Apr 25, 2012

Flood of Funding

Tax-shy Houstonians fund water infrastructure with pay-as-you-go plan

Funding water and wastewater infrastructure is doubly difficult in the slowly recovering economy, but residents of Houston—in a region known for low taxes and frugal government—passed a groundbreaking measure to impose a fee that is fueling a major, long-needed overhaul of its storm water systems.

This innovative funding tool for a large-scale drainage project is virtually unprecedented, and is a monumental step for Houstonians that offers a roadmap for other cities. 

After earlier unsuccessful attempts with traditional approaches, Houston officials and key constituents involved with storm water undertook a comprehensive approach that involved research, information, voter education and implementation. With revenue now coming in after the November 2010 vote and June 2011 initiation of assessments, the program is completing its needs assessment, establishing priorities and developing construction plans for ongoing projects.

The Residents Pitch In

After previous measures failed to pass, a campaign effort did its homework by creating significant evidence and research, which was then used in an information outreach to help voters understand the dire need and the framework for solution.

A University of Houston study determined that 65% of the city’s underground utilities and infrastructure were beyond their useful life. Residents were asked through surveys and focus groups about their understanding of the problem, what they felt were reasonable solutions and even what they might pay per month to fix things. 

From that homework, it was determined that a pay-as-you-go approach had the most chance for success, in part because it was favored by both conservative voters for its fiscal soundness and by progressives as an innovative solution to a big problem. Researchers also determined that most Houstonians would feel that $5 to $10 a month was an appropriate price to pay for it.

The Not-So-Distant Past

Houstonians did not need much reminding of the huge need. Only a few years earlier, in 2001, Tropical Storm Allison dropped 40 in. of rain on Houston to create a 500-year flood.   The storm inundated the downtown area and thousands of homes with water, killing 23 people in the region and inflicting $5 billion in damage along its multi-state path. 

But everyday heavy rains and flooding had already been an increasingly common occurrence in Houston. As newspaper opinion column writers and residents at public meetings pointed out, the nation’s fourth-largest city by population and second-largest by square miles was also known as one of the worst for flooding. After decades of growth, with new buildings and pavement shunting water off property when it previously had gone into the ground, Houston’s small creeks and bayous were easily overwhelmed. Federally aided flood-control improvements on bayous and channels had enhanced the major tributaries. At the neighborhood level, however, the design criteria of a two-year storm simply could not handle the heavier loads of wet Gulf Coast weather patterns, and flooding for some areas became as regular as rain. 

Politicians, engineers, urban planners and landscape specialists have advocated solving this problem for decades, but when budgets were tightened, term-limited elected officials found it easier to pull funding from infrastructure than to take it from public safety or raise taxes. Houston’s former approach to storm water improvement had been largely reactive and based on input from field maintenance personnel, requests from residents and referrals from elected officials, but that strategy was not working. In the late 1990s, the city’s Comprehensive Drainage Plan estimated a cost of $1.2 billion to bring storm drainage infrastructure up to a standard level of service. 

The residents, however, knew their streets and homes were flooding, and thus the citizen-led initiative was the answer.  

A New Way 

Since then, technology improvements have enabled better data collection and analysis, and provided rallying points in what was dubbed the Rebuild Houston information campaign.

One such innovation, the Harris County Flood Control District’s Education Mapping Tool, provides residents with a clear picture of 100-year floodplains, 500-year floodplains and other flood-control information along mapped floodplains. Entire neighborhoods tinted varying shades of blue are stark reminders of the city’s storm water problem, but many more areas outside mapped floodplains are subject to local ponding and flooding risks.

Comprehensive data analysis also is driving the Rebuild Houston improvement program. A citywide condition-assessment effort outlines a sophisticated needs analysis and prioritization. While Houston’s improvements and maintenance have been ongoing, the first projects under Rebuild Houston are being mapped out for implementation later this year. 

Mayor Annise Parker told the Houston Chronicle that Rebuild Houston would “change fundamentally how city council chooses which projects we do” by relying on facts and science to set priorities. 

The Process

The November 2010 ballot measure spelled out a balanced approach that combined the new assessment with other funding sources. Projects would only start as the money came in to fund them—“pay as you go"—and without the bonded indebtedness that had driven prior projects to spend $1.60 for every $1 in actual construction. The assessments are based on the square footage of the impermeable surface area of a given property—the more pavement or buildings a property has, the more the owner pays. Current schools and churches were grandfathered out of the assessment, but the fee will raise $125 million per year. Other revenue sources, including existing infrastructure funds, state and federal grants, a developer impact fee and interest savings, 3aim to build the total funding for a capital improvement plan to $2 billion over 10 years and $6 billion over 20 years.

One of the amazing aspects of Rebuild Houston is that the ballot measure passed without providing voters the usual street-by-street, creek-by-creek plan for expenditures. The key was educating people about the need for a comprehensive approach and outlining a fiscally sound roadmap to get there.

There is a bonus aspect that Rebuild Houston hopes to employ under the same comprehensive, fiscally sound approach. For projects in which private-sector dollars can augment public infrastructure spending, Houstonians can expect to see green spaces, ball fields, hike/bike trails and other amenities that serve as creeks and detention basins a few days a year. The poster child for this innovative public-private partnership is right downtown. The Sabine to Bagby Promenade and Allen’s Landing on Buffalo Bayou transformed a neglected, trash-strewn eyesore into a linear park that also handles storm water flows. Hurricane Ike, in 2008, flooded many neighborhoods, but the Promenade did its job as a high-capacity storm conveyance and reopened as a park a few days later virtually unscathed. 

About the author

Stephen Costello is an at-large member of the Houston City Council and president of Costello Inc. Costello can be reached at [email protected]
or 832.393.3014.
Kevin Shanley is CEO of SWA Group. Shanley can be reached at 713.868.1676.

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