Tag Archive for: Houston City Council

Bombshells in Council Meeting Raise More and Bigger Questions about Housing and Community Development

Weeks ago, Mayor Sylvester Turner said he would provide a complete explanation for allegations of interference in a $15 million contract that would have benefitted his former business partner. Many people thought that would happen today at a joint meeting between the Budget & Fiscal Affairs and Housing & Community Development Committees. But it didn’t.

The Mayor didn’t appear. His representative didn’t speak. And Tom McCasland, the fired director of Housing & Community Development wasn’t even invited. Instead of explanations, we got more bombshells and even bigger, more troubling questions that pointed to what Mayor Pro Tem Dave Martin called “a train wreck” that was years in the making.

The Longest Three Hours Ever

Keith Bynam, the department’s Interim Director, and Temika Jones, Assistant Director and Chief Financial Officer (also a former auditor) sat in the hot seats for three hours. They gave a presentation about the department’s finances.

The meeting almost ended before it started. Council members received the presentation from Bynam and Jones less than an hour before the start of the meeting. The members had so little time to prepare that several wanted to postpone. Based on their initial review, some also called the presentation a “diversion.” The acrimonious discussion about whether to adjourn the meeting consumed the first 33 minutes and set the tone for the rest of the day. One council member, Mike Knox, walked out.

While the presentation was certainly not what council members expected, it also wasn’t a “diversion.” It more closely resembled open heart surgery on an entire city department in front of live TV…using hand grenades instead of scalpels.

Most of the presentation focused on budget shortfalls in the department, and who knew what about those shortfalls when.

Sadly, Bynam and Jones had planned to talk about a “corrective action plan” for the department, but never got to their recommendations because of persistent interruptions from council members whose jaws were scraping the floor.

At the end of the meeting, the City Attorney said the internal investigation that the Mayor assigned to him had been turfed to outside counsel – former US attorneys. He knows a hot potato when he sees one!

If this presentation was an attempt to support the mayor (who was reportedly at an Astros game), it backfired. Bynam and Jones spent half their time fielding questions from council members about why they didn’t turn whistleblower years ago. They claimed: 1) that they repeatedly raised spending issues with McCasland, 2) that McCasland supposedly discussed them with the Mayor, and 3) that they weren’t really sure if he ever did.

Bombshell Revelations

Among the bombshells:

  • The department’s annual administrative budget for ongoing HUD Community Development Block Grant (CDBG) programs (separate from Harvey programs) went over budget during the last fiscal year by 175%. It budgeted $3,987,480 and spent $11,084,775.
  • TIRZ (tax increment reinvestment zone) money made up the difference, but by law TIRZ money is supposed to be spent within the zone where the tax increment is collected.
  • During the last 5 fiscal years combined, the department overspent its admin budget by 143%. It budgeted $21,088,015 and spent $51,322,491 on admin.
  • Admin expenses for the Harvey CDBG fund exceeded the four-year budget of the program by 14% in the first year of the program.
  • For the department’s Homeowner Assistance Program (HoAP), the department incurred $70 million in expenses as of the end of the third quarter, but has only had reimbursements approved and/or paid that totaled $12,475,085. They missed that one by almost 6X. As a result, they are now $22 million short in their project delivery funds.
  • Only one of nine programs in the Harvey fund is on track to meet its performance benchmarks by the end of the year.
  • The former director’s wife owns a company that was doing business with the department to reduce “duplication of benefit” (DOB) gaps for HoAP applicants. But the company actually increased the gap for each applicant, according to the GLO. To cover the difference, the department will have to reduce each homeowner reimbursement request.
  • The GLO capped Relocation Assistance at $6,000 per applicant, but the department is spending $8 to 10K.
  • Change orders were not accounted for properly.

Virtually all city council members appeared to be surprised by the revelations.

12 Bigger Questions Remain

Compared to his role in one dubious financial transaction, Mayor Turner now has many bigger questions to answer.

  1. Did the Mayor provide proper oversight to the Housing and Community Development Department?
  2. Why did he continue to back McCasland when management issues arose years ago? HUD and the GLO had warned him. The problems were widely reported in the media.
  3. Are the numbers reported today accurate and complete, or are there more surprises waiting?
  4. How could admin expenses swell so much? Previous GLO and HUD audits suggested that the department was understaffed. And McCasland claims he held admin expenses below 13%. And typically, first-year admin startup costs for a new program run about 20-30% of the total allocated for the entire program. They don’t consume 4+ years of budget in one year.
  5. Does the City’s accounting software need improvement? The City doesn’t even recognize liabilities incurred to HUD and the GLO. It only covers the general fund.
  6. Were these numbers being timely reported to the Mayor? Bynam and Jones say they reported them to McCasland every month, and that McCasland supposedly discussed them with the Mayor. But Bynam and Jones claim McCasland kept them out of meetings with the Mayor. So they don’t know what McCasland told the Mayor.
  7. Did McCasland make the Mayor aware of the overages?
  8. What is McCasland’s side of the story?
  9. How is it possible that the City Controller was writing checks and these overages did not show up on a balance sheet?
  10. The City’s general fund advances cash to complete projects in anticipation of reimbursements from the GLO once the work is approved. Are there audited financials that show more detail on how these funds were spent AND additional liabilities which may be accruing?
  11. McCasland says he sent a memo to the Mayor, the Housing Committee and every City Council Member that disclosed the role his wife played. Where is that memo?
  12. Why did the City sue the GLO to keep these programs last year if they were losing so much money?

Rule #1

Rule #1 in business is that when you’re in a hole, stop digging. Evidently, NO ONE at the City got that memo.

Posted by Bob Rehak on 10/7/2021

1500 Days after 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.

Houston City Council Unanimously Approves Motion to Purchase Woodridge Village from Perry Homes

This morning, Houston City Council unanimously approved the purchase of Perry Homes’ 268-acre Woodridge Village tract in Montgomery County.

The 268 acres of Woodridge Village could soon become public property to be used for stormwater detention, parks and wastewater treatment.

The ordinance that passed also included approval of an Interlocal Agreement between the City and Harris County Flood Control (HCFCD) that will govern the use and maintenance of the property as well as the terms of its purchase and development. See below.

As this deal wound its way through city and county political systems for the last 20 months, it morphed several times.

Terms of Deal that City Approved This Morning

Here’s what the City Council approved this morning:

  • Total purchase price = $14,019,316.00.
  • Of that, the City will contribute $4,021,500.00 in cash.
  • And of that, $3,830,000.00 will go toward sole ownership of 73 acres within the 268 acres that the City will use to build a new wastewater treatment plant.
  • The two parties will co-own, co-develop and co-maintain the rest of the property to be used for stormwater detention and parks.
  • The parties will split the cost of the remaining property 50:50 which will be jointly owned, developed, operated and maintained.
  • For its portion of the remaining cost, the City will donate property worth approximately $5,150,000 to HCFCD that the County can then use for flood control projects in areas of the City that flood.
  • The City will also, at a minimum, match Harris County’s detention and fill mitigation requirements.
  • The City will adopt and enforce NOAA’s new higher Atlas-14 Precipitation Frequency standards within the City and in the City’s extra-territorial jurisdiction.
  • The City agreed to require a minimum detention rate of 0.55 acre-feet per acre.
  • All this must happen within 120 days.
  • If the sale falls through, nothing in the terms of the agreement obligates the seller to perform additional flood mitigation.

County Must Now Approve on December 15

Harris County Commissioners Court must still approve the Interlocal Agreement in its December 15 meeting before it becomes effective.

Woodridge Village contributed to flooding hundreds of homes in Elm Grove Village and North Kingwood Forest twice last year, because of insufficient detention.

No Mention of Lawsuits

Nothing in the terms of the sale or interlocal agreement mentions the hundreds of lawsuits that arose out of that flooding. They should not be affected.

Pace of Development To Depend on Speed of Funding

The Parties (City and County) agreed to jointly fund the cost of designing and constructing flood mitigation facilities on the Land and to work cooperatively to secure funding. They targeted completion of the project within five years.

Both Parties agree the Land can stay in its current condition until funds are jointly secured to build the project, which may be built in phases based upon available funding.

Any Project on the Land will involve gravity detention. In other words, no pumps will be involved. Perry Homes has already constructed approximately 60% of the required detention.

Stormwater Detention To Be Based on Current Needs

The amount of the Stormwater Detention allotted to each Party will be based on its pro rata share of costs contributed to the Project. The Parties agree that the Stormwater Detention shall only be used for mitigation of existing flood risks, and not to mitigate the flooding risks of any new developments that arise after the execution of this Agreement.

Martin Thanks Turner for Being Mayor for “All the People”

Mayor Pro Tem Dave Martin sponsored the ordinance that council approved this morning and worked to align support. Mayor Turner supported the agreement despite the fact that the majority of Kingwood voted for his opponent in the last mayoral election. In his presentation, Martin specifically commented on that and thanked the Mayor. He said that Turner promised after the election that he wanted to be mayor for all the people. Martin said this was proof that he was good to his word.

Posted by Bob Rehak on 12/9/2020

1198 Days since Hurricane Harvey and 447 since Imelda

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.

Woodridge Village Purchase on Wednesday’s Houston City Council Agenda

Houston City Council will consider two items Wednesday that could ultimately pave the way for the purchase of Woodridge Village from Perry Homes. Woodridge Village twice contributed to the flooding of hundreds of homes in Kingwood’s Elm Grove Village last year. For more than a year, the City, Harris County Flood Control and Perry Homes’ subsidiary Figure Four Partners, LTD have discussed purchasing the property and turning it into a regional flood-control detention basin.

268 acres currently owned by Perry Homes could be turned into a regional floodwater detention basin if the purchase is approved by Houston City Council tomorrow and Harris County Commissioners Court on December 15.

If successful, the City and HCFCD would work together to reduce the volume of water flowing out of the headwaters of Taylor Gully.

$4 Million in Cash from City Plus Land

The two agenda items are #59 and #65. They call for an interlocal agreement between the City and HCFCD to jointly purchase the property. According to an article in the Houston Chronicle, the purchase price would total approximately $14 million. The City would pay approximately $4 million of that in cash. However, in the past, the City has also discussed the contribution of land to make up its 50% of the purchase price.

The City has also said in the past that it hopes to acquire a portion of the site outright in order to consolidate several wastewater treatment facilities in Kingwood outside of the San Jacinto floodplain. Presumably, the City’s cash would go toward the purchase of that part of the site. Both sides previously agreed to share equally in the purchase, operation, development, and maintenance of the rest of the 268 acres.

Requirements Imposed by Draft ILA from May

Earlier this year, I obtained a draft copy of the interlocal agreement by a FOIA request, which the State Attorney General partially redacted. In May, the City provisionally agreed to:

  • Adopt Atlas-14 precipitation frequency tables
  • Require a minimum detention rate of 0.55 acre-feet per acre of detention for any new development on tracts one acre or larger in size
  • Prohibit the use of hydrographic timing (flood-routing studies) as a substitute for any detention requirements, unless the project emptied directly into Galveston Bay.
  • Enforce these provisions both within the City and its extraterritorial jurisdiction.

The volume of detention ponds currently on Woodridge Village is about 40% short of what the new higher Atlas-14 requirements dictate. The current detention was approved and construction started before Atlas 14 became effective in Montgomery County.

The use of flood-routing studies in Montgomery County to avoid building detention ponds has long been a controversial practice that downstream residents have fought.

Next Steps in Terms of Flood Mitigation

If Council approves the money and ILA tomorrow for the Woodridge Village purchase, Harris County Commissioners would take up the issue at their next meeting on December 15. Approval by both bodies certainly would make Christmas much merrier and more hopeful for hundreds of Kingwood families devastated by flooding last year.

Kudos to Mayor Pro Tem Dave Martin for pushing this forward.

The outcome of the votes could affect projects considered in the Kingwood Area Drainage Analysis. If the purchase goes through, it could reduce or eliminate the need for widening and deepening Taylor Gully itself. It is not immediately clear whether the City and County have set deadlines for the design and construction of the detention basin.

Posted by Bob Rehak on 12/8/2020

1197 Days since Hurricane Harvey and 446 since Imelda

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.

Mayor, City Council Sued Over Diversion of Drainage Fees

Mayor Sylvester Turner and the entire Houston City Council have been sued for allegedly diverting approximately $44 million in drainage fees. This comes after the City campaigned last year to build a “lockbox” around those funds.

Mayor Sylvester Turner, left, Flood Czar Stephen Costello, center, and Council Member Dave Martin, right, took questions from a largely disgruntled crowd at the Kingwood Town Hall meeting on 10.17.19.

Both Turner and City Council Member Dave Martin told an audience at last year’s October town hall meeting in Kingwood, “If you WANT a lockbox around the drainage fee, vote FOR Proposition A. If you DON’T want a lockbox around the drainage fee, vote AGAINST it.” Prop A then passed overwhelmingly with 74% voting FOR.

Troubled History of Drainage Fee

This was actually the second time citizens voted on a drainage fee. In 2010, voters approved the drainage fee by only 51%. Unhappy voters challenged it in court based on the wording that appeared on the ballot. The summary did not disclose that the fee came from a new tax. The Supreme Court agreed and ordered a revote. That occurred in 2018.

Between 2010 and 2018, however, the City became addicted to the new source of money. Bill King exposed how the City had diverted nearly a quarter of a billion dollars from it to pay for things unrelated to drainage. So to keep the gravy train rolling, the City did two things.

  • They said they were creating a lockbox around the money so it could only be used for drainage.
  • Simultaneously, they changed the wording of the amendment to make the drainage fund easier to loot.

After that Town Hall, I emailed both Turner and Martin. I simply asked how the wording of the 2018 version of the charter amendment created a lockbox. Neither would answer directly. Martin and the Mayor’s spokesperson simply repeated, “If you want a lockbox, vote for Proposition A.”

How One Word Can Make a World of Difference

So I investigated the language. The wording of the 2018 version and the 2010 version differed – by only one word. See the post I wrote on October 20th of 2018. In the funding formula, the word “equal” changed to “equivalent” in one place. That meant the word equivalent now appeared TWO times in the formula. And that sent up a red flag for me.

Equal and equivalent sound alike. Most people think they mean the same thing. But the dictionary definitions differ. Equal means you could superimpose one number over the top of a second and not see a difference. Equivalent implies some sort of adjustment factor.

Equivalent gives wiggle room. Equal does not.

For instance, a Canadian dollar is not equal to a US dollar. A Canadian dollar equals 0.76 American. To convert one currency into the other and make them equivalent, you apply the conversion factor.

But what are the conversion factors built into the drainage fee? Those have never been publicly explained. In fact, Turner and Martin adamantly avoided discussing them.

Conversion Factors Help Divert $44 Million

In my opinion, the City deceived voters. There was NOTHING in the language of the charter amendment that created a stronger lockbox. The wording change created a weaker one, as I warned a year ago.

It’s not clear whether any change in the language of the amendment was even legal. The Trial Court’s Final Summary Judgment ordered a new election for Proposition 1 (what it was called in 2010), not a new election on a variation of it.

The net effect: we have less money for drainage, not more. The City diverted $44 million from Drainage to the General Fund. That’s not what voters expected or wanted.

Ignoring Will of the People

Plaintiffs in the lawsuit allege that defendants violated the terms of the City Charter and acted against the will of voters who approved Prop A with 74% casting Yes votes. For the full text of the suit, click here.

Officials led voters to believe they were approving a lockbox around the drainage fee when they were actually approving the opposite.

A Deep Dive into Diversion

Below is a deep dive into how voters (and the Plaintiffs) thought Prop A would work and how the City manipulated numbers to divert money.

At issue is the portion of the drainage fee calculated by the following words:

An amount equivalent to proceeds from $0.118 of the City’s ad valorem tax levy minus an amount equivalent to debt service for drainage and streets for any outstanding bonds or notes issued prior to December 31, 2011, and bonds or notes issued to refund them.

Houston City Charter, Article IX, 22(b)(iii)

Notice the use of the word equivalent TWICE. That gives the City wiggle room to manipulate the figures to the detriment of the drainage fund and the benefit of the general fund.

Plaintiffs in the lawsuit claim that the amount added to the Dedicated Drainage and Street Renewal Fund should have been $252,520,000 minus $161,226,060 or $91,293,940. Yet, according to the City’s 2020 budget, only $47,000,103 will be added to the Fund.

In other words, the City is only paying 51.6 percent of the amount into the fund that a strict “lockbox” interpretation of the City Charter would mandate. More than $44 million that should have gone into the drainage fund will go to the general fund.

“Undisclosed Manipulations”

$44 million is being diverted somewhere else through, in the words of the lawsuit, “undisclosed manipulations.”

The plaintiffs argue that defendants have no discretion to calculate the “amount equivalent to proceeds from $0.118 of the City’s ad valorem tax levy beyond its straightforward mathematical formula.” In other words, they’re arguing for an amount “equal” not “equivalent” to. That’s not the way the amendment is worded. But that is certainly the way the amendment was sold to voters.

Mayor’s Response, According to Fox

According to Fox News, the Mayor’s office released the following statement in response to this lawsuit:

The city disagrees with the premise and the demand of the lawsuit, which would cripple city services. The charter calls for “an amount equivalent to” the $0.118. Once the city had to lower its tax rate because of the revenue  cap, the amount transferred is the equivalent amount under the lower tax rate.

Transferring the 11.8 cent full amount would mean a reduction to the General Fund budget of $50M in this fiscal year alone. That would mean cuts to essential services like police, fire, solid waste, and other services. [Emphasis Added] Mayor Turner doesn’t support that. The 11.8 cents was the amount of the tax rate at the time that covered the existing debt payment that was attributed to previous street and drainage projects. Of a total tax rate of $0.63875 per $100 valuation, the 11.8 cents was equal to 18.5% of the total property tax rate.

The equivalent of 11.8 cents has now exceeded the scheduled annual debt payment for existing debt when Proposition 1 was passed. Using the current tax rate, the percent allocated to DDSRF would increase from 18.5% to over 20%, and with the additional tax rate reduction just adopted, it would be nearly 21%. The city will vigorously defend its position.

By the Mayor’s own admission, the City knew all along that it needed to divert money from the drainage fee into the general fund to pay for other services.

I certainly don’t recall that discussion when the City came to Kingwood selling Prop A. They focused only on “the lockbox.” No official discussed adjustment factors or how they might be calculated. Voters just wanted their drainage issues fixed. And they have not been.

Counterfeiting the Currency of Communication

For me, this was the last straw. This is not a lockbox. It’s not even close. In fact, it’s the opposite of a lockbox. It’s a slush fund for $100,000 a year interns and God knows what else. The City isn’t exactly transparent with its accounting.

When elected officials counterfeit the currency of communication, how can the body politic make informed decisions? In this case, the City duped voters into approving the opposite of what they wanted – a lockbox around that money.

They used deception to stifle dissent.

And dissent or disagreement, no matter how difficult, is necessary for the health of the body politic and trust in government. That’s how we build compromises that work for everyone.

How to Make This Right

Voters have one more chance to make this right before it goes back to the Supreme Court again. Early voting started Monday morning. Every registered voter in Kingwood must vote in this mayoral election.

In the last election, Sylvester Turner won by about 4,000 votes City wide. 28,000 registered voters in Kingwood did not bother to vote in that election. We could have swung that election, but didn’t. Now here we are, beset by flooding problems from the streets of Elm Grove to the banks of the San Jacinto.

We must put people in City Hall that we can trust. Please get your neighbors, friends and family to the polls.

Posted by Bob Rehak on 10/24/2019

786 Days since Hurricane Harvey and 34 since Imelda

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

Houston Public Media Reports Houston City Council Not Attempting to Curb Floodplain Development

Houston Public Media yesterday reported that City Council approved a new floodplain development upstream from the Addicks Reservoir. This is what happens when you pit one person’s property rights against another’s. Engineers and developers say they take precautions to prevent downstream flooding. But still, people downstream flood.

Hmmmm. Wonder why that happens? Here’s a pretty balanced report that explains why, and why politicians approve such developments.

Impact of Land-Use Changes

It’s filled with examples of people who said, “I lived here for 30 years and never flooded before. What happened?”

The experts say it’s usually due to some kind of land-use change upstream from them.

My Personal Experience

I had a similar experience years ago when I lived on Spring Creek in the Dallas area. I bought a house guaranteed to be two feet above the hundred year flood plain. But after they built the Collin Creek Mall in Plano upstream from me, I found I was almost flooding on tiny rains. The Army Corps came back out and resurveyed the creek.

They determined I was now 10 feet BELOW the hundred-year floodplain.

That was the last house I will ever own near water. Highly recommended listening (or reading).

Posted by Bob Rehak on 6/6/2019

646 Days since Hurricane Harvey