With a dwindling revenue stream, keeping the Panther Island project afloat may require some financial intervention soon, the Tarrant Regional Water District board learned April 16.
The Trinity River Vision Authority is trying to stretch about $10.5 million through the end of the fiscal year on Sept. 30, but it could come up about $1 million short, said Sandy Newby, finance director of the water district, parent organization of the TRVA, which manages the $1.16 billion Panther Island project, also known as the Central City project.
Newby attributed the shortfall in part to a $466,222 contract the TRVA signed last week with Dallas-based Riveron for a comprehensive review of the project.
Newby said the shortfall could be averted if the agency receives anticipated funds from the tax increment finance district that was set up to help support and repay debt for Panther Island.
“Last year, we didn’t get the TIF money until September but the year before, we got it in April,” she said. Receipt of the funds would offset the budget shortfall.
The TIF money comes from the city of Fort Worth, which established and manages this and other tax increment finance (TIF) districts within it boundaries.
Alternatives for making up the shortfall include issuing commercial paper, a type of short-term bond, or tapping money approved by voters in last year’s $250 million bond election.
Water board member James Hill, who also is a member of the TRVA board, said he is opposed to tapping the $250 million bond issue until the results of the comprehensive review are known. At that time, the City Council is expected to consider extending the repayment period for the bonds to 50 years from 40 years
Only the City Council can make that decision. The water district can issue the bonds but cannot extend the length of the TIF, officials said.
Financial matters have become an increasing source of concern since the Panther Island project has failed to attract the federal funds that are factored in to account for about half of the cost of the project.
In 2016, The U.S. Army Corps of Engineers authorize the project for flood control and economic development, giving its endorsement for federal funding of $526 million. But to date, the project has only been appropriated about $60 million.
The failure to obtain a federal appropriation for the past three federal funding cycles, and acknowledgement from the Corps that the project was excluded from the Trump Administration’s budget for the Corps in 2020, likely means a fourth consecutive cycle without federal funds.
About $324 million in local tax money has already been spent on the project, including a $200 million loan from the water district that is being stretched through to keep the project solvent.
The TRVA’s budget includes federal funds of $26 million in 2020 and $35 million in federal money in 2021.
The ongoing failure to obtain a federal appropriation is what led to the decision to conduct the comprehensive review, also known as the programmatic review. Fort Worth Mayor Betsy Price asked for the review after meeting with federal budget officials in Washington, D.C., last fall, where she learned that the Panther Island project may not qualify for Corps funding because it is not strictly flood control protection.
The project involves digging a 1.5-mile bypass channel on the Trinity River north of the Tarrant County Courthouse. That channel would add flood control protection as well as carve out an 800-acre center island, which would create waterfront economic development opportunities.
The review is expected to examine whether the scope of the project needs to be changed as well as other issues, including management and oversight and whether an economic analysis is needed to obtain new federal funds.
TRVA officials have said the economic of cost-benefit analysis was waived by Congress when the project was authorized by the Corps in 2016.
Customarily, projects slated for Corps work funds have undergone that analysis.
Price and City Council members have said they want the results of the review before deciding whether to extend the TIF.
Riveron is expected to complete the review within three months.
Given the financial situation, G.K. Maenius, president of the TRVA board and administrator of Tarrant County, said the TRVA board needs to “have a conversation about how we are going to move forward” very soon.
Meanwhile, the water district is negotiating a real estate land swap that could bring the Fort Worth Cats minor league baseball team back into action at LaGrave Field. The deal is still in negotiation and could be finished and ready for consideration by the water board board in May, said the board’s Executive Director Jim Oliver.