Greensboro Council Worried About Strings Attached to ‘Free’ DOE Money

It is hard for local governments to turn down so-called “free money,” no matter how many strings are attached.

The City of Greensboro has had quite a bit of free federal stimulus money dangled before it, and both city staff and the City Council generally are reluctant to turn it down. But the City Council actually may reject a $5 million pot of money offered by U. S. Department of Energy, even though it has given city staff every opportunity to justify accepting the dough.

Twice the council has and discussed the DOE grant, which — in theory, at least — is designed to help homeowners save on energy costs. Twice the council has tabled the issue.

But the catch is, if Greensboro participates in the program, homeowners would have to take out loans to make energy-saving improvements to their homes, with the expectation that the energy they’d save would more than pay for the cost of servicing the loans. It’s not clear this would be the case, which is one reason the council has delayed its decision.

According to DOE’s Better Buildings website, partnerships with local governments “will make energy efficiency retrofits accessible to hundreds of thousands of homeowners and businesses, saving consumers about $100 million annually while creating tens of thousands of jobs.”

Greensboro is one of 27 local governments in roughly 30 states to receive Better Buildings grants.

The DOE website adds the grant will help Greensboro employ “a neighborhood-based approach to build local energy conservation infrastructure capacity as well as increase the community’s capacity for self-reliance … . The community-building approach integrates broad outreach strategies, healthy homes concepts, jobs creation, economic development, neighborhood empowerment, ongoing education, and a monitoring system, resulting in a culture of energy efficiency and savings that will be sustained far beyond the life of the grant.”

The conditions of the grant and exactly how it would be administered are unclear, so the council tabled the issue for further discussion.

Dan Curry, the city’s sustainability manager, told the council in September that the $5 million was a three-year grant “that will roll from year to year as the budget progresses.”

Curry said “many of the details — such as agreements with private lenders — are yet to be worked out.

“But the goals are pretty simple: to improve the health, safety and efficiency of buildings in this community and particularly east Greensboro,” he added.

More important, Curry said, the grant was an “economic development activity designed to create employment opportunities and business opportunities.”

Curry estimated that several thousand buildings could be retrofited over the course of the three-year grant, making its overall impact much greater than the grant itself.
Because homeowners theoretically would save so much on their utility bills that they could use those savings to repay the loans, Curry said, “In effect, there would be no net cost to the property owners.”

Even so, council members weren’t easily convinced.

Council member Danny Thompson expressed concern about homeowners taking on more debt, which he said largely was responsible for the economic meltdown still plaguing the country.

“I think this is what got us into a crisis in the first place,” Thompson said. “I ask that we proceed with caution.”

Skepticism over the program reached its height when council members Dianne Bellamy-Small and Trudy Wade — normally on opposite sides of the issues — both agreed that it was hard to see the winners in this program, aside from government bureaucrats.

Bellamy-Small — probably the most liberal member of a conservative–majority council — described the grant program as “government as its usual self.

“We’ve made something that should have been a very simple process in trying to get stimulus funds down to the people who need work, but we’ve [bogged] this thing down,” Bellamy-Small said. “I will not support encouraging an 80-year-old woman to go out and get a loan, because she’s probably not going to live to pay it off.”

Wade supported Bellamy-Small’s concerns, noting such support would be a “historic” moment for the council.
“We’re going to spend $5 million for two employees to go tell you do something,” Wade said. “What are the advantages here? I’m having trouble seeing them.”

Another major issue is who would administer the grant. Bellamy-Small questioned the $1.8 million allocation for “consultants,” while fellow council member Mary Rakestraw questioned the salaries and generous benefits package of additional city staff who would oversee the grant.

Curry replied that the $356,000 in salaries would be spread over the three-year grant period, while consultants would be needed to train outreach workers who would be performing energy audits for homeowners.

Rakestraw also pointed out a condition of the grant was that the city would provide matching funds at a five-to-one ratio — or $25 million, to which Curry replied that should the city not be able to provide matching funds, then the terms of the grant would have to be renegotiated with DOE.

Despite the many concerns, the lure of free money was still too much for some council members.

“I don’t think you delay this and let this money get away,” said council member Robbie Perkins. “I think you instruct staff to listen to your concerns, peg the money and come back in a briefing session and tell us where they’ve cured your ills.”

Sam A. Hieb is an contributor to Carolina Journal.