It is recommended that the City Council:

1.  Authorize the distribution in the amount of $2,232,485.00 in income from the City's Mineral Trust Fund, the Fort Worth Permanent Fund, commensurate with the terms of the amended trust document;

2.  Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the listed Gas Lease Endowment Funds in the cumulative amount of $2,232,485.00, allocated as follows:

    a.  Aviation Endowment Gas Lease Fund in the amount of $1,006,359.00;

    b.  Park System Endowment Gas Lease Fund in the amount of $430,731.00;

    c.  Water and Sewer Endowment Gas Lease Fund in the amount of $214,663.00; and

    d.  General Endowment Gas Lease Fund in the amount of $580,732.00.

3.  Authorize the transfer in the amount of $580,732.00 from the General Endowment Gas Lease Fund to the General Fund to fund arts programming, in accordance with the City Council approved Financial Management Policy Statements.  

4.  Authorize the transfer in the amount of $1,006,359.00 from the Aviation Endowment Gas Lease Fund to the Aviation Gas Lease Project Fund for expenditure, in accordance with the City Council approved Financial Management Policy Statements.

5.  Authorize the transfer in the amount of $430,731.00 from the Park System Endowment Gas Lease Fund to the Parks Gas Lease Capital Project Fund for expenditure, in accordance with the City Council approved Financial Management Policy Statements.

6.  Authorize the transfer in the amount of $214,663.00 from the Water and Sewer Endowment Gas Lease Fund to the Water and Sewer Gas Lease Capital Project Fund for expenditure, in accordance with the City Council approved Financial Management Policy Statements.

The purpose of this Mayor and Council Communication (M&C) is to take actions to distribute and appropriate income from the City's mineral revenue trust fund so that the money can be used to fund eligible projects and activities.  

In 2008, the City Council adopted amendments to the City's Financial Management Policy Statements (FMPS) to establish a Mineral Revenue Trust Fund known as The Fort Worth Permanent Fund (M&C G-16013). The City Council subsequently authorized executing an Agreement with Wells Fargo Bank, N.A.. (Wells Fargo), to serve as Corporate Trustee (M&C P-11467) and 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 Fund is maintained as a consolidated account and divided into five sub-accounts. Money in the Trust is invested, in accordance with the City Council adopted Investment Policy and Strategy for the Fund (M&Cs G-17857 and G-18244).

Under the terms of the Trust Agreement, the Trustee works with City's Chief Financial Officer (CFO) to determine the amount of income available for distribution each year. Then a recommendation is made to the City Council for distribution procedures for the different funds of the Trust consistent with the goal to preserve, as well as increase, the principal of the Trust.  Expenditure of distributed income is subject to expenditure, in accordance with the FMPS, with the dollars generally being available only for funding one-time program initiatives, capital projects that comply with certain listed requirements and, in the case of distributions from the general endowment, arts programming.

Wells Fargo has worked with the CFO to identify available income and Staff in the Financial Management Services Department has consulted with other City departments to develop recommendations regarding allocation of the distributable income. This distribution includes no corpus of the trust, rather it relates only to income received from the investments within the trust itself.  

The following actions are recommended for available Trust income in each of the designated sub-accounts:

1.  The Aviation Endowment Gas Lease Fund - distribution of income totaling $1,006,359.00 for use toward capital projects.

2.  The Park System Endowment Gas Lease Fund - distribution of income totaling $430,731.00 ($278,370.00 from restricted parks; $152,361.00 from unrestricted parks) for use toward capital projects.

3.  The Water and Sewer Endowment Gas Lease Fund - distribution of income totaling $214,663.00 for use toward capital projects.

4.  The General Endowment Gas Lease Fund - distribution of income totaling $580,732.00 for use toward arts programming needs paid for within the General Fund.

Note:  The Nature Center Endowment Gas Lease Fund does not currently have any income available for distribution.