In June, I interviewed Milan Saunders, Chairman/CEO of Plains State Bank, and his daughter Lori Saunders, the bank’s COO. Both live in Kingwood Lakes with their respective families several blocks apart. I asked for this interview to learn how Harvey affected them personally and professionally, and to see whether the flood had a domino effect on other businesses beyond Houston. Spoiler alert: It did.
As we sit in a quiet corner of Amadeus, awaiting our meals, I ask Milan and Lori to start at the beginning. Both have photographic memories and brains that process information faster than computers. They begin with an almost hour-by-hour narrative of the storm’s approach. Clearly, almost a year later, the images remain vivid and painful.
It’s time to abandon ship. The Saunders household is swamped by Harvey.
Water and Plumbing Back Up
Milan: “Harvey approached the Houston area on Friday, August 25, and started dumping buckets of rain. Going into the weekend, we were tracking weather reports. On Saturday, things lightened up. Then the rains came back again. Sunday … a lot of rain. Monday … a lot of rain. By that afternoon, water was out of Lake Houston and it began to look pretty ominous. By Tuesday, water was also out of Lake Kingwood. We had only 18 inches between it and our threshold.”
Lori: “My plumbing was starting to back up on Sunday. That’s why I went over to Dad’s house.”
Milan: “Overnight, early Tuesday morning, water began to rise substantially. About 1 a.m., we wrapped the legs of our baby grand piano. In ‘94, we were spared, so I was thinking that, at worst, we would get a foot of water in the house.”
Reliving the Story While Retelling It
Milan continues the story in a series of rapid-fire images that seem to fade to black between each. “I went back to sleep. I was woken up at 6:30 in the morning. Came downstairs. At that point, I am standing in water up past my knees. I open the door and go outside. I am standing in water up to my belt. I see this rubber boat pulling in. First responders called out, ‘It’s a mandatory evacuation.’”
“I ask who they are. They say, ‘We’re firemen from Memphis, Tennessee.’ I say to myself, ‘Wait a minute!’ How did they know about it in time to get here from Memphis when I didn’t even know about it?”
Milan makes his great escape with wife and dog on a Wave Runner down Kingwood Drive
“Somehow, we managed to get our dog, a giant German Shepherd, balanced on my lap. They took us up the next street, and we got out there.”
As we delve deeper, Milan increasingly uses present tense, as though he is re-living Harvey in real time. His jaw clenches. The gets that 1000-yard stare. He is in another place and another time now.
“The next challenge is finding a place to shelter for me, my wife, my daughter, my granddaughter and grandson…which we do that afternoon.”
“I’m also worrying about the bank. We had been closed for four days already. The law says banks can’t be closed for more than three days in a row. We had already contacted our regulators to let them know that we were experiencing some really harsh difficulties.”
Never in 50 Years of Banking
“All of our employees are basically stranded. 59 is shut down. The force of water running over the highway has moved the concrete barriers on it.”
“Plains State does business far beyond Houston. We are keeping in touch with our West Texas people to help our clients out there, but our headquarters is in Humble and no one can get to it.”
“If I had had any idea this was going to happen, we would have gotten hotel rooms on the other side of the river for our employees.”
Rising tide of discontent sweeps across Kingwood
One image intrudes on another as Milan talks of his experience. He jumps from subject to subject as we nosh on our linguine.
“I lost my telephone while rescuing my granddaughter’s cat,” he says. “I lost both cars.” He begins talking in a staccato shorthand almost like he’s running down a mental checklist, a pilot evaluating options for an emergency landing. “No cars. No phone. Can’t get across the river.”
“It really made it very difficult for us to run the bank. None of our offices experienced flooding; we just couldn’t get people to the offices to move electronic files. That’s where our connections to the Fed and our core processor are.”
Lori: “A few days later, as flood waters started to subside, some folks in law enforcement told us about a way to get across the river. It was a very long way without the 59 bridge, but it worked. Some of our managers were able to get into the bank and start taking care of customers.”
Milan: “We were down five days. I’ve never experienced that in 50 years of banking.”
Bob: “Were there any repercussions for being closed five days?”
Milan: “Overall, our clients down here were very understanding. The West Texas folks didn’t understand as well. One client is a school district. They had end of month payroll to make.”
“Luckily, the superintendent’s wife worked with first responders and knew what we were up against. We were able to explain those problems and I think we have that behind us now, but it was painful for everyone, including us. We built our reputation on service and reliability. Both were beyond our control at that point.”
Meanwhile, Back at the Ranch House…
Milan: It was just an unbelievable experience getting into that house. Water up to mid chest. Probably a foolish thing to do. All kinds of things can happen. The water wasn’t moving that fast, but it was touching the breaker boxes. Water and electricity! Not a good combination!”
“We finally got the cat out of there, but my phone went in the drink, so I lost all communication.”
“The next day, my wife and Lori had to get to the house, so we borrowed a canoe. We saw our brother in law struggling in the water. When we tried to get him into the canoe, he flipped it over. Now Lori’s phone is under water, too.”
That’s all she played.
“The hardest part for my wife was the piano. We had bought it for our girls in 1977. It was a baby grand. The force of the water had flipped it over and ripped off two of the legs.”
Nightmare Followed by a Miracle
“We had 3.5 feet of nasty water and sewage in the house. It finally subsided on Thursday afternoon. Then another part in the story began. It was just as unbelievable how folks came out to help.”
“The outpouring of help from the people of Kingwood, led by the churches, was amazing. With the help from strangers, we got everything torn out and the dehumidifiers going.”
Secrets of Dealing with Contractors
“Then I had to find some contractors who could get the rest done. Luckily, we deal with contractors all the time; I knew some very good ones. I hired one who builds hotels and high-end townhomes. I cut a cost-plus deal with him.”
Starting over.
“I saw that a real shortage of qualified contractors was coming, so I did everything I could to sweeten the deal, but built in safeguards for us. I gave him two houses – mine and Lori’s. I guaranteed him payment every Friday night. We made up our minds about what we wanted and didn’t change anything. All he had to do was show every day and carry on the work continuously. As a result, we had two or three subs on the job site every day and avoided a lot of the problems that others have had getting contractors to show. If guys are working, you want to pay them every Friday so that they’re back on Monday.”
Kicked to the curb by Mother Nature.
“My wife is fluent in Spanish, so we could converse with subcontractors. That was another advantage.”
Repairs Completed in Record Time, But Now…
“We got the house all done by the first of December. Right now, I’m just wrestling with the insurance guys. They think I should have been able to get it done for half. But it’s unreasonable to look back and say that.”
“The IRS says you should be able to take $104 per square foot, no questions asked. Shopping for the best price in town is probably not the best idea at a time like this.”
Bob: “How long did it take the bank to get back to normal?”
Lori: “Other banks were having trouble getting personnel in. But after Labor Day, most of our staff was able to get into the bank. I remember coming to work Tuesday and seeing all the cars in the parking lot, and thinking, ‘Wow!’ We’d just been through a war zone…the craziest worst week of our lives. And there all of our people were!”
Milan: “We were also very fortunate that only three of our employees had flooded houses and two of those are sitting here with you.”
“The Craziest, Worst Week of Our Lives” Turns into a 3-Year Project
Bob: “How did you manage to cope with the business being down and your homes being destroyed at the same time?”
Lori: “You go into survival mode. You rely on others. I have really good managers. They just stepped up, personally and professionally. They knew what we were going through.”
“We lost everything. Now looking back…I wonder how we did get through it. It was just one day at a time.”
More net worth at the curb
“We knew good contractors and had great relationships with them. Not everyone had that luxury. When I drive down my street now, it breaks my heart. I still see dumpsters in the driveways and portacans…all of it. They’re still far away from getting their houses back together again.”
Bob: “What percentage of your street is finished remodeling?”
Lori: Maybe 20%. At least 80% are still not back in.”
Milan: “We have 42 houses in our part of Kingwood Lakes; only one escaped flooding. There aren’t ten that are completely finished restoring. You see lots of travel trailers. I’ve said all along that this is a three-year project and my opinion hasn’t changed.”
Fighting the Adjusters
Bob: “What’s the most common problem people have?”
Milan: “They’re all struggling with the insurance adjusters. Each adjuster sees things differently.”
“One friend’s adjuster told him that $70/sf was a starting point and that if you have cabinetry involved, you’re up to $100/sf. That matches up to what the IRS said. But some of these adjusting companies are trying to be too safe, in my opinion. They split everything up into a unit-pricing process that takes waaaay too long.”
Counter to counter, but not express
“When a cost-plus contractor shows up, he’s going to give you a quote for labor and all the receipts for materials. He’s not going to break out trim costs or caulking per square inch! Our first adjuster’s report was 40 PAGES!”
“By comparison, when our bank makes loans on a $700K house, the builder gives us pro formacosts on ONE sheet of paper. You can NOT analyze a house on a per-square-inch basis. These guys just don’t get it.”
“The other thing that has happened is that prices have all escalated by 30%.”
The Value of a Banker Who Knows Your Business
Bob: “Do you have any customers that were forced out of business by Harvey?”
Milan: “No. But many were affected.”
“We had a Holiday Inn Express in Rockport that was severely damaged. But the regulators were very proactive and encouraged banks to give people time, suspend payments, look for ways to assist them.”
“We had a dozen clients in different places that were badly affected, and we’ve worked with them.”
The Hardest Hit Clients Didn’t Have Flood Insurance
Lori: “The hardest hit were clients without flood insurance. They weren’t required to have it.
Not in a flood plain, you know!”
Milan: “We’re one of the top ten SBA lenders in this district. We’re up there with Chase and Wells. SBA requires flood insurance if you are in the 100-year flood plain. But the people that were the most affected were not in the 100-year flood plain and so consequently, they didn’t have any insurance.”
“I’ve had flood insurance for 50 years because my first house was in Bellaire. My second house was in Pearland. One time they had 35 inches in Alvin and there was no way out. We had to be rescued by helicopters down there, so when I moved to Kingwood, I insisted on flood insurance.”
Recommendations for Improving the System
Bob: “What would you change politically to help prevent another flood like Harvey?”
Milan: “Oversight needs to be regional. I think the SJRA worried too much about Lake Conroe and not enough about what would happen downstream. They need to communicate better, too. It’s incredible that guys in Memphis got the news before we did. Regional coordination and prompt notification. Those will be big parts of the answer.”
Heavy hearts and high piles: belongings on the curb, waiting for pickup
Nature Always Wins
Bob: “You work with a lot of developers. Do you have any observations about development near rivers?”
Milan: “You can’t outsmart nature. Nature always wins. We need to give Mother Nature her room.”
Posted By Bob Rehak on July 24, 2018
330 Days since Hurricane Harvey
00adminadmin2018-07-25 00:17:032018-07-25 00:30:01Milan and Lori Saunders’ Harvey Experience: “You can’t outsmart nature. Nature always wins.”
Early voting for the $2.5 billion Harris County Flood Bond Referendum begins August 8. If approved, the County could leverage that money to increase the amount available for flood mitigation. Matching funds from FEMA, HUD, the State, and other sources are available. These grants usually operate on a 75/25 or 90/10 basis, returning $3 to $9 for every dollar put up.
Local Dollars Leverage Matching Funds
If voters approve the $2.5 billion referendum, the bond funds could potentially bring in billions of additional dollars. Here is how funding for Flood Control District projects works. (For a printable PDF, click here.)
Partnership Matching Funds Available for Harris County Flood Control District Projects
Bond money can be used as “seed money” for some types of projects. It qualifies us to receive additional money in the form of grants from other partners such as the Federal Government, State, Coastal Water Authority or the City.
Federal dollars for Harvey flood mitigation efforts are available now, but may go elsewhere if we don’t act. Every city along the Gulf Coast is competing for available matching funds.
Partnership Projects: More Leverage but Less Control
Even though you may not be able to follow all the ins and outs of the diagram above, you should be able to see that many opportunities exist to extend the impact of our own dollars. That’s the good news. The downside is that when you start spending other people’s money, they want to have a say in how you spend it. It’s important that we understand risks as we move forward. To get more money, we must give up some control.
Q: How will projects in the bond proposal be selected and prioritized?
A: Harris County Commissioners Court directed Flood Control District staff to develop list of projects. This is not an exact list of projects that must be or will be built with bond proceeds. It represents a list of projects that would meet the goal of the bond election, which is to both assist with recovery after previous flooding events (including Harvey) and to make our county more resilient for the future.
High on the priority list are construction-ready projects with federal funding partners (such as the U.S. Army Corps of Engineers and the Federal Emergency Management Agency) that give the County “the most bang for its flood control buck.”
Q: Can the bond money be used for purposes other than flood risk reduction?
A: No. Under Texas law, bond funds in this election could only be used for the purpose approved by the voters. Bond funds will not be used to fund additional staff positions at the Harris County Flood Control District.
Q: Do bond proceeds have to be used for the specific projects recommended by the Flood Control District?
A: No. Voters will be asked to authorize bonds for flood damage reduction projects, but specific projects may be added to the list of potential projects in the future or projects on the list could be modified based upon public input.
However, officials can only spend bond money on projects supported by the Bond Language. Voters will not be voting on a specific project list, only on the language in the proposal.
Freeing Up Budget to Improve Maintenance
Maintenance is NOT in the bond proposal. Nevertheless, the bond could still improve maintenance in a roundabout way. Here’s how. About half of the Flood Control District’s current $120 million per year budget goes to capital expenditures. If approved, the bond would free up about $60 million currently focused on construction projects.
The other $60 million in the Flood Control District’s budget is devoted to Maintenance and Operations. It is roughly divided as follows: $30 million for salaries and overhead; $10 million for mowing; and $20 million for maintenance.
That $20 million currently devoted to maintaining ditches, bayous and streams, if added to the $60 million that is freed up, would make $80 million that could be devoted to improving maintenance. That means the District’s maintenance budget could quadruple.
Yea or Nay?
On balance, I like how the bond is shaping up and I trust the people in charge of it. I wish that the $50 million allocated for a dredging partnership project was a dedicated $50 million. Then, if the bond proposal passes, we might be able to get the Army Corps to extend the scope of their current dredging to include the giant sand bar at the mouth of the West Fork. Addressing that issue as a change order to the current contract could save years, save dollars, and reduce risk immediately.
Posted on June 23, 2018, by Bob Rehak
328 Days since Hurricane Harvey
00adminadmin2018-07-23 22:54:402018-07-23 22:56:20How County Bond Funds Could Leverage Additional Dollars
Dikes on both sides of the river were breached in the process. In fact, historical images in Google Earth show that they have been breached repeatedly.
During Harvey, floodwaters swept through this complex and breached dikes in multiple locations as the river took a shortcut through the mines.
Highest Risk Scenarios for River Capture
A review of scientific literature reveals that the risk of stream diversion through pits (river capture) is increased by:
Proximity of pits to the river
Increased depth of the pit, particularly where the base of the pit is below the lowest part of the river.
The phenomenon seems common and the consequences well documented.
2014 Survey of Scientific Literature Finds 37 Examples
In 2014, Anthony Ladson and Dean Judd, two Australian researchers, found 37 instances of river capture in a review of scientific literature. They published their findings at the Seventh Annual Australian Stream Management Conference in a paper titled A review of the effect of floodplain gravel mining on river stability.
Advanced economies, they say in their introduction, require large amounts of aggregate (sand and gravel) to sustain growth.Aggregate makes up 80% of concrete and 90% of asphalt pavements.
Many see floodplain mining as a safer way to obtain this aggregate than in-stream mining, but floodplain mining still poses substantial threats to river stability.
Dangers of River Capture
As we saw on the West Fork of the San Jacinto during Harvey, floodwaters take a shortcut through mines that are built on point bars inside meander loops.
Sand bars within sand mine, caused during “river capture” of the mine. These bars prove sand was carried downstream. This photo taken on 10/28/2018 (after Harvey) also shows repairs to mine wall. During floods, the river tries to cut across meanders, runs through the mines and carries sand downstream.
The authors say this can lead to:
River bed degradation
Bank erosion
Channel widening
Infrastructure damage or destruction
Loss of riparian vegetation
Habitat damage
Degradation of water quality.
Their review of local, national and international case studies showed that pit capture and subsequent river channel changes, are a common consequence of floodplain mining.
Changing River Environment and Putting Infrastructure at Risk
In their conclusion, Ladson and Judd state, “Although floodplain gravel mining has been considered a safer option than the direct extraction of gravel from a river, substantial risks to river stability and river health values remain. Floodplain gravel mining can cause change in the riverine environment, both locally and distant to the mining site, and in the short and long term.”
“There are substantial risks to infrastructure if river diversions occur which trigger bed and bank erosion.”
“There may be a role for river management agencies to influence the amount of mining that is undertaken, and the manner in which it is undertaken, in order to mitigate these threats.”
Mechanisms of River Capture
Another study goes into more detail. This second study, was conducted by Jacobs Engineering in 2015, also in Australia. It describes the processes behind river capture, the risks, and how to reduce them. It is titled Risk_assessment_of_floodplain_mining_pits_in_the_mid-Goulburn_Valley, The Golburn River, like the San Jacinto, meanders through relatively flat land. It also has approximately the same number of sand mines that the San Jacinto has.
Jacobs identified three risk scenarios for river capture:
Lateral migration of river channel into the pit
Sub-surface piping into pits and subsequent failure of pit walls
Flow of water into and through the pit and subsequent erosion of the buffer strip between the channel and the excavated pit.
Some San Jacinto Mines Push Recommended Safety Margins
Jacobs assesses (page 19) that 100 meters is the minimum setback to prevent river capture from occurring. In some places on the San Jacinto, dikes are less than 15 meters wide.
Jacobs also assesses that river capture is almost certain (page 19) where the basement of the pit is more than 5 meters lower than the river. San Jacinto sand miners are mining at more than double that depth.
“The physical processes of pit capture have been well documented from case studies: incision upstream and downstream of the pit are expected, with bed adjustments continuing until the river establishes a new equilibrium and grade,” says Jacobs.
Ways to Mitigate Risk of River Capture
Jacobs identified two main ways (page 47) to reduce this risk:
Locate pits out of the 100-year floodplain
Implement controls such as levees, grade-control structures, pit setbacks, depth limits, and waterway diversions.
Sadly, all sand pits on the San Jacinto are already in the 100-year flood plain. Worse, all but one are at least partially in the FLOODWAY, which is defined as the main channel of the river during a flood.
Even more sadly, it appears that none of the measures in the second category are being applied to San Jacinto mines either.
Posted by Bob Rehak, July 22, 2018
327 Days since Hurricane Harvey
00adminadmin2018-07-22 01:46:312018-07-22 01:46:31How Floodplain Mining Can Lead to River Capture
Milan and Lori Saunders’ Harvey Experience: “You can’t outsmart nature. Nature always wins.”
Interview by Bob Rehak
In June, I interviewed Milan Saunders, Chairman/CEO of Plains State Bank, and his daughter Lori Saunders, the bank’s COO. Both live in Kingwood Lakes with their respective families several blocks apart. I asked for this interview to learn how Harvey affected them personally and professionally, and to see whether the flood had a domino effect on other businesses beyond Houston. Spoiler alert: It did.
As we sit in a quiet corner of Amadeus, awaiting our meals, I ask Milan and Lori to start at the beginning. Both have photographic memories and brains that process information faster than computers. They begin with an almost hour-by-hour narrative of the storm’s approach. Clearly, almost a year later, the images remain vivid and painful.
It’s time to abandon ship. The Saunders household is swamped by Harvey.
Water and Plumbing Back Up
Milan: “Harvey approached the Houston area on Friday, August 25, and started dumping buckets of rain. Going into the weekend, we were tracking weather reports. On Saturday, things lightened up. Then the rains came back again. Sunday … a lot of rain. Monday … a lot of rain. By that afternoon, water was out of Lake Houston and it began to look pretty ominous. By Tuesday, water was also out of Lake Kingwood. We had only 18 inches between it and our threshold.”
Lori: “My plumbing was starting to back up on Sunday. That’s why I went over to Dad’s house.”
Milan: “Overnight, early Tuesday morning, water began to rise substantially. About 1 a.m., we wrapped the legs of our baby grand piano. In ‘94, we were spared, so I was thinking that, at worst, we would get a foot of water in the house.”
Reliving the Story While Retelling It
Milan continues the story in a series of rapid-fire images that seem to fade to black between each. “I went back to sleep. I was woken up at 6:30 in the morning. Came downstairs. At that point, I am standing in water up past my knees. I open the door and go outside. I am standing in water up to my belt. I see this rubber boat pulling in. First responders called out, ‘It’s a mandatory evacuation.’”
“I ask who they are. They say, ‘We’re firemen from Memphis, Tennessee.’ I say to myself, ‘Wait a minute!’ How did they know about it in time to get here from Memphis when I didn’t even know about it?”
Milan makes his great escape with wife and dog on a Wave Runner down Kingwood Drive
“Somehow, we managed to get our dog, a giant German Shepherd, balanced on my lap. They took us up the next street, and we got out there.”
As we delve deeper, Milan increasingly uses present tense, as though he is re-living Harvey in real time. His jaw clenches. The gets that 1000-yard stare. He is in another place and another time now.
“The next challenge is finding a place to shelter for me, my wife, my daughter, my granddaughter and grandson…which we do that afternoon.”
“I’m also worrying about the bank. We had been closed for four days already. The law says banks can’t be closed for more than three days in a row. We had already contacted our regulators to let them know that we were experiencing some really harsh difficulties.”
Never in 50 Years of Banking
“All of our employees are basically stranded. 59 is shut down. The force of water running over the highway has moved the concrete barriers on it.”
“Plains State does business far beyond Houston. We are keeping in touch with our West Texas people to help our clients out there, but our headquarters is in Humble and no one can get to it.”
“If I had had any idea this was going to happen, we would have gotten hotel rooms on the other side of the river for our employees.”
Rising tide of discontent sweeps across Kingwood
One image intrudes on another as Milan talks of his experience. He jumps from subject to subject as we nosh on our linguine.
“I lost my telephone while rescuing my granddaughter’s cat,” he says. “I lost both cars.” He begins talking in a staccato shorthand almost like he’s running down a mental checklist, a pilot evaluating options for an emergency landing. “No cars. No phone. Can’t get across the river.”
“It really made it very difficult for us to run the bank. None of our offices experienced flooding; we just couldn’t get people to the offices to move electronic files. That’s where our connections to the Fed and our core processor are.”
Lori: “A few days later, as flood waters started to subside, some folks in law enforcement told us about a way to get across the river. It was a very long way without the 59 bridge, but it worked. Some of our managers were able to get into the bank and start taking care of customers.”
Milan: “We were down five days. I’ve never experienced that in 50 years of banking.”
Bob: “Were there any repercussions for being closed five days?”
Milan: “Overall, our clients down here were very understanding. The West Texas folks didn’t understand as well. One client is a school district. They had end of month payroll to make.”
“Luckily, the superintendent’s wife worked with first responders and knew what we were up against. We were able to explain those problems and I think we have that behind us now, but it was painful for everyone, including us. We built our reputation on service and reliability. Both were beyond our control at that point.”
Meanwhile, Back at the Ranch House…
Milan: It was just an unbelievable experience getting into that house. Water up to mid chest. Probably a foolish thing to do. All kinds of things can happen. The water wasn’t moving that fast, but it was touching the breaker boxes. Water and electricity! Not a good combination!”
“We finally got the cat out of there, but my phone went in the drink, so I lost all communication.”
“The next day, my wife and Lori had to get to the house, so we borrowed a canoe. We saw our brother in law struggling in the water. When we tried to get him into the canoe, he flipped it over. Now Lori’s phone is under water, too.”
That’s all she played.
“The hardest part for my wife was the piano. We had bought it for our girls in 1977. It was a baby grand. The force of the water had flipped it over and ripped off two of the legs.”
Nightmare Followed by a Miracle
“We had 3.5 feet of nasty water and sewage in the house. It finally subsided on Thursday afternoon. Then another part in the story began. It was just as unbelievable how folks came out to help.”
“The outpouring of help from the people of Kingwood, led by the churches, was amazing. With the help from strangers, we got everything torn out and the dehumidifiers going.”
Secrets of Dealing with Contractors
“Then I had to find some contractors who could get the rest done. Luckily, we deal with contractors all the time; I knew some very good ones. I hired one who builds hotels and high-end townhomes. I cut a cost-plus deal with him.”
Starting over.
“I saw that a real shortage of qualified contractors was coming, so I did everything I could to sweeten the deal, but built in safeguards for us. I gave him two houses – mine and Lori’s. I guaranteed him payment every Friday night. We made up our minds about what we wanted and didn’t change anything. All he had to do was show every day and carry on the work continuously. As a result, we had two or three subs on the job site every day and avoided a lot of the problems that others have had getting contractors to show. If guys are working, you want to pay them every Friday so that they’re back on Monday.”
Kicked to the curb by Mother Nature.
“My wife is fluent in Spanish, so we could converse with subcontractors. That was another advantage.”
Repairs Completed in Record Time, But Now…
“We got the house all done by the first of December. Right now, I’m just wrestling with the insurance guys. They think I should have been able to get it done for half. But it’s unreasonable to look back and say that.”
“The IRS says you should be able to take $104 per square foot, no questions asked. Shopping for the best price in town is probably not the best idea at a time like this.”
Bob: “How long did it take the bank to get back to normal?”
Lori: “Other banks were having trouble getting personnel in. But after Labor Day, most of our staff was able to get into the bank. I remember coming to work Tuesday and seeing all the cars in the parking lot, and thinking, ‘Wow!’ We’d just been through a war zone…the craziest worst week of our lives. And there all of our people were!”
Milan: “We were also very fortunate that only three of our employees had flooded houses and two of those are sitting here with you.”
“The Craziest, Worst Week of Our Lives” Turns into a 3-Year Project
Bob: “How did you manage to cope with the business being down and your homes being destroyed at the same time?”
Lori: “You go into survival mode. You rely on others. I have really good managers. They just stepped up, personally and professionally. They knew what we were going through.”
“We lost everything. Now looking back…I wonder how we did get through it. It was just one day at a time.”
More net worth at the curb
“We knew good contractors and had great relationships with them. Not everyone had that luxury. When I drive down my street now, it breaks my heart. I still see dumpsters in the driveways and portacans…all of it. They’re still far away from getting their houses back together again.”
Bob: “What percentage of your street is finished remodeling?”
Lori: Maybe 20%. At least 80% are still not back in.”
Milan: “We have 42 houses in our part of Kingwood Lakes; only one escaped flooding. There aren’t ten that are completely finished restoring. You see lots of travel trailers. I’ve said all along that this is a three-year project and my opinion hasn’t changed.”
Fighting the Adjusters
Bob: “What’s the most common problem people have?”
Milan: “They’re all struggling with the insurance adjusters. Each adjuster sees things differently.”
“One friend’s adjuster told him that $70/sf was a starting point and that if you have cabinetry involved, you’re up to $100/sf. That matches up to what the IRS said. But some of these adjusting companies are trying to be too safe, in my opinion. They split everything up into a unit-pricing process that takes waaaay too long.”
Counter to counter, but not express
“When a cost-plus contractor shows up, he’s going to give you a quote for labor and all the receipts for materials. He’s not going to break out trim costs or caulking per square inch! Our first adjuster’s report was 40 PAGES!”
“By comparison, when our bank makes loans on a $700K house, the builder gives us pro formacosts on ONE sheet of paper. You can NOT analyze a house on a per-square-inch basis. These guys just don’t get it.”
“The other thing that has happened is that prices have all escalated by 30%.”
The Value of a Banker Who Knows Your Business
Bob: “Do you have any customers that were forced out of business by Harvey?”
Milan: “No. But many were affected.”
“We had a Holiday Inn Express in Rockport that was severely damaged. But the regulators were very proactive and encouraged banks to give people time, suspend payments, look for ways to assist them.”
“We had a dozen clients in different places that were badly affected, and we’ve worked with them.”
The Hardest Hit Clients Didn’t Have Flood Insurance
Lori: “The hardest hit were clients without flood insurance. They weren’t required to have it.
Not in a flood plain, you know!”
Milan: “We’re one of the top ten SBA lenders in this district. We’re up there with Chase and Wells. SBA requires flood insurance if you are in the 100-year flood plain. But the people that were the most affected were not in the 100-year flood plain and so consequently, they didn’t have any insurance.”
“I’ve had flood insurance for 50 years because my first house was in Bellaire. My second house was in Pearland. One time they had 35 inches in Alvin and there was no way out. We had to be rescued by helicopters down there, so when I moved to Kingwood, I insisted on flood insurance.”
Recommendations for Improving the System
Bob: “What would you change politically to help prevent another flood like Harvey?”
Milan: “Oversight needs to be regional. I think the SJRA worried too much about Lake Conroe and not enough about what would happen downstream. They need to communicate better, too. It’s incredible that guys in Memphis got the news before we did. Regional coordination and prompt notification. Those will be big parts of the answer.”
Heavy hearts and high piles: belongings on the curb, waiting for pickup
Nature Always Wins
Bob: “You work with a lot of developers. Do you have any observations about development near rivers?”
Milan: “You can’t outsmart nature. Nature always wins. We need to give Mother Nature her room.”
Posted By Bob Rehak on July 24, 2018
330 Days since Hurricane Harvey
How County Bond Funds Could Leverage Additional Dollars
Early voting for the $2.5 billion Harris County Flood Bond Referendum begins August 8. If approved, the County could leverage that money to increase the amount available for flood mitigation. Matching funds from FEMA, HUD, the State, and other sources are available. These grants usually operate on a 75/25 or 90/10 basis, returning $3 to $9 for every dollar put up.
Local Dollars Leverage Matching Funds
If voters approve the $2.5 billion referendum, the bond funds could potentially bring in billions of additional dollars. Here is how funding for Flood Control District projects works. (For a printable PDF, click here.)
Partnership Matching Funds Available for Harris County Flood Control District Projects
Bond money can be used as “seed money” for some types of projects. It qualifies us to receive additional money in the form of grants from other partners such as the Federal Government, State, Coastal Water Authority or the City.
Partnership Projects: More Leverage but Less Control
Even though you may not be able to follow all the ins and outs of the diagram above, you should be able to see that many opportunities exist to extend the impact of our own dollars. That’s the good news. The downside is that when you start spending other people’s money, they want to have a say in how you spend it. It’s important that we understand risks as we move forward. To get more money, we must give up some control.
Q: How will projects in the bond proposal be selected and prioritized?
A: Harris County Commissioners Court directed Flood Control District staff to develop list of projects. This is not an exact list of projects that must be or will be built with bond proceeds. It represents a list of projects that would meet the goal of the bond election, which is to both assist with recovery after previous flooding events (including Harvey) and to make our county more resilient for the future.
High on the priority list are construction-ready projects with federal funding partners (such as the U.S. Army Corps of Engineers and the Federal Emergency Management Agency) that give the County “the most bang for its flood control buck.”
Q: Can the bond money be used for purposes other than flood risk reduction?
A: No. Under Texas law, bond funds in this election could only be used for the purpose approved by the voters. Bond funds will not be used to fund additional staff positions at the Harris County Flood Control District.
Q: Do bond proceeds have to be used for the specific projects recommended by the Flood Control District?
A: No. Voters will be asked to authorize bonds for flood damage reduction projects, but specific projects may be added to the list of potential projects in the future or projects on the list could be modified based upon public input.
However, officials can only spend bond money on projects supported by the Bond Language. Voters will not be voting on a specific project list, only on the language in the proposal.
Freeing Up Budget to Improve Maintenance
Maintenance is NOT in the bond proposal. Nevertheless, the bond could still improve maintenance in a roundabout way. Here’s how. About half of the Flood Control District’s current $120 million per year budget goes to capital expenditures. If approved, the bond would free up about $60 million currently focused on construction projects.
The other $60 million in the Flood Control District’s budget is devoted to Maintenance and Operations. It is roughly divided as follows: $30 million for salaries and overhead; $10 million for mowing; and $20 million for maintenance.
That $20 million currently devoted to maintaining ditches, bayous and streams, if added to the $60 million that is freed up, would make $80 million that could be devoted to improving maintenance. That means the District’s maintenance budget could quadruple.
Yea or Nay?
On balance, I like how the bond is shaping up and I trust the people in charge of it. I wish that the $50 million allocated for a dredging partnership project was a dedicated $50 million. Then, if the bond proposal passes, we might be able to get the Army Corps to extend the scope of their current dredging to include the giant sand bar at the mouth of the West Fork. Addressing that issue as a change order to the current contract could save years, save dollars, and reduce risk immediately.
Posted on June 23, 2018, by Bob Rehak
328 Days since Hurricane Harvey
How Floodplain Mining Can Lead to River Capture
In a previous post, I showed satellite and aerial images of water sweeping through a West Fork sand mine complex during Harvey. This is part of a process called river capture. In the photo below you can see the West Fork flowing into and through mines on both sides of the river during Harvey.
Dikes on both sides of the river were breached in the process. In fact, historical images in Google Earth show that they have been breached repeatedly.
During Harvey, floodwaters swept through this complex and breached dikes in multiple locations as the river took a shortcut through the mines.
Highest Risk Scenarios for River Capture
A review of scientific literature reveals that the risk of stream diversion through pits (river capture) is increased by:
The phenomenon seems common and the consequences well documented.
2014 Survey of Scientific Literature Finds 37 Examples
In 2014, Anthony Ladson and Dean Judd, two Australian researchers, found 37 instances of river capture in a review of scientific literature. They published their findings at the Seventh Annual Australian Stream Management Conference in a paper titled A review of the effect of floodplain gravel mining on river stability.
Advanced economies, they say in their introduction, require large amounts of aggregate (sand and gravel) to sustain growth. Aggregate makes up 80% of concrete and 90% of asphalt pavements.
Many see floodplain mining as a safer way to obtain this aggregate than in-stream mining, but floodplain mining still poses substantial threats to river stability.
Dangers of River Capture
As we saw on the West Fork of the San Jacinto during Harvey, floodwaters take a shortcut through mines that are built on point bars inside meander loops.
Sand bars within sand mine, caused during “river capture” of the mine. These bars prove sand was carried downstream. This photo taken on 10/28/2018 (after Harvey) also shows repairs to mine wall. During floods, the river tries to cut across meanders, runs through the mines and carries sand downstream.
The authors say this can lead to:
Their review of local, national and international case studies showed that pit capture and subsequent river channel changes, are a common consequence of floodplain mining.
Changing River Environment and Putting Infrastructure at Risk
In their conclusion, Ladson and Judd state, “Although floodplain gravel mining has been considered a safer option than the direct extraction of gravel from a river, substantial risks to river stability and river health values remain. Floodplain gravel mining can cause change in the riverine environment, both locally and distant to the mining site, and in the short and long term.”
“There are substantial risks to infrastructure if river diversions occur which trigger bed and bank erosion.”
“There may be a role for river management agencies to influence the amount of mining that is undertaken, and the manner in which it is undertaken, in order to mitigate these threats.”
Mechanisms of River Capture
Another study goes into more detail. This second study, was conducted by Jacobs Engineering in 2015, also in Australia. It describes the processes behind river capture, the risks, and how to reduce them. It is titled Risk_assessment_of_floodplain_mining_pits_in_the_mid-Goulburn_Valley, The Golburn River, like the San Jacinto, meanders through relatively flat land. It also has approximately the same number of sand mines that the San Jacinto has.
Jacobs identified three risk scenarios for river capture:
Some San Jacinto Mines Push Recommended Safety Margins
Jacobs assesses (page 19) that 100 meters is the minimum setback to prevent river capture from occurring. In some places on the San Jacinto, dikes are less than 15 meters wide.
Jacobs also assesses that river capture is almost certain (page 19) where the basement of the pit is more than 5 meters lower than the river. San Jacinto sand miners are mining at more than double that depth.
“The physical processes of pit capture have been well documented from case studies: incision upstream and downstream of the pit are expected, with bed adjustments continuing until the river establishes a new equilibrium and grade,” says Jacobs.
Ways to Mitigate Risk of River Capture
Jacobs identified two main ways (page 47) to reduce this risk:
Sadly, all sand pits on the San Jacinto are already in the 100-year flood plain. Worse, all but one are at least partially in the FLOODWAY, which is defined as the main channel of the river during a flood.
Even more sadly, it appears that none of the measures in the second category are being applied to San Jacinto mines either.
Posted by Bob Rehak, July 22, 2018
327 Days since Hurricane Harvey