Newton County approves repayment deal with Texas Division of Emergency Management after FEMA deobligation

Newton County commissioners on Feb. 24 approved an agreement with the Texas Division of Emergency Management (TDEM) to repay funds that were returned to the Federal Emergency Management Agency after the closure of a 2018 hazard mitigation grant project.

A court speaker summarized the grant history: the county applied after a March 2016 Sabine River flood; FEMA awarded the Hazard Mitigation Grant in July 2018 approving 61 properties for potential acquisition and demolition. The county said it acquired 25 properties and demolished 18 by the extended period of performance; seven properties were demolished after the grant period closed and FEMA later deobligated the acquisition costs for those seven parcels.

"We finished it out at our own expense. Please reimburse us for the money that we paid to acquire the projects," the court speaker said, arguing the demolitions were consistent with the program's purpose even though they fell outside the contract period. FEMA upheld a regional denial and then a headquarters decision, concluding the acquisition costs for the seven parcels were ineligible because the work occurred after the period of performance.

TDEM notified the county that it had repaid FEMA and was seeking reimbursement of $86,912. The court said TDEM had placed holds on other county reimbursements pending resolution; the county estimated minimum withheld reimbursements of roughly $250,000 for other projects.

To resolve the matter, the court approved a repayment agreement that calls for an immediate $225,000 good-faith down payment and for the county to sell property and pay the remaining $581,991 as proceeds become available. The court authorized using up to $225,000 from an investment account described in the meeting record as a settlement-derived rainy-day fund to provide the down payment and to restore the county's flow of reimbursements once TDEM receives the payment.

Commissioner White made the motion to approve the agreement; Commissioner Hopson seconded. The court approved the motion and the separate motion to pay the initial installment from county investments.

Court discussion noted legal limits on borrowing against county investments under Texas law and explored alternatives, including using road-and-bridge reimbursements or selling other county-owned parcels. The court directed formation of a committee to review county real property holdings and pursue sales as needed to retire the remaining balance.

The agreement and payment are intended to restore the county's standing with TDEM and FEMA and to clear a hold on reimbursements for other projects while the county pursues sale of the remaining properties.