Posted on September 12, 2018
One year and one day after Hurricane Harvey devastated the greater Houston region, voters passed the largest bond in Harris County history — $2.5 billion to aid in rebuilding and recovery. By voting for this bond, Harris County residents will see an additional $2 billion from the federal government. There is some discussion that Texas could tap its “rainy day fund,” as well. We will know more in 2019 when the legislature starts its next session.
The $2.5 billion Harris County voters approved to pay for flood control is a good start. But the region will need much more money to pay for the projects that will lead to long-term resilience.
Photo: Melissa Phillip, Staff photographer / Staff photographer
Let’s say that the legislature is generous and provides $1 billion out of the $12 billion fund, the largest such fund in the country. Some of those dollars will come to Harris County. Ultimately, when all these funds are considered, we could end up with about $5 billion — a great influx of cash to the region.
Unfortunately, the way these bonds and federal dollars work, it will take almost 15 years to build the projects almost 85 percent of Harris County voters wanted – that is if all goes to plan. The other concern is that, though these funds are a great start, they are not nearly enough to truly mitigate flood risk in the region. Long-term resilience will require new and innovative public and private investment.
Some of this innovative investment is starting to come to the market, and it includes environmental impact bonds, resilience bonds and green bonds. These mechanisms allow communities to secure additional funding separate from the traditional issuances of public bonds. More importantly, it brings funding to communities that otherwise would not be available, resulting in accelerated schedules for resilience projects.
For example, Port Fourchon, just south of New Orleans, initiated a coastal restoration program with a $40 million “pay for success” environmental bond. The funding allows the state to accelerate project development for much-needed coastal restoration efforts. Prior to this issuance, Washington, D.C., was the first city to issue an environmental impact bond for stormwater management. The $25 million performance bond provides upfront capital and shifts downside risk from government agencies to private investors.
Source: Houston Chronicle
