HomeMy WebLinkAboutIR 9551 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9551
To the Mayor and Members of the City Council April 9, 2013
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SUBJECT: CERTIFICATES OF OBLIGATION ISSUED IN THE LAST 5 YEARS
The purpose of this Informal Report is to brief the City Council about the details and purpose of
the Certificates of Obligation issued by the City in the last 5 years.
The ability to issue Certificates of Obligation (CO) is a highly valuable tool to municipalities that
allows for flexibility to respond to changing or unexpected circumstances while retaining the voice
of the voters. Since they carry, at a minimum, a tax pledge, they generally carry the same credit
rating as a General Obligation bond (GO). However, for certain situations, such as emergencies,
cost overruns on a GO-financed project, and instances where the cost of time delays and
expenses involved in calling a bond election for a single proposition would be too great, CO's are
an effective option.
To ensure the voter still has a say regarding the issuance of tax-supported debt, state law
requires the publication two separate times of a Notice of Intent to issue the debt, with the first
being at least 30 days prior to selling the CO's. If a petition is submitted with signatures from at
least 5% of registered voters, an election must be held prior to the sale. CO's that are secured
solely by an ad valorem tax can be issued only for limited purposes, such as land acquisition or
funding a legal judgment. When combined with a pledge of surplus revenues ($1,000 or more
total), from an operating system (such as water, sewer, drainage, park, or sanitation), they can be
issued for any lawful purpose.
The City has issued Certificates of Obligation for the last five years, and purposed mainly for
capital improvements and infrastructure.
YEAR AMOUNT MAJOR PROJECTS REPAYMENT
SOURCE
2008 $63,150,000 New police station; New fire station; Neighborhood General Debt
streets reconstruction; Arterials construction Service
2009 $5575857000 Acquisition of fire equipment; Program management General Debt
software; Neighborhood streets reconstruction; Service
Arterials construction
2010 $3476857000 Multi-purpose facility located in the Will Rogers Revenue
Memorial Center.
2010A $4275957000 Acquisition of fire equipment; Parking garage Combination
improvements; Phase II of Enterprise Resource
Planning (ERP) system
2012 $8577907000 Acquisition of fire equipment; Police and Fire training General Debt
facility; Arterials construction; Neighborhood streets Service
reconstruction; Telecommunications system
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9551
To the Mayor and Members of the City Council April 9, 2013
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SUBJECT: CERTIFICATES OF OBLIGATION ISSUED IN THE LAST 5 YEARS
With the new implementation of a rolling 5-year capital plan, and renewed emphasis on both
more accurate cost estimates and timely completion, it is staff's intent to minimize the need to
finance via tools such as Certificates of Obligation going forward.
If you have any questions, please call James Mauldin, City Treasurer/Assistant Director of
Financial Management Services, at 817-392-2438.
Tom Higgins
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS