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Lawmakers probe permitting, workforce and funding-stack hurdles after ARPA spending delays on water, energy and weatherization projects
Summary
Committee members and the administration identified permitting appeals, multi-source funding stacks and contractor shortages as primary reasons ARPA-funded municipal water, sewer, energy resilience and weatherization projects are delayed; AOA will collect project-level barriers this summer to inform any reversions or legislative fixes.
Members of the Vermont House Committee on Commerce and Economic Development spent much of May 27 exploring why sizable ARPA-funded municipal projects — especially water/sewer work overseen by the Agency of Natural Resources (ANR) and weatherization/energy programs — have been slow to expend federal dollars.
Doug Farnum, chief recovery officer for the state, told the committee that combined-sewer/wet-weather overflow projects constitute a large share of the unspent money and face multiple, project-specific barriers: Army Corps permitting, multi-jurisdictional permits, local public appeals and the need to assemble complex funding stacks. "It's death by a thousand cuts with a lot of these programs," Farnum said, describing how fifteen projects can be delayed for fifteen different reasons.
Committee members and Farnum both raised workforce constraints as a major factor for weatherization and the Municipal Energy Resilience Program (MERP). Farnum said many weatherization efforts required contractors who were not available at scale; as a result, some weatherization and energy projects were cured using one-time general fund amounts and some reversions were negotiated in December 2024. Farnum estimated MERP had roughly $25 million remaining of an original ~$36 million allocation and said DCF’s income-sensitized weatherization program retained its $40 million allocation because it was moving at expected pace.
Several lawmakers urged the administration to pursue system-level fixes — simpler program design, better technical assistance, and clearer permit coordination — to reduce the pattern of projects that stall between municipal approval and final construction. One lawmaker argued that program complexity and extensive guardrails made projects hard for municipal staff and small contractors to use. Farnum said AOA will ask each agency to identify the specific roadblock for each stalled project this summer and assemble an after-action review documenting why projects failed and what procedural fixes might prevent similar delays.
The committee did not vote on measures but directed staff to coordinate with House Appropriations and to invite agency leaders for deeper briefings. Farnum said that if the state must revert funds, AOA will present the reasons for any reversions to the legislature so lawmakers can consider restorations or policy changes in the next session.
