HomeMy WebLinkAbout27467-02-2025 - City Council - OrdinanceOrdinance No. 27467-02-2025
AN ORDINANCE INCREASING APPROPRIATIONS IN THE WATER AND
SEWER CALLABLE COMMERCIAL PAPER FUND, IN THE AMOUNT OF
$475,000,000.00, FOR A TOTAL APPROPRIATION OF $700,000,000.00, TO
SUPPORT CONTRACTING AUTHORITY UNDER THE CALLABLE
COMMERCIAL PAPER PROGRAM; 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 2024-2025 in the
Budget of the City Manager, there shall also be increased appropriations in the Water and Sewer Callable
Commercial Paper Fund, in the amount of $475,000,000.00, for a total appropriation of $700,000,000.00, to
support contracting authority under the callable commercial paper program.
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 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said prior ordinances and appropriations are hereby expressly repealed.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:
Assistant City Attorney
ADOPTED AND EFFECTIVE: February 25, 2025
CITY SECRETARY
Jannette S. Goodall
City Secretary
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 02/25/25 M&C FILE NUMBER: M&C 25-0156
LOG NAME: 13WATER SEWER COMMERCIAL PAPER PROGRAM INCREASE FY25
SUBJECT
(ALL) Adopt Ordinance Authorizing the Extension and Increase of the Callable Commercial Paper Program for the Water Department with a
Final Issuance Date No Later than February 25, 2055 and in an Aggregate Outstanding Principal Amount Not to Exceed $700,000,000.00 at Any
One Time, Authorizing Conforming Amendments of Existing Dealer, Paying Agent/Registrar and Calculation Agent Agreements for the Program,
and Ordaining Other Matters Related Thereto; Adopt Amended and Restated Thirty -Second Supplemental Ordinance Authorizing Issuance and
Sale of City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds in an Amount Up to $700,000,000.00 to Allow for
Refinancing of Outstanding Commercial Paper if Needed; Adopt Appropriation Ordinances; and Amend the Fiscal Year 2025 Adopted Budget
RECOMMENDATION:
It is recommended that City Council:
1. Adopt the attached ordinance authorizing an extended and expanded callable commercial paper program for the Water Department with a
final issuance date no later than February 25, 2055, in an aggregate outstanding principal amount not to exceed $700,000,000.00 at any one
time, with an annual cost of $25,000.00; authorizing conforming amendments to the existing Dealer, Paying Agent/Registrar and Calculation
Agent Agreements for the program, authorizing certain officers and employees to act on behalf of the City in the selling and delivery of the
obligations, and resolving other matters incident and related to the issuance, sale, security and delivery of the obligations;
2. Adopt the attached Amended and Restated Thirty -Second Supplemental Ordinance authorizing issuance and sale of City of Fort Worth,
Texas Water and Sewer System Revenue Refunding Bonds in an aggregate principal amount not to exceed $700,000,000.00 to allow
outstanding commercial paper to be refunded/refinanced for a longer term if needed;
3. Adopt the attached appropriation ordinance, increasing appropriations in the Water and Sewer Callable Commercial Paper Fund, in the
amount of $475,000,000.00, for a total appropriation of $700,000,000.00, to support contracting authority under the callable commercial
paper program;
4. Adopt the attached appropriation ordinance, increasing estimated receipts and appropriations in the Water and Sewer Fund, in the amount
of $245,500.00, from future revenues, for the purpose of paying closing and delivery fees associated with the program; and
5. Amend the Fiscal Year 2025 Adopted Budget.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to take actions to extend and increase the liquidity facility for the City's Water and
Sewer System, which supports appropriations to initiate capital projects between annual revenue bond sales. Several upcoming large facility
projects in the five-year Capital Improvement Program (CIP) are necessitating this increase.
Since 2017, the City's Water and Sewer Utility System has employed a financing tool known as the Callable Commercial Paper (CCP) Program
with J.P. Morgan Securities LLC engaged as dealer (M&C C-28496, Ordinance 23028-12-2017). The CCP program has provided appropriation
authority for capital projects identified within the Water and Sewer Capital Improvement Program. The Water Department has used this authority in
conjunction with Council -adopted reimbursement resolutions to facilitate the initial award of capital improvement contracts that will ultimately be
financed by longer term bonds issued after the project has commenced. During the initial period of construction, interim payments are paid out of
available resources. When System revenue bonds are then issued, proceeds are used to repay the System's interim payment sources, fund the
projects, and replenish the CCP authority.
Although the CCP ordinance provides authority to have up to $700,000,000.00 in commercial paper outstanding at any one time in order to
support appropriations and expedite project delivery between bond issues, no commercial paper has actually been issued under the program to
date. If CCP were to be issued, the annual dealer fee would be 0.10% of the principal amount of commercial paper outstanding. In addition, an
annual calculation agent fee will be assessed each year as long as the CCP is outstanding. In accordance with state law, the commercial paper
would have a maturity date that is no greater than 270 days from its date of issuance. Were the City to actually issue CCP and have it
approaching maturity, the City would have several options. One such option would be to issue long-term refunding debt utilizing the authority
provided under the amended and restated thirty-second supplemental ordinance, which is attached as the second recommendation. Having the
ability to issue long-term refunding bonds also enhances the credit rating for the CCP program. Updated supplemental ordinances are anticipated
for adoption each calendar year to extend the delegated standby authority to issue refunding bonds, if needed, throughout the life of the program.
As is required by Chapter 1371 of the Texas Government Code, the CCP program must be investment grade rated. The utility system's strong
financial performance and strong market access resulted in the CCP program being awarded S&P's highest short-term rating of A-1+.
The action in this M&C will amend the Fiscal Year (FY) 2025 Adopted Budget as approved in connection with Ordinance 27107-09-2024, Section
4. Enterprise Funds, as listed on Page 22:
Section 4. Enterprise Funds
Page 22
Fund / Department
Budget Category
Water and Sewer Fund
Revenues
License and Permits
Charges for Services
Use of Money and Property
Other Revenue
Sale of Capital Asset
Salvage Sales
Transfer from Water Impact
Transfer from Sewer Impact
Transfer from Environ Protection Fund
Transfer from Stormwater Utility Fund
Transfer from Solid Waste Fund
Use of Fund Balance
Total Revenues
Expenditures
FY2025 Adopted Authority
Budget
Revised FY2025
Budget
Adjustment
Budget
$ 1,910,000.00
$ 1,910,000.00
$ 562,502,751.00This M&C $
245,500.00
$ 562,748,251.00
$ 2,596,386.00
$ 2,596,386.00
$ 13,765,000.00
$ 13,765,000.00
$ 100,000.00
$ 100,000.00
$ 30,000.00
$ 30,000.00
$ 13,865,588.00
$ 13,865,588.00
$ 18,143,557.00
$ 18,143,557.00
$ 756,690.00
$ 756,690.00
$ 1, 562, 024.00
$ 1, 562, 024.00
$ 1,731,102.00
$ 1,731,102.00
$ - M&C 24-0872 $
300,000.00
$ 300,000.00
$ 616,963,098.00 $
545,500.00
$ 617,508,598.00
Water $
Reclaimed Water $
Wastewater $
Transfer to Water Capital Fund $
Transfer to General Fund for Energy Savings Prog $
Transfer to HR for Positions $
Transfer for Parking $
Transfer to Water and Sewer Capital Fund $
Payment in Lieu of Taxes $
Street Rental $
Transfer to Water Debt Funds $
Transfer to IT Refresh Capital $
Total Expenditures $
229,115,919.00 M&C 24-0872
$ 300,000.00 $
229,538,669.00
- This M&C
$ 122,750.00 $
211,659.00
$
211,659.00
129,555,320.00This M&C
$ 122,750.00 $
129,672,570.00
7,796,463.00
$
7,796,463.00
27,005.00
$
27,005.00
1,738,600.00
$
1,738,600.00
218,105.00
$
218,105.00
92,597,771.00
$
92,597,771.00
6,098,464.00
$
6,098,464.00
28,755,154.00
$
28,755,154.00
120,666,320.00
$
120,666,320.00
182,318.00
$
182,318.00
616,963,098.00
$ 545,500.00 $
617,508,598.00
A Form 1295 is not required because: This contract will be with a publicly -traded business entity or a wholly -owned subsidiary of a publicly -traded
business entity: JP Morgan Securities LLC, US Bank Trust Company, Hilltop Securities Inc.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations and adoption of the attached appropriation ordinances, funds
will be available in the Water & Sewer Fund from future revenues and in the W&S Commercial Paper Fund for the W&S Commercial Paper
project. Prior to any expenditure being incurred, the Water Department has the responsibility to validate the availability of funds.
Submitted for Citv Manaaer's Office by
Oriainatina Business Unit Head:
Reginald Zeno 8517
Reginald Zeno 8517
Additional Information Contact: Anthony Rousseau 8338