Newton County agrees to repay $806,991 after FEMA denies appeal; court approves $225,000 down payment from investments

Newton County commissioners on Jan. 28 approved a written repayment agreement with the Texas Division of Emergency Management to resolve a $806,991.12 deobligation tied to a FEMA Hazard Mitigation Grant (DR4266TX‑0011) from a 2016 Sabine River flood project.

The court heard a detailed presentation from county staff who reviewed the project history: the county applied in October 2016, FEMA awarded the grant in July 2018 approving 61 properties for acquisition and demolition, and the original period of performance ran through Dec. 19, 2020. The county obtained three extensions and ultimately extended the POP to March 13, 2023, but seven approved parcels were not demolished within the POP. FEMA and TDEM concluded those seven acquisitions were performed outside the POP and deemed the acquisition costs ineligible, leading to the $806,991.12 deobligation.

County staff said Newton County pursued the available appeals — first to a FEMA regional office and then to FEMA headquarters — but both were denied. TDEM subsequently paid the deobligated amount back to FEMA to close the project and requested written repayment from Newton County; pending collection, TDEM has held other county reimbursements.

Under the agreement approved by the court, Newton County will deliver a good‑faith down payment of $225,000 immediately, with the remaining $581,991.12 to be repaid “as properties are sold” under terms negotiated with TDEM. Commissioners discussed funding the down payment from an unbudgeted county investment account (a rainy‑day fund) established from a 2012 settlement; county staff said the investment account holds approximately $835,000 and that accessing $225,000 is permitted without penalty. Commissioners also discussed legal limits on borrowing and other potential sources of repayment.

The court voted to approve the repayment agreement (motion by Commissioner White; second by Commissioner Hobson) and separately approved the payment of the initial $225,000 installment from county investments, with a provision that proceeds from property sales will restore the fund when available.

County officials said they will pursue sale of county‑held parcels (including a noted 118‑acre tract) to satisfy the remaining balance and to restore reimbursements from TDEM. The court also voted to form a small committee to review county real‑property holdings and make recommendations on utilization or sale.

The actions leave the county on a path to repay the deobligation while seeking to restart other TDEM reimbursements the county said are currently on hold. No timeline for completing sales or the full repayment was specified at the meeting.

What’s next: the county plans to submit the initial payment to TDEM immediately and to begin listing county properties; the committee charged with reviewing holdings was authorized to form and report back.