HomeMy WebLinkAboutOrdinance 27638-05-2025Ordinance No. 27638-05-2025
AN ORDINANCE INCREASING ESTIMATED R-ECEIPTS AND
APPROPRIATIONS IN THE WATER & SEWER FUND, IN THE ANIOUNT OF
S 10,000,000.00, FROM ANTICIPATED PROJECTED REVENUES, FOR THE
PURPOSE OF FUNDING (1) INCREASED OPERATING EXPENSES IN THE
AMOUNT OF $1.4,800,000.001 (2) TRANSFERS TO WATER & SEWER CA11ITAL
PROJECTS FUND FOR THE. PURPOSE OF FUNDING THE UTI.LITY'S PAY -AS-
YOU -GO CAPITAL PROGRAM IN THE AMOUNT OF S22,000,000.00 AND (3)
TRANSFERS TO TIIE WATER. & SEWER CAPITAL PROJECTS FUND FOR THE
PURPOSE OF FUNDING THE CAPITAL INTI2AFIJND TRANSFER OUT
ACCOUNT IN THE AMOUNT OF S3,200,000.00; PROVIDING FOR A
SEVERABILITY CLAUSE; MAKING THIS ORDINANCE. CUMULATIVE OF
PRIOR ORDINANCES, REPEALING= AL,I. 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 2024-2025 in the
Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the Water
& Sewer Fund in the amount of $40,000.000.00, from anticipated projected revenues, for the purpose of
funding 1) increased operating expenses in the amount of M 4,800,000.00, 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
$22,000,000.00. and (3i transfers to the Water & Sewer Capital Projects Fund for the purpose of funding the
capital intrafund transfer out account in the amount of $3,200,000.00.
SECTION 2.
Thatshould any portion, section or part of section of this ordinance be declared invalid, inoperative or void
for any reason by a court of competent j urisdiction, such decision, opinion or judgment shall in noway 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. 27107-09-2024 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 otherordinances and appropriations, in which instance said conflicting provisions of
said prior ordinances and appropriations are hereby expressly repealed.
SECTION 4.
'Phis ordinance shall take effect upon adoption.
APPROVED AS TO F0ltN1 AND LEGALITY:
Douglas Black I J u n 9. 202516.12 CDT)
Assistant City Attorney
ADOPTED AND EFFECTIVE: May 13, 2025
CITY SECRETARY
Jannette S. Goodall
City Secretary
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City of Fort Worth, Texas
Mayor and council communication
DATE. 05113/25 M&C FILE NUMBER: M&C 25-0418
LOG NAME: 60FY25BUL)GETADJUSTMENT
SUBJECT
(ALL) Adopt Appropriation Ordinances Enacting Fiscal Year 2025 Budget Adjustments in the Water and Sewer Fund in the Total Amount of
$76,860,425.00 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 2025 Adopted Budget and to Effect a Portion of Water's
Contribution to the Fiscal Years 2025-2029 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
$40,000,000.00, from anticipated projected revenues, for the purpose of funding (1) increased operating expenses in the amount of
$14,800,000.00, (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 $22,000,000,00, and (3) transfers to the Water & Sewer Capital Projects Fund for the purpose of funding the capital
intrafund transfer out account in the amount of $3,200,000,00;
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 WaterlSewer account in the amount of $36,860,425.00 and decreasing estimated
receipts and appropriations in the Debt Transfer Out — Principal account by the same amount;
3. Adopt the attached appropriation 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 $24.539,297.00 and decreasing the
transfer from the Water & Sewer Fund by $36.860,425.00 and contribution to net position by $12,321,128.00;
4. Adapt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water & Sewer Capital Projects Fund
in the amount of $3,200,000.00, from available funds in the Capital Intrafund Transfer Out account within the Water & Sewer Fund, for the
purpose of funding the Water and Sewer Outlay programmable project (City Project No. P00087); and
5. Amend the Fiscal Year 2025 Adopted Budget and the 2025-2029 Capital Improvement Program.
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 months resulted in higher than
expected water usage for the months of October through December. Receipts and appropriations in the Water & Sewer Fund will be increased by
$40,000,000,00 to be used for operating costs affected by rising costs, increased water demand. 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 Debt Transfer Out -Principal account to the Transfer to Water/Sewer account for the
purpose of funding the Utility's pay-as-you-go capital program.
Per Ordinance No. 27107-09-2024 Section 4, the Fiscal Year (FY) 2025 adopted budget for the Water and Sewer Fund was $616,963,095.00.
The adopted budget was subsequently adjusted in the amount of $300,000,00 via M&C 24-0872 and in the amount of $245,500.00 via M&C 25-
0156 for an adjusted budget of $617,508,598.00. This M&C recommends an additional $40,000,000.00 in revenue appropriations for FY2025,
from anticipated projected revenues, for an adjusted budget of r657,508,598.00.
Expenditure appropriations in the General Operating and Maintenance accounts will increase by $14,800,000,00. Operational costs due to the
transition of the management of the biosollds program from a contractor to In-house staff, as well as a settlement with the vendor (M&C 25-0281),
are driving an expected budget overrun to the FY2025 budget. Additionally, 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 $25,200,000.00 to allow the Utility to address these rising casts. The Utility will also fund equipment purchases
such as valves, drives, pumps and compressors in FY2025 and two additional vehicles for use during safety inspections and field operations.
To balance these increases in expenditures, revenue appropriations will also increase by $40,000,000.00. Due to increased demand, wholesale
and retail revenues are 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 oft 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 higher than normal Federal Funds rates.
As a result, City staff has identified approximately $36,860,425.00 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. By decreasing the transfers for debt, this allows the
reallocation of the funds to the Transfers to WaterlSeweT account by the same amount for the purpose of funding the Utility's pay-as-you-go capital
program.
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 FY2025 Adapted Budget as approved in connection with Ordinance 27107-09-2024 Section 4, Enterprise
Funds, as listed on page 22.
Water and Sewer Ooeratina Fund:.
FY2025 Budget Revised
FundJDepartment Adopted Authority) Adjustment FY2025 Budget
Budget Category Budget
Revenues --Y --- -- -i
License and I $1,910,000.00' $1,910,000,00
Permits
(Charges for i &C 25- M
,services $562,502,751.00 0156 $245,500.00 �$562.748,251 .44f
II,
This M&C; $40,O00,000.00' $44,044,1000.01
, I
(Use of Money and $2,596,386.40$2,596,386.00
Property
Other Revenue $13,765,000.00 $13,755,000.00
Sale of Capital
$100,000.O01 I $100,000A0;
Asset
' I
(Salvage Sales i $30,000.00 $30,000.00
[Transfer from — ---
iWater Impact $13,865,588.40• $13,885,58$.f7f1
I
I I
Transfer from $18,143,557.00, I $18,143,557,00'
,Sewer Impact
I--- - ............
Transfer from
Environ Protection
Fund
Transfer from
Stormwater Utility
Fund
- — Transfer from Solid $1,731 1€i2 tti3
Waste Fund
Use of Net
, Position j
$755,690.Q0 �
$1,562,024.00
$756,690.00
1
$1,582,024.00'i
$1,731,102:O0
iTotal
Revenues
I
$616,963,098.00
,
$40,545,500.00 $657,508,598.00
(Expenditures
Water
$229,115,919,00 M&C 087224=
i,
$300,000.00,$229,415,919,00,
M&C 25-1
0156
$122,750,00 $122,750.00
Reclaimed Water
f 5211,659.00 .
$211,659.00I
Wastewater
$129,555,320.00 This M&C:1
1
$14,800,000.00�$144,355,320.00
I M&C 2b-
0156
$122,750.00
$122,750.00
.1 ......
Transfer to Water
Capital Fund
$7 796,463.00�This M&C
$3,200,000.00 $10,996,463.00
Transfer to General
Fund to Energy
$27,005.00
$27,005.00
Savings Program
Transfer to HR for
Positions
$1,738,600:00�
$1,738,600.00
Transfer for
Parking
S218,105.00
$218,105.00
Transfer to Water
—,
and Sewer Capital ,
$92,597;771.00 This M&C
$58,860,425.00 $151,455,196,00
Fund
Payment in Lieu of
Taxes
$6,098,464.00
$6,098,464.00I
`Street Rental
$28,755,154.00
$28,755,154.0J
L- _
Transfer to Water
DebtFunds �$1205666,320
I
.00 This M&C ($36,860,425.00)
I
$83,805,895,00
�
Transfer to IT
$182 318 00
$182,318.001
Refresh Capital
i
Total
Expenditures
$616,963,098400
$40,545,500.0011$657,508,598.00
Water Pei atity Lien
-Debt Service t°und
FundlDepartment
FY2025
Adopted
I Budget
Authority
Revised
Budget Category
Budget
Adjustment
FY2025 Budget
Revenues
Transfer from
$120,666,32.00'This
M&C ($36,860,425.00)
h
$83,805,895,00
Water &Sewer
Use of Net
Positio
This M&C $24,539,297.00
$24,539,297,00
(Total Revenues
$120,666,320.00�
i
($12,321,128.00),$108,345.192.00
I
Expenditures
Financial
Management
Services (Debt
Obligation)
Contribution to
Fund BalancelNet
Position
Total
.Expenditures
$108,345,192.00
�I
— ....................
k
I
1$108,345,192,00
$12,321,128.00 ThisM&C,($12,321,128.00JI $0.00I
$120,666,320.00i ($12,321,128.00) $108,345,192.00
Water_& Sewer CaDital Proie-et Fund
The FY2025 adopted budget for the Water and Sewer Capital Project Fund in the programmable Capital Outlay project (PO0087) was
$7,796,463.00. This M&C recommends an additional $3,200,000.00, from newly recognized revenues, in appropriations for FY2025, for an
adjusted budget of $10;996,463.00.
Capital IProject FY2025 CIP
and Name Appropriations Authority
Name
Water & -
iSewer 'P00087
Capital Water
Projects Sewer
-Fund Outlay $7,796,463.00, This M&C
$7,796,463.00
Budget Changes Revised
(IncreaselDecreasej, FY2025
Budget
This project is located in ALL COUNCIL DISTRICTS.
$3.200,000.00 $10,996.463.00
$3,2001000.013 �$10,996,463.00
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 funds are currently available in the Water Prior Lien Debt Service Fund and upon approval of the above
recommendations and adoption of the attached appropriation ordinances, funds will be available in the current operating & capital budgets, as
appropriated, in the Water & Sewer Fund and in the W&5 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 Citv Manape r's Office by: Jesica McFachern 5804
Oriainatina Business Unit Head: Chris Harder 5020
Additional information Contact: Sarath Padar 8407
Expedited