Remember the Houston Drainage Fee (RainTax)? Where's the Money?

TexasGOPVote was strongly against the passage of the City of Houston Charter Change (Stop Prop 1) that was pushed by Mayor Annise Parker and certain special interest-fed city council members like Stephen Costello, Oliver Pennington and then council member Brenda Stardig (who is now attempting to get back on city council). However, the voters of Houston passed the measure and then the lies began to become apparent.

Remember, we were told there would be no exemptions from the drainage fee? Remember, the money would go into a lock box and not be used for anything other than drainage projects? Remember, the fee was only going to be $5 per home? Remember, there was going to be complete accountability for these funds?  Well, it turns out none of these things were true.

Houston City Controller candidate Bill Frazer has been conducting an in-depth study on what has been happening since the drainage fee was passed. Oddly enough, you would think this would be a pretty simple research project, right?  One should simply be able to ask the current City Controller Ronald Green for his accounting of the funds in the dedicated lock box, right?  WRONG!

Next week, I will bring you a complete report from what Frazer has learned while researching this issue but for now, here are a couple of things to think about.

  • The 2012 drainage fee collections were only $108 million, $17 million less than targeted. 2013 and 2014 estimates are even lower, at $103 million for each year. This produces a three year shortfall of over $60 million. It should also be noted that the ReBuild Houston website posts an interim report reflecting estimated drainage fees for 2013 of $121.5 million. The amounts shown in Exhibit 1 for 2013 and 2014 are from the Proposed FYE 2014 budget. 
  • Maintenance expenses for 2012 were approximately $5 million less than the maximum, but in 2013 and 2014 they are estimated to exceed the maximum by $35 million. The net excess spending on maintenance from the fund for the three year period is $30 million. 
  • According to the 2012 CAFR, no ad valorem tax revenues were transferred into the fund for 2012. Under the formula noted above, $10 million should have been transferred in 2012. The City estimates and has budgeted approximately $11 million of transfers for each year 2013 and 2014. Under the required formula, the City should transfer $16.3 million in 2013 and $23.7 million in 2014, or $18 million more than estimated and budgeted. 
  • And finally, the City has spent and budgeted a total of $2.1 million in debt service fees from the fund, which is specifically prohibited under the Ordinance.

Next week, we will take a deeper look into this issue and look at the mismanagement of these funds under current city leadership.




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