Exhibit 1 - Agenda Information Sheet
City of Denton
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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
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Denton, Texas
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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.