Vermont Legislature SmartTranscripts:

[Speaker 0]: We are live. All right. This is Senate Finance. And today we are going to continue our introduction of bills. We're going to start with S-three 15. And Senator Mattos, why don't you tell us briefly why you put this in, and then we'll have John Walker's story.

[Christopher Mattos (Clerk)]: So thank you for the time, Madam Chair, introduce this bill.

[Speaker 0]: I like this bill.

[Christopher Mattos (Clerk)]: I worked with our pledge counsel, John Gray, on this one, and just a little backstory, I always get a bunch of grumblings in town from the population 65 about, I've been paying school tax for this long, blah, blah, blah, and I sympathize with that. They've been paying those property taxes, and at a time when their income tends to go down as they age, and we hear about being able lay in place and providing those opportunities because there's not a lot of opportunities out there for folks to move into another residence. In an effort to lessen the burden of a long term resident, and I was trying to figure out a good way to kind of term that, but came up with ten years, is to phase out their education property tax and their homestead property tax bill. And just as a sidebar to this, in my thinking with it would be in conjunction with savings from Act 73, and then also I put in a couple of revenue bills that aren't in here. One is for two casinos in the state of Vermont, and the revenue would go towards the Education Fund to help offset that. So it wasn't going to be a total loss for the Ed Fund. There would kind of be a whole, hopefully, package of bills coming together to help offset.

[Speaker 0]: For a sin to tax, so you may have found it.

[Christopher Mattos (Clerk)]: Well, it's a 35% tax.

[John Gray (Office of Legislative Counsel)]: St. Charlesburg? There's two locations.

[Christopher Mattos (Clerk)]: Department of Liquor and Lottery can come up with those. But I just didn't want to throw something out there that, you know, took money out of the end fund, and if there was no savings realized by Act 73, which I don't think we touched upon here, but it's my overall arching goal of the bill, to be in conjunction with that. And then also with revenue, increasing bills of of the the two casinos in in the state, which I think would be great because also I have a lot of folks in my district that go to neighboring towns and ironically enough, they happen to sometimes be the same age population too. That's the gist of the bill, and nothing to get into the nuts and bolts.

[Speaker 0]: We even tried to put a casino bill through. There was one to do it in the there's a racetrack down near Tombo. Tombo, and that was years ago. Was under how deep I don't think that race was So, on

[Christopher Mattos (Clerk)]: to go back to the casino, I remember a bill I was reminded of,

[Unidentified committee member]: and I'm pretty sure

[Christopher Mattos (Clerk)]: I signed on to it in 2019, that former rep Peter Bagan introduced the bill for casinos in Vermont, so I just kind of mirrored that.

[Thomas Chittenden (Vice Chair)]: That's not in this bill though.

[Christopher Mattos (Clerk)]: No, no, no, that's just kind of my, you know,

[Speaker 0]: plan

[Thomas Chittenden (Vice Chair)]: of it.

[John Gray (Office of Legislative Counsel)]: Grand plan, if you will.

[Speaker 0]: Okay, let's walk through this one.

[John Gray (Office of Legislative Counsel)]: Sounds good. John Gray, the Office of Legislative Counsel. I will screen share so you guys can see. Maybe. Why is this always so hard? Life. Okay. S three fifteen. So I think it's a pretty intuitive concept of yeah. I'll walk through the language itself, but I think the introduction actually explains what this is. Thank you, Jim. Proposes to exempt from the homestead farming tax long term residents who are 65 years of age or older. It is key that they are long term residents, so you'll see a piece relating to late, domicile. And then it proposes to phase in that exemption of a four year period with eligible persons fully exempt from that tax, again, in fiscal year twenty thirty, so it wouldn't hit all at once, it would be phased in incrementally over that period. So in Panel 32, this is what we have in Section I, we have a chapter that is just sets of exemptions from property taxes, and so that's what you're seeing here is added to this chapter on exemptions from property tax, At the very bottom of page one, a homestead validly declared under section four ten of this title shall be exempt from the homestead education property tax, opposed pursuant to fact one thirty five, if then you have to meet these conditions. If the declarant or the homestead meets both of the following conditions, the death warrant is 65 years of age or older as of the end of the taxable year, so will they pay their taxes the following year, were they 65 at any point during the taxable year? And also, have they been domiciled in Vermont for at least ten consecutive years? So not just a ten year requirement, but actual consecutive requirement that you think about what Mr. Mattos was saying, that folks have been paying property taxes over an extended period, this would corroborate that, right? We'd have an actual consecutive compiled

[Speaker 0]: to and became a resident there when we were 65, stayed until you were 75 and then came back close to your children. Would that count or but you've lived here for sixty five years before that.

[John Gray (Office of Legislative Counsel)]: Yeah, so I think technically, I think you're pointing out something good, is that you would meet a requirement of a ten year consecutive domicile for any, right? You would check it off because at some point you have been domiciled for ten years. I think you could say the declaration at the point of declaration has been domiciled in Vermont for at least ten consecutive years, right? Because otherwise you could pick up folks who, at some point in their lives, have been domiciled. Yeah,

[Speaker 0]: In theory, yeah. I mean, it could bring a lot of our younger people who have left earned their money out of state and then come back here as a tax shack.

[Christopher Mattos (Clerk)]: Be open to that amendment if the

[Unidentified committee member]: Not the

[John Gray (Office of Legislative Counsel)]: move. Okay. It'd be as simple.

[Speaker 0]: Well, I think my first question is how much will we have to raise everybody else's property tax too?

[Christopher Mattos (Clerk)]: So, was a big question in my mind. Yeah. And I did not want to take the valuable time of JFO if there wasn't a larger appetite to move, just my thinking. And also I left out of this income guidelines as well that could maybe work hand in hand with how we already have the property tax credit. Because I'd imagine the amount of tax, homestead property taxes, education property taxes that this age group pays is probably less than we think if you are getting a credit, But I still, if it's

[Speaker 0]: And we've got a new credit in 'seventy three. I'm interested in this age group. Frequently have houses who have appreciated a lot, in many cases, a lot more than their income. It be a good time to look at the whole issue. Yeah. Okay. Thank you, Doctor. You didn't finish going through it,

[Thomas Chittenden (Vice Chair)]: but I'll ask my question anyway. Are there constitutional concerns about this because it's based on age and residency? Because I I thought in Greek, like, we can't say, well, we wanna tax second homeowners who don't live in this state, as an example.

[John Gray (Office of Legislative Counsel)]: Yeah, there you have Commerce Clause issues is the reason that that comes up. I would have if there's, I would have to to think think more to

[Unidentified committee member]: answer that question. That

[Scott Beck (Member)]: point, I actually had a similar request from a constituent, and I did correspond with Kirby teaching this last October, November, and Kirby said it would raise non negotiable issues with the privileges and immunities clause Yeah. That would be discriminating privileges to in state. So he was somewhat dismissive of the notion of getting to do this. But that's if we go further down this path,

[John Gray (Office of Legislative Counsel)]: we first saw For the residency piece? Correct. Yeah. For the residency yeah. For the residency piece, it it makes sense that you would be treating differently on the basis of whether you're intra or ex basically. For the age piece, I would have to say more. Yeah. It's But you

[Unidentified committee member]: have other currents that you know that way?

[Thomas Chittenden (Vice Chair)]: But it's usually tied to a combination of age and something else?

[Christopher Mattos (Clerk)]: No. Like, if you're an out of state resident, you pay more taxes because you cannot claim it as your home status.

[Thomas Chittenden (Vice Chair)]: But that's based on homestead versus non homestead, not resident versus non Right,

[John Gray (Office of Legislative Counsel)]: which doesn't distinguish, the reason that doesn't raise the same issues is that those who have a non homestead property here are treated the same as someone out of state who has a non homestead property. So you're treating the class the same, it just happens to be that someone out of state happens to to not have live here.

[Christopher Mattos (Clerk)]: So isn't the same argument then, never treating the class the same?

[John Gray (Office of Legislative Counsel)]: I think the question here is the age question.

[Christopher Mattos (Clerk)]: That's the bigger question.

[Thomas Chittenden (Vice Chair)]: Well, I mean, the ten year executive, I do think it's also the residency required. I've never like, you're you're treating Vermonters differently because there are some people who have lived here for ten years and some people who lived here for eight years and that's why would you treat them differently for task purposes?

[John Gray (Office of Legislative Counsel)]: Right, and I think that's part of the evaluation too, which is what is the meaningful connect, right? You can have legitimate purposes for pursuing something, but you

[Unidentified committee member]: need to tie them to the reason that you Yeah. Okay. Good question, Tom. Good question.

[Speaker 0]: That was just a bit of smoker.

[Randy Brock (Member)]: In the case where you have joint filers Yep. Or so, is that part

[Unidentified committee member]: of this bill

[John Gray (Office of Legislative Counsel)]: So to the way that it's picked up is the sole, is if the declarant meets both of the following conditions. So I would say that it doesn't address how you might apportion the liability in that. I think that's part of what you're asking. If you have joint filers, would it be enough that one of the filers is claiming this, in which case you'd have a full exemption? Or because one is and one is would you exactly. And I don't the bill doesn't. Does

[Unidentified committee member]: that happen?

[Speaker 0]: Yeah. Yeah?

[John Gray (Office of Legislative Counsel)]: Can you be, like,

[Unidentified committee member]: a right? Fine. And you I mean, like, you've got you have joint ownership of the asset. Yeah. Yeah.

[Thomas Chittenden (Vice Chair)]: You're both gone.

[Speaker 0]: Okay. Let's finish the walk through. I'll give you that five minutes. We

[John Gray (Office of Legislative Counsel)]: are

[Speaker 0]: I got the request this morning for our next witness, so we kind of sandwiched her in and like to not cut out that every time, you have to.

[John Gray (Office of Legislative Counsel)]: So, section two is apparently premised on section one, it's just a transitionary mechanism so that that extension doesn't hit all at once. It not withstands imposition of both the exemption and the education property tax chapter for a set period of fiscal years '27 through '29, and it says that the education property tax that's imposed during that period shall apply as described under this section. And it's the same conditions, the mirrors, those in section one, and then the legislative body for the municipality picking up on the way in which bills are currently delivered to taxpayers. The legislative body for the municipality, which the homestead is located, shall bill the network the homestead rate determined for the municipality, so using existing education property tax structure for the fiscal year multiplied by the following portion of the education property's grand list value of the homestead. So in fiscal year twenty seven, you'd be paying 75% of the value of your property if you met the conditions, and then fiscal year twenty eight you draw it down to 50%, fiscal year twenty nine, 25%, so a four year transition so that by FY30 you would be fully exempt if Does that was the

[Speaker 0]: this envision just the school portion of the property tax or the school and municipal forge both?

[John Gray (Office of Legislative Counsel)]: This is just about the education

[Speaker 0]: property tax. Just the education. Okay. Because the towns would be a little upset if, yeah. Town clerks might be a little upset. I'm trying to parcel out how upset I want to make the town clerks this year. We have several things that could upset them.

[John Gray (Office of Legislative Counsel)]: As long as you equitably distribute upset.

[Speaker 0]: Yeah. Guess I don't

[Christopher Mattos (Clerk)]: Depends if they're overstate.

[Speaker 0]: I used to regularly visit town clerk's offices, so I was little more sensitive to not having them hate me.

[John Gray (Office of Legislative Counsel)]: Last piece of blanket, just effective July 2026, the transition period is FY twenty seventh, so we're coming up right on this now. So that is the bill. The concept is simple to understand, but, happy to do more legwork if folks are interested. I'll just

[Unidentified committee member]: see where you guys Okay.

[Christopher Mattos (Clerk)]: Yeah. Just to jot that's where I kind of stopped it and did go JFO and

[Speaker 0]: Okay.

[Unidentified committee member]: Brought it.

[Speaker 0]: I think a good time to talk about this is when we do get the homestead exemption that we passed last year. I'm not sure, we went through so many iterations, remember, income and house value, and I really want to go back and look at that and see who gets impacted, and then that would be a time to also talk about total exemptions. Yeah. But I've also been assured by the appropriations chairs that we will not have a $100,000,000 to buy down property taxes.

[Unidentified committee member]: Who can I get your number? This year or next Next year. Oh, next year.

[Speaker 0]: Next year. Removal of the ways it means tax is a proposal, assuming it is in the governor's budget, but we have not moved that yet. But it's the ways and use passed. Room No. Wait. Rooms and no. Purchase and use. Purchase use.

[Randy Brock (Member)]: Oh, purchase and use. Okay. Got it.

[Speaker 0]: Too many facts. Purchase and use.

[John Gray (Office of Legislative Counsel)]: I agree with you, madam.

[Speaker 0]: So that is another that will be another loss to the Ed Fund if it goes through with $50,000,000.

[Unidentified committee member]: 10,000,000 this year. So what do think?

[Speaker 0]: Toward next. Yep. Okay, she's in the waiting room. Good, we are a few minutes early, so would you like me to invite Martine? Yes, let's is Nicole McTavish and

[Thomas Chittenden (Vice Chair)]: Okay.

[Speaker 0]: Hello. Welcome, Nicole, and thank you for working with our schedule. And the routine, if you haven't done this before, is just introduce yourself for the record and then the floor is yours.

[Nicole McTavish]: All right. Thank you so much for allowing me to come in with late notice today. My name is Nicole McTavish. I'm the Superintendent and Director of the Patricia A. Hannaford Regional Technical School District. So we're one of four independent regional technical schools districts in the state. We operate three campuses, two in Middlebury, and we have a satellite campus in Virgins. We serve approximately three fifty high school students in pre technical and technical courses and hundreds of adult learners in our evening and weekend programs, mostly through our really strong partnership with the University of Vermont Health Network and Porter Hospital. I'd like to talk to you today about the spending caps being discussed in S220 and the unintended consequences this might have for us. In March 2022, our voters approved an $8,000,000 bond to renovate our main campus, bringing it in compliance with safety requirements to enhance energy efficiency, to install viable IT, and to align our shops with industry regulations. Our district's fiscal year twenty six budget is $5,700,000 which is less than 5% of the entire public education spending in Addison County, even though we serve one in three high school students. This year, our fiscal year twenty six, our salaries and benefits account for 2,700,000.0, which is 70 percent of our budget. Debt service is 825,000, which is roughly 15% of our total budget. If bond debt isn't excluded from spending caps, this non negotiable bond debt might result in elimination of CTE programs in order for us to meet the needed reduction in spending. CTE technical school districts don't have the redundancy in positions. For example, we don't have more than one math teacher or multiple third grade teachers. For the most part, in CTE, we have only one teacher for each technical field, one medical teacher, one manufacturing teacher, one auto teacher, etcetera. So if we have to cut staff, it really means that we have to cut entire programs because each program is taught by a technical expert and their areas of expertise don't overlap. Additionally, many of our positions are required by the state and we cannot cut them. The director, the adult education person, the career counselor, the special education coordinator, and the work based learning coordinators are all required by the state of Vermont. So given these limitations and with labor and health care costs rising, we have limited ways to meet a spending cap without cutting actual programming. As you know, it's a downward spiral for CTE because if we cut programs, we also lose the revenue from those programs, means we have to cut quite a lot of programs to actually achieve any real savings. Since 2022, when our bond payments began, we've already had to make deep cuts each year in our staffing and programs and equipment and supplies, eliminating at this point all but the bare essentials to operate so that we can support the debt repayment, which we're very grateful for. However, our three year labor agreements and healthcare costs alone account for an average of an 8% increase in our costs year over year. A cap on spending that would mean eliminating CTE programs. Just to put this in context, we serve three fifty high school students and hundreds of adult learners for 5% of the public education spending at Addison County. We consistently graduate over 90% of our students despite having more than double the number of special needs students. Our programs are directly aligned to high wage, high skill, high demand careers, and 50% of our students go on to four year colleges with the rest entering trade schools or the workforce. Our students leave us with not only a diploma, but also industry recognized credentials, college credits, and workplace experience. Our community invested $8,000,000 to make this 50 year old campus safe, efficient, and aligned with industry standards. And our debt is now 15% of our budget, which if it counts toward our spending cap would really be problematic, especially since it was to pay for improvements that our voters already approved. Safe industry aligned buildings where the investment and impressive student industry outcomes are the return. We're hopeful that we won't end up cutting CTE programs like welding, manufacturing, electrical, nursing, and construction because we had to fix our buildings.

[Speaker 0]: Okay. You said that your bond payments start your bond was passed in '22?

[Nicole McTavish]: Correct.

[Speaker 0]: Okay. So your bond payment was in this year's budget. Right? Correct. Okay. So that's your base. Depending on what you're spending per student, you can go up three to 9% above your base. And then if there's some special circumstance, there will be an appeal to the Secretary of Education. And if your bond is staged so that you're paying it's incremental, you're gonna pay more next year than you did this year, that incremental we have an amendment that would not count that incremental increase. So your bond payment, you can go up depending on your per pupil spending or let's see, it's per pupil spending or where did we come down? Your

[Randy Brock (Member)]: Or your education spending from the year before.

[Speaker 0]: Your education spending from the year before because we know her pupil spend can vary, you know, two to five depending on your population leave, or a weighted student leaves and an unweighted student comes in. So we've got two options for you there with an appeal. I'm hoping that helps. We're trying to balance the needs of the schools, but also the needs of the taxpayers. I'm trying to trace it down, but apparently there was at least one news report that property tax delinquencies are on the rise, and that's not a good thing either. That could eventually contribute to our homeless population. So, we're trying to find that balance, and I hope that would help you. It's not a hard cap, there's alternatives.

[Randy Brock (Member)]: Nicole, is your bond payment a fixed payment?

[Nicole McTavish]: It's not. We're hopeful that well we have yes and no. Have part of that bond debt that we hope to retire in the next few years. So we're hopeful that it will go down somewhat. And we've also picked up some financing though for the buses that we had to buy. So, and a roof that we had to put on. So it may end up being a wash depending on what gets approved in the town meeting this year. Right. And the other piece though is remember that we don't have weighted student formulas. We have just a straight tuition payment. So the weights don't really help us very much.

[Speaker 0]: Okay. So the one proposal we have is we're still working on tuition payments and trying not to penalize you, but to allow you to go up the same amount that we allow every other school to go up.

[Nicole McTavish]: Right. And that's, I think that's what I'm trying to point out is year over year because our budget is small, right? We have a small budget and 85% of it is salary, healthcare and bond payment. Without doing anything differently, without adding anything or adding any additional debt or anything, my year over year expense goes up 8%. So if the cap is anything less than that, then I'm going to be cutting a CTE program.

[Speaker 0]: Okay, but you're recovering that with your present tuition payments.

[Nicole McTavish]: Are assuming the voters both No,

[Speaker 0]: but what we talked about yesterday is allowing the tuition to go up.

[Nicole McTavish]: But at least the caps I've heard are certainly not around the 8% mark.

[Thomas Chittenden (Vice Chair)]: Yeah, so I think it depends on how we're looking at CTE programs, if we're looking at them just as tuition or if they're counted in the budget caps. And I think that we need to ask Beth about that. But I hear you, Nicole, that if this were applied to your budget, the 8%, and this is true for not just you, this is true for school districts all over the place. Like you, They're going to have to cut actual programs if we impose a cap that is above what their sort of regular spending increases are. So, it's not just unique to your situation at all.

[Speaker 0]: So I

[Nicole McTavish]: think it's compounded with CTE though, because we, unless we no longer receive tuition on a per pupil basis, right? Right now, if we cut a program, we actually lose revenue, which often outstrips any cut we made. So we have to cut a lot of programs to get a little amount of savings.

[Speaker 0]: Okay. And is your budget voted on? Yes.

[Unidentified committee member]: Okay,

[Speaker 0]: so what do you do if the voters don't vote for an 8% increase?

[Nicole McTavish]: Then we cut a CTE program.

[Speaker 0]: Okay, have the voters ever voted? Not? No? Okay.

[Nicole McTavish]: Well, not that I'm aware of, maybe before my time.

[Speaker 0]: Okay, but not. Okay. So, we will ask Beth about that. We could just exclude CTE going forward.

[Thomas Chittenden (Vice Chair)]: Well, I mean, they are a big expense in school budgets. So if we're going to exclude it from the cap then we should exclude it as part of the school budget. So you say that's not part

[Speaker 0]: of your budget. They will give everybody a huge place to increase next year and that's not saying.

[Christopher Mattos (Clerk)]: I don't know if you can speak for all CTEs Nicole, but might I ask, do feel like CTEs or your CTE has a wider variability in enrollment from year to year than others for whatever reasons? Do you see

[Scott Beck (Member)]: a larger number of swings in students enrolled in your programs from year to year?

[Nicole McTavish]: For each individual program, I think we can see a pretty good variation from year to year as interest changes. But overall, I can't speak for all CTEs, but even though our sending school district enrollment has been decreasing, ours has actually been increasing. I think students are really leaning into CTE nowadays. And I have heard from my compatriots that that is similar elsewhere, But we are funded at least for now on a trailing six semester average. So we don't see the benefit of additional enrollment for quite some time. It doesn't help us the year we have the kids, it helps us the year after we have them.

[Unidentified committee member]: Okay.

[Speaker 0]: Thank you. Committee, any other questions? Okay. Thank you. Thank you.

[Thomas Chittenden (Vice Chair)]: Our next

[Speaker 0]: guest, I'm waiting on. Okay. So we are moving right along. This is three people from the Vermont Council of Special Educators and they are zooming in. Two are here. Two are here. I'm here. Just one person is here. We've two there, okay.

[Erin McGuire]: Oh, only two people online. Okay. Okay.

[Speaker 0]: So I have married London first. I don't know if you have worked out anything together, but I'm gonna go marry Chris and Aaron because that's where I have you on my list unless you have something different. We just ask you to introduce yourself, who you represent, and then the floor is yours.

[Mary Lundin]: Thank you. Good afternoon, chair Cummings and members of the committee. Thank you for meeting with us today. My name is Mary Lundin, and I serve as the executive director of the Vermont Council of Special Education Administrators, VCSEA. My perspective is grounded in a career dedicated to Vermont students at every level, having served as a special educator, a special education administrator, and a superintendent. I'm joined by my colleagues today to testify on the intersection of act 73 and special education. While we have prepared information and specific recommendations to share, our primary goal is to engage in a meaningful dialogue with you regarding these critical issues. For over forty four years, VCSEA has served as the backbone of special education leadership in Vermont. We are the practitioners who bridge the gap between state policy and the daily realities of serving students with disabilities. To assist the committee's work this session, we've provided our twenty twenty six legislative priorities and a fact sheet on maintenance of effort, also known as MOE. Our testimony today focuses on priority three of our platform, ensuring fiscal integrity to protect IDEA and students with disabilities. Under this priority, we ask for your careful consideration of two topics. One, the special education weighting design with the new foundation formula, and two, the development of Cooperative Education Service Agencies, CESAs. Before we address these specifics, we must highlight the federal compliance standards that serve as the mandatory framework for these decisions. Clear oversight of federal maintenance of effort, MOE, requirements is essential. Without proactive management, the state faces significant fiscal vulnerabilities. MOE has a non supplanting rule. Districts are prohibited from using federal special education dollars to reduce the amount of local or state money spent from one year to the next. IDEA Part B grant funds are allocated to school districts specifically for the education of students with disabilities. A district is required to both budget for and spend the same amount of state and or local funds from one year to the next. MOE ensures that even as the method of funding changes, the total amount of financial support for students with disabilities does not drop. In other words, it provides a level of fiscal stability for LEAs to serve students with disabilities. If an LEA fails maintenance of effort and cannot document allowable exceptions, and those would include, for instance, if you had a decrease in the number of students eligible for special education in your district, if you had some teachers that were at the top of the salary scale, retire, if you had a student move out of district who might have had an expensive out of district placement, those would all be allowable costs that you could document saying that is why your spending had dropped. Those are the only exceptions. So if a district does not pass their maintenance of effort, the state must treat the shortfall as an unallowable use of federal funds, and the LEA may have to repay that money coming from a non federal funding source such as general education. In order to meet federal maintenance of effort standards, a district is required to demonstrate compliance in two ways. So we call this the two pronged approach. The first is budgeting. And so this actually determines your eligibility for the IDEA grant funds. So each year, a district must demonstrate that it plans to spend as at least as much as they did the previous year during your budget development. The second is your spending, and so they will look at two fiscal years and determine if you spent the same amount of money from one year to the next, and that's the compliance piece of maintenance of effort. We did include a maintenance of effort fact sheet with our testimony that will go into a little more detail around this fiscal requirement. So I'd like to turn this over to or turn the floor over to my colleague, Chris, who will speak to the foundation formula and the weights.

[Chris Fenway]: Good afternoon, everyone. Thank you for having us here. We're excited to be able to begin this Can I just, for clarification,

[Speaker 0]: are you speaking to the requirements of S two twenty, which limits the growth, or are you speaking to Act 73 and the implications of the foundation formula?

[Chris Fenway]: We're speaking about Act 73 and the Okay, so

[Speaker 0]: that helps put it in context. Thank you.

[Chris Fenway]: Absolutely. And I am Chris Fenway. I am the Director of Special Services for the Slate Valley Unified School District in Fairhaven, Vermont. I am also the current President of the Vermont Council of Special Education Administrators. I come to the testimony today with the perspective having brought, being brought with thirty four years of experience in public education in Vermont, twenty eight years of those, twenty eight years of that serving as a special ed director here in the state of Vermont. I bring up that experience and Mary and Erin, who's with you in person today, the three of us have a combined, total years of experience just shy of one hundred years when totaled together. And so I bring that to you because I think that we come with a depth of experience, varied experiences in higher ed, mental health, early childhood, special education, general education, and we've had vast experiences. And so we have both policy and leadership experience that we can bring to the table. And we feel that that's exceptionally imperative and important right now. We're at a critical point with regard to absence of leadership at the state level. Unfortunately, we've had another transition with our state director of special education. So we've experienced having, I think four different directors in the last four to five years at the state level. So certainly that can impact the agency's ability and continuity of services and capacity and knowledge and understanding. So while they're going through these transitions, we certainly want you to know we continue to partner with them, but we also stand ready to be a resource to you as a body, a legislative body, to be able to help you make informed decisions as well. So we're very pleased to be able to be here. And as Mary said at the opening, we hope this will be an ongoing dialogue that can be created as we talk about the implications and the intersection of Act 73 in special education. Specifically to talk about the foundation formula and the weights under Act 73, the current special education funding design under Act 73, we believe is fundamentally flawed and must be addressed. Most critically, the weighting formula does not provide sufficient dedicated support for special education, And as a result, districts may be forced to rely on general education foundation formula monies to fill the gap, placing special education and general education in direct competition for the same dollars. My colleague Erin in a few minutes can speak to some modeling that they've done, some financial modeling in her district, and to the shortfalls and the impact that that could potentially have on the foundation monies. Act 73 shifts Vermont away from a census block grant model towards a weighted funding system. The funding system that's currently proposed in Act 73 is derived, by assigning a dollar amount to a disability category.

[Unidentified committee member]: We

[Chris Fenway]: feel that this change creates a harmful incentive in which diagnosis may drive revenue rather than individualized student needs. Disability categories are broad, they're inconsistent, and they're often ill suited as a basis for funding decisions. There is significant variation of intensity and need in each disability category. Many of you may have heard the expression, if you've met one person with autism, then you've met one person with autism. The same is true if you've met one person with a learning disability, you've met one person with a learning disability. We may have a student who's identified as having a learning disability whose programming costs equate to maybe a thousand dollars. We may have another student with a learning disability whose programmatic costs are much more intensive, and they may result in programmatic costs that exceed $100,000 We may have a student who's on the autism spectrum, and they're able to be served in a regular classroom with minimal supports and services, who would be a relatively low cost student, maybe a couple of thousand dollars. You may have a student who's on the autism spectrum with significant and intensive needs. They may need an out of district or an out of state placement, it could cost in excess of $300,000 So there's so much variability within one disability category, it would not sufficiently support the needs that we have. Additionally, the most costly program for a student in my district might be supporting a student with another health impairment. The most costly student in Aaron's district might be supporting a student who has an emotional disturbance. The the cost to disability correlation is not one that we would support. The categories are too vast, our caseloads in specific schools are too small, and our communities are too small for this kind of a model. Most importantly, linking resources to labels on children risks undermining the individualized focus that's required under IDEA. While this lens potentially could work through a financial lens and modeling at a larger state level, tying funds to disability categories is not sensitive to the experience of individuals with disabilities, and this decision seems to be absent a voice of those with lived experience. As noted, while some fiscal modeling may demonstrate savings at a larger scale or at the state level, the modeling doesn't work for funding small school districts in Vermont, given the size, the scope, the variability, and the geographic mobility of students. It sets up a false sense of entitlement, and the categories are far too diverse and variable to use as a model for individual schools or districts for funding. We do not want the funding of special education to be on the backs of children with disabilities. With that said, VCSEA is not opposed to exploring a new funding approach. It is important to recognize that those of us in special education, will realize if funding changes go through that this is the third special education finance design in five years. This level of policy churn creates great instability for, school districts, both from a financial perspective and a programmatic perspective. It creates significant challenges in making, long term planning, also year to year comparisons or analysis, almost impossible. We have in recent years tracked costs by town, we've tracked them by supervisory union, we've changed and tracked them by district, and now we, within those larger district budgets, we are now dissecting them to building level. We're deeply concerned about the lack of impact analysis, particularly as these funding changes intersect with proposed redistricting. The constant changes equate to more impact and disruptions to the field while also decreasing the understanding of policymakers, taxpayers, educators, and other constituents. For these reasons, we urge you to provide districts with a clear and enforceable commitment. We urge you to bring forth a promise of stable and sufficient funding that ensures special education services can be delivered without undermining the general education funds or risking MOE noncompliance. Vermont districts cannot afford to lose their federal funding. Vermont must adopt a funding design that ensures sustainable, dedicated support for special education. This can be accomplished through the analysis of the weight needed by each school district per eligible student to ensure MOE, and we can move toward the determination of an overall special education weight per student model, not disability category, but weight per student model, that includes a glide path for implementation as 01/1973 did with the creation of the census model. I think it's imperative to note that whatever model is implemented, there needs to be a glide path or we will fall off a financial cliff. Together, again, as noted, we've got a hundred years of experience nearly amongst the three of us. We know that you have varied experience and we know that other folks across our state have a great wealth of experience and knowledge and that together we can solve these complex funding issues. I'd like to turn things over now to Erin McGuire, who's there with you the session for further comment.

[Erin McGuire]: Hi folks, I'm Erin McGuire, it's nice to be with you. I'm the Director of Equity and Inclusion and Co Director of Student Support Services for EWSD. I'm the past president of the Vermont Council of Special Education Administrators, and I'm also the past president for a national organization for special education directors. I just wanna provide a quick example. For EWSD specifically, we took a look at Act 73 and the weights for special education, and the weighting funding would provide for all except $6,000,000 of special education expense. And so, we would be left with a choice of either paying for that 6,000,000 out of the foundation formula funds or reducing costs and losing access to our federal funds. That's how maintenance of effort interplays. So our federal funds, as Chris said, are predicated on spending the same local and state dollars together in order to gain access to the federal funds. And so one of the reasons we're here is to try to point out this problem. I know that you're in conversation about S220, appreciate that. But because Act 73 is still in play and these weights are in play, we felt like it was just very important to have the conversation. I want to talk a little bit about cooperative service agencies, but given our testimony in house ed and senate ed, it seems to make sense to actually stop at this point, just to see if there are any questions about what we're trying to say. I think

[Speaker 0]: we my remembrance, and I'm looking at Senator Beck, is that '73, the special education was pretty much held aside for the funding because we recognized that there were a lot of issues, and so there haven't been weights assigned to special ed. It hasn't been that's my recollection.

[Randy Brock (Member)]: I was transitioning to a system whereby there would be a weight based on a child's disability. I think there were three categories. Yeah. And, you know, those weights are outstanding.

[Thomas Chittenden (Vice Chair)]: Well, so there are weights in in the act that are by, as you said, disability category, and I think that the testimony is saying their testimony is not gonna speak to you. Yes. Is that those are problematic. But there also is a report in, in Act Section 45 A that has a report back specifically about various things, but specifically calls out the the special ed weights. Yep. And and it says to move from special education weights based on disability categories to a reliance on the provision of special education services. And, you know, that's somewhat vague. It was drafted in a rush, I can tell you. But, so, I guess my question to you all is, think this report needs to be updated on a number of issues, but specifically to special education, what is the question that we should be asking or paying for a consultant to come back to us with recommendations for how to change the weights in the foundation formula. So what language would be helpful to have in there?

[Erin McGuire]: Ultimately, I think every legislator I've talked to on both sides of the aisle have been very clear that it was intended that special education costs would be covered above and beyond the foundation formula. And so what needs to happen is whatever design takes place is that it will fund each individual district at that level. And if we want to try to get districts to a place where they're spending similarly, we would need a similar glide path that we created in Act 173 with the census model. We've been in reimbursement model, then we're in the census model, now we're talking about a weights model. It's a lot of change and churn, which we're not necessarily opposed to if we're moving to a foundation formula and we want to add special ed to the weighting structure, that's fine, but does need to be in addition to the formula or we'll put in that challenge. One of the things that Chris was saying is that maybe what we need to do is give each individual district a weight that would give them the amount of money that would cover the MOE requirement, and then over time we can work them to common weights. But this idea of immediate implementation of common weights is going to make it so that there will be some districts that end up intersecting the foundation formula. I think for me, the question I would ask is what design should we use in order to ensure that we are funding special education, both at the level of student need, as well as to make sure we meet maintenance of the effort. We all know that Vermont cannot afford to lose federal funds, and special education federal funds are one of the only bipartisan efforts of federal funds. I mean, I think we all know the diphoning that's happened in Washington, in the administration's budget, as well as the Congress's budget, special education funds continue to stay. You know, they go up and down and the administration might recommend a 15% cut and that kind of thing, but they stay present. And so, you know, we don't want to put ourselves in a situation where we'll lose those funds, the only way MOE would go away is if Congress reauthorized IDEA, which I do not think is in the cards. So this solution in Vermont, as we make the changes to funding formulas, has to be a stabilized conversation that we cannot put in, whether we're in S-two 20 or we're in Act 73 or some other change in our funding structure, we need to ensure that we are stabilizing Special Ed district by district, because that's where the analysis happens. There's also a state level MOE and the agency of education can speak to that. But the district by district MOE must be a consideration in whatever funding structure we create. So,

[Thomas Chittenden (Vice Chair)]: you didn't really answer my question, which is the service based. We are right now asking a consultant to come back to us recommendations. That is why. In act 73, they are coming back to us next December. The foundation formula does not go into effect under current law till a bunch of things happen. And so we're in this period where there are weights that are in law right now for the foundation formula, but they're contingent on a whole bunch of things, including this report. So we have the opportunity right now to have a consultant provide us with recommendations for better ways or a different way of funding special education. But what we've asked in here right now in Act 73 is fairly general and a little bit vague. What would be helpful is to have specific language about how do we phrase it to come back with a recommendation that could be useful next year, or when we're going to be looking at the foundation formula following the recommendations of the council.

[Erin McGuire]: I mean, to me it would be to do, I would look for a consultant to do a review of different designs and figure out which one fits That's exactly what this is.

[Thomas Chittenden (Vice Chair)]: So, that's why I'm asking you for and maybe I can look at this with you so you can see what I'm talking about. But the the it's about asking the right question. Mhmm. And and right now, the question isn't exactly the right question. It's saying, let's move away from weights that are based on disability categories, which I hear you all say, yes. You want to move away from weights based on disability categories. Then it says to a reliance on the provision of special education services, which to me This is a reimbursement model, which we used to be in. Exactly. So, that's That's what

[Chris Fenway]: it sounds like to me

[Thomas Chittenden (Vice Chair)]: as it to get the right information. Going to pay somebody to do this analysis. It's already happening. So, what is the information that we want to ask them for? And as you, with your one hundred years of experience, that's what I'm asking you for so we can get the wording right to get the right information back. The state is paying for this analysis. It's in the law. They're picking a consultant as we speak.

[Speaker 0]: You don't have to answer this right now in a second.

[Erin McGuire]: Yeah, I mean, think I would want to think about what is I'm

[Speaker 0]: not sure there's one question

[Erin McGuire]: that would need to be asked because the analysis looking across a reimbursement formula, a census model, and a weighting structure, and the impact of each on these issues feels like the analysis that would need to be done in order to make the just right recommendation for Vermont.

[Thomas Chittenden (Vice Chair)]: So it's making what Yes. You just

[John Gray (Office of Legislative Counsel)]: Okay.

[Erin McGuire]: Thanks for helping reframe. Yeah. Okay. Yeah. Any other questions about this We

[Speaker 0]: have one consultant that I think has been chosen.

[Unidentified committee member]: I'm not sure it's that one.

[Thomas Chittenden (Vice Chair)]: It's for this report, that section 45 a report. Is that the

[Speaker 0]: Jeff JFO report? Yes. I think that consultant may be in the notes.

[Thomas Chittenden (Vice Chair)]: Yeah. Would

[Erin McGuire]: certainly offer to be a part of informing that consultant. I worry about consultants coming in without necessarily collecting solid information from the field and then making recommendations. I've seen that happen several times in Vermont. So, VCSEA certainly stands ready to support whatever consultant might be coming in to think about these issues together so that we are able to inform the impact analysis to help it improve in accuracy.

[Speaker 0]: Well, have your contact information, so make sure the JFO gets that and they can get it to the consultant. Sure, I'm

[Erin McGuire]: happy to help make that happen.

[Speaker 0]: Okay, please go ahead.

[Erin McGuire]: One other thing that I'd like to speak to from a financial perspective, we have a lot of perspectives of guardrails that should be put up around the Cooperative Education Service agencies. But I think for this particular committee's purpose to just recognize that the investment in a cooperative education service agency may not immediately result in cost savings, and this construction of

[Speaker 0]: them and the development of them,

[Erin McGuire]: and then the beginning of districts using them may take a little bit of implementation funding. I'm not sure how we kind of create additional structures to deliver additional services that districts can then pick up and potentially eventually see the savings, but just wanted to make that clear. And then I also wanted to be clear that we cannot move any decision making from the local school district around IEPs and give them to cooperative service agencies. So, all of the decisions about what students receive for services will continue to need to happen at the local school district. The cooperative service agencies is a partner organization to gather maybe less expensive services or more available services and maybe more high quality services, I'm a little bit worried about some of the conversations getting into a space of confusion around what those would be, because they do not replace the local school district in the context of service delivery and education. On

[Christopher Mattos (Clerk)]: that thought, can you utilize the OSI, CSAs, whatever you wanna call them, all the same thing. Can you utilize that service to do the evaluation or does that have to be a district LEA staff member?

[Erin McGuire]: So, can definitely access employees of a cooperative education service agency to complete an evaluation. Yeah. The assessment of the evaluation. Yeah. The case management and decision making around eligibility must stay at the school district So, you might hire an expert from a cooperative service agency to do an evaluation for a student. This also brings up variability across the state on this. I have my own evaluators. I have my own OTs and PTs. I have a fair number of resources. I'm in Chittenden County. You know, I'm not in a rural part of Vermont. And so, what a cooperative service agency might look like in one part of the state needs to look different than it would in another. And so, making sure there's flexibility in the design of those, and maybe there's more of a generalist in one part of the state who would be accessed to do an assessment. I can tell you in Chittenden County, we would be seeking to get very specific expertise on like maybe rare and less frequent disability areas or questions we might have about students from a cooperative service agency. So, they will be different in their designs. The other thing that I think is important is that we don't develop these and then diminish the capacity that districts have already built, if those are reasonable within the cost framework. So, it's another piece that I think is important to consider. We're gonna have to move this along. One more question. Okay.

[Thomas Chittenden (Vice Chair)]: Thank you, Erin, for the testimony. I'm sure you know the general idea, they're trying to bring down especially the extraordinary special education costs, which are very high in the state. The reason I'm bringing that up is that we're currently sending those kids away to places that may not be regulated in the same way as our public schools are. Already there's a problem in the system. So as we're thinking about bringing down those extraordinary costs, maybe there's also an opportunity to provide better, more accessible and higher quality special education. So that to me is where the seesaws come in. And so I hope whatever issue you all have with that model that you can work with it to try to do the things that I was just talking about. Because currently it's not great. The VCSEA supports the concept

[Erin McGuire]: of the development of these for all of those reasons, and I've also developed internal therapeutic schools in my school district, and I don't wanna collapse those because of state policy that assumes that those should be with a speech. You're a gold medal.

[Speaker 0]: You're a gold medal.

[Erin McGuire]: I know. I know. But sometimes when we write laws, we create structures that become inflexible and cause some of those things unintentionally. And so the language is important in the way we would develop them. I also think that seeing service improvement, I think is pretty rapid. Seeing a decrease in cost, I think may have a little bit of an implementation dip. Right? Sometimes when implement new things, we don't see the outcome right away. And sometimes we see a little bit of a dip. And I worry that this idea of these cooperative service agencies suddenly saving a bunch of money related to students who have intensive needs and it can be very expensive, we'll just sort of immediately reduce.

[Thomas Chittenden (Vice Chair)]: To be clear, there's nothing in ACCESS 73 will especially save us in the short term. It's just being a long term Yeah, it's a long term goal. Goal.

[Erin McGuire]: And I think, again, VCSEA is excited about the opportunity. We're not opposed to it. I just want to make sure that there's not confusion, that it becomes some kind of governance structure that changes the behavior of school districts and that it may take a moment to see any cost savings, but we can definitely see some improvement in access. Thank you. Thanks for having us. Thank you.

[Speaker 0]: Okay. We're going move right along to school construction.

[Unidentified committee member]: Hello, everyone. I'm Eric Lafayette with Energy Efficient Investments. I appreciate you guys having me here today. Came here last year and talked to you

[Speaker 0]: guys a little bit. We did.

[Eric Lafayette (Energy Efficient Investments)]: Yeah, came here last year and talked to you guys about performance contracting. Really appreciate it. Last year, you guys were able to implement a twenty year lease law into our performance contracting statute that helped us form more school upgrades around the state. So it's worked out really great. And here to talk about trying to add some clarifying language specific to the performance contracting statute in regards to kind of additions and building renovations. Burlington resident, grew up in Burlington, now live in South Burlington, went to BHS. I live there with my two daughters attending the Orchard School, part of the South Burlington School District. We have up to 18 employees now in Vermont. And what I'm here today is looking, like I said, about the clarifying statute of performance contracting to specifically allow building additions. Who is EEI? I'll try to be quick because I was here last year, and I think a lot of you guys know us. We're a performance contracting company. We work under a statute called it was on my first slide, but it's a performance contracting statute for K-twelve schools. Evaluations on buildings for their energy use, and then we provide recommendations to help them save money. We've been working throughout the state for ten plus years. We've done projects in most of the major school districts around the state Burlington, Masisko, Springfield, White River, Ferry. And a lot of the customers that we work with are long term customers where we're doing reheat energy projects for. Why energy contracting, energy performance contracting? At the end of the day, it's a mechanism for procurement that allows the dollars to go further for school districts. It allows them to get more work done. So So what we do is we go out, we audit facilities, look for different, what we call, energy cost measures or ECMs that will help reduce the energy consumption or operational facility cost of a school. We go out, we chase grants and rebates towards those projects to help maximize the amount of work that the school district can do. And then we provide ongoing commissioning for the system. So we actually stay involved in the project post install, where we actually verify the results for three to five years post construction. We go in, we help them manage their DBC system, service their equipment, and make sure that it maintains and runs the way that we originally installed it on day one. And it's no risk to the schools upfront. So we do all of our work upfront at no cost. We go out there and we audit the facilities, we provide the recommendations. If you guys don't wanna move forward with the work, you don't like what's seen, you guys can, you know, waive us and thank us for the report, send us on our way. A lot of people use these audits as kind of their long term capital planning process. So they'll use the figures that we come up, the cost estimates, along with the kind of like the grading system that we usually give them on the condition assessment to help develop their long term capital plans. And I really think it's the best way for schools to do school improvements. I'll give a hint to that in a minute on why it makes money go further. This is the process that we just talked about. We identify the options, we review them all with the owner, every single measure that's possible. We're not telling people they have to go geothermal, that they have to do solar, that they have to get off of oil. We present all the different options with the long term cost to the school, including maintenance cost, and we let them make an informed decision based off the most information possible. We ultimately design the project, so we have the in house engineers. We manage the project on-site, so we actually provide the site supervision, and then we put everything out to bid to local subcontractors. And then we guarantee the savings post construction. A lot of our work has actually improved the quality of the schools as well. So two statistics that I thought were cool, Springfield High School, we did major ventilation work there. They have statistics that show a 30% decrease in their actual school attendance, sick days from that. And if you can actually show a chart that kind of goes year by year as we upgraded the ventilation, the decrease in sick days through there. And then Hannaford Career Center, we worked there a couple of years ago. I guess they were just here recently, but we actually evaded pretty much almost the whole school, all the asbestos that they had in there while we were doing the energy upgrades. And when they went through and did their PCB testing, the actual one room in the space that they decided not to abate or address, which was actually kind of part of the high school, which is weird because they share a building, that was the one room that had elevated levels of PCBs. So I don't, we didn't test for it, it was just prior to testing for PCBs at the time, it wasn't out there, but we did all the abatement, they ended up testing that facility. When that room came up hot, they found that the mastic, as part of the asbestos, was what where the PCBs was found. And through our actual asbestos abatement process, even though we weren't encapsulating the PCBs or trying to address them as part of the project, we were actually assuming we like mitigated it for the rest of that school. So I have a couple of case studies here, and really the idea of these case studies is to show you how these projects go further. This is a school in Rochester. The total project cost, they had a steam heating system, they had an old, you know, thirty five year old underground fuel oil tank, so we removed the underground fuel oil tank. We added a wood chip boiler system as their primary heating source, added new LP tanks with a backup gas boiler, and then we upgraded the ventilation as well, new LED lighting and DDC controls. The total project cost was $1,200,000 They had ESSER funds at the time of $115,000 We were able to secure $250,000 in grants at the time for that project. Ultimately, less grants and rebates. Their net cost was $922,000 That was their ESSER contribution of $350,000 so their responsibility was $572,000 So we got them a the district responsibility at the end of the day was $122,000 in capital funds. They saved $40,000 a year in energy savings, and that equals the lease payment over fifteen years at the time. This next one, this is

[Christopher Mattos (Clerk)]: Wait, can I ask

[Thomas Chittenden (Vice Chair)]: you the lease payment? Lease So of what to

[Eric Lafayette (Energy Efficient Investments)]: they leased the whole project. So in this case, the whole project got financed under a lease purchaser.

[Thomas Chittenden (Vice Chair)]: I see.

[Eric Lafayette (Energy Efficient Investments)]: Second case study, this is a roof that might be coming up in Burlington here pretty soon that maybe they haven't seen yet, but wanted to throw it out there. If they have a roof that needs to be replaced, the roof cost is somewhere around $625,000 If we add a solar installation that I'm going to be recommending to this of $790,000 what you'll see is rebates from Efficiency Vermont. These are ITC rebates from the federal government projecting or guaranteeing savings of $68,000 a year. So the total project cost is $1,400,000 roughly, less our different rebates we collected. Total net cost of 1,200,000.0 Owner contributes $300,000 to the project that they were originally going to have to pay $625 for the roof. So the net financed amount is $902,000 at the end of the day, which equals annual payment of $68,478 which is almost the same amount as your savings. So this is a project where the school district would have had to come up with $625,000 in capital funds, but instead they come up with $300,000 and they get a solar project at no cost difference. So now the school can do twice as many roofs as they

[Thomas Chittenden (Vice Chair)]: What is the interest rate on the financing?

[Eric Lafayette (Energy Efficient Investments)]: Right now it's around 4.35% on a lease. So traditionally the lease payments on green energy projects are about 0.8 to 1% higher than bond would make. And I'm happy take any questions as they come down. Who's holding that? So in this case, Municipal Leasing Corp is the broker. They go out to green banks all around the country to get financing, and then they'll present three or four different options to the school district to pay for. Thanks. Still going down here. So talking about financing and project funding, I think that's a huge part that we bring to these jobs. That's how we make these things turn at the end of the day. But we go out, we find the leases, we help find other types of IRA rebates, Efficiency Vermont rebates. We try to incorporate those into our design and our magnitude of cost. When the owner's reviewing, do I wanna go geothermal, do I wanna go a biomass heater, do I wanna go a BRF heating system? They have all those rebates and the costs baked in when they're making that decision from the beginning. And then they have the long term operating costs, so the maintenance as well, the annual expense for their energy services. So it's a really encompassing analysis when they're looking at it, and it allows people to make good long term decisions. Because one thing you'll notice is that an oil boiler is a lot cheaper to install up front. They're not as efficient as a gas boiler. Traditionally in the last ten years, oil has been about 5% higher than oil on a cost per BTU basis. So when you do kind of those different comparisons, the LP boiler has higher upfront costs, because

[John Gray (Office of Legislative Counsel)]: you have to get rid

[Eric Lafayette (Energy Efficient Investments)]: of the oil tank, put into new LP tanks, but about after eight and a half years, when you build in the efficiency of the more efficient boiler, as well as the cheaper fuel source, that LP boiler actually becomes cheaper than the oil boiler. So those are part of the analysis that we're looking at, that even though it might have the lowest first initial cost when you build in the maintenance, when you build in the energy used and the efficiency of the equipment, ultimately, you know, after eight years, it would have been made more sense to go with the LP boiler.

[Speaker 0]: Yes. We have a question.

[Thomas Chittenden (Vice Chair)]: So thank you, madam chair. I I appreciate the the total cost evaluation that you're doing. That's great. But, you have as some of the financing is the IRA funding, and a lot of that has been slashed, particularly for solar. So are is this updated to take into account that a lot of that funding no longer exists?

[Eric Lafayette (Energy Efficient Investments)]: Yeah. Yeah. So, I mean, essentially, the IRA funding for the solar aspect of it is available through the 2027 if you meet the foreign entity of concern solar panel stuff. So in this case, for this school district, if they wanted to move forward with it this year, we would just have to have that installed by the end of next year to to recoup those funds. Whereas like a geothermal project, those are good for 2,033 at this point. So the challenge that we're working with, we're working more and more schools considering these energy projects, but they either don't have the space or they have current code issues with their current building design. So when we go through and we propose a comprehensive, say, geothermal or building ventilation project, they actually have this modular building on the back that might have 1,500 square feet, and it carries some of their support services. And at the time when they installed it, it was a temporary building, and the fire marshal says, Before you go through and upgrade your existing building, you actually have to you know, address this temporary building that's now out of compliance. Or there's been situations when we're looking at buildings, say, like a wood chip boiler plant, which takes actually more space than a gas boiler because you actually have to store the wood chips. Requires us to sometimes build a little addition off the side of the building, and at the same time, the owner's like, you know, we really need extra storage for our drip space. Can you, you know, add another 700 square feet of drip storage into that as well? So those are kind of some of the situations, and the contracting law right now doesn't specifically say that we can't do building additions, but it also doesn't specifically say that we can do building additions as part of the energy project. So we're just looking for some clarifying language that would say essentially that as part of these performance contracts, the intent of the law would allow for additions of the new bid. So that's what I'm here for today, and I really appreciate your guys' time, and hopefully that went pretty quick because Addison had fifteen minutes and then ask questions.

[Speaker 0]: Okay. There's a question. I know we've got some of them answered last year.

[Thomas Chittenden (Vice Chair)]: The performance do have a question? The performance contracting under current law is just for full building projects and you're asking for it to be

[Eric Lafayette (Energy Efficient Investments)]: So right now, it doesn't specifically state it, whether we can do or not do additions. It's essentially saying that if there's energy savings as part of the project, and then you guarantee those savings, then you can view a performance contract. Then the question comes up a lot of times about, is addition part of that? It's gone kind of back and forth. There's no clarifying language, so we're just looking at some clarifying language that would allow it.

[Speaker 0]: Okay. Okay. So, Yeah, because if it's an addition, you don't have a prior energy to compare it to because it's new.

[Eric Lafayette (Energy Efficient Investments)]: Yeah, I mean sometimes there are. Like if it's a small outbuilding that's currently operating, but it's out of compliance, we can't actually do a comparison.

[Speaker 0]: Right, but if they're consolidating schools and they keep two classrooms added on, that those classrooms have a prior energy. Okay. Any other questions committee? Okay. Thank you.

[Eric Lafayette (Energy Efficient Investments)]: I appreciate it guys. Thank you very much. Best of luck with the rest of your day.

[Thomas Chittenden (Vice Chair)]: Thank you. We need to, well, you

[Speaker 0]: are, really, we're ahead of the topic.

[Unidentified committee member]: I just saved a half hour.

[Thomas Chittenden (Vice Chair)]: Oh wow, thanks we

[Unidentified committee member]: got it. I know, it's so clear and concise with the Oh, yes, I didn't even have a rush.

[Speaker 0]: Doctor's special, Ann. That was very Yeah. Appreciate

[John Gray (Office of Legislative Counsel)]: it. Have a good day, boss. Thank you.

[Christopher Mattos (Clerk)]: Thank you.

[Speaker 0]: Thank you. See you later. Because the. I understand this. Okay. Great. You've got a twenty minute break, I guess. We have Jessica Caledonia on the veggie sunset and I think we did this for one year last year in economic development. I don't know why it's here this year. It can go one of those that can go to either one but we will listen to her. Yep so she's

[Scott Beck (Member)]: So Senator Brock can also confirm but we do have this addressed in the bill that we're working on which I guess would end up here as well so.

[Speaker 0]: Okay.

[Scott Beck (Member)]: It's just telling us

[Speaker 0]: We will take it and maybe we will put it if you've got a bill coming our way.

[Scott Beck (Member)]: It's the committee bill, so I expect it to be passed out in committee, and it does have two veggie pieces. One of them.

[Speaker 0]: Is the is something So maybe after we hear this, we will sit on this for a while and have it as a vehicle in case you failed. Sure. We can move this along.