HOUSTON, Texas — Houston Mayor John Whitmire announced Wednesday that the city has reached a settlement in a long-running lawsuit over street and drainage funding, reducing the projected budget deficit from more than $330 million to approximately $220 million.
The agreement, finalized on February 5, 2025, resolves a legal dispute filed in 2019 by two engineers who alleged the city failed to allocate funds to a voter-approved street and drainage program properly. An appellate court later ruled in favor of the plaintiffs, requiring the city to address the funding shortfall.
Under the settlement, Houston will meet its funding obligation through a phased payment plan.
The city will contribute $16 million in the current fiscal year, $48 million next year, and fulfill the full obligation by 2028. This approach avoids an immediate lump sum payment and allows city officials greater financial flexibility.
“The settlement is a responsible solution that allows us to move forward,” Mayor Whitmire said. “We’re protecting essential city services while upholding our commitment to infrastructure improvements.”
The lawsuit centered on Houston’s alleged underfunding of the Dedicated Drainage and Street Renewal Fund, which voters established to support critical infrastructure. The plaintiffs argued that the city’s budget practices had fallen short of the fund’s intended purpose.
The agreement enables Houston to redirect previously allocated lump-sum funds into a manageable payment schedule, easing pressure on the city’s already strained finances.
City officials said the revised budget strategy will help balance legal obligations with ongoing infrastructure investment.
