Two months ago, the Texas General Land Office (GLO) launched a review of Houston’s Housing and Community Development Department (HHCD) after Mayor Sylvester Turner allegedly tried to steer a $14 million affordable-housing contract using HUD money toward his former law partner. The GLO review, released Tuesday, notes both findings and corrective actions required of Houston to ensure a fair, open, and competitive award process in the future.
The GLO review criticized HHCD for five major problems listed below. The City has until December 10, 2021, to address the GLO review’s findings by delivering a Corrective Action Plan. Houston then has another 90 days to implement the plan. Hanging in the wind: the fate of the City’s entire multi-family rental program, Harvey multi-family relief projects in the pipeline, and millions of dollars in past awards now being questioned.
The GLO review was triggered on September 22 when the HHCD’s former Director Tom McCasland accused the Mayor during a City Council meeting of overriding his department’s recommendations. The Mayor recommended a project that would have benefited his former law partner. McCasland alleged that his department’s recommendations could have built four times the amount of affordable housing units in poorer neighborhoods for roughly the same amount of money. McCasland also alleged that he was being forced to participate in what he called a “charade of a competitive process.” The Mayor promptly fired McCasland, leading to multiple investigations. The GLO review was just one.
Summary of Five Main Findings
The GLO never uses the word “charade” in its findings, but one could easily infer a charade from their substance.
The GLO’s objective was to evaluate whether the City had adequate controls in place to meet program and contract requirements for the allocation of $450,050,472. At a high level, the five findings released on Tuesday 11/23/21 require the City to:
- Strengthen NOFA/RFP Issuances – GLO found inconsistencies among the way NOFA/RFPs (Notice of Funding Availability/Request for Proposals) were issued, evaluated and scored. Inconsistencies included program content; threshold criteria; and award processes.
- Strengthen the NOFA/RFP Scoring Method – GLO found the City does not have controls in place to ensure it follows criteria for awarding projects.
- Ensure Documentation Supports Project Awards – GLO found that Houston does not document subjective criteria used by HHCD and the Mayor’s office when evaluating applications.
- Strengthen Conflicts-of-Interest Provisions – GLO found the City does not have internal controls that screen out Conflicts of Interest.
- Produce Documentation Justifying Award Recommendations – GLO found inconsistencies between grant requirements and recommendations. Subjective factors – not based on the competitive process – were often used to recommend projects without explanation.
Full Text of Findings and Exhibits
Here is the GLO’s entire 11-page letter to HHCD’s Interim Director Keith Bynam, and three exhibits referenced in the letter:
- Exhibit 1 – Scoring results for four NOFAs
- Exhibit 2 – A memo to the Interim Director from an Assistant Director attempting to justify the Mayor’s intervention on a low scoring project
- Exhibit 3 – Examples of HHCD responses to appeals from developers. The responses do not document specifics for rejections.
If you read nothing else, make sure you see Page 1 of Exhibit 1. It recommended making an award to one project that 25 other projects outscored. Those 25 higher scoring projects were either wait-listed or not recommended. Hmmmm!
Egregious Examples of Specifics Cited in GLO Report
Here are some of the more serious infractions that support the five major findings.
GLO complained about Houston’s lack of consistency, accuracy and fairness. For instance:
- Data for 40% of tested applications was entered incorrectly, resulting in incorrect scoring.
- Submission deadlines for some RFPs were shortened in a way that excluded some applications and diminished the quality of others. This resulted in competitive disadvantage for some applicants and presumably an advantage for others.
- Conflict of interest disclosures were excluded from some rounds of funding.
- 9 of 12 applications in two other rounds of funding did not have conflict of interest forms actually signed by applicants or co-applicants.
- Some NOFAs contained language giving the Mayor’s office the right to approve or deny applications in accordance with the Mayor’s priorities, but the Mayor was not required to explain why.
- The City frequently did not give specific reasons for approving or denying a grant.
ABC13’s Ted Oberg ran this story Tuesday night about the millions of dollars now at risk for poor people who still need help after Harvey.
Here is the Mayor’s response to the charges in GLO review.
Posted by Bob Rehak on November 24, 2021
1548 Days since Hurricane Harvey
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