Brown County, Monroe County, Morgan County, Owen County, Weatherization

Testimony for Weatherization Stimulus Public Hearing

Provided below is the testimony that South Central Community Action Program Executive Director Todd Lare has prepared for Thursday morning’s public hearing in Indianapolis. That hearing will be the Weatherization Stimulus Public Hearing #2.

Testimony provided by: Todd Lare, Executive Director, South Central Community Action Program, Inc.

Date: Thursday, May 28, 2009

My name is Todd Lare and I serve as Executive Director of South Central Community Action Program, Inc., providing services in Brown, Morgan, Monroe and Owen counties.  We have served as a sub grantee to the State of Indiana since 1977 for weatherization services.  We are an applicant under the RFP issued by the Indiana Housing and Community Development Authority.  I appreciate the opportunity to offer comments at today’s public hearing.

Some of the comments I offer today will be the same as those offered on May 4 at an unofficial public hearing held in violation of Indiana Open Door Laws and before the State Plan was made available for public inspection.  Indiana’s State Plan listing proposed sub-grantees was submitted to the Department of Energy on or about May 12, 2009 but still was not made available for public inspection until May 18, the last possible date to allow this public hearing to go on without violating the 10 day notice required.  Still, at this time, information requested as a public records request within 24 hours of release of the state plan has not been made available.  So, many of my comments will be made on the subjective review of the state plan.

Two major changes that were approved at the federal level were: 1) raising the income level of those available to receive services from 150% to 200% of the federal poverty level and 2) raising the average cost per home to $6,500 per home from approximately $3,000.  I strongly support both of these provisions. Unfortunately, Indiana has chosen to ignore the spirit behind each of these alterations by our federal legislators.  On the income limitations, the Indiana plan requires that recipients have applied for and been approved for Energy Assistance for the current season.  The income qualification for that to happen would be 150%.  While this certainly makes it easier, particularly if selecting sub grantees with little or no experience with income qualification and documentation, it does not provide Hoosiers in need equal opportunity to receive these funds.  Effectively, while the plan acknowledges the 200% level, this requirement keeps those eligible as those at or below 150%.  To further restrict the applicant pool, it requires that they must have applied for and been approved for Energy Assistance during the current year.  So, anyone who may not have applied, or been approved for services, or that may have just learned about Weatherization would be eliminated from application. As a current provider, we have over 400 people on our waiting list for services.  We have reviewed that waiting list and determined multiple families who have been waiting for weatherization services for quite some time will be denied access to services under Indiana’s proposal simply because they did not request Energy Assistance this past fall, and despite that fact, that they fall under 200% of poverty. This is not a fair practice, does not help all Hoosiers in need who qualify for the program, and does not meet the intended use of these funds approved by our federal legislators.  I would ask the state to reconsider its position on eligibility and recommend the DOE not approve this portion of Indiana’s plan.

On the average cost per home, Indiana has approved a $5,000 average cost per home rather than the federally approved rate of $6,500 per home average.  An average cost per home allows auditors to consider additional ways of conserving energy that may not be available at the $5,000 cost per home average.  If the true goal of the program is energy conservation, it would seem that allowing auditors to consider a wider range of energy saving possibilities would increase the potential savings per household per year.  Furthermore, holding the cost per home average at the lower level means that Hoosiers receiving these services will, on average, receive less than their neighbors in surrounding states across the nation.  I would ask the state to reconsider its position on average cost per home to meet the federal standard and recommend that the DOE not approve this portion of Indiana’s plan.

According to the training proposal, those who work under this program will be required to pass a pretest at an 88% level and clear a background check.  I don’t believe that the state should be involved in screening backgrounds on those who would be essentially employed by the sub grantees.  This process may be okay for those who intend to be freelance employees. But, for sub grantees hiring staff, background checks should be a requirement of the sub grantee, not a state process.  We already do background checks on potential employees and will continue to do so.  The description of the background check envisioned by the state also seems overly invasive.  The description mentions credit checks, for instance.  If people were eliminated for employment based on credit, this might mean someone currently unemployed, in foreclosure or under other forms of financial distress may not be hired.  This is highly objectionable because these funds are meant to help with these conditions, not exclude people from being employed.  It is counter to the purpose of this funding and in direct conflict with the economic times we live in today.  Again, if imposed, this could lead to us hiring staff and then firing them after the 2nd week of employment.  This is not a fair solution for either party.  The pretesting and background check should be done by the sub grantee in enough time to make an offer and begin employment prior to the first day of training.  I would urge the state to reconsider these parts of the “state plan”.

While I’m discussing training, on Friday, May 1, IHCDA posted an 8 week training process to begin today, May 4.  I’m not sure exactly how potential grantees could get people signed up since those entities do not know who they are, unless some have been notified and their choosing was not made public at the time.  Those selected as sub grantees should receive priority placement for staff in these trainings.  Not doing so puts them in direct competition for people who may never work in weatherization and would mean that training funding was therefore spent on those who may never work in the program. Using DOE training funds to train people who may not be employed in this program is unallowable.  Again, I would urge the DOE to reject this portion of Indiana’s plan.

Next, training for contracted staff is proposed to be done over 3 full days or 5 evenings.  I do not believe this training is sufficient, especially for contractors new to the weatherization program.  With the availability of significant training dollars and given the potential liability and quality problems at risk, I would urge the state to provide more substantial training to contractors by experts in the field.  Indiana’s only experts in this field are the training staff at the Indiana Community Action Association.  They have a nationally recognized training center and it defies logic that they are not directly involved in providing a more substantive training for new contractors.  It also defies logic that the largest recipient of funding for training is Ivy Tech Community College when they have no expertise in providing these services and don’t currently provide these services.

Under the Section entitled “Assessment of Effectiveness”, indication is given that quality in terms of energy savings will not be calculated on those subgrantees who will not continue administering services after March 31, 2011.  While I acknowledge that it does take a year to begin to measure energy savings, I believe that energy savings should be calculated for all homes served under this funding stream.  The data could be used to guide who may be eligible to continue providing services after that date, but at any rate Indiana should want to know what was accomplished with these funds, and as a measure of contractor performance. All sub grantees should be held to the same examination and standards.  I would urge the state to change the plan so that the effectiveness of ALL weatherization is collected.

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 to 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:

(i) The extent to which the past or current program achieved or is achieving weatherization goals in a timely fashion;

(ii) The quality of work performed by the sub grantee;

(iii) The number, qualifications, and experience of the staff members of the sub grantee; and

(iv) 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 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.

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