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Vermont League of Cities and Towns urges repeat of FY24 flood grant formula, seeks three municipal finance changes
Summary
The Vermont League of Cities and Towns told the Senate Appropriations Committee Feb. 12 that last year’s flexible flood grants helped cash‑strapped towns and urged lawmakers to repeat the formula and authorize three changes to municipal finance to improve resilience and access to reimbursements.
The Senate Appropriations Committee heard Feb. 12 from representatives of the Vermont League of Cities and Towns (VLCT) urging the legislature to repeat last year’s flexible fiscal‑year 2024 flood grant formula and to approve three changes to municipal finance law to help small towns recover from repeated flooding.
Samantha Sheehan, municipal policy and advocacy specialist for the Vermont League of Cities and Towns, told the committee the league’s new municipal operations team — created to support local officials with finance, grant readiness and reporting — helped all 247 Vermont municipalities with ARPA funds and played a major role in the deployment of the FY24 flood grants. “This team actually assisted all 247 municipalities with ARPA,” Sheehan said. “They are now working with municipalities on the energy tax credit program in the bipartisan infrastructure act. And another big project for this team was working with the agency of administration in deploying the 2024 flood grants.”
VLCT representatives summarized damage patterns from the July floods and said the impacts were concentrated. According to the league’s summary of FEMA data, about one‑third of impacted municipalities accounted for roughly 91% of estimated damages; about two‑thirds of those municipalities were also hit by floods in July 2023. VLCT said many of the repeatedly affected towns are small and have limited cash flow between property‑tax receipts, leaving them reliant on short‑term borrowing to handle emergency repairs.
To address those pressures, VLCT presented three legislative requests it has developed with the Vermont Bond Bank: 1) allow municipalities to retain limited unassigned fund balances (rather than forcing automatic expenditure of small surpluses), 2) expand emergency borrowing authority so municipalities may take on debt with repayment schedules up to five years (current authority is limited to one‑year schedules), and 3) authorize level debt service as an optional amortization method so municipalities can choose a more predictable payment schedule for bonds. “We are asking for the authority for municipalities to do that,” Sheehan said referring to unassigned fund balances. VLCT said these changes would improve cash flow, make municipalities more ready to match or deploy grant funding and reduce reliance on high‑cost short‑term borrowing.
Committee members asked for clarification on the types of work covered by the flood grants. VLCT said the majority of the spending reported by impacted towns was transportation‑related repair and resiliency work on roads and culverts, with a smaller share going to town buildings. VLCT also told senators many towns did not immediately recognize grant notices from the Agency of Administration, mistaking the outreach for possible fraud; the municipal operations team helped local officials accept and deploy the awards.
VLCT emphasized the technical nature of one of the proposals, saying the Bond Bank’s Michael Bond would be best placed to explain the level‑debt‑service option in detail. The presenters said they expect legislation to be filed and asked the committee to consider including similar funding and statutory language in the pending budget adjustment.
No formal committee action or vote on these requests was recorded during the presentation; presenters said they will work with staff and stakeholders as bill language develops.
