Category: Follow the Money

WAIT. THEY CAN CREATE DEBT WITHOUT VOTER APPROVAL?

THE SHORT ANSWER:

Yes.

Texas cities can issue a type of debt called certificates of obligation, or COs, without first asking voters to approve the borrowing in a conventional bond election.

But there are rules. The City must provide public notice, and in many cases voters can petition to require an election before the debt is issued.

WHY SHOULD I CARE?

Because you may ultimately help repay that debt even though you never voted on whether the City should borrow the money.

Certificates of obligation can be repaid using property-tax revenue, other City revenues, or a combination of the two. Texas law requires the public notice to disclose how the proposed certificates will be repaid, along with the maximum principal amount, estimated principal and interest, and maximum maturity date.

That makes understanding COs especially important when a city is considering a large, long-term financial commitment.

MAKE IT MAKE SENSE:

Imagine the City wants to build a major public project.

One way to borrow the money is through general obligation bonds, commonly called GO bonds.

But Texas law gives cities another financing tool: certificates of obligation.

With COs, the City Council can authorize certain borrowing without first putting the debt on the ballot. The City must publish notice before the certificates are authorized. That notice must tell residents, among other things, how much the City proposes to borrow, what the money is for, how the debt will be repaid, the estimated total principal and interest, and how long the debt may remain outstanding.

Here’s the part that’s easy to miss:

No election does not necessarily mean voters have no say.

For COs subject to the petition provision, if at least 5% of the City’s qualified voters submit a valid petition protesting the issuance before the statutory deadline, the City cannot issue those certificates without holding an election and receiving voter approval. Texas law also contains exceptions to these procedures for certain purposes.

So the system essentially works differently from a traditional bond election:

GO bond: The City asks voters before issuing the voter-authorized debt.

Certificate of obligation: The City Council can authorize qualifying debt without an election unless an applicable legal requirement or a successful voter petition requires one.

And this isn’t just a technical distinction for Pflugerville.

In 2023, Pflugerville City Council approved approximately $153 million in certificates of obligation for Downtown East. Community Impact reported that $86.8 million was tax-supported and $66.2 million was described as self-supported.

That’s why knowing the words “certificate of obligation” matters.

When you see them on an agenda, don’t just ask:

“What are they building?”

Also ask:

“How much are we borrowing, how much will repayment cost, what revenue will repay it, and was an election required?”

THE RECEIPTS:

WHAT TEXAS LAW ACTUALLY SAYS

Chapter 271 of the Texas Local Government Code establishes the certificate-of-obligation process. It sets the public-notice requirements and provides that, for COs subject to the petition process, a petition signed by at least 5% of qualified voters can require an election before issuance.

WHY CERTIFICATES OF OBLIGATION EXIST

The Texas Comptroller explains that COs give local governments flexibility to finance certain public projects without first holding a conventional bond election. The Comptroller also explains the 5% petition mechanism and discusses both the practical arguments for COs and concerns that have surrounded their use.

HOW PFLUGERVILLE USED THEM FOR DOWNTOWN EAST

In May 2023, Pflugerville City Council approved approximately $153 million in certificates of obligation for Downtown East. Community Impact reported that $86.8 million was tax-supported and $66.2 million was designated as self-supported.

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September 20, 2026
Pflugerville has a $481.4 million budget for FY27. What does that actually mean?

THE SHORT ANSWER

Pflugerville’s $481.4 million FY27 budget is the City’s financial plan for the year.

It includes money for everyday City services, employees, water and wastewater operations, debt payments, major construction projects and other expenses.

But not all $481.4 million comes from property taxes, and not all of it can be spent on whatever the City chooses.

That’s where understanding the budget gets interesting.

WHY SHOULD I CARE?

When you hear:

“Pflugerville has a $481.4 million budget.”

Don’t automatically hear:

“Pflugerville is spending $481.4 million of our property taxes this year.”

Those are two very different statements.

The better questions are:

Where does the $481.4 million come from?

Where is it going?

How much represents the cost of running the City today, and how much represents construction, debt and other long-term commitments?

That’s how a $481.4 million number starts becoming a budget ordinary people can actually understand.

MAKE IT MAKE SENSE

Think about your own household budget.

You might have money coming in from your paycheck, savings you’ve set aside, money borrowed for a car, and perhaps funds reserved for a specific expense.

Add all of that together and you could get a pretty big number.

But that doesn’t mean you have that entire amount available to spend however you want.

A city budget works somewhat the same way.

Pflugerville doesn’t operate from one giant pot of money. The City’s budget is made up of different funds, and those funds receive money from different places and pay for different things.

Property taxes help fund City operations and debt. Sales taxes provide another source of revenue. Water and wastewater customers pay rates and fees that support the City’s utility system. The City can also receive development fees, grants and other revenue. And money borrowed for major capital projects may appear in the City’s financial plan even though that money is intended for those projects rather than ordinary City operations.

That distinction matters.

If Pflugerville borrows $50 million to build infrastructure, for example, the budget can reflect that money and the related spending. But the City hasn’t suddenly become $50 million richer. It has borrowed $50 million for a particular purpose and created an obligation to repay it.

The same principle applies to money collected through the City’s utility system. Water and wastewater revenue isn’t simply another pile of cash available for any City expense.

THE RECEIPTS

1. THE ACTUAL FY27 BUDGET

The City of Pflugerville publishes its official FY27 budget through its Finance Department. This is the primary source for understanding the City’s funds, revenues, expenditures and financial assumptions.

2. WHERE PFLUGERVILLE KEEPS ITS FINANCIAL RECORDS

The City’s Annual Financial Documents page provides the FY27 budget alongside prior approved budgets and other City financial records.

3. WHAT CITY COUNCIL ACTUALLY ADOPTED

The City reports that Council approved the FY27 budget and adopted a property-tax rate of $0.5436 per $100 of taxable value. That tax rate is one piece of the City’s overall revenue picture, not the source of the entire $481.4 million budget.

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September 20, 2026
WHAT IS ECONOMIC DEVELOPMENT AND WHY DOES IT MATTER?

THE SHORT ANSWER:

Economic development is the work a community does to strengthen its local economy by creating jobs, supporting businesses, attracting investment, and growing its tax base.

WHY SHOULD I CARE?

Because the strength of Pflugerville’s local economy affects the opportunities, services, and financial burden shared by everyone who lives here.

Here’s why that matters to you:

Communities compete with one another for businesses, especially companies that bring good-paying jobs and significant investment.

When more businesses invest and operate in Pflugerville, they also generate additional taxable activity. That can bring more revenue into the community to help support a growing city.

Communities compete with one another for businesses, especially companies that bring good-paying jobs and significant investment.

MAKE IT MAKE SENSE.

In Pflugerville, economic development has its own dedicated funding source.

In 2001, voters approved a half-cent sales tax to fund economic development. Today, that money goes to the Pflugerville Community Development Corporation, or PCDC, a Type B economic development corporation.

So when you spend $100 on something taxable in Pflugerville, 50 cents goes to PCDC.

What is that money supposed to do?

PCDC works to attract new businesses, help existing businesses stay or expand, create local job opportunities, and support things such as workforce development and infrastructure needed for economic growth. Texas law also allows Type B corporations to fund certain other eligible projects, including some parks and recreation projects.

Economic development isn’t free money. It’s public money being invested with an expected public benefit.That’s why competition will often involve financial incentives. The idea is to make that community more attractive when a company is deciding where to locate or expand.

But an incentive isn’t supposed to be simply free money for a business. When an economic development corporation directly funds a company, Texas requires a written performance agreement that spells out what the company is expected to deliver, including jobs or payroll and capital investment, as well as repayment terms if it fails to meet those requirements.

So perhaps the most important question isn’t simply whether Pflugerville should support an economic development program led by a team of highly skilled professionals.

It’s whether the taxpayers will get enough public benefit from the use of PCDC funds in return for what our leaders are choosing to spend it on.

THE RECEIPTS:

1. HOW PFLUGERVILLE FUNDS ECONOMIC DEVELOPMENT
PCDC is Pflugerville’s Type B economic development corporation. It receives a one-half-cent sales tax on taxable purchases in Pflugerville to fund economic development activities.

2. WHAT TEXAS LAW ALLOWS THE MONEY TO FUND
Texas allows Type B economic development corporations to fund eligible business-development projects and certain quality-of-life projects, including parks, sports facilities, infrastructure and affordable housing.

3. WHAT BUSINESSES MUST PROMISE WHEN THEY RECEIVE DIRECT EDC FUNDING
An economic development corporation cannot simply hand sales-tax money to a business. Texas requires a written performance agreement when an EDC directly funds a business or makes expenditures benefiting an eligible project. At minimum, the agreement must address promised jobs or payroll, capital investment, and repayment if the business fails to meet the agreed requirements.

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September 20, 2026
WAIT. WE VOTED FOR A $47M REC CENTER AND GOT WHAT INSTEAD?

THE SHORT ANSWER:

Pflugerville voters approved $47 million for a recreation center in 2020.

So, voters approved one piece of the project.

What we’re now helping pay for is Downtown East, a much larger development that includes the recreation center, a new City Hall, parking, public infrastructure, retail space and land acquisition. Most of the additional borrowing was authorized by City Council through certificates of obligation, which did not require a conventional bond election.

WHY SHOULD I CARE?

The City later committed public money and debt to build something much bigger.

That raises a pretty simple question: How did we get from what voters approved to what taxpayers are now responsible for?

MAKE IT MAKE SENSE.

Think of it this way.

Voters said yes to borrowing $47 million for a recreation center.

The City later decided to make that recreation center part of a much larger Downtown East project. To pay for it, the City Council authorized substantially more debt, primarily through certificates of obligation, without holding another conventional bond election.

Certificates of obligation are legal. They allow cities to borrow money for certain public projects without first getting voter approval through a bond election.

So the issue isn’t whether the City could borrow the money.

The question is why voters were asked when the project was $47 million, but not when the financial commitment became much larger.

THE RECEIPTS:

1. WHAT VOTERS WERE ASKED TO APPROVE
The City of Pflugerville’s official record of the 2020 Bond Election, including Proposition C.

2. WHAT DOWNTOWN EAST BECAME
By 2023, Downtown East had developed into a larger mixed-use project incorporating the recreation center, City Hall and additional public and private development.

3. HOW THE ADDITIONAL BORROWING WAS APPROVED
In 2023, City Council approved approximately $153 million in certificates of obligation for Downtown East, including debt described as tax-supported and self-supported.

4. HOW THE FINANCING FIT TOGETHER
By November 2023, the reported Phase One financing included the voter-approved bonds, certificates of obligation, right-of-way funding and a comparatively small developer-financed retail component.

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September 17, 2026