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Exhibit 1 - Agenda Information Sheet City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement & Compliance ACM: David Gaines DATE: August 18, 2020 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager to execute a Professional Services Agreement with Schneider Engineering, LTD., for revisions to the Electric Service Standards for Denton Municipal Electric as set forth in the contract; providing for the expenditure of funds therefor; and providing an effective date (RFQ 7379 – Professional Services Agreement for revisions to the Electric Service Standards for Denton Municipal Electric awarded to Schneider Engineering, LTD., in the not-to-exceed amount of $150,000). The Public Utilities Board recommends approval (4 - 0). INFORMATION /BACKGROUND Denton Municipal Electric (DME)’s Electric Service Standards (Standard) provide the requirements for electric service and is the basis for line extensions for service, to new and existing customers. It is critical for the customers and DME the Standard provide a clear and discernable understanding of the rules, regulations, requirements, responsibilities, and conditions associated with attaching to DME’s electric distribution grid. It is unknown when the base for the current standards was originally written and approved by the City Council; however, the current revised and amended version was adopted by the City Council on April 1, 2014. DME established a planned update to the Standard – which was set for five (5) years. Initiation of this update did begin in 2019 as planned. However, as the deep dive of reviewing the Standard’s language and wording and current practices was discussed; contradictions of phrasing and confusion on parts of its requirements, related to application and intent, was seen. In order to capture and make all the adjustments necessary, the update dragged on and was taking up significant staff time, from multiple departments, to fully vet the document as needed. Comparing the language in the existing Standard to language used by other utilities (i.e. Oncor, CoServ, Austin Energy, etc.) in their equivalent document showed many requirements of each utility (including DME) were basically universal; but, the content provided by the other utilities was often more clear and understandable to the reader. Confusing language is one of the motivators associated with a proposed rewrite of the document. When the Standard was originally developed, the often-questioned provision for a line extension was based on a 300-foot, overhead line allowance. The basic understanding of this form of line extension was for every new meter, the developer/customer would get credit for 300 foot of overhead line extension from an overhead power line. Using an overhead line extension is not outside the scope of what was typically acceptable in the electric utility industry. Overhead is still considered base construction when it comes to cost of service since underground is more costly to install. Since the Standard’s language does not officially City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com state overhead, this proved to be problematic in its application. There have been several instances that provided pause and lengthy discussion as to what is the proper application of the line extension policy. A couple of examples of these include: 1) a new customer would contact DME for service, but their home or business was more than 300 feet from an existing overhead power line – but an underground power line was available. The argument could be made an underground extension should be provided – even though it was more costly, or 2) service would require the construction of a new primary (main) service arterial since the property line was greater than 300 feet away. The argument was often made the extension of the primary line to the property should be at the expense of DME and the customer only charged with the 300 feet on the property. This scenario goes against what was thought to be the original intent of the line extension policy. To support acknowledgement of the often-confusing language, recently a developer in Denton criticized the Standard was not clear as to how to apply the line extension policy and they could not determine if there would be any charges associated with their development or not. Unclear application of the line extension policy is a second motivator to support a proposed rewrite of the entire document. DME has often received comments from builders and developers who construct in other electric service territory areas besides DME that the practices and policies in place at DME vary greatly to our competitors. DME staff who have worked for other electric utilities throughout the United States does provided enough concern that current practices and policies may fall outside of what is considered best business practices. This contract will provide the mechanism for a third-party engineering firm to analyze the existing Standard and initiate a rewrite of the document so that it is clearer in its content and intent. It is anticipated that the firm will access the standards from other utilities to learn and recommend organization for the new DME Standard. Additionally, this firm will work with DME to determine the formula and processes which would be associated with a new line extension policy based on revenue associated with the new load. A revenue associated line extension policy provides for a fairer cost of service or line extension based on the rate of return desired by the City. Finally, the firm will be charged with research and identification of where DME may or may not meet utility best practices, in relation to the electric service standards, and provide recommendations as how DME might change practices and policies to be more in-line with our competitors. A complete rewrite of the Electric Service Standards is due and will provide a long-term benefit for understanding and application of its contents for both the customer and DME staff. Project Cost Cost Estimate: $130,670 Contingency (reimbursable expenses and incidentals) $19,330 Total: $150,000 Request for Qualifications (RFQ) for professional electrical standards was sent to 639 prospective suppliers, including 26 Denton firms. In addition, specifications were placed on the Materials Management website for prospective suppliers to download and advertised in the local newspaper. Two (2) statement of qualifications (SOQ) were recieved. The SOQ were evaluated based upon published criteria including understanding of the requirements, past performance, experience and qualifications, and schedule. Based upon this evaluation, Schneider Engineering, LTD. was ranked the highest and determined to be the best value for the City. NIGP Code Used for Solicitation: 918 – Consulting Services 925 – Engineering Services, Professional Notifications sent for Solicitation sent in IonWave: 639 Number of Suppliers that viewed Solicitation in IonWave: 30 HUB-Historically Underutilized Business Invitations sent out: 39 SBE-Small Business Enterprise Invitations sent out: 179 Responses from Solicitation: 2 PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On August 10, 2020, the Public Utilities Board (PUB) recommended this item to the City Council for consideration. RECOMMENDATION Award a contract with Schneider Engineering, LTD, for revisions to the Electric Service Standards for Denton Municipal Electric, in a not-to-exceed amount of $150,000. PRINCIPAL PLACE OF BUSINESS Schneider Engineering, LTD Boerne, TX ESTIMATED SCHEDULE OF PROJECT This project will be started upon approval with a completion date within 365 days. FISCAL INFORMATION These services will be funded through the department’s budget on an as-needed basis. The City will only pay for services rendered and is not obligated to pay the full contract amount unless needed. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Evaluation Sheet Exhibit 3: Ordinance and Contract Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Jerry Fielder, 940 349-7173. Legal point of contact: Mack Reinwand at 940-349-8333.