Page 48 - Benbrook FY20 Approved Budget

CITY OF BENBROOK 2019-20 ANNUAL BUDGET

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 2019-20 BUDGET

The City of Benbrook has no planned expenses for the 2019-20 with financing from the Core Value Fund.

In 2014 the expansion of Benbrook Boulevard, the stretch of Highway 377 spanning from Winscott Road/Lakeway Drive north to the
IH20/Loop 820 junction, was started. The Texas Department of Transportation (TXDOT) project includes the addition of a median and left
turn signals across the approximately 1.3 miles of highway. The development is expected to improve accessibility to businesses along Benbrook
Boulevard and to encourage growth by creating more opportunity for businesses to thrive. This economic growth is anticipated to result in
community advancement, to create a brighter future for Benbrook, and to increase the quality of life for current and for future generations.

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