DOE allocated $118M for New Jersey to weatherize nearly 13,400 homes by March 2012, but only 2,157 are finished
NEWARK — Alex Ibarra pries back the faded green siding on the Newark home and props it up with a screwdriver. Then he grabs a power tool and starts drilling a hole. Next he’ll pump insulation made from recycled newspapers into the wall cavity, stopping hot air generated by the basement heater from escaping through the attic.
Soon the three families sharing the house will enjoy some extra warmth, courtesy of the federal weatherization program, supercharged with $5 billion in stimulus money over a three-year span.
But such success stories are far too rare in New Jersey, which has one of the nation’s worst records when it comes to translating the weatherization program’s federal dollars into better housing and new jobs.
The U.S. Department of Energy — aiming to reduce greenhouse emissions, create green jobs and help low-income households cut their energy bills — allocated $118.8 million for New Jersey to weatherize almost 13,400 homes by March 2012. So far, only 2,157 homes have been reported finished and there are about 7,000 eligible households on a waiting list. About $11.3 million has been spent, leaving the state lagging its goals. Poor families still pay high heating bills in colder homes while trained workers stay unemployed.
Reports, records and interviews with officials show the state was unable to manage a massive influx of federal money, struggled to jump-start the program and locked horns with local agencies responsible for most of the work.
A state audit released Nov. 8 cited questionable spending and lagging production, but a Star-Ledger examination shows more extensive problems, including:
• The audit led to the removal of the state’s veteran weatherization program manager, Clarice Sabree. But Sabree told The Star-Ledger running the program efficiently was impossible because of insufficient staff.
• About 62 percent of the 13,400 homes slated to be weatherized in New Jersey are supposed to be handled by about two dozen nonprofit or governmental agencies. But the relationship between some agencies and the state Department of Community Affairs, responsible for dispersing federal money, has frayed. The state is cutting $8 million from underperforming agencies, which in turn blame the state for inconsistent instructions.
• Sabree and some weatherization agency leaders said restrictive policies have scared off veteran contractors, leaving inexperienced workers who do shoddy work on some projects. At one residential building, a contractor only weather-stripped the bottom half of more than 100 windows, Sabree said.
• Although the stimulus program was designed to put people to work, a state-run training program that has spent more than $1 million was suspended because graduates aren’t finding jobs. Only seven out of 225 received weatherization work, and some of that isn’t permanent employment.
"It’s a win-win-win when it’s done right," said Jeff Tittel, state director for the Sierra Club. "Instead it’s a lose-lose-lose because we’re not creating the jobs, we’re not insulating the homes, and we’re not cutting pollution."
Robert Wright, manager of policy, programs and planning at Community Affairs, acknowledged the state is making slow progress but said changes are being made.
"Right now we have new management in place," he said. "We’re looking at this as largely a new start."
While other states have also struggled with the program, New Jersey had reported completing 14 percent of its workload as of September, behind almost every other state and well below the 44 percent average among states. It raised a red flag at the U.S. Department of Energy.
"We’ve conveyed to the state that they need to substantially increase the pace," spokeswoman Jen Stutsman said.
If the state doesn’t improve, it may lose funding. New Jersey received half of its allocated $118.8 million, and unless it completes more projects, the second half won’t be provided. And any money unused at the end of the program in March 2012 must be returned to the federal government. As of Tuesday, the completion rate had crept up to 16 percent.
FAILURE TO LAUNCH
The weatherization program, intended to upgrade 593,000 homes nationwide over three years, connects federal dollars with workers and homeowners. The money is allocated to states, which partner with local agencies. Those agencies, either nonprofit or governmental, find low-income homeowners in need of weatherization work and either perform the upgrades themselves or hire contractors through bidding. Then contractors and agencies apply to the state to be reimbursed with federal money. The states monitor progress and spending.
The program got a slow start nationally last year as federal officials determined how much contractors should pay weatherization workers in different parts of the country. By the time standards were set and contractors signed up, the severity of last winter prevented much work in New Jersey. "The money really didn’t hit the street until the beginning of the year," said Stephen Butler, president of the South Plainfield-based weatherization contractor GreenLight Solutions.
Field technicians Daniel Lopez and Victor Velazquez inspect a Linden home as part of a federally funded weatherization program.When the weather thawed, problems remained. Former Gov. Jon Corzine’s administration had set complicated rules for contractors in hopes of pulling more workers from distressed neighborhoods, according to Sabree.
"Experienced contractors drifted away because of overregulation," said Norma Sessa, who manages the weatherization program at the Newark-based La Casa de Don Pedro. So her agency and others turned their attention to less experienced contractors, creating a "slow and daunting process" because of "sloppy work, incomplete work orders, inappropriate materials."
Weatherization can be a complicated process, agencies said. Raymond Ocasio, executive director of La Casa de Don Pedro, said each home must be analyzed to determine changes such as replacing drafty doors and windows or improving insulation. "Each and every project is a new job," he said. "To think you would turn on the spigot and thousands of units would walk out the door is unreasonable."
The contracting rules have been loosened, but Sabree, the former state program supervisor, said they still had a negative effect. "It was at a critical time in the process," she said. "As a result of this policy, there is still an insufficient number of contractors."
A negative state audit in March slowed the program more. The report said some homeowners receiving weatherization work made too much money to qualify and their income was not being properly checked. Eligibility is determined by family size and household income. A family of two qualifies with a household income of $29,140, and a family of five can make up to $51,580.
Michele Brown Williams, who runs a Camden County weatherization program, said 145 people were kicked off the agency’s waiting list because they didn’t want to provide more documentation.
The program continued to slide under Gov. Chris Christie’s administration. In September, New Jersey became one of three states visited by a concerned team from the U.S. Department of Energy. Lisa Ryan, spokeswoman for Community Affairs, said the state is in contact with federal officials to keep them "aware of the steps we are taking in order to increase production."
Field technician Daniel Lopez from Proceed Inc. uses a thermal infrared camera to check the insulation in the walls of a home in Linden as part of a federally funded weatherization program.AUDIT, FALLOUT
Behind the scenes in the early fall, Community Affairs was getting ready to shake up the program’s leadership. The pending state audit, released Nov. 8, cited improper spending and slow progress. An examination of $613,577 in spending showed $54,025 in "unreasonable costs," according to the audit.
"Weatherization was always a 5-to-6-million-dollar program. And then we throw $100 million worth of resources at it," said state Auditor Stephen Eells. "The monitoring isn’t able to keep up."
Tittel, the Sierra Club director, said the state’s weatherization program has always struggled to deliver funding and provide detailed guidance.
"It got a large influx of money and it never fixed its problems from the past," he said. "It became a big problem with big money rather than a little problem with little money."
Sabree was called before an internal hearing on Oct. 25 and charged with "incompetency, inefficiency, or failure to perform duties." The disciplinary charges said she had failed to review financial reports, complete work on time and submit accurate data. Division of Housing and Community Resources Director Paul Stridick said she caused "adverse conditions in running the weatherization program and has been a negative force in serving the public citizens of New Jersey," according to a report summarizing testimony from the internal hearing.
Sabree said progress was slow because homes can’t be reported finished until they meet quality standards.
"That has become increasingly hard to do since there are many new and inexperienced weatherization crews who are doing the work," the report stated. "Poor installation and shoddy work creates a backlog for the program monitors."
Sabree said although her staff of monitors was increased from four to nine, it was not enough to adequately review expenditures.
"Someone has to sit down and go line by line through the reports," she said. "I did not have the staff to do that."
After the hearing, Sabree was suspended without pay.
"I’ve been made the poster child for the failure of the stimulus program," she said. Sabree’s union, the Communications Workers of America, is working on a deal allowing her to retire with benefits. Community Affairs declined to discuss her case. Two other officials were also removed from the program.
In a letter written in response to the audit, Community Affairs Commissioner Lori Grifa said the problems are being fixed.
Homeowner Lilianna Caicedo, right, looks on as field technician Daniel Lopez, from Proceed Inc., uses a thermal infrared camera during and inspection her Linden home."The rapid expansion of this program in 2009 to meet tight federal timelines exposed weaknesses in DCA’s monitoring and record-keeping protocols," she wrote. "These shortcomings have been or are being remedied immediately."
The response pleased Senate Majority Leader Barbara Buono (D-Middlesex), who is considering calling a hearing examining the program. "I’m very impressed with how Commissioner Grifa has handled this," she said.
ANGER BOILS OVER
Facing federal pressure, Community Affairs also moved to cut funding from agencies that were not completing jobs quickly enough. By Oct. 31, seven had failed to crack 15 percent of their targets. So on Nov. 18, the department terminated their funding, citing their "failure to perform under the terms of the grant agreement." Pending federal approval, their unused money will be sent to a contingency fund that will portion out dollars to high-performing agencies. One, First Hopewell in Newark, has received an additional $1.5 million, while Isles in Trenton is gaining $2.5 million.
The agencies given the boot were furious, contending they were falling behind because of the state’s red tape and inconsistent direction. On Nov. 19, several packed into a conference room at the Community Affairs headquarters in Trenton for a hearing.
"I’ve never seen such bureaucratic arrogance," said Bill Harris, director of Cape Human Resources in Whitesboro. He told the state officials they had "not acted in good faith." His agency had reported five homes finished as of Nov. 16, short of its 65-unit goal, according to Community Affairs.
The angry public hearing was a window into the frustration agencies have with the program. Arnold Byrd, executive director of the Camden County Council on Economic Opportunity, was crushed by the cut to his funding. Just this year his organization won its seventh "golden hammer" award for weatherization work.
"People think I’m a tough guy," he said. "But I cried. I went in the bathroom and cried."
Ocasio said he’ll have to lay off people hired to handle the weatherization program because of funding cuts.
State officials, however, said the delays were too costly.
As part of a federally funded weatherization program, field technician Daniel Lopez uses a thermal infrared camera to check for insulation in the walls and ceiling of a home in Linden."We were looking at the goals the agencies had," said Wright from Community Affairs. "The production levels were low."
LOOKING FOR WORK
Outside the hearing, a handful of union members huddled. Robert Lyons, 40, of Newark finished a training program on Oct. 29 but has not found weatherization work.
"They told us it was moving kind of slow," he said.
Out of 225 people who finished training — some more than a year ago — only seven have found weatherization work.
"Because fewer weatherization projects have been undertaken to date than originally projected, the department has suspended additional training," said Kevin Smith, spokesman for the state Department of Labor and Workforce Development, which administers the training program. The original goal was to train 600 people.
Frederick Kaimann contributed to this report.