TRWD to raise raw water rates; make loan to Trinity Uptown project September 11, 2013
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Jack Z. Smith
Special Projects Reporter
Fort Worth Business Press
Using royalties from the Barnett Shale, the Tarrant Regional Water District plans to pump another $59.6 million into the massive Trinity Uptown project under the TRWD's proposed general fund budget for the 2014 fiscal year that begins Oct. 1.
The Fort Worth-based district, which provides water to more than 1.7 million people, also is raising raw water rates charged to cities by about 9.5 percent, said Sandy Newby, the agency's finance director, in a telephone interview with the Business Press.
Newby said the higher rates will help pay for a $2.3 billion pipeline project to bring water from Lake Palestine to serve fast-growing North Central Texas. In response to higher raw water rates, some cities are expected to boost water rates for residents. In Fort Worth, rates could rise about 5 percent for a typical residential user.
The TRWD board is expected to approve the agency's fiscal 2014 general fund and revenue budgets at its 9:30 a.m. meeting Tuesday, Sept. 17 at the agency's offices at 800 E. Northside Drive.
The $59.6 million contribution to the Uptown project would come from natural gas and oil royalties received by TRWD from leases on its properties in multiple counties in North Texas.
The big cash infusion is part of an interest-free loan of up to $226 million that the TRWD agreed several years ago to provide the project until there is substantial growth in revenues from a tax increment financing district, or TIF, created to help pay for the Uptown undertaking.
The TRWD will funnel the loan money to the TIF and is to be paid back by the taxing district as its revenues rise in future years as a result of higher property valuations from new development. The TIF already owes the TRWD about $43.4 million, Newby said.
The controversial $909.9 million Uptown public infrastructure project is designed to enhance long-term flood control and spur economic redevelopment in a lackluster 800-acre on Fort Worth's near north side, just north of downtown. Critics call the project a bondoggle, but supporters say it will prove another central-city redevelopment success story in an area that borders a dramatically revitalized downtown and the bustling West 7th Street corridor.
The Uptown project calls for building new infrastructure--including a 1.5- mile bypass channel and hydraulic dam--to help maintain constant, predictable water levels in the Trinity River area north of downtown. Some levees ringing the 800-acre redevelopment area then could be torn down, so they no longer pose a physical barrier to attractive residential and commercial waterfront development.
The Trinity River Vision Authority (TRVA) claims a rejuvenated near north side could trigger construction of 10,000 new residential units and three million square feet of commercial space.
The TRWD is a leading local partner with the U.S. Army Corps of Engineers in the $909.9 million public infrastructure development effort that the federal agency has dubbed the Central City Project, but most Tarrant County residents refer to as Trinity Uptown.
The planned $59.6 million TRWD loan to the TIF represents only about one-fifth of the revenues the agency has derived from natural gas and oil royalties and lease bonuses.
The TRWD has received more than $300 million from royalties since 2003, including more than $68 million in its 2008 fiscal year, according to a TRWD annual financial report and estimates of royalty income in the 2013 fiscal year that ends Sept. 30.
The financial report shows that the district received nearly $290.5 million in royalties from fiscal years 2003 through 2012. In its proposed budget for 2014, the TRWD estimates that its revenues for the 2013 fiscal year ending Sept. 30 will be $22 million. If so, that would put its total natural gas and oil revenues, derived primarily from the huge Barnett Shale play, at about $312.5 million.
The TRWD's proposed 2014 general fund budget would maintain the district's tax rate at 2 cents per $100 assessed valuation, marking the 15th straight year at that level.