Weatherization Stimulus Money Not Being Utilized

updated 2:50 p.m. PT, Wed., Aug 12, 2009
LINCOLN, Neb. - Jackie Harpst expected a busy summer at her nonprofit housing agency, as work crews backed by Nebraska's share of $5 billion in federal stimulus money headed out to seal windows and spread insulation.

Months after she thought work would begin, not a single window has been caulked. And she's still not sure if her team will be able to get to work adding insulation before the summer heat passes — or even before the winter's chill sets in.

"We've hired people and purchased equipment with the anticipation we'd be able to spend the money soon, and now, as we see it drag on and on, it's just very frustrating," said Harpst, housing director of the Community Action Partnership of Mid-Nebraska.

Harpst is among the state and local officials nationwide who are sitting on millions in stimulus money targeted for weatherization, worried about running afoul of arcane federal rules governing how much workers should be paid for making energy-saving home improvements.

They blame months of mixed signals sent by federal officials, whom they accuse of fumbling the effort to spend money designed to give a languishing economy a boost by lowering utility bills and employing construction workers idled by the housing slump.

"It seems like it's just been one roadblock after another," said Christina Zamora, energy program manager for the Community Action Partnership Association of Idaho.

Officials hold back dollars

More than 40 states have received about half of the $5 billion allotted for weatherization efforts in the $787 billion stimulus package, according to the Department of Energy. Because that money was sent to hundreds of nonprofit groups scattered across the country, there isn't a clear estimate of how much has been spent so far.

But several local and state officials interviewed by The Associated Press said they are holding back. David Bradley, executive director of the National Community Action Foundation, said the "vast majority" of states aren't spending the money. The U.S. Department of Energy official in charge of the weatherization program also acknowledged there has been confusion "across the board."

"We have been told by a number of states and local agencies that they have delayed spending recovery-act money," said the official, Gilbert Sperling.

The $5 billion set aside in the stimulus package is a massive influx of money into an old program aimed at reducing energy costs. For more than 30 years, the federally funded, state-run programs have used a broad range of work, such as spreading insulation and installing new heating and cooling systems, to make the homes of low-income people more energy efficient.

Sperling and others responsible for overseeing the program maintain that as early as March, they clearly said that money for weatherizing should be spent in spite of any uncertainty created by the Davis-Bacon Act. The Depression-era law requires contractors to pay wages equal to those prevailing locally for public works projects, and the stimulus law applied it to weatherization projects for the first time.

"I'm satisfied we have communicated as clearly as we can to the states and the agencies that we want them to move forward spending recovery funds even before (the U.S. Department of Labor) issues new wage determinations," Sperling said.

Lack of clarity

Those who oversee the nonprofit groups and agencies that states have used for years to perform the weatherization work tell a different story, saying that Sperling and others flip-flopped in recent months. Zamora and others said federal officials first said the weatherization work could begin in April, then cautioned in June that the Davis-Bacon Act would apply and the spending should be put on hold.

Federal officials said at a July meeting attended by state and local weatherization workers to go ahead and start the work without the wage rules in place. The same advice came in letters sent July 10 and July 24.

"They go back and forth and it makes me nervous," Zamora said. "There's been a lack of clarity."

Tom Markey, a stimulus coordinator at the U.S. Department of Labor, said there is no reason to wait. The Departments of Energy and Labor said in their July 24 letter to states and nonprofits receiving the money that "state and local agencies should be weatherizing homes now."

"Davis-Bacon prevailing wage rates for residential construction exist in just about every part of the country, therefore, any state or community-action agency could have begun work as soon as they received their funds by paying these existing prevailing wage rates," Markey said.

33 metro areas where builders are confident

Several recipients of that letter told the AP said they are wary of following such advice because, they say, federal officials have previously been unclear on whether existing wage levels for other occupations would apply to weatherization work. They also reject the suggestion from federal officials they could simply issue back pay should the weatherization rates eventually be set at a higher wage, saying it could cause an administrative mess.

"They've been saying since April they'd have things straightened out and we'd be able to spend the money. Why we would we go forward now without the rules in place? So far nothing they've said ... has come to fruition," said Jim Crisp, executive director of the Michigan Community Action Agency Association.

NOW is the time to do thid weatherization work, as it will miss the point if its done in the Winter, and will be more difficult to do.