Towns Borrow Money To Pay For Irene Repairs
10/18/11 7:34AM By Steve Zind
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(Host) Vermont towns damaged by Tropical Storm Irene are still waiting to learn how much financial help they'll get from the federal government for damaged roads, bridges and buildings.
In the meantime, the bills are coming in for the repair work.
As VPR's Steve Zind reports, a number of towns are borrowing money to cover those costs.
(Zind) As towns run out of cash on hand to pay for repairs, they're turning to banks.
State Treasurer Beth Pearce says bankers have been quick to offer help in the form of loans or a line of credit to pay for flood recovery.
(Pearce) "I think the banks have demonstrated that they are community bankers, and they've done an extraordinary job of doing these loans as quickly as possible."
(Zind) Pearce says banks are lending to towns at interest rates ranging from 1 percent to 2.5 percent.
It's not clear yet how many towns are borrowing to pay for repairs - and it's not clear how much the federal government will cover those costs.
Karen Horn of the Vermont League of Cities and Towns told legislators last week that the cost of flood recovery for towns is going to be significant.
(Horn) "My poster child town right now is Bridgewater. Bridgewater has a population of 900. The week after the flood they took out a $750,000 line of credit. They spent $500,000 of that in the first month."
(Zind) Thirty bridges were damaged or destroyed in Bridgewater. Select Board chair Nelson Lee says the total damage is $1.5 million. That's nearly twice the town's annual budget.
Lee expects the town will need to borrow beyond the initial $750,000 line of credit.
(Lee) "The bills from the damage are a long way from all in. We have no idea what we're going to get back from the federal government or the state government."
(Zind) The question of how much they'll be reimbursed for their flood recovery expenses concerns many towns nearly two months after Irene.
Bennington has taken out a $5 million line of credit to help cover its costs. Some of the money is going to fix the flood damaged water system and repair bridges.
Town Manager Stuart Hurd says he's confident Bennington will be reimbursed by the state and federal government for up to 90 percent of those expenses.
But the largest cost is the work involved removing debris and stabilizing rivers. Hurd is less certain about how much of that work will qualify for federal assistance - and it could add up to several million dollars.
(Hurd) "I have to say that our hopes are dimming somewhat. FEMA has taken a very hard line about working the rivers. Their initial response was the first 70 hours would be eligible. Beyond that, it's not an emergency. You couldn't accomplish very much in 70 hours."
(Zind) Even if FEMA covers some of that cost, it could take a while for the checks to arrive.
Karen Horn of the League of Cities and Towns says towns damaged by last spring's flooding are only now getting their money from FEMA.
For VPR News, I'm Steve Zind.