FEMA reimbursements could take as long as a year; several towns to float bonds or raise property taxes to pay for reconstruction.
Gov. Peter Shumlin announced Tuesday that the state wants to “harness” the energy of local communities to rebuild towns that were hit hardest by Tropical Storm Irene. The state, he said, will be a “facilitating partner” in the reconstruction process.
The takeaway message? “All recovery is local.”
“If we’ve learned anything from Irene, it is that throughout Vermont local people have come together in a partnership with state government, the federal government and the private sector to rebuild this state faster than anyone would have envisioned nine, 10 weeks ago,” Shumlin told reporters at his weekly press conference.
Shumlin announced that his administration will launch a “partnership” between the states and affected communities.
Initially, that collaboration will consist of a series of “stakeholder” and public meetings involving town leaders and representatives from four state agencies. Officials will ask community leaders what kind of help they need from the state.
“What are their needs, what is their vision … how can the state be a facilitating partner in that discussion to ensure … we deliver on a state that’s better than the way Irene found us?” Shumlin said.
Sarah Magee, a public information officer for FEMA, said a planning meetings may seem “touchy-feely,” but they are crucial for towns that have been substantially altered by a disaster. Other states, she said, said have used FEMA-facilitated recovery planning to help communities re-envision local priorities.
Irene-damaged towns should not, however, expect cash assistance from the state. Shumlin and other officials made it clear that while the state treasurer has greased the wheels for low-interest loans from local banks, access to long-term bonding and $2 million to $4 million worth of tax abatements, the state has no plans at this point to offer direct financial assistance to towns.
Neale Lunderville, the Irene recovery czar, said, “Where we might not be able to bring the financial resources, we’re going to bring the time and talent to communities in the long term.”
Some of that time and talent will likely come from the private sector, according to Noelle MacKay, commissioner of the Department of Housing and Community Affairs. MacKay said in the second phase of the Community Recovery Partnership, the state will help towns connect with organizations that have funding and volunteer resources.
Shumlin has said the state can’t afford to step in where the federal government falls short on reconstruction funding. Towns are eligible for Federal Emergency Management Agency match funding for public infrastructure damage.
It could take months, however, for FEMA to reimburse towns for emergency road repairs, bridge replacements and infrastructure damage. Irene damaged 1,000 road segments and caused the closure of hundreds of bridges on the town highway system in southern and central Vermont, according to Lunderville.
At least a dozen of the 45 small towns that were severely impacted by Irene have incurred more than $1 million worth of recovery expenses. The town of Bethel, which has a population of less than 2,000 residents, has borrowed $4 million, or 300 percent of its annual budget, and officials will likely float a bond on Town Meeting Day, according to a report from the town manager submitted to the Vermont League of Cities and Towns.
Braintree borrowed $1 million at 1 percent interest for Irene repairs and has taken out a $2.5 million line of credit from a local bank for anticipated additional recovery costs. The town’s annual budget for fiscal year 2011 is $840,000.
Holly Jarvis, administrative assistant for the Braintree selectboard and highway crew, said the town is anticipating a year-long wait for reimbursement from FEMA – even if the town submits its “project worksheets,” or bills and projections for the emergency work on several bridges and three to five miles of badly damaged roads, next week – well before the Jan. 1 deadline. The town’s bank has agreed to extend the payback time to 18 months.
“We’re probably going to have to raise property taxes over time,” Jarvis said. “We can’t ask residents to double our budget to pay it off.”
Steve Jeffrey, executive director of the Vermont League of Cities and Towns, said the state’s banks have been very cooperative. They’ve offered 1 percent a year financing and “haven’t required lots of paperwork.”
“Banks are doing everything in their power to make it as painless as possible,” Jeffrey said.
Towns will face exposure to more costs associated with Irene going forward because of the complex bureaucracy associated with the federal funding, according to Jeffrey. He emphasized the importance of documenting expenditures and estimates.
Managing the paper trail is “going to be a long and harrowing experience,” Jeffrey said, because many of the expenses that towns incurred in the “heat of the moment” are not going to be approved “because of all the fine print FEMA has developed over the years.”
Much of the river work that towns paid for, including debris removal and streambed channeling and bank armoring, will not be covered under FEMA, he said. Towns that paid for hauling trash for local residents will likely be denied reimbursement as well, Jeffrey said.
Magee of FEMA said debris removal and streambed management is the purview of the Natural Resources Conservation District program under USDA.
“We’ve been saying since the beginning that FEMA is no pot of gold at the end of the rainbow,” Jeffrey said. “We’ve heard from a number of our state counterparts that it really isn’t over until the fat lady sings, and the fat lady is the inspector general who didn’t come around for hurricanes in Florida in 2004 and 2005 until last year.”
Jeffrey said the inspector general denied millions of dollars of FEMA assistance after the money had already been approved and distributed.
So far, FEMA has obligated, or transferred, $1 million to the state. The Shumlin administration estimates that towns will need about $140 million in FEMA reimbursements to cover Irene repairs.
The towns that expect to spend more than $1 million in damages so far include: Bennington ($1.5 million borrowed so far; $5 million line of credit); Bethel ($4 million borrowed); Braintree ($1 million borrowed, $2.5 million line of credit); Chester ($2 million borrowed); Grafton ($2.9 million borrowed, need $1 million more); Killington (close to $2 million in expenditures); Moretown ($1.8 million line of credit); Plymouth ($2.5 million borrowed); Newfane ($2 million borrowed); Royalton ($2 million borrowed); Roxbury ($1.5 million); Woodstock ($3 million line of credit).
The first Community Recovery Partnership meeting will be held in the Mad River Valley on Nov. 17. Another meeting for Grafton has been set for Dec. 6.
