Texas Tribune
State’s premature release of bid documents touches off new battle over Medicaid contracts
by By Karen Brooks Harper, The Texas Tribune – 2024-04-26 17:27:27
SUMMARY: Aetna, poised to secure a multibillion-dollar Texas Medicaid contract, inadvertently received rivals' sensitive bids early due to a state agency error. HHS wouldn't comment but acknowledged the mistake. This premature disclosure may have compromised the fairness of a $116 billion, 12-year procurement process. Competitors argue that the mistake benefits Aetna unfairly and call for a redo. Eight insurers have protested the tentative awards, surprising many who saw long-established plans dropped for new entrants. Superior Healthplan, facing a $900 million contract loss, has taken legal action for transparency. The controversy raises issues about procedures for government contracts, with accusations of an unbalanced bidding process and consequential impacts on Texas Medicaid recipients.
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Aetna, which is set to win a multibillion Texas Medicaid contract, got a peek at sensitive information submitted by 17 rival health plans during the bidding process after the state Health and Human Services agency erred and sent competitors' proposals to the health insurance giant too early, according to emails and documents obtained by The Texas Tribune.
Neither officials with HHS nor those representing Aetna's Medicaid division – Aetna Better Health Texas – would discuss the matter with Tribune. But the agency confirmed the error in emails it sent to Aetna and others earlier this year, according to a court filing in Travis County this week.
The court documents include the state agency's own admission to the insurance bidders that the release of the information to Aetna was in error.
“The PIA copies were sent to you in error as this procurement is still in the open stage,” reads a Jan. 12 email to Aetna from a legal assistant for the agency, referring to redacted copies of the bids required by the Texas Public Information Act. “As a courtesy, would you please destroy the copies? Once the Notices of Award are issued, we will provide the PIA copies to you.”
The early release of documents throws into doubt the legitimacy of a procurement worth about $116 billion over the next 12 years because it gave a single competitor a look at the other bidders' playbooks while the procurement game was still on, several bidders argue.
“One of the basic tenets of procurement law is that a procuring government entity must ensure a level playing field for all respondents,” attorneys for Superior Healthplan wrote in an April 19 protest letter to HHS. “This procurement utterly failed in that regard, among others.”
Superior Healthplan stands to lose its $900 million contract if the new Medicaid bids are finalized, a move expected later this year.
The competing bidders who are complaining about Aetna's potential unfair advantage say the responsibility for that imbalance lies with the state, not with Aetna, which made a legal and publicly available request for the documents through the proper channels.
But at present, Aetna Better Health Texas is set to win seven new Medicaid contracts once the state finalizes its awards, which were announced March 7. Because records related to the bid evaluations are largely being withheld by the state, it is unclear whether or how any of that information might have been used during the decision-making process.
So far, eight insurance plans have filed protests in response to the state's intent to award the new six-year contracts to Aetna and other winners, one of which is brand new to Texas Medicaid. Each of those contracts can be extended up to a total of 12 years.
The list of winning bids shocked many in the health care community because it dropped three Texas children's hospital-affiliated plans — in Fort Worth, Houston and the Rio Grande Valley — in favor of competitors new to either the region or the state Medicaid programs. It also gutted the coverage areas of some long-standing for profit plans, including WellPoint and Superior.
On Wednesday, Superior Healthplan asked a Travis County district court to compel Texas HHS to release scoring, evaluation notes, audio and video and other records related to the procurement, signaling a contentious battle ahead.
The ‘error'
Medicaid in Texas provides health insurance for more than 4 million people, mostly mothers and children. HHS manages the program but pays contractors to handle individual billing and payments to medical providers.
Each time the state has to reassess and collect new bids from companies that will actually issue insurance coverage to these residents, it can bring a cutthroat battle between companies and the state over who will win those multibillion contracts.
As part of any contract process, companies routinely look for advantage. And one way is by filing open records requests to a state agency to get a handle on what competitors are proposing.
It's a perfectly legal move to request the documents through public information channels, and the onus is on the state to determine if it's appropriate to release them.
But during this STAR/CHIP contracting round, those documents were released before the bid winners were announced – and indeed before the competitors had even been interviewed by the state's evaluation teams – and that has resulted in the losing companies crying foul.
The Aetna request was made in August, long before the awards were announced last month, emails between Aetna representatives and Texas Health and Human Services show.
One other Medicaid contract bidder received the same records in October, but Aetna was the only bidder to receive them while the companies were still presenting their cases to the evaluation team. Another requestor, a research clearinghouse with no affiliations to any bidders, received the records in August as well.
Oral presentations — hours-long interviews before a panel of evaluators that were part of the scoring process — did not conclude until mid-October.
In January, HHS notified all three companies to “destroy” the documents because they were “sent to you in error as this procurement is still in the open stage.” The email said that once the state announced who they intended to award the contracts to the following month, they would re-release those documents.
Curiously, the error was made despite two Texas attorney general rulings that stated the agency had grounds to hold records private until after the procurement process because releasing them could unfairly affect the outcome.
HHS officials said the records contained no confidential information but declined to comment further.
“The agency's misconduct created an unlevel playing field that advantaged one competitor to the detriment of all others in this procurement for the largest state contracts in Texas,” Superior attorneys wrote in the April letter. “The only appropriate remedy is to cancel … and start over. Any other response would simply be a waste of taxpayer dollars and government resources in a misguided attempt to defend HHSC's indefensible actions.”
Aetna declined to comment specifically on the release of the records or the procurement.
“While we defer to the state of Texas to comment on its procurement process, we remain confident in Aetna's ability to deliver excellent service and value across these Medicaid contracts,” according to a statement emailed to the Tribune by an Aetna spokesperson.
New contracts, new battles
In March, Texas HHS announced its intentions to drop children's health plans that are run by three legacy children's hospitals and award the majority of Medicaid STAR and Children's Health Insurance Program contracts to national for-profit health chains.
More than a week ago, two major children's hospitals that had previously held Medicaid insurance plan contracts but lost them this round, announced they would likely have to shut down those programs if the deals are signed.
Some 1.8 million Texans who receive Medicaid coverage from six managed care organizations – the health insurance providers that actually issue the coverage – across the state would lose their current health plans and be shifted to new insurers next year if the decision is finalized.
Lawmakers, angered at the plight of the children's Medicaid plans, have called on HHS to delay the procurement so that they could strengthen laws governing the process and better protect high-quality legacy plans.
Officials with managed care organizations, or MCOs, who lost contracts said they were troubled by the possibility that information they had assumed would be kept private until the end of the procurement process could have been used to compete against them.
“We are aware of this situation and are deeply concerned about the questions this raises about the process,” officials from Cook Children's Health Plan said in a written statement.
Officials at Driscoll Health Plan, which is likely to shut down if it loses its long-standing Texas Medicaid contracts, said they were stunned to learn that one of its competitors had gotten a look at their bid proposals while the plans were all still being evaluated.
They have already filed a protest saying that the new scoring system used in the evaluation phase was unfair, arbitrary, and did not take into account legally required quality measures, among other failures.
“For this procurement attempt to be riddled with so many substantive failures — including the failure to meaningfully evaluate the actual, historic performance of health plans and the failure to involve local community and stakeholder feedback in the selection process — that we believe the process is already fundamentally flawed,” said Craig Smith, Driscoll Health Plan's president and CEO, in an emailed statement. “To now add such serious questions as to the procedural integrity of the procurement attempt, we believe unequivocally that it is due time to set this attempt aside.”
If the procurement is negated, it would be the third failed attempt in six years by Texas HHS to award contracts for the Medicaid programs that encompass the vast majority of state health insurance's low-income Texas recipients.
If it stands, it would mean a reduction in the number of MCOs that administer STAR and CHIP, a shift toward for-profit companies in most areas of the state, a smaller number of top-rated plans administering care, and the introduction of new national plans to regions historically served by local MCOs.
Among those who would be affected are a collective 700,000 families, pregnant women and children covered by Cook Children's Health Plan in the state's Tarrant service area, Texas Children's Health Plan in the Harris region, and Driscoll Health Plan in South Texas, all which formed when the CHIP program was created two decades ago.
Why so many contractors
Texas Medicaid STAR and CHIP programs cover the cost of routine, acute and emergency medical visits. STAR is primarily for pregnant women, low-income children and their caretakers. CHIP provides health care to low-income children whose family's income is too high for Medicaid, which has some of the lowest income limits in the country. Their members compose the vast majority of Texans on state Medicaid programs.
HHS contracts with health plans to provide, arrange, and coordinate preventive, primary, acute care, behavioral health, non-emergency medical transportation, and pharmacy covered services for pregnant women, newborns, children, and parents with limited income.
The state's privatized Medicaid program divides the state into 13 service areas, and multiple contracts are awarded for each service area so enrollees can have a choice of plans, as required by federal law.
Texas law allows three two-year renewals on the six-year Medicaid STAR and CHIP contracts, which are combined into a single service contract so that every MCO that gets a STAR contract also gets a CHIP contract. After the contracts have been in place 12 years, HHS must run a new procurement.
The last completed STAR/CHIP procurement was in 2012.
When the health plan companies submitted bids beginning in 2022, they included redacted “Public Information Act” versions, or PIA copies, of their proposals in their application packets. The PIA copies are required per state law that mandates such information be made available to the public.
Companies were advised from the start that they should not include information in the PIA copies that they do not want released to the public.
But the state's request for proposals did not specify when that information might be released. Texas law does not say explicitly that the state may not release the proposals while the competitors are still being actively evaluated or before the awards are announced.
Attorney General Ken Paxton's office gave HHS the authority to withhold procurement documents in two rulings last year specifically on the STAR/CHIP procurement — once in June and once in October.
Paxton said the state has the right to withhold procurement-related documents while it was still open “if a governmental body demonstrates that release of the information would harm its interests by providing an advantage to a competitor or bidder in a particular ongoing competitive situation.”
Two months after the first ruling, in late August, HHS released thousands of pages of redacted bid proposals by the 18 health plans to Aetna, according to emails contained in this week's court filing.The companies' oral presentations — hours-long, in-person interviews and presentations that were scored alongside the proposals as part of the overall evaluations — weren't scheduled to end until Oct. 13.
The redacted copies that were released to Aetna contained answers to a list of technical questions posed to bidders as well as written arguments for why each company believed they should get or keep a contract.
The bids include sensitive information including company business and marketing strategies or what innovations the bidder has made in dealing with provider shortages — any and all of which can be discussed during the oral presentations.
Shortly before the orals came to a close in October, Paxton's office issued the same ruling in response to a new inquiry by HHS. But a few days after the companies' oral presentations were done, the agency released the redacted proposals to an attorney for the Houston-based Texas Children's Health Plan.
Then in January, HHS attempted to claw them back from Aetna, TCHP and Health Management Associates, a health care consultancy and clearinghouse that routinely requests procurement records and also had received them in August.
Even without a state law regarding the timing of public information releases, the Texas Administrative Code instructs the state to “provide for consistent and uniform management and procurement and contracting processes,” in a “fair consideration of proposals.”
Scorned health plans argue that sending the competing bids, even the redacted ones, to a single competitor halfway through the procurement process runs counter to both of those ideas.
“HHSC's disclosure to Aetna of its competitors' proposals before the oral presentations and while the evaluation of proposals was ongoing destroyed any semblance of a level playing field and gave Aetna an unfair competitive advantage,” Superior attorneys wrote in the company's protest.
Superior is taking HHS to court over the agency's refusal to release dozens of additional records Superior officials requested in March and April after the contracts were announced — including audio and video of the oral presentations, scoring notes and meeting minutes, the identity of the people on the scoring teams who made the decisions, internal communications regarding the evaluation process, and similar information.
Superior argues that because the state already announced who would win the contracts, the competition was over and the records could no longer affect the outcome.
HHS, meanwhile, has asked Paxton for yet another opinion, this time regarding Superior's request, arguing that the additional records would interfere with the negotiations, with potential litigation, or with the evaluation process should the procurement be canceled and the competitors forced to go through it again.
The current fight over public records in government contracts is not a new one to HHS. The agency's record of refusing or delaying release of public information related to Medicaid contracts triggered a lawsuit in November of last year.
Wellpoint, a long-standing contractor of HHS, sued the agency over the $10 billion STAR+PLUS program and what the company, formerly known as Amerigroup, described its lack of effective due process in procurement and barriers to information that is legally public.
Wellpoint's lawsuit also claims that the agency has withheld documents even after the Texas Attorney General directed HHS to produce them.
The agency uses the state's open records law as both a sword and shield – delaying bidders' access to critical information and evidence, and then summarily dismissing protests without proper consideration or justification because the protester failed to provide the very evidence that HHSC itself is withholding,” the lawsuit stated.
Disclosure: Amerigroup has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.
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Texas Tribune
These Texans aren’t taking buyouts despite repeated floods
by By Emily Foxhall, The Texas Tribune – 2024-05-20 05:00:00
SUMMARY: Recent floods in Harris County, Texas, have devastated homes along the San Jacinto River. Tom Madigan, who owns multiple properties, quickly started repairs without knowing the Harris County Flood Control District aims to buy out such flood-prone properties. The region has a longstanding buyout program to remove homes from high-risk flood areas, with about 800 out of 2,400 targeted properties purchased. However, buyouts are voluntary and often insufficient for low-income residents. Despite the program, many choose to stay due to affordability and community ties, while others like Madigan remain skeptical of receiving a fair offer.
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HARRIS COUNTY — After the floodwaters earlier this month just about swallowed two of the six homes that 60-year-old Tom Madigan owns on the San Jacinto River, he didn't think twice about whether to fix them. He hired people to help, and they got to work stripping the walls, pulling up flooring and throwing out water-logged furniture.
What Madigan didn't know: The Harris County Flood Control District wants to buy his properties as part of an effort to get people out of dangerously flood-prone areas.
Back-to-back storms drenched southeast Texas in late April and early May, causing flash flooding and pushing rivers out of their banks and into low-lying neighborhoods. Officials across the region urged people in vulnerable areas to evacuate.
Like Madigan's, some places that were inundated along the San Jacinto in Harris County have flooded repeatedly. And for nearly 30 years, the flood control district has been trying to clear out homes around the river by paying property owners to move, then returning the lots to nature.
The recent floods show why buyout programs can be important. These spots typically flood first and worse. Gov. Greg Abbott reported that hundreds of rescues took place in the state while the floods destroyed homes. A man drowned and a child was swept away into the floods. One Harris County resident described climbing on top of his motor home as the water rose before first responders rescued him.
But the disaster and its aftermath also illustrate why buyouts are complicated to carry out even in Harris County, home to Houston, which has one of the most robust buyout programs in the country. The flood control district has identified roughly 2,400 properties as current buyout candidates around the San Jacinto; the district and county have bought about 800 of them.
Nearly all of the district's buyouts are voluntary. If an owner doesn't want to sell, the district can't force them out.
Buyouts make sense for some people who can't be protected from floods, said Alessandra Jerolleman, director of research for the Center on Environment, Land and Law at Loyola University New Orleans College of Law.
But buyouts might not provide lower-income people enough money to get somewhere safer, she said, and they could lose important support like child care from nearby family or neighbors.
“It's not as though it's a guarantee of reducing risks to that family,” Jerolleman said.
People who live near the river and who have endured repeated floods explained that they've stayed because it's affordable and, most of the time, peaceful. Where else would they be able to buy anything like it? Some said they didn't think the government would offer them what they consider a fair price to sell their land. Some didn't know the buyout program existed.
Madigan started buying homes more than 15 years ago in the unincorporated River Terrace neighborhood because they were cheap. On Tuesday, the Houston firefighter drank a Heineken and grilled hamburgers for his work crew outside his most damaged house, which he rents to his brother. Sodden rugs baked in the sun on the driveway.
Madigan said he might have taken a buyout if it was a reasonable offer — but he doubted it would be. He said he needed to get the properties ready again for his renters. “I can't wait,” he said.
Two blocks away, water had swept through a yellow house Madigan rents to a family with a teenage son. One of the workers fixing the property, 21-year-old Omar Reyna, watched the family throw out pretty much everything they had. Piecing together new laminate flooring with his dad, Reyna kept thinking about a trash bag of Teddy bears and stuffed toys he tossed out for them.
He wondered if the parents had been saving the toys for another kid they might have in the future.
“The faster we get it done, the faster they can come back in here,” Reyna said.
Some people choose to live with the risk of flooding
The San Jacinto is the largest river in the state's most populous county. For years before Harris County's first floodplain maps were drawn up in the mid-1980s, people built homes near its banks. Even today, people can still build in the vast floodplain if the houses are high enough and have enough stormwater detention.
The flood control district tries to buy out homes in pockets of the floodplain that are deepest, said James Wade, manager for the district's property acquisition department. Those are places where engineers can't easily fix flooding problems.
Buyouts are meant to get people out of flood zones before their property floods again, not to help in the immediate aftermath of a disaster. The process is slow: In some cases, it can take 18 months or longer to approve a buyout application, Wade said. The district pays owners the market value or pre-flood value for their house, determined by a third-party appraiser, plus moving expenses and a supplement to help them get into a house out of the floodplain, Wade said.
“It's a very equitable, fair program,” Wade said — but still some people don't want to leave.
Those who stay learn to adapt. They build homes on stilts. They monitor the river level and watch for releases of water from the Lake Conroe dam upstream. Some know intimately the routine of rebuilding: gut the house, clean it, put it back together.
The floor of 49-year-old Sean Vincent's house in the Forest Cove neighborhood in northeast Houston is 15 feet above the ground. Three feet of water flooded it when Hurricane Harvey hit in 2017. This month, the floods reached five feet high on Vincent's property. He cleaned out his waterlogged ground-level shed with help from church members. On Tuesday, he was building new shelves for it.
But most of the time Vincent, who works in railroad traffic control, said he enjoys the space surrounded by tall trees with room for his three kids.
“It's just really not a major part of our life,” Vincent said of the flooding. “Yes, it's inconvenient. Yes, it's now happened to us twice in seven years … It's sort of a trade-off for us. And it is lovely out here.”
“Where are you going to go?”
Then there are those who stay because they don't see anywhere else to go.
Jack St. John, 67, a retired long-haul truck driver, moved to Northshore 43 years ago and has had to clean up after two floods. He worries any time flooding threatens, but the neighborhood's advantages keep him there: He has no water bill because he has a well. His taxes are reasonable. The neighborhood has a fish fry in the spring and a barbecue in the fall.
“You know, when you leave, where are you going to go?” he said. “What's it going to cost to buy into another place?”
Farther northeast, in the Idle Wild and Idle Glen neighborhoods, the floods forced some residents to sleep under tarps. On one largely forested street, boats were turned sideways or flipped upside down. A small building was lodged in the trees. A car was in the ditch.
For several years, Elvia Bethea, 68, has driven from her home in Humble to check on people and pets here, and pick up stray animals. On Tuesday, she and other volunteers gave John Gray, 50, bamboo yard torches to fight the many mosquitoes, plus two trays of chocolate-covered strawberries.
Gray said he couldn't afford to fix up his destroyed house. He earns a living printing labor law posters for businesses. His printers at home were destroyed.
Gray said he had never heard of the buyout program but would consider taking one.
“Who do I call?” Gray asked. “I don't have a clue.”
From the back of a white SUV, Bethea handed some hot dogs to Jose Tabores, 68, who lives on Gray's land in a trailer now filled with mud.
“I'm coming for dinner, remember!” Bethea teased him.
Nearby, 51-year-old Veronika Scheid had been sleeping in a wet tent. The flood washed the shipping crate she lived in down the road and into the trees — along with her and her neighbors' belongings.
At a low point, when Scheid was crying over all she lost, she found a pink-and-white beaded necklace with stitching in the shape of a “V,” like her name. At the end was a charm shaped like a house.
She was grateful the person who owned the land where she stayed hadn't taken a buyout. Otherwise she would have nowhere to go.
“At least we have this,” Scheid said.
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The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.
Texas Tribune
Trump, Abbott speak at Dallas NRA convention
by By Annie Xia, The Texas Tribune – 2024-05-18 19:24:41
SUMMARY:
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DALLAS— At the National Rifle Association's annual convention on Saturday, Donald Trump and Gov. Greg Abbott encouraged the thousands gathered to vote for Trump in the 2024 presidential election as a way to ensure their Second Amendment rights.
“The NRA has stood with me from the very beginning, and with your vote, I will stand strong for your rights and liberties,” Trump said. “I heard it a few weeks ago that if gun owners voted, we would swamp them at levels that nobody's ever seen before. I think you're a rebellious bunch, but let's be rebellious and vote this time.”
Trump and Abbott spoke to a room packed with NRA members, some of which sported supportive attire from the standard-fare red caps to a dress covered with photos of the former president.
During the convention, the NRA released its endorsement for the 45th president, and the Trump political campaign announced the launch for the “Gun Owners for Trump” coalition.
Abbott touted his track record on gun rights by pointing to Texas laws passed last year, such as House Bill 3137 which prohibits local governments from requiring firearm owners to buy liability insurance. To energetic applause, he said the law ensured people would not be forced to pay to exercise their Second Amendment rights.
Abbott also described the state's successful crackdown on the recent pro-Palestinian protests on university campuses, in which protesters are demanding the schools divest from from companies tied to Israel or weapons manufacturing amid the Israel-Hamas War.
“When they tried to pull that stunt in Texas, our Department of Public Safety cleared the area, arrested the protesters and put them in jail,” Abbott said. “Unlike some of these radical leftist universities like Columbia, UCLA and far too many others, in Texas we don't tolerate paid protesters who tried to hijack our college campuses.”
Almost to the day, the NRA convention takes place two years after the Uvalde school shooting, where an 18-year-old gunned down an elementary school with a legally purchased assault rifle. The shooter killed 19 fourth-graders and two teachers with an AR-15 style rifle.
During the 2023 legislative session, Uvalde families unsuccessfully pressed Texas policymakers to pass a raise-the-age law, which would have upped the minimum age for buying semi-automatic weapons from 18 to 21.
“Donald Trump and Texas Republicans made the gun violence epidemic worse, especially in our state, where we have seen nine mass shootings just in the last 15 years,” said a statement by Gilberto Hinojosa, the Texas Democratic Party Chair, on Friday. “Even after Uvalde parents pleaded with Greg Abbott and Ted Cruz for commonsense gun safety laws, they decided, like Trump “ that the NRA and gun lobby was more important.”
Instead the legislature approved a school safety bill that established preventative measures toward school shootings. The law included a mandate that every school must hire an armed security officer and the creation of a department within the Texas Education Agency that can compel districts to adhere to active-shooter protocols.
During his speech, Trump endorsed four Republican candidates who are fighting in late May runoffs to be their party's nominee: Alan Schoolcraft, David Covey, Helen Kerwin and Brett Hagenbuch. Each of them has already received endorsements by Abbott, Attorney General Ken Paxton or both. Schoolcraft, Covey and Kerwin are running against Republican incumbents in the Texas House who impeded Abbott's signature school voucher bill or voted for Paxton's impeachment based on accusations of corruption.
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Texas Tribune
Photos: Texas storms cause widespread damage in Houston area
by By Marie D. De Jesús and Antranik Tavitian, Houston Landing, The Texas Tribune – 2024-05-17 14:45:42
SUMMARY: Severe storms hit the Houston area on Thursday evening, resulting in widespread damage, four fatalities, and power outages affecting nearly 900,000 homes and businesses. The Houston Office of Emergency Management is beginning recovery efforts, while officials discourage unnecessary travel. Reports from Houston Landing detail the extent of the destruction, which includes knocked-down power lines and damaged buildings, such as the Wells Fargo Plaza and the CenterPoint Energy Plaza. Photos provided by Antranik Tavitian and Marie D. De Jesús illustrate the damage seen across the region.
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Severe storms tore through the Houston area Thursday evening, causing widespread damage, killing at least four people and leaving hundreds of thousands of homes and businesses without power.
Gale force winds up to 100 mph knocked over power lines, blew out windows and toppled trees throughout the region. Houston Office of Emergency Management spokesperson Brent Taylor said officials will begin the recovery process once debris and damage are cleared. In the meantime, Houston Mayor John Whitmire and Harris County Judge Lina Hidalgo urged residents to avoid all unnecessary travel.
The storm ravaged Harris County — from transmission towers crushed in suburban Cypress to stricken oak trees blockading traffic to high-rise windows shattered throughout downtown Houston.
Here's a look at some of the damage wrought, reported by Houston Landing:
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