Certificates of Participation as an Alternative Funding Source For Capital Projects: A Case Study


  • Nancy J. Gladwell
  • James R. Sellers
  • J. Robert Brooks


local parks and recreation, public financing, capital development and improvement, capital financing, certificates of participation, and lease purchase agreements


Adequate funding for public parks and recreation is essential for the provision ofleisure services at the local government level. Professional literature from the 1980s and early 1990s indicates growing concern over the availability of traditional funding sources to finance capital development and improvement projects. Such concern has prompted local governments to turn to more nontraditional sources to finance needed capital projects. One such financing technique is the use of lease purchase agreements or the issuance of certificates of participation (COPs). COPs are similar to general obligation bonds with one primary difference. Unlike general obligation bonds, COPs are not secured by the "full faith and credit" of the local government but by either project revenues or monies annually appropriated from the general fund of the local government entity. This article provides a case study that examines the use of COPs to fund the development of a recreation activity center in the City of North Augusta, South Carolina, a community with a population of approximately 16,000 people.





Regular Papers