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HomeMy WebLinkAboutResolution 4770-04-2017 A Resolution NO. 4770-04-2017 EXPRESSING OFFICIAL INTENT TO REIMBURSE EXPENDITURES ASSOCIATED WITH THE 2014 BOND PROGRAM FROM PROCEEDS OF FUTURE DEBT ISSUANCE AND SALE WHEREAS, the City of Fort Worth, Texas (the "City") is a home-rule municipality and political subdivision of the State of Texas; and WHEREAS, on May 10, 2014, a majority of voters participating in a duly called election in the City of Fort Worth voted in favor of seven ballot propositions that together authorized issuance of a total of $292,075,000 in public securities for seven specific purposes (the "2014 Bond Program" or the "Project"); and WHEREAS, the City expects to use available funds to pay expenditures associated with implementing projects included in the 2014 Bond Program prior to the issuance of obligations by the City in connection with the financing of the Project; and WHEREAS, the City finds, considers, and declares that the reimbursement of the City for the payment of such expenditures will be appropriate and consistent with the lawful objectives of the City and, as such, chooses to declare its intention, in accordance with the provisions of Section 1.150-2 of the Code of Federal Regulations, to reimburse itself for such payments at such time as it issues obligations to finance the Projects. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS THAT: Section 1. The City reasonably expects debt, as one or more series of obligations, may be issued or incurred by the City with an aggregate maximum principal amount not to exceed $292,075,000 for the purpose of paying the aggregate costs of the Project, of which $149,075,000 has not yet been issued. Section 2. All costs to be reimbursed pursuant hereto will be capital expenditures. No obligations will be issued by the City in furtherance of this Statement after a date which is later than 18 months after the later of (1) the date the expenditures are paid or (2) the date on which the property, with respect to which such expenditures were made, is placed in service. Section 3. The foregoing notwithstanding, no obligation will be issued pursuant to this Statement more than three years after the date any expenditure which is to be reimbursed is paid. th o000o a, Adopted this 18 day of April. 2017. 04 ATTEST: v0 R= B Mary J. r, ty acretary na &TWNTFH City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 4/18/2017 - Resolution No. 4770-04-2017 DATE: Tuesday, April 18, 2017 REFERENCE NO.: **G-18987 LOG NAME: 13 2014BONDREIMBURSE SUBJECT: Adopt Resolution Expressing the City's Official Intent to Reimburse Expenditures Associated with the 2014 Bond Program from Proceeds Received from the Future Issuance of Public Securities (ALL COUNCIL DISTRICTS) RECOMMENDATION: It is recommended that the City Council adopt the attached resolution expressing its official Intent to Reimburse expenditures associated with the 2014 Bond Program from the proceeds received from the future issuance of public securities. DISCUSSION: The purpose of this Mayor and Council Communication (M&C) is to take action to preserve the ability of the City to reimburse itself from the proceeds received from future debt issuances for expenses associated with the 2014 Bond Program that are expected to be incurred and initially paid from available resources before the debt is issued. Under Title 26 of the Code of Federal Regulation, Chapter I, Subchapter A, Part 1, Section 1.150-2 et seq., the City is able to use available resources to pay original expenditures associated with a debt- financed project prior to the debt being issued and then reimburse itself out of the proceeds of the debt sale if the City timely declares its intent to do so. Adoption of this M&C and the attached resolution represent the City officially expressing the intent to pay expenses associated with the 2014 Bond Program and then reimburse itself when those bonds are sold. The City will use available cash to provide interim funding for these expenditures. Once debt associated with the projects is sold, bond proceeds will be used to reimburse the City's cash position, in accordance with the attached resolution. The projects in the 2014 Bond Program were approved by the voters in May 2014 through a City-wide referendum and are in various states of completion. Beginning with the 2014 Bond Program, the City migrated our debt issuance process to more closely match the timing of when cash was actually needed. Instead of issuing all of the debt up front and drawing against the cash throughout the life of the program, the City now uses available cash as interim financing for original expenditures and then sells the bonds and reimburses itself. The City expressed its intent to use proceeds to officially reimburse expenditures in both the May 17, 2016, M&C G-18736, and in the ordinance canvassing the bond election approved on May 20, 2014. This M&C does not request approval of a contract with a business entity. FISCAL INFORMATION / CERTIFICATION: The Director of Finance certifies that this action will preserve the City's ability to be reimbursed for Logname: 13_2014BONDREIMBURSE Page I of 2 expenditures incurred for projects associated with the 2014 Bond Program. FUND IDENTIFIERS (FIDs): TO Fund Department IAccoun Project Program ctivityl Budget Reference # Amount _L____ ID j ID Year Chartfield 2 FROM ID __ _ _.._ ID . _ Year !F7und,'- Department �Account� Project Program ctivity Budget Reference # moun Charlfield 2 __.. __. CERTIFICATIONS: Submitted for City Manager's Office by: Susan Alanis (8180) Originating Department Head: Aaron Bovos (8517) Additional Information Contact: John Samford (2318) Logname: 13_2014BONDREIMBURSE Page 2 of 2