HomeMy WebLinkAboutOrdinance 22428-09-2016 ORDINANCE NO.22428-09-2016
AN ORDINANCE INCREASING THE ESTIMATED RECEIPTS AND APPROPRIATIONS IN
THE GENERAL FUND IN THE AMOUNT OF $592,151.00,FROM AVAILABLE FUNDS IN THE
AVIATION GAS LEASE CAPITAL PROJECT FUND, AVIATION ENDOWMENT GAS LEASE
FUND, GENERAL GAS LEASE CAPITAL FUND, GENERAL ENDOWMENT GAS LEASE
FUND, PAC GAS LEASE PROJECTS FUND, PAC ENDOWMENT GAS LEASE FUND;
MUNICIPAL GOLF GAS LEASE CAPITAL PROJECT FUND, LAKE WORTH GAS LEASE
CAPITAL PROJECTS FUND,WATER AND SEWER GAS LEASE CAPITAL PROJECTS FUND;
AND THE WATER AND SEWER ENDOWMENT GAS LEASE FUND AND REDUCE
RESERVES BY THE SAME AMOUNT FROM THOSE FUNDS, FOR THE PURPOSE OF
REIMBURSING EXPENSES ASSOCIATED WITH THE MANAGEMENT OF CITY— OWNED
MINERAL INTEREST PROPERTIES IN FISCAL YEAR 2016; PROVIDING FOR A
SEVERABILITY CLAUSE, MAKING THIS ORDINANCE CUMULATIVE OF PRIOR
ORDINANCES, REPEALING ALL ORDINANCES IN CONFLICT HEREWITH; AND
PROVIDING AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH,TEXAS:
SECTION 1.
That in addition to those amounts allocated to the various City departments for Fiscal Year 2015-2016 in the Budget of the
City Manager, there shall also be increased estimated receipts and appropriations in the general fund in the amount of
$592,151.00, from available funds in the aviation gas lease capital project fund, aviation endowment gas lease fund, general
gas lease capital fund, general endowment gas lease fund, PAC gas lease projects fund, PAC endowment gas lease fund,
municipal golf gas lease capital project fund, Lake Worth gas lease capital projects fund, water and sewer gas lease capital
projects fund; and the water and sewer endowment gas lease fund and reduce reserves by the same amount from those funds,
for the purpose of reimbursing expenses associated with the management of city—owned mineral interest properties.
SECTION 2.
That should any portion, section or part of a section of this ordinance be declared invalid, inoperative or void for any reason
by a court of competent jurisdiction, such decision, opinion or judgment shall in no way impair the remaining portions,
sections,or parts of sections of this ordinance,which said remaining provisions shall be and remain in full force and effect.
SECTION 3.
That this ordinance shall be cumulative of Ordinance No. 21873-09-2015 and all other ordinances and appropriations
amending the same except in those instances where the provisions of this ordinance are in direct conflict with such other
ordinances and appropriations, in which instance said conflicting provisions of said prior ordinances and appropriations are
hereby expressly repealed.
SECTION 4.
This ordinance shall take effect upon adoption.
APPROVED AS TO FORM AND LEGALITY:
Christy R olds,Assilialt City orne ary a ity S retary
ADOPTED AND EFFECTIVE: September 20, 2016
Ordinance No.22428-09-2016
Page 1 of 1
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 9/20/2016 - Ordinance No. 22428-09-2016
DATE: Tuesday, September 20, 2016 REFERENCE NO.: **G-18823
LOG NAME: 21 GAS OPERATING EXPENSES FY2016
SUBJECT:
Adopt Appropriation Ordinance and Authorize Transfer of Gas-Related Revenues in an Amount Up to
$592,151.00 from Various Funds to the General Fund for Reimbursement of Expenses Associated with the
Management of City-Owned Mineral Interest Properties in Fiscal Year 2016 and Adopt Appropriation
Ordinance (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations for Fiscal
Year 2016 in an amount up to $592,151.00 from the Aviation Gas Lease Capital Project Fund, Aviation
Endowment Gas Lease Fund, General Gas Lease Capital Fund, General Endowment Gas Lease Fund,
PAC Gas Lease Projects Fund, PAC Endowment Gas Lease Fund, Municipal Golf Gas Lease Capital
Project Fund, Lake Worth Gas Lease Capital Projects Fund, Water/Sewer Gas Lease Capital Projects
Fund, and the Water/ Sewer Endowment Gas Lease Fund; and
2. Authorize the transfer in an amount up to $592,151.00 from gas-related revenue to the General Fund
to cover administrative costs of management for City-owned mineral interest properties.
DISCUSSION:
On September 15, 2015 (M&C G-18552) the City Council adopted Financial Management Policy
Statements (FMPS) for the City. These policies include a provision allowing for the periodic transfer of
gas lease revenues to the General Fund to offset budgeted administrative costs in the Property
Management Department associated with the management of the City-owned mineral interest properties.
Total expenditures in an amount up to $592,151.00 include the budgeted categories noted below.
[Employee Salaries and Benefits 1 $526,380.00
Operational Expenses $ 30,036.00
Contractual Services �$ 35,735.00
Total Expenditures $592,151.00
In Fiscal Year 2016 through the month of August, Property Management staff deposited and allocated
$9,016, 419.00 in bonus and royalties derived from the management of over 600 mineral leases on City
properties. The total revenue for the entire Fiscal Year 2016 is estimated to be $9.8 million. In addition,
$21,000,000.00 in underpaid royalties from previous years was received as part of the Settlement
Agreements between the City and Total E&P, Inc., and Chesapeake Energy Corporation, et al. (M&C G-
Logname: 21GAS OPERATING EXPENSES FY2016 Page 1 of 2
18759, June 14, 2016 and M&C G-18792, August 2, 2016, respectively).
In accordance with the FMPS, the cost of managing mineral leases and distributing revenue from City-
owned mineral interest properties should be proportional to the revenue collected in all funds, including
the permanent funds, for that reporting period. Operating expenditures in amount up to $592.151.00 will
be allocated proportionately based on revenues received by each fund for the royalties in Fiscal Year
2016. No management costs have been deducted from the $21,000,000 in revenues from lawsuit
settlements for recovery of underpaid royalties.
Gas lease revenues are dependent on several factors including natural gas market price and the amount
of production of natural gas by well. Additional factors include gas company drilling schedules, weather,
and access to pipelines to take the natural gas to market. Based on these factors, the allocation of
revenue per the City's Financial Management Policy Statements among the various capital and
endowment funds varies by fiscal year. Those funds include: the Aviation Gas Lease Capital Project
Fund, Aviation Endowment Gas Lease Fund, General Gas Lease Capital Fund, General Endowment Gas
Lease Fund, PAC Gas Lease Capital Projects Fund, PAC Endowment Gas Lease Fund, Municipal Golf
Gas Lease Capital Project Fund, Lake Worth Gas Lease Capital Projects Fund, Water/Sewer Gas Lease
Capital Projects Fund, and the Water/Sewer Endowment Gas Lease Fund. In FY 2016, Mineral
Management Section of the Property Management Department also managed leases and provided
support for lawsuits for the corporate entities including the Housing Finance Corporation, Local
Development Corporation, and Central City Local Government Corporation. Any allocation of costs to the
Housing Finance Corporation, Local Development Corporation, and Central City Local Government
Corporation will be approved by the respective boards.
These appropriations will be accounted for in Fiscal Year 2016 since that is the period in which the
expenditures were incurred and the final actual expenditures will be determined by the Mineral
Management Section of the Property Management Department and the associated accounting entries
recorded.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations and adoption of the
attached appropriation ordinance, funds will be available in the various gas-related funds, as appropriated.
FUND IDENTIFIERS (FIDs):
TO
Fund Department ccoun Project Program ctivity Budget Reference # �mount
ID ID Year Chartfield 2
FROM
Fund Department ccoun Project Program ctivity Budget Reference # moun
ID ID Year ChartField 2
CERTIFICATIONS:
Submitted for City Manager's Office by: Jay Chapa (5804)
Originating Department Head: Steve Cooke (5 134)
Additional Information Contact: Jean Petr (8367)
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