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Galveston has only two choices — and renegotiation isn’t one of them

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Contact: Jim Suydam
EDITORIAL — April 11, 2013

Austin — By Jerry Patterson, Texas Land Commissioner

AUSTIN — The city of Galveston has a choice to make as we try to move forward with plans to complete the recovery from Hurricane Ike: Either quit dragging its feet and comply with the federal requirements as well as the City of Galveston’s own council resolution to rebuild public housing adopted on Sept. 28, 2012, or send the money received to date back to the Feds and stop asking for more.

The General Land Office is dealing without difficulty with 229 communities in 61 other counties — communities from the Oklahoma border all the way down to the Rio Grande — in this program.  However, frankly, after almost two years of delays in Galveston, it might be time to move these limited tax dollars elsewhere.

It’s time to cut through all the fiction that’s been served up regarding this disaster recovery program.

After the storms hit in 2008, Galveston city leaders were quick to step up and ask for as much federal aid as they could get to rebuild. They got it.

But that federal money came with federal strings attached. And a lawsuit filed by public housing advocates who argued that the state was not spending the disaster recovery money on the people it was awarded to help resulted in a settlement between the two state agencies running the program at that time and the Department of U.S. Housing and Urban Development.

Notably, this agreement was entered into long before the General Land Office was placed in charge of overseeing this effort on July 1, 2011. The “Conciliation Agreement”, i.e. the settlement agreement this program is tied to, was not signed off on by the GLO or the City of Galveston.  It predates those of us who are now bound to live by it.

While today’s city leaders are quick to note that they didn’t sign the agreement, they are even quicker to aggressively seek more money flowing from that same agreement — in effect, granting their tacit contractual approval of that agreement.

In 2008, Galveston had the option to accept the federal money or not accept the federal money with all strings attached.  Today, the simple fact is that if Galveston does not follow through with its commitments after having accepted the federal money, Galveston could jeopardize the entire $3.2 billion program statewide.  I will not let that happen.

Now, the current mayor is in a bind. He made a campaign promise he later discovered, after he was elected, that he could not keep.

The mayor and several city council members seem to think they have three choices.  In fact, they have only two.  They can comply with the agreement — however bad it might be — and proceed to rebuild expeditiously or they can return the money they’ve already spent and forego anymore. The idea that there is a third choice —  to renegotiate or re-trade the deal — is where we seem, like the Captain said in the movie, Cool Hand Luke, to be having a “failure to communicate.”

While I may agree the Conciliation Agreement entered into by other state agencies than the GLO and the housing advocates without objection from a past mayor and a past city council may not be ideal, the agreement cannot be renegotiated.

If Galveston’s leaders decide they don’t want to rebuild the public housing they committed to, they must return the federal money. That would cost the city more than the $104 million it has already spent on rehabilitating and rebuilding homes, repairing sewage and water systems and other vital infrastructure. As much as another $482 million that’s on the way would be either sent back to D.C. or spent in some of the other 61 Texas counties under this federal disaster recovery program.

The GLO is responsible for ensuring that Galveston’s local leaders adhere to the terms that were agreed to — even if not agreed to by the current local leaders.  In effect, my role as Commissioner of the GLO is much like that of an executor of an estate in which the beneficiaries are unhappy with the distribution outlined in the will.  The beneficiaries may not be happy with the terms of the will but this is the only we have or will ever have.

The GLO intends to advise local leaders of the consequences of their actions — we do not intend to make the choices for them.

Now let’s separate fact from fiction:

FICTION: The GLO did not negotiate with Galveston.
FACT: In working to facilitate a compromise that would fit within the terms of the Conciliation Agreement — even seeking to obtain relief from the housing advocates — beginning as early as September 2011, the GLO met with Galveston representatives on more than 20 occasions.
FICTION: Galveston does not have to rebuild public housing.
FACT: Yes, Galveston does. Texas would be in breach of the conciliation agreement and potentially jeopardize all funds provided to the state.  Texas signed a conciliation agreement requiring a one-for-one replacement of all the public housing units damaged by Hurricane Ike in the City of Galveston.  While the GLO and the City of Galveston did not sign that document and the GLO and City of Galveston may now believe a better agreement could have been reached, the GLO has been tasked by the Governor to ensure the program is executed in accordance with the terms of the agreement. By executing the subsequent grant agreement with the GLO,Galveston committed to compliance with all program rules and the conciliation agreement.  The Galveston Housing Authority (GHA) also signed a separate agreement with Lone Star Legal Aid for a one-for-one replacement of public housing.
FICTION: The plan to rebuild housing concentrates lower income residents.
FACT: The plan does not call for all units to be built in one location. HUD requires the replacement in Galveston, but they will not be concentrated within the city. Some are in mixed-use developments, some are single-family sites, and some are multifamily sites — all throughout the City in an effort to blend in with the Galveston population demographics.
FICTION: We can do whatever we want with our grant funds.
FACT: No, we can’t.  As with any government funding, it comes with certain strings attached. In this case, the conciliation agreement is one of those strings.
FICTION: You can’t build in a flood plain.
FACT: Federal requirements do not prevent building in a flood plain.  They do, however, require mitigation and elevation.  All housing built using these funds will meet all federal, state, and local building requirements.
FICTION: Building in certain neighborhoods is against HUD rules.
FACT: The Fair Housing Act of 1968 has a number of provisions affecting the building and operation of non-housing and housing.  The ultimate plan will ensure no fair housing violations.
FICTION: The City is now responsible for only 141 units.
FACT: City officials and the GHA must cooperate with the construction of all 529 units.  As part of an agreement between the City and housing advocates, the GLO agreed to oversee the construction of the 388 other sites.  However, the City will still play a key role in this construction including planning and permitting.


July 23, 2008 Hurricane Dolly makes landfall.
Sept. 13, 2008 Hurricane Ike makes landfall.
February 13, 2009 HUD released $1.3 billion in Disaster Recovery Funds to the State of Texas for Hurricanes Ike and Dolly. Governor Perry named the Texas Department of Rural Affairs as the lead agency to oversee the disaster recovery program. The Texas Department of Housing and Community Affairs was appointed to manage the housing money.
August 14, 2009 HUD released $1.7 billion in disaster recovery funds for Hurricanes Ike and Dolly.
Sept. 11, 2009 Galveston received $160,432,233 in federal housing funds of the initial funds released in February 2009.
October 28, 2009 All of the funding received in August 2009, placed on hold as a result of an administrative complaint filed with HUD by Texas Low Income Housing Information Service (TXLIHIS) and Texas Appleseed.
March 1, 2010 Galveston received $106,954,823 in federal infrastructure funds of the initial funds released in February 2009.
May 21, 2010 Conciliation Agreement between the State of Texas, public housing advocates, the Texas Department of Rural Affairs, and the Texas Department of Housing and Community Affairs is signed. August funds released and allowed to move forward with additional requirements.
July 1, 2011 Texas General Land Office took over the State’s disaster recovery efforts.
September 1, 2011 Galveston receives $17,400,000 to repair city infrastructure.
September 28, 2012 Galveston City Council passed resolution to rebuild public housing.
February 2013 Galveston received $122,582,836 in federal housing funds. GHA sent contract for $45 million in public housing funds. About $85 million additional funds placed on hold until the City begins rebuilding the public housing it committed to on Sept. 28, 2012.
April 2013 GLO sends letter to Galveston asking for meeting to resolve public housing issues and placing all Round 2 infrastructure funds — $102 million — on hold.

JERRY PATTERSON was re-elected to a third term as Texas Land Commissioner in 2010 and is responsible for managing billions of dollars of state assets, investments and mineral rights on behalf of the schoolchildren of Texas. He is a retired U.S. Marine, Vietnam veteran and former state senator.


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