Hello from the Northeast Sustainable Energy Association’s 2011 Building Energy Conference in Boston, MA!

We hit killer traffic on the way in this Am, so only caught a bit of the end of the Keynote.

As usual, EVERYTHING is paraphrased because I can’t type as quickly as humans can speak. Any misspellings, typos, and errors are mine!

Keynote Speaker David Orr

At the moment, I’m using someone else’s laptop and can’t type for beans, so I’m just going to grab a couple of quotes of interest.

Referring to the changes needed in college curricula (which is now in progress @ Oberlin):

We should no longer be preparing our students for careers on the titanic.

What they’re shooting for with the Oberlin project is “full spectrum sustainability – parts reinforce the resilience of the whole.”

We’re already in a world the likes of which we’ve never seen.

How do we build in resilience? First we need to know what we mean. Favorite definition:

Resilience is capacity to take gut punch and come back swinging.

Another great definition is in the book “Brittle Power” in Chapter 13 (presentation displayed a long list of elements of resilience).

What do we do?

We’re in gridlock, it’s all rear guard in DC, protecting the existing interests and old technologies instead of supporting the new.

1) Change the narrative about security at the national/global level:

Security is about children going to bed well fed, safe, and sheltered.

2) Create a network of sustainable national security sites around the country – one in each congressional district.

3) Create our version of the Tea Party movement, but not based on bullshit.

Our security is too important to leave to generals alone. We face gridlock, black swans, terrorism, tech changes, etc. and we need to be prepared to adapt and move forward as the world changes.

Our sustainable future will look a bit like this:

local food /farms

powered by sunlighte,

people will walk and bike more

they’ll support and shop at local businesses

people will learn and use regionally appropriate skills

front porches

the word “neighbor” will be a verb

and more

The Great Work of our generation must be to stabilize & reduce Green House Gases – We MUST get to 350.

I don’t believe in the growth economy – stuff

An excellent book on an approach to meeting the challenge: “A Prosperous way down: Principles and Policies.” We have to learn to live w/less, but we can do it well.

It is in every way negotiable, it’s all on the table.

Updated w/much more below the fold. More to come…

The below is all “rough” text. I’ll b eback to clean up later… It’s a fantastic event! I’m suffering from “drinking from a firehose syndrome” re: the volume of great info flowing.)

MA Clean energy and Climate Plan for 2020

Integrated approach to Greenhouse Gas reduction and clan energy since 2007 w/Gov. Patrick.

Vulnerable to high energy costs: export $22 bil/yr for fossil fuel energy costs. $22 bil coal, oil natural gas.

$5200/household, the rest from business

—

Millions saved in 2020:

Electrical efficiency, 2500

nat gas 800

fuel oil efficiency 200

fed and ca vehicle efficiency 1700

clean car incentives 200

pay by mile auto ?

Create jobs:

Cutting energy itself crates jobs:

Reducing imports of fossil fuels keeps that money from leaving the state, which means it’s spent on business w/in the state.

General household spending: creates 9.1 jobs/million dollars spent

Nat gas spending: .7 jobs

Electricity 1.1

Fuel oil: 1

Gasoline: .7

Every million dollars you shift from fossil energy incr. jobs in state by 8.

In MA, there’s been an increase in solar industry: 20-fold in last few years, 10-fold increase in wind (megawatts).

Increases in 2020, direct and indirect (shifting the money from export into local economy)

$6k efficiency

$1k reduced emissions

$3k pay as you drive

$2k clean car incentives

$1k Smart growth policy

$13k transportation subtotal

(similar data re: electrical)

—-

Global Warming solutions act:

Reduce emissions 80% by 2050.

Choose level for 2020 (10 – 25% below 1990 levels)

Bus as usual: emissions would be approaching 94 million tons/yr

Estimates of reductions per sector for 2020 plan: (PLAN IS ONLINE)

9.8% red in building sector

7.7 in elect supply (renewables)

7.6 transportation

non-energy 2.0%

This gives 25% below 1990, we could reduce emissions by 27%, but 25% is max allowed by law. So, target’s been set at 25%. It’s a legally mandated target.

MA Will be spending 3x CA spending/capita, $2 billion -> $6 bil savings.

Will save 20% elect use in state

Ramp up from 2008 -> 2012: tripling expected elect savings. Tough to ask of the utilities. Utilities have committed to these plans.

Exec office of Energy and Environmental Affairs, 2012 statewide elect efficiency programs chart

Gas savings also on a quick rampup. More than tripling from 2008 -> 2012. Not simple to accomplish in residential sector.

Elect supply: renewable protfolio standard was expanded in 2008, EPA will have more stringent EPA rules on power plants

Clan energy imports

Transportation: GHG standards 2.6%

Fed effi. standatrds for trucks: .3%

Fed renewable

Clan car incentives .5%

Pay as you drive auto ins. 1.1% (closest to win-win: not simply raising the bill, letting consumer decide how much to drive so they can adjust their own insurance rate)

Sustrain dev principles” .1%

Green DOT: 1.2%

Smart growth policy pkg: .4%

—-

Green DOT: bike, ped, transit investments

operations efficiency, development project mitigation, emplouyer based commuter choice programs….

Non energy emissions poliicy:

refrivgeration

vehicle aAC

Reducing DF6 emissions from gas

…

Policy directions for 2050:

Building rating and labeling

Adv. building codes

Deep energy improvements

tree retention and planting

smart growth

?

—

decarbonizing elect supply

convert motor vehicles from petroleum to other fuels.

—

Cut en costs for househods and businesses

reduc vulbn to volatile fossil fuel prices

imprive energy independence create jobs

greatest mandatory ghgreduction of any state

————–

New York planning for Climate Action

John willioans director energy analysis

NYSERDA

In process by exc ordre by Gov Patterson in 2009, formed 13 gency commissioner panel.

Interim report in 2010. Wiating to see where Cuomo admin puts climate action planning.

Levels of emissions 1990 – 248 million metric tons; 254 in 2008; benchmark in 2050 is 80% reduction. Need to be down to 148 metric by the halfway point. (40 by 2030)

Seeing some efficiencies and emissionless tech coming in line.

emissions profile:

15% other sources: 38 million mtric tons

89% from fuel combustion

CO2 is THE gas to go for, even after accounting for the multipliers on other gases.

Electricity CO2 emissions

4% imports of electricity

21% electric generation,

40% trasnportation

35% onsite combustion

—

Climate Action Council identified Emissions producing sectors, created working groups to prioritize policies:

Power supply and delivery;

Residential, commercial/institutional and industrial;

Ag, forestry and waste;

Transportation and land use;

Adaptation

Mitigation policy summary:

– no single solution: a portfolio is needed

– comprehensive/multi-sctor planning

– regional and national coordination is essential (our own policy won’t be effective on its own).

Residential commercial industrial/building sector:

– Funding policies (1: efficiency and clean energy find, tax structire and provate financing)

Enabling policies (eductaion, outreach and behavior change, workforce training and dev. rsearch dev and demo. Rate restructuring and flex metering.)

voluntary mechanisms (efficiency incentives, Customr sited reneables, )

statutory mechanisms

Building codes, appliance standards and enforcement of those cods and standards will have most substantial impact.

– more aggressive codes re:” energy use

– statewide stretch code to encourage municipalits to achieve additional savings and inform the building sector of planned future changes.

0- continue to establish and update energy efficicnecy performance standards for products that are notfederally preempted and advocate to increase performance standars.

– building labeling and upgrades. Measure then require audtis and efficiency measures.

Energy efficiency incentives, provide incentives and resources for greater energy efficiency in new buildings and better nergy performance in existing buildings. Employ whole building integrated analysis and design to di high efficincy.

Customer sited renewables:” provide incentives and resources for greatr penetran of solar pb, themal and low-carbon bioenergy solutions

Industrial process incentives: assess and freduc eindustrial process energy use, porvid funding

Workforce training and ev, assess and develop worforce apcabilities in NY to meet the needs of low carbon.

Ed. outreach and behavior change

– changve nergy use patterns by affecting retail purchase pagtterns,e d in schools. Incr. ny state gove elead-by example. provide info and resources to communities and individuals.

Rate restructuring and flex metering

– elec rates vary by time of use for elec usres and xpand installation of smart meters.

R&D and dmopnstration”

invest in next gen tech that will produce low cost low CO2 tech.

Efficiency and Clean nergy Fund

– fund efficiency and clean energy programs, build in existing sources and explore exapansion to all fuels.

Tax structure and private financing

Free up capital, make it easier to make energy efficiency investments.

(Look for NYSERDA to find presentations…)

Once the climate plan is done, it needs to get folded into our energy plan. We need to integrate w/systms reliability, price volatility, env. impacts, and maximizing cost effectiveness.

Plan: Next draft Energy plan 2012, final energy plan 2013

——-

Blair Hamilton from VT

A VT Road Map to A Zero Carbon Building Sector

(NOT an official VT State Plan)

Working backwards from 2050

Big picture: wee’r trying to bend down the energy use curve through efficiency and conservation while increasing availability of sustrainable nergy resources until the two meet.

In VT, we’ve had 20 yrs of aiming low and achieving lower.

We had a 25% reduction by 2012 goal. We didn’t achieve it.

In VT leg, for the first time, adopted efficiency goals:” 40% of all res. buildings should use 25% less by 2020. All building stock using less each year. It would produce 6% overall reduction by 2020. However, we’re only on track for 3%

How do we get back on track toward th goal which is an imperative from a climate perspective.

One poss: focus on achieving climate results. One of the most striking differences between US and EUrope: in Europe’s case they make climate goals

Did not hear the words “cost-effective” – you can’t do it if you only do things that are only cost effective using current cost estimation and planning.

But what if “cost effective” is not enough?

Evrything is easier if we agree that climate imperative trumps everything, then we can look at what’s the last cost path from here to there? This is the direction uropean planning is using, instead of what we’re doing, which is focusing on cost-effectiveness.

Lt’s pick th goal then find the least-cost path to get there and figure out how to get on that path. This is the kind of thinking happening elsewhere, while we’re stuck here.

Sktching this out using VT as example.

Building sector:

Assumtions: building sector will need to be near zero carbon by 2050; efficiency is the least-cost option to provide the bulk of building sector carbon reductions.

AA reasonable mix of strategies:

20% On-site zero carbon energy supply, 20% supply from a de-carbonized electric grid; 60% reduction in consumption through efficiency.

Components of VT building sector roadmap:

– Many of the tech, if not most, are not as yet known.

– Our energy forecasts and plans should not be constrained by our limited ability to account for new tech.

– We tend to assume new tech will cost more and save less, but what is our experience?

All of our forecasts are constrained by our inability to account for new tech. It’s not likely to be that difficult to achieve 60% reduction in consumption as we think.

Typically look at a curve w/low hanging fruit = cheap and easy and quick, then you end up running upwards on a cost curve (more buck, less bang). But real worl experience: look at refrierators and lighting. As we introduce unanticipated new tech, price drops and savings improve even faster.

New delivery strategies for efficiency measures.

Infrastructure:

– Expanded sustrainable Energy utility (Eff. VT is changing format to be a real  utility: appointed for 12 yrs, appointment revocable; adding climate to the measures)

– New VT green energy bank (agregate funds for providing capital from private sources)

– New VT sustainable energy loan guarantee fund (to support PACE, etc.)

– More and better skilled contractors and more who can do the whole job.

Policies

Incremntal and voluntary strategies are far too slow

When it comes to climate, Time Matters.

Need to transition to massive investment.

Regulatory Guidance:

Transition to a focus on achieving carbon goals from current gov and reg poliucy focused on reducing energy use and cost.

The least-cost planning paradign that has served VT well in utility sector will ow need to be applied….

Nw Construction:

codse requrie net zero by 2020.

Existing buildings:

Voluntary won’t get us there.

Phase in time of sale building efficiency requirements as condition of property xfer.

– rating and labeling buildings

delivery infrastructure dvelopment

innoavative financing and loan guarangteeds.

Putting it all together:

-Assume nt zro buildins by 2020

– focus in ach. 50% rreduction through retrofits

Retrofit all the buildings by 2050.

“Go Deep or Go Home”

_ When you look at the goal for 2050, sometimes it doesn’t make sense to even consider a half-measure.

——

Questions:

Why not mandate deep retrofits from the start?

A: Regulation doesn’t make it easy, also low fossil fuel prices and funding support are most limiting. Regulatory inhibitors = public service commissions and utlitiy economics. Try to get the marketplace to look at innovative ways to sell certain activities to their client base using factors other than the resource cost test factors as incentives. Politics will also play a part.

Q: We haven’t achieved sort term goals – what is the root cause of that failure. By looking long-term, are we just kicking the can down the road?

A: (Panel) Recognizing that retrofit of existing building stock is where we can meet most of these agressive goals, we have a set of institutions and practices that are not supportive of making rational social decisions about investment and the level of investment into that building infrastructure. There are fundamental psychological barriers as long as we rely on voluntary programs. Whn you present: “look, this will provide more benefit than what you pay in, why won’t you do it?” ans is often “I already have 4 payments and can’t afford a 5th.” Also “I may not be here until it pays itself off.”  If you could have all 5 of the people who would own your home in the next 100 yrs and sit down to decide how to split up the cost, and they’d all jump on it.

Q: PACE funding will help with this issue.

Utilitis funding this will not do it all. Will need private financing. What’s MA plan for spurring on private financing?

A: Tom Darling at DOER is devoted to that very aspect. In the process of rolling out loan products. Signif. expansion of HEAT loan process.

Q: Efficient materials: why no mention of energy star as a showcase of efficient products; and why no mention of LEED?

A: There’s a presumption that these types of activities need to be maintained and augmented over time. Need to be in partnership. not a discount, but a presumption that they would be maintained and advanced. Q-2: Use their info as a stepping stone to help move into the future.

Q: Why can’t we do deep retrofits today? Should emphasize deep retrofit program that already exists. Some aspects can be cost effective under today’s cost-effectivenss analysis.

A: For roof insulation: better than 1, wall insulation near 1, windows way below 1. We did expand deep retrofits program. 10% of normal house maintenance in MA include deep retrofits. For example: foam insulation in attic when replacing the roof in 20 yrs. Insulate walls when you’re replacing siding. Subsidy up to $40k for deep retrofit.

Q: MA doesn’t let you test the vermiculite insulation you find in house to see if there’s asbestos, so those houses can’t be retrofitted.

—————

Clean and Healthy Retrofits

Liz Eisenberg, Steven Winter Assoc.

Importance of benchmarking buildings in your portfolio

Audit process

Scenario: bathroom damage from leaking toilet above ceiling has peeling paint and partially collapsed.

Benchmarking:

descriptive building info, inc;. total energy and water use in that building. Allows cross-building comparison. Determine (BTU/sf)/heating degree days. This number allows you to compare how efficiently the building uses energy.

Targets:

space heating: <10 BTU/ft^2/HDD (target for high performance), less = target for low hanging fruit.

Benchmarking tools:

Building performance compass

epa portfolio manager

W1egowise

Bright power nergy Scorecard

… others

WQhy measure?

– know usage

– understand carbon footprint

– compare between buildings

– target improvemnts

– inform capital needs and renovations

– identify high nergy and water wasting buildings.

– Can then assess problems.

– Common area lighting, lower hot water set-points, etc. While you’re working on one building, can do some measures in others in the portfolio at the same time. (for example, while changing bulbs in one building on campus, changing in the other buildings while there can save more vs waiting and having another visit with its own costs.

Process:

Benchmark using utility bills.

Visit apartments

Do Air leakage testing & Combustion efficiency testing

Interview staff and tenants

– Find the person who has worked there, determine building psychology (for example, in some complexes, the tenants may not be capable of managing certain implementations (such as heating controls).

How to implement

Owner involvement from the start to finish.

Correct and complete billing data

Aid communication w/tenants (unit access, emphasis on tenant benefits)

Building history and planned improvements

Implementation oversight

Training (trained staff will know how to run new heating system, for example. Video or how to use systems, burned to DVDm handed to building staff brings excellent results.)

—

Green & Healthy Property Management

Ellen Tohn

Tohn Environmental strategies

Indoor air quality and health.

Now looking at Energy efficiency and health. Impact on health of occupants, it may be possible to get funding to make buildings both healthier and more efficient.

Damp musty envi = 30 – 50% incr. risk of having a breathing problem. You don’t need mold, just dampness is enough. Most buildings do not suffer from extreme dryness. You see more wetness than dryness.

Smoke free housing is the #1 way to have a healthier occupant.

Water use: 69 gals/day/person!

Top 4: Toilets, clothes washers, showers, leaking faucets

One apartment in a portfolio was costing $1500/yr for water (average was $700 elsewhere). It turns out that there was a hose faucet outside dripping too little to pool, but enough to use TONS of water.

50% f water loss = leaking toilet

Water benchmarking and usage training will be available on line. (Search Enterprise Green Communities late in March 2011)

Best strategies:

1.3 gal/min toilet.

1.75 gal/min shower heads, (Niagra and Moen) EFI.org is a great source.

Faucet in kitchen 1.5 or less gal/min; Bath faucets, <1.5 gpm

Water Case Study

One retrofit replacing toilets, aerators, shower heads, under 2 mo. payback. ($1800 for the retrofit, 1400/mo payback)

Pest costs per unit per year,

Use IPM, GreenPro and GreenShield are certified.

Monitor, keep out, reduce food availability, Knock down population with traps.

Healthier residents, and workers, fewer complaints, fewer pests. This approach works far more effectively.

Smoke Free Housing

Improved resident health, reduced complaints, reduces unit transfer requests, tenants want smoke free.

Reduces turnover cost: priming, repainting, carpet replacement, appliance cleaning or replacement. 6-fold reduction in cost to prep for next resident. Some insurers give a break up to 10%. Fewer tenant complaints.

It’s very hard to prevent air migration from one unit to another. Better to go with source control.

It’s a tenants rights issue. Yup. And 55% – 75% of tenants say they want to live in a smoke-free environment.

Greening:

GreenSeal or EcoLogo products for cleaning, supply microfiber wipes and mops, HEPA filtration vacuums.

GreenLabel plus carpet, FloorScore resilient flooring products, smooth and cleanable surfaces, entryway mats and grates to reduce tracking contaminants into building. Ask vendor to recycle. Diff in cost of recycling vs throwing away can be equal or very, very close.

Painting use GreenSeal certified paints or meet LEED for Homes VOC standards.

Q: Tenant Engagement in building w/one master meter – how do you get them to change usage?

– Had students w/in a community tech others in the community, sort of worked, but not so well.

——

PACE Funding

Funding for improvements to private property by a community. Paid off via proprty tax bill.

Used in MA for septic replacement, in CA for earthquake resistance retrofits.

Th importance of finance in taking energy efficiency to scale is

Couple of features make PACE important: attaches to the efficient property. When it’s transferred, the new owner acquires the repayment obligation, so you can undertake a project w/longer payback, and know that you’ll only be paying for that project while you own the property. Allows longer amortization than typical bank financing.

It’s local, and helps people in ways that utilities don’t.

FANNIE MAE and FREDDIE MAC said proprties w/PACE financing can’t sell mortgages on secondary market. As a result, only 2 active PACE programs in CA, 1 CO, 1 NY operational PACE programs, instead of the hundreds that had been in the pipeline.

There’s a sense that PACE is dead for the mean time, but it’s more nuanced than that.

Dorian Dale, Babylon, NY (founder of PACE in NY State).

PACE for energy, 26 states authorized PACE finance programs for alt energy.

Evident FANNIE AND FREDDIE will go to any length to prevent the truth from getting out. (Jokes about the

Passed energy star standards for new home construction and req. LEED for new commercial construction over 4000 sq ft.

Retrofitting via ESCO municipal buildings, w/guarantee.

Boss asked if this could be scaled down to homeowners. ESCO said “no.” So boss looked at me…

We had a waste to energy facility that provides signif $$. Expanded solid waste definition to include Carbon (since it started as a solid).

Tried to get some financing lined up, didn’t work. So… added a line to dispense monthly obligations from the power plant, already had waste collection on the property tax, just defined the carbon as some of that waste, Thus was born BASE (benefit assessed sustainable energy) funding.

Others came to visit, and were excited. Suggested that senior lien status would be a deal-maker for $30 – $50 mil of funding.

– Loading order (most cost effective at top)

– comparable pricing

– 2.0 SIR (savings to investment ratio)

– $15k cap

– 10 yr max payback

– $1k savings/yr.

State of NY now has “Green Jobs/Green NY” for same basic purpose – it is now offering 3.5% loans.  The distinction between “Green Jobs/Green NY” and city of Babylon: Babylon are one-stop shop: we provide financing, if contractor doesn’t do satisfactory work, we handle the issues.

We oblige participants to pay for audit fee (gets rid of tire-kickers), then we pay upfront. 70% closing rate from audit to complete retrofit. We’ve done combustion safety test. They’re living in a healthy house. And there’s “that room” that used to be too uncomfortable to use.

We’re gtting it done:

Impact hierarchy of being efficient

We’r gtting it done

(slide pyramid, from top down)

Better world, better sense of community, better self-worth, better off financially, family feels better.

We’re now going to offer $250 to each person you bring into the program, You can collect these “greenbacks” to then use on the next level of efficiency projects.

There are 80 million dtached houses nationwide. At $9k per house, you are creating 9 million job years. The houses are here, now, ready to go.

Don’t stop asking why FHFA is being allowed to kill all these jobs and all the attendant savings for homeowners.

We are suing the FHFA, as are 6 other groups. Our suit includes 10th Amendment claims. FHFA is telling municipality what can be determined to be a public purpose. They could do to municipal sewer systems what they’ve done to PACE funding.

If 5% were retrofitted nationwide @$9k/pop, that would be 6/10 of 1% of Fannie and Freddie’s total exposure. It’s a tiny, tiny percentage.

FHFA is readying to push back even further.

We’re not slowing down and are working on a commercial financing project as well.

Q: Level of funding allowed, and payback required? Why don’t you allow financing for longer-payback measures?

A: Typical job is $9k, largest portion of a typical retrofit is furnace or boiler replacement. Most are opportunistic consumers seeking to replace broken down or very inefficient

Ave payment is $93/mo for the retrofit, Ave. savings is over $100/mo. Obligation on bill should be roughly equivalent to what you would have been paying if you hadn’t made the change.

2.0 SIR is our average; 1.3 is required. US Govt. recommendation is 1.0: you will get equivalency over the life of the retrofit.

We want more than 1.0 so that money can come in and be used for other projects sooner. Gives much better bang for the buck, puts very little additional cost over the mortgage, providing little ammo to fannie/freddie to claim it’s risky. Having a rapid payback has the same effect.

(They use Homecheck software for determining efficiency.)

Q: If you broadened the coalition, including more communities and other betterment projects, you might have more luck.

A: Sent letter to 300 other municipalities around the country w/opinion letter from our atty stating that each community needs to evaluate the implications of this FHFA edict. This is a slippery-slope precedent.

Attendees of this conference should talk to their own municipalities.

Babylon has $42 million in sewer and other senior obligations (but a total of $1 mil would be at risk from PACE). Sewer and others are OK w/Fannie and Freddie; but FANNIE and FREDDIE are trying to stop PACE because it’s “different.” If they’re allowed to do this, does it threaten the capacity of municipalities to bond for every kind of infrastructure they’ve bonded for in the past?

Q: Who is doing the auditing to verify the benefits/savings?

A: Collect billing data from homeowner a year after, compared w/the two

Peter Adamczyk

Energy Finance and Development Manager, Vermont Energy Investment Corporation. 802-488-7631 padamczyk@veic.org

Conference in CA, where they’ve led country in development of PACE both in terms of devel. prog. and in terms of rolling out.

Important:

There’s a difference between a loan and an assessment.

Common Q: “Why is government doing lending?”

A: “It’s not.”

A bank makes a loan with you. Municipalities have a tax relationship to the property. An assessment transfers (27k special tax districts in the country) smoothly with the property – 100 yrs of history.

Since it only has to be brought current at time of transfer, the amount owed is only a very small amount (for example 1/2 of 1% of the property), which is a far smaller an obligation than the full amount owed on the assessment. It’s like the diff between being behind a honda vs being behind a Winnebago.

24 states plus DC in 2 yrs enacted PACE provisions. It speaks to the power of the concept. States that have enabled it represent 65% of the electoral votes in the US. This is a constitutional issue in the sense that a federal entity is telling localities what they can deem as a public good.

1st special assessment in the country, an opt-in, was for fire protection by Ben Franklin. Freddie and Fannie claim that opt-in is “different” because it’s an opt-in.

FL has 40% of houses underwater. Even w/all the foreclosures, tax collection rate is 99.98%. Taxes get paid. Mortgages are a different beast.

10th amendment case could take 6 yrs or more even to reach supreme court. FHFA set up a regulator after PACE was implemented. Lawsuits: 2 kinds:

–  10th amendment (inapprop setting policy).

– There’s a process for fed agencies to change policy (warning, public comment period, etc.) and FHFA didn’t follow it.

FHFA tried to combine all suits into one case, but that was set aside, so the states are separate.

May be, fairly soon, a ruling to require FHFA to withdraw the letter and start the official process.

PACEnow.org to help ensure sufficient public comment….

Sonoma County: cost of funds 3%, lending at 7%, th 4% spread funds their programs and litigation. $44.2 mil, 66 of the projects were pre-paid (paid off early), most likely due to sale.

Palm Desert: wealthy republican community, enormous AC loads ($1000/mo AC bills). $15mil city fund, 235 projects, very active, no let-up in activity. Owners are signing a disclosure letter that they’re aware that it’s going to make it difficult to refinance or sell. Ave size loan: $29,900.

Leasing vs owning a car: If you know you’re not going to exceed the mileage,  it can be better for you to lease instead of own. Same applies to PACE vs mortgage: if you know you’re not going to need to refi soon, you’re better off getting PACE assessment.

Boulder county CO: $125k in energy savings in 1st yr.

Energy Efficiency block grant ARRA money was just about to be released (a few days after FHFA killed PACE). DOE had offered $150 mil in loan guarantees and offered to only allow PACE in limited areas, but FHFA killed it anyway. DOE then had to redirect the loan guarantee money. DOE had best practices specified, no more than 10% of property, better than 1.0 SIR. Would have been a defacto set of national standards. This would have been better for lining up investors.

Maine had applied for the grant money, and wrote their PACE legislation to use that money. It’s basically an assumable mortgage.

VT is taking a different direction. The state is working on legislation:

– Explicitly junior to any other existing mortgages.

– 2% contribution from property owner.

– Designated $1 mil. efficiency funds from Regional energy fund to add 5% credit enhancement. “VT has a bias to action, like Babylon, NY (phrase came from Dorian).”

Will prove demand, gather data, help us determine how much the FHFA rule is costing us. Provide an economic answer to the FHFA letter.

Note: achieving the volumes that CA and CO achieved in just 2 yrs, is incredible, and should be kept in mind.

Sadie McKeown, Sr. VP, The Community Preservation Corporation

Why lending community came out strongly against PACE when it first came out. In 2001 – 2002, market was amazing, “everyone” cashed in on their equity. House became an ATM via home equity loans.  These home equity loans were secondary/subordinate to first mortgages.

This is the world that banks lived in. We didn’t care about efficiency (as bankers). Efficiency work is perceived as a renovation to a house. I can’t have a house w/o water and sewer – that’s what bankers see as a public purpose. I can have a house w/o solar panels or w/o special light bulbs.

Since 2008, everything fell apart.

– financing world changed

– debt is much harder to come by

– underwriting has been severely restricted

Efficiency Emerges

– cost of oil spikes

– savings

PACE emerged in the middle of this.

– lenders are licking their wounds

real estate has lost significant value

foreclosure are way up

– new lending is way down

Idea for PACEE is great

– save money during a recession

-introduce new capital as the banks pull back

There’s no question you need a new source of capita

Lenders see red

– PACE obligation seen as a threat to full first mortgage repayment

– portfolios everywhere are underwater

— pace further depletes repayment in the event of foreclosure

– Perspective may be flawed

— pace advocates see it as a viable option to a broken mortgage market.

Bankers are afraid of losing more. PACE is more depletion on “my” ability to be repaid in full.

Residential v Commercial

– Houses are smaller loans, lower risk, high loan to value

– is there a perpetual source of capital for them?

– is there originations infrastructure to handle the demand for these loans? (Until there’s consistent demand, in a large enough percentage of the population, making the numbers work is hard.)

– will it work across the income spectrum?

Commercial

– scopes and loans are larger

– lien position is a greater concern

PACE part of the solution:

In the absence of PAC, what will the lending community do?

How can we engage the broader markets to take n energy efficiency as part of the process?

The math is clear, energy savings can cover the cost of the debt required to do the work.

Retrofit Financing Soliutuin: Make it part of the Mortgage Delivery System

Majority of buildings have 2 things in common:

– all use energy

– all have a mortgage

Make benchmarking & retrofit part of the loan process (don’t make the energy something separate/different)

– train loan officres to benchmark

– audit 3rd party report lke an appraisal or a phase one

To get to retrofit at scale – financing is key

– the money is in the private sector

– awareness will increase and demand will grow.

— just like Phase Ones.

We’ve developed some benchmarks, now we can have a conversation, translate it into math to show how money will be saved. We’ve made it part of our loan program.

Getting to scale: when you think about making all the buildings out there efficient, it’s overwhelming.

CPC Green Initiative

Closed to date:

– 14 loans,

1395 units,

$30 million dollars,

$20 mil subsidy and incentives

Pipeline

– 1551 units

– $49 mil CPC dollars

– $33 mil subsidy and incentives

Dead deals

– 42 loans, 2520 units

– $72 million – CPC

– $3 mil subsidy and incentives.

Why is it attractive:

Prove you can underwrite the savings

All property types

Considers buildings holistically

No added step to access capital

How do we get there:

– Demand has to increase

– Need to Overcome retrofit apathy

— Govt regulation (green reinvestment act)

— Oil and utility prices spike permanently and drive conservation

Rob Craig, candidate for State House in Groton, Newbury, and Topsham is a “Vermont Tea Party Patriot,” which, of course, he’s entitled to be.

He’s running against Chip Conquest, who’s just put in a terrific first term, after ousting Bud Otterman (who apparently found the sessions so compelling that he developed quite a reputation for sleeping through them). Chip’s ability to bring people from all sides to consensus has earned him a reputation as a hard-working, effective legislator. If you’re a voter in Groton, Topsham, or Newbury, I’d strongly encourage your support for Chip.

So, anyway, back to the tea partier: Craig is part of a group that decries government spending, but he is also the recipient of almost $400,000 in tax-payer subsidized loans in the last 2 years:

One loan for $172,300, one for $206,000 and most recently an additional [warning: PDF FILE] $15,000, for a grand total of $393,300 from 2008 to 2010.

So, let’s see if I’ve got this right, he’s against government spending, wants to cut yet more taxes for the wealthy, but is happy to take nearly 1/2 million dollars that is only available courtesy of the taxpayer.

And how many jobs does this nearly $400k windfall support?

2.

Yup. 2.

That’s just shy of $200,000 per job. His business, Sunapee Precision is listed in Hoover’s as an aircraft parts and equipment manufacturer (a Dubie connection, perhaps?).

But it gets better: Sunapee Precision appears to have disappeared. A little digging on the web shows two addresses at different times:

The first appears to be an empty space in Newport, NH, at the back of a dance studio. The former owner of the dance studio says Sunapee Precision used to be there. It’s hard to discern whether there’s anything there, now.

The second is an empty storefront in a boarded up building in Woodsville, NH.

So, this begs the question: are there still any employees? If so, where are they? Sunapee Precision hasn’t, as far as I can tell, filed for bankruptcy (though they could be at a point in the process that hasn’t made it to the public filing stage, yet). Perhaps they have moved again? If so, why have their address and phone info not been updated?

It’s also interesting that he’s running in VT on a platform of supporting small businesses in our state, but his own business is located out of state. And if his business does happen to be going down the tubes, is it really the best idea to campaign on his business background? I mean, if $400k can’t keep 2 people employed for 2 years, what does that mean in terms of his understanding of budgeting – a skill that will be excruciatingly important in the coming session?

On top of all this, his “likes” on facebook make me wonder if he’s not a little too extreme for Vermont.

One of them is particularly entertaining: SCHOOL CHOICE Vermont! a group that wants to use taxpayer money to send kids to private schools. Why is this so amusing? Because Mr. Craig is also running on:

“Furthermore, we must demand a first-rate education for the next generation of Vermonters, but we need to deliver it at a lower cost.”

Sounds good, but it turns out Mr. Craig has never bothered to vote on school funding for either of the school budgets that affect the town. He doesn’t go to the school board meetings to learn what’s being discussed and offer his own ideas. Nope, he just spouts an opinion based only on his own imagined reality of school budgeting, and wants us to kick in some more of our cash so his grandkids can go to private school. Of course, he wants that money to come out of the budget that would give public school kids an excellent education (you know, most of the kids – the ones who can’t afford the difference between the subsidy he seeks and the private tuition).

I’d give more links – for example, the one where he links to the extremist site redstate.com, but  he’s hidden the “wall” on his facebook page from non-friends since I last looked, so I can’t get to it anymore.

However, his “likes” are still visible. In addition to the Tea Partiers, he lists a few other choice beacons of right-wing lunacy. It’s a little hard to see, the way facebook lays out the list, so I’ve bolded the choicest morsels:

Groton Timberworks, Vermont First, Vermont Energy Partnership, Park Restaurant, Vermont Fall Foliage, Tom Salmon for State Auditor, Kevin Mullin For Senate, Tea Party Patriots, Vermont, Newbury, VT, Groton, VT, Charlie Smith for State Senate, Charles Krauthammer, Charity Lodge # 43 F&AM, Thompson Hill Campground & Country Store, “Walking through life” tv show, Kristin Sohlstrom for State Representative, Angela Chagnon for State Representative, Phil Scott for Lieutenant Governor, NFIB Vermont, The American Conservative, promoteVT, Bennington GOP, Allard For The House, Breakwater Cafe & Grill, Jason Gibbs for Secretary of State, Derby Historical Society, SCHOOL CHOICE Vermont!, Vermont Libertarian Republicans, Kleinhans Keller 2010, Cathy McMorris Rodgers, Paul Avella, New Hampshire Libertarian Republicans, Michelle Malkin, Young Republican Network, Snelling for Lt. Governor, Shelly Roche, Windsor GOP, Thomas Jefferson – American, VTDigger.org, Len Britton, Americans Against Acorn, THE UNITED STATES OF AMERICA – USA, Vermont College Republicans, Robert Craig, Republican Governors Association, Sean Hannity, Support Our Troops, Chris Roy, Glenn Beck, Sarah Palin, The Heritage Foundation, Vermont Republican Party, Brian Dubie, Wounded Warrior Project, Boston Red Sox Fans, Green Mt Monogram Inc., The West Point Candidate Book, Northeast Kingdom Vermont Chamber of Commerce, Vermont Made Products, Charlie Bucknam for State Senate, BestCigarPrices, Six degrees of separation in Vermont, Biz_In_Vermont, Spread The Wealth, Vermont’s Northland Journal, The Bridge Weekly Sho-Case, Lake Morey Resort, Cup Of Joe For A Joe, Vermont.com, Vermont Business and Industry EXPO, Inn of the Six Mountains at Killington, Deborah T. Bucknam & Associates, PC, United States Military Academy, West Point Association of Graduates, Army Football at West Point, The Weekly Standard, True North Radio

I’m curious as to what Mr. Craig has done with $400k of taxpayer money in the last 18 – 24 months. I’m curious about why he feels we should subsidize private educations for children of the well-to-do, and I’m curious as to why he thinks his brand of reactionary extremism is going to fly in Vermont.

Democracy for America has announced it’s DFA All-Stars, and Philip Baruth of Vermont Daily Briefing has won. Philip is running for State Senate in Chittenden County. The DFA All-Stars are chosen by the members of Democracy for America, not its leadership – it’s the best kind of grassroots politics.

Jim Dean’s announcement explains exactly why Philip is such a great choice:

It’s not difficult to see why Philip won this hard-fought endorsement. Just look at how he describes the grassroots campaign he’s running:

When this race is over, I’d like to be able to say that I ran something more and better than a political campaign. Win or lose, I want to be able to point to projects we accomplished along the way — some small in scale, some not so small — projects that will continue to change life for the better in our cities and villages going forward.

Nice work, Phil! It’s a well-deserved win.

Head on over to http://baruth2010.com, and show him some love!

As the first drops of oil from the massive BP Deepwater Horizon spill reach the fragile shores of the US Gulf Coast:

Senator Bernie Sanders has called for an end to US offshore oil drilling, combined with an energy proposal that will help us begin to break our addiction to the toxic brew.

“United States must learn a profound lesson from the BP oil catastrophe in the Gulf of Mexico and make certain we protect our oceans from future disasters and transform our energy system away from fossil fuels.”

Senator Sanders’ proposal calls for increasing fuel mileage standards in US cars to 55 mpg. As a driver of a 7 year old Civic hybrid, I frequently get 55 mpg – even here in our lovely mountain state. So I know this is an easily achievable goal.

The improved fuel economy would translate into a savings of $1.43 per gallon of gas.  Opening all of America’s coastal waters to drilling would yield such a modest boost in petroleum supplies that the price of gas would dip by only 3-cents a gallon.

“Is 3-cents-a-gallon in the year 2030 worth the potential risk of another disaster like this?” Sanders asked. “I don’t think it is.”

When reading the press release today, after having seen the latest news on the Oil-Spewing Volcano of Doom^(TM) in the Gulf of Mexico, it struck me that if the “CAFE” (Corporate Average Fuel Economy) standards hadn’t been weakened by our former oil-company-tied Presidents, we’d probably be past that level by now. It made my heart sink to think how much we’ve lost – in terms of global climate change, soldiers in oil wars, and now much of the life in the Gulf.

I am bemused when people complain that it will cost more to produce cars that get better mileage. But they always stop analyzing cost at the edge of the dealership’s parking lot. That thinking misses so many of the costs that we pay in other ways by wasting gas in unnecessarily wasteful cars.

For example:

• As the price of gas increases, a car that uses less gas becomes less expensive every day relative to a car that gets average mileage (a 50 mpg car costs half as much to drive as a 25 mpg car).
• As our weather becomes less predictable, and insects (ticks, anyone?) that didn’t used to be an issue in one place or another find new homes in our warmer world, we face increased costs of associated diseases (mmmm, lyme disease) and crop destruction (who doesn’t like blue-stained pine?).
• As we watch an entire critical ecosystem be destroyed by risky exploration for more difficult to “harvest” oil, we face disruptions to the food chain for a large swath of the Gulf and Atlantic seacoasts.
• And finally, there is arguably the most painful and expensive cost of all: the cost of sending our kids to die in the Middle East to keep the gas pumps running.

Pushing manufacturers to cut all those costs is a good thing. It’s clear from their behavior in the lax regulatory days of prior administrations that they are disinclined to do the right thing out of the goodness of their own hearts. Coming up with new designs, doing serious R&D, and retooling assembly lines eats into profits (a little), though that’s recouped with the “more expensive car” thing later (and the added expense is then recouped by the consumer in terms of less money flowing out of wallets at the gas pump, coupled with reductions in the “hidden” costs listed above).

Yes, improving mileage will increase the cost of a car, but then we are more than willing to pay extra for iPod adapters and heated seats, so why not pay a little extra to keep our children safe from the clutches of war, keep our planet “human friendly,” and keep the base of our ecosystem from being slimed with the toxic salad dressing from hell?

In his first Katrina, President Bush partied while New Orleans drowned in a hurricane-induced mass of oily, pollution-filled muck:

But he left behind a ticking time-bomb, just waiting for the moment to unleash Bush’s Katrina Mark II – a regulatory structure that allowed companies doing deep drilling off the US coast to skip a critical shut-off valve, leading to an ecological disaster for the history books:

In Bush’s Katrina Mark II, the waters are not as high (though choppy seas are preventing the containment), but an oil slick looms over critical wild life refuges, the nesting areas of endangered birds, and critical fishing industries.

Over the fold for more…

The slick is so large, that currents will carry it to the shores of Louisiana, Texas, Alabama, and Florida – and around Florida’s panhandle, up the East Coast of the US. No one knows exactly how far it will go, because no one knows how long the leak will continue.

Shut-off estimates range up to a month from now, but no one knows if shut-off is actually possible within that time. How many millions (or billions) of gallons of oil will sully the coastal US are as yet unknown.

In addition to the regulatory structure that created this mega-catastrophe, are the rules that allow the fox to secure the hen house. Critical early time was lost because, courtesy of Dick Cheney’s illegal secret energy regulation meetings, the rules allow oil producers to self-police. When a disaster happens, they get to try to fix it and report progress with no government oversight unless it’s requested.

So British Petroleum, in the grand tradition of energy companies covering up leaks, decided to claim for the first few days that they could handle the leak, and that is was 1/5 of its actual size.

President Obama dispatched the Coast Guard immediately, and held daily briefings to try to ensure that the leak was contained quickly … but here’s the problem: because the unregulated  (thanks Dick Cheney) oil company chose to lie and cover-up, the administration did not have the information needed to properly react.

There are many who claim they want to eliminate government regulation, as some sort of libertarian mantra, as if government regulation’s only purpose is to prevent businesses from making a profit. These people delude themselves that corporations, whose sole goal is profit at all costs, will somehow voluntarily take on added costs out of some innate benevolence toward their fellow man. They won’t. And this oil spill, Vermont Yankee’s tritium leak, and big banskter’s ongoing malfeasance are all glowing examples that prove the rule.

It’s time to release the minutes of the Cheney energy meetings, so we can find out what other time bombs await, and so we can determine where greater regulation and scrutiny are needed. Cleaning up the banks would be nice, too.

For those who would like to see a comprehensive discussion of the current state of the spill and its implications, there’s a fantastic, if sobering, write-up here.

In early 2007, a group of entrepreneurial souls in the Tunbridge area decided to try something different. They knew people could save money and energy, and reduce CO2 in the atmosphere by using solar energy to replace (or at least preheat) their conventional domestic hot water.

So, they devised a challenge [PDF file]: get 50 families to install solar hot water. It was a big challenge. It required helping people leap some pretty big hurdles – cost being one of the biggest.

They worked with banks to arrange for “energy efficient loans” with a reduced interest rate, they gathered information on federal and state rebate programs, and then then they set to work.

They set up an educational event (or two, or three) to teach people about the economic reasons to go solar: for example, you’d save $500/yr on a $700 propane bill for heating water for a family of 4. Once the cost of the system – after rebates – had been paid for by savings, then the system would be providing all that hot water for free … for decades. The payback period, depending on your site, can be as little as 5 years, but is almost always less than 7 years. This means a greater than 10% return on your investment. When was the last time your savings account, or even your 401k did that?.

Anyway, it was a great success, and now, another challenge is set to launch NEXT SATURDAY, April 24 in the Upper Valley. If you live in the area or want to learn more (perhaps start one in your area?), it’s going to be worth the trip.

This is the kind of challenge Vermont needs in order to create the real changes that will help all Vermonters – bringing green jobs, saving scarce money, and helping keep the air clean for our children.

Details below the fold…

If you could save more than $50,000 over 25 years by installing a new solar hot water system on your home or business, would you do it?

The Upper Valley Solar Hot Water Challenge will take place on Saturday, April 24 at 10 a.m. at the Bradford Academy building on North Main St., Bradford, VT

During the event, a moderator will present a slide show about solar hot water — how it works, what to expect from the technology, how much it can cost, and available rebates and tax incentives – then the floor will be opened up for questions.

Several area solar technology vendors will be available at The Challenge, and visitors to the event will have opportunities to meet individually with them to learn more about their products and services.

This free public event is co-sponsored by the Bradford & Newbury Energy Committees  and Conservation Commissions, and Hills 5 & 10.  Organizers hope that 50* homeowners and businesses will take the challenge and replace conventional hot water systems with solar in the coming months.

For more information, contact BCC Energy Committee Chair, Ed Wendell

802-222-4657 or at info@hillsofvermont.com.

*An average residential solar hot water system can reduce carbon dioxide emissions by over three tons per year. Replacing 50 conventional hot water systems with solar hot water systems could reduce carbon emissions by up to 150 tons per year.

One of the most common clichés these days is that “some stories just write themselves.” I assume everyone is aware that the RNC has been having a little trouble with “integrity” (heh) in its financial dealings, with some “interesting” expenses (some of which you can’t even write about without feeling the need to wash your hands). Among the cleaner “interesting” expenses are their “office supplies,” more commonly known as “booze.”

We all know the Democratic Party had the wildly successful 50-state strategy for voter turnout in 2008, but little did we know the RNC also has a 50 state strategy: booze and bimbos!  Sure, the Republican President was unwilling to set foot in our little state, but not the Republican National Committee, which bought $982 of “office supplies” from Boyden Valley Winery in Cambridge Vermont (about 1 minute in on the video):

One wonders if these were the “office supplies” for Auditor Salmon’s “office party” and DUI meltdown…

If the terrible toll wrought by fear of the Dreaded Tax Boogieman weren’t so serious, I’d probably be laughing at the timing of this whole “Challenges for Change” thing, since the newest Qunnipiac poll finds that the fear is entirely unfounded. It turns out that the American people, by a large margin, want the government to address the deficit by RAISING taxes on those with high incomes:

60 percent of Americans among both major political parties think raising income taxes on households making more than $250,000 should be a main tenet of the government’s efforts to tame the deficit. More than 70 percent, including a majority of Republicans, say those making more than $1 million should pay more.

This is important. If you’re in a position to influence what happens with “Challenges for Change” over the coming days and weeks, think about that – very carefully.  

When 1 in 5 eligible workers in this country is out of work or severely underemployed, another 2 in 5 are worried that they’re next. (There are some people who don’t worry – they’re either lucky ducks or not too bright.) That means at least 3/5 of the country  does not want you to shred the social safety net that’s dangling just over the edge of that looming unemployment precipice. They want to know that the people they elected to represent them are not going to abandon them to free-fall if the economy keeps shedding jobs. Bungie-jumping sans bungie isn’t in a lot of people’s master financial plans.

With votes coming up, and the end of session looming, those who represent us need to do all they can to represent all of us, not just the donor class at the top of the economic food chain.

People who need the services that are likely to be cut are typically one short step away from homelessness and destitution. The cuts being proposed are going to remove the last rung from the economic ladder. As Mark Horvath of InvisiblePeople.tv puts it:

Please always remember, the homeless people you’ll ignore today were much like you not so long ago.

The same is true for the people who are about to lose that last delicate thread of hope in this new great depression. They are our friends, our neighbors, and our families. “They” only morph from “us” to “them” when they skid off into the sidelines of the economic race course.

You know, when I first heard about “Challenges for Change,” something about the whole “Rush to Revamp Everything” felt … familiar. Side note: you’ve gotta hand it to Republicans, they’re The Masters of Naming Things.^TM If you need a rhyming or alliterative title, ask a Republican.

Anyway, it wasn’t that long ago that we were told there was a great, desperate need to very quickly commit to a radical “fix” to avert disaster. In September 2008, Congresswoman Marcy Kaptur discussed the “emergency” financial fix being proposed by the then-current administration:

“We need the right deal, not a fast deal. The White House is counting on fear to propel this Congress into hasty and inappropriate action … that is not in the interest of our Republic. There is a better way.” …

She was referring to the now infamous Wall Street bailout – the one that has done nothing to slow the collapse of Main Street USA. It hasn’t reduced the unemployment rate, it hasn’t kept Mom & Pop businesses from shuttering their doors forever, it hasn’t freed up credit for businesses, and it hasn’t slowed the foreclosure rate. In fact, all it’s done is separate the performance of the stock market from the performance of the larger economy, and enabled the architects of failure to reward themselves with billions of (our) dollars in bonuses, all while tying the hands of the current administration to do much of anything for ordinary people.

Perhaps not the best approach to take, eh?

It wasn’t long after the bailout vote that those who fell for the “OMG! PANIC!” tactics of Bush the Lesser realized they’d been “had.”

Sure, there was a big problem, and something definitely needed to be done, but it wasn’t exactly something that had never happened before, and we already had the tools (think: Sherman Anti-trust Act and receivership) to deal with the issue at far less cost and with far greater control.

So, what lessons did we learn from the Baby Bush Bailout Bonanza?  Sadly, it looks like we have learned nothing.

[over the fold]

In 2008, our country faced a significant financial crisis, and our President faced the final days of his administration. The traditional lame duck jokes wafted gently over the airwaves into America’s living rooms, and a silent financial problem simmered gently in the background.

This problem was well understood. It had been around for a loooong time, and warned about by professionals who knew their stuff. Those warnings were ignored – over, and over, and over again.

Until suddenly, just months before the end of term for the lame duck leader of our country, it became:

“A Very Big Problem That We Must Deal With Right Away, And Here’s What You Have to Do Right NOW!”

The plan was whipped out (with rushed input and undeserved blessing from a legislative branch that had been given too little time to fully vet either the issue or the “solution”), then put to a hurried vote just before a legislative recess.

In Vermont, we’ve had an eerie parallel. It’s the end of an 8 year term for our now-lame-duck Governor.  The Governor (Mr. “Government is too inefficient,” himself) has spent 8 years in office, proclaiming the woeful inefficiency of state government. In that whole time, he has clearly been aware of this simmering inefficiency, but he hasn’t done much about it – until, suddenly, just a couple of months before the end of his term, he called for an emergency revamping of entire state government from the top down.

Representative David Zuckerman called it a “shock troop” approach to government.

“The Governor talked about smaller efficient government for 8 years, but he didn’t make it his job to manage government. He didn’t do it methodically over those years, where there could have been much greater savings over that time. Instead he’s doing a sudden, fast process, at the last minute.”

Governor Douglas has used the financial problems faced by our state due to the economic downturn to create a sense of panic – pushing the legislature to rapidly make massive changes, without allowing time to ensure the proposed changes are the right changes to make.

As Representative Patti Komline said the other day:

“There’s a lot of confusion around this whole process. … We’re going to be expected to adjourn without, again, knowing the full impact of this, and we’re the ones who have to vote on it and answer to our constituents.”

The “this” to which she refers is massive. Every aspect of state government faces deep cuts, both this year and next. Departments will merge, school districts will change, the prison system will shrink, social services institutions statewide will merge and physically move to new locations. In short, the entire human infrastructure of our state will be rearranged in a grand tsunami of change.

In human services alone, one of every 20 dollars will be cut this year, and one out of every 10 dollars will be cut next year. Zuckerman says that rushing to make cuts in human services can have serious consequences:

“You don’t get a second chance with people’s lives. If you mess up with something environmentally, maybe it can recover over time, but with people … for example if a cut to something in mental health pushes a person into the legal system instead of a system of care, it will have an irreversible impact on that person’s life.”

Rushing through massive cuts in critical programs promises to hurt real people in very serious ways, and since these cuts are happening during a time when more people need help due to job losses, soaring insurance costs, and more, the cuts will hurt more people than would be hurt in a time of prosperity.

To top it off, the legislature’s role is severely hampered. In an ordinary budgeting process, there’s a budget and the legislature allocates appropriations and makes cuts based on those dollars – pretty straightforward. But that’s not how it’s going to work this time. This time, the legislature has to make cuts in programs, with little control over whether the money from a given cut will lead to a reduced budget –  because some cuts will really be shifts, redirecting money from one place to another. In addition, the legislature will have a limited ability to ensure that the shifting money goes where it’s supposed to go:

Unlike the normal budgeting process, in which lawmakers analyze the impacts budget proposals have on programs, under the Challenges for Change they do not have a direct say in how the money is removed and “reinvested.”

But there’s more. It’s not just bad for the most vulnerable people in Vermont, and it’s not just bad legislative precedent, the cuts in human services in particular aren’t even likely to be fiscally smart. According to the Public Assets Institute:

Because of the relatively high match rate in human services programs, Vermont could lose more in federal funds than it saves in state money.

…

The Challenges for  Change report promises to do more with less. But skeptics worry that both the administration and Legislature are counting their chickens too soon and booking the savings before they know what the cuts will mean to the delivery of services. When the implementation plans are unveiled, the administration should provide Vermonters with a full accounting of all planned budget reductions including those resulting from the loss of federal money.

That’s perhaps the most important piece of information among all the discussions regarding this topic:

Vermont cuts in human services funding may well be a double-whammy, because those cuts will be compounded by automatic federal cuts to those same services – and the result may mean a bigger hole in the budget than we started with.

This is a BIG DEAL.

And all the while, most of the legislature, afraid of the Dreaded Tax Boogieman, has stayed far, far away from the issue of raising funds. Zuckerman’s comment on the issue:

“We have a severe budget problem. Myself and a handful of others are willing to look at revenue changes, but that’s not the direction of “the chamber.”

“Where are the values? What are the values? This is the time when the battles ought to be fought.”

Maybe one day I’ll do a long discussion of the ludicrous “Laffer Curve” which is the economic altar to which conservatives bow each time they claim that the only possible answer to any fiscal issue is lower taxes. But I won’t do that now. Just suffice it to say that the current economic collapse is a direct result of that particular thinking.

Not everyone is afraid of the boogieman, though. As reported at Seven Days:

By and large, all the candidates said they would approach cuts in services much differently than has Gov. Douglas, though only one explained how the state might pay for making fewer cuts.

Sen. Doug Racine (D-Chittenden) said he believes the state must balance its budget by a mix of short-term tax increases, if necessary, spending down some rainy day funds, and making cuts as well as finding efficiencies.

“I don’t believe our values are negotiable just because we’re in difficult times,” said Racine to applause.

Speaking of those values, Nicole Mace, of Voices for Vermont Children, wrote a very informative opinion piece on VT Digger recently. In it, she made a point that holds true not only for education, but for all aspects of human services:

The Challenges for Change education “challenge” is based upon two false premises. The first is that education outcomes can be improved while spending less money. The second is that education costs are too high for the public to continue to support.

Let’s do a little experiment and remove “education” from the above quote:

The Challenges for Change “challenge” is based upon two false premises. The first is that outcomes can be improved while spending less money. The second is that costs are too high for the public to continue to support.

Here’s the crux: the Challenges for Change (for some reason, I keep wanting to write “Challenges for Chump Change”) premise implies that our problem is too much spending, and that the bare-bones basic services we offer to our community are therefore, somehow extravagant.

Challenges for Change implies that it’s extravagant to educate our children well, to feed the hungry, to help the sick, provide a place for the unemployed to find out about available jobs, and so on. Everything we supposedly value is an extravagance if you believe the premise of the program, and thus the only appropriate action is to cut.

But sometimes a cut doesn’t save what you think it will save. As Representative Susan Davis said in a recent forum (paraphrased) in Bradford:

After working for 31 yrs in state government, I know there’s been no short range or long range planning. We’re seeing the results of that lack of planning. While challenges for change is touted as cutting $38 million, I doubt we’ll actually see those savings. It’s an uncomfortable truth. …

Much of the discussion at the forum focused on program and tax cuts, but Davis’ response hints that the Dread Tax Boogieman is unworthy of that dread:

…in all the research I’ve read, I see no data that shows that raising taxes is actually detrimental when we’re in such hard times as this.

If raising taxes is the right thing to do, why do we hear so many people complain about taxes being too high? You know the system is very, very broken when we collect more tax revenues from people’s paychecks than we collect from all corporations’ profits, combined.

Is there room for more efficiency in government? Yes. There are some good concepts in Challenges for Change. It’s valuable to have each department revisit its mission and make sure that the things done by the department are designed to effectively and efficiently meet those goals. It’s a great idea for agencies to talk with other agencies and work on ensuring that if there’s data needed by both, there is an appropriate mechanism to share that data.

But to throw whole swathes of state government into chaos all at once, in some sort of a Hail Mary attempt to appease the tax cut gods? No. It’s ridiculous. I know the Republican party as a whole loves the idea of running government as a business. If that’s the Governor’s goal with this restructuring program, then let’s hope he never runs a business, because anyone who has been though a massive business restructuring will tell you: once the restructuring process starts, everything goes “kerflooey” (yes, that’s the technical term). Suddenly most employees have to divide their time between figuring out who’s the new “go to” person for, well, everything, while simultaneously trying to juggle the work that was already on their plate, and for which they barely had time to begin with.

When a company is restructured, everything slows down, customers end up very unhappy, and very little gets done until well after the dust settles – often restructuring ends, ultimately, in the company’s failure. What will happen if our state undergoes a massive, poorly planned restructuring? Failure will have disastrous human consequences.

Let us hope that the legislature is smart enough not to fall for the Governor’s “me too” attempt at shock doctrine governance. Let’s hope they find ways to fill the budget hole without throwing the state into chaos, at a tremendous and painful cost to ordinary Vermonters.

I’ll close by borrowing from Sue’s terrific diary on the hidden time bomb in the proposed Challenges for Chump Change permitting process:

Contact your legislators. Tell them you’re paying attention; tell them what you think of the “Challenges for Change” agenda in general; and remind them once again that their first obligation is to protect their constituents.

House of Representatives

Senate

And the sergeant at arms number for phoning messages into the statehouse: (802) 828-2228

Dave Gram of the AP has the scoop on that Cesium-37 found at Vermont Yankee in February, which Entergy had tried to fob off on background radiation from 1950s nuclear tests, or Chernobyl, or anything other than that oh-so-reliable plant on the banks of the CT River (enphasis mine). Well, all I can say is “Surprise, surprise, surprise!”:

The Health Department statement on Tuesday said the cesium-137 found in the Vermont Yankee soil samples was three to 12 times as high as the background levels attributed to the other causes, meaning it “appears likely the Cs-137 comes from Vermont Yankee reactor related sources.”

Vermont Yankee spokesman Larry Smith said he was not surprised by the finding, and that plant officials believe the cesium can be cleaned up as part of their already planned effort to remove some of the soil around plant buildings and ship it off for treatment as low-level radioactive waste.

Anyone else surprised at this latest chapter from the Purveyors of Truthiness^TM. It seems, some days, that Yankee’s owners ought to consider a new motto: perhaps something along the lines of “more spin, less honesty”….

Tritium Workshop Meeting Notice