I spoke with Ken Robinette this week head of Idaho’s fourth largest community action agency, the South Central Community Action Partnership. He updated me on the latest work going on to spend stimulus funds for weatherization in Idaho and nationally. Robinette attended the national conference of community action agencies in Indianapolis last month where leaders in weatherization gathered for trainings and updates on stimulus funding. The news from Idaho is about the same as from other parts of the region [link]: Davis-Bacon—a measure intended to ensure fair wages—continues to be the most significant roadblock to spending stimulus dollars.
The Davis-Bacon act is a depression era law that ensures workers get adequate wages for work on public projects. Unfortunately it doesn’t fit well with efficiency and weatherization projects. Here’s why. Davis-Bacon bases pay standards on the nature of work done, and up to this point it has not had categories for the kinds of work involved in weatherization projects. Retrofits are a lot different from construction. Here’s how that’s playing out on the ground:
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Idaho received just over $30 million in stimulus funds to support weatherization. All of this money is being focused on the efforts of local agencies to weatherize eligible homes. Idaho hasn’t allocated those funds for other purposes. Robinette says that his agency will be getting about $4 million of those dollars over a two year period a little more than double the $1.6 million his agency current received. That rate of increase is consistent with other agencies I have talked to in the region.
While the money has more than doubled, the rough spot has been spending it. Montana has opted to spend its money even though there is a lack of certainty about whether and how wages for workers might be reset by the Davis-Bacon Act.
So, Robinette reports, there is a large survey effort underway by the federal government to come up with the right categories and wages for weatherization work. Idaho has opted not to spend its dollars until that happens sometime in September. The survey is due in the middle of August.
Based on his experience so far, Robinette says there are a lot of mixed messages. “You can go to one webinar and hear one thing and attend another and hear something totally different.” His worry is that if he pays workers now he may under or over pay them. So it is a waiting game until the new standards are promulgated in September.
A broader concern is that the wage adjustments will adversely affect what is called the Savings to Investment Ratio or SIR. SIR is calculated based on the costs of doing a retrofit to a home and the savings it can deliver vis-Ã -vis energy efficiency. A higher SIR is for the ideal for making effective improvements.
Higher wages are good, but if wages go too high, the savings side of the SIR disappears or becomes negative, meaning that replacing that inefficient water heater or putting in new windows no longer makes as much financial sense. If SIR is too low it means the work won’t meet spending standards and won’t get done.
We’ll be keeping an eye on how the survey and new standards play out. Robinette’s concern—and that of many throughout the region—is whether September is soon enough and what happens if that deadline is missed. Lots of retrofit projects and potential job opportunities hang in the balance.