HomeMy WebLinkAboutOrdinance 13125.~
Ordinance No 3 ~~S
AN ORDINANCE ESTABLISHING A PASSENGER RAIL SERVICE
ASSISTANCE PROGRAM, PROVIDING FOR A SEVERABILITY
CLAUSE, MAKING THIS ORDINANCE CUMULATIVE OF PRIOR
ORDINANCES AND REPEALING ALL PRIOR ORDINANCES IN
CONFLICT HEREWITH, AND PROVIDING AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH,
TEXAS
SECTION I
Passenger Rail Service Assistance Program
a) "Eligible corporation" means a corporation created under former Subchapter
III, Chapter 14, Title 45, United States Code (now 49 U S C Section 24101 et
seq and 24301 et seq )
b) Under the authority of Section 52-a, Article III, Texas Constitution, and
Section 380 001 of the Texas Local Government Code, an economic
development program is hereby established so that the City may enter into
loan guarantee agreements with the Texas Department of Transportation
("TxDOT") to guarantee secured loans that TxDOT has made to eligible
corporations that provide passenger rail service in the City
c) The City Manager, on behalf of the City, but only with approval of the City
Council, may enter into loan guarantee agreements with TxDOT for the
purpose of guaranteeing the repayment of secured loans, including accrued
interest, that TxDOT has made to eligible corporations that provide rail
passenger service in the City
d) The City Manager may only expend funds specifically appropriated by the
City Council for the purposes of this program No such expenditures shall be
made from ad valorem tax funds
e) Unless further extended by the City Council, this program shall terminate and
cease to exist after July 31, 2001
SECTION II
Severabilitv
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 III
Provisions Cumulative
This ordinance shall be cumulative of Ordinance No 12629 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said prior ordinances and appropriations are hereby expressly repealed.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 IV
Effective Date
This ordinance shall take effect and be in full force and effect from and after the
date of its passage, and it is so ordained
ROVED AS FO M D LEGALITY
City Attorney
Date
~- ~y -~ 7
Effective
2
City of Fort Worth 7"exas
Mayor and Council Communication
08/12/97 ~ G-11966 ~ 12AMTRAK ~ 1 of 3
SUBJECT ADOPTION OF ORDINANCE ESTABLISHING PASSENGER RAIL SERVICE ASSISTANCE
PROGRAM, ADOPTION OF RESOLUTION AUTHORIZING CITY MANAGER TO
EXECUTE LOAN GUARANTEE AGREEMENT WITH TEXAS DEPARTMENT OF
TRANSPORTATION
RECOMMENDATION
It is recommended that the City Council
Adopt the attached ordinance establishing a Passenger Rail Service Assistance Program,
and
2 Adopt the attached resolution authorizing the City Manager to enter into a Loan Guarantee
Agreement with the Texas Department of Transportation
DISCUSSION
In January, 1997, Amtrak notified Governor Bush that on May 10, 1997, it would discontinue
operation of the Texas Eagle, which provides service from Chicago to San Antonio via Fort
Worth, if additional financial resources were not provided to Amtrak
The cities along the Texas Eagle line including Fort Worth lobbied the Texas Legislature to
consider providing a loan to Amtrak to keep the line operating through the next federal budget
year or through September 30, 1997 On May 16, 1997, the Governor signed Senate Bill 1706
which provided an appropriation and authorized the Texas Department of Transportation
("TxDOT") to make a 55 6 million loan to Amtrak so that Amtrak could continue operating the
Texas Eagle through September 30, 1997
As a condition to passage of the legislation, the Legislature required that the cities served by the
Texas Eagle agree to guarantee the repayment of one-half of any unpaid balance on the loan,
including interest, in the event of a default by Amtrak
S B 1706 specifically provides
"the department [Texas Department of Transportation], on behalf of the commission
and with the approval of the comptroller, shall secure an agreement or agreements
with the municipalities served by an eligible corporation [Amtrak] that receives
assistance under this subchapter to further guarantee the repayment of half of any
unpaid balance on a loan, including interest, made under this subchapter "
,• ,, ;
S B 1706 also requires that the loan be fully collateralized The loan agreement between TxDOT
and Amtrak grants the State of Texas a security interest in forty-seven passenger rail cars having
a total estimated value of 56,345,000 as collateral
Printed on Re~yded Paper
City of Fort Wortlti Texas
Mayor and Council Communication
DATE REFERENCE NUI~IDER LOG NAME PAGE
08/12/97 G-11966 12AMTRAK 2 of 3
SUBJECT ADOPTION OF ORDINANCE ESTABLISHING PASSENGER RAIL SERVICE ASSISTANCE
PROGRAM, ADOPTION OF RESOLUTION AUTHORIZING CITY MANAGER TO
EXECUTE LOAN GUARANTEE AGREEMENT WITH TEXAS DEPARTMENT OF
TRANSPORTATION
TxDOT has requested that the City of Fort Worth enter into a Loan Guarantee Agreement (the
"Agreement") with TxDOT to guarantee the repayment of 13 9262 % of one-half of any unpaid
balance of the Amtrak loan in the event of a default on July 31, 1999 This percentage is based
on the ratio between Fort Worth's population and the total population of all cities on the Texas
Eagle line A default by Amtrak is considered to be highly unlikely because it is a corporation that
is subsidized by the Federal Government through the budget appropriation process
Fort Worth's liability under the Loan Guarantee Agreement would be limited to its percentage of
one-half of any deficiency that remained after TxDOT sold the collateral and applied the proceeds
to the unpaid balance on the loan Worst case, if Amtrak defaulted and sale of the collateral
brought no proceeds, Fort Worth's liability would be $389,933 60
Because the loan is fully collateralized and it is impossible to determine the exact amount, if any,
of Fort Worth's liability, it is recommended that the City Council appropriate no funds at this
time A clause has been included in the Agreement which states that because of statutory,
constitutional and City Charter provisions, the City of Fort Worth's obligations under the
Agreement are subject to and conditioned upon the City Council appropriating sufficient funds
to make any payment that is called for under the Agreement In the unlikely event that TxDOT
asks the City to make a payment under the Agreement, City staff will ask the Council to
appropriate the necessary funds from a source other than ad valorem taxes
The City Attorney is of the opinion that Section 380 001 of the Texas Local Government Code
grants the City authority to enter the Agreement as part of an "economic development program"
if funds other than ad valorem taxes are used The attached ordinance creates such an economic
development program
Printed on Recyded Paper
City of Fort Worth, Texas
Mayor and Council Communication
DATE
08/12/97 REFERENCE NUMBER
G-11966 LOG NAME
12AMTRAK PAGE
3 of 3
SUBJECT ADOPTION OF ORDINANCE ESTABLISHING PASSENGER RAIL SERVICE ASSISTANCE
PROGRAM, ADOPTION OF RESOLUTION AUTHORIZING CITY MANAGER TO
EXECUTE LOAN GUARANTEE AGREEMENT WITH TEXAS DEPARTMENT OF
TRANSPORTATION
FISCAL INFORMATION/CERTIFICATION
The Director of Fiscal Services certifies that no funds have been appropriated to make payments
under the attached Agreement The City's liability under the Agreement will be subject to and
conditioned upon the City Council taking future action to appropriate funds, other than ad
valorem taxes, for any payments that the City is asked to make
CB f
Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY
Office by: (to)
Charles Boswell 8511 APPROVED
Originating Department Head: CITY CV WlYCI~
Joe Paniagua G168 (from) ~~~' ~~ ~~7
For Additional Information ~,~,~ G~~LU~~J
Contact: Cit j $s~e1~ Of the
of Fort QPotth, Texas
Cit
Joe Paniagua 6168 y
Printed on Recyded Paper Adopted Ordinance N0. ~-S Adopted Resolution ~Vo, ~ 3v2~