in Houston, Texas

Six-figure jobs in federal stimulus program to fix up low-income homes; millions of dollars in questionable spending in Texas’ weatherization assistance program

Thursday, Sep 08, 2011, 09:23AM CST
By Mark Lisheron
cash

What was to have been a Frankenstein-like lightning strike to the economy and to unemployment, the Weatherization Assistance Program today in Texas has spent more than $226,000 on each of 1,041 jobs the program is said to have created or saved.

The director of the state Department of Housing and Community Affairs overseeing the nearly $327 million stimulus program to fix up low-income homes has stepped down. At least three of the original 44 local organizations administering the program have been shut down for chronic mismanagement and concerns about fraud.

The state has taken funding from 13 of the programs and redistributed it to more efficient organizations, while the federal government says it will take back tens of millions from the state if it fails to spend the money quickly.

And in a review by Texas Watchdog of state monitoring reports over the past nine months, state inspectors have found administrative overspending, careless workmanship and millions of dollars in prohibited and questionable spending by contractors working for more than two dozen of the local groups.

Housing and Community Affairs officials asked that they be able to respond to questions about the inspection reports in writing. As of Wednesday afternoon, agency spokesman Gordon Anderson said, “Staff is working on responding to these questions right now, but these same employees have – and continue to be – pulled off of all other tasks throughout the day to assist in responding to inquiries from other governmental entities regarding the state’s response to the numerous wildfires still burning across Texas. This takes a priority over everything else at the moment.”

As President Obama prepares to address the nation with a request that taxpayers come up with another $300 billion for a federal jobs program, it is worth taking a hard look at one of the original jobs programs in the $862 billion American Recovery and Reinvestment Act of 2009.

Baylor University economist Earl Grinols said there are three immediately obvious problems with the weatherization program: “First, it is not an appropriate government function to provide weatherization of private homes. Second, even viewed as a stimulus measure, it is not very effective as a stimulus based on cost-per-job, and third, it appears not to be well-managed.”

Hard to get a stimulus out of unspent $$$

The $5 billion Department of Energy weatherization program was to have not only put people to work quickly, but also provided millions of dollars in energy savings to qualified low-income homeowners and apartment dwellers.

Caught in the undertow of hundreds of millions of dollars and vast new federal and state regulations, it took the housing agency nearly a year for the first houses in Texas to be weatherized.

Almost 31 months since President Obama signed the bill, the housing agency has yet to exhaust its remaining $91.6 million, according to its weekly report through the end of August. The Department of Energy has threatened it will collect unspent money in six months.

A closer look at the report shows that 9 of the 10 biggest weatherization programs in the state are behind the state average in the amount so far spent. The city of Houston has so far spent $13.3 million or 57 percent of its original $23.5 million.

Auditors in other laggard states are warning that thousands of homes will go without new insulation, caulking and energy saving appliances if they are forced to return the stimulus funds. A staff member for Auditor John Keel said Wednesday no similar study had been done or had so far been requested for Texas.

Having so far spent $235.3 million, the number of jobs created in Texas has changed little since work began in earnest in early 2010. Weatherization crew foremen have said that if and when the stimulus money is spent the jobs are likely disappear.

“If this was being done purely to stimulate the economy to generate private activity and higher employment, it’s a failure as a program because the expenditures per job were beyond what they could have been,” Grinols said.

While the housing agency has taken pride in having weatherized 42,350 housing units by the end of August, the crews have had a chronic problem balancing the need to spend swiftly and carefully. The problem has, to judge from the inspection reports, worsened over time.

Inspectors in the past nine months have demanded that crews return to hundreds of homes across the state. The deficiencies in administration, work quality and record keeping are too numerous to cite here, but we have posted copies of each of the 108 inspection reports here.

High carbon-monoxide levels, sunscreens in the shade, and more

When inspectors came to Houston in March, they found nearly a third of the 65 units they saw required crews to come back. They asked that the state be reimbursed for 40 water heaters worth $47,892 that had been installed where they hadn’t existed before. They questioned another $47,892 for 40 water heaters that might not have needed replacing.

An inspection in June of 82 units done by the city of Houston found the work in 47 of them deficient. Inspectors questioned the necessity of $186,291 of work, including the mass installation of heat pumps and new sunscreens put on windows in the shade.

Bad documentation led inspectors to question $2.2 million in weatherizing work done by city of Dallas crews who were forced to return to 32 of the 49 unites inspected in December of 2010.

The state in February threatened to take the remainder of $15.5 million away from the Alamo Area Council of Governments in San Antonio for spending more than half of its funds on administrative costs. The federal program reimburses for administrative spending of no more than 5 percent of the total.

For this, homeowners in the San Antonio area got work in 16 of 17 homes such as gas space heaters left unventilated, high carbon monoxide levels and basic weatherizing like caulking and door sweep installation done improperly.

In October of 2010, inspectors produced a 36-page report complaining that in 28 of 29 inspections the city of El Paso work was substandard. A month later inspectors flagged 23 of 30 units done by another El Paso agency, Project Bravo. After nearly a year on the job, inspectors said weatherization staff for both groups needed to attend the state’s weatherization academy “immediately.”

Still, inspectors complained in report after report that the work and the spending wasn’t being done fast enough. As of the end of August, the Community Services Agency of South Texas in Carrizo Springs had spent about $900,000 or less than 25 percent of its $3.69 million weatherization grant, by far the worst performance in the state. The problems with the Community Services Agency weatherization program are longstanding.

In a 34-page report from January, inspectors said it appeared the program was at a standstill after completing just 149 units. The record keeping, too, had slowed so that inspectors could not account for $1.22 million in materials procured by contractors. And $28,379 of the costs the agency could account for inspectors said were not allowed. All 19 of their inspections found work that needed to be finished or done over again.

To judge from the Weatherization Assistance Program, among other questionable stimulus programs, Grinols said President Obama needs to take a much different approach.

“What the president should have done in the original stimulus, and in any stimulus, is return money to the hands of the private sector. The citizens themselves should decide how that money is going to be spent,” Grinols said.
 
***
Contact Mark Lisheron at 512-299-2318 or mark@texaswatchdog.org or on Twitter at @marktxwatchdog. Lee Ann O’Neal contributed to this report.

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Photo of money by flickr user quinn.anya, used via a Creative Commons license.

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Comments
meg power
Monday, 09/19/2011 - 05:00PM

You would think a Baylor economist would get basic arithmetic: no one got paid the huge sums the professor calculated. He is dividing the expenditures on insulation, weatherstrip, ductwork, furnaces and so forth as well as on workers, by the number of people at work. It's like calling your tools or your office computer part of your salary.

On Sep 6, Texas had weatherized 101% of the homes in its plan and did it at 2/3 the planned cost. As a result, thousands more will be added to the 35, 562 families whose bills are going down as you read this. Of course inspectors are needed ! so is the ability to recognize a success under tough circumstances. And to do simple math.

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