State recovery official: FEMA reimbursements improving but cash gap remains for Vermont towns

Douglas Farm, chief recovery officer for the state of Vermont, told the House Appropriations Committee on April 15 that federal reimbursements for storm damage are starting to move again after a short FEMA review pause, but municipalities and the state still face a large cash shortfall while complex projects remain under negotiation.

Farm gave a numerical update on damage and funding: the state’s working estimate of FEMA-eligible damage for 2023–24 is about $642 million where repairs are not yet complete and roughly $815 million in total damage between state and municipal claims. Of the $173 million in completed work, $149 million is the federal share; FEMA has written agreements obligating $104 million of that and $49 million has been drawn down, leaving roughly $124 million in outstanding cash between state and municipalities, Farm said.

The gap has prompted interim lending and short-term programs: the state treasurer and the Municipal Bond Bank provided roughly $15 million in loans to towns, the emergency board authorized about $5 million from the ERAF balance, and another $13 million was made available recently, for approximately $33 million in lending to support municipal cash flow while reimbursements finalize. Farm said much of the initial lending has been recycled as FEMA reimbursements arrived.

Farm emphasized that FEMA’s processes—especially for large, complex claims like the Capitol Complex and major wastewater facilities—require detailed line-item documentation. “FEMA’s process requires every light bulb, every ceiling tile to be part of a line item,” Farm said, describing why some state building and wastewater repair agreements have taken many months to negotiate.

He also warned that the July 2024 storm’s estimated damages — currently near $100 million to $115 million depending on final estimates — sit close to the federal threshold that could trigger an increase in FEMA’s cost share for an event (from 75 percent federal / 25 percent nonfederal to 90 percent federal / 10 percent nonfederal). Farm said it remains unlikely Vermont will clear that threshold and even if the estimate edged over the cutoff, the president must approve any cost-share increase: “the elevation from 75% cost share to 90% cost share is not automatic. It is a recommendation FEMA makes to the president, and the president has to sign and approve that.”

On buyouts and hazard mitigation, Farm said the state has received approximately 270 buyout applications and that buyouts are consuming most available Hazard Mitigation Grant Program (HMGP) capacity. HMGP is generally calculated as about 15 percent of FEMA-eligible damage; using the state’s damage estimates that could imply roughly $120 million for hazard mitigation over time, he said, though FEMA will likely reduce initial estimates. Farm said the state currently has a little more than $70 million locked with FEMA for mitigation and that the state used $26 million in reverted ARPA funds to support mitigation match. He added that the July 2024 event brought an additional HMGP award near $15 million with about $5 million of required match.

Farm described the buyout pipeline in detail: roughly 3 buyouts have been kicked off, about 47 are in appraisal/assessment phases (including duplication-of-benefits and other reviews), 104 awards are signed by FEMA, about 15 are under FEMA review, and one property is in a closing stage though no demolitions tied to 2023 awards have been completed yet. He warned the buyout process can be slow—often 2–3 years—and that some potential buyouts fall out if owners sell or otherwise stop engaging.

Committee members asked about municipal cash flow and the pace of FEMA obligations. Representative Tom and Representative John pressed Farm on whether bridges and temporary repairs are included in the estimates and on how to accelerate draws; Farm said the state has worked to accelerate draws where legally permissible because a FEMA draw places the burden of proof on FEMA to recapture funds later.

Farm said overall relations with FEMA Region 1 have been productive despite staffing rotations and a short period earlier this year when FEMA instituted a manual review process that added up to 30 days to reviews. He said the agency is decommissioning the joint field office in Williston by June 30 and the state will work primarily with FEMA’s regional office going forward. Farm characterized FEMA staff as helpful but noted layers of review can reverse earlier decisions, which is why negotiations on large projects take time.

Farm concluded the briefing by offering to return with updated numbers in May; he said the state planned to submit data to FEMA on April 30 and could provide a fuller update next month.