The City of Galveston, Texas faces serious challenges associated with coastal flooding. Climate change poses increasing risks in the form of sea level rise and more severe storms that leave the Island’s infrastructure (particularly wastewater treatment) vulnerable to flooding events that compromise the health and safety of residents as well as critical ecosystems.

Background

Galveston is a 32-mile-long and roughly 2-mile-wide barrier island in the Gulf of Mexico, located approximately 50 miles southeast of Houston. With a 2019 population estimate of 50,446 (1), the City is a regional destination for maritime recreation whose economic activity is based around tourism and the Galveston Port, as well as several institutions of higher education. Galveston came to serve as the United States’ major southwest port throughout much of the 19^th century, accepting over a quarter million European immigrants and acting as a center for trade, banking, publishing and printing, real estate and shipping (2). The City’s booming period came to an abrupt halt with the Hurricane of 1900, which brought an estimated storm surge of 15.7 feet and winds of 140 miles per hour, leading to the deaths of 6,000-12,000 people and the destruction of most property and infrastructure (3). Storms have since continued to play a major role in Galveston’s development. Still fresh in memory is Hurricane Ike, which hit the City in September 2008 causing total utility failure and damage to 70% of buildings and much of the Island’s tree canopy (4), and displacing over 15% of the population (5). The City continues to face critical water management challenges, including stormwater management, coastal protection and water quality issues, that stem from its coastal location, proximity to petrochemical industry and the historic patterns of regional development.

Regional Hydrology

Galveston is located within the Trinity-San Jacinto Estuary, commonly known as Galveston Bay, which is the largest estuary in Texas (345,280 acres), and receives an annual flow of 11 million acre-feet (~10 billion gallon per day) of freshwater from regional watersheds (6). Some of the defining features of the region’s hydrology are the Houston bayou system, the San Jacinto and Trinity rivers, as well as the manmade Houston Ship Channel and Port Houston, one of the busiest ports in the world and home to the largest petrochemical complex in the U.S, which is a major source of regional pollution (7).

Water Infrastructure

The City of Galveston gets its potable water through a contract with the Gulf Coast Water Authority (GCWA), which is responsible for extraction from the Brazos River, conveyance through 150 miles of canals, and treatment at the Thomas A. Mackey Water Treatment Plant in Texas City (8).

Galveston operates five wastewater treatment plants (WWTPs): The Main Wastewater Treatment Facility, the Airport Wastewater Treatment Facility, the Terramar Treatment Facility, the Pirates Beach Wastewater Treatment Facility, and the Seawolf Park Wastewater Treatment Plant (currently being redesigned). The wastewater plants have a combined average treatment capacity of approximately 15 MGD (9).

The Galveston Seawall is a critical piece of infrastructure protecting Galveston from coastal storm surge. Constructed in the aftermath of the Hurricane of 1900, the seawall was designed to rise 17 ft above mean low tide and extends over 10 miles along the Island’s coastline. Much of the historic and currently developed eastern part of the City was raised to meet this new grade.

Wetlands, an important part of the Island’s natural infrastructure, exist at the boundary of land and aquatic environments. They trap and filter pollutants that exist in Galveston Bay or are introduced from surface runoff, store nutrients, and serve as habitats for a variety of bird, fish and other species. Additionally, they serve as physical buffers for storm surge. The Bay has seen a drastic decrease in wetlands over the past 20 years (1996 to 2016), with an estimated loss of 271 acres of saltwater wetlands and 26,512 acres of freshwater wetlands to development (7). While development in Texas wetlands is regulated by the Army Corps of Engineers, local measures are being considered and implemented to protect wetland ecosystems, such as local regulations, development setbacks and buffers, and incentives for restoration projects (4).

Water management challenges

As climate change introduces greater uncertainty, coastal regions must cope and adapt to more severe weather events as well as sea level rise, both of which threaten infrastructure systems, sensitive ecosystems, and thus future development. Protecting Galveston from storm surge associated with catastrophic storms, like Hurricane Ike which brought a 17 ft storm surge (10), is not feasible through local efforts and demands federal assistance. This is the focus of the Coastal Texas Protection and Restoration Feasibility Study, commonly referred to as ‘Ike Dike’, that is being conducted by the Army Corps of Engineers. This study proposes flood gates to protect Galveston Bay and the Ship Channel, improvements to the seawall, and dune restoration across the western part of the island, without which Galveston faces existential risk from future catastrophic events. While the request for Congressional authorization for the massive $26.2 billion project is set for 2021, with design and construction estimated to take 20 years, Galveston must be proactive in protecting City owned assets.

WWTPs are susceptible to failure during flooding events. As storm surge or rainfall runoff flood and flow through the plant, untreated or partially treated sewage must be released to not overload the system. Such cases have repeatedly occurred in nearby Houston, most recently when 100,000 gallons of wastewater were spilled during Tropical Storm Beta in September 2020. These overflow pollution events pose threats to human health as they release sewage into water bodies that are used for fishing and recreation, while degrading ecosystems that serve as wildlife habitats.

Adapting to Sea Level Rise

While storm events are chaotic in nature and continue to defy the misleading convention of 100 and 500 year events, sea level rise (SLR) is slowly but surely changing the face of coastal cities. With some predictions estimating a rise between 1.2 and 2.3 ft by 2050, Galveston must prepare for coastal inundation associated with more severe storm and tidal surges. The City’s Main WWTP and the Airport WWTP (Fig. 5) account for most of the Island’s treatment capacity, and therefore demand the most urgent attention. A combination of gray and green infrastructure is proposed to adapt these two plants to rising water elevation, taking 3 ft of SLR as a reasonable scenario for 2050.

Airport Wastewater Treatment Plant

The Airport WWTP is the second largest plant on the Island, accounting for approximately a quarter of the City’s treatment capacity. In a SLR scenario of 3 ft, the Airport plant is expected to be inundated with brackish bay water, regardless of storm surges. The site is situated in a developed area adjacent to other industrial sites. Since the site is located within a canal and is not exposed to considerable wave action, measures should focus on elevating critical structures and ensuring bay water will not flood the site. Since the plant was damaged during Hurricane Ike, this also serves as an opportunity for upgrades in treatment and disinfection processes, as well as the possible need for increasing the plant’s capacity.

Plant design recommendations:

1. Elevate critical structures at least 3 ft above base flood elevation (BFE).
2. Elevate critical equipment such as emergency generators, electrical systems, switchgear, transformers and servers to roof level or higher floors.
3. Raise effluent outfall to avoid backflow in the system
4. Construct a 4 ft tall reinforced concrete perimeter wall to prevent bayside flooding of site.
5. Incorporate stormwater pumps in strategic locations to avoid runoff flooding.
6. Construct a bioswale on the street facing edge to accommodate for inundation from the side channels and relieve street runoff.

Galveston Main Wastewater Treatment Plant

The Galveston Main WWTP accounts for approximately 75% of the Island’s treatment capacity. After suffering serious damage during Hurricane Ike in 2008, the facility underwent an $85 million reconstruction and upgrades, which were completed in 2017. The new flood walls were designed to keep out a storm surge from a 100-year flood plus 3-foot wave action, which may not be conservative enough and does not account for a future 3 ft SLR scenario.

Plant design recommendations:

1. Construct a 6 ft tall flood barrier that will account for SLR as well as wave action from the bay.
2. Incorporate stormwater pumps in strategic locations to avoid runoff flooding.
3. The site is a good candidate for a constructed estuarian wetland, which would help buffer wave action from the bay while providing tertiary treatment of effluent. The 30 acres submerged area adjacent to the plant has a water depth of less than 4 ft that is suitable for plant growth needed to sustain a wetland habitat. This could help further increase dissolved oxygen (DO), lower biological oxygen demand (BOD), remove nutrients like nitrogen and phosphorus, and trap contaminants (12).

Financing Adaptation

Galveston’s combined utility system fund provides for a coordinated response to the city’s long-term, water-related infrastructure and planning challenges.

The city of Galveston employs a progressive water and sewer rate structure. Rather than employing a fixed or decreasing block rate, this system—which, at 30% and $35.8MM/year, is the second biggest source of revenue for the city—has been put in place to disincentivize large industrial users from consuming too much water. Nevertheless, this has yet to be realized over time. While the base rates are the same for water and sewer regardless of user, volumetric rates vary between residential, commercial / industrial / government, and irrigation uses, placing more of the fiscal burden on larger users. Even though the city employs a progressive water rate structure, the airport is subject to the same usage rates as all other commercial, industrial, and residential users (see Fig. 10). The case can be made for a more representative water fee structure for industrial users that more accurately reflects their usage and overall stress on the system.

Rates paid by city residents generally contribute to funding the daily operations of the water system into the Combined Utility System Fund. A new addition to the city’s annual budget, this fund was created to allow for the city to undertake coordinated capital investment projects in its water system, rather than having multiple funding pools from which large projects compete. Over the next five years, Galveston has planned to invest $298.8MM from this fund into drainage, sewage, and water systems, with many of the projects focused on rehabilitating and replacing key components of the city’s 126-year old water system, and protecting infrastructure from the effects of tropical storms and hurricanes (13).

Galveston’s Scholes International Airport (GLS) is noticeably absent from the city’s long-term water plan

Despite a more integrated plan for water system capital investments, Galveston’s Scholes International (GLS) is noticeably absent from the city’s long-term water plan. The city owns and operates GLS, whose activity includes private aviation, corporate travel, and air taxi services. On average, GLS has 167 flight operations per day, with 55% air taxis and 44% general aviation. Each year, GLS teeters between operating profit and loss, but it remains an important source of taxable income for the city. We believe that focusing on improving the city’s wastewater management, but also contribute to its long-term economic growth prospects (14,15). The water treatment plant at GLS comprises approximately a quarter of the City of Galveston’s 9.7MM wastewater flow, making it a critical piece of the city’s water infrastructure (see Fig. 2).

Green financing could provide Galveston an innovative way to execute on a unique water plan and strategy

Despite increasing investor demand for environmental, social, and governance (ESG) investment opportunities (16), green bonds are less than 2% of the total U.S. municipal bond market (17) (see Fig. 12). Issuances have ranged in size from $465,000 to those as large as $2B+, and over 90% of these bonds are tax-exempt and have an average maturity of 15 years (17). Nevertheless, there is no widely accepted, 3^rd party certifying agency that defines what constitutes a “green” investment, but funds raised should generally go to sustainability, climate, and environmental impact initiatives.

Even though TX represents more than 11% of the conventional bond market it has significantly lagged its peers in the number and size of its green issuances – Texas does not show up as one of America’s top 10 green bond issuing states (17) (see Fig. 13). Nevertheless, because transportation and water-sewer related sub-sectors have made up more than 50% of green municipal bond market, with 71% rated AAA or AA, and over 95% of the supply holding investment grade-ratings, we believe that our wastewater proposal could be a good project candidate for Texas, and more specifically the city of Galveston, to make a splash on to the U.S. green municipal bond markets. With its AA credit rating and the fact that investors–defying conventional logic–don’t place a premium on green municipal financing, Galveston could be in a solid position to issue two, attractively priced green bonds in two series to fund the suggested wastewater rehabilitation proposal ($50 million, 30-year maturity) and adaptation measures ($1.5 million, 10-year maturity) (see Fig. 14).

From a political-economic perspective, green financing is especially beneficial for medium and smaller sized cities. Federal programs—like the EPA’s Clean Water State Revolving Fund—can provide money for projects. But states, and not cities, are responsible in operating this program, meaning that cities will have accept a level of politicking when it comes to receiving funds from state governments. In states like Texas where there are often partisan divides between city and state governments, municipal bonds can give municipalities a greater degree of freedom when it comes to capital budgeting. There are already signs of voter acceptance in raising funds on debt markets in neighboring cities like Houston, where, in the aftermath of Hurricane Harvey, residents approved $2.5 billion in bonds to be used for flood control measures intended to stop future damage caused by tropical storms and hurricanes (18).

Conclusion

While proactive adaptation measures are critical for the Island’s resilience, the long-term situation remains dire without a coordinated, global response to climate change. Even though many cities across the United States are facing chronic inundation due to sea level rise, Galveston is arguably in a dire position in relation to many of its sister cities. This situation is only heightened as tropical storms and hurricanes continue to intensify. In the absence of constructing mega-infrastructure projects like the $26.2 billion Ike Dike, or improved transportation infrastructure that links Galveston to cities further inland and incentivizes people to move away from the city, Galveston will be pressed to invest in stop-gap investment projects. Though this wastewater-centric proposal is intended to ensure that the City remains livable and economically viable, challenges associated with sea level rise will continue to be salient as long as there isn’t a coordinated, global response to climate change.

Citations

1. QuickFacts Galveston city. United States Census Bureau.
   https://www.census.gov/quickfacts/galvestoncitytexas
2. City History. City of Galveston.
   https://www.galvestontx.gov/248/City-History
3. Galveston Hurricane of 1900. National Parks Service
   https://www.nps.gov/articles/galveston-hurricane-of-1900.htm
4. City of Galveston Comprehensive Plan. City of Galveston. 2011. https://www.galvestontx.gov/DocumentCenter/View/315/2011-Comprehensive-Plan-PDF?bidId=
5. Market Profile: Galveston, Tx. City of Galveston.
   https://www.galvestontx.gov/DocumentCenter/View/9272/Galveston-Market-Profile
6. Trinity-San Jacinto Estuary (Galveston Bay). Texas Water Development Board.
   https://www.twdb.texas.gov/surfacewater/bays/major_estuaries/trinity_san_jacinto/index.asp
7. Galveston Bay Report Card 2020. Galveston Bay Foundation.
8. City of Galveston Water Quality Report 2019. City of Galveston. Chttps://www.galvestontx.gov/ArchiveCenter/ViewFile/Item/2050
9. City of Galveston Comprehensive Plan. City of Galveston. 2011. https://www.galvestontx.gov/DocumentCenter/View/315/2011-Comprehensive-Plan-PDF?bidId=
10. Living with Sea Level Rise on the Upper Texas Coast. Harte Research Institute. https://gomaportal.tamucc.edu/SLR/Ch5_Ike/index.html
11. Coastal Texas Protection and Restoration Feasibility Study. United States Army Corps of Engineers. October 2020. https://coastalstudy.texas.gov/draft-proposal/index.html
12. Constructed Wetlands for Wastewater Treatment and Wildlife Habitat. US EPA. https://www.epa.gov/sites/production/files/2018-07/documents/constructed_wetlands_for_wastewater_treatment_and_wildife_habitat_17_case_studies_epa832-r-93-005.pdf
13. Adopted 2020 Budget. City of Galveston. https://www.galvestontx.gov/DocumentCenter/View/9971/FY2020-Adopted-Budget
14. Bruce A. Blonigen and Anca D. Cristea, “Airports and Urban Growth: Evidence from a Quasi-Natural Policy Experiment,” National Bureau of Economic Research, Working Paper 18278. https://www.nber.org/system/files/working_papers/w18278/w18278.pdf
15. CNT and SB Friedman Advisors, “Green Stormwater Infrastructure Impact on Property Values,” November 2020. https://www.cnt.org/publications/green-stormwater-infrastructure-impact-on-property-values
16. Advancing environmental, social, and governance investing. Delloite. https://www2.deloitte.com/us/en/insights/industry/financial-services/esg-investing-performance.html
17. Franklin Templeton, “Responsible Investing in a Traditional Asset Class,” June 2020. https://www.franklintempleton.com/investor/download?doc=%2Fcommon%2Fkcg9ld38
18. https://www.houstonchronicle.com/news/houston-weather/hurricaneharvey/article/Harris-County-voters-pass-2-5-billion-flood-bond-13182842.php
19. Feature photo – https://www.tripsavvy.com/attractions-on-galveston-island-1656862