HomeMy WebLinkAboutContract 59199CSC No. 59199
This First Amendment to Calculation Agent Agreement, dated as of March 1, 2023 (this
"First Amendment"), is between the CITY OF FORT WORTH, TEXAS (the "City") and
HILLTOP SECURITIES INC. (the "Calculation Agent"). For and in consideration of the mutual
covenants made herein and other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
Section 1. Background and Definitions.
(a) Pursuant to the Ordinance defined below, the City has authorized the issuance and
reissuance from time -to -time of its tax-exempt commercial paper notes (the "Commercial Paper
Notes") in the aggregate principal amount not to exceed $150,000,000 outstanding at any time.
(b) The City authorized the issuance of the Commercial Paper Notes pursuant to its
"Ordinance approving and authorizing the issuance by the City of Fort Worth, Texas of its Water
and Sewer System Commercial Paper Notes, Callable CP Series, 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 and to refund obligations issued in connection with
Eligible Projects; approving and authorizing certain authorized officers and employees to act on
behalf of the City in the selling and delivery of such Commercial Paper Notes, within the
limitations and procedures specified herein; making certain covenants and agreements in
connection therewith; resolving other matters incident and related to the issuance, sale, security
and delivery of such Commercial Paper Notes, including the appointment of an Issuing and
Paying Agent, a Dealer and a Calculation Agent and approval of an Issuing and Paying Agent
Agreement, a Dealer Agreement and a Calculation Agent 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", adopted on December 5, 2017 (the "Ordinance").
(c) Pursuant to the Ordinance, the City and the Calculation Agent executed and
delivered, and there remains in effect, that certain Calculation Agent Agreement dated as of
December 1, 2017 (the "2017 Calculation Agent Agreement").
(d) There are currently no Commercial Paper Notes outstanding.
(e) On February 14, 2023, the City adopted an ordinance amending the Ordinance (the
"2023 Ordinance") to increase the aggregate principal amount at any one time outstanding not to
exceed $225,000,000 and to authorize the execution of this First Amendment to Calculation
Agent Agreement, and to authorize additional changes to conform documents, including the
2017 Calculation Agent Agreement, to changes in federal and state law enacted subsequent to
the effective date of the Ordinance.
(f) For all purposes, the term "Agreement" shall mean the 2017 Calculation Agent
Agreement as amended by the First Amendment; the term "Ordinance" shall mean, collectively,
the 2017 Ordinance and the 2023 Ordinance; the term "Dealer Agreement" shall mean the Dealer
Agreement dated as of December 1, 2017, between the City and J.P. Morgan Securities LLC, as
amended by the First Amendment to Dealer Agreement dated as of March 1, 2023, between the
City and J.P. Morgan Securities LLC; and the term "Issuing and Paying Agent Agreement" shall
mean the Issuing and Paying Agent Agreement dated as of December 1, 2017, between the City
and U.S. Bank National Association, as amended by the First Amendment to Issuing and Paying
Agent Agreement dated as of March 1, 2023, between the City and U.S. Bank Trust Company,
National Association.
OFFICIAL RECORD
1 CITY SECRETARY
FT. WORTH, TX
Section 2. Amendments to 2017 Calculation Agent Agreement.
(a) For all purposes, any reference in the 2017 Calculation Agent Agreement to (i)
$150,000,000 shall be deemed to read and mean $225,000,000 and (ii) U.S. Bank National
Association shall be deemed to read and mean U.S. Bank Trust Company, National Association.
(b) Section 9(a) of the 2017 Calculation Agent Agreement is amended to read as follows:
The City:
City of Fort Worth, Texas
200 Texas Avenue, Third Floor
Fort Worth, Texas 76102
Attention: Chief Financial Officer
Telephone: (817) 392-8500
Fax: (817) 392-8966
E-Mail: reginald.zeno(ii)fortworthtexas.gov
The Calculation Agent:
Hilltop Securities Inc.
717 N Harwood Street
Suite 3400
Dallas, TX 75201
Attention: Brett Weaver
Telephone: 214-95 3 -4020
Fax: 214-954-4339
Email: Brett. Weaver(ahilltopsecurities.com
(c) The 2017 Calculation Agent Agreement is amended by amending sections 11 and 12
and by adding new sections 13, 14 and 15, to read as follows:
"Section 11. No Israel Boycott. To the extent this Agreement constitutes an agreement
for the provision of goods and services, pursuant to Section 2270.002, Texas Government Code,
the Calculation Agent hereby represents that as a "Company", as defined in Section 808.001,
Texas Government Code, the Calculation Agent, or any wholly owned subsidiary, majority -
owned subsidiary, parent company or affiliate of the Calculation Agent, 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 Calculation Agent, 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 Calculation Agent, 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 808.001, Texas Government Code.
Section 12. Foreign Terrorist Organization. For purposes of Subchapter F of Chapter
2252 of the Texas Government Code, at the time of execution of this Agreement, the Calculation
Agent hereby represents and warrants that as a "Company", as defined in Sections 806.001 and
807.001, Texas Government Code, the Calculation Agent, or any wholly owned subsidiary,
majority -owned subsidiary, parent company or affiliate of the Calculation Agent, is not a
company listed by the Texas Comptroller of Public Accounts under Sections 2252.153 or
2270.0201 of the Texas Government Code. The term "foreign terrorist organization" shall have
the meaning given such term in Section 2252.151, Texas Government Code.
Section 13. Chapter 2274, Texas Government Code (No Discrimination Against
Fossil -Fuel Companies). To the extent this Agreement constitutes a contract for goods or
services for which a written verification is required under Section 2274.002 (as added by Senate
Bill 13 in the 87th Texas Legislature, Regular Session), Texas Government Code, as amended,
the Calculation Agent hereby verifies that it and its parent company, wholly- or majority -owned
subsidiaries, and other affiliates, if any, do not boycott energy companies and will not boycott
energy companies during the term of this Agreement. The foregoing verification is made solely
to enable the City to comply with such Section and to the extent such Section does not
contravene applicable Texas or federal law. As used in the foregoing verification, "boycott
energy companies" shall mean, without an ordinary business purpose, refusing to deal with,
terminating business activities with, or otherwise taking any action that is intended to penalize,
inflict economic harm on, or limit commercial relations with a company because the company
(A) engages in the exploration, production, utilization, transportation, sale, or manufacturing of
fossil fuel -based energy and does not commit or pledge to meet environmental standards beyond
applicable federal and state law; or (B) does business with a company described by (A) above.
As used in this Section, the Calculation Agent understands "affiliate" to mean an entity that
controls, is controlled by, or is under common control with the Calculation Agent within the
meaning of SEC Rule 133(f), 17 C.F.R. § 230.133(f), and exists to make a profit.
Section 14. Chapter 2274, Texas Government Code (No Discrimination Against
Firearm Entities and Firearm Trade Associations). To the extent this Agreement constitutes
a contract for goods or services for which a written verification is required under Section
2274.002 (as added by Senate Bill 19 in the 87th Texas Legislature, Regular Session), Texas
Government Code, as amended, the Calculation Agent hereby verifies that it and its parent
company, wholly- or majority -owned subsidiaries, and other affiliates, if any, do not have a
practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade
association and will not discriminate during the term of this Agreement against a firearm entity
or firearm trade association. The foregoing verification is made solely to enable compliance with
such Section and to the extent such Section does not contravene applicable Texas or federal law.
As used in the foregoing verification, (a) "discriminate against a firearm entity or firearm trade
association" (A) means, with respect to the firearm entity or firearm trade association, to (i)
refuse to engage in the trade of any goods or services with the firearm entity or firearm trade
association based solely on its status as a firearm entity or firearm trade association, (ii) refrain
from continuing an existing business relationship with the firearm entity or firearm trade
association based solely on its status as a firearm entity or firearm trade association, or (iii)
terminate an existing business relationship with the firearm entity or firearm trade association
based solely on its status as a firearm entity or firearm trade association and (B) does not include
(i) the established policies of a merchant, retail seller, or platform that restrict or prohibit the
listing or selling of ammunition, firearms, or f rearm accessories and (ii) a company's refusal to
engage in the trade of any goods or services, decision to refrain from continuing an existing
business relationship, or decision to terminate an existing business relationship (aa) to comply
with federal, state, or local law, policy, or regulations or a directive by a regulatory agency or
(bb) for any traditional business reason that is specific to the customer or potential customer and
not based solely on an entity's or association's status as a firearm entity or firearm trade
association, (b) "firearm entity" means a manufacturer, distributor, wholesaler, supplier, or
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retailer of firearms (i.e., weapons that expel projectiles by the action of explosive or expanding
gases), firearm accessories (i.e., devices specifically designed or adapted to enable an individual
to wear, carry, store, or mount a firearm on the individual or on a conveyance and items used in
conjunction with or mounted on a firearm that are not essential to the basic function of the
firearm, including detachable firearm magazines), or ammunition (i.e., a loaded cartridge case,
primer, bullet, or propellant powder with or without a projectile) or a sport shooting range (as
defined by Section 250.001, Texas Local Government Code), and (c) "firearm trade association"
means a person, corporation, unincorporated association, federation, business league, or business
organization that (i) is not organized or operated for profit (and none of the net earnings of which
inures to the benefit of any private shareholder or individual), (ii) has two or more firearm
entities as members, and (iii) is exempt from federal income taxation under Section 501(a),
Internal Revenue Code of 1986, as an organization described by Section 501(c) of that code. As
used in this Section, the Calculation Agent understands "affiliate" to mean an entity that controls,
is controlled by, or is under common control with the Calculation Agent within the meaning of
SEC Rule 133(f), 17 C.F.R. § 230.133(f), and exists to make a profit.
15. Attorney General Standing Letter. The Calculation Agent represents that it has
on file with the Texas Attorney General a standing letter addressing the representations and
verifications in Sections 11 through 14 of this Agreement in a form acceptable to the Texas
Attorney General. In addition, if the Calculation Agent or the parent company, a wholly- or
majority -owned subsidiary or another affiliate of the Calculation Agent receives or has received
a letter from the Texas Comptroller of Public Accounts pursuant to Chapter 809, Texas
Government Code seeking written verification that it does not boycott energy companies (a
"Comptroller Request Letter"), the Calculation Agent shall promptly notify the City and Co -
Bond Counsel (if it has not already done so) and provide to the City or Co -Bond Counsel, upon
request by the City or Co -Bond Counsel, written verification to the effect that its standing letter
described in the preceding sentence remains in effect and may be relied upon by the City and the
Texas Attorney General (the "Bringdown Verification"). The Bringdown Verification shall also
confirm that the Calculation Agent (or the parent company, a wholly- or majority -owned
subsidiary or other affiliate of the Calculation Agent that received the Comptroller Request
Letter) intends to timely respond or has timely responded to the Comptroller Request Letter. The
Bringdown Verification may be in the form of an e-mail."
Section 3. Miscellaneous.
(a) Except as amended by this First Amendment, the 2017 Calculation Agent Agreement
remains in full force and effect.
(b) This First Amendment may be executed in several counterparts, each of which shall
be regarded as an original and all of which shall constitute one and the same document. Delivery
of an executed counterpart of a signature page of this First Amendment by telecopy or other
electronic imaging means shall be effective as delivery of a manually executed counterpart of
this First Amendment.
(c) This First Amendment shall be effective as of the execution and delivery of that
certain First Amendment to Issuing and Paying Agent Agreement between the City and U.S.
Bank Trust Company, National Association, dated as of March 1, 2023.
[Execution Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment as of
the date first above written.
CITY OF FORT WORTH, TEXAS
By:
Name: David coke
Title: City anager
ATTEST:
0F..F4�Q�,�
0 '
Name: Ja ette S. Goodall
Title: Citj Secretary
HILLTOP SECURITIES INC.
Name:
Title:
Signature page First Amendment to Calculation Agent Agreement
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment as of
the date first above written.
ATTEST:
By:
Name:
Title:
Jannette S. Goodall
City Secretary
CITY OF FORT WORTH, TEXAS
By:
Name: David Cooke
Title: City Manager
(SEAL)
HILLTOP SECURITIES INC.
By:
Name: K i t Wood
Title: Ser -�y M Gl ri a t--h W 01 yn
Signature page First Amendment to Calculation Agent Agreement
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 02/14/23 M&C FILE NUMBER: M&C 23-0105
LOG NAME: 13WATER SEWER COMMERCIAL PAPER PROGRAM INCREASE
SUBJECT
(ALL) Adopt Ordinance Authorizing the Extension and Increase of the Callable Commercial Paper Program for the Water Department with a
Final Issuance Date No Later than February 14, 2043 and in an Aggregate Outstanding Principal Amount Not to Exceed $225,000,000.00 at Any
One Time, Authorizing Conforming Amendments of Existing Dealer, Paying Agent/Registrar and Calculation Agent Agreements for the Program,
and Ordaining Other Matters Related Thereto; Adopt Amended and Restated Thirty -Second Supplemental Ordinance Authorizing Issuance and
Sale of City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds in an Amount Up to $225,000,000.00 to Allow for
Refinancing of Outstanding Commercial Paper if Needed; Adopt Appropriation Ordinances; and Amend the Fiscal Year 2023 Adopted Budget
RECOMMENDATION:
It is recommended that City Council:
1. Adopt the attached ordinance authorizing an extended and expanded callable commercial paper program for the Water Department with a
final issuance date no later than February 14, 2043, in an aggregate outstanding principal amount not to exceed $225,000,000.00 at any one
time, with an annual cost of $20,500.00; authorizing conforming amendments to the existing Dealer, Paying Agent/Registrar and Calculation
Agent Agreements for the program, authorizing certain officers and employees to act on behalf of the City in the selling and delivery of the
obligations, and resolving other matters incident and related to the issuance, sale, security and delivery of the obligations;
2. Adopt the attached Amended and Restated Thirty -Second Supplemental Ordinance authorizing issuance and sale of City of Fort Worth,
Texas Water and Sewer System Revenue Refunding Bonds in an aggregate principal amount not to exceed $225,000,000.00 to allow
outstanding commercial paper to be refunded/refinanced for a longer term if needed;
3. Adopt the attached appropriation ordinance, increasing appropriations in the Water and Sewer Callable Commercial Paper Fund in the
amount of $75,000,000.00, for a total appropriation of $225,000,000.00, to support contracting authority under the callable commercial
paper program;
4. Adopt the attached appropriation ordinance, increasing estimated receipts and appropriations in the Water and Sewer Fund (Operating) in
the amount of $130,000.00, from future revenues, to pay for closing and delivery fees associated with the program; and
5. Amend the Fiscal Year 2023 Adopted Budget.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to take actions to extend and increase the liquidity facility for the City's Water and
Sewer System, which supports appropriations to initiate capital projects between annual revenue -bond sales.
Since 2017, the City's Water and Sewer Utility System has employed a financing tool known as the Callable Commercial Paper (CCP) Program
with J.P. Morgan Securities LLC engaged as dealer (M&C C-28496, Ordinance 23028-12-2017). The CCP program has provided appropriation
authority for capital projects identified within the Water and Sewer Capital Improvement Program. The Water Department has used this authority in
conjunction with Council -adopted reimbursement resolutions to facilitate the initial award of capital improvement contracts that will ultimately be
financed by longer term bonds issued after the project has commenced. During the initial period of construction, interim payments are paid out of
available resources. When System revenue bonds are then issued, proceeds are used to repay the System's interim payment sources, fund the
projects, and replenish the CCP authority.
Although the CCP ordinance provides authority to have up to $225 million in commercial paper outstanding at any one time in order to support
appropriations and expedite project delivery between bond issues, no commercial paper has actually been issued under the program to date. If
CCP were to be issued, in accordance with state law the paper would have a maturity date that is no greater than 270 days from its date of
issuance. Were the City to actually issue CCP and have it approaching maturity, the City would have several options
One such option would be to issue long-term refunding debt utilizing the authority provided under the amended and restated thirty-second
supplemental ordinance, which is attached second recommendation. Having the ability to issue long-term refunding bonds also enhances the
credit rating for the CCP program. Updated supplemental ordinances are anticipated for adoption each calendar year to extend the delegated
standby authority to issue refunding bonds, if needed, throughout the life of the program.
As is required by Chapter 1371 of the Texas Government Code, the CCP program must be investment grade rated. The utility System's strong
financial performance and strong market access resulted in the CCP program being awarded S&P's highest short-term rating of A-1+.
The action in this M&C will amend the Fiscal Year 2023 Adopted Budget as approved in connection with Ordinance 25773-09-2022, Section 4
Enterprise Funds, as listed on Page 19:
Section 4. Enterprise Funds
Page 19
Fund / Department
FY2023 Adopted Authority
Budget Revised FY2023
Budget Category
Budget
Adjustment
Budget
Water and Sewer Fund
Revenues
License and Permits
$
1,420,659
$
1,420,659
Charges for Services
$
474,620,055 This M&C
$ 130,000 $
474,750,055
Use of Money and Property
$
1,646,386
$
1,646,386
Other Revenue
$
11,515,000
$
11,515,000
Sale of Capital Asset
$
80,000
$
80,000
Salvage Sales
$
25,000
$
25,000
Transfer from Water Impact
$
14,669,420
$
14,669,420
Transfer from Sewer Impact
$
8,311,270
$
8,311,270
Transfer from Environ Protection Fund
$
495,475
$
495,475
Transfer from Stormwater Utility Fund
$
1,268,956
$
1,268,956
Transfer from Solid Waste Fund
$
1,399,239
$
1,399,239
Total Revenues
$
515,451,460
$ 130,000 $
515,581,460
Expenditures
Water
$
196,654,144 This M&C
$ 65,000 $
196,719,144
Reclaimed Water
$
119,164
$
119,164
Wastewater
$
109,159,558 This M&C
$ 65,000 $
109,224,558
Transfer to Capital Fund
$
120,000
$
120,000
Transfer to Water Capital Fund
$
2,999,000
$
2,999,000
Transfer to General Fund for Public Art
$
480,712
$
480,712
Transfer to General Fund for Energy Savings Prog
$
27,116
$
27,116
Transfer to Dev Services for Positions
$
1,060,221
$
1,060,221
Transfer to Financial Management Services for
$
244,394
$
244,394
Purchasing Positions
Transfer to Water and Sewer Capital Fund
$
74,102,103
$
74,102,103
Payment in Lieu of Taxes
$
5,791,939
$
5,791,939
Street Rental
$
24,038,181
$
24,038,181
Transfer to Water Debt Funds
$
100,472,611
$
100,472,611
Transfer to IT Refresh Capital
$
182,317
$
182,317
Total Expenditures
$
515,451,460
$ 130,000 $
515,581,460
A Form 1295 is not required because: This contract will be with a publicly -traded business entity or a wholly -owned subsidiary of a publicly -traded
business entity: JP Morgan Chase, US Bankcorp, Hilltop Holdings
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that funds are currently available in the net position of the Water & Sewer Fund. Upon approval of the above
recommendations and adoption of the attached appropriation ordinances, funds will be available in the Water & Sewer Fund and the W&S
Commercial Paper Fund for the W&S Commercial Paper project. Prior to any expenditure being incurred, the Water Department has the
responsibility to validate the availability of funds.
Submitted for City Manager's Office by. Reginald Zeno 8517
Originating Business Unit Head:
Additional Information Contact:
Expedited
Reginald Zeno 8517
Anthony Rousseau 8338
Signature: 5 w�
Email: allison.tidwell@fortworthtexas.gov