Council stalls Inner Harbor desalination amendment, directs staff to seek SWIFT funding flexibility

Corpus Christi — The Corpus Christi City Council voted late Tuesday not to authorize Amendment No. 5 to the design–build contract for the city’s Inner Harbor desalination project and directed staff to ask the Texas Water Development Board (TWDB) to extend and consider repurposing SWIFT financing tied to the project.

Brett Van Hazel, the program management office director for the Inner Harbor project, told council the amendment would have paid Kiewit Infrastructure South a not‑to‑exceed $50 million to advance the project from about 10% design to 60% design and produce a guaranteed maximum price (GMP). “This item is to approve Amendment number 5 to Kiewit in the amount of $50,000,000,” Van Hazel said in his presentation, describing the deliverables the city would receive at 30% and 60% design.

The item followed more than eight hours of public comment, during which hundreds of residents, environmental groups, industry representatives and utility experts urged opposing positions. Many speakers from the Hillcrest neighborhood and neighborhood advocates said the plant should not be located near the residential community, citing environmental justice and ecological concerns. Industry representatives and other supporters urged continuation in order to secure a drought‑resistant supply for residents and local businesses.

Council debate focused on three recurrent facts spelled out during the meeting: the project’s most recent high‑level cost estimate presented to council (about $1.2 billion at the 10% design level), remaining uncertainty in cost until later design stages, and the status of state SWIFT financing already allocated to the project. Drew, a city project staff member involved in technical briefings, told council, “At 10% design you really don't have a lot of information to really fully understand what the cost of this project is gonna be... you really have to get to 60% design before you really have cost certainty.”

Council members also discussed near‑term water supply options the city is pursuing, including new groundwater wellfields, reuse and other regional projects. City staff said a combination of groundwater development (two well fields), reuse studies and other efforts could delay a need for emergency curtailment if advanced quickly. Van Hazel told the council the suspension of work that began Aug. 1 had delayed the project timeline by about three months.

After extended discussion a motion to authorize Amendment 5 (to proceed with Kiewit to 60% design under the presented terms) failed on the council floor. The council later considered, and approved, a separate action directing staff to ask TWDB for an extension and to request that the SWIFT bond funding tied to the Inner Harbor be considered for repurposing to other regionally approved water supply projects if allowed by the board. City staff warned the TWDB could deny such a request; staff described the request as an attempt to preserve options and avoid immediate forfeiture of state financing.

What council members said - “If you continue design, you get more cost certainty,” Brett Van Hazel said, describing the progressive design‑build schedule and deliverables. - “We have to get to 60% design before you really have cost certainty,” Drew said when councilmembers pressed staff about the variance between early cost estimates and the $1.2 billion figure repeatedly mentioned in public comment and interviews.

What happens next City staff said they will contact TWDB by the board’s September deadline to request an extension and to ask whether the SWIFT tranche already allocated to the Inner Harbor can be repurposed to other regionally approved water projects. Staff also said they will continue advancing the city’s alternative water options — including two wellfields that staff have said could produce significant short‑term volume — and will return to council with follow‑up briefings and any technical reports (including updated modeling) as they become available.

Votes at a glance - Item 34 — Amendment No. 5 to the design‑build contract (Kiewit Infrastructure South Co.): Motion to authorize amendment (to advance from 10% to 60% design, NTE $50 million) — failed on the council floor. (Transcript records debate and a roll call vote; the meeting record does not include a complete, named vote tally in the public transcript.) - Item 35 — Direction to staff to request from TWDB an extension and to inquire about repurposing SWIFT funds (second tranche of previously authorized financing): council approved a motion directing staff to request the extension and repurposing. City staff warned TWDB has discretion to approve or deny such a request.

Context and why it matters Corpus Christi has told the public it needs additional, drought‑resistant water supplies to serve the city and regional industries. The Inner Harbor project is the only fully permitted saline desalination option the city had developed and for which the state had previously approved SWIFT financing. Opponents argue the plant’s proposed site — near the Hillcrest neighborhood and within the inner harbor environment — risks environmental and public‑health harm and would leave residents to shoulder high water rates to pay project debt. Supporters say desalination is drought‑proof and will protect the local economy and jobs. The council’s decisions this week pause the city’s path forward with its current Kiewit contract while preserving an administrative path for staff to seek flexibility from the state financing authority.

Ending note Councilmembers and staff said they would continue technical work on alternate sources and modeling and report back to the council. The TWDB deadline to notify the board about participation in the fall bond sale was discussed during the meeting; staff will notify council as the TWDB responds to the city’s request.