HomeMy WebLinkAboutOrdinance 26810-04-2024Ordinance No. 26810-04-2024
AN ORDINANCE INCREASING ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE PARR GAS LEASE CAPITAL PROJECT FUND, IN A
TOTAL AMOUNT OF $731,506.35, BY A) INCREASING (CITY PROJECT NO.
100801) IN THE AMOUNT UP TO $2,006.03, FROM AVAILABLE GAS LEASE
ROYALTY REVENUE, FOR THE PURPOSE OF FUNDING WELLS FARGO
TRUST MANAGEMENT FEES; B) INCREASING (CITY PROJECT NO. 101770) IN
THE AMOUNT OF $20,536.32, FROM AVAILABLE GAS LEASE ROYALTY
REVENUE, FOR THE PURPOSE OF TRANSFERRING TO THE GENERAL FUND
TO COVER THE ADMINISTRATIVE COSTS OF MANAGING CITY -OWNED
MINERAL INTERESTS; C) INCREASING (CITY PROJECT NO. 101770) IN THE
AMOUNT OF $52,772.00, FROM AVAILABLE GAS LEASE ROYALTY
REVENUE, FOR THE PURPOSE OF TRANSFERRING TO THE GENERAL FUND
TO COVER THE COST ASSOCIATED WITH ONE MANAGEMENT ANALYST I
IN THE PARK & RECREATION DEPARTMENT; AND, D) INCREASING (CITY
PROJECT NO. 101770) IN THE AMOUNT OF $656,192.00, FROM AVAILABLE
GAS LEASE ROYALTY REVENUE, FOR THE PURPOSE OF TRANSFERRING
TO THE COMMUNITY TREE PLANTING PROGRAM FUND TO FUND THE
COMMUNITY TREE PLANTING PROGRAM; 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 2023-2024 in the
Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the PARD
Gas Lease Capital Project Fund in a total amount of $731,506.35, by a) Increasing (City Project No. 100801)
in the amount up to $2,006.03, from available Gas Lease Royalty revenue, for the purpose of funding Wells
Fargo trust management fees; b) Increasing (City Project No. 101770) in the amount of $20,536.32, from
available Gas Lease Royalty revenue, for the purpose of transferring to the General Fund to cover the
administrative costs of managing City -owned mineral interests; c) Increasing (City Project No. 101770) in the
amount of $52,772.00, from available Gas Lease Royalty revenue, for the purpose of transferring to the
General Fund to cover the cost associated with one Management Analyst I in the Park & Recreation
Department; d) Increasing (City Project No. 101770) in the amount of$656,192.00, from available Gas Lease
Royalty revenue, for the purpose of transferring to the Community Tree Planting Program Fund to fund the
Community Tree Planting Program.
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 26453-09-2023 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: CITY SECRETARY
5h..
Assistant City Attorney
ADOPTED AND EFFECTIVE: April 09, 2024
,A .3
Jannette S. Goodall
City Secretary
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 04/09/24 M&C FILE NUMBER: M&C 24-0261
LOG NAME: 03FY2024 GAS LEASE RELATED APPROPRIATIONS
SUBJECT
(ALL) Authorize Increase for Estimated Receipts and Appropriations in Multiple Funds by a Combined Total Amount Up to $3,830,086.52,
Allocated Proportionately, to Record Fees Paid to Wells Fargo Bank, National Association, for Trust Management Services, to Transfer to the
General Fund for Reimbursement of Expenses Associated with the Management of City -Owned Mineral Interests and Administrative
Expenditures, to Transferto the Community Tree Program Fund to Supplement Operational Funding, Adopt Appropriation Ordinances, and
Amend the Fiscal Year 2024 Adopted Budget and Fiscal Years 2024-2028 Capital Improvement Program
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the General Endowment Gas Lease Fund
in a total amount up to $482,719.88 by
A. Increasing (City Project No. 100801) in the amount up to $61,500.00, from available trust distribution, for the purpose of funding Wells
Fargo trust management fees;
B. Increasing (City Project No. 101770) in the amount of $387,544.88, from available annual authorized trust distribution, for the purpose
of transferring to the General Fund for public art contract and support;
C. Increasing (City Project No. 101770) in the amount of $33,675.00, from available Gas Lease Royalty revenue, for the purpose of
transferring to the General Fund to cover the administrative costs of managing City -owned mineral interests; and
2. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the General Gas Lease Capital Project
Fund (City Project No. 101770) in the amount of $47,801.06, from available Gas Lease Royalty revenue, for the purpose of transferring to the
General Fund to cover the administrative costs of managing City -owned mineral interests; and
3. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Aviation Endowment Gas Lease Fund
in a total amount up to $1,727,904.92 by
A. Increasing (City Project No. 100801) in the amount up to $177,254.66, from available trust distribution, for the purpose of funding Wells
Fargo trust management fees;
B. Increasing (City Project No. 101770) in the amount up to $1,501,652.13, from available annual authorized trust distribution, for the
purpose of transferring to the Aviation Gas Lease Cap Projects Fund;
C. Increasing (City Project No. 101770) in the amount of $48,728.13, from available gas lease royalty revenue, for the purpose of
transferring to the General Fund to cover the administrative costs of managing City -owned mineral interests; and
4. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Aviation Gas Lease Capital Project
Fund in the amount of $48,679.32, from available Gas Lease Royalty revenue for the purpose of transferring to the General Fund to cover the
administrative costs of managing City -owned mineral interests; and
5. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the PARD Endowment Gas Lease Fund in
a total amount up to $476,490.90 by
A. Increasing (City Project No. 100801) in the amount up to $48,000.00, from available trust distribution, for the purpose of funding Wells
Fargo trust management fees;
B. Increasing (City Project No. 101770) in the amount up to $409,383.54, from available annual authorized trust distribution, for the
purpose of transferring to the PARD Gas Lease Capital Projects Fund;
C. Increasing (City Project No. 101770) in the amount of $19,107.36, from available Gas Lease Royalty revenue, for the purpose of
transferring to the General Fund to cover the administrative costs of managing City -owned mineral interests; and
6. Adoptthe attached appropriation ordinance increasing estimated receipts and appropriations in the Municipal Golf Gas Lease Capital Fund
(City Project No. 101770) in the amount of $3,878.00, from available Gas Lease Royalty revenue, for the purpose of transferring to the
General Fund to cover the administrative costs of managing City -owned mineral interests; and
7. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Lake Worth Gas Lease Capital Project
Fund (City Project No. 101770) in the amount of $117,292.60, from available Gas Lease Royalty revenue, for the purpose of transferring to
the General Fund to cover the administrative costs of managing City -owned mineral interests; and
8. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the PARD Gas Lease Capital Project Fund
in a total amount of $731,506.35 by
A. Increasing (City Project No. 100801) in the amount up to $2,006.03, from available Gas Lease Royalty revenue, for the purpose of
funding Wells Fargo trust management fees;
B. Increasing (City Project -No. 101770) in the amount of $20,536.32, from available Gas Lease Royalty revenue, for the purpose of
transferring to the General Fund to cover the administrative costs of managing City -owned mineral interests;
C. Increasing (City Project No. 101770) in the amount of $52,772.00, from available Gas Lease Royalty revenue, for the purpose of
transferring to the General Fund to cover the cost associated with one Management Analyst I in the Park & Recreation Department;
D. Increasing (City Project No. 101770) in the amount of $656,192.00, from available Gas Lease Royalty revenue, for the purpose of
transferring to the Community Tree Planting Program Fund to fund the Community Tree Planting Program; and
9. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water/Sewer Endowment Gas Lease
Fund in a total amount up to $178,250.49, by
A. Increasing (City Project No. 100801) in the amount up to $21,500.00 from available trust distribution, for the purpose of funding Wells
Fargo trust management fees;
B. Increasing (City Project No. 101770) in the amount of $5,158.00, from available Gas Lease Royalty revenue, for the purpose of
transferring to the General Fund to cover the administrative costs of managing City -owned mineral interests;
C. Increasing (City Project No. 101770) in the amount of $151,592.49, from available annual authorized trust distribution, for the purpose
of transferring to the Water and Sewer Gas Lease Cap Projects Fund; and
10. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water/Sewer Gas Lease Capital
Project Fund in the amount of $15,563.00, from available gas lease royalty revenue for the purpose of transferring to the General Fund to
cover the administrative costs of managing City -owned mineral interests; and
11. Amend the Fiscal Year 2024 Adopted Budget and Fiscal Years 2024-2028 Capital Improvement Program.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to appropriate royalty and investment income derived from the City's gas lease
funds.
Gas Well Trust Investment Income and Royalty Revenue
In 2008, the City Council adopted amendments to the City's Financial Management Policy Statements (FMPS) to establish the Trust known as The
Fort Worth Permanent Fund (M&C G-16013). The governance and applicable use of the income derived from the Trust were last updated on
September 26, 2023 (M&C 23-0842) in the FMPS. The City's gas lease funds produce investment income and royalties throughout the year, which
is then used to fund eligible projects and other approved activities. This M&C gives permission for the funds to cover trust management fees,
approved operational needs, and transfer to gas lease capital project funds. At a later date, authorization will be sought to appropriate funds into
projects transferred to the gas lease capital project funds in this M&C.
The following information presents the activities related to the management and use of gas lease funds.
Wells Fargo Trust Management Fees
The City Council authorized an agreement with Wells Fargo Bank, N.A. (Wells Fargo), to serve as Corporate Trustee (M&C P-11467) on
December 11, 2012. All of the accumulated money that had been designated for inclusion in the Trust was transferred to Wells Fargo in June
2013. In accordance with the terms of the written Trust Agreement and the FMPS, the Trust is maintained as a consolidated account and divided
into five sub -accounts. Funds in the Trust are invested in accordance with the City Council's adopted Investment Policy and Strategy for the Trust.
During the first quarter of Fiscal Year 2022, the Financial Management Services Department (FMS) issued a Request for Qualifications for Trust
management services. Through that competitive process, Wells Fargo was once again selected to serve as the Trustee (M&C 22-0212) on March
29. 2022.
The City Secretary contract (CSC No. 57771) requires the City to pay Wells Fargo for the costs of management fees for the identified City funds.
Each participating fund is allocated its proportionate share of the total cost based on the relative percentage that mineral revenues for that fund for
the year bear to the total mineral revenues received during the year.
The chart below shows the participating funds with estimated fees for Fiscal Year 2024 and prior year deficits that will need to be covered with this
M&C. The Wells Fargo trust management fees are paid out of gas lease investment income.
Fund Name
FY2024 Estimated Fees
Prior Year Deficits
13002-General Endowment Gas
61,500.00
Lease
53001-Aviation Endowment Gas
162,000.00
15,524.66
Lease
13001-PARD Endowment Gas Lease
48,000.00
33002-PARD Gas Lease Capital
2,006.03
Project
53003-Water/Sewer Endowmt Gas
21,500.00
Lse
Mineral Management Administration Costs
The Financial Management Policy Statements (FMPS) includes a provision allowing periodic transfers of gas lease revenues to the General Fund
to offset budgeted administrative costs in the Property Management Department (PMD). These costs are associated with the management of
City -owned mineral interests with the allocation of such costs being proportional among all gas revenue funds.
In accordance with the FMPS, the costs associated with the management of City -owned mineral interests and the distribution of revenues
therefrom should be proportional among all gas revenue funds according to each fund's relative percentage of the total revenue collected in all
funds during that reporting period.
The total administrative costs were allocated proportionately based on revenues deposited into each gas lease -associated fund during each
Fiscal Year. The chart below shows the allocation charged to the funds with the associated amount for Fiscal Year 2024 and prior year deficits that
will be covered with this M&C.
Fund Name
FY2024 PMD Mineral
Prior Year Deficits
Management Fee
13002-General Endowment Gas
33,675.00
Lease
33005-General Gas Lease Capital
34,938.00
12.863.06
Pd
53001-Aviation Endowment Gas
40,219.00
8,509.13
Lease
53002-Aviation Gas Lease Cap
40,216.00
8,463.32
Proj
13001-PARD Endowment Gas
15,475.00
3,632.36
Lease
33004-Muni Golf Gas Lease Cap
3,878.00
Proj
33001-Lake Worth Gas Lse Cap
79,399.00
37.893.60
Project
33002-PARD Gas Lease Capital
15,962.00
4,574.32
Project
53003-WaterlSewer Endowmt Gas
5,158.00
Lse
53004-WaterlSewer Gas Lease
15,563.00
Cap Proj
Park & Recreation Department (PARD) Position, General Fund
The PARD Gas Capital Project Fund supports one Management Analyst I in the Park & Recreation Department. These transfers offset
dependence on the General Fund.
Park & Recreation Department (PARD), Community Tree Program
Since October 1, 2017, the first draw from the endowment trust earnings, have been appropriated to support the PARD Community Tree Planting
Program operating program (City's Financial Management Policy Statements, Section I (Gas Related Revenue & Expense 1 Expenditure Policy,
VI. Expenditures/Expenses 7.)
In prior years, the actions requested above were brought to Mayor and Council through various M&C's and annual budget adoption over the course
of each fiscal year. This M&C consolidates all FY2024 needs into one request, with the intent to build these activities into the annual budget
process beginning with FY2025.
A Form 1295 is not required because: This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION 1 CERTIFICATION:
The Director of Finance certifies that funds are currently available in the Unspecified -All Funds, Unspecified -Gas Lease Rev, and Unspecified
Restr Park projects within the Aviation, PARD, General & Water/Sewer Endowment Gas Lease Funds and in the Lake Worth, PARD, Muni Golf,
Aviation, General and Water/Sewer Gas Lease Capital Project Funds and upon approval of the above recommendations and adoption of the
attached appropriation ordinances, funds will be available in the PARD Gas Lease Capital Project, Aviation and Water/Sewer Gas Lease Cap
Proj, Community Tree Planting Prog and General Funds. Prior to an expenditure being incurred, the participating departments and Financial
Management Services Department have the responsibility of verifying the availability of funds.
Submitted for City Manager's Office by: Reginald Zeno 8517
Originating Business Unit Head: Christlanne Simmons 8542
Additional -information Contact: Ashley Clement 8505