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Exhibit 1 - Agenda Information Sheet - Amendment 3City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement & Compliance ACM: David Gaines DATE: October 6, 2020 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the approval of a third amendment to a Professional Services Agreement between the City of Denton and Black & Veatch Corporation, amending the contract approved by City Council on November 6, 2012, in the not-to-exceed amount of $564,000, amended by Amendments 1-2 approved by City Council, said third amendment to continue to provide electrical substation design and other engineering-related consulting services for Capital Improvement Projects and other technical support for Denton Municipal Electric; providing for the expenditure of funds therefor; and providing an effective date (File 5089 – providing for an additional third amendment expenditure amount not-to-exceed $2,990,900 with the total contract amount not-to-exceed $6,556,300). The Public Utilities Board recommends approval (6 - 0). INFORMATION /BACKGROUND Denton Municipal Electric (DME) requires the services of consultants for professional engineering services to aid in development and design for approved CIP projects, provide technical support, to prepare documentation to satisfy NERC/TRE/ERCOT requirements related to system protection, and to provide general technical consulting for other operations and system protection needs. DME has a Professional Service Agreement (PSA) in place with Black & Veatch Corporation for these services under contract # 5089 but the funds approved for the contract will not be sufficient to complete immediate and future needs. This contract was approved on November 6, 2012 for a not-to-exceed amount of $564,000. This contract was amended on December 17, 2013 to increase the amount by $781,400 and again on April 5, 2016 to increase the amount by $2,220,000 bringing the total not-to-exceed amount to $3,565,400. This proposed third amendment will add $2,990,900, of which, $900,900 is allocated for serving as DME’s Owners Engineer for the Hickory Geographical Information System (GIS) CIP project and $2,090,000 is allocated for future project design, for support with NERC/TRE/ERCOT requirements related to system protection and for general technical support. This amendment is expected to meet DME’s needs for these services for the next three years. The amount proposed for the increase in this contract was arrived at by estimating the man-hours required for completion of the tasks mentioned above. Below are summaries of the estimated cost breakdown of the proposed amendment. More details are included in the proposal. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com Hickory Gas Insulated Substation Funding Requirement Breakdown: The Hickory GIS Substation CIP project will be procured and constructed utilizing the design/build method with one contractor to design, procure, and construct the entire substation. This involves preparing a technical specification that completely describes the substation general function, equipment specifications, construction methods, and protection schemes. This will require the expertice of engineers in design of GIS substations and DME does not have engineers experienced with GIS design to create the technical specification. Also, Texas State law requires that the City of Denton have an Owners Engineer to oversee a design/build project and serve as oversight of the winning contractor throughout the project timeline to ensure quality is met and technical standards are followed. These services for the Hickory GIS Substation will require significant man-hours to complete and is summarized in the table above. Black and Veatch has experience with GIS substations and has already started work on the Hickory GIS Substation design by supporting the development of the site plan concept, assisting with determining the unique requirements for a GIS project, and preparing a technical specification for the GIS equipment. Engineering Services Breakdown: The following is a brief summary of the engineering services that Black & Veatch has provided under this contract and will continue to provide if the proposed amendment is approved: • Concept development and refinement for Underwood Substation to serve Cole and Hunter Ranch. • Design for a future capacity upgrade project at Denton West Substation. • Complete relay coordination study and propose recommended adjustments. The relay coordination information is generally updated annually or sooner if new stations or equipment is added or if there is a change to the transmission system. • Complete the relay loadability analysis and documentation for ERCOT/TRE/NERC compliance (needed annually). • Complete other reports and analysis on technical and operational issues. • Perform relay design and setting consultation. • NERC/ERCOT/TRE compliance support and interpretation of new standards • Consult on technical issues or designs. Changes in schedules, changes in priorities, unforeseen requirements, or the addition of new projects could alter which projects are undertaken within a given time. The contract is structured to be billed on an hourly basis for work performed so that, should needs arise that are not related to the specific projects that were used to construct the estimate for this amendment, Black & Veatch can be used as a resource for DME to obtain necessary professional engineering services to meet the requirements. It should also be noted that the contract does not obligate DME to provide work up to the contract amount or to make any minimum expenditure. DME has chosen to recommend an amendment to the existing contract rather than a new contract since Black and Veatch has already spent a large amount of time on the Hickory Gas Insulated Substation project and has performed the engineer services mentioned above since 2012. Both entities are satisfied with the terms and conditions in the existing contract. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On November 6, 2012, City Council approved a contract with Black & Veatch Corporation, in the not-to- exceed amount of $564,000 (Ordinance 2012-303). On December 17, 2013, City Council approved Amendment 1 with Black & Veatch Corporation, in the not-to-exceed amount of $781,400 (Ordinance 2013-340). On April 5, 2016, City Council approved Amendment 2 with Black & Veatch Corporation, in the not-to- exceed amount of $2,220,000 (Ordinance 2016-099). On September 28, 2020, the Public Utilities Board (PUB) recommended this item to the City Council for consideration. RECOMMENDATION Award a third amendment to the Professional Services Agreement between the City of Denton and Black & Veatch Corporation, to continue to provide electrical substation design and other engineering-related consulting services for Capital Improvement Projects and other technical support for Denton Municipal Electric in the not-to-exceed amount of $2,990,900. PRINCIPAL PLACE OF BUSINESS Black & Veatch Corporation Overland Park, KS ESTIMATED SCHEDULE OF PROJECT Project designs will begin (or continue) immediately upon approval by the City Council and will proceed in accordance with project needs. FISCAL INFORMATION These services will be funded from PSA-Black & Veatch Corp-FY 13 account 603187491.1360.3560. Purchase Order #160700 has been increased in the Purchasing software system in the amount of $2,990,900. The budgeted amount for this item is $6,556,300. The majority of the costs attributable to the transmission category will ultimately be recovered through the Public Utility Commission transmission cost of service program (TCOS). The proposed amendment will not increase CIP cost. Amounts for all projects were included in the CIP or annual budgets. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Original Contract and Ordinance Exhibit 3: Ordinance and Amendment 1 Exhibit 4: Ordinance and Amendment 2 Exhibit 5: Ordinance and Amendment 3 Exhibit 6: Presentation Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Mark Zimmerer, 940-349-7169. Legal point of contact: Mack Reinwand at 940-349-8333.