Weatherization Assistance Program Allocation for American Recovery and Reinvestment Act Funds

New Jersey’s Weatherization Assistance Program has existed for many years, but the funds available for the program have been relatively modest.  The American Recovery and Reinvestment Act (ARRA) dramatically increases the funding available for this important program.

The allocation of $118,821,296 to New Jersey’s weatherization program necessitated an analysis of the current delivery system to determine the organizational capacity to effectively administer this larger grant.  The U.S. Department of Energy’s (USDOE) guidelines for the program require that preference be given to community action agencies (CAAs) or other nonprofit entities that have, or are currently administering, an effective program per the Economic Opportunity Act of 1964.  Currently, New Jersey has 21 organizations that administer the program and qualify under USDOE rules. 

The Office of Low-Income Energy Conservation (OLIEC) in New Jersey’s Department of Community Affairs concluded that the most efficacious means of providing weatherization services is to continue to utilize all existing weatherization agencies that have provided the foundation for the local delivery of weatherization services in New Jersey since 1976.  This determination was based on past evaluations of the CAAs’ performance as well as program requirements set by USDOE.  Every local agency will expand to absorb an increase in funds that is calculated to be sustainable.

In addition to the CAAs, the NJ Housing Mortgage Finance Agency (HMFA) is allocated $30 million in weatherization funds in order to weatherize approximately 3,877 units of multi-family housing over the next 3 years.  The HMFA estimates their total need at $112 million; however, $30 million will address the most immediate-need homes.  By allocating funding to the HMFA, the needs of multi-family housing will be addressed while allowing the CAAs to focus on single-family homes. 

Historical Methodolgy

For the past twenty plus years, grant allocations have been based largely on agency performance and the percentage of poverty within an agency’s service area. The OLIEC rates the performance of its weatherization grantees based on the following factors:

  • 0-40 points for meeting monthly expenditure requirement;
  • 0-30 points for the quality of work performed;
  • 0-30 points for having sufficient staff to operate efficiently;
  • 0-10 points for accuracy and timeliness of quarterly production/expenditure reports.

 

The points awarded under this system are totaled quarterly.  The annual totals provide the framework for determining future allocations.

ARRA Methodology

For the purpose of allocating the ARRA funds, the OLIEC took into consideration each agency’s performance history along with the DCA’s recent assessment of each agency’s capacity to expand.  The allocation decision rested on DCA staff’s evaluation of the resources and capability of each grantee based on the performance factors outline above as well as the number of eligible households in the CAA’s jurisdiction.  The evaluations are based on periodic site visits conducted by OLIEC monitoring staff, including inspection of ongoing production projects, and the review of relevant reporting and requisitions.

OLIEC set a maximum award of $5 million for the most productive agencies. Their good performance records serving high demand areas bear out their ability to weatherize at least 646 units.  A minimum award of $500,000.00 or 65 units was established to encourage developing weatherization agencies to grow in a controllable manner without placing expectations upon the agency beyond its capacity.

Allocations beyond the $5 million limit have been provided to three agencies for providing weatherization services outside their normal service area.  Additional funding was provided to Tri-County Community Action Program, Ocean Community Action Now, and Camden County Council on Economic Opportunity for providing weatherization services for Atlantic County.  Additionally, Tri County Community Action Program is partnering with the Nanticoke-Lenape Indians to provide weatherization and received additional funding beyond the $5 million limit based on this partnership.

When any of the agencies demonstrate the ability to increase production, they will be eligible to receive additional incentive funds that are set aside for weatherization agencies that are meeting or exceeding the performance levels set forth under the terms of their contract.

Perfomance and Fiscal Monitoring
In order to effectively manage the expenditure of ARRA funds, the OLIEC will phase each local agency’s allotment, allowing only an initial award of 35% of their total grant.  The OLIEC will approve draws beyond the initial 35% when performance goals are met and the agency has submitted a quarterly report outlining proper expenditure of funds.
Performance Based Adjustments
The CAAs will have until July 31, 2009, to ramp up without the imposition of production requirements.  Starting in August 2009, OLIEC monitors will implement the performance rating system described above.  By December 31, 2010, weatherization agencies will be expected to have capably and appropriately produced 30% of their total production for the three year term of the grant.  Production will be monitored on a quarterly basis.  DCA monitors will report annually on the conduct and performance of each CAA and recommend funding adjustments based on the CAA’s production, beginning after the 17th month of the grant.

Funds allocated to an agency that failed to meet production goals may be recaptured and awarded to neighboring agencies that have demonstrated sufficient capacity to serve a larger area.  In this manner, the OLIEC will ensure continued coverage of the service area. Likewise, the OLIEC will use the incentive funds to reward agencies that can expend and effectively manage an increase in funds.

In fulfillment of ARRA requirements, during the final quarter of the grant term, the OLIEC will prepare a comprehensive account of the State's use of the $118.8 million dollar federal grant that will encompass an evaluation of the local agencies' achievements including the number of units weatherized, the jobs created, and the quality of the work completed.

New Jersey’s full application to the USDOE for funding may be viewed at:

http://www.nj.gov/dca/divisions/dhcr/offices/wap.html