Certificates of Participation and Capital Markets: Lessons from Brevard County and Richmond Unified School District

This article analyzes the genesis of certificates of participation (COP) in the municipal securities market. We document the trend in the use of COPs and illustrate problems in the market through case studies of the Richmond Unified School District default and the Brevard County referendum crisis. The valuable fiscal administration lessons drawn from the growing pains of a maturing sector of the municipal securities market can help municipal governments and investors avoid the tragic consequences that seem to inevitably accompany the circumvention of legal debt restrictions and public accountability.