Vermont Legislature SmartTranscripts:

[Brian Collamore (Member)]: Check.

[Russ Ingalls (Chair)]: So I can Good morning. It's Thursday, January 15. I am a little a few minutes late. We apologize for that. We are gonna spend some time today with chief executive officer, Joseph Joe and Goldstein of the of Vida. They're gonna make some, I believe, fundamental changes as far as how they would like to do business, and they wanna make us aware of that. Is that correct?

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: That is correct, Sandra. Thank you very much, and thank you for receiving us. I have not been to this committee before.

[Russ Ingalls (Chair)]: Well, let us introduce ourselves.

[Brian Collamore (Member)]: So, Brian Collamore representing the Rutland District. And I'm Rob Plunkett. Steven Heffernan, Addison County District.

[Chad Richardson (Chief Financial Officer, VEDA)]: Joe Major Windsor.

[Russ Ingalls (Chair)]: Russ Ingalls, Essex Orleez. Linda Leven.

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: Nice to meet you.

[Russ Ingalls (Chair)]: So thank you. Thank you for coming.

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: And I'd like to introduce, brought my team with me. Hi, everybody. It's Chad Richardson, who I think you already know, but Chief Financial Officer at NEDA. And also Jennifer Evans Butler, who's our Chief Legal Officer, Andy Wood, our Director of Agricultural Lending, and Christine Heffernan who's our Director of Communications.

[Russ Ingalls (Chair)]: Very nice.

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: Just to get an idea of who we are.

[Russ Ingalls (Chair)]: Thank

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: you. I spent a lot of time in the building, but not so much in this committee. Before coming on to VITA, I was the state's economic development commissioner for about ten years. I worked for both Governor Scott and Governor Shaun. I do a little intro to VITA, Vermont Economic Development Authority. We were established in 1974, and we were meant to help economic development in the state, defined loosely as creation of jobs and creating opportunities for prosperity. We want to use our time today to tell you about VITA, but also Vermont Agricultural Credit Corp, which is a separate entity, but it's within VITA. We call that affectionately, VACC. What we'd like to do is have that inserted into the VITA statute just as another sub chapter. VITA, like I said, we were created in '74 and since inception, we've lent about 2,600,000,000 for businesses, farms, nonprofits, also agricultural enterprise other than farms, but to enhance the mentality of Vermont's economy. DAC was established in 1999, and that was formed to provide an alternative source of constructive credit to farmers and forest products businesses who are not having their credit needs met by conventional sources. The existing statute requires VITA to incorporate VAC, for VITA's board of directors to serve as VACS board, VITA's CEO to serve as president and CEO of VAC. What that creates is quite a lot of administrative issues. So, for example, we go in and out of different meetings at the board, even though it's all the same people. We fund through intercompany lending to back for payroll and for funding of loans. So separate books, separate, all to consolidate with Ancient Vida. Little bit of background. Where does Vida's money come from? We're not asking for appropriations. We do receive appropriations from time to time for specific programs. Last year, we received $2,000,000 to do a disaster recovery vote fund, which this year we made available for drought impacted businesses and farms. But otherwise, we are issuing commercial paper, we get lines of credit from banks, and particularly on agriculture, it's from COBEN. We borrow from banks and then we lend it out to fulfill our mission. So in that way, we're just like another lender.

[Russ Ingalls (Chair)]: Who does the servicing of those monies when you lend them out? Is it the bank stake or you guys

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: take We it do all of it. For agriculture, we lend directly, meaning there's rarely another bank involved. So on the agriculture side, we're direct lenders. We do the servicing, do all of it. On the commercial side, we do take positions in other bank loans, and so sometimes that's coordinated, sometimes that ranks first, and depending on whether it's participation or a separate loan, we do the servicing, and other times the bank is given the majority of the service. But for agriculture, it's direct. It's a direct primary relationship. From our annual report, just to give you a sense of how much we do, we did 173 loans totaling 61,500,000.0 dollars $35.8 is commercial, dollars 15,000,000 is agriculture, dollars 10,700,000.0 was water and wastewater. That's another partnership with the state. Department of Environmental Conservation has some monies for water and wastewater, and we service those lawns. We make those lawns. We make that underwriting decision. On the ag and forestry portfolio of the $83,000,000 in total, that's five fifty three loans to two eighty six farms and forest entities. So there are many farms and forestry that have multiple loans for a particular business enterprise. The two largest types of exposure is dairy at $30,000,000 and maple at 14.7%. Combined, that's over 50% of our portfolio.

[Russ Ingalls (Chair)]: Can we ask you, maybe you're gonna get there, Commissioner, and I apologize for interrupting. The types of these loans, are they growth loans, would you say, or are they servicing loans as far as to to keep an operation, or a mixture of all of them?

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: All of the above. Everything from purchasing land, purchasing equipment, working capital, lines of credit, refinance, all of the above on the agricultural side. And some examples, I don't know where we are on the slideshow, because I'm not looking behind me. Yeah, on the recent, so some of the recent Vida agricultural investments was we helped Stewart Maple buy land, add more tubing, upgrade taps, and add new ones. Virgin's Animal Hospital, they purchased property. The Dorset Equine Rescue, they bought almost 200 acres. So it gives you an idea of the variety. Blue House Mushroom moved out of the owner's basement and into a new building. That's probably good. Isn't that a good one? I love that one. We helped eight zero two lobbying modernize and increase efficiency by purchasing new equipment. DeGraffernan with working capital and loans for new equipment. And Lambert Farm purchased their farm, which they had previously been leased. So it gives a bit of a flavor. On the commercial side, we helped Ben and Jerry's before they were a household name. Higher ground boarding stables used Vida financing to consolidate debt and support their growing equine business. We supply financing to allow Machias Farm to expand, buying more land in Franklin County. Pete's Greens rebuild following a devastating fire, and Black River Produce purchased a building in Springfield. And Cabot Freamery, dating back to 1986, helped finance an 88,000 square foot facility in Cabot, including their first on-site refrigerated warehouse. Prior to those warehouses were in Burlington and Albany, New York. So, just as a flavor, the language that we're proposing, we worked on and gave to Steve Collier at Agency of Addison. I believe he forwarded it.

[Russ Ingalls (Chair)]: He did. I was trying to print that off, and I was trying to print that language off. For whatever reason, we couldn't get it to go.

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: So the summary, I mean, current state, the Vermont Agriculture Credit Corp is a separate statute. What we wanna do is incorporate that as a subchapter into the existing VIDA statute, outlines what we can do or not do. We wanna also there are a couple of housekeeping things. We wanna remove references to the FSA because we don't want to have our hands tied by the feds. These are federal.

[Russ Ingalls (Chair)]: I was going to ask you about where your involvement was with FSA, where they were in yesterday, and they just seem to have a ton of monies. I don't know that maybe that a lot of that money is getting leveraged, but I don't know that. It just seems like there was just a lot of available funds that were available, but it sounds like your business model

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: I mean historically, and I'll look to Andy, but historically we have used FSA for guarantees and less about borrowing from them, but I don't know if you have other

[Andy Wood (Director of Agricultural Lending, VEDA)]: Yes. So our relationship with FSA is non

[Russ Ingalls (Chair)]: loan guarantees. Something. If everybody wants to, you gotta be able to do that.

[Andy Wood (Director of Agricultural Lending, VEDA)]: Andy Wood, the director of ag lending at VITA. So, yes, the the FSA our relationship with FSA has been, guaranteed on our loan. Historically, that was an important, credit enhancement tool that we used for ourselves. Today, we have used that less and less. If we as an organization have been more established, we're more comfortable with what we do. We have used that less and less, and it really doesn't hasn't limited what we're able to do as we've done that.

[Russ Ingalls (Chair)]: The capital that they can bring to the table, you can, raise yourself or

[Andy Wood (Director of Agricultural Lending, VEDA)]: So the guarantees don't provide us with capital. It's basically an assurance in the event that our loans go bad. We do look to partner with them, when they are, when appropriate, particularly some of their, with a direct loan, with them providing direct loans, in, particularly, farm purchases or, beginning farmers that have some very good, loan programs, and we certainly look to partner with them or even advise businesses to work with them when that, is appropriate. And then a lot of their funding also comes through the the programming side, which is it's not grants, but it's more akin to grants than the loans on what they're able to offer in the programming side. As far

[Russ Ingalls (Chair)]: as the language, attorney call of the year will be in tomorrow, and we we'll have him go through that language so that we can get.

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: Okay. You'll see, I think, and Jennifer worked on it to make sure that we're just basically taking it, inserting it into the statute, we're getting rid of the FSA limits, just because we don't want the limitation, and we also removed references to Agricultural Credit Development Fund, which is no longer used. So just to clean it up and update it. And just so the committee knows, we maintain an unwavering devotion to add. Andy leads a team of four lenders, and there are also four credit analysts that work with those lenders. So, in total agriculture, I'd say that's about nine people devoted specifically to agriculture. We've had more streamlined operations, wouldn't be as concerned with the administrivia, going in and out of meetings, intercompany lending, payroll and funding, and enhancing ease of administration. Absolutely no impact on borrowers or potential borrowers. We have a dedicated staff also in Middlebury, where most of the, much of the agricultural lending is, but we do lend all over the state. Yeah, the lending capacity practices oversight all stay as they are today.

[Russ Ingalls (Chair)]: Nice. Well, portfolio's pretty heavy with all what you just said. Just looking back at the 173 loans closed in 2025 and carrying that over to the portfolio loans of $5.53, Where does the 82,900,000.0 come into play? Is that what you're carrying currently on portfolio?

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: Yeah, that's the balance of the portfolio today, but I think that was as of 06/30/2025. So just to show the production numbers are for a particular year and then what the total balance is. So as time goes on, people are paying it back, but we're also relending.

[Russ Ingalls (Chair)]: And I think one of the things that shocked us yesterday, to compare you to somebody different again, but we've kind of touched upon that, what's FSA, it's just that there seems to be a disconnect as far as getting that aim out there. Do you feel that you're properly leveraged in the farming community as far as people knowing who you are and how to turn to you and who to connect with?

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: We do, but I always feel like you can never be that well known, right? Like, can never be over well known. So one of the changes we made, I came in in July as CEO, we hired Christine as our Director of Communications to do more outreach, to do more, whether it's social media or print ad or radio ad, just to get the name out there. But we do get a fair amount of our business on the agriculture side is from referrals, current customers who refer other customers. Also people who are happy with us keep coming back for more. The farmers are very innovative people. They're always doing something different, enhancing machinery, maybe building a building, enhancing the farm facilities. So I want to say we're happy with it, I always, we want to, we always feel that we could do more. Not FSA, but Farm Credit seems to have the lion's share of larger farms, and we have many, many small ones, but we are all getting some business people who have come from Farm Credit East. Thanks. Thank you, Mr. Chair.

[Brian Collamore (Member)]: Jones, good to see you.

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: Yeah, nice to see you.

[Brian Collamore (Member)]: Is there a different group of underwriters for each particular business? How does that who decides who's gonna get along and Yeah.

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: So there's different lenders for agriculture. They tend to be and many of the activity comes from Montpelier as well as Middlebury. The credit analysts, although they can work with commercial, they tend to also work directly on the ag side. So when I say nine, that's a combination of lenders and credit analysts and to some extent, even the loan assistance.

[Brian Collamore (Member)]: And the process is fairly quick. If I'm a dairy farmer and I'm looking to get $200,000 loan, from the time I make application to the time it's either accepted or not, or week to week

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: to It could be quick. It's really dependent upon when we get full information from the farm and the quality of the data. It depends on the condition of their financials. The better condition, the quicker the It's process is going to not going to be held up like we have director level approvals that you don't even have to go to committee, and then the higher up the exposure, it'll go to an internal committee, and then even higher, or a policy exception goes to the board. And we don't wait for a board meeting. There's board loan committee meetings interspersed each month. So maybe they're actually going to wait for a meeting that's two weeks, but we have lending approval meetings every week internally. So something like $200,000 should be done pretty quickly. Delinquency rates? Delinquency rates? Very low. And, like, I should have that off the top of my head, but I'm gonna look at that. It's like Single numbers? Yeah. Oh, sure. Like, less than 2%. Okay. I don't think I'm lying here.

[Chad Richardson (Chief Financial Officer, VEDA)]: Yeah. Sure. That between CFO of Avita. I think the nature of our business as a patient lender, delinquency doesn't mean quite the same as it does in a normal banking sense where we will be patient and allow folks to stretch things out than a bank's able to do so. If you look at a percentage, it's higher, but our actual losses when something goes fully all the way through liquidation are virtually zero. So it's a much different product for us as we let folks take years to hopefully work out of any issues that are in, but would very rare to be actually. So if that makes sense.

[Brian Collamore (Member)]: Percentage rate, you're saying if you've got a good score, it's less than as your score goes down, may you have to pay a higher rate, or is

[Chad Richardson (Chief Financial Officer, VEDA)]: it pretty much all? Yep, it's a pretty tight range. So we have a risk rating matrix that we use, but for example, right now our loan rates are 6% for probably the first average credit, and we don't run into very questionable credits, so I think the bottom end is probably in the 17% range, so still very piecemeal compared to what Utah has.

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: Yeah, we're very competitive. We have a special forestry program right now. If they are buying equipment that has less impact to the environment, they get a 2.5% loan. Wow. Just incredible, right? So it really helps that. And get back to what

[Brian Collamore (Member)]: the church says, do loggers know that they have this opportunity?

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: They're finding out because we are getting applications on that. And we've promoted it. Again, can't do too much promotion. But word-of-mouth is heavy and, yeah, we've got some great applications on the 2.5%.

[Russ Ingalls (Chair)]: Yeah. As far as the regulations that you have to follow, are you more of a credit union type lender or more of a traditional bank type lender?

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: Well, we're not regulated by the banking authorities, but we have our own policies, and we also, the state treasurer is on our board, and he is able to decide whether or not we, when we borrow, some of our borrowings are enhanced through credit enhancements, right? And it's the moral obligation of the state, not the full faith and credit of the state. So if we were to renege on our borrowings, the state kind of would not let us do that, right? Like, they would not let us let it go unpaid. So we, of all of our borrowings, there's a certain percentage that is backed up by the moral of the state. So to me, that's our wrong test purpose, our regulator. We're audited every year by an outside CPA firm. But other than that, no, I'd say we're not like a credit union. We're not like banks or credit unions. We don't take deposits. We're not really doing retail lending. This is all very business, farm, nonprofit. We could lend to municipalities. We rarely do just because the bond bank does most of that.

[Russ Ingalls (Chair)]: So you're nonprofit, so the profits that are raised through normal practices and all that just comes back in and just keeps on being, getting That's popped in the exactly right.

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: That's to our equity position.

[Brian Collamore (Member)]: Thank you, Mr. Chair. So if I mischaracterize what you're asking, please say something. But it sounds like the same five people, for instance, that sit on VAC and VITA adjourn and then immediately reconvene. Maybe they switch chairs or something, but it's basically same five people. To me, it's a housekeeping change. Correct.

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: I think that's absolutely correct.

[Brian Collamore (Member)]: Okay. There ever differences in the constitution of in other words, were there five different PAC members at one point and five different and I'm using five, whatever the number is.

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: Not to my knowledge because and I think, Jennifer, correct me wrong, I think the actual statute called for it to be the same. Oh. Right. Very strange.

[Jennifer Evans Butler (Chief Legal Officer, VEDA)]: We apologize the language wasn't available in time. This is Jennifer Evans Butler, chief legal officer at VITA. The statute actually there's 15 members of VITA, and the and the chair is named. It's very specific in the statute who are the ex officio members and who are the members. And then the VAC statute just says, shall be the same board. So, is the same board. The changes that we've asked for is just to take out the fact that it's the Vermont Agricultural Credit Corporation. All our other programs at VITA, we do other things by way of sub chapter and program, but not by a separate legal entity. So, you have the separate legal entity that has the separate boards, that has the separate finances. And you're right, you're in the same room. Not only is the board sort of like that, it's the same people, but the intercompany loans, it's the same thing, and we have the same staff. So, if we're employing our own people and then lending it back and forth to to have

[Brian Collamore (Member)]: the same Yeah. And it's that corporation. Redundancy here.

[Jennifer Evans Butler (Chief Legal Officer, VEDA)]: It does have some redundancy. Yeah. That's what we're trying to get rid of.

[Russ Ingalls (Chair)]: Yep. Thank you.

[Brian Collamore (Member)]: And the the separation, was that done originally in 1974?

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: No. In '74, Beta was created. In '99,

[Brian Collamore (Member)]: Okay. That was Do we know why it was not separated?

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: I don't know what ended up that.

[Chad Richardson (Chief Financial Officer, VEDA)]: It had something to do with the funding structure. It was a separate capital or an appropriation Okay. State that kind of kicked that off. It ended up in a separate entity, but over time,

[Russ Ingalls (Chair)]: we were

[Chad Richardson (Chief Financial Officer, VEDA)]: doing agricultural before separate entity was created. Over time, it has lost its recent certification from entity. It means VITA has two other entities as well that were established as requirements of other programs. Over time, we look at those and say, do they still need to do that? We're in that process for Vida as a whole, this is the first one.

[Brian Collamore (Member)]: And most of your investment at all is coming from investors?

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: It's from banks. From banks. Yeah, so co bank for agriculture. On the commercial side, it's TD. Okay.

[Chad Richardson (Chief Financial Officer, VEDA)]: And that's And JP Morgan. And JP Morgan. So our borrowings are large enough, so as much as we'd like to use our local banks, and we do that

[Russ Ingalls (Chair)]: Well, those are pretty big

[Chad Richardson (Chief Financial Officer, VEDA)]: names in lending, so We have $87,000,000 virtual paper program, 100,000,000 of TD. So those are a little bigger than the local folks in quite now.

[Brian Collamore (Member)]: And you get to follow just some different guidelines that make it easier for a starting business or business to

[Russ Ingalls (Chair)]: Well, you. Very nice. Sorry for all the questions, but great We time you've been in are a brand new committee except for Brian's been here for a long time, so very valuable to us to understand how it goes. We see no problems. I don't see any problems. I had the pleasure of meeting with you all earlier and knowing that this was coming and that it raised no concerns for me. And, again, we'll get with Steve on the language tomorrow just to make sure that we're all good.

[Jennifer Evans Butler (Chief Legal Officer, VEDA)]: But

[Russ Ingalls (Chair)]: other than that, we appreciate very much what you do. We appreciate you coming in, taking the time to come in on such a rough day. But, yeah, we're we're all good. Thank you

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: so much. We're very happy to come back with any additional questions. Okay,

[Chad Richardson (Chief Financial Officer, VEDA)]: thanks. Thank

[Joan Goldstein (Chief Executive Officer, Vermont Economic Development Authority)]: you, boss. Okay,

[Russ Ingalls (Chair)]: committee. We're to take a little break here and let you guys have anything to talk about for seventeen minutes. So we'll take a little break and then see what we gotta do, and we'll