HomeMy WebLinkAboutResolution 5235-05-2020 A Resolution
NO. 5235-05-2020
NOTIFYING THE TRUSTEE OF THE FORT WORTH PERMANENT FUND AND
THE CHIEF FINANCIAL OFFICER OF THE CITY OF FORT WORTH THAT THE
FORT WORTH CITY COUNCIL INTENDS TO CONSIDER AND VOTE ON
AMENDMENTS TO THE TRUST AGREEMENT FOR THE FORT WORTH
PERMANENT FUND THAT WOULD ALLOW A ONE-TIME DISTRIBUTION OF
CORPUS TOTALING UP TO SIXTEEN MILLION DOLLARS ($16,000,000.00),
ALLOCATED PRO-RATA ACROSS THE WATER AND SEWER, GENERAL, AND
PARK SYSTEM SUB-ACCOUNTS
WHEREAS, in 2008, the Fort Worth City Council adopted M&C G-16013, which
established a Section 115 Trust Fund, "The Fort Worth Permanent Fund" (the "Fund"), to
enable prudent financial management of gas-related revenues to provide a long-term
source of revenue to benefit both current and future residents; and
WHEREAS, in 2013, following a competitive bid process, Wells Fargo, N.A. was
selected to serve as the initial corporate trustee (the "Trustee") for the Fund, and the
"Trust Agreement for the Fort Worth Permanent Fund" (the "Agreement") was executed;
and
WHEREAS, in 2015, the Agreement was amended to add a definition of "income"
and to clarify the annual distribution process; and
WHEREAS, market conditions over the last several years have resulted in limited
returns on the Fund's investments; and
WHEREAS, following a lengthy study process involving multiple stakeholders,
City staff presented recommendations to City Council regarding taking actions to acquire
undeveloped land throughout the City for possible future City use or for retention as
more natural landscapes and open space that promote overall livability and serve as a
balance to the rapid development occurring throughout the City; and
WHEREAS, because the acquired land would benefit both current and future
residents of the City of Fort Worth, staff recommended that the City Council consider
using a portion of the corpus of the Fund as a potential funding source; and
WHEREAS, taking a distribution of corpus would require an amendment of the
Trust Agreement; and
WHEREAS, the Agreement sets forth a detailed process for consideration of
amendments to ensure ample opportunity is provided for public review and input, with
such process being initiated by the City Council giving written notice to the Trustee and
to the City's Chief Financial Officer of the proposed amendment; and
WHEREAS, the Fund consists of five (5) separate subaccounts — the Aviation
Endowment Gas Lease Fund, the Nature Center Endowment Gas Lease Fund, the Water
and Sewer Endowment Gas Lease Fund, the General Endowment Gas Lease Fund, and
the Park System Endowment Gas Lease Fund, which itself consists of two subaccounts;
and
WHEREAS, the Nature Center Endowment Gas Lease Fund is currently unfunded;
and
WHEREAS, external restrictions apply to funds within, generated, and distributed
from certain subaccounts; and
WHEREAS, restrictions applicable to the Aviation Endowment Gas Lease Fund
make it an unsuitable source for funding general open space acquisition; and
WHEREAS, staff recommends that the City Council consider amending the
Agreement to provide for a one-time distribution of corpus totaling up to $16,000,000.00
with such amount to be taken on a pro rata basis from the remaining funded subaccounts,
with the timing of such distribution to be determined by staff to allow for fluctuating
market conditions, and with the intent that such distribution be used for acquisition of
open space, subject to any applicable external restriction; and
WHEREAS, the City Council wishes to initiate the amendment process so that the
recommended amendment to the Trust Agreement may be fully considered by the City
Council, the Trustee, the Chief Financial Officer, and the citizens of the City of Fort
Worth and may be voted on by the City Council if desired.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS:
1. That official written notice is hereby given to Wells Fargo, N.A., as Trustee of
the Fort Worth Permanent Fund, and to the City's Chief Financial Officer that
the City Council intends to consider and vote on amendments to the Agreement
for the Fort Worth Permanent Fund, to wit amending the Trust Agreement to
provide for a one-time distribution of corpus in an amount up to Sixteen
Million Dollars ($16,000,000.00) with such amount to be taken equitably on a
pro-rata basis from the following funded sub-accounts within the Trust: the
Water and Sewer Endowment Gas Lease Fund, the General Endowment Gas
Lease Fund, and the Park System Endowment Gas Lease Fund with the exact
timing of such distribution to be determined by City staff to take into account
fluctuating market conditions.
2. That staff is hereby directed to take all necessary actions to ensure compliance
with the process for considering and voting on amendments to the Trust
Agreement as described above, including (i) setting an initial meeting among
the City Council, the Trustee, and the City's Chief Financial Officer; (ii)
scheduling and publishing notice of at least three public hearings to explain the
reasons for the proposed amendments and to obtain public input concerning the
proposed amendments; (iii) scheduling a follow-up meeting among the City
Council, the Trustee, and the City's Chief Financial Officer; and (iv) scheduling
a City Council meeting to vote upon the proposed amendments, all of which
shall be done in accordance with the terms, conditions, and requirements of the
Trust Agreement for the Fort Worth Permanent Fund.
Adopted this 19"' day of May 2020. '
ATTE
By. -
Mary J. KaysOiSeOetiary
• S