State Treasurer Mike Pieciak announced a new program on Tuesday that he says will save flood-hit municipalities millions of dollars in avoided loan interest payments.
It can take more than a year for municipalities to receive reimbursements from FEMA for damage to roads, bridges and public buildings.
Pieciak says that means they have to take out loans to begin those recovery projects.
“And they have bank loans on their books for 8 or 9%. So that’s going to cost their taxpayers money. That’s going to delay their rebuilding efforts and their recovery efforts," Pieciak says.
"It’s going to cost towns millions of dollars in interest alone to recover."Ted Brady, Vermont League of Cities and Towns
Ted Brady at the Vermont League of Cities and Towns says it’s an expensive proposition right now.
“The lending environment after this flood is a lot different than the lending environment after Irene. It’s going to cost towns millions of dollars in interest alone to recover," Brady says.
Pieciak, and Gov. Phil Scott, announced a plan Tuesday that will use money on hand in the state treasury to underwrite $15 million in low-interest loans to municipalities.
Pieciak says the program will save towns an estimated $3.5 million in avoided interest payments.
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