HomeMy WebLinkAboutIR 8654INFORMAL REPORT TO CITY COUNCIL MEMBERS No. .6.4
To the Mayor and Members of the City Council January 11, 2005
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SUBJECT: GAS LEASE PROGRAM MANAGEMENT SERVICES
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Purpose
The purpose of this report is to provide the City Council with an overview of gas lease program
management services provided by the Engineering Department and to contrast those services to mineral
asset management services being provided by JPMorgan Chase, the City's consultant.
Background
The proposed Gas Lease Revenue Management and Distribution Policy is currently under consideration
by the City Council. The proposed policy provides provisions to reimburse the Engineering Department
for gas lease program management services provided by the Department.
The City has engaged the services of JPMorgan Chase to provide mineral asset management services for
the City's gas lease program. The City's Engineering Department, in turn, provides gas lease program
management services for the City's programs.
euring a recent Pre - Council work session, Councilmembers inquired as to why both types of services are
necessary. Following is a brief overview of the specific work elements being provided by the City's
consultant and the City's Engineering Department.
Mineral Asset Management Services (JPMorgan Chase)
JPMorgan Chase currently provides the City of Fort Worth professional mineral asset management
services in six key areas. Those areas include Private Sector Communications, Private Sector
Coordination, Private Sector Marketing, Bid Proposal Review and Recommendations, Financial
Management, and Lease Site Follow -up Visits.
Private Sector Communications
• Handling of private sector lease questions
• Single point of contact for bidding questions
• Assist City staff as requested at neighborhood informational meetings
Private Sector Coordination
• Networking with drilling companies to know and understand leasing arrangements between
parties
Private Sector Marketing
• Positioning Fort Worth to get multiple, competitive bids
• Establishing benchmarks to maximize return to the City of Fort Worth
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
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To the Mayor and Members of the City Council
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January 11, 2005
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SUBJECT: GAS LEASE PROGRAM MANAGEMENT SERVICES
Bid Proposal Review and Recommendations
• Knowledge of the playing field and capabilities of private sector companies
• Review of technical drilling plans
Financial Management
• Negotiation of bonuses and royalties
• Collection of funds for City; reporting of accounts
Lease Site Follow -up Visits
• Site clean -up (if seismic performed)
• Q &A for those submitting bid proposals
Gas Lease Program Management Services (Department of Engineering)
The City's Engineering Department provides lease program management services in four major areas.
Those areas are Program Communications, Program Coordination, Program Lease
Advertisement/Bid/Review, and Program Real Property Services.
Program Communications
• Neighborhood communications /meetings
• Requests for program information
• Development of information materials/brochures
• News media briefings
• City Council briefings
Program Coordination
• Customer department liaison
• Key point of contact for mineral asset consultant
• Internal staff team — leadership role
• Lease package development
Program Lease Advertisement/Bid/Review
• Bid proposal development
• Lease package advertisement
• Bid opening scheduling
• Bid review
• Proposal follow -up
• Recommendation to Council of `best bid'
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8654
&- .AT&A, To the Mayor and Members of the City Council
January 11, 2005
r Page 3 of 3
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E SUBJECT: GAS LEASE PROGRAM MANAGEMENT SERVICES
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Program Real Property Services
• Management of seismic permit application
• Intradepartmental coordination — landman issues
• Pipeline easements
Recommendation
It is Staff's opinion that the services provided by JPMorgan Chase and the City's Engineering Department
are significantly different and that both types of services are necessary to proactively manage and ensure
the success of the City's gas lease program.
It is recommended that the gas lease program management services provided by the City's Engineering
Department, outlined above, be funded from proceeds of gas lease bonuses on an annual basis. Since the
Engineering Department functions as an internal services department, it depends upon revenues from
- ecific projects to fund its operations.
M10.00§111.
Charles R. Boswell
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS