Mayor’s Budget Proposal Would Zero Out DOEE Funding for Key Challenges

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The fight between Mayor Muriel Bowser and the D.C. Council over the Fiscal Year 2024 budget promises discord on all fronts. A steep slowdown in revenue growth, combined with the end of pandemic-era federal funding, has meant that some major cuts seem all but inevitable; but the mayor’s office, the D.C. Council and community advocates don’t agree on where the cuts should come from. 

Bowser’s proposal included a 14% reduction to the Department of Energy and Environment’s (DOEE) operating budget. Environmental and public health advocates, along with Council member Charles Allen (D-Ward 6),  who chairs the Committee on Transportation and the Environment, say the proposed cuts would harm D.C.’s most vulnerable residents and throw the city off-track to meet its climate goals.

“I do not believe that this budget as it is right now is saying yes to the right priorities,” Allen said at a budget action event hosted by the Washington Interfaith Network March 25. “We’re seeing deep cuts on climate. We’re seeing transit shut down and cut off. We’re seeing school crossing guards eliminated. We are seeing millions taken out of DOEE, of where it needs to go.”

DOEE’s budget reductions include the loss of $33 million in federal American Rescue Plan Act (ARPA) funding. At the DOEE Budget Hearing on April 6, the agency’s interim director, Richard Jackson, said that the agency had not spent all of its ARPA money so far in fiscal year 2023, and he expected unspent money to roll over to FY 2024 when it begins in October. 

“We keep talking about a cut, but it’s more of a reallocation,” Jackson said. 

Yet the proposed changes in DOEE’s budget would cause significant program reductions and cuts in fiscal year 2024. A few significant cuts include funding for lead pipe replacements, electric appliance installation for low- and moderate-income households, home improvements for houses in floodplains and implementation of energy efficient building standards.

“The issues of climate, health and housing are all connected,” Washington Interfaith Network organizer Richard Vilmenay said at the hearing. “One line in the budget can have massive implications in all of those areas.”

Zeroing Out Funds for Lead Pipe Replacements

Last in fiscal year 2023, DOEE received a $10 million allotment to support the replacement of lead pipes. While DC Water holds most of the responsibility for the city’s plans to eliminate lead service lines—the pipes that connect water mains to individual buildings—DOEE did spend more than $12 million in fiscal year 2022 to support those efforts.

The mayor’s proposed budget would allocate $0 to DOEE for that program. 

“It says to me that the city is not prioritizing the health of its citizens,” Paul Schwartz, a longtime community organizer with the Campaign for Lead Free Water, said in an interview. “It’s reprehensible.” 

At the DOEE budget hearing, several members of the public testified about the District’s long history with lead issues, urging the agency to continue funding the pipe replacements. Anne Cauman, a 76-year-old Ward 3 resident shared at the hearing her own long-ago experience seeing a spike in her blood lead levels caused by work being done on her new home. At the time, she was trying to have a child.

“Fortunately, I wasn’t pregnant yet—if I had been pregnant, I would have had to have had an abortion,” she said. “We had to delay moving in… and I had to delay trying to get pregnant. Fortunately, my lead levels went back down quite quickly, but it was a terrifying experience.”

In the District today, lead in water rarely causes severe spikes, but even very small amounts of lead can cause irreversible health harms—particularly for infants and children. Funding through DOEE supports DC Water in providing complete lead service line replacements at no cost to residents.

While DC Water has pledged to remove all lead service lines in the District by 2030, a report commissioned last year by the D.C. Council found that the utility is not on track to meet that goal. Council members Janeese Lewis George (D- Ward 4) and Brooke Pinto (D- Ward 2) have both recently introduced bills aimed at speeding up the process, but the mayor’s budget proposal indicates that finding the necessary funding will likely prove an uphill battle. 

The District expects to receive about $28 million in federal funding for lead pipe removal every year for the next five years, according to Pinto. But the lead-free by 2030 goal would require additional local funds: overall cost estimates for the program range from $480 million to $1 billion. 

No Local Money for Low-Income Home Electrification 

The lead pipes legislation is not the only bill on the Council’s agenda that would face money troubles, despite major federal funding, if the mayor’s budget proposal passed as-is. Council member Allen’s “Healthy Homes and Residential Electrification Amendment Act” would create a program to fully fund thousands of low- and moderate-income residents’ switch from gas appliances to electric ones. Supporters of the bill say it could have a tri-fold impact: reducing childhood asthma and other health risks of indoor air pollution, lowering energy bills and moving the city away from fossil fuels. 

“We need to get off of unhealthy gas, which increases childhood asthma and affects our health—as the parent of a toddler, this is very concerning,” Vilmenay, the Washington Interfaith Network organizer, said during the hearing. “We want a pilot program to show the District that our vision of a safe, healthy and green future is possible. We can have homes completely off of gas, decommission leaky gas pipes block by block, and not just stabilize but strengthen our communities.”

A smaller-scale DOEE program with similar goals, the Affordable Housing Retrofit Accelerator, would lose funding under the mayor’s proposed budget because of the federal dollars allocated away from DOEE. 

Since federal funding from specific legislation expires if it’s not used, advocates say it’s particularly urgent to act on opportunities sooner rather than later. 

“The Inflation Reduction Act has millions of dollars for D.C. for things like heat pumps and high-efficiency HVAC systems, but it won’t cover 100% of the cost for low- and moderate-income households,” Mark Rodeffer of the Sierra Club’s D.C. chapter said in an interview. “So we need some local dollars to match it. And if we don’t do that, we’re basically leaving money on the table.”

Vanishing Support for Home Flood Improvements

The mayor’s budget proposal also does not include local funding for a recently launched program that would help District homeowners living in floodplains access home improvements to reduce their flood risks. Federal funding will allow the program, FloodSmart Homes, to continue offering residents assessments to identify their home’s flood risks.

But without local money, DOEE will not be able to continue paying for the actual low- or no-cost home upgrades that the program had aimed to provide.

Jackson, the current agency head, said in a statement that FloodSmart Homes has $2.6 million with which to do some improvements during the rest of this fiscal year, which ends Sept. 30. But the statement also said that the agency is still evaluating proposals for the contract and “plans to award a grant in the next two months.” That timeline could leave just three and a half months to get installations done. The flood risk assessments, which are funded by a grant from the Federal Emergency Management Agency, are also scheduled to begin in June. 

Over 1,000 total residences in the District fall within the 100- and 500-year floodplains designated by FEMA, according to DC Water. And 98% of the District’s single-family homes in the 100-year floodplain are in Wards 7 and 8. 

“Flood risk is increasing significantly in the District due to climate change,” Rodeffer said during his testimony. “It’s a disgrace that the mayor’s budget fails to fund upgrades for homes in Wards 7 and 8 after much of the work has already been done to reach out to communities and offer assistance to plan for the upgrades.”

Delaying Energy-Efficient Buildings

Climate advocates at the DOEE hearing focused heavily on a single subtitle in the mayor’s Budget Support Act bill, which covers budget changes that require a change in law. In it, Bowser proposed a three-year delay for implementing the Building Energy Performance Standards (BEPS). The BEPS are a set of standards for tracking and improving energy efficiency in DC’s buildings. The first phase of the regulations went into effect for buildings over 50,000 feet earlier this month. 

The mayor’s proposal would push all compliance deadlines back by three years. The deadlines were already pushed back one year in response to the pandemic. 

At least 75% of buildings required to choose a pathway for how to comply have already done so, and more than half of them are already on track to meet the standards, according to testimony from Cliff Majersik, a senior policy advisor at the Institute for Market Transportation. Majersik and other advocates argued that several years of work and millions in investments—on the part of both building owners and city government—would be wasted if the delay passes. 

“Compliance is strong and growing: BEPS has positive momentum, and it would be unfair to the many building owners who are complying with BEPS to change the schedule and the requirements,” Majersik said in his testimony. “[It would] make many owners go back to the drawing board, wasting much of the work and investments that they have made to date.”

The law includes many hardship waivers or extensions available for buildings struggling to comply, supporters argued. But Peggy Jeffers, executive vice president of the Apartment and Office Building Association, said in an interview that those case-by-case exemptions were not enough to account for the pandemic’s impact on property owners’ finances, especially for office buildings. 

“Vacancies are high, net operating income is down,” Jeffers said. “Extension of future tenancies is very uncertain.”

Apartment and Office Building Association of Metropolitan Washington (AOBA) also advocates for certain structural adjustments to BEPS, such as changing the energy tracking metrics utilized to measure performance or including ways to incentivize tenants to reduce energy. Those changes would require new legislation, which can take months or years. Other issues Jeffers mentioned, such as problems with multifamily apartments’ energy metering, require technical fixes. 

Jeffers said that the numerous members of the public who testified in favor of keeping BEPS on schedule likely did not understand the “glitches” and complications building owners and managers have encountered while working on meeting the new compliance standards. 

No property owners or other witnesses spoke in support of the delay during the hearing. AOBA Government Affairs Vice President Katalin Peter appeared as a witness, but declined to give spoken testimony, saying that the organization would be submitting written testimony before the April 14 deadline. 

Buildings account for over 70% of the District’s greenhouse gas emissions, according to DOEE data. D.C. currently stands as a climate leader in this sector, because of both the BEPS and the Council’s passage of legislation this summer requiring all new buildings constructed after 2026 meet net-zero-energy standards—meaning that the property should produce as much energy consumption should not exceed energy production.  

But, despite the city’s ambitious goal to become carbon neutral by 2045, the mayor’s budget proposal includes little in the way of additional support for climate action. 

“When we did this presentation of the budget with the mayor and the council, [there was] not a single slide or bullet point or information talking point on climate and resiliency in the entire thing,” Allen said during the DOEE budget hearing. “I’ll be very blunt: I don’t think that’s leadership guiding us through this troubling time.”