HomeMy WebLinkAboutResolution 4499-08-2015 A Resolution
NO. 4499-08-2015
A RESOLUTION INCREASING THE AMOUNT TO BE PAID TO MOSES, PALMER
AND HOWELL, L.L.P., AS OIJTSIDE LEGAL COUNSEL TO ADVISE THE CITY
ON LEGAL ISSUES RELATED TO OIL AND GAS MINERAL LEASES AND GAS
MARKETING AND AUTHORIZING PAYMENT OF COIJNSEI, FEES
WHEREAS, the City has ei-itered into al,)proxini ate ly 581 oil and gas leases for the 11,366
mineral acres it owns; and
WHEREAS, the City, has recently conducted audits of its oil and gas leases with Chesapeake
Operating, Inc. and XTO f`Aiergy, Inc.; and
WHEREAS, as a result of the audits of the oil and gas leases, tegal issues regarding gas
marketing provisions have arisen which require outside legal counsel with expertise in this area of oil
and gas law; and
WHEREAS, because of the eXtraordinary complexity of this area of law, Council authorized the i
employnient of Moses, Palmer and 14()svell, 11.111, for as fee not to exceed $3,000.00; and
WHERE,AS, the cost of legal services provided by the law firm. of Moses, Pah-ner and 11owell,
.L.L.P., is currenfly $4,834.50, and it is estimated that an additional aniount of approximately $7,000.00
beyond the authorized cost of$3,000.00 will be needed.due to the ongoing nature of the issues involving
the oil and gas I eases.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH,�TEXAS,THAT:
lw
The compensation authorized to be paid to Moses, llah-ner and 11owell, L-L.P., for legal services
be increased frorn. $3,000.00 to an anioujif not to exceed $10,000,00',
Adopted this w I 11h day of A Z115 IFORr 4o
U 2015. 11:� ` �
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By: ................................. _.._mm 0
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Secretary *%, 00
Mary e r, �'-�y %6 000600*0 ICY
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City Foil Worth, Texas
Mayor and Council communication
COUNCIL ACTON: Approved on 8/11/2015 - Ordinance No. 2182G-08-2015,& Resolution
No. 4499-08-2015
DATE: Tuesday, August 11„ 2015 REFERENCE NO.: **G-16527
LOG NAME: 1 1NCREASE OIL GAS I-EASE OUTSIDE COUNSEL
SUBJECT:
Adopt Resolution Increasing the Amount of Fees for Moses, Palmer and Howell, II...L. .0 as Outside
Counsel in an Amount Not to Exceed $10,000.00 to Advise the City on Oil and Gas Mineral Lease
Provisions Related to Gas Marketing and Authorizing Payment of Counsel Fees from a Lease Revenues
and Adopt Appropriation Ordinance (ALL COUNCIL DIS'TRICT'S)
RECOMMENDATION:
It is recommended that the City Council:
. Authorize the transfer of 7,000.00 from the Airports Gas Lease Project Fund from lease revenues
to the General Fund;
2. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
General Fund in the amount of 7,000.00, and
.. Adopt the attached resolution authorizing an increase in the amount to be paid to Moses, Palmer and
Howell, I.,..ILa ., as outside counsel to advise the City on oil and as mineral lease provisions related to gas
marketing and authorizing payment of counsel fees in an amount not to exceed the amount of 10„000.00.
DISCUSSION:
The City of Fort Worth (City) has currently entered into approximately 531 oil and s mineral (leases for
the 11,366 mineral acres that it owns. In the past year„ the City has conducted two intensive audits, one
with Chesapeake Operating Inc., and one with XTO Energy, Inc. During these audits, certain legal issues
arose which require expertise in oil and s mineral leasing, including gas marketing contracts to affiliates.
On October 14, 2014, the City Council approved a resolution authorizing the City Manager to real
Moses, Palmer and Howelll, L.L. ., as outside counsel to provide legal assistance to the City regarding its
oil and gas mineral leasing, including gas marketing contracts to affiliates. The resolution authorized
payment in an amount not to exceed $3,000.00 to be paid to Moses, Palmer and Howell, L.L. .„ for those
legal services. The issues related to the airport property leases have raised the need for continued
counsel,
Because of the ongoing nature of issues and because oft the extraordinary complexity of this area of law, it
is recommended that the City Council increase the maximum amount to be paid to Moses„ Palmer and
Howell, L.L, ., to an amount not to exceed the amount of 10,000.00. Payment of counsel fees shall
be made from Lease revenues, The City Manager and the City Attorney recommend increasing the
maximum amount.
CIQf'AI IAICf%DRAAT1nK1 / f%1=0T1C1f%AT1nK1.
Lmagnam e: 121NC:tllkEAS ; OIL GAS LEASE OU"I'«IDE Col..:➢il SEA" Page 1 of
Upon approval of these recommendations, the Financial Management Services Director certifi es that
funds will be available, as appropriated in the FY 015 General Fund operating budget, for these
expenditures.
FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Account/Centers
GG01 472240 0062050 E000.00 P240 538070 551929990100 $7 0-0000
r%3'Q01--539120 0062050 7 000.00 GG01 5.097120 0062050 7 000.00
...........
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CERTIFICATIONS:
Submitted for Ci anagees Office by: ALL ACMs (6222)
Originating Department Head: Sarah Fullenwider (7 623)
Gerald Pruitt (7616)
Additional Information Contact: Christ a Reynolds (8984)
11-1 -, --........... ............
Logname: 121NCREASE OIL GAS LEASE OUTSIDE COUNSEL Page 2 of 2