HomeMy WebLinkAboutOrdinance 24738-03-2021 ORDINANCE NO.24738-03-2021
AN ORDINANCE ADJUSTING APPROPRIATIONS IN THE VENUE DEBT
SERVICE FUND BY INCREASING TRANSFERS IN FROM THE CULTURE AND
TOURISM 2% HOTEL OCCUPANCY TAX FUND BY $1,617,139.00 AND
DECREASING TRANSFERS IN FROM THE CULTURE AND TOURISM
PROJECT FINANCE ZONE FUND BY THE SAME AMOUNT, FOR THE
PURPOSE OF ADJUSTING THE FY2021 BUDGET; 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 the budget of the City of Fort Worth for Fiscal Year 2020-2021, as enacted by Ordinance 24446-09-
2020, as amended, is hereby further amended to adjust appropriations in the Venue Debt Service Fund by
increasing transfers in from the Culture and Tourism 2%Hotel Occupancy Tax Fund by $1,617,139.00 and
decreasing transfers in from the Culture and Tourism Project Finance Zone Fund by the same amount,for the
purpose of adjusting the FY2021 budget.
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 24446-09-2020 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said prior ordinances and appropriations are hereby expressly repealed.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
Assistant City Attorney Mary J. Kayser
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ADOPTED AND EFFECTIVE: March 9,2021 * z
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City of Fort Worth, Texas
Mayor and Council Communication
DATE: 03/09/21 M&C FILE NUMBER: M&C 21-0179
LOG NAME: 25HOT2% PFZ DEBT AMENDMENT2021
SUBJECT
(ALL)Declare$1,579,095.75 in Fund Balance in the Culture and Tourism Debt Service Fund as Surplus and Make Related Findings,and Adopt
Appropriation Ordinances Amending the Fiscal Year 2021 Adopted Budgets for the Culture and Tourism Operating and Debt Service Funds
RECOMMENDATION:
It is recommended that the City Council:
1. Find that(1)only$1,050,703.25 of the balance in the Culture and Tourism Debt Service Fund is needed to meet the obligations associated
with the 2013E Certificates of Obligation in the current fiscal year;(2)an additional balance of approximately$1,579,095.75 and attributable
to Dallas Fort Worth Revenue Share exists and constitutes a surplus that may be used toward other debt-related needs,including paying
toward outstanding general obligation debt,the proceeds of which refunded other Culture and Tourism-related debt;and(3)use of the
surplus will not impair the City's ability to meet its obligations to the holders of the 2013E COs in the current fiscal year or any future year;
2. Adopt the attached ordinance adjusting FY2021 appropriations in the Culture and Tourism Debt Service Fund by increasing use of fund
balance by$1,844,628.00 and decreasing transfers in from the Culture and Tourism 2%Hotel Occupancy Tax Fund by the same amount;
3. Adopt the attached ordinance adjusting FY2021 appropriations in the Culture and Tourism 2%Hotel Occupancy Tax Fund by reducing
transfers out to the Culture and Tourism Debt Service Fund by$1,844,628.00, increasing transfers out to the Venue Debt Service Fund by
$1,617,139.00,and reducing total appropriations in the Fund by$227,489.00, resulting in an amended budget of$5,116,605.00;
4. Adopt the attached ordinance adjusting appropriations in the Venue Debt Service Fund by increasing transfers in from the Culture and
Tourism 2%Hotel Occupancy Tax Fund by$1,617,139.00 and decreasing transfers in from the Culture and Tourism Project Finance Zone
Fund by the same amount;and
5. Adopt the attached ordinance adjusting the FY2021 budget in the Culture and Tourism Project Finance Zone Fund by eliminating all
anticipated intergovernmental revenues and decreasing appropriations by$2,450,612.00,to reflect stagnation in incremental hotel-related
tax growth as a result of the COVID-19 pandemic,and increasing anticipated use of fund balance by$833,473.00,for an amended budget
of$2,022,807.00.
DISCUSSION:
The purpose of this Mayor and Council Communication(M&C)is to further adjust FY2021 budgets associated with the Public Events Department
(PED)and reduce anticipated revenues and reallocate expenditures to reflect ongoing impacts of the COVID-19 pandemic and the spring 2020
near collapse of the tourism industry and protracted recovery process.
On December 1,the City Council approved amendments to the FY2021 operating budgets for the Culture and Tourism Project Finance Zone
(PFZ)Fund and Culture and Tourism 2%Hotel Occupancy Tax(HOT 2%)Fund(M&C 20-0888)and declared $6,315,096.00 in unpledged
FY2020 year-end fund balance in the Culture and Tourism Debt Service Fund as surplus, reallocating the bulk of those funds to offset negative
financial impacts of COVID-19 and leaving$467,706.00 in unprogrammed declared surplus available for future use(M&C 20-0886).
The intent of this M&C is to take actions to authorize use of available funds in the Culture and Tourism Debt Service Fund(C&TDSF)to offset
additional projected revenue losses based on recent re-estimates following prior Council action.
The evolution of the budgets for these funds from their original presentation and adoption,through the December 1 changes,to the modifications
proposed today is shown in the following chart.
FUND FY21 FY 21 AMENDED FY21 AMENDED VARIANCE Use of Fund
ADOPTED FM03 FM06 Second Balance/Other
(Ordinance Amendment Sources
24446-09- (M&C 20-0888) (this M&C)
2020)
HOT2% $5,870,007.00 $5,344,094.00 $5,116,605.00 ($227,489.00) $0.00
PFZ $5,689,334.00 $3,639,946.00 $2,022,807.00 ($1,617,139.00) $2,022,807.00
Culture and Tourism Debt Service Fund
M&C 20-0886 noted that as of FY20 year end,the Culture and Tourism Debt Service Fund(C&TDSF)had a balance of$8,944,895.00,including
interest attributable to the period ending September 30,2020. That M&C(1)set aside the portion of that balance(29.4%,or$2,629,799.00)that
was attributable to DFW revenue share,which supports the pledge for Series 2013E certificates of obligation(2013B COs),and(2)declared the
remainder($6,315,096.00)unpledged surplus,most of which was programmed for use to offset lost hotel-and tourism-related revenues.
The prior M&C also indicated that the FY2021 obligations for the 2013B COs totaled only$1,050,703.25($840,447.00 in debt service plus
$210,256.25 in required reserve). Approval of the first recommendation declares the rest of the balance attributable to DFW rental share
revenues($1,579,095.75)as surplus that may be used for other debt-related purposes.
Approval of the second recommendation and adoption of the associated ordinance,will appropriate$1,844,628.00 of fund balance,which
consists of$840,447.00 of DFW revenue share for debt service payment on the 2013E COs plus$1,004,181.00 of the declared surplus to pay
debt service on a portion of general obligation bond debt that refunded(refinanced)prior C&T debt. Taking these actions will allow the remaining
budgeted FY21 transfers in from the HOT 2%Fund to be reduced by$1,844,628.00.
The C&TDSF will continue to meet its reserve requirements following the proposed use of fund balance.
Culture and Tourism 2%HOT Fund
With the$1.84M reduction of the budgeted transfer from the HOT 2%to the C&TDSF,the funds needed to make the remaining transfers to the
Venue Debt Service Fund for FY2021 ($1.61 M)can be made out of this fund.
By using the HOT 2%,the remaining$1.61 M in transfers that had originally been budgeted out of the PFZ can be eliminated. It is recommended
that the budget in HOT 2%be reduced by the difference between the two transfers($227K)to reflect that tax receipts are now projected to be
lower than was anticipated when the December 1,2020 budget amendment was approved(M&C 20-0888).
Culture and Tourism Project Finance Zone Fund
Through the middle of FY2020 Project Finance Zone(PFZ)payments from the State were based on anticipated incremental growth in tax
collections in the zone. The onset of the pandemic cratered those revenues,which meant that the Comptroller's payments for the first six months of
FY2020 exceeded the total actual increment for the year, resulting in a negative balance in the PFZ account at the Comptroller's. Staff is working
to negotiate payment options for rectifying the deficit when incremental growth returns.
The PFZ is not anticipated to achieve any revenue in FY21 due to the FY20 deficit. The ordinance for this Fund decreases the amended budget
estimate of$2.45M,eliminating foreseeable collections in tax revenues from this source for the fiscal year and eliminating the remaining$1.61 M in
transfers that the fund had been budgeted to make.
Because$1.61 M in transfers to the VDSF were already made through March 2021 in compliance with the budget as most recently amended,the
attached ordinance also appropriates$833K in PFZ operating fund balance to balance that expenditure, resulting in a revised total PFZ budget of
$2,022,807.00.
The previously made transfers from the PFZ,the added transfers from the HOT 2%,and the previously approved use of$1.18M in available
Dickies Reserve funds will ensure the$3.63M debt obligation for the arena bonds is met for FY21.
Staff in the Public Events Department will continue to closely monitor budgetary projections and receipts at both the state and local level and will
bring forward additional corrective action if needed.
A Form 1295 is not required because:This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations and adoption of the attached appropriation ordinances,funds
will be available in the Culture&Tourism 2%Hotel Fund,Culture&Tour Proj Fin Zone Fund,Culture&Tourism Debt Service Fund and the Venue
Debt Service Fund. Prior to an expenditure being incurred,the Public Events and Financial Management Services Departments have the
responsibility of verifying the availability of funds.
Submitted for City Manager's Office by: Jay Chapa 5804
Originating Business Unit Head: Michael Crum 2501
Additional Information Contact: Andrea Wright 2502
Expedited