Donna halts over $60 million in funding for international bridge expansion

DONNA — Just four days after a new majority took control of the Donna City Council, its members voted to put an indefinite halt to millions of dollars in funding that is crucial to the commercial expansion of the Donna-Rio Bravo International Bridge.

The $58 million in revenue bonds canceled by the city council during its meeting Tuesday is crucial to financing the construction of two northbound lanes that would allow for Mexican truckers to bring cargo into the United States for trade.

Tuesday’s vote also put a stop to at least two years’ worth of work by Donna’s financial advisers, city staffers and others in the leadup to the funding bid, which had initially been approved by the council at the end of October under the leadership of now-former Mayor Rick Morales.

“The issue I have with this whole thing is the lack of transparency from the very beginning,” Place 3 Councilman Ernesto Lugo Jr. said just before the vote.

“I asked for public information before I got elected as a councilman. I never received it. I don’t know what the terms of the agreements are, the percentage rates, whether there’s fees associated with these transactions. I don’t know anything about it,” Lugo added, referring to the debt issuance that the previous council leadership approved during an Oct. 31 meeting.

Tuesday’s agenda item called for the city to “cease and abate immediately” the issuance of approximately $61.2 million in debt to fund the northbound commercial expansion, according to City Attorney Robert Salinas.

The lion’s share of that funding — some $58 million — would have come from revenue bonds that would be repaid via tolls collected from the commercial truckers who crossed at the bridge.

Another $1.2 million would have come from Texas Public Property Financial Contractual obligations and $2 million from tax notes, according to Andre Ayala, from the city’s financial advisers, Hilltop Securities.

The city has already invested more than $60 million to fund the construction of two southbound commercial lanes for so-called “empties” — tractor trailers returning to Mexico after having delivered their cargo on this side of the border.

That portion of the expansion got underway in late-2019 and has since been completed, though commercial truckers have yet to begin using those lanes.

The lack of southbound commercial traffic is just one of the concerns that prompted David Moreno, who was newly installed as Mayor during a swearing in ceremony on Dec. 15, to vote to pause the funding endeavor.

“We’ve been trying to get empties going south. We haven’t gotten it. I want to know why,” Moreno said after the meeting Tuesday night.

Moreno was first elected to the city council by running on a slate with Morales in November 2020.

But that relationship later fractured, leading Moreno to run for mayor against his former running mate this November.

It was a three-way race that led to a runoff between the two on Dec. 9.

Moreno emerged victorious and was sworn into office during a special meeting Dec. 15. His new running mates, Lugo and political newcomer, Jesse “Coach” Jackson, also won their respective runoffs.

With a new council majority secured, their first order of business after being sworn in was appointing a new city attorney in Salazar, who replaced Javier Villalobos.

And in their first regular meeting since being elected, the council trio led the undoing of Donna’s pending efforts to fund the bridge expansion.

Part of those efforts include nearly $30 million in debt approved by Donna’s two economic arms, the 4A and 4B economic development corporations.

Earlier this spring, the 4A EDC approved just over $14.36 million in sales tax revenue bonds, while the 4B EDC approved $15 million in the same.

That money already sits in the city’s coffers.

But the EDCs’ debt contribution represents less than half the money needed to fully fund the northbound lanes, Ayala, the financial adviser, explained.

“The 4A and 4B secured about 44% of the funding. These three transactions would secure the 56%,” Ayala told the council.

Lugo asked about the possibility of finding additional funding via state or federal grants.

“At this point in time, we’re banking on an $8.9 million contribution from TxDOT. And I don’t know if the city has applied for any other grants. I would assume that the city has,” Ayala replied.

U.S. Customs and Border Protection has previously provided nearly $12 million in funding for the southbound portion of the expansion, but that was to install the “nonintrusive inspection technology” its agents need to inspect vehicles, not for the construction of the bridge’s infrastructure.

And previous TxDOT funding went toward improving Farm-to-Market Road 493 leading up to the bridge.

Thus far, there’s no timeline for when or if Donna will resume its efforts to secure the revenue bonds to complete the bridge expansion. But for the new mayor and for Lugo, the pause is meant to give them a chance to look at the project “with a fine-toothed comb,” Moreno said.

“I’m not against, totally against, the bridge. I think it’s a great idea. I think it’ll bring a lot of revenues to the city, but I think we just need to take a closer look at it when it comes to the financing part of it,” Moreno said.

The mayor added that he wants the council — especially its newest members — to meet with Donna’s financial advisers to “get up to speed” on the project and to look for ways to reduce the debt burden on taxpayers.

He’s also hopeful that restarting the process further down the line could net the city millions in cost savings should market forecasts for falling interest rates come to fruition.

“Looking at the financing of it and the total amount, you know, I think it’s a lot to put on the backs of the taxpayers,” Moreno said. “My great-great grandchildren will by paying for this.”