STRATEGIC PRIORITY: Government Performance & Financial Management
AGENDA DATE: October 23, 2024
COUNCIL DISTRICT(S): N/A
DEPARTMENT: City Controller’s Office
EXECUTIVE: Jack Ireland
______________________________________________________________________
SUBJECT
Title
An ordinance authorizing the issuance and sale of 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 - Not to exceed $175,000 - Financing: Dallas Water Utilities Fund
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 for planning, design, and construction of projects on programs on the prioritization list. Financial assistance applications for State Water Implementation Fund for Texas (SWIFT) 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 2024C (the “Series 2024C Bonds”) for Project Loan LM241535 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 third-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 2024 funding commitment issuance, City Council authorization will be required for subsequent bond sales, each year for the next two years, to issue the remaining amount of the five-year water main replacement program commitment with the TWDB.
Following approval of the Ordinance the bonds are scheduled to close, wherein DWU will receive the funds for the authorized projects, in December 2024.
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 to the Texas Water Development Board 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 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 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 Government Performance and Financial Management Committee was briefed by memorandum regarding this matter on August 9, 2024. <https://dallascityhall.com/government/citymanager/Documents/FY23-24%20Memos/August%2014%2c%202024%2c%20Upcoming%20Agenda%20Item%20%e2%80%93%2024-2275%20%e2%80%93%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; by Resolution No. 24-1040.
FISCAL INFORMATION
|
Fund |
FY 2025 |
FY 2026 |
Future Years |
|
Dallas Water Utilities Fund |
$175,000.00 |
$0.00 |
$0.00 |