MONTPELIER — Gov. Peter Shumlin has blamed federal officials for a fiscal setback that could force Vermont to retreat from a post-Irene recovery plan that had banked on nearly $90 million from the Federal Emergency Management Agency.
A months-long paper trail obtained in a public-records request, however, suggests that federal funding for the rebuild of the Vermont State Hospital and Waterbury office complex was never as secure as the first-term Democrat has suggested in recent days.
Administration officials delivered news of the potential shortfall to legislators 12 days ago, laying culpability for the dire midyear adjustment at the feet of FEMA.
Commissioner of Buildings and General Services Mike Obuchowski said the federal agency had “deceived” state officials. Shumlin himself said last week that FEMA had committed verbally and in writing to funding levels that were reflected in the budget approved by legislators in May.
“The head person from FEMA made us all kinds of promises. We’ve got emails saying we’re going to get this.” Shumlin told the editorial board at the Rutland Herald and Times Argus on July 23. “FEMA made us a promise to get us 90 percent funding on the state hospital ... and to give us significant funding to rebuild the Waterbury complex. That was the promise.”
But email correspondence between regional FEMA officials and high-ranking administration staffers show the federal government going out of its way to express its inability to predict what kind of aid Vermont might ultimately receive.
Additional emails will be forthcoming in coming days, according to the governor’s general counsel.
In one Feb. 22 email, Secretary of Administration Jeb Spaulding looks to secure at least a “conceptual okay” for the administration’s plan to replace the state hospital with a new psychiatric facility somewhere in central Vermont.
A top FEMA official says the agency “doesn’t have the legal authority to make a conceptual ok.”
“We can say that FEMA will participate, however to what extent is dependent on (federal regulations),” Nick Russo, associate director of FEMA’s New England division, wrote in an email. “We are required to obtain all required info and balance insurance proceeds against the costs. Secondly, we can only reimburse those costs deemed to (be) ‘reasonable,’ which can only be determined after a direction is chosen and a benefit cost analysis is established for the project.”
Republican candidate for governor Randy Brock, who acquired the same records in his own records request, seized the email chain as evidence of fiscal mismanagement by the Shumlin administration.
Brock said the months-long debate earlier this year over the future of the state’s mental health system and central office complex was predicated on the FEMA reimbursement figures provided to the Legislature by the Shumlin administration.
“I’m wondering why the Legislature was led to believe with almost unanimous certainty that we were going to get 90 percent federal money, because the documents I’m looking at don’t seem to say that,” Brock said Tuesday. “Those of us in the Legislature who voted on this bill did so based on the assurances we received from the administration that this FEMA money would be there. To now find out there’s a substantial question about what level of funding we’ll actually receive is shocking.”
Spaulding on Tuesday said no one from the administration ever attached iron-clad assurances to the FEMA money outlined in its budget proposals.
He said he pressed FEMA for clarity as the state looked to address building pressure in a mental-health system overburdened by the loss of the 52-bed hospital. While he never got any promises from FEMA, Spaulding said at least one of the emails gave him reason to believe that Vermont could expect to receive FEMA reimbursement for the state hospital plan that ultimately passed the Legislature.
That plan includes a new, 25-bed facility in Berlin, as well as the creation of additional bed space at existing private facilities in Rutland and Brattleboro.
In the email Spaulding referenced, he asked Russo whether he could “envision any showstoppers that would prevent FEMA participation” in that plan.
Russo responds on Feb. 23, saying “the only show stoppers that I see initially would be” the decision to rebuild in a flood plain for “any drastic change in function or capacity.”
“I believe we will be able to assist in some way,” Russo continued. “It will come down to the extent that we can participate after insurance and all other factors are considered.” Spaulding said the exchange made him feel secure in the integrity of the administration’s budget proposal.
“We had to follow the direction they were pointing us in. ... We had to use the best information we had at that particular point in time, and I was confident,” Spaulding said Tuesday. “I believed the direction they had pointed us in would lead a person to be of the mind that we would be eligible for public assistance.”
Legislators put varying degrees of stock in the administration’s FEMA projections.
Rep. Ann Donahue, a Northfield Republican who was heavily involved in the plan to replace the state hospital, said Tuesday she never considered the numbers provided to her committee as an assurance.
“We were not assured of certain numbers,” Donahue said. “That’s not the message I heard anyway.”
Sen. Dick Sears, a Bennington County Democrat, said he was led to believe lawmakers could count on the figures in the administration’s budget proposal.
“We had a belief that this money would be there,” Sears said. “There were lots of times we held budgets on rosy assumptions that don’t come through, but the idea to me seemed that this (FEMA) money would be pretty routine, and that FEMA was willing to cover this money. Now who led us there? I honestly don’t remember. I think it was the administration, information from Washington, the whole nine yards.”
Brock said revelations about potentially less generous aid casts doubt on the recovery plans legislators spent four months fine-tuning during the most recent session.
“In the event we don’t get this money, then the question is how do we deal with the vulnerable people awaiting the construction of this new mental health system?” Brock said.
Spaulding said the state will proceed with its mental health plans regardless of how the FEMA situation is resolved. If federal assistance is diminished, he said, then the state will look elsewhere for the money.
As for the Waterbury office complex, Spaulding and others say plans there could be affected by the final scope of FEMA funding.
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