Vermont’s Irene Recovery Officer Susan Minter said Friday that substantial progress has been made toward FEMA reimbursements to rebuild state infrastructure, but she acknowledged that the state still doesn’t have firm figures from FEMA. Minter testified before a legislative committee on Friday.
Minter said she hopes that documentation of the damage caused by Tropical Storm Irene to the Vermont State Hospital and the Waterbury State Office Complex could be finished by January. The documentation will be used to determine eligibility for federal funding.
She said that FEMA officials and state representatives are working to complete the documentation so that disagreements over reimbursements would be unlikely to occur later.
“We’re in a much better place with this new leadership team” at FEMA, said Minter, “because we have consistent communication, which is very different from before.” She added that Vermont’s congressional delegation members are also working with FEMA representatives on funding for the state hospital and the office complex.
“There may be a sense out there that we’re in some sort of poker game with FEMA,” said Minter. “But it really isn’t that. We are in the process of documenting our damages to every single building in the complex.”
After the public hearing, Minter reiterated that progress has been made, but she emphasized that the state hadn’t received any concrete commitments from FEMA in terms of dollar amounts.
She wouldn’t estimate minimum and maximum figures from FEMA, arguing instead that partial documentation for all buildings in the Waterbury state office complex still constitutes a “significant step forward.”
House Corrections and Institutions Committee Chair Alice Emmons, D-Windsor, called the shift in attitude from FEMA officials, especially their increased responsiveness, “a very positive step.”
It would cost an estimated $182 million to rebuild and repair the Vermont State Hospital and the Waterbury state office complex, of which only $62.8 million is secured. That leaves a $119.3 million funding gap, according to a Department of Buildings and General Services analysis.
The state hopes that much of this funding shortfall will come from FEMA reimbursements, though there is no guarantee from the federal agency.
Modifications and financing options
Rep. Cynthia Browning, D-Arlington, said she remained skeptical about relying on federal funding. She said there is a “huge number of outstanding questions with FEMA.”
“We didn’t really get any commitment or knowledge about what we’re going to get and when we’re going to get it, except that we’re going to know more in January,” she said. “I certainly hope that’s true.”
Browning cast the sole vote against recommending a slightly modified plan for the Waterbury State Office Complex, for another special legislative committee to consider on Nov. 15. She is concerned about financing uncertainties; other lawmakers on the committee argued that financing could be dealt with later, with the approval merely representing a conceptual nod for the modified design, presented by architects Freeman French Freeman.
Another financing option under consideration is to authorize the sale of additional bonds from the state treasurer, on top of the recommended maximum state debt of $159.9 million for fiscal years 2014-2015, generated through bond sales.
Deputy Treasurer Stephen Wisloski told VTDigger that authorizing a bigger bond sale beyond the maximum recommended level could be highly risky because credit agencies might re-examine the state’s excellent fiscal ratings as a result.
“The concern is that we would, for the first time in 20 years, do a much bigger [bond] authorization than was recommended by the authorization committee,” said Wisloski. “We believe there are a lot of resources that can and should be looked at, before we just have an additional authorization.”
He said reallocating funds from other stalled or delayed capital projects, deploying General Fund surpluses, and using bond premiums from bond sales, as preferable avenues.
Throughout the hearing, lawmakers discussed potential obstacles to smoothly documenting damages, proving eligibility, and finally receiving FEMA assistance. Rep. Robert South, D-Caledonia, feared that another new FEMA team, dropped in as a replacement of the current cooperative team, could restart the entire process again.
Sen. Bob Hartwell, D-Bennington, worried that disputes between FEMA and state workers over damage assessments, and subsequent appeals to those initial assessments, could delay funding and reconstruction indefinitely.
Browning summed it up by saying: “We have a lot of risk points in a sense … I don’t know what the worst case scenario is.”
Minter said she’d tried to reduce risks and future disputes by working closely with FEMA officials at this stage, and that she hadn’t experienced many cases where FEMA official disagreed with local documented estimates, though final approval often took some time.
If evaluations by both the state and FEMA show that repairing a structure at the office complex would cost more than half of its replacement cost, then the state could replace the building and receive full reimbursement.
Reviews so far indicate that this could be the case for the Brooks and Annex buildings of the state hospital. Minter’s strategic goal remains to assess other key buildings like the Agriculture and Agency of Natural Resources laboratory, the facility’s heat plant, and sewage lift stations, to determine if they meet this threshold.
The state’s insurance manager, Bill Duchac, estimated that the state’s insurance payments for post-Irene recovery would be between $50 million and $55 million, of which $49 million would likely go towards the Waterbury office complex and the state hospital.
Meanwhile, BGS commissioner Michael Obuchowski presented a slightly modified plan for the Waterbury offices, which reduced costs by $345,000 from a July 2012 design. The modified plan could accommodate 992 people, up from 800 in a March plan.
That plan reduced costs by retaining instead of demolishing two buildings, planning for employees working from home via telephone, with additional savings realized over 30 years.