HomeMy WebLinkAboutOrdinance 25969-02-2023 ORDINANCE NO. 25969-02-2023
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE GENERAL DEBT SERVICE FUND IN THE
AMOUNT OF S228,042.00,FROM AVAILABLE UNRESERVED FUND BALANCE,
FOR THE PURPOSE OF FUNDING DEFEASANCE OF OUTSTANDING
GENERAL DEBT SERVICE OBLIGATIONS; 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 in addition to those amounts allocated to the various City departments for Fiscal Year 2022-2023 in the
Budget of the City Manager,there shall also be increased estimated receipts and appropriations in the General
Debt Service Fund in the amount of$228,042.00,from available unreserved fund balance,with such amount
subject to reduction to conform to final figures at the time of defeasance.
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 25773-09-2022 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said prior ordinances and appropriations are hereby expressly repealed.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 Jannette S.Goodall
City Secretary
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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/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#1 4 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
Expenditures
Financial Management Services(Debt Obligation) $ 145,939,016.00 This M&C $ 228,042.00 $ 146,167,058.00
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 I 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