A potential 2028 bond has been pushed back to 2029 or 2030 to align with the expiration of the Tax Increment Reinvestment Zone 2. This move will free up enough financial capacity to pay for the new debt without instantly raising property taxes, Pearland City Manager Trent Epperson said.
What you need to know
TIRZ 2 is a financial district within Shadow Creek Ranch. As property values inside this zone increase, the "incremental" tax revenue generated from that growth is captured and kept within the zone's fund, rather than going toward the city's general bond debt, according to city documents.
TIRZ 2 is scheduled to expire at the end of 2028, Epperson said. When this happens, all of that captured property value is released back onto the city’s general tax rolls for fiscal year 2029-30.
Rather than issuing new debt before TIRZ 2 expires, city officials want to wait for the zone to end so they can use its returning property value to offset the cost of a future bond.
Diving in deeper
The plan to push the future bond election back was discussed at City Council’s special June 22 meeting. In that meeting, city officials outlined FY 2027-31’s capital improvement plan, or CIP.
From FY 2027-31, Pearland plans to allocate roughly $524 million to streets, drainage, facilities and parks with nearly 55 projects, according to city documents.
Much of the projects will be paid for through various bonds, general revenue and the Pearland Economic Development Corp., among other sources.
What’s next?
City staff will continue holding budget workshops throughout the summer, with the final five-year CIP and property tax rate scheduled to be formally adopted by City Council in September, according to city documents.
