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City Council Authorizes Issuance of Certificates of Obligation

​At the July 24, 2018 meeting, the Coppell City Council unanimously voted to approve an ordinance authorizing the City to issue Combination Tax and Limited Surplus Revenue Certificates of Obligation in the amount of $42,405,000. These bonds will be used to fund necessary quality of life projects and improvements.   

Previously, the City Council authorized City staff to move forward with a notice of intent to issue $46,185,000 in Certificates of Obligation. Because of the City's AAA bond rating and market conditions, the certificates sold at a premium with an interest rate of 3.19 percent. The City was therefore able to reduce the amount of debt issued, which will save tax payer funds in the long-term. 

"Our AAA bond rating is significant because it lowers the cost of borrowing for Coppell taxpayers," said Jennifer Miller, Director of Finance. "We were able to reduce the amount of debt we had to issue, which meant that we were able to be better stewards of public monies while still taking on projects that will positively impact the lives of our residents."

The City Council also approved a resolution authorizing the City to execute an agreement with the Coppell Recreation and Development Corporation (CRDC) for the construction of the long-anticipated Arts Center. The City and CRDC have established an inter-local agreement in which the CRDC pledges the sales tax revenue, of which approximately 65% is collected from businesses and corporations, for the Arts Center debt repayment.  

"We have an agreement with CRDC stating that they will pay their share of the principal and interest on the bonds," said Miller. "The City issued the certificates of obligation, but the CRDC will transfer sales tax revenue to the City for the repayment of principal and interest." 

Likewise, water and sewer revenue collected from residential and commercial utility payments will be used to pay the principal and interest related to the portion of the bonds used for Water and Sewer System projects.​

The certificates of obligation will be used to fund the followingprojects: 

  • Water Works and Sewer System Project – This $12 million issue will be funded from water and sewer revenues generated by users in the consumption of water and discharge of wastewater. Of the $12 million, $6.8 million will be used to fund the Advanced Water Meter System project, $3 million for inflow and infiltration improvements, $1 million for equipment at the Village Parkway Pump Station, and $1.2 million for the rehabilitation of a water tower. 
  • General Government Projects – This $18 million issue includes $6.5 million for Phase 2 of the Rolling Oaks Cemetery expansion, $10 million for the design and construction of Fire Station 4 and the design of Fire Station 1, and a $1.5 million repayment to the City for the asphalt overlays on Royal Lane and South Belt Line. 
  • Arts Center Project – This $16 million issue will be funded by a transfer of sales tax revenue from the Coppell Recreation and Development Corporation (CRDC). The City and CRDC have established an inter-local agreement in which the CRDC pledges the sales tax revenue, of which approximately 65% is collected from businesses and corporations, for the debt repayment.  

For more information about of certificates of obligation or other sources of City funding, contact the Finance Department at 972-304-3691.