Page 57 - Honorable Mayor and Members of the City Council

CORE VALUE STATEMENT

HISTORY AND BACKGROUND OF CORE VALUE FUND

In November 2005 during a planning work session, the Benbrook City Council enumerated its goals and objectives for
the upcoming fiscal year and beyond. Several goals, particularly in municipal finance, were discussed for establishing
a clear policy direction for the long term.

These discussions were triggered by the City’s acceptance of a proposal from Chesapeake Energy Corporation for a
natural gas and oil lease for City property. The City owns approximately 211 acres of land with mineral rights in the
Whitestone Ranch area. The land includes Whitestone Golf Course, two undeveloped park sites, and the fire station
site. Chesapeake Energy Corporation’s proposal offered a royalty agreement of twenty-five percent plus a bonus of
$5,700 per acre; the total bonus was approximately $1,207,260. With the receipt of this unexpected windfall, the Council
decided to examine financial goals and to institute specific objectives and restrictions for the natural gas and oil lease
proceeds. Council has not yet allocated any of these proceeds for special projects.

The 2007-08 Budget reflected the transfer of $200,000 from General Fund reserves to the Core Value Fund. The City
deferred the preliminary engineering project for Benbrook Boulevard; funds were allocated in the 2006-07 Budget for
this project and were not spent. Funds in the amount of $142,206 were allocated for transfer from the Operating Funds
in the 2009-10 Budget. This amount represents the estimated revenue generated from current property taxes from
mineral rights (natural gas wells); Council requested that revenues from this source not be used for operating programs
and used for special projects only. The 2010-11 Budget included the transfer of $571,617 from the General Fund to the
Core Value Fund; $200,000 was for transfer of sales tax revenue attributed to new development and $371,617 was to
transfer current property tax revenue generated from mineral rights. The 2011-12 Budget included the transfer of
$535,466 from the General Fund to the Core Value Fund; $147,693 was transferred for sales tax revenue attributed to
new development and $387,773 was transferred from current property tax revenue generated from mineral rights. The
2012-13 Budget included the transfer of $378,174 from the General Fund for current property tax revenue generated
from mineral rights.

IMPACT OF CORE VALUE FUND ON 2018-19 BUDGET

The City of Benbrook has no planned expenses for the 2018-19 with financing from the Core Value Fund.

CITY OF BENBROOK 2018-19 ANNUAL BUDGET
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