Texas House committee studies how cities contract with nonprofits for health, safety and homelessness services
The Select Committee on Governmental Oversight took testimony on Sept. 30 under an interim charge to recommend safeguards against conflicts of interest in local spending on outside groups. Officials from Austin, Houston, San Antonio and Dallas testified, a press account said.
Austin. A Texas House committee heard testimony on Sept. 30 on how cities and other local governments pay nonprofits and consultants to deliver public services, part of a study that asks the committee for recommendations to the Legislature.
The Select Committee on Governmental Oversight, chaired by Rep. Cody Vasut, a Republican from Angleton, is working from an interim charge that Speaker Dustin Burrows issued in March. It asks the committee to study how local governments appropriate money to, or contract with, consultants and nongovernmental organizations for services including health and human services, public safety and homelessness; to weigh the risks and benefits of that spending; to examine how much influence those groups have on public policy; and to recommend ways to prevent conflicts of interest and ensure transparency and accountability.
The same hearing took up two other charges: a study of adding New Mexico counties to Texas, and the role of for-profit and nonprofit groups in local prosecutors' work.
What the cities told the committee
Austin's chief financial officer, Ed Van Eenoo, told the committee that a city audit of 25 social service providers found 76 percent of the contracts had failed to meet one or more performance expectations, according to an account of the hearing by Texas Scorecard, a conservative news site. Asked by Rep. Ellen Troxclair, a Republican from Lakeway, what happens to a provider that misses its targets, he said "right now, there are not good consequences in place," and that staff would work on that in a comprehensive review of the city's social services contracting.
Jeff Coyle, an assistant city manager in San Antonio, described requests for proposals, monthly performance reports and the city's right to withhold payment, and said an independent audit in December 2025 of the agencies the city funds found no recommended changes to its monitoring, the site reported. Dallas Council member Cara Mendelsohn proposed a public list of poorly performing vendors who would not be used for three years.
“The city views contracting not as a substitute for accountability, but as a tool for delivering services effectively, efficiently, and at the scale that our communities require.”
Concerns about political activity
Ben Crockett of the Texas Public Policy Foundation, a conservative research group, told the committee that some city-funded 501(c)(3) organizations make grants to affiliated 501(c)(4) groups that can take part in elections, which he called "taxpayer-subsidized political activities," Texas Scorecard reported.
The charge does not change any law. The 90th Legislature convenes Jan. 12, 2027. As of Oct. 4, the Legislature's site had posted no witness list or minutes for the hearing.
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