The Tarrant Regional Water District board on Tuesday, Dec. 17, agreed to allow commercial paper to be issued to keep the $1.17 billion Panther Island project from drowning.
The board decision comes as the balance of a $200 million interest-free loan from the TRWD for the project has dwindled to less than $74,000.
“We will be able to get through December and that’s about it,” said Sandy Newby, chief financial officer for the TRWD and its subsidiary, the Trinity River Vision Authority, the public agency the manages the Panther Island project.
Officials said they have not determined yet how much commercial paper would need to be issued each month to pay bills and continue contracts. Commercial paper is a short-term promissory note.
Eventually, the commercial paper could be rolled together into bonds, which would be repaid by a city of Fort Worth Tax Increment Financing (TIF) district, the funding source of the Panther Island project, officials said.
TRWD officials tried to prevent this pay-as-you-go funding approach by issuing $250 million in bonds approved by district voters in 2018 and extending the debt repayment of the TIF from 40 to 50 years.
Since the debt extension must be approved by the City Council, which established the TIF, TRWD officials and some TRVA board members lobbied the council to take a vote on the extension.
But Fort Worth City Manager David Cooke, who sits on the TRVA board as a representative of the city, pushed back against the TIF extension. Cooke repeatedly said it would not be fiscally responsible to extend the TIF without a guarantee that federal funding for ambitious project is forthcoming.
The U.S Army Corps of Engineers has authorized up to $526 million to be spent on the capital improvement project. Each year, TRVA request between $30 to $40 million from the federal government for the project, which calls for the Corps to dig a 1.5-mile bypass channel on the Trinity River north of the Tarrant County Courthouse.
Channelization of the river would provide flood control protection and create an 800-acre island with waterfront economic development opportunities.
Only about $65 million has been appropriated for Panther Island under the previous two presidential administrations. No federal money has been appropriated to the project by the Trump administration.
At the TRVA board meeting two weeks ago, board members discussed tapping into the approximately $5 million TRWD recently received from the TIF to pay short-term bills.
Newby said that money was intended to be put aside to repay bond debut from the $250 million bond issue.
Local partners, which include the city and Tarrant County along with TRWD and TRVA, have already invested $326 million in the flood control project that would open new opportunities for amenities such as a San Antonio-style River Walk and redevelopment of a blighted industrial area north of the courthouse.
But the project has been teetering the past few years as local taxpayers have picked up the bill for about $326 million while federal funds have languished.
“The city maintains it would be irresponsible to extend the TIF without a clear path forward to securing federal funds,” Cooke said in a statement to the Fort Worth Business Press.
Cooke has suggested that TRWD officials use some of the capacity of the TIF that could be repaid within the 40-year life of the TIF.
TRWD General Manager Jim Oliver also floated the idea of TRWD issuing $126 million in bonds to be repaid through the 40-year life of the TIF if the city pays the takes over responsibility for the other $124 million (about half of the $250 million) for relocating and upcoming utilities.
Cooke said he planned to discuss Oliver’s plan with the City Council.
“The city will continue progress related to relocation of utilities to ensure utilities do not keep the project from being shovel-ready if and when the project secures federal funds,” Cooke told the Business Press.
Efforts to revamp and improve the project to make it more attractive to federal funders have been underway for more than a year.
Mayor Betsy Price was the first to raise concern about the federal government’s willingness to pay the $526 million, about half of the total cost of the project.
After a meeting she had with Trump administration officials in 2018, she called for a comprehensive review to re-evaluate the project and determine steps that could be taken to boost its chances for federal funding.
After the Dallas-based consulting firm of Riveron was hired and conducted the review, TRVA, city and TRWD officials agreed to follow the recommendations, resulting in a restructuring and reorganization of the TRVA.
Among the changes, TRVA executive director J.D. Granger was reassigned to a role within the TRWD. Scrutiny also focused on the to the optics of the project being managed by the Granger, the son of Republican Congresswoman Kay Granger, who has been the champion of the project and leader of efforts to secure federal dollars.
Also, the focus of the project has narrowed to flood control with economic development activity split off and returned to the city of Fort Worth to oversee.
Price and Republican Congressman Roger Williams of District 25 together met with Trump Acting Chief of Staff Mick Mulvane in the hopes of obtaining positive information about the federal funds.
The project could be eligible for up to $250 million in federal money to pay for flood control improvements only, Price announced after that meeting.
The project partners are still awaiting word on whether some funds would be appropriated for Panther Island in the $1.4 trillion federal spending bill approved by the U.S. House on Tuesday.