HomeMy WebLinkAboutOrdinance 23174-04-2018 Ordinance No. 23174-04-2018
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND APPROPRIATIONS IN THE
GENERAL DEBT SERVICE FUND, IN THE AMOUNT OF$17,000,000.00, FOR PURPOSE
OF DEFEASING CERTAIN 2009 CERTIFICATES OF OBLIGATION, INCLUDING
PAYMENT OF PRINCIPAL, INTEREST, AND TRANSACTION COSTS, WITH SUCH
AMOUNTS SUBJECT TO REDUCTION TO CONFORM TO FINAL FIGURES AT THE TIME
OF DEFEASANCE, AND REDUCING CONTRIBUTION TO FUND BALANCE BY THE
SAME AMOUNT; 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 amounts allocated to the various City departments for Fiscal Year 2017-2018 in the
Budget of the City Manager, there shall also be increased estimated appropriations in the General Debt
Service Fund in the amount of $17,000,000.00, for the purpose of defeasing certain 2009 Certificates of
Obligation, including payment of principal, interest, and transaction costs, with such amounts subject to
reduction to conform to the final figures.at the time of defeasance, and reducing contribution to fund balance
by the same amount.
SECTION 2.
That should any portion, section or part of a section of this ordinance be declared invalid, inoperative or void
for any reason by a court of competent jurisdiction, such decision, opinion orjudgment shall in no way impair
the remaining portions, sections, or parts of sections of this ordinance, which said remaining provisions shall
be and remain in full force and effect.
SECTION 3.
That this ordinance shall be cumulative of Ordinance 22927-09-2017 and all other ordinances and
appropriations amending the same except in those instances where the provisions of this ordinance are in
direct conflict with such other ordinances and appropriations, in which instance said conflicting provisions of
said prior ordinances and appropriations are hereby expressly repealed.
SECTION 4.
This ordinance shall take effect upon adoption.
APP ED A O FORM AR1D LEGALITY: CITY SECRETA
Denis cElroy a J. Kays
Senior Assistant C' orney
ADOPTED AND EFFECTIVE: April 10, 2018
City of Fort Worth, Texas
Mayor and Council Communication
r SIL ACTION: Approved,on 4110/201_$ Qrdnance.Noses3173r04» 018
2018
DATE: Tuesday, April 10, 2018 REFERENCE NO.: G-19265
LOG NAME: 13SERIES 2018 GPBOND AND 2009 CO CASH DEFEASANCE
SUBJECT:
Adopt Ordinance Providing for Issuance and Sale of General Purpose Bonds Series 2018 in an Aggregate
Principal Amount Not to Exceed $65,000,000.00, Establishing Parameters with Respect to Sale of the
Bonds, Delegating to Designated City Officials Authority to Effect the Sale of the Bonds, Enacting Other
Provisions Related to the Subject, Authorizing Partial Cash Defeasance of$16,420,000.00 of City of Fort
Worth, Texas, Combination Tax and Limited Surplus Revenue Certificates of Obligation Series 2009 Using
Fund Balance in the General Debt Service Fund, and Declaring an Immediate Effective Date; and Adopt
Appropriation Ordinance (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached ordinance (A) authorizing the issuance of Series 2018 General Purpose Bonds in an
aggregate principal amount not to exceed $65,000,000.00 for the purpose of funding projects within the
2014 bond program to include (i) constructing permanent street and transportation improvements, parks,
recreation and community center improvements, library system improvements, fire safety improvements,
and animal care and control improvements, and (ii) paying the costs of issuance associated with the
issuance of the Bonds; authorizing execution of all related documents; ordaining related matters, including
approving the sale of the notes subject to certain parameters, as set forth in the ordinance, being met and
providing for levy, assessment and collection of a property tax sufficient to pay the interest on and
principal of the bonds if other revenues are not otherwise available and appropriated for those payments;
and (B) authorizing partial cash defeasance of City of Fort Worth, Texas Combination Tax and Limited
Surplus Revenue Certificates of Obligation Series 2009 including principal, accrued interest, and
transaction costs, using fund balance in the General Debt Service Fund; and
2. Adopt the attached supplemental appropriation ordinance increasing appropriations in the General Debt
Service Fund in the amount of$17,000,000.00 and decreasing the contribution to fund balance by the
same amount, with all such amounts subject to reduction to conform to final figures at the time of
defeasance.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to take actions associated with issuance
of"new money" as part of the 2014 bond program and with partial cash defeasance of 2009 Certificates of
Obligation using available fund balance in the General Debt Service Fund.
Adoption of the attached bond ordinance approves the issuance and sale of Series 2018 General Purpose
Bonds for the purpose of(i) constructing permanent street and transportation improvements; parks,
recreation and community center improvements; library system improvements; fire safety improvements;
and animal care and control improvements, and (ii) paying the costs of issuance associated with the
Logname: 13 SERIES 2018 GPBOND AND 2009 CO CASH DEFEASANCE Page 1 of 3
issuance of the Bonds.
The proposed bond sale will fund capital projects in alignment with the 2014 Bond Program's Capital
Improvement Plan:
Date of Amount Amount Amount Now
Election Authorized Purpose Previously Offered
Sold
10-May-14 $219,740,000 Street and $102,905,000 $46,000,000
Transportation
10-May-14 31,440,000 Park & 12,000,000 11,000,000
Recreation
10-May-14 12,650,000 Library 6,000,000 4,000,000
System
10-May-14 9,285,000 Fire Safety 5,010,000 2,000,000
10-May-14 1,530,000 Municipal 1,005,000 0
Courts
10-May-14 2,350,000 Animal Care 1,000,000 1,350,000
and Control
- $276,995,000 - $127,920,000 $64,350,000
Staff is recommending that these bonds be sold through a competitive sale with identified city
representatives being authorized to approve the terms of the sale so long as it comes within the
parameters set forth in the Council-adopted ordinance. Key parameters include providing for levy,
assessment and collection of a tax sufficient to pay the interest on and principal of the bonds if other
revenues are not otherwise available and appropriated for those payments.
Rating agency presentations for Moody's, Fitch, Standard & Poor's, and Kroll will be conducted in late
April and early May of 2018. Ratings are anticipated to be received in Mid-May. Bids for the sale of the
bonds are estimated to be submitted on June 6, 2018. 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 July 10, 2018.
The attached bond ordinance also authorizes the partial cash defeasance of City of Fort Worth, Texas,
Combination Tax and Limited Surplus Revenue Certificates of Obligation ("COs"), Series 2009. The cash
defeasance would be in the principal amount of$16,420,000.00, which represents $500,000.00 in
principal of the COs maturing March 1, 2021 and all of the COs maturing March 1, 2022, plus accrued
interest and transaction costs.
Each year, the Financial Management Services Department, in conjunction with the City's financial
advisors, First Southwest Company and Estrada Hinojosa & Company evaluate the General Debt Service
Fund's financial position along with the City's debt portfolio. The current debt portfolio includes Series
2009 COs, which have been identified for partial cash defeasance to achieve savings. These certificates
were issued for an initial principal amount of$55,585,000.00, for the purpose of constructing permanent
street, storm sewer, and park and recreation improvements, bearing interest at rate between three and
five percent with a final maturity in 2029. This debt is callable on or after March 1, 2019.
Staff proposes redeeming the debt on July 11, 2018. At that time, the City can repay a significant amount
of the remaining outstanding principal in the amount of$16,420,000.00 plus accrued interest in the
estimated amount of$335,051.00 and transaction costs estimated in the amount of$15,000.00 and
achieve savings by avoiding future principal and interest payments. As a result of improved economic
Logname: 13 SERIES 2018 GPBOND AND 2009 CO CASH DEFEASANCE Page 2 of 3
conditions within the General Debt Service Fund, fund balance is available to defease callable debt. Staff,
therefore, recommends defeasing this debt utilizing cash balances in order to achieve estimated gross
savings in the estimated amount of$2,017,267.00 or 12.29 percent. As a result of the partial cash
defeasance, the City will still be obligated to pay $6,298,600.00 in principal and interest through March 1,
2021.
The attached appropriation ordinance reflects the maximum appropriation amount for the CO defeasance.
Its structure accommodates variables in costs that are associated with the call date being a few months
away. To the extent numbers at the time of defeasance are less than those reflected in the ordinance, the
available appropriation amount will be reduced as needed to reflect final figures to ensure appropriations
do not exceed actuals.
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 2018
General Purpose Bonds will occur as required under the parameters set forth therein and the partial cash
defeasance of the Combination Tax and Limited Surplus Revenue Certificates of Obligation, Series 2009,
in the principal amount of$16,420,000.00 plus accrued interest and transaction costs will be fully and
legally defeased.
FUND IDENTIFIERS (FIDs):
TO
Fund Departmentccoun Project JProgram ctivity Budget Reference # mount
ID 1A ID Year Chartfield 2) 1A
FROM
Fund Department ccoun Project JProgram ctivity Budget Reference # Amount
ID 1A ID Year Chartfield 2
CERTIFICATIONS:
Submitted for City Manager's Office by: Susan Alanis (8180)
Originating Department Head: Aaron Bovos (8517)
Additional Information Contact: Alex Laufer (2268)
Logname: 13SERIES 2018 GPBOND AND 2009 CO CASH DEFEASANCE Page 3 of 3