DALLAS – After winning strong voter support for six bond propositions totaling $400 million, Fort Worth, Texas, is mapping out its issuance plans over the next five years.
Alex Laufer, debt and compliance manager for the city, said it could issue its first tranche a year from now.
“It is anticipated that up to $100 million of that program could be issued over the next 24 months with the full authorization to be issued over a five-year period,” Laufer said.
Average voter approval for the six proposals on the ballot exceeded 78%. The largest single proposal, $261.6 million for new streets and upgrades to existing streets, won 81% approval.
Fort Worth’s combined proposal was the largest from any city statewide in the May 5 election.
“Fort Worth’s growth has created challenges and opportunities for us, and Fort Worth residents have recognized the increasing need for transportation infrastructure, new city service centers close to new, outlying neighborhoods, along with improved parks and community centers to help sustain our health and well-being,” said City Manager Dave Cook. “Now, we execute and implement all of these projects.”
Also on Tuesday, voters in the boundaries of the Tarrant Regional Water District serving Fort Worth’s Tarrant County approved $250 million for flood control bonds that will allow a $1 billion development in the heart of Fort Worth called Panther Island.
In addition to streets, Fort Worth expects to use its bond money for police and fire facilities, a new animal care center and for parks and recreation facilities.
Downstream from Panther Island, Fort Worth is redeveloping its thousand-acre Gateway Park in the floodplain of the Trinity River. To reduce risk of flooding, the U.S. Army Corps of Engineers removed 14 million cubic feet of soil in 2017.
The city anticipates that projects covered by the 2018 bond program will begin within the next month. But long-term debt follows initial cash outlays.
“The city issues the majority of our debt in arrears, so we use available cash within our portfolio to pay initial expenses and then reimburse ourselves through the debt issuance process,” Laufer said.
Fort Worth bonds are rated AA-plus by both S&P Global Ratings and Fitch Ratings with stable outlooks. Moody’s Investors Service rates the debt Aa3 with a negative outlook.
The ratings information, including the names and phone numbers of analysts are included in the city’s new
finance website using BondLink architecture.
BondLink founder Colin MacNaught said sites like Fort Worth’s enlarge the pool of investors by giving more retail buyers a shot at issues on the primary market. The larger pool of investors can, in turn, lower yields for the issuers, he said.
The site’s ease of use also provides prompt disclosure and transparency for taxpayers, he said.
Other Texas BondLink clients include the University of Texas and Dallas Area Rapid Transit, MacNaught said.
“We want to work with issuers who want to do more in terms of disclosure,” he said. “To BondLink it doesn’t matter if it’s a big issuer or small issuer. It’s all about best practices to attract more investors.”