I believe that Harris County elected officials and Harris County Flood Control District (HCFCD) managers have not intentionally set out to make inequitable flood risk reduction investments. I believe that some inequitable investments were a side-effect of relying on the Civil Works program of the U.S. Army Corps of Engineers (USACE) for the vast majority of funding. Why would this reliance lead to some inequitable investments?

By federal law and policy, the USACE can only study a project if the study directive is included in federal legislation passed by both the House and the Senate and signed by the President. The USACE then must evaluate project alternatives using a planning guidance document published in 1983, known by the short title: “Principles and Guidelines” (P&G).

Under the P&G document, planners must calculate the benefits and costs of all project alternatives and, in a broader sense, all projects that are competing for federal funding. Engineers like numbers so we calculate the ratio of benefits over costs and call it the Benefit-Cost Ratio or BCR. Projects (or project alternatives) that deliver higher BCRs are much more attractive to the federal government than those that deliver lower BCRs.

I’m told that in recent years the Executive Branch of the federal government typically only supports projects with a BCR of more than 3.0.

Section IV of the Principles and Guidelines – relating to urban flood damage – requires planners to calculate the benefit portion of the BCR from the value of the avoided “physical damages to … buildings or parts of buildings; loss of contents … loss of roads, sewers, bridges, power lines, etc.”

To illustrate this, consider two projects that each cost $100 million dollars. One project removes 1,000 homes each worth $350,000 from the 100-year floodplain (the 1% annual chance floodplain). The other project removes 1,000 homes each worth $85,000 from the 100-year floodplain. Let’s also assume that both projects benefit 2,300 people (2.3 people per household).

For simplicity let’s compare both projects for just one 100-year flood event and assume that the 100-year flood would completely destroy all of the homes. (I realize this is not true in the real world, but just go with it for the example.)

The first project would avoid $350 million in property damage (1,000 homes times $350,000 for each home). This would yield a BCR of 3.5 ($350 million / $100 million) and benefit 2,300 people.

The second project would avoid $85 million in property damage (1,000 homes times $85,000 for each home). This would yield a BCR of 0.85 ($85 million / $100 million) and benefit 2,300 people.

Which project do you think would secure federal support? In this example, the project that removed the higher-value homes from the floodplain would be supported and would attract federal funding, while the other project would not attract any federal funding. When federal funding is secured, it often pays for 90% of the project cost. So in this case, the federal government – using income taxes from citizens all around the nation – would pay $90 million for the project while HCFCD would pay $10 million using local property tax revenue.

To illustrate just how important property values are to the process, the P&G document provides a flowchart to illustrate the process.

The federal reliance on BCRs determined using the value of avoided property damages outlined above, means that when we rely on federal funding to do projects, we must identify projects that have a high BCR so that the projects can get a favorable recommendation from the USACE to federal lawmakers. This encourages flood mitigation planners and engineers to think up projects that protect higher-value properties, regardless of the number of people helped.

Federal law and policy also direct the USACE to only design and build projects with both a local sponsor – in our case HCFCD – and authorization and appropriated funding by Congress and the President.

A quick review of the Texas law that created the Harris County Flood Control District (HCFCD) in 1937 shows why HCFCD was created in the first place. Section 2.g. of House Bill No. 1131 of the 44th Texas Legislature states:

To cooperate with and contract with the United States of America or with any of its agencies now existing, or which may be created hereafter, for grants, loans, or advancements to carry out any of the powers or to further any of the purposes set forth in this Act and to receive and use said moneys for such purposes; or to contribute to the United States of America or any of its agencies in connection with any project undertaken by it affecting or relating to flood control in Harris County;

HoUSE BILL NO. 1131, 44TH TEXAS LEGISLATURE

So it is clear that we have relied on federal funding to reduce flood risks in Harris County. Maximizing the use of federal dollars is important. Why not take advantage of available federal funding? Many people, myself included, appreciate how HCFCD staff has been able to maximize the federal investments in our region. But I think it’s fair to acknowledge that this reliance on federal funding did inadvertently lead to some inequitable investments.

Today, one important policy question for Harris County is this: “To what extent, if any, will we rely on federal funding to further reduce flood risks?”

Since this question depends upon federal policy and regulations, in another post, I will provide an update on pending changes to federal policies and regulations that may allow “counting” other benefits — not just the value of avoided property damages — in the benefits part of the BCR. Other benefits might include favorable social, environmental, and economic outcomes – some that can be converted to a monetary value and some that are qualitative.