Exhibit 1 - Agenda Information Sheet - Extension City of Denton
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AGENDA INFORMATION SHEET
DEPARTMENT: Procurement
ACM: Cassey Ogden
DATE: November 14, 2023
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
authorizing the City Manager to execute a contract extension between the City of Denton and HSI
Workplace Compliance Solutions, Inc. until the project is complete, for consulting services related to North
American Electric Reliability Corporation (“NERC”) compliance for the City of Denton; and declaring an
effective date (RFQ 7693 – extending a contract with HSI Workplace Compliance Solutions, Inc., until
project completion).
STRATEGIC ALIGNMENT
This action supports Key Focus Area: Pursue Organizational Excellence and Collaborative and Respectful
Leadership.
INFORMATION/BACKGROUND
The City’s Electric Department, Denton Municipal Electric (“DME”), is a North American Electric
Reliability Corporation (NERC) Registered Entity that must be compliant with NERC’s standards for the
electric power industry. DME must comply with over 350 NERC requirements. These are enforced by the
Federal Energy Regulatory Commission. Violations of these standards could result in Civil Penalties of up
to $1,000,000.00 per violation, per day. NERC audits are conducted on a regular schedule and DME is
scheduled to be audited in 2025. To assist in its audit preparation DME is seeking approval of an agreement
for services to review and analyze DME’s NERC compliance state.
In preparation for an upcoming audit, DME and the City’s Technology Services department will benefit
from having a professional review, analysis, and mitigation plans to prepare for the upcoming audit. The
RFQ solicitation criteria required that firms have experience with NERC compliance programs that cover
both the operational and cyber areas of NERC, experience with audit support, and have a licensed engineer
supporting the project. Of the eight firms that replied to the RFQ, HSI Workplace Compliance Solutions,
Inc. was selected as the most qualified.
The NERC Audit is scheduled for Fall 2025. The PSA for NERC Compliance Consulting will provide a
process review in early 2025 and provide onsite support through the completion of the NERC audit.
If approved, HSI Workplace Compliance Solutions, Inc. will complete an audit readiness assessment and
assist DME in making recommended changes, if needed. The consultant will provide an extensive review
of the current policies, procedures, controls, and evidence of the existing compliance program governing
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
both DME and Technology Services. The overall goal is to prepare DME for audit readiness through the
utilization of a third party that has an independent view without the handicap of being too familiar with the
program.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On November 2, 2021, City Council approved a contract with HSI Workplace Compliance Solutions,
Inc., in the not-to-exceed amount of $280,000 (Ordinance 21-2305).
On November 13, 2023, this item will be presented to the Public Utilities Board (PUB) for consideration.
RECOMMENDATION
Award a contract extension with HSI Workplace Compliance Solutions, Inc., for consulting services related
to North American Electric Reliability Corporation (“NERC”) compliance for the City of Denton, in a not-
to-exceed amount of $280,000.
PRINCIPAL PLACE OF BUSINESS
HSI Workplace Compliance Solutions, Inc.
Kennewick, WA
ESTIMATED SCHEDULE OF PROJECT
This project does not have a defined time period and the schedule of the project will remain until the project
is complete.
FISCAL INFORMATION
These services will be funded from Denton Municipal Electric operating budget account 600750.
Requisitions will be entered on an as-needed basis. The budgeted amount for this item is $280,000.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Original Ordinance and Contract
Exhibit 3: Ordinance and Amendment 1
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Jerry Looper, 940-349-7676.
Legal point of contact: Marcella Lunn at 940-349-8333.