Corpus Christi City Council Meeting – June 24, 2025

Mayor Paulette Guajardo called the Corpus Christi City Council meeting to order at 11:30 a.m. on Tuesday, June 24, 2025, in Council Chambers at 1201 Leopard Street. The meeting opened with an invocation by Reverend Dr. Chip Blackshear of First Presbyterian Church of Corpus Christi and the Pledge of Allegiance led by Joshua William Martinez, a 6th grader from Tuloso Midway Elementary School. City Secretary Rebecca L. Huerta called the roll of Charter Officers. The agenda included an update on alternative water supply projects, a public comment period with 15 speakers, the consent calendar, an MOU update with South Texas Water Authority, a resolution regarding Corpus Christi Housing Authority property acquisitions, a discussion of Oak View Group 360's (OVG 360) performance and the Convention Center Complex naming rights, a resolution on Inner Harbor Seawater Desalination Project procurement authority, and executive session items. No meeting minutes were available in the source material.

City Manager's Update on Alternative Water Supply Projects (Item 1)

• City water official Drew Molly presented the update on alternative water supply projects.
• Beneficial rainfall between June 10 and June 15 raised the combined reservoir level of Choke Canyon and Lake Corpus Christi from 14.7 percent to 15.9 percent; Lake Corpus Christi was the biggest beneficiary, while Choke Canyon registered little change.
• Lake Texana rose from 81.4 percent to essentially full at 99.4 percent. On Monday, the general manager of the Lavaca Navidad River Authority, Pat Briskowski, made 4,500 acre-feet of interruptible water available to the city.
• The water supply dashboard model, updated every two weeks, now shows the previously predicted water shortfall pushed back from October 2026 to December 2026.
• Drew Molly reported that South Texas Water Authority (STWA) entered into a water supply agreement with Seven C's in August 2024 to design, permit, construct, finance, and operate a 4 million gallon per day (MGD) brackish water desalination treatment facility. STWA has expressed interest in expanding the facility to 30 MGD, of which 28 MGD could potentially be made available to the City of Corpus Christi on a take-or-pay contract basis. The water supply agreement was released to the city on Friday night as a confidential document, and on June 23 the city agreed on a memorandum of understanding (MOU) with STWA allowing 45 days of deeper evaluation.
• On effluent reuse, council previously approved an award to the company Garver for professional services; the contract was executed on June 20. The first step will evaluate reuse options, followed by a 12-month source water characterization study of the effluent, working in concert with TCEQ.
• On the Nueces River groundwater well project: two contractors are working around the clock drilling wells. Phase one is expected to provide 13 to 15 million gallons a day of water into the Nueces River using up to eight wells. Phase two would treat that water at a future brackish reverse osmosis plant. The state has provided roughly $30 million in grant funding to support the project. A TCEQ temporary bed and banks application permit was declared administratively complete; the city still needs the official three-year temporary permit to protect the water as its own.
• In response to council questions, Drew Molly confirmed three wells are currently operational, with TDS (total dissolved solids) test results of approximately 5,000 milligrams per liter for the first well and approximately 3,000 milligrams per liter for the other two. Normal river TDS ranges from about 500 to 1,000 milligrams per liter; the Evangeline aquifer ranges between 750 and 900. The well water has arsenic below the EPA/TCEQ maximum contaminant level of 10 parts per billion. Councilman Hernandez expressed concern about liability to downstream users with senior water rights (including San Patricio Municipal Water District, Flint Hills, Celanese, and Water District No. 3 in Robstown), and staff stated real-time monitoring devices and conversations with all downstream users are in place.
• The Mary Rhodes Pipeline has been operating at a reduced 55 million gallons a day; the repaired pump was delivered over the weekend, and the system is expected to return to its 70 million gallons a day flow within 24 to 48 hours.

Consent Calendar (Items 2–16)

• The consent agenda was approved by one vote with the exception of items 2, 6, and 13, which were pulled for individual consideration.
• Item 2 (Roadway Master Plan/Urban Transportation Plan amendments for County Road 22 near the Mirabella and Kingslake West developments): Interim Assistant City Manager Ernie Delagarza presented. Staff modified its recommendation after receiving a June 22 email from a London ISD trustee stating that ongoing discussions for multiple school sites in the area could be negatively impacted by the proposed reductions. The new staff recommendation changed only street #1 from a C3 to a C1 collector; streets #2, #3, and #4 remain as shown on the master plan. Councilman Hernandez noted discrepancies between the Infrastructure Design Manual and the UDC regarding right-of-way and pavement width descriptions and said he would work to migrate those definitions into the UDC. The item was approved as amended.
• Item 6 (Municipal Court judge appointments): The recommendation was amended to remove Arnold McAdams from the part-time judge #6 position because he was no longer interested. The ordinance was approved as amended.
• Item 13 (TCEQ Agreed Order for Oso Wastewater Treatment Plant): Wesley Nippen, Director of Water Systems Infrastructure, explained that the agreed order allows the city to make improvements at the Oso Wastewater Treatment Plant in lieu of a $236,955 administrative penalty. The maintenance items stemmed from delays during the 2016–2018 consolidation study and recovery from Winter Storm Uri; the city is now performing maintenance items at all wastewater plants. The resolution was approved.

Public Comments & Testimony

• Steven Klepper (Corpus Christi resident): Criticized the city's budget transparency, stating the city lacks fundamentals of transparent budgeting, no data on efficiency and effectiveness, and no explicit definitions of services and service levels. He reminded the council that the city auditor's office, established in November 2010, can objectively answer those questions.
• David Lafeld (District 5): Called the recycling program a failure, citing a 13.8 percent diversion rate and estimating the curbside recycling rate at no more than five to seven percent. He said the city spends $2.5 million a year on a program with the most expensive processing contract in the state.
• Susie Saldania: Criticized the naming rights decision at the American Bank Center, saying the city is 'throwing away money,' and called Councilman Mark Scott's comparison of the two bidding law firms to the Proud Boys shameful.
• John Hanzelik (District 5, owner of TFW Construction employing about 60 people): Expressed support for the Inner Harbor seawater desalination plant as a viable long-term solution, and said passing agenda item 19 would send a message that the council is not in favor of the city's proposed desalination plant, potentially jeopardizing funding.
• Absede Fuentes (District 1, speaking on behalf of Mary Carroll High School early graduation class of 2026): Cited over 1,100 homeless people, a top-ten neediest ranking, teen pregnancy 46 percent above the national average, and nearly 15 percent of local adults lacking a high school diploma. She asked the council to fund an education and family resilience initiative, launch a parenting and life skills program, build career and vocational pipelines, expand youth housing and mental health services, and create youth civic fellowships. Councilman Hernandez asked staff to share information about existing city programs with her.
• Jason Hale: Raised concerns about hypoxia risks from the proposed desalination plant, requesting that GHD modeling tell how long salinity plumes last before they erode. He flagged that the modeling domain appeared to be missing the intake for the Nueces Bay Power Station, which diverts around 300 million gallons a day, potentially overestimating outflow to Corpus Christi Bay by about 20 percent. He asked for answers at the July presentation.
• Isabella Araiza (District 2, co-founder of For the Greater Good): Opposed the desalination project, stating the pilot project modeling is solely for diffuser design, extends only to the mouth of the ship channel, and runs for just one month. She cited cost estimate discrepancies of $5 million, up to $18 million, and $11–12 million. She supported item 19, referenced the city manager's office spending $44,000 on restaurant food in 11 months, and said extrapolating from pilot costs suggests a build cost of $1.7 to $2.7 billion.
• Chloe Torres (District 2, Texas Campaign for the Environment): Supported item 19, and quoted expert testimonies from Dr. Scott Socolofsky (Ph.D., MIT) and Dr. Ben Hodges (Ph.D., Stanford) stating that additional far-field modeling is needed to adequately determine discharge impacts.
• Jay Hernandez (District 2): Supported item 19, arguing that elected officials should hold decision-making power over how millions of tax dollars are spent on design and material contracts for the desalination plant.
• Adam Rios (District 5): Shared personal negative experiences with the current arena management company, including a job application that received no follow-up and a Nitro Circus event he said lacked marketing and promotion. He noted the company's Austin venue is under a Department of Justice antitrust probe.
• Rachel Caballero (District 1): Called for terminating OVG's contract, citing the American Bank Center running at a loss, no financial update in two years, a naming rights 'disaster' resulting in a $7 million loss, and questioned the housing authority apartment purchases, which she said could result in tax roll losses in excess of $350 million. She supported item 19.
• Joshua Frederick: Supported adding a question period to public comment with questions allowed but not answered, opposed moving public comment to 5:30 p.m., and asked the council to consider an ordinance requiring labeling of produce grown using treated fracking water.
• Travis (virtual, District 2): Supported item 19, stating the council should hold primary decision-making power over the Hillcrest desalination facility rather than the unelected city manager.
• Laramie Fain (virtual, District 2): Supported item 19 and argued for extending council oversight to all future projects, criticizing the city manager's behavior and spending.
• Andrea Puyol (virtual, District 2): Stated her opposition to the Inner Harbor desalination plant, saying it is '100% to bring in more industry,' and supported item 19 to take decision-making power away from the city manager.

Discussion: South Texas Water Authority MOU (Item 20)

• The council heard item 20 early to accommodate a visiting STWA commissioner. Staff confirmed the MOU between the City of Corpus Christi and South Texas Water Authority had been executed on June 23 with all signatures complete by approximately 4:30 p.m.
• STWA Commissioner Morris stated the MOU creates a framework to determine if a brackish desalination project is viable for both operations; the project is currently projected at 3 MGD but STWA is exploring a larger amount up to 28 MGD. He noted Seven C's helped speed release of information and thanked the city for its work.
• Kleberg County Judge Mendray explained his involvement, saying he helped spearhead the project with STWA, represents his constituents and taxpayers, and cited benefits including Baffin Bay replenishment. He said Senator Hinojosa has given his 'absolute 100 percent support' and called the agreement a benchmark for regionalization in Texas.
• Councilman Hernandez questioned why the city was requesting details such as TCEQ permits, energy contracts with AEP/NEC, and hydrological surveys. City Attorney Miles Risley responded that the city's own information is generally public and obtainable via public information requests, but when dealing with private entities not subject to the Texas Public Information Act that lack a long track record, the city must delve into that information and handle risks through contractual provisions.
• Councilwoman Vaughn noted the council's prior 9–0 vote in support of moving forward and mentioned a ribbon cutting scheduled for July 8. Staff stated the STWA project is expected to be built by mid-2027.

Discussion: Corpus Christi Housing Authority Property Acquisitions (Item 17)

• The resolution before the council found that the authorization and purchase of properties by the Corpus Christi Housing Authority (CCHA) related to 21 apartment complexes (Armon Bay, Azure, Churchill Square, Ocean Palms Apartments, Sandcastle, Sawgrass, South Lake Ranch, Stoneleigh Apartment, The Icon, The Summit, The Veranda, Tuscany Bay South, Villas of Ocean Drive, Arts at Ocean Drive, Caspian Apartments, Gulf Breeze, Shadow Bend, Bay Vista, Bay Vista Point, Baypoint, and Solana Vista) were void by operation of law, and that the related memorandums of understanding, ground leases, and operating agreements were illegal. It requested CCHA to acknowledge the findings and immediately terminate the void/illegal land acquisitions, related contracts, and actions.
• CCHA CEO Gary Alsa defended the actions, stating the housing authority is an independent unit of government, state statutes clearly indicate the actions were legal, no properties were purchased (they were acquired through MOUs in recognition of providing 50 percent of units for affordable housing), and there was no purchase, no bonds, and no borrowing of money governed by Chapter 392. He cited a similar Plano housing authority case and expressed concern about rumors that the city's objection was based on where residents would live.
• Councilwoman Vaughn said she disliked the transactions and thought they 'sound like a scam,' but stated the council is not a court of law and cannot declare actions illegal. Councilman Hernandez objected to the word 'illegal' as inappropriate, and Councilman Roy moved to amend the language to 'appears illegal' or 'apparently illegal' with further action possibly required; the amendment was adopted by voice vote. The resolution was then approved as amended.
• Public comments on item 17 included Susie Saldania urging removal of two remaining housing authority commissioners, and Rachel Caballero, as President of the Corpus Christi Taxpayers Association, saying developers are trying to escape tax burdens while the city faces a $7 million budget deficit.

Discussion: Oak View Group 360 Performance and Naming Rights (Item 18)

• Council members Cantu, Vaughn, and Hernandez requested discussion of OVG 360's performance and financial reporting as operator of the Convention Center Complex, including possible termination, returning naming rights authority to the council, and directing staff to initiate a new bidding process for arena management services.
• OVG representatives (Daniel Melissa, General Manager; Liam Weslow, Senior Vice President of Partnerships; Greg Odell, President of Venue Management; and Claudio Olivery, District General Manager) announced they are moving into contract negotiation with Hilliard Law for naming rights, with an offer of approximately $13.3 million over a 10-year term, compared to Thomas J. Henry's publicly offered $20 million over 10 years.
• OVG explained its rationale: the Thomas J. Henry package contained roughly 50 elements while the Hilliard package contained about 30, leaving approximately $400,000 per year of additional sellable inventory; conversely, OVG projected between $375,000 and $895,000 per year in negative impact from unnamed sponsors, tenants, or partners who said they would reconsider support if Henry were selected. OVG stated these partners asked to remain unnamed.
• Council members expressed significant concerns about transparency and the roughly $7.7 million difference between offers (approximately $5.5 million to the city after the 80/20 split). Councilman Hernandez calculated the city loses approximately $536,000 per year under the lower offer. Several members stated they believed the decision was political rather than financial.
• OVG reported operational gains: sponsorship and suite revenue grew from $330,000 annually prior to OVG to $1.3 million; sponsors grew from 1 to 22 and suite holders from 2 to 9; total visits grew from an average of about 504,000 to a projected 739,000; and the facility has hosted 9 globally televised or streamed events in the last two and a half years.
• City staff member Heather explained that audits have been delayed because the prior vendor SMG fell behind on its audits; OVG has complied with monthly financial reporting and operates a city bank account with full transparency of ins and outs. An audit firm has been hired and audits are expected to be caught up within several months.
• City Attorney Miles Risley outlined the contract term: the agreement runs through September 30, 2027, with non-renewal notice required on or before March 1, 2027. Termination outside that window is limited and tied to material breaches, bankruptcy, failure to fund, or failure to meet performance measures in two consecutive operating years. Breaking the contract would expose the city to damages.
• No formal action was taken on termination. Councilwoman Paxon requested quarterly financial and performance reports moving forward; Heather committed to providing reports by the end of the week and quarterly thereafter. Councilman Scott apologized for his earlier comparison of the two law firms to Antifa and the Proud Boys.
• Public comments on item 18 included Michael Miller offering $5,000 immediately to buy a suite and saying there will be plenty of sponsors to replace any that back out; Bon Zim raising concerns for the approximately 200 American Bank Center employees; and Eloisa Lozada urging a fair process and a return of naming rights decisions to the council.

Discussion: Inner Harbor Seawater Desalination Procurement Authority (Item 19)

• The original agenda item was a resolution to rescind Council Resolution 033396, which authorized the City Manager or designee to execute contracts and amendments for design services or construction materials for the Inner Harbor Seawater Desalination Treatment Plant Project and acquisition of property.
• Councilwoman Vaughn stated the intent was not to stop desalination but to restore checks and balances and council oversight, and she objected to what she characterized as bullying from the Chamber and others. Councilman Cantu said he received 50 to 60 text messages, including threats, but insisted the goal is transparency, not stalling.
• Brett Van Hazel, the officer in charge (OIC) for the project, explained that the city executed a contract with Kiwit in December 2024 for phase one (planning and design through GMP). Under the contract, the city manager no longer holds execution authority for amendments; that authority falls to the OIC. Staff stated they had not yet studied the unintended consequences of rescinding the resolution, and warned of time and cost impacts. The design phase authorization was $138 million total, including approximately $68 million for design and $69 million for early work packages, long-lead items, and property/easement acquisition.
• Drew Molly stated the project remains on schedule for water delivery by June 2028, with a cost model to be presented on July 15. Construction spending could reach $30 to $40 million per month. City Attorney Miles Risley cautioned that rescinding the resolution could remove the legal basis for the already-executed Kiwit contract, potentially rendering it void.
• Councilman Hernandez withdrew his original motion and substitute resolution, and moved a modified version that (1) instructs the city manager to follow normal procurement procedures for all future purchases, contracts, and amendments for the project; (2) requires the city manager to provide accurate accounting to council for all funding spent and encumbered for the project and acquired property; and (3) states the resolution is effective July 1, 2025. This substitute resolution passed by a 5–4 vote.
• Public comments on item 19 included one speaker urging the council not to delay or stop desalination, and Bob Pollison, executive director of the Coastal Bend Industry Association, urging the council to listen to the recommendations of professional staff and to avoid adding risk in time and cost.

Briefings (Items 21–22)

• The briefing on the City Proposed Tax Increment Reinvestment Zone #7 London Area (Item 21) and the briefing on the Inner Harbor Water Treatment Campus Update (Item 22) were postponed to the next council meeting.

Executive Session and Real Estate Purchases (Items 23–25)

• The council entered executive session pursuant to Texas Government Code § 551.071 and § 551.072 to consult with attorneys on the potential long-term agreement with 1PointFive USA, LLC (1P5) to purchase reclaimed water and potential property rights near the Greenwood Plant; the potential acquisition of properties at/adjacent to Leopard Street and Corn Products Road and near Airline Drive and St. Pius Drive; and a potential agreement with Ticona (aka Celanese) to purchase water.
• Upon reconvening, the council authorized: (1) execution of a real estate sales contract with Ted Donald Cohen, Lewis J. Cohen, William A. Cohen, and Ann Cohen Clem to purchase approximately 9.26 acres on Leopard Street between Benny's Road and Corn Products Road (HL Kenny Tract) for $655,000; and (2) purchase of 713 Airline Road (Lee Kwan) for $375,000. The motion carried.

Key Outcomes

• The consent calendar was approved with items 2, 6, and 13 pulled; all three were approved as amended or as presented.
• The MOU between the City of Corpus Christi and South Texas Water Authority was confirmed as executed on June 23; a 45-day evaluation period is underway, with the project target of mid-2027.
• Item 17 (Housing Authority properties) was approved as amended, replacing 'illegal' with 'appears illegal/apparently illegal' language.
• Item 18 (OVG 360) was discussion only; no termination action was taken. OVG is proceeding with Hilliard Law naming rights contract negotiations, and the city will receive quarterly financial and performance reports.
• Item 19 (Desalination procurement authority) was approved as a substitute resolution by a 5–4 vote on June 24, 2025, modifying rather than rescinding Resolution 03396: the city manager must follow normal procurement procedures for future purchases, contracts, and amendments, provide accurate accounting to council of all funds spent and encumbered, with an effective date of July 1, 2025.
• The council authorized two real estate purchases totaling $1,030,000 ($655,000 for the Leopard Street 9.26-acre tract and $375,000 for 713 Airline Road).
• Briefing items 21 and 22 were postponed to the next council meeting, and the meeting was adjourned.