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Council briefed on GLO grant disruption and options after pipeline stalls Flag Lake drainage work
Summary
Staff outlined four paths after Texas GLO signaled changes to HAZMAT and MITMod funding and said a private pipeline operator is blocking work; options range from amendment requests and waivers to terminating and reapplying for grants, each with funding gaps and schedule risk.
Staff described a complex problem with federally and state-funded drainage work tied to two grants (HAZMAT and MITMod) and a blocked construction corridor where an Energy Transfer pipeline runs through a ditch. Staff explained the options and their trade-offs, saying that Texas GLO prefers terminating or re-scoping parts of the HAZMAT contract instead of simply pivoting the funds.
“Energy Transfer … they’re gonna fight us tooth and nail,” the Presenter said, describing a company refusal to remove a pipeline in the Flag Lake Drive corridor that prevents safe ditch work. Staff outlined four options: (1) continue with an amendment request to use HAZMAT funds for Penn Money Phase 1 and request a waiver; (2) terminate HAZMAT and recraft MITMod to complete Penn Money Phase 1 (creates approximately $1.5M funding gap); (3) terminate both and reapply under a relocation opportunity (risk of losing funds); or (4) continue both and seek planning-grant reclassification to cover professional services.
Council members asked technical questions about hydrology sequencing and the risk of moving to Phase 2 without Phase 1. Staff warned the GLO expenditure deadline and HUD processes limit flexibility: if HAZMAT is terminated staff would face significant replacement-funding gaps and potential repayment obligations if waivers are later denied. Staff said they would follow up with GLO and return with the preferred option and legal/financial implications.
