The Tarrant Regional Water District board of directors has decided to put off shoring up finances for the Trinity River Vision Authority until restructuring within the agency is complete.
The board’s decision at its Sept. 17 meeting to not issue any new bonds or other form of debt gives the Fort Worth City Council time to decide whether to extend a tax increment financing (TIF) district from 40 to 50 years to help the water district repay $250 in bonds authorized by voters in May 2018.
The TIF is a vehicle for recapturing tax revenue on development within the district instead of repaying it through property taxes.
Instead, board members agreed to spend only the remaining $7 million from a $200 million loan made by the TRWD to the $1.17 billion Panther Island project managed by the TRVA.
The TRVA is a subsidiary of the TRWD.
Sandy Newby, chief financial officer for both agencies, said the $7 million could be stretched to cover about two months of expenses before the TRVA needs an infusion of money to remain afloat.
The TRWD tabled discussion of extending the TIF by 10 years as well as any possible action the water district could take to prod the City Council to extend the TIF.
The City Council, along with Tarrant County and other government entities, are partners with the water district and the TRVA in development of the Panther Island flood control project, which has enormous economic development implications for the area north of the Tarrant County Courthouse.
The council, which created the Panther Island TIF and others within Fort Worth, is the only agency that can extend the TIF. The water district has officially asked the City Council to extend the TIF for Panther Island.
Water district officials say extension of the TIF is critical for repaying the $250 million in bonds the district expects to issue this year as funds for the Panther Island project run dry.
Mayor Betsy Price and Fort Worth City Manager David Cooke, who is a city representative on the TRVA board, have balked at extending the TIF because funding for Panther Island is beginning to look like a house of cards.
Cooke recently called it a “Catch 22” situation.
“It is our responsibility to be strong stewards of taxpayer dollars,” Cooke said in a statement after the water board meeting. “To that end, we feel it would be irresponsible to extend that TIF without implementing the Riveron recommendations and having a clear path forward to secure federal funds.”
The sticking point has been federal funding, which was expected to pay for about half the cost of the Panther Island project.
TRVA hired the Dallas consulting firm Riveron to recommends changes and improvements that might better position the project for federal funds. The TRVA board has begun efforts to implement those recommendations, which include creating a risk management program, and other administrative restructuring.
The TRVA board assigned tasks to the TRWD and the city to develop proposals for carrying out the Riveron recommendations. Those proposals are expected to be considered by the TRVA board next month.
In 2016, the U.S. Army Corps of Engineers authorized an appropriation of up to $526 million for the project, although only about $60 million was released under the Bush and Obama administrations.
Local taxpayers have already put about $324 million into the Panther Island project, which includes digging a bypass channel and rerouting the Trinity River north of the courthouse.
The river channel would provide enhanced flood control protection in place of aging levees while creating a center island and a series of canals. Officials say the changes would propel waterfront development.
But the failure of the project to attract federal funds from the Trump administration has become a source of concern, especially for city leaders.
Price and Republican U.S. Rep. Roger Williams, whose District 25 stretches from the southern Fort Worth area to Austin, attempted this past summer to improve the project’s funding chances by meeting with Mick Mulvaney, the White House budget director and Trump’s acting chief of staff.
The two walked away buoyed by the possibility that the project could receive up to $250 million just for flood control measures.
Both the TRVA and TRWD boards have approved a $36.6 million budget for TRVA for 2020, a budget that includes between $30 million and $40 million in federal funds for the project. That is the same amount of federal revenue that has been budgeted every year for Panther Island.
But this year, with the TRWD loan money almost fully spent, Cooke said he is wary of spending more local money on the project without any guarantee that federal funds will be forthcoming.
Money in the 2020 budget would be spent to relocate utilities and build infrastructure necessary for new development.
“We need to have economic development opportunities on the island to pay back the debt,” TRVA Board President G.K. Maenius said recently. “To do that, we have to move the utilities. No one is going develop there if the utilities aren’t in place to support it.”
In other action at the Sept. 17 meeting, the TRWD board approved the agency’s 2020 revenue fund and general fund budgets.
The revenue fund budget is $154.8 million. The fund pays for reservoirs, pipelines, wetlands, future water supply and operations and maintenance of pipelines and structures. Revenue for the fund comes from water supply sales to customers, including the cities of Fort Worth, Arlington and Mansfield.
The general fund, which supports flood protection and levee maintenance, is $22.5 million. Funding comes from tax revenues.
The board adopted a new tax rate of $0.0287 cents per $100 of property valuation, an increase from $0.0194 per $100 property tax valuation.
Newby said the TRWD’s tax rate is still the lowest in Tarrant County. The increase of less than 1 cent would result in a tax increase of $17.98 for a taxpayer with Fort Worth’s average home value of $193,328.
Tax revenue will not be used to pay TRWD’s portion of the Panther Island project (funded by the TIF) or to build and maintain the district’s recreational assets, officials said in a statement.
“Over the last five decades, TRWD has used a total of $322 million in oil and gas royalties to supplement its tax revenues,” according to the statement. “However, the unpredictable oil and gas markets can no longer be relied upon to offset the district’s tax funding.
“TRWD’s tax dollars will continue to exclusively fund the maintenance and operation of its flood control efforts,” the statement said.