MUD for years failed to mention flood risk to homeowners

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Harvey Flooding
Texas Army National Guardsmen assist residents affected by flooding caused by Hurricane Harvey in Houston. (Army National Guard photo by Lt. Zachary West)

Homes were flooded in the midst of Hurricane Harvey because they were in the flood pool behind Barker Reservoir — a reservoir that overflowed and sent torrents of water into a Katy neighborhood.

The reason for the flooding is simple: During an unprecedented hurricane and rainfall, officials kept the reservoir’s floodgates shut to prevent further flooding into the Houston area. That meant the water overflowed right into what’s known as the Canyon Gate subdivision.

Also simple is why homeowners were unaware this could happen: Prospectuses from the Municipal Utilities District that issued bonds for infrastructure never disclosed the flood risks for homes in the area.

Some digging by Houston Chronicle reporter James Drew unearths some answers:

Since Cinco MUD 8 first sold bonds in 1996 to reimburse developers for infrastructure costs, none of the bond prospectuses prepared by the MUD’s lawyers have referred to the warning, which Fort Bend County officials have included since 1994 in these records: “This subdivision is adjacent to Barker Reservoir and is subject to extended controlled inundation under the management of the U.S. Army Corps of Engineers.”

The only reference to flooding for nine years in the prospectuses, required by the Municipal Securities Rulemaking Board to protect investors, was one paragraph that said none of Cinco MUD 8’s land was within the 100-year flood plain, except for the banks of drainage channels. Subsequent prospectuses, issued from 2005 to 2012, referenced drainage and flood plain studies, but still said nothing about how the neighborhood was right next to Barker Reservoir and could be inundated for long periods of time by the Army Corps of Engineers if it rained long and hard enough.

That is exactly what happened during Hurricane Harvey to all 721 homes in Canyon Gate.

The state Legislature created Cinco MUD 8 in 1985, Drew reports. Four voters in 1990 authorized the sale of up to $16.5 million in tax-exempt bonds, a common practice in creating special districts.

You can see some of The Texas Monitor’s recent reporting on questionable special district actions here:

One more interesting note that Drew found:

Cinco MUD 8’s bond prospectuses disclosed several “risk factors” about the sale of the bonds. The 1999 official statement, for example, cited the Y2K problem as a potential risk. But no mention was made of the Fort Bend County warning that the subdivision was “subject to extended controlled inundation …”

You can read the Houston Chronicle’s full report here.

Trent Seibert can be reached at 832-258-6119 or [email protected].

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Trent is an award-winning editor and reporter, who has previously worked The Denver Post, The (Nashville) Tennessean, and the San Diego Union-Tribune. Most recently, he was the investigative producer for Houston’s KTRK-TV ABC-13. He was also the editor and founder of Texas Watchdog, a ground-breaking news group that paved the way for this project. Trent is a teacher of journalism skills, and has shown hundreds of reporters and citizen-journalists how to use public records, databases and journalism tools to keep a watchful eye on their own local government.

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