HomeMy WebLinkAboutOrdinance 26493-09-2023ORDINANCE NO. 26493-09-2023
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE WATER AND SEWER FUND IN THE AMOUNT OF
$1,500,000.00, SUBJECT TO THE SALE OF THE BONDS, FOR THE PURPOSE OF
PAYING COSTS OF ISSUANCE RELATED TO THE REFUNDING BONDS, WITH
SUCH AMOUNT SUBJECT TO REDUCTION TO CONFORM TO FINAL
FIGURES REFLECTED IN BOND CLOSING DOCUMENTS AND WITH ANY
EXCESS COST OF ISSUANCE FUNDS REMAINING AFTER CLOSING BEING
TRANSFERRED TO THE WATER AND SEWER DEBT SERVICE FUND;
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 2023-2024 in the
Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the Water
and Sewer Fund in the amount of $1,500,000.00, subject to the sale of the bonds, for the purpose of paying
costs of issuance related to the refunding bonds, with such amount subject to reduction to conform to final
figures reflected in bond closing documents and with any excess cost of issuance funds remaining after closing
being transferred to the water and sewer debt service fund.
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 incorporated into the ordinance effecting the budget of the municipal government
of the City of Fort Worth for the ensuing Fiscal Year beginning October 1, 2023, and ending September 30,
2024, 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instance said conflicting provisions of said prior ordinances and appropriations are hereby expressly repealed.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
ADOPTED AND EFFECTIVE: September 26, 2023
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 09/26/23 M&C FILE NUMBER: M&C 23-0799
LOG NAME: 13WATER AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 2023A
SUBJECT
(ALL) Adopt Forty -First Supplemental Ordinance Authorizing Issuance of City of Fort Worth, Texas Water and Sewer System Revenue Refunding
Bonds, Series 2023A in an Aggregate Principal Amount Not to Exceed $90,000,000.00, Establishing Parameters with Respect to the Sale of the
Bonds, Delegating to Designated City Officials Authority to Effect the Sale of Bonds, and Enacting Other Provisions Relating to the Subject; and
Adopt Appropriation Ordinances
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached Forty -First supplemental ordinance (i) authorizing the issuance of City of Fort Worth, Texas Water and Sewer System
Revenue Refunding Bonds, Series 2023A, in an aggregate principal amount not to exceed $90,000,000.00; (ii) approving the sale of the
bonds subject to certain parameters being met; (iii) delegating to designated City officials authority to effect the sale; (iv) approving
execution of an agreement for the retirement of the refunded obligations, if any, and other instruments related to the issuance of the bonds; (v)
providing for the establishment of rates and collection of revenues sufficient to pay the principal and interest on said bonds; and (vi) enacting
other provisions related thereto;
2. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water Prior Lien Debt Service Fund in
the amount of $85,000,000.00, subject to the sale of the bonds and receipt of proceeds, for the purpose of funding the required escrow to
refund existing debt, with such amount subject to reduction to conform to final figures reflected in bond closing documents;
3. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water and Sewer Fund in the amount of
$1,500,000.00, subject to the sale of bonds, for the purpose of paying costs of issuance related to the refunding bonds, with such amount
subject to reduction to conform to final figures reflected in bond closing documents and with any excess cost of issuance funds remaining
after closing being transferred to the water and sewer debt service fund; and
4. Amend Fiscal Year 2024 Budget.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to take actions associated with the revenue -based debt financing of
infrastructure for the City's Water and Sewer System. The actions include authorizing bonds to refinance existing Water and Sewer debt
obligations to achieve a net savings (Forty -First Supplement) and adopting associated appropriation ordinances.
Forty -First Supplement
The first three recommendations relate to the Forty -First supplemental ordinance, which authorizes issuance and sale of up to $90,000,000.00 in
Water and Sewer system revenue refunding bonds, in one or more series, for the purpose of (i) refinancing existing Water and Sewer debt
obligations to achieve net savings and (ii) paying the costs of issuance of the bonds. The second and third recommendations relate to the
appropriation of the bond proceeds and costs of issuance.
It is the City's practice to achieve positive debt service savings through refinancing when the opportunity presents itself. Staff and the City's Co -
Financial Advisors PFM Financial Advisors and Tijerina Galvan Lawrence LLC, are recommending $82,375,000.00 of the callable 2014 Water
and Sewer System Revenue Bonds be refunded, with a par amount outstanding of $88,620,000.00. The actual savings amount will not be
determined until the time bids are received. However, in accordance with the City's Financial Management Policy Statements, the ordinance
provides that the refunding debt shall not be sold unless the sale will result in net present value savings of at least 3.50 percent of the par amount
being refunded. Currently, the refunding is projected to provide 7.45 percent net present value savings, or $6,136,565.01.
In 1991, the City adopted a master ordinance establishing a Water and Sewer System Revenue Financing Program for the Water Department.
Each time the Water Department issues debt, a supplemental ordinance must be adopted which contains details specific to the debt being issued.
This issuance would be the Forty -First supplemental ordinance since the master ordinance was adopted.
The ordinance provides delegated authority to the City Manager and Chief Financial Officer, individually, to effect the sale of the bonds. Staff is
recommending that these bonds be sold through a competitive bid sale with the City Manager or the Chief Financial Officer being authorized to
approve the terms of the sale so long as it comes within the parameters set forth in the Council -adopted ordinance. Key parameters include:
bonds must be rated in one of the four highest generic rating categories (BBB or higher); the maximum maturity is February 15, 2053; the
maximum true interest cost is 5.00 percent; and the maximum net effective interest rate is 15.00 percent.
Rating agency updates with Moody's and S&P will be conducted prior to the sale of the bonds with the bonds expected to be offered for sale
approximately two weeks after ratings are received. Subsequent to the pricing and awarding the sale of the bonds, the City will seek approval of
the debt transactions from the Texas Attorney General with an estimated closing date approximately one month after the award of sale.
The attached appropriation ordinances reflect the maximum appropriation amount for each of the identified purposes. The ordinances' structure
accommodates variables associated with sale of debt under delegated authority such as the uncertain final interest rate to be achieved and the
possibility of a premium or discount being associated with the sale of the bonds. To the extent numbers at closing are less than those reflected in
each of the ordinances, the available appropriation amount will be reduced as needed to reflect final figures based on the closing documents to
ensure appropriations do not exceed actuals. Similarly, to the extent there are any remaining appropriated funds after paying cost of issuance
expense, those funds are to be moved to the Water Prior Lien Debt Service Fund.
The actions in this M&C will amend the FY 2024 Budget.
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 approval of the above recommendations and adoption of the attached appropriation ordinances, the
sale of the 2023A Water and Sewer System Revenue Refunding Bonds will occur as required under the parameters set forth therein and that funds
will be available in the Water & Sewer Fund and the Water Prior Lien Debt Service Fund to record the appropriate and necessary transactions.
Prior to any expenditures being incurred, the Finance Department has the responsibility to validate the availability of funds.
Submitted for City Manager's Office by: Reginald Zeno 8517
Originating Business Unit Head: Reginald Zeno 8517
Additional Information Contact: Anthony Rousseau 8338
Expedited