Tuesday, City of Houston Mayor Sylvester Turner and Houston Housing and Community Development Director Tom McCasland got into a verbal brawl over alleged improprieties in the distribution of Harvey relief funds.
Houston Mayor Sylvester Turner photographed in February of 2020.
The Mayor overrode the recommendations of McCasland and his staff, who pointed out that $16.2 million could have created four times the number of affordable units in poorer neighborhoods. Those projects all scored higher in the competition for funding.
General Land Office Response
Brittany Eck, a spokesperson for the Texas General Land Office (GLO), issued a statement within hours. She said, “The GLO is looking into the serious allegations of fraud or corruption regarding projects by the City of Houston’s Harvey Multifamily Program. The GLO is responsible for ensuring all money allocated through the Community Development Block Grants for Disaster Recovery (CDBG-DR) are spent appropriately. These projects and funds are intended to be utilized to aid the greatest number of low-income Texans as possible.”
Eck continued: “As such, we will re-review all requests for funding draws allocated to the City of Houston by the U.S. Department of Housing and Urban Development (HUD). The GLO will coordinate with HUD and other investigative entities to determine what actions should follow regarding these allegations. Fraud has no place in helping Texans recover from disaster.”
She concluded, “Anyone with information relating to potential fraud, waste, and/or abuse is encouraged to report it by calling 1-844-893-8937 or emailing cdr@recovery.texas.gov.”
Mayor’s Response
According to multiple news reports and a press release from the Mayor’s Office, Turner denied specific knowledge of the deal with his former law partner. He claimed there was no impropriety, that McCasland had raised no objections to the deal, and that he (Turner) had the right as Mayor to override McCasland’s objections.
The Mayor also asserted he was trying “to place affordable housing projects throughout the City…” Finally, he claimed he severed all ties with his former law partner before assuming his position as Mayor.
McCasland’s Point of View
McCasland insisted this was not the first time the Mayor’s office interfered. The Houston Chronicle, which broke the story, said “McCasland acknowledged the Mayor has the authority to overturn staff recommendations, but McCasland argued that in this case it represented a subversion of a competitive process to benefit one applicant.
McCasland said he was not alleging fraud, but said the pattern of behavior was emblematic of a broader problem in Turner’s administration, a “do-it-because-I-said-so” management style. McCasland did say that drives out public servants dedicated to integrity and breeds a “culture for corruption.”
Further, the Chronicle article quoted McCasland as saying he briefed the Mayor August 17 and again on August 24.
McCasland said the Clear Lake complex (Huntington at Bay Area) ranked 8th out of 12 proposals, and had the lowest percentage (60%) of its units reserved for low income tenants.
Note McCasland’s comments on page 4. He claims “The outcome of that process was predetermined before the funding opportunity was even issued.”
If you don’t read anything else, skip to the last page. It’s an email from McCasland to the Mayor dated September 17. In it, he summarizes all his objections to the Clear Lake deal. That would seem to contradict the Mayor’s claim that McCasland did not register his objections.
Mayor Fires McCasland
McCasland said to City Council, “I am being forced to participate in a charade that this was a competitive process, when I know it was not a competitive process. That’s the problem here and I’m being forced to ask my teammates to participate in that charade and that is not something that we can do and that is not something that we will do.”
According to those who watched the gripping testimony in City Council, it was like watching someone commit career suicide. By the end of the day, the Mayor issued a terse press release. He denied McCasland’s allegations, said he had lost confidence in McCasland, and that it was time to move on.
Why All of a Sudden?
The big question is this: Why now? McCasland and his embattled department have been under fire for years:
Coming forward when he did – as he did – almost felt like a Law & Order episode in which the DA flipped a witness with a promise of immunity. Some veteran City Hall observers felt McCasland was being unusually frank and fearless for someone at the center of such a huge mess. If there was a pattern of ethics violations, why wait years before objecting to them?
Mayor Likely Overstepped Authority
Both McCasland and the Mayor said the Mayor had the right to overturn staff decisions. But Eck pointed out the Mayor did not have the power to “rewrite” the Notice of Funding Availability (NOFA) to favor one applicant; any project selected must meet federal regulations.
She said that had the City written the NOFA to favor affluent neighborhoods, and had HUD and the GLO approved it that way, there would be no problem at this point. However, the City did not do that.
From McCasland’s report and the documentation provided, it appears the City’s award went against the scoring system laid out in the published NOFA, resulting in a competition that was not full, fair and open. The result led applicants to believe their projects would be considered against one criterion when other unknown criteria were actually utilized.
We now know the City awarded the project to a former partner of the Mayor in a high-income area…ignoring the posted and approved scoring system. In that regard, the Mayor evidently overstepped his authority.
The GLO has been in touch with HUD, the Texas Department of Housing and Community Affairs, Gov. Greg Abbott’s office and the Department of Public Safety, according to Eck.
KTRK’s Ted Oberg said DPS would only be involved to investigate criminal matters.
Brown, who audits City projects, continued, “In the past several months alone, our office has been denied procurement documents required to conduct an audit of the Strategic Procurement Department and were told to stop all work on a financial transparency project that would bring much-needed insight into the city’s spending practices. Taxpayers deserve a city government that is transparent and above reproach. Unfortunately, recent events suggest that the city is falling short of that goal.”
Posted by Bob Rehak on 9/22/2021
1485 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.
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2020/02/20191017-RJR_3755.jpg?fit=1200%2C800&ssl=18001200adminadmin2021-09-22 22:05:092021-09-23 11:27:43Blowup Between Mayor and Housing Director Triggers Fraud Investigation over Harvey Funds
Humble ISD’s North Transportation Center adjacent to Woodridge Village on Ford Road is now complete. And the District’s new Ag Barn should be completed by the start of next year.
Humble ISD’s press office confirmed today that the project is now totally complete and operational.
The property, located at 24755 Ford Road, encompasses about 12 acres. The new center will save an estimated $2 million in operating costs due to shorter routes and improved response times.
(Looking north) Note the bus exiting the facility toward Ford Road on left.This large detention pond on the north side of the transportation center will reduce the risk of flooding caused by rapid runoff from all that concrete.Looking south. The project was completed so recently, that silt fencing from the construction still has not been removed.
Ag Barn Construction Could Finish by Early Next Year
While I had the drone up, I also took several pics of Humble ISD’s new ag barn about a block south. Note the cell tower in the photo above. It’s the same one in the photo below.
According to an Humble ISD spokesman, the contractor has finished exterior construction and is now focusing on interior buildout.
Looking north toward Humble ISD’s new ag barn in Porter. Ford Road in upper left. Transportation center in upper right.Looking south toward smaller, triangular detention pond next to Mills Branch Road (upper right) and North Kingwood Forest (also upper right).
Wider shot showing location of new ag barn, where Ford Road (right) turns into Mills Branch Road (top) across from entrance to North Kingwood Forest.
Mills Branch (the creek) originates in the woods in the upper left. Mills Branch then goes through Woodstream Forest and Royal Brook before joining White Oak Creek and Caney Creek.
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2021/09/20210921-DJI_0465-2.jpg?fit=1200%2C800&ssl=18001200adminadmin2021-09-21 16:56:392021-09-21 17:05:28Humble ISD North Transportation Center Now Complete, New Ag Barn Getting There
A new flood-insurance rating system, designed to make rates reflect the true risk to an individual property will go into effect on October 1. FEMA calls it their Risk Rating 2.0 system. They describe it as Equity in Action. It’s FEMA’s attempt to put the National Flood Insurance Program (NFIP) on a sound actuarial footing and stop the system’s financial hemorrhaging.
“The new system moves away from basing price primarily on a handful of broadly drawn and often dated flood map zones,” according to the Pew Charitable Trusts. The new rates reflect “a more detailed set of factors, including proximity to and size of a water source, flood frequency and type (such as heavy rainfall or coastal erosion), ground and building elevation, foundation types, and drainage issues.”
Source: FEMA Presentation in MaapNext MeetingSource: FEMA Presentation in MaapNext Meeting
Sliding Scales not Price Brackets
“The more detailed analysis allows for prices that run along a sliding scale,” says Pew, rather grouping homes into brackets because they’re in the same mapped zone. Thus, low-risk homes will no longer be carrying the freight for high-risk homes.
Under Risk Rating 2.0, policyholders can save through mitigation activities such as elevating mechanical and electrical equipment above flood levels or installing flood openings.
Also, under the old system, all National Flood Insurance policy holders paid the same base rate. However, they could purchase additional insurance at substantially discounted rates. Thus, more expensive homes enjoyed an advantage over less expensive homes. But the new system will attempt to correct that imbalance.
Risk Rating 2.0 also gives policy holders savings for practical mitigation activities, such as elevating mechanical and electrical equipment above flood levels or installing flood openings.
So far, so good. Congress mandated the change to actuarily sustainable rates in 2012. At the time, people thought the rates would also help discourage development in flood prone areas.
A google search turned up many news stories about fears of massive rate increases. However, by law, most new rates may not increase by more than 18% per year, according to FEMA.
Gap Between Policies and Practice, At Least Initially
Still, several insurance companies have pointed out hidden inconsistencies between policy and practice in the new system.
A new artificial rate cap. Under Risk Rating 2.0, regardless of risk, policyholders will never pay more than $12,125 per year. This effectively creates a subsidy that encourages development in the most flood-prone areas.
Rates still do not align with risk. Current policy holders will not be penalized for any losses during the past two decades. That said, the artificially low rate will immediately increase to reflect actual risk after the first claim under Risk Rating 2.0. For a period at least, the NFIP provides no way for homebuyers to discover the flood-loss history of a structure.
Rate discounts unrelated to specific risk will continue. The NFIP’s Community Discount System will continue to provide community-wide premium reductions regardless of an individual property’s risk. These reductions impact more than 70% of NFIP policies and provide discounts of up to 45% to every structure in the community regardless of actual risk.
There are still no refunds for many policyholders who want to trade up. Once an NFIP policy has been in force for more than 30 days, the NFIP will not allow a refund to a policyholder who cancels an NFIP policy and replaces it with private coverage.
Pushback from Politicians
Several senators and congress people have complained about the new system and asked to delay the rollout to study impacts more closely.
The influential, Washington publication “The Hill” published a scathing op-ed of Risk Rating 2.0 in May. The author, Jainey Bavishi, director of the NYC Mayor’s Office of Climate Resiliency, felt that rising costs would force many to let flood-insurance policies lapse. She called the rollout “rushed.” She claimed, and I quote, the new policy “threatens to transform the National Flood Insurance Program from a financial lifeline into a crippling financial burden for thousands of low-income families in coastal cities.”
Phased-In Changes
Any change this massive was bound to cause political indigestion. FEMA has heard the criticisms and is trying to roll out the new system in a way that minimizes hardships. For instance, existing policies will be on an 18% “glide path” to their full risk rate. Said another way, FEMA will phase in the increases to make them more bearable. They will also give discounts for flood proofing, adding flood vents beneath homes, elevating homes and much more.
For policy holders in multi-floor apartment buildings, FEMA will now consider the actual floor you live on, not just quote a flat rate for everyone in a building. This should benefit renters who live on upper floors.
Timing
PHASE I
New policies beginning Oct. 1, 2021, will be subject to the new rating methodology. Also beginning Oct. 1, existing policyholders eligible for renewal will be able to take advantage of immediate decreases in their premiums.
PHASE II
All remaining policies renewing on or after April 1, 2022, will be subject to the new rating methodology.
Get a Quote From Your Insurance Agent
In its efforts to make pricing reflect true risk, FEMA will now consider many new data sources and variables. I reviewed an hour-long FEMA presentation on the subject. At the end, I was left with one overwhelming conclusion. Call your insurance agent. Your price may go down. It may go up. It costs nothing to get a quote. But the cost of NOT having insurance when you need it can break the bank as we saw during Harvey and Imelda.
1483 Days since Hurricane Harvey and 732 since Imelda
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2021/09/20210908-Screen-Shot-2021-09-08-at-4.24.22-PM.jpg?fit=1200%2C673&ssl=16731200adminadmin2021-09-20 15:51:182021-09-20 15:54:46New Flood-Insurance Rating System Starts October 1
Blowup Between Mayor and Housing Director Triggers Fraud Investigation over Harvey Funds
Tuesday, City of Houston Mayor Sylvester Turner and Houston Housing and Community Development Director Tom McCasland got into a verbal brawl over alleged improprieties in the distribution of Harvey relief funds.
The trigger was the award of $15 million to build a Clear Lake multi-family housing complex in which the Mayor’s former law partner is a co-developer. (Here is the group’s full application.)
The Mayor overrode the recommendations of McCasland and his staff, who pointed out that $16.2 million could have created four times the number of affordable units in poorer neighborhoods. Those projects all scored higher in the competition for funding.
General Land Office Response
Brittany Eck, a spokesperson for the Texas General Land Office (GLO), issued a statement within hours. She said, “The GLO is looking into the serious allegations of fraud or corruption regarding projects by the City of Houston’s Harvey Multifamily Program. The GLO is responsible for ensuring all money allocated through the Community Development Block Grants for Disaster Recovery (CDBG-DR) are spent appropriately. These projects and funds are intended to be utilized to aid the greatest number of low-income Texans as possible.”
Eck continued: “As such, we will re-review all requests for funding draws allocated to the City of Houston by the U.S. Department of Housing and Urban Development (HUD). The GLO will coordinate with HUD and other investigative entities to determine what actions should follow regarding these allegations. Fraud has no place in helping Texans recover from disaster.”
She concluded, “Anyone with information relating to potential fraud, waste, and/or abuse is encouraged to report it by calling 1-844-893-8937 or emailing cdr@recovery.texas.gov.”
Mayor’s Response
According to multiple news reports and a press release from the Mayor’s Office, Turner denied specific knowledge of the deal with his former law partner. He claimed there was no impropriety, that McCasland had raised no objections to the deal, and that he (Turner) had the right as Mayor to override McCasland’s objections.
The Mayor also asserted he was trying “to place affordable housing projects throughout the City…” Finally, he claimed he severed all ties with his former law partner before assuming his position as Mayor.
McCasland’s Point of View
McCasland insisted this was not the first time the Mayor’s office interfered. The Houston Chronicle, which broke the story, said “McCasland acknowledged the Mayor has the authority to overturn staff recommendations, but McCasland argued that in this case it represented a subversion of a competitive process to benefit one applicant.
McCasland said he was not alleging fraud, but said the pattern of behavior was emblematic of a broader problem in Turner’s administration, a “do-it-because-I-said-so” management style. McCasland did say that drives out public servants dedicated to integrity and breeds a “culture for corruption.”
Further, the Chronicle article quoted McCasland as saying he briefed the Mayor August 17 and again on August 24.
McCasland said the Clear Lake complex (Huntington at Bay Area) ranked 8th out of 12 proposals, and had the lowest percentage (60%) of its units reserved for low income tenants.
Here’s a 77-page document that catalogs nine months of correspondence between McCasland, MST (Mayor Sylvester Turner) and their staffs regarding the controversial project.
Note McCasland’s comments on page 4. He claims “The outcome of that process was predetermined before the funding opportunity was even issued.”
If you don’t read anything else, skip to the last page. It’s an email from McCasland to the Mayor dated September 17. In it, he summarizes all his objections to the Clear Lake deal. That would seem to contradict the Mayor’s claim that McCasland did not register his objections.
Mayor Fires McCasland
McCasland said to City Council, “I am being forced to participate in a charade that this was a competitive process, when I know it was not a competitive process. That’s the problem here and I’m being forced to ask my teammates to participate in that charade and that is not something that we can do and that is not something that we will do.”
According to those who watched the gripping testimony in City Council, it was like watching someone commit career suicide. By the end of the day, the Mayor issued a terse press release. He denied McCasland’s allegations, said he had lost confidence in McCasland, and that it was time to move on.
Why All of a Sudden?
The big question is this: Why now? McCasland and his embattled department have been under fire for years:
Coming forward when he did – as he did – almost felt like a Law & Order episode in which the DA flipped a witness with a promise of immunity. Some veteran City Hall observers felt McCasland was being unusually frank and fearless for someone at the center of such a huge mess. If there was a pattern of ethics violations, why wait years before objecting to them?
Mayor Likely Overstepped Authority
Both McCasland and the Mayor said the Mayor had the right to overturn staff decisions. But Eck pointed out the Mayor did not have the power to “rewrite” the Notice of Funding Availability (NOFA) to favor one applicant; any project selected must meet federal regulations.
She said that had the City written the NOFA to favor affluent neighborhoods, and had HUD and the GLO approved it that way, there would be no problem at this point. However, the City did not do that.
From McCasland’s report and the documentation provided, it appears the City’s award went against the scoring system laid out in the published NOFA, resulting in a competition that was not full, fair and open. The result led applicants to believe their projects would be considered against one criterion when other unknown criteria were actually utilized.
We now know the City awarded the project to a former partner of the Mayor in a high-income area…ignoring the posted and approved scoring system. In that regard, the Mayor evidently overstepped his authority.
This was not the first time the presence of the Mayor’s former partner in a deal has raised eyebrows and questions. The Houston Chronicle reported in 2018 that several city council members complained about the optics of the partner’s role as a subcontractor for a firm hired to find Harvey victims.
What Next?
The GLO has been in touch with HUD, the Texas Department of Housing and Community Affairs, Gov. Greg Abbott’s office and the Department of Public Safety, according to Eck.
KTRK’s Ted Oberg said DPS would only be involved to investigate criminal matters.
Oberg also reported Wednesday that Chris Brown, the city’s controller, said, “This week’s revelations underscore an ongoing pattern concerning procurement processes and a continued lack of transparency at City Hall.”
Brown, who audits City projects, continued, “In the past several months alone, our office has been denied procurement documents required to conduct an audit of the Strategic Procurement Department and were told to stop all work on a financial transparency project that would bring much-needed insight into the city’s spending practices. Taxpayers deserve a city government that is transparent and above reproach. Unfortunately, recent events suggest that the city is falling short of that goal.”
Posted by Bob Rehak on 9/22/2021
1485 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.
Humble ISD North Transportation Center Now Complete, New Ag Barn Getting There
Humble ISD’s North Transportation Center adjacent to Woodridge Village on Ford Road is now complete. And the District’s new Ag Barn should be completed by the start of next year.
North Transportation Center Now Fully Operational
As I drove by the transportation center on Ford Road in Porter today, I noticed a steady stream of buses exiting the facility to pick students up from schools. Contractors were still completing the interior buildout just a few months ago. I quickly put up a drone and captured the images below.
Humble ISD’s press office confirmed today that the project is now totally complete and operational.
The property, located at 24755 Ford Road, encompasses about 12 acres. The new center will save an estimated $2 million in operating costs due to shorter routes and improved response times.
Ag Barn Construction Could Finish by Early Next Year
While I had the drone up, I also took several pics of Humble ISD’s new ag barn about a block south. Note the cell tower in the photo above. It’s the same one in the photo below.
According to an Humble ISD spokesman, the contractor has finished exterior construction and is now focusing on interior buildout.
Mills Branch (the creek) originates in the woods in the upper left. Mills Branch then goes through Woodstream Forest and Royal Brook before joining White Oak Creek and Caney Creek.
Posted by Bob Rehak on 9/21/2021
1484 Days since Hurricane Harvey
New Flood-Insurance Rating System Starts October 1
A new flood-insurance rating system, designed to make rates reflect the true risk to an individual property will go into effect on October 1. FEMA calls it their Risk Rating 2.0 system. They describe it as Equity in Action. It’s FEMA’s attempt to put the National Flood Insurance Program (NFIP) on a sound actuarial footing and stop the system’s financial hemorrhaging.
Says FEMA, Risk Rating 2.0 is “not just a minor improvement, but a transformational leap forward. Risk Rating 2.0 enables FEMA to set rates that are fairer and ensures rate increases and decreases are both equitable.”
Based on More Data, More Variables
“The new system moves away from basing price primarily on a handful of broadly drawn and often dated flood map zones,” according to the Pew Charitable Trusts. The new rates reflect “a more detailed set of factors, including proximity to and size of a water source, flood frequency and type (such as heavy rainfall or coastal erosion), ground and building elevation, foundation types, and drainage issues.”
Sliding Scales not Price Brackets
“The more detailed analysis allows for prices that run along a sliding scale,” says Pew, rather grouping homes into brackets because they’re in the same mapped zone. Thus, low-risk homes will no longer be carrying the freight for high-risk homes.
Under Risk Rating 2.0, policyholders can save through mitigation activities such as elevating mechanical and electrical equipment above flood levels or installing flood openings.
Also, under the old system, all National Flood Insurance policy holders paid the same base rate. However, they could purchase additional insurance at substantially discounted rates. Thus, more expensive homes enjoyed an advantage over less expensive homes. But the new system will attempt to correct that imbalance.
Risk Rating 2.0 also gives policy holders savings for practical mitigation activities, such as elevating mechanical and electrical equipment above flood levels or installing flood openings.
So far, so good. Congress mandated the change to actuarily sustainable rates in 2012. At the time, people thought the rates would also help discourage development in flood prone areas.
Not Everyone Happy with New System
Not everyone is happy with the system, however. The Sugar Land City Council unanimously approved a resolution during an Aug. 3 meeting stating its opposition to Risk Rating 2.0. They expect it to result in increased flood insurance rates for the vast majority of policyholders in Fort Bend County.
A google search turned up many news stories about fears of massive rate increases. However, by law, most new rates may not increase by more than 18% per year, according to FEMA.
Gap Between Policies and Practice, At Least Initially
Still, several insurance companies have pointed out hidden inconsistencies between policy and practice in the new system.
NU Property Casualty 360, for instance, pointed out several hidden inconsistencies that undermine the equity goal. They include:
Pushback from Politicians
Several senators and congress people have complained about the new system and asked to delay the rollout to study impacts more closely.
The influential, Washington publication “The Hill” published a scathing op-ed of Risk Rating 2.0 in May. The author, Jainey Bavishi, director of the NYC Mayor’s Office of Climate Resiliency, felt that rising costs would force many to let flood-insurance policies lapse. She called the rollout “rushed.” She claimed, and I quote, the new policy “threatens to transform the National Flood Insurance Program from a financial lifeline into a crippling financial burden for thousands of low-income families in coastal cities.”
Phased-In Changes
Any change this massive was bound to cause political indigestion. FEMA has heard the criticisms and is trying to roll out the new system in a way that minimizes hardships. For instance, existing policies will be on an 18% “glide path” to their full risk rate. Said another way, FEMA will phase in the increases to make them more bearable. They will also give discounts for flood proofing, adding flood vents beneath homes, elevating homes and much more.
For policy holders in multi-floor apartment buildings, FEMA will now consider the actual floor you live on, not just quote a flat rate for everyone in a building. This should benefit renters who live on upper floors.
Timing
PHASE I
New policies beginning Oct. 1, 2021, will be subject to the new rating methodology. Also beginning Oct. 1, existing policyholders eligible for renewal will be able to take advantage of immediate decreases in their premiums.
PHASE II
All remaining policies renewing on or after April 1, 2022, will be subject to the new rating methodology.
Get a Quote From Your Insurance Agent
In its efforts to make pricing reflect true risk, FEMA will now consider many new data sources and variables. I reviewed an hour-long FEMA presentation on the subject. At the end, I was left with one overwhelming conclusion. Call your insurance agent. Your price may go down. It may go up. It costs nothing to get a quote. But the cost of NOT having insurance when you need it can break the bank as we saw during Harvey and Imelda.
Of the 154,170 homes flooded in Harvey, 64% did not have a flood insurance policy in effect.
And in Tropical Storm Imelda, almost two-thirds of the homes flooded were outside the 100-year floodplain.
Posted by Bob Rehak on 9/20/2021
1483 Days since Hurricane Harvey and 732 since Imelda