Capital Projects: Why Does the City Issue Bonds?

The City of Sugar Land uses bonds as a funding source for capital projects, which are improvements or additions to the City's physical assets. Capital projects can be further categorized into land, buildings, improvements other than buildings, and infrastructure, which includes roads, sidewalks, bridges, utility lines, etc. Capital costs typically consist of preliminary design, final design, and construction, and may involve the acquisition of land or rights-of-way (easements).

The City Charter charges the City Manager with recommending a multi-year Capital Improvement Program (CIP) to the City Council as part of the annual budget. The proposed annual budget and multi-year CIP must be presented to the City Council by the end of July. The CIP is a long range plan that identifies capital projects, provides a planning schedule, and identifies options for financing the plan. The program provides a link between the City’s comprehensive plan, various master plans, the annual budget, and the five‐year financial forecast. The City seeks involvement of various stakeholders during the CIP development process because the City recognizes the invested interest in maintaining Sugar Land as a “great place to live and work.” The City considers input from citizens, the Planning and Zoning Commission, City Council and City staff members in the CIP preparation. The Five Year CIP is limited by City Council policy to the affordability limits identified in the long range financial plan of the City.

There are three basic methods of financing capital requirements: Funding from current revenues (general, utility, economic development and airport funds); funding from fund balance/working capital as allowed by the Fund Balance/Working Capital Policy; or funding through the issuance of debt. When possible, the City uses cash for capital improvements within the financial affordability of each fund rather than issuing debt.  Debt financing is used when the capital assets or projects cannot be funded prudently from current revenues or fund balances.  Debt financing is also utilized to better ensure inter-generational equity by spreading payments for assets and infrastructure over their useful lives.  This is similar to taking out a mortgage to purchase a home that you intend to live in for a long time rather than emptying your savings to pay cash.  Debt is not used to fund operating expenses.

FY23 GO Bond Funded Projects

GO Bond Projects Amount
Animal Shelter
Public Safety Building Rehab
Public Safety Training Facility
EOC/Dispatch Building
Sugar Creek Drainage Impr.
Avalon/Brazos Landing/Commonwealth 
University Blvd Widening
Major Street Rehabilitation
Country Club Blvd Improvements
Total GO Bond Projects

Applied to TWDB for Loan

Project Amount
Covington Woods Drainage Improvements- Covington West & Imperial Woods $4,000,000

Utility Revenue Bond Projects

Utility Project Amount
Telfair Raw Water Pump Station
Lift Station 48 (MUD 136 Reg LS#1)
Lift Station Rehabilitation
Wastewater Treatment Plant Improvements
Collection System Rehabilitation
North WW Treatment Plant Improvements
Regional Wastewater Siting & Distribution Plan
Flow Monitoring & WW Modeling Study 
Evaluation of Greatwood WWTP Rehabilitation Alternatives
Lift Station Bypass Pump Assessment
Lift Station Odor Control Study/PER
Advanced Metering Infrastructure
Distribution System Water Main Rehabilitation Program
Ground Storage Tank Rehabilitation
SCADA Improvements
Ground Water Plant Rehabilitation
Well Rehabilitation
Regional Water Facility Siting & Conveyance Study
Greatwood & RiverPark Water System Capacity Improvement Evaluation
Total Utility Revenue Bond Projects

CO's for Sugar Land Regional Airport

Project Amount
Parallel Taxiway relocation & Hangars ALD #4  & ALD#11
$ 2,295,211
Land Acquisition
Runway Design
Total Certificates of Obligation- Airport

Capital Improvement Process 

How does the City decide what projects are included in the Capital Improvement Program? An overview of the development process can be found on the Engineering Department's website.