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6560 executed contract - Enterprise Risk Consulting - Amendment 1 Docusign City Council Transmittal Coversheet File Name Purchasing Contact City Council Target Date Contract Value Piggy Back Option Contract Expiration Ordinance DocuSign Envelope ID: FDF2D120-5BF2-4E93-9B02-0E1854D8C211 PSA no 6560 Rebecca Hunter Enterprise Risk Consulting - Amendment No. 1 $299,000 10/10/17 N/A 2017-290 PSA 6560 – Amendment No. 1 Page 1 of 3 THE STATE OF TEXAS § § COUNTY OF DENTON § FIRST AMENDMENT TO CONTRACT BY AND BETWEEN THE CITY OF DENTON, TEXAS AND ENTERPRISE RISK CONSULTING, LLC CONTRACT NO. 6560 THIS FIRST AMENDMENT TO CONTRACT NO. 6560 (“Amendment”) by and between the City of Denton, Texas (“City”) and Enterprise Risk Consulting, LLC (“Consultant”); The original Agreement provided by Enterprise Risk Consulting, LLC for professional services related to Agreement for Denton Municipal Electric (“DME”) Energy Center Resource Planning and Power Supply Strategy, as is contained in Contract No. 6560. The initial agreement for the Basic Services was approved on August 23, 2017, in the not-to-exceed amount of $99,000. The CITY deems it necessary to further expand the professional services provided by CONSULTANT to the CITY; NOW THEREFORE, 1. “ARTICLE II, SCOPE OF BASIC SERVICES, A.” of the Agreement is hereby amended to read as follows: C. “CONSULTANT shall perform all those services set forth in the individual task orders as described in Exhibit 1 – Scope of Work and Cost Estimate for Part II – Power Supply Hedge Strategy & Risk Management Process Implementation, which shall be attached to this Agreement and made a part hereof. 2. “ARTICLE V, COMPENSATION, B. BILLING AND PAYMENT” of the Agreement is hereby amended to read as follows: “BILLING AND PAYMENT: For and in consideration of the professional services to be performed by the CONSULTANT herein, the OWNER agrees to pay, based on the cost estimate detail shown in Exhibit “B” – Cost Estimate of Professional Services and Reimbursement of Out-of-Pocket Expenses and Exhibit “1” – Scope of Work and Cost Estimate for Power Supply Hedge Strategy & Risk Management Process Implementation, which are attached hereto and made a part of this Agreement as if written DocuSign Envelope ID: FDF2D120-5BF2-4E93-9B02-0E1854D8C211 PSA 6560 – Amendment No. 1 Page 2 of 3 word for word herein, a total fee, not including out-of-pocket expenses, such as airfare, hotel, ground transportation, and meals including reimbursement for direct non-labor expenses and incidentals not to exceed $299,000 for Part I and Part II of the Project.” All other provisions of the contract, as heretofore amended, remain in full force and effect. IN WITNESS WHEREOF, the CITY and the CONSULTANT, have each executed this Amendment, by and through their respective duly authorized representatives and officers on this the _________________________. “CITY” CITY OF DENTON, TEXAS A Texas Municipal Corporation By: __________________________________ TODD HILEMAN CITY MANAGER ATTEST: JENNIFER WALTERS, CITY SECRETARY By: __________________________________ APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY By: ___________________________________ DocuSign Envelope ID: FDF2D120-5BF2-4E93-9B02-0E1854D8C211 October 10, 2017 PSA 6560 – Amendment No. 1 Page 3 of 3 “CONSULTANT” Enterprise Risk Consulting, LLC A Limited Liability Corporation By: _________________________________ AUTHORIZED SIGNATURE, TITLE DocuSign Envelope ID: FDF2D120-5BF2-4E93-9B02-0E1854D8C211 President 9/21/17 Confidential Proposal of the City of Denton from Enterprise Risk Consulting, LLC 1 Exhibit 1 - Scope of Work for the Project Power Supply Hedge Strategy & Risk Management Process Implementation (Part II) I. Introduction The objective of the consulting engagement is to provide strategic support to Denton by providing strategic support in the implementation of a reengineered EMO function for power supply trading and risk management, as well as the design and implementation of a long-term power supply strategy, and assistance in revising Denton’s pro forma financial projections. The proposed timeline for the scope of work is October 2017 to September 2018. II. Scope of Work Power Supply Hedge Strategy & Risk Management Process Implementation Activities will include: • Based on Denton’s risk assessment and best practice process gap analysis, ERC will assist Denton with the implementation of changes to its trading and energy risk management operational process as needed to meet best practice requirements and close identified process gaps. • ERC will work with Denton personnel to revise its energy risk management and credit risk management governance documents to reflect the necessary changes identified in the risk assessment and gap analysis, and to reflect implemented changes to Denton’s organizational structure and management process. • Based on the chosen renewable power supply resource plan, ERC will develop an integrated hedge strategy to meet Denton’s chosen renewable resource goals. o ERC will work with Denton to determine its risk tolerance and to develop measurable risk management and risk reduction objectives. o Based on Denton’s risk tolerance and risk reduction objectives, ERC will develop an actionable hedge strategy including hedge targets specifying quantities, durations, transaction triggers, and transaction deadlines. These will include power market targets for hedging and balancing DME’s power supply portfolio, along with natural gas supply and hedge targets (to be determined by the operational and monetization plan developed for the DEC). o Based on the hedge strategy, ERC will translate the hedge strategy, its targets and deadlines, into a risk limit structure for control and policy compliance purposes. EXHIBIT 1 DocuSign Envelope ID: FDF2D120-5BF2-4E93-9B02-0E1854D8C211 9/21/17 Confidential Proposal of the City of Denton from Enterprise Risk Consulting, LLC 2 • Based on the renewable resource plan and integrated hedge strategy, ERC will develop a set of risk and performance metrics. • Based on the new renewable power supply resource plan and hedge strategy, ERC will assess Denton’s risk information system requirements including deal capture and transaction and exposure database needs, system security, risk and performance measurement functionality, and settlement and accounting functionality. • ERC will work with Denton staff to incorporate the revised risk management objectives, risk and performance metrics, risk management strategies, and risk limit structure in Denton’s risk management governance documents. • Knowledge Transfer - Ongoing interaction between Denton personnel and ERC staff will help to develop skills to allow Denton to independently and efficiently operate a functional market-based power supply and risk management program. • Pro Forma Support – ERC will assist Denton in revising its pro forma financial projections for expenses related to wholesale electric power and fuel supply costs resulting from its revised renewable resource power supply plan, and revised budgets for its EMO operations. III. Deliverables Deliverables will include written documents submitted by email, information communicated in meetings and teleconferences, and PowerPoint presentations. IV. Cost Estimate The cost estimate is presented as a range of minimum to maximum estimated amounts. The range is a function of several elements of uncertainty. How much time on-site will be required, and how many trips to Denton will be required? How many best practice gaps (and how large) will be identified in the risk assessment and gap analysis? Based on Denton’s to-be-determined risk tolerance, how transaction heavy or light will be the new hedge strategy? How many resource nodes will be involved in the revised resource plan (this will affect the number amount of analysis and bidding preparation needed to manage congestion hedging)? How cooperative or resistant will existing staff act? How much training will be required for new staff or existing staff who take on new roles? What is the current state of Denton’s credit risk management process, and how many counterparties are on the books (this can either speed up or slow down the transaction planning process). It is anticipated that Larry Lawrence (President), Neil McAndrews (Senior Principal), and Tom Lord (Senior Principal) will perform the majority of the work under this contract, assisted by ERC’s analytical support staff. DocuSign Envelope ID: FDF2D120-5BF2-4E93-9B02-0E1854D8C211 9/21/17 Confidential Proposal of the City of Denton from Enterprise Risk Consulting, LLC 3 Scope of Work Minimum Estimate* Maximum Estimate* Power Supply Hedge Strategy & Risk Management Process Implementation $135,000 $182,250 Out of Pocket Expenses Travel costs such as airfare, hotel, ground transportation, and meals will be billed at out-of- pocket cost, without additional markup. Air travel will be purchased at coach class fares, with advance purchase discounted tickets used when scheduling permits. Travel time is not billable unless project-specific work is performed in route. Expense reports detailing all expenses, along with receipts, will be presented for reimbursement. We estimate that the scope of work could involve several trips to Denton for Neil McAndrews and Larry Lawrence, and a few for Tom Lord. Thus, we would need an adder to the cost estimate to cover travel expenses. DocuSign Envelope ID: FDF2D120-5BF2-4E93-9B02-0E1854D8C211 Certificate Of Completion Envelope Id: FDF2D1205BF24E939B020E1854D8C211 Status: Completed Subject: Please DocuSign: City Council Contract -Enterprise Risk Consulting - Amendment No 1 Source Envelope: Document Pages: 7 Signatures: 4 Envelope Originator: Certificate Pages: 6 Initials: 0 Rebecca Hunter AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) rebecca.hunter@cityofdenton.com IP Address: 10.102.101.12 Record Tracking Status: Original 10/5/2017 7:00:24 AM Holder: Rebecca Hunter rebecca.hunter@cityofdenton.com Location: DocuSign Signer Events Signature Timestamp Rebecca Hunter rebecca.hunter@cityofdenton.com Assistant Purchasing Manager City of Denton Security Level: Email, Account Authentication (Optional) Completed Using IP Address: 129.120.6.150 Sent: 10/5/2017 7:09:03 AM Viewed: 10/5/2017 7:09:14 AM Signed: 10/5/2017 7:09:58 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Larry Lawrence llawrence@enterprise-risk.com President Security Level: Email, Account Authentication (Optional)Using IP Address: 201.165.81.96 Sent: 10/5/2017 7:10:00 AM Resent: 10/6/2017 9:27:56 AM Viewed: 10/6/2017 10:17:43 AM Signed: 10/6/2017 10:52:07 AM Electronic Record and Signature Disclosure: Accepted: 10/6/2017 10:17:43 AM ID: f85f6cc2-ecfa-4e9d-91f1-1368c26f9f3c Jennifer DeCurtis jennifer.decurtis@cityofdenton.com Deputy City Attorney City of Denton Security Level: Email, Account Authentication (Optional) Using IP Address: 129.120.6.150 Sent: 10/6/2017 10:52:11 AM Viewed: 10/6/2017 2:20:50 PM Signed: 10/6/2017 2:21:35 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Julia Winkley julia.winkley@cityofdenton.com Contracts Administration Supervisor City of Denton Security Level: Email, Account Authentication (Optional) Completed Using IP Address: 129.120.6.150 Sent: 10/6/2017 2:21:38 PM Viewed: 10/10/2017 3:33:28 PM Signed: 10/10/2017 3:33:51 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Todd Hileman Todd.Hileman@cityofdenton.com City Manager City of Denton Security Level: Email, Account Authentication (Optional) Using IP Address: 129.120.6.150 Sent: 10/10/2017 3:33:55 PM Viewed: 10/10/2017 4:39:09 PM Signed: 10/10/2017 4:39:19 PM Electronic Record and Signature Disclosure: Signer Events Signature Timestamp Accepted: 7/25/2017 9:02:14 AM ID: 57619fbf-2aec-4b1f-805d-6bd7d9966f21 Jennifer Walters jennifer.walters@cityofdenton.com City Secretary City of Denton Security Level: Email, Account Authentication (Optional) Using IP Address: 129.120.6.150 Sent: 10/10/2017 4:39:21 PM Viewed: 10/16/2017 9:38:47 AM Signed: 10/16/2017 9:39:33 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Sherri Thurman sherri.thurman@cityofdenton.com Security Level: Email, Account Authentication (Optional) Sent: 10/6/2017 10:52:09 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Julia Winkley julia.winkley@cityofdenton.com Contracts Administration Supervisor City of Denton Security Level: Email, Account Authentication (Optional) Sent: 10/6/2017 10:52:10 AM Viewed: 10/6/2017 11:11:11 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Jane Richardson jane.richardson@cityofdenton.com Assistant City Secretary City of Denton Security Level: Email, Account Authentication (Optional) Sent: 10/10/2017 3:33:53 PM Viewed: 10/13/2017 10:04:08 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Robin Fox Robin.fox@cityofdenton.com Security Level: Email, Account Authentication (Optional) Sent: 10/10/2017 3:33:54 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Carbon Copy Events Status Timestamp Jennifer Bridges jennifer.bridges@cityofdenton.com Procurement Assistant City of Denton Security Level: Email, Account Authentication (Optional) Sent: 10/16/2017 9:39:35 AM Viewed: 10/16/2017 2:14:56 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Jane Richardson jane.richardson@cityofdenton.com Assistant City Secretary City of Denton Security Level: Email, Account Authentication (Optional) Sent: 10/16/2017 9:39:36 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Bryan Langley Bryan.Langley@cityofdenton.com Assistant City Manager City of Denton Security Level: Email, Account Authentication (Optional) Sent: 10/16/2017 9:39:37 AM Viewed: 10/16/2017 10:42:26 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Sarah Kuechler sarah.kuechler@cityofdenton.com Security Level: Email, Account Authentication (Optional) Sent: 10/16/2017 9:39:38 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 10/16/2017 9:39:38 AM Certified Delivered Security Checked 10/16/2017 9:39:38 AM Signing Complete Security Checked 10/16/2017 9:39:38 AM Completed Security Checked 10/16/2017 9:39:38 AM Payment Events Status Timestamps Electronic Record and Signature Disclosure ELECTRONIC RECORD AND SIGNATURE DISCLOSURE From time to time, City of Denton (we, us or Company) may be required by law to provide to you certain written notices or disclosures. 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