in Houston, Texas

47 homes retrofitted, $3.7M spent in Texas through Dec. under program to improve low-income homes

A worker installs attic insulation in a North Texas home.
Monday, Feb 01, 2010, 01:00PM CST
By Mark Lisheron

AUSTIN - Texas has spent $3.7 million to weatherize just 47 homes through December under a program set up by Congress a year ago in economic stimulus legislation.

This amounts to a taxpayer cost of $78,000 per home.

A little more than $200,000 paid for materials and labor to retrofit the homes, an official said. The remaining $3.5 million was used to grow the state's housing agency so it can attempt to make as many as 56,000 low-income homes more energy-efficient by March 2012.

Top officials for the Department of Housing and Community Affairs, the administrator for the state's Weatherization Assistance Program, insist that with the bureaucratic machinery finally in place thousands of homes will be weatherized this year. Indeed, officials say hundreds more homes were improved in JanuaryExecutive Director Michael Gerber has pledged that all the money allotted to Texas will be spent and accounted for.

Critics of the program have little confidence in promises to spend the money efficiently. From the U.S. Department of Energy to the laborer putting down the weatherstripping, no one seems to know how the money is being spent, how many homes will be improved and whether the work is being audited, said Leslie Paige with the fiscally conservative watchdog Citizens Against Government Waste.

"Everything about weatherization from the beginning has been done ass backwards," said Paige, who has been following the program from Washington for a year. "The biggest problem with the program is that it is unknowable. Even the infrastructure to track its progress has come months after the money was approved. Whenever there is lots of money swirling around unaccounted for you have opportunities for waste and for fraud."

The Weatherization Assistance Program here and across the country is a laggard, critics say, outstanding even by the standard of the American Recovery and Reinvestment Act, which had been roundly criticized for failing to get money into the economy quickly enough to stimulate it.

Beset by delays, regulatory demands and unexpected administrative and labor costs, the U.S. Department of Energy was criticized by the Government Accountability Office in a Dec. 2009 report for having spent just $113 million, or 2.3 percent, of its $5 billion weatherization fund through the end of September. The Texas Department of Housing and Community Affairs had through December spent $3.7 million, or 1.1 percent, of the state's $327 million total.

As states like Texas are beginning to learn, the bureaucratic cost of getting the program through its two-year gestation will be counted in many millions of dollars that will not be used to weatherize thousands of qualifying low-income homes.
 
In Texas, the cost to satisfy federal wage rules, oversight requirements and documentation standards could run as high as $65.4 million, or 20 percent of the program cost. That could mean as many as 10,000 homes that will not get  caulked, insulated or outfitted with energy-efficient appliances under the program.

Gerber said spending more to make sure the job is done right the first time is worth the administrative cost. Gerber

"You can throw a m assive amount of money at a problem and say, 'Spend the money as quickly as you can,'" Gerber, pictured at left, said. "There is some pressure to do that. I know everyone expects quick results. But that is not the weatherization program we are running in the state of Texas. We are running a program that is confident in the work we're doing and that is making a difference in people's lives."

Making weatherizing a moral issue is precisely the way to take accountability out of the equation, Paige said. "You don't care how much anything costs because it makes you feel good, with somebody else's money, I might add. And once you've turned on the spigot, how do you turn it off? It will be politically impossible because you'll be seen as putting poor people out in the cold."

STIMULUS MONEY A WINDFALL, WAGE RULES SLOW PROGRAM
 
With the stroke of a presidential pen, the American Recovery and Reinvestment Act passed last February dropped $327 million on a state agency with an annual budget of $13 million. As late as August, Gerber was still hiring new state employees to keep up with the paperwork for the windfall.

At the same time the U.S. Department of  Energy, which had coasted for years on an annual weatherizing budget of $225 million, had its own $5 billion windfall challenge, made more difficult because Congress was quite specific about the ways in which the department was to dispense the money through the states, cities and agencies.

The federal and state agencies were being asked to follow accounting and reporting rules the Obama administration called the most rigorous ever devised. Concerned about failing to meet the new federal standard, the offices of the governor and the comptroller insisted on a separate and detailed state accounting.

In addition to the usual months of delays as applications for funding and plans for execution went up and back down the chain of command, the federal government was adding and changing rules. In December, for example, the federal Office of Management and Budget changed the way states would tally the number of jobs created or retained by using stimulus money, including counts for weatherization crews.

More crippling to getting actual weatherization jobs under way, however, was a decision by the Obama administration last summer to require contractors to base worker pay on how much other workers in a geographic area were being paid. The Department of Housing and Community Affairs scrambled around the state with seminars to explain the policy and the Depression-era regulation it stems from, the Davis-Bacon Act of 1931. The U.S. Department of Labor gathered data describing the prevailing wages across the country.
 
Months were lost, according to Deborah Britton, division director of Community Services for the Travis County Health and Human Services Department, which has yet to receive the first half of a $4.5 million federal grant for its weatherization plan.

The wage rules "were specific to each contractor," Britton said. "We were finally notified last week that everything was in order, but we're actually still sitting here waiting for it."

However long it took to explain and report on, Davis-Bacon did not deter contractors from wanting to bid for federal work. When Austin Energy hosted a luncheon for contractors to learn about the weatherization program two weeks ago in Austin more than 150 contractors showed up, Karl Ra'bago, vice president for Distributed Energy Services for Austin Energy, said.

Rabago

"We were very clear about Davis-Bacon from the start," Ra'bago, pictured at left, said. "I think 150 contractors, many of them new, would objectively tell you there is considerable interest in this program."

Josie Valdez, who runs a small remodeling and weatherization company in northeast Austin, said she will be paying at least $2 an hour more to her crews because of the Davis-Bacon requirements.

Valdez remains interested in going after a federal contract, but was told that it may be weeks before Austin Energy issues a list of prices the federal government says she must pay for materials.

"It's been going on for six months already," Valdez said. "And I still don't know yet what the requirements are and what it's going to cost me. I want to know if I can make any money doing this."

MOST HOMES IMPROVED IN NORTH TEXAS IN 2009

Both Austin Energy, which has received the first of two $2.9 million grants, and Travis County, its partner in some of the oversight, expect that with no further delays, contractors can begin weatherizing homes in March.

Forty of the 47 homes that have benefited from the weatherization program so far were improved in November and December by crews for the Texoma Council of Governments, which serves a 15-county region in north Texas.

Texoma crews spent an average of $4,593 on each of 40 units, for a total of $183,720, Susan Thomas, executive director of the council, said. Projects cost from $2,100 to $6,300. They ranged from caulking and laying insulation to putting in heat pumps and new air conditioning systems.

Thomas

Thomas was surprised to learn that so few housing units in Texas had so far been weatherized and was at a loss to explain how Texoma got its head start.

"I'd like to say we have the best weatherization program in Texas," she said.

Texoma crews have a goal to weatherize 30 homes per month through March and 50 a month until the $5.9 million grant is exhausted, said Thomas, pictured at left.

"I'm afraid it will be two years, five years before we finally figure out what all of this cost us," Paige said. "It's like pushing a whole pile of money into an abyss. We've never sent anyone down there to see what happened to the money before."

Contact Mark Lisheron at mark@texaswatchdog.org or 713-980-9777.

Photo of worker adding insulation to a home in North Texas courtesy of Texoma Council of Governments.

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Comments
Ken Martin
Monday, 02/01/2010 - 04:48PM

Good work! We've got big problems in this big state and the Texas Watchdog is doing a terrific job of pointing out where changes are needed. Keep up the good work. Ken Martin The Austin Bulldog www.theaustinbulldog.org

kjb434
Tuesday, 02/02/2010 - 08:23AM

Another great Texas Watchdog story! Keep up the good work!

Ed Armour
Tuesday, 02/02/2010 - 08:30AM

The wage provision sounds like a winner for all concerned: the contractor gets Federal Contracts, his/her workers get a better deal and the local economy benefits from both! They get $327 million and the author gripes? I don't think I would see $327 million that benefits my community AND the local economy as a burden.

J.Shelton
Wednesday, 02/03/2010 - 07:12PM

That's chicken feed. Here in Wilson, NC the Wilson Housing Authority got $7.6 million stimulus to make 68 apartments more "green"! $111,000+ per apartment they could bulldoze the place and build fine homes with swimming pools. Just imagine how many times this is repeated in our country.

crux56@yahoo.com

Thursday, 02/04/2010 - 11:44PM

Take money from people who earned it and give it to those who did not...how could that be bad?

Rorschach
Thursday, 02/11/2010 - 02:29PM

Ever wonder how companies end up on the approved vendor list for this program? It is all in who you know...

http://redinktexas.blogspot.com/2010/02/serious-corruption-in-obama.html

Charles
Thursday, 02/18/2010 - 05:37PM

Absolute out and out corruption and B.S. I get sick to my stomach reading about how our government keeps inventing new ways to rob us blind. Take our tax dollars to give to corrupt contractors to weatherize someone elses home. No wonder why people flock here from all over the globe. Yeah, just come to America and all the tax paying suckers will support you,unbelievable f@#$%^g unbelievable.

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