Community leaders of the Rutland region gathered in the Bardwell House Community Room on Monday afternoon to join State Treasurer Mike Pieciak as he announced the reintroduction of the 10% in Vermont local investment program.
The program, originally founded in 2014, allows the treasurer’s office to invest up to 10% of the state’s average daily cash balance into economic development projects across the state.
At the meeting, Pieciak said the state’s average daily cash balance has grown from $300 million to $400 million in 2014 to now being consistently north of $1 billion — usually over $2 billion.
He added that this increase, in combination with the former program’s lending capacity, has raised the program’s cap from $39 million to $85 million available for lending to economic development projects at interest rates below market.
“We’ve had a lot of additional big taxpayers move to Vermont. If you look at the number of individuals filing their taxes for the first time earning over $100,000, that number has increased 55% over the last few years,” Pieciak said at the meeting. “Some of that (average daily cash balance) is federal money that we anticipate being spent over the next few years, but a large portion of it is just simply an increase in state revenues and an increase in float that we’ve seen in the state of Vermont.”
As determined by the Local Investment Advisory Committee, which advises the treasurer on the 10% in Vermont program, projects that focus on housing, social equity or reducing Vermont’s carbon footprint will take priority when determining loan recipients. Municipalities, nonprofits and instrumentalities of government will also be given priority over other applicants.
Pieciak said interest rates and the duration of the loans would be flexible, adding that loans can be very short term or up to 30 years. Interest rates will be looked at on a year-by-year basis, but he said that at the moment they are fixed with the duration of the loan with the lowest, under five years, holding a rate of 1% and the highest, up to 30 years, holding a rate of 2.5%.
Rutland Mayor Michael Doenges also spoke at the announcement, confirming that Rutland City would indeed be applying for the program in collaboration with community partners.
“There’s been a lot of people in the city talking about housing (and) about that energy resiliency piece. Everything this program is designed for is exactly how we would want to do it. We’re gonna build something new, and we want it to both have a positive economic impact and grow housing,” Doenges said in an interview following the meeting. “This program allows us to remove those barriers for developers to come in.”
He added that if the city does receive a loan to expand housing in the Rutland area, the city can leverage the program guidelines to include energy efficiency considerations.
The announcement also featured statements from several LIAC members and from Heather Starzynski of NeighborWorks of Western Vermont — an organization that has previously benefitted from the program as part of their weatherization work.
“NeighborWorks has been able to utilize this tool over the last few years in support of our energy efficiency work with households (and) homeowners on the ground,” Starzynski said at the meeting. “We were lucky enough to steward some of these crucial 10% in Vermont investment funds, with which we have been able to make 250 loans over since 2017, totaling a little bit over $3.5 million.”
The location of the meeting, the Bardwell House, also has benefitted from the program.
Applications for the program will open on May 1 with a deadline for the first round of recipients on June 1. After closing, applications will be analyzed and treasury staff will provide recommendations to the LIAC committee for a final decision, likely by early July.
An investment policy detailing application guidelines is available on the treasurer’s website, as is a link to a webinar that will be hosted by treasurer’s office staff on April 17 from 12 to 1 p.m. to further discuss the application process.
Currently, it is planned that Pieciak will announce a timeline for a second round of applications in the fall.
“The reason we’re willing to do (this) is because of the economic development that this money will spur. We’re willing to support our communities. We’re willing to have them support themselves by bringing other capital to leverage for this money. And we will see the direct benefits of that in terms of the loan being paid back and interesting charge, but we’ll also see the indirect benefit in terms of job creation, increased tax revenues and improved communities,” Pieciak said.
sophia.buckley-clement
@rutlandherald.com
