 Welcome, everybody. It's the House Appropriations Committee and we are continuing our work this morning at this one o'clock meeting. First on the agenda, we have the state treasurer. And I believe Treasurer Pierce, you have brought other people to join you. We have three items that we wanted to cover with you. The first that I would only, I think that we only need to spend a very bit of time on is the bond investment earnings that are reflected in the budget adjustment to help bring us to balance. And after that, I would like to move to the strategy for the FY 2020 closeout. There's a couple of options on the table and we'd like to hear from you on that. And that should spend about 25 minutes there. And then I'd like to finish up with a possible bill that this committee will be considering regarding municipal borrowing. And if we could spend about 25 minutes on that. Lisa, will you help me keep track of time because we have a testimony at 215 from legislative council. Yes. Municipal borrowing that I need to be respectful of the treasurer's time and of legislative council's time. So good morning. Good afternoon, Beth. Are you, you're, you're one of the telephones I'm looking at. That is correct. Can you hear me. We can hear you. All right. Welcome. Do you want me to begin? Yes, I'd like to start with the bond investment earnings. That won't take much time at all. We did take a look at that to make sure that there were no issues with it. And for tax purposes, we treat the bonds as procedures being held in a fund within the general fund. Bottom line is that you can use those without restriction. So we're comfortable with that inclusion in the BAA. Okay. Are there any committee members that have any question on that piece? We just to make the full circle. I do not. Peter. Hi, Beth. Thank you for coming on quick question. Are those strictly from the, the COVID relief fund? Or is there more in the more that that interest has been generated from these are bond funds that from our various bond issuance. And when, when they, when we go forward with those as our bond council took a look at this, that that tax rules permit us to treat them as being co mingled with the general fund and being spent. So this is something that we've done in a distant past. And it's, it's, but it's not COVID related. Thank you. Thank you. I don't see any other questions. Treasure appears so. No, I do. I have one from representative Lanford. Thank you. I just, I just want to be clear that I'm understanding this. We're talking about right now is just a testimony on the 2.74 that's in the governor's recommend. Correct. Yes, that is correct. Thank you. Okay. I don't see any other questions. Diane, your hand is up if you'll put that down so I don't get, I get easily confused. So let's move to the next topic, Beth. I wanted to talk about the fiscal year 2020 close out and we also have commissioner aggression. The administration has brought forth their proposal and part of the proposal is to address the deferred revenues that would be coming in on July 15 and doing a cash close out and using reserves and we understand that you may have a second proposal for us to consider. Yes. So, should I begin? You should please. Thank you. Okay. Well, first, I want to say that whether you whichever method you pick will not have an impact in terms of the merits of the items within the budget adjustment act. I think the only issue is how you treat the year in close. And if I'm, and Adam can correct me if I missed representing this, but I think the proposal was to to use the reserves and then replenish them in in 2021 when you can start when those collections become available. An alternative way to do this and I think that one that I would recommend is that instead of doing that on a gap basis and not on a cash basis our budget is done on a cash basis. Gap accounting for the cap of the state's financial report is on on a crew basis. We we accrue those revenues for for gap purposes. And this is the suggestion of the recommendation I have is rather than hit the reserves, and then replenish them in the next year when there's some uncertainty in that next year is to grab the, the, the collections from July 15 and bring them in. And if you would essentially a modified accrual on the revenues only not a modified full modified accruals I described this, not as modified accrual but but cash with with an accrual provision. And you would recognize those in the current year so fiscal year 20, and then you would reduce the need to hit reserves in the in the education funds for instance you're still going to need to to to to use the reserve accounts. In addition to pulling those revenues forward that for instance the sales tax. We think that this has some advantages for a couple of reasons one is comparability. If you leave the dollars in the in fiscal year 21. Basically your tax revenues and 20 are going to be very low. The next year you're going to have one, not quite twice because obviously know that there's going to be some revenue loss but you're going to have an inflated amount and 21. And then at 22, you're going to be back down to whatever the new normal is to be very frank. So, from a comparability purposes, it wreaks havoc with the budget and wreaks havoc with outside folks looking at it. We think that a more measured approach would be to say we're recognizing those revenues that were deferred in the in the current year and fiscal year 20 and accruing those. I am the president of a group called NASA at the National Association of auditors comptrollers and treasures, and we have convened a working group, roughly a little over a half dozen treasures and and and trade, excuse me, treasures and comptrollers. We've discussed this issue at yesterday's meeting in the week before and, frankly, the, the, the response has been almost to a person it is to a person that this is this would be a preferred method of doing it. I'm going to let go of the rest of my time. If it's okay with you, just ask Tom history, who's our financial advisor who works with the bond rating agencies on the state's behalf, and what so that's when we're when we're putting together bond deals as well. And with public resource advisory group which is on deals with several states and if it would be a pro okay with you, Madam chair, I'll stop talking to let him present. You know what he thinks the the rating agencies would would would view either proposal. Thank you. Thank you, Mr. Pierce. I only caught your first name Tom I didn't hear the last name Tom. Yes, it's Houston, h u s t is what welcome Mr. Houston, we look forward to your information and why don't you just jump right in please. Okay, happy to do so. Thank you. Yes. So the, so we've had a various, various discussions with the rating agencies over the past several months with regard to different states and how they're going to approach the issues that you're facing in terms of the delay of income tax self tax and in Vermont case meals and room tax. And the rating agencies understand that this is this is a trying time for states and that they're going to do things that are a little bit unusual in terms of, you know, how they backed it over, you know, the in, as that said in normal times. We specifically asked about the using the deferral revenue to as as a way to balance the budget and, you know, they, they, they said, you know, they thought they thought that was fine they wouldn't have any issue in it. And I would point out what their, what their main concern right now is for most states is liquidity. So is the state in position from a cash basis and from available other sources to stay liquid and to be able to, you know, make payroll, make not to let vendor payments lapse or were delayed and and for sure make its payment in terms of debt service and pension payments in terms of the long term fixed obligations. And then the rating agencies are also looking at their stated looking at what is going to what what's the state going to look like after COVID-19, you know, we get through this. So their ratings are long term, they're supposed to have a long term perspective. And so, you know, each state is different in this. And so, but they're, they're, they're asking questions in terms of, okay, what is your state going to look like after you get through this. And I think the proposal that Beth has made in terms of keeping the reserves intact and using kind of the deferred revenue proposal in order to balance the current year budget makes sense that you'll have those reserves in place to deal with future, you know, for future fiscal year issues and a number of states are facing this. I just got something across my across in my email that California is saying they're going to have a $54 billion hole in their budget between now and 2021. And, you know, we work with them and then we're in Minnesota announced earlier this week in terms of a but $3.6 billion through the end of 2021. So a lot of people, you know, a lot of states are dealing with this issue and I think that what you have now is you have an issue in terms of the timing of your revenue. It seems to make sense to the rating agencies and make sense to me from a long term credit perspective to save your reserves and use this in order to balance the budget. Thank you. Do you have you heard from other states to see how they're closing out their year or another or something totally different. I think, you know, I bet that's probably heard from more states right now I think there are a lot of states are in kind of the haven't announced how, you know, options. You've seen things like the state of the, there are some states that have a constitutional issue with changing the way that they budget. So that they have to, they have to buy cat, they have to go about on a cash basis. So one of our clients the state of West Virginia is in that, in that camp, and they can't do something like this so there's a couple states that that can't make an adjustment in the reserves of their of how they actually are going to balance the budget. New Jersey has extended their fiscal year so they've extended the their fiscal year I think till the end of July. So I think that's kind of the opposite. They're not a client, but you know that is kind of unusual and that is definitely going to be an issue in terms of comparability. And you know, it is likely going to cause a bunch of unintended consequences I think. There's a lot of states are looking at this I've already heard I think from Georgia that they're considering what Beth has proposed that I don't believe that is public yet. So, that may or may not be public I'm sorry, but so a number of states are looking at different different ways. And I do have to ask you because people may be listening to this recording and jumped right in and Beth did introduce you but just for the record would you state your name and your position so it's on the, it's on the recording. Absolutely. It's Thomas Houston h u s TIS. I'm a senior managing director for the firm with the firm public resources advisory group. And I'm in New York office. We have a question from representative helm. Do you make some questions. Just, just curious. So if you extend like New Jersey did if you extend your your fiscal year. Then what happens the next year. I don't know if they change their fiscal year or they just extended the current year I I'm sorry I, I, I realize I don't, I don't know the specifics about what happens later I know I believe they just, they'll just have a shorter fiscal year next year but I'm not positive about that. Well then it's, you know, you take it the church next year. Well, thank you. I have a question from representative Hooper and then representative Fagan. Hi, Mr here says, do you have any. Do you have any insight into how it would be viewed that we would make this change as treasure appearances proposing. Over the long run, it essentially it's an expedient thing to do to solve this problem. Does that begin to make us look like we're kind of searching for shortcuts and easy ways to solve a problem rather than addressing it as you know, these problems as they come up. Right. I think that's a great question and it's a question that that we've asked the rating agencies. As kind of representatives of the market and representatives of the investor community is would be, you know, something like this looks strange and I think that there is an expectation that this crisis is unprecedented since, you know, since the, you know, since the Second World War, and that they're the states are going to need to do things that are a little different than what they've done in the past and AAA states, or, you know, are going to maybe have to do things in terms of one time money and and this is what the rating agencies are saying that they understand that that you know that that the budget might be structurally imbalanced for a period, but what they're going to what they're looking at is how you what what decisions you're making, you know, for the long term view of the state and I don't think this is something that is, you know, that you're trying to do to game the system or anything in terms of the in terms of your long term financial position, you're going to be making revenues that are going to be allocated and they're going to be shown in your financial statements as 2020 revenues, and you're going to recognize those in your budget this year. I don't think they'll want one, I think that the investor community and the rating agencies expect you to make decisions and make and implement things that you wouldn't see in a normal time, but they also recognize that, you know, you're doing this for a reason and that they're expecting you to come out in a, you know, in a healthy position in a year or two. Kitty may I follow up with him. Yes. So you mentioned the, the importance of showing that we're maintaining our liquidity. Does, by preserving our reserves at this point at least does that feed into that perception that or the fact that we are trying to maintain our liquidity. Can I tie those two together or is that a separate issue. I think it's a separate issue that that's probably as the treasure would have a better perspective on that but I think, you know that the things you're not doing any, you're not doing anything to hurt your liquidity and this, you know, that would be my perspective. Thank you. Representative Fagan. Thank you. And thank you for coming on Mr. Houston. I thank you pretty much answered my questions. My concern I sent two questions forward this morning was the fact that this is a one off, if you will, a limited time, one time limited duration use of a modified a cruel basis accounting. You know how that could that possibly hurt us and you've just said no it won't actually be the bond agencies are looking at the liquidity, and they appreciate the comparability of our statements going forward so this will, this will make sure that they remain as such. My, my other question was, how is this looked at from a generally accepted accounting principles viewpoint of where you were changing at once and going back to the cash basis at the end of this. I am not a CPA, so I, I don't know that I don't know that question. And my guess is that it's in the schedules in terms of budget versus actual and then making the adjustments to the financial statements, it will be easier but I don't know if the. I believe the, the accountants accept the budget numbers as you present them and then, and then do their adjustments from there but I am not a CPA. But really in your, in your mind here the biggest piece is maintaining liquidity, ensuring we follow through with with our obligations and continue to pay them and being comparable over fiscal years. Yes, I said it very well. Madam chair may I may I respond to that question as well. Yes, yes, please. Okay, so I think that gap accounting is gap accounting and that's what you do with your financial statements the budget is the is is a matter for the legislature, making this one change I think again gets back to the issue of comparability. I think it's a better presentation of the budget and in the position that the state is in. Again, I'm not an accountant. I'm not, I'm not, I used to be but I've, I've worked in a different area now, but I have talked to through with the comptroller members of our working group and they feel pretty comfortable, very comfortable with this that does include the folks from Georgia that that that Tom mentioned. And I saw, you know, the survey that that's being done by JFO there's a little bit of passage that a lot of folks are looking at this in terms of the question of borrowing, but I did see other states and looking at some variation of this. And I think it is the best possible presentation given these unusual circumstances. Thank you very much. We have two more questions. We have time for questions I want to make sure I'm being considered of your time. Yes, yes, sometimes yes, we have a representative conquest and representative Jessup. Thank you. Mr uses, I think I understood you to say that the that the that the rating agencies are okay with us thinking about doing this is that because it was, it was forecasted revenue, and though we won't actually have it. We're just, we're just recognizing it in this fiscal year. My question is, so the forecast was done in different times, are the, are they expecting any particular reduction in the revenue that we might account for in this year I mean, is there a standard or reasonable amount that they would. They would look kindly on if we were to reduce our the recognition of the revenue by a certain amount. That's a really good question that the actual I think the proposal is and what I what I is that it's only the revenue that's being earned in fiscal year 2020 and paid in 21. So it wouldn't be any lost revenue that you would recognize in the current fiscal year it would only be the revenue that would have otherwise been paid in in for essentially for tax year 2019 if you're thinking about income tax. It's only that revenue that they are that was earned in 2019 and was required to be paid in 2020. That makes sense. So it's not forecast it's kind of earned. True enough. Thank you for that that's helpful for me my thinking. And maybe I maybe I just need to understand it more clearly so what one of the issues that we're looking at is that we, although certain taxes might be owed, because they were earned in 2020. We do not get all of them we don't expect that people will actually be able to pay all of those taxes. And so there's going to be a possibly a reduction between what might be owed and what we actually receive. Right. My understanding is your tax department already looks at and that jump in here about your tax department already codes revenue that was that is owed in one period and paid in and expected to be paid in this in a later fiscal year so I think this is all going to be tracked. And that's that I know that's the discussion with a number of states. If I, if I could that is that is precisely the case and it would be money that was actually paid in July for for the 2020 year. It wouldn't be an estimate of what else is owed. So it would be an actual number and it is tracked as and I would point out that at least one state that I thought does this on a regular basis. And it's not modified accrual it's kind of a modified cash but I think it's a again a reasonable approach. Thank you but that's that's comforting to understand that. Joseph. Yeah, thank you. I think maybe chip asked the question what I'm trying to sort through in my mind is what are the pros and cons if the revenues don't come in as expected. I guess I'm what I've heard so far and maybe I'm not fully following is that we don't go into the reserve funds, and those are there for fiscal year 21 which we understand will be a harder year but it's, it doesn't take away the challenge that lies before us. I don't know the the actual where the, the 20 close out and the budget stands I know that. So, there may be a gap between, you know, even recognizing revenue that that is expected to be earned in 20 and paid in 21 doesn't fully close the gap. I don't know that. So it may not. This is Beth again it may not close all the gap for instance in the Ed fund using the reserves and accruing those revenues. In other words, recognizing those revenues in July that were attributable to to June, you're still going to have some. I'm trying to find the right word financial difficulties there. Again, this would not be any money that that's just money that would actually have been collected in that June period had you not made the decision to push it out a little further. Okay. This Kimberly I didn't mean to jump in are you finished. Thank you. Beth and Tom just so that I understand, either method that we use whether we use first or whether we use these dollars that come in and count them for 2020. The revenues come up short. Both proposals would count on using our, our reserves to to cover the difference because we can't go into 21 with a deficit. Correct for again. You still would only recognize the amount that was accrued or deferred into the next year and accruing it back into 2020 and if you still had a problem you would have to address it. Part of what you're doing today with the budget adjustment act. And I think that that that is the correct answer to that again. The methodology here would just create a little bit more comparability and not put you in a position where those reserves are depleted granted you will be replenishing it at least in part the next year but I think it's a it's a cleaner presentation of your final financial conditions. I understand that piece and what you said about comparability is is is important between 2021 and then back to 22 the up and down the up the down representative Townsend. Yes, thank you. If things came up short. Is this where the interfund borrowing authority might come into play to help adjust for that shortness of dollars. That is also a very good question so we do have food cash between several funds including the general fund transportation and education fund. If you ended up with a cash deficit, in other words, you in one fund, it certainly could have what's called a borrowing between another fund and do to do from to replenish that it wouldn't change the financial condition of the fund, however, because it would still be in deficit because if you if you provided it, you know, a cash loan on one side you'd have cash asset but on the other side you have a liability on the on the other side. So would not change the structure or the or the temporary deficit that you have, but it does permit you to have cash to to essentially continue to make the the payments that are appropriate to that for that fund. Thank you. This is Tom, just to add that but that that is I think I understand that as part of the liquidity that you know that I that I was talking about that's important to the radio agencies to be able to make sure that you have enough sources of cash to make your payments for unanticipated issues. So just to be clear, Tom in your position, you closing out the end of the year in for in Vermont, you would choose using the modified approval method over over using reserves at the end of the year. So, I think that that is the more prudent way I don't think that, you know, I don't think that either way would cause you a rating downgrade or, or anything like that but I agree that that is the more for me that that would be the more prudent by yes. Thank you representative Jess up your hand is it up from before. Another question, did you want to weigh in, or would you like a conversation with the committee at a different time and it's totally up to you I don't want to put you, you know, in a hot seat that you haven't been prepared for the nature of my work, I'm always in a hot seat in front of you guys. So, you know, I just had a couple of and I would start off by saying that the treasure. What is Adam or connection. Gression can you turn off your video and then it'll reduce the streaming and we'll hear you better. No, you're still in slow motion do you have another device on or anything. I don't. But you know what, if I, let me get up and move to another room, you're good right where you are. Don't move. So if I stand on my head everyone can see me. No, it's not working. I'm sorry, Adam. Sorry, let me try to move. Here. I don't think that's any better. Can you call in. I haven't stopped yet. Okay. Let's try it anyway. I think, you know, there are a couple of things one mentioned. And which I think kind of was the deciding factor for us. And that was that we do believe that we're in a volatile period here. You know, to Tom Cubette's point that he made several days ago. Everything is in flux. The federal construct is somewhat vague still, and we can't predict what will come out of DC. We can't predict what will come out of this, but we do believe that it might. We don't know, but there could be some benefit to using reserves in terms of how we stand with the federal government. You know, there is oftentimes strings attached to federal money. And, you know, I think what was the deciding factor was that it may well be down the road that states that have used the reserves and use the resources that are available to them will be in better stead than states that have it. We certainly can't confirm that, but it does seem again, like it's standard federal practice to ask to kind of meet them in the middle with Medicaid with transportation money and the like and so you know that for us seem to be an important, or, you know, the deciding factor for us. I'll make a couple of more points in that in that, you know, you've heard what other states are doing or you've heard that other states are doing different things and you know I can tell you that states are all over the map on this. You know, I'm not participating in NASAC conferences, but we are quite active in NASBO, which is the National Association of State. Well, states doing often reflects their underlying fundamentals. Some states have the lucky of doing one thing and some states don't have that luxury so I think what you'll find is what states do is on territory grounds are and to what their positions are. What I will also say though is we've heard, I think we've talked quite a bit about rating agencies and you know I will acknowledge that the rating agencies I think are too all over in terms of their opinions but yesterday afternoon. I figured just because it may well come up that it would be helpful to speak to the rating agencies on that. So in the Moody's report that was done in July of last year. The two analysts on that report that did the state of Vermont report, Matthew Butler and Marsha van Wagner. You know I called both of them and I got a hold of Marsha and I can tell you that she whether we use reserves or whether we use a pool accounting. Your opinion was not strong, you know, to what Tom and the Treasurer both said earlier, their, their opinion is governed much more by the liquidity of the state, and how you manage your budget and how you manage your liquidity and what available liquidity you have. They did not have a strong opinion on whether you use reserves, whether you don't use reserves. I'm kind of backing that up I can also confirm to you and a reserve study that we did, you know, over the past. Actually we did last year. There were plenty during the Great Recession there were plenty of triple a states that use reserves, including Georgia and North Carolina, Florida, Virginia, Tennessee, in fact, the only triple a state that did not use reserves during the Great Recession was Delaware. So, it's not like you're in the penitentiary if you use your reserves. In fact, the agent the rating agencies, often believe that that is what reserves are for to smooth out, you know, various cash flow issues and that's why you have reserved so you know I would really say that you know we're not in jail if we use reserves. What I'm going to mention is that, you know, there was a lot of discussion, I think representative Jessup it asked the question. You know, kind of getting at the risk file, you know if you use reserves and the expected revenue does not come in. That means that you are thus for those are, but it's the same if you use an cruel method because an cruel method you are essentially putting a receivable into your budget and you're assuming that you are going to receive X amount of revenue if you don't receive that amount of revenue. You're using your reserves anyway so your risk profile is substantially the same. You know the reserves are going to be your kind of money of less resort. So, you know, I just think it's important to understand that. And, you know, from our standpoint it's not like one is is riskier than the other because at the end of the day. If you don't receive the money that you anticipated receiving, it's the reserves that are going to fill your budget. So that's, that's all I'll say and I guess to repeat what I said several days ago that the beauty of it is, is Vermont, we have a choice, we don't have to do a little unique maneuver here, we can do as we always always have done. And, you know, I think that's a good thing. So, anyway, I leave it at that. Thank you. Thank you. Pressure appears to do I, your box lit up. Well, I think that one of the things I would say is that we've already done a unique event we pushed out those revenues into it into another fiscal year on a cash basis. In fact, we have done a unique event that what it does in the process is it puts our financials into a continuum that does, again, not as much, too much, and then back to whatever, as I said, that new normal will be. So we have done a unique event. I think that we can compensate for the fact of that unique event and properly address those. You're not going to accrue any more than what you've already collected in June. So it's a known number, excuse me, in July. It's a known number. It's not something where you're taking a guess, and then if the guess doesn't work out, you've got a problem. It will be a known, I think it's more consistent with the proper presentation. And it does point out that absent that deferral, we would use no reserves for less reserves. And I think that's a good message to the rating agency and to the financial community. Thank you, Treasurer Pierce. Are there any final questions? Tom, thank you for joining us. I appreciate, I know the committee appreciates you coming on and wishes being in New York City is all I can say right now to you. Thank you very much. I enjoyed it. And if anything further comes up, I'd be happy to testify again. Thank you. Thank you. Okay. Are we set then to move to the next topic, Adam, or Beth, was there anything else that you needed to have our committee here? I'm good. Thank you for listening. Thank you, Adam. Excuse me. Sorry, Adam. One of the problems with phones. Again, that the bond investment earnings, and there was an issue of Unclaimed Property as well. The Budget Adjustment Act, we are in agreement on both of those two items directly hitting the Treasurer's office. And we're fine with both. The bond investment of 580, no, the Treasury was, the Unclaimed Property was 580,000 investments. That is correct. That is correct. Thank you, Beth. I wanted to move now, Beth, to a conversation that started in ways and means that continued today in House government operations. And our committee has looked very little at it, but are waiting to hear from you and from legislative council around the topic of municipal borrowing due to education payments that are coming in at different times? Okay. I would like you to start, and then we have legislative council coming in. Our committee understands it. And are we able to determine, since some of those payments that are coming in or in May and June, are we able to determine an amount or estimate what we would need for an appropriation to do something like this to pay the interest? Okay. So to answer that question in advance of the rest, I think the answer is by May 15th, I think the Vermont legal cities and towns believe that we'll have an estimate. We've got kind of an outside number right now we're looking at. But by May 15th, they believe there has a good sense of what's been paid as well as the state and we can we can firm up a figure at that point in time. And so if something were to pass out of the house, we could use your estimate and then it could be trued up in the Senate. That makes sense to me. I'm just thinking of timing because that June 1st deadline is coming very quickly. Yeah. Yeah, I would like to reserve because I don't think Karen is on the call right now. And as I'm doing estimates, this is their bailiwick. I would rather confer with them to settle on that number. But I can certainly give you my my best estimate for the for the time being recognizing the league will be in a better position to answer that question. Thank you. So there is a PowerPoint and I will point out that unlike some of my 60 page PowerPoints, this is I believe 10 pages. So and we will make it relatively quick. So starting on page two, and we talked about this a little bit in terms of the Interfund borrowing that that we had. When the state needs to take a look at cash flows, we start with our pooled cash accounting. And as Tom pointed out earlier, Tom, that's something that the rating agency see as a positive. Other states use similar models. I believe Virginia, for instance, and it allows us to take care of the the the peaks and valleys in our cash flow. In addition, and based on that, we are the opinion that that we will get through 2020 without having any need for any type of borrowing. That said, we do have Interfund borrowing of what we call restricted funds, special purpose funds, such as the workers comp fund and so on, that we have already had authority to to use the various points in the year. There were, for instance, from June 15 to July 15. And you folks enacted a change to that this year to allow us to have a 45 day window each side from May 15 to August 15 that has been enacted and signed by the governor. And we're good to go on that. But that would be our first line of defense. Our second is a line of credit that you would go out if you needed that. And we don't anticipate needing this. But it's always nice to have a backup plan and a plan A, B and C here. And that line of credit, we would we would work with our bank of record and do that as we needed it. The advantage of the first one is that there's no cost to the taxpayer. The second one is a little bit more cost because you have to set up the line and then if you use it. And if you needed to go further, you could issue short term debt. The state has not done any short term debt since 2003 2004 fiscal year with September of that year. We're going to look it up. I can't remember if it was 46 or 48 million. I do remember it was from September to February. But it is something that would be available to us if we needed it. We towns have a similar structure. So go to page three. Someone can move this power point along for me. You have it in front of you. I don't. And it says municipal options are similar yet different. Most towns, you know, are not in the same cash position, but some of the towns may have submitted from borrowing. But most when they need borrowing, when they do taxes, for instance, and they're waiting for that, it's not unusual for communities to go borrow through their local bank. And that's a practice that already happens. Because just like we do, they have peaks and valleys in their cash flows. Banks have a good relationship with their partners and banks have stepped up in 2011 with Hurricane Irene. They were great partners in working with municipalities. An example I use this morning was a town of about 400 people had a budget of about 800,000. I think it's up to a little over a million now. And they had $4.3 million worth of damage. And they were able to secure loans while they waited for their female payment. The bond bank is out there, but it's a different kind of process there. They really work with infrastructure and they're not in the short term borrowing tax flow kind of market. There's a longer term piece that towns can use through the community disaster loan. It's a program through FEMA. It's going to take a while to get that up and running across the country because they're used to having a localized disaster. And this is as governing magazines had a headline saying this is the hurricane across the whole country. I think I heard a question. Should I stop or keep going? I do not see a hand raised. Okay. So as we're looking at this, and you take a look at the education fund cash flow. So we made, this is page four, we made X68 payments on April 30th. So we're continuing to pay out our bills on time. And 163.4 million. We have two payments in September 10th and December 10th. And education payments come in from the towns that pay in. And that is the bills have gone out by the agency of education for June 1st. They total 88.76 million. And then the next due date is December. So looking at this, recognizing that you have, you know, in any given year, you have some peaks and valleys. We expect that municipalities are going to experience cash flows due to the impacts of delays and deferral of receipt of property taxes. So if you go to page five, that's a little bit of where we were. And that has changed somewhat as we move forward. This is something I pulled out of the previous report JFO sent to you because as of May 50, excuse me, March 15th. And at that point, there was about 132 million dollars potentially out there with 82 towns that still had some tax due dates. I think Karen mentioned this morning something in the area of 50, 59, I believe, let her speak to that if she's here in a new period. But that's the money that would be if all of them were not paid. That's my understanding any event based on the JFO analysis. We expect that some portion of that will be paid. But that looks like kind of the outside number. So page six, I'm not going to spend any time on this. This was something that's been announced and people were asking me a lot of questions about it. And I usually don't put into a presentation something we're not going to use. But the feds created this municipal liquidity facility supposedly, well, I shouldn't say that it will help a lot of communities. It's just not appropriate for Vermont for two reasons. One, the population size associated with it. We could do borrow on behalf of towns, but that creates another whole set of problems. And then if you see down at the bottom, the interest rate pricing, the Federal Reserve recognizes this as a lender of last resort. So if you didn't have access to the markets for whatever reason, and they would add a premium on to the market rate penalty rate, essentially. So this is not something we were going to look at, but it's out there in towns and cities are asking about it and others as well. And again, it will work in other communities and we appreciate what the Fed has done. But it's not something that would work for us. Our recommendation is on page seven. And that's the bill that you that that Becky will go through. But we would recommend that towns would borrow through their local banks through their established networks. They have working relationships with these banks, and they've been good partners with each other. The interest payment, however, would be reimbursed by the state to manage the cash flow effects of the property tax deferred and receipt. It cannot be used to replace revenue. In other words, you can't use it as a long term solution to if you have inadequate taxes, just as we were talking about at the state level, we can move those monies forward, but you know, you can't move what you don't have. But this would allow for in terms of the borrowing for those deferrals. It has to we expect, and our intent would be to recover these monies from the from the Relief Fund, the CARES Act. And we don't have 100% guarantee on that. But the indications that we have, based on communications, particularly through NASBO, and the the NGA National Governors Association with the Treasury, as well as other sources, we believe that this would be a eligible expense, based on the terms that are in that indent on that second bullet, the short term borrowing costs, the dates. These are established by the CARES Act prior to March. It couldn't be in a budget before March 27. It has to be within expenditures incurred between March 1 and December 30 and must be consistent with the CARES Act. So we would recommend that we would let the communities do their short term borrowing. And subsequent to that would seek interest, relief of the interest for those borrowings through a fund that would be established by the language that we're proposing. And that that fund would be administered by the Treasurer's Office. We would seek assurances through a through a application form that you comply with those three bullets. And we would then then be able to disperse those funds. There's an appropriation in the bill for fiscal year 20. That's what we would be looking for. This type of fund does not have it's it's it would not it would carry forward any appropriations into the next year. So if you appropriated dollars in fiscal year 20 for this purpose, it would move over to 21 as well to cover those ongoing costs. We may need more than this down the road. There's you know we don't know what the what the future is going to look like. But with June 1 coming on rather quickly, we think that this is a a good option. It's a fair and reasonable option to assist communities. And it sends a message also that that we're in partnership with with our municipalities. And I would urge adoption of this. And the last two pages of this presentation are just a question first on this page before you continue. Was this was this page in particular part of your presentation today with the government ops committee? It is. This was the same presentation. Okay. And so you've stated here though that how hopeful are you that the CARES Act will reimburse these these dollars the interest? I'm I'm I'm very my expectation is that they would. There's no hundred percent guarantee. There was some correspondence or actually a discussion between the NGA Nazbo and the Treasury and in the White House actually and a question related to this came up and the answer was in the affirmative. So I think that we you know we don't have final written guidance on this, but we're fairly comfortable. I think we need to take the risk regardless. I mean to be very candid. This is similar to the to you know when we when the treasurer's office worked with the administration to issue those checks. We you know and you know we are taking some risk, but I think it's an appropriate risk measured and it's the right thing to do. Okay thank you. I just want to make sure the members of the committee of jurisdiction did hear that it appears at your assessment thus far that the COVID dollars would backfill dollars used to for these interest payments. Yes that is our our expectation, but again there's no there I want to be clear that there there is a risk involved in that. Yes I understand. I'm going to I'm going to skip the last three pages. Those are related to the community disaster loan which we're working on is the longer term so that the municipalities have a continuum of options. There's there's still some work to be done on that and I will in the interest of time stop there. And I have one question I have Mary Hooper. Thank you. The question that was asked in the government operations committee about using the CARES Act to pay for this I assumed was asking about to pay for the education payments not the not the interest payments and and it's very clear isn't it that we cannot use the CARES Act to cover the cost of revenue that was lost and the only reason yeah and this works because yeah yeah this works because it is for an expense that will be incurred after March 26th or 7th and so it's clear that it falls into an eligible pot. That is correct. It marks first actually but if you look at the guidance that you just got the other day from on the coronavirus relief fund on the CARES Act one of the lines it says may funds be used as a Q&A to assist impacting property owners with the payment of their property taxes and it's very clear the fund payments may not be used for government revenue replacement including the provision of assistance to meet tax obligations. It can however be used because of an increase in expenditure because of COVID and the argument is that because because of COVID in the delay you have additional interest expenses not revenue replacement and that's and that's the the the conversations that we've had so far with with officials at the national level. Thank you Beth. Mary did you have a follow-up or are you set representative Townsend? Thank you. Treasure appears. What sort could you please address the needs that your office would have to administer the program and where the costs where the funds would come to cover costs for the business bring the program? Yes so we would the bill as we've or language as we've proposed and it's been when we proposed we proposed that you know we're finance types and the led council makes it into the right language there but are you hearing me okay? Okay. Slow down just a bit Beth. I'm getting an echo too I hope you can hear me but the the staffing for this was to come out of our office we have a position with someone the skills that they could do this and we would seek reimbursement from COVID to do this if we add some strength to our to our office functions and we may need to do some extra training on this so this is a temporary position and we would continue that position to perform these functions. Beth we may need just that written in an email that was garbled and I think we there were some key words that we missed. I'm very sorry representative I could not hear any of that what I could do is try to put this phone on mute and then pick up on on on the YouTube if that's helpful but I'm sorry I did not hear the question. I hear some background noise if you're not muted others might want to mute because I can hear some like a radio or something on that you're jazzy Peter. We have a why don't you like jazz? Meada were you finished? Yeah I have just a follow-up question for the treasurer so the funds to cover the the staff person would that be coming out of the hearing I apologize overall fund that's in this. We're going to have to send Peter your question through Meada also and we'll get a response from Beth because we're not she's not hearing us and it's not a clear communication back. I'm going to apologize again I can't hear it I just tried to add a question approach and moved around the room and still can't can't hear you I apologize I just can't hear the question. Can you hear me Beth? It's maybe perhaps somebody else might want to kind of repeat the question if they've heard it. Can can you hear me Beth? I cannot I think we've lost okay right again. We are going to have Meada send the questions to you and then if we could get a response via email if that works for you. Yes that would be fine if you send me my email I will look at it right now and and get back to you I don't know if you want Becky to start while I take a look at those. Yes that would be great and I have just a quick question that I for at least our committee if there's some estimate of an appropriation that would be needed at this time did you have okay yes I did hear that so let me go under here for just a moment. So as I said we're not going to know precisely to about May 15th for for this but I was taking a look at that $132 million of potential as of 315 and again we expected some of that will be collected but you took a look and just said okay there's $132 million dollars if that was at 2% which is a reasonable expectation in this this market and that was for a whole year that would be $2.6 million roughly or you know for a half a year about 1.3 million so I think that's the outside range you know Karen may see something that I don't but I think that we're in that 2.6 range would would would would be about what I would expect as as as an outside perimeter and again we will have to wait to see if May 15 it's possible that there was more from that 3.1 to 3.15 period on that's not reflected in that spreadsheet that that that I we see we see from JFO and they did a great job on that I it's possible that there's more cash flow issues from that period that aren't reflected in this but that would be my my range right now would be someplace in that 2.6 maybe a little higher that's a 3 million and or under could somebody do a something they heard all that we get the 2.6 the 2.6 we get okay and chip a question perhaps you will hear your question um yeah so I'll ask Beth I was gonna ask made it to email but if Beth can hear me um I just I wonder is there any utility in doing the appropriation as an up to whatever amount I mean the that our amount would have to be encumbered until until those payments were made but it just might be easier to get our hands on the money to use it for other purposes after those payments are made rather than having to take it back from that fund that we established yeah um I think that's a good idea and I did hear that question and most of it I'm still a little static there but that sounds to me like an approach that we could use in that that regard so if you set up to 3 million now the the the other piece is you're going to be coming back and if it's not what we need we can certainly sit down and take a look at that at that point in time and to be very candid you made look and say we need there's more need out there in different areas that we haven't um I haven't identified for instance this may be more protracted cash flow issue for the municipalities and this initial this initial piece and you do have the option of of looking at that and and as you move forward over the over the fall but I think that's a that's an excellent idea and Peter thank you and thank you Beth so Beth my question um I'm not sure if I heard you correctly I wanted the clarification regarding what we can use covid funds as far as covering the interest payments I I agree my reading I agree I think we can do that um the municipal municipalities are that would take out loans to cover this would we pay the interest on both the education property taxes yes what about municipal property taxes that they might borrow funds for at the same time um right now this bill contemplates the the education taxes only and it's something you could certainly take a look at down the road but that that was the the piece that that this bill is addressing particularly with that June 1st deadline coming thank you okay maida do you want to try your question one more time it seems like we have a connection and maybe we won't have to do email and then we will let Beth go and get Becky on okay um so um Beth the the funds necessary to cover the staff who would be administering this program um would that um money come from within the this new special fund or would that be a separate amount of covid money we would expect that it would come from this fund and I can't hear you from within the fund okay yes with the can or cannot it can yes okay with point six all of a sudden we have clarity again within the 2.6 Beth uh uh yeah uh yes again tentative um you know I think I said you know maybe um a little higher as um until until we know what um what what it looks like on May 15th but yes I think it's in that range I mean we would be able to be stored in that so that again we may in in the if we do it this committee bill the sum of x and I want to be really clear what are you recommending x b the number we put in this bill I'd say 2.7 million um and we'll take another look at it on May 15th we may find that there's more need out there that we we haven't accounted for or on the other side we might find it to be less okay thank you 2.7 million yeah and I think that um I don't remember who but uh someone made a suggestion of up to and I think that's a great idea okay okay Amanda did you have a follow-up yeah just just a quick one on on the same issue of the uh treasury office of the treasurer's office staff um I heard you say something about the temp position is that a full-time temp position it's a full-time staff position yeah we have a position right now that's there um and uh this and the skill set to do this um and we'd like to continue with that right now we're um you know we have seven people in treasury operations we have more in retirement more investments and so on and uh this is this could be a sizable workload but we're going to make it work and the workload would be going through the applications did I catch that yeah yeah um if you look at that chart it could be as many as 80 some odd applications you know we would need to take a look at the substantiation check out the interest rate and and get get that work done um and then implement this and get those dollars out to individual uh to to individual municipalities thank you we have one friend from uh bob helm bob your question bob you have to unmute yourself please forget it every time um so can I go to something else uh wait um so are we it's not for beth right what is it for the treasurer yes it's for the treasurer oh absolutely as long as it's for the treasurer yes yeah okay um so if I'm not wanting to tell me but um I was wondering my understanding is you're reviewing Vermont state colleges costs and that kind of thing dad or whatever is that so uh yes I was asked to uh to take a look at it in a very limited way I'm certainly not going to make any recommendations I'm not an education specialist but to take a look at the the cost so that as the legislature is looking at what this next year might look like with a low and a um and a best case and a worst case scenario and what that cost might entail and then you're going to be making decisions and doing other pieces and I would recommend a consultant so we're going to be briefly involved we've been working with the financial staff at the uh the chancellor's office and we're going to be briefly involved to try to get a scope on those dollars and that's the extent of what we're going to be doing and when will you expect to complete that uh well I'd like to have already finished but I think in the next couple of weeks um we we will we will hopefully get this done um you know people also have other schedules in the colleges and they're working on other pieces and we will be talking to each of the that some of the folks in each of the individual each of the institutions as well but two weeks I'm hoping um it's uh you know if it's if it slips into three but certainly no more than that well and one more thing will we be um privy to that information as soon as it's made available or absolutely okay um well I think it's pretty important not to make conclusive decisions with but to give us maybe a little better idea of where they're at yeah okay thank you I would agree yep thank you I just wanted we have Becky Wasserman um ringing the doorbell to come in and just on a tight time schedule as you are so I wanted to make sure we didn't um we didn't overuse your time and that she wasn't waiting for us and Bob we'll get a full update from the treasurer when when that comes out when that happens thank you very much Beth um see do we have on Becky Wasserman are you with us yes I I'm here there you are welcome Becky good to see you hi how are you good um so we have heard uh uh briefly from ways and means that they that they support this um this municipal borrowing proposal and I think it came I know it came out of their committee on a straw vote of 10 01 this this morning I believe you were with government operations and walked through the bill and they made a small technical change that you will talk about and they voted um this bill out uh 10 and a half to zero and the half was the concern about the cares act covering the interest payment the interest amount and so that's why I was asking the treasurer about that page and I have been texting back to some members with that committee that it is the expectation of the treasurer that the interest payment will be care will be paid for by the cares act always a risk but there's other educational payments that um that I think we're getting confused when that vote was taken um so uh welcome Becky and we look forward to a quick walkthrough of the bill uh we'll put it on the screen some of you may have printed it off others of you haven't on another device um and I have the old one Becky so I don't know where you'll show us where government operations made a change from the um and I can't tell in this draft yet but I highlighted in yellow what I sent to Teresa where it was changed so it'll be easy to see okay so I didn't put up the highlighted one but if okay then I can just I can just point it out when we get there all right um so uh this this program is um authorizing the state treasurer uh to make to assist municipalities by um assisting with the short term borrowing costs that uh for the short term borrowings that are done to manage cash flow effects from deferrals or delays in receipt of statewide education property tax that are a result of the COVID-19 pandemic and it is um named the municipal emergency statewide education property tax borrowing program so subject section a of section one just sets forth the intent of the program um so what I just described is uh is the intent of assisting municipalities for this purpose and then um the the language after that in sorry there are no my numbers in this draft I just realized um the the language starting on this program shall be administered in a way that is consistent with um section 5001 of the CARES Act um so the the the reason for this is that the idea is that CARES Act funding would be used um to reimburse this program and so um to the you know to the extent possible the the program will be administered in in a way that is consistent with the guidance and regulations that may be issued around that CARES Act funding um and allows the state to recover to the maximum extent possible um funding under the CARES Act and then there also is additional language that allows for um the treasurer to recover funding from any other federal funds that may be granted to the state and used to reimburse short term borrowing costs so if there is another federal program another bill that federal bill that allows for funding that could be used for this purpose the treasurer would be able to also access that funding as well um so subsection that is foolproof that's foolproof language we I mean that that will really work um well this is this is an intent section um so I think the the understanding is that CARES Act funding would uh this would be an eligible expense for CARES Act funding so I think if there's another source of federal funds that come in there would have to be an assessment done on whether those funds could could work for this program as well I just want to make sure that by passing something that we don't uh eliminate our opportunity to use federal dollars yeah so the intent here is that um if if there are federal dollars we should be able to recover we should recover those to the to the maximum extent possible okay I'm sorry I interrupted we'll let you get through the end no problem and so the definition section is subsection b um and this is where there was a change made by House GovOps um so short term borrowing costs is defined as interest incurred for short term borrowing directly attributable to the COVID-19 pandemic and then there are some examples of short term borrowing including letters uh oops I think we've we've passed letters or lines of credit uh revenue anticipation notes tax anticipation notes and bond anticipation notes um so GovOps uh there was a question as to whether it was clear that those examples actually referred to short term borrowings and not the the costs of the borrowings so they've included in front of um sorry they've included after including um interest on letters or lines of credit revenue anticipation notes um so forth to make it clear that it's not the the what's not being reimbursed is the the actual revenue anticipation notes but just the interest on on whatever short term borrowing is done um and then short term oh sorry I'm still on page one short term borrowing um does not mean in this definition principal payments of any borrowing or any interest on borrowing that's not directly attributable to COVID-19 um so we can go on to the page two there is another definition for municipality and so municipality here means a city town or incorporated village subsection c establishes the program um so the municipal emergency statewide education property tax borrowing program authorizes the treasure to make payments to municipalities to cover these short term borrowing costs that are incurred um directly attributable to COVID-19 uh subsection D is an application process a municipality that has duly authorized a short term borrowing uh may apply to the state treasurer for payment under the program the treasurer uh will prescribe the manner uh of the application but at a minimum it shall include the following uh first there's the amount and type of short short term borrowing costs that the municipality seeks to have reimbursed second the municipality's 2020 tax collection date third there's uh requirement for an explanation with supporting documentation of the municipalities under collection or delay in statewide education property tax collection that's due to COVID-19 and then finally certification by the municipality um and including supporting documentation that the costs meet that definition of short term borrowing that is in um subsection B and that uh it also meets the eligibility criteria that um are set forth in subsection E which we will get to next on the next page. I'm keeping track of members names and we're going to do questions at the end just so um you don't think I'm avoiding and um ignoring anyone I have made it in Bob so far. Okay keep going Rebecca back please. Uh sure so the eligibility requirements um these uh the criteria here are trying to be consistent with the criteria for eligible expenses under the CARES Act. So first the borrowing costs um the short term borrowing costs were not included in the municipality's budget or any amendment to the budget enacted on or prior to March 27th of this year. Second the short term borrowing costs were incurred during the period beginning March 1st and ending on December 30th 2020. Third the borrowing has to be for the purpose of managing this cash flow issue of having a deferral or delay in collection of the statewide education property tax as a result of COVID-19. The expenses um in number four the expenses have to be consistent um with the use of funds authorized in the CARE Act as may be amended or the requirements of any other federal funds that may be granted to the state and used to support the program and then finally the any borrowing interest must be commercially reasonable based on published municipal indices or prevailing bank rates. In terms of administration of the program uh the treasure uh is required to specify the form of certification to the municipalities not later than seven days after enactment of the act and can begin accepting applications not later than 10 days after enactment of the act. And subdivision two on the next page um allows the treasure to seek uh reimbursement for any expenditures made for administering the program. Subsection G imposes a record keeping requirement on municipalities to have records sufficient to demonstrate that the amount of payments to the municipality has been used in accordance with the section. And then section two moves on to the creation of the fund for which the payments under the program will be made out of. So subsection A creates a the municipal emergency statewide education borrowing fund which is created under the special fund provisions in title 20 title 32 and administered by the state treasure. The money in the fund can only be used for two purposes um that is to make these payments municipalities under the program and for necessary cost incurred in administering the fund. The fund can consist of uh any sums that are appropriated or transferred to it. In subsection C the state treasure may seek and accept any gifts donations and grants from any public or private source to be dedicated for the deposit in the fund. And subsection D relates to how interest um earned on the fund will be handled so it will the it will be credited back to the fund and um this is um in part here because of uh treasury guide guidance on how um CARES Act funding interest that's earned earned on CARES Act funding should be treated and used for eligible expenses that would be eligible under CARES Act. So the idea is to keep that interest in this fund so it can be used for those eligible purposes. Section three is the appropriation for the fund. Uh this this amount is is left blank here but the an amount is to be appropriated in FY 2020 to the fund for use in um FY 20 and FY 21. And then section four is the effective date so the act would take effect on passage. Okay our um we do have a few questions uh Mata uh had a question in the bob and then Peter. Okay three very short questions um Becky um this section 5001 of the CARES Act I just want to double double check that that's the section that contains the um the guidance the uh the regulations as to proper usage of the money. So that's the section yeah that's a section for the coronavirus relief fund and that has some criteria in there and then the treasurer the treasury has issued additional guidance about how funds can be used um after the act was passed um and I believe there's been two there's there's been a guidance that came out and then this week there was also um some FAQs that were issued. Thank you uh second question there is reference to the tax collection date as part of what needs to be um turned in from the municipalities this would be in section uh d section one sub d um and then number two under within that says the municipalities 2020 tax collection date does that mean say in the instance of a municipality that may have deferred its collection date does that mean the deferred date or the originally scheduled date or doesn't it matter I think if it's I think it's intending to be the date that the tax um is is set to be collected so if they deferred it then it would be the date that's deferred to but um that can certainly be clarified in the language um well personally I think it would I'm always on the side of clarity it's right I'm I think I'm confused um I this is for the state the state property tax collection and I I need to look into into I know that there's some bills about um deferring municipal property tax collection so I am not sure what the deferral rules are for the I know there's a June 1st collection date so I think I need to look into that okay thank you and then my last question in section two sub c that language about how the treasurer can solicit funds to go into this big fund from these various sources is that just boilerplate language that is added for any kind of special fund yeah that that's um that's language that just has uh sort of a responsible person giving given the authority to accept like a grant for the for the fund um we we do typically include something like that for special funds thank you thank you thank you made up for that clarification bob bob you need to unmute sorry um this happened way up in the beginning and I um was trying to write fast enough but it blew out of my sight and anyways it's made a mention of the reason for borrowing has to be something like it has to be directly created by COVID-19 you recall that hello sorry what are you are you asking where that language is well I'm asking yeah where is that language did I read it correctly and you actually read it sure so there's um in if I think it's in subsection c where the program is established yeah see I can't scroll anything um so the uh short-term borrowing cost has to be incurred um directly attributable to the COVID-19 pandemic okay that was it so how do you and I know this question's been asked a thousand times how do you directly attribute it to COVID-19 pandemic I mean how what where's the line drawn on that as to it makes it or it doesn't do I make sense yeah I mean I think the idea is that if a property tax owners are unable to pay their property tax because of a loss of income then the municipality will not be able to collect the the amount that they are anticipating collecting by a certain time um I don't I don't I don't know how the the treasurer might assess that um perhaps she can speak to that yeah okay all right I'm not gonna worry about it too much because it works both ways I don't think either side could prove it I mean if you if you go up to the taxpayers some are some are affordable of it and some are not but anyways okay I appreciate it thank you Becky thank you Bob uh Peter and then Mary and chef thank you and thank you Becky for coming in so Becky uh section one sub g records please um municipality shall keep records sufficient to prove this I know that the audits will occur audits I know from CMS are three years if not a little bit longer in the future for things occurring today so I have no idea how long these audits might go for my concern here is that if those records are not kept long enough at the municipal level such that they are destroyed and then if we are audited need to prove something we no longer have the records should we stayed in there a timeframe for which they must keep the records um that that might be helpful um I I don't know if the treasurer wants to weigh in on whether that um would be a helpful change in administering the program I know I mean under the the CARES Act funding the the money has to be used by the end of the year and there is some oversight in the federal government about making sure that it's being used for an eligible expense but I I actually don't know what the timing on that would be if if they consider this to be and not eligible for those funds yeah that's that's a concern and all I want to make sure is that we can prove that it is in fact eligible three four five years down the road when they finally they finally audited us go ahead Beth I think you're on okay um do you want do you want me to answer those questions at this point madam chair or should I wait okay so um I think that a couple of questions there so one in terms of um um what kind of documentation for instance if a town generally will have some level of of non-compliance um with the deadlines on taxes so for instance they might have a a lag of x percent over a period of time um and this thing exacerbated it uh the the COVID um crisis uh exacerbated it and it's over and above so we would we would look for some type of assessment like that uh how long you keep the records is a good question um we've been asking the uh the federal government whether or not this is going to be um I think the terms the CDFA number basically is it subject to the single audit and uh we're still waiting to hear some answers on that so I don't know what the record retention would be but we could certainly add into the application process itself um something um in terms once we get a little more clarification um what that documentation would look like or say something's the effect on the application that you need to keep it in terms of those timelines and then notify people that they need to do that it's unclear at the federal government level how they're treating these monies in terms of grant uh versus payment uh other type of payment and that conversation is still happening with O and B and the U.S. Treasury Department and others and we're waiting for some guidance in fact we asked that very question of some folks yesterday well I'm I'm satisfied personally Beth that if you're going to address the record retention piece uh through the through the application process that's fine uh Becky one more question if I may in section three the dates down at the very bottom um you've got the for use in and and I reread the instructions while we were sitting here for the COVID and it has to be incurred uh during the time periods that we have indicated uh specifically uh 30 or whatever it is 20 marks through end of year 20 fiscal year into fiscal year 21 um the fact that we are that we have section three it states for use in FY 20 and FY 2021 it could be a bit confusing someone might think that might cover the April interest that is incurred in April uh because that's still in FY 20 21 uh should we rephrase that to to um to state through December uh and you know end of month December um yeah that that change could could clarify that I think the intent there was that there is a June collection date that the the municipalities have to pay the Ed fund and then also in December yes it's possible that um a municipality would uh use this program for the December date which is in FY 21 rather for the June date um but it could be uh but the another point to make is that under the special fund rules in which this fund is created um the balance in the fund is carried over into the following year so you know it's not it's not necessary to save for use in what years because the money if it's not all if it's appropriated in FY 20 and it's not used in FY 20 it will just be carried the balance will be carried over to FY 21 so this section relates just to uh the treasurer's use of the uh the funds and not to the municipalities incurring um interest expense under this fund is that correct that's correct yeah the treasurer can make payments out of the fund in FY 20 and 21 but the the the costs still have to meet the eligible expenses under the CARES Act in terms of when they're incurred and when the money is expended I'm finding thank you thank you for that clarification Becky that was important um Mary your question please so two questions you define what municipalities are for the purpose of this fund are are there any other entities that collect proper that own property and would be collecting an education property tax um I just want to make sure that we're covering everybody um so the original draft of this had a broader definition of municipality um that's in Title I that includes um school districts and fire districts and I think it was raised in ways and means that there are some incorporated school districts that have taxing authority and could possibly um borrow under this program if needed uh ways and means decided to to narrow it to just city town or incorporated village um but I think that I don't know that the answer to the question if any other entity would um would need to use this program but I think that's that's a policy decision perhaps Karen Horn might be able to speak to that um because I know she's been involved with this as well okay thank you um I do it would be sad if we left somebody hanging out there who has an obligation that they can't meet so if Karen is on the line that would be interesting to know um Mary she had a one o'clock um okay did another commitment but she was going to try to do this over and I've texted Maria a while ago and if she is on um we'll we'll just hear from her yeah a couple of these questions and I'm guessing we would have heard if I mean she was she was there through ways and means and so I assume has this covered um my other question has to do with the creation of a special fund as everybody knows I'm not fond of special funds um in this instance I understand the need to create one um unless the treasurer can tell us that there is a special fund that we could put this in and keep as a separate account and associated with this assuming that we are creating a new special fund should we put a sunset date on it since it is a very specific use that we're creating and make provisions to revert whatever may be remaining there at the as of the sunset date I know JFO and the administration look for these monies and sweep them as appropriate but why not make it automatic uh Beth are you still on uh yes um I think that having a special fund is appropriate in this case and I didn't see a place where it would be a better match with respect to to a date that this would sunset I think that there may be some need going down the road with additional um additional need with communities and and depending on how things work their way through in 2021 um and uh I would recommend leaving it now at this point because you're going to come back in the fall and reassess uh where we are with this and whether or not you want to make any other provisions we could put a date out in in you know for a year or two Beth uh just so it comes back to our uh awareness and it just doesn't hang out there that's true that's true now the point I would make however is that any of the monies that we do receive through the uh CARES Act need to be expended by December 30th and uh another question we've asked and we're seeking clarification on is what does incurred mean does it mean if you have a contract as of June uh 29th December 29th versus you must have all the dollars out the door by December 30th and we're seeking clarification from the federal government on that as well so unless there is a concern about this I would like to propose that we put a sunset date on it that could be for all I care five years out um just as the chair noted so that it does come back to us you y'all know how we are in in 10 or 15 years we're going to be wondering why in the world is this there and why didn't we take care of it Mary in 10 or 15 years you and I are not going to be wondering somebody else is going to be wondering what they were thinking yeah so so Beth do you have a recommendation for a date for a sunset that would um that would um how about the end of uh June 30th uh 2000 in um uh 21 at the end of next fiscal year at that point yes and then we would um um do the books based on that so close it out and you can be comfortable with that Beth uh yes again you may want to look and say gee uh you need to do a little bit more and you can push it out but I that's I think that's fine I think that's an appropriate way to do it and I won't be here in 10 years to look at it either thank you um so just to clarify would that be a sunset on the fund or the program as well with the idea that by the time June 21 rolls around um the the program will no longer be needed I would assume both fund I would assume the fund again I apologize if I um but I think it's the fund you know the the eligibility is going to be determined by the federal government whether they plan on expand expanding this or there are other federal aid but I would assume it would be on the fund at this point in time okay and before we make that change I would just need a show of hands from committee members on a couple of things so um we'll do a show of hands um when we when we look at a couple of the other changes that were also recommended um Mary were you have are you going to ship your hand was up uh yeah I have a couple just brief questions but I think I'll muddy the water on this issue before I do that um so the only things that are eligible for this program are the expenses incurred um between March 1st and December 30th it's it's already by that a sort of a disappearing um program um you know once once those expenses have been covered to the degree that can be the thing disappears I mean we might have to go back and and change the um you know remove it from the books but it but it it will cease to exist for all practical purposes if as Beth says we want we might might need it again later we're going to either have to resurrect it by changing those dates or just create a new version of it um so when we get to it I'll I'll be arguing that it doesn't need a sunset but before that uh my questions um for Becky um and the section D the application that says the municipality that has duly authorized a short term borrowing um is that clear in these days of of a new world what it means to have duly authorized short term borrowing has it changed at all from our our previous life and is it going to be clear to the municipalities what that means um I think I need to check to see if there have been any changes in how that can be authorized uh my understanding was that it is it should be the same as it has been but um I can I can just double check on that okay uh and the other question is later in section D both three and four um uh for part of the application requires supporting documentation um later in F1 it says the treasurer shall specify the form of certification to the municipalities will that will that um specification by the treasurer cover those what's needed in the supporting documentation I think that was the intent um unless the treasurer has anything to add to that but I think the intent was that um the treasurer would be sort of prescribing like the certification and application process like and okay I just want to make sure the municipalities know what they'll need to provide but thank you and Peter and Bob I think your hands were up from before unless there's a question um we are in unusual times and we need to move this bill very quickly and we do not have the ability to go out in the hall and chat with people to get information and then bring it back into the committee room so I have asked um uh Karen Horne from the Vermont League's League of Cities and Towns to weigh in on Mary you had a question regarding is anyone being left out and so Karen would you mind responding to a couple of questions that the committee has I'd be happy to Karen Horne for the Vermont League of Cities and Towns thank you Karen Mary do you want to ask your question please yeah Karen this is a narrow definition of municipalities which makes sense and I was wondering however if there is some other taxing entity responsible for paying property taxes that may need to have the same sort of shelter that we're providing here for towns I can't think what it would be but I just wanted to double check so the um this piece of legislation only addresses bar um municipalities that are collecting education property taxes and then needing to remit them to the state um and so uh the only entities that actually collect education property taxes are the cities the towns and the villages it's pretty narrowly written okay so no one else collects education property taxes except for those entities that we've described here yes great thanks and Mayda is your question for Karen uh yes it is go ahead may I is it okay go ahead okay thank you uh Karen um from the league's perspective under the information to be included in the application the second thing on the list is the municipalities 2020 tax collection date um how do you define that well the um we actually have a list of all the municipal uh tax due dates the towns in the state and um so it would be the uh tax due dates that have been established in that community I can actually send that list to the committee if you'd like but what we're really looking at are towns that had due dates um after the beginning of this COVID-19 crisis because those are the towns that are experiencing um difficulty as a result of this crisis and and again the bill is limited so that it's only addressing that piece of unpaid education property taxes thank you very much I understand thanks are there any uh may uh marty is this question for Karen I recall a bill I recall a bill that we passed through the house just last week in which we gave towns the ability to defer the tax day receiving taxes from their citizens they they had the ability to defer that tax date it did not allow them to defer the time that they had to pay it to the state however but it did have a deferred tax date from their citizens and wouldn't we want to include that here as well because if for instance if they ask their citizens to pay the education tax by May 1 and due to complications right now they might say okay you don't have to pay your education taxes to us until August 1 that's a a deferred tax date wouldn't we want to include both of those dates here isn't it just the municipal portion that we allowed them to do not the state education piece what I think we allowed them to defer the date on both days but we didn't allow them to defer paying it to the states yeah but that is defer when their citizens had to pay it yeah this is Karen Horn so you did pass legislation that allowed the town to defer tax due dates on both the education and the municipal tax side it did not change your your right representative it did not change the due date for towns having to make the education fund whole right and this legislation would allow them to borrow in anticipation of those taxes coming in the state will pay the interest due because of that borrowing and the treasurer may have a comment on this as well if she's still here if I may if I may madam chair I think that yes we're looking for the the date but we would also ask in the in the in the explanation of why why you need it if it wasn't for instance that you've deferred the dates from April 15th to to May 15th that would be something that we would see in the application itself okay but the the reason that we wanted to ask that other question of what's the date because this getting to Karen's point earlier this would only really apply to people that had tax dates after after March 1st because if you had a tax date of of of January 20th for instance I'm just picking a date off the top of my head you would not be adversely impacted by the the COVID Marty does that question okay yes I mean if the town had a date of May 1 and then they decided because things are difficult locally to extend it till June 15th they could still apply for these funds I mean and then if they have to go out and borrow then they could apply for these funds and I think the tax collection date would probably they would probably call it the deferred date because they had officially deferred it but it was still after the other date beginning in the COVID problem okay okay and the risk is the same as the regular collection dates if people pay their property taxes or not there's still a risk that they may borrow what the need is but all those taxes don't come in but that happens in towns anyway over time yeah Dave is there an estimate from anyone on what the appropriation amount should be we got one from the treasurer earlier at 2.7 we're going up to 2.7 but March not March May 15 would have a better amount and Karen you might thank you speak to this and that an adjustment could be made on the senate side or in the skinny you know we could also put it in the quarter year bill so Karen does that number you know what the towns um what what it's like in towns the treasurer suggested 2.7 million and we had a suggestion to write up to 2.7 and then I did think oh sorry no I'm fine go ahead I do think that we will have a much better idea on May 15 the number of towns have their final payment on May 15th and and to the earlier question we do have some towns that are deferring tax due dates we have a lot of towns that are not because they don't feel they can at this point so on on May 15th or May 16th most likely I think we'll have a better idea of what the need is going to be Madam Madam Chair may I ask a question of of Karen yes so Karen what I did just to try to get a thumbnail on this is I took 132 million that was offered that 315 report and I multiplied by 2% and added just a little bit of room is that a reasonable process at this point in time or do you have a better suggestion for the committee um I think that's a reasonable process I think that you might want to go for like 5% instead although it's um I'm not a mathematician but um most most of this year's taxes have been paid so the um have been collected excuse me and so the amount that is going to be delinquent or not available to provide to the education fund is is definitely low but I think it you know it's sort of an estimate at this point and it's what you're comfortable with treasure or committee on to that Beth what the percentage is that you're comfortable using that we would reflect in this. Are you doing the calculation Beth? I apologies I had you on mute I would assume that 132 million actually some portion of that and Karen is correct would be paid so that's a high number when I talk to the bank that recently I'm hearing numbers between one and a half and two percent it might be a little higher but I think it's off that on the other I'm comfortable with this is a ballpark and less Karen says boy I've got the other information and you know and um this is nowhere near near near the range I was thinking um and again we can correct it on May 15th but that was the reason behind it the 132 million that was potentially outstanding recognizing that some portion will not be and then just a rate in that ballpark at the moment we could certainly increase that rate test for instance if I increased it to 2.5 percent we'd be talking 3.3 million but the other piece too is that's for a whole year and I actually think that these will be less than that someplace if you did this at six um six months for instance it would be 1.6 so I think 2.7 is a comfortable number until we get to uh a week from now or so. Thank you Beth. Marty your hand is up was that from before or do you have another question you're good any other final questions um on this bill and this is fully supported by the Vermont League of Cities and Towns who have been working with with um communities across the state Karen is I guess yes yes we we're very grateful to the legislature for taking this up it's going to be very helpful okay thank you um Mary you have one question no I don't have a question I just want I had raised the issue of sun setting this and are we going to have a conversation about we are I think we can have that and we I know everyone else is busy so the treasurer I I think that she gave a date out that we could talk about sun setting and there's four pieces that we just need to make sure with Becky that we have a final copy of of this bill I'm assuming and I should never assume but if I could just have a raise of hands of how many committee members would support such a committee bill being explored further would you raise your hand and I'm I'm counting with my fingers one two three four five five six okay seven we have a majority okay thank you thank you Karen for joining us Beth it's always nice to have you here thank you for coming thank you thank you very much thank you okay um so um let's um let's see what time it's 303 do we have a few more minutes are you guys okay to to work on this just for a bit more uh Becky the first piece that uh we need to see in a final copy with dub ops on page one section one small letter b number one to put in interest on letters so we don't have that in our in ours but uh we would need to see that and the second one with what made a brought up in section one small letter d number two the date clarification language you haven't already done this have you been have I already done this yeah you know I just I have the gov ops change oh okay I don't have um what was just discussed okay so made up it's on that number two uh d two that we would make that clarification um the so that clarification would be to say that the defer the collection and any deferral date made up um can you weigh in on this this is I think I think that's what was shared in the conversation by the by the treasurer and by Karen that was my understanding that in the application process the original date could be there but if they defer the deferral date also so you don't want to change it here or you do made up well I haven't personally I have an understanding now of what is meant but I did not have that understanding just looking at the words as they are currently on the page and so what would you like it to be made up what's your recommendation goodness gracious um all right just to do a knee jerk thing for for to move this along a little bit feel free to attack me okay the municipality's 2020 tax collection date as originally scheduled or deferred or to to the deferred originally or deferred date how about putting I don't think we want or deferred date I think what they want to make sure is that that the original collection date falls within the time period for which it would be allowable correct Beth said that in the application she's she's going to have to send out specify the form of certification to the municipality she said she would make clear to them that she would like in that section that she would like both the this date and the in any deferral date so we do not need to change this we can trust the application process to yes and if a question about this comes up on the floor when we ever get to that point you know what this means and how it'll be covered in the big picture yeah so everyone is comfortable with leaving D2 as it is and that it would be addressed in the application process and I have a thumbs up or a hand for people just so I'm seeing that we're okay okay I have the next piece um was um I'm going to do the 10-set last I want to talk about the money Beth was pretty clear on the 2.7 million how our committee is feeling about I believe it was we were going to consider up to 2.7 million how do committee members feel about that yeah I I have to say I think that's a very generous amount given the the discussion we heard both by Karen and by Beth about how that was arrived at so I would I I think it's more important to put up to in there but I think that's a fine number I can't imagine and I'm exceeding that any other oh wait I do have some hands up Dave you have a hand up yes I do I agree with Chip it's I mean it's based on the full 132 million and I just don't see that happening because the more money we tie up to this it's not going to be spent on other causes that are perhaps equally if not more important but the chip's point said it better than I did okay um made up so um this amount is to cover the interest payments to the municipalities as well as the payments to the treasurer's office for the administration of the program and um come May 15th um next week is that next week yeah that's next there'd be a clearer picture as to what the amount is and it can be changed then right yes it could be addressed in the senate side once the once there is a number I my free screen just froze or made a your preach yeah things just can't go I need to lower my hand okay Peter just a point if we put two point and I'm fine putting 2.7 in there right now and I know the senate will adjust it based upon a little little a little more information at that point in time but if we put two million dollars in there 2.7 million dollars in there and one million remains unexpended and unallocated based upon nothing incurred towards it on the end of the year it has to be returned to the US Treasury just you know we're going to need to watch that and we may want to actually put something into the end of the skinny budget that actually addresses that because I'm going to ask not in this bill though Peter right no not in this bill what's not well let's get this thing moving um and if maria could maybe make a note excuse me if maria could maybe make a note to remind us that we need to uh you know we'll need to remember that okay I have marty and chef I would I would disagree with you Peter I think what we're doing here aren't we appropriating general fund money 2.7 million and then we will seek reimbursement as necessary we're going to seek general fund money left over okay if we do it that way we're fine we're allocating money we don't have but we're okay you know we can do it that way and we'll be fine Becky you need to jump in to yeah so this the the treasure did um and you might want to seek clarification from her but I do recall that she she testified to the fact that we there there would be an appropriation first and then we we'd be seeking to reimburse that with um hares act funding or any other federal funding that could support that program okay she clearly stated she thought it would be reimbursable but there's always a risk I wrote down the marty okay that's it it's a it's a general fund appropriation and then we will seek recovery right okay uh Dave and mary yes so now I'm more concerned you're you're saying we're going to have to um commit several million dollars that may or may not be used in general fund at a time when more hemorrhaging general fund elsewhere would needs we can't appropriate this to the federal covid fund wouldn't that give us more flexibility and then just draw it down as we need it why would we tie up resources at such a critical time not arguing just asking well I think that the resources um could be made available uh for this very short period if need be um they we we we have the resources that we could find for a short period of time within our reserve state to do this um I shouldn't have had the treasurer come off the line so fast but we need the approval process of the covid 19 dollars and we need the money to go out forward uh well we have the dollars with covid but we we don't have the approval of it and I don't know if we can get Beth back because I can't answer that question um because we have to make absolutely sure that the dollars do work for reimbursement but then then then I see your point is this um a priority if if it's not if they're not reversible is that your Dave is that your um yeah I hate to just uh tie up tie up cash at a time when it's very precious general fund cash that's all I don't see why we can't you know housing and uh government ops voted 10 and a half to nothing you know and the belief that this was a permissible expense why not just cook it through a federal line item and then pay it from there because if it's if it's an inappropriate expense if down the road it has to be reconciled then it has to be reconciled Steve Klein is um he is on this um he's on this zoom meeting Steve is that something you can weigh in on yeah I mean I I tend to agree I think you can appropriate it out of the uh CRF money and then the worst case is we would at some point down the road after it would be disallowed and we'd have to repay it which I don't think is happening I tend to agree it's very eligible and so I don't see why we wouldn't uh in this part of the list of things that we can appropriate you can either put the bill out and give me the authority to and put the appropriation in your bill or just add to it and say appropriating CRF fund you know whatever the amount is out of the CRF fund um so I would I mean we can talk to Beth about it but that would be my my sense also okay um that's something that we really need to have uh clarified by tomorrow morning so that we can get this bill out I was hoping we could perhaps get it out tonight but that would be a big piece that we need clarification on um I'll try to reach here but I might I can do I think that this is very very usable um okay thank you um there's a goal we have the treasure coming back on the treasure appears we let you go too soon your appears you're unmuted hi Beth I unmuted go right yes Beth we've come across a stumbling block just as soon as we let you go um Dave and Marty and others have brought up um an interesting question first that these general funds that will be reimbursed by CARES dollars the question is the CARES dollars are here and in the bank can we use the CARES dollars now instead of substituting them later um I think the answer you can do it both ways I think that one way to do it would just to be appropriate the money because again there is that that possibility that it's not eligible and get a better tune on the money I get your point I you know when I gave that 2.7 that's the high end and at least I believe it's the high end um and I'd be interested in seeing what um uh happened after the the league has been able to weigh in on that next week um or you know if Steve thinks I just I was just listening to to this uh uh discussion which is why I called back as quickly as I could um I I'm okay with Steve's approach as well I would just say you you know we're not going to know for a long time whether or not this money is going to be I mean we're going to assume it's eligible I'm jumping back it's going to be yours yeah okay so Steve is your recommendation that directly use the CARES dollars for this yeah and we would just appropriate out of the uh CRF funds um rather than the general fund and and then we would reflect it in our BAA in that CARES yeah or yeah we would just note it Kim uh made up so yeah so I was going to ask if this did not fall within that framework which you folks on joint fiscal adopted the other day you know where there's that big bulk of COVID money subject to appropriations from the legislative process or through the legislative process so and here we I guess in my own way I'm like Steve was saying it seems to me that we're exercising that uh that possibility here and and and this is our this is the first appropriation that's coming and it sounds like it would apply Mary and Kimberly I like what we're deciding to do um I'm a little confused how you appropriate up to I mean I'm assuming that means we're going to set aside 2.7 million and which ties up money that could have been used so how do we think about that and maybe Steve could help us well with the only I was just going to weigh in quickly Steve you can unmute yourself the the two point the 1.25 billion dollars this small amount's not going to tie up much because I don't think we would have it all out the door until into the fall and yeah I think that's right and you'll have another chance in in August to yeah change the number so either way you know it's it's uh yeah yeah that makes sense thank you Kimberly yeah I I think I get it I just had a clarification along the lines of made that this would fall into tranche three in terms of the tiered joint fiscal and we and it would book in it's such a low amount compared to the rest of the pot of money that remains in tranche three that it's not a concern unlike tranche one and I don't know where things stand currently with tranche two right there's nothing out of the second one yet and proposals for the the administration will see the excess receipts for the first one but there's nothing out of that I know of out of two or three you don't agree Mary no I'm just amused that we're saying oh it's only 2.7 you know it's no big deal think about how we fight over I know over 50 000 yeah okay 10 let me get 10 000 let me get a read from the committee if the committee you have two choices either you would like to use general fund and have it reimbursed or you would like to use the crf money right away how many of you want to use general fund and reimburse if I could see a hand please a wave of a hand I don't see any how many of you prefer the second method crf money okay I either got blue hands or other hands so Becky so we'll change the language at the end and are agreeing that it would still remain up to because of the adjustment in the skinny bill or in the bill in September all right that takes those pieces the last piece was the sunset date and Mary I have I have to say I have some sympathy I want to go into those special funds and get rid of a whole bunch of them but Chip you also raised a good point the program ends but the special fund could hang out forever so do you want to talk a little bit about what we wouldn't get rid of the special fund you know I mean ultimately I absolutely want to see like everyone see the special fund go away I guess you know I guess I don't have a strong feeling about it I mean I think this this is self-limited in in the actual affected time of the program and if we and therefore if we want to put a well so I guess I'm not queer then what Beth is saying about how we might need to use it again unless she means for next year's taxes because by the time this is the eligible time period and this elapses municipalities would have taken care of that deferment the possible deferment of property taxes so is she saying we might need to use this again in the following year he is still on the yeah I I don't I don't the thing is that I take it one year at a time this money can only be used for CF money can only be used September 31st so I would do this as a one-year event and then somebody if you decide next year you have to do a similar program unless something changes you'll be will be funding in a different way okay so I'm gonna drop my objection and agree with Mary let's get rid of this thing after it's done Beth did you need to weigh in would you like to weigh in I'm fine with that decision I think the one thing I'd point out is the definition of encourage is still in flux with with the with the guidance so again you might you might have a bill that was incurred on December 29th and it takes to April 2nd or 3rd to pay it or does the money have to go out all by December 31st cash out the door and that's a question we're still trying to seek clarification on so I think having it out to June 30th is a good move and some setting it is just fine with me thank you Beth so if I could just see a race of hands how many of you are would support a sunset on the fund on June 30th 2021 would you raise a hand or a blue hand or any kind of hand Linda what are you thinking okay I'm just looking for hands I see Maria's hands but that's all I see okay I think we have a unanimous uh there so um so my next question is Becky how long would it take to make these changes and is it too late in the day to get it to the clerks off its office anyway you know I think I can make these changes pretty quickly I just have to I sent an email during this call to our drafting operations team to see if they could open this as a committee bill um so if I can I think they would just have to do another one silver of it um I don't to the answer to the question of the clerk's office I don't know what time they are available until Marisa can you give a quick call to the clerk's office to see if it if it doesn't matter we could come back tomorrow morning and do it I will email that I will email Bill McGill okay um and I think that that completes the bill is there anything anyone thinks that we have missed do the money up to change it to crf money put a sunset in we're going to leave that date clarification and we'll make sure that the interest on those two words are in from the gov ops committee would you like me to sign off so I can start that getting that done and try to text you uh or email you if it's tomorrow representative toll can I before we get I just happen to think this is a committee bill yes so it's Nadine and not Bill McGill oh I don't know that so it doesn't normally do the committee bill it has to go through uh drafting apps first okay well if they can accept the bill if they can accept the committee bill just today I will I will email them both simultaneously but I believe that's the process not bill yet Nadine I won't get back and then um so while while we're just waiting for uh an email to come back I'm just looking for my agenda I know I had an agenda around here somewhere that I organize myself is why I can't find my agenda thank god I'll I'll find it for you no I've gotta have it I'm convinced that I'm organized now tomorrow morning we're going to have Adam Gresham back in to talk about the language the 50 000 in the more inclusive state and um he will be Sarah Clark is on at 8 31st yep and Adam will be uh at 9 30 and um Sarah Clark is coming in and she's going to talk about the COVID-19 tracker and and really focus in the a large majority of these are within AHS and and to talk about expenses that they have incurred and and expenses that they are tracking and she did a presentation for I think Senate health and welfare and she was updating it and tweaking it for so that will be 30 tomorrow then Adam will be 9 30 to go over the language and then um I'm not sure after we hear from Adam if Steve has any availability or Maria or there any pieces um you and Steve were going to weigh in on I think uh we had asked for legislative council to weigh in on the language that Adam has presented but does that need to wait until Monday or can we do that tomorrow so you had asked about the um 50 000 that language Adam's gonna talk about and I think I had um communicated with Steve um asking him what his thoughts were on it so he's on right now he might want to just um let you know what his availability is Steve did you follow the conversation I'm I know that when you're muted you're doing three things at the same are you there Steve he's physically behind that name but he's not with us okay so so we'll uh we'll ask him and get him on tomorrow because he may have some thoughts on that I just I didn't want to answer before I you know talk to him and um and also um if he's not available on Friday we can we can do this Monday so just waiting to hear back from Teresa on that email um I just want we still need a little more time with the Clean Water Fund because we need to hear back from the Committee of Jurisdiction Marty you haven't heard back have you from Amy Sheldon. Amy listened in to our YouTube this morning and she passed along the spreadsheet that Julie gave us and she was going to send her she was going to send that to her committee with comments and ask them to reply by tomorrow if they had questions but she said she would reply by tomorrow afternoon on behalf of the committee but um I can ask her if she can do it earlier if you want to okay thank you um whatever whenever you get the update we would take it I'm I'm just going to um make notes um on my sheet uh using the enhanced FMAP money to bring us to closure is there um anyone that um um I need to know if if that's going to be an acceptable use for uh committee members um I I just want to go through the adjustments and we're going to leave the clean water piece out because we're we're waiting to hear back. Kitty? Yes. Dave here that falls kind of in the Medicaid bucket I do not see why anyone would object I did however send a note to my committee liaison um uh but I would you know you know if you don't do it you got to cut somewhere so I would think people would want to do it. Thank you Dave so um is there anybody um Dave has a recommend these are just straw pulls yeah okay Dave has a recommendation on the table to use that $38 million if you agree with them can I have either a blue hand or a real hand just something that I see okay I have a majority so I'm going to just put an okay there um we also have Dave the reduced Medicaid claims the states that are one time in nature because those those procedures are going to start back up and this is a one-time expense what is your recommendation there is my recommendation is to accept it okay and how about committee members uh can I have a blue hand or four five six seven okay I have a majority um the renter rebates um it's just a lining experience with the actuals and that's 1.4 million dollars I have a thumbs up if if people agree to rebate I agree with you but I didn't check in with ways and means on that or that's okay this is just for our committee so tomorrow we'll hear back from your committees if it disagrees we'll thank you though Diane but I heard that little baby voice in the background lucky you to have a young voice yeah the bond investment earning we heard from the treasurer she was good um and we also heard that's an allowable use can I have a yes or a yes if you agree with the treasurer and the administration and okay I have a majority there the unclaimed property is that a yes for everyone okay and um since we've all paid in the liquor tax we might as well we might as well use it okay so so we are good with those sources so I believe that the the last the last three things that we have to um to uh agree upon as a committee and and to hear from the committees of jurisdiction obviously but for us is the clean water uh how we're going to do the end of year construct uh which method that we want to use and that will be part of our discussion tomorrow because that's going to be um you know we're going to need to work through that and clean water end of year adjustment and the last thing would be what um COVID-19 expenses that we that have been incurred that we can reflect in the budget adjustment for 2020 am I missing something those are the three pieces I see outstanding did you did you do the reserves versus accrual yep that's the end of the year yep okay oh that's the end all right in language oops kitty you're frozen lost kitty uh oh oh dear Mary take over yeah okay so she's asking if there's anything else I was suggesting it's language I think we're all pretty clear on what needs to be done um I don't know if she had anything else for us I believe she did not Teresa do you have any insight into the idea I'm texting her now yeah um so let's just wait and see if we hear from kitty Mary he's gonna go out and come back in okay so made up was that you yeah somebody's back in not yet what did you have made up I just had a question um I I don't know if this is accurate or not but I had made a note to myself from the last time we were on the floor that we actually received a bill are we supposed to do anything with that bill as we just tell what it was 945 yeah we had h945 which I think we did oh a special ed do you know what are you asking to be on multitasking in the background did we I don't know if my note is accurate or not I had a note here that s 343 something to do with special ed come to us that's what I have a note too that's ghost appropriations okay I don't know I hadn't heard that special ed delay and special ed change changes due to COVID-19 okay I just had a bill today yesterday yeah the other day or the other day nobody yesterday yeah yesterday it was yesterday so I gotta before we get into can I just tell you what Nadine said and Bill McGill will tag on this but and Becky Becky is in contact with them now that I've linked everybody but it says I will need the draft from the attorney which Becky's working with her she's giving her the drafting request so she can set up the document and get it edited she asked does it need to be voted out today for introduction tomorrow or can it be voted out tomorrow so she needs to know the timing are you voting it today or voting it didn't I didn't know if the clerk's office was even open that was what I was wondering if it's supposed to be there at a 430 but it has to do the most work here so well if you need them to get this all ready to be voted out then we get it to the clerk but she's like the start so how much time is it between now and when we could vote we could have a bill in front of us to vote I think her office can do it rather quickly but they're working on it now so I think this is time sensitive for communities and and the sooner so that we don't miss oh and here's Bill he says Nadine and drafting operations will need to get voted out version of the committee bill and then they will put it in bill form where we get all that he says I will pick it up once printed and it will be introduced tomorrow so if we if you voted out today he can get it on the calendar so what I could do is let me ask Nadine if you want to keep going I'll ask her how long before it'll be ready so I apologize my computer died and I had to go find my cord we have the three pieces the clean what we're doing with clean water the end of year construct and COVID-19 and Steve are you listening I can see your name here I have a question for you hi Steve tomorrow I don't know if you have time to come in we after Adam talks to us about the language at the in the BAA regarding the $50,000 and expanding it between departments we would like to have you or Maria or both of you explain you know what exactly that means and and you know if it may be not unlimited you know for a billion dollars you know is there an amount that that in these Trump these difficult times that we're in that we should consider as the JFO office could weigh in on and help walk us through great okay yeah I know we can try to do that okay and then my other question uh Steve and it's coming back to my mind and I'm what was my other question I was going to ask you that piece and somebody help me there were two things there was that was it about a cruel versus cash yes that's it thank you Kimberly um would would you um with the JFO office like to um to weigh in on the testimony between the the administration's cash proposal and the treasurer's proposal of you know using the dollars come in in 21 to retroactive 20 is that something that you would talk to us tomorrow about the pros and cons or would you yeah I won't be able to add but I you know I'm not a I don't have a strong yeah opinion although that may be changing by some recent news but um yeah I can talk to you about that okay and if there is some recent news that you could share with us that would maybe help us make decisions okay hey kitty Maria Mary yeah if we're just hanging around here waiting for this draft to come up and we're stuck here waiting I don't know if Steve's ready to talk to us about his opinion about the closeout but why not do it now if if we're just waiting anyway was there more information you were going to research Steve no I I mean I would I would just you the cruel thing the cruel versus yeah I mean I'm pretty agnostic about it uh I was um slightly lean toward the idea of what Beth suggested which was to do it in an accrual basis opposed to the reserves but the what came across the wire just now and who knows you know it's a very strange national scene um the president is talking about maybe postponing the revenues the tax obligations from July 15th to November 15th or October 15th and you know we have no control over that that's sort of something he can do and if he does then we the cruel thing is sort of out of the question then so I think it seems to me the safer way to go is probably um what Adam laid out because the worst comes worst the reserves will be unfilled with that fair time but you haven't created a situation where you really can't accrue it accrue it back so I and I don't know how real this is you know it's it's uh you know every day is a new day in the Washington world so uh it's um but if that is a real problem and we'll probably know it does create issues for the cruel approach right and we may not know that until you know they could work you know that could be a tomorrow decision or that could be a two week birth a week from now decision yeah yeah that that that was uh interesting timing that had just it literally just this afternoon that uh the first news event uh came across so and I don't know if Beth has seen that and we should I doubt I doubt it are you sending it to where Steve yeah I'll send it to her okay Kimberly yeah I just just in terms of interesting timing I think it's also talking about the previous bill on municipal and moving around dates and keeping track and yeah backfilling I mean to me personally first impressions and having to look at this a little more that was also another argument for me about why that can get a little muddy yeah Mary Adam suggested that the a reason to go with their approach was that the feds may be more willing to help us out if we've used our existing resources um he said that's the way other programs have been handled and that was compelling for me too yes I agree I'm multitasking here yeah and and I don't know if that you know something to think about we we don't know if that would be a factor or not but we wouldn't want to eliminate it as a factor if so kitty yes at the end of the day you know tomorrow or the next or whenever sometime soon we're just going to have to say hey we think this is what the feds are going to do and manage it based on that I mean what Steve is raising is really changing our thoughts but it could change again yeah yeah so at some point we just need to say we're going with something chip you are frozen for some reason chip you're completely frozen we'll come back to you Diane thank you I I was uh in the same camp that Mary was I'm glad that we're on the same page there would you know I heard from Adam when the explanation that there might be there was a little bit of an advantage that we might be able to get forgiven I don't like having the risk out there that our reserves are emptied out before they go oh look they they've emptied their coffers you know I did like the accrual piece better until Steve mentioned that news so now it changes everything that does put a twist and I think the treasurer needs to hear that because she may weigh in differently yep you want to try it again can you hear me now we can no I don't need to go into any detail I feel the same way everybody else is here I mean I don't think there was a strong argument to absolutely do one or the other and this might just tip tip us tip me anyway towards sticking yeah thank you Chip um Dave and Mehta um I as I thought about it the two key components to the discussion were liquidity and comparability and in my mind if you spend all of your reserves you've hurt your liquidity argument or position haven't you even though it's for a relatively short time until it gets paid back that was the treasure of one of her arguments yeah yep how important is liquidity probably is Mehta I was solidly in the camp in support of the treasurer's approach to this until Steve's information I mean we need to protect ourselves God knows what will come out of Washington um which could just totally totally up end um a decision that we make if we you know if indeed revenues aren't going to necessarily be coming in when we think they are I agree yeah there's lots of questions Peter okay yes I agree we need to protect ourselves I I was I had already felt that I was going to go in one specific direction and then Steve just gave us some information so I am in the I've really got a gnaw on this camp now and would like a little more information you know I'm I'll make a decision if we have to but I'd like to see if we could get a little more surety number one number two kitty I've got to leave in like four minutes I've got a 25 minute teleconference that I must attend I will be back by 4 30 um so just to let you know um thank you Peter um it's at the proof readers right now so we should have it within minutes Peter and Diane do you have a sheet ready to go and you can read a motion for us I do okay and um tip your hands up do you have a question nope sorry this will be made is going to report this made us going to report this this is why she was asking all those questions so she'll be right floor I didn't want to fill it in I was making that assumption and then um we don't have a number yet but it's going to be sponsored by the committee of our committee did we lose bob helm yes I don't know where he went is he coming back on okay um the editors are saying um probably 15 20 minutes so I know I'm happy they just I'm going to be on a tell I need to do another zoom a little bit later if you want but I mean it may be sooner but that's what she said check back in 15 minutes so they just zoom in at 4 30 to vote does that make sense to are actually at 4 20 so we can get it to the clerk's office before 30 but Peter needs to get in I can yeah I'll I'll stop my my my teleconference at 4 20 and and I'll come on the same you can do two screens I'd prefer to do a you know cut it short by five minutes than not started at all okay perfect okay so I will send you a zoom invite for 4 20 okay can I use that on my phone Teresa you can do anywhere you want excellent I'm going out for a walk all right thank you guys take us out Teresa I gotta go apply oh yeah