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Presentation, discussion, and possible action on an appeal from the City of Slaton related to a denial of draw request submission and deobligation of funds for HOME Homeowner Reconstruction Assistance activity 53727
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RECOMMENDED ACTION
recommendation
WHEREAS, on July 8, 2024, the Texas Department of Housing and Community Affairs (TDHCA or the Department) and the City of Slaton (“Administrator”) entered into a Household Commitment Contract (HCC) to provide Homeowner Reconstruction Assistance (HRA) for an eligible household under HOME HRA Activity 53727;
WHEREAS, the HCC included a one-year term which expired on July 7, 2025;
WHEREAS, the deadline to request reimbursement for funds expires 60 days after the expiration of the HCC;
WHEREAS, a request to extend the deadline for the project was not received on or before expiration of the HCC, making funding subject to deobligation under the terms of the HCC;
WHEREAS, the City of Slaton submitted a timely filed appeal to the Executive Director requesting an extension and the ability to draw funds, but the appeal was denied on October 20, 2025;
WHEREAS, in accordance with 10 TAC §1.7(f), the City of Slaton submitted an appeal of the Executive Director’s decision on October 24, 2025 (Board Appeal);
WHEREAS, the Board Appeal did not include additional information or documentation that establishes a mutual understanding of continuation of the HCC term past the original expiration deadline;
WHEREAS, the Board Appeal did state there was a conversation about submitting the draw between the Department and the Administrator’s consultant on or around July 1-2, but the Department records only document that this was about the City of Muleshoe’s contract; and
WHEREAS, TxGMS prevents the Department from reimbursing costs that were incurred after the Activity was expired;
NOW, therefore, it is hereby
RESOLVED, that the appeal from the City of Slaton related to an extension of the term for and request for reimbursement related to HOME HRA Activity 53727 is denied.
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BACKGROUND
The City of Slaton (the City) entered into a Household Commitment Contract (HCC) for HOME Homeowner Reconstruction Assistance (HRA) Activity 53727 with TDHCA with an effective date of July 8, 2024, attached as Exhibit A to this item. The HCC was executed as an attachment to the HOME Reservation System Participation Agreement 2020-0051 (RSP Agreement, attached as Exhibit B). Article 2, Section 2.1 of the HCC included a one-year term, which expired on July 7, 2025. The term of the HCC establishes the term during which costs may be incurred for the project and the project completion deadline. Although the term expired on July 7, 2025, Section 5.2(F) of the RSP Agreement permits a grace period of 60 days for submission of a request for funds. This grace period expired on September 5, 2025.
Prior to expiration of the term, on June 9, 2025, TDHCA staff sent a reminder of the project end date which outlined both the expiration of the HCC and the deadline for submission of reimbursement requests (Exhibit C). As no request was received, TDHCA sent a subsequent request to the City of Slaton for completion of the Project Completion Report on September 8, 2025, after the expiration of the 60-day grace period (Exhibit D).
The procured grant administration consultant for the City, South Plains Association of Governments (SPAG), reached out to determine why a draw request was unable to be submitted in TDHCA’s Housing Contract System (HCS). The HCS features a validation that does not allow for submission of a draw request more than sixty (60) days after the expiration of the HCC for a given activity. Due to the seriousness of the matter related to potential loss of funding, staff conferred with management, and management reviewed the underlying documentation. The documentation confirmed that the deadline had passed, and that no communication related to a request to extend or explanation of existing delays for the Activity had been received prior to the expiration date.
Staff notified SPAG on October 14, 2025, of the result of the review and staff confirmed that an appeal would be required to be submitted for any further consideration. Although a formal notice of deobligation had not yet been issued on October 15, 2025, the City of Slaton submitted an appeal to the Executive Director through SPAG, which was considered to be a timely filed appeal of a staff determination. The appeal of staff decision is attached as Exhibit E to this item. While not specifically stated, it is understood that the appeal requests the ability to submit requests for reimbursement.
The appeal of staff decision did specifically request an extension to the construction completion deadline and stated that construction was not complete until mid-September, but did not provide a specific construction completion date. Reasons for the delay stated in appeal include vandalism to the site, pest infestations, and a series of weather events. The appeal also stated that the SPAG employee that was initially assigned to the contract was released from employment and subsequently replaced in May 2025; however, the new staff member had received training related to submission of HRA draw requests from TDHCA on April 24, 2025.
The Executive Director reviewed the appeal of staff decision, and concluded that although an extension may have been granted had the request for extension been submitted during the term of the HCC, the appeal could not be granted, nor could an extension of the term be considered. The underlying rule and contract documents require submission of the draw request prior to the 60-day deadline, and amendments to contracts may not be considered if a contract has already expired under its own terms. Additionally, no record of any kind of communication establishing mutually understood changed terms which could be utilized to support an extension is present. A denial of the appeal of staff decision was sent on October 20, 2025, and is attached as Exhibit F to this item.
Subsequent to the denial of the appeal of staff decision, the City of Slaton submitted a timely filed appeal to the Board on October 24, 2025, attached as Exhibit G. The appeal included emails between TDHCA, the City, and SPAG (Exhibit H). The following assertions to justify for the inability to request funds timely under the terms of the agreement.
• Awareness and Communication. SPAG was advised by TDHCA staff that a single draw for all costs, inclusive of retainage, may be submitted rather than progress draws, and this was the agreed upon submission form. Emails from September 18, 2025 include this guidance.
o The emails from September 18 are related to separate Activities under the RSP Agreement (54186 and 54189) which were not yet expired. A request to amend was received and approved timely for each of these two Activities.
o TDHCA does advise submission of a single draw for completed activities when the deadline is fast approaching in order to ensure that funds may be fully drawn down as efficiently as possible when no progress draws have been submitted. This is also because none of the costs are eligible under the Contract if an Activity is not properly completed.
• Guidance from TDHCA Staff. TDHCA staff advised SPAG that in order for a draw to be able to be submitted for Activity 53727, an appeal would be required.
o On October 7, 2025, a month after the 60-day draw request deadline, SPAG reached out to TDHCA staff to ask why the draw request for 53727 was not able to be submitted in the Housing Contract System (HCS). TDHCA staff did advise SPAG that an appeal would be required as staff could not authorize a draw request submission that is not submitted in accordance with the terms of the HCC, RSP Agreement, and underlying rule. The appeal was submitted and was denied as it was reviewed, and unable to be granted by staff based on the specific facts.
• Staff Turnover and Oversight. SPAG acknowledges that staff turnover at their organization impacted their performance, but assets that TDHCA staff was unresponsive to requests for assistance.
o TDHCA staff provided training to new SPAG staff upon request, including a specific training related to draw requests on April 24, 2025.
o TDHCA staff held at least 11 virtual meetings with SPAG related to the City of Slaton between April 15, 2025 and October 8, 2025.
• City Notification. The City of Slaton received notice on September 8, 2025, related to submission of the project completion report. The appeal states that SPAG had already uploaded the reimbursement request and was unaware that the funds were at risk of deobligation.
o Both the City of Slaton and SPAG received a notification on June 11, 2025 of the project end date, which included the following text:
“I am contacting you to remind you that your Reservation Activity for Judy Gonzales under activity set aside 1003148 will end within 30 days. The end date of the Household Commitment Contract is 7/7/2025. You will be able to request reimbursement for expenses incurred on or before 7/7/2025 for no more than 60 calendar days after the end date. Expenses incurred after 7/7/2025 are not reimbursable. Request for reimbursement must be submitted on or before 9/5/2025.
Please note that if this is the last project on an expired Reservation System Participation Agreement, all administrative funds must be drawn within 60 days of the end of the last Household Commitment Contract end date.
If all funds for this project have been drawn, please disregard this notice.
Thank you for your time and attention to this matter, and for your continued participation in the HOME Program.”
o Attachments to the Housing Contract System are timestamped, and the timestamps for the attachments for the draw request entered, but not submitted, so that attachments were uploaded on October 7, 2025. between 4:43 and 4:48 PM central daylight time. A view of the timestamped documents is included as Exhibit I.
Both the appeal to the Executive Director and Board appeal also included information, and in the case of the Board appeal substantial documentation of, severe weather conditions that led to the delay in construction completion for Activity 53727 (Exhibit J). As with the other Activities under the RSP Agreement, this information would have been considered had a timely request for an amendment to extend the term been submitted. However, no request was submitted and neither the City nor SPAG made a request during the time period during which an amendment could be considered.
Regrettably, after review of the Board appeal, the supporting documentation, and additional review of underlying documentation, staff recommends denial of the appeal as there is no basis under which the HCC may be extended after its expiration.
While the July 7, 2025, termination date may not be waived or amended, if the Activity is found to meet all other federal and state requirements of the HOME program, based on the City’s representation that there was a conversation on July 1-2 between the Department and the Administrator’s consultant, SPAG, about the intent to submit a draw, and because the federal expenditure period has not expired nor have the funds been committed to another activity, the Board could find that there was a meeting of the minds to submit reimbursement of costs properly incurred on or before July 7, 2025. However, staff could find no record of a conversation pertaining to the City of Slaton or this household, only a conversation regarding the City of Muleshoe. This Board Action would require the Administrator to provide documentation that the HOME activity was completed by October 5, 2025.