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 Fifth Amendment to Revolving Credit Agreement with Bank of America, N.A.; (2) execution of the Fourth Amendment to Fee Letter Agreement with Bank of America, N.A.; all in support of the City of Dallas, Texas Waterworks and Sewer System Commercial Paper Notes, Series D-2; and (3) execution of agreements pertaining thereto and resolving other matters related thereto, the for a three-month extension from April 15, 2021 through July 30, 2021 - Not to exceed $185,000 - Financing: Dallas Water Utilities Fund
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BACKGROUND
In 1987, City Council authorized an ordinance establishing a commercial paper program as interim financing for Dallas Water Utilities (DWU) 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 consisting of Series D and E with each series authorized at $300 million.
Commercial paper provides interim financing for 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. 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 invest...
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