At the July 22 Budget Workshop, City Council discussed Coppell’s Debt Service Fund, which is used to account for the accumulation of financial resources for the payment of principal, interest and related costs for general long-term debt. Debt – typically in the form of Certificates of Obligation – is issued as needed to provide for public infrastructure and safety.
Per the City’s Charter and State and Federal law and with City Council direction, the City uses debt to finance the construction, acquisition or renovation of infrastructure. The City may also issue bonds to refinance existing debt when there is an opportunity to obtain a better interest rate and decrease interest expense. The City does not issue debt – or use any proceeds from issuing debt – to finance operations or for normal maintenance.
Each year, City staff reviews any outstanding debt to determine whether or not there is an opportunity to refinance the debt at a better rate. By refinancing, the City is able to reduce the amount of its payment on the debt, and this in turn allows the City to use taxpayer funds for other projects. The City has retained its AAA bond rating – the highest rating available – from both Moody’s Investors Services and S&P Global, which highlights the City’s strong and experienced management and financial policies, solid budgetary performance and flexibility, and strong liquidity.
Earlier this year, the Coppell City Council approved the issuance and sale of Combination Tax and Limited Surplus Revenue Certificates of Obligations (COs), which will help fund street, water and sewer projects. These securities sold at a premium, meaning investors paid more than 100 cents on the dollar.
The majority of the funds raised in the recent CO sale will go to the Belt Line Road project. The remaining funds will be used for a water system redundancy project, the painting and rehabilitation of Water Tower #2, and the replacement of various large diameter water lines.
Learn more about the City’s use of debt. Keep up to date with all things budget at coppelltx.gov/budget.
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