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Austin Energy under pressure to expedite federal weatherization spending

Monday, March 15, 2010 by Austin Monitor

In response to pressure from federal and state officials, Austin Energy has begun to spend $6 million allocated to the utility through the federal stimulus program for home weatherization for low-income residents. This story has been corrected. Note addendum in bold.


Mayor Lee Leffingwell noted last week that he had participated in a phone call from an official at the Texas Department of Housing and Community Affairs asking Austin to speed up its work. Leffingwell said he was eager to have the money spent so that Austin Energy did not lose that federal money.


“The federal government is pushing downhill to get this money into circulation, and so far, even though we got the award, we haven’t done any projects, along with some other cities that haven’t done any projects. And so, we’re getting some pressure . . . We could lose the money,” which might be reallocated “to somebody else,” he said.


“I very strongly suggested—I don’t directly give direction to Austin Energy—that we expedite the process so that we get some actual projects done so that we avoid losing the money…and that should be done as soon as possible,” Leffingwell said. He hoped that the utility could get some projects done faster by compressing timetables and skipping some procedures such as pre-bid conferences, but that idea ran into a great deal of resistance from the City Council’s minority members Mayor Pro Tem Mike Martinez and Council Member Sheryl Cole.


Martinez noted during a Council subcommittee meeting last week that Leffingwell had been warned that there might be “requests at the end of this month for any cities that received federal stimulus moneys to return that money if it wasn’t out on the streets.”


But Martinez said, “ I found that Austin Energy had reversed its commitment for a mandatory pre-bid conference. There were multiple emails between me and (Interim General Manager Robert) Goode regarding this decision.”


Goode sent a memo to Mayor and Council on Tuesday, which says in part: “the In Fact Daily report yesterday was completely wrong when it stated that “…Austin Energy Interim General Manager Robert Goode suggested canceling the pre-bid conference.” I did no such thing!  Here are the facts:  1) no one suggested “canceling” the pre-bid,   2) the pre-bid was held on March 1st, and 3) I took the AE reins the day of the pre-bid and had no hand in the development of the bidding process. I’m dismayed that this article inaccurately portrays that I personally suggested canceling the pre-bid since it certainly can then be construed that I don’t support networking via pre-bids…which is not true.  I’ve simply been explaining what I have found out about the circumstances leading up to the pre-bid. The only action that I have taken thus far on this issue was to approve extending the date the bids were due to allow more time for subs to connect with primes.”


Cole said, “My staff has been following the process at Austin Energy for at least six months now . . . And it was my hope that this would be an opportunity for minority contractors . . . to get ahead (in a way that’s) not so difficult.”


Adrian Neely, chair of the citizen committee on minority business opportunities, told the committee Assistant City Manager Rudy Garza “let me know that staff had changed its position on mandatory pre-bids. That shows me that he is being proactive and trying to look out for minorities in this community.” 


Although Austin Energy has had its own weatherization program, providing weatherization—and thus lower utility bills—to about 600 to 800 families per year, spending federal stimulus money is more complicated. Utilities receiving the funds must jump through some additional hoops, according to Karl Rábago, vice-president for distributed energy services at AE.


“We started inspecting homes,” last Monday to start the federal program, Rábago said. “We’re doing it according to all the federal standards with inspectors who have been trained. What we hope to do is that once everything is in place we can do a journal entry that those homes have been weatherized,” according to federal guidelines “so we can claim houses done this month.” And even if that does not suit the federal overseers, the homes get weatherized and “we will get dry run experience” in dealing with those regulations, he said.


Rábago said as soon as new contractors are approved by the City Council they will have work to do. “We’re just going ahead and spending money now and we’re going to get reimbursement later.”


He also stressed that Austin Energy is “continuing to try to maximize opportunities for women and minority owned contractors.” There was an optional pre-bid conference instead of a mandatory one as well as a “meet and greet” meeting and three training sessions for aspiring MBE/WBE firms, said Rábago. In order to give those companies adequate time to respond to the opportunity and to give the utility time to evaluate the bids, the matter won’t come before the City Council until April 8. Rábago said he believes the current contractors can weatherize about 15 homes using the federal regulations this month.

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