STRATEGIC PRIORITY: Government Performance and Financial Management
AGENDA DATE: February 24, 2021
COUNCIL DISTRICT(S): N/A
DEPARTMENT: City Controller's Office
EXECUTIVE: Elizabeth Reich
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SUBJECT
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A resolution authorizing the (1) execution of the Fourth Amendment to Revolving Credit Agreement with JPMorgan Chase Bank, National Association in support of the City of Dallas, Texas Waterworks and Sewer System Commercial Paper Notes, Series E; and (2) the execution of agreements pertaining thereto and resolving other matters related thereto for a four-month extension from March 31, 2021 to July 30, 2021 - Not to exceed $820,000 - Financing: Dallas Water Utilities Fund
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BACKGROUND
Commercial paper provides interim financing for Dallas Water Utilities (DWU) capital projects. The use of commercial paper permits more cost-efficient use of capital as short-term debt is issued to closely match the amount and timing of the award of capital project contracts. Commercial paper notes are normally sold at rates of interest that are lower than rates available at the same time on long-term debt. Outstanding commercial paper is periodically reduced by refinancing it with long-term debt.
In 1987, City Council authorized an ordinance establishing a commercial paper program as interim financing for Dallas Water Utilities capital improvements for a period of 10 years, ending in September 1997, with a maximum issuance amount of $100 million. Since 1987, DWU's initial commercial paper program has been reauthorized several times and increased in total size to $300 million. The current $300 million program was authorized in June 2014 to be issued as Series E notes.
Commercial paper issuance is supported by lines of credit from highly rated banks. These lines of credit assure investors that the notes will be paid in the unlikely event that a note cannot be sold to another investor at maturity. This pro...
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