Mineral Wells Area News

Reporting by Gary Norman / Mineral Wells Area News

MINERAL WELLS, Texas — After receiving construction bids far exceeding budgeted amounts for the Turkey Peak Reservoir project, the Palo Pinto County Municipal Water District No. 1 Board of Directors held a special meeting Friday, Sept. 5, in the Mineral Wells City Council chambers to decide whether to formally accept a $100 million loan from the Texas Water Development Board’s State Water Implementation Fund.

In response, the City of Mineral Wells announced it will hold a special meeting Monday, Sept. 15, in the City Council chambers to discuss the matter and provide guidance to the district on whether to terminate the funding contracts with the Water Development Board or to seek a one-year extension.

The city’s press release stated, “Although the bid amounts came in higher than anticipated, a challenge many agencies are facing, the City of Mineral Wells and the District continue to carefully review all options to move this project forward in a responsible manner.” Read the full press release here.

The Turkey Peak Reservoir project will expand Palo Pinto Lake to increase surface water storage and provide a more drought-resistant water supply to the region. The lake supplies water to Mineral Wells, which also sells treated water to seven local water districts.

The $100 million loan represents the second in a series of three funding installments from the Water Development Board. The district has already received $60 million, with another $40 million scheduled as construction progresses. Mineral Wells guarantees the loans and provides payment through water and sewer bills charged to its municipal and wholesale customers.

The board’s agenda called for members to meet in executive session with legal counsel, then vote on whether to sign and initiate the financing agreement and authorize the executive director to request a one-year extension of the SWIFT commitments. The final item called for a decision on whether to take no formal action on the construction bids.

The board voted to sign agreements with the Water Development Board and authorized the executive director to seek the one-year delay if the Mineral Wells City Council chooses that route. Members determined no vote was required to take no action on the construction bids.

According to the district, the project’s cost estimate was $200 million. The construction bids came in as follows:

• Flatiron-Dragados: $349,999,852.95
• Thalie Construction Co.: $393,002,805.15
• Sundt Construction: $393,011,855.00
• Phillips & Jordan: $399,993,064.00 Bernard Construction Co.: $459,252,884.00

After the meeting, District General Manager Howard Huffman said, “The decision was made today to sign the financing agreements by my board, and the city council will come behind us and make their decision at a later date about whether to support that decision.”

Huffman said he did not yet know why the bids came back so much higher than expected. He and the district’s selection committee plan to travel to Austin this week to evaluate and score the bids before bringing a recommendation back to the board.

He added that construction bids nationwide have recently been coming in higher than expected. Project engineers updated their Opinion of Probable Construction Cost three months ago using the latest data, estimating an increase of about 5% but still within tolerance levels.

“That’s even after adding Ward Mountain Road,” Huffman said. “They used the most recent costs that get input into a national database to keep that maintained and up to speed, and we just didn’t see this coming.”

Huffman noted that the Corpus Christi City Council earlier this week canceled a seawater desalination plant project after cost estimates rose substantially.

Asked what would happen if Mineral Wells declined to guarantee the $100 million installment, Huffman said the board would seek a one-year delay from the Water Development Board to evaluate whether the project could be reengineered to lower costs.

Huffman said he has met with the wholesale water districts that would be supplied by the expansion, informed them of the situation and invited them to be part of the decision-making process.

“And so it’s critical that the wholesalers become part of the team now,” he said. “It cannot just be the district and the city making decisions for the county.”

Bobby Bazzell, president of the board of directors for the North Rural Water Service Corporation, a wholesale water customer of Mineral Wells, said he is willing to work with the district on possible solutions.

“We appreciate the fact that the District has included us in what their thoughts are moving forward,” Bazzell said.