HomeMy WebLinkAboutResolution 5531-02-2022 A Resolution
No. 5531-02-2022
RESOLUTION AUTHORIZING DEFEASANCE OF BONDS
WHEREAS, the City of Fort Worth, Texas (the "City") has outstanding the following
obligations:
City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series
2012 (the "Bonds"); and
WHEREAS, the proceedings adopted by the City Council authorizing the issuance of the
Bonds provide that the City may effect a defeasance of the Bonds prior to their scheduled
maturities; and
WHEREAS, City staff has determined and recommended to the City Council that
effecting the defeasance of the Bonds will result in the reduction of debt service payable on the
outstanding Bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS:
Section 1. That the City Council hereby authorizes the use of surplus water and sewer
system revenues for the purpose of effecting the defeasance of the Bonds maturing on February
15 in each of the years 2023 through 2025, aggregating $9,895,000 in principal amount, as
shown in the following table (the "Defeased Obligations"):
Maturijy Principal Amount ($)
2023 3,155,000
2024 3,285,000
2025 3,455,000
Section 2. That the City Manager is hereby directed to cause the Defeased Obligations to
be redeemed prior to their scheduled maturities. The City Manager is hereby directed to cause
the Bonds to be redeemed prior to their maturities but no earlier than March 15, 2022. Notice of
the redemption of the Defeased Obligations shall be in substantially the form attached to this
Resolution as Exhibit A and shall be given in the manner provided in the proceedings
authorizing the issuance of the Bonds.
Section 3. That the City Manager is hereby directed to fund the defeasance of the
Defeased Obligations from available surplus water and sewer system revenues in the Water
Priority Lien Debt Service Fund, in an amount equal to the principal amount of the Defeased
Obligations to be redeemed, plus accrued interest on the Defeased Obligations to the date fixed
for redemption.
Section 4. That the City Manager is hereby authorized to and shall execute and deliver
any documents necessary to effect the defeasance of the Defeased Obligations, specifically, any
agreement with the paying agent for the Defeased Obligations to hold the amounts deposited and
invested to pay the Defeased Obligations at their date fixed for redemption.
Section 5. That this Resolution shall become effective immediately upon its adoption, in
accordance with the provisions of Section 1201.028, Texas Government Code.
Section 6. That this City Council officially finds and determines that the meeting at
which this Resolution is adopted was open to the public, and that public notice of the time, place,
and purpose of such meeting was given, all as required by Chapter 551, Texas Government
Code.
PASSED AND APPROVED the 8th of Fe uar 2022.
Mayor, Cit of Fort Worth, Texas
ATTEST:
'FOR7.
.'q
..
Fort 0
Ci Secretary, City of Worth, Texas
ROVED I
AS TO FORM AND LEGALITY:
...........
L)01
City Atiorne/�, City of Fort Worth, Te��'
(SEAL)
EXHIBIT A
NOTICE OF REDEMPTION
CITY OF FORT WORTH, TEXAS
Notice is hereby given that the following obligations issued by the City of Fort Worth, Texas (the "City")
are called for redemption prior to their scheduled maturities on the dates and at the redemption price of par plus
accrued interest to the redemption date:
CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM REVENUE
REFUNDING BONDS, SERIES 2012, all obligations maturing on February 15 in each of the
years 2023 through 2025, aggregating $9,895,000 in principal amount; REDEMPTION DATE:
March 15,2022.
Maturity Date Principal Amount Interest Rate CUSIP
03/01/2023 $3,155,000 3.00% 349515QL3
03/01/2024 $3,285,000 5.00% 349515QM1
03/01/2025 $3,455,000 5.00% 349515QN9
Due provision for the payment of the above-described obligations has been made with BOKF,
NA, the paying agent for said obligations ("BOKF"), and said obligations shall be presented for payment
either in person or by mail,at the following addresses:
First Class/Registered/Certi red Overnipht Delivery
BOKF,NA BOKF,NA
P.O.Box 64106 Corporate Trust Services
St.Paul,MN 55164-0106 111 Fillmore Avenue E
St.Paul,NIN 55017
Interest on the redeemed obligations shall cease to accrue thereon after the redemption date.
CUSIP numbers have been assigned to this issue by the CUSIP Service Bureau and are included solely for
the convenience of the Bondholder. Neither the City nor BOKF shall be responsible for the selection or correctness
of the CUSIP numbers on the obligations or as indicated in any redemption notice.
IMPORTANT NOTICE: Under the provisions of the Jobs and Growth Tact Relief Reconciliation Act of
2003 (the "Act"), paying agents making payments of interest or principal on municipal securities may be obligated
to withhold a 28% tax from remittance to individuals who have failed to furnish the paying agent with a valid
taxpayer identification number. Owners of the Bonds who wish to avoid the imposition of the tax should submit
certified taxpayer identification numbers when presenting the Bonds for payment.
THIS NOTICE is given under authority of a resolution adopted by the City Council of the City on February
8,2022.
THE STATE OF TEXAS
COUNTIES OF TARRANT, DENTON, WISE, PARKER AND JOHNSON
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 02/08/22 M&C FILE NUMBER: M&C 22-0095
LOG NAME: 13CASH DEFEASANCE WATER SEWER BONDS,SERIES 2012
SUBJECT
(ALL)Adopt Attached Resolution Authorizing Cash Defeasance of Water and Sewer System Revenue Refunding Bonds, Series 2012;Adopt
Attached Appropriation Ordinance; and Amend the Fiscal Year 2022 Adopted Budget to Achieve Projected Net Present Value Savings in the
Estimated Amount of$677,187.60 or 6.84 Percent
RECOMMENDATION:
It is recommended that the City Council.-
1. Adopt the attached resolution authorizing full cash defeasance of City of Fort Worth,Texas Water and Sewer System Revenue
Refunding Bonds,Series 2012, including principal,accrued interest,and transaction costs; and
2. Adopt the attached ordinance adjusting appropriations in the Water Priority Lien Debt Service Fund by reducing budgeted contribution to
fund balance by$684,912.00 and increasing appropriations by$9,955,971.00, including$9,271,059.00 in use of net position,for
defeasance of Series 2012 Water and Sewer revenue refunding bonds,with such amount subject to reduction to conform to final figures at
the time of defeasance;and
3. Amend the Fiscal Year 2022 Adopted Budget
DISCUSSION:
The purpose of this Mayor and Council Communication(M&C)is to take actions associated with defeasance of outstanding Water and Sewer
System debt obligations.
Each year,the Financial Management Services Department and Water Department, in conjunction with the City's financial advisors, PFM Financial
Advisors LLC and Tijerina Galvan Lawrence LLC,evaluate the Water and Sewer System's financial position and its debt portfolio to identify
opportunities to refund (refinance)and/or defease outstanding debt obligations to achieve net savings and/or free up capacity for future debt-
funded projects. This strategy supports the City's initiative of being good stewards of ratepayers'money.
The attached resolution authorizes the recommended cash defeasance further described below:
City of Fort Worth,Texas.Water and Sewer System Revenue Refunding Bonds,Series 2012
These bonds were issued for an initial principal amount of$31,155,000.00 for the purpose of refinancing then-existing Water and Sewer System
debt to achieve savings.
This debt is callable on or after February 15,2022,at a price of par plus accrued iterest to the redemption date.The cash defeasance would be for
the approximate amount of$9,955,971.00,which represents$9,895,000.00 of remaining principal of the bonds maturing February 15,2023
through February 15,2025, plus accrued interest and transaction costs.
As a result of sustained improved economic conditions within the Water and Sewer Priority Lien Debt Service Fund and additional Fiscal Year
(FY)2021 contributions that were made in anticipation of a debt issuance that was reduced in size, net position above the reserve requirement is
available to defease callable debt.The defeasance is being paid wholly out of fund balance/net position available as of the close of FY2021.
Adoption of this M&C will eliminate the$684,912.00 contribution to fund balance/net position that was identified in the adopted FY2022 budget for
the Water and Sewer Priority Lien Debt Service Fund and appropriate that money plus$9,271,059 in net position for this defeasance.
Defeasance of the identified maturities will achieve projected net present value savings in the estimated amount of$677,187.60 or 6.84 percent.
As a result of the cash defeasance,the Water and Sewer System will no longer have a debt service obligation for the Series 2012 bonds.
If approved,defeasance of the identified maturities would occur on March 15,2022.
Funding is available for appropriation in the net position/fund balance of the Water Priority Lien Debt Service Fund.
NOTE ON APPROPRIATIONS-The attached appropriation ordinance reflects the maximum appropriation amount for defeasance.Their structure
accommodates variables in costs that are associated with the transaction date being a month away.To the extent numbers at the time of
defeasance are less than those reflected in the ordinance,the available appropriation amount will be reduced as needed to reflect final figures to
ensure appropriations do not exceed actuals.
The action in this M&C will amend the Fiscal Year 2022 Adopted Budget as approved in connection with Ordinance 25073-09-2021, Section 3.
Debt Service Funds as listed on page 13 as follows:
Fund/Department FY2022 Adopted Revised FY2022
Budget Category Budget Budget Adjustment Budget
Water Priority Lien Debt Service Fund
Revenues
Transfer from Water/Sewer $ 97,221,066.00 $ 97,221,066.00
Use of Fund Balance/Net Position $ 9,271,059.00 $9,271,059.00
Total Revenues $ 97,221,066.00 $ 9,271,059.00 $ 106,492,125.00
Expenditures
Financial Management Services(Debt Obligation) 96,536,154.00 $9,955,971.0b $106,492,125.00
Contribution to Fund Balance/Net Position $684,912.00 (684,912.00) $0.00
Total Expenditures $97,221,066.00 $9,271,059.00 $106,492,125.00
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 adoption of the attached resolution and appropriation ordinance,funds for principal,accrued interest,
and transaction costs will be available in the Water Prior Lien Debt Service Fund,as appropriated,to legally defease the above
referenced obligations.
Submitted for City Manager's Office by: Reginald Zeno 8517
Originating Business Unit Head: Anthony Rousseau(Acting) 8338
Additional Information Contact:
Alex Laufer 2268
Expedited
THE STATE OF TEXAS
COUNTIES OF TARRANT, DENTON, WISE, PARKER AND JOHNSON
CITY OF FORT WORTH
I, Jannette S. Goodall, City Secretary of the City of Fort Worth, in the State of Texas, do
hereby certify that I have compared the attached and foregoing excerpt from the minutes of the
regular, open, public meeting of the City Council of the City of Fort Worth, Texas held on
February 8, 2022, and the Resolution Authorizing Defeasance of Bonds, which was duly passed
at said meeting, and that said copy is a true and correct copy of said excerpt and the whole of
said resolution.
In testimony whereof, I have set my hand and have hereunto affixed the seal of said City
of Fort Worth, this 8th day of February, 2022.
tytySecretary of the
of Fort Worth, Texas
(SEAL)
�XP►S
DEPOSIT AGREEMENT
BOKF, NA (the "Bank"), as paying agent for the City of Fort Worth, Texas Water and Sewer
System Revenue Refunding Bonds, Series 2012 (the "Obligations") issued by the City of Fort Worth,
Texas (the "Issuer") hereby acknowledges, agrees and certifies for the benefit of the Issuer and the
owners of the Obligations as follows:
1. The Bank understands that certain maturities of the Obligations, as described in the notice of
redemption attached hereto as Exhibit A (referred to herein as the "Called Obligations"), have been
called for cancellation and redemption on March 15, 2022 (the"Redemption Date").
2. The Bank acknowledges that the total amount due on the Redemption Date for such Called
Obligations is $ , representing principal in the amount of$9,895,000.00 plus accrued interest
in the amount of$ Funds in payment of such principal and interest will be deposited with the
Bank upon receipt of such funds from the Issuer on or before the Redemption Date.
3. The Bank acknowledges that the fees and expenses due to the Bank with respect to the Called
Obligations to and through their redemption and final payment have been paid or will be duly provided
for. The Bank will continue to act as paying agent for the Called Obligations under the existing paying
agent agreement with the only remedy for nonpayment of its fees being an action for amounts owing
under such agreement.
4. The Bank acknowledges receipt of notice of redemption of the Called Obligations to effect the
redemption of the Called Obligations on the Redemption Date.
5. The Issuer certifies that it will cause to be deposited the amounts stated in paragraphs 2 and 3
with the Bank on or before the Redemption Date.
6. The Bank shall deposit any moneys received from the Issuer for the payment of the Called
Obligations into one or more trust accounts to be held in an agency capacity, with such moneys to be
collateralized to the extent required by law.
7. The Bank represents and warrants, for purposes of Section 2252.908 of the Texas Government
Code,that the Bank is a wholly owned subsidiary of a publicly traded business entity.
8. Pursuant to Section 2271.002, Texas Government Code, the Bank hereby represents that as a
"Company", as defined in Section 808.001, Texas Government Code, the Bank, or any wholly owned
subsidiary, majority-owned subsidiary, parent company or affiliate of the Bank, does not Boycott Israel
and, subject to or as otherwise required by applicable Federal law, including, without limitation, 50
U.S.C. Section 4607,the Bank, as a"Company", as defined in Section 808.001,Texas Government Code,
or any wholly owned subsidiary, majority-owned subsidiary, parent company or affiliate of the Bank,
agrees not to Boycott Israel during the term of this Agreement. For purposes of this Section, "Boycott
Israel' shall have the meaning given such term in Section 2271.002,Texas Government Code.
9. For purposes of Subchapter F of Chapter 2252 of the Texas Government Code, that at the time
of execution of this Agreement,the Bank hereby represents and warrants that as a"Company", as defined
in Section 808.001, Texas Government Code,the Bank, or any wholly owned subsidiary, majority-owned
subsidiary, parent company or affiliate of the Bank, (i) does not engage in business with Iran, Sudan or
.any foreign terrorist organization as described in Chapter 808 of the Texas Government Code, or
Subchapter F of Chapter 2252 of the Texas Government Code, and (ii) is not a company listed by the
Texas Comptroller of Public Accounts under Sections 808.051 or 2252.153 of the Texas Government
Code. The term "foreign terrorist organization" shall have the meaning given such term in Section
2252.151, Texas Government Code.
10. For purposes of Section 2274.002,Texas Government Code(as added by Senate Bill 13, 87th
Texas Legislature, Regular Session) as amended and Section 2274,002, Texas Government Code (as
added by Senate Bill 19, 87th Texas Legislature,Regular Session)as amended, the value of services to be
provided by the Bank under this Deposit Agreement will not exceed $100,000; therefore, the provisions
of each of the cited statutory provisions do not apply to this Deposit Agreement.
11. This Deposit Agreement may be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall constitute one and the
same Deposit Agreement. The delivery of copies of this Deposit Agreement as executed by Adobe
Acrobat PDF or similar electronic form of execution, or by electronic reproduction of a manual signature
transmitted via electronic mail or facsimile, shall constitute effective execution and delivery as to the
parties and may be used in lieu of originals for all purposes.
[Execution Page Follows]
EXECUTED as of , 2022.
CITY OF FORT WORTH,TEXAS
City Ma r
:Z
(S Xt�S
i Secretary
APPROVED AS TO FORM:
City A orney ------
BOKF,NA
By:
Name:
Title:
Signature Page Deposit Agreement—City of Fort Worth, Texas
EXHIBIT A
NOTICE OF REDEMPTION
(attached)