HomeMy WebLinkAboutOrdinance 24454-09-2020 Ordinance No. 24454-09-2020
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND APPROPRIATIONS IN THE
STORMWATER REVENUE REFUNDING AND IMPROVEMENT BONDS 2020 FUND IN
THE AMOUNT OF $54,000,000.00, SUBJECT TO THE SALE OF THE BONDS AND
RECEIPT OF PROCEEDS, FOR THE PURPOSE OF FUNDING CAPITAL
IMPROVEMENTS AND PAYING COSTS OF ISSUANCE, WITH ANY EXCESS COSTS OF
ISSUANCE FUNDS TO BE TRANSFERRED TO DEBT SERVICE AND WITH SUCH
AMOUNT 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 2020-2021 in the
Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the
Stormwater Revenue Refunding and Improvement Bonds 2020 Fund in the amount of $54,000,000.00,
subject to the sale of the bonds and receipt of proceeds,for the purpose of funding capital improvements and
paying costs of issuance, with any excess costs of issuance funds to be transferred to debt service and with
such amount subject to reduction to conform to final figures reflected in 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 incorporated into the ordinance effecting the budget of the municipal government
of the City of Fort Worth for the ensuing Fiscal Year beginning October 1, 2020, and ending September 30,
2021, 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instance said conflicting provisions of said prior ordinances and appropriations are hereby expressly repealed.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:
` ( P.-Id P.Gonzales(ep 24,2020 10
Denis C. McElroy Mary J. Kayser
Assistant City Attorney City Secretary
FORT'!2
ADOPTED AND EFFECTIVE: September 22, 2020 _
City of Fort Worth,Texas
Mayor and Council Communication
DATE: 09/22/20 MSC FILE NUMBER: M&C 20-0727
LOG NAME: 13SERIES 2020 STORMWATER REVENUE REFUNDING BOND SALE
SUBJECT
(ALL)Adopt Ordinance Authorizing Issuance and Sale of City of Fort Worth,Texas Drainage Utility System Revenue Refunding and Improvement
Bonds,Series 2020, in an Aggregate Principal Amount Not to Exceed$110,365,000.00, Establishing Parameters with Respect to Sale of the
Bonds, Delegating to Designated City Officials Authority to Effect Sale of the Bonds,Authorizing Escrow and Other Related Agreements, Enacting
Other Provisions Relating to the Subject, Declaring an Immediate Effective Date,and Adopt Appropriation Ordinances
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached ordinance(i)authorizing the issuance and sale of City of Fort Worth,Texas Drainage Utility System Revenue Refunding
and Improvement Bonds,Series 2020, in an aggregate principal amount not to exceed$110,365,000.00,(ii)approving the sale of the bonds
subject to certain parameters being met, (iii)delegating to designated City officials authority to effect the sale of the bonds(iv)authorizing
escrow agreement related to retirement of the refunded obligations and other instruments related to the issuance of the bonds,(v)providing
for the establishment of rates and collection of revenues sufficient to pay the principal and interest on said bonds,(vi)ordaining other matters
related to issuance and sale of the bonds, and(vii)declaring an immediate effective date;
2. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in fiscal year 2021 in the Stormwater
Revenue Refunding and Improvement Bonds 2020 Fund the amount of$54,000,000.00 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 such amount subject to reduction to conform to
final figures reflected in bond closing documents and with any excess cost of issuance funds remaining after closing being transferred to the
debt service fund;
3. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in fiscal year 2021 in the Stormwater Debt
Service Fund in the amount of$57,000,000.00,subject to the sale of the bonds and receipt of proceeds,for the purpose of funding the
required escrow to refund existing debt;and
4. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in fiscal year 2021 in the Stormwater Utility
Fund in the amount of$550,000.00,subject to the sale of the bonds and receipt of proceeds,for the purpose of paying the costs of issuance
for the refunding portion of the bonds with any excess cost of issuance funds remaining after closing being transferred to the debt service
fund.
DISCUSSION:
The purpose of this Mayor and Council Communication(M&C)is to take actions associated with revenue-based financing of infrastructure for the
City's Stormwater System with the bonds being structured with a premium which will increase the total estimated proceeds to$111,550,000.00
and will exceed the bond principal amount of$110,365,000.00.The actions include authorizing bonds for system improvements and to refinance
existing Stormwater debt obligations to achieve a net savings and appropriating proceeds of the bond sale.
The proposed debt transaction includes$54,000,000.00 in new money to fund capital projects in alignment with the Stormwater Department's
Capital Improvement Plan which includes$1,000,000.00 to cover the cost of debt issuances.
City staff and the City's co-financial advisors, Hilltop Securities and Estrada Hinojosa,regularly monitor the City's outstanding bonds for
opportunities to refinance at lower interest rates. Based on current market conditions for bonds that are eligible to be refinanced under current tax
law,we are recommending that the Mayor and Council refund the callable portion of the Series 2011 Bonds,with a par amount outstanding of
$55,330,000.00.The Series 2011 Bonds were structured with an Optional Call Provision,which allows the City to refund/refinance the existing
bonds by purchasing the outstanding bonds at a pre-determined price, using dollars obtained from the issue of new bonds.The Optional Call
Provision for the Series 2011 bonds is any date on or after February 15,2021.
This refunding will offer an estimated present value savings of approximately$7.81 million,or 14.12 percent of the refunded principal amount.The
actual savings amount will not be determined until the time bids are received.However,the ordinance provides that the refunding debt shall not be
sold unless the sale will result in net present value savings of at least 3.5 percent of the par amount being refunded.
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, including a
maximum maturity date no later than February 15,2045.Rating agency calls for Fitch and Standard&Poor's will be conducted prior to the sale of
the bonds. Ratings are anticipated to be received the week of October 6,2020.Bids for the sale of the bonds are scheduled to be submitted
on October 20,2020.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 November 17,2020.
The attached appropriation ordinances reflect the maximum appropriation amount for bond proceeds for each of the identified purposes. Because
sale of the bonds will not occur until after the end of the current fiscal year,these ordinances are supplementing the Fiscal Year 2020-2021 budget
anticipated to be adopted by Council on September 22,2020. The ordinances'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 each of the ordinances,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 Stormwater
Debt Service Fund.
A Form 1295 is not required because: This MSC does not request approval of a contract with a business entity.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that upon adoption of the actions provided within this Mayor and Council Communication,the sale of the
Drainage Utility System Revenue Refunding and Improvement Bonds,Series 2020 will proceed as necessary to provide funding in the Stormwater
Revenue Refunding and Improvement Bonds 2020 Fund for the related Stormwater projects. Further,upon adoption of the attached supplemental
appropriation ordinances,and the adoption of the Fiscal Year 2020-2021 budget by the City Council,funds will be available in the Fiscal Year 2021
Budget of the identified funds. Prior to any expenditures being incurred,the Transportation&Public Works Department has the responsibility to
validate the availability of funds.
Submitted for City Manager's Office by: Jay Chapa 5804
Originating Business Unit Head: Reginald Zeno 8517
Additional Information Contact: Alex Laufer 2268