HomeMy WebLinkAboutOrdinance 21559-12-2014 Ordinance No. 21559-12-2014
AN ORDINANCE INCREASING THE ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE 2017 WATER & SEWER REVENUE BONDS CAPITAL
PROJECTS FUND IN THE AMOUNT OF $100,000,000.00, FROM AVAILABLE
FUNDS, FOR THE PURPOSE OF INTERIM FINANCING OF ELIGIBLE PROJECTS
FOR THE CITY'S WATER AND SEWER SYSTEM; 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 2017
Water & Sewer Revenue Bonds Capital Projects Fund in the amount of$100,000,000.00, from available
funds,for the purpose of interim financing of eligible projects for the City's Water and Sewer System.
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of said prior ordinances and appropriations are hereby expressly repealed.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.
APPROVED AS TO FORM AND LEGALITY: CITY SECRETARY
Denis V.McElrV ssistant City Attorney M ys
ADOPTED AND EFFECTIVE:December 9, 2014
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 12/9/2014 -Ordinance No. 21559-12 2014
DATE: Tuesday, December 09, 2014 REFERENCE NO.: **G-18375
LOG NAME: 60WATER AND SEWERTRANSFER2017
SUBJECT:
Authorize Transfer of Appropriations in the Amount of$50,000,000.00 from the Water Capital Projects
Fund and $50,000,000.00 from the Sewer Capital Projects Fund to the 2017 Water& Sewer Revenue
Bonds Capital Projects Fund to Provide Interim Financing for Projects in the 2017 Water& Sewer Revenue
Bonds Capital Projects Fund and Adopt Appropriation Ordinance (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the transfer of appropriations in the amount of$50,000,000.00 from the Water Capital
Projects Fund and $50,000,000.00 from the Sewer Capital Projects Fund to the 2017 Water& Sewer
Revenue Bonds Capital Projects Fund for the purpose of providing interim financing of eligible projects for
the City's Water and Sewer System; and
2. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
2017 Water& Sewer Revenue Bonds Capital Projects Fund in the amount of$100,000,000.00.
DISCUSSION:
In 2013 the City Council took actions (M&C's C-26169 and G-17791) to authorize a Direct Purchase Note
(DPN) program for the Water and Sewer System to provide a short-term financing mechanism for the
department's ongoing capital projects that begin prior to periodic issuance of Water and Sewer System
revenue bonds. Under the DPN Program a selected liquidity provider, Wells Fargo, has agreed in advance
that it will purchase up to $100,000,000.00 in short-term notes if the Water and Sewer System issues
them. This identified, contractually secured liquidity source serves as an interim funding mechanism that
the Water Department can use as the basis for letting contracts and initiating projects prior to the issuance
of Water and Sewer System debt that provides long-term financing.
Payments on contracts that come due prior to the debt issuance are paid from either(i) proceeds of sale
of the short-term notes to the liquidity provider or(ii) cash from the Water and Sewer System's portfolio or
the City portfolio, with the payment source being reimbursed when the Water and Sewer System revenue
bonds are issued and sold. The DPN program is the successor to a commercial paper program that the
Water and Sewer System used for many years as an interim financing tool to deliver capital projects.
Since the DPN program was established, the Internal Revenue Service (IRS) has been more aggressive
in auditing issuers of tax-exempt obligations. One area of emphasis by the IRS is its review of information
retained by an issuer to establish that internal funds expended by the issuer for projects that are intended
to be financed with the proceeds of tax-exempt obligations are properly accounted for. To facilitate on-
going compliance with this requirement, the Financial Management Services Department has
recommended that each issuance of tax-exempt obligations be tracked through the creation of its own
unique fund, so that the City can properly track all receipts and expenditures of projects that are intended
Logname: 60WATER AND SEWERTRANSFER2017 Page 1 of 2
to be funded with the proceeds of tax-exempt obligations.
The 2017 Water& Sewer Revenue Bond Capital Projects Fund is a newly created fund that will be used
for all projects related to the next Water and Sewer System revenue bond issuance, which is anticipated
to occur in Fiscal Year 2017. Exact timing of the issuance will be dependent upon the funding and cash
flow needs identified in the Water and Sewer capital improvement program. The long-term strategy of the
Water and Sewer capital plan continues to call for infrastructure investments to continue to be paid for
using a combination of both debt financing and pay-as-you-go funding.
This Mayor and Council Communication transfers the DPN authority to this newly created fund for the
purpose of tracking expenditures made using this authority.
A separate M&C is scheduled for consideration of a resolution that would express the City's official intent
to reimburse itself out of the proceeds of the 2017 revenue bonds for actual expenses incurred prior to
issuance of that debt.
FISCAL INFORMATION /CERTIFICATION:
The Financial Management Services Director certifies that these appropriations will be available for
eligible projects within the Water and Sewer System's five year capital improvement program.
FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Account/Centers
1) P266 485114 0601159990100 $100,000,000.00 1) P265 485114 0601159990100 $50,000,000.00
2) P266 541200 0601159990100 $100,000,000.00 1) P275 485114 0701139990100 $50,000,000.00
CERTIFICATIONS:
Submitted for City Manager's Office by: Fernando Costa (6122)
Originating Department Head: Andy Cronberg (5020)
Additional Information Contact: Jan Hale (8438)
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