HomeMy WebLinkAboutOrdinance 24151-04-2020 Ordinance No. 24151-04-2020
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND APPROPRIATIONS IN THE
2020 TAX NOTE PROJECT FUND IN THE AMOUNT OF $18,850,000.00, SUBJECT TO
THE SALE OF TAX NOTES AND RECEIPT OF PROCEEDS, TO PAY FOR THE
PURCHASE OF FIRE EQUIPMENT, CONSTRUCTION IMPROVEMENTS TO THE FORT
WORTH BOTANIC GARDENS,AND LAND ACQUISITION ON ANGLE AVENUE,AND TO
PAY COST OF ISSUANCE; 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 2019-2020 in the
Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the 2020
Tax Note Project Fund in the amount of $18,850,000.00, subject to the sale of tax notes and receipt of
proceeds, to pay for the purchase of fire equipment, construction improvements to the Fort Worth Botanic
Gardens, and land acquisition on Angle Avenue, and to pay cost of issuance.
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 23835-09-2019 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said prior ordinances and appropriations are hereby expressly repealed.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: CITY SECRETARY E
Denis C. McElroy, Asst City Attorney Mary J. Kayser
ADOPTED AND EFFECTIVE:April 7, 2020
�XAS
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 04/07/20 M&C FILE NUMBER: M&C 20-0214
LOG NAME: 132020 TAX NOTES
SUBJECT
Adopt Ordinance Authorizing Issuance of Tax Notes in an Aggregate Principal Amount Not to Exceed$18,550,000.00,Approving Sale of the
Notes, Establishing Parameters with Respect to Sale of the Notes, Delegating to Designated City Officials Authority to Effect Sale of the Notes by
Competitive Bid or Negotiated Sale, Expressing Official Intent for City Reimburse Itself for Certain Eligible Expenditures, Enacting Other
Provisions Related to the Subject,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 authorizing the issuance of 2020 Tax Notes in an aggregate principal amount not to exceed$18,550,000.00;
expressing official intent for the City to reimburse itself for expenditures made within the preceding 60 days for the listed projects;authorizing
execution of all related documents;and approving the sale of the notes by competitive bid or negotiated sale as determined most advantageous
based on current market conditions and subject to meeting certain parameters,as set forth in the ordinance;providing for levy, assessment and
collection of a property tax sufficient to pay the interest on and principal of the notes if other revenues are not otherwise available and appropriated
for those payments;and ordaining related matters;and
2.Adopt the attached ordinance increasing estimated receipts and appropriations in the 2020 Tax Note Project Fund in the amount of
$18,850,000.00,for the purpose of paying(i)contractual obligations incurred or to be incurred for the construction of identified public works and
the purchase of materials,supplies,equipment,machinery,buildings,lands,and rights-of-way,and(ii)costs of issuance of the notes,with
appropriations subject to the sale of tax notes and receipt of proceeds and all identified amounts being subject to reduction to conform to final
figures reflected in the note-closing documents.
DISCUSSION:
The purpose of this Mayor and Council Communication(M&C)is to take actions associated with the issuance and sale of Series 2020 Tax Notes
and appropriation of proceeds for the purpose of paying(i)costs related to certain capital projects, and(ii)costs of issuance of the notes.
Proceeds from the sale of the tax notes will be used to pay for purchase fire equipment,construction improvements related to the Botanic
Gardens,and land acquisition on Angle Avenue(City Project No. 101583),and to pay the cost of issuance.Schedule of costs listed below:
Project Description Amount
Fire Apparatus Replacement $11,600,000.00
[Botanic Gardens Improvement Project $4,300,000.00
Fnglevenue Land Acquisition $2,650,000.00
Cost of Issuance $300,000.00
Total $18,850,000.00
The Equipment Note Program for the City's Fire Department was established on February 9, 1999,through the adoption of Ordinance No. 13701.
Under the program,on an annual recurring basis,tax notes are sold on the open market under a competitive process and proceeds are used to
finance the equipment replacement program for fire equipment and apparatus. In conjunction with the Fleet Management Division of the Properly
Management Department,the Fire Department manages a fleet rotation plan that annually identifies vehicles and equipment that have reached
their useful lives and are too old or costly to continue to utilize or maintain for public safety operations.A portion of the proceeds from sale of the
notes will be used to acquire equipment replacements scheduled for Fiscal Year 2020.
Additional proceeds will be used to pay for a portion of the costs associated with technology infrastructure and other improvements at the City-
owned Botanic Gardens. The bulk of the remaining proceeds will be expended for part of the costs related to the acquisition of land on Angle
Avenue for the Northwest Patrol Division and Auto Pound,along with additional land that may be programmed for other City purposes as needed.
Finally a small portion of the proceeds will be used to pay the costs of issuance.
The attached note ordinance also contains language that complies with federal requirements regarding the City's ability to reimburse itself out of
debt proceeds incurred in the 60 days immediately preceding the authorization for the debt. That language is included because the Information
Technology Solutions(IT)Capital provided interim funding of$350,000.00 so that the technology improvements at the Fort Worth Botanic Gardens
could be started to maintain project schedules.Tax Note proceeds from the above-noted$4.3 million for the Botanic Garden project will be used to
reimburse IT Capital for the funding it advanced.
Due to current market conditions,public issuers are struggling to price favorably in the competitive market due to a lack of liquidity with investors.
In an effort to mitigate this downside risk,the ordinance provides delegated authority to the City Manager and Chief Financial Officer,individually,
to effect the sale of notes.This includes authority to seek not only competitive bids for the sale of the Notes authorized,but also a negotiated sale
conducted as either a public or private offering negotiated through a purchase agreement with Underwriters.Staff is recommending that these
Notes be sold with the City Manager or the Chief Financial Officer having authority to approve the terms of the sale so long as those terms
come within the parameters set forth in the Council-adopted ordinance.Key parameters include that the Notes must be rated in one of the four
highest generic rating categories(BBB or higher);the delegated authority expires on December 31.2020;the maximum maturity is March 1,
2027;and the maximum net effective interest rate is 4.00%.
The Notes will be priced and sold as soon as practicable based on market conditions and volatility,subject to the hard deadline of December 31
for the delegated authority.Subsequent to awarding the sale of the Notes,the City will seek approval of the debt transactions from the Texas
Attorney General with an estimated closing date approximately one month after the award of sale.
The attached appropriation ordinance reflects the maximum appropriation amount for Note 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 Notes.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.Similarly,to the extent there are any remaining proceeds after paying cost of issuance expense,those funds are to be moved to the
general debt service fund.
A Form 1295 is not required because: This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION I CERTIFICATION:
The Director of Finance certifies that upon adoption of the attached ordinances,the sale of the 2020 Tax Notes will occur as required under the
parameters set forth therein,that funds will be available in the Tax Note 2020 Fund,and that funds will be available in the General Debt Service
Fund to repay the debt when due and payable.
Submitted for City Manager's Office by: Reggie Zeno 8500
Originating Business Unit Head: John Samford 2318
Additional Information Contact: Alex Laufer 2268