Certificates of participation have become a popular financing method for cities, counties, school districts, and other public entities. They offer officials a way to obtain the resources needed to build capital improvement projects without having to obtain a vote of the public while complying with California debt limitation laws such as Proposition 13.
At Weist Law, we guide public entities through the process of structuring and issuing certificates of participation (COPs). COP transactions can be complex, requiring knowledge of leasing, real estate law, corporate entity formation and securitization, in addition to public finance and tax law. For over thirty years our firm has been handling all aspects of a COP transactions throughout California, and we work hard to ensure that staff is involved and informed each step of the way.
In addition to the typical COP public offering, we also specialize in the many variations of COPs, including Build America Bond designation, private placement, variable rate, multi-modal interest rate, and Marks-Roos pooling programs.
Examples of Projects Financed by COPs
Our COP projects have included:
- Public buildings such as city halls, administration buildings, courthouses, libraries, police and fire stations and civic center complexes
- School campuses, buildings, gymnasiums and performing arts buildings
- Water system facilities
- Wastewater treatment facilities
- Irrigation District facilities, including "Water Banks"
- Recreational projects such as golf courses, sports complexes parks, open space and marinas
- Solid waste facilities
- Community College buildings, laboratories, theaters and equipment
- Energy projects
- Prison, jail and other correctional facilities
- Parking structures
How COPs Work
All COPs are structured so that the ownership of the building, equipment or land being financed (the "Project") is vested in a third-party entity that then leases the Project back to the public agency conducting the financing, giving that agency the use or occupancy of the Project in return for lease payments from its general fund. The third-party entity assigns the lease payments to a trustee, who then remits the lease payments to investors of the COPs. Our firm handles all aspects of this type of public financing instrument, including acquiring bond insurance, obtaining bond ratings and determining abatement terms.
Like other public finance instruments, COPs are ultimately sold to investors and require the same due diligence on the part of the issuer as other securities. Our office is known for the care and attentiveness with which we handle each step of the process. To have us discuss the pros and cons of a COP financing, call the California-based Weist Law Firm at 831-438-7900 or contact us online.
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