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State asks committee to expand use of $15M reserved for FEMA denials and repurpose $30M for disaster match
Summary
Douglas Farnham, the state’s chief recovery officer, asked the committee to expand allowable uses of a $15 million general‑fund reserve (held for potential FEMA denials) to pay some administrative and case‑management costs as FEMA closeouts continue, and described plans to repurpose a $30 million disaster appropriation as an easier-to-track match fund for multiple federal programs.
Douglas Farnham, the state’s chief recovery officer, told the House Appropriations Committee that the administration seeks to broaden the permitted uses of two prior general‑fund set‑asides related to disaster recovery.
Farnham said $15 million that was being held to cover potential FEMA denials stemming from COVID-era spending could be used, in part, for administrative costs related to flood recovery and to sustain limited‑service positions as ARPA-funded positions reach planned end dates. He said the bulk of the $15 million would remain available for potential FEMA denials, but the administration proposes language expanding allowable uses so the funds can also cover certain administrative and case‑management costs while FEMA closeouts continue.
On the $30 million general‑fund appropriation set aside last year, Farnham described it as intended to cover the non‑federal share (state match) for disaster‑related capital repairs, including damage to the state’s capital complex and other state‑owned structures. He said initial aggregate damage estimates produced an expected match need of roughly $37 million (derived from larger estimated damages) and that federal negotiations, particularly with FEMA, are ongoing and will take time; the capital complex negotiation alone carries significant uncertainty.
Farnham said some of the $30 million could be used to cover the state’s share of Federal Highway Administration and EPA match requirements that otherwise would fall to affected state agencies’ budgets. He described the $30 million as a transparent single appropriation to track non‑federal disaster spending instead of scattering match obligations across agency budgets.
Committee members asked about urgency. Farnham said the $15 million language is more time‑sensitive because administrative costs and ARPA-funded limited‑service positions are being incurred now; the $30 million repurposing could wait for the regular budget (BAA) discussion if the committee prefers.
Farnham said Guidehouse and contracted staff have supported FEMA negotiations and municipal assistance and that the state has hired additional limited‑service staff to supplement core capacity. He noted that FEMA interest begins 30 days after the federal government issues a debt notice, which creates urgency to have funds available to respond to possible denials or recoupment demands.
Farnham provided several numeric clarifications: he estimated less than $1 million in FEMA denials had been recorded so far, that roughly $4 million of the $15 million might be used for administrative costs (including sustaining limited‑service positions), that the $30 million remains largely unspent (about $28 million remaining), and that the administration is tracking about 140 Vermonters still actively seeking recovery assistance from the floods.
