The URL can be used to link to this page

Home My WebLink About26-28741 - City Council - OrdinanceORDINANCE 26-28741 AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND APPROPRIATIONS IN THE RISK FINANCING FUND IN THE AMOUNT OF $2,057,252.00, TRANSFERRED FROM GENERAL FUND INTEREST EARNINGS, FOR THE PURPOSE OF A CONTRIBUTION TO THE FUND BALANCE OF THE RISK FINANCING FUND; PROVIDING FOR A SEVERABILITY CLAUSE; MAKING THIS ORDINANCE CUMULATIVE OF PRIOR ORDINANCES; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH; AND PROVIDING AN EFFECTIVE DATE. 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 Risk Financing Fund in the amount of $2,057,252.00, transferred from General Fund interest earnings, for the purpose of funding the Jefferson Lawsuit Settlement. 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 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in which instance said conflicting provisions of said prior ordinances and appropriations are hereby expressly repealed.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 AS TO FORM AND LEGALITY: Assistant City Attorney ADOPTED: September 15, 2026 EFFECTIVE: September 15.2026 oa� A . Z'� Jannette S. Goodall City Secretary Ordinance No. 26-28741 Page 1 of 1 FORT WORTH® MAYOR AND COUNCIL COMMUNICATION 7.1.13 INTEREST EARNINGS APPROPRIATION DATE: 09/15/26 M&C FILE NUMBER: M&C 26-0946 DEPARTMENT: FWLAB SUBJECT (ALL) Enact Budget Adjustments to Recognize Unrestricted Interest Income in the General Fund Rather than Debt Service Fund, Approve Transfers to the Group Health Insurance Fund, Risk Financing Fund, and the General Capital Projects Fund in Fiscal Year 2026, Adopt Appropriation Ordinances and Amend the Fiscal Year 2026 Adopted Budget RECOMMENDATION It is recommended that the City Council: 1. Reduce unrestricted and unencumbered interest earnings in the General Debt Service Fund by $22,157,262.00 and increase interest earnings in the General Fund by the same amount, for transfers and one-time projects; 2. Authorize the use of Interest Earnings from Fiscal Year 2026 in the amount of $22,157,262.00 for immediate and potential future appropriations as follows: 3. $16,600,000.00 for Group Health Insurance Fund 4. $2,057,252.00 for Jefferson Lawsuit Settlement (partial) 5. $2,000,000.00 to Community Arts Building Project 6. $1,500,000.00 Foregivable Loan to Evans -Rosedale Affordable Housing Project 7. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the General Fund in the amount of $22,157,262.00 by recognizing and utilizing available unrestricted interest earnings for the purpose of transferring to the Group Health Insurance, Risk Financing and General Capital Project Funds for one-time projects; 8. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Group Health Insurance Fund in the amount of $16,600,000.00, transferred from General Fund interest earnings, for the purpose of a contribution to the fund balance of the Group Health Insurance Fund; 9. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Risk Financing Fund in the amount of $2,057,252.00, transferred from General Fund interest earnings, for the purpose of a contribution to the fund balance of the Risk Financing Fund; 10. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the General Capital Projects Fund in the cumulative amount of 1of5 FORT WORTH® $3,500,000.00 by (i) $2,000,000.00, for the purpose of funding the Community Arts Building, 512 W 4th Street project (City Project No. 107093) and (ii) $1,500,000.00, for the purpose of funding forgivable loans to Evan -Rosedale Affordable Housing project (City Project No. 105570); and 11. Amend the Fiscal Year 2026 adopted operating budget. DISCUSSION The purpose of this Mayor and Council Communication (M&C) is to enact budget adjustments to reallocate resources and appropriate unrestricted interest earnings to provide funding for one-time projects and other capital needs. Allocation of Unrestricted Interest - Department Additional ADDroariations This M&C proposes utilizing $22,157,262.00 in unrestricted interest earnings for a variety of projects and uses as detailed below in accordance with City policy. OTHER FUNDS GrouD Health Insurance Fund: $16.600.000.00 The contribution to the Group Health Insurance Fund will add to the fund's working capital for Fiscal Year (FY) 2026 as part of a comprehensive plan to bring the fund into reserve compliance by FY2028, which also includes changes to pharmacy benefits, additional departmental allocations and additional contributions of interest income during FY2027 and FY2028. Planned contributions are based on Period 9 (June) projections and may change as FY2026 is closed and numbers are finalized. Risk Financing Fund: $2,057.262.00 The proposed $11.25 million settlement for the family of Atatiana Jefferson will be funded by a previously earmarked amount of $2.25 million, $2,057,262.00 from surplus interest income in FY2026, and $6.94 million from surplus interest income during FY2027. The transfer to the Risk Financing Fund fund balance will assist in providing adequate reserves for the fund in anticipation of the settlement payment. General Capital Projects- Community Arts Building City Project No. 107093): $2,000,000.00 The Community Arts Building, located at 512 W. 4th Street requires system upgrades and renovations once the Mayor's Task Force finalizes its work. The current funding available for the project totals $9.0 million, which will primarily be utilized to update building systems like the A/C and elevators. It is recommended that the $2 million from interest income be made available to complete renovations of the space. 2 of 5 FORT WORTH® General Capital Projects- Evan -Rosedale Affordable Housing (City Project No. 105570): $1,500,000.00 On June 10, 2025, the City Council approved an allocation of $2.5 million for the development of multifamily housing in the historic Evans and Rosedale Urban Village as part of the Housing and Urban Development (HUD) Pathways to Removing Obstacles to Housing (PRO Housing) Grant Action Plan (M&C 25-0523). Because projects funded by the PRO Housing grant funds are subject to federal Build America, Buy America Act (BABA) requirements, the project developer, Royal Capital Group, LLC (RCG), has indicated that complying with BABA would increase construction costs and create a funding gap ranging from $2.4 to $6 million. As an alternative, staff is recommending withdrawing the $2.5 million PRO Housing grant allocation for the Evans and Rosedale Urban Village and instead providing RCG with $1.5 million in City interest earnings in the form of a forgivable loan. RCG has indicated that it believes it will be able to identify project savings to cover the remaining $1 million of project costs. Once another eligible housing project or initiative is identified for the PRO Housing grant, approval to amend the PRO Housing Grant Action Plan will be requested from the City Council and HUD. Description Amount Transfer to Group Health Insurance Fund $16,600,000.00 Transfer to Risk Financing Fund - Jefferson Lawsuit Settlement (partial amount) 2,057,262.00 Transfer to Community Arts Building Project (former Center for Transforming Lives Building) 2,000,000.00 Forgivable Loan to Evans -Rosedale Affordable Housing Project 1,500,000.00 Total to be Allocated $22,157,262.00 Recoanition of Interest Earninas The City generates investment income by prudently investing idle cash from operations, "pay as you go" capital funds, and bond funds in compliance with state law and City policy. The existing practice, in compliance with the current Revenue Policy, is to allocate investment income from governmental funds, derived from resources other than bond or debt proceeds, either in the City's General Debt Service Fund or in the General Fund (to one-time capital projects or contributing to unassigned fund balance) as recommended by the City Manager. 3 of 5 FORT WORTH® The latest FY 2026 analysis has identified $22,157,252.00 of unrestricted and unpledged surplus interest and investment income. Staff recommends for City Council to authorize the recognition of this unpledged and unencumbered investment income in the General Fund rather than the Debt Service Fund in FY 2026, so that such funds can be used to fund one- time initiatives and/or capital projects as detailed herein. Recommendation 2 of this M&C assigns this amount for such one-time projects. Going forward, staff will monitor collection of investment income from general government operations to identify any surplus that can be used for other lawful purposes. Given the variable nature of investment income, any surplus will generally be prioritized to fund one- time initiatives, capital projects, or to accumulate cash which can be used to pay off debt prior to maturity to achieve debt service savings. This action does not encompass income derived from the investment of debt proceeds, which continues to be allocated to the appropriate Debt Service Fund in accordance with legal and policy requirements. Nor does it include investment earnings attributable to purpose -restricted funds such as Water & Sewer, Stormwater, Crime Control Prevention District, etc. or to funds that are subject to other legal or policy constraints. Those funds will continue to receive their appropriate allocation of investment income. Current Fiscal Year Interest Earninas Budaet Purpose FY2026 Adopted Budget Budget Increase Employees $1,175,000.00 $0.00 Supporting Debt Health Fund $0.00 $16,600,000.00 Risk Fund $0.00 $2,057,262.00 Community Arts $0.00 $2,000,000.00 Building Evans -Rosedale $0.00 $1,500,000.00 Affordable Housing Total $1,175,000.00 $22,157,262.00 FY2026 Revised Budget $1,175,000.00 $16,600,000.00 $2,057,262.00 $2,000,000.00 $1,500,000.00 $ 23,332,252.00 Approval of this M&C will amend the Fiscal Year 2026 Adopted Budget, as approved with Ordinance 27979-09-2025. 4 of 5 FORT WORTH„ This MSC does not request approval of a contract with a business entity, therefore, a Form 1295 is not required. FISCAL INFORMATION/CERTIFICATION The Director of Finance certifies that funds are currently available in the General Debt Service Fund and upon approval of the recommendations and adoption of the attached appropriation ordinances, funds will be available in the Fiscal Year 2026 operating and capital budgets, as appropriated, in the Group Health Insurance and Risk Financing Funds and in the General Capital Projects Fund for the 512 W 4th St Facility Renovation and Evans - Rosedale Affordable Housing projects. Prior to an expenditure being incurred, the participating departments have the responsibility to validate the availability of funds. SUBMITTED FOR CITY MANAGER'S OFFICE BY: Christianne Simmons, # 6222 ORIGINATING BUSINESS UNIT HEAD: ADDITIONAL INFORMATION CONTACT: ATTACHMENTS 1. ORD.APP_031NTEREST EARNINGS APPROPRIATION_A026(r3) [7.1.13.1 - 2 pages] 2. ORD.APP_031NTEREST EARNINGS APPROPRIATION _A026(r4) [7.1.13.2 - 2 pages] 3. ORD.APP_031NTEREST EARNINGS APPROPRIATION _A026(r5) [7.1.13.3 - 2 pages] 4. ORD.APP_031NTEREST EARNINGS APPROPRIATION_A026(r6) [7.1.13.4 - 2 pages] 5of5