Municipalities face ‘Rescue’ money wrinkle

By David Delcore
Staff Writer
MONTPELIER, Vt. — Cities and towns across Vermont are on the clock when it comes to applying for the first installment of funding available under the American Rescue Plan Act and it is just dawning on some of them that those checks will be considerably smaller than they were led to believe.

That could change, but city councils in Barre and Montpelier were alerted this week to dial down their expectations.

In Barre, City Manager Steve Mackenzie delivered the message by memo. In Montpelier where councilors recently launched a discussion about how to spend the money they were expecting, City Manager Bill Fraser warned they might not receive as much as they thought as Wednesday night’s virtual meeting was coming to a close.

For the moment at least, it appears the initial estimates provided earlier this year by the Central Vermont Regional Planning Commission were more accurate than the ones Rep. Peter Welch, D-Vt., shared with both councils on back-to-back nights in late March.

Barre, Welch told councilors there on March 23, could expect to receive a total of just under $2.5 million in two equal installments, including one that based on his understanding at the time, should have arrived by late last month. It didn’t.

Montpelier, Welch said the following evening, would receive $2.15 million in the same two-installment fashion.

Welch’s claims presumed money destined for county governments would be redistributed to local municipalities in Vermont — an adjustment the U.S. Treasury Department hasn’t yet made and, Mackenzie and Fraser both warned their respective councils this week, may not.

Despite lobbying from Vermont’s congressional delegation, Gov. Phil Scott and the Vermont League of Cities and Towns, the Treasury Department has yet to alter its unexpected ruling that Vermont does have general units of county government and a significant portion of the state’s ARPA allocation — more than $121.2 million — should go to them and not be directly distributed to cities and towns using a population-based formula.

That matters, because it accounts for roughly two-thirds of the money Barre, Montpelier and several other Vermont communities were told they could expect earlier this year.

This week, the state Department of Finance and Management opened the web portal where Vermont municipalities may request their share of $58.8 million in “local fiscal recovery funding” available under the pandemic-related rescue plan. That’s roughly one-third of what had previously been projected and disbursement to individual municipalities are far closer to the regional planning commission’s original estimates.

The commission had initially projected Barre was in line to receive a total of $840,000 and Barre Town $760,000. Welch upped those estimates to $2.5 million and $2.26 million respectively based on the assumption municipalities would receive county money in Vermont.

According to the latest estimates posted on the VLCT’s website, both communities will receive slightly more than the regional commission predicted, but far less than Welch announced during his virtual visit in Barre.

In Barre and Barre Town both payments combined don’t add up to what would have been the first installment based on the numbers announced by Welch.

Barre is currently slated to receive about roughly $893,000 in equal installments of just over $446,000, while Barre Town will receive about $808,000 in installments of roughly $404,000 — one this year and one next.

The story is the same in Montpelier where Fraser told councilors Wednesday night they may not receive the $2.15 million they were told to expect. Barring a change, the city would receive a total of about $772,000 in equal installments of roughly $386,000.

That’s a significant drop and would necessarily alter the discussion that the council started late last month when members conceptually agreed to pursue a path use some — if not much — of the money to restore projects and purchases that were deferred to balance a pandemic-depleted budget and some on new initiatives.

Attempts to reach VLCT Executive Director Ted Brady were unsuccessful Thursday, but the organization’s website outlined the state of play for its municipal members including cities, towns and many villages that now have less than 30 days to request funds under the American Rescue Plan.

It acknowledges the uncertainty with respect to the disposition of the $121.2 million currently earmarked for the counties and efforts to persuade the Treasury Department to alter its ruling.

“Municipalities may need to take additional steps in the near future to access their share of the county funding, should it become available,” it states.

If the Treasury Department doesn’t have a change of heart?

“We anticipate many if not all Vermont counties will return most of this funding to the state,” the post on the VLCT’s website states. “However, during the 2021 Legislative session, the Vermont Legislature included a provision in the budget that requires the Legislature to determine how to spend any county ARPA funding returned to the state.”

Though that money could eventually trickle down to local communities, when and under what conditions that might happen is a huge unknown.

“In theory, the state can take this (county money) and do whatever it wants with it,” Fraser said, promising to keep councilors updated on any new developments Wednesday night.

david.delcore @timesargus.com