Senate panel reviews governor's clean-water capital proposal and program delivery

The Senate Institutions Committee received an overview of section 10 of the governor's capital bill recommendation and how capital-appropriated dollars fit into Vermont's broader clean water investment strategy from Julie Warren, Secretary of Natural Resources, and Emily Bird, who manages the Clean Water Initiative and will become Water Investment Division director.

Warren told the committee that Vermont's clean water work is guided by state statutes and multi-agency plans, including the Vermont Clean Water Act (Act 64 of 2015) and the Clean Water Service Delivery Act (2019). She described Total Maximum Daily Loads (TMDLs) as the EPA-recognized "pollution budgets" used to estimate acceptable pollutant loads and explained that phosphorus is often the primary focus because it can drive harmful algal blooms and beach closures.

The proposed FY26 capital-side clean water package discussed during the hearing includes an expected $10 million in capital bill funding that the administration aggregates with Clean Water Fund revenues and federal grants. Warren said the FY26 budget the agency built included roughly $46 million in combined clean water resources, including one-time funds and projected interest. Emily Bird briefed committee members on the distribution the administration proposed in the governor's capital recommendation: $3 million for Agency of Agriculture water-quality grants (best-management-practice infrastructure such as expanded manure storage and heavy-use-area improvements), $4 million for municipal pollution-control grants (often used to provide partial loan forgiveness or match for Clean Water State Revolving Fund projects), forest access road improvements on agency-managed lands, and allocations routed through the Vermont Housing & Conservation Board for land conservation and agricultural water-quality infrastructure.

Bird and Warren also addressed federal funding. Warren said the Lake Champlain Basin Program has historically provided about $8 million annually to the Department of Environmental Conservation and that the agency had received assurances from the congressional delegation and EPA that anticipated federal funding for the coming fiscal year remains available. The witnesses explained the interplay with the Clean Water State Revolving Fund (SRF): the state typically provides a match to leverage EPA SRF dollars, but in the current cycle congressionally directed spending reduced the state's required match so no additional state SRF match was requested this year.

Warren outlined the Clean Water Board's role: an interagency board that reviews investment priorities and sends recommended allocations to the governor; she said the board includes administration and agency designees and that the governor historically has adopted the board's recommendation. Committee members asked for project-level lists and for the clean water team to provide the annual Clean Water Initiative performance report and an interactive dashboard that breaks investments down by watershed. Emily Bird said the performance report has been produced annually for nine years and can be presented to the committee with project-level detail.

Committee members also discussed the link between wastewater capacity and housing development in village centers, and the agency noted village-scale wastewater projects have been advanced with ARPA and other funding to reduce capital costs so user rates remain affordable. Witnesses said work remains on long-term operation and maintenance funding for small community systems.

No formal votes were taken; the committee asked the agency to provide the performance report, the interactive dashboard, and project-level data on capital and Clean Water Fund spending so senators can review specific projects that would receive capital appropriations.