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Pflugerville approves $80.1 million in certificates of obligation to fund waterworks projects
Summary
The Pflugerville City Council approved two ordinances authorizing $52,925,000 (Series 2026 A) and $27,180,000 (Series 2026 B) in combination tax and surplus-revenue certificates of obligation to fund waterworks improvements; the sales were awarded to the Texas Water Development Board and council votes were unanimous.
Pflugerville City Council on Jan. 27 approved ordinances authorizing issuance of combination tax and surplus-revenue certificates of obligation Series 2026 A ($52,925,000) and Series 2026 B ($27,180,000) to finance waterworks improvements, awarding the sales to the Texas Water Development Board. The council approved both ordinances on first and final reading after closing the public hearings.
City staff said the projects came in under earlier cost estimates, reducing the amount the city needs to issue. "We originally applied for 72,000,000, and the project came in below what we originally had projected," Tracy said, noting the city also received "1,100,000.0 from a county ILA and 2,400,000.0 for a FEMA grant that is gonna provide a generator on this site." The additional funds lowered the city’s borrowing need.
Justin Traylor of RBC, the city’s financial adviser, said the Texas Water Development Board financing produced notably lower interest costs than a public-market sale. "The interest rate on these obligations, all in TIC, is a 2.894%" for the A series, Traylor said, and "the B series is about 2.905%." He told council the board’s program yielded roughly $400,000 a year in lower debt service for the A series compared with a public-market sale and about $220,000 a year for the B series; Traylor estimated total lifetime savings in the millions.
Council members asked for clarity about which projects drew on CO proceeds and how staff reallocated budgeted amounts. Tracy explained the water-treatment-plant expansion had been listed at a higher amount on the 2025 CO list before Texas Water Development Board approval; because the actual need was lower, staff reallocated the difference to other projects that lacked funding. The Wise Pecan Waterline Project was cited as one recipient of previously budgeted funds.
No members of the public spoke during the hearings. Each ordinance was approved by unanimous voice vote following a motion and second.
Next steps: staff will complete closing and proceed with the sale through the Texas Water Development Board, and the city will allocate the granted and ILA funds to the identified project components.
