Refugio County Can't Repay Its $3 Million State Disaster Loan
Summary
A January 2026 Texas State Auditor's Office review found Refugio County cannot repay the $3 million disaster recovery loan it took from the state in October 2023 while also keeping its required cash reserve. The same program had already forgiven the county's first, $6.1 million loan in August 2025. Created by 2019's Senate Bill 6, the loan program sizes loans to the disaster -- eligibility requires rebuild costs above half a year's revenue -- not to a small county's capacity to pay them back.
The loan -- taken October 2023, after Hurricane Harvey⧉ put the County's courthouse repairs at $27 million -- carries no net interest above the $3 million principal. The Disaster Recovery Loan Program⧉ only lends when rebuild costs top half a year's revenue, so the debt is built large relative to what small counties take in. It's the second time for Refugio: the County's first loan, $6,146,000 from 2022, was already forgiven in August 2025. Together the two loans total $9.146 million; forgiveness has covered 67% of it so far. This audit is the statutory trigger for the same review on the remaining $3 million.
View data as table
| First loan, 2022 (forgiven Aug 2025) | 6,146,000 | Received 2022 for Hurricane Harvey courthouse damage; forgiven by the state in August 2025 after an earlier audit |
|---|---|---|
| Second loan, Oct 2023 (this audit) | 3,000,000 | The loan the State Auditor forecasts the County cannot fully repay |
View data as table
| Annual loan payment due, 2024-2033 | 300,000 | The $3 million loan is repaid through annual payments of $300,000 over 10 years |
|---|---|---|
| Funds available after required reserve, 2026-2033 | 0 | The audit forecasts the County falling below its minimum required cash reserve every year from 2026 through 2033, leaving nothing for the loan payment |
- Refugio can't repay a $3M loan the state issued. $0 is left for the $300,000 annual payment, every year to 2033, after the required cash reserve.
- The shortfall is structural. The program only lends when rebuild costs exceed half a county's annual revenue -- the debt starts out large relative to the borrower's means.
- Forgiveness is the built-in backstop, and Refugio's used it before. Its first loan, $6.146M (67% of the $9.146M total borrowed), was forgiven in 2025 after the same kind of audit.
Loan figures, payment schedule, and forgiveness dates from State Auditor's Report No. 26-014 (January 2026). Program eligibility rules from TDEM's Disaster Recovery Loan page. The $9.146M total and 67% forgiven share are this publication's arithmetic. This audit determines repayment capacity only; it does not itself forgive the loan.
Sources(3) ▾
- Texas State Auditor's Office, An Audit Report on Refugio County's Disaster Recovery Loan (Report No. 26-014) (2026-01-31) — The Texas State Auditor's Office limited audit determining whether Refugio County can repay the $3 million Disaster Recovery Loan it received from the Texas Division of Emergency Management in October 2023. Fetched and read in full (7 pages, including Figure 1 and Figure 2 read as page images). Source for the audit's central finding (the County will not be able to repay after complying with its required cash reserve balance), the loan terms ($3 million, $300,000 annual payment, 10-year term ending 2033), the prior forgiven loan ($6,146,000, forgiven August 2025), the $27 million courthouse repair estimate, the Hurricane Harvey August 2017 disaster declaration, and the Texas Government Code Section 418.064(c) audit mandate. Direct fetch succeeded; the numeric figures live in embedded images/tables and were read from the page renders. A Wayback capture was confirmed at read time. sao.texas.gov · original document
- Texas Division of Emergency Management, Disaster Recovery Loan Program -- Emergency Management Officials (2026-08-14) — The Texas Division of Emergency Management's own program page for the Disaster Recovery Loan Program. Fetched and read in full (loan section read from the raw page markup). Source for the program's statutory origin (Senate Bill 6, Sen. Kolkhorst, 86th Legislative Session), the eligibility threshold (rebuild cost greater than 50% of the entity's total revenue for the current fiscal year), the loan conditions (at or below-market interest rates, term not to exceed 10 years), the two-year audit trigger, and the forgiveness mechanism (forgiveness may be granted if the state auditor determines the recipient is unable to repay, subject to Legislative Audit Committee approval). Direct fetch succeeded; a Wayback capture was requested and indexed at read time. tdem.texas.gov · original document
- Texas Legislative Budget Board / Texas Legislature Online, Fiscal Note, SB 6, 86th Legislature (Committee Report), Legislative Budget Board (2019-05-16) — The Legislative Budget Board's fiscal note for SB 6 of the 86th Legislature, hosted on the Texas Legislature Online. Corroborates that SB 6 created the disaster recovery loan program to provide short-term loans for disaster recovery projects to eligible political subdivisions, that the Disaster Recovery Loan Account was created to hold appropriated money and loan repayments, and that the bill took effect September 1, 2019. Independent second Tier-1 source for the program's statutory origin; the TDEM program page is the primary. Direct fetch succeeded; Wayback save was rate-limited at read time. capitol.texas.gov
Comments
Always open. Logged-in readers can annotate paragraphs in place.
Texas's own auditor says Refugio County can't repay the $3 million disaster loan the state gave it. Report No. 26-014⧉ forecasts $0 left for the $300,000 annual payment every year from 2026 through 2033, after the County sets aside its required cash reserve.