Mineral Wells Area News

By Gary Norman | Mineral Wells Area News

The Mineral Wells City Council held a called meeting Monday to decide whether to accept a $100 million loan from the Texas Water Development Board for construction of the Turkey Peak Reservoir. After public comment and presentations from project leaders, the council voted unanimously to direct the Palo Pinto Municipal Water District No. 1 to seek a one-year extension on the financing agreement.

City officials emphasized the delay will allow time to explore rebidding strategies, evaluate cost adjustments, and pursue possible state funding without immediately raising water rates. For the coming year, there will be no increase in residential and commercial water rates, though sewer rates will see a small adjustment.

A city press release stated: “The one-year extension will allow the District, in coordination with HDR Engineering and project partners, to carefully evaluate options, explore potential cost adjustments, and continue advancing the project with a focus on balancing long-term water supply needs and financial responsibility for the community.”

The Turkey Peak Reservoir has been years in the making. The project is intended to secure a long-term water supply for Mineral Wells and surrounding communities by expanding Lake Palo Pinto. In 2023, the city increased water rates by 146 percent to begin funding construction, a move that drew significant pushback from residents and wholesale customers. Since then, delays and escalating costs have continued to shape debate over how and when to move forward.

The Turkey Peak project is designed to expand Lake Palo Pinto, boosting available raw water supplies by 83 percent and strengthening long-term water security. But the five construction bids came in at $350–$450 million, far above engineering estimates of $200 million. Paying such costs could have required water and sewer rates to quadruple, which officials said was untenable.

City Manager Jason Weeks noted the bids reflected current market conditions consistent with other large infrastructure projects across Texas and the nation.

Palo Pinto Water District General Manager Howard Huffman called the project at a “decision making point.” He told the council staff needed time to review bids, consider rebidding line by line, and meet with contractors. “The contractors’ notes and comments mentioned risk, risk, risk,” Huffman said. “And we all know in this world risk aversion means add money.”

He pointed to major TxDOT projects and planned AI data centers competing for workers and materials, including one near Abilene that had already purchased a rock mine and locked in hundreds of acres of cement and fly-ash. “The simple fact here today is the costing models that we used did not incorporate and did not understand these risks,” Huffman said.

Huffman also noted upcoming legislation that, if approved by voters in November, will provide $1 billion annually in grant funding for new state water projects. As the only active reservoir project in Texas, he said Turkey Peak could be well-positioned to benefit.

Rudy Segurra, the project’s bond counsel, added that in his opinion the Water Development Board would not begin accepting applications for grant funding until November 2026, with money becoming available in 2027 once the Legislature finalizes distribution rules.

Council members voiced both concerns and cautious optimism. Glenn Mitchell asked about the likelihood of voter approval. Huffman responded he was confident, pointing to a previous statewide water measure that passed easily.

Beth Watson said her recent conversation with Huffman was her “first realistic hope” that costs might be reduced, but warned, “It terrifies me that this idea that we could get a cheaper price is like looking for the Loch Ness Monster or Bigfoot.” She added that without alternative bidding or new funding partners, the project would be “DOA anyway.”

Mayor Regan Johnson said delaying was the responsible choice. “I feel like it would be irresponsible to just blindly proceed forward and lay the burden of this on our rate payers as they exist right now,” she said.

Council Member Mike Rankin stressed affordability, saying, “I know my people can’t afford a $400 water bill, let alone the rent prices where they are right now.”

Council Member Kyle Kelley pointed to improved drought resilience compared to two years ago, citing reduced demand on Lake Palo Pinto and more diversified water sources. “Because of the diversification and the other projects we’re working on, we can weather a drought for the foreseeable future right now,” Kelley said.

Rankin also tied the project to growth pressures from the Dallas–Fort Worth metroplex, noting, “More people are moving here whether we like it or not. It’s happening and we have to be ready to support those new people.”

With the unanimous vote, the council made moot agenda items that would have accepted the loan immediately or raised water rates. The meeting then adjourned.

📺 Watch the full meeting here