STRATEGIC PRIORITY: Fiscally Sound
AGENDA DATE: August 27, 2025
COUNCIL DISTRICT(S): N/A
DEPARTMENT: City Controller’s Office
EXECUTIVE: Jack Ireland
______________________________________________________________________
SUBJECT
Title
A resolution authorizing the execution of the Financing Agreement and related documents for the funding commitment from the Texas Water Development Board for Project Loan LM251535; and all other matters related thereto - Financing: This action has no cost consideration to the City (see Fiscal Information)
Body
BACKGROUND
On April 27, 2022, the City Council authorized the City Manager and the Director of Dallas Water Utilities Department (DWU) to submit loan applications to the Texas Water Development Board (TWDB) for low-cost financial assistance via the State Water Implementation Revenue Fund for Texas (SWIRFT) for planning, design, and construction of projects and programs on the prioritization list. Financial assistance applications for the approved prioritization projects were submitted by DWU in May 2022, to include two eligible projects representing $80.8 million in planned capital improvements and one multi-year commitment with TWDB of $170 million to fund DWU’s water main replacement program for five years for a total funding commitment of $250.8 million.
In accordance with the SWIRFT funding commitment, DWU will issue $34.0 million in Waterworks and Sewer System Revenue Bonds, Series 2025C (the “Series 2025C Bonds”) for Project Loan LM251535 that will be purchased by the TWDB. Through the purchase of our bonds, the TWDB will in turn provide the City with interest rates based on the cost of funds, which reflects the program’s AAA credit rating wherein the interest rate is further reduced by a subsidy established by TWDB for each funding cycle. This will result in an average debt service payment reduction over the life of the loans when compared to a public offering.
This item represents the fourth-year issuance of a five-year funding commitment from the TWDB, totaling $170 million. Participation in these programs will benefit DWU and its customers by providing lower overall costs for financing its water and wastewater main replacement programs. Following the 2025 funding commitment issuance, the City Council authorization will be required for the subsequent bond sale in 2026, to issue the remaining amount of the five-year water main replacement program commitment with the TWDB.
This action is required to accept and execute the Financing Agreement for the SWIRFT borrowing, as provided by TWDB. The issuance of bonds is contingent upon the approval of an ordinance, scheduled for City Council consideration in October 2025. Following approval of the ordinance, the bonds are scheduled to close in December 2025.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The City Council was briefed by memorandum regarding this matter on April 15, 2022. <https://dallascityhall.com/government/citymanager/Documents/FY%2021-22%20Memos/Application-for-Texas-Water-Development-Board-State-Water-Implementation-Fund-for-Texas_memo_041522.pdf>
On April 27, 2022, the City Council authorized a loan application for four eligible projects to the Texas Water Development Board for low-cost financial assistance through the State Water Implementation Fund for Texas, in an amount up to $378,200,000, to fund construction projects including Elm Fork Filter Complex Phase 2 in an amount up to $127,400,000; Southwest Pipeline Phase 1 in an amount up to $73,300,000; Water Main Replacement Program for five years in an amount up to $170,000,000; and to fund the design of Lake June Pump Station Replacement in an amount up to $7,500,000, by Resolution No. 22-0663.
The Government Performance and Financial Management Committee was briefed by memorandum regarding this matter on August 22, 2022. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=11144921&GUID=E3372AC1-B49F-46F1-844B-57C665C02C6A>
On August 24, 2022, the City Council authorized the acceptance of a loan from the Texas Water Development Board for low-cost financial assistance through the State Water Implementation Fund for Texas, in an amount up to $250,800,000, to fund construction projects including Southwest Pipeline Phase 1 in an amount up to $73,300,000; Water Main Replacement Program for five years in an amount up to $170,000,000; the design of Lake June Pump Station Replacement in an amount up to $7,500,000; and execution of the Financing Agreements and related documents by Resolution No. 22-1239.
The Government Performance and Financial Management Committee was briefed by memorandum regarding this matter on October 24, 2022. <https://dallascityhall.com/government/Council%20Meeting%20Documents/Upcoming-Agenda-Item-22-2187_GPFM_102422.pdf>
On October 26, 2022, the City Council authorized the issuance and sale of the City of Dallas, Texas Waterworks and Sewer System Revenue Bonds, Series 2022C, in the amount of $114,800,000 to the Texas Water Development Board; awarding the sale of the bonds; approving the execution of agreements in connection with the sale of the bonds; and all other matters related thereto by Ordinance No. 32328.
On August 23, 2023, the City Council authorized the execution of the Financing Agreement and related documents for the funding commitment from the Texas Water Development Board for Project Loan LM231535; and all other matters related thereto by Resolution No. 23-1127.
On October 25, 2023, the City Council authorized the issuance and sale of the City of Dallas, Texas Waterworks and Sewer System Revenue Bonds, Series 2023C, in the amount of $34,000,000 to the Texas Water Development Board; awarding the sale of the bonds; approving the execution of agreements in connection with the sale of the bonds; and all other matters related thereto by Ordinance No. 32581.
The City Council was briefed by memorandum regarding this matter on August 9, 2024. <https://dallascityhall.com/government/citymanager/Documents/FY23-24%20Memos/August%2014,%202024,%20Upcoming%20Agenda%20Item%20%2024-2275%20%20Financing%20Agreement%20for.pdf>
On August 14, 2024, the City Council authorized the execution of the Financing Agreement and related documents for the funding commitment from the Texas Water Development Board for Project Loan LM241535; and all other matters related thereto by Resolution No. 24-1040.
On October 23, 2024, the City Council authorized the issuance and sale of the City of Dallas, Texas Waterworks and Sewer System Revenue Bonds, Series 2024C, in the amount of $34,000,000 to the Texas Water Development Board; awarding the sale of the bonds; approving the execution of agreements in connection with the sale of the bonds; and all other matters related thereto by Ordinance No. 32895.
The Government Performance and Financial Management Committee City Council was briefed by memorandum regarding this matter on August 225, 2025. <https://dallascityhall.com/government/citymanager/Documents/FY24-25%20Memos/August%2027,%202025,%20Upcoming%20Agenda%20Item%20%E2%80%93%2025-2513A.pdf>
FISCAL INFORMATION
This action has no cost consideration to the City. Payment for cost of issuance is not made unless the bonds are issued. City Council approval of the ordinance authorizing the sale of bonds is scheduled for October 22, 2025. The anticipated cost of issuance is $1745,000.00 from the Dallas Water Utilities Fund.
|
Fund |
FY 2026 |
FY 2027 |
Future Years |
|
Dallas Water Utilities Fund |
$1745,000.00 |
$0.00 |
$0.00 |