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W >, O N N V � p N W \O � � � H U .F� � � � N � � sN. �i U .,��- 'z3 P� '� N [ -+ E� E-i E-i . a: f + i N c '� W W W .a C� O 4 Page 1 of 2 City of Fort Worth, Texas Mayor and Council Communication DATE: Thursday, January 18, 2007 LOG NAME: 30CITY LEASES REFERENCE NO.: G-15588 SUBJECT: Authorize the Provision for Administrative Approval of Leases for Natural Gas Drilling under City - Owned Properties of Two Acres or Less in Size RECOMMENDATION: It is recommended that the City Council authorize the City Manager to approve and execute leases for natural gas drilling under City -owned properties that are two acres or less in size. DISCUSSION: On May 17, 2005, (M&C G-14798) Fort Worth City Council authorized City staff to advertise a request for proposals from private companies to drill for natural gas under 3,651 estimated mineral acres of City -owned properties. Most of these properties range from 3 to 800 acres or more in size. From time to time, the City is asked to lease isolated City -owned properties in various locations that are two acres or less. City staff is recommending that gas leases for these properties be administratively approved for natural gas drilling leases after evaluation of the gas company's drilling plan, reputation, financial status, project team, and compliance history by engineering staff and the City's mineral asset management consultant, JPMorgan Chase. Staff will report the negotiated lease bonuses and royalty to the City Council through the regular monthly gas lease report. The leases would be executed through an internal administrative process involving the Engineering Department, the City Attorneys Office and the City Manager's Office. Requirements and guidelines to be followed in determining eligibility for inclusion in the Adminstrative Gas Lease Process are as follows: City -owned property two acres or less that is not a City park No surface use of any kind No identified adverse impact to the surrounding neighborhood Compliance with the City's gas drilling ordinance Minimum bonus to be determined by current market rate Minimum royalty of 25 percent The distrubution of lease bonus and royalties will be in accordance with the revenue distribution policy approved by the City Council No MWBE goal will be required due to the size of the parcels In accordance with the Alternative Assets Agency Account Agreement between JPMorgan Chase and the City (City Secretary Contract 29698), JPMorgan Chase will serve as the depository of the lease bonus and royalty revenue until the City requests wire transfer of the funds. http://www.cfwnet.org/council�acket/Reports/mc�rint.asp 1/16/2008 Page 2 of 2 FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that this action will have no material effect on City funds. TO Fund/Account/Centers Submitted for City Manager's Office b� Originating Department Head: Additional Information Contact: FROM Fund/Account/Centers Marc A. Ott (8476) A. Douglas Rademaker (6157) Jean Petr (8367) http://www. cfwnet. org/council�acket/Reports/mc�rint. asp 1 / 16/2008