Local Texas election officials concerned about software vendors’ financial scare

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A company that makes software used by Texas’ largest counties to manage voter registration data has thrown election officials for a loop again with the departure of two top executives and mixed messages about its financial viability, just months before a critical statewide election.

The latest word from Votec Corp.’s chairman is that the company has secured enough funds to continue operating for now. But the California-based company’s dire warnings about a shutdown just days earlier spooked some county election officials, who must now consider whether to try to switch to a new commercial vendor, migrate to a state-run system that they have concerns about, or stick with an unsteady partner in Votec.

The uncertainty follows a similar scare last year, when Votec demanded a 35% surcharge from its customers to help it stay afloat. And it comes as election officials prepare for a constitutional amendment election Nov. 4, a potential redrawing of legislative districts and next year’s primary election.

“This is incredibly frustrating," said Kaleb Breaux, elections administrator in Collin County, a Votec customer and one of the state’s most populous counties. “Are we going to have the support we need? If something fails in the middle of an election, is someone going to be on the other end of the line to answer our call?”

Votec chairman’s latest plea for emergency funds

Software like Votec’s is crucial for pulling off elections and ensuring that voters are assigned to the correct precinct and get the right ballot. The massive databases help election officials manage and store voters’ addresses and voting history, plus images of registration applications, signatures, ballot envelopes and other records that help reaffirm the security and integrity of elections. The data also allows campaigns and other community groups to access constituent information.

Votec is one of three companies approved to provide voter registration data services in Texas. Its Vemacs product is used by 26 counties, including Harris, Dallas, Bexar, Cameron and Collin.

That’s down from 33 before last year’s financial scare, when Votec demanded that its customers pay an emergency surcharge to save the company from imminent collapse. Bexar County paid the company nearly $50,000, while some other counties switched to other vendors or the state’s system ahead of the 2024 election.

On Thursday, a new crisis erupted when Votec founder and Chairman John Medcalf emailed the Texas Secretary of State’s Office and a Texas state senator, whom he declined to name, saying that the company needed another emergency infusion.

“Votec will need to close down Monday without some guarantee of financing,” Medcalf wrote in the email to state officials, which he shared with Votebeat. He suggested the state work with him to entice “Mark Cuban or Elon Musk or Joe Rogan to see us through this spell for a nice return on their investment and some interesting insights.”

On Friday, Medcalf told Votebeat that the company was no longer able to make payroll. Votec CEO Trevor Hayward and President Randy Propp both resigned that day.

But this week, Medcalf said client counties stepped in again to rescue the company, though he won’t say which ones. By Tuesday morning, Medcalf had emailed his clients in Texas saying Votec’s “doors and portals are open again.” He added that the company now has a financial cushion and that he’s been communicating with the Texas Secretary of State’s Office to “monitor our efforts to make the next 18 months smooth sailing for you and the state.”

Medcalf told Votebeat that the company, which employs about 20 people, has the staff to support county election officials in the coming months. “They're still all here,” he said. “Could one or two of them say, ‘I can't take it anymore?’ Of course. But so far, we seem to be a pretty solid team.”

The Texas Secretary of State’s Office said it has not communicated with Medcalf.

State is working on a backup option for Votec’s clients

State officials have been working with counties on contingency plans to guard against disruptions to election data services. After Medcalf’s first demand for money, officials with the Secretary of State’s Office began offering counties the opportunity to upload their data to the state’s voter registration management system at no cost. That system, Texas Election Administration Management, or TEAM, was upgraded this summer.

Alicia Pierce, spokesperson for the Texas Secretary of State, said the agency will ensure counties have the data they need “to conduct secure and accurate elections.”

However, some election officials, especially in the state’s largest counties, still have concerns about whether the updated TEAM can handle data for voters from the entire state. And they’re not sure they’d have enough time between now and November to switch to TEAM or another vendor.

In Dallas County, elections administrator Heider Garcia said the county has “a plan in place to continue to run normally.” He declined to comment about whether he’d continue to use Votec. In Harris County, the clerk’s office and the tax assessor collector both use Votec products and said that they had contingency plans in place or in the works.

Michele Carew, the Bexar County elections administrator, said the county’s contract with Votec was set to end at the end of this month and that she’d already intended not to renew it. The county is in the process of contracting with state-approved vendor VR Systems.

She said the county has been working with the state to ensure that a Votec shutdown wouldn’t interfere with planning for upcoming elections.

In Collin County, officials declined to pay last year’s requested $40,000 surcharge but continued to use Votec’s software and electronic pollbooks. Breaux, the election administrator, said the company’s system has always worked well and the county was in the process of renewing its contract with the company when it got the surprising notice that Votec was in financial straits again.

Now, Breaux is on a tight schedule to figure out whether to stay with Votec or find a new vendor.

“The path of least resistance would be to stay with them and limp through with them,” Breaux said. “But I have some concerns about the support.”

Medcalf blames Texas counties for Votec’s problems

Medcalf, who founded Votec in the 1980s, managed the voter registration systems in Nevada’s largest counties before the state cut ties with him last year. Every county in Nevada now uses the state’s recently launched system developed by vendor KnowInk. Medcalf told Votebeat last year that he had a falling out with one of the state’s election officials.

He has clashed with officials in Texas as well. In an email to Bexar County management reviewed by Votebeat, Medcalf complained that Carew, the new elections director, “has never returned a phone message of mine. Michele wouldn’t be the first [election administrator] who does a fine job but has no background to deal with what it takes to qualify a complex system to support that work.”

Carew told Votebeat she would typically communicate with the company’s customer service or the CEO. She said that email Medcalf wrote about her “irrevocably severed the relationship between Votec and Bexar County elections.”

Medcalf told Votebeat that his company’s latest financial troubles in Texas were due in part to Bexar County’s failure to make payments and Harris County’s delayed payments.

Carew denied his claims and said Bexar’s next payment was not due until the end of August. The Harris County Clerk’s Office told Votebeat in an email that “any suggestion that non-payment from Harris County is the cause of the vendor’s closure is inaccurate, given that the company has been experiencing financial issues for over a year.”

When asked if the surprise surcharge he imposed on Texas counties last year may have contributed to a loss of business in Texas, Medcalf said, “I’m sure it did.”

“That was a bad call on my part,” he said. “It’s totally my responsibility. I was thinking that people would not have trouble getting that much money.”

Natalia Contreras is a reporter for Votebeat in partnership with the Texas Tribune. Contact Natalia at ncontreras@votebeat.org.

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