Vermont Legislature SmartTranscripts:

[Senator Richard Westman (Chair)]: You're live. This is Senate Transportation. Welcome, Senator Harrison. We were waiting for you.

[Senator Wendy Harrison (Clerk)]: Sorry about that. It took longer to connect. Thank you.

[Senator Richard Westman (Chair)]: Well, we're glad you're here. And we want to thank everyone for coming today. Hope is, and I'll speak for myself, as chair of the committee, my hope is that what we can do is lay out the issues in a number of areas that transportation is facing. I think we all know that nationally there was an NCSL meeting in Burlington very recently this month, and a number of us were at that, and states across the country are all facing the same issues around revenue, the increased costs, and all sorts of pressures that are putting pressure on their transportation budgets. Our hope is today that we can lay out some of those as kind of the groundwork for the session that we're coming upon and and help frame the picture of what we're all looking for. And so we have a fairly full morning, and I'd like to open it and offer the secretary a chance to say a few words, and then we're gonna move to Jeremy Reed, who is the chief engineer, and then we'll go into some of the revenue estimates after that. And we've got our neighboring state to speak. We've got some people that will come from some national organizations to talk about that, and then we'll dive into some particular areas, the towns, public transit, of where they are. To set the stage for what we're going to be facing and what will be, I think, the central issue in this committee come this winter. We welcome you here. You for coming, secretary. And if you can leave your name and and kick us off, we'd love that.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Thank you very much, chair Westman. For the record, my name is Joe Flynn. I'm the secretary of the agency of transportation. With me in the room today, my left is Jeremy Reed, chief engineer of the agency. Seated in the back is Michelle Boomhauer, the director of policy planning and development and the agency's legislative liaison. And to my right, Candace Elmquist, who is the chief financial officer of the agency. Appreciate the opportunity to come in. I think you teed this up quite accurately. Chair Westman, we began this conversation collectively. You really, I think, delved into this deeply last year, and this is a continuance of it. You know, obviously, in late January, we will present a balanced budget, but we agree that there are significant pressures that continue to face the agency, and there will be for the foreseeable future. I would note that while it does not provide us any relief as we look to the '27 budget or the '28 budget or thereafter, it's a documented fact, at least back into the nineteen eighties, that Vermont has seen pressure on the transportation budget. That's out there. There are studies on that. The agency always puts together an appropriate budget, but I do believe that there is the confluence of a few circumstances in this moment that raise the awareness of sustainability, and that was really have to do with costs that we're seeing. I know that chief engineer Reed will speak more about that. But across the nation, as you said, chair Westman, and in this region and in our state, we are seeing higher and higher and higher prices. And for justifiable reasons, everything's gone up in the cost stream. And so with that, the investment dollars that we have both, you know, primarily through the federal government, that then require match money from us don't go as far as they need to. I always say this in testimony, and I will say this again today, with my friends from paving in the road. We acknowledge that we need to do more miles. The issue here is how do we slice the pie with the finite number of dollars that we have to work with. For anybody listening to this testimony who is not aware, the agency and I know the committee is, but I just wanna frame this. The agency goes into every budget year knowing exactly how many federal dollars it will get, and it knows how much state match money it needs to have to draw down all of those federal dollars. But so with that, you have a finite amount of money in your total budget. And then our, one of our many responsibilities is how do we address the totality of Vermont's infrastructure and the totality of Vermont's modality, meaning transit, rail, air, highway, and how do we do that in a fashion that is balanced in the best data driven way we believe that we can put forward? And I emphasize we believe because I think that's often where the healthy debate comes from, and that's why we're here. We acknowledge that. So we acknowledge there's funding pressure. I think we all know there's infrastructure condition pressure, and, we welcome the opportunity. And, again, I think too, it's important to say we clearly acknowledge the pressure Vermont towns are in. We do not sit here as a monolith tone deaf to towns. Every single one of us who work at the agency, every single one of us in this room live in a town. I was on my select board in South Hero. I know what the towns are facing. We dealt closely with towns, especially in the wake of 2023 and 2024. First person dealt with towns myself, and and I I appreciate. And I I do believe that that is an area that continues to be a concern, and I do believe that it's more than just funding from the agency, which, of course, we'll talk about and continue to talk about. But I do believe that we need to rethink too how towns perhaps come together to work on projects they need to do, perhaps collectively, to have greater buying power because there's just so much money that can be raised, whether it's at the local level or at the state level or at the federal level. So I welcome the conversation. Appreciate the sincere interest of the committee meeting with us early, and

[Senator Richard Westman (Chair)]: thank you for the opportunity to open. Thank you very much, Secretary. And now we're gonna move to Jeremy, and, you've been in this committee and talked about, the needs out there and the pressures both in, the increasing costs and particular in the increasing cost side. And if you can

[Logan (VTrans budget/finance analyst)]: kick us off. Absolutely. Thank you, Chair.

[Jeremy Mead (VTrans Chief Engineer)]: So for the record, Jeremy Mead, Chief Engineer, Muck Agency Transportation. Just wanting to provide a bit of an update on where we are from the cost pressure side, as the chair alluded to. And then I've got some slides discussing what we have for models or conditions moving forward at current funding levels.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Okay. That's it.

[Jeremy Mead (VTrans Chief Engineer)]: So as a a time earn or pressure, we're gonna be talking a lot about the condition of the network. These are just some pictures showing what we consider good, fair, poor, and very poor road conditions. Obviously, upper left is basically a pristine road, the upper right has some distressing, you can see with some minor cracking. The lower left obviously has more cracking, and that would be considered poor, and then the bottom right obviously looks as though anybody would intuitively know that's a very poor condition in road writing. Also as the Chair said, we wanted to talk about the cost of construction. So this is the last piece of information from Federal Highway Administration and it shows what is called the National Highway Construction Cost Index. So that's a composite number based on all the inputs for construction, and and that really illustrates our buying power as it relates to our projects. We do see a little bit of a dip in the 2025. Now those were projected numbers. Quarters three and April '24 our axles. But you can certainly see from 2020, the the 2020, a significant spike in the cost of our projects. All all for now, the IIJA certainly helped mitigate that, but it was not a buying power windfall that we had originally hoped.

[Senator Andrew Perchlik (Member)]: Can you just explain what it's indexed to? So what is this number?

[Jeremy Mead (VTrans Chief Engineer)]: Yeah. So, basically, this has been being tracked going back to 2003. So if 2003 is one point o, and current numbers are are just over three, effectively, this is showing is that it's it's three times more expensive to do a project in 2025 than it was in 2003. But with that,

[Senator Richard Westman (Chair)]: let's What

[Jeremy Mead (VTrans Chief Engineer)]: we have here is is a graph starting in 2025 showing what we are forecasting the payment conditions to be based on f y's '26 paving program budget of a $103,000,000. We see roughly 6% in the very poor category, 21 in the poor category, 30 in fair, and 43 in in good. And we see a a decline in condition out to 2035 or in in if the models hold true and the funding level stays the same, we could see 48% in

[Senator Andrew Perchlik (Member)]: Is there a inflation versus one zero three? It's more flat.

[Jeremy Mead (VTrans Chief Engineer)]: So what this does is this negates inflation on the revenue and on the cost side. So this is strictly $20.25 dollars. So assuming essentially equivalent buying power for the next ten years.

[Senator Richard Westman (Chair)]: Would be interesting to see in this getting back to the issue that the secretary raised in his speak in Miles in in a form where, like, we those of us that don't deal with this every day like you do, Jeremy, But what does this mean in overall life? Right. So

[Jeremy Mead (VTrans Chief Engineer)]: the number of miles is largely dependent on the type of treatment. And we've talked about various roads have different needs. And so we can take a road that's in in good or or fair condition and do a preservation treatment on it. And and again, there's some fluidity for these numbers, but let's just say that's roughly 300 to $500,000 a mile. On the other end of the spectrum, if something's in in very poor condition, it doesn't make sense to do it than the treatment because that has a very low life lifespan. So if we were to do our most intensive treatment, which is a sub base reclaim and new pavement overlay, that's about $1,000,000 a mile. So again, the makeup of the paving program of that $103,000,000 certainly alters the total miles. That being said, as the condition deteriorates across the network, some of those cheaper treatments are no longer viable options, and we are being forced into a more expensive treatment.

[Senator Andrew Perchlik (Member)]: Go ahead.

[Candace Elmquist (VTrans Chief Financial Officer)]: I just wanna make sure I understand because I think

[Senator Becca White (Vice Chair)]: you've I think we've seen this basic style oh, you've won one. But I guess it kinda holds true for the bridges as well. But we've seen this a few times in different at least I have over the last, like, eight years. And I guess I'm just trying to understand correctly. So with our current annual investment, basically, in the next ten years, we will see just about half of all of our roads in very poor condition.

[Jeremy Mead (VTrans Chief Engineer)]: That is what the model length indicates. Yeah.

[Senator Becca White (Vice Chair)]: And that's state roads exclusively.

[Senator Andrew Perchlik (Member)]: Correct.

[Senator Becca White (Vice Chair)]: Okay. So I think when we think about town roads, one of the things that we talked extensively about this last year was we don't get this for town roads. There's no nice what is the rate of what the road conditions are declining. Correct. But I think we all anecdotally experience that it seems like it's getting bad on our local roads. So if you could take this and kind of think about what you've seen for towns, are we at a greater amount by 2035? Like, over 50% of our roads will be in poor condition for those local roads would be your expectation, or are you like, where do you see this condition compared to what the municipalities will experience? Because that's bad to me.

[Jeremy Mead (VTrans Chief Engineer)]: Right. Totally understand the motivation for that question, senator, but I honestly don't have any information beyond sort of the towns I drive in. Okay. So projecting where the town infrastructure is based on the the information I have available Okay. Would just be a fullerity exercise. That being said, as you may remember, there was language in last year's transportation bill to look at that very thing. So that will be ready in the '27. And again, I don't know how much information we'll be able to collect, but I think we're gonna try to take a sample and project that across the state to at least give us an order of magnitude of what the conditions are, what the needs are. But that project's just kicking off, and and so I don't really have any more information on that.

[Candace Elmquist (VTrans Chief Financial Officer)]: Thank you.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: If I might just add to that, I I think it's reasonable to presume that I mean, we know the towns are facing the same same issues we are. Yeah. And I think it's fair to assume that we're getting as good a price per ton in place Mhmm. As anybody. So if we still face these challenges, I think it's pretty accurate that we know that towns are facing the same challenges. The question is, in large part, in in particular, to as Jeremy said, we don't have the structure at this point to monitor it, but cows perhaps, depending on what road you're talking about, have a little bit more flexibility on the type of treatment. Because based on average daily traffic count and how the road is designed in the first place, it may not necessarily require that million dollars a mile treatment that you mentioned versus the other treatments. So a dollar might go further, but it's clear that every pressure we see, they see. I mean, we all see. But they're in the same business, just to a much smaller scale.

[Candace Elmquist (VTrans Chief Financial Officer)]: Well, thank you. No problem.

[Senator Andrew Perchlik (Member)]: And the $103,000,000 was chosen because that's the budget this year? That was FY '26 in budget. '46. And then I think you presented this before. What is the amount of money that would keep the roads at a constant position?

[Jeremy Mead (VTrans Chief Engineer)]: So the models don't necessarily, they're not structured that way. So the way the models are structured

[Senator Andrew Perchlik (Member)]: You can just keep adding different dollar amounts.

[Jeremy Mead (VTrans Chief Engineer)]: It would be a very iterative process, but because keeping it at the status isn't one of the inputs, it would be very iterative. The way the models work essentially is we say, optimize the program at $103,000,000. So it pays the network condition at tenth mile points and says, okay, we've got deterioration curves based on that type of road. How do I look at the 3,300 times 10, all those little mile points? What is the best bang for the buck out of that 103,000,000? If if I had to intuitively guess Yeah. What you think? Right. I mean, we're probably talking a 175 to 200,000,000. And that's a little bit speculative, but think we've seen historically at somewhere in that neighborhood, we see payment condition either stay the same or go down, and and that's what I'm basing it on.

[Senator Richard Westman (Chair)]: If I'm focused on dollars and not on miles. And

[Senator Andrew Perchlik (Member)]: go ahead. Could before we get going in this session, could you give us a sheet a going back to 2003, to present time as to how many miles we paid? Miles? Yes. Each year in dollars?

[Logan (VTrans budget/finance analyst)]: Yes. I believe I

[Jeremy Mead (VTrans Chief Engineer)]: believe you can. I I don't think I have condition back that far. Oh, that's fine. But but I I believe we should be able to produce the the the dollars and miles paid. Okay. That'd be great. So switching gears a little bit to bridge condition. As as I've previously previously stated, bridges are less reactive to funding changes because they deteriorate at a much lower pace. That being said, they also are much more expensive to bring back into good condition. So on on both sides of the coin, they're less reactive. That's why we see, you know, a much flatter deterioration with this, these graphs. But within the the interstate bridge condition, we see roughly, you know, 7% was in poor condition, and we basically predict that to be relatively flat about ten years based on their current pumping levels.

[Candace Elmquist (VTrans Chief Financial Officer)]: And

[Jeremy Mead (VTrans Chief Engineer)]: I would just also say that there is also a distribution within the program that ties in here, again, rehabilitation and preservation treatments at the right time instead of just letting it deteriorate. Time, we'll see essentially the same conversation unfold, but graffiti that we do with Statement about the cost of the treatments and things like that. So, similar graph, but on the state system side. So that was interstate and this is for the state systems. Again, basically at 3% now and basically staying flat, although it came up a little bit, the 7% in 2035. I will add and and touch on this a little bit deeper in the next slide, but our state system is in really good condition, and one of the reasons for that, as we go back to Hurricane Irene, we've probably been able to replace ballpark about 100 bridges through ER funds that wouldn't otherwise have been done because they didn't require any formula money for that. It did require state match, but it didn't require to use our traditional formula funds for it. We focused pretty much today on bridge and pavement just because that's where our models are most mature, and it's also what we have the most information on. We go out there at least once every other year and get conditions on these assets, so we feel more comfortable with these numbers, but I'm not touching on some of the other unmet needs, like block balls, deep interstate culverts, and then certainly smaller culverts as well. So this is a snapshot on two programs, not an all inclusive prediction of where the state capitol will base. So just as the Senator or Chair alluded to at the beginning, this is a national issue, and I just wanted to present this slide as a comparison to where we are relative to other Northeast states. As you can see, interstate pavements are a little bit higher than others, at 1.3% poor. Now I want to clarify, these are our national reporting standards, and I think as I've touched on previously, Vermont has four categories. On the federal level, they have three. So they have a good fair core, we also have a fourth category and very poor, so this 1.3 number doesn't translate to my previous slide on the poor condition. We've got a little bit more detailed grading system, but we do report federally to their standards. And then non interstate pavements were about 7.6% or, again, a little bit higher than our counterparts elsewhere. As I alluded to, obviously, our bridges are in very good condition relative to our neighbors. So there is some good news there as they're the most expensive asset and most difficult to bring back into good condition. Any questions for the subcommittee?

[Senator Richard Westman (Chair)]: What we don't cover in any of this and those of us that went through the Jay Talk meeting in the fall is we did put off some projects. Mhmm. And we also made some shaving within the maintenance area, which is mostly all state dollars. Just remind the committee what we if you could, what are some of the things we did that we we will, in this year's transportation budget, have to deal with around that? And particularly in maintenance, it worries because that's a 100% state mostly.

[Jeremy Mead (VTrans Chief Engineer)]: Correct. So I'll let Candice speak specifically to the the plan we presented, the sanction plan at JCOG. I'll just sort of high level speak to the consequence of some of that. And as I alluded to earlier, deferred maintenance does generally present itself in more expensive projects later on. And I think we all kind of intuitively know that, right? You have a little bit of a ceiling paint on your house, and then ultimately you defer that until the wood wood is rotten. That becomes a much more expensive repair than just painting the house in in the first place. So I I think that's an fairly intuitive notion that's recognized by all. So without question, as we reduce maintenance activities across the network, it will yield itself to some level in increased project costs and more projects being necessary to maintain the network at existing conditions.

[Senator Becca White (Vice Chair)]: This is kind of a general question because I really and this might be something the NCSL folks have a little bit more information on. But is this just a bubble? Like, is this increase for the construction costs in the industry? Are folks saying this is gonna go down? And so this is just a big bubble of costs that we're gonna get back to those previous levels? Or are folks saying, no. This is this trend is continuing up and we're not likely to see a decrease because it it just makes me think a little bit like, dang. I wish we had done more in 2011. You know? Like Sure. And so I'm like, are we gonna say, oh, we should have done less in 2025 and waited out 2028, or are we gonna say the same exact thing that we're saying about '20 and that's a that's

[Senator Andrew Perchlik (Member)]: a Right.

[Senator Becca White (Vice Chair)]: Yeah. Killer. But

[Logan (VTrans budget/finance analyst)]: So so I would just sort of

[Jeremy Mead (VTrans Chief Engineer)]: point to the graph, and, you know, there is kind of a staircase trend where there's minor ups and downs, but in general, inflation never reverts over a ten or fifteen year period. Right? Inflation just sort of keeps ratcheting up. Now we do see in '25 a slight decrease, but certainly over a four to five year period, it's never cheaper tomorrow than it is today.

[Candace Elmquist (VTrans Chief Financial Officer)]: Okay. Thank you.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: And I think part of that as well, we were just at the Associated General Contractors Annual Meeting two weeks ago. Many, many members in the room there, including the incoming president in the room here. Congratulations. I think in large part, and I am no expert in this, but paving is a huge piece of our business. I think oil right now is like $56 $57 a barrel. An oil person would tell you they'd like it to be at $85 a barrel. Won't say relatively cheap is not the right word, but it's on the lower end of the cost model, I'm not laying all these issues on oil or how that relates to asphalt. What I'm really saying is a large part of what we do is on the lower end of the cost model, if you will, as far as the raw material. I don't think I've seen anything, whether I've read, watched, or heard in meetings, where industry is indicating that labor pressures are going to improve, indicating that every company of any size provides insurance, healthcare, all the benefits that everyone in our own lives have, and at the behest, most often, of our employer. Wage rates, housing. I mean, it's all connected. No, seriously, because every employee of these companies has to live someplace, whether they're paying rent or they're paying a mortgage, and they have to get to work. My comments don't intend to be a diversion. I don't see the totality of all of that improving an awful lot just because in my lifetime, I don't think I've ever seen tremendous drops in the cost of goods. So, you know, will certain things shake out and and perhaps level out? That may well be. But I think when you look at construction and you look at petroleum, regardless of whatever is on the end use in relation to moving a vehicle down the road, petroleum is the lifeblood of a lot of construction, both asphalt and concrete. In steel, you have to heat it. I really don't see a tremendous downturn. Could certainly be some corrections, and there could be technological changes that make materials go further, which could have some benefits to pricing. That's just

[Candace Elmquist (VTrans Chief Financial Officer)]: Okay.

[Senator Andrew Perchlik (Member)]: I wouldn't take any of that to the bank.

[Senator Becca White (Vice Chair)]: You. No. It that's just helpful because I think as we try to envision a strategy, it would be a real if you had all said, oh no, it's gonna go down in two years. We have all these expectations. The costs will drop. I'd say, okay, maybe we can ride out this storm in a different way than we might think of, but that doesn't sound like what you're saying.

[Jeremy Mead (VTrans Chief Engineer)]: Well yeah. And and I and I would just say, if if we look at this, the graph, right, if we go back to 2,008, right, we see a bit of a spike in that versus the the hour days. Right? So there's a massive influx. So there is, you know, kind of a basic supply and demand chart there. And then you do see the costs go down after that. But, again, that was in the middle recession. So I think from our perspective, the cost will drop if the economy tanks, but so will our revenues.

[Senator Andrew Perchlik (Member)]: Right? Yeah.

[Senator Richard Westman (Chair)]: So the deltas will be I I would just jump in and get back to the labor piece in this. When I look at that, demographically, we're in an older region of the country, and our thought and the demographics are changing quickly here. So if we could hire 80 year olds to work on on on a construction crew, but I don't think that's gonna happen. We might be able to find some crews, but but it's hard to find 30, 40, 50 year olds and train them up because some of this work is technical, and you can't just hire anybody off the street.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: And highly physical Right, as

[Senator Richard Westman (Chair)]: it's highly physical, and we have an aging population just like most of the states in our region. Right.

[Senator Andrew Perchlik (Member)]: So

[Senator Richard Westman (Chair)]: is there any last parting comments that either one of the two of you would like to

[Joe Flynn (Vermont Agency of Transportation Secretary)]: I don't know. Parting comments. I I you know, obviously, we'll we'll have a much more in-depth conversations after the January 20. I I it's my only parting comment might be to your last comment, senator White. I I don't I don't necessarily see the agency in a financial life or death struggle in fiscal twenty eight I mean, will it be difficult? Sure. But we have a we have an adaptability to pressure. The agency has had an adaptability to pressure forever. It delivers a responsible product for the money that it has to work with, but there will need to be some significant rethinking of the priorities of spending. And, you know, I do believe that this conversation will feed into that. And so, again, just welcome it, and, thanks for focusing on that because it's just a commonly shared reality. Thanks. Thank you, boss.

[Senator Richard Westman (Chair)]: Since your shared thing, this I have yours here, Logan, and we do have the secretary from our neighboring state on the screen. Was thinking that we might switch to

[Candace Elmquist (VTrans Chief Financial Officer)]: That's fine. I can stay. Welcome. If you need me to, where I can go.

[Senator Richard Westman (Chair)]: And I'm and maybe you can help me. Mr. Cassis is not a secretary. Commissioner. Commissioner Cassis.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Hi, Bill. This is Joe. Just nomenclature because it's a bigger agency and New York calls it commissioner as well and it is a much bigger agency. It's simply how they title things.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: I think you're right, Joe. Yeah.

[Senator Richard Westman (Chair)]: We'd like to thank you for being on Zoom with us today. You know, lot of people say, well, what have we done wrong? But this is really an issue that almost every state in the country is facing. Costs and revenue issues that are somewhat driven by more efficient vehicles, electric vehicles, all sorts of things. And we know that our neighbors are having the same problems that we are and I would put it in a category of we all like company. Help us understand what's going on in New Hampshire and we've got both NCSL and AASHTO coming after you to speak. So this is to try to create a picture that it can help us understand what's going on in your state.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: Sure, certainly. Thank you for having me Senator. I'm going to pull up some slides here in a second. I would just echo or confirm a lot of what I heard Jeremy and Secretary Flynn talking about very similar issues with inflation in in New Hampshire and our construction and industry that that we're dealing with as well too. So I would just echo a lot of what they said. I don't wanna be redundant, but I did wanna just throw that in there. A

[Senator Richard Westman (Chair)]: little bit of redundancy isn't bad because sometimes it takes a few of us a few times to hear something before it sinks in.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: Yeah. So I'm gonna just step through a few things about New Hampshire's budget, some of the issues that we are dealing with with our highway fund. We're just coming off of a public process. Every two years, we update our capital program, our ten year plan, and we have some more austere priority decisions through that. So I'll summarize a little of that if I can share my screen.

[Candace Elmquist (VTrans Chief Financial Officer)]: Should be something.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: Hopefully, you're seeing that.

[Senator Richard Westman (Chair)]: Yes. It is.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Thank you.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: So just for so that's a picture of the Hinsdale Brattleboro Bridge Bridge under construction there. I think we have a very good working relationship with our partners in in Vermont as well there too. There we go. So our New Hampshire Department of Transportation, our mission is serving connecting through transportation and our vision is a safe, reliable, connected multimodal transportation system effectively managed by a dedicated and skilled workforce. A little bit of overview just for comparison to Vermont. So our organizational structure, we have five divisions I'm the commissioner. I have an assistant commissioner, a chief engineer that kind of oversees all of project development and operations. And then we have a deputy commissioner that oversees the finance administration policy as

[Douglas Shinkle (National Conference of State Legislatures)]: well

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: as the non highway transportation assets, aeronautics, rail, and and transit. We also have attached to our executive office, our asset management performance group does a lot of the modeling that I heard Jeremy speaking about, as well as our safety section. It's a direct report to the commissioner's office so that we have cross divisional safety applications. Just again, for some comparison, I should know I'm not a 100% sure the size of Vermont Agency of Transportation, but we have about 16 that's a little bit dated that slide. We in the last budget process, we gave up about nine positions. So we have about 1,640 positions. Currently, we're working with about a 20 to 25% vacancy rate. So while we have about 1,640 full time budgeted positions, it's, you know, we're dealing day to day operations with substantially less than that. We have 2,160 state bridges, six 1,698 municipal bridges. What we call red list, all probably talk about is structurally deficient. That's kind of our metric that we've worked with and been driving down the number of structurally deficient bridges, the state red list as well as the municipal red red list. In general size of of the maintenance responsibilities, we maintain about 4,600 centerline miles for an additional 300 miles of state roads that municipalities maintain. I heard a question about, local roads, and and condition of of of local roads, very similar. We don't have eyes necessarily on that. But overall, in New Hampshire, the total roadway miles is about 16,000. So my agency, we maintain the state roads make up about 30% of all the roadway miles in in in New Hampshire. You know, our annual paving goal is to try to do about 500 centerline miles per year to just keep up with general maintenance and keep up with, you know, keeping the roads in serviceable condition. That's about that's about a once every ten year resurfacing cycle as well as some other facts and figures on the on the size magnitude. So I just put that out there for general comparison of, you know, how we maybe, compare numbers wise and scope of responsibility to, Vermont Agency of Transportation. This is a makeup of our of our next biannual budget. So we budget every two years. We just came off last latest legislative session updating the biannual budget for FY 2627. Our total budget is roughly about $800,000,000 per year, per annual, per per annum, annually. And it's made up of four real primary, funding sources. We have a turnpike system in New Hampshire. I'll cover a little bit more on that. That's about 18% of our overall budget. The highway fund, that is the state highway fund, generated by, the state gas tax or road toll and, primarily, that and motor vehicle fees. From our budget, that makes up about, 31%. Other funds are, typically dedicated, gas tax revenues, so that's not the unrestricted revenue, but that's portions of the gas tax are dedicated for specific uses that categorizes other. And the federal funds that we put in our program make up about 38%. We have a very, very small draw in our aeronautics rail and transit division on the on the general fund make up about a point 3% of our budget about $1.8000000 dollars. So a lot of our budget air issues in the state are around the you know, tend to be around the general fund, and, we, at least DOT, tend to be a little bit outside the a little bit outside of the fray, of of some of the general fund challenges. In general, when we talk about our budget, we we usually try to talk about it in two main components. So the operating side of the budget, which is about 4046% of our overall budget, that's the men and women that that plow the roads and maintain the system and and all the materials and everything that we need to keep up the system. Primarily, that is the focus when we do our biannual budget with the legislature. It's usually focused on the operational side of of the of the budget. The other side of the budget is a lot of our federal aid, a lot of those programs, a lot of construction program, municipal aid and construction. Those are, you know, kind of flow through dollars that go, that go out to those programs. We typically take those type of spending priorities up, as I alluded to when we update the ten year plan. So we've got it structured that, you know, usually one year of the legislative session, we're dealing with our operating budget. The next year of our, legislation, we're primarily focused on the biennial update of the ten year plan. That's what we've been working on this past, fall, and we'll be going to the legislature, this winter. And that's really where the debates about prioritization of spending on on construction and transportation infrastructure take place. And the percentages of of funding and stuff are there. But by and large, the municipal aid and construction side of the budget is primarily, federally funded. The operating side of our budget is primarily the highway fund. So this slide just has a little bit more, definition about those primary sources of funding, federal funds that, we received from federal agencies primarily for those programs, the FHWA funds for, surface transportation programs, FTA for transit administration, FAA funds for our aeronautical and eligible airport facilities. The highway funds, the state highway funds, they're our primary revenue source for operations and maintenance of our of our transportation system. We give block grant aid to cities and towns. Statutorily, it's about 12% of our gas tax and motor vehicle revenue goes to cities and towns for for aid. We put funds into a state aid bridge program as well as general obligational debt service that comes from our facilities capital infrastructure. And again, this is generated primarily through the gas tax and vehicle registration fees. And we have usually these funds are constitutionally restricted to strictly surface transportation. We do have a turnpike system, the toll plazas, that's an enterprise system. So the toll revenue

[Senator Andrew Perchlik (Member)]: that

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: support the turnpike system can only be used on the turnpike system. Again, it's restricted by RSA that it can only be used to maintain the Turnpike system. So we can't draw Turnpike funds to support other other other other parts of of the agency or other parts of our responsibility. As I said, general funds are very small portion of our budget. The other aspect is capital funds.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: We do have

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: a state capital budget, which primarily, you know, goes towards, you know, when we reconstruct our facilities, our patrol sheds, our our our office buildings, and things like that. And I presume that's fairly similar in in Vermont. So very quick overview of New Hampshire's Highway Fund. You know, we we we talk a lot with our legislature highway fund in the name, and then they look for the DOT, but we are quick to point out that the highway fund is not the DOT, and the DOT is not the highway fund in New Hampshire. The gas tax revenue and stuff is collected by the Department of Safety, so the revenue projections and things like that do not come from the DOT. They come from the Department of Safety who who are the collection arm of of of that aspect. And while high while gas tax road toll in highway fund is restricted constitutionally to just surface transportation, the revenue from the highway fund is appropriated to various agencies including the DOT and our Department of Safety. Department of Justice does have some small percentage of that to support their activities, primarily their their activities that that are in support of of our agencies. So in 2024, for example, of the overall Highway Fund revenue, about 57% came to DOT for our operational activities, 30% to other agencies, primarily the Department of Safety, and the biggest part of that is the enhancement, you know, our state police and things like that, the enhancement the enforcement of roadway laws and so forth, and about 13% has gone to municipalities. And this has been this has been an not an issue I say. I get a lot of questions from legislators and others that, you know, you know, have opinions that, you know, highway fund dollars should all go to keeping up the roads and bridges. And, you know, we're quick to point out that it's not our decision. Legislature appropriates funds. They've made the determination that Department of Safety and State Police and others are appropriate uses of of the Highway Fund. And at the end of the day, if if you took money from the Department of Safety of State Police and and and and prioritize that for DOT, you still have that that hole that needs to be funded somehow. So it is a complicated it can be a complicated issue. But as I said, highway funds are our primary source of funding for the general operations. And in general, when we look at the highway fund as we went through the last budget and as we're going through our ten year plan, revenue is is It's been flat since we've come out of COVID. So for the last four years, it's been the actual receipts have been very flat and the projected revenue is is very flat in in the long term, incrementally declining about a half a percent a year, primarily due to increased fuel efficiency of vehicles and such. I've I've talked about this, but just, I guess, for context, you know, our highway fund, we have had debates every two years about how to balance the budget. And, you know, our legislature and our our approach has been it seems like every two years there are, you know, one time fixes to shore up the highway fund and and balance the budget. This is going back for this is going back for as long as I can remember, at least the last ten or fifteen years. It started with, you know, a number of years ago around 2010, 2012 budget, if I remember, where we stopped funding a hard match with highway funds to our to our federal program. And we rely on a we rely on a credit that we get for investing state dollars, for investing turnpike dollars into, you know, public roadways and into interstate commerce roadways, our our turnpike system. So at the at the end of the day, we put very little state funds into our, roadway construction, and and we're reliant pretty much solely on the, on our on our on our federal apportionment and and what we what we received as part of our federal aid for our highway and construction program. We've had a lot of general fund infusions to shore up the highway fund. We've done registration fees, surcharges. At one point, we sold the Turnpike system or the highway system sold a bridge to the Turnpike system for, like, a $150,000,000. It was kind of a a gimmicky way of of getting about a $150,000,000 from the turnpike system into the highway fund again to balance the budget that that way. In this in this last budget, they the legislature had raised had raised motor vehicle registration fees to balance the budget. The house had a more, had a, a larger increase when it got to the state senate. They cut it in half, which basically balanced it through the biennium. So I fully expect in next summer, next fall when we take up the budget, we're gonna have same same discussions about how to how to balance the highway fund. I had mentioned our ten year plan. That's what we've been working on. That's our capital program for our highway and bridge construction program. And, again, revenue is relatively flat, lower than previous projections. Project and operating costs are going up. We're dealing with the escalation and inflation, very similar to what Jeremy had pointed out. The cost are exceeding revenue. We've had some state revenue that was that we've been utilizing for the last nine or ten years. So it was part of a TIFIA financing program to accomplish a major reconstruction project of Interstate 93 from from the state line in in Salem up up to Manchester. And we were able to defer paying principal for a number of years, and, you know, that debt service just kicked in in this fiscal year. So it's about $20,000,000 a year of state funds that we're going to rural roads and bridges that aren't available anymore. That's another impact of this ten year plan. So we're we're looking at scaling back our program with a reduction in the number of projects and not adding any new projects in the next two year rollout of the ten year plan. But our focus has been on first and foremost, on maintenance and preservation. So as we set those preservations, we need to keep up with the pavement conditions. We need to keep up with addressing the structurally deficient red list bridges. And our focus has been on continuing to invest in our core system programs and build on some of those successes. Maintaining our core mission objectives, it's it's roughly about a $150,000,000 a year of the generally about 225 to $240,000,000 of federal aid that we get each year that goes primarily to those core system programs. Jeremy hit some of this, but this is a slide that we've taken through our presentation in terms of the impacts of inflation, of cost increases, of some other project delays of that state revenue that's no longer available as it's going to pay the TIFIA debt service. At the upshot, what we're looking at for this ten year plan is reducing or cutting about $400,000,000 worth of of projects, not adding any new ones and cutting about $400,000,000 of projects. Essentially, as I've described it, we have, revenue is flat, costs are up and essentially what has to give is those projects. And as I said, we've been focusing on our core priorities, paving and redless bridges and keeping up with the maintenance of the existing system. A lot of the individual projects, these are the roadway reconstruction, these are the complete street projects, these are the multi use paths. Some of the other municipally sponsored project priorities that tend to be the ones that we have focused on for for project reductions. So we have in our program about 88 individual projects, $684,000,000, and we're looking at either removing or delaying about 49 projects as well as suspending any added new projects in the new year. So numbers wise and at a and at a kind of a very high high level summary, that's the kind of impact of of the inflationary and escalation impact that we've seen on our program. And lastly, just because it has been a point of discussion in the last several months is our is our Turnpike system. So that's a quick graphic what describes the the Turnpike system, but it's essentially the F. Everett Turnpike Route 3 and then 293 And 93 from Nashua up to Concord, Central Turnpike. I 95 between Hampton and Portsmouth and the Spaulding Turnpike on the eastern side of the state. And again, that's an enterprise system, the toll plaza is there, and the toll revenue from those toll plazas go to support that that system. And it's isolated from the rest of the from the rest of our our budget and our program. But very similar to the to the highway fund side of things, costs are up, revenues are flat, and we have a couple of major capital projects that we are coming to the realization. This this updated ten year plan that there's just not the revenue there to support that those capital projects. So we've had a fairly healthy, a fairly robust discussion this past fall about what it would take to to fund those projects. We had floated the idea of a toll increase, about a dollar increase at all of the major toll plazas that would, you know, support the construction of those projects. We have some of the history that we haven't raised the tolls since 2007, and we've removed other tolls and and impacted our revenue by the removal of those tolls as rationale toward supporting a toll increase. As we got toward the end of the process, our governor had had stepped in and and did not support a toll increase. And so right now, we're not moving forward with it. I I do foresee that it will continue to be a discussion as we got to the legislature this time. A couple of those major projects, the support was there. Even our executive counselors and and some of the folks are are have confirmed the need. These are important projects for safety, for economic development, and things like that, but couldn't just couldn't get to the just couldn't get to the point of saying they supported the toll increase to to fund them. So and that's all the all the slides I have hopefully I can take any questions any anyone has but I hopefully gave you a general overview of where we're at in my term.

[Senator Richard Westman (Chair)]: I'm gonna first thank you. It makes me smile a little bit how much like us it sounds. And I want to start off with first, you did a really good job with the first picture because Senator Harrison is from Windham County and any bridge that goes from Brattleboro to Hinsdale, I think she's very interested in.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Oh good!

[Senator Richard Westman (Chair)]: So we're talking about her home area, but you know just when you start to talk about public safety, we moved $20,000,000 last year from public safety back into the T fund here. That back and forth between public safety and we've been we've dealt with that for years and we took a step last year. Know as Jeremy and the secretary here talk about refocusing priorities,

[Joe Flynn (Vermont Agency of Transportation Secretary)]: It

[Senator Richard Westman (Chair)]: all just sounds so similar to everything that we're going through at the same time as you. And you know, in paralyzation about doing anything around this is it's difficult and complicated and it actually is good to hear that we're not alone. And that, know, that I think knowing that we're not alone hopefully helps us focus more on what do we do going forward, not pointing fingers. And so I wanna, I personally wanna thank you for that. And at that point, do we have questions from the pad?

[Senator Andrew Perchlik (Member)]: Yes, thanks, Commissioner. I'm wondering if the toll revenues from your term sites adequately funds the maintenance on those segments Or did it it ever or did it now? So

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: I I always say on the term bike system because of the bond covenants and and, you know, some of the other not restrictions, but other structures there, you know, unlike, I think, some of the rest of our system, you know, we we the Turnpike has kind of a a trickle down effect there. We have to pay the debt service first, pay operations and maintenance cost, then we do the r and r work, that's rehabilitation restoration to keep up that system. Every five years, we have an independent consultant that does an assessment of what we should be doing to, you know, what investment level that R and R work should look like for the paving, for the bridges, for the culverts, things like that. So after we take care of debt service operations and maintenance, an r and r work, only then do we talk about whatever's left for Turnpike revenue going to capital improvement projects like the two major projects I referenced. And we're at the point now where the revenue is currently, you know, keeping up with those first three priorities, but the revenue is not there to support improvements. So hopefully, answers your question. Right now, the Turnpike revenue is keeping up with the overall operations and maintenance, the debt service, and the r and r work, but we don't project having sufficient revenue to take on any match major capital projects, intersection, interchange, reconstruction or or or roadway segment widening.

[Senator Andrew Perchlik (Member)]: Yeah, thanks.

[Senator Richard Westman (Chair)]: Other questions?

[Joe Flynn (Vermont Agency of Transportation Secretary)]: What

[Senator Andrew Perchlik (Member)]: is the on your one chart you had trans or trans border revenue and other revenue. Forgot what it was called. On top of your poles, it's a small I think the most when you're. That far

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: Oh, transponder and nonoperating revenue? Yeah. Yeah. There are some various aspects of managing the Turnpike system that have non toll related information. The transponder fees that that go to EV pass management, we've taken that out of the overall overall budget for various reasons. And I think some of the other non operating revenue, periodically of sales of property, surplus property, and, you know, some other interest bearing accounts that result in some of that, non toll revenue.

[Senator Andrew Perchlik (Member)]: Thanks.

[Senator Becca White (Vice Chair)]: Danielle, normally, I have a lot of questions.

[Candace Elmquist (VTrans Chief Financial Officer)]: So I'm trying to really confident.

[Senator Becca White (Vice Chair)]: Well, have my I I would say well, thank you so much for coming. Normally, I'm, like, full of questions, but I have so many because there is some differences that are very interesting. And the biggest difference I noticed that's most interesting is that you have a special dedicated amount of money from your gas tax that goes directly to municipalities, if I'm understanding correctly. So I'm wondering I have long thought that would be a great idea for Vermont, and I'm wondering if you could explain that, and if you're then seeing your towns get adequate funding. It's a different approach than what we had in Vermont, where we set it aside in our Town Highway 8 process compared to it sounds like just an automatic block grant funding that you do through that.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: Yeah. So by statute 12% of all road toll gas tax, and motor vehicle fees. So it's set in statute that 12% goes to cities and towns. DOT, we administer we administer that with with our treasury department and and it's distributed by formula. So 50% of the formula is based on population. The other 50% of the of the distribution is based on inventoried roadway mileage. So yeah. I mean, just depending on the size of the town, the community, and and and stuff, the the the outlays vary, but it does go directly to those communities in in their budget. Ostensibly by by by the by the law that it is, you know, go to roadway improvements, roadway work, but it's not tracked as an individual thing. Typically, we look at town reports, town reports, and as long as their public works budget, you know, is greater than than what they're receiving in in block grant aid, which which it generally is, We we consider it. It's it's, you know, that's what, you know, the town is putting it to to that work. I've never worked in a municipality, so I I don't have a good sense on how big a portion of those community budgets that block grant aid is. But from the distribute distribution end, I do know that they depend on it where we just we distribute those payments quarterly. And then there's a there's a true up for actual revenue the last quarter. And we always come June, we're getting calls from municipalities wanting to know what that final true up number is. So I I I I implied from that and from that that they do depend on it quite a bit. So

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Yep. Thank you very much. If if I'm following commissioner cash correctly regarding the revenue sources that that 12 is calculated from, and I acknowledge it's quick math here sitting in the corner, I suggest that we look carefully and say as contend, I think we far exceed 12%. If I'm following the commissioner, he's referring to gas tax and motor vehicle fees. If you look at the nearly $100,000,000 we put into our fiscal twenty five budget in relation to the collected motor vehicle and gas tax fees and the $97,000,000 we put into our fiscal twenty six budget as relates to the collected gas tax and motor vehicle fees, you will find that that ratio is much greater than 12%. So I and I will more than willing to stay in corrected on my math, but and that's not a criticism of New Hampshire. My point is I don't, I want to make the point that if we're looking at ratios and thinking that's, you know, understand the motivation and you didn't operate that way Senator about something in statute. You totally got that. I'm just saying I believe the factual calculations that we've put forth every year in our budgets show a very, very I'll say liberal share, if you will, of what's collected through motor vehicle taxes and fees, including gas. That's all.

[Senator Becca White (Vice Chair)]: Yeah, was trying to think that through as well, like that what actually is the real dollar.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: I couldn't have done it without Candace's support really on the fly here.

[Senator Becca White (Vice Chair)]: But maybe this is a question we can get at another point. Yeah, and then the last another thought that kind of percolates for me, and it had come up in the news. The news had called me, WCAA, to ask me about toll roads. Right. Because they had heard that our agency of transportation was looking into toll roads as a funding source.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Let me

[Senator Becca White (Vice Chair)]: But I don't know where that but my question to you would be, so it's toll roads have come up quite a bit, and you do rely on it heavily for your budget. Well, maybe not heavily, but you rely on it for your budget. And I'm wondering, do you have a different agreement than we do with the federal government where you have those tolls before because we can't we would lose a bunch of federal funding if we move forward with any kind of toll roads. But it sounds like you've already done that trade off and you're not losing money by toll roads.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: I think so. I think so. I mean, my my understanding and and the history of it is why we can do some of the things we did is that the turnpike the turnpikes in New Hampshire preceded the the interstate system. So when I 95 was laid out and I 93, they laid out sections of those interest rate interstates over over preexisting termpikes. So we retained the termpike designation. I think that's the way a lot of I 95 is all the way down through, you know, Connecticut, New York, Maryland, and so forth.

[Senator Becca White (Vice Chair)]: That makes sense. Okay. Thank you. That helps me understand why you're doing it versus weed or not. Correct. So

[Senator Richard Westman (Chair)]: unless Senator Harrison get the last question because you're the last you get the last question and then we're we're gonna thank Commissioner Cass and we're gonna have to move on.

[Senator Wendy Harrison (Clerk)]: No, I thank you very much, Commissioner, for for being here, and I'll just have a quick thank you for the work that your staff is doing down in the Brattleboro, Hinsburg area. Just because it is a it's it's taking a lot of staff time and I do appreciate it, and I think we're at a resolution or close to resolution. Just the paving targets. I just want to make sure I'm understanding it. It sounded like you said you have a 500. Mile per year goal. What proportion is that of your of your total? Or or just roughly because I think that's that's something we're we're looking at dollars not miles. And I suspect that we're gonna get to a a miles goal at some point.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: Sure. So I'm I I I very, very, very I mean, a very

[Senator Andrew Perchlik (Member)]: It's roughly.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: But but very roughly of I had I had mentioned in the presentation about a $150,000,000 annually goes to our core programs. I would say close to 90 to $100,000,000 of that is invested in in our pavement management resurfacing program to try to keep up with that 500 mile. That 500 mile a year target was a very it was it was relatable for a lot of the legislators and stuff when when we kind of explained it. It's like, oh, we've got roughly 5,000 miles of state highways. They should be paved every, you know, at least once every ten years to keep up with them, so we should be paving 500 miles a year cost per cost of, you know, ton of asphalt and and stuff. You can you can relate that to a pretty quick, you know, planning target number of what we should be investing.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: So after

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: that, but it stuck because it was a very, easy kind of and relatable kind of, number for people to remember so.

[Senator Wendy Harrison (Clerk)]: That makes sense. Thank you very much for being here, appreciate it.

[Senator Richard Westman (Chair)]: Sure, thank you. Thank you so much for doing this and don't be surprised if we call you back for yes, a period sometime in the future.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: Yeah. And if there's any more information or data, you know, either through Joe or Jeremy, I'm happy to, you know, provide, you know, you know, comparative information or things like that. We work very closely. I think between we've always had a kind of a tristate relationship between Vermont, New Hampshire and Maine. We're very, you know, similar geography, similar size agencies, similar issues and stuff.

[Senator Richard Westman (Chair)]: Well, we we really appreciate you being here today. Thank you.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: Very good. Thank you all. Have a good day. Happy holidays.

[Senator Richard Westman (Chair)]: I think now we will Logan and Candice, you would take the chairs.

[Candace Elmquist (VTrans Chief Financial Officer)]: Before you start again. Yeah. Megan, do I have to join the Zoom if I'd like to share? Yes. Okay. I will do that.

[Senator Andrew Perchlik (Member)]: We don't have a way to plug into our screen. We don't have a way to plug into our screen like that.

[Candace Elmquist (VTrans Chief Financial Officer)]: They don't have that stress prediction.

[Senator Andrew Perchlik (Member)]: Don't? They got rid of them?

[Logan (VTrans budget/finance analyst)]: It failed last I know.

[Senator Andrew Perchlik (Member)]: Early last year. Aw. You broke the German problem.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: I know.

[Senator Andrew Perchlik (Member)]: Good. Yeah.

[Logan (VTrans budget/finance analyst)]: Perfect. Alright. I have a few slides to just go over sort of the financial aspects where the people I'm clicking at today. I'm gonna talk about some of stressful things that we haven't been talking about. Some of this will probably be familiar, especially if you attended the all member briefing. There'll be a seminar presentation with that. And there'll be some slides that maybe Candice wants to speak to in more detail, but we can go from there. I'll just mention there's sort of the overview. But just to bring everyone up to speed on the transportation fund. So this is the year end transportation fund revenue. You'll notice there on the right hand side, fiscal year twenty five ended, we were about $7,400,000 below what we were forecasted to end with. And that shortfall was pretty much solely due to a decrease in purchase and use tax revenues, as well as the DNPPs, which are related. You can see those numbers there, almost 5% for purchase and use and 3% for the DNPPs. After the year end, we then had the July forecast, which downgraded the T Fund revenue estimations. FY twenty six downgraded $7,500,000 Then in 'twenty seven, we're looking at a downgrade of 7,800,000.0 and then it goes up from there. You'll notice we still have decreasing forecast for gas tax and diesel tax. Purchase and use well, seeing most of the downgrade is still forecasted to grow between 2030, about 3.81 there. And then more moderate growth in the DMV fees and miscellaneous credit fees. For a total, T fund forecasted growth of 1.33%, which as you all know is below what we have been seeing for the recent inflation rates. We're soon to get a new forecast in January, so we'll see what comes with that one. I'm sure I'll be back in here to present those once we have that. Because we had the forecast downgrade of 7,500,000.0, as many of you know, we had a decision plan. I won't go into the details. Canvas, if you want to speak to this in more detail if you have questions you can. But essentially, AOT presented this plan to JTOG and JFC, which was adopted, which essentially brought the FY '26 budget into balance with the forecast. And then here we are year to date for FY '26. So this is July through November. The portion on the left is the November revenues and the portion on the right is the year to date. So you see that looking on the right hand side there, we are continuing to underperform even against that lower forecast that we got in July. Right now we're about 1.8% below forecast or $2,300,000 You will notice monthly, we did have sort of a reversal in purchase and use tax revenues. We saw an increase over what we were targeted to by 18%, which was good. We are down in a lot of the other categories though. And as I mentioned, year to date, are still below forecast. We'll see what happens in the next few months. Hopefully the purchasing use trend continues, but it's too early to announce.

[Josh (Vermont League of Cities and Towns representative)]: Sure. Can I

[Senator Andrew Perchlik (Member)]: ask a quick question? On DMV fees that are constituent, and then I think on a discussion with the JFO staff member, it seemed like there might be something to a reduction in DMV fees based on like related to the number of vehicles. Basically that people aren't registering their vehicles. Do we have do we have like multi year data on that? Like there's just less or they're not doing it as before you made sure you got it registered or you thought you're going to get a ticket. Now I've got people like I haven't had my car registered or inspected for over a year. Police officers pull it out.

[Logan (VTrans budget/finance analyst)]: Sure. That could be and I could probably pull some some data, look yearly at registration, at least revenue. It would

[Senator Andrew Perchlik (Member)]: be small, but I'd be interested to see if there's been any static. It's a hypothesis that's shown up in the data.

[Logan (VTrans budget/finance analyst)]: Something we could dig into. I don't have any numbers to speak to right now, but I could definitely look into that if you want.

[Senator Andrew Perchlik (Member)]: Okay. Or .gmd. Yeah. They might also have some numbers on that. I don't know. I'd have to reach out

[Logan (VTrans budget/finance analyst)]: to them, but that is something I can talk about this year for sure. So then just jumping into some of the bigger challenges, which have already been touched on this year. The big one I just would say

[Senator Richard Westman (Chair)]: I'd like to spend a little bit of time in that when we get the first of the session back here.

[Senator Andrew Perchlik (Member)]: But you're forgetting we're not in session.

[Senator Richard Westman (Chair)]: No. We're not. Yeah. But, you know, this is a preview of what what we we, you know, to help us focus on what we want. But what I would say about that is, and I say this some for the agency people that are in here, I'd most like to to dive into those numbers about who's not registering, how old their vehicle is Yeah. What they are. I'm not, you know, I'm gonna show my bias here. I suspect that people with brand new cars that have resources register their vehicles.

[Senator Andrew Perchlik (Member)]: Yeah.

[Senator Richard Westman (Chair)]: I suspect the people that aren't registering their vehicles are in older vehicles. And not only is it do they make a calculation of I won't get caught, but they also look at their family budgets and go, what can I afford? Right. So I think as we talk about that, I wanna be mindful that this is not just blanket across the board, what we're trying to do, cause there's consequences in in in the choices we would make.

[Candace Elmquist (VTrans Chief Financial Officer)]: If I may, senator. So, South Coast, agency of transportation chief financial officer. We recently just submitted the RFP report on Monday, and that's gonna have five years of data on this, and that would be a good starting point before we enter the session.

[Senator Richard Westman (Chair)]: Yeah. That, you know, as we get back there, we'll dive into that because, you know, I think that has a lot to do with family situations. Go ahead.

[Logan (VTrans budget/finance analyst)]: I'll go through the rest of these quickly because I think we're running out of time. You all already know this. Revenues are are stagnant. They're simply not keeping up with the inflation rate. We've been speaking about that. Fuel efficiency, EVs to a lesser degree, but are all attributed to a decrease in gas consumptions. We have demographic constraints, limiting vehicle purchases, as far as registrations, the flat fee revenues. And then there's that 1.33 growth that we are forecasting for the T5 revenue. And then as Jeremy mentioned earlier, and we've talked about cost pressures are increasing far faster than T Fund revenue growth. That National Higher Construction Costs Index has been increasing significantly. We also have salaries and benefits, have gone up across the state, all adding pressures onto a fairly stagnant peak funds. So this chart is just looking at that impact of inflation. The green line is the transportation fund as it's been collected or forecasted out in the future years. And then the red line is if you adjust those numbers for inflation, break them down to $20.13 dollars you can see that right now we're right about where we were as far as purchasing power in 2013. And if the forecast continues as we expect, we will eventually be below purchasing power than we were in 2013. This one I'll

[Senator Richard Westman (Chair)]: In use of 3% inflation based upon general inflation within the economy?

[Logan (VTrans budget/finance analyst)]: Correct. Yeah. So 3% is considered the new normal maybe for future years. We don't know what inflation will actually be, so this is just an estimate. This is just general inflation, not specific. I have another one that looks specific. That's construction highway cost index. But transportation does do other things than just road construction. But this is just one way to look at it. You could tie this to a number

[Senator Richard Westman (Chair)]: of different inflation indexes if you wanted. That would be interesting to see, given what we've heard since 2020 has been the inflation in project costs. Mhmm. But the overall inflation rate was for the agency because I suspect it's higher than 3%. Most likely,

[Joe Flynn (Vermont Agency of Transportation Secretary)]: yes. Okay.

[Logan (VTrans budget/finance analyst)]: Chart, the similar one, the green line is that construction high cost index, and orange line is the T fund revenues. This is going back to 2010, looks at the total change. So you'll see post pandemic, as we were discussing earlier, large increase with a relatively comparatively minor increase in fee fund revenues. And then these, I think Candace will maybe speak to the federal funds one more. But as you know, federal funds make up a large portion of our transportation budget. As we're all aware, we have to contribute a match to it, which there's a projected state that we did of about $33,400,000 or $333,000,000 dollars in FY27 to meet our federal match. And if we don't have the revenue to maximize this and we can't keep up with our maintenance and capital needs, infrastructure deteriorates, costs more, these are all the things that we've been talking about this morning. It generally is more expensive to do it tomorrow than it is today. So I'm gonna skip over this one because I think Candace will speak to it in more detail. And this you saw from Jared. And then just to end it, just to highlight just some things that the General Assembly has done so far. This transportation issue, as the secretary mentioned, has been going on for a while. There's just a few things for the past, what, six years now that we have done utilizing IIJ money, COVID, but related fundings. We paid bonds, bring up money. We've used some general fund to help pay for IT modernization as well as some EV incentives. The MVP increases a few years ago, also between 2024 and 2026, we set aside general fund money to be used for federal map requirements. Then as I mentioned earlier, last year we eliminated the 20,250,000.00 annual JTOC appropriation. Again, just a few things that we've done just to sort of jot that memory as you're thinking about things. With that, I will let Candace speak from one of the things that I skipped over.

[Candace Elmquist (VTrans Chief Financial Officer)]: Thank you, Logan. So,

[Senator Richard Westman (Chair)]: Candice, when we get to that, one of the things that I'm interested in is when we did go through the recession process, there were some things that were we cut. And then there were other things that that the timing, we use timing to push some things off into the next year. So of the of that cut, and you may be gonna cover this when you get there, but for me, it would be helpful to understand what's backing into next year and what we actually cut. Sure. Yeah. I'm prepared to

[Senator Andrew Perchlik (Member)]: go over

[Senator Richard Westman (Chair)]: That that starts us from my behind the eight ball if we can put some more pressure on the next Absolutely.

[Candace Elmquist (VTrans Chief Financial Officer)]: You can definitely talk about your decision plan. But would you like to start with the five year outlook?

[Senator Richard Westman (Chair)]: Why don't you you start with where you are gonna start with? I'm just saying that I'd like to better understand that as when we get there. Okay.

[Candace Elmquist (VTrans Chief Financial Officer)]: So, Lundquist again, CFO at the AOT, and I'm gonna share my screen back in. Is that okay? Yeah. Should be able to. Right. We should be looking at the five year outlook. This is a I know it's small, but I just made it this bigger like this. So, this is a document that should look familiar. The agency has produced this for this committee and the House Transportation Committee since the IHAA in '21. This is a snapshot that was prepared as of September 25 for the Joint Transportation Oversight Committee where we presented the rescission plan. Just a brief orientation. I know folks around this table know this outlook. But again, at the top, we're looking at formula funds in the top three rows. Conservative estimates for '27 through '39 because we don't yet know what the next iteration of the IIJ will bring us. The conservative estimate is a 2.5% inflationary factor, and that was recommended to us by CDM Smith when we were doing the blending study last year as well. The middle of the spreadsheet represents other noncompetitive grants such as the highway safety grant program and and competitive grants, again, point in time snapshot from September 25. And it should be noted that it's more difficult to project those competitive grants further out into the future. So it looks like there could be a drop off of competitive grants in '29. I'd say that's really just because we don't know that that far in the future right now.

[Senator Andrew Perchlik (Member)]: Let me ask you a quick question. Why is there any no competitive grants from '23 to '25?

[Candace Elmquist (VTrans Chief Financial Officer)]: I I am working with my team to fill in that historical data, senator. We definitely had competitive grants. Yeah. I I think it was a factor of a change in the chief Okay. Financial officer. So, the last row here is what we typically focus on during the session and it's what Logan also highlighted. This is the deficit that we projected point in time from September for fiscal twenty seven through the future. A few things to note about this deficit. We balanced the FY twenty six budget on 12,500,000.0 of one time fund that was transfer from the cash fund to the transportation fund. So, assumption makes it assuming that a similar transfer is not available. So, we already know that 30, a portion of the 33,000,000 is the 12.5 that we used last year to balance the 26 budget. We talked about how last session we eliminated the historical JTAC transfer. This assumes that that transfer does not continue to happen in future years. If it did happen, then this 33,000,000 would be 20.25 worse.

[Senator Becca White (Vice Chair)]: Wait. Now I'm wait. Can you explain that one more time? Because that's really critical.

[Senator Richard Westman (Chair)]: The 20,000,000 is permanently not going to public safety. Same to us.

[Senator Becca White (Vice Chair)]: Yes. So you're saying this is $32,000,000 assuming that we're keeping the JTOC transfer in transportation. Correct. So it's not like this isn't $33,000,000. So if we didn't do the JTOC transfer, which I thought we just made JTOC. Yeah. Okay. So we don't need to do anything this year to make that happen. Correct. Okay. Sorry. That was where I was getting confused.

[Senator Richard Westman (Chair)]: Thank

[Candace Elmquist (VTrans Chief Financial Officer)]: you. I just wanted to lay out the assumption of the agency of transportation. It's a good move that we should have. Okay. So inflationary increases are included for state employees according to the collective bargaining agreement. We have increases including here for town highway a, town highway structures, town highway class two roadway, which is all specified out in statute. But I do wanna call out the fact that for all other costs aside for the ones that I just mentioned, it's assumed to be level funded. So that $103,000,000 paving program that we were looking at, it's assumed that we will once again spend a 103,000,000 on the paving program regardless of the effect on inflation. And I think we have we have all been talking about inflationary pressures. Jeremy last session testified that our inflationary pressure is around 29%. So effectively, this deficit is saying if inflationary costs are increasing by 29%, we are making up that 29% elsewhere in the budget through decreases in other places in the budget. Just wanted to call that out. And again, like we talked about, if we're, experiencing inflationary pressures, the towns are also experiencing inflationary pressures. I know that there's a statutory calculation. Maybe that statutory calculation is not going far enough for the towns. But those are all of the things that I wanted to highlight in this spreadsheet.

[Senator Andrew Perchlik (Member)]: You said you were making those up just by doing less pay

[Joe Flynn (Vermont Agency of Transportation Secretary)]: for example?

[Candace Elmquist (VTrans Chief Financial Officer)]: Decrease I mean, the agency of transportation budget includes, the modal, administration, the MP.

[Senator Andrew Perchlik (Member)]: Any project reduction.

[Candace Elmquist (VTrans Chief Financial Officer)]: Or non project reduction.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Operation, anywhere that you

[Jeremy Mead (VTrans Chief Engineer)]: could find.

[Senator Andrew Perchlik (Member)]: But is it saying that you're gonna keep the inflation adjusted at 103 by finding other savings and moving it to paving?

[Candace Elmquist (VTrans Chief Financial Officer)]: The assumption here is that you would find cost savings elsewhere.

[Senator Andrew Perchlik (Member)]: And move it to paving.

[Candace Elmquist (VTrans Chief Financial Officer)]: So that paving is at 130. Yeah.

[Senator Andrew Perchlik (Member)]: The addition of the inflation adjusted, cost inflation adjusted. So can I just in

[Senator Richard Westman (Chair)]: the operating, the maintenance division, we've calculated within that a 3% increase in salaries and benefits for people that work there? But everything that they do within maintenance would be, for the most part, operating, the plowing of the roads, would be operating. Those are all levels funded.

[Candace Elmquist (VTrans Chief Financial Officer)]: That's correct. And the salary increase is at 5.3% because 5.3. That is what's that's specified in the funding agreement. So, yes, the salaries and benefits, 5.3%, but everything else that our maintenance staff are doing level fund. And, we can debate whether we wanna change that assumption, but just for the purposes of going with something, I wanted to call out that that's what's going on in this outlook, and that has been the assumption in all prior iterations of this outlook as well. So that's not a change. I'm just

[Senator Richard Westman (Chair)]: just to Andy and then we'll

[Senator Andrew Perchlik (Member)]: I had a question about the cash fund. Was that what kind of like, where you put surplus funds? What is the cash?

[Candace Elmquist (VTrans Chief Financial Officer)]: The cash fund is a special capital fund. It is managed by the treasurer's office and the department of finance and management. My understanding is that was specified into the '23 t bill that we would have access to. Okay.

[Senator Andrew Perchlik (Member)]: So it's the cash the capital cash fund? Yes. Okay. So, yeah, senator Harrison's fund.

[Senator Richard Westman (Chair)]: If you wanted to. Thank you.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: I'm just gonna say that I think some of the last conversation really starts to talk about the elements in the twenty seventh budget, will be covered in a month. And I and I my understanding of the framework Candice was teeing up here was that as we looked at the 30,000,000, all of which was public knowledge, we had to take certain things into consideration, which is I think what she's referring to on on, like paving, for example, or anything else, whatever you want to call it, as we look to build that budget in November. So it has to be based on some assumptions, like how that pie, how that hole that I talked about before, don't mean hole, H O L E, but I mean W A Q L E, how that hole, revenue piece looks like in the total of a budget, the slate will be clearer, know, probably first or whatever would be.

[Senator Andrew Perchlik (Member)]: Just to get in, Steve, I got a second question about the 33,000,000 dataset. Sure. I think it was two years ago, and this is predecessor, we had a similar projection of a hole, and he was like, we're not worried about it, basically. Like we have money and other funds that we're gonna we're gonna deal with. I just wonder from as the secretary, are you worried about these deficits? Or you feel like that's just operational normalcy and and the budget will deal

[Joe Flynn (Vermont Agency of Transportation Secretary)]: with Every year in this job so far, and six years prior to that at public safety, and then two years prior to that back in AOT, but not this job, there have been pressures that have to be overcome. I've never seen a budget where we were at a loss to figure out where to spend the money. And and I know you're not implying that, and I'm being I'm being sincere. But I think what I frame I would frame your recollection of perhaps my position is that we we have the flexibility. You heard Commissioner Cass talk about this was New Hampshire, not us, but you heard Commissioner Cass say they plan at least two whole construction years with no new projects, zero. Well, so a construction agency has the ability to slow things down, accelerate things, slow some things down, accelerate some things. And AOT has historically had that flexibility. So my concerns are more over the long term than in my experience. We have been able to overcome every immediate problem. But but I concur with, I think, the general low of the discussion that the totality of all of those immediate concurrent problems is a systemic issue that have to be addressed. Okay. Okay? But when we started meeting in July, you know, we we have to work on the assumption that not only are we gonna find 30,000,000, but we have to find the the the labor contract increase. We have to find the increases for fees for space. We have to find the increases for IT before we even looked at cost increases, know, marketplace pressures. We have to work on that assumption, and we have to figure that out. And so we have to make decisions to to fill that and then figure how do we grow from there. And so we are I'm this agency, long before me in this role, under multiple secretaries, guided by various administrations, have been able to contend with the problem at hand. And so I think that was the framework in '23 that I might have been espousing.

[Senator Andrew Perchlik (Member)]: Right. Well, it wasn't you. Was Brad Cooper News.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Well, but I'm responsible as secretary. Following your order. Yes. But but Bradley was a good CFO. And, you know, I we can we can find our way out of every jam, but it gets old. I think that's what we're really talking about. We're talking about how do we We're

[Senator Andrew Perchlik (Member)]: just trying to go inside. It seems like from legislators, we see that, and we're quite worried, but from the agency's perspective, like, well, this is kind of normal.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: I would I would agree with that point. Yes.

[Senator Richard Westman (Chair)]: Yes. Well, I would I would just say when I hear New Hampshire, we will use them and not talk about, but when you aren't doing any capital projects, there is a cost to that. Yeah. If it's going down the going down the pike, you're gonna have infrastructure that has fallen apart. I'll speak just personally. My father was in the last years he formed, didn't replace equipment. I inherited old equipment. It's been painful picking the infrastructure of the firm back up, and I think that's what we can put together a budget and we can muddle through. Go ahead.

[Senator Becca White (Vice Chair)]: Thank you, and I really actually appreciate that analogy. Think that we should try to use that during the session. But I watched a little bit of the rescission plan that was presented to the e board, and so you're gonna get into that. Do you, That's really good. Because I've heard different competing things and people move from one department to another and trying to make money work that way and I just don't understand what's going on with the rescission plan at all. Sure.

[Candace Elmquist (VTrans Chief Financial Officer)]: Let me go through it. I don't know of anyone moving that's part of the rescission plan, but we'll

[Senator Becca White (Vice Chair)]: get Okay. Because I heard that folks had been moved out of some of the more general, almost like environmentally focused work to the highway division potentially, and I don't know, I thought maybe that was a part of the decision It part

[Joe Flynn (Vermont Agency of Transportation Secretary)]: No, the decision decision And that's not currently, that's, well, can't just explain the decision plan, but that's a different conversation.

[Senator Becca White (Vice Chair)]: Oh, okay. That's helpful.

[Candace Elmquist (VTrans Chief Financial Officer)]: Okay. So this is the rescission plan I've presented. There is an addendum as well that was submitted to JTAG, which is on this screen. I'm going to flip back over here for just a second. I will frame it up with, Chair Westman's comment, is wanting to know what has been canceled versus delayed. Mhmm. And then I can go into I I can go into the same detail that I did for Jay Tucker or JFC. But just to start, so items two or six are either one time or delays. And then item nine, maintenance, the return or re or repurpose of device purchased for VMS, that that would be a cancellation. We are not anticipating reissuing those devices. So we're looking at this document? Yes. But I I also have the spreadsheet on the screen here.

[Senator Richard Westman (Chair)]: Yeah. So on I just wanna be looking at the same document if you want. Yeah. So item two through six Two through eight. Two through eight.

[Candace Elmquist (VTrans Chief Financial Officer)]: Are Are delayed. Are are either delays or what in the way that it's presented one time in f y twenty six.

[Senator Andrew Perchlik (Member)]: It's great to hear.

[Senator Richard Westman (Chair)]: And they total up to how much of the

[Candace Elmquist (VTrans Chief Financial Officer)]: It looks like $33,500,000.0 in one time or delays. Items two through eight. K. Item like I said, item nine, one hundred fifty thousand for return of repurpose of iPads. That would be a cancellation. We're not letting them reissuing those iPads. Item 10, the cancellation of the technology project to automate functions under section eleven eleven. That is a cancellation of a contract. The next items, 11 through 13, either delay or one time. And then item 14, position management savings that you do not anticipate bringing those positions back. So that could be considered a cancellation as well.

[Senator Richard Westman (Chair)]: That's 2.5.

[Senator Becca White (Vice Chair)]: Yeah. Let me pick up this exact spreadsheet. We got, like, a memo instead.

[Senator Richard Westman (Chair)]: Yeah. 3,000,000 of this is.

[Candace Elmquist (VTrans Chief Financial Officer)]: Sorry. The this spreadsheet with the cover memo plus the addendum submitted to the state.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Yeah, back. I love the back. Yes.

[Candace Elmquist (VTrans Chief Financial Officer)]: Thank you. So good. Thanks.

[Senator Richard Westman (Chair)]: Perfect. Thank you.

[Candace Elmquist (VTrans Chief Financial Officer)]: Then it's it's up to you, senator. Would you like me to run through each one of these items or open it up for questions now? Don't want to

[Senator Richard Westman (Chair)]: take I think if members have specific questions about this, you should ask those questions now. From my point of view, because something more than half of this is delays, a little less than half is cuts. Those delays are going to totally show up in, as we move forward into next year's budget, and quite frankly, a little more pressure on next year's budget, it can't help. But, so for me, that's but if we have specific questions within the the committee and you wanted to get those out on the table, now we'll spend a couple of minutes on that before we move on.

[Senator Becca White (Vice Chair)]: Go ahead. Well, think it's obvious, probably the one that I'm most concerned about, which is Springfield. I was very disheartened to have this be like the first thing on the list to go and kind of reading through the memo and understanding from what you had provided to the e board, it sounds like this is was going to be delayed anyway. So it's not necessarily like a chosen cut that you identified. But I did just want to say that this delay has meaningful impacts on that area. It's a very often used site. I think a four bay garage is my understanding is what was being designed. That would have greatly improved the quality of the workers' experience at that location. And it's disappointing to me that again, Springfield is being identified as a place for adults. That seems to so often happen to that community. I just want to identify that and name that. Although I understand that it's a little bit out of your hands because it sounds like the engineering didn't come in or there was other time constraints that would have caused it to not happen on its original timeline anyway. And then I did have one other question, which we might get into with Vermont League of Stays and Towns folks, but I'm already starting to hear rumors from my towns that they're being told that they're having projects cut by the state, that they're not happening in 2027 and 2028 and 2029, and that they should be expecting to have temporary bridges not be put in because of decisions that if there's all sorts of conversations that are happening and kind of like a rising sense of panic about, I think, okay, you're cutting this with the rescission plan. What is our expectation for you not funding projects that we had been kind of promised in out years that would be happening? And I'm wondering if you can speak a little bit to, Is that fear rational? Should we be planning differently as individual towns? And what do you think would be smart to do when it it comes to advocating to keep certain projects in over others? Because, like, I'm bummed Springfield got on the chopping block, if I had been on it maybe three years ago, wouldn't we be doing Springfield? You know, like, how would you figure that out?

[Candace Elmquist (VTrans Chief Financial Officer)]: Sure. You wanna take this?

[Joe Flynn (Vermont Agency of Transportation Secretary)]: I would first say we work very close with the league. You know, mister Brady very well. Worked well. I welcome actual information from actual towns who they actually spoke to at the agency because there's obviously, in any quorum, there's there's worry. Yeah. There's rumor. There's conjecture. And and they all make sense in this environment. So I'm not trying to dismiss the concern or worry, but our position has always been we look at every project that's ready to go. You know, from testimony here, there's a difference between the aspirations the talent has about a project and what it might fund in a particular year, but the decisions that we make regarding the projects that are ready to go will be something we deliver in the budget. If there are agency people that are in fact now telling talent, I really would like to know what town and who did they speak to at the agency. They were informed by us officially that a project is being canceled or delayed that has to speak to the '27 budget which we have, which our governor has not released yet and we have not talked to you about. So as the secretary, I would like to know.

[Senator Becca White (Vice Chair)]: Yeah. And I can give you some information. Yeah. We do have some specific people coming later today specific to talk about that.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: But I'm saying more specific than the the town's conjecture or worry.

[Senator Becca White (Vice Chair)]: I don't wanna list specific employees on the record. I do have for Pomfret and South Royal, in conversations they've had at least in our area. And I wanna be clear that the conversation is not your project is being canceled. Figure it out. It's, hey, the we're reading the tea leaves as an employee here, and if I was smart, I might not plan on maybe some of those conversations we've had.

[Candace Elmquist (VTrans Chief Financial Officer)]: Okay. And Very that I

[Senator Becca White (Vice Chair)]: think is an okay thing as an employee to share. I think that's a generalization that from this conversation alone I might take.

[Senator Richard Westman (Chair)]: I don't think it's bad for me.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Then it's think we're on the same page. With your last version of that, I think it's wise for everyone to hear everything that's been said last session and this session, well, we're not even in this session to your point, Chair, but right now, plus Commissioner Caddock, everybody should be aware of the pressures and expectations may all not be met. Those are the decisions we have to make all the time and going back to a moment or two ago, we have to make those same decisions every year. We've had to make them for twenty years. So, you know, we're probably saying the same things just from a different direction.

[Senator Richard Westman (Chair)]: We are behind by about twenty five minutes. So, unless there are other specific questions, can you spend the next few minutes just to wrap up? Sure, sure.

[Candace Elmquist (VTrans Chief Financial Officer)]: Responding to Senator White, I'd say the first item that the agency considered for the rescission plan was line two. And sorry, let me share my screen

[Senator Richard Westman (Chair)]: one more time.

[Candace Elmquist (VTrans Chief Financial Officer)]: Line two was an additional $270,000 That was really my discretion as the CFO to add on top of what engineers have requested for projects that are concluding this fall. So that and and I also said this to Jaystack, that was the easiest one on the list. And just because of their order in the list doesn't mean that it was like the first to go or what not. But I understand everything you said. I think the rescission plan was because of the economic forecast, the downgrade in July. We know that that downgrade trickles into future fiscal years as well, which is a part of that 33,000,000 deficit that we were looking at. So, I'd like to encourage folks to see it if they could as two separate items that they are related, but we we had we were statutorily required to present the rescission plan because it's the current year boundary. And then, we will also deal with the future '27 and '28 to '29 whole as part of the governor's, you know, recommended budget proposal. I think that's all I have. Is there a question?

[Senator Richard Westman (Chair)]: I'm going to move us along and and we do have two gentlemen from AASHTO and and CSL, Doug and Jim. And we moved the order around here a little, and we're sorry that we're running late.

[Candace Elmquist (VTrans Chief Financial Officer)]: That was really.

[Senator Richard Westman (Chair)]: I think, Doug, you're first.

[Douglas Shinkle (National Conference of State Legislatures)]: Yeah. Good morning. Thank you, Chair Westman.

[Senator Richard Westman (Chair)]: Introduce yourself and

[Douglas Shinkle (National Conference of State Legislatures)]: Nice to see you again. Yeah, can everyone in the room hear me okay?

[Joe Flynn (Vermont Agency of Transportation Secretary)]: We can.

[Douglas Shinkle (National Conference of State Legislatures)]: Okay. Thank you very much. Thank you very much for having me, Chair. It was nice to be in Vermont last week to discuss some of these issues in person with a few of you. And let me just quickly,

[Senator Richard Westman (Chair)]: where do I share? I'm struggling

[Douglas Shinkle (National Conference of State Legislatures)]: to find where to share my presentation from the screen.

[Senator Becca White (Vice Chair)]: There's a green arrow at the bottom.

[Douglas Shinkle (National Conference of State Legislatures)]: Are you getting any assistance? Green arrow at the bottom? I'm not seeing that.

[Senator Becca White (Vice Chair)]: It says share.

[Douglas Shinkle (National Conference of State Legislatures)]: Nope. That's not it's not on my it's not on my screen. It's usually very intuitive and very easy. I got you. I found it. Just give me one second.

[Candace Elmquist (VTrans Chief Financial Officer)]: Alright.

[Douglas Shinkle (National Conference of State Legislatures)]: Can everybody see that?

[Senator Andrew Perchlik (Member)]: Yep.

[Douglas Shinkle (National Conference of State Legislatures)]: Alright. Can you see the full screen version? Just in front of that's the case.

[Senator Andrew Perchlik (Member)]: Now we're seeing that.

[Douglas Shinkle (National Conference of State Legislatures)]: Alright. Sounds good. If so, yeah, my name is you're seeing a presenter mode. Alright. Well, what's the problem with doing these things this way? How about now?

[Senator Richard Westman (Chair)]: It's bigger. It's bigger.

[Senator Becca White (Vice Chair)]: We do have printed cop.

[Douglas Shinkle (National Conference of State Legislatures)]: I'll just skip the note. I'll okay. Well, I'm just I have notes to refer to on the page. This is always the issue with doing this is that sometimes the notes I can't refer to the notes while I'm talking to you, because then otherwise you can see the notes as well. Give me one second. Yeah, can you see the full screen, or is that showing my notes if I go down here?

[Senator Richard Westman (Chair)]: It is smaller than it was. We see your notes.

[Senator Becca White (Vice Chair)]: Please wait, still looking.

[Douglas Shinkle (National Conference of State Legislatures)]: We got

[Senator Andrew Perchlik (Member)]: you. Yeah, hold

[Douglas Shinkle (National Conference of State Legislatures)]: on, it says we're still, my bad guys. I'm just gonna go back to normal mode, I think I know this well enough that I can just, yeah, and I'm having some issues with it with it sharing. Give me a minute. Okay. Is it full size is it full size now?

[Candace Elmquist (VTrans Chief Financial Officer)]: No. No.

[Senator Andrew Perchlik (Member)]: It says it's loading.

[Douglas Shinkle (National Conference of State Legislatures)]: Yeah. I don't know what's going on with that.

[Jeremy Mead (VTrans Chief Engineer)]: Oh, boy.

[Douglas Shinkle (National Conference of State Legislatures)]: Give me a moment. Apologies. While I'm doing this, let me just quickly tell you who I am. My name is Douglas Schenkel. I'm an associate director in NCSL's environment, energy, and transportation program, and I am the director of NCSL's transportation program. I've worked at NCSL for twenty years, and represented several committees in the last few years on, this same topic, including to the Vermont Senate Committee, I think, maybe just last year or two years ago. Just give me a second. I'm having issues getting this up. So it's showing up. This should be better. Jeez Louise. And as all you all gosh. Jim, you wanna well, never mind. I think I've got it now. Does it all look does it look good now? Or you can't see it yet because I'm not sharing it yet.

[Senator Richard Westman (Chair)]: I haven't seen that yet. Jeez. I'm

[Douglas Shinkle (National Conference of State Legislatures)]: having a lot of technical difficulties right now all of a sudden. Yep. Slideshow tab from the beginning. Yeah. And then CSL, can you all okay. So now I'm is this. No problem is I can't get to Okay. Can you see me in full screen mode now?

[Senator Richard Westman (Chair)]: Yeah. Yes. We can.

[Douglas Shinkle (National Conference of State Legislatures)]: Sorry about that. Okay. I'll be trying quick and make up for that time because I certainly wanna hear from Jim. Yeah. NCSL is a membership organization, and I think you all know that you are the members, all 7,000 plus state lawmakers and the 30,000 plus legislative staff that support them. And really, I'm just gonna run you through what states are doing with in regards to investigating, exploring, and acting, and implementing alternative transportation funding sources to kinda supplement the existing kinda traditional sources that we're all kind of aware of. So this first slide that I think is kind of the most instructive. This is some information from the National Association of State Budget Officers. And the main thing I would point to you is that top blue line, motor fuel taxes. Back in 2016, motor fuel taxes were on average, were responsible for 41.1% of state transportation revenue, and they are now 35.9% in 2024. That's not an incredible drop, but that is a very notable drop since this is the biggest source of funding. And the newest version of this report is gonna come out in the next few days, and we're kinda gonna be very closely watching if that number drops further. But this is just the long term trend is essentially that is motor fuel tax revenues are dropping, and states are having to come up with other sources. And you'll see that reflected in the next slide. I mean, the next the next line down, the red one that shows that the other category, which oftentimes includes non user feed options, which states are increasingly having to adopt in some instances, is having to be be implemented in some states to make up for that gap. So this just shows in a lot of this echoes what came from some of the last presentations is that the Persian scene of power, the federal gas tax, this slide is specifically the purchasing power of the federal gas tax has fallen precipitously since 1993 when federal gas taxes were last increased is increased. So we're dealing with just not really having the amount of money necessary for the the cost that states still still have to pay for their transportation systems. This is another slide kind of showing that same projection. Well, not the same projection, but similar into the future and still projecting that the not well, the nominal revenue is may stay somewhat flat, declined some that on that in terms of real revenue that's gonna decline fairly dramatically. Then this is kind of a complicated slide, but I I did wanna point this out. You know, I know some of the speakers spoke to the fact that really at the moment, what states are dealing with are is they're dealing with increased fuel efficiency is what's driving the decline in, motor fuel tax revenue. But, of course, alternative and electric vehicle fee vehicles are paying playing a role in that as well. And what this shows is essentially that yellow line at the top is if there was no change in the current, fuel efficiency of America's fleet, what we would expect to collect nationally in terms of fuel tax revenue. But then the three lines below it show, varying forecasts of adoption rates for electric vehicles. And depending on those, you start to see a very large gap. You know, a gap that's already gonna be kind of existing, but it's gonna grow even worse if there's, more and more folks, adopting, you know, buying electric vehicles. I would note that one thing that came up a lot when we were in Vermont last week is it does seem notable that our North Eastern states appear to divert more of their transportation dollars to other sources than other regions. Other regions states and other regions are more more typically have things like transportation lock boxes and some sort of guarantee that does not allow this money to be diverted. Now I would note too that there is one pretty big caveat here, which is that this this is specific to highways and roads, and diversions do include transit and bike pedestrian, which are clearly transportation, but they're not necessarily highways and roads. And, you know, the Northeast, I would say, generally, is probably, has more robust transit infrastructure and systems. And, in some of the states, clearly, there's lots of folks using those systems. I wanted to point that out, but I do think that this is a notable slide. So then I'm gonna just quickly go into what states have been doing to, kind of to increase or keep stable, really not increase, but keep stable the amount of revenue they're bringing in. So the first and most obvious is, you know, state gas tax changes. We have seen 35 states in DC increase their gas tax since 2013. There are now about half of states that have indexed or variable rate gas taxes, meaning that those gas taxes track with the economy in some way, consumer price index, or perhaps population growth, or sometimes there's a formula in place. And these state gas tax gas taxes increases ranged considerably. This is what I call the catch all slide. This is better to kind of look at and, kinda dive into, and and not trying to get a full picture of right in the moment. But essentially, what this is trying to communicate to you, there are a lot of different ways that states train, pay for their transportation systems. And some of them are pretty unique, and some of them are probably not going to be possible in all states, thinking about, like, oil and gas, severance tax, mineral revenue, things like that. But there's some other things that I do think that are pretty applicable to to most states. You see some things that are very clearly not related to transportation at all too, like tobacco tax, lottery funds, etcetera. But this is really just to demonstrate that states are, exploring a wide, suite of options, to fund their transportation systems. Electric vehicle and hybrid vehicle registration fees, we're now in a place where 42 states have higher annual registration fees for electric vehicles. That's quite a sea change from even five years ago, and it's probably about twenty, twenty five states. Most states haven't enacted and implemented these yet. The fees the fees range quite a bit from $50, all the way up to $290. And then a trend we've been seeing of late is that more state have been implementing a higher fee on plug in and or non plug in hybrid fees. And what we've seen generally is that the the highest fee amount for electric vehicles, generally, or almost always for a higher fee for electric vehicles and then not plug in hybrids and then non plug in hybrids, but because that's not all states have those. I mean, you can see some of the kind of the fee ranges for hybrids there. Wanna talk quickly about road usage charges or mileage based user fees, which I think you're all pretty familiar with and have heard probably quite a bit about in the past. So I'll try and kinda go over pretty quickly, but happy to answer questions. I do wanna note there are four states that do now operate a voluntary, road usage charge or MBUF program. All four of these states in Oregon, Utah, Virginia, and Hawaii, all four of these states created these programs through the state legislature, so they did have to be vetted and go through the legislative process and be creative. They are all voluntary at this time. However, in Oregon, it will become mandatory and let me pull this up. In Oregon, the program will become mandatory for all electric vehicle owners beginning in I'm forgetting the date. I wanna say it's 2031, but it's escaping me at the moment. This is partially in response to you'll notice here that Oregon has the oldest program, but it has the least number of enrollees. And so they were really trying to do something to juice up the numbers of enrollees in this. So, in the short term, they're doing some things to do so, but, basically, what will happen is that there's gonna be a a significant increase in electric vehicle fee in Oregon to $340. That's gonna happen in a few years. And you're gonna basically have the choice of, do you wanna pay this giant fee or do you wanna enroll in the Orgo RUC program? And then at a certain point, it's gonna become mandatory for electric vehicle owners to enroll in that RUC program. And I think I'll just note that more enrollees means a more efficient program and more opportunities to kind of smooth out any issues. And, you're just, you know, you're reducing the cost, the overall cost by getting more vehicles in it. Utah was the second state to implement a program, fairly successful thus far. They made some changes. They they it was EVs. It what previously didn't include some grandfathered hybrid vehicles and some other vehicles, but they've mostly made it focused electric vehicles now going forward. And they do offer a variety of reporting methods for those that, that mileage, which, of course, is one of the the main issues that folks ask. And then in Hawaii, kind of an unusual case, you know, they they don't have any they have a annual inspection process just like Vermont, so they have a very easy way to collect this fee. This fee, the road usage charge was just started in July. In Hawaii, this is another state where this will this the RUC will eventually become RUC enrollment will eventually become, mandatory in 2028 for electric vehicle owners. So we're moving towards legislatures considering making these programs mandatory for certain groups of vehicles generally typically, electric vehicle owners. I wanna spend a tiny bit of time on Virginia's. Virginia system's set up quite a bit differently, and I think probably the most notable thing about it is, a, it has the most it has the largest number of enrollees. And the reason it has the largest number of enrollees is because it is not just it is not just for alternative fuel vehicles and including electric vehicles. It also includes fuel efficient vehicles that are rated over twenty twenty five miles per gallon or over. And so essentially, in the state of Virginia, you drivers have to pay a highway use fee, and they can choose to either pay the highway use fee or enroll in this mileage use mileage use fee program. And so a lot of folks are in Virginia are are doing that. And I heard that this number of enrollees from just yesterday is now up at about 26,000, actually. So they're making some progress there. And like I said, I think the big point there is that they're including the fuel efficient vehicles that are also a drag on, you know, one of the big drags in the short term on transportation revenue. I just wanna highlight some other sources of revenue that states have been considering. 13 states in DC now charge additional fees, for rides in a transportation network company vehicle. Transportation network companies or services such as Uber and Lyft. And, of course, you have some emerging emerging, autonomous ride hail healing services such as, Waymo. I would point to the states in blue. Those are the states that really actually are dedicating the speed of transportation purposes. Then the other states, the fees are generally being dedicated for gen to the general fund or for administration on oversight and regulatory oversight of t the TNC kind of safety and operations. I would note that Georgia is using all the money from these TNCs, TNC fees for their tran transit systems. A lot of that's going on in New York as well. New York City specifically, and then Massachusetts dedicates about half the money to its transfer to trust fund. And these fees range from them don't have this represented on the slide here. If I could see my notes, I could possibly see that. But from from about five cents up to, like, a dollar per ride. And so usually, there's discount counts for per a shared ride. Something else that we've seen a lot of interest in in, but only two states have been active thus far is delivery fees. Colorado and Minnesota are the two states with these delivery fees, and I think a lot a lot of the thinking here was that during the pandemic, there was this even more of a seismic shift towards the use of deliver delivery services, door to door delivery services, and that causes kind of an additional train on the strain on the transportation system, adds the congestion, can kinda impact parking situations, etcetera. And so two states have enacted these fees. They look quite a bit different. Colorado's is much broader. Basically, if you buy anything, even if it's a $2 burrito from seven Eleven, you got to get that delivered via DoorDash, you're gonna pay this 27¢ fee. Now businesses with $500 or less $500,000 or less in annual sales are exempted from the fee. Minnesota has a similar, kind of exemption. But I think that that what what purchases are included is a big distinction between these. In Minnesota, the fee is 50¢, but it only in at retail delivery purchases over a $100. And it also exempts many items, including medical products, things for baby baby products, and food. And I just wanna give you a sense here. This is generating a pretty decent amount of revenue in Colorado, the state where I'm located. And so you'll see that, you know, their revenue over 100,000,000 last year, and they're saying that they're projecting that that's gonna likely be even higher in in twenty twenty twenty in 2026. And we have seen a couple other states looking at this, Debating bills, but no no other states have yet enacted. Kilowatt hour charges or electric vehicle public charging station fees. So there are now 11 states that have put some sort of fee or tax in place. If you're charging your electric at a, public EV charging station, these don't apply to not to, residential charging. That's technically possible, but it's difficult, and it's more cost intensive. Perhaps long term, that might be more possible, but in the short term, might be not worth the juice that you're squeezing. I would say, you know, one of the main reasons just maybe highlight one pro and one con from my estimation is that one reason I've I've heard from a lot of states that wanna do this is because they're you know, if you have someone driving through your state and they typically, in the past, had to stop and fill up on gas, they were paying a little bit of motor fuel tax. If they're now going through the state and doing that with an electric vehicle, they're paying nothing. So this is a way to try to hopefully capture some some revenue from that group of drivers. I would say the one potential con is that, you know, you're bringing in a stakeholder, the utility providers. Do the utility providers really wanna get in the business of helping figure out state transportation funding system and collecting this? Now they're usually collecting fees already and taxes, so it's maybe maybe not that difficult, but I do think that is one consideration. And then these are just some of the funding resources we have available they wanted to share. And then really, that's my presentation. And sorry, I try to go as quickly as possible. Happy to take any questions, and thanks for having me.

[Senator Richard Westman (Chair)]: Doug, I think we're gonna go directly to Jim, and if you can hang on here for a while. Jim, could you introduce yourself? And we're only twenty minutes behind now, but that's we're gonna go through lunch.

[Jim Tymon (Executive Director, AASHTO)]: Well, hopefully I can help you get back a little bit more of that time. I'll start by just saying that Doug and I had the opportunity to present about a year ago as well. One of the things that I think we both found was our presentations were very similar. So I'm just going to build on some of the things that Doug said and try to kind of expedite my presentation so that we can get to questions. Just really quickly, my name is Jim Timon. I'm the Executive Director of AASHTO. I'm going to share my screen just for a couple of slides, not anything that's critical, but I think it may help things go a little bit quicker. Just to say that us at AASHTO, we're a non profit association. We were founded in 1914. Our members include the 50 state departments of transportation around the country. So VTrans is one of our members, they're one of our more active members. We have employees that serve in leadership roles throughout the organization and it's really we serve as the trade association for the state DOTs and provide that platform to be able to exchange best practices, but also to be able to identify expertise in all the different discipline areas that a state DOT has. I want to talk a little bit about things at the federal level because I think it does have an impact on what you all are dealing with in Vermont. The federal gas tax has not been increasing since 1993. The first few decades after 1993, federal revenue continued to increase because population grew and people were driving more miles. But now what we've seen is as vehicles have become more efficient and the population growth has leveled out, we're not generating as much revenue at the federal level as we used to. So as a result, Congress has had to transfer about two seventy five billion dollars over the last twenty years from the general fund, general tax revenue into the Transportation Trust Fund that funds the federal surface transportation programs. So if you think about since 1993, when the last time the gas tax was increased, the purchasing power of that tax in 1993 has diminished significantly. So this slide here shows just kind of a basket of goods and what they cost in 1993 versus what they cost now. I am the father of twin daughters who are seniors in high school, so that first one up there is big for me. The college tuition has increased to 721% since 1993. I'm looking at sending two girls to college next year, so I really wish it were still 1993. That would be a little bit of an easier hurdle to get over. But the federal government just hasn't been the appetite to increase the gas tax since 'ninety three, and as a result, they've had to find other sources to fund transportation. Now quickly, just about I'll stop sharing here because I think it's easier to just talk a little bit more about one other thing at the federal level before I move on to what we're seeing in other states. Four years ago, the federal government passed Congress passed the largest transportation bill ever and included a significant increase in federal funding for state DOTs, about 25% increase. But inflationary pressures that we saw in 2021 and 2022 pretty much completely wiped out that increase that states were seeing. Essentially, rather than being able to add new projects to the pipeline, most states were lucky to be able to just keep the projects that they had in their pipeline prior to this federal bill being passed because the increase that we saw in the cost of materials and the cost of labor in the transportation sector was around between 2025% over that two year period. So most states really were struggling to move forward with their plans, even with the large increase in federal funding. So moving over just quickly to the state side, I think Doug did an excellent job of putting together the landscape for what different states are doing when it comes to revenue. Every state in the country has some type of a tax on fuels that goes towards transportation. Some of those states restrict it to just transportation. Doug's slide showed that there are about half of the states that do allow for some quote unquote diversion, but most of that diversion is towards other transportation purposes, not just highways and bridges. So it's diversion to bike and ped infrastructure or transit. There are a handful of states though that do take other transportation revenue sources and use them towards non transportation. Texas is one that always comes to mind. They dedicate about 25% of their fuel tax revenue for education purposes. But really what we've been seeing in recent years is the opposite. We've seen states take a look at all of their revenue sources that they have at their disposal and see if they can find new revenue sources or portions of existing revenue sources and dedicate them to transportation. For example, Utah, they dedicate about $2,000,000,000 a year in general fund revenue to transportation. They've made the decision in the executive branch and the legislative branch out there to say they believe investing in a well funded and well functioning transportation system is critical to economic growth. So they have justified transferring general fund dollars to the transportation program in Utah. Doug showed his kind of catch all slide that included some of the things that I was going to talk about, including that some states dedicate a portion of their corporate tax revenue or fees on oil and gas production or mineral royalties. Some states take a portion of property tax revenue or taxes on the sale of property. And then you have some states that kind of look at those, what we'll call like sin taxes, lottery, alcohol, tobacco, and dedicate some of those revenue to transportation as well. Finally, we're seeing, as Doug again mentioned, there are others that are connected to transportation where we're seeing more and more states see those activities as opportunities for additional revenue for transportation fees on electric vehicles, increases on just your standard license and registration fees, taxes on tires or auto parts and dedicating those to transportation, taxes on the sale of vehicles at the state level and dedicating those to transportation are a few of those other sources of tax revenue that we're seeing states go to. There are several states over the past five years who have established blue ribbon commissions or task forces to look at the options that are out there for funding transportation in the future. Delaware has a task force on sustainable transportation revenue that they stood up this year. New Mexico in 2024 has set up a task force as well. North Carolina and Pennsylvania both have kind of blue ribbon commissions that they've stood up as well to look at revenue sources, as well as one of your neighbors in Maine back in 2020 has stood up a Blue Ribbon Commission to take a look at this as well. So as you heard from Commissioner Cass from New Hampshire earlier, I think what's happening there and what you're dealing with in Vermont with the increase in the cost of projects and labor due to inflation is not something that is unique to Vermont. We're seeing that in states across the country and states are looking at a lot of different ways to deal with that, whether it's new revenue in order to be able to support the increase in costs associated with inflation or if it's kind of refocusing the existing revenue that they have on those must have projects, focusing more on maintenance of existing facilities and making sure that the existing network that you have is able to run as best it can. We're seeing state DOT agencies across the country really having to tighten their belts and making those decisions. Obviously, we believe that there should be additional revenue as a whole and that investing in transportation There's a great dividend or return on that investment from an economic standpoint, but we also see that a lot of states are really struggling financially with decreases in revenue and with other competition for general revenue sources. So with that, I'm happy to hand things back and take any questions that you may have.

[Senator Richard Westman (Chair)]: Well, I wanna, at this point, we're so far behind. This is not the last time we're going to be hearing from you. I personally am going to say that miles the travel states, the four states that we have, we will be looking for contacts on who to talk to from those states. And so we will be circling back around and in touch with the both of you, and thank you. And at this point, we're going to move to the League of Cities and Town. And Josh, if you would take the chair, introduce yourself, and, make us off. Yep.

[Candace Elmquist (VTrans Chief Financial Officer)]: I'm just so confused. We're not taking a break.

[Josh (Vermont League of Cities and Towns representative)]: Thank you. I'm Josh Denver from Salt Lake City and Towns. I'm gonna

[Ryan Rich (Royalton Town Administrator)]: be very brief because we do have four

[Josh (Vermont League of Cities and Towns representative)]: folks lined up from municipalities to speak to you. I know some of them are on some time commitments. So thank you for starting so early in session, working on this important issue. We

[Senator Richard Westman (Chair)]: hope this will help kick us off to help our city feel about where we're headed. Absolutely.

[Josh (Vermont League of Cities and Towns representative)]: And invite M and A municipalities in to share their needs and challenges. As I said, we'll be brief so you can hear from those municipalities. From the league's perspective, we've elevated transportation funding in our priority list this year. We have a number of ideas on how to raise the funds needed to fund and fix the municipal roads and bridges that all Vermonters use. We are open to all solutions to diversify and increase the transportation fund revenue. We believe municipalities can be part of this solution if authorized to raise transportation funds locally. And as I said, we have some ideas around that. We also will make the call that you've heard today from many others that delaying solutions only costs us more in the long run. It's not really a viable option. So please invite us back to share our transportation priorities and revenue ideas, because all Vermonters depend on these local roads to be safe, and after all, roads are one of the first obligations laid out in state statute for local government. With that, I know that Ryan has a time commitment. Megan, did you hear from anyone else that had time sensitive needs?

[Candace Elmquist (VTrans Chief Financial Officer)]: Yes, but I don't have that written down.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Okay. So let's go with Ryan. We're gonna do Ryan. Ryan.

[Senator Richard Westman (Chair)]: They're gonna be here till

[Candace Elmquist (VTrans Chief Financial Officer)]: the end. Right? I didn't realize.

[Josh (Vermont League of Cities and Towns representative)]: What's that? You're gonna be here. Yes. Yes. So, Ryan.

[Ryan Rich (Royalton Town Administrator)]: Oh. I was regretfully a little late with submitting my testimony from my hands on that PO price copies here for for the record. Good morning, my name's Ryan Rich. I'm the town administrator in Loyalty, Vermont. Chairman Westman, Vice Chair White, Ranking Member of Brennan, other distinguished members of the committee on behalf of the town of Royalton, thank you for your attention to the VTrans funding shortfall, the potential impact on Vermont towns, and the opportunity to provide testimony today. In recent years, Royalton has been the fortunate recipient of e trans funding. A class two paving grant helped our town for the reconstruction of our North Road. Grants and aid funding allowed for a highway crew to improve water management and erosion control through multiple ditching projects on back roads. An emergency grant helped us repair bridge abutments after the July 23 flood. Without these critical funds, our town would not have been able to afford these necessary repairs. Today, lingering pandemic related supply chain disruptions, labor shortages, tariffs, and the increased cost of production and trucking have caused construction prices to increase dramatically. Prices for hot rolled steel have surged 90%, concrete 40%, and asphalt over 25%. Fiscal analysts have estimated that the total construction costs have increased 62% in Vermont since 2020. Now more than ever, Vermont towns are reliant on state funds to help repair our crumbling and aging infrastructure. Royalton has experienced these consequences of rising costs firsthand. In 2020, Royalton was awarded a B TRANS bike and pedestrian grant of $904,000 to reconstruct the South Royalton Village sidewalk. In the time it took for engineers to design the project, receive National Environmental Policy Act approval, and clear right of way, our estimated project costs increased from $1,100,000 to over 2 and a half million. Even accounting for the 500,000 in matching funds that the town has already raised, we have a 1,300,000 shortfall. Royalton is hoping to apply for and receive an enhancement grant, but given the VTrans budget shortfall, the guarantee of additional funds is uncertain. VTrans is also facing the same pressures of rising construction costs and decreasing tax revenue. Difficult decisions must be made and state officials have already begun discussing potential cuts and cost saving measures such as transportation project delays. The two publicly announced project delays in Rutland and Springfield are likely just the tip of the iceberg, and that is why I am before the committee today. To state that it is imperative to fully fund core VTrans projects, and specifically the maintenance and repair of town bridges. Royalton Bridge 30, commonly known as Foxtan Bridge, is a town owned historical truss bridge built in 1928 that carried Royalton Hill Road over the White River. In May '4, V TRANS inspectors discovered critical findings in the bridges, floor beams, and gusset plates, and closed it immediately to avoid potential injury or death. Royalton is bisected from east to west by the White River, I-eighty 9, and the railroad, which makes north to south travel extremely difficult. The closure of Foxtan Bridge leaves only two remaining crossings in Royalton, resulting in an extensive detour route that both that adds over seven and a half miles northbound and four and a half miles southbound on class three gravel roads. This route may only be time consuming in ideal conditions, but with snow and mud season, this route becomes nearly impassable. Residents on the west side of the bridge are effectively stranded at times, and there's a high potential of life threatening situations for the 80 affected families. The delayed response times from fire department, rescue squad, and law enforcement have caused many sleepless nights to myself, other public servants, and first responders in Royalton. Lasting economic harm has been done to the multiple independent and family run businesses due to the bridge closure. Farm stands on the west side of the bridge are now inaccessible and can no longer rely on through traffic. The loss of income has caused them to shutter. Residents faced with longer commutes to work now travel at dangerous speeds past working farms and homes. The closure has also caused the town to incur additional costs and premature maintenance due to the increased traffic volume on the detour route and town bridges. Construction of the replacement is currently planned to begin in 2027, and the bridge is scheduled to reopen in the 2028, more than four years since its closure. Phasing or further delay in the construction of the Fox Bridge replacement would be absolutely devastating to our community. I respectfully urge the committee to prioritize the Fox Stand Bridge Project due to the length of closure, the economic impact, and the number of families negatively affected. Thank you again for the opportunity to testify on behalf of Town of Royalton,

[Jeremy Mead (VTrans Chief Engineer)]: and I welcome any questions from today. Oh,

[Candace Elmquist (VTrans Chief Financial Officer)]: I just want to say thank you so much

[Senator Becca White (Vice Chair)]: for coming, apologies for missing the first part of your testimony. What we've spent the majority of our time talking about this morning has been the expected impacts of a lack of funding. And you have very articulately expressed what a delay means now for your community. How do you as a municipality plan if you're expecting there'll be even less money coming to you to resolve any current issues or incoming issues on your roof?

[Ryan Rich (Royalton Town Administrator)]: Senator White, that's a great question. Municipal financial planning is extremely difficult, especially on town budgets. You know, it's it's a goal of the town to be slowly putting funds aside. Unfortunately, with with given other capital improvement projects, the town has has depleted our capital improvement reserve. We have have bonded already for a project which adds to our our debt service and and and taxes on on our on our town budget. So it is very difficult to to plan as a municipality given the the cost of of construction and inflation and other other costs increasing dramatically every year. So we actually did a price proposal and price schedule if if we did accept a temporary bridge that was offered to the town. That would have pushed the project out approximately ten years and increased the increased the price, and the town would end up end up having to pay 1,100,000 for for that that bridge instead of $300,000 for for a bridge, let's say, three years from now. So you can see right there that the costs would would have been easily over, you know, close to $1,000,000 more if if the project was delayed.

[Senator Becca White (Vice Chair)]: Yeah. And you as a community don't have the ability to raise a tax. I mean, you could do a 1% tax, but Royalton isn't filled with hotels like White River Junction.

[Senator Richard Westman (Chair)]: They could

[Joe Flynn (Vermont Agency of Transportation Secretary)]: raise their property.

[Senator Becca White (Vice Chair)]: You could raise your property taxes. I mean, yeah. Do you see that as an option? Is there another way for you to meet that demand? Do you see the people of Royalton being comfortable with the property tax increase to make up the difference?

[Ryan Rich (Royalton Town Administrator)]: So as a as a citizen of of Royalton, I've seen just in the five years I've lived in town, the property taxes have almost doubled.

[Senator Andrew Perchlik (Member)]: I

[Ryan Rich (Royalton Town Administrator)]: think affordability is a top concern of residents of Royalton, and adding additional property taxes is likely to push hardworking Vermonters out, and we would hate to see more and more working Vermont families have to leave and seek employment and housing outside the state.

[Senator Richard Westman (Chair)]: Thanks. Other questions?

[Joe Flynn (Vermont Agency of Transportation Secretary)]: I would like to just make a correlation to the statement made by administrators. I really think it's important that the committee consider when it talks about these concerns and the realities with his colleagues in the building. In the past, when we've talked about thinking how Act two fifty impacts transportation projects like a bridge or already a road, I'm not talking brand new construction, it's I think isn't it a different conversation than the larger Act two fifty conversation. My point I'm making is that I believe the administrator said on a particular project, permitting right of way and environmental created delays on that project that resulted in a 100% increase in price from 1,000,000 something to 2 and a half. I'm not suggesting that's all because of that two fifty review because honestly I don't know anything specific about that project, but my point is if we if we do engage in these discussions specific to transportation projects, there may be there's there's this cacophony of reasons why things are so expensive, and time is one of them. Time and cost, one of them. So it's not just Act two fifty, but it could be permitting, and a lot of that is on the state. I understand that and agree, but I just leave that with you. Because we face the same thing. Our projects also have to go through that, and that's why we've raised that issue.

[Senator Andrew Perchlik (Member)]: I

[Senator Richard Westman (Chair)]: think thank you so much for being your.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Next,

[Josh (Vermont League of Cities and Towns representative)]: John. Did you hear any other

[Senator Andrew Perchlik (Member)]: folks online at halftime concerns? No.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Thank you. Good morning, chair

[Nicolas Storellicastro (Barre City Manager)]: and members of the committee. My name is Nicholas Trelekastro. I'm the very senior manager. I apologize.

[Ryan Rich (Royalton Town Administrator)]: I I have some notes that I

[Nicolas Storellicastro (Barre City Manager)]: got from my public works director that I didn't have written testimony, but

[Ryan Rich (Royalton Town Administrator)]: I will share my they're mostly numbers, but I will share that with Megan when I get back. We're

[Senator Richard Westman (Chair)]: gonna have you back in the winter. Okay. As you heard, the difficulty for us is there are no hard numbers Yes. In the overall I have some. Do have some. So so we have to rely on individual communities. Some have done a really good job. Others haven't had the resources that others have had to deal with. So larger communities like like Barry generally have the small communities have not done inventories for the most part. So for us, particularly with the municipalities, it's a little more difficult to ferret out information.

[Nicolas Storellicastro (Barre City Manager)]: Well, you, chair. And I do have some of our experiences to share. I do want to say we do enjoy working with AOT. Joe has an office run down from Berry. We have the pleasure of getting to see him. They're very good tenants, and they've done a lot of good things for Berry. One of the best things they did was after we brought it in 'twenty three, they helped repave a large section of our North Main Street, which was by the North End, which was completely inaccessible. So I think when the Secretary mentioned that they're able to deploy when they need to, that's true, we witnessed it. They also helped us with, probably to the detriment of the agency's budget, delay of a payment that we owed for the big dig on debt service, which we just paid in this November, but that was due in 2023. And that gave us a lifeboat to get through the immediate impacts of the budget. So I want to thank the Secretary because I know I grapple with a lot of similar budgets to what was shown before with trend lines going in the wrong And we're starting to do our budget and we deal with that as well. So I know how challenging it is for the agency to try to make these numbers work. Just as an example of as a follow-up to the things that had that I've heard in the testimony today. Chair, I think you mentioned that the cost of not doing projects is still a cost, and and we we experienced that. When I started in Barrie in 2022, our state highways were in really bad shape. The schedule at that point to pave it was 2027, which was five years, which seemed like a long time away. Now that schedule is 2030, and those streets, will not make it to 2030. In fact, they are in such bad shape that we as Berry City taxpayers and Berry City government have spent our own money to pave sections of Main Street. They were gullies. Just because we have the granite trucks moving through, I don't know what the condition was for pavement that got placed there wasn't great, because I don't see that condition on other state roads. But our core Main Street, where we have our shops, our restaurants, was a danger to people crossing it, and then during heavy rain events, it would become rivers in those gullies that actually pushed water into shops and restaurants. So it became safety hazards. We had another safety hazard on South Main Street. We have spent, out of Berry City money, dollars 137,000 to pay section of the road that belonged

[Logan (VTrans budget/finance analyst)]: to

[Nicolas Storellicastro (Barre City Manager)]: the state, under the state's responsibility, that we simply could not wait for. When we knew we were willing to hold on to 2027, when we knew it was 2030, that just became not possible. We had to do it for the benefit of our residents. So that's a cost to our taxpayers on a much smaller tax base than the whole state, a city that's gone through floods, a city that doesn't have a know, we're four square miles without a lot of grand we have grand list constraint. So that was a that was a huge hit for us. We also know that as part of the delays that have happened, there's a 40 Street intersection delay that a project that's been delayed since I started, which was part of our paving project this year because Quarry Street was one of our worst streets. And we we reached out to the AOT to say, hey. Is is anything gonna happen on Quarry Street next year because we really like to add it

[Ryan Rich (Royalton Town Administrator)]: to our paving plan? We said, they

[Nicolas Storellicastro (Barre City Manager)]: said not for 2030 again. So these are projects that are lingering that there's a real consequence to for our city and our residents and our taxpayers. Just as the state costs have gone up, I just want to give you our data points on this. Everyone's costs are going up. I'm very sympathetic to that. Three years ago, we paid about $44.77 per linear foot of paving two years ago or last year, I'm sorry, we paid $61.77 per linear foot of paving. And this past paving season, we paid $73.84 per linear foot of paving. It is going up. That is just I I know you've heard it from everyone. That's just our data points, from 44, dollars to about $73 per linear foot. And then my my last point is, you know, as the agency, does grapple with with projects to cost and to cut and priorities, I would encourage dialogue with locals. And and I took in fairness to to Joe, I haven't mentioned this since we won't be hearing for the first time, but I think two years ago, the state paved Route 62, which connects basically to Downtown Berry from I-eighty 9 to Hospital Hill. Large stretch of road, it's beautiful now. It was in much better shape than our Main Street. And so I think looking back on it, if we'd known I think this was possibly before the bottom of everything. If if I'd known then that we were looking at a delay till 2030 of paving our main street of the streets where residents drive on, live on, shop, you know, where our stores are, I would have I would have asked the the agency, hey. Can we can we at least shift the section of 62 that's in very city limits to do some of our main street? Right? That's that was not it it was the the conditions weren't even comparable. Right?

[Senator Andrew Perchlik (Member)]: And then

[Logan (VTrans budget/finance analyst)]: I think if

[Ryan Rich (Royalton Town Administrator)]: you senator Perchlik,

[Jeremy Mead (VTrans Chief Engineer)]: if you probably know you're local, you you

[Nicolas Storellicastro (Barre City Manager)]: you could probably attest to that. So just a suggestion, and and I think that it's really important to do that, especially as resources become constrained because I get it. You can't do everything, and I get it. You have to cut programs. If if if there are projects, for example, on the paving side that maybe, you know, certainly in that case, we would have asked for a shift to our main Street as opposed to 62. So thank you. Thank you, chair. I look forward

[Senator Richard Westman (Chair)]: to being back, and welcome any questions. So in your paving plan for for the city, do you have and I'm not asking for this this minute. Mhmm. But have you done an assessment within that plan of where you'd like to be, where you are, how many things are backed up? And have you got anything in detail that you could come back sometime and present to us?

[Nicolas Storellicastro (Barre City Manager)]: Absolutely, chair. What we do is we typically plan about three years ahead. We have three wards, so we like to hit a ward a year. And what that does for us is not just to keep, you know, residents happy in every part of the city, but it's also strategic. It it it reduces deployment costs. Right? We can pave more if the contractors are paving within a very constrained part of our city. They don't have to move resources. They don't have to move people. So I'm happy to get that to you, Chair. We have a very solid plan for next year, and then we have very confident plans for the next two years of where we're gonna be, and I'm very happy to bring Well, is a concern.

[Senator Richard Westman (Chair)]: You know, you have more resources than some previous, and we're gonna hear from Cabot. We I and I suspect that Cabot doesn't have quite the resources that Jerry City does. So but what are your goals? Where are you falling behind? What constraints do you feel? And we'll have you back to talk about that. And and currently, we are depending on communities like yours to articulate that because we don't have the overall numbers to be able to do that. So we can only do this anecdotally to be able to put that. So you will get asked to come back and

[Nicolas Storellicastro (Barre City Manager)]: I'd love to be back here. And just one final point, I do wanna thank the legislature for one thing you did that does help us in this world, which is increase the amount we get to keep on the local options tax. We do have a local options tax, and when you allow, you change the law to allow us to keep a little bit more. That helps us. That goes right to our capital program, and so we appreciate those steps that you can take to help municipalities because we

[Senator Richard Westman (Chair)]: And I this is not criticism of you getting Keith that.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Yeah.

[Senator Richard Westman (Chair)]: Berry City can do a local option.

[Nicolas Storellicastro (Barre City Manager)]: Yes. Correct. Right.

[Senator Richard Westman (Chair)]: Cavecate it.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Correct.

[Senator Richard Westman (Chair)]: Right. And so there is haves and have nots that get created in an open system. And so that's a always weighs on me too. I have a phone in a 10 town district. I probably have five towns that there is absolutely nothing that they could put local option tax on and stuff. Right.

[Senator Andrew Perchlik (Member)]: Well, you. I appreciate Thank you

[Senator Richard Westman (Chair)]: for coming too. Thank you. And do you have a preference? I believe the

[Josh (Vermont League of Cities and Towns representative)]: LCT board meeting coming up. So maybe the board might.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Yeah, sure.

[Mike Hogan (Chair, Cabot Selectboard)]: Chairman, how are you?

[Senator Richard Westman (Chair)]: Can you introduce yourself?

[Mike Hogan (Chair, Cabot Selectboard)]: Sure. I'm Mike Hogan. I'm the chair of the Cabot Select Board, and I'm also a member of the the board of directors.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Very good. Okay.

[Senator Richard Westman (Chair)]: Tell us about the Cabot situation.

[Mike Hogan (Chair, Cabot Selectboard)]: Sure. Yes. Well, on a positive note, our roads and bridges are in really good condition post flooding of twenty three and four, which we're really happy about. We have one more project in 'twenty six to do. We established a flood mitigation task force, which I think some of your senators might know about, and we have two projects that are in the works right now that should take care of some of the flooding that caused all the problems in Cabot, because we are the headwaters of the Wenuske. And we borrowed a lot of money to fix our roads and bridges over those two years. On our recent budget talks internally in town, we had a couple of thoughts. I'm not sure we can help you too much on the revenue side, but these are just some areas that we talked about. Cabot paving is an issue for us. Right now, we're getting around $200,000 with a 20% match, and a mile of road to be paved is roughly around 300,000 from our perspective of what we've heard, maybe some more. And to bond down any stretch of road is a big hardship for a town like ours, with our grand lists not really growing very much. And one thought we had, this might be a crazy idea, but I'm not sure if it's thought about before, When the state awards large paving projects, would they be able to coordinate with local towns that the projects are going by? And I'll give you an example, like, they were paving Route 2, which is right near Cabot, and it connects Marshfield, Cabot and Walden. So, the future, if they were paving that particular road, and these towns know ahead what roads need to be paved, could they coordinate with them to maybe lower the costs that the town would have to pay they had to do it independently. It's just a wild thought, I don't know if coordination is doable, but it would probably cost less money if the paving company like Pike, for instance, was coming through Marshfield En Route Two. And actually, I'm sure you've heard this before, a lot of towns don't like paying the match that's involved. Right now, it's a 20% match, we have to come up with that. So, that's an issue that we would like to see change, but we know there's constraints now with revenue, so that's probably not a great idea. The better back roads and the grants and aid projects have been really helpful for the town, we appreciate AOT. I think the town has a really good relationship with the agency transportation, especially after the floods of 'twenty three and 'twenty four. They were very helpful coming out and inspecting all of our bridges. So our infrastructure, Mr. Chairman is in pretty good shape right now. One last piece, just we were talking about recently also was capital purchases of equipment. I know in the state, at least at one time, they had a fleet program for vehicles. Is it a good consideration to think about a fleet program for town when a town has to buy a truck, a truck costs over $300,000 as an example. We found something in Dover, Vermont, they were refurbishing town trucks for half the price. We're gonna get one of our trucks refurbished this year and get at least five or six more years of life out of that truck to instead of putting out a $300,000 vote for the citizens of the town. I think that would be helpful. What I'm getting at is that, is there any chance for the state to look at any kind of program that would buy in large purchases like town trucks, or graders or loaders that are big capital costs for towns. They end up stretching these purchases out for years until the equipment eventually just breaks down. And it's a big, big cost to the citizens of the town, especially in their taxes, if we have to buy a new grader or a new loader that could cost as much as the half $1,000,000. So, that's some of the areas that we're concerned about. Our highway budget went up a little bit this year, we're very cost conscious, we're very considerate of the taxpayers how much they have to pay, but we know the roads have to be maintained that's our responsibility. So, overall, I think our town is in good shape. I think just the area of paving, I think would be real helpful for us if there could be some changes.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Thank you, Chair. I'm sure if I might just address the vehicles. It's my understanding you can do that now through buildings and general services and we can have them follow-up with Josh or with you directly. Okay. Municipalities are able to buy what the state has contract prices for. And then secondly, I'm sure you may know, but I know Josh knows, but the municipal equipment loan fund, which no one wants to have to borrow.

[William 'Bill' Cass (New Hampshire DOT Commissioner)]: But if you

[Joe Flynn (Vermont Agency of Transportation Secretary)]: do, is it's run by the treasurer's office, but it involves a committee and they review applications by municipalities for equipment. And historically, it's been at a much lower interest rate, although rates have come down today. So I don't know what the deltas are, but that's another avenue. But I think can truly get equipment at the state price. The catch has to be, it's gotta be the specification that the state bid. Sometimes, the town may want something slightly different, but just closing that loop.

[Mike Hogan (Chair, Cabot Selectboard)]: Yeah, understand. Thank you. Thank

[Senator Richard Westman (Chair)]: you, Michael.

[Senator Wendy Harrison (Clerk)]: Thank you.

[Senator Richard Westman (Chair)]: Ian?

[Senator Andrew Perchlik (Member)]: The other one needs. The other one. Thank

[Senator Richard Westman (Chair)]: you, Dan. If you could introduce yourself and

[Dan Tyler (Director of Public Works, Town of Brattleboro)]: Sure. Good morning, Mr. Chair and members of the committee. My name is Dan Tyler. I'm the director of public works for the town of Brattleboro. Thank you for the opportunity to speak to you this morning about maintenance of our municipal transportation infrastructure. As you've heard from many others this morning, maintaining this system has become increasingly difficult under the current funding realities. As a municipality, we're responsible for paved roads and gravel roads, sidewalks, bridges, culverts, stormwater, bicycle infrastructure, and many other appurtenances that support safe travel of our infrastructure. I'd like to focus for a couple minutes on our paving program. In Brattleboro, we maintain over 60 miles of paved roads, recognizing that, you know, we were underfunding this program and there was a gap that was creating difficulties. We undertook a pavement assessment and long term asset management forecast. So in the 2023, all of our paved roads were scanned with LIDAR imaging, and the imagery was evaluated and scored. In the two construction seasons since, we've updated that inventory with completed projects and updated costs, giving us field verified conditions rather than assumptions, you know, we know what we've got. One third of our roads, more than 20 miles are in a state that require major rehabilitation. So, you know, rip them up, redo everything, start from scratch. Seventeen percent require minor rehabilitation. Only twelve percent are in a category that require no work at all. And this is great thanks to recent V Trans Class one paving project that resurfaced about four miles of class one road in Brattleboro in the center of town that that really brought us to that number of no work required at all. If we were in a situation where we could go and bring everything up to par tomorrow, the shortfall would be about $18,800,000 That's just talking paving. That doesn't include drainage, sidewalks, ADA compliance or any other utilities. Score to one to 100, we're about a 63.89, which is fair. I think probably pretty typical for the region. But that's despite that class one paving project that I just spoke to that completed about four miles of paving. We also received a class two paving grant, which allowed us to do about three quarters of a mile. And we have about a half $1,000,000 of local funding that we put towards our paving projects. So despite all of that, that score is just slightly up from our 2023 score of 63.5. The numbers show, the modeling shows that we need about 850,000 to $1,000,000 annually to maintain the surface condition that we have. As I mentioned, we're proposing 500,000 for FY27, leaves a $350,000 minimum gap. And that gap causes delays and it quickly turns lower cost preventative maintenance treatments into forest reconstruction projects at three to five times the cost. This isn't unique to paving. We maintain about 36 miles of sidewalk. Given that quantity and the life expectancy of sidewalk, we should be replacing about 1.4 miles per year. We fund that locally. We seek grants. We do what we can. We're looking at more like a two hundred year replacement cycle right now rather than a twenty to forty year replacement cycle. Same holds true for the 28 bridges and large culverts and then another 55 retaining walls that we have in town. These are some some of our more high risk and expensive assets, but current funding just doesn't keep pace with the deterioration. Our transportation network, we feel is essential to public safety, economic activity and community life in town. And we're working as efficiently as possible with deep accountability on doing what we can, but the gap just is widening and the conditions continue to deteriorate. And current funding sources just aren't keeping up. I think, you know, like I said, a lot of what you've heard today, I thank you for your time and happy to answer any questions.

[Senator Richard Westman (Chair)]: Go ahead.

[Senator Becca White (Vice Chair)]: Okay. Thank you. Well, first of all, thank you, Dan, so much for coming and for the previous witness. One of the things that's unique about Brattleboro is you do have a a high amount of pedestrian traffic. Like compare like, when I think about you as a downtown, do you find that when you have paving shortfalls or kind of those, I don't know, meat and potatoes budget items that you ultimately then spend less money on pedestrian or by safety related projects? Like, how do you prioritize when you think about your own budget? And how would you prioritize it if you're getting less financial support from the state in future years, which is what I think we're starting to anticipate.

[Dan Tyler (Director of Public Works, Town of Brattleboro)]: Sure. You know, as the public works director, I put forth a budget recommendation, capital replacement plan that includes all of those things you talked about. I mean, sidewalk, also includes retaining walls and structures as well as paving. Ultimately, the taxpayers are not in a position to support the tax increase and the town manager has to make decisions on what to cut. So for the proposed FY twenty seven budget, there's an effort to maintain that $500,000 worth of paving money, but we've essentially cut our sidewalk and structures monies out.

[Senator Becca White (Vice Chair)]: And I totally respect the need to make those kinds of decisions. I think what makes me most concerned from a safety perspective is as you continue to grow, and this isn't unique to you, this is all downtowns. What really frightens me about our transportation revenue shortfall is I think we're gonna see towns that have downtowns where we're trying to grow traffic and grow housing and grow the number of people walking around and biking in those downtowns get less and less money, and they're going to have less and less appetite to improve safety, to improve those spaces because it's just I think as you very rightly put it, like, that's a decision and there might not be an appetite for it at your select board, city council, manager level. And I think that is going to increase safety risks and potentially grow our pedestrian death rate in our state, which is very concerning. Even this week we had someone killed in Vermont who was a pedestrian. So those kinds of things really concern me, and I respect your understanding of your priorities, and I do hope that we're able to provide funding that doesn't cause those types of pedestrian safety measures to be continually put on the back burner.

[Senator Richard Westman (Chair)]: I will just say I find your report's great. And you can see a lot of work went into this. First off, it must be expensive to do this. And your dates of inspection are 2023. When do you plan on doing inspections again?

[Dan Tyler (Director of Public Works, Town of Brattleboro)]: Typically, they'd recommend a three to five year interval. I don't think we'll do it this year, probably next year.

[Senator Richard Westman (Chair)]: What we probably will this is the first time I've got to take a look at this report. Mhmm. We may ask you to come back in and talk about the assumptions and and the report itself, the underlying pieces of this. I'm gonna switch just a little and ask the lead. Do you know how many people, how many communities have done reports like this? We do not. We can't.

[Senator Becca White (Vice Chair)]: Yeah. He is in the management program, he's not specifically, but but we I do think we track the number of

[Candace Elmquist (VTrans Chief Financial Officer)]: capital plans. Yeah.

[Senator Becca White (Vice Chair)]: Which that's usually a component of a capital plan. As you've been talking to our members today, I've I've been thinking we should put that information together. Then the overall number of capital plans is low. The league is eager to support towns and coming up to have these plans in place. They are expensive and they are time consuming and available funding to do what Brattleboro has done here is extremely limited. Yeah. So we have- you have towns competing with each other to get a planning grant to then do

[Candace Elmquist (VTrans Chief Financial Officer)]: a ten year capital plan.

[Senator Richard Westman (Chair)]: It would be interesting if you put something out in the past, just how many do have that and we had a list because it would be, I know it's an adult, but, if I could look at the half a dozen towns and say, well, Brattle Girl's got $18,000,000 hole, and it would it just help us quantify this. I know that the agency is thinking about how to collect more information, but the plan's great. So, at some point we will have it back in Dan to a little more deeply understand all the pieces that are in this. It's as good as any community I've seen.

[Joe Flynn (Vermont Agency of Transportation Secretary)]: Really?

[Dan Tyler (Director of Public Works, Town of Brattleboro)]: Absolutely, happy to come back.

[Senator Richard Westman (Chair)]: Senator Harrison is smiling.

[Senator Wendy Harrison (Clerk)]: Yeah, well, I just want to give a shout out to Dan because he does a great job and the capital plan is terrific and I haven't seen it recently, but I I don't remember if the if the capital plan is I I think it's just for this street because it's it's really important, obviously, to coordinate with utilities. And so that's that's something that these comprehensive towns do is they have water utilities and wastewater utilities. And when you have a long term plan, can coordinate improvements in the utilities. Like, you know, when you're when you're putting in new lines, you coordinate that with the road and or the sidewalk, and you can have two sources of revenue for that project, which is really, really important. So just thanks for all you do, Dan, and I'm glad we're going to have you here again.

[Senator Richard Westman (Chair)]: Well, here's what I'm just trying to understand the whole for Brattleboro that is being created. I think you said you're putting $500,000 a year into, an operating budget to work on, capital projects, and you really should be putting $808.03

[Dan Tyler (Director of Public Works, Town of Brattleboro)]: 50, yep.

[Senator Richard Westman (Chair)]: How do I, if I was going to describe the 18,000,000 that you talk about, knowing that you're not gonna, it can't be the goal to have every single road up to a 100% all at one time. How would you, like, how would you describe the 18,000,000?

[Dan Tyler (Director of Public Works, Town of Brattleboro)]: How would I describe?

[Senator Richard Westman (Chair)]: Yeah, how would you just

[Douglas Shinkle (National Conference of State Legislatures)]: That'd be a

[Dan Tyler (Director of Public Works, Town of Brattleboro)]: dream, you know, I think.

[Senator Richard Westman (Chair)]: Yes, well, you know, that would have everything at 100%. What's the goal in Brattleboro based upon an 800,000?

[Dan Tyler (Director of Public Works, Town of Brattleboro)]: So the 800,000, so I think if you flip to page four in that report, there's a forecasting page that kind of shows it really well. The 800, they actually show it as 880,000 on there. It's the black line that goes through the middle. That just maintains the pretty much maintains the condition that we have now. So, you know, if the taxpayers desire to improve road conditions, we'd have to invest more than that annually. And you can see what, a $1,200,000 investment would look like over the course of five years would bring that score up, know, and then again, even more at $1,500,000 So I think my ultimate goal is not to let anything get any let anything get any worse. But current funding levels, that's not realistic. So it's really targeting the areas that we can maintain what we have that is in good condition and keep it there.

[Senator Richard Westman (Chair)]: Okay. So the 18 maintains you at your RSR level of roughly 64%.

[Dan Tyler (Director of Public Works, Town of Brattleboro)]: Right, the eight eighty,

[Joe Flynn (Vermont Agency of Transportation Secretary)]: yeah. Yeah.

[Senator Richard Westman (Chair)]: We'll get a chance to take a look at this and we will want you back. And what I would say to the league is if you can produce other communities that have done similar work, that would be helpful.

[Senator Becca White (Vice Chair)]: Yeah. Can I have sense? It's like is is it as simple as, like, the RSR scale that you're using is maybe transferable to the agencies as, like, you know, the same kind of four groups. It's very four would be like 25 and below, and four would be 25 to 50. Is that like a reasonable?

[Dan Tyler (Director of Public Works, Town of Brattleboro)]: Pretty similar, yes.

[Senator Richard Westman (Chair)]: Yeah, that's the kind of stuff we would want to understand when you came back is what does that scoring really mean? At this point, thank you, Dan, very much, and we are going to move on to public transit.

[Senator Andrew Perchlik (Member)]: Thank you.

[Senator Richard Westman (Chair)]: Thank you, Dan.

[Logan (VTrans budget/finance analyst)]: Thanks.

[Senator Richard Westman (Chair)]: Failed. Yeah. Thank

[Joe Flynn (Vermont Agency of Transportation Secretary)]: you. Go ahead.

[Cale Grant (Rural Community Transportation; Chair, Vermont Public Transportation Association)]: Thank you, senators, having me today. My name is Cale Grant from Rural Community Transportation, joining you today as the chair of the Vermont Public Transportation Association. So public transportation is not optional or ancillary. It's a core economic infrastructure comparable to roads, bridges, Broadway, and utilities. The economic theory is clear. Transportation produces positive externalities that private markets alone cannot capture. Employers gain access to labor, workers gain access to jobs, health care, and education, and communities retain population and tax base. When transportation systems are stable, Vermont's economy functions. When they are not, economic decline accelerates. Any good farmer, logger, or bike mechanic knows. As a machine ages and there's question of its functional ability, the last thing you neglect is the grease, the element that smooths out the wearing edges and the humble element that when ignored leads to catastrophic failure. Public transportation approachations in recent years have been in one world, variable. We are appreciative of the support that B TRANS has provided, particularly giving the funding pressure across all modes and sectors. However, year over year increases can be misleading. Some apparent growth is driven by one time federal infusions, such as carbon reduction funds or competitive award grants. These dollars are helpful but not structural and cannot sustain operations. State matches for operations. This is the most important category for transit providers is the state match, the true bread and butter of funding. The funding supports administration, personnel, route operations and scheduling, maintenance, insurance, and fuel and utilities, and most critically is also in the category used to meet local match for federal grants. Over the last three fiscal years, the state match has been largely level funded. In earlier years, the state match has artificially low because COVID funds were used to supplement it. While these recent figures show modest increases, they remain well below what is required to operate transit systems sustainably. Transportation underfunding creates what is a self reinforcing failure cycle. Unlike many of the other projects like roads, bridges, transportation is largely scalable, but that scale does have guardrails. The bottom rail being that self reinforcing failure. Insufficient operating funds reduces service instability. Service instability leads to ridership loss. Ridership loss leads to rider per rider cost, and higher costs then creates service cuts or provider insolvency. We've seen this in the Northeast across regional providers becoming insolvent, and this is not theoretical. It is happening now in Vermont. The state legislature directed public transit non federal match study projected a 3,700,000.0 statewide operating deficit in fiscal year twenty seven. This estimate includes needed capital investments for vehicles and facilities, and that forecast is proving accurate. The real world impacts to our providers. One provider faces an estimated 315,000 deficit in fiscal year 'twenty six, prompting administrative position cuts, reducing night coverage, and reducing holiday schedules for riders. Service reductions leading to lower frequency or multiple routes and the elimination of service on certain days. The estimated ridership impact for this one provider is 80,000 lost rides. Another provider absorbed deficits totaling $380,000 over the past two fiscal years, resulting in route reductions, administrative cuts, and inability to hire for essential operations. Insurance costs alone for providers across the system have increased by approximately $1,000,000 with no additional coverage. That is just baseline, our umbrella coverage, our vehicle coverage, and our operational coverage. We're also facing a significant risk in capital investment. Vermont's transit fleet is aging, and without sustained capital funding, we are losing vehicles faster than we can replace them. One provider reports that 33% of its fleet or 20 buses is past useful life. A spare ratio is eight or a spare ratio of 8% compared to the FTA recommended 15%. To stretch limited dollars, providers have purchased used buses, which increases maintenance costs and reduces reliability. Maintenance staffing is insufficient due to lack of operating funds. Facility needs are also being deferred. A needed facility in Broward Borough to safely store and wash buses has been delayed, and vehicles are now exposed to vandalism and weather damage. Uncertainty around federal capital funding further compounds these risks. Human services and transportation pressures. Demand for transportation tied to human services is increasingly rapid. Older adults and persons with disability program funds are being depleted earlier in the fiscal year due to high demand. We're seeing significant increases in dialysis needs and other critical carers, and providers have begun to restrict new members and rides allocations to specific members. This directly impacts the access to health care and essential services, nutritional access, and quality of life. While outside the transportation fund, non emergency medical transportation or NEMT funding is critical and inadequate. BPTA lost $800,000 in fiscal year twenty twenty five, and I will note there is no direct address of that loss in the DIVA Budget Adjustment Act, and an additional $500,000 loss occurred in '26. These losses threaten provider stability and inevitably affect broader transit service.

[Logan (VTrans budget/finance analyst)]: We are hopeful that Diva and

[Cale Grant (Rural Community Transportation; Chair, Vermont Public Transportation Association)]: the legislature will address these the deficits in fiscal year, '26 BAA because without action, providers will have no choice but to seek legislative relief. Economies of scale, why a stable investment saves money. Transportation systems become more efficient at scale. Shared maintenance and facilities, coordinated service planning, workforce stability, and centralized procurement. Predictable and sustained funding allows longer vehicle and lifespans, lower per mile and per rider cost, and more efficient deployment of limited resources. In Vermont's rural context, unstable funding prevents these efficiencies, driving costs higher over time. The potential transportation holds for acting as a flywheel, endless opportunity to gain efficiencies of scale and critical support for efforts across the state. It is really a choice for Vermont's future. Transportation is an investment and is a decision about workforce participation, business viability, health care access, and rural community survival. Failing to invest does not save money. It defers and multiplies costs, and strategic sustained investment in public transportation is one of the most cost effective economic development tools available to all of you. This session, you will experience a parade of exceptional people doing incredible work across the street with one common theme. They are hurting. They are hurting for money, and they do work and the work they do across the state, healthcare, education, childcare, economic development. It will be a lot and I don't envy your position. I will ask you one thing though. As you go through these discussions, ask how dependent they are on public transportation. I think you'll find that a recurring theme and one that I find in my community conversations as well is that many of these industries are heavily dependent on public transportation investment. And so the question before us is not whether Vermont can afford to invest in transportation, but whether it

[Jeremy Mead (VTrans Chief Engineer)]: can afford not to. So thank you. I'm happy to

[Senator Andrew Perchlik (Member)]: answer any questions on tangent.

[Jeremy Mead (VTrans Chief Engineer)]: Thanks, Kevin.

[Senator Richard Westman (Chair)]: It would be helpful if you anecdotally gave the couple of transit providers when it's 300 plus in the whole when they over the last two years, last day, it would be helpful if we had a fuller picture of what the full picture was across the state.

[Cale Grant (Rural Community Transportation; Chair, Vermont Public Transportation Association)]: I'm happy to provide a comprehensive analysis of what the losses look like. It is difficult to kind of analyze the losses because, again, it is scalable. For instance, know, RCT went into the grant cycle. You apply for, you know, both program development, both both program sustainability, and based off of our award, we adjust our services. So an application to grow microtransit services, what is level funded with increasing costs then leads to a reduction of five hours of service per day. That then leads to a potential decrease of up to 10% of ridership within that microtransit service area. So did we experience a loss in that case? No. We scaled to the appropriate budget. Who experienced the loss? The riders. So quantifying that as a constantly fluctuating we have a number of levers that we can pull. I think the the most constrained services are certainly the fixed route. You send a bus on the route and it meets its stops in appropriate deadlines, and there's very few things you could do other than reducing vehicle size, which has incremental decreases. But the other alternative is cut routes, which is one of the examples shared by that $300 or $300,000 deficit. So I think it's hard to truly reflect the comprehensive losses experienced because going into each, service cycle, we adjust appropriate to the funds that are given. So

[Senator Richard Westman (Chair)]: Everybody makes assumptions. I appreciate that. If you start from assumption that we're trying to create a steady state. If you had a steady state, then you could come back with us, and we're gonna ask you again early in the session. It to produce a steady state ridership, what would that look like? That would be helpful.

[Cale Grant (Rural Community Transportation; Chair, Vermont Public Transportation Association)]: And just to clarify for me, I I would kind of present that the providers over the past two years have been doing efficient cuts to get us to what is minimally sustainable. And at that point, any further cuts are gonna be into what are measurably successful units. So I would say at this point, we're as sugared off as we can get. So to come forward with that rate, are you looking for an optimal service or for where we currently stand?

[Senator Richard Westman (Chair)]: I I think a lot of people make assumptions about, you know, just came in and they said, we maintain the system the way that we are. Here's what we would have to do if we increased it to this level. We can't do that for you. Okay. And, you know, I I'm not in a position to be able to tell you what your providers and what their budgets We have to rely on you to be able to articulate to us so we can articulate to our colleagues what is going on. So I would ask that you take the pin and at least take a stab at it and to explain to us what the flaws are and what we do. But without, you know, apparently, at least one agency, came up with a number. And so a like number from all of the agencies, I think is, would be important.

[Jeremy Mead (VTrans Chief Engineer)]: Thank you, Chairman Westman. I'm happy to provide that. Okay,

[Senator Richard Westman (Chair)]: thank you. Any other questions? At this then, we thank everybody for coming. We're going to, is there a way to keep Wendy online? Yes. And we're generally gonna go offline, and I would like the members of the committee