The Tarrant Regional Water District will provide the final installments of its $200 million loan to the Panther Island flood control project within the next year, leading to a possible bond sale to buy land and pay for crucial utility relocation.
The District expects to provide the final $13.3 million of its loan commitment for construction of the $1.16 billion Panther Island project, which also will create a waterfront community on an 800-acre island north of downtown Fort Worth.
The District will complete funding the loan by mid-2019, meaning that the District’s board members will next to consider selling bonds to sustain the $32.9 million budget adopted in September for the 2019 fiscal year.
“At some point they will have to decide if they want to switch over from the loan to a bond sale,” to continue funding, said Sandy Newby, the District’s Financial Director following a presentation to the District’s board at its December meeting.
“Our board wants to make sure the public knows how the money is being spent and when we get to the point where bonds will have to be sold. They want to authorize the first use of bond proceeds,” Newby said.
Panther Island is primarily a flood control project with the U.S. Army Corps of Engineers building a 1.5-mile long bypass channel north of the central business district. It also involves Gateway Park on the city’s east side for temporary flood water storage.
The District, the City of Fort Worth, and Tarrant County are providing money for land purchases, business relocation, environmental cleanup and utility relocations which supports both the flood project and bridge construction. The Texas Department of Transportation and Fort Worth are building the three bridges.
The Trinity River Vision Authority, a political subdivision of the District, is the agency coordinating with the local partners, who are required to do the flood control prep work before the Corps actually begins building the channel.
The District committed to making a $200 million loan to Panther Island, along with a $64.4 million cash contribution. The revenue stream for the interest-free loan came from the District’s natural gas lease money. The City of Fort Worth pledged $26.6 million and Tarrant County another $11 million, with the remaining local funds coming from the TIF.
In May, voters overwhelmingly approved a $250 million bond issue to complete funding for Panther Island. Costs had escalated for many reasons, including post-Hurricane Katrina levee requirements. The estimated costs of relocating utilities jumped from $14 million to over $100 million.
If issued, the bonds would be paid off from revenues generated by a tax increment financing district, or TIF. As property becomes more valuable within the TIF boundaries, the increased tax revenue would be used to repay the bonds.
The City of Fort Worth created the TIF and it is scheduled to end in 2044. The bond sale was designed with the idea that the TIF would be extended another 10 years. The Fort Worth City Council is expected to vote on the TIF extension in 2019.
At the Dec. 18 District board meeting, Newby outlined the flood control project’s spending for October, the first month of the 2019 fiscal year.
Newby told the board that the District had spent about $68,000. She said activity in the Panther Island accounts was slow because entities are closing their books on the previous fiscal year.
The Panther Island flood control project’s $32.9 million budget showed $13.8 million for land purchases; $5.9 million for business relocation, demolition and environmental cleanup; and $7.4 million to rebuild or relocate utilities.
The budget did not include spending for the programmatic review which the TRVA board approved earlier this month. The review is expected to completed by June as an unbudgeted item.
Documents provided to the board showed that the Corps has $9.8 million to spend over the next fiscal year for project design, despite the fact that the agency did not include Panther Island in its 2019 spending plan. Overall, Congress has authorized the Corps to spend $526 million on Panther Island.
“…The Corps still has money to work on their design for the bypass and valley storage, which is mostly what they are going to be working on,” Newby said.