Council hears progress on Inner Harbor desalination project; staff outlines timeline, costs and parallel supply options

City Manager Peter Zanoni and program staff told the City Council the city is advancing the Inner Harbor seawater desalination project while simultaneously pursuing short- and mid-term alternative water sources to address an ongoing drought.

City officials said contractors have delivered key permits and design milestones and that staff expect a draft cost model this summer, with a guaranteed maximum price (GMP) target later this year and construction scheduled to begin in 2026 with plant completion currently planned for 2028. Staff also described parallel efforts: drilling and testing groundwater wells along the Nueces River, renewed talks with the Evangeline groundwater owners about purchasing up to 12 million gallons a day, and a consultant contract to study wastewater reuse.

The update matters because the council must weigh near‑term water needs against longer‑term costs and rate impacts. The council is considering multiple options — each with different delivery timelines, technical tradeoffs and price implications — while staff continue twice‑monthly briefings to keep the council and public informed.

What staff told the council City staff summarized where the Inner Harbor project stands. Brett Van Hazel, director of the city’s Program Management Office, described the current procurement and design sequence: the city completed a Phase 1A planning package, has a draft basis of design report under review, and has started Phase 1B work to capture long‑lead items. He said the project team has received the U.S. Army Corps permit and the TCEQ discharge permit earlier than anticipated and is reviewing a draft cost model now; staff and independent reviewers expect to complete a thorough vetting of cost estimates by July.

Van Hazel and staff said the procurement team selected Kiwi Infrastructure South as the progressive design‑builder and that Kiwi’s contract authorized Phase 1A preconstruction services. Staff described Phase 1B as work to secure long‑lead equipment such as transformers and to finalize demonstration‑plan details. If the project proceeds on the current schedule, the team expects to submit a GMP late in the year and to begin major construction in early 2026, with commissioning steps through 2028. Kiwi is slated to operate the plant alongside city staff for one year after completion to transfer operations knowledge.

Modeling, the demonstration plan and public questions Council members pressed staff on environmental modeling and community impacts. Draft modeling for far‑field dispersion — prepared by GHD under contract to the project team — is expected within about two months, staff said, and the city committed to present that work publicly. Council members asked whether the GHD work covers the wider bay system or only the Inner Harbor; staff said GHD’s scope focuses on the Inner Harbor and immediate ship‑channel area but that additional, broader modeling elements are being coordinated and that staff will brief the council on the far‑field results when completed.

The project team plans a demonstration (pilot) package to test diffuser and discharge designs and said an executed amendment to enable demonstration work is expected this month, with construction of the demonstration site likely to begin in June or early July.

Cost, schedule and energy concerns Council members repeatedly asked when the public will see refined cost figures. Van Hazel said staff expect a draft cost model at the end of the month and that an initial public briefing of estimates could follow in July, after independent review. City staff reported commitments of about $25 million so far against the $211 million in bond authorization for the project; specifically, staff cited approximately $12 million committed to Friese & Nichols (planning and independent review), about $9 million to Kiwi for Phase 1A and roughly $4.7 million to Kiwi under Phase 1B commitments. Van Hazel cautioned that early cost figures are preliminary and will become more certain as design advances toward the GMP.

Councilmembers also raised operational questions: staff estimated plant energy demand in the “tens of megawatts” (one councilmember referenced an initial estimate greater than 20 MW), and said those electricity and chemical costs will be major factors in long‑term operating expense and thus in future water rates. Staff said the city will continue to pursue competitive power arrangements and to refine O&M projections as design details firm up.

Federal grants and financing Drew Molly, the water utility’s chief operating officer, told council members the city is preparing to pursue major federal funding, including the Bureau of Reclamation program often referred to as “WIN” (large projects may be eligible for up to about $180 million, depending on program rules and project match). Staff plan to submit grant applications in the fall and expect award decisions in the following spring grant cycle; staff also said the city will coordinate with congressional and federal delegations on applications.

Parallel and near‑term water supply work Molly briefed the council on alternative sources intended to reduce short‑term risk while the desalination project proceeds: - Nueces River groundwater wells: The city has drilled multiple wells on city property along the Nueces River. Staff reported three completed wells producing usable volumes (one well produced roughly 1.5–2.0 million gallons per day in recent tests). Staff plan to submit permit applications to TCEQ for “bed and bank” or related permitting this month and expected a regulatory decision in late June if reviews proceed normally. City staff are studying a two‑phase approach in which river‑pumped water is used immediately (phase 1) and a brackish reverse‑osmosis treatment phase (phase 2) could be added later if warranted. - Evangeline (groundwater purchase): Staff said an owner proposal now contemplates a sale rather than a lease. That offer is under rapid review; staff aim to deliver a recommended counteroffer to the Evangeline representatives and report back to council (staff referenced an early‑June internal target to respond to the owner and a potential council briefing thereafter). - Eshelman/Voigt (Catahoula Water Company) and other brackish suppliers: staff said they are evaluating opportunities and risk — particularly groundwater conservation‑district approvals and the feasibility of transporting large volumes long distances. - Reuse and wastewater infrastructure: the council approved a consultant contract with Garver to study expanded reuse; staff said a notice to proceed for that work is imminent and that reuse is being examined as part of the city’s portfolio of options. - Regional collaboration: staff said they are coordinating with the South Texas Water Authority (STWA) and other regional partners to examine shared supplies and delivery strategies.

Council reaction and next steps Council members repeatedly emphasized the need for transparent, frequent public briefings and clear cost numbers before any final decision. Several members stressed cost discipline and asked staff to prioritize design choices that limit nonessential amenities to reduce capital costs. Staff committed to continuing twice‑monthly council briefings, to post materials on the project website, and to provide the far‑field modeling, the draft cost model and the demonstration‑plan details as soon as they are available.

Why it matters now The council is balancing an immediate drought and stage‑3 restrictions with the long‑lead time required for large water infrastructure. The desalination project is the city’s largest planned water supply investment; staff said it will take time to firm up cost and operational impacts and to secure potential federal grant support. Shorter‑term options (river wells, brackish purchases, reuse) are being advanced in parallel to reduce near‑term risk.

What to watch for next Staff said they will post the draft cost model and schedule a public briefing when internal and independent reviews are complete (staff cited July as a target for sharing reviewed cost‑model information). The GHD far‑field modeling and the demonstration‑plan amendment are both slated for public presentations in the coming weeks. City staff will return to council at least twice a month on project status and post regular updates on the city’s Inner Harbor project website.

Provenance: Excerpts in the transcript that support this article include the staff presentation introducing the project and later council Q&A and wrap‑up.