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Testimony regarding DDOE FY 2010 Proposed Budget

Tuesday, March 31, 2009
George S. Hawkins, Esq., Director, DDOE

Director George S. Hawkins - Testimony Before the Council of the District of Columbia

 

FY 2010 Proposed Budget (March 31, 2009)

Good afternoon Chairperson Cheh, and members of the Committee on Government Operations and the Environment. My name is George Hawkins, and I am the Director of the District Department of the Environment. I am pleased to appear before you today in order discuss the Mayor’s proposed budget for Fiscal Year 2010.

Introduction

The District Department of the Environment’s mission is quite simply to improve the quality of life in the District of Columbia by protecting and restoring the environment. DDOE encompasses a diverse range of programs that protect, preserve, and restore the natural environment, conserve resources and improve human health. DDOE enforces the District’s environmental laws and regulations via inspections, monitoring and plan review. In addition, the agency conducts a broad range of outreach activities in order to promote sustainable choices and raise awareness of environmental issues. It is DDOE’s goal to make the nation’s capital an international model of environmental protection and sustainable practices.

Mayor Fenty has produced a balanced, workable budget that we believe will permit the District to come through the current difficult period with a record of responsibility and service that will be a point of pride for us all. Although we are experiencing lean times, I and my dedicated staff are committed to continuing and advancing DDOE’s important work with this proposed budget, with minimal impact on the fundamental activities of the enterprise. As directed by Mayor Fenty, DDOE will streamline its operations, and strive to provide the same services. Furthermore, DDOE is actively pursuing all opportunities for funding made available to the District by the American Recovery and Reinvestment Act of 2009.

In my testimony today, I’d like to discuss the proposed budget in three parts. First, I will offer a summary of DDOE’s fiscal year 2010 budget picture. I will then discuss some major mechanical changes in the budget. Finally, I will discuss our priorities for the coming fiscal year.

Summary of Budget

DDOE’s proposed FY 2010 overall budget is $102.96 million and includes 315.51 FTEs. This budget represents a 31.8 percent increase over the FY 2009 budget, primarily due to the following 3 factors:

  • $15.2 million of ARRA stimulus funds.
  • $4.4 million increase in Special Purpose Revenue particularly in Energy Trust funds and soil erosion & sedimentation control.
  • $3.4 million increase in the Low Income Home Energy Assistance (LIHEAP) federal grant funds. This increased funding for LIHEAP reflects the Mayor’s continuing commitment to this program and the citizens it serves.

Specifically by fund type, our proposed budget changes break down as follows:

  • Local funds: These funds total $19.27 million and 93.4 FTEs, representing a decrease of $3.6 million from FY 2009. This apparent decrease is due mostly to the transfer of LIHEAP funding from our Local to our Intra-District (TANF) budget.
  • Federal Grant funds: These funds total $41.9 million and 122.7 FTEs, which is a $22 million increase over FY 2009, and as I mentioned, is due to $15.2 million (and counting) in stimulus grants funds, a $3.4 million increase in LIHEAP funding, and a moderate increases in our other existing grants.
  • Special Purpose Revenue funds: These funds total $39.3 million and 96.4 FTEs, representing an increase of $4.4 million over FY 2009, due primarily to increased funding in the budget for Clean and Affordable Energy Act (CAEA) Trust Funds, the Soil Erosion and Sedimentation Control Fund, the Pesticide Fund, and the Lead Fund.
  • Private Grant funds: We have budgeted the remaining $130,000 to reflect a private grant from the Fish and Wildlife Foundation to help clean up a portion of the Anacostia River. This is the balance of an original $650,000 private grant awarded by the Fish and Wildlife Foundation in FY 2008.
  • Intra-District funds: These funds total $2.4 million, a significant increase from FY 2009 due to the transfer of $2 million funding for the LIHEAP program from the Local budget to the Intra-District budget. The remaining $400,000 in our Intra-District budget reflects the work we do on behalf of the Department of Motor Vehicles for compliance with emission standards.

 

Specific Changes in the FY 2010 Budget

 

Local changes – in addition to redirecting $2 million to the Intra-District budget for energy assistance payments, we have reduced our Local budget by $1.5 million. We will nevertheless, still be able to maintain our services at their current level by operating the Department in a more efficient manner.

  • Federal grants
    • Stimulus – Thus far, the budget includes $15.2 million of stimulus funds, which includes $9.9 million of State Energy Plan, $4.1 million for weatherization, and $1.1 million for diesel emission reduction grants. We are optimistic that this number will increase over the coming weeks and months as more and more stimulus funds are applied for, and granted to DDOE.
    • LIHEAP – The proposed FY 2010 budget for LIHEAP is $10 million, representing an increase of $3.4 million and 4 FTEs from the FY 2009 approved budget of $6.6 million.
    • Weatherization grant – The proposed FY 2010 Budget is $1.4 million, which is an increase of $700,000 from the FY 2009 approved budget of $700,000.
    • Air Pollution grant – The FY 2010 proposed budget includes $1.3 million, which is an increase of $600,000 and 2 FTEs over the FY 2009 approved budget of $750,000.
  • Special Purpose Revenue Funds
    • Soil erosion – The proposed FY 2010 budget to prevent soil erosion is $2.2 million, which represents an increase of $1.4 million and 7 FTEs from an FY 2009 approved budget of $800,000.
    • Pesticides – The proposed FY 2010 budget to protect the environment from pesticide hazards is $1.6 million, which represents an increase of $700,000 and 4 FTEs from the FY 2009 approved budget of $0.9 million.
    • Lead – The proposed FY 2010 budget to prevent lead poisoning is $0.6 million, which represents an increase of $400,000 and 1.8 FTEs from the FY 2009 budget of $177,431.
    • Brownfields – The FY 2010 proposed budget to remediate brownfields is $150,000, which is an increase of $126,000 from the approved FY 2009 budget of $24,000.
  • Energy Trust Funds (CAEA) – The proposed FY 2010 Budget includes $22 million for the Clean and Affordable Energy Trust Funds, representing an increase of $2 million and 5 FTEs over the FY 2009 approved budget. As the Clean and Affordable Energy Act of 2008 came into being well after the FY 2009 budget had been developed, the $20 million for the Reliable Energy Trust Fund (RETF) and Natural Gas Trust Fund (NGTF) in the approved FY 2009 budget were reprogrammed into the Clean and Affordable Energy Act Trust Funds – the Sustainable Energy Trust Fund (SETF) and Energy Assistance Trust Fund (EATF).
  • Intra-District
    • TANF/LIHEAP – There are $2 million of LIHEAP energy assistance funds that are being transferred from Local budget to the Intra-District budget. I would like to add here that one change we made in our budget structure was to add a new activity to the Energy Program – the Energy Assistance Benefit Payments activity – which will make more transparent the amount of funding available specifically for LIHEAP energy assistance benefit payments.
    • DMV – The proposed FY 2010 budget includes $364,000 of Intra-District budget which reflects the work DDOE does on behalf of the Department of Motor Vehicles for compliance with emission standards.

Priorities for FY 2010

  • Stimulus Funds – I want to assure you that DDOE is investigating every funding opportunity, and meet every deadline. To date, DDOE has applied for a total of approximately $8 million for weatherization assistance for low-income persons, approximately $22 million for the State Energy Program, and $1.73 million for State Clean Diesel Grant Projects. Furthermore, we have every reason to be optimistic that the District will receive its fair share of grants for:
  • $19,500,000 split between FY 2009 and FY 2010, in stimulus capitalization grants funding for Clean Water State Revolving Fund.
  • $19,700,000 split between FY 2009 and FY 2010, in stimulus capitalization grants funding for Drinking Water State Revolving Fund.
  • $9,600,000 in stimulus funding by formula for Energy Efficiency and Conservation Block Grants.
  • A portion of the $210 million available nationally in competitive stimulus funding for Diesel Emissions Reduction Programs.
  • A portion of the $5 million available nationally in competitive stimulus funding for Brownfield Remediation Job Training.
  • A portion of the $200 million available nationally in stimulus funding for the Leaking Underground Storage Tank Trust Fund Program.
  • Summer Youth Programs
  • The Mayor’s Green Summer Jobs Corps and the Mayor’s Conservation Corps will provide Summer Youth Employment Program (SYEP) participants with meaningful projects designed to clean and green their communities. Two new FTEs will be hired soon to manage the programs, and DDOE has received $200,000 available for Green Summer contracting needs. Additional funds for this program came via Intra-District transfers of SYEP funds from DOES. Examples of Green Summer projects include community cleaning and beautification projects, cleaning of parks and open spaces, graffiti removal, community outreach and surveys, and other projects intended to green neighborhoods, parks and open spaces.
  • Internal Control Committee
  • In light of several instances of fraud allegedly perpetrated from within District agencies, I have decided it prudent that DDOE establish certain internal controls to proactively address DDOE’s internal fiscal management processes. I am confident we are managing the expenditures of our funds properly, but I want to be doubly sure of this conclusion as we move forward – and that DDOE has a mechanism that can verify and improve our performance.
  • Accordingly, I am formally establishing an “internal control committee” for the agency. The function of this committee is to ensure that fiscal policies and procedures are followed relative to all our budget and procurement systems. This team will take a sample of various items and compare them to a checklist to ensure that all procedures have been properly followed. Initial items on the checklist will likely include the following: sub-grants and grants, energy payments, purchase orders, payroll, travel, inspectors, and O-type checks.
  • This committee will be comprised of a chairperson and eleven individuals, including one from our "cross-cutting" programs, and two from each of our core programs. This team – which I am proposing will serve a six-month term - will be led by Rosalind Inge, the Associate Director of our Office of Administrative Services. The limited six-month term will ensure that the members of the team rotate in order to bring new "eyes" to the process on a regular basis. This will also provide excellent educational experience to more staff members. I also have asked Chris Carew, DDOE's Chief of Staff, to attend periodically and participate, which I will do as well.
  • Green Buildings – DDOE has $200,000 for support of green building and green development projects including development of publicly available "green spec sheets" for approvable green practices for use by commercial and residential development community; funding for green building related training for District employees and the private sector; technical support for greening of the building code; and development of green "how to" outreach materials for key constituencies including condominiums and cooperatives, schools, single family homes, and places of worship.
  • Stormwater Administration – Reducing stormwater is critical to restoring the Anacostia River, Rock Creek and the District's other waterways, and is clearly a high priority for both the Mayor and this Council. Therefore, in the FY 2010 proposed budget, there is $3 million in capital funds for DDOT-related stormwater work and an increase of 8 FTEs in the Stormwater Division. Overall, this funding will be used to comply with the District’s obligations under the new Municipal Separate Storm Sewer System (MS4) permit from U.S. EPA. The net effect of our stormwater efforts will be to reduce the pollutant loadings that reach our rivers and streams, which ultimately benefits all District residents by providing a cleaner and healthier natural environment.
  • Lead management – Funding increases $600,000 to sponsor the lead program’s full implementation of the new lead law, coupled with its anticipated enforcement of a new Renovation, Repair and Painting program.
  • With respect to the recently passed new lead law, B17-0936 the "Lead-Hazard Prevention and Elimination Act of 2008" (projected to go into effect tomorrow, Wednesday, April 1, 2009), these funds will be needed to help the lead program deploy a proactive inspection regime and to help defray the cost of an aggressive outreach effort directed to inform the public at large and the regulated community in particular about the new lead law. With respect to what we anticipate will be a new District Renovation, Repair and Painting (RRP) program (subject to authorization from US EPA), these funds will also be directed towards implementing an effective enforcement program to carry out new RRP-specific regulations.
  • Attorneys/Enforcement – The FY 2010 Office of the General Counsel’s (OGC) budget increased $631,000 for additional support for legal services from Office of the Attorney General (OAG), for expert witnesses, for contractual toxicologist expertise ($120,000), and for other litigation and case development expenses expected from increased enforcement actions and large scale projects, such as pursuit of Chevron for costs incurred at Riggs Park. This amount also includes funding for an additional 1.5 FTE’s to hire one new attorney, and to fully pay for one position whose costs DDOE had been sharing with OAG in previous budgets.
  • Emergency Response – $150,000 is budgeted in FY 2010 for contractual services to support the agency in responding to local environmental emergency situations at sites including time critical removal actions, or mitigation of the release of oil or any hazardous substances into the environment that would threaten the health and welfare of public health and the environment.
  • The Clean and Affordable Energy Act of 2008 – DDOE is currently coordinating efforts with a consultant -- who has experience in drafting an RFP for the state-wide provision of end-user energy efficiency services -- to prepare the draft RFP for the Sustainable Energy Utility (SEU) contract administrator. DDOE is developing performance benchmarks to be presented to the SEU Advisory Board for consideration. DDOE has ensured that an Evaluation, Measurement &Verification system will be in place to assess the performance of the SEU, and verify that SEU contractor expenditures have resulted in energy savings over the expected life of each measure compared to baseline levels. DDOE is participating in the North-East Energy Efficiency Partnerships (NEEP) E, M&V Forum to develop consistent E,M&V protocols for energy efficiency and demand side management programs.

DDOE staff has prepared draft bylaws to be presented to the SEU Advisory Board for consideration. DDOE consulted with the Office of Boards and Commissions, and the proposed bylaws were modeled after the bylaws of other Boards in DC. DDOE has made preparations to provide Staff resources to the SEU Advisory Board.

Finally, DDOE has implemented the Renewable Energy Incentive Program (REIP), which is already very popular (Budget: $2 million annually for fiscal years 2009 – 2012). Extensive information on the REIP, including the application process, the process for participation in the program may be found at www.greenenergy.dc.gov.

Closing

Overall, the FY 2010 proposed budget will allow the District Department of the Environment to effectively continue its work in tackling the environmental issues of greatest concern to our citizenry, albeit in a more streamlined manner. We will continue to employ all of our resources as effectively as possible in order to yield the greatest possible benefit for the city, while moving forward with innovative solutions to address the environmental challenges of our time.

I thank you again for the opportunity to testify, and look forward to answering any questions the Committee may have.