Page 406 - FortWorthFY22AdoptedBudget

determined by state law. Coverage requirements, and the need
for and level of reserve funds to provide additional security in
support of revenue bonds, are subject to rating agency review and
market standards.

Generally, for the City to issue additional water and sewer revenue
bonds, net revenues, as defined in the ordinance authorizing the
revenue bonds, shall be a minimum of 125% of the average annual
debt service and 110% of the debt service for the year in which
requirements are scheduled to be the greatest, but should be at
least 150% of the annual debt service for financial planning
purposes. Annual adjustments to the City's rate structures will be
made as necessary to maintain a minimum 150% coverage factor.
Exceptions to these standards must be fully explained and justified.

Generally, for the City to issue additional stormwater revenue
bonds, gross revenues, as defined in the ordinance authorizing the
revenue bonds, shall be at least of 150% of the maximum annual
debt service, however net revenues (after operations and
maintenance expenses) should be at least 150% of the annual
debt service for financial planning purposes. Annual adjustments
to the City's rate structures will be made as necessary to maintain
a minimum 150% coverage factor using net revenues.

Revenue bonds that may be issued to finance improvements for
other activities (e.g., airports or convention center facilities) will
necessitate the consideration of coverage and reserve fund
requirements unique to the operating fund, such that the revenue
bonds will be creditworthy and marketable.

3. Certificates of Obligation

Certificates of Obligation may be issued without a public election
to finance any public work project or capital improvement, as
permitted by State law. However, it is the policy of the City to
utilize Certificates of Obligation to finance public improvements
only in special circumstances and only after determining the City’s
ability to assume additional debt based on the standards identified
above. Those special circumstances in which Certificates might be
issued include, but are not limited to, situations where:

 Cost overruns on a general obligation bond-financed capital
improvement have occurred;

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