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HomeMy WebLinkAbout1999-279NOTE. First Amendment - Ordinance No. 99-470 ORDINANCE NO q -,A //9 AN ORDINANCE AUTHORIZING THE CITY MANAGER TO ENTER INTO SEPARATE PROFESSIONAL SERVICES AGREEMENTS WITH DIVERSIFIED UTILITY CONSULTANTS, INC TO PERFORM AUDITS AND FRANCHISE REVIEWS OF TXU ELECTRIC AND GAS AND COSERV GAS COMPANY, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Manager, after review by the Assistant City Manager for Fiscal & Municipal Services, has determined that it would be in the best interests of the City to review the current year franchise fee calculation and the past franchise fee calculation of TXU Electric and Gas ("TXU") due to the fact that the recent audit by Diversified Utility Consultants, Inc indicated that TXU may owe the City delinquent franchise fees, and the need to verify the 1999 franchise fee payment under TXU's current franchise, and WHEREAS, under Senate Bill 7, the City must commence an audit of an electric company's franchise prior to September 1, 1999 on past franchise payments or it will lose the opportunity to audit such franchise payments, and WHEREAS, CoSery Gas Company has made an initial revenue filing which it would be in the public interest to review, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 That the City Manager is hereby authorized to enter into two separate Professional Services Agreements with Diversified Utility Consultants, Inc, substantially in the form of the Professional Services Agreements attached, to perform audits and franchise reviews of TXU Electric and Gas and to review the proposed tariff and revenue requirements of CoSery Gas Company SECTION 2 That the City Manager is hereby authorized to make the expenditures and take the actions set forth in the attached Agreements SECTION 3 That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the AA -ay of , 1999 JA M LER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY �J t ti APPRO D AS O LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY ♦ %/ / F \ he WcptU GL\Our D ummw\Ordmmcm\99\ ti tfw ordmmm dm Page 2 PROFESSIONAL SERVICES AGREEMENT FOR PROFESSIONAL SERVICES REGARDING COSERV GAS COMPANY'S PROPOSED TARIFF AND REVENUE REQUIREMENT STATE OF TEXAS § COUNTY OF DENTON § THIS AGREEMENT is made and entered into as of the D ! day of , 1999, by and between the City of Denton, Texas, a Texas municipal corpor ion, with its principal office at 215 East McKinney Street, Denton, Denton County, Texas 76201, hereinafter called "OWNER" and Diversified Utility Consultants, Inc, with its corporate office at 12113 Roxie Drive, Suite 110, Austin, Texas 78729, hereinafter called "CONSULTANT," acting herein, by and through their duly authorized representatives WITNESSETH, that in consideration of the covenants and agreements herein contained, the parties hereto do mutually agree as follows ARTICLE 1 EMPLOYMENT OF CONSULTANT The OWNER hereby contracts with the CONSULTANT, as an independent contractor, and the CONSULTANT hereby agrees to perform the services herein in connection with the Project as stated in the sections to follow, with diligence and in accordance with the highest professional standards customarily obtained for such services in the State of Texas The professional services set out herein are in connection with the following described project The Project shall include, without limitation, investigation and analysis of CoSery Gas Company's ("CoServ") proposed tariff and revenue requirement to make a determination of the reasonableness of the initial rates, based on analysis of that rate base, expenses, investment, and rate of return of CoServ, along with any other factors which would bear on the reasonableness of CoServ's rate request ARTICLE 2 SCOPE OF SERVICES The CONSULTANT shall perform the following services in a professional manner A The CONSULTANT shall perform all those services as necessary and as described in the CONSULTANT's proposal to review CoServ's proposed tariff and revenue requirement dated August 19, 1999, with CONSULTANT's cost proposal, which is attached hereto as Exhibit "A" B CONSULTANT shall perform all those services set forth in individual task orders, if any, which shall be attached to this Agreement and made a part hereof for all purposes as separate agreements C CONSULTANT will meet with and submit status reports to the Assistant City Manager for Fiscal & Municipal Services, City Attorney, and their staffs, will be available for at least two City Council meetings, and shall provide a final report indicating its recommendations as set forth in Exhibit "A" D If there is any conflict between the terms of this Agreement and the exhibits attached to this Agreement, the terms and conditions of this Agreement will control over the terms and conditions of the attached exhibits or task orders ARTICLE 3 ADDITIONAL SERVICES Additional services to be performed by the CONSULTANT, if authorized by the OWNER, which are not included in the above-descnbed Basic Services, are described as follows A Appeanng before regulatory agencies or courts as an expert witness in any litigation, including, without limitation, testimony in rate proceedings before the Texas Railroad Commission, the Public Utilities Commission, or other state and federal agencies B Any other additional services specifically requested by the OWNER not included within the scope of this Agreement and its exhibits ARTICLE 4 PERIOD OF SERVICE This Agreement shall become effective upon execution of this Agreement by the OWNER and the CONSULTANT and upon issue of a notice to proceed by the OWNER, and shall remain in force for the period which may reasonably be required for the completion of the Project, including Additional Services, if any, and any required extensions approved by the OWNERt provided however, the Project shall be completed within 180 days of the date of the notice to proceed, unless an extension of time is granted by the OWNER This Agreement may be sooner terminated in accordance with the provisions hereof Time is of the essence in this Agreement The CONSULTANT shall make all reasonable efforts to complete the services set forth herein as expeditiously as possible and to meet the schedule established by the OWNER in Exhibit "A", acting through its City Manager or his designee Page 2 ARTICLE 5 COMPENSATION A COMPENSATION TERMS 1 "Subcontract Expense" is defined as expenses incurred by the CONSULTANT in employment of others in outside firms for services 2 "Direct Non -Labor Expense" is defined as that expense for any assignment incurred by the CONSULTANT for supplies, transportation and equipment, travel, communications, subsistence, and lodging away from home, and similar incidental expenses in connection with that assignment B 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 at an hourly rate shown in Exhibit `B", July 30, 1999 letter from CONSULTANT to OWNER and attached manpower and cost requirements to provide review of CoServ's tariff and applicable revenue requirement on behalf of OWNER, a total fee, including reimbursement for direct non -labor expenses not to exceed $17,000 00 Partial payments to the CONSULTANT will be made on the basis of detailed monthly statements rendered to and approved by the OWNER through its Assistant City Manager for Fiscal & Municipal Services and its City Attorney or his designee, however, under no circumstances shall any monthly statement for services exceed the value of the work performed at the time a statement is rendered The OWNER may withhold the final five percent (5%) of the contract amount until completion of the Project Nothing contained in this Article shall require the OWNER to pay for any work which is unsatisfactory, as reasonably determined by the City Manager or his designee, or which is not submitted in compliance with the terms of this Agreement The OWNER shall not be required to make any payments to the CONSULTANT when the CONSULTANT is in default under this Agreement It is specifically understood and agreed that the CONSULTANT shall not be authorized to undertake any work pursuant to this Agreement which would require additional payments by the OWNER for any charge, expense, or reimbursement above the maximum not to exceed fee as stated, without first having obtained written authorization from the OWNER The CONSULTANT shall not proceed to perform the services listed in Article 3 "Additional Services," without obtaining prior written authorization from the OWNER C ADDITIONAL SERVICES For additional services authorized in writing by the OWNER in Article 3, the CONSULTANT shall be paid based on the Schedule of Charges at an hourly rate shown in Exhibit "A" Payments for additional services shall Page 3 be due and payable upon submission by the CONSULTANT, and shall be in accordance with subsection B hereof Statements shall not be submitted more frequently than monthly D PAYMENT If the OWNER fails to make payments due the CONSULTANT for services and expenses within 60 days after receipt of the CONSULTANT's undisputed statement thereof, the amounts due the CONSULTANT will be increased by the rate of one percent (1%) per month from the said sixtieth (60`h) day, and, in addition, the CONSULTANT may, after giving seven days' written notice to the OWNER, suspend services under this Agreement until the CONSULTANT has been paid in full all amounts due for services, expenses, and charges, provided, however, nothing herein shall require the OWNER to pay the late charge of one percent (1%) set forth herein if the OWNER reasonably determines that the work is unsatisfactory, in accordance with this Article 5, "Compensation " ARTICLE 6 OBSERVATION AND REVIEW OF THE WORK The CONSULTANT will exercise reasonable care and due diligence in discovering and promptly reporting to the OWNER any defects or deficiencies in the work of the CONSULTANT or any subcontractors or subconsultants ARTICLE 7 OWNERSHIP OF DOCUMENTS All documents prepared or furnished by the CONSULTANT (and CONSULTANT's subcontractors or subconsultants) pursuant to this Agreement are instruments of service, and shall become the property of the OWNER upon the termination of this Agreement The CONSULTANT is entitled to retain copies of all such documents The documents prepared and furnished by the CONSULTANT are intended only to be applicable to this Project, and OWNER's use of these documents in other projects shall be at OWNER's sole risk and expense In the event the OWNER uses any of the information or materials developed pursuant to this Agreement in another project or for other purposes than specified herein, CONSULTANT is released from any and all liability relating to their use in that project ARTICLE 8 INDEPENDENT CONTRACTOR CONSULTANT shall provide services to OWNER as an independent contractor, not as an employee of the OWNER CONSULTANT shall not have or claim any right arising from employee status Page 4 ARTICLE 9 INDEMNITY AGREEMENT The CONSULTANT shall indemnify and save and hold harmless the OWNER and its officers, agents, and employees from and against any and all liability, claims, demands, damages, losses, and expenses, including, but not limited to court costs and reasonable attorney fees incurred by the OWNER, and including, without limitation, damages for bodily and personal injury, death and property damage, resulting from the negligent acts or omissions of the CONSULTANT or its officers, shareholders, agents, or employees in the execution, operation, or performance of this Agreement Nothing in this Agreement shall be construed to create a liability to any person who is not a party to this Agreement, and nothing herein shall waive any of the parties' defenses, both at law or equity, to any claim, cause of action, or litigation filed by anyone not a party to this Agreement, including the defense of governmental immunity, which defenses are hereby expressly reserved ARTICLE 10 INSURANCE During the performance of the services under this Agreement, CONSULTANT shall maintain the following insurance with an insurance company licensed to do business in the State of Texas by the State Insurance Commission or any successor agency that has a rating with Best Rate Carriers of at least an A- or above A Comprehensive General Liability Insurance with bodily injury limits of not less than $500,000 for each occurrence and not less than $500,000 in the aggregate, and with property damage limits of not less than $100,000 for each occurrence and not less than $100,000 in the aggregate B Automobile Liability Insurance with bodily injury limits of not less than $500,000 for each person and not less than $500,000 for each accident, and with property damage limits of not less than $100,000 for each accident C Worker's Compensation Insurance in accordance with statutory requirements, and Employers' Liability Insurance with limits of not less than $100,000 for each accident D Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate E The CONSULTANT shall furnish insurance certificates or insurance policies at the OWNER's request to evidence such coverages The insurance policies shall name the OWNER as an additional insured on all such policies, and shall contain a provision that such insurance shall not be canceled or modified without 30 days' prior written notice to OWNER and CONSULTANT In such event, the CONSULTANT shall, prior to the Page 5 effective date of the change or cancellation, serve substitute policies f rrmshmg the same coverage ARTICLE 11 ARBITRATION AND ALTERNATE DISPUTE RESOLUTION The parties may agree to settle any disputes under this Agreement by submitting the dispute to arbitration or other means of alternate dispute resolution, such as mediation No arbitration or alternate dispute resolution ansmg out of or relating to this Agreement, involving one party's disagreement, may include the other party to the disagreement without the other's approval ARTICLE 12 TERMINATION OF AGREEMENT A Notwithstanding any other provision of this Agreement, either party may terminate by giving 30 days' advance written notice to the other party B This Agreement may be terminated in whole or in part in the event of either party substantially failing to fulfill its obligations under this Agreement No such termination will be affected unless the other party is given (1) written notice (delivered by certified mail, return receipt requested) of intent to terminate and setting forth the reasons specifying the non-performance, and not less than 30 calendar days to cure the failure, and (2) an opportunity for consultation with the terminating party prior to termination C If the Agreement is terminated prior to completion of the services to be provided hereunder, CONSULTANT shall immediately cease all services and shall render a final bill for services to the OWNER within 30 days after the date of termination The OWNER shall pay CONSULTANT for all services properly rendered and satisfactorily performed and for reimbursable expenses to termination incurred prior to the date of termination, in accordance with Article 5 "Compensation" Should the OWNER subsequently contract with a new consultant for the continuation of services on the Project, CONSULTANT shall cooperate in providing information The CONSULTANT shall turn over all documents prepared or furnished by CONSULTANT pursuant to this Agreement to the OWNER on or before the date of termination, but may maintain copies of such documents for its use ARTICLE 13 RESPONSIBILITY FOR CLAIMS AND LIABILITIES Approval by the OWNER shall not constitute, nor be deemed a release of the responsibility and liability of the CONSULTANT, its employees, associates, agents, subcontractors, and subconsultants for the accuracy and competency of their designs or other work, nor shall such approval be deemed to be an assumption of such responsibility by the Page 6 OWNER for any defect in the design or other work prepared by the CONSULTANT, its employees, subcontractors, agents, and consultants ARTICLE 14 NOTICES All notices, communications, and reports required or permitted under this Agreement shall be personally delivered or mailed to the respective parties by depositing same in the United States mail to the address shown below, certified mail, return receipt requested, unless otherwise specified herein Mailed notices shall be deemed communicated as of three days' mailing To CONSULTANT Jack Pous Diversified Utility Consultants, Inc 12113 Roxie Drive, Suite 110 Austin, Texas 78729 To OWNER City of Denton Herbert L Prouty, City Attorney 215 East McKinney Denton, Texas 76201 All notices shall be deemed effective upon receipt by the party to whom such notice is given, or within three days' mailing ARTICLE 15 ENTIRE AGREEMENT This Agreement, consisting of ten pages and two exhibits, constitutes the complete and final expression of the agreement of the parties, and is intended as a complete and exclusive statement of the terms of their agreements, and supersedes all prior contemporaneous offers, promises, representations, negotiations, discussions, communications, and agreements which may have been made in connection with the subject matter hereof ARTICLE 16 SEVERABILITY If any provision of this Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of this Agreement and shall not cause the remainder to be invalid or unenforceable In such event, the parties shall reform this Agreement to replace such stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the stricken provision. Page 7 ARTICLE 17 COMPLIANCE WITH LAWS The CONSULTANT shall comply with all federal, state, and local laws, rules, regulations, and ordinances applicable to the work covered hereunder as they may now read or hereinafter be amended ARTICLE 18 DISCRIMINATION PROHIBITED In performing the services required hereunder, the CONSULTANT shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap ARTICLE 19 PERSONNEL A The CONSULTANT represents that it has or will secure, at its own expense, all personnel required to perform all the services required under this Agreement Such personnel shall not be employees or officers of, or have any contractual relations with the OWNER CONSULTANT shall inform the OWNER of any conflict of interest or potential conflict of interest that may arise during the term of this Agreement B All services required hereunder will be performed by the CONSULTANT or under its supervision All personnel engaged in work shall be qualified, and shall be authorized and permitted under state and local laws to perform such services ARTICLE 20 ASSIGNABILITY The CONSULTANT shall not assign any interest in this Agreement, and shall not transfer any interest in this Agreement (whether by assignment, novation, or otherwise) without the prior written consent of the OWNER ARTICLE 21 MODIFICATION No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith, and no evidence of any waiver or modification shall be offered or received in evidence in any proceeding arising between the parties hereto out of or affecting this Agreement, or the rights or � obligations of the parties hereunder, and unless such waiver or modification is in writing and duly executed, and the parties further agree that the provisions of this section will not be waived unless as set forth herein Page 8 ARTICLE 22 MISCELLANEOUS A The following exhibits are attached to and made a part of this Agreement A — Letter of August 19, 1999, with CONSULTANT's cost proposal, B — July 30, 1999 letter from CONSULTANT to OWNER B CONSULTANT agrees that OWNER shall, until the expiration of three years after the final payment under this Agreement, have access to and the right to examine any directly pertinent books, documents, papers, and records of the CONSULTANT involving transactions relating to this Agreement CONSULTANT agrees that OWNER shall have access during normal working hours to all necessary CONSULTANT facilities and shall be provided adequate and appropriate working space in order to conduct audits in compliance with this section OWNER shall give CONSULTANT reasonable advance notice of intended audits C Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton County, Texas This Agreement shall be construed in accordance with the laws of the State of Texas D For the purpose of this Agreement, the key persons who will perform most of the work hereunder shall be Jack Pous, Dan Lawton, Ruth Runyon Wenzel, and Sara Coleman However, nothing herein shall limit CONSULTANT from using other qualified and competent members of its firm to perform the services required herein E CONSULTANT shall commence, carry on, and complete any and all projects with all applicable dispatch, in a sound, economical, and efficient manner and in accordance with the provisions hereof In accomplishing the projects, CONSULTANT shall take such stops as are appropriate to ensure that the work involved is properly coordinated with related work being carved on by the OWNER F The OWNER shall assist the CONSULTANT by placing at the CONSULTANT's disposal all available information pertinent to the Project, including previous reports, any other data relative to the Project, and arranging for the access thereto, and make all provisions for the CONSULTANT to enter in or upon public and private property as required for the CONSULTANT to perform services under this Agreement G The captions of this Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of this Agreement IN WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be executed by its duly authorized City Manager, and CONSULTANT has execute this A cement thro gh its duly authorized undersigned officer on this the Q'y day of 19M Page 9 ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPR VED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTOF4EY m WITNESS B F\shared\depNAL\Our Do mu\Contr U\99\drvaslFled cmery dw DIVERSIFIED UTILITY CONSULTANTS, INC Page 10 EXHIBIT "A" D U C I DIVERSIFIED UTILITY CONSULTANTS, INC. 19118 ROME DRIVE SUITE 110 AUSTIN TX 78799 TIDLID['AON (51M 257 9000 FAR 1519, 957 8968 August 19, 1999 Herbert L Prouty City Attorney City of Denton 215 East McKinney Denton, Texas 76201 Dear Mr Prouty AUG 2 0 1999 CITY OF DENTON LEGAL DEPT Diversified Utility Consultants, Inc ("DUCI") appreciates the City of Denton's ("City") request to have DUCI review CoSery Gas Company's ("CoServ") tan IT and requested rates CoSery is a new gas company which presented a tariff to the City based on its estimate of costs over 30 years DUCI is a Texas Corporation located in Austin, Texas, with a local as well as international client base DUCI's personnel have extensive, current and relevant Texas gas and electric utility rate regulation experience necessary to review the issues in CoServ's tariff filing Another major reason DUCI is qualified to perform a thorough analysis of CoServ's tariff is our recent experience conducting an analysis of TXU-G's proposed rate increase in the City As such, DUCI has experience working with the City staff and working within the time constraints set by the City As a new company, CoSery has made many assumptions in developing its rates With DUCI's extensive ratemaking background it will be able to analyze the assumptions for reasonableness, precedence and compliance with the Railroad Commission of Texas ("RCT") Substantive Rules tariff DUCI is proposing to perform the following general guidelines in the analysis of CoServ's COSERVI&PROPOSEaTARIFF__AND-REVENUE REQUIREMENT • Complete analysis of the Company's documented revenue requirements • Data request and discussions with the Company to determine its actual revenue requirements Review the Company's expenses, revenue calculation, rate base and depreciation amounts requested Herbert L Prouty Page 2 August 19, 1999 • Review each of CoServ's assumptions for reasonableness and compliance to RCT Rules • Verify allocation of costs between electric and gas and ensure they are properly separated • Verify that gas customers are charged for only their fair share of costs • Determine whether CoServ's rates are discriminatory to TXU-G's • Prepare a revenue requirement that is in compliance with the RCT rules • Develop rates based on data received • Prepare report to the City of DUCI's findings These are only meant to provide a general outline of DUCI's analysis DUCI will perform additional analysis on CoServ, as needed Another factor that will affect our analysis is the cooperation that we receive from the Company's I hope this has provided a general understanding of the approach DUCI intends on pursuing If you have any questions, please do not hesitate to contact us We look forward to working with you Sincerely, 1414 Diversified Utility Consultants, Inc 0-1/30/1?99 10054 5122572243 DUCI EXHIBIT "B" DUCI nrV-jMSnMn vTILITy OONSMTANTS, INC- *,.,a la].,a HOx= DSNQ eve 11a airs%=4 TX 78"0 o=a,=*"4M o sax 01000700" July 30, 1999 Herbert L Prouty City AttorneY City of Denton 215 East McKuuieY Denton, Texas 76201 Dear Mr Prouty Per your request, I am submitting to you cost estimates to review Lone Star Gas Company's ("LSGC") franchise fee calculations for the current year, LSGC's franchise fees paid in the past to the City of Denton ("City") and a review of Cosery Gas Company's tariffs and requested revenue requirements The cost estimate for the review of LSGC's current Year franchise fee calculation is based on mnminal assistance vnth LSGC. If the Company cooperates and sends mformauon to DUC1 instead of requiring us to travel to Denton, the cost may be closer to $4,000, The cost estimate to review LSGC's past franchise fee requires research and some cooperation frorn the Company DUCI will make every effort to verify whether LSGC has paid the proper franchise fee to the City The finial price proposal relates to DUCrs review of Cosery Gas Company's proposed tariff and applicable revenue requirement Per our preliminary review of Coserv's request, it appears the Company has included a forecasted rate base in its revenue requirement This is not permitt with In DUCra opinion, to adopt rates based on future estimated costs of Cosery will create pro LSGC LSGC could claim rate are discriminatory The proposal anticipates working closely with Cosery and developing rates that are fair and reasonable based on known and measurable costs We would like to thank you for allowing DUCI to submit this Proposal We are prepared to commence work on this project immediately upon selection, and would t omplete the project this proposal or oche a timely and efficient manner. Should you have any questions with regard matters, please feel free to contact Dan Lawton at (512)257-2600 SmelY, Sara Coleman 07/30/1999 10 54 5122572249 DUCI PAGE 05 PRICE PROPOSAL. MANPOWER AND COST REQUIREMENTS TO PROVIDE REVIEW OF COSERV GAS COMPANY'S TARIFF AND APPLICABLE REVENUE REQUIREMENT ON BEHALF OF THE CITY OF DENTON CHARGE CAT29M PRINCIPAL Dan Lawton Jack PODS SR CONSULTANT Sara Coleman TOTALLASOR �ap0 RECUIREMENT HOURLY CHARGES TOTAL 20 $125 $2,500 30 $125 $3,750 90 $100 $9,000 140 515.250 CHARGE CHARGES TOTAL CATEGORY Exem E A A Printing $010 Per Copy $325 00 Computer CIO per Hour $600 00 Postage Estimated $125 00 Phone Estimated $125 00 Air Travel 2 Trips to Denton $400 00 Transportation $75 00 Hotel & Meals Estimated $200 00 TOTAL EXPENSE 161 750 n0 GRAND TOTAL A+s_000_oa PROFESSIONAL SERVICES AGREEMENT FOR PROFESSIONAL SERVICES REGARDING TXU ELECTRIC AND GAS CURRENT YEAR AND PREVIOUS YEAR FRANCHISE FEE CALCULATIONS STATE OF TEXAS § COUNTY OF DENTON § THIS AGREEMENT is made and entered into as of the A14 day of �ZV�, 1999, by and between the City of Denton, Texas, a Texas municipal corporate , with its principal office at 215 East McKinney Street, Denton, Denton County, Texas 76201, hereinafter called "OWNER" and Diversified Utility Consultants, Inc, with its corporate office at 12113 Roxie Drive, Suite 110, Austin, Texas 78729, hereinafter called "CONSULTANT," acting herein, by and through their duly authorized representatives WITNESSETH, that in consideration of the covenants and agreements herein contained, the parties hereto do mutually agree as follows ARTICLE 1 EMPLOYMENT OF CONSULTANT The OWNER hereby contracts with the CONSULTANT, as an independent contractor, and the CONSULTANT hereby agrees to perform the services herein in connection with the Project as stated in the sections to follow, with diligence and in accordance with the highest professional standards customarily obtained for such services in the State of Texas The professional services set out herein are in connection with the following described project The Project shall include, without limitation, investigation and analysis of TXU Electric and Gas' ("TXU") current franchise fee calculations under the current franchise with OWNER, TXU's past franchise fee calculations, and to perform an audit on TXU's franchise with the OWNER in accordance with Senate Bill 7, along with any other services which would be necessary to perform such audits and franchise fee calculations ARTICLE 2 SCOPE OF SERVICES The CONSULTANT shall perform the following services in a professional manner A The CONSULTANT shall perform all those services as necessary and as described in the CONSULTANT's letter proposal dated August 19, 1999, with CONSULTANT's cost proposal, which is attached hereto as Exhibit "A", to review the various TXU current and delinquent francluse fee calculations and TXU audit as set forth in Senate Bill 7 B CONSULTANT shall perform all those services set forth in individual task orders, if any, which shall be attached to this Agreement and made a part hereof for all purposes as separate agreements C CONSULTANT will meet with and submit status reports to the Assistant City Manager for Fiscal & Municipal Services, City Attorney, and their staffs, will be available for at least two City Council meetings, and shall provide a final report indicating its recommendations as set forth in the scope of work of Exhibit "A" D If there is any conflict between the terms of this Agreement and the exhibits attached to this Agreement, the terms and conditions of this Agreement will control over the terms and conditions of the attached exhibits or task orders ARTICLE 3 ADDITIONAL SERVICES Additional services to be performed by the CONSULTANT, if authorized by the OWNER, which are not included in the above -described Basic Services, are described as follows A Appearing before regulatory agencies or courts as an expert witness in any litigation, including, without limitation, testimony in rate proceedings before the Texas Railroad Commission, the Public Utilities Commission, or other state and federal agencies B Any other additional services specifically requested by the OWNER not included within the scope of this Agreement and its exhibits ARTICLE 4 PERIOD OF SERVICE This Agreement shall become effective upon execution of this Agreement by the OWNER and the CONSULTANT and upon issue of a notice to proceed by the OWNER, and shall remain in force for the period which may reasonably be required for the completion of the Project, including Additional Services, if any, and any required extensions approved by the OWNER, provided however, the Project shall be completed within 120 days of the date of the notice to proceed, unless an extension of time is granted by the OWNER This Agreement may be sooner terminated in accordance with the provisions hereof Time is of the essence in this Agreement The CONSULTANT shall make all reasonable efforts to complete the services set forth herein as expeditiously as possible and to meet the schedule established by the OWNER in Exhibit "A", acting through its City Manager or his designee Page 2 ARTICLE 5 COMPENSATION A COMPENSATION TERMS 1 "Subcontract Expense" is defined as expenses incurred by the CONSULTANT in employment of others in outside firms for services 2 "Direct Non -Labor Expense" is defined as that expense for any assignment incurred by the CONSULTANT for supplies, transportation and equipment, travel, communications, subsistence, and lodging away from home, and similar incidental expenses in connection with that assignment B 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 at an hourly rate shown in Exhibit "B", July 30, 1999 letter from CONSULTANT to OWNER and attached manpower and cost requirements, a total fee, including reimbursement for direct non -labor expenses not to exceed $13,500 00 Partial payments to the CONSULTANT will be made on the basis of detailed monthly statements rendered to and approved by the OWNER through its Assistant City Manager for Fiscal & Municipal Services and its City Attorney or his designee, however, under no circumstances shall any monthly statement for services exceed the value of the work performed at the time a statement is rendered The OWNER may withhold the final five percent (5%) of the contract amount until completion of the Project Nothing contained in this Article shall require the OWNER to pay for any work which is unsatisfactory, as reasonably determined by the City Manager or his designee, or which is not submitted in compliance with the terms of this Agreement The OWNER shall not be required to make any payments to the CONSULTANT when the CONSULTANT is in default under this Agreement It is specifically understood and agreed that the CONSULTANT shall not be authorized to undertake any work pursuant to this Agreement which would require additional payments by the OWNER for any charge, expense, or reimbursement above the maximum not to exceed fee as stated, without first having obtained written authorization from the OWNER The CONSULTANT shall not proceed to perform the services listed in Article 3 "Additional Services," without obtaining prior written authorization from the OWNER C ADDITIONAL SERVICES For additional services authorized in writing by the OWNER in Article 3, the CONSULTANT shall be paid based on the Schedule of Charges at an hourly rate shown in Exhibit "B" Payments for additional services shall be due and payable upon submission by the CONSULTANT, and shall be in accordance Page 3 with subsection B hereof Statements shall not be submitted more frequently than monthly D PAYMENT If the OWNER fails to make payments due the CONSULTANT for services and expenses within 60 days after receipt of the CONSULTANT's undisputed statement thereof, the amounts due the CONSULTANT will be increased by the rate of one percent (1%) per month from the said sixtieth (60`h) day, and, in addition, the CONSULTANT may, after giving seven days' written notice to the OWNER, suspend services under this Agreement until the CONSULTANT has been paid in full all amounts due for services, expenses, and charges, provided, however, nothing herein shall require the OWNER to pay the late charge of one percent (1%) set forth herein if the OWNER reasonably determines that the work is unsatisfactory, in accordance with this Article 5, "Compensation " ARTICLE 6 OBSERVATION AND REVIEW OF THE WORK The CONSULTANT will exercise reasonable care and due diligence in discovering and promptly reporting to the OWNER any defects or deficiencies in the work of the CONSULTANT or any subcontractors or subconsultants ARTICLE 7 OWNERSHIP OF DOCUMENTS All documents prepared or furnished by the CONSULTANT (and CONSULTANT's subcontractors or subconsultants) pursuant to this Agreement are instruments of service, and shall become the property of the OWNER upon the termination of this Agreement The CONSULTANT is entitled to retain copies of all such documents The documents prepared and furnished by the CONSULTANT are intended only to be applicable to this Project, and OWNER's use of these documents in other projects shall be at OWNER's sole risk and expense In the event the OWNER uses any of the information or materials developed pursuant to this Agreement in another project or for other purposes than specified herein, CONSULTANT is released from any and all liability relating to their use in that project ARTICLE 8 INDEPENDENT CONTRACTOR CONSULTANT shall provide services to OWNER as an independent contractor, not as an employee of the OWNER CONSULTANT shall not have or claim any right arising from employee status Page 4 ARTICLE 9 INDEMNITY AGREEMENT The CONSULTANT shall indemnify and save and hold harmless the OWNER and its officers, agents, and employees from and against any and all liability, claims, demands, damages, losses, and expenses, including, but not limited to court costs and reasonable attorney fees incurred by the OWNER, and including, without limitation, damages for bodily and personal injury, death and property damage, resulting from the negligent acts or omissions of the CONSULTANT or its officers, shareholders, agents, or employees in the execution, operation, or performance of this Agreement Nothing in this Agreement shall be construed to create a liability to any person who is not a party to this Agreement, and nothing herein shall waive any of the parties' defenses, both at law or equity, to any claim, cause of action, or litigation filed by anyone not a party to this Agreement, including the defense of governmental immunity, which defenses are hereby expressly reserved ARTICLE 10 INSURANCE During the performance of the services under this Agreement, CONSULTANT shall maintain the following insurance with an insurance company licensed to do business in the State of Texas by the State Insurance Commission or any successor agency that has a rating with Best Rate Carriers of at least an A- or above A Comprehensive General Liability Insurance with bodily injury limits of not less than $500,000 for each occurrence and not less than $500,000 in the aggregate, and with property damage limits of not less than $100,000 for each occurrence and not less than $100,000 in the aggregate B Automobile Liability Insurance with bodily injury limits of not less than $500,000 for each person and not less than $500,000 for each accident, and with property damage limits of not less than $100,000 for each accident C Worker's Compensation Insurance in accordance with statutory requirements, and Employers' Liability Insurance with limits of not less than $100,000 for each accident D Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate E The CONSULTANT shall furnish insurance certificates or insurance policies at the OWNER's request to evidence such coverages The insurance policies shall name the OWNER as an additional insured on all such policies, and shall contain a provision that such insurance shall not be canceled or modified without 30 days' prior written notice to OWNER and CONSULTANT In such event, the CONSULTANT shall, prior to the Page 5 effective date of the change or cancellation, serve substitute policies furnishing the same coverage ARTICLE 11 ARBITRATION AND ALTERNATE DISPUTE RESOLUTION The parties may agree to settle any disputes under this Agreement by submitting the dispute to arbitration or other means of alternate dispute resolution, such as mediation No arbitration or alternate dispute resolution ansing out of or relating to this Agreement, involving one party's disagreement, may include the other party to the disagreement without the other's approval ARTICLE 12 TERMINATION OF AGREEMENT A Notwithstanding any other provision of this Agreement, either party may terminate by giving 30 days' advance written notice to the other party B This Agreement may be terminated in whole or in part in the event of either party substantially failing to fulfill its obligations under this Agreement No such termination will be affected unless the other party is given (1) written notice (delivered by certified mail, return receipt requested) of intent to terminate and setting forth the reasons specifying the non-performance, and not less than 30 calendar days to cure the failure, and (2) an opportunity for consultation with the terminating party prior to termination C If the Agreement is terminated prior to completion of the services to be provided hereunder, CONSULTANT shall immediately cease all services and shall render a final bill for services to the OWNER within 30 days after the date of termination The OWNER shall pay CONSULTANT for all services properly rendered and satisfactorily performed and for reimbursable expenses to termination incurred prior to the date of termination, in accordance with Article 5 "Compensation " Should the OWNER subsequently contract with a new consultant for the continuation of services on the Project, CONSULTANT shall cooperate in providing information The CONSULTANT shall turn over all documents prepared or furnished by CONSULTANT pursuant to this Agreement to the OWNER on or before the date of termination, but may maintain copies of such documents for its use ARTICLE 13 RESPONSIBILITY FOR CLAIMS AND LIABILITIES Approval by the OWNER shall not constitute, nor be deemed a release of the responsibility and liability of the CONSULTANT, its employees, associates, agents, subcontractors, and subconsultants for the accuracy and competency of their designs or other work, nor shall such approval be deemed to be an assumption of such responsibility by the Page 6 OWNER for any defect in the design or other work prepared by the CONSULTANT, its employees, subcontractors, agents, and consultants ARTICLE 14 NOTICES All notices, communications, and reports required or permitted under this Agreement shall be personally delivered or mailed to the respective parties by depositing same in the United States mail to the address shown below, certified mail, return receipt requested, unless otherwise specified herein Mailed notices shall be deemed communicated as of three days' mailing To CONSULTANT Jack Pous Diversified Utility Consultants, Inc 12113 Roxie Drive, Suite 110 Austin, Texas 78729 To OWNER City of Denton Herbert L Prouty, City Attorney 215 East McKinney Denton, Texas 76201 All notices shall be deemed effective upon receipt by the party to whom such notice is given, or within three days' mailing ARTICLE 15 ENTIRE AGREEMENT This Agreement, consisting of ten pages and two exhibits, constitutes the complete and final expression of the agreement of the parties, and is intended as a complete and exclusive statement of the terms of their agreements, and supersedes all prior contemporaneous offers, promises, representations, negotiations, discussions, communications, and agreements which may have been made in connection with the subject matter hereof ARTICLE 16 SEVERABILITY If any provision of this Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of this Agreement and shall not cause the remainder to be invalid or unenforceable In such event, the parties shall reform this Agreement to replace such stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the stricken provision, Page 7 ARTICLE 17 COMPLIANCE WITH LAWS The CONSULTANT shall comply with all federal, state, and local laws, rules, regulations, and ordinances applicable to the work covered hereunder as they may now read or hereinafter be amended ARTICLE 18 DISCRIMINATION PROHIBITED In performing the services required hereunder, the CONSULTANT shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap ARTICLE 19 PERSONNEL A The CONSULTANT represents that it has or will secure, at its own expense, all personnel required to perform all the services required under this Agreement Such personnel shall not be employees or officers of, or have any contractual relations with the OWNER CONSULTANT shall inform the OWNER of any conflict of interest or potential conflict of interest that may arise during the term of this Agreement B All services required hereunder will be performed by the CONSULTANT or under its supervision All personnel engaged in work shall be qualified, and shall be authorized and permitted under state and local laws to perform such services ARTICLE 20 ASSIGNABILITY The CONSULTANT shall not assign any interest in this Agreement, and shall not transfer any interest in this Agreement (whether by assignment, novation, or otherwise) without the prior written consent of the OWNER ARTICLE 21 MODIFICATION No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith, and no evidence of any waiver or modification shall be offered or received in evidence in any proceeding ansmg between the parties hereto out of or affecting this Agreement, or the rights or obligations of the parties hereunder, and unless such waiver or modification is in writing and duly executed, and the parties further agree that the provisions of this section will not be waived unless as set forth herein Page 8 ARTICLE 22 MISCELLANEOUS A The following exhibits are attached to and made a part of this Agreement A — Letter of August 19, 1999, with CONSULTANT's cost proposal, B — July 30, 1999 letter from CONSULTANT to OWNER B CONSULTANT agrees that OWNER shall, until the expiration of three years after the final payment under this Agreement, have access to and the right to examine any directly pertinent books, documents, papers, and records of the CONSULTANT involving transactions relating to this Agreement CONSULTANT agrees that OWNER shall have access during normal working hours to all necessary CONSULTANT facilities and shall be provided adequate and appropriate working space in order to conduct audits in compliance with this section OWNER shall give CONSULTANT reasonable advance notice of intended audits C Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton County, Texas This Agreement shall be construed in accordance with the laws of the State of Texas D For the purpose of this Agreement, the key persons who will perform most of the work hereunder shall be Jack Pons, Dan Lawton, Ruth Runyon Wenzel, and Sara Coleman However, nothing herein shall limit CONSULTANT from using other qualified and competent members of its firm to perform the services required herein E CONSULTANT shall commence, carry on, and complete any and all projects with all applicable dispatch, in a sound, economical, and efficient manner and in accordance with the provisions hereof In accomplishing the projects, CONSULTANT shall take such steps as are appropriate to ensure that the work involved is properly coordinated with related work being carved on by the OWNER F The OWNER shall assist the CONSULTANT by placing at the CONSULTANT's disposal all available information pertinent to the Project, including previous reports, any other data relative to the Project, and arranging for the access thereto, and make all provisions for the CONSULTANT to enter in or upon public and private property as required for the CONSULTANT to perform services under this Agreement G The captions of this Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of this Agreement IN WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be executed by its duly authorized City Manager, and CONSULTANT has execute this A cement thro h its duly authorized undersigned officer on this the 7f 011:1 day of 19 Page 9 ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPRO D AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY r` WITNESS B F \eh.,ed\dept\LOL\Our m. dm CITY OF DENTON, TEXAS MANAGER DIVERSIFIED UTILITY CONSULTANTS, INC PW4- P44 JA6K POUS, PRINCIPAL Page 10 EXHIBIT "A" DUCI DIVERSIFIED UTILITY CONSULTANTS, INC. 19118 RoxHO DRIVE SUITE 110 AUSTIN TX 78799 TELEPHONIC H619) 957 9800 VAX (519) 957 9948 August 19, 1999 Herbert L Prouty City Attorney City of Denton 215 East McKinney Denton, Texas 76201 Dear Mr Prouty [Rme11pnEID AUG 2 0 1999 CITY OF DENTON LEGAL DEPT Diversified Utility Consultants, Inc ("DUCI") appreciates the City of Denton's ("City") request to have DUCI assist in the review of TXU Gas Company's ("TXU-G") franchise payments to the City In addition, you would also like DUCI to perform an initial analysis on TXU-Electric franchise calculation as set forth in Senate Bill 7 ("SB-7) DUCI is a Texas Corporation located in Austin, Texas, with a local as well as international client base DUCI's personnel have extensive, current and relevant Texas gas and electric utility rate regulation experience necessary to review the issues in both the analysis of TXU-G and TXU- Electric franchise fee calculation Another major reason DUCI is qualified to perform a thorough analysis of TXU Company's franchise payment is our recent experience conducting an analysis of TXU-G's proposed rate increase in the City As such, DUCI has experience working with the City staff and working within the time constraints set by the City Another factor that qualifies DUCI to analyze TXU Company's franchise fees is that we have recently completed an analysis of franchise fees for several cities in the Rio Grande Valley of South Texas DUCI is proposing to perform the following general guidelines in the analysis of TXU-G's franchise calculation and TXU-Electnc audit per SB-7 TXU-US CURRENT_YEARFRANCHISE FEE CALCULATION Review the Company's actual franchise fee calculation performed Review Company workpapers, RCT reports, and documentation in determining the proper amounts to be included in the calculation Review weather normalization clause, and applicable workpapers Herbert L Prouty Page 2 August 19, 1999 Data requests to TXU-G's regarding input in calculation and other data Recalculate franchise fee due to the City Prepare report to the City of DUCI's findings • Review Company's past franchise fee paid to the City and components that are part of the Company's calculation • Analyze the franchise fee agreement(s) • Review prior franchise fee reports from the Company • Calculate past franchise fee due to the City and compare to amounts paid • Prepare report to the City of DUCI's findings TXU--ELECTBICAUDIT_AS_SET FORTHI"B-7 Perform an audit of TXU-Electnc's franchise calculation, as set forth in SB-7 Similar analysis will be performed as discussed in the TXU-G statements above DUCI will also report to the City its audit findings of TXU-Electric These are only meant to provide a general outline of DUCI's analysis DUCI will perform additional analysis on both TXU-G and TXU-Electnc, as needed Another factor that will affect our analysis is the cooperation that we receive from the Company's I hope this has provided a general understanding of the approach DUCI intends on pursuing Herbert L Prouty Page 3 August 19, 1999 If you have any questions, please do not hesitate to contact us We look forward to working with you Sincerely, Diversified Utility Consultants, Inc 07/30/1999 10:54 5122572249 DUCI `'-- -- EXHIBIT "B" D T T C I ]DrvBRgn17 UTILITY a. J CONSULTANTS, INC- 1Y118 x0xM DFx4e6 sur= 120 '&xMTn4 Tx 78749 . XMZV=o .p ale AMM" VAX 4510 P"4" July 30,1999 Herbert L Prouty City Attorney City of Dentton 215 East McIGiiuieY Denton, Texas 76201 Dear h& Prouty Per your request, I am submitting to you cost estimates to review Lone Star Gas Company's ("LSGC") Ranchise fee calculations for the currant year, LSGC's franchise fees paid in the past to the City of Denton ("City") and a review of Cosery Gas Company's tariffs and requested revenue requirements. The cost estimate for the review of LSGC's current Year franchise fee calculation is based on minimal assistance with LSGC. If the Company cooperates and sends information to DUCI instead of requiring us to travel to Denton, the cost may be closer to $4,000. The cost estimate to review LSGC's past franchise fee requires research and some cooperation from the Company DUCI will make every effort to verify whether LSGC has paid the proper franchise fee to the City The final price proposal relates to DUCI's review of Cosery Gas Company's proposed tariff and applicable revenue requirement. Per our preliminary review of Coserv's request, it appears the enue requirement Company has included a forecasted rate base in its reviis not permitted In DUCI's opinion, to adopt rates based on future estimated costs of Cosery will ll create problems with LSGC LSGC could claim rate are discriminatory The proposal anticipates working closely with Cosery and developing rates that are fair and reasonable based on known and measurable costs We would like to thank you for allowing DUCI to submit this Proposal We are prepared to commence work on this project immediately upon sellecti, and would complete the project in with regard to this proposal or eclair a timely and efficient manner. Should you have any questions matters, please feel free to contact Dan Lawton at (512)257-2600 Sin ely, Sara Coleman 07/30/1999 10 54 51225722a4 DUCI PAGE 03 PRICE PROPOSAL MANPOWER AND COST REQUIREMENTS TO PROVIDE REVIEW OF LONE STAR GAS COMPANY'S CURRENT YEAR FRANCHISE FEE CALCULATION ON BEHALF OF THE CITY OF DENTON CHARGE CATEGORY PRINCIPAL Dan Lawton SR CONSULTANT Sara Coleman TOTAL LABOR CHARGE CATEGORY HOURLY CHARGES HOUFM BATE A 24 $126 $3,000 17 $100 $1,700 41 Printing $0 10 Per Copy Air Travel 1 Trip to Denton Postage, Phone TOTAL EXPENSE GRAND TOTAL DO CHARGES I $75 00 $200 00 $26 00 TOTAL S TOTAL i 07/30/1999 10:54 5122572249 DUCI rawm uv PRICE PROPOSAL MANPOWER AND COST REQUIREMENTS TO PROVIDE REVIEW OF LONE STAR GAS COMPANY'S PAST FRANCHISE FEE CALCULATION ON BEHALF OF THE CITY OF DENTON CHARGE Se„ T 21= PRINCIPAL Dan Lawton SR CONSULTANT Sara Coleman TOTAL LABOR CHARGE CATFQQRY LABOR [EQUIREMM HOURLY CHARGES HOURS RATE li 40 $125 $5,000 28 $100 $2,800 88 PriMing, Copying $010 Per Copy Air Travel 2 Trips to Denton Postage, Phone TOTAL EXPENSR GRAND TOTAL CHARGES s $125 00 $400 00 $176 00 TOTAL IE TOTAL i ORDINANCE NO 9- AN ORDINANCE AUTHORIZING THE CITY MANAGER TO ENTER INTO A FIRST AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH DIVERSIFIED UTILITY CONSULTANTS, INC TO PERFORM AN AUDIT AND A FRANCHISE REVIEW OF TXU ELECTRIC AND GAS, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE WHEREAS, by Ordinance No 99-279, passed by the City Council on August 24, 1999, the City Council authorized the City Manager to enter into a Professional Services Agreement with Diversified Utility Consultants, Inc to perform an audit and a franchise review of TXU Electric and Gas ("TXU"), and WHEREAS, due to TXU's failure to respond to requests for information completely and in a timely fashion, it is necessary to extend this Professional Services Agreement for an additional 30 days in order for Diversified Utility Consultants, Inc to complete the audit of these franchise fee payments, and WHEREAS, the City Council deems it in the public interest to enter into this First Amendment, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 That the City Manager is hereby authorized to enter into a First Amendment to that Professional Services Agreement with Diversified Utility Consultants, Inc, substantially in the form of the First Amendment attached and made a part of this ordinance for all purposes to extend the term of the audit and franchise review of TXU Electric and Gas for an additional 30 days ECTION 2 That the City Manager is hereby authorized to make the expenditures and take the actions set forth in the attached Agreement SECTION 3 That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED tlus the � day of &LjL_leL, 1999 JACK ER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY ?g S Our ume9u%0rdtnwm99Wfm,fled fm emendmemd FIRST AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT FOR PROFESSIONAL SERVICES REGARDING TXU ELECTRIC AND GAS CURRENT YEAR AND PREVIOUS YEAR FRANCHISE FEE CALCULATIONS STATE OF TEXAS § COUNTY OF DENTON § This First Amendment to that certain Agreement made and entered into as of the 24`h day of August, 1999, by and between the City of Denton, Texas, a Texas municipal corporation, with its principal office at 215 East McKinney Street, Denton, Denton County, Texas 76201, hereinafter called "OWNER" and Diversified Utility Consultants, Inc, with its corporate office at 12113 Roxie Drive, Suite 110, Austin, Texas 78729, hereinafter called "CONSULTANT," acting herein, by and through their duly authorized representatives, hereinafter referred to as "Base Agreement" WHEREAS, OWNER entered into the Base Agreement with CONSULTANT to perform audits of TXU Electric and Gas' ("TXU") current year and previous year franchise fee calculations, and WHEREAS, due to the failure of TXU to answer requests for information in a timely and complete manner, there is a need to extend the contract term for an additional 30 days, NOW, THEREFORE, WITNESSETH, that in consideration of the covenants and agreements herein contained, the parties hereto do mutually agree as follows SECTION 1 That Article 4 "Period of Service" of the Base Agreement is hereby amended to extend the Base Agreement for an additional 30 days so that the same shall read as follows ARTICLE 4 PERIOD OF SERVICE This Agreement shall become effective upon execution of this Agreement by the OWNER and the CONSULTANT and upon issue of a notice to proceed by the OWNER, and shall remain in force for the period which may reasonably be required for the completion of the Project, including Additional Services, if any, and any required extensions approved by the OWNER, provided however, the Project shall be completed within 150 days of the date of the notice to proceed, unless an extension of time is granted by the OWNER Tins Agreement may be sooner terminated in accordance with the provisions hereof Time is of the essence in this Agreement The CONSULTANT shall make all reasonable efforts to complete the services set forth herein as expeditiously as possible and to meet the schedule established by the OWNER in Exhibit "A", acting through its City Manager or his designee SECTION 2 That save and except as amended hereby all the original sections, subsections, paragraphs, sentences, and clauses of the Base Agreement shall remain in full force and effect IN WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be executed by its duly authorized City Manager, and CONSULTANT has executed this Agreement through its duly authorized undersigned officer on this the l day of g—P o mJaA4- 19cjc�— CITY OF DENTON, TEXAS W PEZ, CITY MANAGER ATTEST JENNIFER WALTERS, CITY SECRETARY BYet'uudeo� APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY DIVERSIFIED UTILITY CONSULTANTS, INC poCLy_ J K POUS, PRINCIPAL WITNESS