Reporters congregated in the empty parking lot at the Waterbury State Office Complex for an hour and 15 minutes last Wednesday. There were no long speeches, no show and tell, only two men standing near the vacant Vermont State Hospital with sharply conflicting points of view, talking about email.
What riveted journalists, who have a reputation for short attention spans, for more than an hour? The uncharacteristic parry between an underdog Republican candidate for governor and the Democratic incumbent’s righthand man over memos. The back and forth began with public records requests that turned into allegations that appeared in the print media, got picked up by a radio celebrity and then morphed into a dueling press conference.
Sometimes timing is everything.
Republican Randy Brock, in stories that appeared in the Times Argus and VTDigger.org on Wednesday, accused the Shumlin administration of misleading lawmakers about just how much money the state could expect in reimbursements for the relocation of the Vermont State Hospital and the rehabilitation of the Waterbury State Office Complex, which were damaged by Tropical Storm Irene a year ago. At the presser, he reiterated the point he made in the articles, namely that he didn’t think the Shumlin administration had fully informed the Legislature about FEMA’s reluctance to fund the projects last spring. On July 20, the administration told lawmakers that the 90 percent (federal)/10 percent (state) match they were confident would be forthcoming had been hung up on public assistance eligibility requirements. In other words, the hospital and parts of the complex had been deemed ineligible for public assistance.
At the end of the question-and-answer session, a reporter asked Brock if it was frustrating that his political opponent, Gov. Peter Shumlin, wasn’t engaging him in the campaign.
“My opponent? I haven’t seen him,” Brock replied.
Seconds later, as reporters turned to leave, they noticed Jeb Spaulding, the secretary of the Agency of Administration, casually standing behind them, attired in a red tie and plaid summer suit.
As happenstance would have it, Spaulding had scheduled an interview with WDEV host Mark Johnson that same morning in Waterbury. Afterward, he turned up at Brock’s press conference. By the time the state senator from Franklin County had finished his spiel, the press corps, including several TV crews, VPR, and the requisite print contingent, including the Associated Press, recognized Spaulding was waiting there to give a response.
And respond he did — for about 45 minutes — as a feeding frenzy of questions ensued.
Reporters wanted to know if the Shumlin administration had led the Legislature to believe that the federal funding was a given. Spaulding rejected the notion that they had misled lawmakers or the public — they were working with the best information they had at the time, he said, and had expected FEMA to come through.
“Was I confident FEMA would participate substantially with the state hospital replacement plan? Yes, I was,” Spaulding said. “Did the information change? Yes, it did, and we reported that to the Legislature. We tried to be transparent through the entire process.”
The change Spaulding referred to came down to a semantic problem: The administration used the word “damaged” instead of “destroyed” when it filed its request to FEMA for funding. Spaulding said FEMA had changed the information; in an interview with VTDigger.org last week, the secretary said a contractor with the agency had “messed up” and used fact sheets instead of the language in the federal code for the request.
Was the administration misled by FEMA officials or contractors?
“I don’t think there was any intentional misleading,” Spaulding said. “I don’t think that the FEMA representative put ‘damaged’ in to mislead us. Did it mislead us, yes? Yes, it misled us. If they’d had that word destroyed in there in the paper they gave us last December, I would have known it was different, but it wasn’t until June, despite numerous attempts to say, hey, listen, if you want to disavow this thing go ahead, otherwise we have to we rely on the roadmap you’ve laid out for us. They said, well we really need to know if there was repetitive damage, that’s one of things laid out as a criteria, and we need to know if it’s cost effective by a benefit cost analysis. That would lead one to believe that the roadmap they had laid out for us was the one they were following as well.”
Early on in the exchange at the presser, Spaulding ruefully remarked: “It’s unfortunate we are in a campaign season debating this publicly. I think it does hurt our odds, and there’s no question in my mind if Sen. Brock wasn’t running for governor he would have come in and asked the questions, and he would have gotten the answers directly as opposed to having a press conference.”
Paul Heintz, a political reporter for Seven Days, asked: “Jeb, did you just say before that Sen. Brock raising this issue is actually hurting our chances with FEMA in getting more money?”
Spaulding: “I think doing these kinds of negotiations in a public setting doesn’t help.”
Heintz: “You think he’s causing trouble for the state, that it could cost the state money?”
Spaulding: “I’m not going to answer that. I just said I don’t think having these discussions in public is helpful.”
Heintz: “Why not?”
Spaulding didn’t respond directly. He talked about the critical situation the state faces with the state hospital post-Irene. The state is trying to maximize funding from FEMA and lower the hit to Vermont taxpayers, he said.
“We are not slowing down our efforts to replace the state hospital,” Spaulding said. “The beds in Brattleboro and Rutland are going ahead. We’re trying to get a temporary facility in Morrisville open as soon as we can. We believe we can get our 25-bed hospital open in Berlin. We have a very critical situation. There’s no reason to slow down.”
“We believe that we have the plan that the Legislature and the governor agreed to is the most cost effective, best treatment model available,” Spaulding continued. “To stop that would put our patients and providers in a very bad spot. So are we working on contingencies? Yes, we are, but we need to first maximize the funding we get from FEMA before talking about what those contingencies would be.”
Dave Gram, reporter for the Associated Press, took the reportorial grilling a step further. “You say you’ve been transparent throughout, yet on the other hand you say it’s a bad idea to have these kinds of conversations in public. How do those two ideas square?”
Spaulding said: “It’s a balancing act. It’s tough, it’s difficult. Here I am.”
Reporters asked if he was campaigning for the governor.
Spaulding said, “I’m not on the campaign. If Sen. Brock was here and he wasn’t running for governor and he was holding a press conference I’d be here.”
“You show up to press conferences?” Answer: “I need to get information out there.”
Meanwhile, Gov. Peter Shumlin was holding his own press conference in Bethel to celebrate a regional broadband installation.
Was the Shumlin administration playing defense? Not overtly. The governor has said he won’t start campaigning until after Labor Day.
The correspondence in question
The emails between Spaulding and FEMA officials were from January through April of this year. They revealed that the Shumlin administration did not have a “conceptual OK” from the agency to replace the Vermont State Hospital, which was damaged by Irene floods nearly a year ago at the Waterbury State Office Complex. Nor did the state have explicit permission to move ahead with plans to remove or rebuild structures at the complex.
Since the original request was met by the Shumlin administration last week, hundreds more have been released to the press.
FEMA officials told Spaulding in January they couldn’t make any commitments. It would be months before they would have an answer on the complex and the hospital, according to the email exchange.
In the interim, lawmakers approved the Shumlin administration’s proposals for both projects and set aside $18 million in the capital bill as an initial downpayment on what is expected to be a $182 million investment.
In late June, FEMA deemed the proposals in question, worth up to $88 million to the state, ineligible for public assistance. On July 20, the Shumlin administration announced that FEMA had reneged on funding for their proposals for the state hospital. Members of the Joint Fiscal Committee were shocked by FEMA’s apparent about-face, which could put significant pressure on the state’s finances next year.
This week the issue turned into a political football, and Brock ran down the field shouting the word “transparency.” His question was not what did Shumlin administration officials know and when did they know it, but why didn’t they tell anyone?
Brock accuses the Shumlin administration of forging ahead without FEMA approval, withholding information from the public, and failing to create a contingency plan should the funding not materialize.
“Based on documents released yesterday, there were clear warning signs that funding was in jeopardy,” Brock said. “That information should have been disclosed to the Legislature at the time we voted, and it wasn’t.”
The correspondence trail raised serious doubts about the FEMA funding, he said, and that level of uncertainty, was not conveyed to the Legislature.
“When we dealt with the capital bill, which included the funding for these projects, never was there any question raised to us, at least to my knowledge, that this funding was in jeopardy,” Brock said. “Transparency is critical to the Legislature and to the public in making good public policy in the interest of everyone, and we’re simply not getting it in this particular case.”
Brock described the turn of events as part of “an all-too-familiar pattern” from the Shumlin administration: “Trust us, everything is OK, the funding will work out in the end, and we’ll figure it out.”
Key lawmakers say there was no guarantee
Rep. Alice Emmons, D-Springfield, chair of Institutions and Corrections, said her committee “was well aware that FEMA wasn’t making any promises in terms of specific dollar amounts.”
That’s why, she said, they included contingency plans in the capital budget that would allow the administration to move forward with proposals for the replacement of the state hospital.
Under statute, the administration must seek funding from the state’s insurer first, then FEMA, then an increase in hospital rates and finally bonding. The bill set aside $18 million in state money for capital investments in the hospital ($5 million) and the state office complex ($12 million) and retrofitting National Life office space ($1 million) for the several hundred employees of the Agency of Natural Resources.
“We knew FEMA would be there, but we didn’t know at what proportion,” Emmons said. She had hoped that the hospital would qualify for public assistance since it is a critical function of state government.
Sen. Bob Hartwell, D-Bennington, was doubtful from the beginning that FEMA would foot the whole bill. “I never thought it would be an enormous amount of money,” he said.
On the other hand, Hartwell said he didn’t think the state hospital, in particular, would be ineligible for public assistance. “I thought it was the most complete case for eligibility,” he said.
As for FEMA, he says: “I don’t understand them anymore. I don’t think anyone understands them anymore.”
“FEMA knew exactly what was going on at Buildings and General Services, and at FEMA everyone knew what we were doing,” Hartwell said. “Whether it’s damaged or destroyed, it’s very galling to go through eight months of that routine and then the entire FEMA mantra shifts.”
Hartwell said the emails suggest FEMA was “not very committed and not committed in any specific way at all, which flies a little in face of having a person embedded at BGS.”
“I was not misled,” Hartwell said. “I do think the emails suggest over optimism from administration.”
Sen. Dick Sears, D-Bennington, who is a member of the Joint Fiscal Committee, said he thought the administration may have had an optimistic outlook on the situation because of the outstanding highway work FEMA funded. The agency has committed more than $133 million to the state in public assistance so far.
“Maybe it was just rosy thinking,” Sears said. “The administration made every effort to keep us informed. I don’t remember anybody promising us.”
What’s at stake
The state hospital wasn’t the only building the state says is a critical government function.
About 1,500 workers were displaced when Irene flooded the Waterbury State Office Complex, and Shumlin administration officials say they know FEMA won’t fund a new building, but they are trying to persuade the agency to replace parts of the complex, pay for floodproofing and perhaps demolition of buildings that Department of Buildings and General Services officials say are beyond repair because of flood damage.
The state is looking for FEMA to significantly fund the cost of replacing the state hospital and renovations for psychiatric units at Brattleboro Retreat and Rutland Regional Medical Center.
The state identified three structures at the complex that are damaged beyond repair: the heat plant, the sewage lift station and the agricultural and Agency of Natural Resources laboratory. Officials hoped these costs would be covered under public assistance.
While FEMA preliminarily rejected these proposals at a June meeting with the state, they didn’t put anything in writing at the time, according to state officials.
The administration is leaving the option open to appeal, but for now, state officials say they are waiting for a formal decision from FEMA. If the state decides to appeal, it has a 60-day window to try to prove its case. An appeal, sources say, could be a distraction from moving ahead with the process.