State recovery chief: Vermont has spent most ARPA money, redirected reversions to flood recovery and municipal aid

Doug Farnham, chief recovery officer in the Vermont Agency of Administration, told the Senate Government Operations Committee on Jan. 29 that state officials have obligated roughly $900 million of the state’s approximately $1 billion in American Rescue Plan Act state and local fiscal recovery (SLFRF) funds and have used targeted reversions and transfers to help pay municipal buyout matches and short-term town needs.

"We're we're up close to 900,000,000 out of that 1,000,000,000 formally expended with treasury," Farnham said, describing the state's work to obligate ARPA funds and to convert or revert program dollars as needed to meet deadlines and emergent flood recovery needs.

The detail matters because federal SLFRF rules gave Vermont broad discretion that required legislative appropriation. Farnham said the legislature appropriated roughly $500 million in 2021 and $500 million in 2022, with additional tweaks in 2023 and contingency language in 2024 to meet federal deadlines. He told senators the administration took steps in December 2024 to “spend down as much of that funding as possible” to reduce the amount the federal Treasury might revisit.

Farnham said the administration established a reversion process and set up an ARPA reversion “waterfall” that captured roughly $36,000,000 of funds from programs that had run their course or were not on track to spend by the federal deadline. "We ended up reverting 26,400,000 from ARPA funds," he said, adding that the largest single source of contested reversion money was weatherization programs.

On weatherization, Farnham told the committee that some weatherization efforts had low early spending rates. "As of September 30th, those programs had spent each about 1 and a half 1000000 out of 25,000,000," he said, describing difficult choices about how much to revert while trying to preserve program goals. He said the state ultimately took about $17–18 million from weatherization reversions even though more than $100 million in ARPA was invested overall in weatherization-related work.

Committee members pressed on implementation barriers. Farnham and senators discussed workforce shortages for home retrofits, deferred-maintenance conditions (for example, roofs that must be fixed before weatherization can proceed), and cash-flow problems for low-income homeowners for whom rebate models are inadequate. Farnham said Efficiency Vermont, the Vermont Community Foundation and other partners used a mix of rebates and temporary revolving funds to provide some upfront capital, but that the cash-flow issue remains.

Flood recovery and buyouts were the other principal focus. Farnham said the state has been managing large buyout and mitigation workloads after the 2023 and 2024 floods. He described the 2023 event as causing more damage than Tropical Storm Irene and said the state received a larger volume of buyout requests this recovery cycle. Farnham estimated buyout requests in the most recent round were "very roughly around 50,000,000" and said the administration covered the state match for that round of buyouts. He also said there remain houses and properties that are still in the buyout or repair pipeline.

FEMA reimbursement timing and process problems were a recurring concern: Farnham said municipalities and residents often wait long periods for federal review, centralization of FEMA decisions has delayed obligations, and frequent staff turnover at FEMA adds uncertainty. He said, "the process with FEMA has frustrated me, mostly because of the turnover and the lack of certainty," and noted that out of an expected roughly $550–600 million in FEMA reimbursements tied to the earlier floods, the state had so far received about $100 million.

To ease municipal cash-flow pressures, the administration and the emergency board used existing state funds and short-term lending. Farnham said the emergency board authorized an additional $5,000,000 for short-term municipal loans in late 2024, and the Agency of Administration advanced funds from the Emergency Relief Assistance Fund (ERAF) to towns. Farnham listed advances of $1,000,000 to Johnson, $1,000,000 to Ludlow, $100,000 to Middlesex and an additional $142,000 to Middlesex; he said more short-term lending will be available to towns that cannot carry debt while waiting for federal reimbursement.

Farnham also described operational steps to compile unmet needs and coordinate long-term recovery. The Vermont Community Foundation contracted Stormwise and provided access to a Monday.com instance that the state and local long-term recovery groups (LTRGs) use to log and track unresolved cases. Farnham said the state created a temporary “bridge case management” team to support people who fall outside federal program rules or who cannot successfully navigate FEMA processes; Capstone served as a contractor for FEMA-funded disaster case management, but federal grant constraints required separate tracking.

On federal grant opportunities, Farnham said the state is preparing to draw down additional HUD CDBG-DR (Community Development Block Grant – Disaster Recovery), USDA Rural Development funds and other supplemental disaster money, and that he was working to improve the state’s competitiveness for those awards. "If successful, we might have accessed over 40 to $50,000,000 from one of these programs," he told the committee, while noting official notifications were pending.

Committee members raised longer-term questions about insurance markets and disclosures on property sales for previously flooded properties. Farnham said flood insurance rates and uptake are low in some areas (he cited insured rates in the low teens for properties in floodplains) and that a 2024 disclosure requirement that sellers must state whether a property flooded was newly enacted; he said that disclosure does not specifically require sellers to state whether FEMA assistance had been received in the past.

Farnham closed by urging continued focus on coordinating federal draws and on sustaining local recovery capacity. He recommended annual public preparedness work—similar to an annual cleanup or “green-up” day—to keep communities aware and ready for future disasters.

Ending: Farnham told the committee that the administration will continue auditing and closing remaining COVID-era SLFRF uses, pushing to obligate federal disaster funds, and working with the treasurer’s office and bond bank to provide short-term municipal lending as towns wait for FEMA obligations. He said the bridge case management team and the common Monday.com tracking platform will remain central tools for compiling unmet needs and routing assistance.