Coppell council directs staff to pursue bond refunding, weighs issuing debt for three fire stations

Coppell — The Coppell City Council on Feb. 6 directed staff to move forward with work to refund callable certificates of obligation and asked bond counsel and the city’s financial advisor to prepare the necessary documentation for a potential sale.

Kim (finance staff) told the council the city’s financial advisor, Jason, identified the 2013 and 2016 certificates of obligation as callable. "We would save about $449,000 over the life of these bonds," Kim said, adding that the modeled net present value savings was roughly 4.13% in current market conditions and could rise if rates decline. She said that equals an average annual interest reduction of about $45,000 for the tax‑supported issues.

The staff analysis also showed potential savings on revenue bonds issued for the Coppell Recreation Development Corporation (CRDC). "For CRDC Series 2014, refunding in the current market shows about $768,000 in life‑of‑issue savings," Kim said, noting that more favorable market changes could increase that total toward $1.1 million in one scenario.

Why it matters: refunding callable debt replaces older, higher‑cost obligations with lower‑cost debt and can reduce government interest costs without extending maturities. Kim emphasized this refunding would not lengthen the original maturities; the city would not extend the payoff dates for the 2013 and 2016 issues.

Council questions focused on process and timing. Jason’s parameter sale recommendation would let the council pre‑authorize a refunding within defined guardrails; staff would then return with formal agenda items after working with bond counsel. Several council members signaled support for proceeding with the analysis and paperwork: when asked whether the council was "good with moving forward with the refunding and moving forward with a reimbursement resolution?" multiple members answered in the affirmative and staff recorded the direction to proceed.

Debt for capital projects: staff framed refunding as one tool in a broader capital strategy. Kim described an option to issue new certificates of obligation instead of spending set‑aside cash on three fire‑station projects (total estimated cost about $17 million; Fire Station 3 estimated a little over $6 million). Issuing debt for those projects could preserve the city’s M&O tax rate used for operations and free set‑aside funds for other one‑time projects.

Council members underscored the condition of the stations as a rationale for timing. Mike (staff) described all three stations as aged and heavily used and said doing the three stations together would equalize facility conditions.

Next steps: staff will engage Jason and bond counsel to draft the reimbursement resolution and bring a formal agenda item to council for a later vote. The council did not adopt an ordinance or vote on issuing debt at the retreat; it provided direction to continue with the refunding process and with preparations that would allow a later sale under council‑approved parameters.