Loading...
HomeMy WebLinkAbout27547-03-2025 - City Council - OrdinanceORDINANCE NO. 27547-03-2025 DIRECTING PUBLICATION AND POSTING OF NOTICE OF INTENTION TO ISSUE COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION; AND ORDAINING OTHER MATTERS RELATING TO THE SUBJECT WHEREAS, the City of Fort Worth, Texas (the "City"), expects to pay expenditures in connection with the design, planning, acquisition and construction of the projects described in Exhibit A to this Ordinance prior to the issuance of the hereinafter described Certificates of Obligation; and WHEREAS, the City Council of the City (the "Council") hereby finds, considers, and declares that the reimbursement of the payment by the City of such expenditures will be appropriate and consistent with the lawful objectives of the City and, as such, chooses to declare its intention, in accordance with the provisions of Section 1.150-2 of the U.S. Treasury Regulations, to reimburse itself for such payments at such time as it issues the Certificates of Obligation; and WHEREAS, it is hereby officially found and determined that the meeting at which this Ordinance was considered was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: Section 1. That attached hereto and marked "Exhibit A" is the form of notice (the "Notice"), the form and substance of which are hereby passed and approved. Section 2. That the City Manager shall cause said Notice to be (a) published, in substantially the form attached hereto, in a newspaper of general circulation in the City, once a week for two consecutive weeks, the date of the first publication to be before the forty-fifth (45th) day before the day tentatively proposed for authorizing the issuance of the Certificates of Obligation as shown in said Notice and (b) posted, in substantially the form attached hereto, continuously on the City's internet website for at least forty-five (45) days before the day tentatively proposed for authorizing the issuance of the Certificates of Obligation as shown in said Notice. Section 3. That the improvements to be financed with proceeds from the proposed Certificates of Obligation are to be used for the purposes described in the attached Notice. Section 4. That attached hereto as "Schedule I" is a list of outstanding debt obligations of the City which the City hereby designates as self-supporting debt for purposes of Subchapter C of Chapter 271, Texas Local Government Code, as amended. Section 5. That all costs to be reimbursed pursuant to this Ordinance will be capital expenditures; the proposed Certificates of Obligation shall be issued within 18 months of the later of (i) the date the expenditures are paid or (ii) the date on which the property, with respect to which such expenditures were made, is placed in service; and the foregoing notwithstanding, the Certificates of Obligation will not be issued pursuant to this Ordinance on a date that is more than three years after the date any expenditure which is to be reimbursed is paid. Section 6. That this Ordinance shall be effective immediately from and after its passage in accordance with the provisions of Section 1201.028, Texas Government Code, and it is accordingly so ordained. ADOPTED AND EFFECTIVE March 11, 2025. CITY OF FORT WORTH, By Mayor, ity of Fo orth, Texan ATTEST: City ecretaiy, City Fort Worth, Texas APPROVED AS TO FORM: City orney, City of F Worth, Texas Signature Page — Ordinance Authorizing Publication and Posting of Notice of Intent to Issue Certificates of Obligation Exhibit A NOTICE OF INTENTION TO ISSUE COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION NOTICE IS HEREBY GIVEN that it is the intention of the City Council (the "Council") of the City of Fort Worth, Texas (the "City"), to issue one or more series of interest bearing certificates of obligation of the City to be entitled "City of Fort Worth, Texas Combination Tax and Revenue Certificates of Obligation," for the purpose of paying all or a portion of the City's contractual obligations incurred in connection with (i) renovating, improving and equipping of the Will Rogers Memorial Center, and (ii) the payment of fiscal, engineering and legal fees incurred in connection therewith. The Council tentatively proposes to authorize the issuance of said series (one or more) of Certificates of Obligation at its regular meeting place in the City Hall at a meeting to commence at 6:00 o'clock, p.m., on the 13th day of May, 2025. In the event the Council will be unable to meet at City Hall on May 13th, 2025, the City will post information on its website for attending the meeting by telephone, teleconference or other electronic means. The maximum principal amount of Certificates of Obligation that may be authorized to be sold on said date for such purposes described above is $15,000,000. The Council presently proposes to provide for the payment of said series (one or more) of Certificates of Obligation from the levy of ad valorem taxes and from a limited pledge (not to exceed $1,000) of surplus revenues derived from the operation of the City's water and sewer system. In accordance with the provisions of Subchapter C of Chapter 271, Texas Local Government Code, as amended ("Chapter 271"), the following information has been provided by the City (excludes $88,380,000 principal amount of outstanding debt obligations the City has designated as self-supporting and which the City reasonably expects to pay from revenue sources other than ad valorem taxes; provided, however, that in the event such self-supporting revenue sources are insufficient to pay such debt service, the City is obligated to levy ad valorem taxes to pay such debt obligations): (i) the principal amount of all outstanding debt obligations of the City is $929,240,000; (ii) the current combined principal and interest required to pay all outstanding debt obligations of the City on time and in full is $1,204,705,522; (iii) the maximum principal amount of the Certificates of Obligation to be authorized is $15,000,000; (iv) the estimated combined principal and interest required to pay the Certificates of Obligation to be authorized on time and in full is $32,486,600; (v) the maximum interest rate for the Certificates of Obligation may not exceed the maximum legal interest rate; and (vi) the maximum maturity date of the Certificates of Obligation to be authorized is September 1, 2055. The ordinance designating certain outstanding debt obligations of the City as self-supporting for purposes of Chapter 271 is available upon request to the City at the address noted above. CITY OF FORT WORTH, TEXAS /s/ Mattie Parker Mayor Schedule I CITY OF FORT WORTH, TEXAS Self -Supporting Debt The City designates all or a portion of the following outstanding debt obligations of the City as self-supporting debt for purposes of Subchapter C of Chapter 271, Texas Local Government Code, as amended: General Purpose Refunding and Improvement Bonds, Series 2015A; General Purpose Refunding and Improvement Bonds, Series 2016; General Purpose Refunding and Improvement Bonds, Series 2020; General Purpose Refunding Bonds, Taxable Series 2021B; Combination Tax and Revenue Certificates of Obligation, Series 2021; and Combination Tax and Revenue Certificates of Obligation, Series 2023. THE STATE OF TEXAS COUNTIES OF TARRANT, DENTON, PARKER, WISE AND JOHNSON CITY OF FORT WORTH I, Jannette Goodall, City Secretary of the City of Fort Worth, in the State of Texas (the "City"), do hereby certify that I have compared the attached and foregoing excerpt from the minutes of the regular, open, public meeting of the City Council of the City held on March 11, 2025, and of the ordinance authorizing the publication and posting of notice of intention to issue Certificates of Obligation, which was duly passed at said meeting, and that said copy is a true and correct copy of said excerpt and the whole of said ordinance. Said meeting was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code, as amended. In testimony whereof, I have set my hand and have hereunto affixed the seal of the City of Fort Worth, this day of March, 2025. City Secretary of the City of Fort Worth, Texas (City Seal) City of Fort Worth, Texas Mayor and Council Communication DATE: 03/11/25 M&C FILE NUMBER: M&C 25-0194 LOG NAME: 13NOTICE OF INTENTION - SERIES 2025 CERTIFICATES OF OBLIGATION SUBJECT (ALL) Adopt Ordinance Directing Publication and Posting of Notice of Intention to Issue Combination Tax and Revenue Certificates of Obligation in an Amount Not to Exceed $15,000,000.00 for Improvements to Will Rogers Memorial Center and Expressing Intent to Reimburse Initial Project Expenditures from Proceeds if Debt Is Issued RECOMMENDATION: It is recommended that the City Council adopt the attached ordinance, which directs publication and posting of notice of the City's intention to issue Combination Tax and Revenue Certificates of Obligation, Series 2025, in an amount not to exceed $15,000,000.00 for the purpose of paying all or a portion of the City's contractual obligations incurred in connection with (i) renovating, improving, and equipping the Will Rogers Memorial Center, and (ii) the payment of fiscal, engineering and legal fees incurred; approves the form of notice; directs notice to be published and posted in accordance with state law; and expresses official intent for the City to reimburse itself from proceeds of the debt sale, if debt is issued, for project - related expenditures incurred prior to issuance. DISCUSSION The purpose of this Mayor and Council Communication (M&C) is to take preliminary actions in preparation for the authorization and issuance of Certificates of Obligation (C.O.$) for the purpose of paying all or a portion of the City's contractual obligations incurred in connection with (i) renovating, improving, and equipping the Will Rogers Memorial Center, and (ii) the payment of fiscal, engineering and legal fees incurred. Under state law the City Council has the authority to issue C.O.s without explicit prior voter approval, provided that notice must be published and posted and the public provided an opportunity to petition for an election to be held. In addition, the City has established financial policies governing the issuance of C.O.s that limit their use to finance public improvements in special circumstances and only after determining the City's ability to assume additional debt. An example of special circumstances is a situation, such as the one posed here, where it would be more economical to issue C.O.s rather than revenue bonds. The projects qualify for C.O. financing under both state law and City policy. The City anticipates the debt service on the portion of the C.O.s associated with the Will Rogers Memorial Center project will be self-supporting and entirely repaid from culture and tourism revenues. Staff is recommending issuance of combination tax and revenue C.O.s with the City's taxing authority and a limited pledge of surplus water and sewer revenues (not to exceed $1,000.00). Making a limited pledge of surplus water and sewer revenues meets state law provisions that require identification of a revenue source when selling the C.O.s for cash to then fund the project, which the City anticipates doing here. Pledging the City's tax authority will allow the debt financing to achieve a more favorable interest rate. Upon City Council approval, the City Manager shall publish the initial Notice of Intention on March 14, 2025 and will post the notice on the City's website at the same time. The second Notice of Intention will be published on the same day of the week following the first notice. An ordinance to authorize issuance and delegate authority for the sale of the C.O.s is scheduled to be brought back for Council consideration on May 13, 2025. The C.O.s are intended to be sold on a competitive basis with closing and delivery of the C.O. funds anticipated to occur in the late spring/early summer timeframe. In addition to setting the form of notice and directing its publication and posting, adoption of the attached ordinance would also serve as the City Council's adoption of a formal statement of intent to reimburse preliminary costs for the project out of the issuance from the certificates. This aspect of the ordinance does not obligate the City to sell C.O.s, but preserves the ability for the City to reimburse itself for amounts already spent on the project from tax-exempt debt proceeds if it does. This mechanism allows projects to continue forward utilizing other funds until debt proceeds are available. Any expenses incurred against an initial funding source would be repaid out of debt proceeds following issuance, sale, and receipt of proceeds. 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 approval of this recommendation will have no material effect on City funds. Submitted for City Manaaer's Office by; Reginald Zeno 8517 Oriainatina Business Unit Head: Reginald Zeno 8517 Additional Information Contact: Anthony Rousseau 8338