Vermont Legislature SmartTranscripts:

[Rep. Matt Walker (Chair)]: Ernie, now you're right center stage, right into the live. Good morning. Good morning. Good morning. And welcome. Wednesday, 01/21/2020 here in Room 10, a joint hearing between the Senate Transportation and House Transportation to welcome Secretary Flynn, agency of transportation, to give us the overview of the budget. We heard a fair amount yesterday. Quite a bit of the budget speech was directed at transportation from the governor. And now I guess we're anxious to hear feel and paint in some more of the details. And thank you all very much for joining us and for all of your members of your team. Senator Westman, if you'd like to add anything.

[Sen. Richard Westman]: I think we'll let the secretary lead us through from a high level so we have an idea of where we are.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Thank you very much, Chairman Westman and Chair Rutland. For the record, my name is Joe Phillips, secretary of the agency of Transportation. And with me today in the room around the the walls are Attorney Sathel, the director of maintenance Jeremy Reed, Chief Engineering Director of the Highway Division Dave Thurberg, the director of Fleet Michelle Blumhauer, the director of policy, planning, and intermodal development Jana Morris, the director of administration and the CFO and Andrew Collier, the commissioner of the Department of Motor Vehicles. I believe that's every probably get by this. Oh, I was gonna say Mike Smith, but thanks. Warmer deputy commissioner Smith throw a curve at me by being in the room. That's anyway, nice to see you. Excuse me. All right, as the chair said, we're going to walk through this at a very high level and I know that our members are starting to agree from committees following this. I will look through it and as always it's parents desire whether you know stop and ask questions or how you should handle it all. If you go right to page on slide two, we're coming in at $934,700,000 this is the largest budget in the agency industry with an increase of almost $50,000,000 over the last year. The budget overview on the next page shows the different fund authorities on the left hand column the '26 has passed, the gov's racked for '27, the ups and downs. I do want to get out of the way immediately what I believe is probably the biggest question on everybody's mind and that is that the budget that I am presenting to you today before you does represent 31 reductions in force at the agency and in the budget that has captured 4.1 in savings. Of those 31 positions 19 of those are actually built with employees and 12 of them are. Of the nineteen eight of all of the entire thirty one eight of those positions are in administration. 20 of the positions are in district plaintiffs two are in highway divisions, and one is in policy planning and intermodal development. There are no planned reductions in force at the DMV or at Central Garage Week. Certainly, I know there'll be much conversation about that but I want us to just air that immediately as I said before you today. So, with that, moving to, you know, we've built a budget based on specific savings due to the collective bargaining agreement. We cannot say exactly how many positions are impacted in each division. I laid out what I laid out but the way that it works and many of you heard this last year when we came before you as a result of the revenue downgrade live, talked about some reductions then. Position numbers that have been identified by us are then reviewed by labor relations in concert with the contract with the SCA. Some employees will have status, what they call status, and some employees will have rip rights, which means that they have a right to another open position either at AOT or somewhere else in state government. So it doesn't necessarily mean that each person separates from employment, but because of that process, and that is not a process that we need to manage that's managed between labor relations and then the language of the contract regarding rent rights has to do with the person's work with service etc. While I indicated what the numbers could be in the area that can move somewhat and the target number is baked into the budget though so it's a I hate to say it's a work in process there's nothing I'd say I intend to sound callous about it being done in their eating habits job. But at this point, our duty is to do a normal labor relation, and they take it from there. That's the message that I need to give. The $331,000,000 in T Fund does include $10,000,000 being proposed on the Governor's as recommended by the judge yesterday, moved to the agency from the purchase and use tax. And of course, because that is for coming in on the fee fund side or state dollars that amplifies what we're going be able to do because we can draw down federal money. We go through that later and certainly when TPG and Reed's team testifies to projects you'll hear more about that. On the federal side the increase in that $63,000,000 that you saw in the prior slide is attributed to that $10,000,000 and that's what that brings us down in the pool. With the $10,000,000 93% of that is intended to go to federal highway aid projects and 7% will go directly to maintenance in the way of brushing tree cutting to continue some of that roadside maintenance that we've been trying to accomplish for the last four or five years. And if you notice too on that slide to take one another there's an $11,000,000 reduction that primarily attributed to fewer 20 fewer flood projects from twenty twenty four projects just becoming completed. Tip fund reduction accounts for rightsizing of the tip budget. The 26 proposed tip appropriations based on the twenty fourth consensus and with the fund transfer from the TF to Tim count January downgrade and 27 of the governor's record, we are reducing TIP appropriations simply to match the consensus. So, that's the reason you see that reflected and again on that list there's no remarkable change in setting the law. Moving to slide four, slide is the pie chart that you're all used to seeing. It's basically just shows where the source of revenues in our budget come from. Slide four in my deck, but that's not the slide on the Bradesco.

[Rep. Matt Walker (Chair)]: Pie chart? Pie chart. Okay.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: If you have a pretty good There we go. We are. We are. Bye bye. So again, I think most of you are familiar with the side chart. Joe, where our money comes from, obviously, the largest piece of this is the Federal Highway Administration. State Transportation Funds is the second down in the lower right hand quadrant. Obviously, you know, that's basically all the money that we raise to the Department of Motor Vehicles. Other federal funds, those are Federal Administration, Federal Aviation Administration, Federal Railroad Administration, and the National Highway Transportation Safety Administration, the primary other federal funds that come to us. And then local and other sources, there's some payment money and then it's local money for some of the grant that we put out. So that's basically how we derive the money that we propose to spend in this '27 budget. Then moving to slide five, again, I mentioned this a moment ago, submission of the '27 budgets includes cleaning off from the purchase and use tax. In other words, the third of the purchase and use tax that has been going to the ed fund from transportation for decades. We are proposing that that began to reduce as initially the day by transfer for years was much higher and at some point perhaps fifteen or more years ago, and I know there are some 70 representatives from the former representatives who remember this. The JTOC transfer that went to public safety was set in motion to decline in increments I think of $5,000,000 over a number of years to a a floor of 20,250,000 where it stayed for twenty years, and then last year you agreed to transfer that to diesel. This proposal sets the same in motion for the balance of the induce the third purchasing use that goes from transportation to bed. And it would ramp this down in increments of 10,000,000 over the next five fiscal years. That's basically what that shows on that slide. You know, I know we sat in this room when we were here in September about the pandemic downgrade and I do believe it's important that I understand that there's an awful lot of fight here and I spoke with some of the committee members that date in September. I understand that this is part of the education reform discussion And I understand not only as a person who sits before you in the cabinet, but as a property taxpayer in my town in South Bureau, and a dad of three kids eat, they come from a good floor as well in this state. That's a complex circumstance. That's not lost on me. But what we are saying is that I think together, and this was really the tone and words the governor yesterday, we all have to figure out where we go from here. And the point I'm here to make today as the secretary of transportation because it's my responsibility to do that and I believe that is that the transportation funds that you all have said too for over a year, many of you before that, that there is a sustainability problem going forward. And one third of the funds that are available for transportation are diverted anywhere, that's not an Ed speech, but when they're diverted anywhere, and at the same time simultaneously, we have a growing concern about sustainable funding for transportation, it's responsible for me as secretary to just call that out. And again, that's just a it's a fact based statement. So it's important that this be launched and that over time working together, we get the funding from purchasing those back from the transportation fund where it's now needed versus as the governor referred to yesterday have stated, when these were identified forty years ago, I believe in 1991, were basically lopsided, they had a balance. The T Fund was flush and the general fund needed a tremendous amount of cash. So between the T Fund and some income tax increases at that time, they were able to come through that. But here we are. So again, I understand this process that launches today and it's deliberatory between both committees and the entire legislature but this is where we stand. What we support So, moving to the next pie chart, this is where we spend the money. And again, you can just take a look at this, but you'll see that there are some primary buckets that are similar in size. One thing I want to point out, one of the first things I want to point out is state paving. You will see up there 148,000,000 That is a significant change within the last thirty days job we would be. And that is primarily due to the fact that the owners are proposing $10,000,000 in purchase use. If not for that 10,000,000 which we are amplifying some projects to come under federal aid paving and then others under state paving, we wouldn't be at the 148. And we have a list of the projects that are directly attributable and I believe they are spread across 11 counties in the state. These are above and beyond what we saw our budget. I apologize because it seems like I've got people behind me and I don't mean to not look at you. But there are I believe it's 11 projects all told or maybe not so I think it's 16 all told that weren't in our budgets even three weeks ago, even two weeks ago because it's the and then what we can do with that $10,000,000 by bringing federal money down from many of those projects. So and and again the spread is very similar every year just slightly different sizes. Interstate bridge roadway seat, you know bike and head winter maintenance. You know, is what it is and I'm happy to answer any questions on it. The next slide, program development budget. This just gives you a snapshot of the breadth of the construction program going forward in the budget that we are capable of. Have paving projects, interstate bridge projects, highway bridge projects, roadway, traffic, safety, parking ride, bike and pad, transportation alternatives and one rest area is in the program at this time. Sitting up in the downs from the chart on your left, we anticipate 151 miles of paving with a budget of $148,000,000 what the current rough price we pay per mile and the type of treatment based on the different projects and overall three forty nine construction projects across all 14 counties of Vermont not two forty nine in there. Construction projects totaling two forty nine and they will be spread across all 14 counties of Vermont. The district maintenance and fleet budget again really just reflects the basic category of the work done, I'm sorry, district maintenance. Next slide is policy environmental and intermodal development. Again just some of the roll up here on the right, I think I mentioned this when I was in a couple of weeks ago but it's important that we talk about just momentarily the involvement that we have as an agency with all of the towns across Vermont. Every town that you would have done in this room would have had conversations with the agency. The agency would have worked with your towns on different projects. Two thirty eight towns, I believe we had a degree of involvement, we had an involvement with two thirty eight towns of the 50 that they were doing. We don't quantify that in the dollar value, but I do believe that that is what they said because it's not easily identified when we get to the last page of this, which many of you have already looked at, and I get it, but it's an effort, it's an effort and behind every effort is a cost, but it's important, it's important work. And you see down through here everything, and I won't read them all, it's a very small thing, just from eleven eleven permits that we issued, either better than or commercial development speaks to the environment since the electric vehicle charging the substance and speak for the rail trails There's a lot in that shop and this slide just depicts the work on the right and then the ups and downs on the left. Public transit you can see that ridership this is statewide it's not one of the particular providers. Statewide ridership is still below what it was last year. Different providers are having different experiences. Some providers are up, some providers are down. It does continue to support the micro transit service that you see across several communities. It does address some extra awarding to CMT. There have been obviously many conversations about DMT mobility and transportation initiative grant programs. There have been federal aid state funds that have been granted and and in the case of the Northwest of where I live, RTC is taking over a rural family from DMT. So, you know, that's been an initiative that's just recently underway. So, there's a lot happening in transit. Of course, Ross Mcdonald will be in to testify to that. The next slide is administration transportation buildings and the transportation board. Let me just start with the transportation board under statute, we've been put in the agency of transportation in our budget, it's on a mortgage chart, it is a totally separate video and influence transportation board, it has an executive secretary and then it has a board chair and members of the board appointed by the government, but it's in our budget and then as far as the administration division I mentioned before the the reductions of that group and they basically just managed the administration of the agency transportation buildings. I want to take a moment just to level set regarding the central broad reconstruction of the Pain Turnpike that is not in our budget because the money for that was not really in the budget with the agency of administration managed through Chief Recovery Officer Doug Farnam because those are FEMA dollars and they have to be one off. They cannot be used for anything like FEMA recovery for that facility because we accepted the award that was granted that was offered for that facility, but that is not in our budget. You'll see that we have a great bill that is on the USDA for granted this. And then we move to the Department of Motor Vehicles and you'll see there is an up at the Department of Motor Vehicles. I think again the story here is that since we all have met, well obviously we met a couple of weeks ago to talk about the accomplishments that I mentioned as well then, but you know officially in this joint committee, I want to just reemphasize, as we're monitoring, we should be very proud, I hope, and as legislators and people who govern the tech club, you should be pleased with the work that was accomplished by the agency of digital services, the Department of Motor Vehicles, and the contractor FAST Enterprises who have delivered the monumental software upgrade to DMV, one that I have said before goes back to the cobalt era, which I know looking around this room, it probably predates some people in the room. And it was done and it was completed. It was completed on time and on budget and it's operational and the work doesn't stop there Things like the e permitting program, which is really independent of the core system upgrade or internally referred to as the Vermont Hall pass a new l. So, those of you don't know about that, they've got the hall pass if you're in high school, it's a little pun on the words there, but we're heavy haulers can go online and get their permits in a such an expedited fashion, and it also has a degree of predictability about routing things like the point of kiosks within the building so that a Vermonter walking into the building or someone new to Vermont walking in the building who may have a registration, mean a radio station or may not have a registration for service. Also, if we go to the kiosk and we'll be able employ more of that. So, we'll hear more of that from the commissioner starting this morning but a lot of actually good things that II know that former deputy commissioner Schmidt in the room and former commissioner of Lalley in the room that all of these initiatives were started in their tenure and you should be proud of the accomplishments as well. And this does then lead to non highway programs. I know that this is probably among the more important slides to know for all of you. Is a down. The downs often reflect as you very forward have stated for available projects as well. So at this time we must manage the funding cap for the projects that are related. Have to also take into account the condition of the varying degrees of projects in the entire portfolio and fund those across the spectrum whether they're projects or estate projects based on need, based on condition. I know there'll be a lot of discussion about this and this is but this it meets all the statutory requirements of the funding that we were required to provide and that's the summation of the slides of the presentation. So, I know that that was a really fast run through. Nice trades. The most beneficial portion of our time for you today is the dialogue that we have, the comments and concerns that you take away, the responses that you provide. Well, I guess I would officially Senator White. Yes, I would.

[Sen. Becca White]: Thank you so much, Secretary Flynn, for coming and presenting to us. And I appreciate some of the clarity. So I just want to make sure I understand the firings that you're going to be doing. So you had 24 folks, as my understanding, who were let go due to the rescission plan, and this is an additional 31 folks. So is that a total of 55 employees or positions that will no longer exist in AOT? Or am I what what's the Venn diagram of people who are losing their jobs?

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: You know, they they're in the first round, were 26, I believe.

[Unidentified legislator]: Oh, so okay.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: And they I don't know if I recall, they were not all built. There were vacancies of that group. We can get to that number. Yeah the math would add 31 to that number.

[Sen. Becca White]: So we're look so there's okay about 57 Vermont AOT positions have been eliminated

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: That's this the way the math works out. That is correct.

[Sen. Becca White]: Thank you. I really appreciate that. Do you have identified which districts? Because you noted, I think it was you had a list of what district garages you were cutting from that total. Do you know what garages you're cutting from?

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: We know what's represented in the 4.1, but the exercise, as I laid out before, really now today, starts with labor relations with the SEA and who had birthright status, so that can change. That's not indefinite at this time.

[Sen. Becca White]: Okay. So it's not like you've identified District 2 or District 4, we're going cut five.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: We are not being that one.

[Sen. Becca White]: Okay. I appreciate that clarity. And then my only other question, just at a high level, and then I would get into the details. Thank you for the white book. You noted that it's important for us to move the purchase and use tax back to the T Fund because it would create sustainability. But my understanding from joint fiscal office is the purchase and use tax is declining and is really volatile during recessions, for example. Do you think it's a good decision for us to try to put that money as the sustainability driver for the t fund when we're seeing volatility and continued decline there as well?

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: I think the way I would answer that is the factual math is that in the last five fiscal years, $220,000,000 has been diverted out of the T fund. So that's that's would speak to sustainability and over the lifetime of the purchase of news tax, prayer, it's over $700,000,000 that has been taken from transportation. So I would offer that there's a strong likelihood we wouldn't be in a situation over sustainability had that money not been converted from transportation all along. And especially over the last five fiscal years, because $220,000,000 of state money, if you do that math at about an 80 fivefifteen split, that would provide the ability to bring down more federal money than there is to bring down at this time. But structurally you don't just wake up one day and find yourself in a structural sustainable situation. It's something that's happened over time. So I can tell you that in part for all of the reasons why it was diverted when it was diverted over time it has led to where we are today. So we need to get that back. And again in the real time, in the time that we spent here, and many if not most of you have been here, $720,000,000 has been diverted from transportation. I do believe that in response to the question that you pose in an appropriate way that it is sensible to use that money and to suggest that that money offset any other fluctuations. Now, it's not the end all and the be all of what we might do in the future, but it's fundamental to predictability. It's fundamental to our ability to draw down more federal money and if you have to recall too, we are now in the last few months before we learn what the authorization will look like which comes in in twenty twenty six October. That's the federal authorization. That's the five year exercise Congress goes through and it has gone through for three thousand five hundred and forty years. I believe since the Eisenhower administration where they derived formula money that we get every year and so we don't yet know what that will look like but being more well suited to have more state dollars at hand starting July 1 should this pass puts us in a much better position if there's an increase or even if there's a static circumstance with the authorization. $220,000,000 is $2,020,000,000 dollars Representative Clark? Yes, you for your presentation.

[Rep. Clark (first name unknown)]: So if I'm understanding correctly, did you say 57 positions since July 1?

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Well, 31 now, I believe it

[Rep. Clark (first name unknown)]: was 26. So, of those positions, are any of those historically unbilled positions? So, when we're talking about how many like physical bodies?

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: There are 57. It's a total amount. And we can correct this in a Director Morris I

[Sen. Richard Westman]: did not hear that.

[Speaker 5]: The record, Jaina Morris, Director of Administration for

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: the Transportation.

[Jana (Jaina) Morris, Director of Administration, AOT]: So in our fiscal 'twenty six expenditure reduction plan, we eliminated 31 total positions. Of those, three were permanent classified, 25 were limited service as part of the Infrastructure and Consumer Foods Act, and three had already been unfunded as part of the fiscal 'twenty six budget. So they were originally not counted in the numbers that I had provided in my original testimony, which were subsequently corrected by John Breyer and recognized during that testimony that afternoon. Of those 31 positions, 15 were vacant and 16 were filled. So of the 31 positions we have this time, 19 are filled and 12 are vacant. So that's our overall 62. Thank you. You're welcome.

[Sen. Richard Westman]: There's some confusion about particularly the numbers from the fall.

[Unidentified legislator]: Yeah. From the fall.

[Sen. Richard Westman]: And the rescission piece.

[Sen. Becca White]: Maybe we could get like an email with it. You because just said there's 31 positions from the rescission plan or is this so it's actually 62 people that are being Total.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Positions. From the fall.

[Sen. Becca White]: Okay. We could get just like a little chart to understand.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Those are bacon tender question.

[Speaker 5]: Maybe could

[Unidentified legislator]: just get that

[Sen. Becca White]: written out somewhere because I hear lots of competing numbers from different folks. So

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Well, you just heard that thirty one and thirty one, and when I spoke a moment ago, I said I thought it was 26, but I understood correct. It's it's 30.

[Sen. Becca White]: So, I guess if we just get written down, that would be

[Unidentified legislator]: really helpful. Guess. Yeah. So, just be

[Rep. Matt Walker (Chair)]: representative McCoy, you still had the floor. If you did, were set with your question. Secretary, how many what's the total FTE or total headcount or both in the agency?

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Believe it's, like, 1,322. We're out for it.

[Rep. Matt Walker (Chair)]: 1,322.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Yeah. It's maintenance. It's got.

[Rep. Matt Walker (Chair)]: Do you have a ballpark of the amount of occupancy? Probably like

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: twelve fifty, twelve sixty.

[Speaker 5]: I'm sorry, the current our vacancies?

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: No, the current roster of both 1,300. Operation 1322, think it is. Where are we? Roughly on December, December. Has been a little bit of bit of bit of retiring independent of this people coming on board.

[Rep. Matt Walker (Chair)]: I was just looking for a ballpark of we have about 100 vacancies in the currently a

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: little bit less, but it's probably close.

[Rep. Matt Walker (Chair)]: Okay. We have authorized the budgeting authorized thirteen twenty two thirteen hundred plus employees across the entire state.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: That includes the including the Okay. Thank you. Representative Corcoran, I'm sorry. Just had a quick question. The 33,000,000 shortfall, I have 10 from the purchase and use, roughly 4,000,000 from layoffs. Where's the 18? Can you walk me? Is that project delays or how do we get to the 18? Are you referring to where we started? The '27 budget? Was 33,000,000. So I'm just trying to put that piece together. Yep. Welcome. If

[Candice White, Chief Financial Officer, AOT]: I may, Candice White, Chief Financial Officer. I have a slide deck that I'm going drive to HTC today at 01:30. Okay. That blocks us from the 33,000,000 to where we are right now.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Alright. I'll withhold my question. Like both of that was one times. One times. Okay. My

[Unidentified senator]: apologies, Senator. My apologies, Neden. Thank you, Secretary. On slide six, you talk about the stabilization reserves being used. And then maybe I missed this coming in late. I just wondered if you could walk or maybe it's Candice walk through this use of the stabilization reserves. And then what what is your level of confidence that that reimbursement for the floods that was denied is gonna come through? This is I'm assuming that the July twenty four floods is that's the July what that is that the kingdom floods from last year? I think so.

[Speaker 5]: So this this slide that references the July 24 reimbursement my apologies on this, that is out of date. The reversion, I'm sorry, the transfer amount that we're giving to the Stabilization Reserve in the '27 budget fully funds the 5% maximum. So we decided to go with finding funds in the FY '27 gov back because that's a more stable figure. And yes, this '26 construct basically borrows from the stabilization reserve temporarily until we fully fill in '27.

[Unidentified senator]: And you're feeling you're going to fill that with that reimbursement from the credits?

[Speaker 5]: No, it's it's continuing in our '27 budget construct. Construct. No.

[Unidentified senator]: If that money comes in, that's just gonna help you Correct. Yeah. Following fiscal years. Okay. I think I've I also have a question if it's okay to put the chairs on slide nine about the maintenance reduction. Mhmm. Again, apologies if you talked about this before. What what is gonna be what's the reaction on the ground of a 4000004% reduction in the maintenance budget? I know in past years, when the committees have talked about smaller reductions in maintenance, it's been met with very strong concerns about what that means to our maintenance. Then also kind of related, how's it looking this year? Are you thinking you're going to be over?

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Let me address the first part and we'll talk about the second part. The reduction you're seeing is primarily the reduction due to the physicians I had mentioned in '20. So that's basically it. We have, you know, we do not cut when we're maintenance, it's mostly physicians. Now, that said,

[Unidentified senator]: people that do the maintenance. Right

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: now, I know Director Patten was sitting behind me, as of last week we were running about 25% of pot on salt, tons deployed. We are not in a probable situation at this time. Salt was moving from the port of Portsmouth, New Hampshire this weekend, into Vermont. I've met with the trucking companies, I've met with the railroad, you know I think it's fair to say that you know the type of winter we're all having across Vermont continues, there will be concern you know at the town level, but it's hard to predict. Winter certainly started out in a fury faster this year, actually last calendar, late last November and all of the summer. So we are ahead of the pace last year, but we really never know what the whole season would look like. I don't think it's going to taper off, think it's going to continue. Mean, the forecasts said that. So weekend doesn't look good. I guess my

[Unidentified senator]: concern is we're going to have this cut. I mean, we're also going to need more money just for this fiscal year.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: We're currently in a situation where we can manage this fiscal year, but again, that depends on where winter takes us. And that's not indifferent from every year. It's just this year, there's not a lot of margin.

[Unidentified senator]: So what did you say? The reduction of the 31 total positions, how many are in maintenance?

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: 20 are intended to be in the consent. Okay, thank you. Representing Burke? So again, you feel obliged to obviously finish the projects that are in play and you feel obliged to do everything we can to fund the projects that are ready to go. When the project ends and the spending stops, it's reflected in the budget so it looks like this is you're making down but you can read, they can have a cohort deal on some of those projects but much of it is that.

[Speaker 5]: He's on the other side.

[Dave Thurberg, Chief Engineering Director, Highway Division, AOT]: Yeah, So a lot of it has to do just with the cyclical nature of projects being ready and going. There was also a significant portion of money with the IIJA that provided for a 100% funding for what's called office and bridges, and those would be very restricted to projects that were not on system, not on a state route, and so we have basically expended that money on those projects. Some examples recently would be like VA Cut Off Road, there's a couple bridges in Seoul recently, and so I think we did call it a 15 off system bridge, 100% federal, then that would have shown up within that hybrid program. So if we looked at two, three, four years, you saw that kind like that was one of the principal drivers of that.

[Unidentified legislator]: I remember that.

[Rep. Phil Pouech (Ranking Member)]: Representative Pouech. Yeah, I guess I'll just weigh in. I'm concerned about funding for municipalities highway and bridges all grant and the highway class two road is a formula that gets in there. So that's gone according to the formula, I assume. And the other one that I just want to note that anytime the towns need additional funds for their roadways that comes right out of property tax. And so if we're really concerned about property tax right now, they're struggling and the only place they can get funds to maintain their roads is directly on property tax and the local folks so, you know, I'd want to look deeper into this to see how that funding is gone down and ensuring we don't leave municipalities sort of holding the bag.

[Dave Thurberg, Chief Engineering Director, Highway Division, AOT]: If I could share. So the statutory formulas are met. The Townsend Highway Bridge program doesn't have a form in mind. That is

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: And

[Unidentified legislator]: I just want to I appreciate these cuts are not easy. And so thank you for the work, just recognize that it's a little painful, the process. But my question is more big picture. I'm looking at slide two, AOT budget over the last nine fiscal years. And seeing fiscal year 2022, $686,000,000. Here we are five years later, 40% higher of $934,000,000. And I see your notation, the increase in the budget is due to the IHAA. And some of the staff cuts you were sharing with us, you said were IAJA positions. So recognizing that there's some opportunity for making cuts there in positions. My question is, what other categories increase substantially with the IIJA to kind of get to such a, what do think of these five minutes later? And I also heard Jeremy speaking about some bridge projects, which were expensive, which were IIJA, and we also know that construction costs have gone up significantly. Other big items that were in that IIJA?

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Well, that's an excellent question. Thank you. On IIJA, IIJA brought $572,000,000 Vermont. So that's a big portion of that delta that you call out. And then in addition, there are several things but primarily for us as a business if you will, every year we are obliged understandably to meet the contract increases that are negotiated with the BSCA. So we have to meet that. We have active phase which is meaning us to fill out for the services that are provided to us. We have the term penalties for things like our apportionment of ADF's agency individual service, confidential, the universal umbrella of IP defense and support for our agency, you know, that weren't necessarily provided by ADF. When I started in Chicago nine, I had 800 homes, I had started

[Sen. Richard Westman]: and we would have seen their process. Are some of

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: the things really eat the meals every year that we get. It's sort of like in a household that even hospitals up here have flexibility in what any needs. So we have to meet the contract increase across the network, then we have to meet the increases given to us for the typical management of the agency, not our own management but given to us. So I think those are really the biggest drivers and then what you also see is just construction related cost increases because the federal investments in Vermont reflect those as they were. But as you heard testimony previously and you'll hear it again in particular you can see read that was saying that you know construction costs in fact that was heard in the Senate testimony prior to Christmas as an individual doing manual intervention that supported our numbers that are constructed 40 to 60% higher now than it was nationwide. So we're building on 80. But I think the biggest leap because you're right I mean when I started budgeting was approaching 600,000,000 but it's lot of money. Hope that attempts to answer the question.

[Sen. Richard Westman]: Play off from that a little bit, the overall spending is up roughly $50,000,000 give or take a tiny bit. And if you go to the next page on that, it's really due to the 14% increase in federal funds comp.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Well, it's also due to the fact that even $10,000,000 which we're able to apply to federal funds.

[Sen. Richard Westman]: When you get to the bottom line in this, and I totally appreciate and quite happy that the administration has opened the door to have the discussion about the purchase and use tax and presented that. I don't know how anybody would put together a budget without that increasing. Think it's something that would, some of us have been calling that for ages, and I think most of the transportation committees here. So we really appreciate that and we recognize that. But the up in here is 14% federal, and almost every other line, even with the 10,000,000 is down a little. When I go to the program development page, I can see that the overall increase, 50,000,000 increase in this, in program development, is interstate bridge and paving. It will be very interesting for me to see how much of this is interstate in paving, and how much of this is, of the 44 projects, is regular state. I know the match is higher on the interstate side, and I know interstates are important, but what I would hope is that what we're not doing is keeping up with the interstate and everybody else in this state highways and the municipals all are seeing a little adverse position in this. So I will be looking when everyone comes into Senate appropriation, because I really, I'm going to speak personally, I see this in tears. I see the interstate system as a class by itself, because they get the highest match rate. And I see our state highway system, which is where most people in most Vermonters access every day. And then the feeders to that, the town systems. I would hate to see that that system, the ones that are eightytwenty match and the municipals not get some of the benefit of the new money coming in that we need.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: Yeah, no, it's a good point and certainly interstates are in a class by themselves because amidst all of that complex managing a condition that you so we're going point it out. So, we're going be have also the obligation imposed on us by US DOT to make sure that we keep the interstates to a certain level. Yeah. So, we must be a certain level while recognizing everything that's rightfully said and and then address all of the rest of that on a needs basis, you know, past their priority. Is it it lends to the complexity. Yeah. And the very keen programming that has to occur in project delivery and the highway shop. I

[Sen. Richard Westman]: would just say to the pressure from our point of view that coming from a county where we don't have an interstate, But I think for most of us, a lot of us are constituents don't travel on the interstate every day. It's the state highway and their municipal roads that get

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: I would say that of the 10,000,000, we're talking at least the 10,000,004 of of those interstate, what we get for that when we amplify the federal mine, four of those interstate paving projects, five are state highway paving projects to your point, seven are state highway bridge projects. So there are some state paving projects that can be done in this budget as recommended that would not be done the budget as recommended it's not full. But that's not the entire reality.

[Sen. Richard Westman]: When I see a $50,000,000 increase and I see paving and interstate bridge make up about 50,000,000 that tiny.

[Rep. Matt Walker (Chair)]: Well, I guess I would have to add my on that piece. The committees and the legislature went yesterday last year's to make sure that Town Highway 8, and under pieces of the formula funds were reviewed and and would move up in terms of an inflation rate. And that does put additional pressure on T funds, but it does put some relief. And if that had been in place over years, we wouldn't be as nearly in the position in town highways as we are now because that had been flat funded for over a decade, I believe. So there is some increase there, but what I it's hard to view that page and see an overall decrease in activity. I know that was mentioned that we're going to see some significant more testimony on that so that we can help our constituents and our towns understand that. It was certainly the intention of our committees and in the T Fund last year that we would bring some additional relief to our towns through all that a small step. And the results of that in this year where we were hoping to see some sort of an increase in that activity, there's a decrease. So we're going to have to and I know you're talking pretty good.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: We're gonna need to

[Rep. Matt Walker (Chair)]: see a significant amount of really making sure that our towns and municipalities understand what's going on in the fluctuation of a year by year issue in projects itself. Because I'm pretty sure that we're unanimously committed to finding help for our towns in the same way that we needed help for our state highway piece. And I'm glad that the building cities have known it for a long time, and many in the building have, and all of you have. Obviously, now it's statewide, and everybody in Vermont knows the trouble that we have in transportation funding. And I appreciate your effort to understand how that increase or in evidence split. So that particular part that we went quite far to make sure increased does appear as an overall net backwards. And we really got to make sure that the public understands that and what we're actually happening there, because it is our intention to provide more relief, not less.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: I certainly understand that. Do want to it doesn't address the golden private appointment set of Robert, but we are meeting the statutory obligations. What we're talking about is beyond the statutory obligation. And second of all, I think it does, to some degree as I see it, sort of support my response to Senator White earlier about the importance of having this discussion about purchasing units, especially in the last few years. You look at $220,000,000 if it weren't, and I'm not suggesting that that would have that everything would be unicorns and jelly beans, but what I'm saying is, you know, if $220,000,000 from the heat fund hadn't been heard within the last five years, then that's that's a frame of time we all can relate It's a possibility that that could have also had some impact on the town. And then I've said this before both committees before and I've said here before you today saying it as well. Every one of us in this room live in the town. Every one of us in this building live in a town. And every one of us pay town taxes or city taxes and we have a municipal budget or a town title budget. And I do in my town. It's nearly $900,000 in South Harrow. So I totally understand, and I know, know, Josh is in the room, we used to work together in the cabinet and with VLCT and totally understand it. It's a difficult question because as I've said it before, at this time, regardless of what the budget proposal is, you're talking about a finite sized circle at some point here. It's just some simple guy. This is the way I see it and correct me or help me if I'm articulating this wrong, but you have a certain size pie and we're talking about changes that's changing the size of the slices. So no one is disagreeing and representative Pouech rightfully brought this up as well. No one is disagreeing about the reality talents are facing especially after three years in some cases of the American scheme of them playing and having the bridge came upon or having to meet the match. But even that aside, increasing pressures. Everything we sat here to talk about, the 40 to 60% construction increases, towns are facing as well. But if you change the slices of that finite pie, then some of the other slices get smaller. So we have to talk about what other slice are you comfortable with getting a scoop? That's all. And you know that. I mean, it's paving, it's road condition, it's bridge and interior, and it's winter maintenance. The answer is not simple. It's never simple, but it can't be, well, I don't support airports, so let's take that money from airport. We can't do that. The federal government long before the current administration has siloed that money out. You can't cross pollinate it. You can't cross pollinate the money from rail. It's got to go where it's intended to go by Congress through US DOT. So we are talking about the FHWA funding to us. Now the rest of those programs are tremendously important. I'm simply saying though, you see all of that in this budget, but that money is not able to be inserted into this conversation, it's going to happen. So it is a confounding reality and I agree.

[Rep. Matt Walker (Chair)]: I guess I would have to add on that and the direction of conversation. Our number of highway miles and town miles and our number of highway bridges and town is never shrinking. It's going it's the same as it's been, and that's not in the funding conversation on how we spend in other areas. Perhaps reminding that some of those areas are shrinking, but your challenge every day never changes. The amount of miles is never going to go down. And the amount of bridges that need work is never going to go down. And this weather that deteriorates it every day is never going to go down. So our collective effort to provide this most basic service to Vermonters, our challenge is never decreasing. Absolutely. So I appreciate where you're coming from. If the criticisms in those areas is only a matter of where we represent and fighting for our piece of that particular pie. And the challenge in this room never decreases. We do not have a shrinking highway mileage or a shrinking highway bridge challenge. So thank you. I appreciate your challenges here at the part of what you're under there.

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: You know, I know I'm the administration guy sitting here. I believe what I'm going to say, I believe it is a lifelong tomorrow. A seven year old guy who's proud will be born and raised here. We've got to prioritize what we already collected. You know there was a really healthy conversation in this room in August or September about the July Governor's downgrade. Some of you were in that debate and it was well articulated and it was truly a bipartisan conversation which really gave me some encouragement about realizing the situation. There was no brinksmanship. I felt in fact, you can go back and look at that. And I spoke with some people after that who I really in my travels as the secretary or in my previous careers in state government had not been before your kids and there was there was common ground understanding about that. So, I'm not suggesting any particular program is at a valuable state but I am suggesting based on everything you're saying here today, everything that's been said all throughout last year, this conversation really got real. And then what was discussed in summer, late summer regarding the downgrade. Everything you're raising as concerns from town needs money to the costs we're increasing, the basic costs that we have over here, here question, representative White. We need the one outcome, I think it's an undeniable reality no matter where we sit and that is transportation is probably one of the most fundamental responsibilities of government. Public safety has to be first. However you define it, every government generally would agree with that. You gotta get from here to there in order to deliver public safety. You've gotta get from here to there to deliver human services support staff I and understand you have everybody, Well, obviously, we're one of our communities at jurisdiction but in general, this building has everybody coming before you to lobby on why what they're here to talk about is the most important. When we sit here and say, there has to be a reality check on how do we prioritize this thing we already do and where we spend the money we already collect. Yet we support in my opinion, we support that statement by all of these good questions. And I really, this is an important time. It's an important time for a whole lot of reasons, but it's an important time to try to level set the near and longer term future for transportation sustainability. If there's good news, we're not building a lot of new sexy expensive things. So it's it's a lot of it is maintaining the network we have to your point, rep Walker. While I've been sitting here talking to you, everything outside has deteriorated already. It's no, it literally has. It's deteriorated further. Got a pave driveway at home, it's deteriorated further, right? I mean, it is absolutely true. We're not in a business that reaches a status quo on anything. We're in a business that spends money every single year to maintain what we have. And yes, we have improvements and that can buy us time in one spot, but then we've got to move to 10 other spots. So it's just a very complicated, but it's a very interesting circumstance. So I know today launches the in-depth testimony of all of my colleagues at the agency with you all and I know that put an awful lot of work as you've acknowledged into this it's clearly the ads recommended budget, it's the governor's budget, we wholly support that as you can imagine, and then we're open to a constructive dialogue that today launches. Thank you. Anything else, Hans? 10:30? Well, we're supposed to start back

[Sen. Richard Westman]: up with the next piece at 10:30. I see the commission tomorrow. Ten minutes? Yeah. Can you be back here in ten minutes

[Joe Flynn, Secretary of the Vermont Agency of Transportation]: to move into your project? Okay.

[Rep. Matt Walker (Chair)]: Thank you very much.