City Projects

The City of Palacios is currently undertaking several important projects to improve the quality of life for its residents and promote economic growth in the area. From infrastructure upgrades to new community initiatives, the city has a lot of exciting developments in progress. Below you will find an overview of some of the key projects underway in Palacios and the potential impact on the city and its residents.

4th and 5th Street Sidewalks Project

  • Transportation Alternatives – Sidewalks
  • Grant with Texas Department of Transportation (TxDOT)
  • 2nd Phase application has been completed
  • Cost Estimate: $906,250.00
  • Our Match: $0

Palacios Activity Complex

Exciting news for the community as the Palacios Activity Complex is coming soon, providing day and night access to basketball and pickleball courts for everyone to enjoy! Estimated completion date 8/4/23.

Bethany Park Drainage Improvements

  • Mitigation Grant with the General Land Office (GLO): Surveying in process
  • Project approved by GLO and waiting on contract
  • Cost Estimate: $1.3 Million
  • Our Match: $0
  • Project under redesign, rendering coming soon

City Wide Drainage Project

  • Design is Complete
  • Mitigation Grant with the General Land Office (GLO)
  • Design is approved by GLO. Ready for bid
  • Cost Estimate: $5 Million
  • Our Match: $50K
  • Funds approved by GLO, going to council 7/27/23
  • View Project

Coastal Resiliency

Downtown Sidewalks

  • The South side of Main Street
  • Grant with Community Development Block Grant (CDBG)
  • Cost Estimate: $305K
  • Our Match: $45K
  • View Project
  • View Map
  • The City has received the Notice to Proceed for Construction
  • Construction has begun
  • Business will be contacted by Staff Concrete to schedule the best time to do work in front of their business.

Downtown Sewer Line and Lift Station

  • Collaborative project – City and Economic Development Corporation
  • Design Complete
  • Bidding will be advertised on April 26 and May 3
  • Cost Estimate: $535K
  • Our Portion: $135K
  • EDC Portion: $400K
  • View Project

WIFIA – Water Infrastructure Finance and Innovation Act

  • Loan with the EPA for Water Lines and Infrastructure Improvements
  • City has been approved to apply
  • Application in process
  • Cost Estimate: $10M
  • Low-interest rate loan, with a long repayment option
  • If all goes well, bid process to start this fall

Water Meters – Performance Services

  • Meters approved  by City Council on June 22
  • 3-4 months out for meters to be delivered
  • Will know an estimated cost by May 25 update
  • To be paid for with budgeted funds
  • Funds escrowed, work to begin in August

Bethany Park Lift Station – PROJECT COMPLETE!

  • Pull pumps and replace – pumps are 2005 model
  • Have holes in the impeller
  • One new pump in. Loaner pump in slot 2 until work complete
  • Estimated Cost: $25K – paid for from American Rescue Grant Funds
  • Cost may increase, found leaks in elbows that need to be replaced, asked for quote

Fire Hydrant Project

  • 234 out of 276 have been done
  • Need to replace 21 hydrants and need to repair 14
  • Estimated Cost: $70K – paid for from American Rescue Grant Funds

Smoke Test Repairs

  • Clean-out caps are 90% complete 
  • Three major infiltrations found by our guys and one is fixed, two are being fixed
  • Continue to work on contacting private property owners to get their lines fixed
  • Need to smoke test again to check for more fix needs
  • We have contacted our engineers for a price quote
  • Paid for in FY 2021 – will budget for additional testing fin FY 2023


  • Will be located at the Airport on TX35
  • Will be open to the public for brush ONLY
  • Survey is done, next step is for legal team to finalize the agreement
  • City Council action planned for April 27
  • Estimated cost: Matagorda County to pay for fencing and equipment
  • Costs to have staff on hand when open will be shared with the County
  • The City donated the property and did the survey which cost $3K
  • Paid for from budgeted funds.

Lift Station Generators

  • Grant with Community Development Block Grant (CDBG)
  • Cost: $431K
  • Our Match: $25,308 – Paid for FY 2021
  • One generator delivered and two generators expected on 6/30
  • Waiting on CenterPoint Energy to hook up gas to generators

Airport Projects – FUEL TANK DONE, T-HANGARS 90% DONE

  • 50/50 Match
  • Up to $100K per year in projects
  • Currently working on the new fuel tank and T-Hangar Repairs

Police Department/Court Lobby

  • Project Complete
  • Demonstration on how to use the safe room to be announced soon
  • It will be advertised on Facebook, website, and in the newspaper.
  • Cost: $65K – paid for from budgeted funds


  • We have been working with the developer to clean up, wrap up and add features
  • Including a contact your council member button, where citizens can send a direct message
  • Estimated Cost: $28,424 paid for from budgeted funds FY 2021-22 and FY 2022-23.


  • Volunteers completed their work
  • The City will be doing the fine painting around letters as time allows
  • Estimated Cost: $500 for paint and supplies paid for from budgeted funds

Friends of Elder Citizens Building

  • The building and property have now been conveyed
  • Documents are recorded at the county
  • Ribbon cutting soon
  • Cost of Survey: $4K

Street Signs

  • We have replaced 129 street signs and all of Foley addition was done with the project
  • We have 20 signs on order
  • We are reordering the 10th 12th and 5th that were ordered in written letters instead of numbers
  • We have a work order in to repaint the city hall handicap spaces blue and set signage
  • Cost: $23K paid for from budgeted funds

Drainage on 2nd Street and in front of the Drainage District/Donut Shop

  • TxDot will not improve, so we improved.
  • We fixed drainage issue with a large collapse and hole underground that could have become a sinkhole
  • Very dangerous with cars and buses passing over it
  • Our Public Works Team did an outstanding job!
  • In front of the drainage district/donut shop, we will finish soon; the gradall was out getting fixed and is back in service.
  • Cost: Labor and materials

5th and Morton Property

  • Finish cleaning it up and remove underground tanks
  • Cost: Dumpsters, Labor, cost to remove underground tanks (getting bids)
  • Environmental studies in progress

Swimming Pool

  • Working with Ed Rachal Foundation (ERF) to replat the property before they can transfer it to the City DONE
  • YMCA will operate
  • ERF will pay all operating fees, but does not want the pool property
  • The pool will be open and operating as scheduled
  • Cost to the City: $0. ERF is picking up all costs.
  • Major reconstruction planned for Fall of 2023

Water Mains

  • Update Water Mains
  • Grant with Texas Department of Agriculture (TDA)
  • Waiting on TDA to approve Environmental
  • Cost Estimate: $350K
  • Approved work to begin in August
  • View Project Here

TxDOT Aviation Capital Improvement Project