Texarkana, Arkansas, board to vote Tuesday on emergency ordinance that would open Millwood Lake water talks with Dallas pipeline company
The Texarkana, Arkansas, Board of Directors will vote Tuesday on an emergency ordinance that would let the Southwest Arkansas Water District offer up to 110 million gallons a day of the city’s Millwood Lake water rights to a Dallas company planning a pipeline into Texas.
The special called meeting, with that single item on the agenda, starts at 6 p.m. in the board room at City Hall, 216 Walnut St.
The ordinance would authorize Mayor Allen Brown and City Manager Tyler Richards to sign an exclusivity agreement with Heartland Water Partners LLC, the water district, the cities of Hope and Ashdown and the town of Ogden, with any changes the two of them “deem necessary or appropriate.” It would also let the district apply to the Arkansas Natural Resources Commission on the city’s behalf for approval to move the water out of state.
Richards told the board last week the city could earn $16 million to $20 million a year from a sale he called “the single greatest economic impact in our city’s history.” The board took no vote then. Richards said he would bring back a resolution. The packet instead contains an ordinance with an emergency clause.
“The City commits to no sale,” the agenda summary says. “Any sale requires further Board approval and General Assembly authorization.”
Why an emergency clause
The emergency clause makes the ordinance effective the moment it passes. The reason the ordinance gives is that the unused water “is currently being released to downstream riparian parties, including those in the State of Louisiana, at no charge,” and that signing the agreement now is “necessary to prevent further loss of value of this City asset.”
The agenda summary lists the cost to the city as $0. The board can adopt an ordinance in a single night by suspending its rules, as it did last week for the Salty Pilot private club permit.
What Heartland would pay
Under the draft agreement, Heartland would pay each participating city $5,000 for every million gallons a day the city commits to the project. The money would come in three installments: within 10 business days after the district files the state application, within 10 business days after the General Assembly approves the transfer, and when a final sale agreement is signed.
At 110 million gallons a day, each installment would be $550,000 for Texarkana, or $1.65 million if the deal goes all the way through. Last week Richards described two $500,000 payments.
The later payments are not owed if the Legislature says no or no final deal is signed. Payments already made are nonrefundable, with one exception: a city that pulls out must return its most recent payment, or the part of it covering water no other city picks up.
The agreement is written around the district filing in time for the commission’s Nov. 18 meeting in Little Rock. If no application is filed by Jan. 31, 2027, any party can end the agreement on 30 days’ notice. Heartland would reimburse the district’s filing, legal and engineering costs for the application.
What the city would give up
In return for the payments, the city, the district and the other cities would agree to deal only with Heartland for that block of water. During the exclusivity period they could not offer the capacity to anyone else, solicit or entertain other proposals, or sign anything with a third party about it, binding or not. Any inquiry that came in would have to be reported to Heartland within three business days, including who asked and what they offered. Heartland could go to court for an injunction to enforce the clause.
The exclusivity period would run until the Natural Resources Commission makes its recommendation to the General Assembly. If the commission recommends the transfer, the period extends automatically until the Legislature acts, and for 180 days after that if lawmakers approve. The draft leaves blank the date on which exclusivity would end no matter what.
The agreement also says its terms “shall be kept strictly confidential,” with exceptions for the Arkansas Freedom of Information Act, open-meetings requirements and approvals by the board or state agencies.
What it does not do
The draft says repeatedly that it reserves or conveys no water to Heartland. Any right to take water, the price, the term and the annual payments would be set in a later “definitive agreement,” which would not bind the city until the board approves it. Any city can withdraw at any time before signing that final deal, and a board’s refusal to approve it would not be a breach.
The final agreement would have to let each city curtail, interrupt or take back its committed water when it needs it for its own supply. The draft also says the final deal would require Heartland to make an annual reservation payment for water it commits to but does not take, with no credit against future use.
Each city must tell the district and Heartland in writing by Nov. 1 how much water it is committing. The district would bundle those volumes into a project capacity of no more than 115 million gallons a day. If Texarkana commits the full 110 million, Hope, Ashdown and Ogden together could add no more than 5 million.
Texarkana’s 110 million gallons a day would come from two places: 99.8 million from a block of Millwood storage the agenda summary calls Storage Space No. 16, and up to 10.2 million from the city’s existing supply.
The pipeline and the state’s role
Heartland proposes to divert water at or next to the district’s existing Millwood intake in Little River County and pipe it to Texas. The agreement does not name a Texas buyer, a route or a price for the water.
Under Arkansas law, anyone who wants to take water out of the state must notify the Natural Resources Commission, which studies the request and recommends to the General Assembly at its next regular session whether the transfer serves the public interest. The commission weighs the state’s supply, current and future in-state demand, any shortages, and the applicant’s supply and demand in the receiving state. No water can leave the state without the Legislature’s approval and an interstate compact. The next regular session convenes in January.
Richards said last week the state has no history of out-of-state transfers and the commission had to create an application form for this one.
Who is Heartland
The ordinance describes Heartland Water Partners as a Texas limited liability company. The draft agreement leaves blank the state where it is organized.
The agreement directs legal notices for Heartland to 5217 McKinney Ave., Suite 400, in Dallas, care of its general counsel, with an email address at grey-rock.com. Business directories and a Texas licensing record list that suite as the office of Grey Rock Investment Partners, a Dallas private equity firm founded in 2013 that has invested mainly in oil and gas wells, carbon capture and power projects. Its founders include Griffin Perry, son of former Texas Gov. Rick Perry. The packet does not say how Grey Rock and Heartland are related.
Heartland has hired lobbyists Chris Caldwell, a senior campaign adviser to Gov. Sarah Huckabee Sanders, and Robert Moery, a former aide to Gov. Asa Hutchinson, the Arkansas Democrat-Gazette reported last week. State Sen. Jimmy Hickey, R-Texarkana, told the newspaper he opposes the plan. A spokesman for Sanders said it was too early for the governor “to weigh in on a proposal before the City of Texarkana has even submitted it to ANRC.”
State lobbyist records list Heartland Water Partners as a 2026 client of both Caldwell and Moery’s firm, Broadview Strategies, registered under the same Dallas address as Grey Rock. The registration describes Heartland’s business as “Utilities.” Neither lobbyist has reported any expenditures on Heartland’s behalf.
The water district holds the Millwood storage under a contract with the U.S. Army Corps of Engineers. The four cities buy their shares from the district under water supply contracts signed in 2016. By signing the new agreement, the district would consent to the cities committing that water so the commitments do not breach those contracts.
Director Laney Harris said last week he recalled a clause in the 2016 contract requiring any sale to benefit residents through their water bills and asked to see it. The 2016 contract is not in Tuesday’s packet.
The ordinance is drawn for the signatures of Brown, Deputy City Clerk Tabitha Churchill and City Attorney Joshua Potter. The board’s next regular meeting is at 6 p.m. Monday, Oct. 19.
Read the full agenda packet, including the draft agreement.