may recall, we had worked in partnership with the treasurer's office last session and submitted a feasibility study around that work indicating the need for additional resources that were not provided. We've been sitting tight on this appropriation so that we have some capacity to bring to bear once the treasurer's office completes their work. But this is still a really challenging space for us, particularly given the amount of ongoing litigation facing the agency. And while the attorney general's office remains in the lead in defending the climate super fund, we are obviously their technical experts and without resources or capacity, this is placing strain on our office of general counsel. I think you'll see from each of us, this sort of chart, just as a way to look at the relative scale of the different pieces of our budget. So legal services is the largest chunk of both the 43 staff positions and the budget within the secretary's office. It's almost identical to the amount we spend each year on pilot payments out to towns. Our finance and administrative services team has a budget of about 1,800,000.0. Our climate action office has a budget of about 1,300,000.0. The secretary's office is really just three of us in a small operating budget as shown in this chart. And then you can see where the office of policy and planning sits as well as our Civil Rights and Environmental Justice Unit. And then we did include in here the budget development form. Personally, I don't find this thing particularly useful. Know it's important to the appropriations committees, the joint fiscal office, and frankly, our department of finance and management, but it can be really hard to see what's going on in there because it's just ups and downs without context. And so particularly in a line where you may have some ups and some downs, the things get lost in the shuffle, but it is in that packet and would welcome your questions in that space. And then also just included in our slide deck are links to a number of other reports that JFO had flagged as potentially having interest for the committee. And I'll stop there. But as I say, we're happy to answer questions you may have now, but also go into any areas in more detail.

[Unidentified Committee Member]: You mentioned that forest legacy is declining. And I guess, can you just explain what that is? Unless somebody else has been going into it in more detail.

[Julie Moore, Secretary of the Agency of Natural Resources]: No, because that'll probably That's obviously run through the Department of Forest Parks and Recreation. So I'm sure it got some more discussion in house ag and forestry. That is a federal funding program that we use to support large, in general, large line conservation initiatives across the state. There was a significant tranche of funding that was provided through the Inflation Reduction Act and the Forest Service worked to actually deploy the lion's share of those dollars during the first two years of the Inflation Reduction Act, which actually turned out to be a good decision and that it meant it wasn't available to be rescinded. We did very well under those grant programs. I would say Vermont sort of consistently punches above its weight in our ability to pull down Forest Legacy projects. And so really what that reflects is we saw a pretty significant increase in FY 'twenty five and 'twenty six in the Forest Legacy awards we secured from our federal partners, but are not anticipating that that will continue in FY27.

[Unidentified Committee Member]: That's a longstanding program that we've been utilizing. So you're saying it will just go back to more standard levels, you still anticipate it being

[Julie Moore, Secretary of the Agency of Natural Resources]: a good source. Yes, correct. They haven't ended the program. I believe we were not successful with the application we submitted that would have been funded in FY27. We didn't rank out this year, but it's also that reflection of the fact that there was considerably more resources the preceding two years than there sort of has been in the program's history.

[Unidentified Committee Member]: Yeah. One one concern I have big concern I have is if the federal flood insurance program pulls out and if private insurers flood for flood, don't renew, policies. There I'm I'm not sure if it's your department or who would be planning for that as a possibility?

[Julie Moore, Secretary of the Agency of Natural Resources]: So I would say it's not our department. We have a role in the administration of the National Flood Insurance Program through our Rivers team. They do substantial damage assessments and sort of determine what folks, what steps folks need to take to remain in compliance with the provisions of the national or remain eligible, I guess, I should say for the National Flood Insurance Program. But in terms of offsetting the availability of those policies, I suspect that would be a conversation for the Department of Financial Regulation.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Any other questions?

[Steve Gomez, Chief Financial Officer, Agency of Natural Resources]: Seeing none, thank you very much.

[Julie Moore, Secretary of the Agency of Natural Resources]: You're welcome. And hopefully,

[Unidentified Committee Member]: you're close to back on schedule. I

[Julie Moore, Secretary of the Agency of Natural Resources]: apologize that I'm not able to stay for the remaining presentation, but Steve will be here throughout.

[Representative Amy Sheldon, Chair]: Very So Thank you. You

[Julie Moore, Secretary of the Agency of Natural Resources]: for your time.

[Representative Amy Sheldon, Chair]: How are

[Stacy Scally, Commissioner, Department of Environmental Conservation]: you doing today? Good. Good morning. I set up. Nice to meet you. Miss Stacy Scally, commissioner, Department of Environmental Conservation. Let me get myself plugged in so that Peter doesn't die.

[Representative Amy Sheldon, Chair]: Representative Hoyt is not here today. So if you need to use that desk for your You're up.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Oh, just for all of my stuff. Right? But I also put that.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Mister chair? You think I might use representative White's chair as opposed to this metal one? I've got a back issue. Then that would be really helpful. Absolutely. Fantastic.

[Representative Amy Sheldon, Chair]: Take it, William. Here.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Well, again, good morning. For the record, again, Ms. Decent Scally, Commissioner, Department of Environmental Conservation. I'm also joined by Deputy Commissioner Cammon. And I believe on the screen, I have Tracy Lafrance, who is our financial director with our administration and innovation division. She's also here to assist with any questions that may come up. Think Tracy is gonna drive today the presentation and is gonna put that up on the screen.

[Tracy LaFrance, Financial Director, DEC Administration & Innovation Division]: Are you not seeing oh, okay.

[Representative Amy Sheldon, Chair]: Perfect.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: So in alignment with the new JFO budget testimony instructions, our goal today is to provide you with a clear, transparent understanding of our fiscal priorities. Given the depth of our department, I am not going to cover all 51 slides that I have. You all have the deck. We instead will really try to focus on what we see as the most significant budget drivers, including the tapering of the federal infrastructure funds and just our ongoing efforts to protect Vermont's public health and natural resources. So while you have the full deck, there will be only certain slides that we will be going over. But please feel free to jump in and ask questions. We can respond in writing or come back and have further conversations if needed. We have structured the presentation, again, to really highlight our mission and department structure, department budget overview, what is new with our budget, you know, key budget changes, federal funds, which is big one, as secretary Moore said. As the federal funding starts to taper down, you know, just to give that high level, we went from a budget, I think, peak last year of about 245,000,000 to this year about $2.00 4,000,000 prior to this influx of federal funding. Our budget was 117,000,000. So in state fiscal year '23, just to kinda give some perspective of where we've come from in the last few years. We're gonna discuss prior fiscal year appropriation updates. And then at the very end, there will be, reports and other information that is available at the the end of the deck that if we can get to, that's great. If not, we can always come back and answer those questions. Alright. So just to kind of bring back PERTMA mission, preserve, enhance, restore, conserve Vermont's natural resources, and protect human health for the benefit of this and future generations. This is very important to this is what I remind our team all the time. We have about three fifty one, I say, slotted positions for DEC. At this time, I believe we have about 30 vacancies. So that number is down around three twenty mark in terms of filled positions. That's a large number of people doing a lot of great work across the state of Vermont, A lot of mission driven people. And so when we look across our organizational structure, you'll see that we have nine different divisions within DEC, all centered around that mission. The at the core or at the center, is the commissioner's office. So that's myself, deputy commissioner Camden, our executive assistant, as well as, even though it's separated out here, our geological survey folks are also within the commissioner's office. Here, they're broken out. We have our administrative and innovation team, which is about I thought it was important to kind of to look at the number of folks in each of these divisions to give you an idea. So our administration and innovation division has about 45 employees within that division. Our environmental compliance division, which is up on top, has about 12 folks. Then you come down to our air and waste. If we're lumping according to appropriations, our air quality and climate folks, there are about 21 of them on that team. Waste management and prevention, around 60. Then you come into our office of waters. You have our water investment division, which I always say is a small small team around 50, but probably the largest in terms of money that passes through that division. And you'll see that on the next slide. I'll show you how it outsizes kind of the others. Our watershed management, which is 100 plus at our largest division out of all of them. And then our drinking water and groundwater protection, which is about 70. Right, going on to the next slide, just a little bit about each division, just as a reminder of kind of what each does. So our administration and innovation division, really department wide administrative, financial, and planning services, also leads the innovation initiatives and improves organizational effectiveness. So working hard across all the all the entire department to do that. Air Quality and Climate Division implements state and federal air quality and climate programs through monitoring, planning, permitting, and compliance to reduce air pollution, advance emissions reduction strategies, and protect public health and the environment. You'll see, as we proceed with this presentation, that this year there were some decisions that were that we had to make about what that vision did and potentially reducing the amount based off of budget constraints. Within the commissioner's office, provides leadership management, business policy, and planning services for all of department divisions and programs. Going on to the next slide, looking at drinking water, groundwater protection. These are the folks I always say turn out the most permits out of our entire department. They turn out about 3,000 permits, 25 to 3,000 a year. They ensure Vermont's water and wastewater systems are safe, compliant, and well mapped through regulation oversight and technical support. Our ECD folks, or environmental compliance division, I always say those are the folks that they they're enforcement, but also assistance. So those folks, ensure that adherence to Vermont's environmental laws and permits, is there as well as assisting folks with applications and accessing all of our different programs that we have. Vermont geological survey folks, you know, when looking at landslides, conduct geologic mapping, research, and outreach to provide or state of information on Vermont's geology, groundwater, and natural hazards in support of our health, safety, and decision making. They're doing some really interesting things in that department or in that division around mapping of different areas, especially a baking stove at this point. There's some great little devices that we have that will that reduce the amount of time that it takes to find water sources and map kind of the bedrock and what is going on underneath underneath, the soil. So, typically, Watershed Investment Division, manages state and federal funding. As I said, Watershed Planning and Infrastructure Investment to support clean water restoration, water infrastructure systems, and dam safety. Again, they are the ones who outsize, pass through the most money, especially with all of these infrastructure dollars that we have had coming through from the federal government. Waste management and prevention division, oversees solid and hazardous waste management, materials division, diversion, site remediation, and spill response. And then our watershed management division, which is the largest of all our divisions, manages and protects Vermont's surface waters through monitoring, permitting, technical assistance to safeguard water quality and quantity and strengthen the resilience of lakes, rivers, wetlands, and floodplain. Alright. So down to the slide that everybody is, this is this is our, budget overview by program divisions. So as, set up above, thinking about appropriations, we've set this apart. Up on the top, you will see a a breakout of the salary and benefits, operating expenses, grants, contracts, and loans by division. So the top table, and then the bottom table represents the media programs, and air and waste appropriations and office of water appropriations, are on the bottom. You can see that our water investment division, is very much dominated, if you look at that, by pass through. Also, a high percentage of pass through in drinking water groundwater protection division currently. Our water investment division do the bulk of the managing of the federal and state funds. Thinking ARPA, EIL, IIJA money, they do this through issuance of low interest loans through our state revolving loan fund grants, etcetera. I will say in looking at this table, again, some of the things that also will pop out, high percentage of in the commissioner's office, high percentage operating due to an internal services funds budgeted in the commissioner's office, which are things such as legal costs and HR, our lease for national life. Those are all pieces that are reflected through the commissioner's office piece of our budget. Interdepartmental transfer, which is shown on another slide as well. Also, you'll see even though it's that reflects legal services and other other fees that are charged across departments. I'm gonna stop here and ask if you have questions based upon this slide. This slide is also, you know, thinking about looking at the numbers, thinking about the pass throughs, do you have questions on any of those items there at this moment? You might

[Unidentified Committee Member]: have said this already, but are you anticipating any loss of federal funding? I mean, are you hearing or I haven't we haven't heard anything. So right now, the federal funding stands as it As yes. So unless I'll let deputy commissioner Kamen, I haven't heard that

[Stacy Scally, Commissioner, Department of Environmental Conservation]: there has been any. We will talk a little bit about some pullback of federal funds from the NRCS side in a couple of different slides. But for the most part, what we have been slotted is still there for BIL in this year. I believe next year is the last year. And what I will say about infrastructure funds is across all across the aisle, those are funds that, no matter what color you come from, they are important and continue to move out the door. I don't know

[Representative Amy Sheldon, Chair]: if Great.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Commissioner, do you have anything else?

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Let me add a little a little extra color for that. So, Neil Camden, deputy commissioner at DEC. Nice to see you all again. In addition to what Commissioner Sinsegali said, I can report to you that the federal appropriations for interior appropriations, Fish and Wildlife, NRCS have been passed by the House and the Senate and have been signed by the President in a minibus bill. So what that means is that the nominal funding levels that we were looking at in both the House and Senate catalogs appropriations came through pretty much as expected. So we're seeing pretty much level funding for our federal appropriations and even a tiny little bit of plus up in some of the water funding for the Lake Champlain Basin program. So that's congressional intent, and that's been signed by the president, and now it's of course up to OMB and EPA and the agencies to move those dollars. Those will be the next steps, but nominally business as usual.

[Unidentified Committee Member]: Good, okay, great,

[Unidentified Committee Member]: thank you so much.

[Unidentified Committee Member]: Great question.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Alright. We'll move on to the next slide then. So this is a visual that is really representative of those pass through funds. So you'll see that our water investment division, when we look at the budget overview by program divisions, really shows the magnitude of pass through funds, but the magnitude of all nine of our divisions. So the largest blocks represent, our five media divisions, and our commissioner's office, which is where many internal service fund costs are administered. DC's water investment division passes through, as I said before, significant state revolving loan fund dollars to support critical water and wastewater infrastructure throughout the state and has brought the recent large increases to the DEC budget based off of those federal funding that we talked about, the BIL, IIJA funds. For the second fiscal year in a row, our drinking water and groundwater protection division has really taken second billing and budget magnitude due to also continued, IIJA and BAL funding through, though decreasing from, fiscal year twenty six. And as it tapers off, will decrease again next year and the year after. And the Waste Management and Prevention Division also has considerable pass through dollars for management of contaminated and superfund sites. And it also has a portion of the pass through BIL, IIJA. The watershed management division, is our largest division. As I said before, a little over 100 positions, within that division. And it also has the largest slice of general fund, out of all of our divisions. Any questions on this slide?

[Representative Amy Sheldon, Chair]: Sure. A quick question. Which which which division does brownfield remediation fall within?

[Stacy Scally, Commissioner, Department of Environmental Conservation]: That is our waste management.

[Representative Amy Sheldon, Chair]: Waste management. Yes. Thanks. You're welcome. Question, since there is a significant amount of money that's passed through on the formal grants, loans, contracts, whatnot. It would be really interesting, and I haven't seen maybe you have more detail here, but it'd be really interesting to see kind of detail where that 130 ish million dollars is is going. Who's spending that? Are we getting for that?

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Through our water yeah. So yeah.

[Representative Amy Sheldon, Chair]: It's it's going through multiple different divisions, and and maybe Neil would have more information on that, but it would be really neat to see kinda where all that's going and what we're getting for that.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: I'm sure we can come back and have that conversation. Michael, it's more detailed

[Representative Amy Sheldon, Chair]: than what we're going to have here.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Oh, so great. I don't know if you have any. I mean, our water investment division does a fantastic job with and has continued to, throughout the years even prior to this, getting that money out the door to all of our communities in Vermont. And this has been, as evidenced by the pass through funds, a very big heavy lift that they've taken on just through ARPA, BIL adding about 50 positions, you know, to get that money out the door, to get these funds on the ground, and to get the infrastructure into the ground. We can certainly have more and come back in for more conversations around that as well.

[Representative Amy Sheldon, Chair]: Just a brief follow-up on that. Is that the area where you would expect to see most of it continue to decline as we expend these ARPA and BIL funds? Yes. Yeah. Going

[Stacy Scally, Commissioner, Department of Environmental Conservation]: back to, I think, the slide above, it was think, percent was is that kind of that pass through funding right now. That won't completely go away because we do, every year, receive funds through EPA for our state revolving loan fund, except in clean water, but it will considerably shrink.

[Representative Rob North (time-bound override)]: Can you just give us a little bit of a going back to the previous sorry, I'm not sure which slide you're on. I'm on slide nine. Just a sense of the scale of the clean water funds for our phosphorus TMDLs. Do you have a sense of what?

[Stacy Scally, Commissioner, Department of Environmental Conservation]: I'm going to turn over to my WGN for this I

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: kinda wanted to answer representative North question too.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: So

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: I'll answer both of them starting with Clean Water Fund. So Clean Water Fund is nominally a little bit over $30,000,000 a year, of which 10,000,000 would be bonded and the remaining is Clean Water Fund. I think it's a little bit more than that because of revenue over performance. I think the Clean Water Board is booking a budget of around $26,000,000 These are course numbers. I can go dig up the spreadsheet. To add to that representative North, about $18,000,000 to $19,000,000 in clean water state revolving loan funds will come in and cycle into the clean water state revolving loan fund, including match from the capital side of the clean water budget. About 20 to 22,000,000 in drinking water state revolving loan funds will come into the drinking water loan fund and then be available to loan out. Every year we get money, and every year we're loaning dollars out. There'll be a list of legislative reports that we've submitted and the state revolving loan fund, the clean water performance report, all of that is listed there. So that's where those dollars are going.

[Representative Rob North (time-bound override)]: And bonded funds are not in this. Is that accurate?

[Steve Gomez, Chief Financial Officer, Agency of Natural Resources]: Correct. That runs through the capital bill.

[Representative Rob North (time-bound override)]: Yes. So out of this 114,000,000 in the water investment division, about 20,000,000 of that, it sounds like, is the ship lane and roughly.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Sure. Roughly, yes. Roughly, yes.

[Representative Rob North (time-bound override)]: Great. And then just similarly on funds for purchases of land for permanent ownership in DEC. Is that where is that in here?

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Yeah. Yes. Yeah. Was redirect over to mister. Was gonna say

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: DEC does not administer sort of land acquisition funds, but we help broker some of those. There's some federal funds that we bring in that then go out for land acquisition, some of which go to Department of Fish and Wildlife for that purpose.

[Steve Gomez, Chief Financial Officer, Agency of Natural Resources]: Yeah. So, most of the agency's land ownership land acquisition projects happen in the Department of Forest Parks and Rec and the Department of Fish and Wildlife. Now, it's a combination of some of their base funding sources like Forest Legacy or Robertson dollars and then there's also as deputy commissioner Kimon mentioned, there's also money that passes through EPA, the DC, to Fish and Wildlife to accomplish some of those projects.

[Unidentified Committee Member]: Those were those that capital, unless it was bonded, was in the ANR's overview across those departments?

[Steve Gomez, Chief Financial Officer, Agency of Natural Resources]: Yes, so anything that's not bonded, yes, would be embedded there.

[Unidentified Committee Member]: It might fluctuate quite a bit.

[Representative Amy Sheldon, Chair]: Yes, correct.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: There may be up to $3,000,000 inside of that big blue square for land acquisition that represents federal funds coming in that would go over to Fish and Wildlife.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: If more information is needed, just let us know. We can get that to you. Okay. I'm going to jump to the next slide, which is DEC budget overview. So as Secretary Moore said, DEC is the largest budget in Agency of Natural Resources. This year, we're going to see a budget overall decrease from $245,000,000 in state fiscal year 'twenty six to about $2.00 $2,000,000 this year in fiscal year 'twenty seven. And that really does represent that tapering of federal infrastructure investment and Jobs Act bipartisan infrastructure law money that's passing through DEC. So for context, I said before, DEC's budget in 'twenty three and state fiscal year 'twenty three prior to the Infrastructure Investment and Jobs Act and bill was $117,000,000 So just to give you the magnitude and the amount of money that we have been managing with staff passing through in the last few years, and just all the great work that that means that is getting done in our state and for our state for lasting generations. Our '27 base budget largely represents a continuation of current services for DEC with a few minor reductions. The primary driver is a reduction in a few particular programs. And by the BIL money issued through grants and loans in 'twenty six and not continuing into 'twenty seven. So the money that has already gone out the door. That will be touched on in the next few slides. Also, personal services category at this level includes contractual budgets, which can vary significantly from year to year. So some one time decreases represented here offsetting the salary and benefit increases. We're also gonna see a decrease in operating that is primarily driven by a reduction in one time environmental site work and the air and waste appropriation. These are beneficiary payments for individual property owners paid direct to contractors and part of the steps being taken to to stabilize the. Control fund. It's hot in here. It's just DEC's operations include several special funds, which include the environmental permit fund, where most of all of our environmental permit program fees are collected. The Environmental Contingency Fund, pays for investigation and cleanup of contamination where a responsible party is not known or is unresponsive and a public health threat exists. We also have several others, which very much buried within the slides. You'll find an operating statement for our special funds, and we can talk through some of those if if we need to going down. This budget also includes, 6% general fund increase, which we were able to absorb that the staff and administration cost pressures for, fiscal year twenty seven using some of our available federal and special fund balances for the increased salary benefit and internal service costs. Also, as we said before, the interdepartmental transfer that really is looking at legal services as well as some others, other funds or other fees that we have that we move back and forth. It's important to note that DEC is very much supported by our legal services team. And we about we have six fantastic general counsels in DEC. And that's part of what that line represents. Yes.

[Representative Amy Sheldon, Chair]: The top line there, personal services, just want to try and understand what else is there. So it looks like there's a significant reduction from year to year, which is about 14.5% or so reduction year over year. And back in the A and R slides, the overall, it looks like if

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: you just focus on salaries and benefits,

[Representative Amy Sheldon, Chair]: it looks like the increase is about 6.5%, which, you know, so benefits and salaries, things are getting more expensive, understand. But we're seeing a significant reduction here. I'm just wondering, are we losing people out of DEC, or is that all contractors?

[Stacy Scally, Commissioner, Department of Environmental Conservation]: I'm gonna, I mean, I I know that we do have contracts that go yeah. I'm gonna turn it over to Sarah. Go for it.

[Steve Gomez, Chief Financial Officer, Agency of Natural Resources]: Yeah. For the record, Steve, only CFO of Anhara. The personal service line, that includes salary and benefits for staff. It includes all contracted services. It includes worker workers' compensation. It includes, a few other account codes like, Catamount Healthcare, unemployment insurance. So it's all of those things rolled up into a single line. So it's more than just that. So that's what you're seeing that line.

[Representative Amy Sheldon, Chair]: But with a significant decline and noting likely salaries of base personnel are increasing. Mean, it looks like overall at the agency level about 65%. Significant decline here, so we're just losing a lot of our contract help. Is that where this big decline is coming from?

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: It's a reduction in contracts associated with bipartisan infrastructure laws supported for, so it's that federal funding.

[Representative Amy Sheldon, Chair]: As that tails off, we're shedding the appropriate contractors, not necessarily losing our base personnel or no? No, okay.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Budget does not contain a reduction in the number of staff. A

[Unidentified Committee Member]: little footnote on that. What about what are they called? Limited service positions. When you say there's no reductions, that include how does limited service positions fit into your overall picture?

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Sure. Would you like to answer that?

[Stacy Scally, Commissioner, Department of Environmental Conservation]: You can put that. That kind of rolls into our next slides too of ARPA. All

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: of our kind of nominal baseline services are fully supported in this budget. American Rescue Plan Act dollars were infused with a very short timeline, something that I spent a lot of time on and I'll speak to you a So little bit about shortly some of the positions associated with that will be sunsetting at the 2026. And I believe, Steve, that ARPA positions are not captured within the base budget within this budget. Right? That's Yes. K. Unless Tracy can correct me if

[Steve Gomez, Chief Financial Officer, Agency of Natural Resources]: I'm wrong, ARPA should be separate. Yes.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: EIL positions are right here. Yes.

[Unidentified Committee Member]: Perfect.

[Unidentified Committee Member]: I gonna wait until towards more towards the end, but since we're talking about positions, you mentioned earlier that there's about 30 positions that are vacant right now, which is almost 10% of your staff. And I'm wondering, in general, where those positions are and what the efforts are to fill those positions. Are there some that are gonna be left empty? Are we having trouble filling some? I just wanna get, like, a more detailed picture of what's going on within the vacancies.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: So this this could be a, like, a joint effort on this one. So there are definite so we we do have Tracy online to maybe speak to Tracy, can you speak to where specifically those are? A good number of vacancies, I believe, are actually limited service positions. And I don't know, Tracy, if you can speak more to and and then I can also speak to we are having trouble filling certain types of positions.

[Tracy LaFrance, Financial Director, DEC Administration & Innovation Division]: I don't have a a summary breakdown of where they all are, but we can certainly get that back to you.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: But I I do have a feeling, deputy commissioner, correct me if I'm wrong on this one, That a good number of those are limited service because we are, as we are approaching the end of, or I would say, what I would say, our ARPA dollars. And those limited service positions are kind of as the money I mean, as it is supposed to, as the money is dispersed and spent, those positions, because they are a limit service will will then disappear and come off. We have had, I think, some trouble filling some of those limited service positions because they are a short window of time left for folks to come into. And so there have been they are more likely to be not filled. We also, I will say, do have trouble filling certain technical positions, such as engineers, just with the limited folks out in the job market right now. So there are there are certain positions that are harder to fill, out of those. I don't know if deputy commissioner, you have anything else to say about the yeah.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: So the budget is constructed with a number that's called the vacancy savings number. That represents our nominal churn that we see. Right? Like, you're never gonna be a 100% capacity a 100 of the time. Our vacancy savings number is nominally as it's been for a while.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: We didn't bump it up six. Yeah.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Or anything like that, and we're not strategically trying to keep positions open. No. As the commissioner states, we're trying to fill them. Moreover, some of the ARPA positions that, you know, those good those are good people, and they know those positions are going to sunset. So we are encouraging folks, as positions come open that are longer duration or permanent, that they should certainly apply for those, Try and keep those good people.

[Representative Amy Sheldon, Chair]: Go ahead, it. No, that's about good. Do I understand that your explanation of the amount of churn, you expect about a 10% being carried year over year for maybe the past two or three bienniums. That's basically our biennium. That's about what you expect for a vacancy.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Tracy, can you answer that?

[Tracy LaFrance, Financial Director, DEC Administration & Innovation Division]: Our vacancy savings is based on, like, a 2.2%, I believe, churn, essentially because not all vacancies are are created equal.

[Unidentified Staff/Analyst]: Currently, it's a little bit your vacancy's savings rate is lower than your actual vacancies currently. Okay. Right. Right.

[Tracy LaFrance, Financial Director, DEC Administration & Innovation Division]: And a lot of those vacancies are are positions which are not in our base budget also.

[Representative Amy Sheldon, Chair]: Right.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: So, yeah, as as Tracy knows, a lot of those are our American Rescue Act positions, and as they come vacant, we're not refilling them. Or if we are, it's very purposefully recruited in that way. This is a ten month position. We've got a couple of those we're doing on purpose because the programs need help. They're very surgical pieces of work that need to get done. And then we're balancing the rest.

[Representative Amy Sheldon, Chair]: Representative Jacob.

[Unidentified Committee Member]: While we're on this topic, I've heard anecdotally that some departments have really lost, in some cases, maybe a significant number of staff due to the return to work policy. And I

[Stacy Scally, Commissioner, Department of Environmental Conservation]: guess I'm just curious, DEC, have you lost staff and have additional open positions because of that? Sure. Yes. I would say we have lost staff. I can't speak to the exact number that we have lost. There are still exception requests out there. There are still folks that, but we have lost that. I I don't I can't speak to whether it's each one of those staff to me is hard to lose because it's hard to lose any staff. At the same time, we have been filling, refilling positions as they, come available and have also gained some great employees, as well. So yes. So we have lost. So and if more information is needed on that, we can come back to that.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Can I can I just off offer a little addition? Those are very personalized decisions that people are

[Stacy Scally, Commissioner, Department of Environmental Conservation]: making there. You know? And

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: And I think some of the decision making that I'm observing have been around for a while, it's just a generational shift in people's expectations as to how much you invest in the activity of getting to your workplace and doing your job. And I've seen a loss of a couple of really talented people claiming commute distances or whatever that kind of honestly surprised me. Come to find out there was a better deal over there, and I saw that person's name pop up at, for example, Stonefire, know, Payback, so be that. But it's, we haven't seen the mass exodus that people have been, projecting. And we are, even though it's tough to refill certain positions, other positions, permanent positions in the analyst series, we're seeing a lot of applicants. We are seeing extremely qualified post federal employees coming to join us. And, you know, I wanna say we welcome them with open arms. We have gotten people from AID, NRCS. So that's, you know.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: A Shifting. Shifting. It is a shifting. And I will say overall, I enjoy being in the office and seeing folks and hearing hearing the conversation, hearing the laughter, and hearing the stories of folks being able to meet new people or just walk across the hall and have a conversation. So I think I think overall, it was it was a tough couple months to get to where we are, and I really do think it is a very positive experience overall. And as deputy commissioner said, as a previous federal employee myself, it is great to find a home for folks that very much meets and lines up with their, kind of, their mission in life and what they like they love to do. So But any further questions on that, we can certainly have a conversation. We're going to talk we're going do a little bit of the ARPA overview. I don't know if we want to switch chairs or if you want

[Unidentified Committee Member]: to go on that. We

[Stacy Scally, Commissioner, Department of Environmental Conservation]: just have a couple of slides. And deputy commissioner has been on the ARPA front for Yeah, I was getting Yeah, so

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: So I've spoken to you all before about the American Rescue Plan Act appropriations and listed here on this slide are all of the different appropriation lines. To all the different program areas that we've been carrying forward. And just to give a little flavor of it, the first two or three of those is about stormwater management and combined sewers, things we've talked about in this room over the last couple of years. The Green Schools program is an amazing program, essentially taking all of our high schools and elementary schools that have storm water requirements all the way to full implementation, fully funded either federally or through ORPA. Healthy homes are the small wastewater and drinking water wells for low income Vermonters. So we've talked about a bunch of these programs before. Village water wastewater at the bottom being new wastewater systems, London Dairy, Walcott, Montgomery, Highgate, those. So exciting work. I was privileged to be put into the driver's seat of some of it six years ago, and all of a sudden we're seeing coming to the end of it. So there's been discussion. Tracy, if we could go down by one slide, please. There's been discussion about the pace of appropriations. So I just want to remind the committee that there's two flavors of ARPA money now flowing through our budget. There's federal, state, local fiscal recovery funds, that's pure ARPA, appropriated by the 2024, expended by the 2026, hard deadlines, working really fast. And then there's what's called cured general fund, which is where the administration essentially replaced some dollars that were ARPA dollars with flood recovery funds, which became eligible for ARPA. And so essentially turned those dollars into general fund, expenditure deadline of ninethirtytwenty twenty seven. So a little bit more relaxed, we're extremely strategic about how we in DEC assigned those cured funds to the most riskiest but highest reward projects like those big village projects. So we invested as much general fund we could into the ones that we really wanted to make happen, and we really knew were at risk of those tight federal deadlines. And there's just two rows here that showed up, expended and encumbered and unincumbered dollars. And I just want you to see the change between September 30 and December 15 in terms of

[Representative Amy Sheldon, Chair]: the

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: amounts expended jumping up and the amounts completely obligated jumping up. So leaving very few dollars on the bottom line. Last year, appropriation committees were very interested in this. I have a file of incredibly detailed information that I've maintained in case anybody's got a question about any project, I can answer it. But that is where we are, and I feel really good about what we're going to get accomplished with the body of investment that we've done. It's just a generational amazing thing that we've been able to see happen. Those are the two slides on that.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Yeah. Perfect. Thank you. And as somebody who works on the outside with deputy commissioner and other DEC staff, the folks our our team has done an amazing job getting these funds out the door. The amount of funds and the amount of work, not only ARPA, but BAL and others to so many great projects, it is truly a generational impact of what these folks

[Representative Amy Sheldon, Chair]: Representative Chittenden.

[Unidentified Committee Member]: Thanks. That's really impressive, the amount of money moved between September 30 and December 15. And you should feel so proud of that. That's just really, really impressive. Just as you talk about the generational importance of this kind of work moment, I guess I'm just curious, and you don't have to answer this right now, but I'd just be really curious to see how as a state we could really, I don't know, eighteen months from now, really maybe do some reflection, celebration, just to help the monitors even start to understand the implications of the outcomes and implications. I'd love to understand outcomes and implications, so I guess I just would invite conversation about how we're going to do that as a state.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: All our children are amazing, right? But I've just so The team that has worked in the Healthy Homes program to help manufactured housing community residents and to help low income homeowners who were literally using buckets, and some of the stories that I've heard coming through that program. But the other thing I also just want to point out is it's not like, yes, yes, we got some money out the door. You've got contractors, you've got yellow machine operators, you've got engineers, everybody has been pulling boards on that. Everybody's truly capacity. Water, wastewater, environmental space, with all these dollars, the entire system is at max capacity. Everybody wants people. Everybody wants yellow machines. So

[Stacy Scally, Commissioner, Department of Environmental Conservation]: the beginning environment's hot. Everybody wants engineers.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Yes.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Yep. Alright. We're gonna go to the next slide, which is another federal funds update, really. Yeah. And so is one So USDA NRCS, Natural Resource Conservation Services, who we work closely with, Unfortunately, under this administration, the current administration, rescinded about $2,200,000 of technical assistance funds under the Regional Conservation Partnership Program. This TA, technical assistance, intended to supplement Well, this TA work, take a step back, some of those contracts had already been signed, were already out there. This administration came in and said, I'm going to take not only the technical assistance funds, I'm going to take the 8.1 total of financial assistance to actually complete these projects. So project was intended the RCPP was intended to address water quality, soil health, and forestry and habitats by targeting small farmers and forest landowners with limited access to conservation funding to reduce new nutrient impacts, strengthen soil health, and food and flood resilience, and also enhance resilient terrestrial and in stream habitats. Just to give you an idea of types of projects that this money was going to be used for. So again, the $2,200,000 that they rescinded was largely obligated to third party contractors as of 09/30/2025. And that accompanying 8,100,000.0 of financial assistance was intended to go directly from NRCS to farmers and forest landowners for practice implementation, and that also was rescinded. While it was rescinded, chose to, DEC chose to pursue an appeal to USDA National Appeals Division. And last week or the week prior had a pre hearing conference with the administrative judge. So we are in that process of saying, we had money obligated. We have projects lined up. We have a pipeline of projects. You should not have taken that money. And we will see where it it goes, but we are are all confident that we are doing the most that we can to say, no, you didn't have the right to do that legally. And we are asking the appeals division to take up the case and to hear it. We can update as needed on how that goes. Going on to the next slide, just some key budget changes. And I'm just going to be cognizant of time. Also, I'm going try to get through as much as I can. So again, bipartisan infrastructure law funds coming to the Department for state fiscal year 'twenty six. Most of the decrease is compromised of those grants to communities under the water infrastructure improvements for the Nation program, as well as lead service line replacement loans, which is under a supplemental drinking water bill grant. So that's where you're going to see some of that decrease come from. General trajectory of those federal funding, just to understand how we will see the decrease kind of hit us as a state. So in fiscal year 2324, state fiscal year, we had an increase of 32,000,000 from BIL funds when they first first came on on the scene. For '24 and '25, we saw $45,400,000 increase. For state fiscal year '25 and '26, we saw a $41,600,000 increase. For state fiscal year '27, it's the final state fiscal year in which we expect to receive new bill funding. And so I believe we're expecting I don't know if Steve or Neil about the same or about the same amount of money. It's a substantial amount of money in in a number of years.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: So one one one piece on that, because it's a large block of money, so just to put it on the table. We will not be pulling in lead service line replacement dollars from EPA because we don't need the money. We've drawn down as much money as we need to basically cover all the lead service line needs of the state at this point. So we're declining to draw those down. They're match free dollars, but there's no reason to draw them down if we can't use them for the purpose. So leave them for other states that have more acute problems.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: For just for contracts, for one time costs, for contracts, our department has a lot of one time projects, and there's always a great deal of fluctuation kind of from year to year. We've noted that in previous slides. So sometimes these contracts are swapped for grants and vice versa. We saw a significant reduction, as deputy commissioner stated, from '26 to '27, largely IIJA and bill related in that line item. So $4,500,000 reduction in Commerce Street groundwater remediation, dollars 3,000,000 reduction in PCB testing and indoor air sampling, kind of user contracts, 1,800,000.0 reduction in kind of our historic preservation work for Eli Pike. So those are just some examples of those one time cost reductions that you'll see. We also saw a significant decrease in environmental site work funded by the Petroleum Cleanup Fund. As previously mentioned, these are beneficiary payments for individual property owners paid directly to contractors, and part of the steps being taken kind of to stabilize that fund as well.

[Unidentified Committee Member]: So we lost it. Yeah.

[Unidentified Committee Member]: Are PFAS PFAS funds at all included in this? I mean, noticed they were ending. I think they're ending, but I didn't know if that involved your agency or not.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Yes. We have a not necessarily in in this realm, but is there a specific

[Unidentified Committee Member]: Just I was wondering if it was the ending because the federal funds were being withdrawn or if any of that was federal funding for the schools. Oh, the PCB. PCB. I'm sorry.

[Tracy LaFrance, Financial Director, DEC Administration & Innovation Division]: PCB PCB.

[Unidentified Committee Member]: Yes. No. No. No.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: That that's okay. So so that that conversation is happening. It's actively happening underneath, I would say, this roof right now in terms of the PCB work. There was no amount of money right now budgeted for fiscal year 'twenty seven. And so the work there, and we'll talk about it in a couple of slides, funding that we had been given is spent, really. In essence, it's already committed to certain schools. So, there are some conversations happening about, how to move forward, understanding that that doesn't mean that everything is solved and everything is cleaned up. But right now at this this time, there's no more funding in the budget to do that.

[Unidentified Committee Member]: So there's no requirement now on schools to have the inspection. If there's a problem, are schools respond do you know if schools are responsible? Or is it just on hold right now?

[Representative Amy Sheldon, Chair]: I'm going to

[Stacy Scally, Commissioner, Department of Environmental Conservation]: take a step back and say that you, Deputy Commissioner, I would rather have Matt Chapin, is our division director, come in and speak. I think it's a great conversation and great questions. I'm going to leave it to the technical experts because I know it's and and there's been some conversations around potential solutions to or proposals to meet that next need. So I would say

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: topic over in town. Yeah.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: So it very much is. So again, division director Matt Chapin, I'm sure if you would like to have more conversations

[Unidentified Committee Member]: with

[Representative Amy Sheldon, Chair]: me about this. Great.

[Unidentified Committee Member]: Thank you.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: No. No. Great questions.

[Unidentified Committee Member]: I wasn't Ed, so I just switched to environment. Neil,

[Representative Amy Sheldon, Chair]: you mentioned the lead service line replacements going away. Is that for the next year, the '27 budget? Because my community has inventory there as much as they can, they're lead goosenecks and have a program to replace them. So when you say that community trying to achieve compliance, Is there money still available? Yes. Okay. Yes. Absolutely. We're just talking about next year.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: These were the lead service line awards were coming into the state of all the loan funds, drinking water side, to the tune of $28,200,000 a year. Like, that's a lot of money. So we took the first year, we took the second year, third year, and during the first two years, we started, through the drinking water program, the inventory process to see what we had out there. Right? And the community certainly wanted that. And coming into the third year, start to think about do we need to draw these dollars down or not? So to keep a tight eye on what the inventories are telling us, for year four and year five, we just don't need it. So the dollars remain, and the drinking water stayed revolving loan, 49% subsidy. So Thanks.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: All right. We will move on to our next slide, which are budget key changes. So ongoing and other operational costs. Salary and benefits, we saw increased total 2,800,000.0 kind of across all base funding sources. Another operating pressure, included the net increase that we saw in the Agency of Digital Services, which Secretary Moore spoke to earlier. Their level agreement and core enterprise services cost under the new billing model implemented, we saw a 353,000 net increase and, ADS service level agreement costs. We also saw $600,000 reduction in our underground storage tank loans to offset, significant increases in expenses in the petroleum cleanup funds. Although the PCF revenues funded by the gas tax have kind of remained relatively stable to date, The PCFs PCF is solvent in the near term. The purchasing power of the penny per gallon, as we know, has eroded considerably as the cost of clean up materials, equipment, and labor has continued increase. And then I had spoken earlier that we did have a $18,000 reduction kind of in our air monitoring pass through. So our air quality and climate division is experiencing rising annual staffing and administrative costs. That's not unheard of, which are placing strain on kind of the availability of special fund balances. So to help address some of these budget pressures, DEC proposes to discontinue funding, for several pass through agreements. So, some of those, are the CAMNET, which provides real time visibility monitoring Burlington, which is about 5,000. The UVM's Mercury Monitoring Program in Underhill, 13,000. And then the funding for Drive Electric Vermont, thousand. About $5,000 contract, which supports Vermonters in adopting electric vehicles, that's actually going to transition to our climate action office for ANR. So those are some of the key budget changes being proposed. And I'm going to actually, my slide deck, your slide deck, if you're following along, will have our breakout by appropriations. And I'm, for time's sake, going to move through or past those to go to some prior year fiscal updates. Mean, we can always come back and I can talk more on whatever slides or information you need. But just for time's sake, I wanted to give you, Tracy, at slide 25, prior fiscal year updates, to give you an update, which I think many of you are looking to. So act 27 of 2025, you know, appropriations for the support of government, you know, one time appropriations for the CAFO program, concentrated animal feeding operation database project in contractor support. So, this is well underway. We actually have a CAFO meeting this afternoon, with stakeholders. So, we will continue to come to these funds, and this process being led by ANR, but with the agency of AG, is continuing. And our report, that is due was due February 15. I think we are asking for a little bit more time, but those meetings and that process has actually that stakeholder process has been going really well. So I look forward to continuing to be a part of that and continuing to support staff and moving that forward. Again, also part of that, we have two new hires as part of that capo. And I know the program manager, Abby Pritchard, has been in and discussed how staffing up and stakeholder process and creating rules is moving forward. And to me, it's it's a great process with a lot of great momentum moving forward. So the next prior year fiscal year update that I'm gonna act one thirteen of 2024, which is one time appropriation for the Flood Safety Act. I know that we've you've had some of our fantastic staff in here to talk about the Flood Safety Act and where we are and where we're moving to. So kind of the status is that the river really, the rivers program is in the process of contracting to support, education outreach and coordination for the study program, National Flood Insurance Program study group, to create the infill maps, update the river corridor base map and DC mapping procedures, and conduct the training funds to be obligated by Fiscal Year '26. So I know that you all have had conversations around that. I don't know if there's questions, any more questions related to where we are with that. If not, we can always come back to it if needed.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Representative Chapin. Yeah.

[Representative Ela Chapin (time-bound override)]: Just wanna belabor it, but maybe just on this one in particular because we're looking at a lot of date changes. So this was appropriated for FY '25, Or I guess if you could just say a little bit more about the sweep over a couple of it feels like it is covers addresses a couple of different budget cycles.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Yes. Sure. Yeah. So let's say if the act was passed, let's say the act 2023 money into the 2025 fiscal year budget, right? So then what happened in July 2024 was a redo of 2023. And you've had Rebecca in here before, but I mean, I think if I dispassionately step back and observe what happens in a major flood, is it basically sets that program back by about a year. It's not just the immediate response, it's also helping municipalities, substantial damage determinations, document everything so that they can maximize the reimbursement from FEMA. And that's super important. And that is what took priority. So that gives you a full year of, we weren't able to do it and now we're doing it, and here we are.

[Representative Ela Chapin (time-bound override)]: Sorry, that piece I think we've heard. I'm trying to just follow the dollars. So those people's salaries get paid from the general fund. You have a chunk of money to ramp up capacity or to cover certain activities? Sorry, we could talk about this offline.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: So these one time dollars, these are for contractual support for the infill mapping, for the flood hazard area, river corridor piece, all of that, the outreach contracts.

[Representative Ela Chapin (time-bound override)]: Those people just haven't been hired yet or already in process.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Already in the process. So, yeah, so just a little bit of a breakdown, the flood hazard area study, original kind of out of that $1,900,000.0225000, cumbered about 135,000. So grant to Mountain Scott New Regional Commission has been there. The hiring of the staff is the biggest piece of that. Getting them on board. We have also, as part of that, because it also includes the wetlands, has contract with Ferrowood Consulting as part of that that is out there and spent.

[Representative Ela Chapin (time-bound override)]: And so there's a legislative process with through appropriations that says this from previous fiscal budget, now we're acknowledging it's gonna be in FY '27. Correct.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Part of the carry forward process, that's exactly why we're showing it's a carry forward.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: The and the yes. And the and, you know, looking forward and having, as respect Rebecca has stated, working hard to get those those folks pulled in, trained enough to feed. Yes. So in the next slide, just a quick note, which you've also heard is that with the Blood Safety Act, did request 18 positions to support the implementation across the different divisions. We provided resources for 11 and continue to try, as Deputy Commissioner said, to work with getting those set get that getting those programs staffed up and moving that forward with those dollars. So the 10 new permanent FTEs hired as of June '51 environmental engineer for dam safety, we're still under recruitment after multiple recruitment attempts. It's kind of one of those positions that we've talked about that is is harder to recruit for given what we have out there. Also on the slide, one time appropriations from municipal wastewater connection database guide, requests for proposal for third party contractors being finalized and expedited as of January. So I know that I reviewed and worked with the program to try to get that out the door for that to be finalized. That's Brian Redmond's shop on that. Then this is the one time appropriations for the PCB testing and remediation. So, startup awards issued in summer twenty twenty five. Two schools nearing cleanup completion with others in corrective action planning. So over the next thirty days, we're going to approve for summer work at Twin Valley Elementary, as well as North Country Union, Hartford, and Green Mountain Union. And there would be 4 and a half million to implement the plan at Green Mountain Union. So that's that is really money well spent, and we'll see what what the future holds for that. Knowing where we are with time, I don't know what's next.

[Representative Amy Sheldon, Chair]: I got the last one. I have just a logistics question here. I'm gonna be I'm almost somebody helping put together our budget letter here. Just so I understand, when when you say prior year fiscal updates, some of these things seem like they were carry forward. They're gonna show up in the twenty seventh, other things you talked about how we Yeah. We'll use the money. We'll it. Yeah.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Well, for I mean, these are all so carry forward, they're all we still have they're still carrying forward balances. So even though there are, like, GE

[Representative Amy Sheldon, Chair]: But all of the things in the prior fiscal year updates charts, all of

[Stacy Scally, Commissioner, Department of Environmental Conservation]: those are Correct me if I'm wrong. That's it. Right? Balances. They it's, they're all carry forward down. Or yes. They should be part

[Steve Gomez, Chief Financial Officer, Agency of Natural Resources]: of Department of Finance and Management's carry forward report.

[Representative Amy Sheldon, Chair]: So, okay. I just want to make sure I understand.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: So what that means is that these scholars are being attached to all these projects, and they become encumbered. But if you do what's called a vision report, right, and the appropriations say that this is their thing, you won't see those dollars as expended yet. And since they're not expended during that fiscal year, the authority to request their carryforward. So that's what that is.

[Representative Amy Sheldon, Chair]: So the numbers in the appropriation column on these on these cards, that's entirely carried carry forward balance, or or was that the total appropriation that was given at the beginning, some of it's spent, and some of it's carried forward? I guess that's what I'm trying to understand.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Tracy, do you want or Steve?

[Representative Amy Sheldon, Chair]: Tracy. Tracy can't. Tracy. Could

[Stacy Scally, Commissioner, Department of Environmental Conservation]: possibly guess, but I'm gonna let just the

[Tracy LaFrance, Financial Director, DEC Administration & Innovation Division]: Tracy? We do have a section in here that kind of breaks that out. It goes down by each of the ones that shows how much is spent, how much is encumbered.

[Representative Amy Sheldon, Chair]: In a separate set of slides called carry off. Carry off. Okay.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: They're in this deck. Yes. They're just down at the bottom. I mean, many tables. You'll see each appropriating line. Gotcha.

[Representative Amy Sheldon, Chair]: Got it. Thank you.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Yeah. And yes. And and feel free to take a look at those, and there are a number of carry forward funds that are there that we can we can walk through.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: Thank you very much.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Being mindful of time, I can either continue to go keep going, or we can I can answer questions based off of what you have? You can always come back and answer

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: your expecting our next presenter five minutes ago. So I guess we'll have to cut this one off. If we have questions, we'll ask you to come back.

[Stacy Scally, Commissioner, Department of Environmental Conservation]: Yeah. And I would say looking at the remaining slides, I will. Tracy, can you just go to there is the special fund operating statement that we put in here. And please feel free if there are questions on any of the remaining slides. This special fund operating statement just gives you an idea of the different funds that we have. And we can always provide more information on any of those funds that you would like, same with any other questions that you have. But it was asked for, and we're we're putting it in here as well as the carry forward funds, representative North that you were talking about. A little more detailed description goes into those. And I would say we we have also our reports as well as our budget forms attached to this. There's also some performance reporting that you can take a look at. And if you have more questions, we can certainly come in and talk more about as well. But I feel like we we got through the the the big changes or the main changes and hopefully answered all of your questions. And I appreciate your time today.

[Neil Kamman, Deputy Commissioner, Department of Environmental Conservation]: I appreciate you, George. Thank

[Unidentified Committee Member]: you. Thank you so much. Very nice to meet everybody.

[Unidentified Committee Member]: Yeah. Thank you. Thank you. Too.

[Representative Amy Sheldon, Chair]: Sensitive noise. I will produce in night in terms of that. It's triggered.