Pflugerville council approves Meadowlark Preserve PID assessments and $14.77 million bond issue

Pflugerville City Council on Feb. 21 approved an ordinance levying special assessments for the Meadowlark Preserve Public Improvement District and authorized a special-assessment bond sale that will fund developer reimbursements and project costs.

At a public hearing, Tracy Waldron, finance director, said the item was a public hearing on levying special assessments tied to the Meadowlark PID. Rob Hazel of p3 works described the development as "the Meadowlark Public Improvement District. It's gonna bring 375 new single family homes into Pflugerville."

The council approved the assessment roll on second reading. Council members asked for details about assessment levels and payment options; Hazel said there are three lot-assessment tiers: $37,462 for the smallest lots, $38,884 for the mid-tier and $42,204 for the largest tier. Those assessments may be paid as 30-year annual installments or prepaid by a property owner, he said. The estimated first-year annual installments are about $2,776, $2,881 and $3,127 respectively.

The council then considered sale of special-assessment revenue bonds to fund the PID. Dane Kopinski of Stifel, the underwriter, told the council the bonds are secured solely by the PID trust estate (the assessments on properties inside the PID) and are not backed by the city's ad valorem taxing authority or other city revenues. Kopinski said the bonds sold to qualified investors at competitive pricing and an "all-in interest rate" of about 6.5 percent. He said the final par amount for the series is $14,772,000, with approximately $12,050,000 in project proceeds to the developer, roughly $1.4 million for required reserves, and the remainder for issuance costs.

Council members pressed for clarity about future refinancing and homeowner impacts. Kopinski said the issue carries a call feature allowing refunding beginning Sept. 1, 2033, and that refinancing could reduce annual assessment costs if market rates fall. Jacqueline Hale, bond counsel, and Dusty Traylor, financial advisor, participated in the discussion and answered legal and structuring questions.

Waldron and staff confirmed the assessment amounts used in the Service and Assessment Plan (SAP) remain valid based on the bond pricing that day.

The council voted to close the public hearing and approved the assessment ordinance on second reading and the bond-authorizing ordinance on first and final reading; minutes record the motions carried.

The council and staff repeatedly noted that the bonds are unrated and marketed to sophisticated investors because they rely only on the PID assessment trust estate rather than the city's general-obligation or utility revenues.

Votes at a glance: the council moved to close the public hearing and then approved the assessment ordinance (6A) and the bond-authorizing ordinance (6B); meeting minutes state the motions carried.

Meadowlark Preserve PID documents mentioned during the hearing include the preliminary and final Service and Assessment Plan, an indenture of trust, bond purchase agreement, offering memorandum and continuing disclosure agreement. Those documents were presented to council as part of the bond authorization package.