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City Council Approves Notices of Intent to Issue Certificates of Obligation

​At the June 12, 2018 meeting, the Coppell City Council unanimously voted to publicize three separate notices of intent to issue certificates of obligation. Because the City is looking to fund projects using three separate funding sources, Finance staff recommended that the City issue the notices of intent individually, but the bonds themselves will be sold collectively. 

"Because the City's tax obligations are rated AAA, we chose to issue certificates of obligation because this will afford the City a better interest rate," said Jennifer Miller, Director of Finance. "We have an agreement with Coppell Recreation and Development Corporation stating that they will pay their share of the principal and interest on the bonds. In addition, water and sewer revenue will be used to pay the principal and interest related to the portion of the bonds used for Water and Sewer System projects."

By using this financing method, the City will realize significant savings over the life of the bonds. According to Miller, revenue bonds come with a reserve requirement that would oblige the City to set aside approximately $1.7 million for the life of the bond. By issuing certificates of obligation, the City bypasses the need to set aside reserve funds, which leaves these funds available for other uses. 

The certificates of obligation will be used to fund the following projects: ​

  • 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 certificates of obligation or other sources of City funding, contact the Finance Department at 972-304-3691.