Tropical Storm Irene caused $7 million worth of damage to roads in the tiny town of Halifax on the Massachusetts border. The burg, population 800, has an annual budget of $700,000.
As Rep. Ann Manwaring, a Democrat who represents Halifax put it: “That’s a cash flow problem.”
Since September, town officials had no choice but to rob Peter to pay Paul, that is to say, they’ve been using some property tax money slated for the state Ed Fund to pay out $2 million to contractors for road repairs, according to Christina Moore, the town’s project coordinator for the Irene recovery effort. So far, the town has received a commitment for $55,000 from the Federal Emergency Management Agency.
“We had multiple roads removed from the map,” Moore said. In recent weeks, since the town has tapped out of ready capital, it has had to put off paying private contractors for bridge, culvert and road repair.
Moore and Patricia Dow, the clerk/treasurer of Halifax breathed a sigh of relief when State Treasurer Beth Pearce announced that she would allow Irene-afflicted towns to defer payments to the Ed Fund. Dec. 1 is the deadline for payments; Pearce said the 40 to 50 municipalities that sustained significant damage as a result of the storm will have until Feb. 28 to remit money to the state property tax education fund. Normally, towns incur an 8 percent penalty for late payments.
The Ed Fund deferment is one of three steps the treasurer’s office is taking to ease cash flow problems for hard-hit towns.
Pearce said she will also send highway aid payments worth $6.4 million to municipalities on Nov. 23 – seven weeks before the state originally planned to make the disbursements.
In addition, $125 million in education payments to towns will also be made available this week – about two weeks ahead of schedule.
The plan, which has been endorsed by the Shumlin administration, will need legislative approval. The Speaker of the House Shap Smith and Senate President Pro Tem John Campbell said they will introduce a narrowly written bill that addresses the Ed Fund deferment.
The Legislature, though not in session yet, has already set the stage for other Irene-related legislation, including a $2 million to $4 million tax abatement plan for flood-afflicted towns. The House Ways and Means committee unanimously approved the bill and it will be one of the first items lawmakers address in January. Shumlin supports the measure.
“We know that municipalities faced economic pressure and we need to do what we can to help them out,” Smith said. “This is a small measure to allow us to ensure towns can continue the task of rebuilding.”
This is the second time since the storm that the treasurer’s office has stepped in to accelerate payments for town road work. Pearce has also marshaled support from local banks and the Vermont Municipal Bond Bank, which are offering bridge loans at low interest rates and long-term borrowing capacity for towns. Though the Federal Emergency Management Agency is expected to provide millions of dollars in public assistance reimbursements to towns, the money is contingent on review of project worksheets that municipal officials are, in many cases, still finalizing. In the meantime, towns are anxious to get crucial roadwork and public infrastructure projects finished, or at least under way.
Jeb Spaulding, secretary of the Agency of Administration, hailed the plan as “one more thing we can do to help the municipalities.”
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. Wilmington has sustained $14 million worth of damage – mostly to downtown businesses, according to Manwaring, who is a resident of the town. 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.
