Page 439 - FortWorthFY23AdoptedBudget

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;

• “Emergency” conditions require a capital improvement to be
funded rapidly;

• Financial opportunities unexpectedly arise to leverage funds
from other entities and reduce the City’s capital cost for a
community improvement;

• A capital improvement is a revenue-producing facility, but due
to the nature of the project or the time it takes for the facility to
become operational and produce revenues, the improvement
may not generate sufficient revenues throughout the life of the
improvement to support the indebtedness secured solely by the
revenues to be produced by the improvement;

• It would be more economical to issue Certificates of Obligation
rather than issuing revenue bonds; and

• The timing of the construction of a capital improvement and the
expense of calling a bond election for a single proposition
would, in the opinion of staff and with the approval of the
Council, warrant the issuance of Certificates of Obligation to
finance the capital improvement.

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