HomeMy WebLinkAboutOrdinance 19113-04-2010ORDINANCE NO 19113-04-2010
AN ORDINANCE approving JPMorgan Chase Bank, N.A. to act as liquidity
provider in support of the City of Fort Worth, Texas Water and Sewer System
Commercial Paper Notes, Senes A, approving J.P Morgan Securities Inc. to act
as commercial paper dealer with respect to the City of Fort Worth, Texas Water
and Sewer System Commercial Paper Notes, Serves A, approving the execution of
a Credit Agreement with the liquidity provider and a Dealer Agreement with the
commercial paper dealer and resolving other matters incident and related to the
execution and delivery of the Credit Agreement, and providing an effective date.
THE STATE OF TEXAS
COUNTIES OF TARRANT DENTON AND WISE
CITY OF FORT WORTH
WHEREAS the City of Fort Worth, Texas (the "City" or the 'Issuer") is a home-rule
municipality acting as such under the Constitution and laws of the State of Texas, has a
population in excess of 50 000, and has outstanding long-term indebtedness that is rated by a
nationally recognized rating agency for municipal secunties m one of the four highest rating
categories for long-term obligations; and
WHEREAS, on March 30, 2004 the City Council adopted an ordinance (the
'Ordinance") which authorized the issuance of from time to time its short term obligations in the
form of commercial paper notes pursuant to the provisions of Chapter 1371 Texas Government
Code (referred to herein as the Act") in an aggregate principal amount not to exceed at any one
time outstanding $100 000,000, to provide interim financing for additions, improvements and
extensions to the City's combined water and sewer system (the 'System'); and
WHEREAS, on March 27 2007 the City Council adopted an amendment to the
Ordinance (the Ordinance, as amended, is referred to herein as the "Commercial Paper
Ordinance") which authorized the issuance of from time to time its short term obligations in the
form of commercial paper notes pursuant to the provisions of the Act m an aggregate pnncipal
amount not to exceed at any one time outstanding $150,000,000, to provide interim financing for
additions, improvements and extensions to the System, and
WHEREAS, unless the context of the use indicates otherwise, all defined terms used in
this Ordinance shall have the meaning given the terms in the Commercial Paper Ordinance; and
WHEREAS, in the Commercial Paper Ordinance, the City covenanted that at all times up
to and including the Maximum Maturity Date, unless the Commercial Paper Notes were no
longer Outstanding, it would maintain credit or liquidity facilities with banks in amounts such
that, assuming that all then Outstanding Commercial Paper Notes were to become due and
payable immediately the amount available for borrowing under such facilities would be
sufficient at that time to pay pnncipal and interest of all Commercial Paper Notes, and
WHEREAS, the City has sought proposals from banks to provide a liquidity facility in
support of the Commercial Paper Notes, and
WHEREAS, upon review of the bids submitted, City staff recommends that JPMorgan
Chase Bank, N.A., be selected to provide liquidity support m favor of the Commercial Paper
Notes, in accordance with the terms of the Credit Agreement attached to and made a part of this
Ordinance, such terms being the most advantageous to the City and
WHEREAS, the City Council hereby finds and determines that the selection of JPMorgan
Chase Bank, N.A., to act as the Bank under the terms of the Commercial Paper Ordinance,
subject to the terms, conditions and limitations set forth in the Commercial Paper Ordinance,
shall be approved and authorized at this time; and
WHEREAS, the City Council hereby finds and determines that the selection of J.P
Morgan Securities Inc. to act as the Dealer under the terms of the Commercial Paper Ordinance,
subject to the terms, conditions and limitations set forth in the Commercial Paper Ordinance,
shall be approved and authorized at this time;
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF FORT WORTH, TEXAS
Section 1 The selection of JPMorgan Chase Bank, N.A., to act as the Bank under the
terms of the Commercial Paper Ordinance is hereby approved. The Credit Agreement,
substantially in the form attached hereto as Exhibit A, is hereby approved, and shall be entered
into with the Bank. The form of the Bank Note substantially in the form contained in the Credit
Agreement is approved, with the interest rate payable thereon to be determined as set forth
therein and in the Credit Agreement. Any Authorized Representative is hereby authorized to
execute and deliver the Credit Agreement and the Bank Note, and the City Secretary is
authorized to attest and to place the City seal thereon. Upon delivery of the Credit Agreement,
the issuance of the Commercial Paper Notes shall be governed by the terms thereof.
Section 2. The selection of J.P Morgan Securities Inc., to act as the Dealer under the
terms of the Commercial Paper Ordinance is hereby approved. The Dealer Agreement,
substantially m the form attached hereto as Exhibit B, is hereby approved, and shall be entered
into with the Bank. Any Authorized Representative is hereby authorized to execute and deliver
the Dealer Agreement, and the City Secretary is authorized to attest and to place the City seal
thereon.
Section 3 The City Manager is directed, in accordance with the provisions of Section
4 17 of the Commercial Paper Ordinance, to provide notice to the Rating Agencies of the
selection of JPMorgan Chase Bank, N.A. to replace Bank of America, N.A. as the Bank under
the terms of the Commercial Paper Ordinance, and to take any other actions necessary in
connection with the selection JPMorgan Chase Bank, N.A., as the Bank, including, without
limitation, to provide notice to Bank of America, N.A. that it will be replaced by JPMorgan
Chase Bank, N.A. In addition, the City Manager is directed to take any actions necessary in
connection with the selection of J.P Morgan Securities Inc. as the Dealer including, without
limitation, preparing a Commercial Paper Note Offering Memorandum m connection with the
issuance and sale of the Commercial Paper Notes.
Section 4 The City Manager or the designee thereof shall submit this Ordinance, the
Credit Agreement and the Dealer Agreement, and a transcript of proceedings related thereto, to
the Attorney General of the State of Texas for approval, as required by the Act. The City Council
hereby authorizes the payment of the fee of the Office of the Attorney General of the State of
Texas for the examination of the proceedings relating to the execution of the Credit Agreement,
in the amount determined in accordance with the provisions of Section 1202.004 Texas
Government Code.
Section 5 Upon the execution and delivery of the Credit Agreement and the Dealer
Agreement, references in the Commercial Paper Ordinance and the Issuing and Paying Agent
Agreement to the Bank shall be deemed to mean JPMorgan Chase Bank, N.A., and references rin
the Commercial Paper Ordinance and the Issuing and Paying Agent Agreement to the Dealer
shall be deemed to mean J.P Morgan Securities Inc. Specifically but not by way of limitation,
the address of JPMorgan Chase Bank, N.A. and J.P Morgan Securities Inc. to which notices are
to be sent as provided in the Credit Agreement and the Dealer Agreement, respectively shall
apply in all instances under the Commercial Paper Ordinance and the Issuing and Paying Agent
Agreement.
Section 6. This Ordinance shall be effective immediately from and after its passage in
accordance with the provisions of Section 1201 028, Texas Government Code.
Section 7 It is hereby officially found and determined that the meeting at which this
Ordinance was passed 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.
City Secretary
AS TO FORM AND LEGALITY
City Attorney City o~
Worth, Texas
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PASSED AND APPROVED the 13th day of April, 2010
THE STATE OF TEXAS
COUNTIES OF TARRANT DENTON AND WISE
CITY OF FORT WORTH
I, Marty Hendrix, City Secretary of the City of Fort Worth, m the State of Texas, 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 of Fort Worth, Texas held on April
13 2010, and of the ordinance authorizing the execution of a Revolving Credit Agreement with
JPMorgan Chase Bank, N.A. and a Dealer Agreement with J P Morgan. Securities Inc., 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 said City
of Fort Worth, this 13th day of April, 2010
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City Secret of the
City of Fort Worth, Texas
City of Fort Worth, Texas
Mayor and Council Communication
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COUNCIL ACTION:. Approved on 4/13/2010 -Ord. No. 19,113-04-2010.. & 19114-04-201:0
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DATE. Tuesday April 13 2010
LOG NAME 1310WATERCP
REFERENCE NO C-24182
SUBJECT
Adopt an Ordinance Approving JP Morgan Chase as Liquidity Provider in Support of the City's Water and
Sewer System Commercial Paper Notes, Adopt a Supplemental Appropriation Ordinance Increasing
Appropriations by $488 130 58 Approve the Execution of an Agreement with the Liquidity Provider and
Resolve Other Matters Incident and Related to the Issuance Sale Security and Delivery of Commercial
Paper Notes
RECOMMENDATION
It is recommended that the City Council
1 Adopt the attached ordinance approving JP Morgan Chase as liquidity provider in support of the City's
Water and Sewer System Commercial Paper Notes,
2 Adopt the attached supplemental appropriation ordinance increasing appropriations in the Commercial
Paper Debt Service Fund by $488 130 58 from cash available for appropriation
3 Approve the execution of an Agreement with the liquidity provider and
4 Resolve other matters incident and related to the issuance sale security and delivery of Commercial
Paper Notes
DISCUSSION
The Commercial Paper program allows the City to deliver capital projects in one of two ways The City can
issue Commercial Paper Notes for interim financing or use the Commercial Paper authority to initiate the
project and use cash from the City portfolio to fund projects until such time as the City issues debt to
replenish the portfolio This is the same practice where commercial paper has been used to support
previous Water and Sewer capital projects, as well as the 1998 and 2004 capital projects bond programs
The Agreement with the current liquidity provider for this program Bank of America expires on April 20
2010 Because of the current market, rates have increased significantly over what the City is currently
paying After comparing quoted rates, the City's financial advisors and the City staff recommend retaining
JP Morgan Chase to provide the liquidity facility and act as the Issuing/Paying Agent, if required The fee
of 70 basis points equates to an annual cost of approximately $1 150 000 00 which is an increase of
$488 130 88 over existing fees for the remainder of Fiscal Year 2010
FISCAL INFORMATION /CERTIFICATION
The Financial Management Services Director certifies that upon approval of the above recommendations
Logname 1310WATERCP Page 1 of 2
and the adoption of the attached ordinance and attached supplemental appropriation ordinance funds will
be available in the current debt service budget, as appropriated of the Commercial Paper Debt Service
Fund
FUND CENTERS
TO Fund/Account/Centers
FROM Fund/Account/Centers
PE52 553010 0132000 $488,130.58 PE52 553010 '0132000
CERTIFICATIONS
Submitted for City Manager's Office bv. Karen Montgomery (6222)
Originating Department Head.
Additional Information Contact:
Lena Ellis (8517)
James Mauldin (2438)
$488,130.58
Logname 1310WATERCP Page 2 of 2