HomeMy WebLinkAboutOrdinance 22218-05-2016 ORDINANCE NO. 22218-05-2016
AN ORDINANCE INCREASING THE ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE WATER AND SEWER DEBT SERVICE FUND IN
THE AMOUNT OF $36,000,000, SUBJECT TO SALE OF BONDS AND RECEIPT
OF PROCEEDS, FOR THE PURPOSE OF REFUNDING EXISTING SYSTEM
DEBT AND PAYING COSTS OF ISSUANCE; PROVIDING FOR A
SEVERABILITY CLAUSE; MAKING THIS ORDINANCE CUMULATIVE OF
PRIOR ORDINANCES; REPEALING ALL ORDINANCES IN CONFLICT
HEREWITH;AND PROVIDING AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH,
TEXAS:
SECTION 1.
That in addition to those ainounts allocated to the various City departments for Fiscal Year 2015-2016 in the
Budget of the City Manager,there shall also be increased estimated receipts and appropriations in the Water
and Sewer Debt Service Fund in the amount of$36,000,000, subject to the sale of bonds and receipt of
proceeds,for the purpose of refunding existing system debt and paying costs of issuance.
SECTION 2.
That should any portion, section or part of a section of this ordinance be declared invalid, inoperative or
void for any reason by a court of competent jurisdiction, such decision, opinion or judgment shall in no way
impair the remaining portions, sections, or parts of sections of this ordinance, which said remaining
provisions shall be and remain in full force and effect.
SECTION 3.
That this ordinance shall be cumulative of Ordinance No. 21873-09-2015 and all other ordinances and
appropriations amending the same except in those instances where the provisions of this ordinance are in
direct conflict with such other ordinances and appropriations, in which instance said conflicting provisions
of said prior ordinances and appropriations are hereby expressly repealed.
SECTION 4.
This ordinance shall take effect upon adoption.
APPROVED AS TO FORM AND LEGALITY:
i
9/117
Denis .Mc r ,Assistant City Attorney iy J. Kayser, City tPary
ADOPTED AND EFFECTIVE: May 17,2016
Ordinance No.22218-05-2016
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 5/17/2016 - Ordinance No. 22217-05-2016, 22218-05-2016 i
& 22219-05-2016
DATE: Tuesday, May 17, 2016 REFERENCE NO.: G-18737
LOG NAME: 131316 WATER REVENUE SALE
SUBJECT:
Adopt Twenty-Eighth Supplemental Ordinance Authorizing Issuance of City of Fort Worth, Texas Water
and Sewer System Revenue Refunding and Improvement Bonds, Series 2016 in an Aggregate Principal
Amount Not to Exceed $90,000,000.00 Establishing Parameters with Respect to the Sale of the Bonds
Delegating to Designated City Officials Authority to Effect Sale of the Bonds, Enacting Other Provisions
Relating to the Subject and Declaring an Immediate Effective Date and Adopt Appropriation Ordinances
(ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached supplemental ordinance (i) authorizing the issuance of City of Fort Worth, Texas
Water and Sewer System Revenue Refunding and Improvement Bonds, Series 2016 in an aggregate
principal amount not to exceed $90,000,000.00; (ii) approving the sale of the bonds subject to certain
parameters being met; (iii) approving execution of an Agreement for the retirement of the refunded
obligations, if any, and other instruments related to the issuance of the bonds; (iv) providing for the
establishment of rates and collection of revenues sufficient to pay the principal and interest on said bonds;
and (v) waiving the provision in Financial Management Policy Statements that states the revenue debt of
the City shall generally have an average life of approximately 12 years;
2. Adopt the attached ordinance increasing, estimated receipts and appropriations in the Water and Sewer
Debt Service Fund in the amount of$36,000,000, subject to sale of the bonds and receipt of proceeds, for
the purpose of refunding existing debt and paying costs of issuance; and
3. Adopt the attached ordinance increasing, estimated receipts and appropriations in the Water & Sewer
Bond 2016 Fund in the amount of $50,000,000, subject to sale of the bonds and receipt of proceeds, for
system improvements.
DISCUSSION:
The purpose of this M&C is to approve issuance and sale of refunding and improvement bonds that will
allow refinancing of existing Water and Sewer debt obligations to achieve a net savings and will provide
additional funding for system improvements.
It is the City of Fort Worth's practice to gain positive debt service savings through refinancing when the
opportunity presents itself. Staff and the City's Co-Financial Advisors, First Southwest, a Division of Hilltop
Securities, and Estrada Hinojosa, are recommending the 2005B Water and Sewer System Subordinate
Lien Revenue Bonds be refunded, with a par amount outstanding of$34,335,000.
Logname: 131316 WATER REVENUE SALE Page 1 of 2
This refunding will offer an estimated present value savings of approximately $1.2 million, or 3.59 percent
of the refunded principal amount.
The actual savings amount will not be determined until the time bids are received. However, in
accordance with the City's Financial Management Policy Statements, the ordinance provides that the
refunding debt shall not be sold unless the sale will result in net present value savings of at least 3.5
percent of the par amount refunded.
The proposed debt transactions also include the issuance of $50,000,000.00 in new funds for capital
projects in alignment with the Water & Sewer System's Capital Improvement Plan. Proceeds from the
new money portion of the issue will primarily be used to fund expenses related to major water
transmission mains and wastewater collectors; and relocation, rehabilitation and replacement of existing
infrastructure due to age and capacity constraints. In addition, capital projects include water and
wastewater treatment plant upgrades to meet demands and regulatory requirements.
Staff is recommending that these bonds be sold through a competitive bid sale with the City Manager or
the Chief Financial Officer being authorized to approve the terms of the sale so long as it comes within the
parameters set forth in the Council-adopted ordinance. Rating agency presentations for Moody's, Fitch,
and Standard & Poor's were conducted the week of April 26, 2016. Ratings are anticipated to be received
in early May. Bids for the sale of the bonds are scheduled to be submitted on May 25, 2016. Subsequent
to accepting the best bid and awarding the sale of the bonds, the City will seek approval of the debt
transactions from the Texas Attorney General with an estimated closing date of June 28, 2016.
This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION /CERTIFICATION:
The Director of Finance certifies that upon adoption of the attached ordinances, the sale of the 2016
Water and Sewer Refunding and Improvement Bonds will occur as required under the parameters set
forth therein and that funds will be available in the Water and Sewer System Debt Service Fund and in the
Water& Sewer Bond 2016 Fund to record the appropriate and necessary transactions.
FUND IDENTIFIERS (FIDs):
TO
Fund Department ccoun Project Program ctivity Budget Reference # moun
ID ID Year Chartfield 2
FROM
Fund Department ccoun Project Program ctivity Budget Reference # moun
ID ID Year Chartfield 2
CERTIFICATIONS:
Submitted for City Manager's Office by_ Susan Alanis (8180)
Aaron Bovos 8517
Originating Department Head: )
Additional Information Contact: Trey Imes (8558)
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