Despite Rocky Start, Texas' Weatherization Program Thrives

A worker contracted by Austin Energy helps weatherize a South Austin home with funding from the federal stimulus program.

For conservative opponents of the federal stimulus package, the beleaguered Weatherization Assistance Program has been an easy target. And Texas’ component of the Obama administration’s “green jobs” initiative has hardly been immune, either from the well-documented problems or the criticisms of it.

But despite its rocky start and the disdain of Texas' Republican leadership, including GOP presidential hopeful Gov. Rick Perry, state officials say Texas’ program has actually been quite successful — surpassing its goal of weatherizing more than 38,000 homes and creating more than 1,000 jobs across the state.

The federal weatherization program, designed to help low-income families make energy-efficient upgrades to their homes, has been around since the oil crisis of the 1970s sent electricity prices soaring. But its relatively small annual budget didn’t generate much attention until the Obama administration infused the program with $5 billion as part of the 2009 American Recovery and Reinvestment Act. As a result, Texas’ $13 million annual weatherization budget got topped off with $327 million in stimulus funds.

“When the federal government comes at you unannounced and throws $327 million at you and says, ‘Go create something and here’s a bunch of rules,’ it’s a real challenge,” said Tim Irvine, executive director of the Texas Department of Housing and Community Affairs (TDHCA), which administers the program.

The highly politicized program came with a set of rigorous federal regulations. Contractors had to perform specific science-based diagnostic tests to determine the most cost-effective way to weatherize a home. And as with all stimulus programs, employers had to abide by the Davis-Bacon Act, which requires them to pay fair and competitive wages determined by the United States Department of Labor.

The program got off to a slow start nationally, and Texas was no exception. Nearly a year after the passage of the stimulus legislation, Texas’ program had created only 117 jobs and failed to weatherize a single home.

To prevent cold air from leaking into the attic, a worker installs more insulation.

In a letter to the Department of Energy in March 2010, Michael Gerber, then the executive director of the TDHCA, blamed the federal government for the delay. He wrote that it had taken the Department of Labor nearly a year to determine appropriate wage rates and that Texas did not receive the information until December 2009. Although the federal government had given states permission to begin weatherizing homes, most states, including Texas, chose to wait rather than risk overpayment or underpayment.

The governor’s office places the blame even higher — with the Obama administration. “This is yet another example of a stimulus program that was poorly designed and has come under national scrutiny for wasting taxpayer funds,” spokeswoman for the governor, Lucy Nashed, wrote in an email.

But Kevin Jewell, an economic analyst for Texas Low Income Housing Information Service who has chronicled the progress of the state program on the nonprofit’s blog, said state officials used the lack of Davis-Bacon wage information as an excuse. Really, he said, the delay occurred because the TDHCA had to build the program from scratch.

“They were ramping the program up from a small annual program to a very large, short-term, one-time project,” he said. “Although they had that seed from the original program, that in my mind is the real reason things had a slow start.”

Many of the small nonprofits in Texas’ existing network of weatherization providers struggled with the increased funding and new federal regulations. Fourteen of the original providers gave back a combined $29 million in weatherization funds to the state because they weren’t prepared to administer the program. Several providers forfeited their stimulus contracts altogether. And at least two of those nonprofits were involved in investigations for fraud.

Those providers who stayed in the program often had contractors who were good at the technical aspects of their jobs but not at record keeping, Irvine said — a major problem given federal audit procedures and other requirements.

A Texas Tribune review of more than 130 TDHCA monitoring reports found weatherization providers consistently had problems accurately documenting expenses and conducting energy audits, which in some cases led to thousands of dollars in unexplained costs and improper installations of energy efficient materials. More than half of the 3,500 weatherized homes inspected by the TDHCA had workmanship deficiencies contractors were ordered to return to fix.

The monitoring reports also reveal more severe transgressions.

The executive director of the West Texas nonprofit Community Council of Reeves County was accused in June of using weatherization funds to purchase groceries and toys, and of authorizing three months of pay for an employee she knew was on unpaid leave. Following a state investigation, the nonprofit voluntarily returned more than $1.6 million in government funds to TDHCA, including $800,000 for the weatherization stimulus program. The nonprofit is no longer in business, and its former executive director could not be reached for comment.

In Laredo, the Webb County Community Action Agency also relinquished its funding after an investigation earlier this year determined that on at least 43 occasions, contractors hired by the organization had invoiced the program for materials that hadn’t been installed.

Officials from the TDHCA said they can’t comment on pending — or possible — criminal investigations. When asked about the fraudulent activity in the program, Irvine said the monitoring reports helped the department identify “a few instances of improper activity.” But he said the real takeaway is that most providers learned from their mistakes.

A worker replaces an old air conditioner with a more energy efficient one to reduce the homeowner's electricity costs.

Texas’ problems certainly weren’t unique. Recent audits of other states’ programs by the Department of Energy’s Inspector General found many have been technical and bureaucratic nightmares.

But with five months remaining and $65 million left in the bank, Texas’ program looks successful by comparison. It has surpassed the weatherization goal set by the Department of Energy by 7,000 homes. The program has created more than 1,000 jobs in Texas. Meanwhile, the TDHCA has trained more than 3,000 contractors, electricians and other technicians through the stimulus-funded Weatherization Training Academy.

Not everyone is impressed. Nashed, the governor’s spokeswoman, said, which tracks Recovery Act spending, inflated the numbers, inflates the number of jobs created by the stimulus program, “making it impossible to know the actual impact of these massive stimulus programs on employment across the nation.”

Jewell, a supporter of the program, said the weatherization providers hired the right number of workers to get the job done. His concern is that Texas providers only spent $5,500 per household on average, while the spending limit set by the federal government is $6,500. “It may indicate the homes that needed the most work haven’t been prioritized,” he said.

But at the ground level, the recipients of the home improvements and the Texas contractors who have been hired say it’s been a giant benefit.

Josie Valdez, whose company, Valdez Remodeling and Weatherization Inc., was contracted by Austin Energy to provide weatherization services in Central Texas, was able to hire five full-time employees with money from the stimulus program. “My business is doing great because of this,” she said.

Sebero Palacio, who works at an Austin grocery store, had the house he shares with six family members upgraded with a new energy efficient air conditioner after a receiving a flyer about the stimulus program in the mail. He can’t wait for the cost savings.

“We don’t have money to pay the bills,” Palacio said. “Sometimes when it’s real hot we have to use the A/C all the time, day and night.”

As part of the 2009 American Recovery and Reinvestment Act, the federal government gave Texas $327 million to help low income Texans save on utility bills by making their homes more energy efficient. Use the interactive maps below to explore the effects of the stimulus-backed Weatherization Assistance Program across Texas: The amount of stimulus money distributed to various state-defined regions, how much weatherization providers returned or gained based on their ability to implement the upgrades, the total number of homes the providers weatherized, and the percentage of homes inspected after the repairs that needed follow-up work.

Click on the map to see more details about the weatherization provider in that region.

Click on the headings to sort the table.

Organization Stimulus Funds Received Money Returned or Gained Percent Spent Households Weatherized Original Household Goal Spending per Household Homes Inspected After Weatherization Percent Needing More Work After Inspection
ALAMO AREA COUNCIL OF GOVERNMENTS $15,519,918 $0 67% 3,282 1,792 $3,181 192 71%
BEE COMMUNITY ACTION AGENCY $757,192 -$380,000 88% 90 100 $7,407 31 16%
BIG BEND COMMUNITY ACTION COMMITTEE INC. $1,776,922 -$600,000 91% 238 191 $6,764 39 68%
BRAZOS VALLEY COMMUNITY ACTION AGENCY INC. $7,262,088 $750,000 73% 913 830 $5,814 40 75%
CAMERON AND WILLACY COUNTIES COMMUNITY PROJECTS INC. $5,753,463 $0 103% 1,018 819 $5,798 72 48%
CITY OF ARLINGTON $2,098,456 -$90,000 92% 320 285 $6,046 34 52%
CITY OF AUSTIN - AUSTIN ENERGY $8,090,874 $2,121,100 75% 1,349 996 $4,504 105 58%
CITY OF BEAUMONT $2,256,338 $750,000 71% 293 268 $5,430 49 52%
CITY OF BROWNSVILLE $3,281,585 $0 57% 255 367 $7,305 17 46%
CITY OF CORPUS CHRISTI $3,163,472 $0 79% 816 354 $3,051 83 52%
CITY OF DALLAS DEPARTMENT OF HOUSING $7,306,985 -$6,000,000 98% 1,003 851 $7,116 98 69%
CITY OF EL PASO $7,170,066 -$850,000 81% 891 863 $6,503 97 77%
CITY OF HOUSTON $23,571,279 $0 83% 3,285 2,730 $5,953 207 50%
CITY OF LAREDO $1,479,701 -$1,915,740 56% 210 167 $3,954 36 75%
CITY OF LUBBOCK $4,787,754 $8,219 75% 520 627 $6,926 56 43%
CITY OF ODESSA $1,175,064 $0 83% 190 147 $5,160 19 69%
CITY OF SAN ANTONIO $16,532,609 $4,100,000 81% 2,970 1,951 $4,501 125 50%
COMBINED COMMUNITY ACTION INC. $5,461,915 $1,000,000 82% 631 662 $7,119 58 63%
COMMUNITY ACTION COMMITTEE OF VICTORIA $4,766,792 $0 79% 926 594 $4,055 82 18%
COMMUNITY ACTION CORPORATION OF SOUTH TEXAS $16,735,182 $4,103,115 84% 2,702 2,125 $5,171 321 66%
COMMUNITY ACTION PROGRAM INC. $452,809 -$5,192,938 (Contract Relinquished) 100% 62 42 $7,303 32 81%
COMMUNITY COUNCIL OF REEVES COUNTY $800,361 $0 (Contract Relinquished) 74% 98 78 $6,026
COMMUNITY SERVICES AGENCY OF SOUTH TEXAS INC. $3,685,430 $0 (Contract Relinquished) 25% 221 174 $4,114 23 69%
COMMUNITY SERVICES INC. $10,593,620 -$3,200,001 71% 1,341 1,336 $5,627 122 21%
CONCHO VALLEY COMMUNITY ACTION AGENCY $4,513,684 -$950,000 83% 565 520 $6,666 66 52%
DALLAS COUNTY DEPARTMENT OF HEALTH AND HUMAN SERVICES $27,918,406 $8,778,808 79% 3,402 3,640 $6,480 232 45%
ECONOMIC OPPORTUNITIES ADVANCEMENT CORPORATION OF PR XI $6,678,661 $1,108,728 80% 781 788 $6,848 58 47%
EL PASO COMMUNITY ACTION PROGRAM PROJECT BRAVO INC. $8,770,948 $0 89% 1,439 1,148 $5,427 116 73%
FORT WORTH CITY OF DEPARTMENT OF HOUSING $15,146,008 $2,250,550 86% 2,027 2,041 $6,428 187 43%
GREATER EAST TEXAS COMMUNITY ACTION PROGRAM (GETCAP) $8,598,602 $2,750,000 80% 1,337 1,092 $5,155 113 73%
HILL COUNTRY COMMUNITY ACTION ASSOCIATION INC. $5,141,277 -$1,000,000 85% 579 632 $7,551 38 21%
INSTITUTE OF RURAL DEVELOPMENT INC. $139,452 -$311,963 (Contract Relinquished) 75% 28 25 $3,752
NUECES COUNTY COMMUNITY ACTION AGENCY $5,419,161 $2,250,000 79% 673 685 $6,328 36 66%
PANHANDLE COMMUNITY SERVICES $3,819,459 -$3,948,632 93% 882 464 $4,032 50 54%
PROGRAMS FOR HUMAN SERVICES INC $9,897,787 $3,500,000 77% 1,197 1,316 $6,338 119 3%
ROLLING PLAINS MANAGEMENT CORPORATION $5,593,915 $1,451,230 74% 770 633 $5,366 53 73%
SHELTERING ARMS INC. $26,783,707 $2,999,999 81% 4,482 3,565 $4,849 204 37%
SOUTH PLAINS COMMUNITY ACTION ASSOCIATION $5,138,889 $1,700,000 70% 573 605 $6,291 52 81%
SOUTH TEXAS DEVELOPMENT COUNCIL $1,327,920 -$500,000 97% 312 185 $4,111 20 46%
TEXOMA COUNCIL OF GOVERNMENTS $7,039,604 $1,076,195 87% 1,216 911 $5,029 59 8%
TRAVIS COUNTY $8,922,699 $4,300,000 50% 1,093 1,026 $4,080 66 49%
TRI-COUNTY COMMUNITY ACTION INC. $589,424 -$2,900,000 64% 73 53 $5,129 3 100%
WEBB COUNTY COMMUNITY ACTION AGENCY $599,130 -$1,826,880 (Contract Relinquished) 100% 159 91 $3,768 89 70%
WEST TEXAS OPPORTUNITIES INC. $5,765,748 $0 82% 938 801 $5,009 35 66%

Austin Energy, a municipally owned utility company, received $8 million in federal stimulus funds to weatherize the homes of low income Texans. In the video, Rusty Smith, a home inspector with Austin Energy, explains the benefits of making these energy efficient upgrades.

The documents below are a sampling of the monitoring reports the Texas Department of Housing and Community Affairs prepared on the organizations that received federal funding to weatherize Texas homes. Included are the details of the TDHCA's investigations into allegations of fraud at the Community Council of Reeves County and the Webb County Community Action Agency.

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