HomeMy WebLinkAboutOrdinance 26880-04-2024Ordinance No. 26880-04-2024
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE GENERAL DEBT SERVICE FUND IN THE
AMOUNT OF S24,810,000.00, SUBJECT TO THE SALE OF BONDS AND RECEIPT
OF PROCEEDS, FOR THE PURPOSE OF PAYING COST OF ISSUANCE, WITH
SUCH AMOUNT SUBJECT TO REDUCTION TO CONFORM TO FINAL
FIGURES REFLECTED IN BOND CLOSING DOCUMENTS; 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 General
Debt Service Fund in the amount of $24,810,000.00, subject to the sale of bonds and receipt of proceeds, for
the purpose of paying cost of issuance, with such amount subject to reduction to conform to final figures
reflected in bond closing documents.
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 26453-09-2023 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said prior ordinances and appropriations are hereby expressly repealed.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:
Assistant City Attorney
ADOPTED AND EFFECTIVE: April 23, 2024
CITY SECRETARY
Jannette S. Goodall
City Secretary
Fex x�
City of Fort Worth,
Mayor and
Texas
Council Communication
DATE: 04123/24 M&C FILE, NUMBER: M&C 24-0313
LOG NAME: 13GENERAL PURPOSE BONDS SERIES 2024
SUBJECT
(ALL) Adopt Ordinance Authorizing Issuance and Sale of City of Fort Worth, Texas General Purpose Bonds, Series 2024, in an Aggregate
Principal Amount Not to Exceed $185,000,000.00; Establishing Parameters with Respect to Sale of the Bonds; Delegating Authority to Effect
Sale of the Bonds by Competitive Bid or Negotiated Sale; Authorizing Escrow and Other Related Agreements; Enacting Related Provisions;
Adopt Ordinance to Extend Period of Delegated Authority for General Purpose Refunding Bonds in Support of the Commercial Paper Program;
Adopt Appropriation Ordinance; and Amend Fiscal Year 2024 Adopted Budget
RgCCOrAMENDATION:
It is recommended that the City Council:
1. Adopt the attached ordinance, which (i) authorizes the issuance of City of Fort Worth, Texas General Purpose Bonds, Series 2024, in an
aggregate principal amount not to exceed $185,000,000.00, for the purpose of funding projects within the 2022 bond program, and paying
the costs of issuance for the bonds; (ii) delegates to designated City officials authority to effect sale of the bonds by competitive bid or
negotiated sale as determined most advantageous based on current market conditions - subject to certain parameters as set forth in the
ordinance; (iii) authorizes execution of all related documents; (iv) provides for levy, assessment, and collection of a property tax sufficient to
pay the interest on and principal of the bonds if other revenues are not otherwise available and appropriated for those payments; and (v)
enacts other provisions related thereto;
2. Adopt the attached appropriation ordinance increasing receipts and appropriations in the General Debt Service Fund in the amount of
$24,810,000.00 , from available unpledged fund balance and subject to the sale of bonds, for the purpose of paying cost of issuance, with
such amount subject to reduction to conform to final figures reflected in bond closing documents;
3. Adopt the attached ordinance (i) authorizing issuance and sale of City of Fort Worth, Texas General Purpose Refunding Bonds, in an
aggregate principal amount not to exceed $300,000,000.00 outstanding at any one time, to allow outstanding commercial paper to be
refundedlrefinanced, if needed; (ii) approving the sale of the bonds subject to certain parameters being met; (iii) authorizing instruments
related to the issuance of the bonds; (iv) providing for levy, assessment, and collection of property tax sufficient to pay the principal and
interest on said bonds; and (v) extending delegated authority to effect the sale of refunding bonds through April 22, 2025.
4. Amend the Fiscal Year 2024 Adopted Budget.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to take actions associated with the City's general obligation, tax -backed debt.
Actions include adoption of an ordinance for issuance and sale of tax-exempt Series 2024 General Purpose Bonds and appropriation of proceeds
as part of the 2022 Bond Program and adoption of an updated refunding bond ordinance to support the general commercial paper (CP) program.
2022 Bond Program Issuance
Adoption of the attached bond ordinance associated with Recommendation 1 approves the issuance of bonds to provide $160,190,000.00 in
"new money" bonds from the 2022 Bond Program for the purpose of constructing streets and public mobility improvements; park and recreation
improvements; library system improvements; and police and fire public safety facilities. Because interest income deposited to the General Debt
Service Fund came in higher than was originally budgeted, there is unpledged, available fund balance, which the ordinance associated with
Recommendation 2 would appropriate to pay cost of issuance.
The role of the current bond offering in the overall 2022 Bond Program is shown as follows:
Amount
Date Of
Amount
Purpose
Previously
Amount Now
Unissued
Election
Authorized
Sold
Offered
Balance
Streets
May 07,
2022
$369,218,300.00
and
$68,774,000.00
$56,403,000.00
$244.041,300.00
Mobility
May 07,
2022
$123,955,000.00
Parks and
Recreation
$11,270,500.00
$78,799,000.00
$33,886,000.00
1[z0227'
$12,505,200.00
ic
Libralry
$712,500.00
$10,111,000.00
$1,681,700.00
20227,
��IFNatural
$39,321,000.00
Publlic ic
$4,843,000.00
1 �1
$14,877,000.00
$19,601,000.00
rea
May
0 ' � $15,000,000.00I A Open d $011 $0� $15,000,000.
160,1
Staff is continuing to refine how project costs will be allocated as between proceeds of issued bonds and the ECP appropriation (M&C 22-
0607; Ordinance 25675-08-2022). A separate M&C will be brought forward in the near future to appropriate the proceeds of this sale and make
any necessary adjustments and reallocations for the ECP appropriation authority to maximize use of all available resources. To date no ECP notes
have been issued for any 2022 bond program projects.
Staff anticipates that these bonds be sold through a competitive bid sale. However, to provide maximum flexibility to address any disruption
to market conditions, the attached ordinances authorizes the City Manager or the Chief Financial Officer to conduct either a competitive or
negotiated sale and to approve the terms of the sale so long as those terms come 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 March 1, 2044; maximum true interest cost of 6.00%; and maximum net effective interest rate, calculated per chapter 1204 of the
Government Code, is 15.00%.
Rating agency meetings with Fitch, S&P, and Kroll will be conducted prior to the sale of the bonds. Ratings are anticipated to be received the
week of May 7, 2024. Bids for the sale of the bonds are scheduled to be submitted on May 21,' 2024. Subsequent to accepting the best bid 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
of June 18, 2024.
The action in this M&C will amend the Fiscal Year (FY) 2024 Adopted Budget as approved in connection with Ordinance 26453-09-2023, Section
3. Debt Service Funds, as listed on page 12 as follows:
Fund ! Department
FY2024 Adopted Budged
Budget Adjustment
Revised FY2024 Budget
Budget Category
Property Tax
$162,378,702.00;
$162,378,702.00
Use of Money and Property
$3,450,000.00
$3,450,000.00
Transfer from TIRZ #14 Trinity Lakes
$1, 748,950.00
$1, 748,950.00
Proceeds from series 2024 General Purpose bonds
$24,810,000.00
$24,81 0 00 0000 0
Total Revenues
$167,577,652.00
$24,810,000.0D
$192,387,652.00
Expenditures
Financial Management Services (Debt Obligation)
$159,777,621.00
$24,810,000.00
$184,587,621.00
Transfer to Parking Debt Service
$2,980,400.00
$2,980,400.00
Contribution to Fund Balance/Net Position
$4,819,631.00
$4,819,631.00
Total Expenditures
$167,577,652.00
$24,810,000.00
$192,387,652.00
Updated Refunding Bond Ordinance for CP Program
Recommendation 3 of this M&C also adopts an ordinance which provides the officials identified and designated as pricing officers with the
authority to issue up to $300,000,000.00 in General Purpose Refunding bonds if needed to facilitate the City's general obligation CP program. As
approved by City council in August 2022, the CP ordinance was adopted by M&C 22-0607 and authorized up to $30D,000,000.00 in short-term
commercial paper notes for the general fund to be outstanding at any time and a corresponding refunding bond ordinance was adopted at the
same time. Because delegated authority to conduct the sale of bonds is time4imited under state bond law practice, the refunding bond ordinance
must be readopted to extend that authority.
Although it is not anticipated that commercial paper would actually be issued very regularly, the program authority provides the Bond Program
projects with liquidity and contracting authority so that staff can efficiently design and commence capital projects that are ultimately planned to be
financed out of long term debt to be issued at a later date. As the program is structured, an issue of commercial paper cannot have a maturity that
is later than the 270th day after the date on which the paper is initially issued. The refunding bond ordinance is an integral part of the CP program
because it provides delegated authority that allows refunding bonds to be issued, within certain parameters, in the unlikely event that commercial
paper is actually issued and cannot otherwise be retired or remarketed by the 270th day.
Adoption of the attached ordinance extends the delegated authority of the pricing officers to effect sale of all or any portion of up to
$300,000,000.00 in general purpose refunding bonds through April 22, 2025, if needed, and only if the parameters in the ordinance are met.
Among the parameters the ordinance sets for issuance of general purpose refunding bonds is that the bonds bear a "net effective interest rate" (as
defined in and calculated in accordance with the provisions of Chapter 1204, Texas Goverment Code) that is no greater than 15.00%.
Because ongoing authority to issue refunding bonds is needed for proper operation of the CP program, an updated refunding bond ordinance will
be needed on an annual basis to extend the period of delegated authority. Staff anticipates bringing forward an updated refundign bond ordinance
each year as part of the City's annual debt issuance process.
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 ordinances, the sale of the tax-
exempt Series 2024 General Purpose Bonds will occur as required under the parameters set forth therein, that funds will be available in the
beneral Debt Service Funds as appropriated, and will be available to repay the debt when due and payable.
Submitted for City Manager's Office b . Reginald Zeno 8517
Oriicinnating_Rusiness_Unit Head: Reginald Zeno 8517
Additional Information Contact: Anthony Rousseau 8338
Expedited