UPDATE AUG. 10, 3:30PM
Mayor Paulette Guajardo responds to the TWDB letter.
OFFICIAL STATEMENT
Mayor Paulette M. Guajardo – City of Corpus Christi
"The Texas Water Development Board has made it unequivocally clear: the $231 million in state bond funding, already issued, must be used for a seawater desalination project. This funding comes with a strict requirement that the project must be included in the state and Region N water plans. The Inner Harbor project is the most immediate, fully permitted water solution on the table. No other option is this far along in permitting, planning, and readiness to deliver results. From the very beginning, we have been informed that the Inner Harbor Seawater Desalination Project was on track to come online by the summer of 2028.
The City is already obligated to repay these bonds: $231,145,000 in principal and interest, without producing a single drop of water. That means every Corpus Christi taxpayer will be footing the bill, even as we remain under drought restrictions, unable to water our lawns, plant gardens, or count on the water security that families and businesses must have.
The City Council must act by September 5 to close on an additional $210 million in SWIFT financing. If the City withdraws before the TWDB begins pricing its bonds, penalties could reach $11.63 million to cover issuance costs, again, without producing a single drop of water.
Rejecting or delaying this next step would not only cost us $210 million in low-interest financing but also waste years of engineering, environmental permitting, and rigorous state review.
The reality is stark: without moving forward, we will still pay for this project, but receive no water. That would be fiscally irresponsible, dangerous to our water security, and a direct threat to our economic future. In the middle of a drought, political games with our water supply are unacceptable.
The choice is clear: move forward now, or pay the price. The people of Corpus Christi need water."
ORIGINAL STORY:
A letter from the Texas Water Development Board confirms Corpus Christi taxpayers are on the hook for at least $231 million in principal — plus interest — on the proposed Inner Harbor seawater desalination plant, even if the project is never completed.
The August 8, 2025 letter to Councilwoman Carolyn Vaughn outlines the city’s obligations under the State Water Implementation Fund for Texas (SWIFT) program. TWDB records show $235.225 million in bonds have already been issued for the project, with $231.145 million in principal still outstanding and repayment due by 2054.
The letter says the city must decide by September 5 whether to close on an additional $210.045 million in SWIFT financing this fall. If the city declines before TWDB begins pricing its bonds, penalties could be as high as $11.63 million to cover issuance costs. Missing the September 5 deadline would forfeit the funding commitment entirely.
The 2025 financing round would include a 14% interest rate subsidy. Subsidies for the remaining 2026 and 2027 commitments will be set by the TWDB in those years.
Redirecting funds and political response
The TWDB says SWIFT money can only be used for projects in the State Water Plan, and for Corpus Christi, that means seawater desalination. Currently, the Inner Harbor site is the only permitted project in the plan.
For bonds already issued — $231 million in principal still owed — the project must remain a seawater desalination project and be included in both the state and Region N water plans. For funds not yet closed on, the city could request to redirect them to another eligible project if it meets TWDB requirements and is in both plans. The Board notes it has never approved such a change in a SWIFT-funded project.
Councilperson Carolyn Vaughn released a statement Friday, saying:
“The Texas Water Development Board has confirmed that it is possible for the City of Corpus Christi to amend some of our existing state funding to a different water supply project. This means we are not locked into one design or location for delivering water to our community. For the portion of funding where bonds have already been issued, the project must remain a seawater desalination project and be included in both the State Water Plan and the Region N Water Plan. For the portion where bonds have not been issued, we have flexibility to redirect it to another eligible project if it meets TWDB requirements and is included in both water plans.
The letter also makes something very clear — even if we move forward with the Inner Harbor Desalination Project and borrow an additional $500 million to cover its $1.2 billion cost, we would still have to apply, compete, and hope for that funding to be approved. There is no guarantee we would receive it. My responsibility is to ensure we choose the project that delivers water to Corpus Christi the fastest and at the best value, while protecting taxpayer dollars. I will continue to keep every option on the table so that we secure the most reliable and cost-effective water supply possible for our residents, businesses, and future growth.”
Councilmen Eric Cantu released a statement Friday saying:
"The Texas Water Development Board has confirmed it we are NOT locked into just one water project.
Some of the funding we already have can be moved to a different project if it’s in the State and Region N Water Plans.
Yes, part of the money is tied to seawater desalination. But the rest? We can put it where it works best and fastest.
Let’s be clear: the Inner Harbor desal plant comes with a $1.2 BILLION price tag, another $500 MILLION in borrowing, and ZERO guarantee that the extra funding would even be approved. That’s a gamble with YOUR money and OUR future.
And once again this does NOT solve our water problem right now. We won’t see a single drop from this project for 4–5 years. I’m sick of hearing “this is all we have” that’s bull shit. We have options, and I’m going to fight for them.
I will push for the project that gets water to Corpus Christi the fastest, at the best price, with the least risk.
Every option stays on the table until we have water in our taps not just promises on paper."
Political divisions
The funding decision comes as at least three councilmembers — Eric Cantu, Sylvia Campos, and Gil Hernandez — have said they will vote against the project regardless of the TWDB letter. Mayor Paulette Guajardo has urged council to move forward, warning the city could reach a Level 1 water emergency by December 2026 without new water supplies.
Supporters argue desalination is critical to meeting long-term demand. Opponents cite rising costs, which now exceed $1 billion, and call for exploring other strategies.
Next steps
If the council rejects or delays the 2025 SWIFT financing, the city could ask TWDB to reallocate the $210.045 million to the next two funding cycles or extend it to the 2028 cycle, but that would require Board approval before December 31.
Regardless of what happens next, the $231 million already borrowed must still be repaid.
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