Recording in progress.

Good morning, everyone.

I'm Charles Allen, Ward Six Councilmember and Chair of the Council's Committee on Transportation and the Environment.

Today is Monday, May 4th, 2026, and we are convening in person in room 120 of the John A.

Wilson building, as well as virtually over the Zoom platform.

The time is now 9 36 a.m.

and I'm calling to order this budget oversight hearing of the committee.

Today we're gonna hear from government witnesses regarding the mayor's FY2027 proposed budget for the Department of Energy and Environment in the DC Sustainable Energy Utility.

The Department of Energy and Environment, or DOEE, is the district's leading agency for energy and environmental issues.

The agency's mission is to improve the quality of life for residents of the district by protecting and restoring the environment, conserving natural resources, mitigating pollution, increasing access to clean energy, and educating the public on achieving a sustainable future.

DOEE has wide-ranging responsibilities, including enforcing environmental regulations, wildlife management, developing energy policies, issuing permits, and providing funding, technical assistance, and information to residents and businesses in the district.

The mayor's proposed FY27 operating budget for DOEE is 181.5 million dollars, representing a 28.6% decrease from the FY26 approved budget of 254 million.

The DOEE FY27 proposed budget includes a $2 million reduction in local funds and a $19.4 million decrease in special purpose revenue funds.

DC SEU offers a range of programs and services, including rebates, incentives, technical assistance, and education to support energy conservation and sustainability efforts across the city.

While DC SEU's funding is contingent on how DOEE manages their contract and sustainable energy trust fund, it's highly likely DC SEU's capacity will be significantly reduced based on the cuts to the SETF this year.

With that, we're going to turn to our panel of government witnesses.

We're going to start with DC SEU, then we'll turn to DOE.

Uh for Mr.

Burdock, what I'm going to do is um after your testimony, I'll probably start with DC SEU questions, since I have a lot more for DOEE.

We'll go through DCSEU, and then once we wrap that up, if you'd like to step away, you certainly can, and then we'll focus in with Director Jackson for the next 48 hours.

Appreciate the opportunity to testify today on the DCSU's proposed FY2027 budget.

As with previous years, I want to begin by thanking this committee and Chair Allen for its continued leadership on clean energy, climate action, and affordability for district residents.

The committee's support, particularly during challenging budget cycles, has enabled the DCSU to deliver significant benefits to residents, businesses, and the district as a whole.

I also want to thank Director Jackson and the entire DOE team for their hard work and partnership and thank the DCSU advisory board for their support, guidance, and for continuing to push the DCSU to innovate, evaluate how we support the achievement of the district's clean energy and climate goals while also saving district residents and businesses money on their energy bills.

We understand that the district is facing a challenging fiscal environment, and that the mayor and council must make difficult decisions.

We recognize that no agency or program is immune from this, and that prioritization is required across all areas of government.

We appreciate the opportunity to support council with information as they make these decisions and the need to balance immediate budget constraints with the district's long-term policy goals.

In that context, we again want to express our sincere appreciation for efforts last year and in previous budget cycles to continue funding DCSU programs.

That support, including the addition of funding through the Healthy Homes Act, has allowed the DCSU to expand electrification efforts, reduce energy burdens, and improve comfort and health outcomes for DC residents and businesses.

These investments have delivered real lasting energy cost savings to households, which are especially important for those with limited incomes.

Over the past three years, the DCSU has experienced significant budget volatility, including reductions that have required difficult operational adjustments.

In FY2024, we felt the impacts of a mid-year 14.5 million dollar reduction that affected solar for all and related low-income retrofit and electrification programs.

In FY2025, continued budget uncertainty required DOE and the DCSU to reconfigure and adjust budgets with limited ability to scale offerings as planned.

In FY2026, funding available from the Sustainable Energy Trust Fund at the beginning of the year was $24.6 million, supplemented by approximately $11 million in Federal Inflation Reduction Act funds.

Under the proposed FY2027 budget, SETF funding would be reduced to levels comparable to those last seen in FY2012, a 50% reduction over FY 2026.

This proposed reduction comes at a time when demand for DCSU services remains high and when residents are increasingly concerned about utility affordability.

As this committee is aware, PGM wholesale electricity prices have jumped 54% since 2024.

Energy affordability is a growing district-wide concern.

Many households are facing higher energy burdens as bills fluctuate with seasonal heating and cooling needs.

Changes in energy supply costs and the reality that much of the district's housing stock, especially older row homes and multifamily buildings, were not built to modern efficiency standards.

For residents on fixed or limited incomes, even modest bill increases can force difficult trade-offs between paying for electricity or gas and covering essentials like food, transportation, and medicine.

At a moment when utility costs are top of mind for residents and businesses, it's important to underscore that the DCSU's programs deliver proven results.

Despite significant population growth, the district's overall electricity demand in 2024 was lower than it was in 2015, an outcome driven in large part by sustained investments in energy efficiency, building energy performance standards, energy codes, and green financing.

Nationally recognized analyses, such as those highlighted in a February 2026 report from ACEE consistently show that energy efficiency costs substantially less per megawatt hour than new natural gas generation while also avoiding greenhouse gas emissions and price volatility.

As we stated in our FY2025 performance oversight testimony, we believe the DCSU is the only organization with a mandate solely dedicated to energy affordability in the district.

This is one of the core reasons the DCSU exists, to serve as the district's one-stop performance-based provider of energy efficiency and renewable energy programs to help residents and businesses reduce energy use and save money while advancing DC's clean energy and climate goals.

This year the DCSU celebrates 15 years of dedicated service to the district.

Over that period, each dollar invested through the DCSU has generated approximately six dollars in lifetime energy cost savings for DC residents and businesses.

Savings that stay in local pilots and pockets and circulate in the local economy.

Solar for All is a particular particularly strong example of this impact.

Since FY 2019, the program has supported more than 840 single-family rooftop solar installations at no cost to residents.

Over 230 community renewable energy facilities or CREPs, delivering enough solar generation to serve more than 10,000 income qualified households.

And those are located throughout the district, 105 CREPs in Ward 7, 58 in Ward 8, 25 in Ward 5, 10 and Ward 6, 18 in Ward 4, and it goes on from there.

And that ensures equitable access to clean energy benefits.

In total, single family and community solar installations will drive more than $80 million in lifetime cost savings for income qualified families.

While we are working closely with DOE to determine how programming will be adjusted under the proposed budget, the magnitude of the cuts makes it clear that impacts will be significant.

First, every dollar not invested through DCSE programs represents lost opportunity.

On average, a reduction of 1 million dollars in the DCSE budget results in approximately $6.3 million in lost lifetime energy cost savings.

Roughly 38,000 metric tons of foregone lifetime greenhouse gas emissions reductions.

Fewer green jobs for district residents.

Last year, DCSU program supported more than 90 FTEs.

Reduced investments in certified business enterprises.

The DCSU spent $8.1 million with CBEs and FY2025.

And reduced investments in low and moderate income communities, which totaled approximately $9 million in FY2025.

The DCSU is a performance-based contract designed to drive measurable environmental and economic impacts.

A reduction of the size in the proposed budget will require difficult choices from DOE on prioritizing programs while balancing meaningful reductions in energy energy consumption and GHG emissions.

More than 60% of the DC SEU team members are district residents.

These are individuals dedicated to the mission of the DC SEU with years of experience designing, implementing and evaluating these programs, partnering with local contractors and DC based nonprofit organizations, and serving our customers.

While DOE has been an incredibly supportive partner over the past two years in helping maintain organizational capacity through budget volatility, at the proposed fund uh proposed funding level, staffing reductions would be inevitable, and we estimate that we would lose at least six to eight full-time uh equivalent DC based positions.

Third, through the Federal Inflation Reduction Act, though the Federal Inflation Reduction Act funding does remain available.

Local funding is essential to mean meaningfully leverage those dollars, particularly through programs like the Affordable Home Electrification Program or AHIP.

Without adequate local match and administrative capacity, the district re risks leaving federal resources on the table and reducing the number of electrification projects the DCSU can complete.

Fourth, the DCSU's work on the solar for all cramp program would be jeopardized at the proposed funding level.

The DCSU works with local solar developers and installers, many of them CBEs, to build solar for all single-family and community solar installations, driving local economic development and jobs.

In previous fiscal years, the DCSU has worked with local installers to deliver more than 100 single-family installations each year at no cost to customers that deliver more than $500 in electricity savings per year for about 20 years, or for 420 years, excuse me.

Currently, Solar for All Community Solar is fully subscribed by income qualified families.

While we expect to deliver approximately 1.6 megawatts of new community renewable energy facilities before the end of FY26, which will serve an additional 450 income qualified families.

Not adding community solar capacity in FY2027 would limit another tool that can be utilized to help income qualified families lower their monthly electric costs and pair with electrification efforts.

On average, delaying solar deployment results in an opportunity cost of up to 3.2 to $3.4 million per megawatt of installed capacity over five years.

Driven by lost energy and avoided delivery costs and foregone SREF values.

These are benefits that can't be recaptured once lost.

Finally, the proposed funding level puts the DCSU work DCSE's workforce development program at risk.

This program has graduated more than 300 district residents and provides four to five month externships at DC's living wage that help participants build experience, earn industry recognized skills, and transition into clean energy careers.

In practical terms, these cuts would weaken the local pipeline of qualified workers for energy efficiency, electrification, and solar work, slowing project delivery and reducing economic opportunity for DC residents.

Reduced funding may limit our ability to continue operating this program at FY27.

In closing, we want to reiterate our appreciation for this committee's continued leadership and for DOE's partnership as our client for the past 15 years.

We believe deeply in the DCSU's mission in the measure on equal equitable impacts we deliver and in the strong record of these uh the strong track record of these investments in advancing long-term affordability, resilience, and value for the district.

Just as important, we want to underscore the critical role of the SETF in making this work possible.

Consistent availability, predictability, and protection of these funds each year ensures that energy efficiency and clean energy incentives remain reliable and accessible, and savings can be delivered through lower utility costs across the district through DOEE, the DCSU, and the DC Green Bank.

Given the complexity and time required to plan and execute some of these projects, which often span multiple fiscal years, this is especially important as the DCSE works to deliver deeper energy savings and building electrification to residential, multifamily, and commercial properties across the district.

We look forward to continuing this work in FY2027 and to working with the council and the administration to preserve programs that deliver lasting benefits to DC residents.

Thank you, and I'm happy to answer any questions from the committee.

Thank you very much, Mr.

Burdick.

Director Jackson, attorney now.

And director, if you would, I know uh you've got other folks with you.

So I feel uh just make sure you introduce them so that way it's clear for the record, too.

Director Jackson, there we go.

Oh yeah, there we go.

We got you now.

So, yeah, so to my to my right is uh my senior deputy director right now, uh Mr.

Michael Sumersaw.

Morning.

Um he he did a bulk of putting the budget together for the agency, so that's why he'll be my my first go to.

And then as I'm other deputies come on board, we'll we'll introduce those.

Uh before I start my actual testimony, I first want to just thank my team that are here today.

Uh, thank my team back at agency.

Uh again, a lot of what we do, a lot of what is being presented today, is all because of the work that my team has done, and I'm very proud and and and just want to give them thanks first of all.

Again, thanking my deputies for being here today with me uh to support our budget that we put together over the past year, and uh look forward to having this uh testimony.

I also want to thank all the public witnesses from Friday uh that that came in to express their uh concerns and support for the issues that were that were brought to them and the programs that we have at the agency.

Uh just the time that they invested on Friday was uh um thankful to them for that and thankful for you being there to hear it.

Uh a couple of special uh shout outs from Saturday.

So again, uh thanks to uh Javier that came in and stole the show from everybody on Friday.

So I really appreciate his testimony.

Um Mr.

Jamal Lewis, who gave us some stats on DCSEU executive board and and the savings there was uh very insightful.

Uh, learned a lot more about city wildlife than I had in the past.

Uh Mr.

Matt Bro brought up some stuff about food purchasing, which was uh very important to highlight as well.

So I appreciate his time.

And Mr.

Jim Massam Monsama, uh, who's always been a key player in the uh DC environmental community, and I just want to thank him.

And then for Chris Weiss, who's here today, who uh always brings has brought great leadership for the DC Environmental Network, and I just appreciate uh the interaction and support that he's given to uh DOEE and just the environmental um environment for the for the district.

So I just want to thank all of you uh for Friday and for today.

So with that, good morning, Councilmember Allen and members of the community committee on transportation and environment.

I'm Richard Jackson, director of the Department of Energy and Environment, referred to as DOEE.

I'm pleased to pair before the committee today to provide testimony on behalf of Mayor Muriel Bowser on the proposed budget for the department for fiscal year FY27.

Mayor Bowser's proposed FY27 budget, grow DC was formulated with three key considerations in mind.

How to drive growth in our economy, to fund the services and programs that residents count on, how to keep families in district in DC and attract new residents, and how to create a business environment that draws new investments and create new jobs.

We're navigating the pivotal moment that demands a more deliberate approach to growth.

The federal dollars that once expanded our programs is unprecedented in unprecedented ways have been exhausted, and federal workforce reductions have been introduced new pressures on our economy and commercial corridors.

Revenues are slow, but the city maintains a strong financial foundation on which we can build by making the kinds of strategic and targeted decisions that would allow DC to continue growing while delivering the high quality services our residents depend on.

Our agency's budget, our agency's budget is part is but one part of that overall strategy.

DE's total proposed operating budget for FY27 is just over 1.181 million dollars.

These funds come from four sources.

89 million on federal funding, which represents about 49% of our budget, 69 million in special purpose revenue funds, which represents another 38%, $14 million.

Or 10% of our budget, and then $5.1 million in private grant funds, which is our Volkswagen money.

The biggest change in our budget in FY27 compared to the current approved FY26 budget is a reduction of more than 51 million in federal funds.

At this time last year, I told the committee that there was a significant risk and uncertainty around some of our federal grants, given shifts in federal priorities.

Our FY27 budget reflects the reality that funds for several grants that we had hoped would be available are unlikely to be.

In particular, the greenhouse gas reduction remains frozen, both for DC and for other states that have been awarded funding.

The charging fueling infrastructure grant has also been paused, and the rail safety grant was reapply for has what has not been awarded.

While we continue to look for ways to unlock funding opportunities from the federal government and other sources, a realistic budget needs to need to include reasonably anticipated revenue.

We can and will revisit this if federal funding landscape changes again.

I will now provide an overview of our priorities and activities in FY27 that are funded in the mayor's budget.

As it goes through this overview, I will also highlight several important legislative and policy proposals included within the Budget Support Act that accompanies this budget.

As I mentioned, the loss and availability of federal funding significantly impacts the energy administration's budget.

Reductions in special purpose revenue fund balances also reduce program capacity.

Nevertheless, with its budget, we are able to maintain our core commitment by my core commitment that current talent will be reserved as we look for ways to improve our agent our program's efficiency and effectiveness.

In FY27, we will continue to work with the public safety commission and with PEPCO to reform the interconnection process and make it easier and cheaper for residents to go solar.

The mayor budget also provides funding to the DC Green Bank to expand access to green financing solutions and leverage additional private capital for DC businesses and institutions to build new solar energy generating projects and electrifying existing buildings.

The Budget Support Act includes several provisions that advance the district's energy policy, especially to address growing affordability challenges in the face of increasing utility bills.

The first I will highlight in an effort to rein in predatory practices by bad actors is our re in our retail energy market.

Deals DOEE's research found that residential customers of retail electricity suppliers paid on average 70 to 80% more for their supply of electricity with a third-party supplier than they would have on a PEPCO default service.

Contract terms are often confusing, and marketing tactics can be outright deceptive.

With the support of the mayor, DOE has taken the lead in drafting legislation to address this in conjunction with partner agencies and the PSC.

The proposed BSA subtitle requires the PSC to set a price cap for third-party suppliers of both electricity and natural gas.

Require that standard contract terms be published and prohibit early terminations.

The BSA also includes revision to support the continued electrification of transportation in the district.

These include the extension of tax credits for private electric vehicle charging stations and converting vehicles from fossil food to clean energy.

Any new property tax exemption to incentivize the installation of publicly available EV charges.

Is a strategic shift in starting the second cycle of that program.

This will provide DOE with the time we need to learn from the successful completion of the first cycle and adapt as we move into the second.

Building on the 13% drop in energy use that we have seen from 2019 to 2024, driving annual savings of 40 percent 40 million dollars.

DOE is creating more flexible compliance options for owners that are in challenging circumstances.

The year added between cycles will allow DOE to fully implement these flexible options, administer enforcement actions where necessary, and develop the new trajectory compliance pathways options for cycle two.

With regards to Environment Services Administration, an FY27 DLE intends to use 11.75 million in capital funds from the PEPCO settlement to continue implementing the Anna Casa River Settlement Project.

DOE expects to begin in-river operations and complete remedial actions in some key areas after securing an appropriate lay down area for processing settlement dredge from the bottom of the Anakasi River.

DOE remains committed to maximizing air quality benefits and related health outcomes throughout the district.

In FY27, we will continue to use capital funds to operate the low-cost air quality sensors that are being installed at charter schools, libraries, and other select locations throughout the district.

Additional DOE will replace a two-decade-old trailer at its flagship air monitoring station at the Bemillan Reservoir to ensure the longevity of monitoring air pollution at this key location.

DOE will continue to provide funding using Volkswagen Settlement Funds and Federal Diesel Emission Reduction Act grants to electrify reduced emissions from heavy-duty vehicles, including shuttle buses in particular through a new rebate program mechanism in partnership with DCSCU.

Our lead safety healthy housing divisions continue to issue licenses and conduct audits of activities related to mold, asbestos, and lead abatement jobs throughout the district.

Additionally, this division issues licenses and certifies professionals to conduct lead and mold assessments and remediation activities.

The division also maintains oversight of radon testing and homes and drinking water testing for lead and licensed child development facilities in the district.

DOE's rail safety emergency response program will continuous monitoring and inspection activities throughout the district freight rail corridor and with a focus on hazmat and motor power and equipment inspections.

For our natural resources division, DOE's FY27 budget restore the grant that funds work to monitor and maintain eight trash traps to keep trash out of the Anakasi River.

This grant program has also an important workforce development effort and one that educates district residents about pollution that impairs the district's waterways water bodies.

The FY27 budget also expands the agency's work on the on and around Keeman and Heritage Island by providing $750,000 to develop and implement a restoration plan for the forest buffer between the island and RFK Stadium.

The funding will allow the agency to manage invasive plants and plant habit and plant native trees, shrubs, and flowers to restore habitat and create a beautiful and inviting riverfront for visitors and residents alike.

Excuse me.

DOE will continue to develop designs for the environmental education facilities at Keeman Island and will complete the designs for wetland restoration work in Keenan Lake.

The FY27 budget also continues to support the Keeman Island Ranger Program, which employs 11 district residents facing barriers to employment, seasonal year around to perform park maintenance and visitor safety and education work.

With all the work we're doing on Heritage and Keeman Islands, this year's Budget Support Act also looks ahead to a time when we will need to establish a stronger framework for managing demand for the use of those natural resources and facilities.

The BSA includes a provision that clarifies DOE's authorities to establish feeds for permanent events and other activities on the island.

The agency will begin construction on the Fort DuPont Stream Restoration Project, also in Southeast, which will restore approximately 3.5 miles of stream.

Both streams drain to the Anacasa River.

Finally, DOE will design and construct approximately six low impact development retrofit projects on district park and school facilities throughout the city.

These projects not only reduce stormwater pollution but also educate students and the public of our stormwater and its impact on the health of district waterways.

An FY27, the agency will also move forward with several capital restoration projects that are currently being designed, including the restoration of eroded stormwater outfalls in Rock Creek Park, and wetland restoration at Kenilworth Park on the banks of the Anakasa River, upgrades to stormwater management facilities around Fort Lincoln, and stream restoration projects in Pinehorst branch in Northwest and Oxen Run and Southeast.

The Ox Run and Pine Horse Brant Restoration Projects will ultimately restore habitat and water quality in 4.3 miles of the greatest stream in the district while creating amenities for district residents.

For urban sustainability administration and FY27, we look forward to administering the small and accessible sustainable grant program again, which provides small grants to support urban agriculture as well as donation and reuse.

DOE expects to award approximately seven small grants ranging from 5,000 to 15,000 each.

These grants allow DOE to fund community-based projects that may otherwise have difficulty competing for government funding.

In addition to the small and accessible sustainable grants, the Office of Urban Agriculture will continue to advance urban agriculture as a means to address food insecurities, build resilient communities, and offer meaningful jobs.

The urban farm tax abatement program anticipates awarding tax abatement at the maximum 90,000 program limit, $90,000 program limit, which has done each year since the start of 2024.

At the same time, USDA's specialty crop specialty block grant annual award will increase by roughly $40,000 for FY27, totaling approximately $263,000 for sub-awartees.

The annual routing DC event will continue to connect, educate, and support roughly 1,000 urban growers.

To enhance the resilience of both our communities and our own infrastructure, we will continue our partnership with HCMA and other agency partners to build a climate-ready DC by planning to meet the challenges of extreme heat and flooding.

Using updated tools, including mapping on heat exposure and sensitivity, we will continue our work to enhance resilience for residents and communities supporting partner agencies like DDOT and DPR and implementing solutions such as cool corridors and streets, green infrastructure, and resilient parks.

DOE's environmentally preferable products and services are EPS.

Staff will continue to coordinate the OCP on the phase rollout of a certified system facilitating DOEE's integrated review of contracts over $100,000 for compliance with EPS specifications as required by the Green Food Purchasing Amendment Act.

By the end of FY27, DOE plans to have seven agencies participating in the pallet.

The FY27 Budget Support Act also includes a legislative provision that would extend the deadline for the district to adopt a net zero energy code for buildings.

While this total title more directly affects the Department of Buildings, which is the lead agency for the for this effort, I mention it here because DOE is an important partner in that work.

The proposed deadline extension reflects the reality of where we are in the process to avoid abrupt transitions in the regulatory environment is essential that we allow for additional time to complete the work in a way that allows the building industry and other stakeholders to provide meaningful input into the proposed new code.

Total affordability administration, the proposed FY27 budget for the utility discount program will continue to serve district residents through discounts via PEPCO Electric Bill discount program and Washington Gas Bills discount program.

These programs enable district residents to lower their overall household energy burden.

The proposed budget for the Clean Rivers and Pervious Area Charge or CREAC Relief Program will continue to serve district residents by providing approved income eligible district residents with discounts on their DC water bills.

An FY27 our weatherization programs includes continued funding for energy efficiency services that reduce household energy burdens for low-income residents.

Excuse me.

The proposed FY27 budget for the lead reduction program includes funding that advances DOE's mission to create safe healthy homes by mitigating lead hazards for families with young children while strengthening compliance with HUD and DOE led safe safety requirements to improve long-term health outcomes.

DOE's proposed budget for the separate lead pipe replacement payment assistance program, LPRAP, includes funding that supports our partnership with DC Water to replace hazards led service lines, reducing long-term led exposure risk, and improving public health outcomes for households across the district.

And then with regards to operational service administration, DLU's workforce development strategy plan has improved coordination among its programs, prompted fruitful conversations with employers about their needs, and enhance interagency collaboration to assess quality data on green job later projections.

Later in FY26, DLE will publish a green pathways micro site to highlight green career pathways, DLE's education and workforce programs and case studies of successful participants.

Summarizing the findings of the strategic plan and opportunities for improved and new programs.

In partnership with the University of District of Columbia, DOE is establishing research partnerships to support student postgraduate opportunities, and DOE anticipates further strengthening those partnerships in FY27.

Additionally, DOE is supporting youth leadership development via outdoor education experiences at the Department of Youth Rehabilitation Services OASIS Reserve.

With future plans to establish an adult workforce development program, training D2 residents in green building trades through through rehabilitating buildings on the laurel campus.

DOE's budget, like many other agencies include several special purpose revenue funds, SPRs.

As this term suggests, SPR funds are specified are established by law for a special purpose meant to be accounted for separately than the district general fund.

Often there are dedicated revenue streams from federal funders, fees and fines on regulated entities or surcharges on utility bills that are dedicated to fund several of our programs.

I know that I know this committee is aware that DOE oversees a much larger portfolio of these SPR funds than perhaps any other agency.

When the FY26 budget was adopted last year, it included provisions some of those SPR funds that, if left unaddressed, could have significantly impacted program operations.

In some cases, federal requirements regarding the use of program income were at stake.

In consultation with the mayor's team and our federal funding partners, this year's BSA support acts include legal changes to address these issues along with other provisions that will allow us to maintain the integrity of several of our SPR funds year over year.

In conclusion, we appreciate the opportunity to share our worked plan for the coming year and looking forward and look forward to continuing to work with the committee.

This concludes my testimony.

My team and I are happy to address your questions.

Thank you very much.

As mentioned, what I'm probably do is start Mr.

Burdock with a couple of DC SEU questions.

I'll go through that and then essentially I'll transition over to uh DOEE questions, and if you want to step away at that point, uh I'll let you know.

Please feel free.

Um, Mr.

Verdick, in your testimony, Kev said DC SEUs created with the goals of driving green jobs and economic growth while continuing to make the district a greener and cleaner place.

DC SEU has created billions, that's a B, billions of lifetime savings for district residents.

What are some of the most important strategies that the DC SCU uses to reduce energy demand and utility bills for district residents?

Thank you very much.

I think over the last 15 years we've seen uh the tried and true results of traditional energy efficiency.

So lighting HBAC across the board.

Um and I think as we uh as codes have uh gotten more stringent, as has that technologies have improved, the ability to achieve energy savings through traditional energy efficiency will continue to be um will continue to change.

But I think that tried and true energy efficiency um continues to work.

So everything from simple things to no and low cost measures for everyone, for businesses, for residents, for LMI residents, for everybody is is uh a very effective strategy, just being mindful of the the uh energy you use.

Um helping folks adopt new technologies, so I think our rebates and incentives um help with that upfront cost.

Um often uh there are folks, you know, businesses and and um you know uh your typical resident may have some dollars to invest in those.

Uh for our LMI residents and those that uh uh own and operate um uh LMI housing, that upfront cost is is often more.

So we're able to um balance our portfolio in terms of what we're able to invest.

Obviously, our goals uh dictate that we need to invest a certain amount of dollars uh in LMI communities.

So um our rebates and incentives are tremendously helpful.

And then uh, you know, renewable energy as well through the solar for all program.

Um as we have looked uh to uh meet the district's clean energy and climate goals, and we've shifted towards um electrification in partnership with DOEE, ensuring that um renewable energy is available, especially to LMI residents as we help them electrify as well, has been also been a really important strategy just to ensure that uh overall energy costs are not gonna uh increase.

Um hopefully they'll go down, hopefully they'll go down significantly with solar as they adopt that more efficient electric uh technology.

So a variety of different ways that we um uh that we approach that, but tried and true energy efficiency will continue to be something that I think is effective across the board.

Yeah.

All right, great.

Thank you.

Um let me move into some specifics about the SETF funding.

Um I think your testimony is very diplomatic, your written testimony, appreciate that.

Talking about the challenges faced by the district and the difficult budget decisions that are in front of the council and the mayor.

Um, the continued cuts to SETF for the last three years cannot be described as just belt tightening measures.

Um these are direct choices that the mayor is making.

It's not belt tightening.

These are choices.

The mayor has taken very aggressive steps to cover budget gaps and other parts of the city's budget by harming DC residents and the work of these agencies rather than look for other options and solutions.

There is no other agency in all of government with a nearly 50 percent reduction in the last two years.

It is a deliberate choice.

And every dollar that's removed from the SETF by the mayor, the district's effectively raising utility costs by six dollars in the long term.

And again, I want to make sure the public understands it's not like the SETF costs were reduced.

So we're still taking people's money.

We're just not spending on the things we told them we were going to be spending it on.

Um, to that end, what is the expected contribution from the SETF for the fiscal year we're in right now, FY26?

For this year, we started the year with 24.6 million dollars uh in SETF funds.

That's increased slightly through some contract modifications that uh DOE was able to make a few additional dollars available to keep some of our programs uh operating to provide some some backstop, but uh 24.6 million dollars at the beginning of FY26.

Okay.

And then for FY27 in this proposed budget, what would that go down to?

Right now, 12 million is what uh we have been provided in terms of what would be available from the SETF for FY27.

For FY27, correct.

And then an FY28?

Uh uncertain on FY28 at this point.

Um, you know, we we are um in terms of of what we know because ultimately um our contract ends at the end of FY26, uh as you know, council uh authorized DOEE to extend that contract or offer an option year uh into FY2027.

So in terms of FY2028, what would be available from the SETF, I would definitely uh defer to DOE in terms of of total dollars.

Okay.

And when we set the contract, what is the impact for workforce, for hiring, for planning?

So if there's a 50 percent reduction into FY27, and that's the base contract year, what what's the impact of that on the DCSU, on staff, on workforce, on the ability to deliver?

I think you know, working with DOEE first and foremost, programmatically, we would have to take a hard look at what programs would need to be prioritized and what programs we would not necessarily be able to move forward with in my testimony.

So we would not be able to do that.

You're having to decide what are you not doing.

Yes, we're we're having to decide what we're not doing in partnership with DOE for programmatically.

Um and that those will be hard choices.

I think in terms of our staffing, uh it it I don't think there's a way that we would avoid significant cuts to FTEs to our staff.

Okay.

And what about I mean one of the one of the things the SEAU SEU does really well also is helping create new green jobs, workforce training?

Is that going to be impacted?

I believe our workforce development program would definitely be impacted.

Um again, I think balancing out which programs we would be able to operate versus those we wouldn't be able to operate.

We would obviously want to work very closely with DOEE uh to prioritize, but yes, workforce development uh would be impacted by that, whether we'd be able to run that program or not.

Okay.

I think the the last point I would make too is just that um the SETF dollars are really important too to leverage the federal dollars that are on the table, um, especially for uh from uh the HEAR program through the Inflation Reduction Act.

Um right now, the way that that uh we operate the affordable home electrification program in partnership with DOEE requires about a um 60-40, 60 percent local, 40 percent federal uh in terms of uh the the mix of uh incentives to to provide for for residents to be able to run this run that program and uh accomplish an electrification project.

Okay.

Um has a 2027 based on the proposed budget, has a 2027 spin plan been developed then, or that's what you're saying you would have to go back and decide?

We would have to decide.

Um certainly we've um you know worked closely with DOE on some initial kind of modeling, but ultimately the um what where the budget lands will require us to go back and um make our plans there.

I think we have a good idea of uh what things could look like um at twelve million dollars, but certainly um the federal dollars play into that uh as well.

Okay.

All right.

So we don't necessarily have a spend plan yet, but again, if SEU is funded at less than half the cost half of what we've been funding SEU at hearing you say you can't carry and maintain the number of staff, so we're cutting jobs, we're cutting workforce, we're cutting SEU's ability to deliver for residents.

What about um solar for all again?

I think solar for all would would definitely be impacted, whether we'd be able to operate that program or not.

Again, these are all choices that I think um we would make um with DOE's direction and in partnership with them with with information, but solar for all would certainly be impacted.

Um as well as community solar?

Community solar as well, yes, both single family and community solar.

Okay.

All right.

Um we think about the SETF, low-income households are exempt from paying the SETF on their utility bills, correct?

If I believe if they are signed up for the utility discount plan, they are exempt from from the SETF.

Okay.

In terms of DC residents who participate in your programs, with a majority the low and middle income families that receive the benefits from the SEU.

I would say that we serve everybody, but certainly a significant portion of our dollars um are going towards low and moderate income households.

As I said um last year, I think uh more than nine million dollars went to programming um for low and moderate income uh households.

Okay.

I think that's an important element to point out as well is that we've intentionally created an ability for low and moderate income households to not have to pay the SETF surcharge.

Um, but certainly using those resources and dollars to help reinvest back into our city when they're cut, that's who we're hurting the most.

Um agreed SEU serves everybody.

There are programs that you have regardless of ability to pay, they're just good programs for everybody, but you have a significant number that are focused on lower and moderate income households that are feeling the pinch the greatest when it comes to energy costs and affordability.

So this is something that will absolutely hurt.

Um when we look at the FY26 dollars, have you received all your FY26 funding?

Well, we we operate on a cost reimbursable contract, but yes, at this point, um, you know, we have our contract modification in place, we have for for FY for FY26, yes, we have our our funding in place and our purchase order in place.

Okay.

Um within the FY26 approved budget, you should be on track to serve 180 households through the uh AHE program.

Uh is that not the A program?

180 homes.

Um are you on track to be able to continue serving the 180 households?

We well, right now we're estimating um at least 100 units is our goal.

Um obviously there are multifamily uh and single family projects within those.

Um right now um we were able to work with DOEE and put some additional funding uh for the local dollars.

As I said, you have to have local dollars plus federal dollars uh to make those projects work.

Um we plan to be able to continue to to meet that goal this year of the at least 100 units, um which would be significantly more than last year, more than our FY24, which I believe was 81 units.

So we're going to continue to, if dollars are available on the contract in other places where we can shift them over, we will work with DOEE to make as much progress past that 100 units as we can.

Okay.

But so for FY26, you believe you are you have funded and are on track to hit the 180, you said 186 through AHEAP?

Well, uh more than 100 units at this point.

Um I don't know that it's 180.

Um I I can I can double check our numbers here, but it's more than 100 units is what we are currently targeting.

Um again, I think it if if we are able to um free up additional dollars uh and shift those dollars to our local um AHAP funding, we we think we could probably exceed that number.

Okay.

And if the FY27 budget moves forward as proposed, how many homes will we be able to get to?

Again, to be determined based on kind of how we would uh structure programs, but it would be significantly less.

I mean um, you know, again, that that uh kind of 6040 match kind of gives you uh an idea.

We would have uh we would expect to have federal dollars available, but that's a 14,000 dollar cap um on each home.

So um unless we invest a significant amount of that 12 million dollars into AHEP and ignore other programs, it would be a significant drop.

Right.

And let's I want to make sure we make that part clear as well.

So without local funding, which we're talking about that goes into this program, we would miss out on inflation reduction act funding that goes towards this program.

Um so how many federal dollars it's a 60-40 match, right?

So we said so how many federal dollars would we be missing out on the so I'd have to do a little math here, but next year um in FY27 provided that federal funding is remained federal funding remains available for the the tranche two of this funding, um there's about eight point five million dollars on the table for um that would go towards an AHAP program, um about six point five million dollars of that is in is incentives.

Okay, all right.

So we'd be leaving money on the table, which is not ever what we want to do, especially in this economy right now.

Um you mentioned your testimony PJM electricity prices have jumped 54 percent since 2024.

Um I think almost every district resident, every DC small business that I talked to, even your own district government is feeling that pinch um of rate increases after rate increases that continue to hit.

You talked a little bit about some of the tools that SCAU SEU has helped with in terms of overall reducing energy demand.

Um can you talk just a little bit more as we think through investing in both existing strategies and emerging strategies?

What are some of the innovative ideas you think the district should be focused on over the next six, twelve months or the next couple of years?

I think um I think we have to stick with energy efficiency tried and true approach where we're really just doubling down on um making improvements in how we use energy that we are turning lights off.

We are um you know monitoring how HVAC is used in our our buildings and in homes and businesses.

Um I think uh that tried and true approach has worked for us, obviously, and has delivered a lot of savings, um 2.2 billion dollars as we said in lifetime cost savings.

Um I think if we're going to talk about you know affordability, um combining that with renewables, um, we have one of the best markets in the country for renewable energy.

I think continuing to double down on on both of those combined.

Um I think in terms of new strategies, um, you know, uh load shifting and demand costs, especially for buildings like the one we're in, you know, big commercial properties.

I think that's an area where the SEU can help across the board, both with district government and with private.

Um just helping folks monitor their demand costs.

Just helping folks monitor their demand costs.

A 15-minute interval in a building can shift somebody's costs by tens of thousands of dollars per year.

That's that's a big difference.

So I think working closely with D on DOE on those uh types of things, which could include you know batteries and other dispatchable technologies.

When we talked about virtual power plants, distributed energy resources.

I think that's an area that the SEU should and and will be playing uh in the future.

Um so I think those are those are kind of the the main things is just not ignore what we what has worked in the past, uh just continuing to double down on efficiency, but also looking for um those overall demand costs um that we can that we can help with properties.

Well, all right, and you got there.

First, I the efficiencies agreed, they're tried and true, and we still have room to make improvement there.

But at some point, I've changed every life bulb to LED.

At some point I've gotten people to turn lights off and leave a room.

Um say more if you can about the conversation around the emerging technologies around battery storage and load demand shifting.

When we talk through uh when I've talked, for example, with folks around what's the emerging fields when we talk about solar installation.

More and more folks aren't just saying, let's put solar on the rooftop, it's let me also put a battery in this so that I can help do load shift.

I can really start to think through.

We're not at the point, I think where we're scaling that yet, but that's to me more where we have a lot we have a lot of room to be able to make significant changes and from that household to that office building to that small business, you really have the ability to start changing what your costs are and then hitting affordability again.

So can you share a little more about what you think either our SEU can do in this space?

Are there are there other SEUs around the country that you look to that feel like they are kind of leading and innovating the space to absolutely so I think uh in terms of you know batteries, I think the the district is uh getting started on the VPP process.

We've been a part of um DOEE has a policy roadmap discussion uh when it comes to virtual power plants that we're uh we're joining.

Um we are currently examining how the DC SEU could incentivize batteries uh moving forward in the future.

Um we're working on some some pilots right now uh on uh dispatching water heaters.

And I think the way that we look at it is a little maybe a little different than kind of your traditional VPP.

We we want to do that in such a way that we're looking at both cost and GHG emissions.

So batteries can can also not only reduce costs by load shifting, reducing that peak demand um and helping folks with that peak with those peak demand costs, where again 15-minute interval of you know the hottest day of the year with HVAC that is running at full tilt in a building, that 15 minutes can impact your bill for for the entire year for years to come uh in the tens of thousands of dollars.

Um so we think batteries are where we're going.

Um we think dispatchable resources are where we're going.

I think the difference is we're bringing the GHG component to that work and having a measure benefit in GHG, which again is one of our biggest charges as the SEU is to reduce energy consumption, but also overall GHT consumption uh here in the district.

So would love to share more um offline uh about this pilot that we're working on with water heaters.

Um we're hoping to do about uh 50 water heaters alongside the the AHEP program, uh possibly some other uh folks who have who've taken advantage of some of our rebates to install um heat pump water heaters, but um that's that's where we think things are headed, and we're getting started now on that so we can study it, work with DOEE to understand it, and then really understand how that goes, plays into the next version of you know DCSU 2.0.

Yeah, okay.

Um and then last second on that as you think about other incentives, you know, we're seeing more and more states approve and lay out kind of the the structure for um you know portable solar.

So some people call it balcony, but we're talking about kind of portable solar that can plug in.

Um is SCU having conversations around how to create incentives to help people do that.

The council obviously is is uh considering the grid act, which would uh create the parameters for this to be able to move forward here in DC, like it is in Virginia and other places too.

Is that a space that SEU is looking to help create incentives since this is another way people can help afford and shut down the bill.

We are 100%.

So we are already examining um what a rebate could look like for DC residents who may not put be able to put solar on their roof but could take advantage of you know the balcony solar.

So we're following uh the grid act closely.

Um we'll be speaking, you know, to your team and and DOEE about um you know the regulatory aspects of that if the the bill moves forward and and um passes, but we're already looking at what rebates could look like for that technology.

Okay, great.

Thank you.

Um all right, Mr.

Berick, I don't think I have any other questions.

I'm concerned about what the budget impacts are.

So thank you for helping flesh that out for us.

And obviously over the next few weeks we've still got a lot of work to do to try to help repair this.

And so we'll probably be in touch to that.

But at this point, I'm going to switch over and focus on DOEE.

You're more than welcome to stay, of course.

But I'll also uh let you step away from the panel if you'd like.

I appreciate it.

I'll stick around just in case.

All right, thank you very much.

All right, Director Jackson, good morning.

Um to you and your team.

Uh appreciate your testimony.

Let me start.

I'm just gonna take a step back.

What do you think?

You're I'm trying to give you something to start before we get in heavy.

Um what do you think is the most underrated service that DUEE is providing and delivering to DC residents on a daily basis?

What do you want to brag about for a second before I'm I'm gonna come at the budget pretty hard here in a second, but let me give you a chance.

What are what are some of the things that you feel like uh listen, DUEE, it's underrated, people don't see it, but it's delivering results every day for for our residents.

I think yeah, I think the biggest, you know, the number one thing that's not it's not underrated, but it's just not um talked about really because it's it it functions relatively smoothly is the LAHI program.

You know, we're gonna kind of stick with the energy affordability uh theme.

So I would go with like the way we the way we've run and operated LAHE program over the years has been uh efficient.

Um modifications based on funding, of course, but from a perspective of serving residents and providing them with service that we feel has been very good, that's what we are like heat program that had especially for us that has the most direct impact on residents on a literally almost daily basis on a year-in-year-ount basis.

So that would be the number one program for me.

Okay.

And that's one that my recollection from our oversight hearing um essentially you're you're full up on applications uh pretty quickly once the application period opens up.

Yes, sir.

Which would tell me there's unmet demand uh as much, just look with limited light heap dollars coming from the feds.

Correct.

Okay.

Um I would argue that also gets to why making these types of investments that lower people's overall energy costs is so important that are being cut in this budget.

Um one of the other spaces I feel like DUEEE and maybe give you a chance to brag about is many of the programs and services that get delivered the way we use our special purpose revenue funds.

So those partnerships you create with different organizations, the experiences and the del and the service delivery that you create with that.

Anything you want to brag about there for a second?

I think I'll go back to um what um living classrooms said on um Friday.

So uh what is it?

Teresa and Lauren, uh both with uh Ms.

Ms.

Lauren Cross and Teresa Morton for Living Classrooms.

We have a very strong partnership with Living Classroom in terms of uh oversight and maintaining of King and Allen and Heritage Allen, and so I think that partnership is very strong.

Uh worked very collaborative with them, even with a lot of the funding, most of the funding we give them is through SPR, and there's been a lot of fluctuation, of course.

But they've always uh we've always been able to work together to come up with solutions that were uh beneficial to uh to uh to to ensuring that the projects and programs that are going on on Allen are satisfied.

I think uh once people get over to Kingman and realize that that treasure batted is uh a large part of that is is due to the impact that living classroom have and providing that funds to actually give them that multiplier.

They've uh made great strides in making the uh Kingman Allen a place that a lot of people want to come to and just you know relax, explore and and understand better in terms of wilderness in DC.

So living classrooms and that partnership is definitely uh a high mark as well.

Yeah, and a lot of our other water programs that we deal with in terms of uh Anacasa River Keepers, and a Casa Watershed, you know, those relationships are uh good relationships.

We don't agree on everything.

I I I will say that because I I've heard their testimony sometimes.

So we don't agree on everything, but the partnership and the services that uh they're able to assist us with and then we're able to help them with is also invaluable.

The boat tours are invaluable, uh the assistance with the community sampling is also valuable.

Uh all those programs, uh a lot of what they do would not be possible uh without those SPR dollars, but then just the personal collaboration with their with their staff uh makes that also works for us as well.

So those are just others regarding SPR dollars that work.

A lot of um the work we do in environmental services with regard to what I call like the core environmental programs, those don't get as much uh notoriety as some of the some of the other programs.

Because they're like I said, they're old school to me, they've been around the longest.

But a lot of what we do with air quality, uh inland and using SPRs in our toxic substances group, the way those are utilized to ensure that environmental services is uh is is able to achieve the the goals and the missions for their performance and for their KBIs, those kind of things.

Um also programs that are just not talked about a lot, except in some of our trouble spots, but as a whole, those programs uh do a lot of work that are just not spoken about or highlighted in the city.

So though that's another area where SPRs are definitely impactful and allow us to work.

You know, um this is uh my seventh agency level budget that I've worked on.

Uming how the agency uh ebbs and flows on SPRs, uh definitely definitely understand how that moves and and the trajectory of SPRs over all these years, um know how it plays in terms of the overall impact to the district's budget or into the DOE's budget as a whole.

So yeah.

All right.

Nice parts over now.

Okay.

So I'm sorry, sir.

Uh let me scratch out the nice part.

Well, are you a I know we're gonna we're gonna hit energy quick, so I'll bring up uh Nick Berger, my deputy director for energy administration, so he's already here, and I got it.

Got it.

Okay.

Cut to the chase.

Well, I'm gonna stick with SPRs for a second.

Okay.

I mean, one of the things um you mentioned, you know, uh you've you've seen SPRs ebb and flow.

Um one of the challenges we'll have with SPR sometimes is the funding coming in will ebb and flow through an SPR.

And I think the program, all the programs you talked about are things that could be done with DOE, like that you could consider that to be kind of core services that DOEE would operate, but actually the partnerships that you have with other organizations, we put in some of the funding, they're privately raising funds, so we kind of create orders of magnitude of greater impact by helping support them.

So there's the smooth or the bumpiness of an ebb and flow of an SPR from the dollars that come in that we want to try to help manage for, but we're creating the bumpiness here by having the SPR dollars get rated and taken out.

And then I do think, and we've heard some of the acknowledgements in the public testimony uh last week, folks saw big cuts coming into FY26 internally throughout the year, you may be able to make a couple of adjustments and turn the dial here and then be able to restore some of their funding even within the fiscal year budget.

Um I think you heard like the ability for them to figure out how do I keep staff?

How do I plan for a year of funding?

Um, if I told you that all your money's gone and your staff don't have positions next year, but then six months later, oh wait, we do have the money.

Your staff are real life people.

They they got families to feed, they got mortgages to pay, they make choices, and so we lose all the people.

So I get that we got to figure out the bumpiness around an SPR of what's coming in the door to begin with, but we're we're doing a lot of self-inflicted bumps.

I think the the last couple of years, the mayor's budget is removing and creating the bumpiness that we're we are acknowledging creates a major problem for these.

So let me take a look at what do we look at as the impacts to these programs for the FY27 proposed budget.

So when we look through programs reduced in FY26, River Smart Landscaping Grant reduced 61%.

Meaningful watershed education experiences reduced 28%.

Trash-free communities reduced 65%.

Permeal surface grant reduced 27%.

River Smart Communities reduce 66%, water quality standards reduced 50%, water quality database management reduced 60%.

MS4 reduced 50%.

DOE's surface and groundwater system uh reduced 67%.

DOE's Salesforce License for tracking construction erosion and water pollution complaints reduced 83%.

Stormwater plan review and technical support grant reduced 80%.

Illegal discharge detection and elimination and pollution source tracking reduced 60%.

But what what is the FY27 reductions mean to programs like that?

Correct.

We we we are at that point where there's like you said, not a lot to give, not more to give.

But what I would say is although the percentages are what they are for 26 and going into 27, knowing what we were looking at, we made some adjustments.

So something that may not have been funded at a certain level in 26 got re um reallocated for 27.

So if it got reduced a lot in 26, it's probably got more funding in 27.

So we move some funding around.

With regards to some of the contracts and some of those databases are involves a lot of uh contractual type work.

Um why do I need uh a question for me or question that I always have is why do I need so many contractors to manage database when I have a bunch of database people in house?

Um why can't that work be done by the in-house IT team of of um five or six data data database type individuals that I have there, why can't I use some of their services?

So although some of those contracts and some of those databases in terms of what's being used to maintain them or reduced, uh, some of that work can be brought in-house and and and done that way.

Um so that's one way to account for some of the databases and the work that's done.

I know um discussions that are made in terms of those databases requiring specialties.

Everything is learnable uh given enough time, and so having that time to kind of plan for 27 and look at 27, uh, those are ways that we can compensate for some of the cuts that were made there, hopefully being able to then move those funds into other areas.

So the same way we kind of move stuff around in 26.

Like I believe it was said um Friday by one of the witnesses, whiplash.

Not good, not good for anybody.

Uh don't like whiplash with my team.

That I know they have the same level of um concern for this for the staff that works for them and our at our nonprofits.

And so I understand their concerns, and that's why we try to work closely with them to keep them abreast of what's going on and you know what our decisions are, and then if we can make a change, unfortunately it is a sometimes a quick pivot.

Uh, but it's it's not done with a it's not done flippantly, it's not done in such a way that uh those kind of um those decisions are not made half-heartedly, I would put it like that.

Uh I definitely care the same way I care about my team, I know that they care about theirs, and putting them in that position is never good for us or them.

And so we're trying to um work through that is just by maintaining those close relationships with them to um you know do the best we can to uh ensure those whiplashes is not as not as bad.

No.

But I mean, this is more than just we've got some good folks at DOEE that can do database management.

And so let's just kind of shift more in-house.

I mean, this is much more extensive than that, correct?

Some of it, yes.

All right.

These are some of our core environmental energy services that we provide, right?

Correct.

Okay.

So that leads me to something that um, and I'm I'm I'm putting you on the spot, but I will also acknowledge I know you don't write the external facing uh mayor's proposed budget.

But according to the mayor's office, this is our Grow DC budget.

And it says protecting core public services.

DUEEE is listed as one of the agencies that the GROW DC budget maintains strong funding for.

That this budget protects core services.

You have been hit with another drastic budget cut.

Top line cut of 28% on top of last year.

We're talking about a combined nearly 50% reduction.

I know you have a lot of faith and confidence in your staff and team, as do I.

But I don't see how can we possibly be trying to tell the public that DUEE isn't able to provide reliable core public services for our residents and businesses with this level funding?

Why is DUE listed under protecting core public services when it's facing this level of budget cut?

So I I thought about this question.

Um I'm always thinking about this question, especially when I see the budget chapters and and how they're published.

And when I see the numbers, I I already know I'm at uh it's gonna be uphill battle to explain the numbers to explain the percentage cuts.

So again, fortunately, um I also been looking over our budgets for the last uh like I said, seven years.

So when I go back and look at that trend of our budget and how it has an arc and then kind of peaked in 25 or 319 million dollars, and when you look at that drop from 319 million dollars in FY25 to a proposed budget of 181 million in FY27, many, many questions.

How did that happen?

And it's more than when I look at that, when I look at the 28%, even from 26 to 27, there's more to the story than just the 28% than just the number, right?

Yes, our SPRs have been have been cut, realigned, but then there's also that federal grant component, because again, the two largest components of our budget is SPR and grant dollars.

When there's a large shift in our grant dollars, that has a direct impact on our the way our overall budget appears.

Uh in 26 and 27, a large percentage, and I know we took a like a 20% cut in SPRs uh from the numbers I was looking at.

Yeah, for SPRs is 19% for SPRs with combat that's combining local and yeah, local and SPRs.

So we're talking 21%, 10%, right?

Averages out by 19.

Federal budget cut was about 38%.

So we we because of those the way those cuts are, the 38% still had a big a large impact on getting to that 28% drop number.

Um when I look at the FY25 budget, again, looking at we had third 319 million that was approved, there was a large influx of of federal dollars that generated that large number.

One of the things that we we we DOE needs to get better at in terms of how we do our budget during budget development is how we budget budget authority.

That's been a uh it's uh it's not a problem, but just the way we budget budget flow, where we front the entire grant onto a budget when we get that grant or we receive that award, we try to front load the entire budget, even though it may be spent over a three to five year period, depending on the grant.

Uh, but with that grant is removed, that definitely has a direct impact on what our budget looks like the following year because all that budget authority now has to come out.

So part of that 28% is because of the loss of those federal grants.

And again, I acknowledge that's not the only loss that we suffered.

We suffered losses in SPRs, but we did have to suffer that loss at federal dollars.

And then when you go back to 25 and the 319 million, when there was a large influx of of um of uh infrastructure funds and those kind of funds that we received there, and those funds are no longer there, that also allow for the driving down of our FY27 budget to this 181 level.

So there is a component again of local of SPR, but we can't just um say that the federal impacts aren't aren't real, but it definitely in the numbers it looks much more impactful in the numbers when we when we start removing a lot of that federal federal money by removing the federal dollars again, understanding where where where the where discussions are going uh does have a direct impact on how our local dollars or SPA dollars are utilized, so that's another component of it.

So there's multiple impacts, but a lot of it revolves around how those federal dollars are coming in or being utilized in a way that uh has a direct impact on the numbers that we see in our budget chapter.

So although we locked in on the budget chapter, um when I look at those numbers, I'm seeing it from from several different perspectives, not just as a solid 28% cut is a direct impact on operations, but that's really how does that impact my budget authority, and then how am I going to be able to operate in the coming year?

Yeah.

I anybody who's following this should be able to see the lack of the loss of federal dollars, is certainly significant.

And we're in a second, I'm gonna turn to kind of walking through what some of those cuts look like.

But I do not want anyone to be able to say, because it won't be true if they say the only reason you see the reduction is just it's the federal dollars.

There's let's blame the Trump administration, it's their fault.

Our local budget, our local choices are driving a significant portion of the dollars out of DOEE and the things we promised ratepayers we'd be doing and are not there.

So I will say, I think that somebody in the mayor's office figured this out maybe after they sort of putting together the presentations, because when I compare the budget chapter narrative, when I talk about core services and what's being maintained, and then the PowerPoint presentation that gets out there, um the protecting core public services, DOE is included in the description of the budget chapter narrative.

I do think somebody figured out, I don't think we can say that.

Because when the PowerPoint presentation comes out, preserve core services is not say a single thing about DUEE or energy and environment.

At least that part's true.

Um because we're not gonna be able to maintain those core services with this budget.

But there is a disparity between the way that people want to describe in the budget book and what's in the PowerPoint.

So let's go through the federal dollars though.

So by far the largest reduction is a loss of federal grants, about $51.6 million total.

And you kind of mentioned there's three specific federal grants in your testimony.

So let me walk through each of those so we can make sure we understand those pieces.

So let's focus on the greenhouse gas reduction fund start.

Then you said you use the term frozen.

What does that mean legally or procedurally to say that the greenhouse gas reduction fund is frozen?

Sure, I'll let um since that grant falls under energy's administration shop.

I'll let uh Mr.

Berger talk about that.

Okay.

Good morning, uh Chair Allen.

Uh Nick Berger, Deputy Director for the Energy Administration.

So the agency along with dozens of other states were awarded these funds under the Inflation Reduction Act.

And then last year the Trump administration and the EPA specifically issued uh a notice to states, including the district, that those awards were being terminated, and they cited changes in the uh one big beautiful bill act.

Um the district has through the attorney general's office stated that we do not believe that those uh that those funds were lawfully terminated.

Um I want to be careful not to get into the specifics because I'm not a lawyer uh and I don't work for the Attorney General's office, but we've been coordinating closely with OAG and um other states attorney general to essentially say that we don't agree that that termination was lawfully carried out.

Um so from our perspective, those funds were frozen uh temporarily until they are reinstated uh as we hope the courts will agree and then provided back to us to continue our work.

Got it.

Okay.

So our frozen is not a not a legal term of art.

We're just trying to be descriptive in that um there's an OAG process separate from this, and so you need to at least from a budgeting perspective consider them frozen okay.

Correct.

We are not currently able to spend down those funds in the way that we would have based on our federal application and the programs that we would have run under them.

Got it.

Um the terminology on this one was paused.

So you can kind of see I'm trying to understand what's paused, what's frozen, what are my different differences?

So what does that mean to say that that that fund is paused?

So the circumstance here is slightly different.

The district, again, along with other uh funded entities, uh, were awarded by the Department of Energy under the previous administration, in our case $15 million of charging and fueling infrastructure funds to deploy EV charging in the district.

Um we were informed prior to the change in the federal administration that we were we were awarded those funds, and the next step is always then to do a contract negotiation and sign a formal contract that then releases those funds and allows us to spend them.

So step one is we're told we're awarded, step two is finalize all the details.

Step two never took place under the previous administration, and the current administration has not uh elected to continue to execute that second step.

Um at the same time, we have not been told formally that that award was withdrawn, for example.

So from our perspective, we are waiting on the federal government to take the next step to allow us to actually formally spend those funds.

That hasn't happened, so those funds are paused from an implementation perspective.

Okay, got it.

And then finally, you mentioned the rail safety grant that DUEEE applied for was not awarded.

Why was it not awarded?

Um so there's a so basically I gave you those three just uh kind of captures that the Senator gave you several other ones as well.

Um I'll let um my senior deputy Mike Somersell talk about the rail grant, and then there was another uh one point something million dollar grant and air quality, a research grant that we did not receive, but I'll pivot back to that one after uh Mr.

SummerSoul speaks about the uh rail safety grant.

So good morning again, Councilmember.

Good morning.

Uh so the it's about roughly about $18,000 to help support our rail inspectors to go out for training.

Um we normally apply for that grant every each fiscal year.

Not sure why that there's been a pause on that for this year.

Um we're still waiting.

We did apply for it and we're still waiting to get some feedback um from the FRA, Federal Railroad Administration.

Um in terms of the other grant, that's that was a 1.25 million dollar grant for the uh that was an air quality research grant, we didn't get that as well.

Okay.

So we the for both of those we've been notified that we did not receive the award.

Or we just we haven't heard back yet.

From the uh federal railroad administration grant, we haven't been notified that we did not get the award.

We're still waiting on that.

Like every other state though, for that one is all states are waiting for their federal railroad grant.

In terms of the air quality one, I believe we did not receive the grant.

We were awarded it but did not receive the grant.

And if I said that correctly, I'm sure my team will be here in a minute.

Got it.

Okay.

So walk me through when we knew about either the the loss, the pause or the freeze of these different federal funds.

And how much were we building out a budget banking on these federal dollars coming, and how did that impact choices being made from a budget perspective on our SPR funds?

So usually, you know, as you know, budget development starts for us and then um October, right around just beginning the fiscal year, we start we're already starting our budget development at that point last year.

Yeah, should I get my years right?

So as we started 25, we were already in development come set that August, September.

These grants were already applied for.

We were expecting these awards to have come in 26 upon the passage of the you know federal budget.

We that's when of course all the fluctuations started.

Awards were given out, but that they so based on the awards that were given, we assume those funds are coming.

That's the part that didn't happen.

So in the rail case, we knew we were supposed to get those funding, but we just have not received them yet, and that's just more of being in communications with the FRA, they're just not talking about those grants.

And even now we're in communication with FRA with regards to training and other things, but they're not talking about the grant.

The research grant, same thing.

We're just not hearing from the proper party.

So depending on the administration or not the administration, I'm sorry, the the department, whether it's EPA, FRA, Department of Energy, having those individual discussions with the federal agencies, we're getting different type responses or no response at all depending on the program.

So it's very program specific.

But that being said, because of when we start a budget process, these funds were already calculated into our budget when we started the uh process.

So at which point now that we know they're not there in 26, when we did in 27, having already had that budget authority, now that budget authority is gone in 27.

So that is a part of that reduction in there.

But they were planned on being, you know, those funds were already planned or being used, they were planned on being budgeted for those numbers work into our MPS budget as well as our PS budget in terms of some partial funding of some some staff.

So those are the kind of impacts we've had on our budget when you look at 27 between 26 um in the budget chapter.

Okay.

This one point 1.25 million is the number for the uh grant and has the air quality.

Air quality grant, and it was terminated.

Okay.

Um we think about budget authority and appropriations.

So for example, again, being very careful here, we're not using a legal terminology, but when we talk back to our greenhouse gas reduction fund, being we're treating it as frozen for the moment.

We don't know what the outcome of the litigation and legal action is going to be, but we have also seen other examples where states have gone into court and been able to force the Federal Administration to honor the the funding that that was there and unlock or unfreeze those dollars.

So in what way why are we treating this one if it's frozen and pending some kind of legal action, which we cannot predict what the outcome is going to be, but we know it's there's action.

Why do we remove the budget authority rather than leave the authority pending that litigation decision?

Because what I'm and if you want to what I'm getting at is again, we don't know the outcome of that litigation.

Should that litigation end in our favor that these dollars now are released?

I'm concerned that we have an agency now that we have not authorized the budgeting process, the ability to expend those funds.

And so why would we not want to at least have a placeholder for authorization?

Curious your thoughts on that.

So I'll let um Nick Burger start off with that one because I think my yeah, I'll let them start off with this one.

Sure.

Thanks, Director.

Um your instincts align with kind of the way we think about these funds.

So for example, for the GGRF funds, uh we actually have seven million dollars of budget authority in the FY27 budget for precisely the region that you're getting at.

We don't know when the courts will ultimately decide or what they will decide about access to those funds.

But if we are those funds are reactivated, let's say for us, we want to be able to hit the ground running because we have grantees and partners and households that are waiting for the benefits from those funds.

But we did reduce that budget authority for next year for FY27 substantially compared to what it would have been this year in our budget, and frankly, probably what we would have had next year had we been spending those funds.

Um because we want to try to balance that ability to react quickly with not having our budget represents something we don't think is practical or realistic.

In the case of the charging and fueling infrastructure grant, similar story, we actually reduce that down to 500,000 next year.

Given the administration's approach to electric vehicles, we think they will continue to sit on that funding.

Um so our expectation of being able to spend those funds next fiscal year is low.

But we also see some movement at the federal level on things that we didn't necessarily expect.

So if they do release that award, finalize the contract, we want to be able to get moving on it immediately as we request additional budget authority.

So we're working closely with the director and the team uh to sort of strike that balance for our funds between not inflating our budget more than is reasonable, but not cutting off our ability to react quickly.

And I th and I think this goes back to what I said earlier in terms of the way one of the things that we do as an agency, we've we've kind of always done it with regards to grants.

And again, this may be a reason why we just need to step back and reevaluate how we do business in our in our grant budgeting, is we tend to budget the entire award.

So no matter what the award is, no matter what the length of the contract life is, we try to put the award in the first year of that grant.

So if it's a three-year war, we'll we would budget the three years in that first year, and then as the years go, like even though we know we may only gonna spend a third of that, or usually you spend about a third per year if it's a three-year grant, we would budget it up front all of it and then see how that spending goes with the goal of trying to spend it all out by the end of the three years.

That particular practice of putting everything in there up front may not be or has shown to when we have these sharper fluctuations regarding federal grants now, uh not necessarily it it gives a distorted picture, even though we knew we weren't going to use that money all in the first year of that award anyway.

So you know, don't want to micromanage the grant or splice it up in such a way that it puts us at a disadvantage, but definitely uh need to evaluate whether we should be doing full funding of an award up front versus maybe modifying that word using a definitive smaller amount, half a third.

That's something we have to think about in terms of how we become more efficient uh as we move forward with budget development in the future.

Okay, got it.

Sure, sorry, one more thing.

I'm sorry, just simple correction, I misstated the charging and feeling infrastructure grant was awarded by the federal highway administration.

I think I said Department of Energy, so that was incorrect on my part.

Okay.

All right, thank you.

Um is do you we're looking at this?

Are there any programs where DOE has hired new staff or kicked off any no pro any new programs with the funding expectation, the federal funding expectation that it would come in?

So part of um establishing that budget authority, we would have we would have brought on a lot of uh staff we had, you know, we had allocated uh FTEs for greenhouse grass, we had allocated a lot of FDEs.

We were looking to move up, bring a lot of staff in when the water started getting a little choppy at the federal level, we didn't move forward with those positions because again, if we had to brought them on board, to me, there's an obligation now of finding funding to ensure that those that staff was you know paying care of.

Didn't want necessarily put us in a position where uh we didn't necessarily have that funding um in other pockets.

So we put we weren't we were going to go slowly with hiring.

Uh fortunately for in that particular aspect, that left a lot of FTEs on our on our books that are that uh we did not feel because of that.

Um for me, one of the things that's important is if we're funding a position, and this is a lesson learned from BIL and those other, we had the large influx of federal funding.

We brought a lot of we brought staff on uh with no vision of how we want to pay after those grants were over.

Uh we've managed to accommodate that, but I don't want to put ourselves in that position again where even though we may be doing a lot of grant funding, that's it's been a lot of people, we we need to have a better vision on how we pay if we don't have the grant.

We we need to have a better vision on how we pay if we don't have the grant.

And it's something that we just need to adjust for as an agency.

Um instead of just bringing people on when the current funding is here, we we need to be looking four or five years down the road.

I mean, a lot of what we're seeing now from for me when we had large pockets of federal funds coming in, those funds were never going to be inevitable or you know, everlasting.

So if we're getting it in a given fiscal year, we need to be looking at it.

Where does that look like in three years past that point because we have to accommodate for that?

So try not to bring in a lot of the FTEs that's giving us wickle room uh this year, uh, but I'm very mindful of bringing people on in a way that makes sense so that we have funding for for new talent down the road, not just for any given fiscal year.

I can appreciate that in normal times, right?

Of federal grants and big dollars coming in, and to your point, thinking through after the life cycle of that federal grant, what does that look like for those FDE positions?

To be fair, we're talking about something that really hasn't happened before, which is uh Congress approved, authorized, and appropriated dollars, and a federal executive just says I'm not gonna do it.

Um and that's destabilizing to you to all state governments, and that that is to me is a distinct issue, which we're navigating compared to how do you strategically map out federal grants that are gonna last for a few number of years and what's in their side of that.

So do you have a contingency plan in place?

Kind of sticking with federal dollars for a second for a federal grant that we are expecting, and then it also gets frozen or doesn't materialize specifically I can think about LIHEAP where Secretary Kennedy tried to hold that back and not release those dollars.

I mean, I think the blowback was pretty fierce because LIHEAP is uh it's not blue, it's not red, it's not purple, it's something that everybody can get around and understand this is how you help people afford their bills.

Um I didn't stop them though from trying, and I wouldn't be surprised if they try something stupid again.

Um so what would be a contingency?

How are you planning for that contingency?

You mentioned LIHEAP was your number one uh kind of not underrated, but you know, uh you feel like one of the most impactful programs.

Absolutely.

Lahey Bill is our most impactful program, and it's also our you know the program that stays at the forefront in terms of funding.

Excuse me.

Right now, majority over 90% of the funding that we pay out or you know provide to residents is federal funding.

If that federal funding is cut, yeah, that's that's um that would have a significant impact.

We do there we do have a little, you know, there are local funds that also are involved in LA Heat disbursement, but that's um very small turns off.

I believe two to three million dollars.

The rest of it is is federal dollars.

If we were to lose those federal dollars, uh it would have a great impact.

We know um, you know, we've kind of gone through this scenario for the past two years.

I guess the last two presidential budgets were submitted.

Of course, they come with uh he zeroes out LIHEAP.

Uh Congress puts the that funding back in.

Um they tend to make a flat this year.

The same thing happened, RCS.

The thing last same thing happened last year.

Uh, when they zeroed it out, Congress put it back in.

We received the funds.

Uh we just received our uh 10%, they always keep 10%.

And we received that uh a few weeks ago, so we'll continue with payments.

Um we know that the mayor's budget for, or excuse me, the presidential budget for uh next fiscal year came in, came out the same way, zero and outline heap.

Uh so we would be have to be planning for that uh unless those funds are returned once again by Congress.

Um you know, one part of it says that's the that's the practical thing that could happen.

We would expect that to happen, but there's no guarantee that could happen.

So knowing that the potential for losing not having those federal dollars available on FY27 is definitely something that uh we're taking in consideration, but it would have a it would have a major impact on our program and the services that we provide to the city.

Okay.

All right, let's let's switch gears to some local fund issues.

Um we have limited control over what Congress or the Trump administration is gonna do.

Um, but we can control our local decisions.

Um this budget has significant local cuts.

So let's dig in on that.

The largest reduction in the 17.4 million dollar redirection of SPR funds really is the 10.5 million dollar sweep from the SETF.

So other than the 10.5 million dollar sweep of the SETF, what are some of the other SPR balances that are being included in this reduction?

I'll let my senior speak to that.

So I'm just looking at the uh looking at the Natural Resources Administration.

Um we have an 8% reduction on the fish and wildlife fund, another eight on the stormwater fees.

Uh the Anacostia River Cleanup Fund, we're looking at a 21% reduction.

Uh soil erosion sediment control 19.

Uh stormwater permit compliance enterprise fund.

We're looking at a 20-27 percent.

So just for the natural resources administration, we're looking at a 24 percent reduction.

Um there are some other places uh in air quality that I don't have those numbers right here, but you know, in ESA, we have um had some reductions in in that program as well.

Okay.

Let's pick one.

Anakoshi River Cleanup Fund.

It's being reduced by 542,000.

What are we not doing now with a cut of 542,000 dollars in the Anacosta River Cleanup Fund?

I would have to call our Deputy Director, Mr.

Steve Sari, he would be able to explain that in more detail.

Sure.

And if you would, sir, when you come in, just help introduce yourself for the record.

Steve, sorry, deputy director for natural resources administration.

Uh so to answer your question, uh you you already listed um some of the reductions that we have in our grant uh programs that would uh that are caused because of that um that reduction in funding.

I know I listed them, but I want you to list them.

Uh I you know some of those things that are not being funded include boat tours on the Anacostia, um, a uh similar program that we also combined uh kayaking but also cleaning up uh Kingman Lake uh called Green Boats reductions in our environmental education programs, uh reduction in uh program called community stormwater solutions.

Um green zone environmental program also has reductions.

There are there are many programs that have been reduced because of it.

Yeah.

Um I know I'm gonna ask you to name these things, and I'm I'm not I mean, again, I I have some sympathy for DUEE staff because I know that these are not programs that you would probably voluntarily say I don't want to see it move forward.

Um but part of what I have to do is go through and make sure it's very clear and transparent what the impacts of this budget decision is overall.

Um the air quality construction permits, I believe is reduced by 719,000.

So what doesn't take place for our air quality with a 700,000 dollar cut?

I do believe that money impacts maybe three FTEs, but Mr.

Burrell, can you confirm?

Two two MPEs, and I'm not sure what other services would cost the permit.

I got it, I got it.

Okay, all right.

I got it.

So the 719,000 cut would affect uh two FTDs percentage of the salary.

So it would affect the uh funding for those for those two FTEs.

It would have an impact on our permitting program, air quality permitting program with regards to Title V Chapter 2 type permits, and it would have an impact on the a portion of the impact on the uh monitoring program with regards to the overall uh district networks, part of that funding uh because this uh goes back to some of the matching that will be required on that monitoring.

Okay.

What are the impacts on if this is local fund that we cut, where do some of these intersect with federal dollars that we have to put local dollars up to be able to draw down federal dollars?

Air quality, for example.

So do we have Clean Air Act impacts by not doing our local portion that then impacts our federal ability to spend?

Correct.

So yes, there is two types of of uh matching depending on the program that we're in.

With regards to the air air quality permit, the match is does not have to be directly tied to the work.

You just have to have a local match.

With regards to some of the other matches that are or excuse me, some of the other SPRs that were restored, that was considered program income that the federal grant required to be had.

So that funding that was replaced with like for instance the has has waste grant have program income that we receive through our um our um certificate program where we we we license uh small medium or small large parting generators.

That's considered program income by EPA, and thus that funding that came into that particular SPR is tied directly to that has waste grant.

So it needs to be there.

Same with the lead protection, same with fisheries and wildlife.

Again, the the funds we collected from fishing licenses is tied directly to the grant we receive from fish and wildlife.

With regards to the grants that are received in energy, those matches have to be directly used within the program.

So that 6040 split that's been spoken about a couple of times.

In order for that 60 percent really to be used, you have to have the those local or SPR dollars to utilize the federal dollars.

If you don't have the local side, then yes, you cannot use the the federal side.

So that's a direct tie that could not say be shifted to another matching source.

Um something that me and the team, the team have has educated me on, but also we've thought through in terms of well, let's look at some other sources that could be utilized as a match.

As as it became clear that in certain instances, because of the way the grants are written, that's not a possibility.

And so the so we do have several of those through pro primarily through Department of Energy has those type of grants.

Um which case there's not much we're gonna not much um space for negotiation with the federal partner to allow us to do, you know, to explain the situation and do something different.

They're not they're not necessarily receptive to that conversation.

So then that becomes an is instance where yeah, we're we're at jeopardy because of the not being able to utilize local funds to acquire the uh the federal funds.

That's that's how I look at it.

Yeah, I mean uh when we were talking about um earlier, Mr.

Burdick talked about the the dollars left on the table, right?

Could be as much as 6.5 million dollars.

Um and that's just for the A heap, right?

So when we think about the totality of what potentially we're leaving on the table of federal matching dollars with the local cuts, has that number been tallied up?

I don't have the number with me.

No, I'll have the number with me.

We can get it to you, or my team is going to jet it to me.

Okay.

Unless you have a net?

Not across the line.

Okay.

All right.

Across the entire agency, you're looking for a number.

We don't have that numbers yet.

We we can get that back to you.

So I yeah, maybe you've got some MathWiz folks that are watching and they can help get that to you in a little bit, but if not, I'd like to follow up.

Yeah, they're sitting over there.

I would like to follow up after the hearing if we can't get it today.

Absolutely.

Um because I want to be able to make sure we understand what the full impact is of the decision on the local cuts.

Um, so let's spend a little time on the SETF a little more.

Um obviously this was established back in 2008 to be a dedicated funding source for sustainable energy programs in the district.

Last several years we have spent a lot of energy restoring cuts to the SETF.

Um before last year's changes, the DC sustainable energy utility was required to receive 20 million from the SETF, the Green Finance Authority required to receive $7 million.

Three million was to be used by another either DOEE or DCSEU to help provide affordable housing, um affordable housing comply with VEPS, for example.

Did the required transfers in FY26?

So the fiscal year that we're in right now, have those taken place or are there any holdups?

So for the DC Green Bank transfer as of today, we've transferred half of that amount, so 1.75 million.

We have historically done those transfers in two tranches.

So we've completed one tranche of that transfer for this fiscal year.

And that was completed the day before the oversight hearing?

Correct.

All right.

Well, what about today?

So the other half should have gone yesterday.

We actually don't typically time them with the oversight hearings.

We typically would set and have second trend.

It's based on kind of revenue coming into the fund, so we have to make sure there's enough money in the bank, so to speak.

Um there's not a specific date we target, but it we're often doing the first tranche sometime around the start of the calendar year and the second tranche sometime in sort of the summer time.

Okay.

I I know from our conversations to the green bank previously, uh, sometimes we're towards the end of the fiscal year, September.

They still haven't gotten the funding that's required.

If you are running an organization and you don't know when the funding that's coming in that you were banked on, you can't run.

So I think these delays, I I we have debated admit this may be what we have to do this year.

We just need to statutorily then put a date by which you have to transfer the dollars.

Um because my hunch is folks are waiting until the end of the fiscal year because they're trying to decide if they want to sweep that dollar as well.

And then we don't want that.

We've got to protect these.

Um how much all right, so for the year we're in right now, how much of our SETF is being used to pay DC government's energy costs.

Okay.

Sorry, for the current fiscal year.

So uh for this year it's a I'm in a round, it's about 70 million dollars out of a total program revenue of about 100 million, or total revenue across the two SPRs of about 100 million dollars.

So 70 percent.

Okay.

So last for FY25, it was approximately 29 million, I believe, out of the fund.

It ended up being a little bit higher.

It was I think it became in closer to 33 and a half because there were some additional funds that got moved through the budget process last year, but roughly, yeah, that was thirty thirty million plus or minus.

All right, and then FY26 is going to be what was the number again you said about seventy.

70 million, 70 percent, correct.

About 70 million total.

Okay.

And under the proposed FY27 budget, what is it expected to be?

So under the under the law, currently it would be again rounding about 80 million to that would go into the uh MESF fund and about 25 million that would come into SETF for next fiscal year.

So it's not quite 80 percent, but it's thereabouts.

All right.

So just year after year, we're just eroding the SETF.

It is higher this year than it was last year.

I will call that erosion.

Um last year, I mean, we tried to say, all right, you're you're gonna use do this, the mayor's gonna do this.

Uh so we'll create the mayor's energy surcharge fund.

Again, I I turned down several very clever acronyms that people had uh provided to me, but we just said let's call it the mayor's energy surcharge fund.

Um but even after agreeing to that, we see another 10 million take it out of SETF to switch over.

And an effort to even rename it.

So maybe we should rename it again.

All right.

We had some clever recommendations last year.

Um there any updates on the transfer of the funds that the council restored at FY26 to the SETF that you want to highlight or share.

We restored some funds, approximately 3.5 million or so.

Yeah, that's right.

So I mean what one way to frame it would be that as I mentioned, the uh revenue coming into SETF this year is about 30 million dollars.

Our total budget for this year based on those restorations in the budget last year is closer to 37 and a half million.

So that has had a meaningful impact on our ability to not just fund the core DCSEU contract, uh, which is you know 19 in million and change this current fiscal year, but then to actually supplement that contract to do the kinds of additional programs.

So for example, to um finalize and finish up construction of some solar for all community solar projects that were started in the previous fiscal year.

We very rarely are able to get these things done in one fiscal year for a whole variety of reasons.

Um so it's important to have those funds this year to be able to finish those community solar projects.

We've added funds to support the uh affordable home electrification program and the affordable housing retrofit accelerator, again, both funded by federal funds in part, but when we were talking about matching the local funds, the SETF funds are critical to allowing us to execute on those projects.

So as you heard from uh Ben earlier, the work they are doing is is directly related to the total funding available through the SETF, including those restorations.

In the from the SEU contract perspective, so if we are looking at an FY27 budget that allow that creates funding at roughly I think half or so of what they had for FY26.

What's the impact of renewing a contract or extending a contract or building a base contract with a much smaller amount?

So we'll for building the base contract for 28.

If our correct me if I'm wrong, but if our SEU SEU contract expires at the end of 27.

Right, with the one year extension for the first time.

With a one-year extension, but we would be going into a contracting period.

Yes.

During 27 to say let's think through what that that new contract looks like.

If we begin with a much lower base dollar amount level in FY27 or 28, that's going to impact the way you construct a solicitation.

It's going to impact what it is.

It's not that I can just go tack dollars on later.

It fundamentally re-establishes what it is the contract does.

What's the impact on that decision for DOE to be able to provide these different services, create these different partnerships, leverage Federal dollars and others, if we start the process so significantly less than where we've been?

Any more time?

Sure.

So we are trying to both take things in order and act on the most complete information we can.

And what I mean by that is as you heard Ben talk about for the current or the upcoming fiscal year for FY27, once we are all clear on exactly the total available resources to be put toward the DCSEU in the FY27 budget, we'll work closely with Ben and the team to figure out how to specifically deploy those.

Whether that's extending or even expanding if we can existing programs or it's working with them to pair back programs.

So that's for FY27, where uh once council finalizes the budget, we'll have that full information and then we can in earnest make those decisions.

When we think about FY28 and then rebidding the DCSEU contract for another four or five years, um again, we're trying to make sure that we approach that process with as much and complete information as we can.

So we've had some preliminary discussions about what a rebidted DCSU contract might look like under the current law, meaning 10 million dollars to the base contract for the DCSEU out of SETF.

Um we have not gotten very far in defining what exactly that means uh because it it's a big change, right?

Uh it's very different from the current and even the previous five-year contracts that the DCSU has been executing on, as I think you know.

So uh it's it for us, for me, it's an issue of balancing, right?

It's we want to do contingency planning.

We obviously want to make decisions as quickly as we can so that we're not leaving them to the last minute.

We also don't want to make a bunch of concrete decisions before we have full information.

So we assume that as this the budget gets passed for FY27, as the budgets always do, they will define at this point what the out years look like, including for FY28.

And once we have that number, that's what we're going to use to define what that contract looks like and how we go about it.

Whether that means again, tweaks around the margins on programs or whether that's something more wholesale uh in terms of a rethink.

I don't know if that's helpful.

Yeah.

Um just to follow up on the uh SPR, we're gonna get you the numbers you're looking for, but just right now, what all the matches have been made for kind of broken down administration.

So NRA has met all their federally matches, ESA has met all their matches.

We're double checking with the other administrations, but I know those two which are you know, two of our other larger ones staff from energy, uh, they've met their local matches, the challenges right now again with EA and we're looking at UAA as well.

So, you're talking about FY26 local match, or you're talking about in proposed FY27.

For 26 matches.

Right.

Part of what I'm trying to get at is for the proposed budget for 27.

For 27, we've we've we budgeted the matches for ESA and NRA in 27.

Okay.

The other administrations I will get more follow-up, but I know those two are are taken care of.

Okay.

Thank you.

Um let me move back to SETF and energy cost for the district.

So according to the fiscal impact statement that comes with the budget support act.

So when the mayor set transmits the BSA budget support act, there's a fiscal impact statement that comes with it.

So it looks like the SETF contribution to pay for the district's energy bills increases by $18 million in FY27 and is nearly tripled by the time we get to FY28.

What I'm trying to get at is are the district's energy costs increasing by that specific amount, or is it that we are using more and more of the SETF to cover our district energy costs?

I think at the district energy costs tripled.

So not having access to that that you know those bills per se, I don't know if their costs are increasing.

I I know based on the projections they're giving us, that's kind of based more on a projection than on actual costs, which we unfortunately don't have the access to at this point.

But we're working with with um DGS to get that information so that we can address these type of projections to assist in how we can lower those costs, right?

If everyone else's costs are going down, uh the district should be no district, there's there's ways to um allow that to happen as well.

Uh the mayor has they're taking your money.

You should know if our energy bills are going up by that much if they're taking more and more of your money.

Well, that's what I was going to say.

So we're working with the mayor's office and DGS uh coming together so that we can assist with getting that getting a number that makes sense uh so that it can work.

I mean, don't have the actual information yet, but I think this past year and and past few months has put a new emphasis on our affordability from the district perspective and allowing us to actually work more closely with uh the energy component of DGS.

Uh uh Nick's been working more closely with uh with that particular task force that's been put together.

So I'll let him highlight some points from there.

But what is definitely something that um we feel we can have an impact on with regards to the district energy bill.

I could I could get my head around us using part of the SETF if what we were doing was investing in the district to reduce energy demand.

That's not what we're doing.

Is being taken in a larger and larger share just to pay the power bills.

Um that's what's happening.

And yesterday, or not yesterday, last week when we had the DDOT hearing, we talked about DDOT was kind of appropriately bragging about this.

Uh they changed, you know, everybody's gone through the the lighting, uh, your street lights have changed, and we put in LED lights.

It's actually a really good idea.

We have more energy efficient light fixtures.

They are all digitally connected, so we can detect an outage a lot faster.

Um there's dimming that can take place based on specific needs.

It works really well.

It's also saving us a lot of money.

So the D director told us we went from an 11 million dollar energy bill for street lights to a three million dollar energy bill for street lights.

That's substantial savings.

I'd argue that's a really smart investment to help save costs as well as probably just run more efficiently.

So if my street lights went down by $8 million, it's just one example, but that's an example of being more energy efficient.

I don't believe the SETF dollars are being taken because our energy costs have tripled, they just see a pot of money they can come after.

In the when we look at the BSA, the FY27 proposed budget gives authority to DGS to sp to spend more in FY27.

Why isn't DGS only pulling from the mayor's energy surcharge fund?

So they are.

I th I think uh only.

Why are they not only pulling from that?

They should be.

Uh so the the that fund was established with DGS approximately two months ago, working with them to make sure they finally had that fund established and set.

So that fund has been established and set, so funds should only will only be coming from that fund.

Oh, from the SETF.

But if we're this budget transfers more money out of the SETF into that.

The whole point was to have the mayor's energy surcharge fund be able to say, even though I disagree with it, but like let's be honest with ratepayers, you're all paying on your bills for the power bills of your city, but now even more of the SETF is being taken rather than just the mayor's energy surcharge.

It sounds like you're saying additional funds is coming out of SETF.

The funds that are going to DGS is coming out of the ME, what is it, the MESF, the Mayor's Energy Surcharge Fund, it's not coming out of the SETF.

That fund was set up in F in 25 for FY26.

Are we not seeing in FY27 more dollars being swept from SETF?

I don't have.

So I'll answer that in two ways.

One is the the as we kind of covered a minute ago, the amount of money allocated to the MESF through the surcharges, it's what is defined, you know, goes from 70 million this year to 80 million this year, next year.

That is obviously an increase.

That was also defined in last year's budget.

So last year's budget laid out those those amounts and set the maximum spending uh through you know through the MESF.

There is in the kind of large table of transfers some additional uh but but I would argue quite small uh a few tens of thousands of dollars uh out of SETF for this coming year and for FY28.

We don't I I don't know where that money is being allocated, but the act the additional so to called sweep through those intergovernment transfers for SETF is very small.

The the larger amount is that amount that was defined in the budget last year and and it persists this year.

So according to the you know, a lot of the traffic that I'm getting.

There is, I wish they would because this is keeps flicking up.

Um there are no F SETF funds budgeted for DGS and FY27.

Because we're calling it the mayor's energy surcharge fund.

Well, that's what that fund has been set up, right?

That fund has been established.

And so those funds that come from PEPCO should be going or utilities should go directly into that fund, and then the funds that go into SETF should come straight directly into SETF.

All right, we can follow up.

Yeah, if we want to have to, but that yes.

We're having less and less with SETF to be able to get done what is supposed to be done, and more and more that is being taken from ratepayers that's just going straight into covering costs for the district power bills.

From my perspective, when a ratepayer, a resident opens up the power bill and they see a sustainable energy trust fund surcharge listed, because most of our power bills still don't even say mayor's energy surcharge yet, almost a year after this was passed into law.

We're not being transparent, we're not being honest with ratepayers about what's happening.

I understand the utility companies and the mayor's folks want to drag their feet on putting that on your bills, probably because they're trying to hide it.

But they're taking the funds from what you believe is sustainable energy investments just to pay for power bills.

And that to me is wrong.

And uh again, we're just not being transparent or honest with the ratepayers.

Um if we're gonna take their money, be honest about it.

It's uh it's a pattern that we have seen in this budget.

Uh be it child care and the pay equity fund, be it paid family leave, or be it this, that I think is really disingenuous to ratepayers and the people we go to to ask to help fund their government, and we're just taking the money.

Uh this proposed budget just takes the money, and that's not good.

Um, let me switch to healthy homes funding for a second.

Um before you uh You can turn your mic on.

Before you proceed, I just wanted to clarify some numbers that I gave earlier.

The 24% reduction for the NRA, just want to be on since we're on record, I want to clarify that.

That change was from FY23 to FY27.

That that 24% change.

Just want to make sure I appreciate you clarifying that.

All right, so that was from which year to which year, just so we have a FY23 to FY27, that's that's 24% change.

Okay.

In other words, you're trying to clarify that was on a one-year reduction.

Correct.

Is over the couple years.

Just want to be clear.

No, I hear you.

Okay.

All right, healthy homes funding.

With the proposed FY27 budget, I uh it's pretty clear our Healthy Homes Act is gonna see major reductions in funding and support.

How much is allocated to Healthy Homes implementation in FY27?

Yes.

Sure.

So uh for FY27, uh, we have so two-part answer.

For FY27, we have federal funds uh allocated uh to the tune of about 19 million dollars.

So if remember we have two distinct awards under those federal rebate funds, the IRA rebate funds as we call them.

Um they're about half and half.

So of that 19 million, half would be funds that we would direct to our affordable home electrification program for small buildings, and half would go to the Affordable Housing Retrofit Accelerator for larger buildings.

Um that's the federal allocation.

What we would be able to allocate specifically to support those programs through SETF, we're still working to figure out, and it comes back to what I was saying a minute ago about you know we know that there will be less money available.

What how close that is to zero for either of those funds will be determined once we know the exact numbers for the budget going into FY27?

But right now we don't expect to be able to spend specifically of those funds that go to the AHEP program, the smaller buildings, because they do have that kind of quasi matching component, we don't really expect to be able to spend much of those funds at all.

The other funds are a little bit more flexible because the federal rules allow us to spend, you know, uh close to or as much as a hundred percent of the cost that a building owner faces as long as they are meeting a certain set of energy targets.

Does that help?

I mean, uh somewhat, but you talk about the federal dollars, how much of our local funds is going to be allocated for healthy homes implementation.

So typically this year and in previous years, the way we fund the DCSU is through that base contract that funds a bunch of programs and support their performance benchmarks and really Ben and the team determine how those funds get spent.

They have a sense of what they're trying to hit through the benchmarks that are defined in law, and they design and implement the programs.

Then in this year and years past, we would add additional funds onto the contract that would go to things like the Healthy Homes program.

So at this point, because of the available funds for SETF, that that base contract, just that minimum that we would allocate would go down from about 20 to about 12 million, and we don't currently have any additional funds allocated to the DCSEU to do those supplemental programs like the Healthy Homes programs.

What we will work with the SEU to do is to figure out of that if if that is the final number of that 12 million, can we refocus uh in a way that we wouldn't normally do under the base contract some of their programming and funding to to help those support those healthy homes programs and supplement the federal funds.

So the short answer is we don't know right now because we haven't gone through the full exercise to figure out exactly what are we trying to carve out of this sort of much reduced amount that the SEU would have available to it in the next fiscal year.

Well, I think under the proposed budget from the mayor, the answer is zero right now.

Unless and until we work with the SCU to restructure the way they sort of normally do business, that's that yes, I I would agree with that.

Right.

I'm hearing you answer in kind of two parts.

One is, but correct me if I'm not hearing it correctly, under the proposed FY27 budget as is, there'd be zero.

If that becomes the approved budget, DUE would then go to SCU, perhaps restructure the contract a bit, where some of the reduced from 20 down to 12 would be moved around, but that's going to come at the expense of something else that's not going to happen.

And so I would still call that zero right now.

You kind of have some backup contingency plans about how to restructure perhaps, but it's still all a massive reduction that really starts with a zero.

That's that's accurate.

Okay.

All right.

Um of the um operational budget issues.

So despite the enormous reduction to DOE's operating budget, the budget book only reflects a loss, say only, of 34 FDE positions.

So about a 6% reduction of positions.

Um you talked about earlier, some of this perhaps is greenhouse gas reduction fund money where you had FTEs that you were in the process of hiring for those dollars are frozen, and so you make the choice to say let's eliminate those FDEs.

So those FTEs are on paper, they're not people, and greenhouse gas represents a certain portion.

But I thought, based on our oversight, that fund that was going to be five FTEs or thereabouts.

Was it more than five FTEs?

When you looked at the cumulative, what was planned for the entire grant?

Yeah.

Then that's a larger number than the five.

Well, I guess where are the 34 FTEs coming from, then I guess.

Maybe that's a better way to ask the question.

If there's 34 FDEs being removed in this proposed budget, what's the breakdown of where those positions would would be?

Okay.

So I don't have the actual break breakdown.

When we uh took an executive decision to pause some positions, um, we're trying to meet our mark.

Um we came up with a number based on the analysis done by ran by our finance department that we need to maintain 14.70% vacancy of 14.7 14.70% vacancy rate to stay within the mark for local dollars and also for SBR dollars.

14.7 14.70% vacancy rate to stay within the mark for local dollars and also for SBR dollars.

So we didn't pinpoint a particular program area.

We just looked at DOE as a whole when we when we made that decision.

Now that doesn't mean that we're not going to hire positions, or we're just going to maintain the 14.7% agency vacancy savings.

So I know that some programs are feeling in a little bit more than some.

So if you had some programs were more heavily locally funded or SBR funded, may have taken a bigger hit than the other programs that are federal with the fund.

But you don't have a list of where the 34%.

I just don't have it here with me.

I just put it in the budget hearing.

Right.

Well, so looking at it from the agency perspective.

So here's kind of how we got to the 14%, right?

I went back and looked at the history of our budgets and vacancies and vacancy rates.

So if I go back to, I'll just go back three years on the air.

So if I go back to FY23, we had a 15.7% vacancy rate.

24, we had a 12% vacancy rate.

25, we had a 17% vacancy rate roughly.

So knowing what our mark was this year being around an 8% point, we calculated that if we could maintain, if we could take 14% of those vacancies that we normally carry, that could cover the the um the mark that we needed to cover without actually impacting uh real FTEs that are at the agency.

So that's where the number of 34 came from.

24 of those positions that that were vacant or we carry as vacant came from in our NRA, and then the other 10 positions are kind of divvied up throughout their agency.

So like one position in USA, uh two or three positions at ESA, it kind of got the divvied up in one OSA, so they got divvied up over the other administrations.

The biggest reduction was in the NRA level of FTEs that they carry on the books.

So again, because of what we know what our normal average vacancy rate is, that kind of falls in the ballpark of what we were we would have been looking at uh historically anyway, knowing that we also carried a a we carry um double digit F vacancies year over year.

Uh and knowing that, again, knowing historically that I also have a I also carry uh a larger number of vacancies in NRA on an annual basis.

Uh that was an area that that I knew that I could go to in order to achieve the percentage cut that was given to me, but also ensuring that the staff that was there were still being maintained and fully funded.

So that's how we kind of went the direction we went to to get to the number, and that's how we went to knowing where I knew where I had my biggest uh biggest room to make my reduction at without actually impacting overall budget for FTEs.

All right.

So you do have a breakdown of the FTE positions that are being eliminated.

Okay.

Yes, I can get you that.

All right.

Um are there any existing employees that are being separated through elimination of these positions?

That was that again.

That was my that's always my primary driver for the last three budgets I've created, and given the current conditions, nobody will be let go.

Okay.

So when you look at the FY26 schedule A, it does list 152 vacant positions, which amounts to about a hundred FTEs, which will be odd for people to hear the vacant positions and FTEs don't exactly line up, but that's budgeting.

Um your submitted schedule A includes 150 vacancies.

From what we're looking at, environmental protection specialists is the category of position carrying the most vacancies, environmental protection specialists.

What functions of the agency are hampered by short staffing of that position type?

If we have that many vacancies for environmental protection specialists, so the bulk of the bulk of our positions and ESA and yeah, ESA and NRA are environmental protection specialists.

And so that's why when when you see ESA come up as a large percentage, it's really multiple programs: water, air, has waste, underground storage tanks, all those all those positions were identified as environmental protection specialists.

All those all those positions were identified as environmental protection specialists.

So if I'm removing 24 positions from NRA, they're probably all going to be environmental type specialists, but that's spread out over uh multiple programs within NRA.

So two and was the agency holding them, or were you advertising for them trying to fill them, or were they subject to a hiring freeze?

All the positions that were utilized in order for us to make the mark were not advertised positions.

We did do the advertised positions for this past job fair they had in December.

So we brought on a lot of staff this past last several months.

But those positions that were were booked or will be booked with 27, those would not be positions that would be um advertised or put out there on the market to be actually hired.

Okay.

Those 34.

Yeah.

So we've been holding 34 positions that we're not advertising for, we're not trying to fill, and are not subject to the hiring freeze.

So yes.

A lot of positions were added to our budget with a need.

But then that need never came to fruition to allow us to actually hire, so then those positions kept being booked onto our budget, so that allows for this, like you said, 150.

I think in 25 I had um at 100 vacancies in 25.

So now my vacancy went up to 155 in 26.

Again, booking positions, partly from grant funding that we should have received that added positions that we we would have anticipated needing.

So our FT numbers are kind of going up, but it's in anticipation of work coming.

Unfortunately, that work has not been um has come to fruition, but the numbers are still there.

The numbers are still being has to still be budgeted.

So by freezing those numbers or or um not using those numbers for 27, that allowed me to make my mark with my current staff.

Keeping my current staffing levels what they are, backfilling and filling critical positions, those are still moving forward, but I knew I had space to utilize for this particular budget for 27.

Okay.

So how many positions are we holding either from expected grants or others that are gonna remain vacant?

The 34 that we put in there, the 34 that we put into our 27 budget, those are the only positions that we plan on doing that.

All of the positions we plan on moving those forward.

The other hundred or so?

Yeah, those, I mean, you know, there's there was um a lot of vacancies to fill.

We do have a lot of vacancies to fill.

We did fill a lot of vacancy with the last job fair.

We'll move forward with these vacancies.

Um again, I'm always still though.

Part of this is how we're how we're funding all the positions.

None of our positions are 100% funded, usually they're split between multiple sources.

But do I have enough funding?

Are there enough funding that exists so that position is funded down the road versus I we have funding for two years?

If my managers come in and telling me they only got funding for two years, they need to show me a uh a longer track for that funding for that position.

If it's a backfill because something happened, that's you know, that's that's straightforward.

But some of the other ones where I don't see a dedicated funding stream going out.

I'm not necessarily gonna feel that.

But then I also again should not be creating new positions based on future funding that may or may not come as well.

So we have to do a better job managing our or hiring our um our FTE count.

Um again, took advantage of it for 27.

Uh I hope to be in a better place going into 28, but for 27 it was needed.

Um looking at the way our numbers are, but yeah, it it does skew us.

Excuse me, the skewers when you're looking at the budget chapter and how that works.

So that's the work that we have to do internally to uh make sure that we're we're better aligned with what's going on in our chapter.

All right.

Are there any of those hundred plus vacant positions that are subject to a hiring freeze?

At this time, no.

Not not like from the mayor's office, something like that, no.

Whatever hiring freeze.

Whatever the whatever the district policy is, that's the policy we're following.

There's nothing internal, so it all depends on what the policy, but we've moved forward with positions, we're still moving forward.

So you don't do you have any limitations on hiring?

To my knowledge at this time, no.

Okay.

All right.

plus vacant positions that are subject to a hiring freeze at this time no not not like from the mayor's office something like that no whatever whatever the whatever the district policy is that's the policy we're following there's nothing internal so it all depends what the policy but we've moved forward with positions we're still moving forward what you don't do you have any limitations on hiring to my knowledge at this time no okay all right so yes sir just to be clear the uh number that was given the 34 positions that was our decision internally to freeze those positions to meet the mark so those were not restricted via the waiver or process or anything like that that was just our internal decision to to pause those positions okay yep I think you made that clear there's no other positions though the other vacant positions the hundred plus do not have a hiring freeze you're not having to apply for a waiver to hire them they don't have a hiring freeze no sir all right so folks out there there's more than a hundred positions that could be hired today for DOE as we've we've already posted several we'll continue to post we're not posting as fast right now you know trying to let the water settle but yeah we're still moving positions forward.

How many people did DOE hire last year?

Yeah I wanted that number I was thinking about that number this morning and it's about 21 21 positions came on during the last hiring freeze I know that about approximately of those uh about five of those were managers because I got all my management positions filled but we brought in over 20 people into the agency starting like December coming into January February.

So we we've had a lot of people come in these past few months.

That's 2026.

Yes sir okay how many new people were hired in 2025?

I would have to get I could not tell you that number how many in 2024 has DUEE ever brought on a hundred plus people in one calendar year no why do we expect to be able to do it now?

I I'm not expecting to bring a hundred people in a calendar year I'm saying the positions are available that I can move forward to you know to continue hiring people.

The reason why I'm at this level of of such high vacancy is because again we've booked in the past we've booked positions those positions didn't come to fruition and it just made our FTE count increase so the vacancies increased because the positions weren't filled because they stayed on the books whether or not the funding I shouldn't say whether or not the funding was there but they were brought they were supposed to be brought on for say a a grant of some sort the grant didn't come through but the number was already created in the previous budget so now I have these FTEs put onto the books that are not going to get filled.

So they sit there but they're not filling me because I don't have a a funding source that's going to provide a hundred percent funding for that position.

The lowest we ever got to was six sixty eight vacancies in FY24.

But we've always carried an exceptionally high number of vacancies and again a lot of history to that but a lot of it is it's having those numbers booked but not being able necessarily have a full funding for each one of those positions or whether it's on the local side or whether it's on a grant side all right now focused on both underspending and overspending all right so our the council's budget office works the CFO and agencies and pulls year to date spending based off what was revised and approved budgets it may not tell the full picture of what's going on but it also can tell us what's going on here because we are today May 4th we are more than halfway through a fiscal year.

If I look at the natural resources the approved budget was 19.6 million dollars the FY26 available balance is 12.6 million dollars meaning that close to 65 percent of what was approved hasn't actually been spent if I look at environmental 77% hasn't been spent why there could be plenty of reasons why as we sit here at the beginning of May do we see such large amounts of approved authorized spending has not been expended glad you asked me that question finally so I just completed around with all of my administrations going through their budget where we're at with the burn rate for each administration for FY20 burn rate.

Uh we know we have a 42% uh usage rate in PS costs and a 26% in our NPS budget.

When we when we dig dig down into the numbers and have those conversations with each administration, uh we're able to explain those numbers, or they're able to explain those numbers to me so that I know kind of where we're at in terms of contracting.

The majority of the money is spent in the fourth quarter for certain grants.

So we know that grants makes up uh six point one million dollars of their overall budget.

Contracts makes up four point six million dollars of the overall budget.

Right now, their current rate is like twenty-two percent of grants have been spent, uh 31% of contracts have been spent, but we were projecting to spend 100% of all of our contracts for NPS.

So we went through this exercise with each administration, looking to know because we know when we come up at the end of the year, we tend to try to get there, but we wanted to have a better handle as we go through the year.

So we've so we created a new database, and that allows us to see that at the agency level what each administration is doing, and then having that conversation with each administration.

So we've identified some areas that we need to be mindful of.

There were a couple of places where we know the money is not going to be spent.

Uh so we may have to do some reprogramming to get that money put into a better place to be spent, but where we're currently at may not be that may not be possible.

If I look at my uh environmental services administration, again, the PS budget to date has been 44% spent.

MPS budget has only been spent at 4%.

But when I start breaking it down, looking at where the highest numbers are, I see where my where my challenges are, have 7.2 million in contracts that still need to be spent.

We're anticipating because there's still two contracts that need to be issued, those contracts will be issued, and then money will start to be spent.

Right now, the projection is only 46%, but we'll work on that.

Uh professional services is 7.1 million.

Again, that's another contractual issue we'll have out there.

Uh there's 2.1 million in all of equipment money, that's data money or uh diesel diesel mission money.

So we're working with DPW to purchase some additional electric vehicles.

So that purchase should happen by the end of the fiscal year.

So we anticipate again, that money will get will will be spent out at the end of the uh fiscal year.

So by doing this exercise, it's definitely going to allow us to better ensure that we're closer to actually spending our budget uh moving forward.

Again, we just had these these uh particular reviews last week.

This will occur on a quarterly basis with each administration, and moving into as we go forward, this will become part of our daily routine so that we're looking at our budget closely to ensure that we're actually spending so that these low rate that does appear when everybody else is looking at our budget and saying we're not spending our money, we're better able to provide more insider information on why we may be at a certain point, but we really do know what our projection is for actually spending that money by the end of the fiscal year.

Yeah.

It's I think it's important to be able to help point out through here, for example, you could have a grant that's uh reimbursable grant.

And so the dollars aren't gonna leave the agency until later because it's structured as a reimbursable grant.

So in that situation, I shouldn't look at a balance sitting in an administration and think there's a problem because it's it's not supposed to go out yet.

You could be looking at a contract that um until October 1, you didn't even have authority for OCP to even start advertising the contract, and so those take months to go through.

Those are important things.

In a time when this is a very difficult budget, though, if I see agencies that don't have an explanation for each one of here's where these dollars are being spent, it becomes a very ripe for reprogramming not within your administration, out of your department.

Completely understand.

That's why we started these exercises so that we can when we have when those questions come, we're able to provide accurate information or up-to-date information on what's exactly going on with any particular uh pot of money that we have.

So that's that's why we're starting to do these, because that's important because we know it's it's being looked at.

Absolutely.

Yeah.

Well, I'm glad to hear you're doing that process internally.

Um I would ask after our hearing if my committee team can also check in with your team to make sure we see and understand what you're saying.

So we understand where uh it may be a reimbursable grant, it may be a contract that's pending, and it's just not if I'm only looking at the numbers, it's not gonna get reflected very well there.

But give a little context, now we understand why we're seeing it at this snapshot point in time where the balance is where it is.

Absolutely, sir.

I mean again, that's why we pretty much started this because we know you know other eyes are looking, so we need to have answers our put us in a better position to have answers if we if we move this information ourselves ver versus trying to find information when a question is answered.

So trying to get in front of it.

Okay.

So let me look at a different category though.

The energy administration.

So we were that was allotted at 40.8 million dollars, has a little less than seven million left.

So that has an available balance of 17%.

But we have more than 17% of the fiscal year left.

So in the same way that I look at the others and see a larger balance, why am I seeing here a smaller balance overall?

Should I reflect that?

Does that look like overspending over the course of the fiscal year?

Is that the nature of the timing of when those different allotments go out?

If I see only 17% of available balance left now, but I got more than 17% of the fiscal year, it could give me concern.

Help give that one a little flavor and context.

Sure.

So that one involves our DCSEU contract.

So I'll let Nick talk that out.

Yeah, I I I believe that's what you're seeing.

So when we uh and Ben spoke to this a little bit in, I think when he was uh speaking earlier, you know, at the beginning of the fiscal year, we load, if you will, funding onto the DC SEU contract.

Um and that becomes sort of an obligation on our books.

And so it it can look I depending on the report you're looking at, I think it could look like a a spent amount, even though all we've really done is said we've taken that money, we've set it set aside, and it's to be supporting the DCSEU contract.

Um but the DCSCU obviously carries out their work month by month with their subcontractors.

And so that actually leads to the issue you were talking about a moment ago, uh, council member, which is that you you have a sub a CBE contractor billing the SEU, they get paid.

C D CSU bills us, we pay them.

Part of that funding might have come from a federal grant.

Now then we request you know reimbursement from the federal government for that money.

So there can be both uh what looks like sort of an advanced payment as well as sort of that delay on the back end um if that helps.

Yeah.

All right.

So from the energy administration standpoint, that balance you have no hesitation that that's the required balance left for the remainder of the fiscal year.

I would say we're not we're not at this point concerned about being able to spend the money we have.

We do have money that shows up on our books that's related to the some of the stuff we talked about earlier with the GGRF funds or the charging and fueling infrastructure funds, which again we might be able to if things change, but right now we don't anticipate being able to spend.

Sorry, what I'm getting at is does it give me concern that we're gonna be overspending of what was authorized there?

So if there's only 17% left of the account for the remaining five months of a fiscal year, does that tell me we're headed towards overspending there?

Or is it the nature of the spending over the course of the year?

That's just what will be spent over the remainder of the fiscal year, but that does not indicate like a smooth monthly allocation, and then we're about to hit overspending.

Correct.

It does not indicate that.

It will be what will be spent by the end of the year.

So we will not go over our our projected budget for that year for this year.

That's what I was trying to get at.

Is the and again it speaks a little bit to the unevenness of the spending over the course of a fiscal year.

Okay.

Yeah.

Um, I'm gonna go through a few changes that we're trying to understand and adjustments on account group level spending.

So now we're getting into the weeds a little bit here.

So I'm starting with personnel services.

The line item for continuing full time seems to be increased slightly by about a million dollars, balanced against a fringe benefit reduction of about a million dollars.

We're also reducing apparently the continuing full time by 3.3 million.

Can you help us understand what's going on on the account group level spending with these changes?

For the continuing continuing full-time employment.

I'm looking at continuing full time going up by about a million.

If we're reducing overall FTEs, help me understand why we're seeing that go up.

All right, so 12 numbers.

I believe.

So the reason so part of what the way we do our our PS budget is we budget uh continuing full-time employee employment.

And I thought there was another category, but there's this in our budget development, there's two different ways we budget FTEs.

And so we shifted people come out.

Steve, is this?

I realize I'm I'm also referencing a table without giving you the table number.

So in case that's helpful here.

It's table KG 0-3.

Yep, that's what I'm looking at.

Okay.

I realize when I'm gonna just cite something, if I don't give you the benefit of telling you a table, it's gonna be a little hard.

So I without looking at the table.

I'm assuming that uh this is we have um permanent FTEs and we have term FTEs.

And um because those reductions in uh positions that we're not gonna fill in FY27, we have reductions in our term employees, but our permanent employees number might be going up because you know, those people shift from being a term employee to being a permanent employee after a number of years uh in district uh government.

So that number could go up while the overall number would be going down.

Thanks, Steve.

Uh and that's what the team said.

Yeah, I just that's what I couldn't remember.

Yeah, we do have two types of employees.

We have term employees and permanent employees.

And depending on how the administration funds, they'll shift employees' costs from either term or perm, and then that gets reflected in how it is here.

So this past year we had roughly 45 to 60 in staff moved from a term status to a permanent status.

So at DOEE usually if you've been in a term status for five years, after five years, we moved into a permanent status.

We were behind in in that transition, but we kind of caught that up.

So a lot of employees are moving into a permanent position now, or classified as being permanent versus being in the term, and so that shifts where the funding is located from the from the um permanent position to the term positions.

So that's why they're following that increase in funding, but it's just more of a real allocation of what the where the person is identified, whether they're perm or term.

Okay.

Got it.

That's helpful.

Um, I'm gonna look at another table now, and this is trying to understand some of the reductions by division and activity.

I don't know if this is restructuring or what this represents.

Uh but so related with energy administration, for example.

It looks like within the table, there's an 11 million dollar cut to benchmarking, a $51 million reduction to clean energy, and a four million dollar reduction to weatherization.

Is that the nature of restructuring?

Is that a reduction?

Can you walk me through that one, Ms.

Berger?

Yeah, those don't reflect real reductions.

So for example, benchmarking is the shorthand name for one of our divisions that existed before we re-orged effectively two years ago.

And so we've been working to make sure that the budget structure reflects the current division structure and those names.

So that 11 million came when, as we talked about earlier, council restored funds to the agency last year.

Uh in that process, the funds got dropped into the benchmarking division.

But the benchmarking division didn't exist at that point fundamentally.

And so what you're seeing there is not a zeroing out, it's just that in the current fiscal year we account for that money in a place that it probably shouldn't have been.

And next year, that that line item will be zero because we don't use that line item anymore.

Uh the clean energy reduction, I think is mainly about those those grant reductions that we were talking about to kind of make that bat strike that balance between what funding do we have and what we might have.

Yep.

Okay.

That's helpful.

And I in almost every agency we find a reorg will show up as major reductions or major increases that may not truly be major reductions or major increases.

So we need to just work with you after the hearing to make sure we have a crosswalk so we can see where those different pieces are aligning.

Absolutely.

Um there are two notable reductions in the environmental division.

The air quality division received a 1.1 million dollar reduction in the lead safe and healthy housing program received a $727,000 reduction.

Are those actual reductions?

So the 1.1 million change in air quality is reflective of that grant.

Okay.

That we spoke about.

The lead reduction is reducing the lead filter money, so we don't need as much lead filter money because that program is you know matured enough where we don't use as much funds.

So we cut back on the funding for that particular for the filtering program.

So those funds were cut back.

So that's what that reflects because again, the market has that market has matured, we have stock, we have we have supplies, and we just kind of revamping a little bit how we do it, but that allowed for some reduction in that program as well.

Okay.

So you believe you have the stock and quantity of filters?

Yes, we definitely have a stock and quantity filters for for the uh child child care development centers.

Yeah, we definitely have a stock.

We also have additional, and that's one of the few additional grant funds from the feds in terms of that area where we do have sufficient funding coming in for the feds to account for that as well.

Okay, all right.

Um, let me go through now natural resources administration.

Again, appears to be a 2.2 million dollar cut, another reduction SPR funds we've mentioned earlier, and then the 24 FTEs that we talked about earlier.

So I think we've covered the FTEs, are vacant positions that you were not hiring for.

So that does not represent a reduction in services necessarily.

Correct.

But the 2.2 million dollar cut is representative of what?

What activities?

So the overall 2.2 gotcha.

So Steve.

One second.

So Steve, we're talking about this section.

That's the 2.2 cut.

So regulatory view is a 200 cut.

These other three were positive, which are overall two exceptions.

So you have an increase in the water inspection enforcement.

Three seven five seconds.

Between your proposed budget issue, budget costs and the quick answers.

I'm sorry.

Sorry about that.

Um that's okay.

So the quick answer can you cut your budget for 2.2 percent.

All right.

We got something here.

So looking at the 2.2 as a whole, what that represents is when you look at the number, because we're looking at the same table, right?

Uh KGO4, looking at divisions, water inspection, water inspection enforcement, water quality, watershed protection, and regulatory review.

So that cumulatively totals out to a change of 2.2 million or 2.2.

What we did was looking at the sweeps that were given from the SPRs, um the sweeps that that uh my my senior gave earlier, all those sweeps were uh accounted for within those four programs within and I'm sorry, fisheries and wildlife is also included in that.

But when you add up those five divisions within NRA and how we had to adjust for the SPRs that were swept in that group, that's where that 2.2 reduction comes from is the is reduction to SPR funding.

All right.

One quick clarification got a little bit more information.

So last year when money was restored to our budget, yeah, there was a large amount put into bag fund, and uh that number has uh reverted to what it would normally be in a typical year.

So normally it's about 2.1 uh million that we have uh for that, I believe.

Um and last year it was more like four point four point five uh because money was brought back in and it was all put into back fund.

Okay, so what services or activities will be impacted by the two point two million dollar reduction in this category.

Those would be the ones that Steve mentioned earlier in terms of the impacts of the the grants and stuff that you mentioned earlier.

Okay, those same ones that's that's what that reflects is what those impacts are.

Got it.

And just to correct uh there was one additional thing that I didn't mention, which was uh something I know that came up in a lot in public testimony, which was uh the wildlife grants uh are a big portion of the reduction as well.

Yep.

We heard a lot about that.

Um we went through that list earlier, so we know it's significant.

All right, so for the Urban Sustainability Administration from FY26 to FY27, this seems to show a reduction of $794,000.

I'll add on to that the Budget Support Act proposes a change in the mechanism to transfer DOE's 50% portion of the Green Buildings Fund from DOB.

So DOE received these funds in a newly renamed sustainable materials and buildings fund.

Yes, sir.

So the way we have it had been getting those funds in the past, it came, it there was not a fund designated.

So those funds would come into the SETF account, and then we kind of tried to manage it between energy administration and USA, how the you know, making sure they got their proper um disbursement.

That created a couple issues.

One being it inflated the overall budget for SETF showing in available.

Meanwhile, we knew 900,000 of that was dedicated to USA.

So what we wanted to do was how could we get it into more control of the USA?

But they would not allow us to create a new uh SPR because it came into the SPR DLB.

So what we did was we we had a renaming of our product stewardship um SPR that we've always had.

We just kind of expanded that name, so now those funds from DOB will come directly into that particular SPR, which is managed by USA, and so now that it's more of a cleaner use of those funds there.

You know, they can control those funds better for lack of a better word.

And we have that separation that we needed.

So that's why we renamed the fund to allow to accommodate for the transfer from DOB into USA directly.

Okay.

All right.

So in that regard, it's it is a reduction or is not a reduction overall.

It should not be a reduction in USA.

Um I feel like it's showing a reduction of 794.

That that reduction is from is from the uh the final the grant that is a there's an EPA grant that they received, the um pollution reduction control grant that they received, that grant goes away in 27.

Okay.

So that's that reduction there, but in regards to the fund, that's why we renamed that fund.

So I'm sorry, two separate issues, but those are the answers to both.

One that now.

Okay.

All right.

Um just a second to work through several pieces there, but I want to kind of go through some of what we heard at the hearing last week, just to confirm that everybody's working off the same thing and seeing the same thing.

So we obviously heard a lot of testimony, for example, related to the city's wildlife rehabilitation, city wildlife.

So under the FY27 proposed budget, does it eliminate the funding for City Wildlife's grant?

Yes, sir.

The district waterways contract.

Is that eliminated?

Yes, sir.

I believe yeah, those three, yes.

Okay.

Anakasha River Bag Bill funds is reduced by $542,000.

And then within that, other many programs would be within that, but that's what we're seeing is $542,000.

Yes, sir.

That's correct.

We also heard testimony about the Near Nature Schools program.

Is that funded through the Bag Bill $542,000, or is that separate from the $542,000 reduction?

It's within that.

It's within that one.

Okay.

Um for FY26, so for the fiscal year we're in right now, we did hear people say that the uh watershed educational experiences was restored to 66% of the previous, or is that within FY27?

No, that's uh shifting, yeah.

We're increasing it in FY27.

Okay, thank you for clarifying that.

Hickey run trash trap, fully funded.

In FY27.

In 27.

Okay.

And the trash trap maintenance grants are funded 100%.

In FY27.

Okay.

And then River Smart Homes program for FY27.

Where does that uh it still has a reduction?

I will have to look at the exact amount.

I think we're at uh about 66%, maybe a little bit more.

I'll have to double check though.

Okay.

All right.

Thank you.

All right.

I'm gonna move on us in BSA subtitle language to work through that now.

All right, so for the stormwater funding sweep.

So the BSA proposes to sweep an additional 4.4 million from the stormwater permit compliance enterprise fund over to DPW's street cleaning programs.

Um reminder, this is on top of the 10 million dollars from last year.

So I think this is gonna put additional pressure on DOEE and your ability to carry out stormwater programs.

Street sweeping technically I think can count towards some stormwater program, but we heard pretty overwhelmingly.

It's not like we're seeing any additional street swimming.

All this is doing is just carrying on the same street sweeping we already had in our city.

It's just paying for it from you guys, not DPW.

So it's a creative budget gimmick of taking DOE dollars, putting it DPW, doing the thing they were already doing, and then somehow trying to claim we're meeting our MS4 permit, which we're not.

If I understand correctly, in that stormwater permit compliance enterprise fund.

Am I reading that correctly?

There is about 13 million left in that.

Yes, sir.

Okay.

One of our witnesses from last week uh talked about green infrastructure.

It's one of the best store management practices that we can do, and if we're having to triage or prioritize, that's where we do it.

Um what are the higher priority MS4 uses of the district is not going to do because we're just shifting out to DPW's regular street sweeping?

You want to go to Steve?

Uh sure.

There are main shortfalls in meeting our MS4 permit obligation are uh that we are short on meeting uh the number of acres that we need to manage in uh for like this new green infrastructure that needs to be installed.

And additionally uh performing green infrastructure maintenance on the existing facilities, those are our two big areas where we have shortfalls.

Okay.

Um I believe when I asked this question last year, does this budget potentially put us out of compliance with our MS4 permit?

Will we be able to meet the goals last year?

You said correct.

It will it means that we will likely become out of out of compliance.

Is that still true?

Yes.

At this time, yes.

Yeah.

Okay.

Um as part of DC's MS4 permit since 1999, the district government collects various pollution reduction activities, including planting thousands of trees each year, collecting millions of pounds of trash, but literally the first box on your permit application requires the DOE certify there are sufficient finances staff and resources to implement the permit.

So kind of right where we are.

And this year DOE staff forced to tell EPA that local funding is not enough to meet the MS4 permit requirements.

Um what what have other jurisdictions faced when they don't hit their MS4 requirements?

So I think one of the things I that um is not discussed when we talked about that or when when I'm listening to those discussions, is that normally it's looked at as terms of the life of the permit, right?

The permit in this case the five-year permit, we have approximately or roughly two years left on that permit that we need to hit all the goals within that permit.

Uh I think when that statement was made or when we submitted that last annual report, that's the box that we checked because at this you know at that time when the box was checked, that was an accurate statement.

So that's how that report was submitted.

But given that we still have two years to um to go on the permit, we you know, we're still pursuing our will you know, pursue like we're going to do what we can to meet that permit.

There's a lot more than just the financial obligation.

There is the acreage um obligation that Steve spoke about.

That's gonna be even if we were 100% had all the funding available, that acreage number was always going to be a problem from the time that permit was given to us.

Um and for me, that's kind of what I want to have my discussions with EPA, even regionally and at the uh headquarter level, when I have those conversations with both of them.

Uh I expressed that the acreage you gave us was a number that you know was challenging even before, you know.

When you gave us that number, we were going to be challenged to meet that number.

Uh there was um acknowledgement that that number was going to be challenging.

So right now, even if everything was to be hitting hitting properly, the fact that that number was always going to be a challenge still put it puts us at puts us at jeopardy because of that.

Uh I don't I mean I'm not using that, I'm not saying that as an excuse.

I'm saying the reality of that entire grant was challenging from the very beginning.

This this doesn't help it.

I'll I'll admit that, but at the same time, uh there's there's more component to that overall um meaning of that particular permit than just the financial component.

Uh we have to look at the acreage, we have to look at the maintenance, which I don't know if it was um anticipated if it was thought about, but that's definitely uh uh area that that that is our most vulnerable is the maintenance area.

Yes.

Yeah.

Okay.

I mean I agree with you.

I can hear you.

We still have a little bit of time until we're formally out of compliance because we have a couple of years.

But the hole we're digging for ourselves is just getting deeper and deeper.

What would it look like if things radically turned around in the last 12 to 18 months of a permit?

How would you dig out of that hole?

I think I could if it was radically different, I could probably get real close to the top of the hole, but I would still be in a hole because the acreage number puts me at a disadvantage.

So that's what I mean.

I think if if everything came together, I had sufficient funding to do all the maintenance.

We clicked on all the installations and everything moved forward.

At the end of that grant, there's still a good chance that I would not meet the grant because I could not make the acreage numbers, which is like I think 10,917 acre acres square feet.

And um I don't think there's enough going on in the city for us to accommodate that particular number.

Again, we submitted comments when the grant was given to us.

We didn't sign off on a grant, it was just it's given by EPA.

We understood.

But it was not a number that we uh agreed with at the time, but that was still the number that they gave us.

So I think we will always still have uh we would never have been, you know, the asphalt would never have been smooth.

It would have had a little sump in there, even if everything worked out great.

That's where I'm at right now.

Um I would love to be wrong.

I would love to get to the flat surface.

Uh, but I just think there's a lot of factors there that we need that we're going to continue to work against.

And we but we just have to be realistic about it as well.

We shouldn't give up.

We shouldn't go in the towel, we should have the conversation with EPA like we're continuing to have, and uh we're going to continue to press forward to get to get what we can get.

Okay.

Um we've been joined by my ward seven colleague Wendell Felder.

I'm gonna ask one or two more questions on the stormwater that I'm gonna turn to you for a round of questions here.

Um it appears in the budget that about 2.5 million dollars is currently budgeted for vacant positions in the stormwater fund.

2.5 million for vacant positions in stormwater fund.

Could that funding be used for some of the grants and contracts that have been cut in this budget?

Or do we believe that we are somehow going to hire up 2.5 million dollars worth of vacant positions in the stormwater fund?

Steve?

So the 24, not all of them, but uh number of the 24 FTEs that are cut in natural resources administration are uh paid for out of that fund.

So we're actually gonna be reducing that those vacancies greatly, and no, that basically that's a lot getting us to a level where we can meet our budget.

It's not like we will we won't have very many vacancies at the end of this fiscal year.

But this is the funding that seems to be at least in the budget we're looking at.

It looks like those dollars are still there.

So are you saying you don't believe the dollars actually are there?

That the positions have been eliminated and that funding.

Didn't realize that you were talking about that.

Um no, so we do have some vacancies that we are trying to hire for.

Uh and yeah, we're you know working to move to higher uh those positions, but we should be about fully staffed up.

Um those reasons that we're gonna record it's approximately 2.5 million dollars.

That must be accurate.

We heard we have uh like almost zero vacancies after the hiring that we intend to do this fiscal year.

Okay.

How many FTEs does that is 2.5 million dollars worth?

I can't answer I can answer it eventually, but I can't answer it right now.

Okay, all right.

Um I've got a few more questions I want to spend some time on.

Um but I counselor Felder is here.

I appreciate it.

So let me turn to Councillor Felder for some questions and thanks for joining us.

Uh thank you so much, Chairperson uh Alan, uh director, members of your leadership team is good to see you.

See uh director, as you are aware, uh residents all across the district are seeing increases in their utility costs.

Uh specifically uh residents and ward seven and eight uh rely heavily on utility assistance programs.

Uh could you share how much money is being reduced from utility assistance programs within your proposed budget for FY2027?

So for FY27, there is no reduction.

Um we're still anticipating uh the way the budget was designed was uh to have the federal funds that we normally were allocated, like for 26, those same funds would be allocated in the 27.

So from a federal perspective, those funds should still be there.

There's the local funds, which is very small, this should still be in aligned in the 27 budget.

So we're not looking for reduction in those in those in that fund in FY27.

With the reduction in local funding that goes towards utility assistance.

Um I'm getting a I see something differently.

Let me ask a different question.

Well, I'm I'm gonna make sure that I'm citing the right thing.

I don't want to give you wrong information as well.

So uh total administration.

Oh, okay.

I'm with you now.

Okay.

I I think some of the reductions we're talking about is is under UAA administration, but then may not necessarily be under Lobby.

Okay.

So I just so I'm just for the record, there's no reduction to Lahee.

La Heap, there's no reduction.

There is reductions in UAA, but that's based on some of the other programs, weatherization and some of the other things that we're doing there.

That's different than La Heap itself.

That's primarily at this time funded with federal dollars with a small look uh small local component.

Okay those things are accounted for.

Okay, and because of that because of the reduction, could you speak to how many households will be impacted across the district with the federal reduction because of the federal reduction?

So if we're talking about the so we understand, so if you're looking at there's no reduction in LIHEA funding.

For FY27.

So it's about four million dollars in weatherization for EA.

So the money isn't gone, it's just re-reallocated somewhere else.

Okay.

Uh thank you for that.

Um I want to shift gears to uh two specific DOE projects in Ward 7.

You have the Km and Island Education Center, and you have the Fort DuPont uh corridor.

Uh Director, could you speak to heights?

How does your budget or rather your budget shows that Keenan has over three million dollars in remaining funds of its 400, I'm sorry, 4.7 million dollars.

Can you speak to what's driving the slow spin down?

Uh the contract.

So we had to give the contract issued for during the study and everything for the building.

So you're talking about the capital dollars in terms of the Keeman Island Education Center, right?

So it was 4.7 million, and so the uh spend right now is about 788,000.

Again, the contract was disissued, I would say about six weeks ago, we finally got a contract out the door so we can start working with those contractors to get these dollars spent.

So everything is moving in that direction for the process, but the reason why it's taking this long is because of the type of contract.

Originally we were going with a fixed price contract.

That turned and be and did not become the vehicle that we could utilize.

That was about a year ago.

We had to reshuffle and restart the contracting process as a different type of contract, time material type contract.

And so that now has taken about nine months to get done.

So now that we finally have the contract issued, we have a uh vendor on board, we can finally move forward with actually expending those dollars as we move forward.

Now, how much do you think your agency will spend uh in for the project in this year?

So the rest for the balance of FY26, the current year that we're in.

No, going in the 27.

How much will we have spent?

How much do you project you were?

Project in spam, sorry, I got it.

I would have to get back to you on that number since we just got that since we just got it issued, I would have to get back to you with the actual number.

And I only ask that because given all of the development with the RFK stadium, there's a number of infrastructure related projects in the surrounding area.

And what I don't want to have is a situation where you have a stadium, uh, there's a lot of investments in the roads, but you have a historic district like Cayman Park and Heritage Islands and no development.

I'm sorry, there's no investments or the investments doesn't follow suit to what's happening on RFK.

No, totally understanding we're we're um you know, as the RFK project came online, we knew the work that we were doing at Cayman.

Again, again, close proximity to all that work.

So we're definitely making sure that there's alignment there so that you don't have either duplication or how they can you know feed off of each other, work better with each other.

We're definitely in those conversations because we do not want to see what you're talking about happen as well.

And can you remind me when this project is supposed to be delivered?

Do we have a date?

I don't believe we have a date because it takes us so long to get the contract two years.

I'm getting two years from the audience, two years.

And will the slow spend impact the overall delivery date for this project?

Well, right now we won't have a really good delivery date because we're the the this original contract is to get that design and and location and those kind of things done so it's not the actual building itself.

Okay.

That's what I was saying.

Gotcha.

So no, we don't have a timeline for the actual construction.

We just have we're just going to work on getting the plans where it needs to be at.

Okay.

Because again, there may be impact from other sources as well.

So we do the tank down consideration.

Thank you.

Now shift it to the Fort DuPont repairing corridor.

Now I noticed that um it had the Fort DuPont uh reparian has all of this 2.5 million dollars that was allocated.

Can you speak to what's driving the slow spend?

Sure.

So um those projects are a little complicated to get spent down, but I'm gonna let my uh deputy director for natural resources, Steve Sorry, talk about it since that's that falls in his uh his house.

Yeah, uh stream restoration design uh is a very complicated uh effort and it takes years of going through the design process, going getting the permits done.

We have the this is uh actually on National Park Service Land, uh so we have to follow NEPA compliance uh with them.

Once we start construction, the construction happens very quickly.

Uh and uh this is now this is a large project, so this will take a little bit longer than our typical project.

But um this is not all at all unusual that our projects take a couple of years to go through the design process, several years to go through design process, but when they go to construction, it's a relatively quick like a year construction time frame, and we spend down the the that funding quickly once we start construction.

And can you speak to what your agency's plan to make sure that you guys utilize all of the funding for this project?

Well, so uh first off, a lot of the funding that is for this project is actually uh federal funds comes from clean water construction uh funds that come from EPA, and we absolutely will spend down that money because we don't want to see a loss of uh federal dollars coming to the district.

And uh how much do you think will you guys will spend in FY 2027?

Uh I have to get back to you on the exact amount.

Um it depends on the timing of when we're able to start construction, but uh yeah, we will you know be we will be starting construction and we'll be able to spend down uh significant chunks uh in that in this next year.

And when do you think the project will be delivered?

Uh so it's uh there are I think there are 10 sections for this project, and uh we have it phased out over a couple of a couple years.

I will have to get you uh what we're actually gonna construct in the short time period in the sh in the next year um and what's gonna happen in the in the longer term.

Um so I can I can get that to you.

I just don't know that right offhand.

And so just to add to that, um these particular funds that were set aside, and Steve mentioned it earlier.

So normally when we get these type of grants, what we do is we take that grant money and then that's put into a a capital account because these projects take so long to go.

And so these are just funds that were move uh that we receive through operating in terms of capital, I mean in terms of the grant itself, and then those funds are just transferred over into capital as like a pay-go, and then so there's several water construction grants that are in here, they're all designed the same way.

We get the funds from the feds, we put them over there because we know it crosses fiscal years in terms of getting that work done.

And they kind of sit there, unfortunately, until we get that work, but it takes quite a while to complete those projects.

Um this one, like Steve said, was received.

So uh the gentleman that works on this, Josh Birch, he's just constantly working to get these stream restorations up and running.

They do take time, but again, we know the funding is there because it came from grant funds, didn't come from uh local funds or funds that were put in by the district into a capital.

Yeah, and I I did get a uh message from Josh uh real time.

Uh so the the 2.5 that you're seeing in the budget is as you said, uh that's actually a National Fish and Wildlife Foundation grant that we are moving from operating into capital.

Uh so it's not uh district funds, it is a federal or it's National Fish and Wildlife Foundation grant.

And in terms of our budget, our timing for spending, we're gonna spend about five million dollars a year over the next three years.

Okay, thank you for that.

I'm gonna shift gears to uh weatherization.

Now I noticed the weatherization budget declined by approximately four million dollars.

Uh these programs are essential to many families across Ward Saving uh who support were various home repairs.

Now, Rector, could you speak to uh on average?

How many residents received funding from the weatherization program to date and uh how many residents has the program served on FY 2026?

Okay, okay.

So that was the So that was the uh four million dollars that I spoke to you earlier about that was moved from from the uh from the UAA into energy, four million dollars in EATF funds.

Um and you were asked about how many uh residents were served.

Yeah.

So FY25 is showing 122 nonprofits.

Sorry.

Okay.

For CREAT, I'm sorry.

Okay, thank well those can that concludes my questions for uh this round.

Thank you, Mr.

Chairman.

Thank you, Director.

All right, sorry.

Thank you, Councilmember.

Um items uh also BSA language.

One is just quick fact check, actually, um, because it was a little confused a little some folks here.

When the mayor rolled out the budget presentation, I'm assuming she meant net zero when she said BEPS when she talked about and she said that BEPS was delaying the start of new construction.

Because BEPS doesn't impact new construction.

Perhaps we have concerns around net zero requirements, but I think she even tried to coin a term buildings being VEPT uh and then not being built.

But I I believe she maybe meant net zero.

BEPS does not stop new construction, correct?

Correct.

Fact check that.

Do you want to add to that?

Other than that, I think I think that's accurate.

We don't we don't we neither see the BEPS program affecting new construction, nor nor honestly do we hear from stakeholders, including developers, that that is an issue.

That that echoes what I've heard as well.

Um, if I'm correct, the maximum fine that's been issued so far is a thousand dollars for someone who's out of compliance with BEPS.

So we have issued I think I can get this right, but I'm gonna look at my team to help.

To be technically correct, we have not issued any fines related to the BEPS program yet.

So we are in the near the end of the first cycle of BEPS, and uh uh once that cycle concludes, if a building owner was not did not meet their targets and didn't go through the process that you know of working with us on alternative measures and uh whatnot, then then they could be fined uh or they could be assessed an alternative compliance payment for the BEPS program.

I suspect that the thousand dollars, that that level of uh of a fine uh is related to our benchmarking program.

So each year we obviously ask folks to to benchmark to get tell us how much energy they've used for the previous year.

And if if you don't do that, we could come and say, hey, you haven't done your legal obligation in terms of telling us your energy use, and if they still don't do it, then we might issue them a fine.

Okay.

But those fines are typically quite small on the order of a thousand dollars.

Yeah.

And the other piece, a bit of fact checking, I saw like for the last couple of years, we the the mayor has posed efforts to just kick BEPS down the get can down the road several years.

We've rejected that each time.

Um the BSA language regarding BEPS this time, I believe some media said here she goes again, is the exact same uh proposal to delay BEPS when in fact it's a much more targeted effort focused on future cycles of BEPS.

I think that came through in our hearing that we had with the public witnesses too, but want to give you a chance to say why is this different than what we've seen in previous years.

We even had the BEPS task force come in this time and say, no, we think this is a targeted effort that seems reasonable and they would support it.

Um, have you helped lay out why is this different than what we've seen in previous attempts?

Sure.

I think uh but I do agree with you.

I think it did come on here, I think Marshall uh uh you know spoke about it uh precisely, but again, for for the benefit, I'm gonna let uh uh director Berger talk about that as well, uh, since that's in his shop, but I do agree we will state on Friday.

I'm gonna start with something I don't like doing, but it was my own fault.

So I do want to correct what I said.

We've not issued alternative compliance payments, those kinds of the fines that we think of as you know, you didn't meet your BEPS target, but uh but as my team has reminded me, we do have intermediate steps.

So you have to tell us what your pathway is.

And if you haven't done that, then we have so we have issued in some cases, but again, those are small, those are the kind of thousand dollar level.

So when I said there weren't fines for BEPS, that was not correct.

But uh But the $1,000 is the maximum that we've seen thus far.

I'm not gonna say the $1,000 is the max because I'm not getting another one, but we'll find out the number.

But it yeah, those fines are typically smaller.

Um to your other question.

So uh yes, we we basically I would say we agree with kind of the sentiments you heard at the hearing on Friday, which is we're we're fully supportive of this sort of shift in the start of the second compliance cycle.

And I think one thing that's very important to, we think it's very important is that the district completes the first cycle of BEPS.

And you know, the the some of the previously proposed changes would have altered sort of the timing of even completing that first cycle.

Uh this change doesn't do that.

We still conclude the first cycle of BEPS this year.

We reach that milestone, we get to step back and see how much progress we made.

Uh we get to learn from what we did, uh, we get to learn from the experiences of the building owners.

Uh so that additional year between those two cycles sort of increases that opportunity for learning reflection and then developing any changes we want to make and roll out ahead of the second compliance cycle.

Okay, got it.

Agreed.

I think that was one of the big uh criticisms we are also heard in previous years was delaying uh cycle one is also a bit unfair to many of the buildings and property owners that have already gone through the process, and you need to create a level playing field for cycle one.

So what is proposed does appear to be a much more targeted version that is only impacting future cycles, does not mess with the cycle that we're in already.

Um so it keeps that cycle consistent with the tweaks and changes we made collaboratively to get our first cycle of BEPS done.

Um that's important.

In the but in the mayor's BSA narrative on this, she stated DGS would have to spend over $340 million in capital improvements to meet the second BEPS cycle requirements.

Is DGS making any of those investments now?

So uh our team has the BEPS team has been working closely with DGS uh on their approach to compliance for BEPS, and we have talked with them, and I believe their plan is to look at sort of a multi multi-cycle compliance approach, which makes sense for large portfolio owners where you know you've got a lot of buildings, they need to make a lot of progress.

Um we don't currently have a finalized uh compliance pathway with DGS.

So I I can't tell you exactly, you know, in terms of an accepted pathway that everyone's agreed is kind of where they're headed, where they're headed or what progress to date they've made.

I I will say you'd have to talk to DGS about sort of the progress to date in terms of their portfolio of buildings.

Okay.

Um then related to BEPS, will the SETF allotment for BEPS support for affordable housing?

Would that be available with the cuts to SETF this year?

So through the affordable housing retrofit accelerator, we specifically support affordable housing buildings and their compliance with BEPS.

Um that for the last couple of years, this year included, that has that program has been supported jointly by federal funds, the the Inflation Reduction Act rebate funds, and then SETF.

Um again, at this point, based on what we see in the budget for next year for FY27, we would still have federal funds that could be used to support those buildings.

Um we don't currently have SETF funds that would be allocated to the Affordable Housing Retrofit Accelerator Program.

Okay.

All right, let me learn.

Let me turn to the net zero BSA language.

So among the revisions, the DC code in this year's budget, uh, there's yet again language that nixes net zero requirements.

However, this year the council has been presented with a delay of requirements to ban the use of gas in new construction by one year.

The mayor's proposed delay is not a wholesale repeal, but it's a delay.

Um however, the city has had plenty of time to work on our building code and net zero requirements, so it's frustrating we're not ready to implement the laws that we've had on the books.

Can you update us on why this delay is needed after the dissolution of the construction code CCCB?

I'm just gonna use the acronym.

Right, the C C C B.

Yeah.

So uh the primary or the leader for construction code as a whole is DLB.

We've worked closely with DOB trying to uh get this where it needs to be at.

Uh we'll continue to work closely with DOB, but it's it's hard for me to say exactly what that the entire plan is because that's only one component of the overall construction code, so it's more of a DOB issue.

I mean, that's that's kind of where I'm at with that one.

Okay.

If the council were to accept this BSA language, how could you guarantee that we won't be right back here again next year having the same conversation trying to delay again?

How how could it how would it be?

How could I guarantee it would only be a targeted one-year extension?

I would say again, this is it's a DOB question, but I believe in the conversations that we're having with DOB, um that their focus is where it needs to be at to for this one year.

Uh again, I want to put words in the mouth, but I think there is a focus um on them that they need to do this.

Uh and we will definitely be working with them as closely and as hard as we can to ensure that they do make that.

Okay.

How would this apply?

What I'm getting at is if we were to create a one-year extension, is that on permits pulled for construction or the construction itself to certificate of occupancy?

That's a very good question.

And again, I it to me it leans more towards the DOB side than us.

Um what I'm getting at is is it does the extension mean that if I were to get the planning for my building done and I get my permits applied for within this one year extension, I don't have to follow my net zero requirements, even if my construction is another year or so after that.

Or is the is it tied to I have by the time I get my C of O from DOB, I have to have got I have to be I think I'm I'm I'm I think I'm understanding the question, but I don't think it's a question that I can answer because this again is that's more of a DOB since the permit would be coming from them, they would be the ones that would have to say how they would want to apply that one year extension.

Okay.

All right, I'll come back to that in a second.

Um third-party electricity supplier BSA subtitle.

All right, we heard a lot of people not happy at the hearing last week.

This is the one thing that we actually did hear people say, okay, we we like this idea.

So we heard support from witnesses around this.

Uh the subtitle requires public service commission to set a price cap for third-party suppliers of electricity and natural gas, requires standard contract terms to be published, prohibits early termination fees.

I think you talked about that in your testimony.

Um my understanding is a very serious issue that OPC and the OAG are tracking very closely as well.

So this is a relatively technical and lengthy subtitle.

Why is the executive choosing to take action on this and third plier third-party energy suppliers now through the abbreviated process of the BSA rather than sending legislation to us?

So I I'll give my short answer now that uh Director Berger expound upon it.

But you know, the the quickest, the quickest way we can serve the residents, I think that's the priority for the mayor is how quickly can we provide some kind of relief to residents?

And so the path that is determined is the is that path.

That's the driver for that path.

But like you said, it is a lengthy and and has some complications to it, and and the emergency ministr uh energy administration has put a lot of time and effort into pursuing the third party thing.

So I won't let uh uh Director Burger speak about that one since this team is the you know highlighted it.

Thank you.

Uh but I think the director got it basically right.

All I would add is that there's an urgency here, right?

You all know you're getting a lot of questions about people's bills.

We've diagnosed this issue, I think, fairly carefully and come up with some very thoughtful but uh effective changes that we think we can make in law.

And I think what it boils down to from our perspective is every month that it goes by, you know, households are just paying more than they need to.

So our analysis suggests that your your kind of average low-income household that we see coming through the agency for our benefit programs, if they're on a third-party supplier, they're spending about 75 dollars a month more than they would be if they simply reverted back to the PEPCO standard offer service, right?

So there are thousands of those households in the district, thousands of households times 75 a month just adds up.

So every month that it goes by uh is more money that those residents don't need to be paying.

So our our hope is just to get these changes enacted in the most expedient manner possible.

All right, that's helpful.

Keeping in mind we're in a bit of a uncertain space where we have the increased PEPCO rates are actively under litigation.

We've had the Court of Appeals uh vacate and remand back to the PSC.

Uh the most recent PEPCO rate hike.

Are there any other transparency and accounting measures that the department is recommending?

Um I mean, I think there's a lot we think that the district could do to improve uh outcomes for ratepayers across a variety of um areas.

But I mean just in terms of transparency and accountability, uh one issue that comes up regularly is just residents not being able to understand their bills.

You know, you look at a PEPCO bill, and we've heard this from residents that come to our agency, we've heard this from other folks in the government from our own team.

You look at your PEPCO bill.

It's often not clear what you're paying for, where the money's going to, uh, what all the lines and numbers mean.

Um I know PEPCO is conscious of this.

They're working on a bill redesign right now.

I think one thing we we think would make sense would be to do a really thoughtful redesign of your bill, uh the PEPCO bill, so that folks can ideally better understand what it is they're spending money on and maybe have more uh empower them to take action to sort of cut down on their bills.

There's certain things on that bill that your your average household or small business can't do anything about directly, you know.

But there's uh there are things on that bill that you can change, whether it's through the energy efficiency measures we talked about earlier when Ben was testifying, um uh or through some of the structural changes like we're talking about with the third-party supplier market.

Okay.

Um we'll afford to working with you on this.

Let me turn I'm gonna I'm now gonna bridge my net zero with uh with RFK.

Um Director, can you give an update on DOEE's involvement in the planning and conversations with the commanders?

And specifically, does this net zero extension proposed in the BSA, would that impact the new construction on the RFK campus?

So I'm gonna bring up my chief of staff to talk about RFK since he's not been a point person from the beginning for um for that.

Yeah, so we'll swap out.

We'll swap you out so I was swap out, but I did want to just quickly respond on the FTE question.

So I think you're looking at our FY26 vacancy information, not our FY27 vacancy information that shows 2.2 million dollars.

Uh but in FY27, so we're cutting 16 of the 20 FTEs that are there for that 2.2 million dollars.

FY27, we have four FTEs uh that are vacant that we are currently hiring for.

Okay.

All right, we can follow up after the hearing too to make sure we're clear as to which fiscal year we're tied to there.

All right.

Thanks, Steve.

Come on, Danny.

So I'm bring my chief of staff, Daniel Connor up for the RFK.

Before that, uh they didn't want to provide some clarity about the weatherization.

Um question that uh council member Feder asked is my chief of staff for tilling affordability.

Deputy Director for Affordability Administration, till we need affordability administration.

He can provide a little clarity on the weatherization question.

Yep.

Yes, it is that you're adding context to what Councillor Felder had asked earlier.

Yes, sir.

Yes, absolutely.

Uh I believe there was a God I was on.

Uh yes, he had uh we had initially given numbers related to the CREAC program, but I wanted to provide some direct numbers in terms of weatherization.

So the total number of households that we served were 44 households with an average cost of roughly a little over $16,000 per household.

And FY25 and 26 service delays reflected operational changes and securing contractors.

Uh we have since uh started the solicitation process to correct that.

Um I believe in terms of Q1 FY26, there were 72 weatherization applications that were denied.

Uh 13 were missing documents.

Uh also we had six pending and 38 wait listed.

In terms of quarter two for FY26, uh, we had 70 weatherization applications, uh 13 were denied, 20 missing documents, and nine pending.

And lastly, we had 28 wait listed that were eligible.

So I just wanted to provide those for uh for the record.

Excellent.

I appreciate uh adding that for the record.

We'll make sure Council Felder uh gets that his staff may be watching the hearing online.

So we'll say thank you.

All right, so now we turn to Steve um Dan or to provide uh update on RFK and R involve Could you repeat the question for me, Councilmember?

Yes.

So uh one was please provide an update on DUE's involvement in the planning and conversations with the commanders on the site, and then specifically, does the net zero extension BSA subtitle impact development on this site?

Meaning that would they no longer be required to follow the net zero law?

So I'll start with an update on our involvement.

And as we updated at the uh oversight hearing this year, that everything is on the table with this project as they're trying to design the roadways, as they're trying to design the stadium, everything incorporated into that new development.

They're trying to understand what the possibilities are and what they can do for day one operations at the site.

Because right now, a lot of the stormwater that is going into the RFK parking lot is going directly into the river.

So looking at what are the stormwater requirements and opportunities on the site, how do we keep some of the stormwater going into it?

Also the same realm around energy.

What are the opportunities around using batteries at the site, shaving peak demand?

What are what is the equation that is needed to meet day one operations and opening the stadium at 20 uh in 2030?

So everything that I have seen from Brian Hanlon and his team, the commanders, they're discussing about what the possibilities are right now.

They're still designing what systems will go in there to meet whatever calculations they have to meet, but everything is on the table right now.

So with that, I'm just trying to uh assure everyone that they are trying to work towards this as fast as they can and seeing what the possibilities and opportunities are here.

My understanding is that the net zero requirement, everyone is trying to understand what that means right now.

What are the systems?

What did they need to design to try to work towards that goal, right?

What is going to be possible at the site?

Um, as far as the impact of the BSA piece of this, um I would assume that the delay itself would um have an impact on all projects in the district, right?

So um to answer your question is they're still trying to understand what the possibilities are here on the site and what can be accomplished with everything on the table.

And just that I can add, because to be getting some information in anything about in the district subject to all the construction code, this the subject to all of the construction code in effect at the time of the application for permits.

So that's how would it be applied is based on when the application for permanent was issued, that's when it can that's the destruction code that's in effect.

That's my understanding as well.

Uh so thank you.

Um we were having the debate on RFK about a year ago.

I had asked a specific question, which was will the net zero laws apply to the construction of buildings on this site?

And the answer said back to me was yes.

Nada, we're gonna explore it.

All options are on the table.

It was a yes.

I can't support that.

That was a commitment made.

That's exactly what we talked about a year ago, that that was what we are focused on.

Um so I think that appropriately, a lot of conversations going into what are the different ways we can do stormwater management on the site.

Agree with 100%.

Oceans of asphalt next to a river that are just dumping stormwater into our river is bad, and there's a huge opportunity there to capture stormwater.

And I think there's some really exciting things that could be done with battery storage on site to help offload that peak demand.

I think there's some really exciting things that can be done there, and I'm glad to hear that's part of the conversation.

Um but I do want to be clear a net zero extension that essentially walks back and undermines the commitment around what we want to do at RFK campus, is something I cannot support.

Um other element that I wanted to ask about when it deal requires, it says we have a commitment, or sorry, there was a the deal requires lead platinum version four.

At a recent public event, a commander staffer mentioned in this public meeting that there would be gas infrastructure at the RFK site, and said we're only quote committed to a goal of LEED platinum.

Backup generators are the only gas infrastructure that's permitted at the stadium under lead platinum version four, which requires carbon and methane emissions to equal zero.

What and how are we, the district, pushing to achieve our commitment and our goal of lead platinum version four, not letting them drive the conversation, but what we want out of it?

So I think that um well one of the things that Brian Hanlan and his team have done is they have a comprehensive energy RFP that is out on the street.

I think it's actually closed now.

That uh the winning bidder will come in to uh this and propose a whole um network of energy solutions for the site itself.

So it is supposed to look at the campus itself, what is supposed to be done uh for day one operations and what can be done for that, and then how that interacts with the future development at the site as well for the future phases of that when it comes online.

So really trying to dive down into this and understand, as I mentioned earlier, what is possible, what does that uh puzzle look like, and how do they put all of these pieces together, whether that is battery, whether that is gas, whatever it is that they're looking at the variables to meet the energy needs on the site and looking at that from a phased approach about what they need on day one operations, and then what are the future uses uh uh and then what what are the energy solutions around that.

And just to add to that's uh another resume either last week or before about lead status.

So that is that is currently being in discussions, I don't think um in terms of what we're looking at.

We're not we're not you know backing down from whatever was proposed that's still in play.

Uh which is why we that's why those conversations have actually started around LEED.

So, you know, not sure what was said at those moment, but I know we're actively engaged with them, handless team and everyone else with regards to the lead status, because that was something that was discussed early on.

So we're we're staying on top of that.

Okay.

I just want to be crystal clear, it's not just a discussion, it's literally written into the deal.

Correct.

Correct.

That's what that's why I learned as the Department of Energy and Environment.

I don't think DOB is gonna be the one who's gonna be pushing the envelope to say how hard can we make sure we meet the I mean, again, it's the terms of the deal.

So DOEE has to be the one at the table to say this is this is the terms of the deal.

Absolutely.

This is what we're pushing for.

Because if you're not doing it, I don't see anybody else who's gonna push it.

I think and that uh I believe that's our you know, that is our posture.

That is our posture.

That's that's why we have uh one single point for the project to make sure all the responsibilities and requirements that are there that we're you know, we'll require to ensure happen is is is being is being there, being put in front.

Okay.

All right.

Um I have a couple of capital budget questions and then we'll try to wrap ourselves up.

So um clean water construction management project has an unspent balance about 36 million dollars for FY26, another 7.6 million is being added to the 5.5 million already budgeted for FY27, making the total for F-O-27 about $13 million, and the total funding over the CIP of $49 million.

Can you talk about the status of these projects to improve the district waterways in the Chesapeake Bay, specific capital projects?

Um I think this represents a healthy amount of the increase we're seeing in the capital budget.

This is for, I'm sorry, this was for clean water.

Clean water construction management.

So thanks, Daniel, and bring Steve back up so we can talk about the uh clean water construction since it's uh again under his shop, it's very similar to the uh um we just talked about the um stream restoration falls in that same category, but Steve can provide the details.

Welcome back.

Thank you.

Uh so uh the question is the increase in the clean water construction funds.

So we have had an increase in the allotment from EPA that is part of the bipartisan infrastructure law, and this is uh just uh this I think this will be the last year of those funds uh that will come in, and then after that we'll be back to a more normal uh funding level for it.

Um is there something specific?

So yeah, yes.

So we have the 36 million in FY26, and the the increase in FY27 takes it up to the 13 million, so total of about 49 million in the CIP over those two fiscal years.

So the question is what's the status of those projects?

Okay, so there's uh there are a lot of different projects that are funded by this.

Uh a lot of it goes to sister agencies, including Department of Transportation for green infrastructure that they install in their right of way.

Um a lot of that are also our stream restoration projects that we're talking about.

Um these are rolling funds that we have about five years to spend down um and uh we always spend down that that funding.

Um but that's for the construction of the new sites, right?

Yes.

Well, it's also design, it can't be design.

Uh but if we need if we do design, then we have to construct.

We yeah, we can't.

But it's not for management of that stormwater.

No, we are not using uh paying for staff's salary out of this or anything along that line.

Or no, we can't pay for the maintenance maintenance.

Specifically, yeah, it's specifically forbidden to use these uh funds for maintenance purposes.

It's the right thing to do to be designing and building them.

Um on the other side of the shop, nobody's managing them.

And so we're not managing the sites we build well, which need to they need to go together.

100% agree.

All right.

The other big uh increase is with the hazardous material remediation.

It's got 18.5 million in FY26, set to receive an additional 28.5 million over the next three fiscal years.

Project is obviously analyze the sediments in the entire estuary of the Anacostia, develop the cleanup remedy.

Can you give us an update on this project?

Yes, sir.

So this is the account that the um right now the uh PEPCO settlement dollars are going to, so that's why you see the increase over the next three years uh due to that 11.75 that'll come in this year, and I think two more years after this.

Uh again, those funds are being used for the sediment project itself, but they're also um the funds that were already there uh will be used for work at Poplar Point to complete work in regard to the Renewal investigation and feasibility study at Poplar Point and then the work that'll be done to finally uh allow uh Kenworth Park to finally be received.

We have to complete that remediation work.

Uh that's more of a capping uh process at Kenilworth, but we do need to do some additional uh groundwater testing just to make sure there was a couple of areas that were in question.

So we'll work with National Park Service for that.

The work at at uh Popar Point with again in conjunction with National Park Service is coming up to where we're almost done with that remedial investigation.

Again, that is being hit it up by Demped, but we've provided an environmental support for that project for them.

Those are the primary three projects that are coming out of HMR HMC.

Um, those are the biggest three coming out of HMRH and C and kind of how those funds would be allocated in the next two to three years.

Okay.

Um that's separate from our Anacoster River sediment.

Well, that's include that's one of the three.

So Anacost was a sediment, uh Kennelworth and Poplar Point.

All right.

You said uh lay down process is coming soon.

Any minute now.

I'd say any minute because it's it's been it's the lay down area is is a is a thorn.

It's two different sites, right?

If I understand correctly, there's like the laydown of the cleaning.

It's just the lay down of the right.

Well, put yeah, place the locate the clean, which working with uh Steve's team, we may have a solution there using uh acreage from one of the storm sites.

It may allow for space to actually put clean material that can be used for settlement project and then other things, but it's a clean area and it's large, about you know, six or seven acres.

The lay down area for the settlement itself.

Again, right now we're after multiple discussions, we're still back at the maintenance yard as the location.

Uh we're in discussions now with park service on what it would take for us to actually use that park or the um the maintenance yard itself.

Um they've given us kind of what their requirements are for us to use the site because it will require some tree removal um clearing the site out to allow for this it has the space, but there's a lot of clutter there or debris buildings, those kind of things.

That stuff needs to be removed.

So we're in active discussions now to see what the final what a final price tag for actually staging the site just to receive the settlement would look like.

But it looks like we're going to have to settle in on uh the maintenance charge at this time uh and just work out the final details within the PS that will allow us to use that maintenance charge, but um not the ideal situation, but it's it seems to be the only avenue we have left.

And so that's we're just gonna go ahead and pursue it and see what we can do.

What is that from a timeline perspective look like to get with the National Park Service to make a decision on the site?

Well, so we have so we have maybe you know there's there's a cost associated with actually setting the site up.

Was trying to look to get some, you know.

Hey, can we meet in the middle somewhere in terms of a cost?

Of course.

No.

We don't you guys gonna pay it.

So we'll pay it.

Um so we we have a quote now for actually doing the work.

Going to submit that quote and basically show MPS how we're gonna do that.

Once we have that cleared that we can move forward, all of that should happen within this fiscal year.

So although we have planned on being in the water itself, I think if we can get the site staged up, we'll make it past bonding season and we could be able to get in the water.

We still have some permitting issues that need to be resolved with Army Corps and uh no was involved in the in the permitting MPS and EPA.

So we've had several discussions with them regarding uh the not the remediation but the restoration in terms of if we're doing the remediation, dredging and those things.

How are we going to you know reinstall the um plant life and those kind of things that are disrupted?

So that's part of that permitting process.

So we've had about two or three meetings with them to try to get some headway there.

We've submitted our comments, our plans to uh Army Corps, and we've had a meeting with uh NOAA and Army Corps and one other agency.

We have not met with um EPA, but we're just waiting now to get their comments back on our um permit submission, and then so once we have the permit, once we have laid out, we're ready to go.

I don't see that it happened an hour until probably the winter or sometime after the um like I said the spawning season now.

So we'll be looking at late fall to late fall 2026 or late fall 2027.

Late fall of 2026.

So I'm looking at that October November time frame.

I just want to get a boat in the water at this point.

This is it's it's it's been too long since 2013.

We started this.

So getting something.

But still on track to get that part done.

Contract issue was resolved, and so all the all three of those components the permit, the lay down area, and the contract are all moving in the right direction, but I'd still look for something that happened late this year.

Okay.

Later this year, meaning we actually start in the river or something this year means the next stage of permitting.

I think I think some I think tearing down and and getting that stage area set up the way where once we even restage it, we still get NPS's kind of like approval that yep, the site is where it needs to be at for you to actually start putting settlement on the ground here.

So that's what I'm looking to get done this fiscal year.

Got it.

Okay.

All right.

Um as always on that one.

If we can help collaborate or support, happy to do it because I know you're uh anxious to get it going.

Uh I think we all are.

And if there's ways that we can try to help have a shared messaging to the National Park Service and others, let me know.

I can be helpful in that.

Appreciate that.

Thank you.

Yeah.

All right.

Um at this time, I don't have any other questions.

Um I know that we will have more follow-up with you and your team in the weeks to come.

I want to appreciate you being here today.

Uh, I want to thank our government witnesses for testifying today.

I want to look uh forward again to figure out how do we help fill and patch and fix the holes in the budget.

Um before we wrap, I also want to reiterate uh the agency is staffed, I know, by a lot of dedicated, incredibly skilled folks that are working hard.

Um, I think I've I feel like unfortunately I've had to say this a couple of times um in hearings.

My frustration uh at what you are being given is with the decisions that I do believe rest above the department.

Uh and I think it's asking our staff to continue to do more and more with less and less at a time when we need more and more out of all of you.

So to the staff, I appreciate that.

I hope you felt that reflected as well from the public witnesses who were deeply angry with the budget they saw that I think is deficient for what our city needs.

But I also heard them repeatedly praise different staff members, praise work that's happening by the department.

So I hope your team hears that uh as well.

I don't know it puts you in a tough spot uh from time to time.

So um again, I want to uh appreciate the testimony and the work that we've got ahead.

Um this is gonna conclude the fifth budget oversight hearing of the committee on transportation and the environment on the mayor's FY27 proposed budget for the Department of Energy and Environment and the DC Sustainable Energy Utility.

Again, for any witnesses who wanted to add testimony, you can submit written testimony to us by up until May fifteenth.

When the committee will hold the public and government witness portion of its budget oversight hearing for the Green Finance Authority.