Almost everyone following the federal stimulus funds allotted for weatherization realized in the early going that it would take a good long while for the money to end up in the hands of the people doing the actual weatherizing.

With almost $5 billion being doled out over the next two years by the Department of Energy’s Weatherization and Intergovernmental Programs agency, each state has had to prepare for a major expansion of its long-running weatherization programs, submit proposals to the DOE, adjust plans if necessary, and prepare local crews to do the work.

The amount of money at stake and the expanded scale of programs naturally intensify the scrutiny of participating state and local agencies, and the DOE has declined to release funds to states – notably recession-battered Indiana – whose program proposals don’t meet its criteria.

Conflicts and uncertainty

The holdup in Indiana stems from DOE concerns about the suitability of a business group, the Indiana Builders Association, that was chosen to administer weatherization work, and the toughened qualifying criteria and per-home spending cap that the state plan imposes.

Another, more bizarre snafu, reported this week by the Associated Press, is pegged to confusion among some state weatherization administrators over guidelines for setting wage rates for workers.

Managers at community-service agencies in Idaho and Michigan, for example, told the AP that the DOE has sent mixed signals about how, or whether, to proceed setting wage rates, which the DOE said should equal local prevailing wages for local for public works projects, per the requirements of the Davis-Bacon Act of 1931.

This is the first time Davis-Bacon has been imposed for weatherization programs, but federal officials say state and local groups are already familiar with the law, the DOE has been clear about its application, and spending delays are unnecessary.

“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,” Tom Markey, a stimulus coordinator at the U.S. Department of Labor, told the AP.

Lingering doubt

A letter to state and local agencies sent by the DOE on July 24 affirmed Markey’s assertion. But several program managers who received the letter said they’re reluctant to follow its 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 that, should wage rates be reset later, agencies could issue back pay without causing a major 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,” Jim Crisp, executive director of the Michigan Community Action Agency Association, told the news service.

But as with most programs that are bureaucratically tangled but also economically sensitive, things will eventually settle out. As the AP notes, definitive wage rules are now expected Friday in 15 states. The rest are due at the end of August.