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Presentation, discussion, and possible action on recommendation to consider early termination of the remaining debarment term for Evan J. Hunden, David B. Ratliff, and Michael Volz
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RECOMMENDED ACTION
recommendation
WHEREAS, in 2024, Evan J. Hunden, David B. Ratliff, and Michael Volz (collectively, the Respondent) were the Responsible Parties in Control of a portfolio of Actively Monitored Developments in which 50% or more of the Actively Monitored Developments under their Control were referred to the Enforcement Committee for an administrative penalty during the prior three years, triggering mandatory debarment for repeated violations in a portfolio pursuant to 10 TAC §2.401(e)(2)(a);
WHEREAS, in accordance with Tex. Gov’t Code §2306.0504(b) and 10 TAC §2.401(e)(2)(a), the Board issued a Final Order of Debarment on November 7, 2024, debarring Respondent from participation in Department programs for a two-year term ending November 7, 2026;
WHEREAS, the Final Order of Debarment included a clause stating that if Respondent timely and fully complied with the terms of the order, correcting all future findings of noncompliance as required, and remained in compliance for a period of one year from the date of the order, Respondent could petition the Board after November 7, 2025, to reduce or terminate the remaining period of debarment;
WHEREAS, Respondent timely submitted complete corrections for all findings of noncompliance identified by the Department since November 7, 2024;
WHEREAS, Respondent has therefore brought forward a petition to reduce or terminate the remaining period of debarment, pursuant to the terms of the Final Order of Debarment;
WHEREAS, staff has prepared an Order Terminating Remaining Debarment Term effective December 11, 2025, for Board consideration; and
WHEREAS, staff recommends early termination since the parameters and conditions of the Final Order of Debarment relating to truncating the term of debarment have been met.
NOW, therefore, it is hereby
RESOLVED, that an Order Terminating the Remaining Debarment Term effective December 11, 2025, substantially in the form presented at this meeting, and authorizing any non-substantive technical corrections, is hereby adopted as the order of this Board.
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BACKGROUND
During 2024, Evan J. Hunden, David B. Ratliff, and Michael Volz (collectively, Respondent) exceeded the 50% debarment threshold identified at 10 TAC §2.401(e)(2)(a) to trigger mandatory debarment for repeated violations in a portfolio, with 50% or more of the Actively Monitored Developments under their Control being referred for an administrative penalty during the prior three years. All three Responsible Parties are executive officers of DevCo, LLC, headquartered in Washington state. It is Washington’s largest provider of affordable housing, and they develop, own, and manage approximately 12,000 units throughout the US. They expanded into Texas on December 29, 2020.
The 2024 referral was the second time that debarment was considered for Mr. Ratliff and Mr. Volz, who were previously considered for debarment in 2022 under the same rule. That 2022 debarment referral was dismissed after the Enforcement Committee voted to increase the 50% referral threshold for Respondent, as permitted by the rule; however, the Department reserved the right to consider future debarment under 10 TAC §2.401(e)(2)(A), in the event that there were additional administrative penalty referrals for this ownership portfolio.
The promised changes from 2022 were not fully implemented, and Rosemont at Meadow Lane (HTC 03433 / CMTS 3421), a 264-unit development located in Dallas (the Property), was subsequently referred for an administrative penalty during 2024, for failure to submit corrective documentation for a Uniform Physical Condition Standards (UPCS) inspection conducted on September 26, 2023, in which the property scored 47 out of 100, with 86 Level 1 deficiencies, 39 Level 2 deficiencies, and 131 Level 3 deficiencies, with Level 3 being the most severe. TDHCA granted corrective action deadline extensions through March 26, 2024, the maximum allowed. Owner uploaded the certification of correction for exigent fire and safety hazards (EH&S) on October 1, 2023, but did not submit work orders and/or invoices to document correction of any of the 256 cited deficiencies. This UPCS inspection was therefore referred for an administrative penalty, and analysis of the portfolio’s compliance history identified this penalty referral as a second breach of the 50% debarment threshold identified at 10 TAC §2.401(e)(2)(a). Respondent acquired the Property on January 29, 2021. TDHCA’s UPCS inspection score on July 9, 2021, was 65 out of 100. The previous UPCS inspection conducted on September 1, 2017, scored 83 out of 100.
The Enforcement Committee considered both administrative penalties and mandatory debarment during its informal conference on July 30, 2024. The Committee recommended an Agreed Final Order for an administrative penalty, but it tabled the debarment recommendation per owner’s counsel’s request because the Property was due for a TDHCA physical inspection in September since it was on an annual inspection schedule due to the low 2023 UPCS score. Respondent was confident of an improved score, and hoped that would be taken into consideration. TDHCA performed a National Standards for the Physical Inspection of Real Estate (NSPIRE) inspection on September 26, 2024, scoring 75.28 out of 100, and confirming resolution of the noncompliance from the referred 2023 UPCS inspection. The Enforcement Committee reconvened on October 3, 2024, and voted to recommend a two-year debarment term for Respondent.
On November 7, 2024, the Board approved an Agreed Final Order for the Property, and Respondent paid an administrative penalty of $15,000.00. The Board also approved a Final Order of Debarment for Respondent, for a two-year term ending November 7, 2026, which Final Order included a clause permitting Respondent to petition the Board to reduce or terminate the remaining period of debarment after November 7, 2025, if Respondent timely and fully resolved all future issues of noncompliance. Copies of both orders and the Board Action Request from November 7, 2024, are attached for reference.
In accordance with the terms of the Final Order of Debarment dated November 7, 2024, Respondent submitted a petition for early termination on November 11, 2025, a copy of which is attached. Department staff analysis regarding all findings of noncompliance identified by the Department for this ownership portfolio between November 7, 2024 and present is also attached, confirming Respondent’s analysis in their petition. All identified noncompliance in the interim period was timely resolved as required, and there were two file monitoring reviews with no findings of noncompliance, showing that Respondent has successfully implemented protocols to ensure compliance with TDHCA requirements. Respondent has also hired Novogradac & Company LLP as a consultant to provide support and oversight to help ensure complete and timely responses to TDHCA compliance monitoring deadlines.
Accordingly, after consideration of all appropriate factors, Department staff recommends Board approval of an Order Terminating the Remaining Debarment Term effective December 11, 2025.
Attachments:
1. Actively Monitored Development Analysis for Findings of Noncompliance Identified after November 7, 2024
2. Final Order of Debarment dated November 7, 2024
3. Agreed Final Order dated November 7, 2024
4. Petition to terminate debarment term, dated November 11, 2025
5. Board Action Request from November 7, 2024