Third-Quarter Flood-Mitigation Spending Trends, Surprises

Third quarter flood-mitigation spending data is now available for Harris County Flood Control District and its partners. In some ways, the data shows a continuation of previous trends. But the data also contained some surprises. The major findings:

• Spending continued to dip. Slower project delivery means inflation will claim an increasingly large percentage of taxpayer dollars and may force cancellation of some bond projects.
• If the last quarter of this year is anything like the first three, we could see less than half the activity in 2023 than we saw in 2020.
• The trend toward investing more heavily in minority areas continued and even accelerated. But there was one notable exception – Cypress Creek and its tributaries.
• An unusual $9.7 million real-estate transaction for a stormwater detention basin near the Mercer Arboretum skewed the Cypress Creek total. That was 16.5% of all HCFCD spending for the quarter.
• Without it, many of the numbers below would also have been skewed. For instance, total spending and average spending per watershed would vary dramatically.
• The focus on so-called “equity” spending and the Cypress Creek watershed meant 15 watersheds saw less than a million dollars in activity during the quarter. And five of those received less than $100,000.

Let’s look at each and the implications. Everything below INCLUDES the unusual real estate transaction near Mercer. In several places, I note how things would have changed without Mercer.

Overall, Slowdown Magnifies Inflation Concerns

Overall, flood-mitigation spending dipped about 5% in the third quarter compared to the previous quarter. It declined by a little more than $3 million to $58.8 million. That may not sound like much, but it continues a 3-year downward trend and creates delays that expose residents to more flood risk.

As projects are delayed, their costs also escalate due to inflation, raising concerns about whether there will be enough money in the bond to finish all the projects promised to voters.

Spending this year will likely be a hundred million dollars less than the first full year of the 2018 flood bond – when projects were ramping up. See chart below.

Moreover, spending will be $200 million less than the peak year of 2020 – about half of what it was then.

Halfway through the 2018 10-year flood bond, HCFCD has spent only about a third of the funds approved by voters – $1.65 billion. However, if the present slowdown continues, this will be the third straight year of decline.

The slowdown in project delivery means inflation will increasingly raise costs and undermine the purchasing power of the dollars authorized by voters.

HCFCD acknowledges the serious impact of inflation in its latest bond update to Commissioners Court, and hopes toll-road money remaining in the Flood Resilience Trust will cover any shortfall.

Average Spending in LMI Areas Growing

Data also reveals that with one exception (Cypress Creek and its tributaries), the trend of preferentially allocating funds to Low-to-Moderate-Income (LMI) areas continued and even accelerated when measured by average spending per watershed.

On average during Q3, watersheds with a majority of LMI residents (hereinafter called “LMI watersheds”) received 2.5X more funding than more affluent watersheds – $3.1 million each vs. $1.2 million. That’s up from 1.7X over the longer period since Harvey. So, the gap is widening.

Without the Mercer real-estate transaction, the average for more affluent watersheds would have been cut in half to $600,000. That would have almost doubled the ratio. The recomputed average would created a 4.7X ratio between LMI and all other watersheds for the third quarter.

That trend will likely continue for some time as projects funded by HUD through the Texas General Land Office get approved and start construction. That pot of money will spread across the income spectrum, but projects in lower income areas will likely start first.

Cypress Creek Spending Explodes

In fifteen Harris County watersheds, more than 50% of residents make above the average income for the region.

As a group, those 15 received $18.6 million last quarter – $2 million more than the $16.6 million received by the eight LMI watersheds.

However, the first group is twice the size of the second. And looking deeper within the more affluent watersheds, we can see that Cypress Creek and its tributaries (Willow and Little Cypress) received 79% of that $18.6 million last quarter.

The three Cypress watersheds received almost 4X more funding than the 12 other watersheds in the more affluent category put together.

Here’s how that same spending looks in a bar graph.

The 12 other watersheds divvied up $3.8 million; they averaged just $348 thousand each.

FOIA request. Data supplied by HCFCD.

$348,000 is one ninth of the $3.1 million average for LMI watersheds. And we know that some of those, such as the San Jacinto, have huge, unmet needs.

Cypress Knocks Brays Out of First Place

Now, let’s look at ALL watersheds in both categories. When looking only at the third quarter, Cypress Creek surged into first place. It nudged out Greens, White Oak, Brays and Sims, all of which have LMI populations greater than 50%.

HCFCD finished Project Brays 15 months ago, but still managed to spend $3.8 million there last quarter. That was almost 10X more than it spent during the third quarter in the San Jacinto watershed, the county’s largest, and where the flooding was deepest. HCFCD spent only $400 thousand in the entire San Jacinto watershed last quarter.

Brays Still Ranks #1 in Total Spending Since Harvey

Since Hurricane Harvey (not just last quarter), Brays still ranks #1. But Cypress now ranks second. If you added its Little Cypress and Willow Creek tributaries in the graph below to the Cypress Creek total, they would rank #1 by more than a $100 million.

Brays even managed to increase in the last quarter by $1.5 million while the San Jacinto decreased by $55,000.

Granted, some watersheds have smaller needs than others, but the ratio between the highest and lowest spending exceeds 300X.

Impact of Equity Formula

The spending priorities shown in this post reflect the Equity formula adopted and periodically revised by Harris County Commissioners Court.

Ironically, the language approved by voters in the flood bond never mentions the word “equity.” Paragraph 14G does say that Commissioners Court shall provide for an “equitable expenditure of funds.”

However, most dictionaries define “equitable” as “nondiscriminatory.” Yet the current formula prioritizes projects largely on the racial composition of neighborhoods as described in the CDC’s social vulnerability index.

The theory is that poor people are financially less able to fix their homes after a flood. I accept that.

But some commissioners are using that to push the idea of fixing 500-year flooding in poor neighborhoods before fixing 2-year flooding in more affluent communities.

Therefore, I ask:

• At what point do we do we say enough money has gone into an LMI watershed and start spending elsewhere to reduce greater flood risk?
• Why isn’t HCFCD publishing updated flood risk maps as it completes mitigation projects so we can make objective comparisons and see what our tax dollars bought?
• Why does Harris County’s formula for allocating flood-mitigation funds NOT consider:
  • Flood damage to homes, businesses and retirement communities?
  • Damage to infrastructure, such as bridges, schools, hospitals, grocery stores, traffic arteries, water and sewage treatment plants, etc.?
  • Height of floodwaters, i.e., the severity of flooding?
  • Deaths caused by floods?
• Is a poor person’s carpet worth more than a rich person’s life?
• Will there be enough money in the flood bond and flood resilience trust to finish all projects in the bond given inflation?

So many questions. So few answers. Perhaps this explains why trust in government has reached a 70-year low.

Only 20% of Americans now say they trust government “just about always or most of the time.” That’s something to think about as we near the next election.

Posted by Bob Rehak on 10/15/23 and updated 10/16/23 with additional info on Cypress Creek

2238 days since Hurricane Harvey

The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.