The federal government wants the city of Dallas to repay $15 million that it sent by mistake years ago.
The money from the U.S. Army Corps of Engineers was for Trinity River levee flood control work reviewed by it.
"We provided the city cash when we weren't authorized to do so," said Richard J. Muraski Jr., commander, U.S. Army Corps of Engineers Fort Worth District.
The city has already spent $8 million of that cash buying land for future levee expansion.
A briefing delivered to the Dallas City Council Trinity River Corridor Committee on Monday laid out a five-year repayment plan that Muraski said the corps negotiated with city officials to lessen the impact on the city.
The briefing requested committee support at a Sept. 28th vote of the full City Council on a contract to repay the money.
The city is facing an extremely difficult budget and may have to borrow $8 million with interest in a future bond issue to meet the corps request according to the briefing.
"I would use the word outrageous," said former Dallas Councilman Craig Holcomb, a longtime observer of Dallas levee issues.
"There is no question that we did what we were supposed to do with the money and that they sent us the money knowing they were sending us the money, so it really makes no sense," he said.
At the very same meeting, council members heard another briefing detailing the additional work the corps now insists Dallas must perform to make the levees safe under rules that became more stringent following levee damage in New Orleans from Hurricane Katrina.
Dallas officials say they had always received good marks from the corps on the condition of the Trinity River levees in the past.
"One of the constant frustrations is that the rules change, and without knowing it, you have to go back and make up something that when you did it, you obeyed the rules," Holcomb said.
City officials estimate the additional work now required by the corps will cost Dallas at least $50 million.
"It would seem that it's better to spend the $15 million doing that than paying them back," Holcomb said.
Dallas recently spent about $1 million on levee area tree removal required by the corps.
"They are now saying maybe the trees on levees are good," Holcomb said.
The City Council committee met behind closed doors with city lawyers for about 45 minutes, then voted against the repayment deal and instructed city lawyers to negotiate a better deal with the government.