HomeMy WebLinkAboutOrdinance 20929-09-2013 (}rdh0000e No.
AN ORDINANCE DNCRBABO'�G THE ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE WATER AND SEWER PKO]BZ8 FUND IN THE
AMOUNT OF $100`000,000.00, FROM AVAILABLE C/\SI{ FOR INTERIM
PAYMENTS ON ELIGIBLE CONSTRUCTION PROJECTS FOR THE CITY'S WATER
AND SEWER SYSTEM; PROVIDING FOR & SEVE5ABlL[TY CLAUSE; MAKING
THIS ORDINANCE CUMULATIVE OF PRIOR ORDINANCES; REPEALING ALL
ORDINANCES IN CONFLICT BBQEVVlTB; AND PRO\/D}l0G AN EFFECTIVE
DATE.
BE IT ORDAINED BT THE CITY COUNCIL OFTHE CITY OF FORT WORTH,
TEXAS:
SECTION |.
That in addition to those amounts allocated to the various City departments for Fiscal Year 2012-2013 in the
Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the Wo1cc
and Sewer Capital Projects Fund in the amount of $100,000,000.00, from available oaab for interim
payments on eligible construction projects for the City's Water and Sewer System.
SECTION 2.
That should any portion, aeoboo or part of meoboo of this ordinance he declared invalid, inoperative or
void for any reason bya court u[competent jurisdiction, such decision, opinion or judgment shall iuooway
impair the remaining portions, mccdoom, or parts of aeod000 of this ordinance, which said m:nuoiuiog
provisions shall be and remain in full force and effect.
SECTION 3.
That this ordinance ubo|l be cumulative of Ordinance No. 20411-09-2012 and all other ordinances and
appropriations amending the same except io those instances where the provisions of this ordinance are bu
direct conflict with such other ordinances and appropriations, in which instance said conflicting provisions
o[said prior ordinances and appropriations are hereby expressly repealed.
SECTION 4.
Tbio ordinance shall take effect upon adoption.
~ P O FORM AND LEGALITY:
Isi
ADOPTED AND EFFECTIVE: Septemb r 10,2013
____
City of Fort Worth, Texas
Mayor and Council Communication
✓i ,,oi�i r,,,,o oc,iri,,;U:. ,,,„;: o„„<rn. ,<„ao.... .,nr�i v , ird i, va;� ,i::r�. i n ,�n i i„i v_- ina�i mvnc omrzr
COUNCIL ACTION; Approved on 9/10/2013 - Ordinance Nos, 20928-09-2013 & 20929,-09-
2013
DATE: Tuesday, September 10, 2013 REFERENCE NO.: G-17991
LOG NAME: 1313 DP NOTE APP
SUBJECT:
Adopt Appropriation Ordinances in an Amount Not to Exceed $100,000,000.00 Each in Support of the
City's Water and Sewer System Direct-Purchase Note Program (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Water and Sewer Capital Projects Fund in the amount of$100,000,000.00 from available funds for the
purpose of interim financing for the construction of eligible projects for the City's Water and Sewer System;
and
2. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Water and Sewer Capital Projects Fund in the amount up to $100,000,000.00 from available cash for
interim payments on eligible construction projects for the City's Water and Sewer System.
DISCUSSION:
On March 26, 2013, (M&C C-26169) the City Council authorized the sale of short-term notes to Wells
Fargo in an aggregate principal amount at any one time outstanding of no greater than the amount of
$100,000,000.00 for the Water and Sewer System for the purpose of providing a short-term financing
option for the department's ongoing capital projects. In 2004 and 2007, (M&Cs C-20014 and C-22028)
the City Council had previously authorized an alternative short-term financing option in the form of a
commercial paper program with an aggregate principal amount of$150,000,000.00 at any one time.
These programs provide short-term financing for capital projects that will ultimately be long-term financed
through the issuance of bonds. The Direct-Purchase Note Program offers two delivery alternatives; the
City can actually issue short-term debt for interim financing or can use the liquidity and contracting
authority represented by the program to initiate a project and use cash from the City portfolio to fund the
project until such time as the City issues debt to replenish the portfolio.
In connection with establishing the Direct-Purchase Note Program, it was determined that an aggregate
principal amount of$100,000,000.00 for the Direct-Purchase Note Program would result in savings of
approximately $795,000 annually on fees when compared to the fees associated with the commercial
paper program and its $150,000,000.00 aggregate principal. Enacting a smaller program without
compromising the Water and Sewer System's ability to deliver capital projects was partially predicated on
the ability to use available cash-on-hand as a bridge financing source to make payments between the
initial execution of the contract and the issuance of the long-term debt; thereby, freeing up capacity in the
short-term note program and replenishing authority to the extent of any cash payments.
Logname: 1313 DP NOTE APP Page 1 of 2
The following example illustrates the process. |D January, Staff could present the City Council with a
Mayor and Council Communication for a contract for a large-scale project COs(ing $10O.0D0.000.00thot
would ultimately be financed from long-term bonds that would not be issued until September and would
use the full capacity of the Direct-Purchase Note Program as initial interim short-term financing. AS
invoices became due OD the project bebw8eDJonu8ryandSepternber. StaffVVou|duSeCash-0n-h8ndtO
make payments. By June, if the amount Of$1O.O0O,0O0.00 had been paid from cash, Staff could then
seek City Council authority for a new $10,000,000.00 contract for another project thatvvOU|da|s0be
eligible for and planned to be long-term financed by a future bond issuance. Using the Direct-Purchase
Note Program iO combination with bridge payments from cash allows the $100.0O0.0O0.OU capacity Ofthe
pn}g[8On to be utilized to provide On8XirnuOl benefit to the City with less cost than g larger scale prOQ[8nn.
Adoption of the two recommended ordinances would fully implement the program as detailed above and
would enable proper accounting and tracking Of expenditures throughout the projects' |ifeCydes.
FISCAL INFORMATION / '
The Financial Management Services Director certifies that upon adoption of the attached appropriation
ordinances, funds will b9 available inthe current capital budgets, as appropriated, Of the Water and Sewer
Capital Projects Funds.
FUND CENTERS:TO Fund/Account/Centers FROM Fund/Account/Centers
P265 458110 601159990100 $50,000,000.00
P275 458110 701139990100 $50,000,000.00
P265 458111 601159990100 $35,000,000.00
P275 458111 701139990100 $65,000,000M
CERTIFICATIONS:Submitted for City Manac
SusanA|anio (8180)
Jay Chapa (8517)
Lisa Parks (5030)
Additional Information Contact: Jan Hale (8438)
Lopiame: 1313 DP NOTE APP Page 2 of 2