Hays County under scrutiny for nearly $2.5 million loss of funds

The timeline above illustrates the events that led to Hays County losing some of the ERA funding. (Graphics by Rachal Russell/Community Impact Newspaper)
The timeline above illustrates the events that led to Hays County losing some of the ERA funding. (Graphics by Rachal Russell/Community Impact Newspaper)

The timeline above illustrates the events that led to Hays County losing some of the ERA funding. (Graphics by Rachal Russell/Community Impact Newspaper)

In February, Hays County learned it would be losing federal funding for the second time from its Emergency Rental Assistance Program for not meeting the minimum spending requirement, at almost $2.5 million.

The U.S. Department of the Treasury began the $25 billion program in January 2021, to help citizens with rent, utility and other payments. Through the Department of the Treasury, funding was allocated to more than 500 cities, counties and other entities across the country. Hays County was allocated $6,955,475.70 in ERA1 funding, though the money remained untouched through August, according to the Department of the Treasury’s ERA reports.

It was not until six months later, in July, that the county announced the ERA program that is meant to provide financial assistance to residents for rent, utilities and other payments. The county could potentially receive an allocation of $7,552,074 million in ERA2 funding for non-COVID-19 related expenses but that funding will not be released by the Treasury until ERA1 funds are spent.

In September, the Department of the Treasury allocated even more funding for ERA programs to “high-performing” entities.

Neighboring entities such as Travis County had already spent almost $2 million by Sept. 1. Hays County did not disperse a penny by Sept. 1, therefore making it ineligible for additional funding. The county was not only ineligible for additional funding to help residents, but it was almost too late for the county to keep the original amount of funding provided.

In mid-September, Deputy Secretary of the Treasury Adewale Adeyemo presented detailed guidelines regarding reallocation of funds from entities that had not spent 30% of their funds by October. By the end of the month, Hays County reported it had spent $149,733, or 2.65% of the funds. As a result of not meeting the minimum requirements, $772,791.22 was taken from Hays County’s ERA fund—along with 20 other entities nationwide—in December and reallocated elsewhere.

In February, the Department of the Treasury took another $1.7 million from the Hays County ERA fund for not meeting the minimum spending requirement. On Feb. 7, Hays County Judge Ruben Becerra posted to Facebook a letter he wrote to U.S. Reps. Chip Roy, Roger Williams and Lloyd Doggett asking for assistance regarding the second loss of funds.

“Hays County is seeking an extension of time in order to adequately allocate the funding to our citizens,” Becerra wrote in the letter.

In the letter, Becerra said that the county opted not to hire a third party to run the program as “all proposals received by the county included elevated administration costs, which the county thought would negatively impact the funding available for its citizens in need of assistance.”

However, on the frequently asked questions page of the Department of the Treasury’s website, it is stated that 10% of the funds allocated to entities “may be used for administrative costs attributable to providing financial assistance and housing stability services to eligible households.”

Becerra cited his grievances with the former ERA program manager, Wesley Matthews.

“The shortcomings of the expenditure ratios were a direct result of the program manager’s narrow approach to the administration of the ERA Program,” Becerra wrote.

In his time as program manager from July 2021-January 2022, Matthews alleged that all requests for additional staffing for the program were denied. For $84,000, or 1.2% of the nearly $7 million allocated, the program could have hired six additional employees for help, he said.

When asked about the letter to the U.S. representatives and about Matthews’ attempts to get additional staffing help, Becerra told Community Impact Newspaper in an email “I signed the letter as the head of Commissioners Court. I personally do not believe we should blame anyone but the court.”

Instead of spending $84,000, the commissioners were willing to lose over $2 million, Matthews said.He also alleged that attempts to speak to the commissioners for input and assistance for the program were either denied or very difficult to achieve and were often kept in executive sessions, meaning the transcripts and details are not public record.

The ticketing system to receive applications and keep track of information was run through the county’s information technology system, he said.

Upon Matthews’ departure from the program, the county Commissioners Court issued a request for proposals to outsource the position. They have since approved a contract with Ardurra Group Inc. for the position. Ardurra began meeting with staff, training and the takeover of the program March 9.

The county will be re-evaluated every two months. The minimum amount that needs to be spent will continue to increase by 5% each month. If the county fails to meet that minimum, it could continue to lose the ERA funding.

Requests for 2022 spending data were not made available from the program by the publication of this article.

Residents in need of assistance can apply at https://era.co.hays.tx.us.

Editor's note: This story was updated to reflect that the Treasury Department has not distributed ERA2 funding to Hays County.
By Zara Flores
Zara joined Community Impact Newspaper as a reporter in August 2021. Prior to CI, she interned at Picket Fence Media in Southern California and graduated from Cal State Fullerton where she was assistant news editor for the Daily Titan and copy editor for Tusk Magazine. Zara covers education, business, government and more for Buda, Kyle and San Marcos.