GOVERNOR GREG ABBOTT

September 26, 2017

Honorable Sylvester Turner

Mayor
City of Houston
901 Bagby
Houston, Texas 77002

Dear Mayor Turner:

In response to your letter of September 25, I am writing to request a meeting between our teams to
review all available funding sources and to ensure all federal reimbursement opportunities have been
exhausted for recovery expenses incurred by the City of Houston in response to Hurricane Harvey and
the flooding that followed. My staff will call shortly to schedule.

A Texas-sized storm demanded a Texas-sized response. That is why my office took aggressive advance
action to help prepare for the disaster and its aftermath. Because of the cost-share waiver immediately
negotiated with the Federal Emergency Management Agency (FEMA) and swiftly approved by the
president, we will receive a 100 percent match of federal funds for the first 30 days of expenses incurred
for several critical categories of Public Assistance.

I was pleased to present to you and the City of Houston one of the first payments secured from FEMA
for $91.2 million earlier this month. Another check from FEMA for $44.5 million was also presented to
Harris County. More money will be sent to the City of Houston as soon as you submit appropriate
invoices.

We continue to work closely with FEMA and our federal partners in Washington as well as with the
president, vice president, cabinet members and Senators John Cornyn and Ted Cruz to ensure that Texas
will receive direct federal appropriations to rebuild our communities and infrastructure.

In addition to spending significant state resources, we must work together to secure all federal resources
that are made available for cities and counties to respond to disasters.

Granted, if there ever was a rainy day, this was one, which is why I recommended tightening the use of
the Texas Economic Stabilization Fund (ESF) to reserve it for very unique and challenging
circumstances, among them the costs related to natural disasters.

POST OFFICE BOX 12428 AUSTIN, TEXAS 78711 512-463-2000 (VOICE) DIAL 7-1-1 FOR RELAY SERVICES
Mayor Sylvester Turner
September 26, 2017
Page 2

In times like these, however, it is important for us as stewards of the taxpayers hard-earned dollars to be
fiscally responsible as opposed to reacting in a financial panic.

The lieutenant governor and the speaker agree with me that Texas will need to tap into the Rainy Day
Fund. The appropriate time to do this is will be when we have an understanding of all potential financial
obligations. As of now, it would be impossible to determine the highest and best use of ESF, because we
do not yet know the extent of the losses. As a result, the lieutenant governor, speaker and comptroller
have all informed me that Texas should first use the full array of state financial resources and federal
resources already available to us to respond to our current challenges. Those tools should be sufficient
to respond to our needs, and Texans needs, until the next session at which time a supplemental budget
can be passed to pay for the expenses Texas has incurred. That supplemental budget will almost
assuredly require using money from the Rainy Day Fund.

The Economic Stabilization Fund is a limited resource, and so it is imperative we understand the
statewide financial situation before draining the fund only to learn of more financial obligations.

As I have been informed, the City of Houston has access to funds through the Tax Increment
Reinvestment Zone that could be employed for recovery efforts. There are other financial solutions for
cities that are already provided by the federal government to meet the very needs you have.

Finally, to make certain no community is disadvantaged due to a lack of administrative resources, a

regional approach to funding is required. That is why I created the Governors Commission to Rebuild
Texas and why I charged Commissioner John Sharp with this critical mission: We must use resources
effectively and efficiently.

As a reminder, the deadline for mayors, county judges and other local leaders to submit their prioritized
requests for federal funding to the commission is September 29. The commission will use the
information to quantify Texas needs, identify potential sources and begin advocating for federal
funding.

Just as I have been persistently responsive to every need you have articulated such as expediting
reimbursements, waiving regulations to expedite debris removal and expediting FEMA fixed resource
centers I remain committed to ensuring that Houston recovers swiftly and effectively. And, as I told
you at Ellington Field, we will achieve more when we work together to meet Texans' needs.

At this time and going forward, I want to make certain you have all the support and information you
need to access this assistance. For example, I told you last week about the funding grants from the U.S.
Department of Labor to pay to dislocated workers and about funding for small businesses, but I have yet
to hear from you about those strategies. Those and many more resources exist to help you, your city,
and your residents.

I look forward to our teams meeting as soon as possible.

As a reminder, and until our teams meet, here are several of the programs that can provide much needed
Mayor Sylvester Turner
September 26, 2017
Page 3

cash flow during the crucial early phase of the recovery process when revenue may remain temporarily
depressed.

Below are two programs specifically designed to ensure local entities have access to funds in the event
of temporary cash flow issues that may arise due to increased expenditures related to Hurricane Harvey:

Expedited Project Worksheet. This funding option allows eligible local entities to receive
expedited funding to reimburse for Category A (Debris Removal) and B (Emergency Protective
Measures) expenditures needed to address immediate needs. If you are in need of expedited
funding, please contact your TDEM district coordinator.

Community Disaster Loan Program. Under the Community Disaster Loan Program, FEMA
provides operational funding to help local governments who may be experiencing a significant
loss in revenue. These low-interest loans help jurisdictions return to normal operations and
jump-start community recovery.

FEMA and other federal agencies also provide assistance to eligible individuals who are experiencing a
temporary interruption in work. Whether one is a small business owner who lost a business or a worker
who has been temporarily displaced as a result of the disaster, programs exist to get our fellow Texans
back on their feet.

Small Business Administration Disaster Loans. The Small Business Administration (SBA)
offers the opportunity to defer interest on existing SBA loans or apply for a low- interest disaster
loan to help individuals or businesses get back on track. These loans are available to help cover
repairs to physical assets such as businesses or homes and can be used to cover small business
operating expenses.

Disaster Unemployment Assistance. The Texas Workforce Commission, through FEMA, is

offering Disaster Unemployment Assistance (DUA), which provides unemployment benefits for
individuals who lost their jobs, are self-employed or no longer working as a direct result of the
disaster.

Disaster Supplemental Nutrition Assistance Program. The Texas Health and Human Services
Commission is offering a Disaster Supplemental Nutrition Assistance Program (D-SNAP), which
provides short-term food assistance benefits for families impacted by the disaster.

Critical Needs Assistance Program. FEMA authorized Critical Needs Assistance (CNA) to
individuals and households living in jurisdictions included in the major disaster declaration who,
as a result of the disaster, are displaced from their primary dwelling for a minimum of seven
days. CNA is an accelerated disaster assistance program provided to eligible individuals and
households that may be used to purchase life-saving or life- sustaining items.

Disaster National Dislocated Worker Grants. The Texas Workforce Commission can provide
information on grants to hire individuals for clean-up jobs and also to provide longer-term
Mayor Sylvester Turner
September 26, 2017
Page 4

employment and training services. These funds flow through State Workforce Agencies to Local
Workforce Development Boards with services being delivered through American Job Centers.

I encourage you to contact former Texas Representative John Otto, your Commission to Rebuild Texas
point of contact, if you have additional questions on these programs. The commission stands ready to
help you utilize the tools available to ease temporary budgetary constraints and will assist you in
ensuring that your residents have access to resources that may be needed to help them get back on their
feet.

Thank you for your continued dedication and commitment to the City of Houston and the State of Texas.
I look forward to working by your side. Together we will rebuild Texas even stronger than before.

Sincerely,

Greg Abbott
Governor

GA:dw