Harris County Commissioners Vote to Explore Using Flood-Bond for Maintenance, Possibly Floating Another Bond

At the October 27, 2020 Harris County Commissioners Court meeting, Precinct 2 Commissioner Adrian Garcia introduced a motion from the floor to explore using flood bond funds for maintenance projects. The motion was not on the agenda, nor did he circulate it before the meeting. It caught some commissioners off guard. Minor changes in wording between what the motion said, and how Garcia and Commissioner Rodney Ellis described it, will keep court watchers guessing about their true intent.

In the end, the motion passed. It didn’t commit commissioners to anything more than conducting a survey and exploring options. However, last Tuesday’s discussion gives voters a peak over the horizon. It reveals what commissioners think and how desperate some are to find new sources of revenue rather than reign in runaway spending.

Garcia Explains Rationale for Motion

View the discussion yourself online. Click on Departments (Part 4 of 5). Start at approximately 4:21 into that segment. Below is a close transcription.

Adrian Garcia: The flood control district has developed the future operations and maintenance needs for the projects that the district will be constructing using the bond program. The overall need for the next 10 years is ninety seven million, with an average annual budget increase need of approximately 10 million per year. Major infrastructure that the control district owned and maintained are detention ponds, earthen channels, concrete channels, and outfall. It’s extremely important that the county funds the proactive maintenance and deferred maintenance for all Harris County owned infrastructure.

I see the spreadsheet that the district has submitted for their 10-year, cost-increase projections for bond projects and growth only as of 10/16 of this year. I am curious as to why some of the heavy equipment, the vehicles, management software implementation, the customer service, the (garbled) software, large repair projects, why these couldn’t be paid out of the bond funding [Emphasis Added, see below] versus using general-fund dollars?

And so I’d like to propose a motion that would touch on the customer-service satisfaction aspect of the flood control district. (Interruption) …

…so the customer-service satisfaction model, the risk-based model and the deferred-maintenance model.

Garcia Proposes Motion

Adrian Garcia:  And so my proposed motions would read that Harris County flood control district should perform a customer satisfaction survey for deferred maintenance and services to develop the maintenance cycle and overall maintenance budget needs.

The flood control district should develop an overall condition assessment for the infrastructure and based on the risk of failure and risk of potential flooding, the flood control district should develop a prioritized criteria and maintenance-needs budget and the Harris county flood control district needs to take a comprehensive look at the condition of all existing infrastructure and identify maintenance needs that have been deferred for years due to budgetary or any other reason. There are many areas where repair work can be significantly large and may also qualify for a capital project. And the Budget Management Department needs to evaluate if we can fund this through a bond program [Emphasis Added, see below].

So that’s the motion I’d like to propose.

Judge, just make sure that we’re not forgetting how to maybe better deal with the O&M (operations and maintenance) side of the Flood Control District’s operations.

Ellis Wants Maintenance Tied to “Equity” Scheme

Rodney Ellis: Second.  It also brings to my mind the question of, “How much of the flood bond money was spent before we adopted the equity guidelines?” 

Matt Zeve (Deputy Exec Director, HCFCD): Yes, sir, Commissioner. My staff and I are working on getting those numbers over to you by the end of the week, plus all the other questions that you asked us to dig into. We plan to have that over to you before the end of the week.

Rodney Ellis: And Commissioner (Garcia), I only ask because it relates to the issue. Let’s say if a half a billion, five hundred million was spent before we adopted equity guidelines, I know the city is trying to get us to do some swap. They don’t have equity guidelines as it relates to that … some other project in another county … and I’m going to propose that they give us a recommendation or I’ll come up with one so that we make up a project that will fund it in the absence of equity guidelines, possibly in an equitable way. And money was taken off the top while we were coming up with guidelines, and I want to compensate for that going forward. And that ties in with what you’re doing today.

Hidalgo: So there’s a motion and a second… 

Cagle Objects Because Motion Isn’t in Writing

Cagle: Was it sent around, Judge? (Meaning, “Was the motion circulated so that commissioners could see in writing what they were voting for?”)

Adrian Garcia: It’s coming around now, Commissioner.

Cagle: I’ll hold off until I see it. 

Hidalgo: We can circle back (before taking a vote).

One Hour Later, Motion Passes

Approximately an hour later, at time code 5:23:50, Hidalgo finally circles back to Garcia’s motion.

Commissioner Jack Cagle asks Commissioner Garcia if he discussed his motion with the leaders of the flood control district. Answer: “Some of it.”

Cagle then states, “It’s asking for an assessment. I don’t have an issue with that.”

Commissioner Radack asks whether it could be implemented without coming back to court.

Robert Soard, speaking for the County Attorney’s office, says that any action on the survey would have to come back through Commissioner’s Court for a vote.

Garcia restates the motion, but this time the wording differs slightly: To direct the Harris County Flood Control District to perform a customer satisfaction survey for deferred maintenance and services (i.e. mowing, desilting, etc.) to develop the maintenance cycle and overall maintenance budget needs, to develop an overall condition assessment for the Infrastructure and based on the risk of failure and risk of potential flooding, HCFCD should develop a prioritization criteria and maintenance needs budget and to take a comprehensive look at the condition of all existing infrastructure and identify maintenance need that has been deferred for years due to budgetary or any other reason. There are many areas where repair work can be significantly large that may also qualify for a Capital Project and Budget Management Department need to evaluate if we can fund these through a Bond Program.

Ellis seconds it again. The motion passes.

Text of Flood Bond That Voters Passed

The words “maintenance” and “operations” appear nowhere in the bond language approved by voters.

Under Texas law, bond funds from the 2018 referendum can only be used for purposes approved by the voters.

However, as Commissioner Garcia alludes to in the final sentence of his motion, some maintenance projects are so large that they could legitimately be characterized as capital projects. In fact, the 2018 Flood Bond contained three such projects:

• F-53 $40 million for “Rehabilitation of Channels Upstream of Addicks Reservoir to Restore Channel Conveyance Capacity”
• F-52 $20 million for “Rehabilitation of Approximately 20 Miles of Channels Upstream of Barker Reservoir to Restore Channel Conveyance Capacity”
• CI-012 $60 million for “Major Maintenance of Cypress Creek and Tributaries”

Before the 2018 Bond Election, Harris County Flood Control had only a $120 million budget for maintenance, half of which it spent on capital projects. So you can see that those three maintenance projects would have consumed the entire annual maintenance budget by themselves. Clearly, they fall into a gray area.

The three projects above fall under language in the flood bond that allows “channel improvements.” Also HCFCD publicized them as potential projects before the vote.

Is It Wise to Pay for Maintenance With Bond Money?

Ordinarily, it’s a bad idea to pay for maintenance out of 30-year bond funds.

Mr. Garcia’s introduction of the motion mentioned things not in the motion. For instance:

• Vehicles
• Software
• Customer service

The County should never, in my opinion, pay for those with a 30-year bond. Neither should the bond pay for mowing, which WAS in the motion.

It’s literally like taking out a mortgage to cut your grass. A week later, you’re back where you started and saddled with 30 years of debt.

A New Bond?

Above, I bolded “THE BOND” and “A BOND.” At first, Commissioner Garcia said he wanted to use money from THE BOND (meaning the 2018) bond to pay for some maintenance items. But his actual motion refers to “A BOND.”

That’s certainly a strange way to refer to the historic flood bond passed in 2018. It sounds as though he’s laying the groundwork to float another flood bond.

Rodney Ellis’ rush to second the motion supports the second interpretation. For months, Ellis has consistently carped that there won’t be enough money in the 2018 bond to do all the projects that need doing.

Ellis, Equity Flap and Elm Grove

That’s why Commissioner Ellis redefined “equity” earlier this year. The 2018 Flood Bond specified “equitable distribution of funds.” 88% of people throughout the county voted for that language – thinking they would get their fair share of flood bond money. However, Commissioner Ellis redefined the word to favor the socially vulnerable and penalize others.

Now, Ellis seems to be linking help for Elm Grove to the City of Houston’s adoption of “equity guidelines” comparable to his. He said, “I’m going to propose that they give us a recommendation or I’ll come up with one…” Then he added, “That (meaning equity) ties into what we’re doing here today.” Literally, they are conducting an inventory of maintenance needs and developing a prioritization framework for it.

That framework will no doubt be used to ensure distribution of maintenance dollars according to Mr. Ellis’ definition of equity.

Posted by Bob Rehak on 11/3/2020

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