Logjam of Weatherization Assistance Program Money is Breaking

The Obama Administration in March announced $5 billion in funding to weatherize low income homes, but today little of that money has been spent. The logjam of Weatherization Assistance Program (WAP) money that should be going to upgrade windows and insulation has been blamed on the Departments of Energy and Labor because of confusing rules over wage rules.

According to the DOE half of the money has been sent to the states. But many states have not distributed funds to the cities and local community organizations for fear of running afoul of the 1931 Davis-Bacon Act. The rule was instituted to ensure fair wages on public works projects.

Federal weatherization programs have existed for 30 years, but this is the first time that Davis-Bacon rules were applied. Lacking a precedent of what are fair rates for weatherization laborers, many states have been waiting for the Department of Labor to set guidelines. The DOL is to issue rules for 15 states today, with the remaining state guidelines to be out by the end of August.

This lack of clarity on wages has caused the money to be held onto by the states, but on July 24th, a joint DOE-DOL letter stated “agencies should be weatherizing homes now,” and that they should make adjustments to any contractor payments later.

The letter explains:

“While WAP grantees and contractors are waiting for the results of surveys, they may use Recovery Act funds to begin weatherizing homes so long as they pay construction workers at least the wage amounts currently listed at http://www.wdol.gov/Index.aspx for residential construction… The rates posted at the DOL website are minimums. If DOL issues different rates after the survey is complete, the proper wage determination, as issued by DOL, will be incorporated…. The contractor/subcontractor and grantee/sub grantee must compensate employees for any increases in wages resulting from such change, and grantees and subgrantees may use Recovery Act funds they have already received to cover the cost of the adjustments. Projects starting after any new wage determinations are issued (or options exercised after new wage determinations are issued) should use the new wage determinations.

The huge influx in cash for community programs used to working with much smaller amounts has also contributed to the lack of spending. This “extraordinary increase in funding,” has grown a program from tens of millions per year to $5 billion, and some agencies did not have the infrastructure in place to handle the expansion, according to Stockton Williams, the Director of Green Economy Initiatives at Living Cities.

“I think the (Obama) administration has done an impressive job so far,” Williams said.

Living Cities, is a consortium of 21 large banks insurance companies and philanthropic organizations dedicated to pool resources to invest in inner cities. The organization is providing grants and technical assistance to several of the cities that are receiving WAP funds and are doing leading-edge approaches to large scale retrofitting, Williams said.

“Funding is just now available not because of bureaucratic delay, but because states wanted to make sure that the organizations receiving the money are prepared to accept the scale,” according to Williams.

Criticizing agencies for being cautious in spending federal funds is quite a reversal, but agencies now have only a few months to complete energy-efficiency projects before colder weather arrives.

Appearing courtesy of Matter Network.