The federal agency that subsidizes Vermont’s historic preservation programs has threatened to hold back its $550,000 annual contribution out of concern that the state’s Division of Historic Preservation-which has lost one third of its central staff in recent months-is no longer capable of meeting federal requirements.

In a letter sent to Gov. Jim Douglas last month, Jon C. Smith, the Assistant Associate Director of the National Park Service’s Heritage Preservation Assistance Program, said recent changes in the Division “would not meet the requirements of the National Historic Preservation Act and would jeopardize the status of Vermont’s historic preservation program.”

In an interview yesterday, Smith said he was confident “everything is going to be fine,” and predicted that the state would get its funding.

But his December 22 letter calling recent changes in the Division “problematic and of great concern” to the National Park Service echoes concerns being voiced by historic preservation advocates in the state, who fear that the Division (the DHP) has been enfeebled by the Douglas Administration,  out of either indifference or outright hostility.

“I’m very concerned,” said one of them, who, like many others, deals with the state agency regularly and therefore did not want to be identified. “I want to believe it is not maliciousness in spirit that has brought about these changes”

The changes this activist was talking about were the same ones mentioned by Smith in his letter. Viewed separately, each seems an unremarkable example of governmental routine-a retirement, some bureaucratic chair-shuffling, the elimination of two positions.

But the combination led Smith to warn that “if the (DHP) is left with a staff which, in the judgment of the National Park Service, acting on behalf of the (Interior) Secretary, is inadequate to perform any or all of its responsibilities…NPS would be obligated to suspend Vermont from approved program status and eligibility to receive annual Historic Preservation Fund matching grants.”

The DHP’s recent changes, he added, could threaten Vermont’s economy.

“Drastic staffing cuts and changes in staff responsibilities…would further complicate the prompt completion of economic development projects that would help your State and its citizens recover from…economic difficulties.”

That wording illustrates what appears to be a difference in outlook between the historic preservation community on one hand and many businesspeople-and apparently some Douglas Administration officials-on the other. In parts of the business world, historic preservation is seen as just another regulatory obstruction. To its advocates, historic preservation is, as one said, “a means of economic development.”

Paul Bruhn of the Preservation Trust of Vermont called the historic preservation process ” an incredible economic engine for the state (which) last year processed $60 million worth of rehabilitation projects.” Bruhn said that  ”translates into $12 million of new federal money coming in tax credits.”

The tax credits, Bruhn said, can save a developer up to 30 percent of the cost on some construction projects. Most of these projects are either low-income housing construction or restoration of older buildings in village centers or downtown city areas, precisely where many experts think most development should take place.

To qualify for those tax credits, developers have to get buildings put on the “National Register of Historic Places,” a process which relies on a State Historic Preservation Officer, ” who is the DHP Director.

Director Jane Lendway retired last month after 35 years of state service. She has been replaced, on an interim basis, by Nancy Boone, who was a staff architectural historian. Meaning there is one less architectural historian.

Perhaps, Smith’s letter said, there are now not enough.

Until recently, nominations for  inclusion in the National Register were reviewed by an expert in the field, Sue Jamele. One day last fall, she said, she was called into the office of Kevin Dorn, Secretary of the Agency of Commerce and Community Development (of which DHP is part) and told that her job was being eliminated.

“I had no idea my job was being cut,” she said. “Nor did Jane Lendway who was my supervisor.”

Earlier last year, Chris Cochrane, the specialist who reviewed the tax incentive aspects of historic preservation projects, was reassigned from the DHP to the planning section of the Agency of Commerce and Community Development. According to one historic preservation supporter, Cochrane was one reason Vermont is considered  ”one of most effective states in terms of drawing down tax credit dollars used primarily by land trust and nonprofit housing developers.”

Cochrane reportedly still does the tax incentive reviews for DHP. But on top of other duties. Furthermore, he no longer reports directly to the DHP director, as appears to be required by federal law.

Sue Jamele said that former director Lendway had told her that she and Nancy Boone had been doing Jamele’s former job “on the weekends, but of course at a much slower pace.  Services are much reduced.  No one has time to do it. They’re trying to fit in pieces of what I used to do. . I think it’s an essential position. It’s defined in the federal regs” Now that Lendway has retired, Jamele said, she doesn’t know who is performing her former duties, or how. Boone could not be reached.

Historic preservation advocates are divided over whether these changes stem simply from cost-cutting to deal with falling state revenues, or whether they are part of Gov. Douglas’s effort to make it easier for builders to get permits approved.

“I have a hard time drawing any other conclusion,” than that the changes are part of a strategy to weaken historic preservation, said one expert. “The connection they (administration officials) haven’t made is how important historical preservation is in terms of our economic development.”

And a consultant who works with historic preservation projects said that , “getting rid of Sue Jamale, the national register specialist, that sent signals. ”

But another historic preservation backer said that Douglas himself had always been a supporter, and that the staff changes more likely reflected the state’s budget crunch.