Agenda Date: 02/17/2026
Subject:
Title
Main Street Improvements Financing: Certificates of Participation (COPs) Discussion
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by: |
Laurie Matta, Finance Director |
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Presentations: |
Laurie Matta, Finance Director |
PURPOSE:
To propose a strategy to finance Main St. improvements through issuance of Certificates of Participation (COPs) in the summer of 2026.
LONG-TERM OUTCOME(S) SERVED:
Vibrant Community with Rich Culture; Robust and Resilient Economy; Safe Community
DISCUSSION:
In September Council provided direction to proceed with Certifications of Participation (COPs) for the Main Street Improvement, Belleview Service Center, and Town Hall Arts Center projects. Certificates of Participation (COPs) offer an efficient, timely, and cost-effective method for financing public infrastructure. COPs are a form of lease-purchase financing used by state and local government to finance the construction of public facilities. COPs are not considered debt under Colorado law, which means they do not require voter authorization for issuance. Due to immediate project readiness and specific expenditure requirements, staff recommends the issuance of COPs to fund the Main Street Improvement project.
The Capital Improvement Sales Tax (CIST) Fund secures our debt repayment, per a City Council informal policy allowing one-third for debt service and two-thirds for other capital needs. This approach allocates approximately $4 million annually to debt obligations.
Following Council's direction, the next steps include approving the COP issuance ordinance (1st and 2nd reading) in May, passing a reimbursement resolution in June, and finalizing funding in mid-July. Adopting a reimbursement resolution is essential to ensure that initial project costs can be recovered using proceeds from the future COPs issuance.
BACKGROUND:
Littleton faces a substantial backlog of capital needs that must be addressed to maintain high service standards for our residents. Maintaining the quality of life our citizens expect requires a renewed commitment to our city's infrastructure.
Revitalizing downtown is essential for economic growth; modernizing Main Street will enhance its beauty and walkability, drawing in the customers our local businesses rely on. We envision a revitalized Main Street that serves as a stunning destination for visitors and a strong support system for local shops.
Despite constraints on our debt capacity and borrowing options, we have several strategic tools to explore. Today’s discussion focuses on finding the smartest, most sustainable way to move forward. We are here to evaluate most effective path forward.
For 20 years, the city has refrained from issuing debt for facility upgrades to address our growth. The cost of delaying facility upkeep continues to rise. Over the past year, the Council has held discussions regarding near-term projects and potential long-term financing solutions. We intend to present a long-term financial strategy to Council at a future date.
Prior Actions or Discussions
In September 2026, the Council directed staff to proceed toward issuing COPs for Main Street improvements, the Belleview Service Center planned replacement, and Town Hall Arts Center renovation projects, all planned to occur in the next couple years.
FISCAL IMPACTS:
While the ultimate financial impact depends on market conditions at the time of borrowing, the city plans to move forward with capital improvements funded by the 2021 voter-approved sales tax increase of .75%. Our current fiscal strategy is to allocate 33% of these tax receipts toward debt repayment. Current projections provide approximately $4 million annually for repayment. Current market analysis indicates the $30 million project will require an annual expenditure of approximately $2 million.
STAFF RECOMMENDATION:
Next steps will be to bring forward an Ordinance authorizing the issuance of COPs and Reimbursement Resolution.
ALTERNATIVES:
1. Approve issuance of COPs in the near future.
2. Not approving the issuance of COPs will delay the start of capital projects.