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
$250,000
Public Safety Building Rehab
1,000,000
Public Safety Training Facility
9,000,000
EOC/Dispatch Building
1,500,000
Sugar Creek Drainage Impr.
4,300,000
Avalon/Brazos Landing/Commonwealth 
6,780,000
University Blvd Widening
1,500,000
Major Street Rehabilitation
3,000,000
Country Club Blvd Improvements
1,700,000
Total GO Bond Projects
$29,030,000

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
$260,000
Lift Station 48 (MUD 136 Reg LS#1)
650,000
Lift Station Rehabilitation
1,050,000
Wastewater Treatment Plant Improvements
1,500,000
Collection System Rehabilitation
300,000
North WW Treatment Plant Improvements
800,000
Regional Wastewater Siting & Distribution Plan
225,000
Flow Monitoring & WW Modeling Study 
600,000
Evaluation of Greatwood WWTP Rehabilitation Alternatives
100,000
Lift Station Bypass Pump Assessment
250,000
Lift Station Odor Control Study/PER
150,000
Advanced Metering Infrastructure
2,000,000
Distribution System Water Main Rehabilitation Program
2,800,000
Ground Storage Tank Rehabilitation
1,200,000
SCADA Improvements
304,000
Ground Water Plant Rehabilitation
2,160,000
Well Rehabilitation
870,000
Regional Water Facility Siting & Conveyance Study
185,000
Greatwood & RiverPark Water System Capacity Improvement Evaluation
200,000
Total Utility Revenue Bond Projects
$16,504,000

CO's for Sugar Land Regional Airport

Project Amount
Parallel Taxiway relocation & Hangars ALD #4  & ALD#11
$ 2,295,211
Land Acquisition
2,850,000
Runway Design
1,265,000
Total Certificates of Obligation- Airport
$6,410,211

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.