HomeMy WebLinkAboutOrdinance 27640-05-2025Ordinance No. 27640-05-2025
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE WATER PRIOR LIEN DEBT SERVICE FUND, IN THE
AMOUNT OF 524,539,297,00, FROM AVAILABLE. NET POSITION GENERATED
FROM PRIOR YEAR INTEREST EARNINGS, AND DECREASING THE
TRANSFER FROM THE WATER & SEWER FUND BY
$36,860,425.00 AND CONTRIBUTION TO NET POSITION BY $12,32.1,128.00;
PROVIDING FOR A SEVERABILITY CLAUSE; MAKING THIS ORDINANCE
CUMULATIVE OF PRIOR 0RDINANCES; _REPEALING ALL ORDINANCE'S IN
CONFLICT HEREWITH AND PROVIDING AN EFF.F.CTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF TIME 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
Prior Lien Debt Service Fund in the amount of $24,539,297.00, frorn available net position generated from
prior year interest earnings, and decreasing the transfer from the Water & Sewer Fund by $36,860,425.00
and contribution to net position by $12,321,128.00.
SECTION 2.
That should any portion, section or part of section of this ordinance he declared invalid, inoperative or void
for any reason by a court of competent jurisdiction, such decision, opinion or j udgment 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 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 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said prior ordinances and appropriations are hereby expressly repealed.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:
Douglas Slack (,Jun 9, 202516A2 CDT)
Assistant City Attorney
ADOPTED AND EFFECTIVE: May 13, 2025
CITY SECRETARY
.lannette S. Goodall
City Secretary
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 05113/25 M&C FILE NUMBER: M&C 25-0418
LOG NAME: 6OFY25BUDGETADJUSTMENT
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, 0, (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 Water/Sewer 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 earn Ingis 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, Adopt 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.
DISCUS-SION:
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 eapitM 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. 27107-09-20;24 Section 4, the Fiscal Year (FY) 202.5 adopted budget for the Water and Sewer Fund. was $616,9.63,098.00.
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 $65.•7,5.08,598.00.
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 biosolids prograrn 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. Additiona.11y,. 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 costs. 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 iPrior 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 higher than normal Federal Funds rates.
As a result,. City staff has identified approxima:tOy $36,860,425.00 of excess funds. above the roinirnum 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 Water/Sewer 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 Adopted Budget as approved in connection with Ordinance 27107-09-2024 Section 4, Enterprise
Funds, as listed on page 22.
Water and Sewer Ooeratino .Fund-
.4
FY2025
Fund/Department.
Adopted
Authority
(IBudget Category
Budget
(Revenues
i
License and
$1 .,910.,0Q0.tdt3
Permits
Charges for
$562,502,751.00
M&C 25-''
Services
I
01567
This M&C��
Use of Money and
Property
$2,596,386.00
Other Revenue $13,765,000.00
Sale of Capital $100,000.00
Asset 1
Salvage Sales $30,000.00
ITransfer from $13,865,588.00
Water Impact
Transfer from I$18,143,557.00
Sewer Impact
Transfer from
�.Environ Protection
Fund
$756,690.00'
Transfer from I
Stormwater Utility $1,562,024.004
Fund
ransfer, from Solid J
$1,731,102.00
Waste Fund
I
Budget Revised
Adjustment FY2025 Budget
I
$1,910,000, 00
$.245,500,00 $562,748,251.00
$40,000,000.00I $40,000,000.00
$2,596,386-.00
$13,765,000.00
it
$1,00,000.00 ,
$13, 865, 568
$18,143,55T001
I
$756,690.QQ
I
$1,562,024.00
$1,731,102.001
Use of Net
Position
I�M&C 24-1 0872 $300,000
$300,000.001
Total Revenues +$616,963,098.00� $40,545,500.00 $657,508,598.00
Expenditures
(Water
1$229,115,919.00 08721�
$300:000,00 $229,415,919.00
�.
M&C 25_
0156
$122.,750.00�
$122,750.00 11
LReclairnedWater
i $211,659.00. �
$211,659.00
Wastewater s
$129,555,320.00IThis^MCI
$14,800,000.00 $144,.355,320.00
f
_
$122,750.00� $122,750.00
1
Transfer to Water
Capital Fund
'$7,,3..M This M&C
iI79646�I
$3,200,000.00 $10,996,463.001
Transfer to General
Fund to Energy $27,005.00� $27,005.00
Savings Program
(Transfer to HR foa I —
Positions
ITra nsfer for
(Parking
Transfer to Water
and Sewer Capit+
Fund
(Payment in Lieu E
Taxes
Street Rental
Transfer to Water
Debt Funds
i
ITr' ansfer to IT
;Refresh Capital
!Total
(Expenditures
Water Prioritv Lien Debt Service Fund:
FY2025
Fund/Department. Adopted Authority Budget Revised'
Budget Categoryi� Budget Adjustment FY2025 Budget
,'Revenues r----
'Transfer from
Water &Sewer $120,666,32.00 This M&Ci ($36,860,425,00) $83,805,895,00
Use Net
Position it This M&C $24,539,297,OO $24,539,297.00
� � �
Total Revenues $120,6.66,320.00� �$12,321,128,00j $108,345,192,00
Expenditures
Financial
Management $1-08..345,192.00 1$108,345,192.00
Services (Debt 1
Obligation)
Contribution to
Fund Balance/Net '' $12,321,128,00Jhis M.&CI($12,321,128.00) $0.00,.
Position
a
al
Expenditures I$120,666,320.00 ($12,321,128.00) $108,345,192.00
Water & Sewer Cau t.al Pro.•iect Fund
The FY2025 adopted budget for the Water and Sewer Capital Project Fund in the programmable Capital Outlay project (P00087) was
$7,796,463M. 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.
I
+capital Project FY2025 CIP Budget Changes r --Revised
Fund Name Appropriations Authority (IncreaselDecrease) FY2025
Name J Budget
Water &
Sewer P000871
Capital & afar
Proje , s
i'�ewer
- Fund �•
56002 Outlay $7,796,463.00 This M&C '
r
t
$7,796,46.3.00
L�
This project is located in ALL COUNCIL DISTRICTS.
$3,200,000.00 $10,996,46100
$3,200,00000 $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 I 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&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 hv:. Jesica McEachern 5804
Oriainatina Business Unit Head: Chris Harder 5020
Additional Information Contact. Sarath Padar 8407
Expedited