HomeMy WebLinkAboutOrdinance 19438-11-2010 ORDINANCE NO. 1943 8-11-20 10
ORDINANCE AMENDING ORDINANCE NO. 17462-03-2007
APPROVING AND AUTHORIZING THE ISSUANCE OF
CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM
COMMERICAL PAPER NOTES, SERIES A
WHEREAS, on March 27, 2007, the City Council adopted "An Ordinance approving and
authorizing the issuance by the City of Fort Worth, Texas of its Water and Sewer System
Commercial Paper Notes, Series A, in an aggregate principal amount at any one time
outstanding not to exceed $150,000,000 to provide interim financing to pay Project Costs for
Eligible Projects; authorizing the issuance and delivery of a bank note in connection with the
issuance, sale and delivery of Commercial Paper Notes, and prescribing the terms,features and
characteristics of such instruments; approving and authorizing certain authorized officers and
employees to act on behalf of the City in the selling and delivery of such short term obligations,
within the limitations and procedures specified herein; resolving other matters incident and
related to the issuance, sale, security and delivery of commercial paper notes, including the
appointment of an Issuing and Paying Agent and a Dealer and approval of an Issuing and
Paying Agent Agreement, a Credit Agreement and a Dealer Agreement; approving the use of an
Offering Memorandum in connection with the sale from time to time of such commercial paper
notes; and providing an effective date" (referred to herein as "Ordinance No. 17462-03-2007");
and
WHEREAS, the United States Securities and Exchange Commission (the "SEC") has
amended Rule 15c2-12 (the "Rule"), promulgated by the SEC, in a manner such that effective
December 1, 2010, the continuing disclosure obligation as set forth in the Rule will apply to the
new issuance of Commercial Paper Notes on and after December 1, 2010; and
WHEREAS, Ordinance No. 17462-03-2007 provides that it may be amended without
notice to or the consent of any owner of the Commercial Paper Notes to add to the covenants and
agreements of the City contained in Ordinance No. 17462-03-2007; and
WHEREAS, the City Council finds it necessary and desirable to amend Ordinance No.
17462-03-2007 in order to be in compliance with the Rule, effective December 1, 2010, with
respect to the new issuance of Commercial Paper Notes on and after December 1, 2010; and
WHEREAS, terms not defined by this Ordinance shall have the meaning given said terms
by Ordinance No. 17462-03-2007.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF FORT WORTH, TEXAS:
Section 1. Ordinance No. 17462-03-2007 is hereby amended by adding a new Section
4.18, which reads as follows:
Section 4.18. Continuing Disclosure Obli ag tion. (a) Annual Reports. (i) The City shall
provide annually to the MSRB, within six months after the end of each fiscal year ending in or
after 2010, financial information and operating data with respect to the City of the general type
described in Exhibit C to the Twenty-First Supplemental Ordinance to the Master Ordinance.
Any financial statements so to be provided shall be prepared in accordance with the accounting
principles described in Exhibit C to the Twenty-First Supplemental Ordinance to the Master
Ordinance, or such other accounting principles as the City may be required to employ from time
to time pursuant to state law or regulation. If the City commissions an audit of such statements
and the audit is completed within the period during which they must be provided, a copy of such
audit also shall be provided in accordance with the Rule. If any such audit of such financial
statements, if one is commissioned by the City, is not completed within such period, then the
City shall provide unaudited financial statements within the required time and audited financial
statements for the applicable fiscal year to the MSRB, when and if the audit report on such
statements become available.
(ii) If the City changes its Fiscal Year, it will notify the MSRB of the change (and of the
date of the new Fiscal Year end) prior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section. The
financial information and operating data to be provided pursuant to this Section may be set forth
in full in one or more documents or may be included by specific reference to any document
(including an official statement or other offering document, if it is available from the MSRB)
that theretofore has been provided to the MSRB or filed with the SEC. Filings shall be made
electronically, in such format as prescribed by the MSRB.
(b) Material Event Notices. The City shall notify the MSRB, in a timely manner not in
excess of ten Business Days after the occurrence of any of the following events, notice of any of
the following events with respect to the Commercial Paper Notes, if such event is material within
the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-
TEB) or other material notices or determinations with respect to the tax-exempt
status of the Commercial Paper Notes, or other events affecting the tax-exempt
status of the Commercial Paper Notes;
7. Modifications to rights of holders of the Commercial Paper Notes, if material;
8. Commercial Paper Note calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Commercial
Paper Notes, if material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the City;
13. The consummation of a merger, consolidation, or acquisition involving the City
or the sale of all or substantially all of the assets of the System, other than in the
ordinary course of business, the entry into a definitive agreement to undertake
such an action or the termination of a definitive agreement relating to any such
actions, other than pursuant to its terms, if material; and
14. Appointment of a successor Issuing and Paying Agent or change in name of the
Issuing and Paying Agent, if material.
The City shall notify the MSRB, in a timely manner, of any failure by the City to provide
financial information or operating data in accordance with subsection (a) of this Section by the
time required by such subsection. As used in clause 12 above, the phrase "bankruptcy,
insolvency, receivership or similar event" means the appointment of a receiver, fiscal agent or
similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other
proceeding under state or federal law in which a court of governmental authority has assumed
jurisdiction over substantially all of the assets or business of the City, or if jurisdiction has been
assumed by leaving the City Council and official or officers of the City in possession but subject
to the supervision and orders of a court or governmental authority, or the entry of an order
confirming a plan of reorganization, arrangement or liquidation by a court or governmental
authority having supervision or jurisdiction over substantially all of the assets or business of the
City.
(c) Limitations, Disclaimers, and Amendments. (i) The City shall be obligated to
observe and perform the covenants specified in this Section for so long as, but only for so long
as, the City remains an "obligated person" with respect to the Commercial Paper Notes within
the meaning of the Rule, except that the City in any event will give notice of any deposit made in
accordance with this Ordinance or applicable law that causes the Commercial Paper Notes no
longer to be Outstanding.
(ii) The provisions of this Section are for the sole benefit of the Noteholders and
beneficial owners of the Commercial Paper Notes, and nothing in this Section, express or
implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any
other person. The City undertakes to provide only the financial information, operating data,
financial statements, and notices which it has expressly agreed to provide pursuant to this
Section and does not hereby undertake to provide any other information that may be relevant or
material to a complete presentation of the City's financial results, condition, or prospects or
hereby undertake to update any information provided in accordance with this Section or
otherwise, except as expressly provided herein. The City does not make any representation or
warranty concerning such information or its usefulness to a decision to invest in or sell
Commercial Paper Notes at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
NOTEHOLDER OR BENEFICIAL OWNER OF ANY COMMERCIAL PAPER NOTE OR
ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN
WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR
WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION,
BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT,
FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION
FOR MANDAMUS OR SPECIFIC PERFORMANCE.
(iv) No default by the City in observing or performing its obligations under this Section
shall comprise a breach of or default under this Ordinance for purposes of any other provision of
this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise
limit the duties of the City under federal and state securities laws.
(v) Should the Rule be amended to obligate the Issuer to make filings or provide notices
to entities other than the MSRB, the Issuer agrees to undertake such obligation in accordance
with the Rule, as amended.
(vi) The provisions of this Section may be amended by the City from time to time to
adapt to changed circumstances that arise from a change in legal requirements, a change in law,
or a change in the identity, nature, status, or type of operations of the City, but only if(1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
sell Commercial Paper Notes in the primary offering of the Commercial Paper Notes in
compliance with the Rule, taking into account any amendments or interpretations of the Rule
since such offering as well as such changed circumstances and (2) either(a) the Noteholders of a
majority in aggregate principal amount (or any greater amount required by any other provision of
this Ordinance that authorizes such an amendment) of the Commercial Paper Notes then
outstanding consent to such amendment or (b) a person that is unaffiliated with the City (such as
nationally-recognized bond counsel) determined that such amendment will not materially impair
the interest of the Noteholders and beneficial owners of the Commercial Paper Notes. If the City
so amends the provisions of this Section, it shall include with any amended financial information
or operating data next provided in accordance with subsection (a) of this Section an explanation,
in narrative form, of the reason for the amendment and of the impact of any change in the type of
financial information or operating data so provided. The City may also amend or repeal the
provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable
provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the
Rule are invalid, but only if and to the extent that the provisions of this sentence would not
prevent an underwriter from lawfully purchasing or selling Commercial Paper Notes in the
primary offering of the Commercial Paper Notes.
(d) Definitions. As used in this Section, the following terms shall have the meanings
described herein:
The term WSRB" shall mean the Municipal Securities Rulemaking City.
The term "Rule" shall mean SEC Rule 15c2-12, as amended from time to time.
The term "SEC' shall mean the United States Securities and Exchange Commission.
Section 2. The provisions of this Ordinance amending Ordinance No. 17462-03-2007
shall become effective December 1, 2010, or such other date if the Rule is amended prior to
December 1, 2010 stating a different effective date.
Section 3. This Ordinance shall be effective immediately from and after its passage in
accordance with the provisions of Section 1201.028, Texas Government Code.
Section 4. It is hereby officially found and determined that the meeting at which this
Ordinance was passed was open to the public, and public notice of the time, place and purpose of
said meeting was given, all as required by Chapter 551, Texas Government Code, as amended.
PASSED AND APPROVED the 16th day of November, 2010.
Mayor, City of Fort Wo exas
ATTEST:
ity Secretary,bity of Fort Worth, texas
APPROVED AS TO FORM AND LEGALITY:
(SEAL)
City Attorney, City of F Worth
City of Fort Worth, Texas
Mayor and Council Communication
CE�!UNGIL ACTtON� Appr4vect ort 11l16l2Q1Q -Ord. eta.-194381f-201 "... °'
DATE: Tuesday, November 16, 2010 REFERENCE NO.: G-17118
LOG NAME: 13WATER CP AMEND
SUBJECT:
Pursuant to the Requirements of a Recent Amendment to a SEC Rule, Adopt an Ordinance Amending
Ordinance No. 17462-03-2007 Which Approved and Authorized the Issuance of City of Fort Worth, Texas
Water and Sewer System Commercial Paper Notes, Series A in the Maximum Principal Amount of
$150,000,000
RECOMMENDATION:
It is recommended that the City Council, pursuant to the requirements of a recent amendment to an SEC
rule, adopt the attached Ordinance amending Ordinance No. 17462-03-2007 which approved and
authorized the issuance of City of Fort Worth, Texas Water and Sewer System Commercial Paper Notes,
Series A in the maximum principal amount of$150,000,000.
DISCUSSION:
The City Council authorized a $150,000,000.00 Commercial Paper program for the Water and Sewer
System in 2007 (M&C C-22028)for the purpose of providing a short-term financing option for the
department's ongoing capital projects. The program allows the City to issue commercial paper notes for
interim financing or use the commercial paper authority to initiate the project and use cash from the City
portfolio to fund projects until such time as the City issues debt to replenish the portfolio. While the City
rarely, if ever, actually issues the notes, it is crucial for the City to be able to do so in order to use the
authority as a funding source.
In May of 2010, the Securities and Exchange Commission (SEC), federal regulator of the capital markets,
adopted amendments to Rule 15c2-12 relating to municipal securities disclosure. Specifically related to
this M&C, the amended Rule now covers commercial paper(CP) notes for the first time, subjecting the
notes to the same disclosure requirements as the City's bond programs. The amendments to the Rule,
which go into effect December 1, 2010, also prohibit dealers from selling CP without the issuer agreeing to
undertake a continuing disclosure agreement.
The attached ordinance amends ordinance number 17462-03-2007, which authorized the current Water
and Sewer System Commercial Paper Program, to include a section on Continuing Disclosure Obligations
putting the City and the Program in compliance with the amended SEC Rule. Without this amendment,
the City would not be able to utilize its commercial paper program, if it so desired
FISCAL INFORMATION / CERTIFICATION:
The Financial Management Services Director certifies that this action will have no material effect on City
funds.
FUND CENTERS:
Logname: 13WATER CP AMEND Page 1 of 2
TO Fund/Account/Centers FROM Fund/Account/Centers
CERTIFICATIONS:
Submitted for City Manager's Office by.� Karen Montgomery (6222)
Originating Department Head: Lena Ellis (8517)
Additional Information Contact: James Mauldin (2438)
Logname: 13 WATER CP AMEND Page 2 of 2