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HomeMy WebLinkAboutOrdinance 21472-09-2014 Ordinance No. 21472-09-2014 AN ORDINANCE INCREASING THE ESTIMATED RECEIPTS AND APPROPRIATIONS IN THE GENERAL DEBT SERVICE FUND IN THE AMOUNT OF $9,736,000.00, FROM AVAILABLE FUNDS AND DECREASING THE UNASSIGNED FUND BALANCE BY THE SAME AMOUNT, FOR THE CASH DEFEASANCE OF CERTAIN TAX SUPPORTED DEBT; 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 in addition to those amounts allocated to the various City departments for Fiscal Year 2014-2015 in the Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the General Debt Service Fund in the amount of$9,736,000.00, and decreasing the unassigned fund balance by the same amount, for the cash defeasance of certain tax supported debt. 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 No. 21457-09-2014 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in which instance said conflicting provisions of said prior ordinances and appropriations are hereby expressly repealed.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. APPROV D AS TO FORM AND LEGALITY: CITY SECRETARY De C.voy,Assistant City Attorney M Y. kayseu ADOPTED AND EFFECTIVE: September 23,2014 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 912312014 - Ordinance No. 21472-09-2014 DATE: Tuesday, September 23, 2014 REFERENCE NO.: G-18318 LOG NAME: 1314 CO DEFEASANCE SUBJECT: Adopt Resolution Authorizing Cash Defeasance of City of Fort Worth, Texas, General Purpose Refunding Bonds, Series 2004, in the Principal Amount of$9,600,000.00 Plus Accrued Interest and Transaction Costs, Using Unassigned Fund Balance in the General Debt Service Fund and Adopt Appropriation Ordinance (ALL COUNCIL DISTRICTS) RECOMMENDATION: It is recommended that the City Council: 1. Adopt the attached resolution authorizing cash defeasance of City of Fort Worth, Texas, General Purpose Refunding Bonds, Series 2004, in the principal amount of$9,600,000,00.00 plus accrued interest and transaction costs; and 2. Adopt the attached supplemental appropriation ordinance increasing appropriations in the General Debt Service Fund in the amount of$9,736,000.00 and decreasing the unassigned fund balance by the same amount. DISCUSSION: Each year, the Financial Management Services Department, in conjunction with the City's financial advisors, First Southwest Company and Estrada Hinojosa & Company evaluates the General Debt Service Fund's financial position along with the City's debt portfolio. The current debt portfolio includes Series 2004 General Purpose Refunding Bonds. These bonds were issued for an initial principal amount of$46,230,000.00 bearing interest at rate between three and five percent with a final maturity in 2021. Under the current structure, the City is making annual payments each March 1 st of a portion of principal along with interest at a rate of five percent on the outstanding principal balance. This debt is callable on or after September 1, 2014. Staff proposes redeeming the debt on November 5, 2014. At that time, the City can repay the full amount of the remaining outstanding principal in the amount of$9,600,000.00 plus accrued interest in the amount of$86,000.00 and transaction costs estimated not to exceed the amount of$50,000.00 and achieve savings by avoiding future interest payments. As a result of improved economic conditions within the fund, the fund balance is available to defease callable debt. Staff, therefore, recommends defeasing this debt utilizing cash balances in order to achieve estimated gross savings in the amount of$1,300,000.00. FISCAL INFORMATION / CERTIFICATION: Lognarne: 1314 CO DEFEASANCE Page 1 of 2 The Financial Management Services Director certifies that upon approval of the above recommendations and the adoption of the attached resolution and supplemental ordinance, funds will be available in the Fiscal Year 2014-2015 operating budget, as appropriated, of the General Debt Service Fund. FUND CENTERS: TO Fun"Mccount/Centers FROM Fund/Account/Centers GD06 551010 0132000 $9,600.000.00 GD06 551010 0132000 $9,600.000.00 CERTIFICATIONS: Submitted for City Manager's Office by: Susan Alanis (8180) Originating Department Head: Aaron Bovos (8517) Additional Information Contact: Stephen Vogl (6630) Logname: 1314 CO DEFEASANCE Page 2 of 2