Berlin, VT - State Treasurer Mike Pieciak joined Governor Scott today to announce a $15 million program to support flood-impacted municipalities. Through the 10% in Vermont local investment program, the Treasurer’s Office has awarded $15 million to the Vermont Bond Bank to create the Municipal Climate Recovery Fund (MCRF).
The high costs associated with recovery from the summer floods has forced many communities to borrow the funds needed. Vermont’s banking sector has stepped up to help, but interest rates at twenty-year highs are stressing budgets as towns await FEMA assistance or other funding solutions.
Through the 10% in Vermont award, the Vermont Bond Bank will be able to offer financing allowing municipalities to refinance or reimburse flood expenses at an estimated interest rate of 1.3% for seven years. The program will save taxpayers in flood-impacted communities up to an estimated $3.5 million.
The Vermont Bond Bank is also partnering with the Vermont League of Cities and Towns (VLCT) on the implementation of the MCRF to further reduce interest rate costs for members of VLCT’s Property and Casualty Intermunicipal Fund (VLCT PACIF) with unreimbursed losses due to the flood. VLCT PACIF will help its members buy down the interest costs on related loans for up to $1 million in additional savings.
“It’s clear we need to continue our efforts to support communities across the state as they rebuild infrastructure damaged by this summer’s flooding. I’m thankful for the Treasurer’s work with the Bond Bank to develop this program, which will help save Vermont taxpayers money as we recover,” said Governor Phil Scott.
"In the aftermath of this summer’s historic flooding, Vermont’s community banks have stepped up to help municipalities across the state recover,” said Treasurer Pieciak. “As those municipalities await FEMA reimbursement, and with interest rates at such high levels, this program will provide millions of dollars of crucial relief to municipalities and local taxpayers as they continue to rebuild their communities and local economies.”
In addition to the MCRF, the Treasurer’s Office and the Governor provided $11 million in accelerated State payments to municipalities immediately following the July flooding. Both programs aim to ensure that impacted municipalities maintain a steady cash flow and reduce costs to local taxpayers while awaiting FEMA reimbursements.
Ted Brady, Executive Director of the Vermont League of Cities and Towns, said, “As municipalities build their budgets for next year, they’ll be appreciative of this new low-cost loan option that allows them to put tax dollars to work providing services to their residents instead of paying interest on loans. The July flooding required cities, towns and villages to undertake tens of millions of dollars in projects and forgo millions of dollars in other revenue. This new funding stream will help fill budget gaps while we wait for federal and state reimbursements.”
“The MCRF allows us to directly respond to the challenges we observed after Irene when we saw towns that were still trying to resolve flood expenses ten years later,” said Michael Gaughan, Executive Director of the Vermont Bond Bank “The lesson learned was that municipalities need low-cost and medium-term financing after climate-related disasters to recover sustainably. This program accomplishes both objectives. We’re thankful for the Treasurer’s 10% in Vermont program for the breathing room it will provide our borrowers as they recover, plan, and adapt for the next climate event.”
The Vermont Bond Bank will host a webinar on Tuesday, December 12th at noon to review the timeline, application requirements, and answer questions. Details and registration are available on the Vermont Bond Bank’s website at: vtbondbank.org/mcrf.
The 10% in Vermont program allows the Treasurer’s Office to invest up to 10% of the state’s cash on hand in economic development and job creation projects through low interest loans. The state’s average daily cash balance has grown substantially in recent years, allowing Treasurer Pieciak to significantly increase the amount of funds available for investment.
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