Even though those funds will be returned to state control, the aid still must be spent to help Harvey victims in the city.
Our 13 Investigates team got a hold of a letter from the General Land Office earlier this week, which says the city missed deadlines for spending money for Harvey flood victims.
The GLO claims the city of Houston has missed benchmarks to disperse funds to Hurricane Harvey flood victims. The GLO's letter also states the city missed seven of the nine benchmarks at the end of June, allowing the GLO to terminate the contract for disaster recovery funds.
On Friday, the City of Houston said its "Houston Housing and Community Development department is fed-up with the General Land Office's continued actions to thwart the City of Houston's post-Harvey recovery efforts."
"On July 7, the GLO notified the City that it was removing $40 Million from the City's Public Services program to use the funds for its oversubscription of the GLO Homeowner Assistance Program,", Houston Housing and Community Development Director Keith Bynam said in a news release. "This reverse Robin Hood effect is a calculated move by the GLO and has real ramifications. Houstonians are not nameless widgets or numbers on a page; they are people with lives and jobs and families, and they deserve better. These Houstonians need help to recover, not be stripped of funds, have funds redirected or endure more delays."
The GLO provided demographics data for the families who it has served after taking over Houston's Homeowner Assistance Program, which show the majority of applicants are low-income and 66% are Black.
"The GLO has already rebuilt or is rebuilding 600 homes for Houstonians that were unserved by the City of Houston's failed program. More than 850 more are approved for construction, but nearly 400 Houston families more will not be served without additional funds being added to the program," the GLO said in a statement.
Regarding the funds that the city will no longer have direct control over, Houston said $40 million was removed from a Public Services program that will "gravely impact services for persons experiencing or on the verge of homelessness, survivors of domestic violence and job training programs."
"It is unconscionable that the GLO would remove funding from the City of Houston," said Melody Barr, who is deputy assistant director at Houston's Public Services Program. "Our department and non-profit service providers have worked tirelessly, answered numerous questions, and submitted copious rounds of documentation, all to have the funds taken away to benefit the GLO's own programs."
The city said it was notified Friday that the GLO was also removing $12 million from the City of Houston Housing and Community Development's Economic Development program.
"The reallocation of $12 million from the program will hurt Houston businesses impacted by Hurricane Harvey and reduce the number of jobs these businesses would have created," Housing and Community Development Assistant Director Ray Miller said in a statement."
The city says the reason it failed to meet some of the benchmarks is due to the GLO delaying the approval of several programs for six to nine months.
Among the delays Houston says are caused by the GLO, the city said it is currently waiting on the approval of $120 million for critical projects. Without the GLO's approval, the city says it "would likely not be reimbursed by the GLO, thus forcing the City to wait at the discretion of the GLO and, in essence, stalling its ability to help Houston residents."
"Given that the U.S. Department of Housing and Urban Development has already determined that GLO discriminated against communities of color by denying flood mitigation funding to the City of Houston, it is audacious that GLO would actively slow down the process of providing much-needed relief and restoration to those who suffered losses from Hurricane Harvey," Houston Mayor Sylvester Turner said in a news release. "The office's adversarial relationship with the City benefits no one, especially not those who are already up against the ropes."
In a statement to ABC13 on Friday, the GLO said the city was at fault for the delays.
"After missing the benchmarks the City of Houston set for itself - three times in a row - the GLO has determined the City of Houston has made no process improvements and never will. The GLO has not slowed the City of Houston from using disaster recovery funds - only prevented them from using them improperly. Any delays are a result of the City of Houston's misplaced focus on circumventing rules and requirements. This can no longer continue," according to the statement.
In a news release on Friday, the City of Houston said:
These are the latest examples of the GLO's unreasonable and unjustified actions toward the City of Houston.
As governmental entities, the GLO and the COH have a mutual responsibility to Houston residents. It has been five (5) years since Hurricane Harvey and three (3) years since funds were awarded to the COH to begin programming.
Despite the GLO's continued intervention, the COH has made great strides to improve the quality of life for Houstonians, processed thousands of applicants, and has applied a fair and consistent process for all programs. Still, the City could and had planned on doing so much more.
HCD urges the U.S. Department of Housing and Urban Development to investigate the GLO's biased and inconsistent treatment of the COH and its residents.
Until then, the City of Houston will continue to be transparent and fight for Houstonians and Houston's recovery. For additional information on how the GLO has purposely delayed COH programs, please contact hcddpio@houstontx.gov.
The city sent the following statement to ABC13 earlier this week:
GLO has proven to be an adversarial party in dealing with the City over the last four plus years. Their letter is misleading, inaccurate and states nothing new. This is also the same GLO that HUD has found discriminated against and continues to discriminate against communities of color in the City of Houston.
They have actively participated in slowing down the same process they criticized in the letter. The City of Houston Housing and Community Development Department is preparing a letter in response to the GLO.
Note: An earlier version of this report suggested a determination had already been made that the city must return all the money. That is not yet the case.