HomeMy WebLinkAboutResolution 5682-02-2023 A Resolution
NO. 5682-02-2023
RESOLUTION AUTHORIZING DEFEASANCE OF OBLIGATIONS
WHEREAS, the City of Fort Worth, Texas (the "City") has outstanding the following
obligations:
City of Fort Worth, Texas Combination Tax and Revenue Certificates of Obligation,
Series 2013C(the "Obligations"); and
WHEREAS, the proceedings adopted by the City Council authorizing the issuance of the
Obligations provide that the City may effect a defeasance of the Obligations prior to their
scheduled maturities; and
WHEREAS, City staff has determined and recommended to the City Council that
effecting the defeasance of the Obligations will result in the reduction of debt service payable on
the outstanding Obligations.
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 available funds in the
General Debt Service Fund for the purpose of effecting the defeasance of the Obligations
maturing on March 1 in each of the years 2025 through 2034, aggregating $9,155,000 in
principal amount, as shown in the following table (the "Defeased Obligations"):
Maturi Principal Amount($)
2025 920,000
2026 915,000
2027 915,000
2028 915,000
2029 915,000
2030 915,000
2031 915,000
2032 915,000
2033 915,000
2034 915,000
Section 2. That the City Manager is hereby directed to cause the Defeased Obligations to
be redeemed prior to their scheduled maturities but no earlier than March 15, 2023. 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 Obligations.
Section 3. That the City Manager is hereby directed to fund the defeasance of the
Defeased Obligations from available funds in the General 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 14th day of February, 2023.
y Secretary, City of Fort Worth,Texas
(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 COMBINATION TAX AND REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2013C, all obligations maturing on March 1 in
each of the years 2025 through 2034, aggregating $9,155,000 in principal amount;
REDEMPTION DATE:March 22,2023.
Maturity Date Principal Amount Interest Rate CUSIP
03/01/2025 $920,000 3.375% 3494254R6
03/01/2026 $915,000 3.500% 3494254S4
03/01/2027 $915,000 3.750% 3494254T7
03/01/2028 $915,000 5.000% 3494254U9
03/01/2029 $915,000 4.000% 3494254V7
03/01/2030 $915,000 4.000% 3494254W5
03/01/2031 $915,000 4.125% 3494254X3
03/01/2032 $915,000 4.250% 3494254YI
03/01/2033 $915,000 4.375% 3494254Z8
03/01/2034 $915,000 4.375% 3494255A2
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 Class1&gistered1Cerffined Overnight Deliver
BOKF,NA BOKF,NA
P.O.Box 64106 Corporate Trust Services
St.Paul,MN 55164-0106 111 Fillmore Avenue E
St.Paul,MN 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 Obligationholder. 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 Tax 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 Obligations who wish to avoid the imposition of the tax should
submit certified taxpayer identification numbers when presenting the Obligations for payment.
THIS NOTICE is given under authority of a resolution adopted by the City Council of the City on February
14,2023.
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 14, 2023, and the Resolution Authorizing Defeasance of Obligations, 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 17t'day of February, 2023.
ity Secretary of the
ity of Fort Worth, Texas
OF V
(SEAL) f..
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 02/14/23 M&C FILE NUMBER: M&C 23-0100
LOG NAME: 13CASH DEFEASANCE 2013C CERTIFICATES OF OBLIGATION
SUBJECT
(ALL)Adopt Resolution Authorizing Cash Defeasance of Combination Tax& Revenue Certificates of Obligation,Series 2013C to Achieve
Projected Net Present Value Savings in the Estimated Amount of$876,988.00 or 9.58 Percent;Adopt Appropriation Ordinance;and Amend the
Fiscal Year 2023 Adopted Budget
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached resolution authorizing cash defeasance of City of Fort Worth,Texas Combination Tax and Revenue Certificates of
Obligation,Series 2013C, including principal,accrued interest,and transaction costs,to achieve projected net present value savings in the
estimated amount of$876,988.00 or 9.58 percent;
2. Adopt the attached ordinance increasing estimated receipts and appropriations in the General Debt Service Fund in the
amount of$228,042.00,from available unreserved fund balance,toward the total defeasance cost,with such amount subject to reduction to
conform to final figures at the time of defeasance;and
3. Amend the Fiscal Year 2023 Adopted Budget.
DISCUSSION:
The purpose of this Mayor and Council Communication(M&C)is to take actions associated with defeasance of outstanding general debt
service obligations in order to achieve savings.
Each year,the Financial Management Services Department, in conjunction with the City's financial advisors, PFM Financial Advisors LLC, and
Tijerina Galvan Lawrence LLC,evaluate the City'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 taxpayers'money.
The attached resolution authorizes the recommended cash defeasance further described below:
City of Fort Worth.Texas,Combination Tax and Revenue Certificates of Obligation.Series 2013C
These obligations were issued for an initial principal amount of$19,270,000.00 for the purpose of acquiring a maintenance facility as part of a
lease purchase agreement.
This debt is callable on or after March 1,2023,at a price of par plus accrued interest to the redemption date.The cash defeasance would be for
the approximate amount of$9,176,761.00,which represents$9,155,000.00 of remaining principal of the bonds maturing March 1,2025 through
March 1,2034, plus accrued interest and transaction costs.
Defeasance of the identified maturities will achieve projected net present value savings in the estimated amount of$876,988.00 or 9.58 percent.
As a result of the cash defeasance,the general debt service fund will have one remaining maturity outstanding for the Series 2013C obligations
due March 1,2024.
Existing appropriations coupled with a modest use of fund balance available above the reserve requirement within the General Debt Service
Fund will be used to defease callable debt.Adoption of this M&C will appropriate$228,042.00 from use of fund balance for this defeasance.
If approved,defeasance of the identified maturities would occur on March 22,2023.
Funding is available for appropriation in the available fund balance of the General Debt Service Fund.
The action in this M&C will amend the Fiscal Year 2023 Adopted Budget as approved in connection with Ordinance 25773-09-2022, Section 3.
Debt Service Funds,as listed on page 12.
Fund I Department FY2023 Adopted Revised FY2023
Budget Category Budget Authority Budget Adjustment Budget
General Debt Service
Revenues
Property Tax $ 138,508,506.00 $ 138,508,506.00
Use of Money and Property $ 3,450,000.00 $ 3,450,000.00
Transfer from CCPD $ 2,655,560.00 $ 2,655,560.00
Transfer from TIRZ#14 Trinity Lakes $ 1,324,950.00 $ 1,324,950.00
Use of Fund Balance $ - This M&C $ 228,042.00 $ 228,042.00
Total Revenues $ 145,939,016.00 $ 228,042.00 $146,167,058.00
F.acperrditur� ` �
Financial Management Services(Debt Obligation) $ 145,939,016.00 This M&C $ 228,042.00 $ 146,167,058.6
Total Expenditures $ 145,939,016.00 $ 228,042.00 $ 146,167,058.00
NOTE ON 2013Cs-In spring of 2022,the City Council authorized an issuance of taxable refunding bonds to advance refund certain obligations to
achieve savings(M&C 22-0266). (Federal law now precludes advance refunding of outstanding debt with tax exempt obligations.) The 2013Cs
were identified as one of the series of obligations intended to be refunded. Due to the rapidly rising interest rates at that time,issuance of the
taxable bonds no longer made sound financial sense as the closigng date neared;therefore no 2022 taxable refunding bonds were issued.
NOTE ON APPROPRIATIONS-The attached appropriation ordinance reflects the maximum additional appropriation amount for this defeasance.
The 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.
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 General 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: Reginald Zeno 8517
Additional Information Contact: Anthony Rousseau 8338