Page 368 - FortWorthFY22AdoptedBudget

that are subordinate to the Parity Obligations. Such subordinate lien obligations, which the
City has issued and may continue to issue, are also considered Outstanding Obligations under
the Master Ordinance. Under Section 11(b) of the Master Ordinance, provision must first be
made for funds from Pledged Revenues to be deposited to the debt service, reserve, and other
funds and accounts for ALL Outstanding Obligations as required by the Master Ordinance and
applicable Supplemental Ordinances and bond covenants. If System funds remain available
after these actions have occurred and provisions have been made for all Operating Expenses
and debt-related payments, remaining System funds constitute Excess Pledged Revenues that
can be used for other lawful purposes, including payments under this policy.

By adoption of this policy, the Mayor and City Council delegate to the Financial Management
Services Department responsibility for determining and certifying the availability of Excess
Pledged Revenues. The certification shall be provided to the Water Department, and a copy
shall be maintained in the records of the Financial Management Services Department.

An initial determination of Excess Pledged Revenues shall be made in connection with the
annual budget process to determine the extent to which revenues exist for budgeting purposes
and for making payments under this policy. If it is determined that Excess Pledged Revenues
are projected to exist but are not sufficient to make all three of the proposed payments in full,
the amount of Excess Pledged Revenues that is certified to be available shall be allocated
among the payments on a pro rata basis.

To ensure payments under this policy consist only of actual Excess Pledged Revenues, after
the close of each fiscal year, in connection with preparation of the annual audit, staff shall
conduct a “true up” process, recalculating Excess Pledged Revenues using actual, rather than
budgeted, figures for Gross Revenues, Operating Expenses, and debt-related payments. If it is
determined that actual Excess Pledged Revenues for the preceding fiscal year were not
sufficient for the full amount of the payments that were made under this policy, the General
Fund shall make a one-time payment to the Water and Sewer Fund in the amount of any
shortfall so that the Water and Sewer Fund’s final audited figures for the year, as reported in
the Comprehensive Annual Financial Report, reflect payments made solely from Excess
Pledged Revenues.

In this context, gross service revenue is defined as (i) total revenues of the System excluding
(ii) non-service revenues. Non-service revenues consist of funds that are not generated in
connection with the provision of water or wastewater services; examples include Interest
Earnings, Gain/Loss on Assets, Transfers from Other Funds, Transfers from Impact Fees,
reimbursements for Water Main Capacity Charges and Sewer Per Acre Charges, Front Foot
Charges, Refunds from external service providers, and proceeds from Sale of Capital Assets or
Equipment.

IV. Payment for Street Rental Fee:

The Street Rental Fee payment to the General Fund is intended as an assessment in lieu of
franchise fees that the General Fund would receive in return for use of the City’s streets and
rights-of-way if the Water and Sewer System were a private utility enterprise.

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