Local residents against the Turkey Peak project say the financing poses a repayment risk

Ann Powers
Editor

AUSTIN – The Texas Water Development Board approved $200 million in financing to the Palo Pinto County Municipal Water District No. 1 for the Turkey Peak Reservoir project’s construction phase on July 23.

TWDB staff recommended awarding the low-interest, 30-year loan drawn from the State Water Implementation Revenue Fund for Texas. It’s estimated to save the district approximately $12.5 million.

TWDB Project Manager Tom Barnett said construction is set to begin in March 2025 and wrap up in 2028. State officials have endorsed plans for the water supply project for many years.

“It’s been in the works since 2001,” Barnett told the board of directors. “It’s been recommended in every state water plan since 2007.”

TWDB previously committed $37.1 million for the new lake’s planning, acquisition and design – bringing the project’s total debt to $237.1 million. PPCMWD No. 1 owns the area’s main water source, Lake Palo Pinto, which is struggling to meet current needs.

“As this system has gone through two severe droughts in the past decade, this project is not about economic development, in my personal opinion it is simply about economic survival,” said PPCMWD No. 1 General Manager Howard Huffman. “Growth is happening down the I-20 corridor into our county.” 

Built in 1963, Lake Palo Pinto has lost much of its original storage capacity due to sedimentation. The district plans to build the Turkey Peak Reservoir downstream of Lake Palo Pinto and connect the two lakes as a single system.

The project is estimated to increase water storage capacity by 83% to meet the needs of the district’s 34,979 customers in Palo Pinto and Parker counties.

Barnett said construction includes a new earthen dam, partial removal of the lake’s spillway, and building a new county road and bridge across its dam.

Additionally, portions of Ward Mountain Road will be upgraded. A three-quarter mile section of new county road will be installed to account for parts of Farm-to-Market 4 and other county roads taken out of service.

“The approval of the SWIFT funds loans for the water district speaks to their confidence in this project and the water security it will provide this region,” Mineral Wells Mayor Regan Johnson told the Palo Pinto Press following the state’s meeting in Austin. “Turkey Peak is invaluable to this area. I look forward to breaking ground.” 

The loan is to be repaid with revenue bonds backed by a 146% water rate increase. The Mineral Wells City Council unanimously approved the rate hike last year.

Local resident Richard Jones spoke against the Turkey Peak plans during the TWDB meeting. He claimed the city provided a “false, misleading analysis” of the project’s cost and downplayed alternative options.

He also said Mineral Wells residents couldn’t afford the rate hike, making the loan risky for the state. The average household income in Mineral Wells is $71,124 with a poverty rate of 18.18%, according to World Population Review.

“Mineral Wells is an economically disadvantaged town,” Jones noted. “How can such an economically disadvantaged town ever pay for a massive project as Turkey Peak? You will not get your money back for these loans.”

Jones cited two rate appeals filed with the Public Utility Commission of Texas as additional repayment risks.

Shortly after the rate increase showed up on utility bills last December, customers in the city’s extraterritorial jurisdiction submitted an appeal to the PUC. The ETJ is a ring about two miles wide around Mineral Wells.

A similar appeal was also filed by two of the city’s seven water wholesalers – Santo Special Utility District and the Sturdivant Water Supply Corp.

“If the PUC rules against the city, they’re going to reject the water rates and most likely find they raised them illegally and return the money back to the citizens,” Jones said.

Water district attorney David Klein countered by saying the ETJ appeal represents “a small percentage of a small percentage” of the district’s nearly 35,000 customers.

The other appeal comes from just two of seven wholesale customers buying water from the city and none of the other entities have objected to the rate increase, he added.

“I don’t think the debt repayment is cause of any concern,” Klein said.

State Representative Glenn Rogers, R-Graford, applauded TWDB’s green light on the loan, adding it is one piece of a larger water security strategy.

“I hope we all remember it is a component of the entire package we need to bring long-term water security to the area,” Rogers said. “As we move forward, we must also invest effort toward conserving water through decreasing water loss and overall usage, regionalizing in order to cost effectively bring water from the east to the west, and finding additional opportunities to capture and store water.”

The state is set to issue the $200 million financing in three separate payouts. For more information about the Turkey Peak Reservoir project, visit turkeypeakreservoir.com.