HomeMy WebLinkAboutOrdinance 27014-06-2024Ordinance No. 27014-06-2024
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE WATER PRIOR LIEN DEBT SERVICE FUND BY
INCREASING THE USE OF NET POSITION GENERATED FROM PRIOR YEAR
INTEREST EARNINGS IN THE AMOUNT OF $25,996,664.00 AND REDUCING
THE TRANSFER FROM THE WATER & SEWER FUND BY $34,000,000.00 AND
CONTRIBUTION TO NET POSITION BY $8,003,336.00; 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
Prior Lien Debt Service Fund by increasing the use of net position generated from prior year interest earnings
in the amount of $25,996,664.00 and reducing the transfer from the Water & Sewer Fund by $34,000,000.00
and contribution to net position by $8,003,336.00.
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said prior ordinances and appropriations are hereby expressly repealed.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:
bouglas Black )JUI %202411:29 CDT)
Assistant City Attorney
.ADOPTED AND EFFECTIVE: June 2)r20*
CITY SECRETARY
Jannette S. Goodall
City Secretary
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 06/25/24 M&C FILE NUMBER: M&C 24-0600
LOG NAME: 60FY24BUDGETADJUSTMENT
SUBJECT
(ALL) Adopt Appropriation Ordinances Enacting Fiscal Year 2024 Budget Adjustments in the Water and Sewer Fund in the Total Amount of
$74,200,000.00 by Allocating Higher than Anticipated Projected Revenues and Interest Earnings to Offset Anticipated Operating Shortfalls and
Fund Departmental Capital Outlays and Capital Projects and Amend the Fiscal Year 2024 Adopted Budget and to Effect a Portion of Water's
Contribution to the Fiscal Years 2024-2028 Capital Improvement Program
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water & Sewer Fund in the amount of
$40,200,000.00, from anticipated projected revenues, for the purpose of funding (1) increased operating expenses in the amount of
$15,175,000.00, and (2) transfers to Water & Sewer Capital Projects Fund for the purpose of funding the Utility's pay-as-you-go capital
program in the amount of $25,025,000.00;
2. Adopt the attached appropriation ordinance adjusting estimated receipts and appropriations in the Water & Sewer Fund by increasing
estimated receipts and appropriations in the Transfer to Water/Sewer account in the amount of $34,000,000.00 and decreasing estimated
receipts and appropriations in the Debt Transfer Out -- Principal account by the same amount;
3. Adopt the attached appropriation ordinance in the Water Prior Lien Debt Service Fund by increasing the use of net position generated from
prioryear interest earnings in the amount of $25,996,664.00 and reducing the transfer from the Water & Sewer Fund by $34,000,000.00 and
contribution to net position by $8,003,336.00;
4. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water Capital Projects Fund in the
amount of $175,000.00 transferred from available funds in the Water and Sewer Fund for the purpose of funding the Water and Sewer Outlay
programmable (City Project No. P00087) and to Effect a Portion of Water's Contribution to the Fiscal Years 2024-2028 Capital Improvement
Program; and
5. Amend the Fiscal Year 2024 Adopted Budget.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to recognize additional Water & Sewer revenue projected to be received by the
Utility due to higher than usual water usage revenues associated with increased demand. Temperatures in the fall and winter months resulted in
record water usage for the months of October through March. Receipts and appropriations in.the Water & Sewer Fund will be increased to be
used for operating costs affected by rising costs, as well as supplementing the Utility's pay-as-you-go capital program. In addition, this M&C takes
actions to declare surplus funds from interest earnings in the Water Prior Lien Debt service fund by reallocating Water & Sewer Fund transfers
from the Water Prior Lien Debt Service Fund to the Water & Sewer Capital projects fund for the purpose of funding the Utility's pay-as-you-go
capital program.
Per Ordinance No, 26453-09-2023 Section 4, the Fiscal Year (FY) 2024 adopted budget for the Water and Sewer Fund was $574,843,877.00.
After the Refunding of Bond Series 2023A, M&C 23-0799, the amended budget was $575,265,097.17. This M&C recommends an additional
$40,200,000.00 in revenue appropriations for FY2024, from anticipated projected revenues, for an adjusted budget of $615,465,097.17.
Expenditure appropriations in the General Operating and Maintenance accounts will increase by $15,175,000.00. Inflationary factors have
increased the costs of commercial meters, chemicals and fuel; and electricity costs have increased due to increased demand on our system.
These issues are causing large projected overruns to the FY2024 budget. These same inflationary costs and supply chain issues, such as the cost
of pipe and electrical materials, are impacting the costs of debt -funded capital projects and the pay-as-you-go program as well. Consequently, the
Transfer appropriations will increase by $25,025,000.00 to allow the Utility to address these rising costs. The Utility will also fund three additional
vehicles (for safety and inspection of capital projects) and one piece of heavy equipment (for warehouse use).
To balance these increases in expenditures, revenue appropriations will also increase by $40,200,000.00. Due to increased demand, retail
service revenue is expected to exceed projections, helping to offset the aforementioned rising costs.
The City's Water Prior Lien Debt Service Fund generates interest income by prudently investing idle cash from operations, "pay as you go" capital
funds, and bond funds in strict compliance with state law and City policy. The current practice is to allocate interest income from Water enterprise
activities to the City's Water Prior Lien Debt Service Fund to offset interest cost associated with outstanding debt issuances and to accumulate
cash which can be used to pay off debt prior to maturity to achieve debt service savings. The City has benefited tremendously from the current
elevated interest rate environment, resulting in better-than-expected interest earnings due to a dramatic increase in the Federal Funds rate from a
range of 0.01% to 0.25% to over5%.
As a result, City staff has identified approximately $34,000,000.00 of excess funds above the minimum reserve requirement in the City's Water
Prior Lien Debt Service Fund. Staff recommends for City Council to declare this surplus of interest income receipts, by reducing current year debt
service transfers from the Water & Sewer Fund to the Water Prior Lien Debt Service Fund. At the same time, authorize the transfer from the Water
& Sewer Fund (56001) to the Water & Sewer Capital Projects Fund (56002), in the same amount, for the purpose of funding the Utility's pay-as-
you-go capital program.
Going forward, staff will monitor collection of investment income from utility operations to identify any surplus that can be used for other lawful
purposes. Given the variable nature of investment income, any surplus may fund one-time initiatives, capital projects, or to accumulate cash which
can be used to pay off debt prior to maturity to achieve debt service savings.
The actions in this M&C will amend the FY2024 Adopted Budget as approved in connection with Ordinance 26453-09-2023 Section 4. Enterprise
Funds, as listed on page 20.
Water and Sewer Operating Fund:
FY2024
Budget
Revised
Fund/Department
Adopted
Authority
Adjustment
FY2024 Budget
Budget Category
Budget
kevenues ,.,
t
License and
$1,646,940.00
$1,646,940.00
Permits
Charges for
$524,426,085.00
$524,426,085.00
Services
This M&C
$40,200,000.00
$40,200,000.00
Use of Money and
$2,296,386.00
$2,296,386.00
Property
Other Revenue
$12,515,000.00
M&C 23-
0799
$421,220.00
$12,935,220.00
Sale of Capital
$100,000.00
$100,000.00
Asset
Salvage Sales
$30,000.00
$30,000.00
Transfer from
$14,584,082.00
$14,584,082.00
Water impact
Transfer from
$15,697,815.00
$15,697,815.00
Sewer Impact
Transfer from
Environ Protection
$576,756.00
$576.756.00
Fund
Transfer from
Stormwater Utility
$1,418,235.00
$1,418,235.00
Fund
Transfer from Solid
$1,552,578.00
$1,552,578.00
Waste Fund
Total Revenues
$574,343,877.00
$40,621,220.00
$615,466,097.00
Expenditures
Water
$216.220,428.00
M&0799
$210,610.00
$216,431,038.00
This M&C
$5,000,000.00
$5,000,000.00
Reclaimed Water
$132,641.00
This M&C
$175,000.00
$307,641.00
$121,297,960.00
M&C 23-
$210,610.00
$121,508,570.00
Wastewater
0799
This M&C
$10,000,000.00
$10,000,000.00
Transfer to Water
$4 156,000.00
This M&C
$175,000.00
$4,331,000.00
Capital Fund
Transfer to General
Fund to Energy
$27,116.00
$27,116.00
Savings Program
Transfer to Dev
Services for
$1,060,221.00
$1,060,221.00
Positions
Transfer to
Financial
Management
$345,088.00
$345,088.00
Services for
Purchasing
Positions
Transfer to Water
and Sewer Capital
$84,505,035.00
This M&C
$58,825,000.00
$143,330,035.00
Fund
Payment in Lieu of
F$-9.7-37.866.00
$5,737,866.00
Taxes
Street Rental
$26,313,324.00
This M&C
$25,000.00
$26.338,324.00
TranDebt fer to Water
$114,865,880.00
This M&C
($34,000,000.00)
$80,865,880.00
Debt Funds
Transfer to IT
$482,318.00
$182,318.00
Refresh Capital
Total
Expenditures
$574,843,877.00
$40,621,220.00
$615,465,097.00
Water Priority Lien Debt Service Fund:
FY2024
Budget
Revised
Fund/Department
Adopted
Authority
Adjustment
FY2024
Budget Category
Budget
Budget
Revenues
Proceeds from WSS Rev Ref 2023A
$83,320,676
Q
$83,320,676
Transfer from Water & Sewer
$114,865,880
This M&C
($34,000,000)
$80,865,880
Use of Net Position
This M&C
$25,996,664
$25,996,664
Total Revenues
$198,186,556
($8,003,336)
$130,183,220
Expenditures
nancial Management Services
r
$190,983,220
$190,183,220
ebt Obligation)
Contribution to Fund Balance/Net
Position
$8,003,336
This M&C
($8,003,336)
$0
Total Expenditures
$198,186,556
($8,003,336)
$190,183,220
Water & Sewer Capital Project Fu d (recommendation 4)
The FY2024 adopted budget for the Water and Sewer Capital Project Fund in the programmable Capital Outlay project (P00087) was
$4,156,000.00. This M&C recommends an additional $175,000.00, from newly recognized revenues, in appropriations for FY2024, for an
adjusted budget of $4,331,000.00.
Capital Fund
Project
FY2024 GIP
Authority
Budget Changes
Revised
PY2024
Name
Name
Appropriations
(lncreaselDecrease)
Bud et
9
P00087 -
Water & Sewer
Water &
Capital Projects -
Sewer
M&C 23-
Fund 56002
Outlay
0869
$4,156,000.00
$4,156,000.00
$175,000.00
$175,000.00
Total
$4,331,000.00
$4,331,000.00
This project is located in ALL COUNCIL DISTRICTS.
A Form 1295 is not required because: This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION 1 CERTIFICATION:
The Director of Finance certifies that upon, the approval of the above recommendations and adoption of the attached ordinances, funds will be
available in the Fiscal Year 2024 operating budget, as appropriated, in the Water & Sewer Fund and the Water Prior Lien Debt Service Fund and
in the W&S Capital Projects Fund for the Water and Sewer Outlay programmable 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 bk Femando Costa 6122
Originating Business Unit Head: Chris Harder 5020
Additional Information Contact: Sarath Padar 8407
Expedited