Pflugerville City Council approved the sale of city bonds Jan. 9 to the Texas Water Development Board, resulting in interest savings of over $28 million.

In a nutshell

As Pflugerville pushes forward Phase 2 of construction for the Wilbarger Creek Regional Wastewater Treatment Facility expansion—a $200 million project—city staff identified potential cost savings by selling the city-issued bonds directly to the TWDB rather than on the open market.

Council’s approval of the transaction marks the third and final issuance of a $164 million financial agreement previously authorized with TWDB, with bond funding to be used towards the Wilbarger project.

“The reason that you go to the [Texas Water Development Board] is they provide a significant interest cost subsidy, as compared to open market interest rates,” said Dusty Traylor, a financial adviser for the city.

Traylor noted that TWDB offered a 2.61% interest rate to the city, compared to the current 3.93% interest rate found on the traditional market.

“This translates in dollars to about $28.3 million in interest savings over the life of these bonds by going through the Texas Water Development Board to conduct this financing,” Traylor said.

Pflugerville has been awarded the TWDB funding as expansion plans include environmental conservation strategies, such as reclaimed water and biosolids composting, according to city documents.

Some context

City Council initially approved plans for wastewater expansion July 2022, which includes a new treatment facility and 15,300 linear feet of new wastewater lines in Pflugerville. The Wilbarger project, located on a 159-acre tract of land near Wilbarger Creek north of Gregg Lane, has been identified as a critical capital improvement project in the city’s 2020 wastewater master plan.

The completed project will allow for the treatment capacity of 24 million gallons per day, according to city documents.

Wastewater has been listed as one of the highest priorities for the Pflugerville residents in a recent city survey.

Pflugerville continues to experience a heightened demand for water and wastewater services as the city expects a population growth of nearly 80,000 residents by 2030, according to a previous reporting by Community Impact.

The Wilbarger expansion plans will nearly double the plant’s capacity, tracking closely with future expected wastewater demand. In 2020, Pflugerville experienced a demand of 10.28 million gallons per day in water services.

Water demands are expected to increase to 20.3 million gallons per day by 2030, according to data compiled by Community Impact.

"It's a testament to this council and this administration. The financing mechanisms that you guys are going after—you've got a robust capital plan here. Everybody knows [council members] are seeking alternatives and have been driving towards those alternatives that will drive down the borrowing costs for that capital improvement plan. And this is one example of that," Traylor said.

Looking ahead

In tandem with the Wilbarger expansion project, Pflugerville is currently working on plans for a second pipeline to pump water from the Colorado River into Lake Pflugerville.

The city is currently negotiating land deals and in discussions of eminent domain for several properties along the planned route for the pipeline.