Investigation Reveals Sandy Energy Grant Program Riddled With Errors

Scott Gurian | March 6, 2014 | Politics, Sandy
Hoboken, state’s largest cities appear to have been shortchanged aid money

The backup generator at Hoboken's Observer Highway firehouse was destroyed when the building was surrounded by floodwaters.
The Sandy fund that’s at the heart of Hoboken Mayor Dawn Zimmer’s accusation against the Christie administration was allocated through a faulty selection and scoring process.

An ongoing investigation by NJ Spotlight and WNYC/NJ Public Radio has found that by using the Christie administration’s own scoring criteria, seven of Hoboken’s requests for backup generators should have been funded instead of just one, making it eligible for up to $700,000 more than it was originally awarded

Zimmer has claimed her city was shortchanged because she refused to support a redevelopment project favored by a close ally of Gov. Chris Christie.

The money in this particular program has yet to be distributed, and when these scoring inaccuracies were brought to the administration’s attention, officials said they were making adjustments and correcting problems and would take this investigation’s findings into consideration.

The process used to allocate funds, however, provides a window on the Christie administration’s handling of Sandy recovery money. Questions about the integrity of the scoring data appear to extend beyond a few errant numbers to structural issues concerning the methodologies used in the ranking process.

The problems run much deeper than just Hoboken. Many errors were discovered after only a cursory review of the data, and their occurrence is too varied and numerous to easily overlook.

A review of the initial scoring highlights many municipalities receiving unequal treatment, and anomalies such as Nutley — which had comparatively little damage from Sandy or past storms — getting a significant mitigation grant of $556,240, while places like Atlantic City and Belmar weren’t awarded any funding at all.

To be clear, the $25 million Hazard Mitigation Grant Program Energy Allocation Initiative — the focus of this investigation — is only a small fraction of the overall Sandy aid money, but it’s one of the few grants given directly to local municipalities. And it’s also one of the few over which the Christie administration has complete control.

The Administration’s Scorecard

The investigation’s findings are based largely on an analysis of the internal scoring spreadsheet the Christie administration used to conduct its rankings.
The spreadsheet was obtained by the New Jersey chapter of Public Employees for Environmental Responsibility (PEER) and was shared with NJ Spotlight reporting partner WNYC/NJ Public Radio.

According to that document, as well as information supplied by the Governor’s Office of Recovery and Rebuilding — the department overseeing the state’s Sandy recovery effort — applicants were awarded points for a variety of factors including population, density, and disaster history.

Using those criteria and the ranking system identified by state officials, NJ Spotlight conducted its own scoring and found instances of similar grant applications from different municipalities receiving unequal treatment, multiple cases of applicants being awarded points they never should have gotten or not earning credit – or the proper amount of credit — for ranking criteria they met, and a scoring methodology that appears to have favored a few applicants at the expense of the majority in several key rankings.

NJ Spotlight and WNYC/NJ Public Radio have tried to get detailed answers from the Christie administration about how the allocations were awarded, but despite a public records request and weeks of calls and emails, we’ve only received partial explanations.

Four different administration departments participated in the scoring, and the initial award decisions were shared with towns and the press over four months ago. Yet, confronted with these findings, administration officials now say the awards were preliminary and may still be revised. If the scoring is to meet its own criteria, the list of revisions will be lengthy.

Assessing the Damages

In the aftermath of Sandy and the nor’easter that hit New Jersey about a week later, 2.7 million people were left in the dark, some for as long as two weeks. The power outage crippled the region, shutting down transportation networks, contributing to sewage overflows, and causing major delays for drivers waiting to fill their tanks.

In densely populated Hoboken, more than 85 percent of residents and businesses were without power for days. At the top of the hill on Hudson Street, a small number of row houses that still had electricity had extension cords and surge protectors strung out their front windows, attracting dozens of people who sat around chatting as they charged their laptops and cell phones. Down the block from city hall, PSE&G also set up a command post under a giant tent for residents to power their mobile devices.

At the Marian Towers senior housing complex in the badly flooded southwest section, it was chaos, with backup generators running on empty and only the building superintendent left to look after the 150 residents.

“We have no power, we have no heat, and there’s a lot of elderly people in the building that really need help,” said Tony Sciarra, one of dozens of residents milling around the lobby the day after the storm. Without elevators, many tenants were trapped on the twelve-story building’s upper floors, unable to manage the stairs, and food supplies were running low.


Elsewhere in town, generators at several of the city’s fire stations failed after taking on water, so firefighters were unable to recharge their equipment. What’s more, the department’s radio repeater system located atop the Stevens Institute of Technology Administration Center building was supposed to maintain power when the university’s backup generators kicked in, but that didn’t work as planned. “All of my fire companies were out, and I had no way of communicating with them,” recalled Fire Chief Richard Blohm.

Meanwhile, officials were struggling to find ways to communicate disaster-recovery information to residents. They resorted to posting handwritten messages on bulletin boards in key locations around the city.

Hoboken Fire Chief Richard Blohm.

All this was still fresh in the mind of Mayor Zimmer a few months later when she delivered her annual State of the City address and called for a variety of measures to harden the power grid and make Hoboken less vulnerable. Along with proposals to build a giant flood wall to protect the city, manage stormwater runoff, and ensure sustainability and resiliency, Zimmer spoke of the need to build a micro power grid with backup energy sources. Redundant power was necessary, she said, for critical infrastructure like the police and fire departments, city hall, hospital and supermarket.

It wasn’t just Hoboken that was thinking about energy resiliency.

After New Jersey’s Office of Emergency Management announced early last year that it was handing out money from FEMA’s Hazard Mitigation Grant Program for projects to lessen vulnerabilities to future storms, more than half of the 1,550 letters of intent it received from municipalities and other entities around the state were for backup diesel and natural gas generators – the single most-requested type of project.

Recognizing the need, state officials set aside $25 million in HMGP funds to create the Energy Allocation Initiative, but even that amount paled in comparison to the demand, which was nearly 10 times as much.

To sort through proposals from over 400 applicants, state officials convened a working group composed of representatives from the Office of Emergency Management, Department of Environmental Protection, Board of Public Utilities, and Office of Homeland Security and Preparedness to develop a scoring and ranking system. The U.S. Department of Energy’s National Renewable Energy Laboratory and Sustainable Jersey also participated, but they were not directly involved in the scoring.

Although the scoring process appears rigorous, it was not applied with the same rigor — or even consistently — across the board. And while NJ Spotlight chose to home in on Hoboken and Brick Township, because they were most suitable for a one-to-one comparison, we uncovered numerous other anomalies.
Among our findings:

  • Atlantic City didn’t get any funding at all because it was shortchanged in the FEMA Public Assistance category and because its application for generators at five of its fire stations and five of its shelters was grouped on the score sheet as a single request.
  • Belmar’s request to fund a generator for an emergency evacuation shelter was similarly denied because it didn’t receive any credit for its public assistance history, despite having asked for more than $2.6 million over the past 15 years.
  • Jersey City’s $3.5 million request for 22 generators only received an allocation of $159,840 because it was given just a single line item on the score sheet. The city also missed an opportunity to get backup power for its traffic lights because that application was shortchanged in the FEMA Public Assistance ranking.
  • One of Bloomfield’s requests for its fire station was turned down because it received an improper number of points.
  • Though it’s been awarded some $825,000, Newark had several of its requests denied due to fluctuations in public assistance points that can’t be explained by the source data.
  • The scoring irregularities appear to have worked the other way as well. Morristown and Nutley incorrectly received hundreds of thousands of dollars for backup generators despite having comparatively little disaster history. Had the scoring been done properly, it appears that none of their requests would have been approved. Likewise for Cresskill, Dover, Monroe Township (Middlesex County), Mount Arlington, North Caldwell, and Old Tappan.


    Meanwhile, Berkeley Township, Cresskill, East Brunswick, Fair Lawn, Mahwah, Manville, Tenafly, Union, and Washington Township (Warren County) are among the municipalities that got credit for energy audits they never actually conducted. Without those added points (or in the case of Cresskill – the combination of points in both categories), they wouldn’t have received an allocation through this program.

    To complicate matters even further, Rahway is in a class of its own, with three of its generator requests accidentally entered multiple times on the score sheet, but assigned a different number of points in each instance.

    Hoboken Up Close

    What happened when NJ Spotlight slid Hoboken’s application under the microscope?

    According to documents we reviewed, Hoboken submitted seven requests totaling about $100 million for HMGP funding, for everything from building a two-mile long floodwall to flood-proofing the city’s historic library to turning vacant land into parks to reduce stormwater runoff.

    It was ambitious, and after Mayor Zimmer came forward with her allegations that Christie administration officials had threatened withholding Sandy aid money, the governor’s office issued a press release portraying Hoboken as foolish for asking for so much.

    But it turns out $100 million wasn’t the highest request, and it wasn’t out of the ballpark given what several other municipalities had requested.

    Documents NJ Spotlight received in response to public records requests show Brick Township, for example, requested a total of $241 million, and the City of Elizabeth — which, though larger, suffered much less damage than Hoboken — asked for funding for 21 projects totaling $62 million.

    As with other municipalities, all of Hoboken’s non-energy-related requests were lumped together under “Local Resiliency Projects” and were passed along to the county OEM, for officials to make the spending decisions. The state ended up giving Hudson County a total of $1.7 million, which it them distributed 13 ways, taking $136,000 for itself and giving equal amounts to each of the dozen municipalities within its borders.

    As for the energy-related request Hoboken had made — $1.7 million for 12 backup generators — the city was notified in October that it would receive just $142,080 through the Energy Allocation Initiative.

    But according to a close review of the data — including an analysis of the state’s internal scoring spreadsheet and an examination of how letters of intent from various municipalities were treated — it appears that Hoboken’s application was handled differently from others, and it received substantially fewer points than it should have.

    Brick officials bundled their requests for nine different generators into a single letter of intent totaling $1.260 million And they attached an itemized list breaking down how much each generator would cost.

    Hoboken similarly submitted a single letter of intent for 12 generators totaling $1,770,000.

    But in Brick’s case, the working group gave the township a separate line item for eight of the nine generators (the ninth was excluded for reasons that are unclear). This process worked greatly to Brick’s advantage, since it gave the township eight opportunities on the score sheet to get funding. And each request that earned at least the minimum threshold of 80 points was guaranteed coverage of project cost, up to $142,080. In the end, several of Brick’s requests crossed that threshold, and it received an overall allocation of $380,000.

    In Hoboken’s case, rather than getting separate line items for each of its 12 requests, the city inexplicably received just three line items, labeled on the score sheet as “Public Works Department,” “Emergency Medical Service,” and “Shelter.”

    Further, NJ Spotlight obtained a list from NJ Clean Energy of all municipalities and local government departments that have conducted Local Government Energy Audits. We confirmed with the NJ Board of Public Utilities that this was the same data the working group had used to award points in the “BPU Energy Audit” category. It was found upon examination that Hoboken improperly received credit for a Public Works Department audit it had never completed, but did not receive credit for eight of its other generator requests.


    In addition, a review of Hoboken’s 15-year FEMA public assistance history found that the city had received nearly $1.5 million in disaster aid as of last August, when officials conducted their scoring. According to an Office of Emergency Management spokeswoman, historical public assistance requests totaling between $500,000 and $2 million should have gotten 20 points, yet Hoboken’s three requests only received 10 points.

    NJ Spotlight conducted its own scoring for Hoboken’s generator requests and found that — according to the working group’s own rules and ranking criteria — had Hoboken been treated the same as Brick (and some other municipalities like Rahway) and had all points been properly awarded the city would have received at least partial funding for seven of its 12 requests and would have been entitled to as much as $839,680, if it had been scored like other municipalities.

    NJ Spotlight’s analysis of Hoboken’s scoring does not even take into account the fact that Hoboken only received 10 out of 20 points in the population-density ranking, despite being the fourth most densely populated city in both the state and the nation. Administration officials defended their scoring methodology, noting that Guttenberg — the city at the top of this ranking — has a density nearly one-and-a-half times that of Hoboken).


    The bar was set similarly high in the population ranking category: Newark and Jersey City — the state’s first- and second-largest municipalities — only received five out of a possible 20 points. Elizabeth — the state’s fourth-largest city — did not receive any points. Full credit was awarded, however, to a handful of county applicants and statewide agencies, which administration officials said had the effect of prioritizing “regional” projects, as called for by the recommendations of the President’s Hurricane Sandy Rebuilding Task Force.

    In some instances, a small change in points made all the difference between whether a community got pushed over the minimum threshold to receive funding or whether it got no funding at all. In other cases, differences in how applications from various municipalities were treated meant that some towns and cities potentially received hundreds of thousands of dollars more or less than they should have, according to the scoring criteria laid out for the program.

    Expert Witness

    Mark Mauriello worked at the NJ Department of Environmental Protection for three decades, eventually rising to the role of Acting Commissioner before leaving in 2010 to work in the private sector. During his time at the agency, he participated in several working groups just like this one, and he’s quite familiar with the mechanics of how the Hazard Mitigation Grant Program works.

    Mauriello reviewed the state’s internal scoresheet at the request of NJ Spotlight, and he concluded that the way state officials conducted their rankings appears to be much more complicated than it should have been.

    “Whenever you see these things, you don’t know the subjectivity of who’s populating these columns and these boxes,” he said, “And obviously, the more of these columns you have, the more opportunities you have to check off a box and add weight or points to a certain proposal. It just seems to me that this thing by nature creates a lot of opportunity to really make funding decisions that might not be in the best interest of the state.”

    Rather than rank the applicants based on their FEMA public assistance history following federally declared disasters, Mauriello said a much better gauge of the needs of municipalities would have been to look at their claims history with the National Flood Insurance Program to capture a wider snapshot.

    “I find it a little unusual that the selection criteria wouldn’t include NFIP claims, which represent a broader scope of impacts, hazards, and I would argue opportunities for mitigation,” he said.

    Others like Bill Wolfe of Public Employees for Environmental Responsibility raised questions about the relevance of awarding points based on whether the applicant had conducted an energy audit (state officials called it an indication of “efficiency and forethought”).

    Using the scoring criteria former NJDEP Commissioner Mark Mauriello suggested the state should have used, NJ Spotlight mapped the towns and cities that applied for funding through the HMGP Energy Allocation Initiative to see the relationship between their past flooding history and the percentage of their mitigation grant requests that were honored.

    To level the playing field, we focused on the subset of requests municipal applicants made for Tier 1 projects — like police stations, fire departments, and shelters. We excluded the handful of municipalities that are not part of the National Flood Insurance Program.

    In some cases like Point Pleasant, Passaic, and Little Falls, there appears to be a strong correlation, with municipalities that have the most flooding history receiving the largest portion of requested aid. In others, towns like Franklin Township and Caldwell applied for mitigation funding through this program but did not receive anything. That seems fair, given that they have little history of flooding.

    But there are also places like Mount Arlington, Plainsboro, and Winslow, which received much greater award allocations than they should have, if they were ranked strictly by their flood histories. Meanwhile, Atlantic City, Tuckerton, Belmar, and Keyport did not have any of their grant requests honored, but they probably would have if their flood histories had been a primary factor in the ranking.
    Zoom in to see greater detail.


    NJ Spotlight also looked at the approaches taken by several other states to rank municipalities for mitigation aid following federal disasters. An expert in disaster relief who worked on the aftermath of Hurricane Ike in 2008 (but did not wish to be identified due to current business relationships) said the state of Texas scored solely on the tier of the applicant, so critical facilities like police and fire stations received money before anyone else. He agreed with Mauriello’s assessment about New Jersey’s scoring system. “It opens up the process to criticisms of fairness if you establish too many criteria,” he said.

    By contrast, the state of Connecticut took a more holistic approach to its awarding of mitigation aid following Sandy. Scott Devico with the Department of Emergency Services and Public Protection says state officials scored on a series of eight questions. Some looked at similar factors as New Jersey, such as population and facility tier. But there were also broader considerations, such as:

  • How much does the measure directly mitigate the effects of a frequent natural hazard?
  • To what extent will it result in a long-term solution and require minimal maintenance?
  • To what extent will it eliminate future vulnerabilities?
  • Does this represent an innovative approach or best management practice?
  • A Chance to Respond

    As part of its investigation, NJ Spotlight provided copies of the documents we obtained to both the Department of Environmental Protection and the Governor’s Office of Recovery and Rebuilding, ran our findings by them, and offered them multiple opportunities to respond.

    “This was done with great speed. It was a necessity to get it done and get things moving, and when you have something like that, you’re always bound to have some confusion,” said one administration official, who only agreed to speak anonymously.
    Municipal representatives and county OEM officials said that despite several mandatory training meetings, there was little guidance given on how to complete the forms, so different applicants took wildly different approaches.

    Some simply submitted the completed letter of intent, while others attached all sorts of supporting documentation. In some cases, multiple requests were combined in a single LOI, while in others, they each appeared on their own application. Some municipalities included itemized cost estimates from engineering firms, which also tacked on contingency fees. It’s unclear how those doing the ranking would have accounted for such fees.

    Backup generators like this one at Hoboken's Fire Dept. HQ failed after taking on floodwater.

    Meanwhile, the administration official we interviewed admitted that there may have also been confusion among members of the working group that did the scoring, so different people would have relied on different rules and methods to assign points.

    “We’re going back over to reconcile to make sure they were evaluated on a consistent basis,” he said. “We’re fixing it, and we’re well aware of it,” he said.

    “While legitimate scoring errors have been discovered and rectified, any assertion that they were anything but human data-input errors or attempting to connect those errors to unsubstantiated claims in the press is simply and categorically false,” wrote NJ DEP spokesman Larry Ragonese.

    Given a list of specific questions, he provided partial answers to some, but declined to comment on others.

    “These are all technical questions that would require our working group to provide specific answers,” wrote Ragonese, “But they are still in the process of completing their task. So I can’t insert you into the middle of their work.”
    The picture the administration paints of a grant decision process still up in the air and subject to all sorts of changes appears to be at odds, though, with the timeline of events that have transpired so far, as well as with the understanding of several individuals involved with the process and interviewed for this story.

    Municipalities first submitted their letters of intent for the HMGP Energy Allocation Initiative in February and March of last year. The state Office of Emergency Management (or in some cases, state lawmakers acting on OEM’s behalf) sent out letters to applicants announcing allocation decisions in October, and the governor’s office issued a press release at the time. Meanwhile, elected officials in several municipalities including:

  • Morristown
  • Rahway
  • Burlington
  • Little Falls
  • and a number of other communities went public with their allocation amounts.

    Out of nearly 150 applicants who received initial award letters, a couple dozen had their amounts adjusted, and they received revised allocation notices in December. Later that month and in January, the state asked all applicants to submit detailed plans for how they intend to spend their awards. In early February, there was a workshop for grantees in Toms River to review the process of preparing memorandums of agreement to receive the money from FEMA. All indications seem to be that the process is moving full steam ahead.

    That analysis is backed up by an official who was involved with the process and agreed to speak on the condition of anonymity. He said that the allocation amounts appeared to be relatively stable even back in the fall — when they were first announced — and that it’s unlikely there was still a lot of reassessment going on by this point. “Any adjustments that were made after September were only because there was recognition there were real problems with the scoring or for correcting new realities that came to light,” he said, adding that the only changes now would be strictly around the edges.

    That also sounds accurate to Mauriello. “I don’t know how it’s still up in the air if those decisions are made,” he said. He added that the state asking applicants to submit their spending plans is a fairly significant milestone. “I guess it isn’t final until the spending plans are received and approved and all that, but that’s sort of a formality. I think the substance of the work has happened. It seems like if it’s not final, it’s pretty close to the goal line.”


    Further, while responding to Zimmer’s claims that Hoboken had been shortchanged, state officials never once said that the award amounts were still being finalized. Nor did New Jersey’s Storm Czar Marc Ferzan when responding to Zimmer’s allegations late last month.

    Given the assertion that award decisions are still being revised, NJ Spotlight asked Ragonese and other administration officials when the process would be complete. They were unable to provide details, saying only, “We are continuing internal reviews. The process is still ongoing.”

    No Playing Politics

    What Ferzan did say, on a follow-up call with reporters a few weeks later, was that politics has never played a role in the state’s distribution of Sandy aid money, and that any suggestion discrepancies like these were anything more than honest mistakes would be unwarranted.

    “It’s unfathomable that the system could be gamed in any way,” he said. ““There is nothing that is more highly regulated than federal disaster grants programs. Everything must be documented. Everything is subject to review by federal agency auditors. Each federal agency has an Office of Inspector General. And as a result of that, there’s been a lot of process that’s built into disaster recovery.”

    While it’s generally true that there’s a massive amount of oversight built into the distribution of federal Sandy aid, HMGP is different in key ways from some other sources of funding for rebuilding and recovery.

    The Hazard Mitigation Grant Program is not intended to pay for repairs but rather to help recipients prepare for future events. FEMA gave New Jersey broad discretion about where to distribute this money. That potentially includes areas that may not have even been directly affected — or badly affected — by the disaster.

    A gas-powered generator provides electricity for a Hoboken residence in the aftermath of Sandy.

    When it comes to HMGP spending, FEMA’s only rules are that approved projects meet a list of eligibility requirements and a cost–benefit ratio analysis, so any dollars spent today can be quantified with a return on investment over the long term.

    The Christie administration was under no obligation to distribute funding from the HMGP Energy Allocation Initiative to municipalities in proportion to the damage they suffered from Sandy. In fact, damage from Sandy wasn’t even a factor that was explicitly considered in the ranking criteria (It would have been partially captured in the points assigned for FEMA Public Assistance History, but state officials say the working group relied on data supplied by FEMA last August, and many public assistance requests from Sandy were processed in the months following that).

    Since there are few federal requirements over how the state distributes this mitigation money, there’s actually not a lot of oversight to ensure that scoring and ranking are conducted fairly.

    “FEMA’s mantra is to ‘let the locals lead,’” said one official who’s been involved with the state’s grant process, but would only speak off the record. “They give broad guidelines, but it’s up to the locals to implement, and they don’t generally second guess the local officials,” he said. “If the state were to say, ‘We want to give money to municipalities that have a trout stream but not to municipalities with dunes,’ FEMA probably wouldn’t step in to micro-manage that decision,” he continued.

    That analysis was echoed by a statement from FEMA officials themselves. “The state administers the HMGP and the funds available to them,” they said. “FEMA does not determine who gets money or how much money a subapplicant [municipality] receives from the HMGP. It is a state responsibility. Every state determines how they spend, or not spend their HMGP funds.”

    Illogical and Unfair?

    Even if all the scoring were done properly, it would seem illogical and unfair to many people that a densely populated city like Hoboken — which suffered over $100 million in damage from Sandy and has a long history of flooding — would receive no more funding through this program to prepare for future storms than a place like Mount Arlington, a tiny borough with just 5,000 residents that has received less than $200,000 in past FEMA disaster assistance. Or that a place like Belmar — which suffered heavy damage in Sandy and previous storms — wouldn’t receive any funding at all.

    So while the administration might not have actually broken any FEMA rules with its scoring, the appearance of improprieties is there.

    A spokesman for the city of Hoboken released a statement in response to NJ Spotlight’s findings. “This investigation adds to the growing body of evidence that the Christie Administration’s process of distributing Sandy funds has been flawed, politicized, and subject to abuse,” it said.

    Briefed on the investigation’s findings, state Senator Ray Lesniak — a frequent critic of the administration — called for an independent audit of the state’s distribution of Sandy aid money. “We’re going to have to just add that to our lengthening list of investigations,” he said.

    Flooding in Hoboken during superstorm Sandy.

    For their part, state officials — who previously seemed ready to wrap up this grant program and move on to other things — now appear to be backpedaling.

    “As part of the State’s ongoing quality control and assurance process,” they wrote in a letter to grant applicants a few days after NJ Spotlight first confronted them with the scoring improprieties, “the cross-agency working group continues to review each data point, confirm accuracy, make any needed adjustments, and ensure that the data is correct before finalizing and submitting project applications to FEMA (no projects have yet been submitted).”

    The letter continued, “As part of this process, the cross-agency working group has already worked with several municipalities to make adjustments as warranted. All proposed energy projects included in Letters of Intent (including in communities that did not receive initial notice of an Energy Allocation) are also being proactively reviewed, and we will contact you promptly in the event that any adjustments are required.”

    State officials also noted that the proposed $210 million NJ Energy Resilience Bank might give another chance to applicants that don’t receive funding through the HMGP Energy Allocation.

    In Hoboken, meanwhile, the city council recently approved a bond ordinance to come up with the $1.7 million — including the $700,000 they should have gotten through the Energy Allocation Program — to pay for their original generator requests. Unlike the grant that the city should have received, this money will have to be paid back — with interest.

    Photograph of flooded Hoboken firehouse courtesy of Vincenzo Bochicchio.

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