HomeMy WebLinkAbout2021/02/23-Attachments-M&C 21-0113City of Fort Worth, Texas
Mayor and Council Communication
DATE: 02/16/21 M&C FILE NUMBER: M&C 21-0113
LOG NAME: 13NOTICE OF INTENTION - SERIES 2021 CERTIFICATES OF OBLIGATION
SUBJECT
(CD 5) Adopt Ordinance Directing Publication of Notice of Intention to Issue Combination Tax and Revenue Certificates of Obligation in an Amount
Not to Exceed $18,500,000.00 for Improvements to Trinity Boulevard and Expressing Intent to Reimburse Initial Project Expenditures from
Proceeds if Debt Is Issued
RECOMMENDATION:
It is recommended that the City Council adopt the attached ordinance, which directs publication of notice of the City's intention to issue
Combination Tax and Revenue Certificates of Obligation, Series 2021, in an amount not to exceed $18,500,000.00 for improvements to Trinity
Boulevard; approves the form of notice; directs notice to be published in accordance with state law; and expresses official intent for the City to
reimburse itself from proceeds of the debt sale, if debt is issued, for project related expenditures incurred prior to issuance.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to take actions associated with issuing Certificates of Obligation (C.O.$) for
improvements to Trinity Boulevard.
Under state law the City Council has the authority to issue C.O.s without explicit prior voter approval, provided that notice must be published and
the public provided an opportunity to petition for an election to be held. In addition, the City has established financial policies governing the
issuance of C.O.s that limits their use to finance public improvements in special circumstances and only after determining the City's ability to
assume additional debt. An example of special circumstances is a situation, such as the one posed here, where it would be more economical to
issue C.O.s rather than revenue bonds.
The Trinity Boulevard project, which includes certain improvements to road, sidewalk, and stormwater infrastructure, qualifies for C.O. financing
under both state law and City policy. The Board of the adjacent Tax Increment Reinvestment Zone No. 14 (Trinity Lakes) (TIF) has authorized
participation in the project, and the City Council previously approved a TIF development agreement in the amount of $18,500,000.00 for the project
(M&C 20-0939).
Although the City anticipates the entire cost of the C.O.s to be repaid from TIF revenues, staff is recommending issuance of combination tax and
revenue C.O.s with the City's taxing authority and a limited pledge of surplus water and sewer revenues (not to exceed $1,000.00). Pledging the
City's tax authority will allow the debt financing to achieve a more favorable interest rate. Making a limited pledge of surplus water and sewer
revenues meets state law provisions that require identification of a revenue source when using revenue as a potential source of repayment.
Upon City Council approval, the City Manager shall publish the initial Notice of Intention on February 17 or 18, 2021 and will post the notice on the
City's website at the same time. The second Notice of Intention will be published on the same day of the week following the first notice.
An ordinance to authorize issuance and delegate authority for the sale of the C.O.s is scheduled to be brought back for Council consideration on
April 6, 2021. The C.O.s are intended to be sold on a competitive basis with closing and delivery of the C.O. funds anticipated to occur in the late
spring/early summer timeframe.
In addition to setting the form of notice and directing its publication, adoption of the attached ordinance would also serve as the City Council's
adoption of a formal statement of intent to reimburse preliminary costs for the project out of the issuance from the certificates. This aspect of the
ordinance does not obligate the City to sell C.O.s, but preserves the ability for the City to reimburse itself from tax-exempt debt proceeds if it does.
This mechanism allows the project to continue forward until debt proceeds are available. A separate M&C to appropriate an interim funding
source will be brought forward for Council consideration; any expenses incurred against that initial funding source would be repaid out of debt
proceeds following issuance, sale, and receipt of proceeds.
This project is located in COUNCIL DISTRICT 5.
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 approval of this recommendation will have no material effect on City funds.
Submitted for City Manager's Office by. Jay Chapa 5804
Originating Business Unit Head: Reginald Zeno 8517
Additional Information Contact: Alex Laufer 2268
Expedited