Vermont is awash with an unprecedented surge in federal funding. The Infrastructure Investment and Jobs Act, American Rescue Plan, and other pandemic-related aid represents the most significant infusion of federal funding to Vermont in decades. Developers, municipalities, and Vermont citizens should pay close attention, as the funding provides myriad opportunities to build more resilient communities through housing, infrastructure, and environmental improvements.
The American Rescue Plan Act (“ARPA”)—designed to facilitate economic recovery from the COVID-19 pandemic—provides more than $1.25 billion in aid to the State of Vermont. On January 18th, Governor Phil Scott released his proposal for spending the remaining $500 million in ARPA funds. While the Vermont legislature (subject to the governor’s veto) will have the final say on how these funds are spent, the proposal envisions allocating remaining ARPA funds to address five main areas: economic development, climate change mitigation, water and sewer infrastructure, housing, and broadband connectivity. Targeted infrastructure projects include proposals to expand weatherization of low- and moderate-income homes, increase hazard and flood mitigation, improve municipal water and sewer infrastructure, and increase affordable housing. Previously allocated ARPA funds are being used for projects such as developing community sewer systems, reducing sewer overflows, and aiding compliance with three-acre stormwater permit requirements.
In addition to this infusion of ARPA funding to the State of Vermont, Congress appropriated nearly $200 million in ARPA funding directly to Vermont’s cities, towns, and villages, with the second funding installment scheduled for this August or September. Towns can use these funds independently, or in partnership with developers, to expand affordable housing, implement sewer and water projects, and for other infrastructure projects. For example, a town might fund a land bank and work with developers to turn acquired land into affordable housing, build new municipal water and sewer systems to support the creation of new affordable homes, or buy down the cost of water or sewer-connection for income-eligible housing units. SRH Law has a long track record of working with municipalities and developers on similar projects, such as helping the City of St. Albans revitalize its downtown area by using Tax Increment Financing (“TIF”) to acquire land, remediate it, and build a parking garage that spurred private investment.
Federal COVID-19 relief bills have also authorized $285 million in Elementary and Secondary School Emergency Relief (“ESSER”) funds for Vermont schools. State guidance allows these funds to be used towards school construction and renovation costs, which may include remediation of polychlorinated biphenyls (“PCBs”) contained in building materials.
Signed into law in November 2021, the Infrastructure Investment and Jobs Act (“IIJA”) represents the newest large influx of infrastructure funding, with $550 billion in new nationwide spending over the next five years. This includes $40 million for the Lake Champlain Basin Program to address excess phosphorous and other threats to the lake. The IIJA will also quadruple Vermont’s water and wastewater revolving loan funds, which provide grants and loans to municipalities to construct, improve, and expand public drinking water and wastewater systems. In addition, the IIJA contains funding to make Vermont’s road and bridges more resilient to climate change, provide flood mitigation assistance grants, and remediate environmental hazards including brownfield sites.
These new federal funding opportunities bring new legal challenges, including hurdles associated with permitting, compliance, and remediation. SRH Law is monitoring the progress of new funding and helping clients identify and implement opportunities to improve the resilience of our communities. We have extensive experience in affordable housing development, land use, environmental and energy permitting, and the legal issues arising out of public infrastructure projects. If you have any questions about developing these types of projects using federal funds, please contact Brian Dunkiel, Drew Kervick, Geoffrey Hand, Jon Rose, or Paul Quackenbush at (802) 860-1003.
