HomeMy WebLinkAboutOrdinance 23660-05-2019 ORDINANCE NO. 23660-05-2019
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE WATER AND SEWER BOND 2019 FUND IN THE
AMOUNT OF $102,000,000.00, 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 2018-
2019 in the Budget of the City Manager, there shall also be increased estimated appropriations in
the Water and Sewer Bond 2019 Fund in the amount of$102,000,000.00, 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 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 23392-09-2018 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provisions of said prior ordinances and appropriations are hereby expressly repealed.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: ECRETARY
Ale-
Denis Mc .lil6y Ronald P. Gonzales
Senior Assistant A rney Assistant City Secretary
ADOPTED AND EFFECTIVE: May 7, 2019
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 5/7/2019 - Ordinance Nos. 23654-05-2019, 23655-05-2019
and 23660-05-2019
DATE: Tuesday, May 7, 2019 REFERENCE NO.: G-19531
LOG NAME: 13SERIES 2019 WSS REV BOND AND CP APPROPRIATION RESTORANCE
SUBJECT:
Adopt Thirty-Fourth Supplemental Ordinance Authorizing Issuance of City of Fort Worth, Texas Water and
Sewer System Revenue Bonds, Series 2019, in an Aggregate Principal Amount Not to Exceed
$101,040,000, 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 the Prior Thirty-
Second Supplement but Extends the Term of Delegated Authority and Makes Minor Conforming Changes;
and Adopt Appropriation Ordinance (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached Thirty-Fourth Supplemental Ordinance (i) authorizing the issuance of City of Fort
Worth, Texas Water and Sewer System Revenue Bonds, Series 2019, in an aggregate principal amount
not to exceed $101,040,000, (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 seventeen-to-eighteen
years.
2. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Water and Sewer Bond 2019 Fund in the amount of$102,000,000,00 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 the
prior Thirty-Second Supplement 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 seventeen-to-eighteen years, but (vi) extends delegated
authority to effect sale of refunding bonds through May 31, 2020 and (vii) makes minor revisions in
conformance with recent changes in federal securities disclosure regulations.
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The purpose of this Mayor and Council Communication (M&C) is to adopt ordinances associated with
revenue-based debt financing of infrastructure for the City's Water and Sewer System. The actions
include authorizing $100,000,000.00 for system improvements (Thirty-Fourth Supplement), extending
standby refunding authority to facilitate the System's Commercial Paper (CP) program (Amended and
Restated Thirty-Second Supplement), and adopting an associated appropriation ordinance.
Thirty-Fourth Supplement
The first two recommendations relate to the Thirty-Fourth Supplemental Ordinance, which authorizes
issuance and sale of$102,000,000.00 in Water and Sewer revenue bonds, in one or more series, for the
purpose of(i) extending and improving the System and (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, and (ii) setting a maximum maturity of bonds not later than February 15, 2049.
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-fourth supplemental ordinance since the Master Ordinance was adopted.
Rating agency presentations for Moody's, Fitch, and Standard & Poor's will be conducted in late April and
early May of 2019. 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 July 16, 2019.
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-
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
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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 and previously
amended and restated (M&C G-19266). 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 prior versions of the Thirty-
Second Supplemental Ordinance provided delegated authority that would expire a year after the
ordinance (original or restated) 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 29, 2020. Prior restated
versions of the Thirty-Second Supplemental.Ordinance incorporated minor changes reflecting the impact
of federal tax law changes on advance refundings, and the current restated version adds to the list of
events that require disclosure under federal securities regulations.
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 2019 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 2019
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 ctiv u ge I reference # moun
ID Year hartfield 2)
FROM
Fund Department ccoun Project Program ctivity Budget Reference # mound
ID ID Year (Chartfield 2
CERTIFICATIONS:
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Susan Alanis (8180)
Originating Department Head: Kevin Gunn (2015)
Additional Information Contact: Alex Laufer (2268)
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