HomeMy WebLinkAboutOrdinance 23428-09-2018 Ordinance No.23428-09-2018
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND APPROPRIATIONS IN THE
WATER PRIORITY LIEN DEBT SERVICE FUND, IN THE AMOUNT OF $15,000,000.00,
FROM AVAILABLE FUNDS, FOR THE COMPLIANCE WITH BOND COVENANTS OF THE
WATER AND SEWER SYSTEM REVENUE FINANCING PROGRAM; 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 receipts and appropriations in the Water
Priority Lien Debt Service Fund in the amount of $15,000,000.00, from available funds, for the compliance
with bond covenants of the Water and Sewer System Revenue Financing Program.
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 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said prior ordinances and appropriations are hereby expressly repealed.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.
APPROVED LlO FORM AND LEGALITY: CITY SECRETARY
C 'sC
Asti ant City rney Mary J. Ka s
ADOPTED AND EFFECTIVE: September 25, 2018
City of Fort Worth, Texas
Mayor and Council Communication
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DATE: Tuesday, September 25, 2018 REFERENCE NO.: G-19386
LOG NAME: 132018 SUPPLEMENTAL WATER TRANSFER
SUBJECT:
Authorize Transfers from the Water Operating Fund and Drinking Water State Revolving Fund Totaling
$18,347,543.06 to the Water Priority Lien and Water Subordinate Lien Debt Service Funds:and Adopt
Appropriation Ordinances (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Water and Sewer Operating Fund in the amount of$15,000,000.00 from increased revenues;-
2.
evenues;2. Authorize transfer of$15,000,000.00 from the Water and Sewer Operating Fund to the Water and
Sewer Priority Lien Debt Service Fund to support an initiative to fulfill transfer and fund balance / net
position covenants as laid out in the bond documents;
3. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Water Priority Lien Debt Service Fund in the amount of$15,000,000.00 for the purpose of supporting the
initiative to fulfill transfer and net position covenants as laid out in the bond documents; and
4. Authorize transfer of$3,347,543.06 in excess proceeds from the Drinking.Water State Revolving Fund,
with $3,317,637.58 moving to the Water and Sewer Priority Lien Debt Service Fund and $29,905.48
moving to the Water and Sewer Subordinate Lien Debt Service Fund to support the initiative to fulfill
transfer and net position covenants as laid out in the bond documents.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to take actions to enhance compliance
with bond covenants of the Water and Sewer System Revenue Financing Program.
The Department of Financial Management Services, in conjunction with the Water Department, has
completed a review of existing debt covenants and requirements associated with the System's current
outstanding revenue bond issues. As a result of this review, it has been determined that the current
balances maintained within the Water& Sewer Debt Service Funds (Priority Lien and Subordinate Lien)
are below calculated requirements. The appropriations and transfers outlined within this M&C reallocate
funds that are available within Fiscal Year 2018 as a result of positive operating results in the Water
Department to the debt service funds to increase the balances within these funds.
The City's current practice includes budgeting funds required to meet the annual debt service:obligations
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for each Fiscal Year, and then transferring that total via a series of equal monthly installments that
commences on October 1 and continues through the subsequent and respective debt service payment
date. In effect, the yearly transfer amounts have equaled the total principal and interest payments due for
the Fiscal Year. While this practice has supported the timely payment of principal and interest of all bonds
outstanding without missing a debt service payment, it is not in full compliance with the technical
requirements of certain bond covenants.
The System's bond documents call for monthly installments of a portion of the subsequent principal and
interest payments that are due, with those transfers to occur on an on-going basis from each principal or
interest payment date to the next, resulting in a funding schedule that would cross Fiscal Years. As such,
the actions outlined within this M&C will enhance the water debt service funds'covenant compliance.
On June 26, 2018, City Council approved M&C G-19310 to provide the City Manager with delegated
authority to expedite the clean-up and closure of the City's legacy capital project funds; however, it did not
provide the City Manager the authority to move excess proceeds to debt service funds. Rather than
appropriating residuals in the Drinking Water State Revolving Fund and then transferring them to the debt
service funds, staff proposes moving any excess revenues from the Drinking Water State Revolving Fund
to the corresponding new debt service funds. This approach will simplify future monitoring and auditing of
the funding sources by maintaining the distinct character of each. The movement of funds will not result in
an increase of appropriations; however, it may be necessary to reduce appropriations in order to close out
projects in the Drinking Water State Revolving Fund.
Providing the City Manager with delegated authority will allow the City to effectively clean-up and close the
Drinking Water State Revolving Fund by moving excess proceeds to the respective debt service funds.
Delegated authority shall end when the Drinking Water State Revolving Fund is closed.
This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION/ CERTIFICATION:
The Director of Finance certifies that funds are available in the Water Operating Fund and the Drinking
Water State Revolving Fund, as appropriated, to support the above recommendations and the transfers to
the Water& Sewer Priority Lien Debt Service Fund and the Water&Sewer Subordinate Lien Debt Service
Fund.
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 # mount
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)
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