State Learns FEMA Funding For State Complex May Come Up Short

07/20/12 5:50PM By John Dillon
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State officials watch a presentation about options for rebuilding the state office complex in Waterbury.

State officials say they've learned that Vermont will probably not get all the federal money it was counting on to rebuild state buildings damaged by Tropical Storm Irene.

If the federal money doesn't come through the state may face a $120 million shortfall in an already tight state budget.

The news shocked lawmakers assembled in Montpelier for a regular financial briefing.

The administration had been counting on FEMA funding to pay 90 percent of the cost of rebuilding the flooded Waterbury state hospital and office complex.

But state officials said they learned recently that the full funding may not come through, and if it does, the federal checks may be delayed for months.

"We've been working on this for months. Our patience is wearing thin," said Deputy Administration Secretary Michael Clasen. "We're frustrated."

He says the state has heard different interpretations of FEMA rules from different FEMA officials. He says the funding situation is now uncertain.

For example, the state was counting on 90 percent FEMA funding to build a new hospital for people with mental illness. That facility will cost $28 million, and is planned for a new location, away from the site flooded by the Winooski River during Tropical Storm Irene last August.

"Now we're being told that the state hospital is not likely to be eligible for permanent re-location," he said. "The reasoning is that it doesn't meet the FEMA regulations and rules and laws with respect to when something is eligible for permanent relocation."

Buildings Commissioner Michael Obuchowski has been working with FEMA for months. He says the state may face a $120 million funding gap if the FEMA funds it had hoped for don't come through.

"Depending on what the gap ends up we may have to go back to the drawing board in relation to the state hospital and the Waterbury complex," Obuchowski said.

Obuchowski says the state is in the same position as hundreds of individuals who are trying to rebuild after Irene. He says mixed signals and a confusing federal bureaucracy have compounded the hardship from the storm.

"People were hurting," Obuchowski said. "Their homes have been destroyed. Their workplaces have been destroyed. And we turned to people from the federal government and we totally trusted in what they told us. We did test it, but we totally listened to their agents from FEMA. And we made decisions. And we all got deceived."

A FEMA official says the state will get funding - but the final amount will depend on what FEMA determines is eligible. Steven Ward is the deputy federal coordinator for Vermont.

"And there are some very challenging policy issues that include determination of the floodplain, what the state requires as far as codes and standards," Ward said. "There are a lot of different aspects to developing the final number and we are in the process of going building by building through the Waterbury complex."

The FEMA funding issues have affected Vermont towns as well. State Senator Dick Sears says he just found out that FEMA will not reimburse the town of Bennington for $5 million in repairs needed to protect roads and bridges from future floods.

"This is just devastating to our plans for recovery from Irene and our own plans to come out of the recession as well," Sears said. "So it's just very disappointing today."

Sears says Bennington will appeal the FEMA decision. And he says the state may need to revisit the budget it passed last May if the FEMA money for the Waterbury work doesn't come through.


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