Milan and Lori Saunders’ Harvey Experience: âYou canât outsmart nature. Nature always wins.â
Interview by Bob Rehak
In June, I interviewed Milan Saunders, Chairman/CEO of Plains State Bank, and his daughter Lori Saunders, the bankâs 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 stormâs 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: âHarvey 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.â
Lori: âMy plumbing was starting to back up on Sunday. Thatâs why I went over to Dadâs house.â
Milan: âOvernight, early Tuesday morning, water began to rise substantially. About 1 a.m., we wrapped the legs of our baby grand piano. In â94, we were spared, so I was thinking that, at worst, we would get a foot of water in the house.â
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. âI 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, âItâs a mandatory evacuation.ââ
âI ask who they are. They say, âWeâre firemen from Memphis, Tennessee.â I say to myself, âWait a minute!â How did they know about it in time to get here from Memphis when I didnât even know about it?â

Milan makes his great escape with wife and dog on a Wave Runner down Kingwood Drive
âSomehow, 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.â
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.
âThe next challenge is finding a place to shelter for me, my wife, my daughter, my granddaughter and grandsonâŚwhich we do that afternoon.â
âIâm also worrying about the bank. We had been closed for four days already. The law says banks canât 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.â
Never in 50 Years of Banking
âAll 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.â
âPlains 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.â
âIf 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.â

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.
âI lost my telephone while rescuing my granddaughterâs cat,â he says. âI lost both cars.â He begins talking in a staccato shorthand almost like heâs running down a mental checklist, a pilot evaluating options for an emergency landing. âNo cars. No phone. Canât get across the river.â
âIt really made it very difficult for us to run the bank. None of our offices experienced flooding; we just couldnât get people to the offices to move electronic files. Thatâs where our connections to the Fed and our core processor are.â
Lori: âA 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.â
Milan: âWe were down five days. Iâve never experienced that in 50 years of banking.â
Bob: âWere there any repercussions for being closed five days?â
Milan: âOverall, our clients down here were very understanding. The West Texas folks didnât understand as well. One client is a school district. They had end of month payroll to make.â
âLuckily, the superintendentâs 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.â
Meanwhile, Back at the Ranch HouseâŚ
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 wasnât moving that fast, but it was touching the breaker boxes. Water and electricity! Not a good combination!â
“We finally got the cat out of there, but my phone went in the drink, so I lost all communication.â
âThe 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 Loriâs phone is under water, too.â

That’s all she played.
âThe 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.â
Nightmare Followed by a Miracle
âWe 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.â
âThe 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.â
Secrets of Dealing with Contractors
âThen 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.â

Starting over.Â
âI 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 â mine and Loriâs. I guaranteed him payment every Friday night. We made up our minds about what we wanted and didnât 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 theyâre back on Monday.â

Kicked to the curb by Mother Nature.
âMy wife is fluent in Spanish, so we could converse with subcontractors. That was another advantage.â
Repairs Completed in Record Time, But NowâŚ
âWe got the house all done by the first of December. Right now, Iâm just wrestling with the insurance guys. They think I should have been able to get it done for half. But itâs unreasonable to look back and say that.â
âThe 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.â
Bob: âHow long did it take the bank to get back to normal?â
Lori: âOther 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, âWow!â Weâd just been through a war zoneâŚthe craziest worst week of our lives. And there all of our people were!â
Milan: âWe were also very fortunate that only three of our employees had flooded houses and two of those are sitting here with you.â
âThe Craziest, Worst Week of Our Livesâ Turns into a 3-Year Project
Bob: âHow did you manage to cope with the business being down and your homes being destroyed at the same time?â
Lori: âYou 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.â
âWe lost everything. Now looking backâŚI wonder how we did get through it. It was just one day at a time.â

More net worth at the curb
âWe 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 portacansâŚall of it. Theyâre still far away from getting their houses back together again.â
Bob: âWhat percentage of your street is finished remodeling?â
Lori: Maybe 20%. At least 80% are still not back in.â
Milan: âWe have 42 houses in our part of Kingwood Lakes; only one escaped flooding. There arenât ten that are completely finished restoring. You see lots of travel trailers. Iâve said all along that this is a three-year project and my opinion hasnât changed.â
Fighting the Adjusters
Bob: âWhatâs the most common problem people have?â
Milan: âTheyâre all struggling with the insurance adjusters. Each adjuster sees things differently.â
âOne friendâs adjuster told him that $70/sf was a starting point and that if you have cabinetry involved, youâre 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.â

Counter to counter, but not express
âWhen a cost-plus contractor shows up, heâs going to give you a quote for labor and all the receipts for materials. Heâs not going to break out trim costs or caulking per square inch! Our first adjusterâs report was 40 PAGES!â
âBy 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 donât get it.â
âThe other thing that has happened is that prices have all escalated by 30%.â
The Value of a Banker Who Knows Your Business
Bob: âDo you have any customers that were forced out of business by Harvey?â
Milan: âNo. But many were affected.â
âWe 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.â
âWe had a dozen clients in different places that were badly affected, and weâve worked with them.â
The Hardest Hit Clients Didnât Have Flood Insurance
Lori: âThe hardest hit were clients without flood insurance. They werenât required to have it.
Not in a flood plain, you know!â
Milan: âWeâre one of the top ten SBA lenders in this district. Weâre 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 didnât have any insurance.â
“Iâve 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.â
Recommendations for Improving the System
Bob: âWhat would you change politically to help prevent another flood like Harvey?â
Milan: âOversight 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. Itâs incredible that guys in Memphis got the news before we did. Regional coordination and prompt notification. Those will be big parts of the answer.â

Heavy hearts and high piles: belongings on the curb, waiting for pickup
Nature Always Wins
Bob: âYou work with a lot of developers. Do you have any observations about development near rivers?â
Milan: âYou canât outsmart nature. Nature always wins. We need to give Mother Nature her room.â
Posted By Bob Rehak on July 24, 2018
330 Days since Hurricane Harvey










