State Rep. Yvonne Davis and Dallas officials are involved in a dispute over $20 million of federal funding from the American Rescue Plan Act, which could jeopardize critical investments in the southern sector.

A memo obtained by The Dallas Morning News late Monday evening detailed instances where Rep. Yvonne Davis, D-Dallas, had an “atypical involvement” in naming grant recipients. The memo was written jointly by interim City Manager Kim Tolbert and the Dallas Parks and Recreation Department Director John Jenkins.

Davis did not respond to requests for comments when reached by two phone calls and a text on Monday.

In 2021, she secured a grant from the Texas Wildlife and Parks Department for the city to serve areas in and around House District No. 111 with housing and workforce development, parks and trails, and libraries and cultural centers.

The City Council accepted the grant in 2022. The resolution attached to the voting item said Davis had “identified several future projects that can be aligned with the grant requirement,” and the state representative wanted to partner with the city to execute those projects.

Money was divided into three categories, and a majority of them were located in Districts 3 and 8.

The Dallas Parks and Recreation Department was given $10 million for parks and trails, including athletic field improvements. About $3.5 million was supposed to go to a digital board. City officials were going to use the remaining $6.5 million for additional projects in collaboration with Davis and TWPD, according to the memo.

The money is yet to be disbursed, and the city is on the hook to obligate those funds before the year ends to meet rules set down by the U.S. Treasury.

Delays in projects

The memo said the Parks Department experienced delays due to Davis’ involvement.

“At every step [of] the procurement process, the state legislative district questioned the processes, which required time to resolve the questions and issues that were brought up,” the memo said.

In the memo, officials said Davis “blindsided (parks) staff” at what was supposed to be an internal meeting by bringing members of the public who demanded a change in designs after they had already been 85% crafted and despite indicating no public input was needed.

After multiple revisions and a public meeting later, Davis’ office still has not approved the design plans, and on Oct. 1, the lawmaker’s office told park officials not to use any more of the money, the memo said.

“It has been very challenging administering the ARPA funds received from Texas Parks and Wildlife Department,” Jenkins said on Monday when reached by text. “It’s unfortunate a former Assistant City Manager misinformed Representative Davis on how the funds could be administered.”

Jenkins, whose department has a separate procurement process, did not say who gave Davis the wrong information. “We are willing to continue with the projects as long as everyone understands the City of Dallas must adhere to all federal, state and city policies, guidelines and compliance requirements when administering the funds,” Jenkins said.

Meanwhile, Fair Park was slated to get $3.5 million. The memo said a project manager was brought on last year to begin designing the message board, and the work was completed. But on Aug. 27, Davis directed city staff to cancel the contract and not expend more money, the memo said.

Potential non-compliance

Officials said they cannot circumvent the standard procurement process and disburse funds, which require monitoring and reporting activity, without violating state and federal law.

In April, Davis told city officials that she wanted to create a grant program for handpicked projects in her district to disburse the rest of the $6.5 million, according to the memo. City officials asked for supporting documents to gauge the eligibility and expenses. Davis’ office gave the required documentation in June, but city officials did not move forward as they said the contracts may not comply with regulatory requirements on all levels of government.

City officials told The News Davis repeatedly insisted on picking the recipients for the various projects and wanted the city to administer funds immediately. Separately, two city officials told The News that Davis showed up during a council briefing in June and refused to leave until city officials cut a check for 100% of the payments.

Typically, the city disburses money when contractors file invoices for reimbursements, according to a state statute detailing the rules for procurement processes. Lawmakers also don’t generally tell the city what vendor and how much money should be awarded to the contractors.

The state representative recently told city officials the North Central Texas Council of Governments was amenable to receiving the money and asked city officials to route the money to the regional agency. Since the grant was given to the city, the city would have to take on compliance procedures for the funds and get reports from the North Central Texas Council of Governments.

City officials offered Davis options to open a procurement process in line with regulatory guidelines or award the $6.5 million to another local governmental entity via an interlocal agreement in which the entity would have to agree to the requirements.

The city would remain responsible for compliance and auditing, if necessary, the memo said.

Former official says some departments could’ve executed projects

At the time, former Assistant City Manager Majed Al-Ghafry oversaw the ARPA funds.

Al-Ghafry, now the Desoto city manager, told The News he was part of the process to secure the federal funds for the city but had not worked on the project for the past 14 to 15 months. Al-Ghafry said city officials, not including the park department, could’ve executed the grant allocation faster.

The former city official defended the grant, emphasizing the language in the original resolution, which said Davis had identified projects that fit regulatory requirements.

Al-Ghafry said there are ways to expedite money for projects if it’s deemed in the city’s best interest, adding that municipalities do it all the time.

“The city manager has the ability to do $100,000 in procurement without going through the regular process. The assistant city managers have the ability to do up to $50,000,” Al-Ghafry said, adding that this is a common tool officials use to expedite projects.

Well-known community members attached to Black churches, such as Friendship-West Baptist Church and Concord Church, are listed to speak on the item during Tuesday’s council meeting.

The News reached out to the speakers Monday evening. Many did not pick up. One who did, John Proctor, did not know he was signed up to speak.

Council member calls for an audit

Deputy Mayor Pro Tem Adam Bazaldua called for an audit into Davis’ involvement in the grant fund, according to another memo obtained by the News late Monday night.

“In government, our biggest priority is maintaining public trust,” Bazaldua said. “In all we do, we must lead with ethics and integrity in order to adequately represent and deliver results for the residents whom we serve.”