Stimulus Red Tape Ties Up Maryland's Weatherization Projects


WASHINGTON (Feb. 26, 2010) - One year ago, weatherization for low-income housing was touted as a major "shovel-ready" initiative that could be funded by stimulus money, but a new national report says Maryland and most other states are behind schedule in home weatherization projects.

The Department of Energy's Inspector General called the states' lack of progress "alarming" in its February report.

Nationally, only 5.2 percent, or 30,297 out of the planned 578,124 homes, have been weatherized in the 50 states and the District. Less than $400 million has been spent of $5 billion allotted. Maryland received about $61.4 million to be spent over three years.

Maryland officials and contractors responded that they are working as fast as they can while navigating the red tape that entangles Recovery Act grants, and that safety considerations are too important to rush projects.

"We would be negligent in developing the work force too rapidly with the best interests of our clients' lives, building health and energy savings in mind," said Maryland Energy Conservation Inc. owner Tim Kenny, who has been weatherizing homes for 21 years.

The report says Maryland has finished about 4 percent of homes selected for improvements. But Bill Ariano, deputy director for Maryland's Community Development Administration, said Maryland has actually finished 7.8 percent as of Feb. 19—536 out of 6,850 homes. That number does not include 479 homes weatherized with regular annual funding from the Department of Energy.

The Maryland Department of Housing and Community Development is responsible for the state's Weatherization Assistance Program, which provides up to $6,500 in home improvements for low-income families to reduce utility bills.

Improvements run from installing water reduction systems, to placing more insulation in the walls or to swapping old light bulbs for more efficient ones.

The department received more than 24,000 weatherization requests in fiscal 2009, and expects more than 30,000 requests in 2010.

Weatherization projects should have been shovel-ready, the report said, because most states already have programs in place, but problems arose in meeting the requirements.

The first glitch was a requirement that workers be paid the prevailing wage, but a lack of information meant the Department of Labor had to conduct nationwide wage surveys. Some states, Maryland included, postponed stimulus projects until results were released in September to avoid calculating back wages.

Kenny said he has to pay his workers $15 as a starting wage, but other state agencies running similar programs can pay less because they are not constrained by the wage requirement.

"It's really driven up the cost of doing the work, and it's tied my hands in being able to court more (contractors)," he said.

A second problem was the additional time needed for training employees. Ariano said six new training modules were built in Maryland community colleges to teach 350 workers how to weatherize a house. He also said the number of subcontractors working in the program has increased from 37 in March 2009 to 62 today.

A third factor was a transparency requirement that meant Maryland had to purchase and use new database software to track all stimulus-funded weatherization projects.

Safety issues also take priority when selecting and weatherizing a house, Ariano said.

"The basic approach of weatherization is to seal a house. That sounds really good except, you have to be careful you aren't creating a situation where carbon monoxide builds up," he said.

Last, the stimulus funds are not paid up front, but are reimbursed 45 days after a project is completed. Kenny said he loaned himself money from his private company to finance projects while waiting for reimbursement, and that bank loans are difficult to come by. His company was awarded about $7.8 million in stimulus funds.

"We're doing our best to accountably grow the workforce ... with the overlying concern that they're still going to take our funding away," Kenny said, and paused before adding, "I'm pleased to meet the challenge."

Maryland is ahead of Connecticut, South Carolina, Rhode Island, Alaska, Texas and Wyoming, which have completed no projects.

Housing Department Spokeswoman Rosa Cruz said Maryland is "ahead of the game and we've been doing quite well." Ohio has made the most progress, with more than 6,800 homes weatherized.

"We're just working to get these numbers up," said Ronald Jackson, the weatherization program manager for Diversified Housing Development Inc., based in Baltimore. His company received $1.8 million for weatherization projects.

Jackson said his employees completed the new training program but are still awaiting equipment funding, which is not provided in the grant. "We're a little behind," he admitted, adding, "I think everybody's going through a ramping up period."

Not all contractors have run into trouble; Associated Catholic Charities has completed 200 units of senior housing in Baltimore, said Karen Heyward-West, the program manager for the employment services division at the Catholic Charities' Our Daily Bread Employment Center.

The six new workers they hired came from troubled backgrounds, and they were able to successfully complete the required training program at Baltimore City Community College. They are on track to finish 630 more units by May 31.

"It's a great project and we're excited to be doing it," Heyward-West said.

Capital News Service contributed to this report.

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