Over the next couple of days, we’ll provide reports here on Thursday’s public hearings at the Indiana Housing and Community Development Authority to discuss our state’s plans for use of Weatherization and Community Service Block Grant stimulus funds.
Provided below are some of the highlights of today’s testimony from Indiana Community Action representatives regarding the state’s plan for allocating about $55 million in Weatherization stimulus funds to be used by 30 organizations over the next program year to create jobs, lower monthly heating and electric bills for low-income families, help reduce U.S. dependence on foreign oil and cut carbon emissions.
Just after hearing the comments below in a public hearing, the IHCDA board quickly passed the state plan with few questions and little discussion from the board members. The next step for Indiana’s plan is for it to be reviewed by the U.S. Department of Energy.
Selected highlights of testimony from Todd Lare, South Central Community Action Program, located in Bloomington, serving Brown, Monroe, Morgan and Owen counties:
“My organization has been granted funding for only 1 of the 4 county region we traditionally serve. Indeed, we have only been proposed to be awarded $899,373 of the $2,613,105 originally advertised for our region, or 34.4% of what has been requested. The 24 current sub grantees requested $56,294,639 and were awarded $23,754,250, or 42% of the funding available. Newly proposed sub grantees requested $61,267,405 and were awarded $31,260,370.50 or 51% of the amount they requested. Newly proposed sub grantees were awarded 57% of the $55,014,620.50 awarded during this first cycle. That for just 10 new sub grantees. The other 24 collectively received less funding than the newly chosen 10 sub grantees.
Two new sub grantees received the largest amount awarded to any sub grantee, new or existing. The Indiana Builders Association received $20,725,963.50 or 38% of the entire amount awarded. This award is made to an organization whose annual revenue in 2007 was $1,404,341 according to their 990 tax return. In 2006, they had gross receipts of $1,264,077 and in 2005 they reported $1,196,835. So, the decision was made to award the largest amount to an inexperienced provider in these programs, the largest amount totaling 15 times their annual revenue for the year 2007. This, to an organization whose primary mission is “the education of construction and home building industry by conducting conventions and seminars using resources by members” according to that tax return.
The second largest new sub grantee, Hoosier Energy, received $5,094,541 or 9% of the funding made available. This organization is much larger, boasting a 2008 total revenue of $566 million and total assets of $1.2 billion. While this is remarkable, it seems wild that an organization of this immense size would compete with local nonprofits that have been operating these programs for more than 30 years, yet would have so little staff trained in this process. It is my understanding that collectively, Hoosier Energy has had 3 staff members trained in DOE weatherization prior to this process.
In my four-county region, the Indiana Builders Association was awarded Owen County while Hoosier Energy was awarded Morgan and Brown counties. Title 10, Section 440.15 of the Code of Federal Regulations requires that “The subgrantee’s experience in assisting low-income persons in the area to be served” be used in the approval criteria. I would question the experience of both entities in providing weatherization services to residents of these counties. There is no Indiana Builders Association presence in Owen County, as they are served out of the Monroe County office. Our organization does maintain an office in Spencer and has served the area in this program for decades. In Morgan and Brown counties, while a member of the Hoosier Energy association, a rural electric cooperative maintains a presence in Morgan County and also serves Brown County, I am unaware of any other local presence or connection to the low-income community. Our organization maintains offices in both Martinsville and Nashville and has operated a variety of low-income programs in this area for more than 40 years.
Finally, the selection criteria found in 10 CFR, Part 440.15 gives clear preference to those who are currently operating weatherization programs. It states, “In selecting a sub grantee, preference is given to any CAA or other public or nonprofit entity which has, or is currently administering, an effective program under this part or under title II of the Economic Opportunity Act of 1964, with program effectiveness evaluated by consideration of factors including, but not necessarily limited to, the following:
- The extent to which the past or current program achieved or is achieving weatherization goals in a timely fashion;
- The quality of work performed by the sub grantee;
- The number, qualifications, and experience of the staff members of the sub grantee; and
- The ability of the sub grantee to secure volunteers, training participants, public service employment workers, and other Federal or State training programs.”
I believe that Indiana’s selection process does not abide by these expectations given the fact that one NEW provider is given more money than most of the other 24 current sub grantees combined. We attempted to determine the criteria used in scoring the proposals and to obtain a copy of all proposals submitted so that we could testify on them at this hearing. The public records request was submitted by the Indiana Community Action Association on May 19, 2009. The Indiana Housing and Community Development Authority (IHCDA) has responded that additional communications may be received on or before May 29, conveniently one day after this public hearing. Scoring criteria has been added to the IHCDA website in the last few days, and that had not previously been made available. With the lack of individual scores, however, this information is useless, other than to show that experience in operating this program was a low consideration. That is born out by the fact that 4 existing providers received no funding, 3 existing providers received what they asked for and most of the rest received somewhere between 30 and 50% of the funding available and requested. I would ask the Department of Energy to deeply scrutinize the scoring of these applications and reject this seemingly flawed process.
Two new potential grantees were awarded funding despite the fact that they are non-Indiana companies. People Working Cooperatively is a Cincinnati, OH based organization with no local ties and experience working in the territory assigned to them while the existing sub grantee was given no funding. This Ohio Company, a newly proposed sub grantee was given nearly $2 million of stimulus funding meant for Indiana. The second company, Wisconsin Energy Conservation Corporation is based in Madison, Wisconsin. They were given more than $1 million for work in Marion County and the existing sub grantee was given zero funding. Page 4-3 of the original RFP issued by IHCDA stated that businesses must be incorporated and located in the State of Indiana. While both are licensed to do business in Indiana, neither is corporately based in Indiana, and are listed as foreign corporations with the Indiana Secretary of State. While the Wisconsin company does have a physical presence in Indiana, I do not believe that People Working Cooperatively does. Awarding funding to non-Indiana companies flies in the face of the intended purpose of this funding and does not align with other policies to buy Indiana supported by the administration, especially when existing providers have been provided no funding in areas they have served for years, and are currently serving using regular DOE funding.
One has to assume that existing sub grantees are performing adequately if they were fully funded beginning April 1, 2009 under the non-ARRA DOE grant and were not on a performance improvement plan (PIP) through the Indiana Housing and Community Development Authority. Our agency was funded during the current DOE grant cycle, closed out the prior DOE funding cycle having spent more than 99% of the funding awarded, and we are not now, nor have we ever been under a PIP for weatherization services. So, today I am left to draw on the only conclusion left, that this selection process was flawed, deeply political and should be rejected by the Department of Energy regulators upon submission. This fact can only be born out by the delivery of all relevant records requested under Indiana public access laws and by deep scrutiny by the federal department.
I believe the process followed during the past several months has been much less than transparent and the planning far short of inclusive. The RFP issued did not detail how proposals would be scored and how existing providers would be given preference, as required by DOE regulations. Instead of working together to determine the best plan for accomplishing the goals set forth on the national level, we have had to try to guess how to be in the best position to move quickly if selected. If existing providers were used, we could have been a lot further along in the joint planning process and would have, at the very least, been able to talk through the points I have made during my public testimony.
Nonetheless, I thank you for the opportunity to provide this testimony today and would ask that it be included in its entirety in the public comment forwarded to the Department of Energy for consideration with the Indiana state plan, though I would urge the Department of Energy to reject Indiana’s initial submission due to the problems noted earlier in my presentation.”
Selected highlights of testimony from Larry Kleeman, executive director of Lincoln Hills Development Corporation, a community action agency located in Tell City, serving Crawford, Perry and Spencer counties:
“The proposed plan eliminates Spencer County from our service area. The request for proposal issued by IHCDA allocated funds for Crawford County in the amount of a little over $380,000, Perry County a little bit over $768,000 and Spencer County a little over $380,000. Lincoln Hills Development Corporation has served these three counties as a community action agency since 1965, including Weatherization since 1976. We responded to the request for proposal with a proposal requesting the full amount of $1.5 million allocated for these three counties. We’re included in the proposed state plan with an award of a little over $971,000 to serve Crawford and Perry counties only. . .
Why was Spencer County removed from our service area and awarded to Hoosier Energy? We believe this decision is contrary to Department of Energy regulations and policies for the following reasons: The PRISM results for Spencer County for the period of April 1, 2006 through March 31, 2007 reflect that of the six homes weatherized in which pre- and post-data was gathered, one house saved 29 therms of energy, one house reduced natural gas usage by 35 percent and one house reduced electric usage by 25 percent. Data on the other three homes was difficult to obtain and analyze due to various reasons. However on 50 percent of the homes measured, where the data was sufficient and analyzed, there were savings achieved through weatherization.
To the best of my knowledge, Hoosier Energy has never Weatherized a home in Spencer County, but if they have, what are the results and was this the basis for awarding Spencer County to Hoosier Energy rather than us?
Finally, LHDC has served Spencer County continuously for 44 years, including since 1976 in Weatherization. One-third of our local board of directors are residents and represent Spencer County. We have facilities located in Rockport, the county seat, and Dale, while to the best of my knowledge, Hoosier Energy has no local offices in Spencer County. During this past energy assistance season, we served 542 households in Spencer County and of those households, only 98, or 18 percent, were customers of Hoosier Energy. Hoosier Energy does not serve the cities and towns of Chrisney, Dale, Grandview, Rockport and Santa Claus in Spencer County. With such a limited presence in the county, what was the rationale for Indiana Housing to award Spencer County to Hoosier Energy?”
Selected highlights of testimony from Kathryn Williams, Indiana Community Action Association:
“The Indiana Community Action Association represents the 24 Community Action Agencies that provide services in all 92 Indiana counties. These services include the Low-Income Weatherization Assistance Program.
All 24 Community Action Agencies have responded to the Request for Proposals for the American Recovery and Reinvestment Act (ARRA) Weatherization funds. Twenty of the Community Action Agencies were selected for funding. Forty-four percent of the ARRA funds were allocated in the state plan to Community Action Agencies and 56 percent of the funds were allocated to organizations that are not within the Community Action Agency network.
The Community Action Agency network within Indiana has operated the Low-Income Weatherization Assistance Program (WAP) since its inception. The Indiana program is held in high regard by the U. S. Department of Energy and by other programs around the country. Indiana is consistently viewed as the exemplary model by other states wanting to design training programs, look at the value of certification of employee skills, determine the feasibility of conducting PRISM evaluation of homes weatherized, and to employ many other positive aspects of Indiana’s program. The Community Action network has worked closely with the Indiana agency that has been the funding channel for this program, with a focus on developing and delivering a program of which we all can be proud.
“The U. S. Department of Energy regulations governing the ARRA Weatherization Assistance Program provide guidance to states on priorities to be considered when allocating these funds. These regulations state that all funding used to conduct weatherization activities must be distributed by states to entities in accordance with the federal WAP statute and regulations governing selection of subgrantees. These subgrantees must be Community Action Agencies(CAA) or other public or nonprofit entities. In selecting a subgrantee, preference must be given to any CAA or other public or nonprofit entity which has, or is currently administering, an effective program under this part or under title II of the Economic Opportunity Act of 1964 [Community Action Program], with program effectiveness evaluated by consideration of factors including the following:
- The extent to which the past or current program achieved or is achieving weatherization goals in a timely fashion;
- The quality of work performed by the subgrantee;
- The number, qualifications, and experience of the staff members of the subgrantee; and
- The ability of the subgrantee to secure volunteers, training participants, public service employment workers, and other federal or state training programs.
The final selection of each subgrantee must be made on the basis of public comment received during the public hearing and findings regarding:
- The subgrantee’s experience and performance in weatherization or housing renovation activities;
- The subgrantee’s experience in assisting low-income persons in the area to be served; and
- The subgrantee’s capacity to undertake a timely and effective weatherization program.
The allocation of funds by IHCDA appears to be inconsistent with these regulations which require a preference for Indiana CAAs who already administer an effective and respected weatherization program, and who clearly possess experience performing weatherization activities and assisting low-income persons in the areas to be served. We encourage IHCDA and the U. S. Department of Energy to give this disparity serious scrutiny.”