in Houston, Texas

Shoddy workmanship found in $22 million federal stimulus contract to improve the homes of the poor

Photo of a worker installing insulation by flickr user williamhartz, used via a Creative Commons license.
Thursday, May 13, 2010, 12:29PM CST
By Mark Lisheron


Sheltering Arms Senior Services oversaw substandard work on 33 of 53 homes inspected by the state. The Houston nonprofit, aided by tax money, has kept secret the locations of homes it has weatherized with federal stimulus dollars.

Houston, Texas -- Inspections done under the second biggest federal stimulus weatherization contract in Texas found flaws in workmanship so serious that more than 60 percent of the jobs will have to be fixed, documents obtained by Texas Watchdog showed.

A report by the Department of Housing and Community Affairs criticized Sheltering Arms Senior Services of Houston for poor performance and for spending nearly half of its funding on administrative costs, while the legal limit is 5 percent. Sheltering Arms has a contract with the department to spend $22.3 million in American Recovery and Reinvestment Act money through March of 2012 to improve the energy efficiency of low-income homes in the Houston area.

"The Department is very concerned with (Sheltering Arms') capacity and commitment to implement" the federal stimulus' Weatherization Assistance Program, the report said. "Accordingly, the Department instructs SASS to submit a detailed action plan with its response to this report. Failure to provide a plan which satisfies the Department's concerns may result in contract sanctions."

To date, Texas Watchdog has been unable to independently verify the state's assessment of Sheltering Arms' work, or interview beneficiaries of the weatherization program. Sheltering Arms has tried to block the release of addresses of homes it's fixed up, citing a federal law that protects medical information.

Only the city of Houston, with its $23.5 million two-year contract, is doing more work through the department's $326 million stimulus Weatherization Assistance Program than Sheltering Arms. The next largest of the 44 contracts with counties, cities and non-profit groups statewide is the Alamo Area Council of Governments for $14.5 million for San Antonio, followed by the county and the city of Dallas with contracts valued at more than $13 million each. 

In spot inspections in February and March of 53 units weatherized by Sheltering Arms contractors, state inspectors found:


  • 33 of the 53 will require workmanship corrections
  • 15 window replacement jobs did not meet energy savings standards. Sheltering Arms has been asked to refund $5,000 to the state.
  • A false claim for having installed a stove in one of the units. The state has asked for reimbursement.
  • Dozens of cases in which work could not be documented, documents were missing and data was either wrong or incomplete.

Texas Watchdog made a Texas Public Information Act request for reports on all weatherization monitoring done by the Department of Housing and Community Affairs through the end of April. While inspectors expressed concerns in at least of a third of the 41 monitoring files that weatherization work was moving too slowly, none of the critiques came close in breadth and severity to that of Sheltering Arms.

Officials for Sheltering Arms have 30 days from the April 12 date of a letter sent by Michael DeYoung, director of the department's Community Affairs Division, to respond to recommendations to dramatically improve production, workmanship quality and documentation. The Department said it had not received a response as of the 30-day deadline Wednesday.

Lynne Cook, chief operating officer for Sheltering Arms, would address only one question from Texas Watchdog about the specific findings.

Cook said administrative costs were high at the beginning of every job.

"Sheltering Arms has always been within budget at the end of each contract year for all programs executed and will be within the 5 percent maximum allowable administrative budget on the ARRA contract," she said by e-mail.

Sheltering Arms will respond to all other specific findings in its response directly to Housing and Community Affairs, Cook said. "Any findings for incomplete work noted in monitoring reports will be corrected in a timely fashion as part of the normal monitoring follow up."

Cook defended a 25-year record of Sheltering Arms in providing quality service and oversight for its programs serving the poor, elderly and disabled.

The Housing and Community Affairs report is the first time since 2003 that the quality service and oversight of Sheltering Arms contractors have been criticized. In that year, a $5 million federal emergency home repair program in Houston was suspended when the U.S. Department of Housing and Urban Development found that Sheltering Arms and a handful of area nonprofits were overpaying contractors for bad work and incomplete work that left the homes of the poor, elderly and disabled unsafe.

Although criticized in the report for having more than $3.8 million in cash on hand while weatherizing work lagged badly in January, Housing and Community Affairs held up Sheltering Arms as one of its early weatherizing stars. After months of bureaucratic problems of its own, the department had reported spending $3.7 million to weatherize just 47 homes throughout all of Texas through December.

Department director Michael Gerber was concerned enough about the numbers to call Texas Watchdog on a Saturday to report that roughly 450 home units had been weatherized in January alone. Sheltering Arms, with its focus on multi-family units, was responsible for more than 25 percent of the new work that month.

By the time Housing and Community Affairs inspectors had completed their second round of monitoring inspections on March 18, Sheltering Arms contractors had completed 620 units, Cook said. As of April 19, they had done 957 units, tops among all 44 subrecipients of the state and roughly a quarter of the 4,074 units the department said had been completed statewide by the end of April.

Still, the department has been under tremendous pressure to speed up weatherizing work all over the state. State Rep. Jim Dunnam, chairman of the House select committee tracking the stimulus in Texas, has taken the department to task for failing to spend its money fast enough to create jobs.

Mark Lisheron continues to write about how federal stimulus programs are playing out in Texas. Contact Mark at 512-299-2318 or

Photo of a worker installing insulation by flickr user williamhartz, used via a Creative Commons license.

Thursday, 05/13/2010 - 06:13PM

May 13, 2010 Texas Watchdog posted an item on its web site today referencing Sheltering Arms that is riddled with incorrect statements and inaccuracies.

In an effort to present the facts, Sheltering Arms Senior Services offers the following statements: The Texas Department of Housing and Community Affairs (TDHCA) report is a standard part of the routine monitoring process. The report was incomplete because it was released without the inclusion of Sheltering Arms’ required response.

1. Regarding the issue of repairs needed in 33 homes: As in any typical, large scale construction or weatherization project, there is a punch list of repairs that in the normal course of action will be completed. Most repairs were minor in nature, such as tightening a door latch or caulking around a window or a bathtub. We have completed or are in the process of completing all of the repairs.

2. Regarding the request to provide names and addresses of clients: It is Sheltering Arms’ longstanding policy not to release the names and addresses of its clients. Our clients represent some of the most vulnerable population including the elderly and disabled who are often targets of fraud. We offered to writer Mark Lisheron that we would check with several of our weatherization clients to see if they would like to be interviewed. Obviously, we could not speak for them but would need to check on their interest and availability. Mr. Lisheron never took us up on our offer.

3. Regarding the claim of high administrative costs: All TDHCA contracts for federal funding contain strict policies for the utilization of administrative funding. With any contract of this magnitude, there are upfront administrative costs and training fees necessary to ramp up staffing and resources to support the program. Sheltering Arms has always been within budget at the end of each contract year for all programs executed and will be within the five percent maximum allowable administrative budget on the ARRA contract when the project is completed.

4. Regarding the false claim that Sheltering Arms missed the deadline to respond the TDHCA: TDHCA granted Sheltering Arms an extension to respond to the monitoring report.

5. Regarding the 2003 federal emergency home repair program in Houston: Sheltering Arms was not a part of that program. This monitoring report represents a snapshot at one point in time of a multi-month, large, long-term weatherization project where at the end of the day, Sheltering Arms will fulfill its obligations to the state, our clients and our local community. Sheltering Arms has a strong track record that includes more than 25 years of excellent management of multiple weatherization programs.

We stand behind our record, reputation and performance as TDHCA’s largest subrecipient.

Carlos Ramirez, Sheltering Arms

Mark Lisheron, Texas Watchdog
Thursday, 05/13/2010 - 09:29PM

Mr. Ramirez, Having looked closely at your five points of contention I can say with fair certainty that no riddling occurred, either with incorrect statements or inaccuracies.

Before I address these contentions, I think it is important to note that I have repeatedly tried to engage both Sheltering Arms and the Texas Department of Housing and Community Affairs on this story and this issue. I have copies of all the e-mails to prove it. The story clearly explains your position on the matter and the position of Housing and Community Affairs. Frankly, based on several of the points you made in this memo I can't understand why you didn't just sit down and talk with me rather than turn me over to your attorneys.

You could have, for example, told me that repairs on the weatherization jobs were either completed or in the process of completion. No harm in that. Instead, I relied on a report, which refers to "deficient" and "poor" workmanship and making sure this sort of work isn't repeated. TDHCA's words, not mine. I gave Lynne Cook with Sheltering Arms an opportunity to respond to these judgments and she said she preferred to respond in writing directly to TDHCA.

To be clear, I approached Cook and you directly about getting the addresses of clients, not to expose them to anything, but to be able to verify if and how much weatherization work was done. In our conversation, I specifically asked you to see if you could find clients who would discuss their good fortune in weatherization and get back to me. You didn't do that.

Given the findings of the Housing and Community Affairs report, I feel even more strongly that the public ought to be able to check up on how their tax dollars are being spent, unit by unit, if necessary. It was your own oversight agency that was concerned about your 49 percent administrative cost. It's in the report.

I included in the story a quote from Ms. Cook explaining that you believe when all is said and done you will at least meet the 5 percent limit.

Regarding your response deadline, as far as we knew at the time our story posted this morning you had missed your deadline. It was a couple hours after posting that TDCHA responded to my inquiry about it, which was made a couple of hours before the story was posted.

All I can say about the Housing and Urban Development issue in 2003 is that the Houston Chronicle reported that HUD listed Sheltering Arms in its report that prompted a $5 million low income housing repair program to be shut down. I could find no story or statement from Sheltering Arms at the time disputing the HUD report. I appreciate your reading the story and taking the time to respond in detail.

Mark Lisheron

Chad Shuford, Weatherization Management Group
Thursday, 05/20/2010 - 11:54AM

My company is a weatherization contractor in Texas. While we do not do any work with Sheltering Arms, we work with 20 other Weatherization Assistance Program (WAP) subrecipients around the state and I have had the chance to interact with all of the people mentioned in the article.

From my knowledge and experience in working with TDHCA and many subrecipients, it is readily apparent that the author has a very incomplete understanding of the WAP program and how it is monitored. I applaud his desire to watch over our tax payer money, but unfortunately he has picked the wrong group of which to be critical, or he has ulterior motives to lobby against a program that creates jobs, gives aid to the less fortunate and saves energy.

The aggressive tone the author takes and the hyberbole he uses are unnecessary and undermine his credibility. To those who make a living in this field, Sheltering Arms is recognized as one of the most well-run Community Action Agencies in the state, not because they market themselves as such, but because they have good people who care and they have delivered on their promises year after year. Over the past decade, they have created one most experienced and capable weatherization programs in the southwest.

It is for this reason that the TDHCA has granted them the largest weatherization funding for many years. The Weatherization Assistance Program has received stimulus funding in order to employee out of work construction workers and low-income families’ households by saving them money and making their homes more livable. The intent of this program is nothing but positive. And groups like Sheltering Arms who raise their hand to take on the ridiculous challenge to take on this task and be held responsible for it should be applauded.

Trent Seibert, editor, Texas Watchdog
Thursday, 05/20/2010 - 01:13PM

Dear Mr. Shuford,

Thanks for reading and writing in.

I want to assure you that no one at Texas Watchdog has an ulterior motive other than to provide a public service by reporting on the way the $787 billion federal stimulus is playing out in Texas. Because it's a public project, we believe it's important to follow its progress step-by-step. No one here is trying to pick on Sheltering Arms Senior Services. By all accounts, they do lots of good work.

Unfortunately, state inspectors found that their work earlier this year under the weatherization assistance program was lacking. Texas Watchdog reviewed more than three dozen monitoring reports of weatherization work in Texas. As our story notes, "none of the critiques came close in breadth and severity to that of Sheltering Arms."

As a reminder to all readers: The primary source report that generated this story is available at the link below.

Best regards. And always feel free to contact me directly at

Trent Seibert, editor, Texas Watchdog

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