State recovery officials told the House Appropriations Committee that Vermont has largely obligated its American Rescue Plan Act (ARPA) state and local fiscal recovery funds but faces a narrow spending window to expend remaining dollars.

“We got a 100% of the ARPA state and local fiscal recovery funds obligated,” Douglas Farnham, the state’s chief recovery officer, reported to the committee. Farnham said ARPA award agreements had to be created by Dec. 31, 2024, and that the program’s administrative rules create a two‑year closeout (2025–2026) during which the state may only expend funds and make limited reallocations.

Farnham cautioned that de‑obligating funds without re‑obligation within the same reporting quarter risks Treasury seeking the funds back. He said reallocations that change program intent would require Joint Fiscal Committee approval and that significant reallocations during the closeout period might draw Treasury scrutiny or audits.

The administration’s spreadsheet, shown to the committee, highlights concentrations of unexpended ARPA funds in water and wastewater investments administered by the Agency of Natural Resources. Farnham said those infrastructure projects typically have long timelines and “balloon” payments late in a project, increasing the risk that ARPA funds might remain unspent by the close of the allowable period. As of the Sept. 30 report cited in the briefing, Farnham said about $96,000,000 of ARPA remained unexpended; Farnham noted that additional spending since Sept. 30 likely has reduced that amount.

Committee members asked whether engineering, permitting or contractor capacity pose red flags; Farnham said most projects show a path to expenditure but added the path is “not super wide,” underscoring the need for careful coordination with the Agency of Natural Resources and the Joint Fiscal Committee.

Farnham offered to coordinate notifications to the Joint Fiscal Office when potential reallocations arise so the committee can consider requests promptly. The administration will provide updated quarterly reporting after the end of the calendar year and continue monitoring ARPA burn rates.