Vermont Legislature SmartTranscripts:

[Matt Walker (Chair)]: Good morning, Thursday, 01/29/2026, here in house transportation committee. We are continuing to sort of dig into the budget and budget presentations, as well as digging into the agency's testimony on how they closed their $33,000,000 gap and the adjustments they made to 2026 and into 2027. And we have Jeremy Reed with us this morning, focused on the highway portion of what we did to close that and also looking into the 'twenty seven budget projects and pieces. I am really looking heavily at the CFO's, Candice Ellenquist's testimony on January 21, but we're also going to go into a few different directions on projects and pieces. So we're gonna do sort of ceremonies, testimonies all the way through, and then we'll add a break in on this morning's agenda that's not there. And then we'll come back and finish with public transit before lunch. So we'll probably take a break when we get through all of these pieces, and then we'll come back for the eleven whatever time that break starts, then we'll come back for 11:15 for public transit testimony. So welcome back to committee, Let's see where we can start. Okay.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Thank you very much, Chair Walker. Jeremy Reed, Chief Engineer for the Agency of Transportation. I think the easiest thing to do would start out with what did the $10,000,000 that we're recapturing from the purchase and use, or what is that intended for? And so I think you all have this spreadsheet, but I'll just share it for everybody's benefit. And so, what you see here are 16 projects that, if not for the $10,000,000 purchase and use recapture, would not be moving forward in FY twenty seventh. And so the list is made up of both bridges and paving. Majority the a little bit heavier on the paving than the bridges. We largely selected these projects because they were ready. I will get into a little bit more how we go through that, both from a programming perspective and as a project sequencing and being selected to be included in a budget. So, what you see on the bridges front is one bridge maintenance project, and that's, again, a preservation treatment to extend the life of that bridge. There's a new bridge in Topsum and Rockingham and Castleton. And then there's three culvert projects. And again, they were ready. And obviously, anytime we can increase the capacity of our culverts, there's a benefit for resiliency and and aquatic organism passage and all those things.

[Matt Walker (Chair)]: I guess first question for me is, if I were to get into that drawer underneath Logan's feet and look at the white book from last year, are all these projects in there?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: I don't know. I think let's touch on that when we get into project sequencing and how we build the budget. Because it's not a fluid binary decision. So I'll just tee that conversation up like this. If we've got X amount of T fund, I can reduce the T fund but have more projects. And the simplest way to do that is to alter the project selection based on the state match to have the same amount of TIFF. So, if I have a ninety-ten interstate project and an eighty-twenty state highway project, if my key fund goes down, I can actually do more with interstate projects because the state matches 50% of what the state route would be. So, typically when we look in the out years, we always have more projects than what we think there's funding for. And that's just to hedge against maybe we're going to have an increase in funding. The more likely outcome is a project will be delayed for any number of reasons. It could be right of way, it could be environmental permitting, maybe the condition of the roadway is not deteriorating as much as we had anticipated. So even if we have a situation where the revenues come in exactly as predicted, we will probably see reductions year over year in what we're anticipating because we intentionally overfill out years.

[Matt Walker (Chair)]: Good question. Then the bridges, will they be done

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: in one fiscal year? Probably not.

[Matt Walker (Chair)]: So it begs the question, what are

[Unidentified Committee Member]: we locking ourselves into with depleting funds? Are these the highest?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, so from the state side, it's not generally an issue. No project generally is done in one fiscal year. We just carry that money forward. On the federal side, it's even more fungible because we get a clonch of money over a five year period. And as you probably have heard before, the state and the federal fiscal years don't match up, which further complicates it a little bit. So when we say here's the federal funds, that's offset by five months basically compared to the state fiscal year.

[Unidentified Committee Member]: Yeah, no, my point is this $10,000,000 that we might not get next year. So fees have on the stay side another x amount, you're depleting what's currently in here. So I'm just wondering what the

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: So, I understand the question better now. This is the total contract cost. So, we are acknowledging not all of this $10,000,000 will be spent in FY27. So, we're not anticipating FY28 revenues to complete these projects. We're assigning the full contract value in FY27 with some expectation that it will be carried forward at the conclusion. So, here's the added paving projects. What you see here is $10,700,000 The biggest thing I want to point out here is I think in Candice's slide, she said, well, this is going to be an increase of $9,300,000 So, where'd the other 1,400,000.0 come from? These projects, principally the paving projects, because they weren't as far along with development, already had design money in white book. So, the net is $9,300,000 between all of these. The bridges were all funded through the TID, and these were further along in the design process, so they didn't have very much in FY27 under the original construct of the budget. And then the paving is what we really accelerated, and there were monies anticipated in FY twenty seven just to complete the design.

[Unidentified Committee Member]: Just a clarification, I guess I never really added those up. We get $10,000,000 from the purchase and use, which is all paid. So now we're going above and beyond the 10 with the bridges.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: So we're not. So that 10.7 includes the whole column. So that's bridges, TIFON, Oh, that's, and no, thought that you broke it down from maybe 1,000,000 Traditionally, the bridges are exclusively funded through the TIB. So this is additional T fund headed towards bridges, and the 10.7 is the 16 projects aggregated, not just Just paving. Okay. Yep. So the net of this is 9.3. And then obviously, as Candice pointed out, there's 700,000 plus or minus going on maintenance. Similarly, there's $64,000,000 here in federal funds. And again, we had 11,000,000 originally programmed just to help progress the design of these paving projects. So the net there being roughly 53 ish, a little over 53. Any questions on what what the $10,000,000 gets us?

[Matt Walker (Chair)]: Okay. Other than how you picked those particular how did they bubble to the top? Sure.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: The the the the quick easy answer is they were ready, but I'll get into the full sort of decision making matrix now. So okay.

[Matt Walker (Chair)]: Let me go back.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Okay. So the intent of this is to walk through how we program projects and how we select projects in any given year to be included into that year's, program. It is very much a two step process. One is the programming of a project, and then one is selecting it for construction. Obviously projects move at different paces, so if something may be a priority in programming, those priorities don't carry it through construction just because there's going to be different rates of progress within the design phase. So I think most of you have heard the acronym DPS P2, Prompt Project Selection and Prioritization Process. And this is something that was implemented a number of years ago. And this is how we program projects. I'll just give you a quick overview of that. So the vision is to develop a performance based data driven project selection prioritization framework that maximizes the transportation value to Vermont taxpayers. This has been used for three, four years, a lot of RPC involvement. And really this is once we have our generally asset condition driven projects selected and we have room in the budget, this gives the local communities and regions a seat at the table to help select what gets programmed into the project. And there's a very objective scoring criteria there. And so, when I say when we get our condition driven projects selected and there's extra, that's when everything else kicks in. You could also say that we use this process in that, but as you can see with safety and asset condition, 40 points, when we do score them, even if we didn't select them first, they would reign supreme just because the weighting of the selection criteria. Beyond safety and asset condition, there's mobility connectivity, economic access, resiliency, environment, community, and health access. This all gets scored and a project is then given a transportation value. And at the end of the day, that's how projects get programmed.

[Phil Pouech (Ranking Member)]: Yeah, thanks. So cost is the name here?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: It isn't. And generally, again, it's about transportation value. And that's where it's a two step process. Because let's just take a roadway project. A lot of times when we see the value of a new roadway project, have no idea what the cost is. We have no real information other than a potential need and or desire. So it would be very tough to have an objective cost component at this stage. Because at this stage, we know nothing other than there's a need or a desire.

[James "Jim" Casey (Member)]: Yeah. Represent Casey? Where was that bridge that was

[Matt Walker (Chair)]: short there ago? Oh,

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: this is this is Drataburro.

[Unidentified Committee Member]: That's right. Okay. Yep.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: And so that's the southbound is the old iron trust. Yep. And then this is the the new bridge, which carries both northbound and southbound being constructed, and that's Route 30.

[James "Jim" Casey (Member)]: Yeah. Yeah. The did somebody take a wrong measurement there? Or is

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Well, it's it's mid construction. Yeah. No. No. No. It's it's mid construction.

[James "Jim" Casey (Member)]: I was just kinda curious. Kinda hollow in there too.

[Matt Walker (Chair)]: That's Yeah. Oh, it's huge. Yeah. So is it is it cape you guys can walk right through that, I think.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Totally. Yeah. That's, like, at the deepest point kinda towards the piers. I think that's, like, 30 feet deep.

[James "Jim" Casey (Member)]: So do they keep that open so you guys can, like, periodically go in there and check

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah. For There's there's Good idea. Patches to to get in there.

[Matt Walker (Chair)]: Yep. Nice.

[James "Jim" Casey (Member)]: Well, there's a little apartment there. This

[Mollie S. Burke (Member)]: this one here is

[Matt Walker (Chair)]: a cost the housing prices. There's a there's

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: a few places to put some homes there. This gives us some controversy

[Mollie S. Burke (Member)]: in this way. Also, the fact that it was chosen, it was an aesthetic sort of addition. It's a really beautiful entry gateway into Vermont, sort of Route 30, it spans the West River just before it opens up into this big meadows, and there's a walking trail that goes behind it, people like walk on that every day, and the bridge was just gorgeous. There's a blue, they painted the underside of it blue to sort of reflect the water, you can kneel under it. It's really spectacular. But, yeah, during construction, I was able to go down inside the, you know, what's underneath there

[Patricia McCoy (Member)]: and just walk around. It's very interesting.

[Mollie S. Burke (Member)]: And then when it opened up, before they put traffic on it, they had shuttle buses. It was like the coldest day of the year, and people could walk across or go across in the bus. It was really pretty exciting for our community.

[Phil Pouech (Ranking Member)]: Representative Pouech? I'm done. Thank you. These 10 criteria. Mobility and connectivity, is that the number of vehicles that it uses? Is this a very busy road versus one that's hardly used? To

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: some extent. So I'll just read the published criteria. So it's increasing the reliable connectivity to jobs and other destinations and or increasing the number of mode choices available for people and goods, connectivity to bicycles, pedestrian, public transit, and multimodal facilities. So I think it's looking at, yes, volume is going be part of that, but it's also the network at large. So if there's a road headed to an airport, a bus station, a train station that has a higher transportation value than just a single use load, which would be vehicles traveling on.

[Matt Walker (Chair)]: Okay, thanks. I'm

[Kate Lalley (Member)]: just wondering how I believe, a bridge in my town that is on the forever on the list to, you know, get a place. Yeah. But it is it's the only access in for emergency vehicles. And I was just wondering what sort of a criteria that would count as if something happened to it that would Yeah. Be a

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: probably resiliency and safety to some extent. Resiliency is probably the biggest one. So those would be the criteria.

[Kate Lalley (Member)]: So that would fall under some of those criteria points.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, absolutely. The unfortunate thing here is we haven't taken in new projects in a couple of years, much to the disappointment of some local communities and RPCs. But the fact of the matter is it's given the inflation and our fiscal constraints, we've got a full program for the next seven to ten years anyway. And so we're trying not to make promises we can't fulfill. And if we start scoring projects for construction ten years out, the scoring is going to completely change by then. So we haven't taken any projects in for two or three years with this process.

[Matt Walker (Chair)]: I guess I want to comment on that for a second. I know we had big financial discussions going on in this building about funding transportation. And there's a comment about we addressed that last year with the JTOF transfer. Well, just the gas tax alone that we haven't collected for the last ten plus years, $20,000,000 less a year for ten years, I don't know that everybody understands that there's a huge list of projects that people want done, like this bridge that we should refer. I go to the RPC meetings in our area and they're frustrated that why are they at these meetings if they can't impact and add a project. The agencies can't add them because they have no money to do that. And I guess what I'm saying is last year's work is not even close to being done, nor is the work that we're trying to do this year if we want to help these communities. That's part of my When I hear that, I think of how many times and how many dedicated people go to these transportation meetings and they can't add a project. And they know that looking into the future, don't see being able add a project for years. And maybe we haven't fully, maybe all of our members don't fully understand that at this point, but that's one of my pieces. It's not just, we're doing the bare minimum right now. We're not taking on anything beyond what's the bare minimum unless we significantly change even more than what we're addressing day to day right now. But that's my feeling, and it's perhaps part of the message that's not entirely out there. So I'm sorry. Did you have your hand that way by hand?

[Phil Pouech (Ranking Member)]: Not in half with the debate.

[Matt Walker (Chair)]: So then Representative Casey and

[James "Jim" Casey (Member)]: then Representative White, is are costs trending up or down? Do you think they're kind of leveling off right now? Or do you think they'll

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: So inflation only generally works one way. Yeah.

[Unidentified Committee Member]: At

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: the end of the day, it's stabilized, but it's not going down. And it's not flat either, but it's not 9%, 10% year over year. So I can share that over the last five or six months, a vast majority of our projects have come in pretty close or under our engineers estimate. So when we do program projects and you see them in the white book, there's a higher level of confidence that we're actually going to be able to do what's in the white book for this construction season and not see projects 50% over or 70% over the engineers estimate, where we then have to pull projects within the fiscal year.

[Patricia McCoy (Member)]: The

[Candice White (Member)]: first list we looked at were all the projects that were added because of the $10,000,000 that we're holding back from the Ed Fund. And then you're showing us the criteria that you're using for selecting projects. But then there's that other list, which I think we've seen in the last week or so, which are projects that weren't on the list that then are added because they're in such critical shape. I'm not familiar

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: with that list.

[Candice White (Member)]: I thought that I had seen a list of projects that were emergency level paving, maybe not full paving, but just

[Unidentified Committee Member]: So there could be

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: a list of district leveling projects.

[Candice White (Member)]: Yes, district leveling.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah. So, we allocate in the white book every year some amount for district leveling. And what that is, is that after we get through the winter or a need is identified, and again, we're spanning two summers in each fiscal year, those are just trying to put a Band Aid on something before the more capital intensive project can come through.

[Candice White (Member)]: And do the district leveling projects have any coordination with the master project list? Or is that just you're hearing really critical issues on certain roads and responding to that?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: So there's some coordination because if, for instance, got a previous scenario here. But so let's say, award is in horrible shape, but we know we have a capital project that's advertised. You know, we're gonna start it in four months. We wanna spend the money to do a de left there. If the project was four years out, that would probably be a good candidate to be like, Okay, we've got to do Band Aid, work on that. The other thing I'll note on those district leveling projects is generally they're very short runs. So most of our paving projects are, let's

[Matt Walker (Chair)]: just

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: say five miles. A district leveling project might be two or three quarter mile segments within that five miles. So we'll take the worst of the worst of that project, address that kind of patchwork area. And then when we come in with more of a program project, it is for a longer stretch along the corridor.

[Matt Walker (Chair)]: Ms. Burke?

[Mollie S. Burke (Member)]: Yeah, I just wanna say, a popular thing to say, but we've done a number of transportation funding studies, the years 2013, 2016, recently, and we've really never even taken testimony of, as far as I can tell, what if? And you know, there's a mix of things that would probably be necessary to bring in adequate revenue. So, what do we do, do we just up our hands and say we don't need enough money and people are clamoring for projects, or do we actually look at some options to at least consider and then maybe say, well no, it can't be

[Patricia McCoy (Member)]: bad or it can't be cancer.

[Mollie S. Burke (Member)]: I'm just bringing that up because I feel like that's the elephant

[Matt Walker (Chair)]: in the room here.

[Phil Pouech (Ranking Member)]: Representative? Yeah. And I'll also add to that. I mean, two or three years ago, I raised fees, transportation fees, got a lot of tech for it, but it's now fully embedded in the budget. And without having done that, we'd be that much more in the hole. So, yeah, I agree. It is sort of the elephant in the room. And it doesn't mean we just go for as much money as you can. But True. We don't solve this problem I take it from the Ed Fund, and I'm not saying one way or the other, I did sign on to that bill because I think we need to have good discussions. But it's just shuffling things around and not solving the problem. Not solving the problem, it's helping. I started to see the projects.

[Matt Walker (Chair)]: I started it, I commented on the other RPCs and their inability. I should have asked a question about how much demand do you have from RPCs that you've had to turn away for the last two years. I started the discussion. Can't do that. It's got to go this way when we have

[Unidentified Committee Member]: a witness and we have

[Matt Walker (Chair)]: a good discussion. I started it. So I'm not coming down on you or on you because I did it first. I apologize. But can reframe those into questions that I could have done a better job to say, how much would an RPCs want to do? And how much do you turn them away? And is that property pretty well dead at this point? Could you comment on Sure. You made a comment about RPCs can't add one. Quantify it or get some extra background I on

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: don't know that I can quantify it because and I'll just say from personal experience, right? I'm the chairman of the local select board. If you come and say, hey, you wanna do anything? I will always give you projects. There's no doubt about that. So I would say the demand is largely limitless because every town will always want something and that's just human nature. Don't know what's in the queue because for the last two or three years we haven't even asked because we just know we can't take them. It is what it is. We're not trying to cut them out of the process. We just want to set reasonable expectations. And again, we're not seeing a lot of value in adding a project that we know won't have construction funding for ten plus years potentially.

[Matt Walker (Chair)]: President Holland?

[Kate Lalley (Member)]: Yeah, if there is such a long time frame, is there, before we embark on fulfilling this project, is there a way for the community to touch base again with the agency and on just maybe through the RPC on what the project is about, and if it needs modification, or if it's still wanted, or if there's maybe something that in their local context that has risen to the top. Is there any flexibility to say we would prefer to do this instead? Or we need to do this instead?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Sure. Sometimes. There is certainly ongoing communication with communities on our projects, even if they're entirely state and federally funded. We have local concerns meetings, so it's obviously property owner visits, and we have various touch points along that process. We're not really in a position typically to get a project close to ready and then go back to the town and be like, you want to do this or do you have another idea? Because that project is ready, another idea may not be. And this gets into the second part, how do we select those projects? If we're talking about features of a project, absolutely through that process, if you want to look at, Hey, can you adjust the line striping? That's a common one. We're coming through with a paving project, we'd like to adjust the line striping. Can you take a look at that? Happens all the time and we're certainly able to do that. We're not able to take an F Pave, which is a fairly low treatment paving project, and then fix the geometry of the roadway though, because that's outside of the scope of what was programmed. So,

[Matt Walker (Chair)]: kind of

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: a non answer there is sometimes, but not always depending on what the ask is. So once we get to, I'll just say August, September, October timeframe, and we start building the next budget, Essentially, have a sequencing process that looks at five different tiers. And this is much more subjective, but this gives you an idea of the decision making and what's in our heads on how to build an out year budget. So the first here is basically continuation of what's already happening. So obviously, if we have ongoing construction, we have to finish that construction project. If a project is awarded, that means we've already made

[Matt Walker (Chair)]: a

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: commitment to a contractor. And unless something has gone significantly sideways, in general it would be only sideways with that project, we're going to move forward. And that would not be a budgetary decision. That would be some nuance of the project. Case in point, the diverging diamond, that wasn't awarded, but we had open bids, and we had to reject all bids because we hadn't cleared right of way yet. We thought we were going to, and then we got taken out of the screen for and we ultimately prevailed, but it did delay the process. And we couldn't award a project with uncertain right of way. Safety critical needs. So if there's something that's happened, that would obviously jump to the list. Prime example would be the Fairly Rockfall. That wasn't on the project selection list until the rocks fell. That was a very significant project. I want to say over 15,000,000 that had to be added, but it needed to address a safety need. And then any time limited money. So, if funds are about to lapse, we have grant funding that expires, anything like that, that obviously jumps to the front of the list. Because the last thing we wanna do is send back federal money. So, those are the absolutely first selected projects fit into this category. The second one are projects that we have commitments with other states. So the Gratteburg Hensdale Bridge is a fine example. That's a New Hampshire managed project. We committed to them that we would have the funding and the construction years. So that's one of those must do. Critical asset condition. Again, if the road's deteriorating, that might be a de lev. If a bridge is now being posted or we think it's about to be closed, obviously that elevates it to the top of the list. And then the third in this asset and cost considerations would be if we have a preventative maintenance project planned. And if we keep kicking it down the road, now all of sudden we lose that window to do that preventative maintenance and it has deteriorated, let's just say a bridge, the steel is busted beyond an ability where we would feel comfortable just repainting it and doing some patchwork. So, that's kind of the third consideration within the second tier is the project scope going to still be appropriate for the construction season. The third tier, and this is where we actually start making decisions. Because the other two generally are without discretion, they become obvious. And we generally always have funding for the first two tiers. So the third tier is dependency on other projects. Again, diverging diamonds are a great one. We could not kick that down the road another year or two because we've got the Berlin Kowinowski Bridge. And regionally, we don't want to absolutely foul up traffic, and we can't have those two things going on at the same time. So if there's any dependencies along or amongst projects, that's a consideration. We've spoken frequently on our performance measures, 25 very poor, not to be exceeded, 7070% travel weighted average, things like that, and obviously bridge conditions as well. So when we do our analysis, how does the project help with our network condition? Federal match maximization. So all else being equal, if we have available federal funds and how I started this, if it's eightytwenty versus ninetyten, the ninetyten is going to get the nod just because if we're state constrained, we want to maximize those federal funds and we would select the ninetyten over the eightytwenty if that's all we had funding for from the state side. Tier four is a little bit less frequent as the decision maker because a lot of the budget's gonna be built in the first three tiers. What we're seeing here in tier four is what the 16 projects are that we added with the $10,000,000 and so readiness to proceed. And so that is, are we clear? Do we have right of way clear? Do we have environmental clear? Is NEPA clear? The project's actually done and fully designed and estimated. And so that sort of sorts out what can or cannot go. And then all else being equal, regional prioritization. So when we do go back to VPSV2, where did this score on that prioritization? So let's say we have two identical projects and the region, the RPC or the TAC says, well, we'd really rather have this one, Then that's where that input comes in to help us build that next year's project list. And then Tier five, largely not something we were able to entertain at this point, but capacity limits. So industry and agency's capacity to actually deliver those projects. So if we had a bunch of extra key funds, and this is what we did this year, then you saw a mix between bridges and paving. So we actually used key fund on some bridge projects, again, to distribute the type of work, because what we don't want to do is have a year where there's 200,000,000 in paving and 50,000,000 in bridges because then the bridge contractors are under worked and the paving contractors overworked. Long term strategic goals. So this is multimodal connectivity, resiliency, any other sort of longer term aspirational goals would fall into this criteria. And then ultimately geographic equity. Are we doing as much in the kingdom as we're doing in Chittenden County type stuff? And that's the last consideration. We've got to look at the network at that whole. But just because you live in one county or another, we try not to let that swing the decision making. And again, that's not very frequently the decider.

[Phil Pouech (Ranking Member)]: Yeah, thanks. The idea that makes sense is that you have to coordinate with the contractors too. Would guess, potentially some paving contractor might say, I've got this huge project in Maine and I'm not gonna have as many assets available. So how is that done? Do we have meetings during the year with contractors to understand their capacities or their limitations

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: or maybe their overcapacity? So we don't generally meet with specific contractors one on one for obvious reasons. We do hold regular meetings with AGC of Vermont and paving industry, PAVE, to understand where the industry's at with various things. And it goes even deeper. Within the paving world, there's different types of treatments. And again, we try to balance that out because different contractors have different capacities within those treatment types. And so that's part of that just ongoing effort to understand where industry's at. The other thing we try to do is have some level of predictability so that they can be prepared for two years out, three years out, because they've got to make capital investments. They've got to work within their workforce constraints. And so we try to be as transparent as possible as what's coming. Unfortunately, especially at the federal level with reauthorization, we're in the last year of reauthorization. We have no confidence in predicting what that's going to look like. So, we're in a little bit of an awkward place today with that. But again, we're at least on the state side trying to provide some level of predictability and satisfy the previous four tiers.

[Unidentified Committee Member]: So Jeremy, thanks for this. This may be an impossible question to answer, but do you have a sense of the inventory that needs to get done? And I know there's so many criteria about how far you go out. I mean, everything's got to be done in one hundred years, but in the ten year cycle, mean, to get a sense of magnitude of the issue?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: We do. It's probably easier on the bridge side just because they deteriorate slower and more predictable. The paving side's a little bit more challenging. The paving industry will tell you, Well, if you've got 3,300 miles of road and you pave every mile every ten years, that's 300 miles a year. We think we could probably do with a little bit less just because of some of our preservation treatments and some of our more intensive treatments that we expect to get more than ten years of. So, there's a little bit of fluidity there. We feel fairly confident in being able to meet our performance measures on the bridge side out ten years. And I think last year I showed some graphs showing that the bridge condition staying relatively level. Unfortunately, the paving side of the house, we do recognize that well, last year's model was $103,000,000 or something like that. At that funding level, we will see a deterioration of the network condition. We haven't completed analysis at this year's funding level. I think we will still see a deterioration even at $145,000,000 It's a little bit tough to say. We will be dead flat even at 175,000,000 or 180,000,000. I think those who want to handicap this would put the number somewhere in that at 175 to 200,000,000 as sort of maintaining the status quo. The other thing I would offer is if you look at the historical condition, we're actually in a really good spot right now. If you go back to the twenty thirteen, twenty fourteen period, both our bridge and our paving condition were worse than they are today. And so trying to understand what the public's expectation is versus our goal is a bit of an uncertainty as well. Because we can anecdotally say that if 25% of the roadways are in very poor condition, we've met our strategic goal, but there's going to be a segment of the population that's very unhappy with us. And everybody has their own experience. So if you're part of that 25% as your daily commute, it's unacceptable.

[Matt Walker (Chair)]: Thank you. What was back in 2013, 2014 timeframe, our condition was?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: So I don't know that I have the numbers off the top of my head.

[Matt Walker (Chair)]: It was better or it was a lot worse?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: It was worse. So our payment conditions, if we go back to that timeframe, I want to say were 15%

[Matt Walker (Chair)]: to 25% very poor, depending on the year. So since that timeframe, we obviously went through COVID and massive influx of federal funds. What did we do as a state related to the prioritization of T Fund money and funding T fund, what I've at least loosely heard is that our bridges are in as good a shape as they are, unfortunately, because we had major disasters and we were able to really accelerate rebuilding. And our roads are in really a much better shape than what they otherwise would be because a huge chunk of federal money came because of COVID. What that makes me think is that what did we actually do as a state to prioritize our infrastructure and give it the level of funding that it need, or did outside influences help us save us to get us into this position? Gene? Kenneth, is that a theory?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: I think what their commitment has been at the governor's office in this room over that period is we will maximize federal funds. So we've been actively pursuing grants, the traditional formula funds, which I don't think is a new concept and it's universally accepted. And so I think there's just been a commitment to raise the T Fund and the TIB Fund enough to make sure that we fully utilize those monies. Obviously, in that timeframe, you're right, we saw devastating floods in 'eleven, 'twenty three, 'twenty four, less than 'twenty five, but still nonetheless. And so, we have seen a dramatic increase in federal funds that we've been able to capitalize on, and we've been aggressively pursuing grants that we were able to capitalize on. That has shifted, and again, I'll just use rough numbers here. We have now become accustomed to budget years with 100 or so projects. If we go back to pre our days, February, the historic norm was 65 projects. And I can pull some data and show graphs on that. I'll just start at 2009 as sort of a benchmark. We see a fairly significant increase in annual project workload than what the historic norm was. And that's, I think, probably one of the biggest drivers. Now I'd like to also say that we as an agency have become a little bit more strategic, a little bit more intentional in our decision making. Think folks can tell you the war stories here where this committee would pick each project back in the day and say, we want this project to go forward and this project wants to go forward. They're good old days. Prioritization. And so again, we've tried to be a little bit more intentional and data driven. And so, is there a silver bullet? Is there a one thing that changed the paradigm? No, it's a bunch of things. I'll also add to that. It's easier to keep something in good condition than it is to rebuild it. And so once you get into that good condition, you get the snowball effect of success.

[Matt Walker (Chair)]: Okay,

[Phil Pouech (Ranking Member)]: Representative Pouech. And just sort of build on that, I expect what you're saying fifteen years ago or so, conditions were not as good as they are now generally across the board. And I would guess expectations go up with that too. So it's not judging it at all, but the expectations are, and I think as I drive around different areas, just even in New England, I was gonna say, boy, this shirt's a hat, not like Vermont. Generally look at Vermont's roads as pretty good.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Without a doubt, expectations change with what you're used to. We do candidly know, and again, no real science behind this, that our goal of 25% very poor, around 18%, 19%, you reach a critical mass there where folks start calling the governor because you've got enough people whose daily experience isn't pleasant. Not saying that's the right number or the wrong number, but to your point, yeah, there is some level of expectation that will change and the degradation of the experience will probably trigger concerns quicker than an improvement of experience.

[Matt Walker (Chair)]: You mentioned about well, you said it's about neighbors, etcetera. Do we have any idea how you would compare us to Northern New York, New Hampshire, Maine, as opposed to Southern New York, with other weather and geographic related challenges, mountains built up and down? Flats got to be easier.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Is. So I can say nationally, on the bridge side of the house, we're in very, very good shape. We are better than any of the Northern New England states. And I think the last time I looked in which we had numbers for, which is 2023 numbers, I think we were ninth in the nature. So pretty good. Don't have quite the same success story on the paving side. Probably in the middle of the pack of Northern New England on the paving side. And again, that's much more of a volatile number just because a a a roadway can deteriorate over a span of one or two years that can really change the the scoring. But I think that's basically where we're at.

[Matt Walker (Chair)]: Lalley and then Doctor. Lalley?

[Kate Lalley (Member)]: Yes. I was just kind of wondering, we, a couple of years ago, had a very interesting tour of the materials lab and learned about some of the new techniques. And I was wondering if that is just, if that's making maintenance easier, last longer, or if you could sort of speak to that. And because it's sort of interesting, it sounds like we have, our system is overall, you're suggesting in better shape than it was, let's say, twelve years ago at this time, which is great. But what's it like to maintain something like that? That becomes the, know, as the secretary said, gave me an insight into how you guys see the world. Are deteriorating as I sit here, think he said, which is quite a graphic image.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: No, and it's absolutely true. There will never be a day when we're like, Okay, we're done. Because it is. A freestyle cycle, you've got rust, you've got corrosion, you've got heaving. So, it is going to be a perpetual effort. Without a doubt, the materials we use today are very different than, well, from a geeky guy like me, they're very different. From the layman's, they're probably not that different, but they're definitely different from what we did 2010, 2011 timeframe. Our concrete mixes have changed. The asphalt we use in paving has changed. Our rebar, which is the steel inside concrete, is much more frozen erosion resistant. So we do try to make our investments last as long as possible, and we're constantly looking at both the regional and national level for new technologies that balance the longevity with the cost, because you do have to do that life cycle analysis. We could build a bridge out of stainless steel, but it'd be so cost prohibitive that over the life of that bridge doesn't make any sense. So there is always that turning the dials, shall I say, like, oh, gone a little bit too far on the expense side, a little bit too low on the durability side. But yeah, I guess to answer your question, things are constantly changing and we're always looking for more tools in the toolbox and ways to you know, extend our limited resources as far as possible.

[Matt Walker (Chair)]: Appreciate that. You know,

[James "Jim" Casey (Member)]: I drive up here, the highways are they're nice. Like, they're but we don't do the same, you know, getting getting to the highways. I'll tell you what, was a a filling rattler. You know

[Phil Pouech (Ranking Member)]: what I mean?

[Matt Walker (Chair)]: Over going over Bethel Mountain.

[James "Jim" Casey (Member)]: That's soft or rough. One's terrible. And other roads I drive around on, secondary roads are really, really in rough shape. I know where highways are really good. I'll give you a thumbs up on that. Some of these other roads, especially when you get the frosty each coming up.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: So the unfortunate reality of it is this. Talk about performance measures at the national level from USDOT and Federal Highway. What they care about is the NHS, which is your interstates and your Route 4 to Route 7. So specifically on the paving side, the only thing that we really report on are in your states and NHS. And that's the I won't say the only thing they care about, but that's where they want their investment going. And so, somebody from the Senate pointed out, you spend a lot more time being concerned with those roads than you do the town highways. Yep. Because the people who fund us are way more concerned about that. And so at the end of the day, if we don't meet those targets on the interstate and then NHS, Federal Highway can come in and say, okay, you're not spending any more money on the secondary roads until you increase the condition of the interstate system, as an example. Obviously, any bridge over 20 feet gets inspected and that's a safety concern, but there isn't a performance measure at the federal level for 10 mile bridges. So it's part of the national bridge inventory and so we ensure safety. If, I'll just pick a really crazy number, 55% of our town highway bridges were in poor condition and were subject to weight restriction or potentially even closure, the federal highway would not look poor upon us.

[James "Jim" Casey (Member)]: So seems like the towns really don't have anybody going to bat for them, it sounds like.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: The the unfortunate reality is that it's a town highway is, from from the federal lens anyway, a town's responsibility.

[Matt Walker (Chair)]: Can't help but comment on the general amount really, the discussion of expectations that we had before. Because when I was a UGA in, the expectations on that road then and the expectations now, it was a one lane dirt path that drops about 150 feet below where you are now when you go over Bethel Mountain Road. My expectation was if there were no trees across it or any potholes big enough to take my car, it was a great cut off to get over to Randolph and Bethel. And now it's quite beautiful road that does now need some significant more work, but the improvement and the expectation is amazing, because that was a one lane road when I was a kid.

[Patricia McCoy (Member)]: What was over in Bethel and Randolph? That was so impressive, I was hit to you.

[Matt Walker (Chair)]: So the expectations changed dramatically. Church, you moved to church. We split our time between Northfield and Brandon for about five years. The family was split between Northfield and Brandon for five years. And the Mountain Road is the quickest way to get between the two. But boy, my expectations then and my expectations on the road today are completely different. I just find that interesting to me. Representative White, save me.

[Candice White (Member)]: Hey, Jeremy, I have a couple of questions. First, seeing the pretty big increase in paving projects scheduled for 2027 versus 2026. Are you feeling confident that the agency has the capacity to oversee and make sure that increase is achievable?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah. No concerns on on a $150,000,000 paving program. From either industry capacity or our capacity perspective,

[Matt Walker (Chair)]: that that's not a problem.

[Candice White (Member)]: Okay. And then my second question. So you're obviously looking at the conditions of our roads all the time. You've been in this position for a while, sounds like. Could you just talk about salt and it's I where on the know we have a salt program that Ernie's spoken about last year, he's feeling pretty good about. Do you feel like we're doing everything we can to use the least amount of salt that is necessary to get the road conditions we want, while taking into account waterways and cost of salt, and the use of salt brine as a means to make salt go further, etcetera.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Correct. So I can't speak to the practices of how much salt we use and when we use it and how we use it. That's outside of the highway division. So I wanna wanna dare opine on that. I can say salt is very detrimental to specifically our bridges. It's very corrosive. Everyone has probably experienced that. And we have a lot of metal components in our bridges that we try to galvanize and make specific critical components stainless steel, things like that. But at the end of the day, we are fighting a very corrosive environment. When we design a bridge, you have to pick what level of corrosive environment we're in, and we are think, the second highest just because of winter maintenance, the highest being along the coast where you have a lot of ocean spraying and things like that. So without a doubt, salt is an enemy of longevity, but it's necessary. I don't think anyone would deny that. I would assume that this is widely acknowledged, and when the snow and ice control was developed, that there was that balance between safety and durability because at the end of the day, we are paying So for even if it was free, there's a downside to spreading it. So we don't have a bare roads policy. It is expensive. We recognize that. We also recognize the roads have to be on Monday. They have to be safe to travel on. So I assume we're we're striking the right balance. The Snow and Ice Control plan has been largely untouched for a long time. But it's definitely a balanced piece of work.

[Candice White (Member)]: Just so when you say that the plan has been untouched for a long time, so you're referencing that our salt practices were established x number of years ago and it pretty much stayed the same since then.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: I believe that to be true. Mean, I think there's some margins within the snow and ice control plan, but by and large, the snow and ice control plan is what it was quite a while ago. I don't know when it was fully adopted, but just hallway conversation. It's largely the same.

[Candice White (Member)]: Thank you.

[Matt Walker (Chair)]: And for the benefit of the member and for the committee, Mavis team will be back to finish the rest of their presentation, and they've been asked to include piece on Salt, and then also Joel that deals with the town support, and he is going to, at that same day, provide additional testimony related to Salt's piece. You're going to get more. And guess Jeremy's group fights against it in terms of its effects, not the use of it, the effects of it. Ernie Pattono's group is the one that decides how much goes down, I believe. So we will hear more from him. And then Joel Perrigo works with the towns in terms of their application of salt. So we are going to get at least two more pieces of debt money in that already in next week.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: And I think that's another great example of changing expectations. If we look at what the roadway conditions were after storm twenty years ago and what the expectation is this year, it's probably quite a

[Matt Walker (Chair)]: bit different. I think for those that are listening in the distance, we'll make sure we bring some historical context to the snow plan and how it's been before and what it'll be. We'll hear some more about that. It's always gears in the corner of your room.

[Patricia McCoy (Member)]: Is there another question? Representative McCoy, sorry. My personal experience driving Land And Mountain Route 4, I will say that there is less salt being applied. There absolutely is. That's a dangerous corridor, several deaths on it. Mean, you drive it to us. I feel that there has been less salt of thought. I mean it's driving to the conditions too, getting up to the top of Billington, Perrigo, and heading down, it's treacherous.

[Matt Walker (Chair)]: The doctor always says, let's salt doodle. Let's say it louder.

[Phil Pouech (Ranking Member)]: It's all

[James "Jim" Casey (Member)]: the way around. It's not just the roads.

[Kate Lalley (Member)]: There was a story in the news recently about how towns have a hard time getting salt and they're running out. What's the situation with AOTA? You all have I'm asking you a question about somebody else's

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: I can't give you today's update. I can just say that I know we work with towns on a very regular basis. And if they are in dire need, we'll do what we can to help them.

[Phil Pouech (Ranking Member)]: We're going

[Matt Walker (Chair)]: bring back ourselves, guys. For sure.

[Patricia McCoy (Member)]: I know, and I just want to comment on that because this last storm that was hyped up so much, my road group reached out to me because they had me so often, we and reached out to Matt, we reached out to Ernie. I got an answer back within maybe a half an hour, that if towns were in short supply, they could get one drop out for that particular, just to have them buy the store. And so I think it was a great partnership between both states and the municipalities, and it worked out well. And what my road foreman told me was they get their salt historically from cargo, and they are completely having salt. So they would have to look

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Some of it does, some of it comes from Western New

[Matt Walker (Chair)]: York. Somewhere from Jane with us. We might even have, he's got time to put his testimony together, he can explain to us how salt's distributed throughout Northeast and how it gets here and how it gets to and divided. I don't know how to, I've never been a select board chair or involved at the level that many of you are, I have no idea what our town does to severe salt and how much and what that process is. We might hear even more as to listening in here to see what we're interested in.

[Phil Pouech (Ranking Member)]: Comes from Shelburne at the railroad. Yes, deep house. But we're

[Matt Walker (Chair)]: not quite entirely done. I'm not sure where you're at exactly because I do have the questions on the stuff that came out of when we want to transition to the stuff that

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, any time I'm comfortable with that, so

[Matt Walker (Chair)]: we can go where are at where your piece is.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, so we can transition right into the reports,

[Matt Walker (Chair)]: in that particular, in the $6,000,000 highway projects the that were savings that are well, maybe I don't want say the wrong number. But when we took program reductions and reduction in state match available for projects within the program development division, the highway projects, $5.365000.000 dollars budget that we took out to fill the $33,000,000 gap that was part of Candice's testimony. I'm hoping you can speak to that at some point, whether that's now or the next piece of where you're at. Well, what came out and what's what's not getting done?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Why did that go back in? Well, I don't know that it didn't go back in. What I would say, right, because your net is 4,000,000. So, something could have come out of the 6,000,000, but then went back in under the 10. So, this is what I didn't do a good job of saying before. So, we always overfill the program. And then within the program, we can adjust the project numbers by picking state match numbers that are lower. So, if we pick an interstate project, the state matches happen in a state project. So it's very difficult to say when we cut, let's just say $6,000,000 These are the four projects that came out because of that $6,000,000 because the project was overfilled based to begin with. And in theory, we can alter the project selection based on the state match side. Now, something could have come out within that $6,000,000 initial reduction, but with the $10,000,000 purchase and used, it then went back in. They're not distinct necessarily. It is a net plus $4,000,000 if you look at it like that.

[Unidentified Committee Member]: I know what you're saying, but do we know definitively what those projects were for 5,000,000 and where do they stand when the 10,000,000 came

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: back in? It'd be good

[Unidentified Committee Member]: to know, it's like, yeah, we took 5,000,000 out, these potentially are all new projects that will be in front of the pandemic.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: It's tough to do that because the program was overfilled, as is our practice, to say specifically that project didn't go because of the 6,000,000. So if we had level funded, there would still be projects that came out. Because we would have in our '26 budget, we would show in the white book '27 construction funds in excess of what we anticipate.

[Unidentified Committee Member]: You sound like you're patting the budget. You're saying you're adding too much money to this year's budget, so we can just go in there?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: No, next year's. Well, we have to because there are going to be natural delays, and the last thing we want to do is not have enough projects. So we always have a little bit extra projects than what we think we're going to have revenue for.

[Unidentified Committee Member]: Well, I think you're saying it backwards. You have too much, you're adding the money.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: No. No. So because 4 or 5,000,000

[Unidentified Committee Member]: cut from.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah. No. What I'm saying is it's tough to say why a project got pulled out because we have more projects than we have money purposefully. And so when a project comes out, was that because it was overstuffed to begin with or was that because we took a financial

[Matt Walker (Chair)]: reduction? I'm sorry.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: No, I haven't digested I can give you a total project list that was in the '26 budget that isn't in the '27 budget, But I just want to recognize that may not add up to the $6,000,000

[Matt Walker (Chair)]: Okay, then that's part of my question. Does it mean it came out of the book entirely or it rolled to completion? No, it just gets pushed. I didn't see 10 gs reports that we canceled

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: And we haven't. When I say take out, we have yet to come to this committee and say, These are the projects we're canceling. That is happening internally to see if there are projects we should cancel. They're not paving projects because that need will be there sooner or later anyway. There are roadway projects and some other projects that were potentially brought in that the need has disappeared. When we say projects were removed or canceled or not canceled, but they were pulled out of the budget, They're not pulled out entirely. They're just pushed to the next year. And so, you may have heard some of my predecessors talking about the roll in the carpet, right? Where if you keep pushing, that continues to grow and snowball. And before you know it, you've got a really big budget. And that's where we've spent a lot of time over the last year too to say, what is the ten year plan? Now, as you get in those out years, obviously the accuracy goes down. But the idea here is not to have that carry over or carry forward necessity too large. So, there will always be projects that in one fiscal year are projected in the next one, but are pushed out for any number of reasons. Some of it could just be we get stuck right away, we found an archaeological site we need to address, whatever the case may be, or we may not have money for. But to assign a purpose to every single project is difficult because I can just about guarantee that the projects in the twenty sixth budget that were projected for FY '27 spending exceeded that were pushed out exceeded the $6,000,000 on Candice's slides. If a project was ready and you see a lot of those bridges, they were ready, so they may have been pushed out from '27 to '28 originally, then the 10,000,000 allowed us to bring it back in.

[Unidentified Committee Member]: I'm just trying to sync those two up. I know what you're saying. You have ebbs and flows, you have carry forward all the time and things slip, but I just wanna make sure those potentially projects are effective, and if they're ready to go, that they were the first ones to

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: get back to them. They were

[Unidentified Committee Member]: But maybe you can't

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah. Well, and they generally were, right? So, as when I showed the list originally, the principal reason why those were selected because they were ready to go. Obviously, the paving side has a quicker development cycle, so we were able to bring them along faster, But the bridge side, they were ready to go. I'd have to go back and look and see if they had 27 funding in '26. But yes, anything that came out that was ready to go, probably went back in with the 10,000,000.

[Matt Walker (Chair)]: You've got the first one. No. I'm I'm to stirring on the same Trying

[Unidentified Committee Member]: to make sure the money is I don't want somebody to come back and say, you know, why

[Matt Walker (Chair)]: don't you cut us off

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: and put, these 10,000,000 new projects? The 10,000,000 weren't projects that were just out there that had no real thought. There might have been some on the bridge side that were pushed further, but at the end of the day, it really is a net of four, not a down a six and autonomous from the plus 10. It is all jammed together at the end and the 10,000,000 didn't fundamentally alter our priorities.

[Matt Walker (Chair)]: If $6,000,000 related to projects that are not necessarily a specific project, I guess I hear you saying that $6,000,000 of work that is not getting done was somewhere, there's a pain of some sort that needed, that was identified at one point that should have been done or not done or needed to be done,

[Phil Pouech (Ranking Member)]: but it's not happening or not.

[Matt Walker (Chair)]: And it's how do we explain or understand other than that's an accounting movement of some sort that we didn't, what what isn't gonna happen that was should have or was planned on happening. Or it is truly, an accounting issue, then those are picked up in the next piece. In other words, it makes it sound like the money doesn't always the pot of money doesn't always go directly because of delays in projects, etcetera. You're managing a global number. They don't really 100% tie back to individual projects because the payouts and the times they're spent and the pieces when they're ready ebb and flow. So it can't always be dollar to dollar. It isn't. Is there $6,000,000 worth of work that's not happening that is a pain that's being felt somewhere?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Well, I do. So there is definitely $6,000,000 worth of work that's not happening. But is it not happening strictly because of those budget cuts? I can't make that statement. If there's a local project, I'll just take the railroad enterprise project. So, I don't know what we had, but we could have carried money in that for, and it's a big project, expensive project. We could have carried money in '26 showing expenditures in '27. Now unrelated to any sort of budgetary issues, that project is slowing down. So that allocation from '26 that was shown as projected in '27 isn't in this year's '27 budget. And so that weighs into that $6,000,000 cut. When Candice says highways cut $6,000,000 in match, it isn't here's the 12 projects that came out. Because projects, like I said, we start out overstuffed, projects have some natural delays, then we do the budgetary five tiers, then we added 10,000,000 in. And so there isn't going to be a like, here's what the 6,000,000 cost you. Here's what the 10,000,000 got you. Because that 6,000,000, there could be a project that was shown in '28 that moved to '27 because a big project may have gotten delayed.

[Matt Walker (Chair)]: So when that railroad project you were talking about kind of, they slowed down, that money will the reason the projects are over padded, that there's more that's a tough word over there. There's more projects in there because if this one slowed down, we will just move that tief on money onto those to make sure construction continues to happen and maximize the dollar.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Exactly. How do I know that

[Matt Walker (Chair)]: I couldn't take until you make that $10,000,000 and save the jobs.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Well, this committee has that discretion. And we would then, much like last year, I sat before you and said, if the JTOC procreation doesn't occur, here are the suite of projects I can cancel. Push out. Push out. And that's because, again, the tiers, tiers one, two, and three, or actually tiers one and two already took up everything else. So if that JTAG appropriation was redirected, continued to be redirected, we had no choice other than to take these, I forget the number, a dozen projects or something like that and push them out to FY '27.

[Matt Walker (Chair)]: You pretty much guarantee that everyone that we push out is going cost us a lot more tomorrow than it is today?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Guarantee you, no, but as we talked about earlier, inflation only goes one direction. Now there are other market factors. Generally speaking, if we point out a $200,000,000 paving program versus a $100,000,000 paving program, they have certain limitations, so there may be some price increases. I mean, we don't work in a silo. If New Hampshire cuts back, okay, our bidding is more competitive. If New Hampshire has a big increase, now all of sudden our bidding is less competitive. So inflation is always present. Inflation always goes one direction. Generally speaking, yes, project costs only go up. Can I definitively say that the pricing would have absolutely been better this year than next year? Not really. Pretty close with some level of confidence, but definitively no.

[Unidentified Committee Member]: Just wrap this up so I get in my mind, the way I guess I'm comprehending this is every year we have carryforward because we haven't closed. And that's typically, you know, 10, whatever. So basically what we're doing is we're taking that carryforward and we're just reverting it in

[Phil Pouech (Ranking Member)]: current year that we're

[Unidentified Committee Member]: in, because we know there's going to be X amount. So with that 6,000,000, this basically would have been a carry forward for the following year, right? Because the outflows, things are slowing down, but we're just going to take that. We're not going to wait till the fall. We're just going to take it now because the odds are we know that there's X amount every year we carry forward projects. So eventually, we're going to, as Chair Parkinson, we're eventually going to have to backfill that because those bills are going to be eventually due down the road. Is that my getting that right?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, if you looked at a programming list and looked three, four years out, because we never cancel projects, sooner or later that money will need to be spent on those projects. Now there are scopes refinements, Putney Road is a prime example. We think we've refined the scope, minimized the scope, and in theory we have saved, I'll just say 50% of that project cost. Now, that doesn't show up as a cut. We didn't eliminate anything. We just narrowed the scope and refined the scope and potentially got ourselves total funding of I'll just throw out 25 to 30,000,000. Now that's not a cut per se. Right?

[Unidentified Committee Member]: That's carried forth. So as

[Matt Walker (Chair)]: a policy, I'm not sure what I said.

[Unidentified Committee Member]: We could just theoretically, level, because we know the last five years, we always have x amount of carry forward and money doesn't get spent. Big five.

[Matt Walker (Chair)]: Well, I'm just

[Unidentified Committee Member]: saying that's what they did, their comfort level six is going to be there. And like you said, it could

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: be 10. Well I won't say the money is going be there, project and need is going to be there.

[Unidentified Committee Member]: No, the project and need, but it could be under for various things that come in, bits, a mint motor.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: I mean I did

[Unidentified Committee Member]: understand that stuff, but you're right, that could be tense.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, I mean at the end of the day, it's in all likelihood gonna cost more in the out years, but it's Yeah. Again, I just couldn't definitively say that. We've got

[Matt Walker (Chair)]: the word guarantee. Right. Representative Casey?

[James "Jim" Casey (Member)]: Yeah. So do we how many how many major bidders do you guys have? Is there is there quite a few bidders? I mean so if New Hampshire's busy, they're taking the bidders. They got some bidders over there that are are

[Matt Walker (Chair)]: we dealing with the same Frequently, yes.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: So it's very dependent on the type of work. There are some scopes of work where we are lucky to get two bidders. There are some scopes of work where we think, okay, yeah, that project very much touches on a lot of people's preferences and we'll have six, seven, eight bidders. It's a smaller project type of thing. Yeah, smaller projects definitely have a bigger bidding pool. I'll just use the Virgin Diamond as an example. That was two bidders. The Creechy Gorge Bridge was one bidder. So it really there's a lot of a lot of inputs in there. So

[James "Jim" Casey (Member)]: so that's how prices can really, really go up. There's total cool stuff. And so one bidder is like, I can help. To get one bidder. It's like, let's not do that. Let's let's wait. Let's wait till people are hungry. But but does so so if you have a couple major couple major bidders, what's to stop them from talking to each other?

[Matt Walker (Chair)]: Well, I I mean

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: so so that that would be collusion, and that's a a federal offense. Do we know that we could catch that? Mean, somebody makes a point. I mean the bigger issue, right, and this is kind of what we saw with IIJA. We talked about it was probably, I won't say a net loss, but on balance our purchasing power went down over the IIJA. So, what we saw is nationally a huge influx in spending. We saw obviously some COVID work restrictions, and so the National Highway Construction Cost Index went up 50%, 60%, 70% depending on when you measured it, and our available funding from a formula perspective went up, I think 18 or so percent. So, it's a market with a lot of inputs and there's not a lot of definitive guaranteed statements that if I do X, Y is going to happen. Because there's a lot of things. Even recently in Vermont, we're seeing a consolidation within contractors. So a couple of mid contractors are buying some of the smaller contractors. And does that affect the market? Probably in some way, but I wouldn't want to sit here and say we're going to see prices go up. I don't know that because there's seven other factors as well.

[James "Jim" Casey (Member)]: You you said it went up 60%. Right? Right. It's not gonna come back down. Nobody wants to nobody wants to let go of profit. I mean, I've never put my prices down. Right. Yeah.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: And and and I think there's a, you know, a question whether or not that's all profit or not. Like, it's still a competitive marketplace. And at the end of the day, you know, AGC's been in here talking about the workforce challenges. Right? What we see in salaries from 2019 to 2025 is really a significant increase, right? And if you try to hire somebody at 2019 wages today, you'll get nobody. The workforce just isn't there. That doesn't mean that the contractors are making exponentially more. Their costs have increased as well.

[Matt Walker (Chair)]: Okay. Other questions? The two parts on the agenda related to municipal grant efficiencies report and the mobility service oh, that's later. And the section 14, act 43, municipal grant payback report. We had two reports on your piece to deliver to us from. And I guess to catch us all back up, remind us where they came from and why we're doing them and then what you came out with.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Thank you. As as you frequently remind us, this committee did not request these reports.

[Matt Walker (Chair)]: And lost kid. Oh, yeah, I guess so. Last month with his new best friend. Oh, he did tell me. I'm sorry. He had an appointment this morning. And got several of them in a row so yes he didn't tell me that. I should remember. I'd rather be here than where he is. That's not easy to say. I like how you always bring us new pictures and some of

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: the things out of the archives. I like all things old, but I'm running out of old pictures, I will tell.

[Patricia McCoy (Member)]: Where is this?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: We think this is the drawbridge.

[Unidentified Committee Member]: Oh, the original.

[Patricia McCoy (Member)]: The drawbridge. In any other state, the drawbridge.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: The floating bridge.

[James "Jim" Casey (Member)]: Is the bridge? Grand Island, North Europe.

[Matt Walker (Chair)]: There you go. Alright. They rebuilt the whole thing and we went on a field trip.

[Mollie S. Burke (Member)]: That was a field trip.

[Patricia McCoy (Member)]: Oh my god.

[Matt Walker (Chair)]: It is.

[Mollie S. Burke (Member)]: Crawling up in the street.

[Matt Walker (Chair)]: $100,000,000. It's amazing when a $100,000,000 you get. What a dream.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Oh, sorry. Later, you're talking real money. Okay. So there were two reports that were requested. Both of them had to do with municipal and town aid. One was trying to find some efficiencies within the numerous grant and aid sources to towns. And one was to explore what the correct payback provisions are. And by that, I mean when a town gets a grant to pursue a project and then decides not to do that project for any number of reasons, what is the appropriate amount of payback? So I'll start with the efficiency piece. And so, this is Act 43 of 2025, Section 16. And really there were two objectives. One is to look at the town aid and the municipal grant programs and identify potential efficiencies and improvements related to the administration of those two programs. And then to evaluate the various funding streams authorized as well as the programs administered through the Municipal Assistance Bureau. And again, trying to find efficiencies. So it's not a lengthy report, but I'll hit on the highest level findings. So to give you an idea of why we undertook this report is here are all the various funding pathways that a municipality could have. And within the municipal assistance program, there's nine different sources of funding mixed between both state and federal funding. Finance administration portion of VTrans does the direct county program. District maintenance and fleet has three aid and grant programs, and then our planning section has a Better Connections grant program. So, if you're a small municipality, like the one I'm part of, this can be a daunting, heavily bureaucratic process. Jumping right to the key findings, and I think a lot of this is intuitive to most after seeing what the landscape is. Municipalities have limited resources and the administrative burden is required. That's not only on the application administration piece, but when we start bringing in federal funds, I think we've heard this before in this room, there comes a lot of strings with federal money, Well, that we have to deal with and what a town they have to deal with. And I think you've heard testimony in the past about transportation alternatives, salt shed costing significantly higher if they get a grant than if they were just to pay for it out of their own pocket. So, again limited resources means total compliance not just the application fees. Essentially, the authors of the report spoke with municipal assistant project managers, district project managers, municipal entities, RPCs, and VLCT. And how accounts administer these grants and seek this funding varies by the municipality, obviously. Some have in house public works teams that this is not a big deal for them, others rely on their RPCs and consultants, municipal project managers, etc. Also the frequent turnover, select boards generally change over every five or six years, priorities can change. Obviously, we spoke about inflation, what the cost of the salt shed is, all other things aside, went up dramatically. So again, the ability to fund and execute any of these projects is highly fluid. Transparency. So, given the limited municipal capacity, it was recognized we need to be very transparent in what the process looks like, both what the opportunities are and what the expectations are. What one of the findings was is that we were found to be highly transparent in some places, but also there was inconsistency in how transparent

[Matt Walker (Chair)]: we were.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: They did look at what our neighbors do. That's oftentimes one of the first places to start, trying not to reinvent the wheel. Really, it's all over the board as far as how different folks administer all these different programs. The big takeaway I would say here is that the formula driven process, so that is instead of getting a Class II paving grant, it's just rolled up into your direct aid. So you don't have to apply for the grant. A portion of that grant effectively comes every year and it's incumbent upon the town to basically create a reserve fund that they then can do a project every three or four years instead of waiting three or four years and applying for a tranche of money every three or four years. The downside of that is a lot of towns don't do that. And so when the critical need arises, they don't have that tranche of money and a reserve fund. So, yes, you remove the bureaucratic hurdle, but you've lost the discipline, I'll say, to reserve that money and not use it for general maintenance, but set it aside for an upcoming paving project.

[Matt Walker (Chair)]: So,

[Patricia McCoy (Member)]: how is that grant money split? Does every town get the same amount? Is it based on road mileage, population?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: So I believe the statute, that's administered through our district maintenance team, And I believe the statute says it needs to be administered equitably. And this is to some extent the lack of transparency. So, essentially at the district level, they try to balance it out and say, okay, this is what you get. And what I understand and maintenance would have to provide clarity here is it's generally not calculated. So, like the grants program is a proportion to the number of bridges you have in town. Whether or not road mileage plays into that, I'm not 1% sure. But they try to keep track over a three or four year rolling average timeframe and say, okay, you just got a bunch of money, you go to the bottom of the list, and then you sort of cycle through. And so if you get a really big structures grant, you won't be really in line for another structures grant for a period of time. Now, because the grant value changes a lot, again, it's sort of subjective. It's not you get 18,000 this year, but maybe you're only asking for 11. So, maybe you don't drop to the bottom unless you drop to the bottom third. That's how I understand it, Ralph.

[Phil Pouech (Ranking Member)]: I think that's what we heard last year too, that they're just trying to be fair to all the municipalities. And it doesn't mean they don't look at some critical things and adjust. But I'm guessing I would agree and maybe you would agree that there are municipalities who for whatever reason would maybe do more paving and buy some new trucks rather than put money aside. They have to have that discipline, put money aside because there's a bridge that they need to fix in four years. And think we see that in school education too, it's difficult to have that discipline when on the other side it's property tax. 100%. So

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: there is a savings on the bureaucracy side, but then you need the parachute when a town hasn't set aside that money.

[Patricia McCoy (Member)]: Well, I guess I'm still a bit confused. So, this is a grant, this is grant money we're talking about.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: We're talking about if you eliminate the grant program and just bake it into their direct aid.

[Patricia McCoy (Member)]: Okay. We do not do that. Currently, we have this list, because I remember we had someone come in and talk about the list. We were, how do you figure out who gets what? That was pretty much what you just said.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Okay. So what I was contemplating as far as different approaches is effectively if you looked at the Town Highway Costly Paving Program, and the Town Highway Structures Program, in theory those should go away. The administrative burden of administering those grant programs and the annoyance of the towns having to apply for them would go away. And that money could be applied to the Town Highway Aid Program. So, annual highway aid would go up. But if they did not establish reserve funds and they did not set that money aside when they needed to do a small paving project, there would be no grant program to apply for.

[Patricia McCoy (Member)]: But you could list it out. Get there

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: three times a year. Four, I think, yeah, whatever it is.

[Patricia McCoy (Member)]: You separate out on that piece of paper. It's probably emailed now. But we could certainly separate.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: You could note it, but again, whether or not they have the discipline to not use it for all three costs.

[Patricia McCoy (Member)]: It's amazing how many towns don't. Mean, had set up a lot of preserves. A

[Matt Walker (Chair)]: lot

[Unidentified Committee Member]: them. They said we put 5,000 a year in each bucket. They were there.

[Matt Walker (Chair)]: We have Representative Pouech, and then Representative Burke, and then Representative Lalley.

[Phil Pouech (Ranking Member)]: Would say at our town, I mean, we've, in the last four or five years, really the capital plan has become far more important and far better funded. But potentially if we were to go forward with some of these changes, the funds that we give for the regular formula funds could just continue to go and the town sides, I'm gonna pay this, or I'm not gonna do this, or we're gonna do something and buy new trucks. And then potentially another chunk of money could be earmarked for, I'll say capital and put some controls on it. I suppose you could try to legislate some discipline in it, but just, you know. So it's not one or the other, potentially you could balance.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: In theory, you could. I don't know how you enforce that though. Effectively, there'd have to be some level of audit for every town budget on an annual basis for some frequency. And then what's the consequence of that? Do you pull the money back if they, again, bought new trucks instead of setting it aside in reserve fund? I don't know how that I'm not saying it's not off the top of my head. I just don't know how.

[Matt Walker (Chair)]: It's not 100% well, if you're helpful. Yeah.

[Mollie S. Burke (Member)]: Are you referring? No, you're referring. Okay. It seems to me that since there's a you know, not everybody gets a grant, structured grant, last year, payment grant every year. So if you were just to take all that money and divide it up, the towns wouldn't be getting enough money, I mean, to be doing the projects. Am I right in this? That if you just lumped all that money together and gave it out as town highway aid, then you're spreading out the amount of towns that are receiving, like say, I don't know, how many towns get a structures grant every year, maybe 20 or something, I don't know, whatever, whatever they get, and those grants are capped at 200,000 or something, maybe?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, I forget the number.

[Mollie S. Burke (Member)]: And then the paving grants too. So if you were to lump all that money up, that would say, just for example, 20 towns get, and you spread it out to all the towns, then even if they set that money aside, or I don't know if I'm figuring this out right, but even if you set it aside for for capital projects, it wouldn't be be enough. You would have to accumulate over a number of years.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, so absolutely. On an annual basis, if you got a grant, the combination between the aid and the grant would be far more than if we combined it and just gave you the aid. I think the notion is that over a five or ten year period, it would equalize itself out. And that's where the discipline comes in for, and I think you said this, a town would need to accumulate a portion of their aid in a reserve fund over a five year period in effect to supplement or take the

[Matt Walker (Chair)]: place of that grant. Yeah,

[Kate Lalley (Member)]: I just wanted to clarify. These are state funds, right? Or are these some of these federal?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Generally, we're talking about would be state funds. So it would be the town highway aid program and Town the Highway Class II paving and then the Town Highway Structures program. So yes, those are

[Kate Lalley (Member)]: Okay, all the bit of state funds.

[Matt Walker (Chair)]: Yeah,

[Kate Lalley (Member)]: think this is really interesting, carrot and stick approach that we might think about on this committee. And this is something I think that we have this existing infrastructure of the RPCs that could help with some of the littler places that, because I know a lot of them don't even do capital planning and there's a load of challenges that I think are kind of too granular for you guys to get involved with. But that's why we have RPCs. They are that middle existing bureaucratic layer and they're well trusted and they help a lot. I think this is worth exploring what the potential savings could be. And we could mandate, I mean, Michigan has done a lot of things with carrot and sticks, incentivizing, if you want this, you got to do these things. That's working.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, and just to clarify, the example we were talking about is what I was talking about. But if you look at this, the different pathways, in theory, it would apply to anything that was state funded. So, it could be the Better Roads grant program and the Municipal Parking Ride program. It would be very difficult to do that with any federal money, but if it was exclusively state funded program, in theory, you could just give it as direct aid and towns would be responsible to figure out how to manage it.

[Kate Lalley (Member)]: Well, I think this is showing the advantages of being disciplined and defederalizing money so that we can do these things at the local level. Because it's very interesting that you said in your earlier testimony that the feds, their focus is the interstate and the national highway system. They really don't care. Heard that loud and clear. So what are we doing?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: I'm probably a little direct when I said that. That is not their priority. At the federal level, they're looking at interstate commerce.

[Candice White (Member)]: Sure.

[Kate Lalley (Member)]: But I feel like we are living in unvarnished times in terms of our fiscal reality. And we have a lot of competing needs that we're trying to balance. And I think we need to get creative about how we do some of these things. And I'm also absolutely customer service to our localities is one of reasons I serve on this committee because I think that we need to find better ways to do that. And it's not that all men is a criticism of the AOT. There's a mismatch between what you guys have to do at a really big level, and then what needs to happen in our communities. How can we, everybody wants this, right? You serve on your slut board to help make some of that better, too. And so what are our opportunities here? I think this is really interesting.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, and you could have a sensible conversation that this restores some level of local control as well. And so the local municipality gets to set their objectives and to set their priorities that are tailored to their needs at that moment, not necessarily their priorities being dictated from either a state or a higher level.

[Phil Pouech (Ranking Member)]: And I'm sure I've heard this before, but I'm not quite sure of the answer. So, not every municipality is the same. Obviously, have different roads, but some have far more bridges and structures than other ones. So I Can you say that even though everybody tries to be equal and every municipality getting some of these grants, that there would be more grants or larger grants for those municipalities that have more infrastructure to maintain?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: I don't know. I think Ernie would have to testify to that, exactly how they do that. Because obviously not every town has the same number of bridges, same number of lane miles. So, don't know how they determined equity. And again, I don't think it's a strictly calculated measure. There's probably some level of subjectivity to it, but I don't know how they do it in practice.

[Phil Pouech (Ranking Member)]: Just to sort of follow-up, and then some town roads have more value for interconnectivity than others. I assume that might be part of it, even though it may not be in the national thing. Are, I know, within our municipality, there's a couple of roads that really get a lot of action and a couple that don't.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Agree. And I don't know how that plays into the awarding formula, but yeah, we talked about Bethel Mountain Road. I'm assuming a Class II Road at this time. That's probably more important than a lot of other class two roads in Bethel for the region. If you live in Rochester, that road is pretty important.

[James "Jim" Casey (Member)]: Yeah, it is footage.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: So again, the principal takeaway here is there is a way to reduce bureaucracy, but what level of safety nets are in place and mandates? So jumping to the recommendations, largely the theme here is trying to simplify the process. So having a single web page for all municipal funding opportunities and then potentially having a cloud based singular application for those. Obviously, we talked about the turnover within select boards and some of the knowledge deficits. So develop training, it's very clear what strings come attached with a potential grant, but also what opportunities are out there and how to manage a project successfully with varying degrees of resources within a town. Making sure it's very clear as far as what the commitments and risks are to a project. Some towns, again, not having that experience don't necessarily know what sort of knuckle balls in the dirt are coming their way. Trying to clarify that will help the select boards or whatever body it is understand that. And then again, as we said, transparency, trying to understand and some of the questions you're asking about exactly how does this work out with varying size and various needs within different towns.

[Unidentified Committee Member]: So is the agency going to recommend some update to the statute language? We're not in

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: a position to make any recommendations right now. We're delivering this report. We'll have to go back through and decide what, if any, recommendations will be executed. I think all of these recommendations come with, I'll just say a consequence, whether it be the cost to do something, what is the safety net, what is the, R. Lalley said, what is the stick and who's in charge of that? So none of these are free to implement, shall I say.

[Candice White (Member)]: And what? Well, just, Jeremy, looking at your recommendations, it seems like a single webpage for municipal funding opportunities would be a great first step that would not have high costs. And just putting them all on one page so towns know where to look, instead of having to chase down this grant program and this one, I think that would be a great first step.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Any other questions on the efficiencies piece? Okay, so section 14 of Act 40 three-twenty 25 had two objectives, and this is to examine the requirements for cancellation of locally managed projects. And second objective, identify potential changes to the provisions in this section. Really, this became an issue with the passage of IIJA. Previous to IIJA, it was very clear where when you needed to repay Federal Highway. Those provisions were largely scaled back. The state statute and our grant agreements did not necessarily reflect that change. And so we had a number of municipalities who questioned what their payback provisions were. Right now, the appeal process is to go to the transportation board. There's some relatively onerous process involved with that. And so the effort here is just to address that inefficiency and uncertainty.

[Phil Pouech (Ranking Member)]: And could you just, I remember we talked about this quite a bit last year. Could you just give an example, it could be a made up example of when a municipality gets in trouble? Basically, what they're saying is they get in trouble, they have to pay money. So,

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: I'll sort of give you a gamut of what we've experienced. So, one was a project that was progressed along for a period of time and the select board turned over and they said,

[Matt Walker (Chair)]: Nah,

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: not really interested in that project anymore. That's generally probably

[Phil Pouech (Ranking Member)]: Sidewalk project.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, exactly. Sidewalk project. So, could be sidewalks, salt sheds, bike paths, they run the gamut. So, story short, that happens. You've got a municipality who gets a grant for a salt shed and gets to construction and the bids come in two and a half times what the engineer's estimate was. They're stuck. They don't want to raise property taxes. Then what? And then there's of stuff where another one we had a salt shed grant. I don't think the engineering firm did them any favors, but there were some different site conditions, price increases. There was a supplemental grant, and then ultimately they go forward. Okay, how do we untangle this? In these cases, they've spent some federal funds.

[Matt Walker (Chair)]: Yes.

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: And state funds maybe too. Yes, both. And in other cases, probably the extreme example I use, there was a bike project and they had grants going back, I want to say twenty years, that were just kind of kept rolling over ultimately for any number of reasons, they decided to pull the plug on the project. So I guess that's another key point here is that oftentimes the decision making is years after the grant award. And if there's federal funds involved, we have to manage that. So, as this committee knows, we have to obligate funds in a certain timeframe. There are certain benefits to us obligating funds as fast as possible. So, we'll make a grant award knowing that the funds won't be obligated in the project, but won't be ready for construction for a number of years. So, we're trying to balance those grant awards with the likelihood of what the construction period will be. Basically, those federal funds are encumbered for what can be a long period of time. And there's a certain, I'll say financial gymnastics that has to occur to make it all work out in the end.

[Candice White (Member)]: Just on that point, Jeremy, I understood that some of the criteria used in deciding who receives these grant funds are how close they are to starting the project, or how shovel ready they are, how much they've put in so that you know that your funds are actually getting deployed. Am I wrong about that?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: So, I think there are two potential ways. One, and again, there's a litany of different grant programs that have different criteria. But one could be, have you gone through a scoping study? And that is certainly a criteria in that, okay, we think you have a good scope, you have a better understanding of where you're at, but that's not a prerequisite to get the grant. So, most of these grants are not shovel ready because they haven't spent the local money to design the project yet. And it's generally not going to be reimbursable, especially from a federal perspective. You can't get that design money back after you get a construction grant. So, most towns won't progress a project to shovel ready without a grant in ink.

[Candice White (Member)]: And sometimes those grants are for scoping projects?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, we give grants exclusively for scoping. So, again key findings. There's some ambiguity and inconsistency in what the statute and the grant agreements say. And as somebody who spends a lot of time reading the CFR and trying to pick that apart, it's not always clear either because there's a lot of time references to different memos from fifteen years ago or whatever. There's ambiguity on all sides of the house. Process challenges for the municipality. We touched on this before, smaller and rural towns may not necessarily have the dedicated staff to manage these things and to drive the project forward. Also, if a project goes up, Burlington can handle $100,000 price increase better than Roxbury can. That's just the fiscal realities of it. So, as I alluded to before, there's a certain level of inefficiency when these projects aren't built because they do income for federal funds. We've got to play that game to move federal funds around and product match their construction expenditures with the FY budget. The general consensus is we need to do something. There needs to be some level of standardizing the payback language. There needs to be milestones that are articulated from the beginning that say, once you get to this, you don't move forward, you've got to pay everything back from there. The question is what are those? One of the pieces here is, and I'm not making a judgment on it, but if you are, I'll just say generous or compassionate to one town, it needs to be recognized that another town didn't get those funds. And so, kind of like I said, there's no free recommendations here. There's a consequence to everything. So, here's some of their recommendations. One, update state statute and all grant agreements. So, that's plain language. Clearly here's what the payback provisions are that would raise awareness and understanding at the earliest stages. Second point, mandate project scoping or even a scoping plus as far as a liability study before we would even give them a construction grant. That does add some bureaucracy, but in theory, the town would be better positioned to move the project forward. Provide regular and targeted training sessions for the towns, so that they know what the current status is. This would in effect be similar to the previous training as to what the agreements are and then what the payback provisions are. And it would, in some hopes, help with that knowledge transfer and the churn within a town. And then obviously once this got stood up and got accustomed to it, would be like PIIJA in which it would just be institutionalized. One of the other pieces to this would be what does the appeals process look like? So currently it goes directly to the T Board, and the way the state statute has been interpreted is effectively, I think, and I'm going to paraphrase here, the T Board has to issue a decision within thirty days of the appeal, but the T Board is a qualified judicial entity. So that means you've got to go through discovery, you've got to go through the whole process within thirty days. And I'll just give you an example of a situation I was involved with where I want to say, and I'm just going to use general terms here, but the appeal was filed by the town. I want to say somewhere in the neighborhood of a week before Thanksgiving. And so if you look at that thirty day window, there's a huge amount of discovery and document transfers that have to occur basically between Thanksgiving and Christmas. And the keyboard felt obligated to not only do that discovery, but then to hold a hearing and then issue their decision within thirty days. So, you're talking about a very, very, very tight timeframe. So I think as part of this, just from a personal perspective and having gone through this, we would want to take a look at that and perhaps give both the town and the state and the keyboard a little bit longer runway there. Because the other thing this does is it prohibits any period of mediation or negotiation. If you've got a strict timeframe, it almost discourages compromise. So those were the two reports that were presented to the committee, I think January 15.

[Patricia McCoy (Member)]: I

[Matt Walker (Chair)]: guess the same

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: question, state statute update? We're not proposing anything at this point in time. We still have to work with the RPCs, VLCT, to agree on what state statute update needs to be. I think we all agree there needs to be one. There needs to be an agreement on what our grant agreements say, but at this time, we're not there yet. The other sort of complicating factor here is we don't know what reauthorization language will say. So in theory, if they- Federal. Yes. So principally all this is for federal funds. So, I would hate to say this could be an outcome, but in theory, we may have to revisit this topic every five years.

[Patricia McCoy (Member)]: Do the majority of the projects that you've seen already have scoping done?

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: No, don't think so. What are they?

[Unidentified Committee Member]: Slept for it, sit around and find this guy, hey, let's do Well,

[Jeremy Reed (Chief Engineer, Vermont Agency of Transportation)]: Yeah, I would give them a little bit more credit, and there's probably a difference between formal scoping and hey, this is what we think we can do. So, I think there is probably the full spectrum as far as preparedness of the towns when they get a grade. You've got some folks who have done scoping plus, they've identified in a capital plan where they're going to get their match, all nine yards, they've built in contingencies. To the other end, they're like, yeah, we need salt, let's just go get the grant. Not sure where yet, not sure how, not sure the size, but we're going to do that.

[Phil Pouech (Ranking Member)]: So are the stakeholders in yourself, B TRANCE, going to continue that discussion? Absolutely. Okay.

[Matt Walker (Chair)]: Well, I think that we did hear, by the way, last year, this is not a particularly common thing. This is something that happens very occasionally. And we'll have to decide as a committee to get feedback whether we want to take the next step of testimony on who else might have an opinion on what