HomeMy WebLinkAboutOrdinance 23177-04-2018 Ordinance No. 23177-04-2018
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND APPROPRIATIONS IN THE
WATER AND SEWER BOND 2018 FUND, IN THE AMOUNT OF $50,650,000.00,
SUBJECT TO SALE OF BONDS AND RECEIPT OF PROCEEDS FOR PURPOSES OF
MAKING IMPROVEMENTS TO THE WATER AND SEWER SYSTEMS AND PAYING
COSTS OF ISSUANCE, WITH SUCH AMOUNTS SUBJECT TO REDUCTION TO
CONFORM TO FINAL FIGURES REFLECTED IN BOND CLOSING DOCUMENTS;
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 Water and Sewer
Bond 2018 Fund in the amount of$50,650,000.00, subject to sale of bonds and receipt of proceeds, for the
purpose of making improvements to the Water and Sewer System and paying costs of issuance, with such
amounts subject to reduction to conform to the final figures reflected in the bond closing documents.
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 22928-09-2017 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said prior ordinances and appropriations are hereby expressly repealed.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.
7 PPROVEDVTOFOND LEGALITY: CITY SECR TA Y
DenbG
.. McElro ary J. a�/
Senior Assistan Ci y Attorney
ADOPTED AND EFFECTIVE: April 10, 2018
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 4/10/2018 - Ordinance Nos. 23175-04-2018, 23176-04-2018
& 23177-04-2018
DATE: Tuesday, April 10, 2018 REFERENCE NO.: G-19266
LOG NAME: 13SERIES 2018 WSS REV BOND AND CP APPROPRIATION RESTORANCE
SUBJECT:
Adopt Thirty-Third Supplemental Ordinance Authorizing Issuance of City of Fort Worth, Texas Water and
Sewer System Revenue Bonds, Series 2018, in an Aggregate Principal Amount Not to Exceed
$50,000,000.00, Establishing Parameters with Respect to the Sale of the Bonds, Delegating to Designated
City Officials Authority to Effect the Sale of Bonds, and Enacting Other Provisions Relating to the Subject;
Adopt Amended and Restated Thirty-Second Supplemental Ordinance, which Mirrors Ordinance 23029-12-
2017 but Extends the Term of Delegated Authority and Reflects Minor Conforming Changes and Adopt
Appropriation Ordinance (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached Thirty-Third Supplemental Ordinance (i) authorizing the issuance of City of Fort
Worth, Texas Water and Sewer System Revenue Bonds, Series 2018, in an aggregate principal amount
not to exceed $50,000,000.00, (ii) approving the sale of the bonds subject to certain parameters, as set
forth in the ordinance, being met, (iii) authorizing 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 the Financial Management Policy Statements that
outlines the revenue debt of the City shall generally have an average life of approximately 12 years;
2. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Water and Sewer Bond 2018 Fund in the amount of$50,650,000.00 for the purpose of funding capital
improvements and paying the costs of issuance, subject to the sale of the bonds and receipt of proceeds,
with all such amounts subject to reduction to conform to final figures reflected in bond closing documents;
and
3. Adopt the attached amended and restated Thirty-Second Supplemental Ordinance, which mirrors
Ordinance 23029-12-2017 in (i) authorizing issuance and sale of City of Fort Worth, Texas Water and
Sewer System Revenue Refunding Bonds in an aggregate principal amount not to exceed
$150,000,000.00 to allow outstanding commercial paper to be refunded/refinanced if needed, (ii)
approving the sale of the bonds subject to certain parameters, as set forth in the ordinance, being met, (iii)
authorizing 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 the Financial Management Policy Statements that outlines the revenue debt of the City shall
generally have an average life of approximately 12 years, but (vi) extends delegated authority to effect
sale of refunding bonds through May 31, 2019 and (vii) makes minor revisions in conformance with recent
changes in federal tax law.
DISCUSSION:
Logname: 13SERIES 2018 WSS REV BOND AND CP APPROPRIATION RESTORANCE Page I of 4
revenue-based debt financing of infrastructure for the City's Water and Sewer System. The actions
include authorizing $50,000,000.00 in "new money"for system improvements (Thirty-Third Supplement),
extending "standby" refunding authority to facilitate the System's Commercial Paper (CP) program
(Amended and Restated Thirty-Second Supplement), and adopting associated appropriation ordinance.
Thirty-Third Supplement
The first two recommendations relate to the Thirty-Third Supplemental Ordinance, which authorizes
issuance and sale of$50,000,000.00 in Water and Sewer revenue bonds, in one or more series, for the
purpose of(i) extending and improving the System, (ii) and paying the costs of issuance of the bonds, and
to the appropriation of the bond proceeds.
The proposed debt transaction will fund capital projects in alignment with the Water& Sewer System's
Capital Improvement Plan. 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. Other parameters
include: (i) providing for the establishment of rates and collection of revenues sufficient to pay the principal
and interest on said bonds, (ii) waiving the provision in the Financial Management Policy Statements that
states the revenue debt of the City shall generally have an average life of approximately 12 years to allow
a bond maturity of up to 30 years, which is consistent with the projected useful life and revenue-generating
potential of the facilities authorized to be financed, and (iii) setting a maximum maturity of bonds not later
than February 15, 2048.
In 1991, the City adopted a Master Ordinance establishing a Water and Sewer System Revenue
Financing Program for the Water Department. Each time the Water Department issues debt, a
supplemental ordinance must be adopted which contains details specific to the debt being issued. This
issuance would be the thirty-third supplemental ordinance since the Master Ordinance was adopted. The
attached ordinances reflect the maximum appropriations for proceeds and costs of issuance. To the extent
numbers at closing are less than those reflected in the ordinances, available appropriation amounts will be
reduced as needed to reflect final figures based on the closing documents to ensure appropriations do not
exceed actuals.
Rating agency presentations for Moody's, Fitch, and Standard & Poor's 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 May 30, 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 June 27, 2018.
The attached appropriation ordinance reflects the maximum appropriation amount for bond proceeds. Its
structure accommodates variables associated with sale of debt under delegated authority such as the
uncertain final interest rate to be achieved and the possibility of a premium or discount being associated
with the sale of the bonds. To the extent numbers at closing are less than those reflected in the ordinance,
the available appropriation amount will be reduced as needed to reflect final figures based on the closing
documents to ensure appropriations do not exceed actuals.
Amended and Restated Thirty-Second Supplement
This M&C also adopts an amended and restated Thirty-Second Supplemental Ordinance, which provides
the officials identified and designated as pricing officers with the authority to issue up to $150,000,000.00
in Water and Sewer revenue refunding bonds if needed to facilitate the System's CP program.
As approved by the City Council in December 2017, the CP program authorizes up to $150,000,000.00 in
short-term commercial paper for the Water and Sewer System to be outstanding at any time (M&C C-
Logname: 13SERIES 2018 WSS REV BOND AND CP APPROPRIATION RESTORANCE Page 2 of 4
28496). Although it is not anticipated that commercial paper would actually be issued very regularly, the
program authority provides the Water Department with liquidity and contracting authority so that it can
efficiently design and commence capital projects that are ultimately planned to be financed out of longer
term debt to be issued at a later date.
By statute, an issue of commercial paper cannot have a maturity that is later than the 270th day after the
date on which the paper is initially issued. The Thirty-Second Supplement is an integral part of the CP
program because it provides delegated authority that allows refunding bonds to be issued, within certain
parameters, in the unlikely event that commercial paper is actually issued and cannot otherwise be retired
or defeased by the 270th day.
The Thirty-Second Supplemental Ordinance was initially adopted by M&C C-28496. Among the
parameters the ordinance sets for issuance of Water and Sewer revenue refunding bonds is that the
bonds bear a "net effective interest rate" (as defined in and calculated in accordance with the provisions of
Chapter 1204, Texas Government Code) that is no greater than 10%. In accordance with the practice of
the Texas Attorney General, the original version of the Thirty-Second Supplemental Ordinance provided
delegated authority that would expire a year after the ordinance was adopted.
Adoption of the attached amended and restated version of the Thirty-Second Supplemental Ordinance
extends the delegated authority of the pricing officers to effect sale of all or any portion of up to
$150,000,000.00 in revenue refunding bonds through 5:00 p.m. on Friday, May 31, 2019. This version of
the Thirty-Second Supplemental Ordinance also incorporates minor changes that reflect the impact of
federal tax law changes on advance refundings.
Because ongoing authority to issue refunding bonds is needed for proper operation of the CP program, a
newly amended and restated Thirty-Second Supplemental Ordinance will be needed on an annual basis
to extend the period of delegated authority. Staff anticipates bringing forward an amended and restated
Thirty-Second Supplemental Ordinance each year as part of the City's annual debt issuance process.
With the appropriation of proceeds in the bond project fund following sale of the bonds and receipt of
proceeds, the available amount in the Water and Sewer Callable Commercial Paper Fund, against which
project expenses had initially been booked, will be restored to approximately its full capacity of
$150,000,000.00 as established by Ordinance 23030-12-2017.
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 ordinance, the sale of the 2018 Water
and Sewer System Revenue Bonds will occur as required under the parameters set forth therein and that
funds will be available in the Water and Sewer Debt Service Fund and in the Water and Sewer Bond 2018
Fund to record the appropriate and necessary transactions. Pursuant to the recommended actions,
appropriation authority up to $150,000,000.00 will be restored in the Water and Sewer Commercial Paper
Fund.
FUND IDENTIFIERS (FIDs):
TO
Fund Department ccoun Project Program ctivity BudgetReference # mount ID ID YearT (Chartfield 2)
Logname: 13 SERIES 2018 WSS REV BOND AND CP APPROPRIATION RESTORANCE Page 3 of 4
FROM
Fundl Department ccoun Project Program ctivity Budget Reference # moun
ID 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 WSS REV BOND AND CP APPROPRIATION RESTORANCE Page 4 of 4