Vermont Legislature SmartTranscripts:

[Sen. Anne Watson (Chair, Washington District)]: Okay, good morning. This is Center of Natural Resources and Energy and it is Tuesday, January 27 and we are starting the morning talking about S224, which is a bill broadly about lakes. We're joined this morning by Mr. Sterling Castro, the City Manager. Barry, welcome.

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Good morning, Chair Watson. How are you?

[Sen. Anne Watson (Chair, Washington District)]: Good, how are you? Thank you. Okay.

[Chris D’Elia, President, Vermont Bankers Association]: Good to

[Sen. Terry Williams (Vice Chair, Rutland District)]: see you here.

[Sen. Anne Watson (Chair, Washington District)]: And maybe before we get started, if we can go around really quick, so you know who you're talking to. Great. Senator Williams,

[Sen. Terry Williams (Vice Chair, Rutland District)]: Mr. Secretary Williams from the Rutland District.

[Sen. Anne Watson (Chair, Washington District)]: Obviously, Anne Watson from the Washington District.

[Sen. Seth Bongartz (Member, Bennington District)]: Seth Bongartz from the Bennington District. Good morning. Scott

[Sen. Scott Beck (Clerk, Caledonia District)]: Beck from Caledonia District.

[Chris D’Elia, President, Vermont Bankers Association]: Morning. Morning.

[Sen. Anne Watson (Chair, Washington District)]: So I think I've mentioned to the committee a little bit about the situation that happened in Barrie, but if you'd like to tell us about the story and what your concerns are and anything else you wanted to tell us.

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Absolutely. Well, thank you, Chair. Chair Watson, Vice Chair Williams and members of the committee, it's really great to be with you this morning. I'm happy to speak today in support of S two twenty four. Just by way of background, the Thurman Dix Reservoir is located in Orange, Vermont, and it provides our drinking water in Berry City. And sole purpose is to supply clean, safe water. There's activities that threaten the contaminations of water source. We spend $2,800,000 annually to operate it. And it was built, our water treatment system in Barrie, it was built as a standard facility. It doesn't have the enhancements that other facilities in the state have like St. Johnsbury. So our facility is not designed, our water treatment system is not designed to remove contaminants introduced by recreation, which could be things, sort of gasoline, benzene and other substances. So the reason this sort of came up is we have had a situation in Barrie, which highlights the need for this, which is the Department of Environmental Conservation approved a fishing tournament on the Dix Reservoir. The applicant for that fishing tournament was a New Hampshire resident who's had a history of attempting to access protected reservoirs such as ours in Central Vermont for personal use. The city was not notified that this permit had been issued until after the fact. And unfortunately, had no other choice but to trespass this individual earlier this year at our reservoir because we own all the land around it. So, is short of parachuting in, there is no legal access to the site if we don't grant it. So, the Department of Environmental Conservation acknowledges this. They acknowledge that there's no public access to the reservoir, but it still approved the event. And unfortunately, what this does for Barrie City, it sets up a really avoidable conflict between individuals attempting to access the site, the Dix Reservoir, our police department, who will now have to be deployed to respond to this fishing tournament and our water treatment staff who frankly don't sign up for this kind of work, right? They're looking to treat our water and that's it. And now they're gonna be in this avoidable situation of having to enforce our property rights. We consider ourselves stewards of this water system, but as we learned, and it was highlighted by this sequence of events, we have no legal authority to prevent an outside recreational use that was approved by the state, even when, as the state acknowledges, there is no legal access to our site short of trespassing on it. As we saw here, a permit was issued even when access required going through our land. So this is why we're really excited about S224 and why it's necessary. In looking at this issue, know that other states like Massachusetts have adopted restrictions on recreational use. We're not trying to do that here. What we're trying to do is have, let local decision makers weigh in on how to have access to these sites. So, for example, this would be a decision under this bill that the Barrie City Council, those councils are elected by our voters, that Barrie City Council could decide what to do with access to our site. And this is why it's really important for us in Barrie City, Our reservoir is relatively small compared to some of the other ones. So, example, Berlin Pond, which supplies Montpelier's drinking water, is about 1,500,000,000 gallons. Lake Champlain, is in the trillions, over 6,000,000,000,000 gallons. We are a measly five eighty eight million gallons. We are much smaller than many other reservoirs. And so, that means is that we are way more susceptible to contamination than some other reservoirs in the state, right? The little rhyme that my water treatment office employees give me is the solution to pollution is dilution. And at five eighty eight gallons, that's less of a solution for us than it is in Lake Champlain, which is at over 6,000,000,000,000. So that combined with the fact that our water treatment facility is a standard facility, it's not designed to take out every contaminant, it's not designed to take out these higher grade contaminants. That's why we are really concerned about what could happen with these increased recreational uses, which are discouraged by associations that say that these activities should be restricted in public water sources. So again, what we want to do is have a little bit more say locally about what happens with our reservoir. The conditions of our reservoir may be very different than the conditions of other reservoirs. As I mentioned, the size of it is one really big mitigating factor that the condition of our plant is another mitigating factor. And that's why we're here in support of this bill. And I, you know, I'm happy to answer questions and sort of explain why, again, why we're so supportive of this legislation.

[Sen. Anne Watson (Chair, Washington District)]: Thank you so much. Any questions from the committee? Oh, yes, go ahead.

[Sen. Terry Williams (Vice Chair, Rutland District)]: So, you don't have the same water purification system as Montpelier then? You have your own?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Yeah. We're on water treatment plant. Yes.

[Sen. Terry Williams (Vice Chair, Rutland District)]: And and the feed comes from is it Berlin Pond?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Our our water comes from Dix Reservoir. Yeah. Montpelier served by Berlin Pond. We're served by Dix Reservoir. What

[Sen. Terry Williams (Vice Chair, Rutland District)]: about so what would your plan b would be would it be to pencil off? So, horseman couldn't use it or?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: No, our issue really is that we would want to have a little bit more say about widespread larger events such as this fishing tournament that was permitted without our say. So for many years, Berry City has allowed, we have a couple of access points for fishing, we're very supportive of that. We have for many years issued hunting permits, we own a lot of land around our reservoir for source protection. So we've been very supportive of sportsman's activities on the DICK'S in terms of fishing, we don't allow use of watercraft or swimming, but fishing we have two access points that we would love to have people access and use. As I said, we also allow hunting and the land surrounding the Dix Reservoir by permit. So, we're very supportive of that. Our concern is a large scale fishing tournament, which could introduce a whole set of other issues and contaminants, which provides less ability for the city to sort of monitor and regulate what is being brought in. The site is really not suitable for such a large scale event like that. We would gladly continue to have our two fishing point accesses, which I hear from residents, not just residents of Berry, but people who live in Orange, Vermont adjacent to the reservoir that they love to take advantage of. And we're happy to continue that. We just would rather not have a large scale event on the property because it's so susceptible to potential contamination.

[Sen. Terry Williams (Vice Chair, Rutland District)]: So how many acres is that reservoir?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Oh, sir, I don't have the acreage right off the top of my head. I could pull it up here quick while we're talking. But I have the gallons or five eighty eight gallons. It's a pretty shallow reservoir. I don't have the acreage right at my fingertips at the moment. Do own, in addition to, as I mentioned, in addition to the reservoir itself, we own quite a bit of land right around it as well for source protection.

[Sen. Terry Williams (Vice Chair, Rutland District)]: You own right up to the waterline?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Yes, we own entirely. We own all of the water. The water's edge is owned by Berry City, correct. So that's why short of parachuting in, people would be trespassing on our land if we deemed not to wanna have the fishing tournament there, which creates this really avoidable conflict, which I don't like putting, pitting police officers and water treatment staff against anglers for a situation that could have been avoided. We own all that land. Like I said, unless they parachute in, they would be crossing it to go to this fishing tournament.

[Sen. Terry Williams (Vice Chair, Rutland District)]: What can you tell me more about the fishing tournament? Was that people fishing from shore? Were there boats involved?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: I believe it's mostly fishing from shore. There's been two tournaments that were permitted by the Agency of Natural Resources by DEC. One coming up in February is a fishing tournament. So, they'll be out the lake on the reservoir. And then there's one in June, which will be primarily from shore. So we do know that this individual who has sort of made it a point to access these sites has been trespassed for using watercraft on our reservoir. So we wouldn't put that beyond what might be happening at the fishing tournament as well.

[Sen. Terry Williams (Vice Chair, Rutland District)]: The reason I asked about the acreage, believe it's 40 acres or less, they're not allowed to have motorized boats on an aggregate. Only the record. So so what about this the water that downstream from the reservoir? Do you plan on keeping people out of there too?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Yes, we do. Yeah, we have a lower reservoir that feeds to our water plant and that is even more susceptible to contamination as well. So, we have the Dix Reservoir, and then we have a reservoir right, sort of a holding area right next to the water plant, which is the intake section. And yeah, those are all on Berry City property. And yeah, the idea is that those should not be used for recreational purposes. That is the point at which the water is entering our facility for treatment and then distribution into the city.

[Sen. Terry Williams (Vice Chair, Rutland District)]: Okay, thank you.

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Yep, thank you.

[Sen. Anne Watson (Chair, Washington District)]: Other questions? One of the things that you hadn't mentioned was the potential for the codification species, and the one that I'm thinking of particularly is zebra mussels. And with that as a risk, one possibility is that the intake pipes could get clogged with zebra mussels. Do you have any sense of like, if you were to have to replace an intake pipe that was clogged with zebra mussels, do you have any sense of how much that might cost the city?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: I mean, we haven't scoped anything like that out, but when we look at major repair projects at the plant, anything that we do at our plant at this point is going to hit triple digits, six digits, I'm sorry. They're going to be big numbers. I do know, Senator, that when I spoke to the designer of our water treatment plan in preparation for this testimony, and what he shared with me was that to upgrade our plant to not be a standard plant, to have the sort of the advanced treatment capabilities, we'd be looking at 3 to 5,000,000 in upgrades to the plant to do that. And so if we're looking at situations where there's increased use and contact with the water and contamination risk, That's what we'd be looking at it. That makes sense. My understanding is speaking with that same designer of the plant that when St. Johnsbury was building their plant, they were looking at a 6,000,000 option for a standard plan and a 10,000,000 option for a more advanced plan. They went with a 10,000,000 option, but that gives you the same price range, right? You're looking at a couple million dollars in order to have the enhanced treatment capabilities that you would need with more access. So, there's always, this is a, like I said, anything we do at these plants is very cost prohibitive and certainly wouldn't be, wanna be the area, we have a lot of infrastructure to upgrade anyway. If we could avoid having to upgrade something caused by infestation of zebra mussels, that's better. We have a lot of other infrastructure that needs upgrading now, even without creating this problem.

[Sen. Anne Watson (Chair, Washington District)]: Then one other thing I wanted to ask about was one of the provisions in the bill just makes it really explicit that in whatever delegation agreement exists in an MOU that the city would not be permitted to be more lax than the state. You have to at least district at the state, but you could go beyond that. And you're okay with that as a provision?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Yeah, we're very comfortable with that. As I've mentioned, we're not against limited recreational use. The use we've allowed is, we believe, sort of tangential with the risk that we want to take, right, based on the treatment plan that we have. So, as I said, having access points for fishing, which is sort of gets light use anyway, we're fine with that. Where we have issues is when we're having the more broad scale use, is harder to regulate, harder to monitor. So we are very comfortable with the provisions of the bill you mentioned.

[Sen. Anne Watson (Chair, Washington District)]: Yeah, and we have another question here. Thank you. Hi Nick, thanks for your testimony. Nice to see you.

[Chris D’Elia, President, Vermont Bankers Association]: Good to see you.

[Sen. Anne Watson (Chair, Washington District)]: I'm sorry I missed the very beginning, but I'm curious about the fishing tournament issue. Was there a fishing tournament on the lake in question?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: It's been permitted by, so the Department of Environmental Conservation approved an application permit for the fishing tournament. The first one is, I believe the first weekend in February, which will be an ice fishing tournament. The second one is scheduled in mid to late June, which will be just a regular fishing tournament. So, they are coming up and what we have done is we have, our water treatment staff will be on-site. We have increased signage on the property. We have assigned police department shifts because we have no recourse other than to trespass people because we don't want a fishing tournament on this site. There's 800 lakes in Vermont that are suitable for this type of recreational activity. And so we think that our relatively shallow, relatively small reservoir that is susceptible to contamination maybe shouldn't be one of those sites. And so, so we're going to have, we're unfortunately going to have some possible confrontations between people trying to access this tournament and us trespassing them, and completely avoidable. If we had a little bit of say, or if the agency of natural resources had acknowledged and maybe been a little bit more thoughtful knowing that there is no access to our site absent crossing private property.

[Sen. Anne Watson (Chair, Washington District)]: Okay, so when they were permitting the fishing tournaments, did they check-in with you at all? Did you have an opportunity, did you, the city have an opportunity to state your opinion in the process?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Were notified after they had sort of gone down the approval route. We told them that once we learned that this was headed down the approval route, spoke, I reached out to the commissioner and explained, A, this is an individual who has a history of doing this. This was the individual who brought litigation against Berlin Pond. And Berlin Pond is a separate situation because the city of Montpelier doesn't own all the land around Berlin Pond. So, there is a little bit more legal issue there. We own all the land around our reservoir, so we do have the ability to trespass people if we wanted to. And so, was my point to the commissioner, which is, you're sort of approving an application under false pretenses. You're setting up a situation for conflict because you know that we're gonna trespass people. You shouldn't really be inviting them to this event that you know is just gonna sort of be a confrontation. That's not serving anyone's interest. Yeah, I know. And we made our, once we knew this was sort of on their approval docket and they sent it to us for awareness, I reached out to the commissioner, I made these points. Their argument was, well, technically they could parachute in, so we have to prove it. And realistically, Seriously? That's gonna

[Sen. Anne Watson (Chair, Washington District)]: Did they actually say that to you? The parachute?

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Yeah, they could enter, they could come down onto the water and they could access it that way. That's just not realistic. I'm not in the business of putting my staff in difficult situations, but unfortunately we have to, because this has sort of created a conflict. Yeah, it's unfortunate because my point was, why approve an application that you know, and they acknowledge doesn't really provide for access to this site, and they did it anyhow.

[Sen. Anne Watson (Chair, Washington District)]: Okay, well, thank you. That's helpful. And I guess I just have a question now for the chair. And maybe this is more, the fishing tournament stuff, there's language added about an application, identifying access points. But I'm wondering if, when we have the commissioner in again, is there anything in the ask, do you know if there's anything in the process about checking in with the landowners around? I don't think that there is, but it's occurring to me through this conversation, and there's always multiple ways to solve a problem, and I mean, this is something that we can chat about more, but it's occurring to me too, that another way to get at the same thing would be potentially to, as a part of the, if the problem is just fishing tournaments, if that's the problem we're trying to solve for the fishing tournament application, could you for options. You know, could we say, pour a body of water entirely owned by municipality. Well, they're also just, you know, like notifying landowner or getting landowner approval, and also specifically if there's, know, if it's drinking water. Don't know, it seems like there could be a way to modify the application process to make sure we don't end up- And also compensating for any security costs or anything. Because it sounds like you're gonna spend city resources on this and we all know that Barry doesn't have extra money lying around for that.

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Absolutely. These are all gonna be overtime shifts. These are all unionized staff. They're all overtime shifts. And we're short three officers right now. We're going to have to fill these shifts in possibly with the chief and the deputy chief if we don't get people to fill it in. Our water treatment staff, this is going to be a weekend event, so they're going to be coming in on overtime as So it's just an unfortunate situation.

[Sen. Anne Watson (Chair, Washington District)]: Yeah, I mean, I'm all for fishing tournaments. Fish and I think they're kind of cool, but we want to make sure they're on the right lakes and with the right conditions. Any other questions? Okay, well thank you so much. It's so helpful to hear from you about the problem that seems entirely avoidable. So, hopefully we can resolve that.

[Nicolas (Nick) Storellicastro, City Manager, Barre City]: Well, thank you, Karen, members of the committee. Again, I'll just leave it with, as I mentioned a couple of times, we've been very supportive of sportsmen and sports women on our land. As I said, with hunting permits, with the two access points for fishing, it's sort of these bigger events that we're concerned about. And we completely recognize that the concerns that we have with our relatively smaller reservoir may not be suitable to other bigger reservoirs and that's okay. But we're certainly concerned about what it might mean for us. And once that toothpaste is out of the tube with contamination in the water, it's hard to put back in. Mean, I think when you all think of Flint, Michigan, we all think of the water crisis. I think water is one of the things we need to really be able to trust. And that's really what we're trying to do. So I appreciate your time and the questions. I really enjoyed speaking with you all today.

[Sen. Anne Watson (Chair, Washington District)]: Thank you so much. Thanks, Nick.

[Chris D’Elia, President, Vermont Bankers Association]: Thank you. Take care. See you.

[Sen. Anne Watson (Chair, Washington District)]: All right. So we are going be switching topics to S174, which is the Green Bank Study. So we're going hear from a couple of people about that. We're going to start with Mr. Delia from the Vermont Bankers Association. Welcome. Thank you. And just to put some context out there, I'm anticipating that we are going to be, as a committee, we're going be done before fall today. It's a bit of a gap, but I also have a meeting I need to go to. You fully support me all the time. Okay, and so with that, Cecilia, welcome.

[Chris D’Elia, President, Vermont Bankers Association]: Sure, good morning for the record, Chris Cecilia, President of the Vermont Bankers Association. Thank you for the opportunity to come in and test ify on S174. I'm gonna try and convince my comments because there's so much to talk about around this type of issue. First, let me say I've been with the association for twenty three years and sixteen of those years I've dealt with the state bank or green bank discussions in the state house and the treasurer's office in other locations. So it's a topic I'm quite familiar with. It has been looked at and implemented in a handful of other states in different forms, whether it's a standalone organization or whether it utilizes existing amenities that are in that particular state. I wanna be consistent, but I'll caveat that consistency. We do not support the general concepts of a state bank or green bank as a standalone entity. However, this is a study and quite honestly, I think we could save you money on doing the study through conversations with the partners that already exist in Vermont. And in fact, I know those conversations have occurred over the years. When you look at the private sector, whether it's my folks, whether it's the credit unions, you look at the public partners that we work with, whether it's Vermont Economic Development Authority, BHFA, Long Housing Finance, the bond bank, there are players and practitioners that work very closely together in partnership. And make sure they have the treasurer's office with 10% in Vermont. I think get the issues that you may want to look at or perhaps are concerned with. Capital is often not the issue in the marketplace, it's often the project and the circumstances around that particular project. And when there was funding a few years ago, coming out of COVID, they did the big stainless bill down in Congress and there was some energy efficiency fundings that were made available. I can tell you that those partners got together and figured out, is there a way to access and draw those funds down in a manner that's much quicker than trying to stand up an organization, which takes capital, it takes infrastructure, it takes people. And again, even if you're doing the study, you've got to come up with the funding to do that study and support the treasurer's office. Think you can get there without a study, quite frankly. I think if there's a gap that you folks see or recognize in the market, then direct those parties as we often do separate from summer studies and so on to go out and figure it out. And again, I think those partnerships exist in Vermont to do just that. So I normally vigorously oppose and I don't think I'm vigorously opposing studies, but I just, if you've got goals and objectives, think you can direct people to have those conversations without trying to fund us.

[Sen. Anne Watson (Chair, Washington District)]: Thank you. Yes, go ahead. Well, guess I'm thinking about particularly with the private entities that might be involved, I guess I would just say it feels a little unusual that the state would be like, Hey, private entity. You need to figure this out for us. If it's like a public or a quasi public entity, would that include the bond bank? Sure. Right, so it might make some sense to direct them or similar kinds of players, but participation of the private sector seems more tricky to say, please participate in this.

[Chris D’Elia, President, Vermont Bankers Association]: Oh, don't think it is. We do it all the time. We absolutely do. I'll give you a quick example. Okay.

[Sen. Anne Watson (Chair, Washington District)]: Because I

[Chris D’Elia, President, Vermont Bankers Association]: was just asked by the commerce committee this summer to conduct a study on non competed grants representing private sector entities. We had a group of people come to the table and have conversations and we reported back to the commerce committee with recommendations. In my opinion, it happens all the time. So while you can't direct our ultimate participation in a program to have as part of the study or part of the conversations. Happens. Absolutely.

[Sen. Anne Watson (Chair, Washington District)]: But was that a study or was that a report that came out of a bill?

[Chris D’Elia, President, Vermont Bankers Association]: No, that was at the request of the chair and vice chair in a letter to me. Oh. Just to would you please help us on this non compete bill? I could say, hey, Bongartz, Vita, VHFA, private sector lenders, Farm Credit Bureau. Here's what we've identified for some issues out there. We'd like you guys to get together and have conversations to in response to what you would like the group to look at or perceive gaps or whatever

[Sen. Anne Watson (Chair, Washington District)]: it may be. That's helpful. I mean, am just also recalling from the treasurer's climate infrastructure report, one of the recommendations was to further study a green bank. And if I recall, I think they're, I'm trying to find it, but I'm having a hard time putting my fingers on it right now, but there was, a collaborative letter from a number of, lending institutions saying just direct us to, to do this. We can figure this out. Right.

[Chris D’Elia, President, Vermont Bankers Association]: So that I've highlighted.

[Sen. Anne Watson (Chair, Washington District)]: Yeah. So what you're saying is just, just go directly to that group to figure it out and bypass at least the recommendation from the report to further study it.

[Chris D’Elia, President, Vermont Bankers Association]: Well, think the treasurer's office is part of that discussion. If I go back a long time ago when we had one of the iterations of the state bank bill, this was at the time that Pierce was the treasurer, she got a collaborative group together to have a conversation about the parameters of a concept 10% Vermont. Wasn't a legislative study, this was okay, we see an issue out there, legislators seeing issue out there, let's get together and have that conversation. I think about this because I recognize monies are petty, every little dollar counts and I think you can accomplish a task without having to embedded in statute with a follow setting where you gotta come up with homie and support somehow.

[Sen. Anne Watson (Chair, Washington District)]: Thank you. I think Officer Hardy had- Yeah, you basically answered my question because I was gonna suggest the same thing that we could do it more informally. And as long as we have the right list of people and your list is a great list, I would also add maybe the Sustainable Jobs Fund is another partner that would be interested. And I think part of what we could ask for also is what is already out there, because I know that there are a lot of green bank type programs that are out there that are, the bond bank has a couple, the FHFA, I think has Orbita. I get those fees mixed up sometimes, but know, sort of a list of like, these are things that exist already, these are things that we could do more above.

[Chris D’Elia, President, Vermont Bankers Association]: Yeah, because the goal at the time when the federal money started to flow was how do we go after that? And that's when you moved to like the Bongartz or NEDAs, saw opportunities there and stood up a program or whatever it may be. Sometimes under NEDA, the legislators directed them to do certain things and expand into certain areas. I think there's a different way to accomplish it and achieve the goals that you're looking.

[Sen. Anne Watson (Chair, Washington District)]: Okay, thanks, Dennis.

[Sen. Terry Williams (Vice Chair, Rutland District)]: No, it's basically the same thing I was gonna say. You you've got some kind of an idea of what other things are out there. I'd be interested in your own.

[Chris D’Elia, President, Vermont Bankers Association]: Yeah, and I will say when you look at some of the other states that have done this, there's like connected as a standalone green bank, but then you have other states that have created these climate funds, if you will, that are embedded within some state entity or nonprofit entity that's within the state. So there's different ways. We just having researched the state bank, green bank as standalone, you don't have the capacity to do that. Not tiny. You did. And right, by the time you get it up and running, which will take time, your window of opportunity becomes less narrow. Why not? Again, we felt we can respond more immediate in that partnership approach to what you're trying to accomplish.

[Sen. Anne Watson (Chair, Washington District)]: Very interesting. Any other comments or questions?

[Chris D’Elia, President, Vermont Bankers Association]: I'm always in the building. One question.

[Sen. Seth Bongartz (Member, Bennington District)]: It's just sort of thinking about it or want to understand this. So one, and the the issue at if I'm not I don't really focus on now. So Yeah. We're the reason that this is in front of us is that these adverse often don't pencil because things like historic floodplains don't have an immediate economic return or even calculable.

[Chris D’Elia, President, Vermont Bankers Association]: Yeah. And so how do we deal with that? So I'm gonna try and not get in the weeds because if a project doesn't pense, there are or reasons why it doesn't pencil. We hear this in house model time these days. Yeah. Stink it out in the context of how a standalone state entity would approach that because you've got to raise capital, you've got to have reserves, and then you've got to figure out what your risk appetite is because when you're raising capital in the markets or utilizing state dollars, whatever it may be, there is an expectation of repayment. And that's why you set up those reserves to deal with some of those situations. So it introduces a whole underwriting process around risk that the bar when you're dealing with tax dollars or going into the market should be an expectation of repayment. Obviously, you can't rule out circumstances that may develop. You should not go into it thinking that it's okay if it doesn't pencil out there, you know, it's for the public good or whatever. I will tell you there would be losses somewhere along the way. And and if you the appetite for those losses may not be very palatable if you gotta pay back your lenders, if you get the loan from Wall Street or as we talk about the treasurer being back early on and with treasurer peers, you go too far beyond that 10%, that's your state's cash flow, which you use to pay bills. Now, obviously, there's something

[Sen. Seth Bongartz (Member, Bennington District)]: wasn't I wasn't making any points. I just wanna make sure I understand. Yeah. Sorry.

[Chris D’Elia, President, Vermont Bankers Association]: Told that agent too far on me.

[Sen. Seth Bongartz (Member, Bennington District)]: It's my bill. Yeah. I think the obvious thing is that they're asking me to pay. Sometimes, if you ever pay me, but the project itself was a pencil like the municipality that decided it was in its interest to restore a floodplain upriver upstream from where they are getting flooding at about 105, but that's exactly what's going on. So that's different than what the project has, as long as there's the expectation of repayment with this value can theoretically do. So I guess one possible here is, even what you're talking about, what I actually think about this bill is not necessarily about a human bank, more as just how they get and have these issues, we're trying to solve and what are possible mechanisms we could do either in a study or not.

[Chris D’Elia, President, Vermont Bankers Association]: I think there is an example to, so in the case of 10%, the treasurer is looked for intermediaries where the money flows through and that intermediary is the one that's gonna guarantee the repayment to the Terry Hayes office. So it minimizes the risk just as important.

[Sen. Anne Watson (Chair, Washington District)]: Well, we may hear more from folks that could potentially benefit from

[Sen. Scott Beck (Clerk, Caledonia District)]: them. Yeah.

[Sen. Anne Watson (Chair, Washington District)]: The kinds of, the gap in the market.

[Chris D’Elia, President, Vermont Bankers Association]: Yeah. We're more than happy to help if you identify those gaps and how we can help to close those accounts.

[Sen. Anne Watson (Chair, Washington District)]: All right, well, thank you

[Chris D’Elia, President, Vermont Bankers Association]: very much. Thank you, we appreciate your time. And

[Sen. Anne Watson (Chair, Washington District)]: so we're gonna move to Mr. Sher. Sher, okay, welcome from the Treasurer's Conference.

[Chris D’Elia, President, Vermont Bankers Association]: Thank you

[Sen. Anne Watson (Chair, Washington District)]: very much.

[David Sher, Deputy State Treasurer (Vermont)]: For the record, David Sher, Deputy Treasurer. I'd say just jump right to the point on the bill here. We are certainly happy to conduct a study as outlined in the bill, and we would ask for an appropriate one time appropriation to help us hire the staff and capacity we need to do that study well. I don't think we would make any advanced judgment on what that study might show. And so the efficacy of the green bank or alternative models for a climate infrastructure financing, obviously the treasurer's office does have within it some climate structure financing now. I would refer the committee if you have interest in some prior thought that has gone into it emanating from our office that it's a June 2024 climate infrastructure financing study that Vermont creditor's office file that was fairly extensive and it does actually state that a green bank is something that could be looked at more at the time of great details on the green bank idea, but it does have some discussion outlining some of the pros and cons that various stakeholders have identified with the idea. You can, for further reading right now if you're interested, that January 2024 study does have some additional information.

[Sen. Anne Watson (Chair, Washington District)]: Could you tell us a little bit about, there's the 2.5% for climate infrastructure projects that the treasurer's office is doing right now, can you tell us the scope of what that is allowable for? Does that make sense?

[David Sher, Deputy State Treasurer (Vermont)]: It does make sense, and I think basically as Mr. Neely had pointed out, the way the 10% out 12.5 Vermont financing generally works is a very risk averse method of lending such that we always do find intermediaries to guarantee the payback, and obviously those intermediaries are heavily involved in selecting and deciding what they're going to be willing to accept that guarantee, what types of products you can be able to accept, what types of projects or what types of projects that you want to accept that guarantee. And I apologize, I don't have in my head a list of the types of things that are financed with that, but I can certainly come back with a committee or just to say an overview of what has already been gone out under that 2.5% widening capacity.

[Sen. Anne Watson (Chair, Washington District)]: Okay, great. That would be better. I didn't think of that when we were chatting. No problem. Any questions for JJ? Yes. Hi, James. Nice Hi, meet

[David Sher, Deputy State Treasurer (Vermont)]: good to see you.

[Sen. Anne Watson (Chair, Washington District)]: If we were to go the route that Mr. Delia suggested and just kind of say, Hey, you guys, can you talk amongst yourselves and come back with recommendations, not do a formal study? Would you all have the capacity to participate in those conversations?

[David Sher, Deputy State Treasurer (Vermont)]: We certainly would be if they had the capacity to participate in those conversations.

[Sen. Anne Watson (Chair, Washington District)]: And what about facilitating them? Or would you rather not be asked to facilitate unless you get

[Chris D’Elia, President, Vermont Bankers Association]: appropriation? Know,

[Sen. Terry Williams (Vice Chair, Rutland District)]: the way

[David Sher, Deputy State Treasurer (Vermont)]: the line is that when we're being asked to actually run a study, it could get a little squishy here. I think I'd wanna look at language. Fair enough. But I think empower our responsibilities.

[Sen. Terry Williams (Vice Chair, Rutland District)]: Fair enough.

[Sen. Anne Watson (Chair, Washington District)]: Fair That makes sense. Great, any further questions at this point? No, no, excellent. Okay, super, thank you so much. Okay, before we adjourn for the day, any conversation, thoughts folks want to share either about this bill or ST24? I mean, we'll hear more. But yes. So other than

[Sen. Terry Williams (Vice Chair, Rutland District)]: the word green, why does that in our is there a word in finance, like, any initiative as far as studies with for financial? It's multi community groups.

[Sen. Anne Watson (Chair, Washington District)]: I think that's fair. I think I would guess that there's a choice that probably had to be made about where it would go. Here it is. I mean, it's also similar to like, why did we end up with S-one 138? The commercial case could have gone to multiple places. Probably those bills will go to finance if we've asked them. Sure. Yeah. It's been spared. You might want to have a beta in. Yes. I think they do some of it, and the bond bank, they do some of this already and it might be interesting to hear how they're doing. And I mean, is your concept of a green bank like a lending institution that lends money out for green infrastructure projects, and then there are repayments, and it's sort of like, almost like a revolving loan fund type concept, or is it broader than that? Well, so that is, the thing is I'm open and that, the first thing you described is what I was starting, and particularly the, at least, and this is my perception, we can hear more about this, but in my perception of the gaps in the market, particularly around transition technology, so not just mitigation of climate work, rather, or I guess I should say, it's adaptation. There's entities that are doing the adaptation. I think there's some products out there that are about transition technologies, but I'm very interested in accelerating that, and particularly leveraging more private funds to accelerate the transition. For state government, for nonprofits, for individuals to For individuals, yeah, individuals and businesses, for I think it could be any year, all of the above. And this was actually brought to me by folks in the farming community, which is why agriculture is specifically called out in there that they were having some difficulty with access to lending. I don't know how much time I'm going take on this, I know because we have a lot of other things. Also, there are some, it might be interesting to hear from some entities who've tried to do, or have not successfully done this work, how they've managed to piece together the work, the rating and lending of funds, which is like the hot tub term, because I think one in my district in particular, that's done quite a bit of, or a nonprofit organization, and I don't know exactly how they financed it all. But that could also be something that the study group or the informal group, whatever we decide, can talk to people too. So depending on how much. Yeah, no, that's fair. Yeah, depends on how much time we definitely have. So, okay, any other thoughts or comments on this or S-two 22?