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Clean-water and municipal wastewater projects hold largest ARPA risk as engineering and execution lag
Summary
Douglas Farnham told the House Appropriations Committee that clean-water programs — particularly municipal wastewater, wet-weather sewer overflow and three-acre stormwater work — account for a large share of remaining ARPA balances and face capacity and timing constraints that could require swaps or reallocation.
State officials told the House Appropriations Committee on May 13 that clean-water and municipal wastewater programs are the riskiest portion of Vermont’s remaining ARPA portfolio because of project timing, contractor and engineering capacity and the seasonality of construction.
Douglas Farnham, chief recovery officer, said the environmental programs still need substantive spending and that the largest single exposure in the portfolio is with ANR/DEC wastewater and stormwater projects. He summarized the outstanding balances and spending patterns: “they have spent 44,000,000 at this point,” and, for specific buckets, “wet weather sewer overflow has $20,000,000, 3 acre stormwater has $12,000,000.”
The nut graf: Committee members raised concerns about the pace of clean-water projects, the availability of engineers and contractors, and whether ARPA rules permit reallocating funds if municipal projects fail to proceed. Farnham said projects are often awarded but not yet drawn down because work stalls during winter and can surge in warmer months, and that engineering and contractor shortages have been redirected to flood response and hydrology work.
Farnham described common reasons projects stall: cost overruns that make municipal ratepayers unable to support upgrades, timing delays in permitting or engineering and seasonal construction limits. He said some municipal projects have been canceled after bids or estimates increased, and that Treasury now generally disallows starting new municipal wastewater awards with ARPA funds unless funds are moved from existing, eligible ARPA awards or converted via payroll swaps.
Committee members pressed for monitoring and for DEC to appear if needed. Farnham said AOA would “crack the whip” and keep monitoring; he signaled the administration could perform short-term swaps to preserve funds and “buy time for the conversation” between DEC and the legislature.
Ending: Farnham urged faster execution but warned that some projects may require reallocation decisions if they cannot be completed before the federal deadline.
