LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community...

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LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter Conference March 3, 2011 Bethesda Maryland

Transcript of LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community...

Page 1: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

LIFE AFTER ARRA“WZ FEE FOR SERVICES”

Presented by:

Ken Robinette, CEO

South Central Community Action Partnership

Twin Falls, Idaho

2011 NASCSP Mid-Winter Conference March 3, 2011

Bethesda Maryland

Page 2: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Why consider a “fee for service” company

Uncertainty of Federal Funds DOE Weatherization Plus~ Leveraging States looking to expand Agencies WZ resources

Staff Retention after ARRA is done Agency Self Sufficiency (long term goal) Provide Energy Conservation to Middle and

Upper Income Homeowners/Business’s

Page 3: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

History and Experience

South Central Community Action Partnership’s (SCCAP) WZ Program started 1978

Provided Energy Conservation to 5,500 + Homes Trained/Certified Auditors avg. 20+ Yrs Service Built & Rehab Homes w/Grants & Low-Interest Loans

(USDA/Rural Development & HUD) In early 1990’s WZ’d Homes for Utility Company

creating Program Income (10 CFR Part 600.124)

Page 4: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Sec.600.124 Program Income

(a) The standards set forth in this section shall be used to account for program income related to projects financed in whole or in part with DOE funds.

(b) Except as provided in paragraph (h) of this section, program income earned during the project period shall be retained by the recipient and, in accordance with program regulations or the terms and conditions of the award, shall be used in one or more of the following ways

(1) Added to funds committed to the project and used to further eligible project objectives.(2) Used to finance the non-DOE share of the project.(3) Deducted from the total project allowable cost in determining the net allowable cost which the cost is based.

Page 5: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Sec.600.124 Program Income (cont.)

(c) When DOE authorizes the disposition of program income as described in paragraphs (b)(1) or (b)(2) of this section, program income in access of any limits stipulated shall be used in accordance with paragraph (b)(3) of this section.

(d) In the event that the program regulations or terms and conditions of the award do not specify how program income is to be used, paragraph (b)(3) of this section shall apply automatically to all projects or programs except research.

(b) Except as provided in paragraph (h) of this section, program income earned during the project period shall be retained by the recipient and, in accordance with program regulations or the terms and conditions of the award, shall be used in one or more of the following ways

(3) Deducted from the total project allowable cost in determining the net allowable cost which the cost is based.

Page 6: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Sec. 600.134 Equipment

(a) Title to equipment acquired by a recipient with Federal funds shall vest in the recipients, subject to conditions of this section

(b) The recipient shall not use equipment acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statue, for as long as the Federal Government retains an interest in the equipment.

(g) When the recipient no longer needs the equipment, the equipment may be used for other activities in accordance with following standards. Equipment with a current per-unit fair market value of less than $5000 may be retained, sold or otherwise disposed of with no further obligation to the awarding agency. ( over $5000 is more restrictive)

Page 7: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Sec.600.135 Supplies & other expendable

property (b) The recipient shall not use supplies acquired with Federal funds to

provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statue for as long as the Federal Government retains an interest in the supplies.

Fee for Service can be done using DOE equipment and supplies however, extreme caution should be exercised and

check your contracts with your State Office for allowable use. Follow the 10 CFR 600’s

For those purposes SCCAP chose to create our own LLC. In 2005 called: Home Energy Management

Page 8: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

“FEE FOR SERVICES”Limited Liability

Corporation (LLC)

Home Energy Management (HEM)

Started w/Home Diagnostics ~ Blower Door/Duct Blaster

Expanded to: Insulation ~ Windows & Doors

USDA/Rural Development (loan & grant program)

Developers/ General Contractors~ Private & Federal Idaho Power Utility Contract~ 175% to 250% OMB

Page 9: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Setting up “FEE FOR SERVICES”

Board Support and Approval Meet the Mission of OrganizationWZ Staff/ Administration Staff Buy

InInformed State Office (IDHW)Created a Business Plan (with help)

Page 10: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Setting up “FEE FOR SERVICES”

Help available to Develop Plan SCORE (Senior Corp Of Retired Executives) is a

non-profit association providing free counseling and low-cost workshops to small businesses throughout the United States.

The website hosts a “Business Toolbox” and on-line learning center that brings together the expertise of successful business owners. http://www.score.org

Page 11: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Setting up “FEE FOR SERVICES”

Help available to Develop Plan

Small Business Administration

Marketing Research http://www.sba.gov/starting_business/marketing/research.html

Competitive Analysis http://www.sba.gov/starting_business/marketing/analysis.html

Page 12: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Evaluate each of the following areas– State Office Involvement – Financial Needs– Location– Market– Customer Payment– Organization’s Accounting Capabilities

Before You Begin

Page 13: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Financial Considerations

Capitalization requirements include: Pre-business planning and development (who pays for it) Equipment, facilities, tools, vehicles, and other start-up “assets” Employees, inventories, and supplies for business operation Cash (“working capital”) to cover inventories, payrolls, and

operating costs until profits accumulate

Page 14: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

How Will Your Business Be Organized and Managed?

Sole Proprietorship Partnership Joint Venture Corporation, Subchapter S Corporation, Tribally-chartered

Corporation Limited Liability Corporation Limited Liability Partnership DBA of the parent not for profit DBA of the subsidiary for profit

Page 15: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Legal and Financial Steps for HEM Received Board Resolution to create For-Profit dba – Home

Energy Management (HEM)

Created the HEM Board of Directors

Received Board Resolution for Zero Interest Loan to HEM from Agencies non-federal cash account

HEM had signed Promissory Note for Loan & Operating Agreement

HEM applied with State of Idaho for Articles of Organization as LLC

Page 16: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Legal and Financial Steps (cont.)

HEM applied for Employer Identification Number HEM applied for an Idaho Income Tax Withholding

Account Number HEM purchased General Liability & Workers

Compensation Insurance HEM applied for Building Contracting Licenses with

Bureau of Occupational Licenses Worked w/Agency Auditor for Financial Compliance

Page 17: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Legal and Financial Steps (cont.)

Agency set up Commercial Lease Agreement for office space, utilities, furnishings and office equipment

Set up HEM Accounting Procedures

Purchased accounting software (Quick Books Professional)

Purchased Diagnostic Equipment

Page 18: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Legal and Financial Steps (cont.)

Generated cost basis for equipment leasing with DOE and Agency owned equipment

Purchased cell phones and service

Set up new accounts with material suppliers

Competition with other contractors (perception)

Page 19: LIFE AFTER ARRA “WZ FEE FOR SERVICES” Presented by: Ken Robinette, CEO South Central Community Action Partnership Twin Falls, Idaho 2011 NASCSP Mid-Winter.

Bids, Profits and Benefits

Bid projects timely Bid projects to cover all cost and allow profit % Win some – Lose some Profits create additional income for Agency Provides resources not allowed by other programs

(building add-on) Sustains employees and increases moral Increases community awareness Ultimate goal to have agency become:

Become Self Sufficient & “Pay Taxes”