The URL can be used to link to this page

Home My WebLink About26-0062 - 2026-06-02 - Informal ReportINFORMAL REPORT TO CITY COUNCIL MEMBERS No. 26-0062 To the Mayor and Members of the City Council June 2, 2026 A Page 1 of 3 * VA SUBJECT: 2026 DEBT FINANCING PLAN OVERVIEW yez3 The purpose of this report is to provide an overview of the City's planned debt financing activities for Fiscal Year 2026. As the City continues to invest in critical infrastructure and other capital projects, a strategic and well -structured approach to debt issuance is essential to maintaining financial stability and long-term affordability. This report outlines anticipated bond issuances, including their intended purposes, projected timelines, and key financial considerations. Credit Ratinq and Market Update The City's Water System has received an upgraded revenue bond rating of AAA from S&P Global Ratings, the highest rating available, reflecting the utility's strong financial management, stable performance and long-term infrastructure planning. Furthermore, the City maintains strong General Obligation (GO) credit ratings, including: • Aa3 from Moody's Investors Service • AA from S&P Global Ratings and Fitch Ratings • AA+ from Kroll Bond Rating Agency The City's credit ratings are anchored by a very strong local economy, excellent management practices, strong reserves, and healthy financial performance. Credit challenges remain due to the City's weak debt profile related to pension and OPEB liabilities. Municipal market interest rates remain elevated relative to the historically low -rate environment experienced during 2020 and 2021. The Financial Management Services Treasury Division and the City's financial advisors continue monitoring market conditions and evaluating financing structures and issuance timing to minimize borrowing costs. Debt Manaqement Tools & Initiatives • Commercial Paper Program Amendment. General Purpose Extendable Commercial Paper Program (ECP) The General Purpose Commercial Paper Program supports appropriations to initiate capital projects between annual bond sales. An increase to the capacity of the ECP program, from $300 million to $845 million, would facilitate appropriations for the 2026 Bond Program. • Tax Exempt Master Lease Program Approval The Master Lease Program would support financing for equipment and vehicles across multiple City departments while providing greater flexibility in evaluating financing options. The program would also give staff added flexibility to respond in emergency situations when the timing of Council action conflicts with bond sale schedules. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 26-0062 To the Mayor and Members of the City Council VA SUBJECT: 2026 DEBT FINANCING PLAN OVERVIEW yez3 Refinancinq and Defeasance Opportunities June 2, 2026 Page 2 of 3 The City's financial advisors and Treasury staff continue monitoring refunding opportunities and have identified opportunities for savings. Based on current market conditions, the following actions are recommended: • Water System —Series 2015A and Series 2016 Water System Revenue Bonds Refunding Current refunding of the City's Water and Sewer System Bonds, Series 2015A and Series 2016 to achieve estimated debt service savings of approximately 3.70% or $1,358,400. General Purpose —Cash Defeasance of Outstanding Maturities The proposed cash defeasance strategy would use approximately $24 million of available General Debt Service Fund balance and $22 million generated from eligible transportation projects transferred from the Transportation Impact Fee Fund to redeem approximately $46 million in outstanding maturities in FY 2027 and FY 2028. This cash defeasance would reduce future debt service obligations and increase debt capacity to support issuance of the proposed Certificates of Obligation. New Monev Bond Issuance • Series 2026 General Purpose Bonds General Purpose Bonds in the amount of $105,000,000 are planned to fund propositions under the 2022 Bond Program, including: streets and mobility infrastructure and parks and recreation. Repayment will be funded by ad valorem taxes, generated from the I&S tax rate. Series 2026 Combination Tax and Revenue Certificates of Obligation Combination Tax and Revenue Certificates of Obligation (CO) in the amount of $103,000,000 planned to fund various street and mobility infrastructure projects, parks and recreation projects, and facility improvement projects. Repayment will be funded by ad valorem taxes, generated from the I&S tax rate. Pending Council's approval of the parameters ordinance, the City may price Certificates of Obligation within 90 days of the approval date, in one or more issuances, up to the total authorized amount. If the bonds are not priced within the 90-day window, a new notice of intent to issue Certificates of Obligation would be required. To properly align use of Certificates of Obligation funding with priority projects, staff will be transferring previously identified general revenues from CO eligible projects. This will provide flexibility in the use of those general revenues on other non -CO eligible programs. This includes freeing funds for the FY2026 operating budget and the Downtown Library Project. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 26-0062 pFT&4 To the Mayor and Members of the City Council June 2, 2026 • A Page 3 of 3 * VA SUBJECT: 2026 DEBT FINANCING PLAN OVERVIEW yez3 • Series 2026 Water & Sewer System Revenue Bonds Water & Sewer System Revenue Bonds in the amount of $240,000,000 to fund planned Water and Sewer System capital improvements and a customer billing software system. Repayment will be funded by pledged revenues of the water system. • Series 2026 Special Tax Revenue Bonds Special Tax Revenue Bonds in the amount of $550,000,000 planned to fund Fort Worth Convention Center Phase II - Construction. Repayment will be funded by various pledged revenues of the culture and tourism system. Next Steps Staff will continue coordinating with the City's financing team regarding the planned fiscal year 2026 financing transactions, including required Council actions, rating agency presentations, market monitoring, and evaluation of refunding opportunities. Additional details regarding planned financings and anticipated activity dates are included within the attached appendix provided to Council on June 2, 2026. If you have any questions, please contact Alex Laufer, Assistant Finance Director, at 817-392- 2268. Jesus "Jay" Chapa City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS LlJ 2026 FINANCING PLANS GENERAL OBLIGATION DEBT CAPACI MARKET UPDATE CREDIT RATING INFORMATION CALENDAR OF ACTIVITIES ewer General Obligation Water A r $185 MM Series 2025B Bonds $ 60.20 M M Series 2025 Refunding Bonds A r $ 23.17 M M Series 2025B Tax Notes $347. Series 2( (w TWDB Loan Bond Fire & EMS Mary' W Issue �neral Purpose Commercial Paper Notes, Series ECP Issue iter & Sewer System Commercial Paper Notes, Callable CP Series Issue Linage Utility System Commercial Paper Notes, Series ECP Recommendation Increase authority to $8, Recommendation No Change 3MOMMMMM Recommendation No Change mmercial Paper program provides necessary appropriation authc thorized Bond Programs. Purpose program authority will provide the 2026 Bond Program a sport the wide scope of projects., but does not provide funding to e ;ue commercial paper at this time. services (FMS) and the City's financial advisors issued a Request fc Annual Appropriation Master lease program for vehicle and equips im will provide financing for the acquisition and reimbursement of s, including: )icles and firefighting equipment machinery and maintenance vehicles patrol vehicles and specialized equipment - Maintenance equipment and golf carts Iditional flexibility in financing options for essential vehicles and eq most appropriate financing mechanism for each project ( to respond in emergency situations when the timing of Council a• charged against the General Debt Service Fund 1 Opportunities* MA Water System $ 36/715/000 $11358,400 3.70% $1721721 (FY2026-2035) Series 2015A - 2028-2035 maturities Series 2016 - 2028-2035 maturities Principal to Be Redeemed Total Interest Savings Average Annual Savings Maturities Redeemed 0 ^s and staff monitor refunding opportunities and at current market rates, savings of $1.35 million or 3.70% savings, executing a refunding of appro) tegy would use approximately $24 million of available General Debt Sery ►ortation projects transferred from the Transportation Impact Fee Fund tc maturities in FY 2027 and FY 2028. ild reduce future debt service obligations and increase debt capacity to Project JN feral Purpose Improvement 'tificates of Obligation SS Revenue Bonds .1cial Tax Revenue Bonds Loan (TWDB) .1cial Assessment 2022 Authorization (Streets &Mobility and Park and Recreati Police Central Division Renovations, Bridge and Street Improl Water & Sewer Projects FWCC Phase II Construction Lebow Flood Mitigation Veale Ranch Public Improvement District structure iprovements rents Space $3691218,300 123,955,500 12/505/200 39,321,000 15/000/000 $560rOOOrOOO $178,894,300 11010691500 12/505/200 39,321,000 15/000/000 $355r79OrOOO $91111411 13,886,1 $105FOOOFI ow forecast and analysis in coordination with FWLab. 1111111111CVP 1111111111111111111MOrw 1 1 1 6/301/900 $ 61820,880 $ 7/360/080 $ 7/919/500 $ 14/934/449 $ 15/681/172 $ 161308,419 $ 16/797/672 $ 21,236,349 $ 22,502,052 $ 23,668,499 $ 24,717,172 $ 2 21,250,000 $ 22,550,000 $ 23,700,000 $ 24,750,000 $ 25 ile preliminary set for Ist Quarter of FY 2027 ease vehicle and replacement costs, currently under review by property management. Does not include any othc at 3% after 2031 (D 0 Adlbk Adilk $126.4 Billion )1.25MM to $26.6MM in 2027 through 2032, growing 3% thereafter ining 2022 Bond Program-2026 ($105MM), 2027 ($99.21MM) Bond Program-2027 ($245MM), 2028 ($200MM), 2029 ($150MM), 2030 ($150MM), 2031 ($100MM) Model is dynamic ( by staff and FAs as Issuance plan may based on estimate 7-Year Forecast, th 2026 Bond Prograr Current market interest rates +50 bps for 2026 issuance and 6.00% Debt capacity will I subsequent issuances to accommodate potential market volatility p y of final property ta: December 2025 3.00%(1) Growth of I&S Levy Flat at $0.1475 :ix Year 2026 $185,401,313 )ugh 2032(2)(4) $1.32 Billion ►gram $204 Million ►gram $845 Million e Program $145.5 Million bligation _ cicity $120 Million h rate over FY 2025 provided by FWLab, December 2025-3.00%, March 2026-2.17% ,ty tax revenues available for debt service on a 20-year level principal debt financing and municipal market interest rate. Assumptioi =ions paid from self-supporting revenues will continue to be funded. Bonding capacity budget includes sizing consideration of future Projected Debt 2( 21 21 2032 2034 2036 2038 2040 2042 2044 ;If -Supported Debt Tax Notes Program For Fire and EMS Remaining B )nd 2026 Program $100 Million Emergency Reserve $103 Million C Purpose cash defeasance, producing debt service savings in FY 20 3 for the issuance of $103 million of Certificates of Obligation sance strategy would use approximately $24 al Debt Service Fund balance and $22 million ansportation projects transferred from the Fund to redeem approximately $46 million in FY27 & FY28. approximately $75.6 million of projects outlined occur within 90 days of approval to fund the wim the remaining ouiance or approximately of intent would be required after 90 days. icluding the downtown library and other projects eral Fund interest income and assigned fund swaps are necessary. I ' iblish 2nd Council ce of Intent Meeting Issue in Bond First Sale Pricing 24 Bond Closing Project Lisi McCart Ave. & McPherson Blvd Panther Island Projects Horne Street Reconstruction Camp Bowie Blvd at Horne St Adventuress Court Repair Bailey Boswell East NB Sheridan @ Altamesa Blvd Interse Las Vegas Trail Wichita Street Widening 512 W. 4th Street Facility Renovations Police Central Division - 200 Texas St, Municipal Court Maintenance (Electr IT/Civil Infrastructure - Downtown Lib Fire Station Community Center Stop Six Hub Pool Centreport Trail (PARD) Total Project Lisi Community Facilities Agreement Roa Stop Six HUB* Total Telegram Authorization & Parameters Project Tax Notes Fire Apparatus, EMS Vehicles and VERF Certificates of Obligation Stop Six Hub/Community Facilities Agreement Road Projec General Purpose Improvement Bonds 2022 Authorization General Purpose Improvement Bonds 2026 Authorization Tax Notes Fire Apparatus and EMS Vehicles General Purpose Improvement Bonds 2026 Authorization TWDB CWSRF Loan Mary's Creek TWDB DWSRF Loan Carbon Facility W & SS Revenue Bonds W&SS and Mary's Creek TWDB CWSRF Loan Mary's Creek TWDB DWSRF Loan Transmission Mains W & SS Revenue Bonds W&SS and Mary's Creek Solid Waste System Revenue Bonds Land Fill Project I•/ F' $62,220,000 Series 2018 3.2672 June 2018 $106,595,000 Series 2019 2.6167% June 2019 v $109,065,000 Series 2020 1.7469% June 2020 /Aopl May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 $81,380,000 Series 2022 3.8439 May 2022 \ L $76,605,000 Series 2021 1.5813% June 2021 May-21 Nov-21 May-22 A S1� SE r $154,325,000 Series 2023 3.51093% May 2023 000 Nov-22 May-23 Nov-23 ystem was recently upgraded to AAA rating from S&P, with the i fiscal management and proactive response to growth -relate rice coverage. eral Obligation (GO) rating of AA+ rating i S&P and Fitch, and a Aa3 from Moody's. :)nomy Strong reserves ant Healthy financial performance predominantly due to the Pension/OPEB (AA) ax base (AAA) -ne (A) rowth (AAA) I IC Moody's S&P Fitch Aaa AAA AA+ AA+ Aa2 AA AA i Aa 3 AA- AA - Al A+ A+ A2 A A A3 A- A - Baal BBB+ BBB+ Baa2 BBB BBB Baa3 BBB- BBB- Water & Sewer Svst Credit immmi Certificates of Obligation General Obligation Certificates of Obligation Certificates of Obligation Water System/Convention Center Veale Ranch PID Water System General Obligation/Convention Center Water System General Obligation/Convention Center General Obligation/Certificates of Obligation Convention Center General Obligation/ Certificates of Obligation Water System Convention Center General Obligation/ Certificates of Obligation Debt Plan Informal Report to Council - c Notice of Intent to Issue - Council Meeti General Purpose Cash Defeasance Apr Publish Notice of Intent (45 days) Publish 2nd Notice of Intent (45 days) Bond Authorization/Parameters Approv Bond Pricing Credit Rating Agency Meetings Credit Rating Agency Meetings Receive Credit Ratings Receive Credit Ratings Bond Authorization/Parameters Approv Bond Pricing Bond Pricing Bond Closing Bond Closing Water System C m