House committee hears DEC explain spike in federal SRF award, seeks project lists

Emily Byrd, water investment division director at the Department of Environmental Conservation, told the House Corrections and Institutions Committee on Feb. 5 that the department seeks additional state matching funds after an unexpected increase in the federal capitalization grant.

"My name's Emily Byrd. I'm the water investment division director at DEC," Byrd said as she opened the agency's presentation on sections 9 and 10 of the capital budget adjustment. Patrick Monks, DEC's water infrastructure finance program manager, later summarized the request: the administration asks for a $2,498,000 cash appropriation for the Drinking Water State Revolving Fund match to make the state whole for a larger FY25 federal award and to project match needs for FY26.

Monks described why the number rose. "The current grant that we're operating under is the federal fiscal year '25, and it came in higher than we anticipated," he said, adding that congressional earmarks can reduce the base SRF pot but that the continuing resolution left more federal money available to Vermont this cycle. "Depending on the status of funding for earmarks, it can cut into what we would receive for our SRF grant," he said.

Committee members pressed DEC for more granular supporting documents. The chair asked for lists showing which communities and projects are slated to receive Drinking Water SRF money, Clean Water SRF money and municipal pollution grants, including priority ranking and whether a bond vote is required. Committee members said they need the lists to answer constituent questions about timing and cash flow during markup.

DEC committed to producing the Intended Use Plans and attached priority project lists. Monks described those documents as the federal-required IUPs that list ranked projects and explained they inform which projects receive loans or grants.

Monks also walked members through the clean water budget numbers in section 10: the administration proposes a Clean Water Fund budget of roughly $45.2 million for state fiscal 2027, including a $10 million capital carve-out and $5.3 million in one-time fund carryforward that DEC said resulted from higher-than-expected prior-year revenues.

Lawmakers asked clarifying questions about timing and the 18-month federal match window that can stretch state obligations across fiscal years. DEC said it typically seeks to secure the match at the start of the federal grant but will pace the match in coordination with EPA guidance to avoid surprises.

The committee did not take any formal votes. DEC promised to submit the IUPs and priority lists and to follow up with more precise FY25/FY26 match breakdowns for drinking water and clean water SRF lines.