Stimulus Act FundingPrevailing Wage Issues: Scope, Reporting

Associated Builders and Contractors of Delaware

4 February 2010

James D. Werner

Department of

Natural Resources and Environmental Control

Overview

• ARRA Funding American Recovery and

Reinvestment [“Recovery”] Act of 2009

• Federal Guidance on ARRA Funded Projects

• Reporting Requirements for

ARRA-funded projects

• Other Delaware Energy programs

• Sustainable Energy Utility Re-cap

President Obama Signed “Recovery Act” (ARRA)

February 17, 2009

American Recovery and Reinvestment Act (ARRA)

Overview

• ARRA enacted to create jobs using a combination of federal tax cuts, expansion of unemployment benefits, and spending in education, health care, and infrastructure, including the energy sector, estimated at more than $700 billion

• ARRA will provide nearly $1.2 billion to Delaware

• Nearly $54 million is designated for energy efficiency and renewable energy programs

Direct Stimulus Spending is

1/3 of ARRA

President Obama Highlighted Renewable Energy

Investments in Signing ARRA

Status of Delaware ARRA Spending

DescriptionNumber of

Awards

Percent of

Project

Awards CumulativeCompleted 10 4.4% 4.4%

More than 50%

Completed31

13.7% 18.1%

Less Than 50%

Completed121

53.5% 71.7%

Not Started 64 28.3% 100.0%

Total Awards 226 100.0%

Updated: 10/30/2009

[to be updated based

on Jan 2010 data]

ARRA Funding for Energy ProgramsState Energy

Program (SEP)

Grant

$24 million Energy efficiency and

renewables for

residential, commercial,

industrial and public

sector

Managed by Sustainable

Energy Utility

Program Grant for

Energy Star

Appliances

$838,000 Enhancements to

existing appliance rebate

program

Managed by Sustainable

Energy Utility

Community

Development Block

Grants

$16 million Grants to state, counties,

and municipalities for

energy efficiency and

renewables

Managed by Delaware

Energy Office and

recipient

Low Income

Weatherization

$13 million Supplements State’s on-

going weatherization

program for low income

households

Managed by Office of

Community Services

ARRA Funding Largely Spent Through States

“Measuring” Negawatts

Megawatts are measured with meters (with

regulated accuracy and high confidence).

But

‘Negawatts’ cannot be measured, only

determined from measurements. 10

What does my energy bill pay for?

Typical Costs for Home Appliance Energy Use

Delaware Sustainable Energy Utility

• The SEU is an innovative non-profit organization offering Delaware a one-stop resource for saving money on energy bills and new clean energy sources.

• SEU’s programs are marketed under “Energize Delaware”

• Change the way Delawareans make decisions about energy:– Education and Information

– Programs

– Incentives, Financing and Other Resources

How Will the SEU use ARRA Funding?

Sector Approximate Allocation*

Residential $12.5 million

Commercial & Industrial $5 million

Public Buildings $2 million

Renewables (solar,

wind, etc.)

$4.5 million

Appliance Efficiency $0.8 million

Total State Energy Prog. $24.8 million

* Allocations as submitted to the U.S DOE. Allocations are approximate and may

change based on participation and other factors

Long Term Goals

• Reduce Participant Energy Use by an average of 30%

• Reduce CO2 emissions by 33% by 2020

• Install over 300 MW of renewables at homes & businesses by 2019

Commercial & Industrial Energy Efficiency Program

• Prescriptive lighting rebates began Dec. 2009

• Focus on non-profit organizations, multi-family housing structures and small public sector projects

• Generally a low-interest loan program

• Expect that larger public sector buildings would take advantage of performance contracting.

• Other C/I sectors programs developed through Sustainable Communities program

http://www.energyservicescoalition.org/resources/whatis.htm

Addressing Residential Energy

• Information Programs– Home Assessments

– Consumer Education

• Limited Appliance Rebates

• Comprehensive Programs– Integrated Efficiency and Renewables

– “Home Performance” programs

• Emphasis on financing to encourage participation

American Recovery and Reinvestment Act

(“Recovery Act”) of 2009 (Pub. L. 111–5)

SEC. 1606. Notwithstanding any other provision of law and in a manner

consistent with other provisions in this Act, all laborers and mechanics employed

by contractors and subcontractors on projects funded directly by or assisted in

whole or in part by and through the Federal Government pursuant to this Act

shall be paid wages at rates not less than those prevailing on projects of a

character similar in the locality as determined by the Secretary of Labor in

accordance with subchapter IV of chapter 31 of title 40, United States Code. [*]With respect to the labor standards specified in this section, the Secretary of

Labor shall have the authority and functions set forth in Reorganization Plan

Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40,

United States Code.

* Aka “Davis Bacon Act”

“Notwithstanding any other

provision of law…”

• Overrides other laws that may provide

exemptions to Davis Bacon Act (DBA).

“..all laborers and mechanics employed by contractors and subcontractors

on projects

funded directly by or assisted in

whole or in part

by and through the Federal Government pursuant to this Act…”

• Projects with blended funds using ARRA must comply with DBA.

•Requires payment of locally prevailing wages

(including fringe benefits) to laborers and mechanics

on federal government contracts in excess of $2,000 for

construction/alteration/repair of public buildings or public works.

40 U.S.C. §§ 3142(a) and (c).

•Contractors and subcontractors on covered projects

must pay laborers & mechanics weekly,

& submit weekly certified payroll records.

•ARRA provides that Davis-Bacon prevailing wage requirements

broadly apply to construction projects funded with ARRA appropriations. Sec. 1606, Division A, Pub. L. No. 111-5, 123 Stat. 303.

Davis-Bacon Act

Required wage rates are available at www.wdol.gov

•Delaware prevailing Wage Law 29 Del.Code 6960

trumps federal Davis Bacon Act

if Delaware prevailing wages are higher.

State Prevailing Wage Law

•Delaware Law Applies to Projects:

• $100,000 for new construction, or

• $15,000 for alteration, repair, renovation,

rehabilitation, demolition or reconstruction

Required state prevailing wage rates are available at http://www.delawareworks.com/industrialaffairs/services/BuildingRates2009.pdf

Prevailing Wage (DBA) Requirements in ARRA Are Strict

• Applies to projects with any ARRA funding,

• Application process

• Requirements for ARRA tracking & reporting (including Payment of Wages, Benefits and Overtime, Enforcement, Subcontractor Responsibility and Proper Record Keeping)

U.S. Dept. of Energy Guidance Dec. 30, 2009

“…it is the responsibility of all

contractors and subcontractors on

covered projects to pay covered

employees the prevailing wages listed

in the wage determination included in

the contract, to pay such wages on

weekly basis, and to submit weekly

certified payroll records to the

contracting or administering agency.”

U.S. Department of Energy Guidance, SEP Notice10-003

December 30, 2009

Rebates to Individual Homeowners are Exempt from DBA Requirements

“..rebates to individual homeowners for

energy efficiency and renewable energy

improvements to an individual’s home

are not subject to the DBA prevailing

wage requirements.”

U.S. Department of Energy Guidance,

SEP Notice10-003

December 30, 2009

Other Delaware Energy programs

Green Energy FundSupported by consumer benefit charge through utilities.

Scott Lynch – 302-735-3480

Other Delaware Energy programs

Regional Greenhouse Gas InitiativePhil Cherry – 302-739-9000

Wind Turbine at

Ion Power – Delaware City

ARRA Reporting Requirements (Grants)

• “Recipients” (State) Submit quarterly reports

• (fund spent, jobs created/retained)

• “Subrecipients”/contractors use DOL forms to

track spending

• Weekly payroll must be certified and signed

• (no FAX or scan permitted)

May 29, 2009 - US Dept of Labor

Employment Standards Administration

Wage and Hour Division Guidance

(“All Agency Memorandum”)

http://www.dol.gov/whd/recovery/AAM207.pdf

“All requirements of the Davis-Bacon Act apply to

constructions projects that receive ARRA funds,

with an added provision that „projects funded

directly by or assisted in whole or in part by and

through the Federal Government‟ as a result of

ARRA must also comply.”

“Green Jobs” Need to

Show the “Green”

Questions?

Background Information (Extra Slides)

• SEU Overview

• SEU/Delaware Goals

• SEU use of ARRA Funds

• SEU Funding Approach

Commercial/Industrial

• SAIC was selected as the SEU’s C/I Implementation Contractor in November 2009

• Prescriptive lighting rebates began December 1, 2009

• Comprehensive programs with financing starting end of 1st quarter 2010

Non-Residential Program Areas

• Commercial/Industrial Lighting

• Institutional Shared Savings

• Commercial/Industrial Assessments

• HVAC Retrofits

• Building Re-Commissioning

• New Construction and Major Renovations

• Integrated Efficiency and Renewables

Sustainable Communities

• Innovative program intended to provide financing and other resources for “grass roots” projects

• Combines energy efficiency and renewable energy

• Two proposals under consideration