To be here today.

I am Twila Carter, Chair of the Committee.

We have Councilmember Alcorn and staff from Councilmember Castillo's office, Councilmember Amy, Vice Mayor Pro Tim Amy Peck, Mayor Pro Tim Martha Cassex Tatum staff, as well as Councilmember Julian Ramirez's staff.

I am super excited about the presentation today.

And Richard Celine is our presenter and super excited to see what you have got for us today, Richard.

And he's got quite a presentation.

Said that he's not going to go through each slide word for word, but he's really bringing forth a lot of really good information.

And we welcome you today, Richard.

The floor is yours.

Okay.

We're not going to make you stand.

So you just say advanced slide or next slide, and we'll we'll get you moving.

Perfect.

Perfect.

Cool, cool, cool.

So Madam Chairman, first off, thank you.

Move over to the there you go.

One side or the other.

Thank you.

First off, thank you for your hospitality today and for your encouragement also to Councilmember Alcorn.

Both of y'all are individuals who I uh have gotten to know since coming back to Houston, my fourth generation hometown.

Um, and uh I would say this both in public and private, so since I'll take the the public liberty, uh the two of you have been, along with your other council members, have truly done some major heavy lifting since Hurricane Harvey.

And the sad truth is we're gonna probably, as we'll go through this a little bit, uh need to continue to keep our focus.

But thank you for the work of this committee.

Thank you for your colleagues uh who have kept the focus on that we need to remain uh resilient.

Um you can read faster than I can talk, or according to my wife, I will slow down and talk at a speed that makes sense.

But um I thought what we ought to cover are um some current realities, why we are suggesting a uh maybe an enhanced strategy uh at the city, the county, the regional level, and then some things that we think could be put in place.

Um this is the the agenda that we're gonna cover.

I did cut it down, uh Madam Chairman, from 72 slides and 30 minutes of full motion video to a handful.

So, you know.

So next slide.

Um a little bit about us.

Um we're a Houston-based national organization.

Um we operate like a uh think tank and a do tank.

The do tank is Roar Partners, and the think tank is Future Proofing America.

So it's a 501c3 under Future Proofing America that includes a number of uh firms and individuals that you're you're uh aware of, like Gensler and others here in our own backyard, but it also represents uh a set of national stakeholders.

Um our chairman is the former CEO of Munich Re US, which is the largest global reinsurance firm in the uh you know out there.

Um and I'll come back to the the issues about insurance versus reinsurance.

Um we have a number of individuals that represent insurance, mortgage banking, uh traditional banking and new investment finance, um manufacturing, all of what we felt needed to be around the table because that's really what this has become.

It's no longer just a silo of government.

This is truly a um uh and needs to be and has needed to be uh an integration of a lot of expertise and capital sources.

One of our newest uh board members is David Marstead, who retired about six, seven months ago.

David was the FEMA administrator for resilience mitigation and insurance, meaning the national flood insurance program.

So you kind of see we've tried to bring together a set of stakeholder representatives.

Next slide.

The other part of this is I mentioned this so Roar is the do tape.

That's the one very focused on projects and getting things done.

The collaboration under Futureproofing America is made up of a significant amount of expertise, again in these different silos, but more importantly, what they've been doing, um of it privately, a lot publicly, is if you see on the left-hand side, there are five topics, and these go from how do you move um uh standards of practice, uh let me just make it simple.

We've identified 2600 building codes in the United States.

This is everything from the Institute of Business and Home Safety, which we'll talk about in a few minutes with their fortified roofs.

This is ISO, this is ASTN, all these anachronyms.

There's 2600 standards and building codes, and what we've heard from insurance and reinsurance financial institutions, elected and appointed officials is like like how do we make sense of it?

Um just this past Tuesday, we hosted a national fire side with the global head of infrastructure and public finance for Fitch ratings.

That's one of the three major ratings, FITCH, Standards and Poor, and Moody's.

And Fitch has rolled out a framework starting this year, really in 2026, that essentially uh Chairman addresses and acknowledges that if you make an investment in resilience in your infrastructure, it will change the filter by which a rating is produced.

And why is that important?

You want the better rating because it brings the cost of cash, cost of capital down, but it also creates a somewhat of a headwind for others to participate.

So you see who we have assembled here.

Some of them are based here in Houston, some of them are you know different parts of the United States, but they are all integrated around one simple uh metric, a one to eleven or better cost benefit.

If you and I invest ahead of the curve, ahead of the next event, we want to bring down the cost of recovery and rebuilding by $11.

And that should be the metric by which we operate on.

Next.

So here's part of the stark reality that put a lot of this in motion, and it really started when I came back to Houston 48 hours after Hurricane Harvey.

And it's hard for a fourth generation Eustonian.

My grandfather uh and great-grandfather stood outside this building and put the original stone in this building.

Our family goes back four generations.

The Republic Bank building that looks like the Gothic church over here, our family put the 72 tons of La Dakota Copper.

So I'm I'm kind of invested in my hometown as much as we are invested in other places across the country.

Here's the issue.

The country as a whole has lost well over five trillion dollars since the late 1980s.

50 percent of that has just been in the past 10 years, meaning 2.5 trillion dollars.

There's no way that a city, a county, a federal government can keep up with that.

There's just no way.

Um next.

So we identified these six uh kind of challenges.

And um Councilmember Alcorn, I am now referred to as the Ven Diesel of Doom.

When I start showing some of these slides, okay.

Um I was accused a little bit ago of uh why are you mayor out in the parking lot?

Um I'll put my glasses on.

All right.

Um, but these six issues impact every part of this city, every part of this nation.

Um, and when I ask this question, how many people you know in a room have had their insurance policy premiums go up, they're in the hand that doesn't go up, okay.

Umgages are being repriced.

What's worse is, and you'll see this in a moment, is the value of your home, the value of your buildings in high risk prone areas is beginning to come down.

And you don't want that in a real estate environment that no matter what uh is impacted by all these other types of uh occupancy or other types of issues.

Now, let me make a point here.

All of these six issues are terrible.

They're even worse for low to moderate income communities.

And the impact on low to moderate income communities is exponentially higher, and in certain cases, sometimes two to three uh times higher.

Next slide.

So we describe this as kind of why this why now, all right.

Um, and I will admit that being called the Venn Diesel of Doom is probably appropriate for the moment.

If you look at this map, look at Houston and Harris County.

All right, we're we're we're kind of in the dark red.

So are most of the coast, obviously, all right.

Our risk profile going forward for the next at least 15 to 18 years is not good.

All right.

It doesn't mean we it doesn't count on or reflect the activities that you all have invested in, uh flood control district or others, but the fact of the matter is we live in a highly prone area for disasters.

But also the disasters that we have to take a look at are not just the ones that come in from the Gulf or come in from the north or come in from a wildfire.

I I again uh I'm reluctant to keep on saying this, but um do y'all realize how many pipes are underneath us in Houston?

Okay.

Um two years ago, three years ago, you all may recall that there was a massive explosion on the goal on the ship channel, all right, which shut the ship channel down for about six days.

What we look at is is not just the impact on insurance or or you know that part of it, we're looking at the impact on jobs, employment, tax base.

So if you look at this kind of map, you realize that we are in a club that has high risk, but there are things that can be done about it, and some things are already underway.

Next slide.

So I'm gonna you've got copies of uh this presentation, all I'm gonna say to you is there is no graphic on these pages that's in the right direction.

All right.

So the loss claims are going up, but also what's worse is the uninsured loss claims.

If you have to make a choice about what you're gonna spend money on, again, whether it's low to moderate income or other parts of Houston, if you have to make a choice of what you're gonna spend insurance on, and then you get hit with some form of a flood or a windstorm or whatever it may be, and you decide to be uninsured, the consequences become a almost circular way of leaving you in generational um uh wealth challenge, meaning you're you're you're losing the ability to get out of that uh crux.

Uh the other part is you know, we've looked at where Federal, State, and local uh funding, how it's impacted those governments.

Next one.

Then what we started taking a look at is some of these features that I don't know if council is hearing this from others, and apologies if I'm being repetitious, but I would say the more I've gone around the country and more I've sat in different uh forums and sessions here in Greater Houston, we don't talk about the insurance as much as we should, and not from my God, I can't get insurance, but frankly, the role of insurance as a strategic partner in this, and again, we'll talk about that.

Um I don't remember the precise number, and I want to say it was north of 28 percent.

So don't hold me to this.

But after Hurricane Harvey, Councilmember Alcorn, the number of people that walk from their homes was significant.

Matter of fact, our old home in Myerland, the uh the folks that bought it from us, Madam Chairman, walked and it sat empty for six years.

So that has a, again corresponding trailing impact to it, and so does the fact that asset devaluation, which means that these assets, it's not just a home, it's a portfolio homes or portfolio of buildings.

Whatever the portfolio is, we have always in the United States relied on third-party investment houses and investors, whether it's J.P.

Morgan Chase or Goldman Sachs or Blackstone BlackRock, very large investment houses are a part of how we move projects, whether they are residential or commercial, even industrial, and especially in the public sector.

Here's the problem is if my portfolio, if what I own in this bucket starts reducing in the amount of money that it will earn to pay back the bonds, it creates a significant challenge.

And that's been underway quietly in Houston in lots of different parts of the city.

Next.

So what we then had to take a look at is who plays a role here, who plays a role.

One of the biggest roles, and because as a fourth generation Houston, I'm pretty aware like you are, is the real estate community.

We rely on the real estate community to build houses, whether they're sitting on, you know, $2 million homes to affordable housing, to mixed-use developments, to, you know, sports complexes.

Real estate ultimately has to make a decision how they're going to pay for building something.

And if I'm asking them now, Madam Chairman, to lean into this a little bit more and spend what could be 20 to 30 percent more to make it more resilient, they're not going to do it.

Not out of a negative reason other than it just won't pencil out per se.

It won't create an economic incentive, and that's one of the pieces that we've been working on with the real estate community is to find ways to incentivize them to overcome this.

The second part of this is you all, like everybody else across this country, God have been on the East Coast, Madam Alcorn too long.

Y'all, all right.

Um the fact of the matter is that elected and appointed officials that we interviewed and went to the National Association of, you know, the mayors, the county executives, every survey keeps on saying we are tired, Richard, of having to go back to the taxpayer and constantly put a fund together to rebuild.

It just not we started looking at are the economic sectors, our clusters, energy, health care.

Y'all are aware, having one of my other careers was five and a half years as the assistant to the president of MD Anderson Cancer Center after Hurricane Harvey, we could not recruit people to come here just yet.

All right.

The hurricane before in the flood, all right.

Y'all are aware we lost 10 million dollars research mice that were beyond, right?

So what we're looking at, next slide, are these consequences of what happens to communities, all right?

Um see the details to this, but what we're essentially saying is for city council, county, the region, to do this alone as a governmental set of bodies and interested parties misses the opportunity to leverage and bring in the other asset holders, of which the majority of assets in Houston, much less Texas, are the private sector asset uh owners and players.

Next slide.

So here's another set of realities.

We in Houston, and you can see this on the map that's in green.

We in Houston have been significantly reliant since 2021, and frankly, a little bit before that, on FEMA for funding and helping individuals, families, and small businesses recover.

We are one of those locations in the country that are proportionally higher than any place else.

All right.

Slide graphic to the next of it.

As I said said to the chairwoman a little bit ago, as we're sitting here, the White House and EFEMA are rolling out their reorganization of FEMA and the reorganization of the whole of government.

I'm not going to say anything that will shock you, but you could no longer rely on the Federal government as you once have.

And the problem is we in certain places across the country became so reliant upon these Federal dollars that that gap is what we're going to talk a little bit about.

The fact of the matter is that yes, uh what was announced is one, a higher threshold for the eligibility of a presidential declaration.

You should know that that isn't really completely a shock because a lot of the storms and events that have occurred in Houston have not been at presidential level, they have been at state or another level of eligibility.

Below presidential eligibility, you get to pay for it.

It means that the Federal dollars don't show.

Next slide.

So you're going to hear me say this over and over and over again today, and again, you know, want to leave time and definitely have y'all interrupt and ask questions.

Capital is not the issue, and it never has.

It's if we only look at this narrow band or narrow slice of departments and agencies to go after that funding, it becomes very limited.

We believe it's time, and that's been one of our, I guess, most important pieces of work the past three years is there are avenues for leveraging different sources of funding.

One of the problems is wait a second, Richard, the eligibility of all of this is all right.

That's part of what we're doing now, is trying to harmonize like what's the eligibility.

Okay.

Next slide.

So when I say capital is not the issue, we formed within Future Proofing America on a national basis what we call the resilience capital investment stack working group, meaning that the only way for the city, the county, the region, the private sector, industry, and all is these are different forms of capital that have to be packaged.

Um we've looked at those in uh very uh uh unique ways.

One of which is that because of this massive shift from D.C., we focus very heavily on state and local public financing.

So two of our uh advisors for this working group are Hilltop Securities and Oppenheimer and Company.

Those are two of the five largest state and local public finance firms who do a lot of work, not only with the city, the county, and the states, but all 50 states, but they have been working with us on how to craft new ways of uh forming uh capital instruments.

The second part I want to point out is you see this impact rate of return, all right.

So we've partnered with Howard Buffett Jr.

and his work up at Columbia.

Howard started working on this about 10 years ago.

Essentially, um we look at a traditional rate of return, we look at the traditional, but a new form of cost-benefit analysis, like if you do this, will it generate that?

All right.

But what we've also looked at is an impact rate of return.

It is no longer acute metric.

Let me use an example.

At one point a few years ago, Houston still had close to 3,04,000 homes with blue tarps on them.

Still we have homes with blue tarps on them, all right.

You and I can go fix the homes.

We can put the the roofs on, all right?

And suddenly we have a quote unquote livable home, we have an insurable home, we have something that still is on the tax rolls.

What we want to know is have we reduced the health care cost because we've removed mold and other consequences?

Those are economic links to societal benefits, all right?

What we also want to know is do these individuals have access to health care before, during, and after an event.

So we've looked at capital from multiple uh uh approaches here.

But I wanted you to see that each of these items on here, we have been working with and now want to find a way, Madam Chairman, to implement some of this here in Houston with and for y'all.

All right.

I'm gonna keep on going real quick.

Next slide.

So here's a call to action.

Next slide.

Um, this is very much appreciative of the Texas Department of Emergency Management, uh, Harris County office and City of Houston Office of Emergency Management, no question.

No question.

We do really well with day of event and what what we call the you know, the response recovery rebuild.

But that is no longer sufficient.

It is no longer sufficient.

Let me re-emphasize this.

If the City of Houston, Harris County, and the State of Texas continue to only focus on recovery, response, recovery, and rebuild, we are leaving money on the table that can help people across this community on what we call the blue sky days.

I know that's not a shock.

I know it's not a surprise, but trying to get this part of it implemented across the country has a lot of barriers because it's not something that folks are used to doing.

We wait until the event.

Next.

So a couple of quick items, and then I really want to have a conversation back and forth.

We now have curated, organized over a hundred billion data points down to the county, the census track, the zip code, and the parcel level, not for insurance pricing purposes, but for the purposes of understanding what's happening with the real estate, what's happening with mortgages, what's happening with employment patterns, workforce, all the way over to private assets, large-scale private assets.

Madam Chairman, we looked at three major oil and gas upstream, downstream companies with headquarters and operations in Houston.

Not going to name them.

We looked at three of them.

You know all three of them by name, you all see them in the newspaper.

Of those three, one of them has the highest risk exposure of any of the oil and gas companies that we have seen, meaning not just up in the Permian and Basin.

But down here on the still, all right?

Which means that we know there's going to be another event.

Some of these places still have not really strengthened themselves.

Why is that important to City Hall?

Is because they are part of the tax base, and every time their business continuity in some way or fails, it impacts your ability to count on them for the tax base of the city and the region.

All right.

Let's just be very clear about that.

So we've organized a lot of data that gives us a deeper dive on the risk profile of Houston of the assets, residential, commercial, industrial, and public sector assets, which in this community sit side by side and sometimes within the same real estate umbrella.

Next slide.

So that data began to give us some insights, not to take away from what public works has done, uh, Office of Emergency Management, flood control, but that's not all of the data sources that are available to make decisions on and to make proper financial, economic, and fiscal decisions on.

So what we decided is that yes, we've got to crunch a lot of information to really get this kind of profile that says, by the way, you don't need me telling y'all what that Houston is at risk.

What you need is to make it actionable.

If this says this, what do we do about it?

That is the entire focus of what we call future-proofing Houston.

Next.

So working with Ginsler, which just down the road, meaning three blocks from here, Gensler's Global Resilience Institute is based here in Houston.

All right.

And we've been working with Gensler and others to basically say we can design and retrofit new types of land use in Houston across the country around these different types of disaster vulnerabilities.

But frankly, if we're not incorporating these social vulnerabilities, we will have missed an opportunity to resolve what we believe is resilience's real purposes, and that is thriving versus just surviving citizens.

And sad but true, what FEMA and a bunch of us have been working with FEMA and HUD and SBA and others is we find ways to deliver enough money to get you back on your feet.

What we have not done is moved you from just surviving to the next event to now becoming a thriving member of the economy, the community.

Next.

So last couple of things.

But guess what?

Those now are being heavily adopted across the country as resilience districts and resilient hubs.

We just published it this morning on a national basis how to leverage resilient zones that are designated special purpose districts to ultimately not just leverage public sector financing, but to attract insurance, reinsurance, and private sector capital to the table.

If California can adopt what's called the enhanced infrastructure financing districts, and now are referred to on the wildfire, which we're working on, a solution in LA around a disaster resilience district, which is a tax increment district, but it has very specific and limited use of those funds.

So we looked at how to do more special purpose resilience types of infrastructure.

And I know some of you have heard and Councilmember Alcorn's probably heard this from me more than enough.

We have 6,700 detention ponds in Harris County, 6,700.

Only 30 percent of those ponds are owned and operated by a public entity, meaning the majority of those detention retention ponds are owned and operated by a private sector entity.

Once we permit them, we do nothing to bring them into a means of uh limiting the impact of a 50-year, a hundred-year, a 500-year flood.

Um we felt very early on that some of the land that the city, the county owns could be used for microgrids, all right, to create uninterruptible supplies of power.

I know you all made a um uh great uh step forward uh with Councilmember uh Plummer and others on looking at the resilience hubs through Acres Home on deploying a form of a grid, but we think there's more resources to go behind that.

Um when we announced about a year or so ago a partnership with the SBA, and most of y'all either know by name or know of Francisco Sanchez, who was with Harris County, then went to the SBA, and we were just with him a couple of weeks ago at this resilient cities expo down the street here.

I I don't think a lot of people realize that the SBA, 70 percent of SBA's disaster loans go to whom.

Anybody.

Residents, right?

Right, they go to homes.

Yeah.

All right.

Yes, there are small business programs, all right.

But SBA has had a program for rebuilding homes.

Um there is under his leadership, then it continues with a number of folks, is how do you use the SBA dollars to actually retrofit a home before the next event, right?

A new roof, new new fortification.

So we started looking at that the best place in this town to really move forward off of what's been done, but to take it to the next level is not on individual homes, not on streets, but on portfolios of homes.

And I'll describe why.

Insurance is what you and I buy for our homes or our assets.

What sits behind the insurer is reinsurance.

That's the insurance for the insurance companies.

So if I have a hundred million dollar set of policies for a disaster, but the disaster ends up costing claims of about 150 million, the reinsurance picks up that 50 million.

What we now know is that the reinsurance sector has the greatest impact on transforming what's happening what needs to happen in the country.

Umdly, State Farm did not stop writing policies in California just because State Farm woke up one day and said we're not doing it.

It's because the reinsurers behind them said, wait a minute, you can't keep on coming back to us, you know, like like this is an open registry, right?

So what we've looked at is how do we really truly look at portfolios of homes in neighborhoods so that reinsurance isn't looking at going, okay, you've done something, she hasn't, she hasn't, he's done something, because literally whether your home is fortified against a fire or you know, a flood or whatever, is great.

But if the whole of the neighborhood, the whole of the area is not made more resilient, which gets to something that I think I may have missed, but I have not seen Harris County Flood Control District report on what is the consequences to insurance and reinsurance and to the risk exposure economically on the work that's been done so far.

That's not uh a criticism.

It's we've got to look at this information and what we're doing in a whole different way.

The other part about this approach is if we're going to go in, I don't care if it's acres home, I don't care if it's over, you know, here in you know the fifth ward or wherever, is we've got to find ways to make sure that these homes are not only fortified, but we also are bringing in health and well-being, food and nutrition, uh, energy, all of these pieces all together.

Why?

Why, why do we need to do it?

Because those are our employees, those are our small businesses, those are a part of the economic fabric of our communities, and we need to find ways to make them part of the thriving versus just surviving.

Next slide.

So I'm going to end on this.

Madam Chairwoman, capital is not the issue.

It's how to structure solving these problems.

I know the state of what the city is in.

Almost every major metropolitan city across the United States is in some form of a of a fiscal transformation would be a polite way of saying it.

We believe that there are capital sources that come to play side by side, but do not have to solely go through the city, but can be the strategic partner.

And what we've got to find are ways to unleash that capital.

And the way to unleash those cap that capital is to take a look at these new structures like resilience districts that are more than just can we put a generator here?

It is what can we do to create a new economic financial investment structure?

So what we've said to folks around the country is we think that the public sector in 2026, especially with what got announced today, has two opportunities.

One is to unlock investment capital and increase the insurability of the assets.

I'll stop there.

Wow.

Are you all afraid?

If you weren't, you should be.

Thank you, Richard.

Uh wow, great information and and certainly spot on capital is not the challenge.

Um, you know, and and you brought up a point about the uh retention funds.

I've never understood that.

It's like having a bucket of water over here and then one over there, and how did how do we tie that together, right?

There's so many the big picture is is uh a little bit scary.

Um we do have uh uh uh Councilmember Alcorn is in the queue.

Thank you, Richard.

Great presentation.

And you've been singing this song a while.

And what are the what are the practical steps we can take as a municipality to unlock that capital?

So I think there's there's a couple of things.

One is I go back to this that understanding how all the different departments play a true role in contributing to a higher value of resilience, all right?

So, like, not going to speak out of turn, but you know, when I've talked with Tom Jason and some of the things about what Metro does, all right, and you've heard me say this uh again, I'll give a couple of practical pieces.

Um, these Metro buses collect a lot of data, significant amount of data.

They actually know where things are before public works does, even before offices of emergency management do, all right?

So one is I believe we have got to once and for all seriously create a just-in-time data curation with public and private sector capabilities, including Councilmember Alcorn, a way to use the data to drive action that says if I know that I have this condition here and I put an investment, who benefits from that investment, and it's not just the government, it impacts bringing insurance, reinsurance, mortgage, other capital to the table.

That's one.

The second part is there needs to be these kinds of investment structures, these investment um instruments.

We have them.

Um I fear that some of them are under attack for kind of the wrong reasons, okay.

Um but if we want to call them resilience zones or resilience districts, the the capital structures exist.

What doesn't exist is aligning the sources of capital to, in a sense, help buy down the cost with a developer for investing, doing something different, helping homeowners get access to capital.

So one of the structures that we are rolling out is a community mutual risk pool.

Because no one in Harris County, the city of Houston, I don't care, Hedwig Village, you name it, can afford to cover all of the risk.

So we are looking at how these community mutual risk pools come together that bring reinsurance capital from different sources along with public sector capital and share the burden of the risk, but use the resources from that mutual fund, that mutual pool to actually invest in doing things right now that reduce the risk exposure.

I get it.

I get what you're saying.

But uh what what are we tell public works go do something?

What are what are we what do we do?

So what do we do?

Not like go get data from Metro, what like what do we do to unlock this capital?

What how do we get the money, like if we're gonna go do a big drainage project or we're gonna do some resilience project and there's all this private money out there that would benefit, you know, because insurance is going to go down and there's you know, all these insurance companies that want, I mean, I want them to help help pay for our project.

How do we get is that is that the idea to get public works to join forces and get funding, not just from our stand our traditional ways of getting funding for for flood mitigation, but to seek out private funding?

I I public works will not get insurance funding or third-party capital other than what it already has now, unless we can create a new kind of instrument, a new type of so like one of these resilience hub zones or whatever.

A zone, a community mutual risk pool.

All right.

So that's what we have to do first.

Yes.

Yes.

Because look, the um flood mitigation by itself is not the only solution required here.

It is a part of it.

Right.

All right, and now we've got a gap, all right.

But what we've looked at is, you know, again, use an example.

I'll make this as quick as I possibly can.

But that's kind of what we do before you go on, but that's kind of what we do.

We do projects.

We do projects to make the city more resilient.

Right.

But they're not public private.

I mean, we have a community, you know, that we have the community rating and all of that.

We work on that, and we promulgate rules having to do with flooding, but we our way of being more resilient is through projects, through actual, you know, building staff.

So when we build that affordable housing, are we bringing the affordable housing up to a higher standard of resilience so that the roof doesn't blow off, that the windows don't fold in?

Okay.

Right?

So looking looking more at at the standards to make sure that's the same.

Looking at how the standards can be applied that if done, and we're not even advocating for a whole set of building codes.

We're just saying that that in reality, we pretty much know what has to be done, right?

So it's whether going if we went project by project, okay, whether the streets are being done in a way that make the streets resilient, all right?

That's a part of it.

Okay.

But it's as much as helping the private sector, who are the biggest part of the investments of the infrastructure in this town.

And how do we do that?

Um I I believe very strongly that you create these kinds of real estate entitlements and incentives that say if you spend 20 to 30 percent more on making your real estate project achieve a higher standard, we can provide a certain type of tax credit or certain type of.

Okay.

And based on, in a sense, a proportional link to that if I do this, will the public financing, will the insurance, will the reinsurance right align to say I have spent this amount of money more than I needed to, all right?

Right now, and it's not a criticism of the real estate community, they do the baseline that they've got to do.

Anything above that, we've got to find a way to encourage and incentivize and frankly reward them for doing that.

So when we talk about these master plan communities, especially in places I'm gonna pick on somebody today, I'll get in trouble for this, all right.

Waller County is one of the fastest growing master plan logistics distribution centers, all right.

Those projects are not being made resilient.

They're not.

So they're great.

We're building a lot of locations for the growth of the community in the region at large.

We're kicking the resilience dividend down the street.

So that also ties into something that says we now have the empirical data that says I, Councilmember Alcorn and you know, my district have this project.

If we build it to a higher standard to a higher value of resilience, or if we encourage and partner with the private sector to build out, you know, whatever X, then that resilience dividend can be securitized, it can be financed.

And it's not your dollars alone.

So what I would say to you, what's the number one piece that I would take away is can we once and for all establish, I don't care if it's with the finance director, with a group of y'all with a couple others.

I think that Houston is ripe for having an entire discussion about financing the mitigation of risk exposure with some new instruments and new ways that doesn't put the city further in debt, but frankly attracts other forms of capital.

If I were to encourage one takeaway from today is let us assemble a set of stakeholders that are already interested, all right, even want to compete against each other for the opportunity.

But what needs to happen is y'all's role as elected and appointed officials is to use the apparatus you've got, part of it is tax incentives, part of it is entitlements, but part of it is also bringing your assets to the table in a way that says we also are going to raise the value of our infrastructure side by side.

All right.

So that's one aspect of it is we think this is now time to address the financial, economic, and fiscal strategy for resilience.

And what a great time because it's also not intended to put the city in further debt, but to find a way to unlock other forms of capital for the private sector themselves to use to do part of this work.

Okay.

Thank you.

Well, you were speaking to the right one because Councilmember Alcorn has the budget and finance committee chairs always looking for a way to unlock those finances and find that new money.

So can I throw one other?

I'm sorry, let me throw one other part something.

So the reinsurance sector right now on a global basis has proven out different uses of what they call insurance as economic capital.

So there's two sides of, so to speak, the insurance house uh, Councilmember Alcorn.

One is, you know, the actuarial and the premiums, the other is the capital market side.

That's part of what we're also describing as enlightened self-interest.

There is significant amount of money on the capital market side to be invested.

What's enlightened self-interest is that if I use part of their capital wisely, we are in a sense on the other side of their books reducing their lost claims and their risk exposure.

So part of this is to go back to something I promise I'll shut up on this note is what's missing is this what we call future proofing standard that says if I incorporate doing X, then this is the offsetting financial resources that can be brought to bear, okay?

And if we want to do it on one project, that's great.

What I would say is that why are communities around the country realizing it can't be done just on one asset, it has to be done on a portfolio of assets.

That's where we think the opportunity is.

Okay.

We have uh also two uh have been joined by staff from Councilmember Thomas's office and council member uh staff from Councilmember Ramirez's office have a question in the queue here.

Hey, good to see you again.

Good to see you.

Um thank you so much for the presentation today.

Very informative, and I mean, I think it's been said many times, but resilience is such an important topic, and really glad that you were able to come in and provide some information.

Um I was wondering if you could speak more to these pools of funds that you spoke about.

I believe it's on slide 26 in this version, um, where you spoke about the the RCET national and or regional trusts.

Oh, yeah.

Or those is that a separate item.

No, no, keep on going back.

I think it's the other way.

Oh, I don't know if we actually got to it in this.

Yeah, I'll keep on keep on going later in this.

No, go back, go towards the end.

There it is.

Yeah.

Is that the trust that you were speaking about where you're envisioning being able to leverage this funding for resilience projects on the blue sky days, or are these trusts ones that you're this is another instrument that in the apologize, I kind of thought I was losing y'all, but but let me talk about why we formed the trust.

Okay.

All right.

Um exemplar.

Every place I go around uh the United States and the world.

We are a very charitable city.

Um part of this is easy to talk about here.

But every time there's a disaster, we turn to the community foundation to others, and fortunate and blessed that $30 million, $60 million can show up pretty quickly in this city.

We're fortunate.

That's not going to always be the case.

So we started looking at how a nonprofit trust could be formed for corporate philanthropy, foundations, and donor-advised funders, not just in Houston, but if somebody wanted to put money to work, and let me use an example of something.

Um I'm going to go real quick on this.

You know what THUIA is?

All right.

So we 10 plus 15 years ago, we had a major windstorm in the State of Texas, and especially on the Gulf Coast, and the insurance industry pretty much said, we can't keep on doing this, we're gone.

So the State of Texas with the legislature created its own insurance program for wind.

All right.

So you blame me for the statement, not you.

Okay.

TWIA still charges everybody across the State to pay for the uh uh creation of this wind insurance, all right?

It can only be used on the coastal communities, which is great.

Uh however, the most damage of wind that's occurred in the State of Texas in the past five years has occurred in North Texas in the panhandle.

Okay.

However, one slight change that is now available in TWA does allow some of those dollars to be used for fortified roofs based on the Institute for Business and Home Safety Code, building code.

Okay.

One of the things that we have looked at is how to employers with low to moderate income employees contribute a certain amount of dollars into a voucher program for their homes to receive a fortified roof, meaning a retrofit.

That's how you can use a trust is to have designated dollars go, not just for clothes and food, which we still believe is important.

What we believe the trust could be used for is this pre-disaster risk mitigation before, including the what we suggested way back was that you could use the trust for generators, microgrids, not just at the res, not just at Acres Home.

We felt and still do believe that you could get 300 to 500 homes, um faith-based facilities and others in the neighborhoods connected into a distributed energy grid, but use the trust as a 501c3 investment vehicle.

So these trusts, it's primarily for blue sky days, solely for blue sky.

What does it look like after a disaster?

That is not what this is for.

We want to encourage it for the blue sky days because that's where the investments tend to come where where money tends to not show up.

Okay.

But go too long?

Okay.

But let me use an example.

United Way, American Red Cross, and others are now moving their strategies to blue sky as much as the traditional response and recovery.

So we're not taking response and recovery off the equation with a trust, but what we are seeing is if we lean into more pre-disaster blue sky, it does show it, I mean, it's proven evidence that what I have to spend money is more efficient and effective if I do things up before the next event.

And the trust is a way to do that.

I see.

Thank you.

Um may I ask one more question?

Okay.

Um I know we have several offices within City of Houston that are also focused on this, including the mayor's Office of Resilience, we've got um OEM.

Have you worked or partnered with them at all or met with them to speak about this?

In the past, yes.

Okay.

Not recently.

Okay.

All right.

Thank you.

I'm I I I'm gonna emphasize something, and that is that we believe this is as much a way of bringing the private sector to the table that this is not just a government entity, nor is it just an insurance solution.

That's what we're trying to say is we're seeing evidence and examples of initiatives and very specific solutions and structures that say here's the role of government, but frankly, here are all the other what we call enlightened self-interest stakeholders.

So it it it is not one just driven by the Office of Emergency Management.

It's as much sitting down with employers, investors, insurance, and reinsurance.

That's where we, you know, and you you rightly and I graciously say you always push me to get to the very specific, okay.

The very specific that has to be is we need a new resilience financial investment instrument for the City of Houston, but it does not meet need to be solely borne by the city's budget or ownership solely.

All right.

So we've got some language, we've got some structures for y'all to take a look at.

I decide not to do those today, but we have very specific structures that have already been proven out in different places in the United States.

We think that there are ones that need to be and can be adapted for here, and we know who some of those investors are that would be interested in sitting down and looking at how to structure these.

Okay.

But we also look at this as a mutual risk pool tied with trust, meaning that there are multiple ways for capital to be deployed, but not on the day after the event, but on the blue sky days, especially.

Councilmember Alcorn.

So, Chair, is that the is that the kind of next step uh for this is to try to get um this group with the with our financial people and public works.

That's uh exactly uh the lengthy presentation, which I'm not sure that we actually send out to all of counsel, but there's a uh the mayor's office has it.

Um pages.

No, no, no.

God God love it.

I think I got it to 30.

No, but the the big one at the end of the year.

30.

30.

Okay.

I thought I have a bigger one.

But anyway, but to to uh really try to connect with the with the mayor's team and see how we kind of disperse um the discussions and really start the ball rolling.

Um because I think obviously Richard, I mean you're I you can talk about this all day.

Clearly, you bitch, you know, you you've got the work that you put into it.

Uh but you know it's that golden egg that we're that we're looking for, right?

And so uh, you know, certainly I'm committed to to helping try to get uh you know push forward and see if that plan that you so uh you know that you laid out is something that that's our commitment to you is the same thing that I said this morning on a uh a call to a another large state.

People that we're working with are so ready to just get going to find the right pilot community, you know, however you want to call it project, right?

That that's the reason why we believe 2026 is the seminal year.

We don't want to do another study.

There's some data that needs, but we don't want to do another study.

We want to put something together that you're comfortable with that will show immediate and you know longer term results, but one that one more time opens the door to not just relying on the city, the county, or government for being the only source of the dollars.

So our commitment is to bring people to the table for this discussion to really design something that can be purposefully done and then scaled.

That's that's my commitment to you.

Well, thank you for your work and your efforts, and certainly uh we'll continue uh to follow up.

We do have a couple of uh speakers that had signed up for questions, so um we'll call them up and thank you for your wonderful presentation.

Well, thank you for your time, thank you for your your patience with me.

We're gonna do this in Houston first and foremost, but thank you.

Happy holidays to all of you.

Thank you.

At the uh time of the meeting, we had Mikia Moreno is Ms.

Moreno, and I don't see Dominic Mazock, he's not here.

Pastor Deb is not here.

Do we have any other speakers that wanted to speak that had not signed up or have signed up?

That's Richard.

Okay.

I have listened to Richard.

This is Hermani Bañas.

Mr.

Ivanes.

Yeah, um, so we've done a couple of things that that Richard didn't uh mention.

One, we passed the 2021 um uh building c international building codes.

Mr.

Castillo has set up uh his um uh resiliency plan in and um in age where he's now trying to do uh trees and um uh renovation and uh to weatherized homes.

And one of the things that we've been stressing through my organizations um is trying to do weatherized homes better, you know, Sear and Hark are working on a program right now, so if we can get these kinds of trusts to help us try to get those weatherized homes and solve the the this um need, uh I I commend him for him.

I I really want that to move forward because we've been we've we still have uh people with blue tarps from uh hurricane A and and uh and so I I still think that you know we're not doing enough uh on that part, and I think that that would help um do that.

And one of the things uh that I I suggested that to Councilman Castillo is working with uh faith-based groups to grab the the portfolio of of houses that need the work, and because we've tried this before, and the problem has been the city's not good at project management, and so if we can have the the block of uh homes, 15 homes that we can do in a week, and our our our weatherization teams can go and do these things in a row, that's how how we solve the problem.

But we need more money, and you know Rich Richard is has got uh a ne a new way of doing it.

Thank you.

Thank you, and thank you for being here, Mr.

Evanes.

You know, um uh I'll get with you after the meeting.

I'm gonna ask you about a couple of organizations and maybe we can make some connections too.

Uh, next speaker is uh Joe Dunham.

Thank you.

And that was a great presentation.

Very detailed.

I'd love to see the big one.

I don't know if there's a way we can see the the large presentation or not.

Um, but one I had a question of something and then wanted to make a couple comments, but you were talking about a resilience district versus a mud district.

Can you give it a little bit more detail about that?

I know right now um statewide.

Um my name is Joe Dunham, I work for St.

Castle Homes.

I'm an active member of Greater Houston Builders Association.

They could not come today, and and I I was overhearing and said, hey, I can go, so that's why I'm here.

I'm not here in any official capacity at all.

Um but I know um, because I am on the government affairs depart um committee, and I know that right now we're facing scrutiny statewide uh with mud districts that there's they seem to work really well here in a lot of areas at Houston.

You do have back and forth about it, but I know statewide, uh, especially Austin areas, different areas that people are are are fighting those.

So those may start to go away in some in some aspects.

But just curious, what do you mean?

Are you talking about combining those or can you speak to that a little more?

Yes, come on.

My question was to him about that.

If that's I don't know how this works.

So um get the money there.

Uh but um uh first off, thank you for the work that y'all do.

I I'm very aware of the uh home builders and and builders, which are we think a critical part of this strategy.

So thank you for being here.

Um what she's raising is is that there are some concerns uh at the legislative level about uh municipal utility districts inters, um and you know, and uh uh about some of the places where they have not been as well managed.

Yeah.

Would that be a way of of responding?

Um no, what we're seeing is if you look at the reason why utility districts were created, which is truly a phenomenal national model that was started, uh Chairwoman, on in your part of the world on the west side of Houston.

I mean, MUDs were were truly in the 1960s, something that was novel.

Now they're all across the country.

What we're saying is those types of districts where you're looking at the horizontal and trying to make the horizontal everything energy, power, water, whatever you can do across the horizontal uh with a developer, a master plan community developer and the public sector, and do whatever you can to invest in a higher value of resilience.

We know for a fact that the cost of capital will come down.

We know for a fact that the insurance and reinsurance will be repriced.

We know that mortgages will be repriced, right?

So, no, we're not trying to combine anything.

We're basically saying, can you use that same structure, even go into some of the existing utility districts and do retrofits?

This is where a part of this strategy emerges on public-private partnerships, right?

So I'll use one last thing.

Sorry.

I've had five cups of coffee and no breakfast.

Okay.

Babcock Ranch, we talk about all the time.

Babcock Ranch, two-time NFL football player Sid Kiston, buys 70,000 acres of land, uh, donates 75% of that into a conservancy, and off he goes to develop a master plan community.

Do you know about Babcock Ranch?

Yes, you do, and everybody up here does.

Babcock Ranch had one standard by which it was built.

It has to withstand the direct hit of a category three hurricane.

That was the standard.

Everything that was done at Babcock Ranch, they buried all the power lines.

It's the largest solar-powered master plan community in the United States.

Um, so why you heard about it is Hurricane Ian three years ago, went on the west side of Florida, went right over Babcock Ranch, took out a few trees and a few tiles.

It's been on the front page of the Houston Chronicles seven times.

It's been on CBO, uh everything.

We know that these projects can be developed this way, but you're not as a developer gonna say, well, we'll just take 30 percent hit to our profit margin.

Absolutely.

Right?

Right.

So that is where we think not only is this from a not a building code, we want to incentivize.

We believe it's in your best interest on those homes to be built in a way that not only continue to be on the tax roll, all right, but individuals can live in there.

All right, do all the things that they need to do with their jobs and you know, so what's happened with Babcock Ranch, go look at it.

They can't sell houses fast enough, right?

So it is an opportunity, we believe, to use the government structures we have, but to take them to that next level, but also not do this purely on your capital alone, because it's in a lot of folks' interest that those homes survive.

I want to pay my mortgage.

I don't want to default, right?

But I also need to make sure that the infrastructure, like what this gentleman does behind us, that that infrastructure is also made to work.

So we need to make sure there's power, water, energy, those that's what we're looking at.

Sorry.

No, that's good.

No, that's that's good.

That's over.

I I love how you're asking questions, Sally, because it's like over my head how that all fits together.

But um uh just but wanted to make the statement about and we're talking about different building codes, and you're also talking about Waler County, all of that.

I understand that, but as a builder who builds in the city, I build a thousand homes over 20 years, and they're all you know all over around Houston.

More strict building codes won't necessarily make my homes more resilient.

I can I can tell you, and uh, out of all those homes, we have had five flood, and they were actually all because of a clogged drain that was further down the Rhine.

I'm sure everybody's had a couple shingles here or there.

But you know, we we who are building too basic code, which I do, um uh our homes are resilient here within the city.

I just wanted to speak to that for a second.

Thank you for your comments and you know it's it is a team effort.

You know, if the infrastructure is not resilient, then your home can't be.

Correct.

Thank you.

Thank you.

Do we have any other guest speakers who wanted to speak?

I don't see anybody up and over the podium here.

Thank you all for being here.

Umry Christmas and happy new year.

We'll see you in January.

Thank you.