HomeMy WebLinkAboutContract 45281-ExZ-A2 Fort Worth City Secretary
Contract No. 45281-EKZ-A2
SECOND AMENDMENT TO TRUST AGREEMENT FOR THE FORT WORTH
PERMANENT FUND
This SECOND AMENDMENT TO TRUST AGREEMENT FOR THE
FORT WORTH PERMANENT FUND ("Second Amendment") is made and entered
into by and between the City of Fort Worth, a home-rule municipal corporation of the
State of Texas, as Grantor, and Wells Fargo Bank,N.A., as the Trustee.
WHEREAS, effective June 10, 2013, Grantor and Trustee entered in to a Trust
Agreement for the Fort Worth Permanent Fund(the"Trust Agreement"); and
WHEREAS, Article V, Paragraph A of the Trust Agreement, entitled
"Amendment," allows the Fort Worth City Council to amend the Trust Agreement under
certain conditions; and
WHEREAS, in 2015, following compliance with the terms and conditions of
Article V, Section A, the Trust Agreement was amended to define income to include net
gains from the sale of principal assets and to revise and clarify the process for making
distributions from the Trust; and
WHEREAS, Article III, Paragraph B of the Trust notes that the Trust is "for the
benefit of not only the present citizens of the City but for future generations as well"; and
WHEREAS, staff proposed, and the City Council endorsed, a recommendation to
make a one-time distribution from the corpus of the Trust with the intent that such funds
be used, subject to any other applicable restrictions, for the acquisition of open space, a
use which will benefit both present citizens and future generations; and
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TK
Second Amendment to Trust Agreement for the Fort Worth Permanent Fund Pagel of 3
WHEREAS, the City wishes to amend the Trust Agreement to provide for such
distribution with all conditions under Article V, Paragraph A having been met with
respect to such amendment.
NOW, THEREFORE, the City of Fort Worth and Wells Fargo Bank, N.A., do
mutually covenant and agree as follows:
1. That Article III of the Trust Agreement, entitled "Separate Funds of the Trust," is
amended to add a Paragraph C to read as follows:
C. Distribution from Corpus. Notwithstanding anything in this
Agreement to the contrary and consistent with the goal that the Trust to benefit
not only the present citizens of the City but future generations as well, the Trustee
shall make a one-time distribution from corpus in accordance with the terms of
this Paragraph C with the understanding that such funds are intended to be used
for acquiring open space for the City.
The total amount of the corpus distribution shall not exceed Eleven
Million and Eighty-Five Thousand Dollars ($11,085,000.00), which shall be taken
from the Water and Sewer Endowment Gas Lease Fund, and the General
Endowment Gas Lease Fund (collectively the "Contributing Funds"). Under no
circumstances shall any portion of the distribution be taken from the Aviation
Endowment Gas Lease Fund, the Park System Endowment Gas Lease Fund, or
the Nature Center Endowment Gas Lease Fund.
The distribution from corpus may occur no earlier than the date on which
this Paragraph C becomes effective and no later than December 31, 2022. The
timing of the distribution as well as its exact amount and allocation among the
Contributing Funds shall be subject to and made in accordance with written
instructions from the Chief Financial Officer. In distributing corpus, the Trustee
shall follow the written instructions unless the Trustee determines that following
such written instructions would result in a breach of the Trustee's fiduciary duty
or would violate the terms of the Agreement, and Trustee shall not be held liable
for following written instructions that Trustee determines, in the exercise of its
reasonable discretion, do not constitute a breach of the Trustee's fiduciary duty or
would violate the terms of the Agreement
The amounts distributed may be expended as determined in the sole
discretion of the Fort Worth City Council, and the Trustee shall have no
obligation to monitor the uses and purposes of such expenditures, nor shall
Trustee be liable for the manner in which such amounts are expended by the City
following disbursement.
Second Amendment to Trust Agreement for the Fort Worth Permanent Fund Page 2 of 3
2. That all other terms and conditions of the Trust Agreement, as previously
amended, shall remain in full force and effect throughout the term of the Trust
Agreement and any subsequent renewals.
3. That this Second Amendment may be executed in several counterparts, each of
which will be deemed an original, but all of which together will constitute one and the
same instrument. A signature received via facsimile or electronically via email shall be
as legally binding for all purposes as an original signature
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment in
Fort Worth, Tarrant County, Texas, on this 2nd day of December, 2020.
GRANTOR: TRUSTEE:
CITY OF FORT WORTH WELLS FARGO BANK,N.A.
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Jesus Chapa(Dec 1,202012:46 CST)
Jesus"Jay" Chapa Heidi Coombs
Deputy City Manager Managing Director
Contract Compliance Manager:
By signing I acknowledge that I am the
person responsible for the monitoring and
administration of this contract, including
ensuring all performance and reporting
requirements.
By:
Name: John Samford, Treasurer
Approved as/toForm and Legality:
By:
Denis C. McElroy
Assistant City Attorney
Contract Authorization: M&C 20-0869
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CITY SECRETARY
FT. WORTH, TX
Second Amendment to Trust Agreement for the Fort Worth Permanent Fund Page 3 of 3
12/9/2020 M&C Review
Official site of the City of Fort Worth,Texas
CITY COUNCIL AGENDA FORTTII
DATE: 12/1/2020 REFERENCE M&C 20- LOG 13PERMANENT FUND (GAS WELL)
NO.: 0869 NAME: TRUST AMENDMENT 2020
CODE: G TYPE: NOW PUBLIC NO
CONSENT HEARING:
SUBJECT. (ALL) Authorize an Amendment to the Trust Agreement for The Fort Worth Permanent
Fund for a One-Time Distribution of Corpus in the Amount of $11,085,000.00 with the
Intent of Funding Open Space Acquisition and Adopt Appropriation Ordinances
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize an amendment to the Trust Agreement for a one-time distribution of corpus from
the Water and Sewer Endowment Gas Lease Fund and the General Endowment Gas Lease
Fund of the City's Mineral Trust Fund, The Fort Worth Permanent Fund, in a total amount not
to exceed $11,085,000.00;
2. Adopt the attached ordinance increasing receipts and appropriations in the Transfer Out
project of the General Endowment Gas Lease Fund by $8,200,000.00 for the purpose of
transferring to the General Gas Lease Capital Projects Fund with the intent of funding open
space acquisition; and
3. Adopt the attached ordinance increasing receipts and appropriations in the Transfer Out
project (City Project No. 101770) of the Water and Sewer Endowment Gas Lease Fund by
$2,885,000.00 for the purpose of transferring to the Water and Sewer Gas Lease Capital
Projects Fund with the intent of funding open space acquisition.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to complete the final step needed to
authorize the second amendment to the Trust Agreement for The Fort Worth Permanent Fund to
allow a one-time distribution from the trust's corpus with the intent of using the funds for open space
acquisition.
In 2008, the City Council adopted amendments to the City's Financial Management Policy
Statements (FMPS)to establish a Mineral Revenue Trust Fund known as The Fort Worth Permanent
Fund (M&C G-16013). The City Council subsequently authorized an agreement with Wells Fargo
Bank, N.A. (Wells Fargo), to serve as the trustee (M&C P-11467), and all of the accumulated money
that had been designated for inclusion in the trust was transferred to Wells Fargo in June of 2013. In
August 2015, the City Council completed the process for authorizing the first amendment to the Trust,
which added a definition of"income" and clarified the income-distribution process. (M&C G-18538)
At the December 3, 2019 City Council work session, a presentation was made regarding the Open
Space Acquisition Program, outlining the importance of preserving open space to enhance the quality
of life for the citizens of Fort Worth. In that presentation, Gas Well Trust funds were listed as a
potential funding source, and support was voiced for pursuing that possibility.
Per the terms of the Trust Agreement, amending the trust is a multi-step process that begins with
formal notice to the trustee and Chief Financial Officer. That notice was given on May 19, 2020 with
the adoption of a resolution (Resolution Number 5235-05-2020) and was followed by all of the
required notices and public hearings.
Following further internal discussions regarding other funding sources, including dedication fees, that
might be available for park-type open space, a decision was made to recommend excluding the Park
System Endowment Gas Lease Fund from the distribution process. Therefore, the amendment being
recommended by this M&C consists of distribution of no more than $11,085,000.00 from the Water
and Sewer and General Endowment subfunds,
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12/9/2020 M&C Review
A formal vote on the proposed amendment is the final step in the amendment process. Affirmative
vote of three-fourths of all of the members of the City Council is required to approve the proposed
amendment to the Trust Agreement.
If the amendment is authorized and executed, the corpus distribution would have to be consummated
no later than December 31, 2022. While it is anticipated that distribution will likely occur prior to the
end of the current year, the amendment provides flexibility regarding the date to allow staff to respond
to any unforeseen market conditions that might occur.
Staff would return to City Council with further M&Cs as needed to authorize use of the distributed
funds and the actual purchases of open space.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that funds are currently available in the UNSPEC project within the
General Endowment Gas Lease and the Water/Sewer Endowmt Gas Lse Funds and upon approval
of the above recommendations and adoption of the attached appropriation ordinances, funds will be
available in the General Endowment Gas Lease and the Water/Sewer Endowmt Gas Lse Funds for
the Transfer Out project for the intent of funding open space acquisition within the General Gas Lease
Capital Prj and the Water/Sewer Gas Lease Cap Proj Funds. Prior to an expenditure being incurred,
the participating departments will be required to verify the availability of funds.
TO
Fund Department Account Project Program Activity Budget Reference# Amount
ID ID Year Chartfield 2
FROM _
Fund Department Account Project Program Activity Budget Reference# Amount
ID ID Year Chartfield 2
Submitted for City Manager's Office by_ Jay Chapa (5804)
Originating Department Head: Reginald Zeno (8517)
Additional Information Contact: John Samford (2318)
ATTACHMENTS
Corpus Endow Land Acquis funds avail.docx
Rec 2-General Gas Lease Fund AO.docx
Rec 3-W&S Gas Lease Fund AO.docx
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