HomeMy WebLinkAbout26-28634 - City Council - OrdinanceORDINANCE 26-28634
AN APPROPRIATION ORDINANCE INCREASING ESTIMATED RECEIPTS
AND APPROPRIATIONS IN THE WATER PRIOR LIEN DEBT SERVICE FUND
IN THE AMOUNT OF $42,000,000.00, SUBJECT TO THE SALE OF THE BONDS
AND RECEIPT OF PROCEEDS, FOR THE PURPOSE OF FUNDING THE
REQUIRED ESCROW TO REFUND EXISTING DEBT AND PAYING COST OF
ISSUANCE RELATED TO THE REFUNDING BONDS, WITH SUCH AMOUNTS
SUBJECT TO REDUCTION TO CONFORM TO FINAL FIGURES REFLECTED
IN BOND CLOSING DOCUMENTS.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH, TEXAS THAT:
SECTION 1.
In addition to those amounts allocated to the various City departments for Fiscal Year 2025-2026
in the Budget of the City Manager, there shall also be increased estimated appropriations in the Water Prior
Lien Debt Service Fund in the amount of $42,000,000.00, subject to the sale of the bonds and receipt of
proceeds, for the purpose of funding the required escrow to refund existing debt and paying cost of issuance
related to the refunding bonds, with such amounts subject to reduction to conform to final figures reflected
in bond closing documents.
SECTION 2.
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.
This ordinance shall be cumulative of Ordinance No. 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of said prior ordinances and appropriations are hereby expressly repealed.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.
APPROVED A TO FORM AND LEGALITY:
Denis C. McElroy
Assistant City Attorney
ADOPTED: August 11.2026
EFFECTIVE: August 11.2026
Jannette S. Goodall
City Secretary
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Ordinance No. 26-28634
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FORT WORTH.
MAYOR AND COUNCIL COMMUNICATION
7.1.11 WATER AND SEWER SYSTEM REVENUE BONDS SERIES 2026B
DATE: 08/11/26 M&C FILE NUMBER: M&C 26-0567
DEPARTMENT: FINANCIAL MANAGEMENT SERVICES
SUBJECT
(ALL) Adopt Forty -Eighth Supplemental Ordinance Authorizing the Issuance and Sale of City
of Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds,
Series 2026B, in an Aggregate Principal Amount Not to Exceed $285,000,00.00; Establishing
Parameters With Respect to the Sale of the Bonds; Delegating to the Designated City Officials
the Authority to Effect the Sale of the Bonds; Enacting Other Provisions Relating to the Subject;
and Declaring an Immediate Effective Date; and Adopt Appropriations Ordinances
RECOMMENDATION
It is recommended that the City Council:
1. Adopt the attached forty-eighth supplemental ordinance (i) authorizing the issuance
of City of Fort Worth, Texas Water and Sewer System Revenue Refunding and
Improvement Bonds, Series 2026B, in an aggregate principal amount not to exceed
$285,000,000.00, for the purpose of extending and improving the System, refunding the
Refunded Obligations, and paying the costs of issuance; (ii) delegating to designated
City officials authority to effect the sale - subject to certain parameters as set forth in
the ordinance - by competitive bid or negotiated sale as determined most
advantageous based on current market conditions; (iii) authorizing execution of all
related documents; (iv) providing for the establishment of rates and collection of
revenues sufficient to pay the principal and interest on said bonds; and (v) enacting
other provisions related thereto;
2. Adopt the attached appropriation ordinance increasing estimated receipts and
appropriations in the Water and Sewer Revenue Refunding and Improvement Bonds
Series 2026B Fund by $243,000,000.00, subject to the sale of bonds and receipt of
proceeds, for the purpose of extending and improving the System, and paying the
costs of issuance, with such amount subject to reduction to conform to final figures
reflected in bond closing documents and with any excess cost of issuance funds
remaining after closing being transferred to the Water and Sewer Debt Service Fund;
and
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3. Adopt the attached appropriation ordinance increasing estimated receipts and
appropriations in the Water Prior Lien Debt Service Fund in the amount of
$42,000,000.00, subject to the sale of the bonds and receipt of proceeds, for the
purpose of funding the required escrow to refund existing debt, and paying cost of
issuance related to the refunding bonds, with such amount subject to reduction to
conform to final figures reflected in bond closing documents.
DISCUSSION
The purpose of this Mayor and Council Communication (M&C) is to adopt ordinances
associated with revenue -based debt financing of infrastructure for the City's Water and
Sewer System.
The forty-eighth supplemental ordinance authorizes issuance and sale of up to
$285,000,000.00 in Water and Sewer system revenue refunding and improvement bonds, in
one or more series, for the purpose of (i) extending and improving the System, (ii) refunding
the Refunded Obligations and (iii) paying the costs of issuance of the Bonds.
To the extent the proposed debt transaction consists of new money, $243,000,000.00 will be
used to fund capital projects in alignment with the Water Department's Capital Improvement
Program. As for refunding, it is the City's practice to achieve positive debt service savings
through refinancing when the opportunity presents itself. Staff and the City's financial
advisors, PFM Financial Advisors LLC, recommend refunding of the Water and Sewer System
Revenue Refunding and Improvement Bonds, Series 2015A and Series 2016. The estimated par
amount to be refunded is $38,005,000.00 The actual savings amount will not be determined
until the time bids are received. In accordance with the City's Financial Management Policy
Statements, the refunding debt shall not be sold unless the sale will result in net present
value savings of at least 3.00% of the par amount being refunded. Currently, the refunding is
projected to provide 3.70% net present value savings, or $1,355,112.85.
In 1991, the City adopted a master ordinance establishing a Water and Sewer System
Revenue Financing Program for the Water Department. Each time the Water Department
issues debt, a supplemental ordinance must be adopted which contains details specific to
the debt being issued. This issuance would be the forty-eighth supplemental ordinance since
the master ordinance was adopted.
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FORT WORTH.
Staff anticipates that these bonds will be sold through a competitive bid sale. However, to
provide maximum flexibility to address any disruption to market conditions, the attached
ordinance authorizes the City Manager or the Chief Financial Officer to conduct either a
competitive or negotiated sale and to approve the terms of the sale so long as those terms
come within the parameters set forth in the Council -adopted ordinance. Key parameters
include: bonds must be rated in one of the four highest generic rating categories (BBB or
higher); the maximum maturity is February 15, 2056; the maximum true interest cost is 6.50%;
and the maximum net effective interest rate, calculated per chapter 1204 of the Government
Code, is 15.00%.
Rating agency calls with Moody's and S&P will be conducted prior to the sale of the bonds.
Ratings are anticipated to be received the week of August 12, 2026. Bids for the sale of the
bonds are tentatively scheduled to be submitted on August 27, 2026. Subsequent to
accepting the best bid and awarding the sale of the bonds, the City will seek approval of the
debt transactions from the Texas Attorney General with an estimated closing date of
September 24, 2026.
The attached appropriation ordinance reflects the maximum appropriation amount for bond
proceeds for each of the identified purposes. The ordinance structure accommodates
variables associated with sale of debt under delegated authority such as the uncertain final
interest rate to be achieved and the possibility of a premium or discount being associated
with the sale of the bonds. To the extent numbers at closing are less than those reflected in
the ordinance, the available appropriation amount will be reduced as needed to reflect final
figures based on the closing documents to ensure appropriations do not exceed actuals.
Similarly, to the extent there are any remaining proceeds after paying cost of issuance
expense, those funds are to be moved to the Water Prior Lien Debt Service Fund.
This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION/CERTIFICATION
The Director of Finance certifies that upon approval of the above recommendations and
adoption of the attached appropriation ordinance, the sale of the Series 2026B Water and
Sewer System Revenue Refunding and Improvement Bonds will occur as required under the
parameters set forth therein and that funds will be available in the W&S Rev Bonds Series
2026B Fund to record the appropriate and necessary transactions. Prior to any expense being
incurred, the Water Department has the responsibility to validate the availability of funds.
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SUBMITTED FOR CITY MANAGER'S OFFICE BY:
ORIGINATING BUSINESS UNIT HEAD:
ADDITIONAL INFORMATION CONTACT:
Reginald Zeno, # 8517
Reginald Zeno, # 8517
Alex Laufer, # 2268
ATTACHMENTS
1. Water and Sewer Revenue Bonds Series 2026B Ordinance [7.1.11.1 - 46 pages]
2. Water and Sewer Revenue Bonds Series 2026B AO [7.1.11.3 - 2 pages]
3. Water and Sewer Revenue Bonds Series 2026B Ref AO [7.1.11.5 - 2 pages]
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