HomeMy WebLinkAbout28508-05-2026 - City Council - OrdinanceOrdinance No.28508-05-2026
AN ORDINANCE ADJUSTING ESTIMATED RECEIPTS AND APPROPRIATION IN THE
WATER PRIOR LIEN DEBT SERVICE FUND, BY INCREASING IN THE USE OF NET POSITION IN
THE AMOUNT OF $32,450,000.00 FROM AVAILABLE FUNDS IN EXCESSS
OF RESERVE REQUIREMENTS, AND DECREASING A BUDGETED TRANSFER IN FROM THE
WATER & SEWER FUND BY THE SAME AMOUNT; 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 the budget of the City of Fort Worth for Fiscal Year 2025-2026, as enacted by Ordinance
27979-09-2025, as amended, is hereby further amended to make the following adjustments to estimated
receipts and appropriation in the Water Prior Lien Debt Service Fund, by increasing in the use of net
position in the amount of $32,450,000.00 from available funds in excess of reserve requirements, and
decreasing a budgeted transfer in from Water & Sewer Fund by the same amount.
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 27979-09-2025 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provisions of said prior ordinances and appropriations are hereby expressly repealed.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.
APPRO D A TO FORM AND LEGALITY:
Douglas Black (May 26, 2026 13:57:13 CDT)
Douglas W. Black
Senior Assistant City Attorney
ADOPTED AND EFFECTIVE: May 12, 2026
CITY SECRETARY
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Jannette S. Goodall
City Secretary
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City of Fort Worth, Texas
Mayor and Council Communication
DATE: 05/12/26 M&C FILE NUMBER: M&C 26-0355
LOG NAME: 60FY26BUDGETADJUSTMENT
SUBJECT
(ALL) Adopt Appropriation Ordinances Revising Appropriations in Identified Water Utility Debt Service Funds to Make Additional Resources
Available for Current Year Debt Service Obligations and Enacting Fiscal Year 2026 Budget Adjustments in the Water and Sewer Fund Totaling
$72,450,000.00 from Anticipated Additional Projected Revenues and Reduced Transfer for Debt to Fund Capital Projects; Amending the Fiscal
Year 2026 Adopted Budget; and Effecting a Portion of Water's Contribution to the Fiscal Years 2026-2030 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 Debt Reserve Fund in the
amount of $4,500,000.00, from legally available funds in excess of debt service reserve requirements, for the purpose of transferring to the
Water Prior Lien Debt Service Fund;
2. Adopt the attached appropriation ordinance adjusting estimated receipts and appropriations in the Water Prior Lien Debt Service Fund
by increasing the use of net position in the amount of $32,450,000.00, from available funds in excess of reserve requirements, and
decreasing a budgeted transfer in from the Water & Sewer Fund by the same amount;
3. 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 $21,367,125.00 and in the Capital Intrafund
Transfer Out account in the amount of $11,082,875.00 and decrease the estimated receipts and appropriations in the Debt Transfer Out —
Principal account by the total amount of $32,450,000.00;
4. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water and Sewer Fund in the amount of
$40,000,000.00, from anticipated projected revenues, for the purpose of funding the Utility's pay-as-you-go capital program;
5. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water & Sewer Capital Project Funds,
in the amount of $11,082,875.00, 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
6. Amend the Fiscal Years 2026-2030 Capital Improvement Program.
DISCUSSION:
This Mayor and Council Communication (M&C) takes actions to make more dollars available for the Water Utility System's capital program by
appropriating additional revenues beyond what was budgeted, in the event they are received, and reallocating available resources associated with
the system's debt program to make more efficient use of available funds.
Specific actions consist of (1) declaring a surplus in the Water Debt Reserve Fund from interest earnings and appropriating those legally available
dollars for a transfer to the Debt Service Fund; (2) programming legally available net position (fund balance) in the Water Prior Lien Debt Service
Fund toward current -year debt service payments and reducing a budgeted transfer in from the Operating Fund so that those operating dollars can
instead be transferred to capital; and (3) appropriating the additional operating dollars made available by the first two actions along with additional
revenues, in the event they are received by the Utility, due to higher than budgeted water usage and sewer flows due to hot and dry conditions
throughout the year;
Per Ordinance No. 27979-09-2025 Section 4, the Fiscal Year (FY) 2026 Adopted Budget for the Water and Sewer Fund was $674,171,145.00.
The adopted budget was subsequently adjusted in the amount of $354,500.00 via M&C 25-0964 approved on October 21,2025, in the amount of
$72,939.50 via M&C 25-1004 approved on October 25, 2025, and in the amount of $1,418,288.00 for an adjusted budget of $676,016,872.50.
The Water utility's various Funds, including the Water Prior Lien Debt Service and Water Debt Reserve Funds, generate interest income by
prudently investing idle cash in strict compliance with state law and City policy. The current practice is to allocate Water's interest income to offset
its debt service costs associated with outstanding debt and to accumulate cash which can be used to pay off Water debt prior to maturity to
achieve savings. The City has benefited tremendously from the current elevated interest rate environment, resulting in better-than-expected interest
earnings due to higher Federal Funds rates.
As a result of recent interest rates, City staff has identified approximately $4,500,000.00 in the Water Debt Reserve Fund in excess of the amounts
required under the debt -specific reserve commitments and the Fund's general reserve requirements that can be transferred to the Debt Service
Fund and (ii) a total of $32,450,000.00 of net position in the Water Prior Lien Debt Service Fund that is in excess of the Fund's reserve
requirements and can be used in accordance with pledge obligations to make current year debt service payments.
Staff recommends for City Council to declare these amounts as surplus and program them for use to make current year debt service payments, in
accordance with the terms of bond covenants for outstanding debt. For the Reserve Fund the first ordinance appropriates the surplus to the Debt
Service Fund. With the Debt Service Fund, adoption of the second attached ordinance appropriates available surplus for current year debt service
payments and reduces the transfer in from the Water & Sewer (operating) Fund by the same amount. Once the debt fund appropriations are
made, those additional dollars that are freed up in the operating fund plus projected higher than budgeted revenues (a grand total of
$72,450,000.00) will be appropriated for a transfer to Water's Capital Fund.
As individual capital projects are identified, M&Cs will be brought forward to appropriate dollars in the capital fund.
The actions in this M&C will amend the FY2026 Adopted Budget as approved in connection with Ordinance 27979-09-2025 Section 4, Enterprise
Funds, as listed on page 17.
Water and Sewer ODeratina Fund:
FY2026 Budget Revised
Fund/Department Adopted Authority Adjustment FY2026 Budget
Budget Category Budget
Revenues
License and $2,252,443.00 $2,252,443.00
Permits Revenue
Charges for $596,575,968.00 This M&C $40,000,000.00 $636,575,968.00
Services Revenue
Use of Money $7,346,386.00 $7,346,386.00
Revenue
Other Revenue $16,159,260.00
Non -Operating
Revenue
Transfer in
Revenue
Use of Fund
Bal/Net Position
$130,000.00
$51,707,088.00 This
M&C
$16,159,260.00
$130, 000.00
$51,707,088.00
$0.00 26-0061 $1,418,288.00 $1,845,727.50
25-0964 $354,500.00
25-1004 $72,939.50
Total Revenues $674,171,145.00 $41,845,727.50 $716,016,872.50
Expenditures
Reclaimed Water $1,000,000.00
Dept
$1,000,000.00
Wastewater Dept $285,941,801.00 26-0061 $709,144.00 $311,150,945.00
This $20,000,000.00
M&C
Water Dept $387,229,344.00 26-0061 $709,144.00 $408,365,927.50
25-0964 $354,500.00
u
25-1004 $72,939.50
This $20,000,000.00
M&C
Total $674,171,145.00 $41,845,727.50 $716,016,872.50
Expenditures
Water Prioritv Lien Debt Service Fund:
FY2026 Budget Revised
Fund/Department Adopted Authority
Adjustment FY2026 Budget
Budget Category Budget
Revenues
Transfer In $139,620,311.00 This M&C ($32,450,000.00) $107,770,311.00
Revenue
Use of Net $32,450,000.00 $32,450,000.00
Position
Total Revenues $139,620,311.00 $139,620,311.00
Expenditures
Financial
Management
Services (Debt
Obligation)
Contribution to
Fund Balance/Net
Position
Total
Expenditures
$139,620,311.00
$139,620,311.00
$139,620,311.00
$139,620,311.00
This project is located in ALL COUNCIL DISTRICTS.
A Form 1295 is not required because: This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that funds are currently available in the Water Prior Lien Debt Service Fund, Water Debt Reserve Fund and in the
Water & Sewer Fund, and upon approval of the above recommendations and adoption of the attached appropriation ordinances, funds will be
available in the current operating budget, as appropriated, in the Water Prior Lien Debt Service Fund and the Water & Sewer Fund and in the
Water & Sewer Capital Projects Fund. Prior to any expenditure being incurred, the Water Department has the responsibility to validate the
availability of funds.
Submitted for Citv Manaaer's Office bv: Jesica McEachern 5804
Oriainatina Business Unit Head: Chris Harder 5020
Additional Information Contact: Norma Naylor 2748
Expedited