STRATEGIC PRIORITY: Government Performance & Financial Management
AGENDA DATE: August 14, 2024
COUNCIL DISTRICT(S): N/A
DEPARTMENT: City Controller's Office
EXECUTIVE: Jack Ireland
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SUBJECT
Title
Authorize amendments to Ordinance No. 31668 authorizing the City of Dallas General Obligation Commercial Paper Program and resolving other matters relating thereto in an amount not to exceed $95,500.00 $143,000.00 - Financing: Current General Funds
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BACKGROUND
In 2017 and again in 2020, the City Council approved an ordinance establishing a $350 million General Obligation Commercial Paper Program as interim financing for the City's capital improvements. Contracts are awarded using commercial paper as a funding source. Notes are issued to pay project costs as invoices are received. Notes are typically sold at lower interest rates than longer-term bonds. The notes are periodically refinanced with longer-term bonds.
Commercial paper issuance is supported by lines of credit from highly rated banks. The current program is supported by a $350 million credit agreement from JPMorgan Chase Bank, N.A. ("JPMorgan"). These lines of credit assure investors that the commercial paper notes will be paid in the event that a note cannot be sold to another investor at maturity. The rating agencies rate commercial paper programs based on the rating of the banks providing the credit lines, although the credit rating and outlook of the commercial paper issuer affects the marketability of the notes as well as the rating of the credit bank.
The current commercial paper agreement with JPMorgan expires on November 28, 2025, however, the ordinance and corresponding authorizing documents must be amended to reflect the current 2024 Bond Program election and authorized bond propositions, as required by the Office of the Attorney General. The terms and conditions of the current commercial paper agreement will remain unchang...
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