Innovative Infrastructure Funding Initiative Facing Legal Troubles in Houston

2556496178cd07cd83d3a71a71cd7cae_400x400Recent news suggests that ReBuild Houston, an innovative program that utilizes a variety of funding mechanisms to pay for the reconstruction of badly-needed road and drainage projects in a city notorious for flooding,  might be in some legal trouble. At issue is whether the ballot language that led to the creation of a drainage fee back in 2010 confused voters.  According to the Houston Chronicle:

[A] Texas Supreme Court ruling two weeks ago found the ReBuild ballot measure voters narrowly approved in 2010 obscured the nature and cost of the drainage fee. The case is headed back to trial court where legal experts say a judge is likely to honor the Supreme Court decision.

If the city no longer can collect the drainage fee, ReBuild projects slated for mid- to late next year, like the one near South Acres, could be shelved. Next fiscal year alone, the city has budgeted more than $100 million in drainage fee spending, and the fee was projected to bring in $500 million over five years.

At a budget meeting last week, Mayor Annise Parker acknowledged the city’s Capital Improvement Plan could take a hit. Council members have pushed the administration for more clarity on the impact of the lawsuit as they consider the five-year plan, up for a vote Wednesday.

“The Supreme Court ruling, first of all, it’s ongoing litigation, it has no operational impact today,” Parker said. “But it would be the CIP. Probably a third to a half of the CIP would go away if we didn’t use the drainage fee. But there’s still other money in there.”

The drainage fee is merged with three other ReBuild funding sources: a developer fee, dedicated property taxes and third-party funds, mainly grants and road repair money from Metro. The drainage fee is the largest single source, accounting for almost half of the ReBuild revenues.

While this wouldn’t be a fatal blow to the program, removing the drainage fee component as a revenue stream source would certainly have a significant impact. My personal view is that the real issue here is with regard to the court of public opinion.  On one hand, Houstonians hate paying taxes; yet on the other, they hate potholes.  Framed another way: the higher YOUR taxes, the quicker the City will be able to fix YOUR road.  Maybe this could be an opportunity for City leaders (and the outgoing Parker Administration) to not only address this issue in the courtroom but also to explain to voters the positive impacts Rebuild has had and will have on the lives of Houstonians in the years to come.


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