Vermont official says Municipal Technical Assistance Program helped small towns but needs more funding

Douglas Farnham, chief recovery officer for the Vermont Agency of Administration, told the House Committee on Commerce and Economic Development on April 30 that the Municipal Technical Assistance Program, created in the 2023 budget adjustment act with $3 million in general funds, helped smaller and mid-sized Vermont towns apply for and advance projects in housing, water and sewer, and climate resilience.

Farnham said the program was designed to prioritize towns that score highest on the Vermont Community Index — a measure that compares community needs and capacity — because those places historically were less likely to win federal and state grants. "The municipal technical assistance program was created in the 2023 budget adjustment act," Farnham said, describing MTAP as a tiered support effort intended to help communities move projects forward.

MTAP allocated a little more than half of its $3 million to regional planning commissions to support locally identified projects; roughly 40 percent was placed with contractors and partners such as the Preservation Trust of Vermont, the Vermont Housing & Conservation Board programs for rural economic support, the Vermont Council on Rural Development, and a limited $200,000 contract with Stone Environmental to provide hydrology and environmental assessments on specific projects. The Vermont League of Cities and Towns was engaged to provide broad, high-level technical support and coordination, Farnham said.

Farnham described two distinct program goals: help towns that were already prepared to use federal infrastructure funding and broaden participation among smaller communities that lack grant-writing and project-administration capacity. He told the committee that many small towns prefer preserving historic structures or maintaining existing assets rather than undertaking the larger new-construction projects typically funded by federal packages.

The program paused and then restarted after the 2023 floods. Farnham said MTAP temporarily expanded eligibility for flood-impacted communities in 2024 to towns scoring as low as the 25th percentile on the Vermont Community Index; the 2023 floods affected about 150 communities. He said much of MTAP’s work is still early-stage — community engagement, project ideation and permit navigation — and that many projects will take several years to finish.

Farnham said the administration requested an additional $3 million for MTAP in the governor’s recommended budget, but that the House version of the budget did not include the full request. "The Senate at this point has restored $1,000,000 of funding for the program," he told the committee, and the restored amount would be funded from the pilot fund, which is seeded by local-option tax receipts. Farnham noted the pilot-fund approach has prompted debate because the communities that generate those receipts are not always the same communities eligible for MTAP.

Committee members asked whether MTAP could support projects that are not strictly publicly owned infrastructure — for example, manufactured-home communities or nonprofit-owned facilities — and Farnham said the program allowed projects sponsored by a municipality even when the immediate work would be carried out by a nonprofit or another local partner. "As long as the municipality endorsed it, yes," he said.

Farnham also placed MTAP in the context of three federal funding streams that shape state priorities: the American Rescue Plan Act (ARPA), the Infrastructure Investment and Jobs Act (sometimes called IIJA or the Bipartisan Infrastructure Law), and the Inflation Reduction Act. He reported on ARPA implementation: Vermont received about $1.049 billion in state fiscal recovery funds; all funds were obligated by Treasury’s Dec. 31, 2024 obligation deadline, and Treasury’s spending deadline is Dec. 31, 2026. To reduce the risk of federal recapture, the administration used authority granted by the legislature to reclassify some ARPA dollars in December 2024, moving funds into lower-risk categories (including payments that counted as revenue-loss replacements to higher education and payroll-replacement calculations). Farnham said roughly $160 million was applied to higher-education payments and another $60 million to $80 million was recorded as payroll replacement, producing just over $200 million of formal expenditure in that quarter. He said Vermont has since expended just under $900 million of the $1.05 billion ARPA allocation and is continuing to monitor spending to avoid recapture.

Farnham said MTAP has had measurable success getting towns into the 50th–75th percentile range of the Vermont Community Index to a point where they can participate in larger programs; he described the most frequent beneficiaries as Vermont towns of roughly 1,000 to 2,500 residents. He cautioned that very small towns often lack the user base to sustain municipal water or wastewater systems even if funds were available, so projects must consider long-term maintenance and economies of scale.

On reporting and transparency, Farnham said MTAP produced its required short reports and that an unfunded-project spreadsheet exists and was shared with House Appropriations; the spreadsheet is not published on MTAP’s public pages but can be shared on request. He said the agency would include reporting requirements if additional funding were provided.

Committee members praised MTAP’s engagement-focused approach. One member said the program gave small towns the ability to have conversations and begin to see projects that create local momentum. Farnham and committee members emphasized that many MTAP projects are developmental and that communities often value early planning and perceived progress even where construction and full grant awards may come years later.

Farnham closed by noting remaining program limitations: MTAP is limited by its original appropriation, by the availability of private-sector contractors in Vermont able to provide specialized services to small towns, and by choices about pilot-fund use. He urged the committee to consider the policy question of how pilot-fund receipts should be used — whether returned to generating municipalities or allocated to broader municipal support programs.

Douglas Farnham’s testimony and answers to committee questions made clear MTAP’s role as an early-stage technical-assistance effort focused on capacity-building and helping Vermont towns participate in larger federal and state infrastructure programs.