Image: The San Jacinto River Authority is a euphemism for “government mandated water monopoly.”
Conroe, May 26 – On April 26, 2018, the Board of Directors of the San Jacinto River Authority (SJRA) voted to raise the monopolistic state government agency’s raw water rates by 1.5 cents per thousand gallons, effective January 1, 2019, allegedly to fund the new Flood Management Division, which it established this year after the Harvey disaster (to which SJRA greatly contributed) 81 years too late. That SJRA is raising its water prices at all is strange, because it has unrestricted cash (not required for any allocation to protect the Authority’s bond investors) of $32,822,465, according to SJRA’s latest audited financial statement.
Currently, SJRA charges $2.10 per thousand gallons, a 207.92% increase in price since only nine (9) years ago. SJRA enjoys the regulatory monopoly the Lone Star Groundwater Conservation District (LSGCD) has created for SJRA by LSGCD’s strict groundwater usage regulations that prevent citizens from using their own groundwater on their own property. As a result, utility companies, municipalities such as the City of Conroe and the City of Magnolia, and large groundwater producers must purchase SJRA’s expensive surface water, on which SJRA levies monopolistic pricing.
Lone Star Groundwater Conservation District Board member, former Conroe Mayor, and water rights advocate Webb Melder is furious about SJRA’s price increase. He told The Golden Hammer, “They take surface water Groundwater Reduction Plan money to pay for state flood control. This item was in their enabling legislation in the 1930’s! And the beat goes on…” Melder’s reference to “Groundwater Reduction Plan money” is the to the program that LSGCD has established to restrict property owner groundwater use, so that owners must purchase surface water instead from SJRA.
As for SJRA’s establishment in 2018 – finally – of a Flood Management Division, Melder added, “SJRA acts like they never heard of flood control; and now they want the good people of Conroe and Montgomery County to pay for it with a 1.5 cents rate increase in surface water fees!”
This newspaper asked Conroe City Councilman Duane Ham, who has been very vocal in his criticism of LSGCD and SJRA whether SJRA’s actions to raise prices on surface water to fund a brand new Flood Management Division are a good thing or a bad thing. Ham answered, “It’s a bad thing. They should be trying to raise that money from the big companies downstream to whom they sell water at retail prices. Why should they hit citizens of Conroe when they sell water downstream to giant corporations that want to buy SJRA’s retail water, while SJRA is forcing Montgomery County citizens to take their water.”
Ham further explained that the City of Conroe’s contract with SJRA “forces Conroe citizens to take 5.8 million gallons per day from Lake Conroe whether they need it or not. Meanwhile, the River Authority is selling water to big corporations downstream who are retail customers like oil and plastic refineries. That’s who SJRA needs to hit with the price increase. This is all a ploy, because SJRA screwed up and failed to come to the table to do flood control a long time ago. They need to be on top of the big storms coming in, like Harvey, but they’ve dropped the ball time and time again. The Lone Star Conservation District has created a monopoly for SJRA by forcing us to buy surface water. It’s horrible!”
SJRA’s latest Comprehensive Annual Financial Report is quite telling on whether SJRA should actually raise water fees to pay for the “flood control” the Texas Legislature mandated SJRA to provide since 1937. SJRA enjoyed $32.8 million of unrestricted cash and a net financial position of $152.7 million on $794.5 million of assets at the end of Fiscal Year 2017.
While total government expenditures for the state agency have increased 282.8% since 2008 for the state agency, salaries have increased a whopping 337.5% to $12,182,806 in salaries out of $65,727,546 in total government expenditures. Meanwhile the price of SJRA’s water has increased from $1.01 per thousand gallons to $2.10 per thousand gallons.
In other words, SJRA’s financial picture has blossomed since LSGCD’s monopolistic regulations have forced water users to purchase from SJRA.
In announcing the 1.5 cent increase on its raw water, SJRA General Manager Jace Houston said, “Since we don’t have the power to levy taxes, the Flood Management Division is funded from raw water sale revenue.” If that’s the case, there simply is no reason SJRA should increase its prices at all, given the massive profit SJRA is already making on raw water sales. During Fiscal Year 2017, SJRA enjoyed $94.9 million in operating revenues with only $65.7 million of operating expenses and another $23.6 million of non-operating expenses primarily on bond interest payments.
Therefore, SJRA is already enjoying a $5.6 million operating profit on its monopolistic sale of water. That profit, plus the unrestricted $32.8 million of cash SJRA already has, should easily be sufficient to fund the “flood control” SJRA has a legal duty to provide the citizens of the watershed of the San Jacinto River other than in Harris County where SJRA has no duty.
SJRA has focu$ed on matter$ other than it$ $tatutory mi$$ion
The San Jacinto River Authority has focused its money and other resources on making lots and lots of money. SJRA, which currently controls the Board of Directors of the Lone Star Groundwater Conservation District, has effectively caused LSGCD to issue such restrictive regulations regarding groundwater production that municipalities, utility companies, and homeowners associations have been forced to purchase surface water from SJRA at monopolistic prices at least since 2000 when LSGCD began the unnecessary regulation of groundwater, a resource of which there is no shortage or even threatened shortage in Montgomery County or the surrounding vicinity.
As a result, SJRA has enjoyed immense profits in its sale of surface water to those entities which cannot utilize their own groundwater resources.
State Senator Brandon Creighton, Republican of Conroe, cross-examined and politely ripped apart SJRA Jace Houston during a high-profile investigative hearing before the Senate Agriculture, Water, and Rural Affairs Committee at the East Montgomery County Improvement District in New Caney on Monday, October 16, 2017. “I’m embarrassed the public has to hear that answer,” said Creighton after Houston tried to justify the SJRA’s failure to fulfill its statutory mandate “to provide flood control” by arguing “we have the power but not the duty to do flood control.”
The Senate Committee, which Senator Charles Perry, Republican of Lubbock, chaired, was fascinating and provided citizens with a glimpse into the completely reckless disregard SJRA has exhibited towards its responsibilities to provide flood control and prevent soil erosion as its two primary statutory purposes since the Texas Legislature created the state agency in 1937. Houston and his primary ally during the hearing, Montgomery County Judge Craig Doyal, showed an arrogance reminiscent of the shocking flaunting of President Herbert Hoover whom citizens often witnessed playing rounds of golf at lavish golf resorts during the Great Depression.
Jace Houston, General Manager, San Jacinto River Authority
In response to polite, yet firm, questioning from Senator Creighton, SJRA’s General Manager Houston withered. He admitted SJRA’s “Board of Directors didn’t meet before the [Harvey] storm to consider whether or not to pre-release [water from Lake Conroe in order to mitigate downstream flooding when the storm becamore more intense]. We didn’t meet, because it’s not an option.”
Creighton continued, “Are you prohibited from pre-releasing? Didn’t the Sabine River Authority pre-release water prior to the Harvey storm?”
Houston tried to sidestep the question, “Every basin is different…From our flooding standpoint, a pre-release would make the situation worse.”
Creighton asked, “Do you have the math for the Committee to show how many days early you could have pre-released without doing any property damage?”
Houston admitted that neither he nor any of the other of SJRA’s engineers had every done such calculations because, he claimed, “you couldn’t reduce the amount of water moving down the water way.”
Houston repeatedly emphasized that the water from the Lake Conroe Dam is only 10 to 20 percent of the water that reaches Lake Houston. Creighton asked, “You keep saying that the Lake Conroe Dam water only contributes ten to twenty percent of the water in Lake Houston, doesn’t that mean you could’ve pre-released without doing any property damage?”
The most tense exchange between Creighton and Houston occurred towards the end of the hearing when Creighton asked whether SJRA has the duty “to provide flood control” since that’s in the SJRA original enabling statute which the Texas Legislature enacted in 1937. “We don’t any taxing authority but flooding control is in our enabling legislation…We haven’t asked for that charge to be removed from the law,” said Houston. “But I would interpret ‘flood control’ as an authority we have but not a duty.”
Creighton responded, “The fact that you don’t feel you have a duty to do it is very troubling. That was written in the 1930s. When there’s danger, we run towards it as a steward of the public. But it sounds like you’re running away from the danger…We can’t wait until there’s thousands of people displaced to make those requests.
Houston admitted that SJRA has the authority to provide flood control and admitted “one option to provide flood control [in Montgomery County] is for the River Authority to do it. We don’t provide flood control now, because we have the power but not the duty to do that.”
Creighton responded, “I’m embarrassed that the public has to hear that answer.”
SJRA’s Houston tried to argue that no governmental entity has the power to do debris cleaning and desnagging from rivers and tributaries, although he eventually conceded those powers are within SJRA’s enabling mandate which the Legislature passed in 1937.
Houston also tried to deflect the responsibility for flood control to a regional authority rather than to SJRA. “Regional is better,” Houston told the Committee.
Houston then played an accounting trick on Creighton and then Committee when Creighton asked, “How much cash do you have in reserves?”
Houston answered, “I don’t know…less than $10 million.” In actuality, SJRA’s most recent audited financial statement shows that SJRA has more than $54.7 million in unencumbered cash. It’s possible that SJRA has set aside a large chunk of its cash for defense of lawsuit arising from SJRA’s conscious flooding of several thousand homes downstream of the Lake Conroe Dam.
The flood SJRA caused during Harvey
On Friday, September 1, 2017, SJRA, which operates the Lake Conroe Dam, released a blood-curdling video in which SJRA Executive Director Jace Houston attempted to rationalize its actions, which resulted in flooding thousands of homes downstream from Lake Conroe and the endangering of hundreds of people’s lives during the Tropical Storm Harvey weather over the past week.
The video has enraged many citizens who watched it. Former Representative Steve Toth (R-The Woodlands) who is now running for his previous State Representative, District 15, seat in the March 6, 2018, Republican Primary Election, has become the primary critic of the SJRA.
Why was there so much flooding from Tropical Storm Harvey?
To be fair, Tropical Storm Harvey was a very unusual storm. It brought record levels of rainfall during the past week. It made landfall in Rockport, Texas, east of Corpus Christi. As a tropical storm, the weather made landfall into the Greater Houston area beginning around Friday, August 25, 2017.
The flooding in the Greater Houston area was widespread. Areas in Fort Bend County and south Houston experienced terrible flooding. Arguably, the worst flooding was in Kingwood.
The lack of planning and zoning in the development of the City of Houston and surrounding areas cost a dear price during the last week. Subdivisions in Fort Bend County suffered mandatory and recommended evacuations. People were trapped inside their unflooded homes even for several days, because roads had flooded and were impassable.
Montgomery County and Kingwood seemed to experience the worst of the Houston Standard Metropolitan Statistical Area.
Montgomery County experienced the worst flooding in Porter, the Splendora-Patton Village-Woodbranch area, River Plantation, Harper’s Landing, some areas of The Woodlands, Benders Landing in far south-central Montgomery County, and elsewhere.
One of the most bizarre areas where a road flooded was the Grand Parkway, Highway 99, at Birnham Woods, as the brand new roadway should not have flooded at all.
The following map is not necessarily accurate, but it is nonetheless helpful in this discussion. The geographic is largely accurate, although some people dispute whether there is so little interconnectedness between the West Fork and the East Fork along F.M. 1314. The flow numbers are tentative, however.
SJRA: September 1 video and Executive Director Jace Houston’s statement
Jace Houston, SJRA’s Executive Director and General Manager, conducted a briefing for elected officials on Friday, September 1, 2017, at the extraordinarily plush offices of SJRA adjacent to the Lake Conroe Dam. After the briefing, Houston invited elected officials to participate in his video presentation that Houston intended to release on social media.
It’s understandable why County Judge Craig Doyal and Precinct 1 County Commissioner Mike Meador would participate in a video wherein SJRA attempted to explain its actions. Doyal and Meador are scions of the “establishment” and seek to fool the public even in the face of obvious catastrophe. Also with Houston during the video were Darren Hess (the County Emergency Management Director who was just following Doyal’s and Meador’s orders) and Lloyd Tisdale (SJRA President).
Houston explained that Lake Conroe reached a peak level of 206.2 feet above sea level during the morning of August 28, while normal levels for the lake are 201 feet above sea level. Houston noted that the SJRA has a legal duty to keep the water levels in the lake below the 6 foot flowage easement around the perimeter of Lake Conroe.
On Friday, September 1, the flow of water from the Lake Conroe Dam was 2,700 cubic feet per second. The maximum flow out of Lake Conroe, which the SJRA released during Tropical Storm Harvey, was 79,141 cubic feet per second. Houston remarked that the inflow into Lake Conroe reached 130,000 cubic feet per second at the height of the storm.
In comparison, during the 1994 500-year flood event, the Lake Conroe watershed received 13 inches of rainfall, while it received 22 inches during Tropical Storm Harvey. During the 1994 flood, the peak elevation of Lake Conroe was 205.6 feet above sea level and the peak flow rate from the Dam was 33,000 cubic feet per second. The 1994 flood damaged River Plantation and other subdivisions along the West Fork of the San Jacinto River severely.
Houston stated “our primary goal at SJRA is to protect life and property…the release rate [of water through the Dam] has to be lower than the inflow.” Incredibly, SJRA’s Houston admitted in the video, “we understand there will be devastating flooding downstream but we don’t have the option to stop releases to avoid the catastrophic consequences.”
For SJRA, Houston said, “our concern is around the lake levels…We have to protect the structural integrity of the Dam itself…” Houston admitted, however, that there was no time during Tropical Storm Harvey when there was any risk to the structural integrity of the Lake Conroe Dam.
Houston added, “We never pre-release water from Lake Conroe for numerous reasons.” Those reasons which Houston listed during the video included:
- “it would take weeks to safely lower Lake Conroe”
- SJRA would then “artificially fill up Lake Houston and cause flooding problems downstream”
- “it’s impossible to predict how much rain will fall and when to safely pre-release”
- if you lower the Lake Conroe levels too quickly, “then soils become fluidized and threaten the structural integrity of the dam.”
Toth’s criticism of SJRA
Toth has been vehement in his criticism of the SJRA’s handling of Tropical Storm Harvey.
First and foremost among Toth’s criticism is that SJRA failed to notify subdivisions and neighborhoods downstream from the Lake Conroe Dam that SJRA was increasing the outflow dramatically. “All they did was issue a press release. It’s completely disgusting. They should have gone into neighborhoods with sound trucks and warned people what was coming,” Toth emphasized.
Toth made clear that he doesn’t believe Houston’s and SJRA’s rationale for failing to pre-release water in order to control the volume of water flowing through the Lake Conroe Dam during the actual storm.
On August 28, Toth issued the following statement:
“Shame on the San Jacinto River Authority.
“In anticipation of Harvey and a possible 50” of rain you probably filled your car with gas and did some grocery shopping. What did the San Jacinto River Authority do? Nothing
“Did they start to bring Lake Conroe down a small amount over an extended time? Nope. Instead they waited until the spill way was at a record level and released a record amount of water at 77,000 cubic feet per second. That’s over a half million gallons water per second. What are the consequences of their poor planning? Residents down stream including Harper’s Landing are being flooded out of their homes. Shame on this foolish board.”
Toth argued that during recent droughts, Lake Conroe water levels were extremely low, but the SJRA continuously claimed that the structural integrity of the dam was never at risk. Houston’s argument that lowering Lake Conroe’s water level could cause soils to become fluidized and risk the Dam’s structural integrity does not make sense as a result, according to Toth.
Toth added, “I’m appalled at the complete lack of coordination with local officials to warn them and to ensure that residents in cities and subdivisions downstream received real and adequate warnings, not just a flimsy press release. The SJRA released two-and-a-half times more water than they’d ever released before. There is no excuse for not adequately warning in a meaningful way.”
Toth pointed to the devastating flooding in Kingwood, Harpers Landing, and River Plantation as areas which SJRA harmed.
Despite the heavy rainfall above the hydrologic levels of the Lake Conroe Dam, there was little flooding in those areas. Neighborhoods below the Lake Conroe Dam suffered greatly. There’s no question that Spring Creek areas also flooded and that water had little, if anything, to do with the West Fork of the San Jacinto River.
SJRA has at least three major problems. First, as an agency whose board comes from gubernatorial appointments as opposed to direct election by local citizens, SJRA seems largely out of touch with the concerns and needs of this community.
Second, SJRA suffers from incestuous relationships with engineering contractors. Halff Associates, the same engineering firm whose vice president is Bobby Jack Adams, Craig Doyal’s best friend and business partner, is one of the primary engineering contractors for SJRA. Adams is the son of longtime SJRA Executive Director Jim Adams who was Houston’s predecessor. Halff is very slowly working on a drainage study, although it’s unclear at this point what such a drainage study will contribute beyond reiterating the fact that water flows downhill into tributaries with which longtime residents of Montgomery County are already very familiar. There’s no reason whatsoever to wait to pay Halff almost two million dollars for a seemingly unnecessary study in order to resolve the third problem, which SJRA should have resolved long ago.
The big problem: SJRA should develop an effective early warning system in order to communicative – effectively – with people downstream of its flood intentions. Jace Houston said in the video, “we understand there will be devastating flooding downstream but we don’t have the option to stop releases to avoid the catastrophic consequences.” Regardless of whether one agrees or disagrees with Houston’s conclusory statement about SJRA’s lack of options to stop releases, SJRA most certainly has the financial resources and ability to develop the early warning system it should have implemented a quarter of a century ago.