Speaker numbers apply only to this recording.
This workshop, held on October 3, 2025, was called to order at 9:00 AM by Mayor Paulette Guajardo. The meeting focused on two main topics: (1) alternative project delivery options for the Inner Harbor Water Treatment Campus (a seawater desalination project) and (2) an update on the city's broader water supply projects aimed at avoiding a Level 1 water emergency. No formal votes were taken; the purpose was informational and to gather council direction.
Brett Van Hazel presented four options for the future of the Inner Harbor desalination project, which is currently suspended:
Brett noted that the current contract with Kiwit (the original design-build team) has been suspended since August 1 and will expire on October 30, 2025, unless the council directs otherwise. The project is fully permitted, with power and land agreements in place. Up to $50 million has been spent on the project to date.
Sergio Morelos provided an update on the Texas Water Development Board (TWDB) SWIFT loans. The city was approved for $760.3 million, of which $235.2 million has been borrowed, leaving $525.1 million available. The borrowed funds are held in a state escrow account (balance $212.6 million) and require state approval for withdrawals. The outstanding debt, including interest, totals approximately $366 million.
City Manager Peter Zanoni reported on a recent meeting with TWDB. He explained that if the council decides not to proceed with the desalination project, the city would likely need to defease the existing loans, a process that would take time and may involve additional costs. The TWDB has indicated that this would be a first-time scenario for them, requiring close collaboration with the city's bond counsel.
Council members asked about the cost per thousand gallons for each option (not yet available), the expertise of GCA in desalination (they lack specific experience but would hire experts), and the implications of defeasance on bond ratings.
Nick Winkleman presented an update on short- and long-term water supply projects to avoid a Level 1 water emergency, which requires bringing online an additional 60 million gallons per day (MGD). Key projects include:
Peter Zanoni emphasized that the immediate goal is to bring on 60 MGD to avoid emergency measures. Staff is working on multiple fronts, including integration of Evangeline water into the Mary Rhodes Pipeline.
Council members raised concerns about project risks (permitting, water quality, community impact), the need for realistic timelines, and the importance of communication with neighboring communities (e.g., Sinton, Portland). Some expressed interest in seeing a business plan for the NRA reservation fee before committing.
No formal votes were taken, but the following direction was established based on council consensus:
All right. Great, good morning, everyone. Um, thank you for joining us uh for our water workshop. I'd like to call this meeting to order. Uh Miss Fox, would you please uh call the role? Present. Council members roll and barrera. Here. Sylvia Campos. Eric Conto is absent. Kale Hernandez. Calen Paxton is running late. Uh Everett Roy. Here. Mark Scott. Here. Carolyn Vaughn is absent. City Manager Peter Zanoni. Present. And City Attorney Miles Risley. Mayor and Council of Corma. The council and require officers are present to conduct the meeting. Just for the record. Okay, great. Thank you so much. So today we will be proceeding with an overview of the inner the first part of this work uh workshop will be an overview of the inner harbor water treatment campus alternate project delivery options. After we'll have question and answer and discussion after this presentation, and then we'll move on to uh an update on water our water supply projects. Okay, Brett Van Hazel. Um and as you mentioned, Mayor, we will also have uh Sergio, who is our uh director of finance and procurement, and then we'll have Nick Winkleman come up and uh present on the water supply update. So again, I'm gonna be presenting on the alternate delivery options for the inner harbor project. Uh Sergio will touch on the update for the Texas water development SWIFT loans, and then Nick Winkleman will give an update on the water supply project updates. So just a quick recap. Um, why we're here today at our last scheduled council meeting on September 23rd, there were a number of council members who uh express interest in holding a workshop to talk about alternate delivery options for the inner harbor project. So we put this together. Uh we have a number of options to present. Um also we've had a number of questions regarding the Kiwit contract. So the Kiwit contract has not been terminated. If you remember, we had suspended the contract uh starting August 1st after the decision on July 29th council meeting uh to postpone a decision on amendment five was made. So we issued a suspension of work uh and we later extended it uh in September after our council meeting. So we've extended it for the full uh 90 days that the contract allows. So on October 30th, uh the suspension will end and the contract will expire. Um I also want to point out that um the project is fully permitted. We we have all our permits from TCQ, the core. We also have uh the power AEP uh has already um locked in an agreement with us, they're gonna be providing the power to the site. We also have a land agreement that is still active and has uh extension options, and we also have deliverables that Kiwit has produced over the last uh eight months, all of which is available for all of the options that are going to be presented, either in uh part or whole. So as we work through the different options, um we'll I'll I'll point out what's available and what we um what uh will be shared for each option. So option number one that we have today is we could transition to the number two ranked design build team, which is Axiona.