The Mineral Wells City Council voted 7-0 to terminate existing financing agreements tied to the Turkey Peak reservoir project and requested that the Palo Pinto County Municipal Water District No. 1 ask the Texas Water Development Board for a one‑year extension of the district’s financial assistance commitments. The motion passed after an extended staff briefing and public comment about sharply higher construction bids for the reservoir.

Council members and water‑district officials said the decision gives engineers and bond counsel time to investigate alternative bidding approaches and pursue state funding before the district issues additional debt. "Risk drove cost of this project up," Howard Huffman, general manager of the Palo Pinto County Municipal Water District No. 1, said in his briefing, summarizing contractors' feedback that uncertainty around workforce, raw materials and competing large projects increased bid prices.

The vote follows a set of construction bids opened by the district’s engineering firm, HDR, that ranged from about $350 million to a little over $450 million. Those bids contrast with the district’s earlier construction estimate of roughly $200 million. District staff reported that summing the lowest line‑item prices across the five bids yields about $230 million, a figure staff said shows there may be room to reduce overall cost by changing the procurement method.

Why it matters: The Turkey Peak reservoir is intended to add new water supply for Mineral Wells and regional wholesale customers. Council members said they were concerned about the potential effect on utility bills if the city must shoulder a larger share of debt. City staff told the council that, under the action taken, there would be no water‑rate increase for the next fiscal year; a small sewer increase is still expected.

What officials said: Huffman described options including alternate contracting models such as a construction manager at risk (CMAR) approach that would allow the city to seek the lowest price by line item and require the CMAR to use those lower line‑item bids. "This is a process that is designed specifically to go in, drill down on a line by line by line basis and get the lowest price from whoever you can," Huffman said.

Rudy Segura of McCall, Parkhurst & Horton, bond counsel to the city, reviewed the long history of the project and the timing for state funding programs. Segura said the project has been planned in phases since 2009 with earlier planning bond issuances for land acquisition and surveys, and that federal and state permitting and program schedules factor into financing timing. He estimated the Texas Water Development Board’s new funding program might begin accepting applications in late 2026, with awards rolling out in 2027, based on past program rollouts.

Officials also described permitting status and risks. The district reported its U.S. Army Corps of Engineers 404 permit and state renewals are current; staff said the 404 permit has about four years remaining before another extension would be required and that a biannual renewal with the Texas Commission on Environmental Quality (TCEQ) is already under way. "At this time, a one‑year delay would not affect any of the permits that are in place," district staff said.

Financing specifics discussed at the meeting: earlier staff materials referenced issuing revenue bonds including a 2025A series and a 2025B taxable series (figures discussed in the meeting included $58,000,000 and $42,000,000 line items in staff text and a $100,000,000 aggregate figure cited by district staff). Council and district officials also warned of contractual timing constraints in the state’s SWIFT/SRF financing: borrowers with multiyear commitments must accept bonds within a short window tied to the Water Development Board’s bond sale, creating a limited annual opportunity to draw that funding.

Penalties and timing: Bond counsel said there can be financial penalties for removing the project from the current bond pool; during discussion counsel cited approximately an $8,485,000 penalty tied to the timing and structure of the state sale as a potential cost if the parties withdraw from the current issuance. (At least one council member referenced a separate smaller figure earlier in the meeting when discussing timing; the record contained both figures.)

Public comment and council concerns: Members of the public and several council members urged caution about passing costs to ratepayers. Red Thomas, a Mineral Wells resident and business owner, told councilors he wanted more information on the original estimate and a revenue analysis before proceeding. Council members voiced concern about the impact on low‑income households and renters if bills were to rise; one council member said her ward contains many residents who could not afford a sharply higher utility bill.

Next steps: With the council’s direction, district staff said they will spend the next months investigating alternative procurement methods, continuing interviews with contractors and working with the Texas Water Development Board and legislators to pursue state funding options. The council also indicated staff should provide updated rate analyses to any state financing partners that request them. The council further noted that, because it approved the district’s request for a one‑year extension, related agenda items about rate changes and additional financing arrangements were no longer applicable at this meeting.

Action taken: The council voted to terminate the current financing agreements and approved requesting a one‑year extension from the Palo Pinto County Municipal Water District No. 1 to seek revised bids and funding opportunities; the motion carried 7‑0. No other formal financing actions were approved at the meeting.

Background: Project planning for Turkey Peak dates back more than a decade, with multiple planning bond issuances for land, archeological surveys and road work. District and bond counsel presentations described the project as part of the state water plan and noted Texas‑level competition for new water funding and for construction resources, including large TxDOT projects and new data‑center construction that district staff said have tightened availability of rock, cement and skilled labor.

The council scheduled no additional financing approvals at this meeting and adjourned after the action.