Special City Meeting Thursday At 2 PM Will Address Multi-Family Housing Flap

City of Houston called a special joint committee meeting for Thursday, October 7, at 2PM between Budget & Fiscal Affairs and Housing and Community Affairs. Mayor Pro Tem Dave Martin will chair the meeting.

The agenda is scant. It entails a Housing and Community Development “Financial Update” with three speakers:

  • Keith Bynam, Deputy Director, Housing and Community Development
  • Temika Jones, Chief Financial Officer, Housing and Community Development
  • Andy Icken, Chief Development Officer, Mayor’s Office

I asked Mayor Pro Tem Martin for more detail. He replied, “Fiduciary update on City of Houston Housing, specifically CDBG and DR-17, and the status of the investigation from the City Attorney regarding his decision to bring in outside Firms and appropriate resources to ensure independence and completeness.”

Turner Vigorously Denies Allegations

The last part about the City Attorney refers to a self-investigation Mayor Sylvester Turner launched in the wake of explosive allegations by Tom McCasland, Housing and Community Development’s former director. Turner fired McCasland two weeks ago after McCasland accused the Mayor of improperly influencing the award of a housing grant. The Mayor skipped over the top seven recommendations by McCasland’s department to pick the eighth ranked project. The Mayor’s selection would have delivered one quarter of the affordable housing for basically the same price as the four projects recommended by the Department of Housing and Community Development. It just happened to turn out that the Mayor’s former law partner, Barry Barnes, is also a stakeholder in the eighth ranked project.

Turner vigorously denies any charges of impropriety and asked the City Attorney to investigate. However, the appointment of an appointed official to do the investigation was panned by the media.

Since then, the Texas General Land Office (GLO), HUD and the Harris County Attorney have each launched separate investigations. And now it appears that the City Attorney will also bow to public pressure by appointing an outside investigator.

Documents At Heart of Controversy

I spent the better part of the day reviewing complex documents in this case. I will post them below with some brief comments for those who like to refer to original source materials.

  • The 110-page contract between the GLO and City of Houston for $835 million. This is a subset of the $1.2 billion original contract that became the subject of a lawsuit between the same two parties last year. It lays out the expectations for each party, allocates totals to each program, sets performance goals for each, and lists deadlines. The Mayor signed it on Page 104.
  • A letter from the GLO to Keith Bynam, Interim Director of Housing and Community Development. It requested a review of the City’s Multi-Family Rental Program, starting no later than September 29, 2021.
  • The agenda for a review and a list of requested documents. Some of the acronyms in this may be puzzling. MQA stands for “Monitoring Quality Assurance.” MFRP stands for Multi-Family Rental Program. Page 4 lists the purpose of the review. Page 5 lists the scope. Page 11 lists the items that the City had not yet supplied as of 9/30/2021. Page 12 explains regulations that could penalize the City if it fails to provide the requested records.
  • The 40-page 2021 Notice of Funding Availability (NOFA) refers to Round 3 of the Disaster Recovery (DR-17) and Multifamily Program. It lays out the ground rules and selection criteria for the controversial Clear Lake apartment complex preferred by the Mayor. This was the “report card” for companies submitting proposals. It told them how they were going to be graded – i.e., what would increase or decrease their chances of success. It includes such factors as “flood resilience,” “experience,” “project readiness,” “cost reasonableness,” “disaster-recovery construction standards,” “location relative to the floodway,” and more.

Significantly, in the last document, the City’s Chief Procurement Officer, Jerry Adams, promises, “Bid proposals will be reviewed, underwritten and scored to select awardees based on a predetermined set of criteria outlined in the NOFA.”

Is There a Contract?

Yes and No.

No, in that a contract has not been signed with the Mayor’s hand-picked developer. The developer has not been paid any money. GLO has not even received a recommendation yet as to the developer. Everything blew up on the launching pad before things got that far.

However, the GLO and HUD contend that the NOFA is a contract. It obligates the City to solicit proposals according to criteria that have been agreed to beforehand.

The documentation calls into question whether bypassing seven higher scoring proposals in favor of a lower scoring project might violate the NOFA and federal procurement process regulations.

Here are some important federal requirements listed in the Code of Federal Regulations under 2 CFR Part 200:

  • Appendix I to Part 200 – Full Text of Notice of Funding Opportunity: “The intent is to make the application process transparent so applicants can make informed decisions when preparing their applications to maximize fairness of the process.” (E. Application Review Information)
  • § 200.319 Competition: “All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and § 200.320.

Additionally, in CONTRACT NO. 21-134-000-C788 above (section 8.05, page 19), the City of Houston agreed to strictly adhere to sections 318-326 of 2 CFR Part 200.

From that perspective, there was and is a contract. As this controversy plays out, the contract question will likely play a central role. Don’t be fooled if someone says, “There was no contract.” Clarify what that means.

To View Special Meeting Thursday At 2PM

To view the Microsoft Teams Live Meeting, go to: https://tinyurl.com/JOINTMTGBFAHOU.

Presentation handouts may be available at: https://www.houstontx.gov/council/committees/bfa.html. As of this posting, no handouts were available.

This meeting will also be broadcast on HTV, the City of Houston’s Municipal Channel.

Posted by Bob Rehak on 10/6/2021

1499 Days since Hurricane Harvey

The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.