Financing
Designed to Minimize Tax Impact.
Certificates of Participation (COPs) let the city build a recreation center from its existing budget — no bond vote, no new taxes. Idaho Falls, Nampa, and Chubbuck all did it this way.
The Simple Version
How does the city build a $65 million building without raising your taxes?
The recreation center is designed to pay for itself operationally through the people who use it. Membership fees, program registrations, tournament entries, and facility rentals are intended to cover ongoing operations and the annual lease payment — following the same model Nampa has used for 30+ years.
Here's how it works:
- Investors put up the construction money through a financial tool called Certificates of Participation (COPs). Think of it as rent-to-own for a city building.
- The city makes annual payments from its existing $101 million budget — designed to avoid new taxes, no bond vote required. The city council approves it directly (4 of 7 votes).
- Before the doors even open, charter membership pre-sales and corporate sponsorship commitments begin offsetting those payments. Nampa pre-sold 13,000 memberships before their rec center opened.
- Once the facility opens, membership revenue, program fees, tournament hosting, facility rentals, and concessions cover the payments AND operating costs. The city's general budget steps back.
- After 20-25 years, it's paid off. The city owns it free and clear. Nampa paid off their rec center debt by 2003 — nine years early — and has operated at 100% operational self-sufficiency (no general-fund subsidy) for over 30 years.
“But where does the money actually come from?”
Fair question. Here's the honest breakdown:
During construction (Years 1-3):
The building doesn't exist yet, so there's no membership revenue. During this period, the annual COP payment (~$2.4M on a $40M COP) comes from three sources:
- Pre-sold charter memberships. Nampa sold 13,000 before opening. At 5,000 Twin Falls pre-sales averaging $600/year, that's $3 million before a single door opens.
- Corporate sponsorship and naming rights. Contracted before construction begins. Interior naming rights on courts, fitness center, community spaces — $2-5M in committed revenue.
- The city's existing $101M budget. The ~$2.4M annual COP payment represents roughly 2.4% of the current budget — absorbed the same way Idaho Falls absorbed its $30M police station payments.
After opening (Year 3+):
The recreation center becomes an enterprise fund — a city-owned operation that runs like a business. Revenue from memberships, day passes, programs, tournaments, rentals, and concessions covers both the COP payments and operating costs. The city's general fund steps back.
This is how Nampa's rec center has operated for 30+ years: no ongoing general-fund subsidy, operations fully funded by users, ~$3 million in reserves. (The original $6.5M in COPs was still city-backed debt — this describes operations, not construction financing.)
Why not just use a regular bond? In Idaho, bonds require 66.67% of voters to say yes — the highest threshold in the country. From 2020 to 2024, only 26% of Idaho school bonds passed — and municipal bonds face the same supermajority threshold. The Twin Falls fire station bond failed in 2019 despite 63.45% voting yes. COPs skip that problem entirely.
What makes a rec center different from a police station? Police stations and city halls generate zero revenue — the city budget covers the COP payment forever. A recreation center is a revenue-generating facility. That's why the Nampa model works and why it's the right precedent for Twin Falls.
The bottom line: this model is designed to minimize tax impact — the city's existing budget absorbs the construction-phase payments, and user revenue is intended to cover operations once the facility opens. Idaho Falls, Nampa, and Chubbuck all used this approach. The Idaho Supreme Court validated the COP structure in 2015. This isn't experimental — it's proven.
The Layered Funding Model
COPs don't need to cover the full $65M. Multiple revenue streams reduce the COP amount and spread risk.
With layered funding, the COP drops to $35–40M — annual payments of ~$2.1–2.4M (2.1–2.4% of the city's $101M budget).
COP Financing Calculator
COP Financing vs Traditional Bond
COP Financing
- ✓ Designed to avoid property tax increases
- ✓ City council vote (4 of 7) — no public election
- ✓ Paid from existing budget + membership revenue
- ✓ COP structure validated by Idaho Supreme Court (2015)
- ✓ Used by Idaho Falls ($30M), Nampa, Chubbuck
- ✓ Weeks to fund (council vote)
Traditional Bond
- ✗ Property tax increase (~$188/year per household)
- ✗ Requires 66.67% supermajority — highest in America
- ✗ Only 26% of Idaho school bonds passed (2020-2024) — same threshold
- ✗ 2019 Twin Falls fire station bond failed
- ✗ 12-18 months for campaign + election
- ✗ Vulnerable to anti-tax opposition groups
Proven in Idaho
Nampa Recreation Center
140,000 sq ft, $6.5M in COPs. 13,000+ charter memberships pre-sold. Debt paid in full by 2003. Operations today are funded entirely by user fees (no general-fund subsidy), ~$3M fund balance.
Idaho Supreme Court: Frazier v. Greater Boise Auditorium District
Unanimous ruling validating COP structure. Annual lease renewal with non-appropriation clause complies with Article VIII, Section 3. Binding precedent for all Idaho municipalities.
Chubbuck Municipal Facilities
$15.31M in COPs. City hall, police expansion, animal shelter, fire station. A+ credit rating. No tax increase.
Idaho Falls Police Station
$30M in COPs at 1.89% over 22 years. Paid from existing budget — $0 tax increase. Completed on budget. Moody's Aa2 issuer rating.
Twin Falls Recreation Center
$65M estimated. Layered funding: COPs + charter memberships + corporate sponsorship + land contribution + grants.