The Tarrant Regional Water District plans to issue its first commercial paper bonds this week to keep the $1.17 billion Panther Island project moving forward despite financial woes.
The TRWD will issue $1 million in short-term debt, enough to cover about three months expenses related to the project, Sandy Newby, chief financial officer of the TRWD and its subsidiary, the Trinity River Vision Project, reported at a meeting of the TRVA board on Wednesday.
“We’ll figure out what we have to do next after that,” she said.
Meanwhile, Mark Mazzanti, program director for the TRVA, the agency managing the Panther Island project, said he expects that the TRVA will learn in early February whether it will receive any federal funds through the U.S. Army Corps of Engineers budget this year.
Since the U.S. House and Senate agreed to budget deal in December, which President Donald Trump promptly signed, the release of allocated funds could begin as early as Feb. 3, Mazzanti said.
The TRVA has requested about $38 million in federal funds for the Panther Island project but only $10 million is considered a critical need this year, Mazzanti said.
Federal funds are crucial for completing the ambitious project, which is rooted in the Army Corps digging a 1.5-mile bypass channel on the Trinity River north of the Tarrant County Courthouse. The channel would replace aging levees and provide improved flood control protection.
The channel would also carve out an 800-acre island with waterfront economic development opportunities.
The U.S Army Corps of Engineers has authorized up to $526 million to be spent on the capital improvement project. Every year, the TRVA has requested between $30 and $40 million from the federal government for the project but has been rebuffed by the Trump administration.
About $65 million has been appropriated for Panther Island under the previous two presidential administrations.
Mazzanti, a retired Army Corps executive who was recently hired as a contractor to assist with this project, said $170 million will be available in the Corps’ budget for flood control projects nationwide in 2020.
He said he “has no way of knowing” whether the Fort Worth project will receive some of that money.
But TRWD and TRVA officials continue to press forward to keep the project afloat.
Issuing short-term commercial paper bonds is a necessary move because $326 million in local funds have already been expended, including a $200 million interest-free loan from the TRWD.
TRWD officials had planned to continue the local funding stream by issuing $250 million that voters approved for the project in 2018. But the caveat for the bond issue was extending the repayment period for the Tax Increment Financing (TIF) District, which is the local funding mechanism for Panther Island.
But Fort Worth City Manager David Cooke, who is also a member of the TRVA board, resisted increasing the term of the TIF from 40 to 50 years without a guarantee that federal funds are forthcoming.
Only the Fort Worth City Council, which is empowered to establish TIFs for new development, has the capability to extend them.
The city of Fort Worth and Tarrant County are also partners in the Panther project along with TRWD, TRVA and others.
The impasse over the TIF extension between the city and the TRWD has threatened to stall the project.
Since local funds have run out, issuing commercial paper bonds as will provide enough short-term revenue to pay TRVA bills and continue progress on land acquisition for the bypass channel, Newby said.
Cooke has repeatedly said the city won’t impede progress on the project and will award contracts to upgrade and relocate utilities in the Panther Island development zone.
The utilities need to be moved so they are out of the way for the Army Corps to dig the channel. The utility upgrades are also necessary for private development to occur because the tax revenue from new development will repay the bond debt.
Despite the project’s unwavering support from the TRWD officials and its board, the project has faced community criticism and ongoing uncertainty of federal funding, which was intended to pay half the cost of Panther Island.
Last year, the TRVA spent $466,000 for an outside consulting firm to conduct a comprehensive review of the project and suggest ways to better position it for federal funding.
The TRVA board approved all of the recommendations of the Dallas-based consulting firm of Riveron, resulting in a reorganization of the agency.
Among the changes, TRVA executive director J.D. Granger was reassigned to a reduced role within the TRWD. Scrutiny also focused on the to the optics of the project being managed by Granger, the son of Republican Congresswoman Kay Granger, the original champion of the project and leader of efforts to secure federal dollars.
The focus of the project has narrowed to flood control with economic development activity split off and returned to the city of Fort Worth for oversight.