in Houston, Texas

Texas state housing chief resigns; agency failed to use Hurricane Ike rebuilding funds, oversaw faulty stimulus program to fix up low-income homes

Thursday, Aug 18, 2011, 08:18AM CST
By Mark Lisheron
Galveston following Hurricane Ike

Gov. Rick Perry has accepted the resignation of the head of the state’s housing agency, which has failed to handle billions of federal dollars to rebuild homes in the wake of Hurricane Ike and oversees a federal stimulus program plagued by questions of fraud and mismanagement.

Michael Gerber, executive director of the Texas Department of Housing and Community Affairs, tendered his resignation, effective Aug. 31, as Perry yanked nearly $3 billion that has yet to be used to rebuild thousands of homes, roads, public utilities and buildings damaged or destroyed in 2008 by Hurricane Ike.

The program, administered together with the Texas Department of Rural Affairs, has been shifted to the state’s General Land Office. Timothy Irvine has been named interim chief at Housing and Community Affairs.

Crushed beneath billions of dollars in federal disaster and stimulus weatherization funds, the housing agency is still scrambling to spend more than $92 million in what has been a troubled stimulus Weatherization Assistance Program, reported on extensively by Texas Watchdog.

The agency has taken more than two years to spend the rest of the $327 million allotted to it. It has stripped funding from a handful of its 44 original contracting agencies and has investigated dozens of instances of alleged fraud and bad workmanship. Out from under the burden of the Hurricane Ike disaster program, Irvine is confident the agency will not have to return any of its weatherization funding to the U.S. Department of Energy.
Michael GerberGERBER

Gerber is on paid vacation until his departure date. A call by Texas Watchdog to his cell phone number was not returned as of Thursday morning.

In addition to Gerber’s departure, Perry asked J. Paul Oxer, a member he appointed in March, to take over as chairman of the Housing and Community Affairs board. The Legislature abolished the Department of Rural Affairs, a move recommended in 2005 by the Sunset Advisory Commission, turning over its duties to the Department of Agriculture.

The Governor originally designated two agencies to handle the Ike money because the Department of Rural Affairs administered the state’s Community Development Block Grant program through which federal disaster funds flow. Rural Affairs was to handle the infrastructure, and TDHCA was to handle the housing recovery.

“The problem had to do with putting the Ike recovery funding in the hands of two agencies, each with their own bureaucracies,” Kathy Walt, a spokeswoman for Perry, said Wednesday. “The General Land Office has played a role in disaster recovery in the past, and the governor has confidence in Jerry Patterson (Texas Land Commissioner) in getting this taken care of.”

Gary Hagood, chief financial officer for the Land Office, pledged Wednesday to have all of the HUD money spent no later than December of 2015. While insisting on not dwelling on past performance, Hagood expressed impatience that after nearly three years two agencies managed to spend just $200 million while Hurricane Ike victims lived in trailer homes.

“I don’t care about the history, I’m interested in streamlining, and if there’s stuff in the way I’m going to move it out of there,” he said Wednesday. “You had a bunch of people working with contracts that had no milestones. Now, we’re going to say if you don’t hit this milestone, we’re going to terminate your contract.”

Adding the Weatherization Assistance Program to an agency unprepared to get into the disaster recovery business was an unsustainable blow, Irvine said. With its welter of state and federal requirements and the cross-purpose goals of spending hundreds of millions of dollars quickly, efficiently and well, “We very quickly found out that drinking from a fire hose wasn’t that easy,” Irvine said.

Contact Mark Lisheron at 512-299-2318 or or on Twitter at @marktxwatchdog.

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Photo of Galveston following Hurricane Ike by flickr user simminch, used via a Creative Commons license.
Thursday, 08/18/2011 - 11:16AM

Had any of these bureaucrats had family living in those trailers, money would've been spent. When you are totally detached from the day to day activities of those who are trying to survive in poor living conditions, it is easy to push solutions down the priority list. Placing yourself in the shoes of those folks is pretty good medicine and usually a good dose is enough to put a plan in motion. I dare say, had the ones in charge been sleeping in one of those trailers, the situation would be much more quickly resolved. Tragically, they simply don't care.

Friday, 08/19/2011 - 09:23AM

Mr. Gerber is an amazingly compassionate and competent person, it is unbelievable this could happen on his watch. There has to be more to this story than is being told.

Saturday, 08/20/2011 - 12:23PM

Where was the oversight within the agency? I recall reading many stories about problems with these programs. Doesn't the agency have an internal audit function? Seems like the repeated stories of problems did not highlight any need for internal review of the programs. Hopefully the new director will review all of the manager who should have identified the problems and clean house.

Problem Solver
Friday, 08/26/2011 - 10:32AM

Maybe GLO can move the program forward. Three years removed from the Hurricane and very little money has reached those who know where it is needed and how to spend it. One of the major problems receiving very little attention is the State's hiring of the engineering giant HNTB. They are sucking millions out of the disaster program and accomplishing nothing... accept adding an additional level of bureaucracy.

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