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HomeMy WebLinkAbout1996-211E \wenocs\oRD\max Tsx NOTE First Amendment to Contract - 96-276 Second Amendment to Contract - 97-264 ORDINANCE NO —{(o-a 11 AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH RESOURCE MANAGEMENT INTERNATIONAL ("RMI"), AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the City Manager is hereby authorized to execute a professional services agreement with Resource Management International ("RMI"), a copy of which is attached hereto and incorporated herein SECTION II That the expenditure of funds as provided in the attached agreement is hereby authorized SECTION III That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the L?!�: day of 1996 JAW MILLER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY KA APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY O v STATE OF (TEXAS COUNTY OF DENTON PROFESSIONAL SERVICES AGREEMENT This Agreement is entered into this 4rdav of ,1996, by and between Resource Management International, Inc ("RMP'), a California corporation, and City of Denton, Texas ("City"), a Texas municipal corporation with its principle office at 215 East McKinney Street, Denton, Texas, 76201, for professional and related services to be provided to City, both parties acting by and through their duly authorized representatives SCOPE OF SERVICES RMI shall provide to City the services set forth in individual Task Order made an attachment to this Agreement II FEES FOR SERVICES Fors services provided by RMI to City pursuant to this Agreement, City shall pay RMI in accordance with the rates and charges set forth in Exhibit A, "Fees for Services", attached hereto and made a part of this Agreement for all purposes, provided however such charges and rates shall not exceed $25,000, unless the City agrees by an amendment to this Agreement to increase the maximum fee for services III BILLING AND PAYMENT RMI shall submit a monthly statement to City setting forth the amount due for services and itemizing amounts due for expenses City shall pay the full amount of such statement within thirty (30) days after receipt Any sums billed, not disputed in written form setting forth specific exceptions and unpaid after thirty (30) days from the date of receipt, shall be subject to a late payment charge equal to the lesser of one and one-half (1-1/2) percent or the maximum rate pernutted by law, for each month or fraction thereof past due Nothing contained in this article shall require the City to pay for any work which is unsatisfactory as reasonably determined by the Executive Director of Utilities for the City or which is not submitted in compliance with the terms of this contract Nor shall any late charge apply to any such unsatisfactory or disputed work The City shall not be required to make any payments to RMI when RMI is in default under this Agreement IV INDEPENDENT CONTRACTOR RNfl shall provide services to City as an independent contractor, not as an employee of City RMI shall not have or claim any right arising from employee status RMI agrees to perform the services hereunder in connection with the project as stated in the sections to follow with diligence and in accordance with the highest professional standards obtained for such services in the State of Texas V TERM AND TERMINATION OF AGREEMENT (a) Unless otherwise terminated as provided herein, tlus Agreement shall become effective upon execution by the parties and shall terminate when (i) the services provided for herein have been fully and completely performed or (u) December 31,1998, whichever occurs first This Agreement may be sooner terrinated in accordance with the provisions hereof Time is of the essence in ttus Agreement RMI will make all reasonable efforts to complete the services set forth herein as expeditiously as possible to meet the schedule established by the City (b) Notwithstanding any other provision of this Agreement, either party may terminate this Agreement by giving thirty (30) days advance written notice to the other party (c) This Agreement may be terminated in whole or in part in the event of either party substantially failing to fulfill its obligations under the Agreement No such termination will be affected, unless the breaching party is given (1) written notice, delivered by certified mail, return receipt requested, of intent to terminate, and not less than thirty (30) calendar days to cure the failure, and (2) an opportunity for consultation with the terminating party prior to termination (d) I If the Agreement is terminated prior to completion of the services to be provided hereunder, RMI shall immediately cease all services and shall render a final bill for services to City within thn t� (30) days after the date of termination, and City shall pay RMI for all services properly rendered and reimbursable expenses to termination incurred prior to the date of termination in accordance with Section III Should the City subsequently contract with a new consultant for continuation of services on the project, RMI shall cooperate in providing information All documents prepared o; furnished by RMI pursuant to this Agreement shall become the property of owner, but RMI may maintain copies of such documents for its use VI INSURANCE (a) RMI shall maintain in effect at its own expense, employer's liability insurance, one million dollars ($000,000) aggregate of comprehensive general liability insurance (bodily injury and property damage), five hundred thousand dollars ($500,000) aggregate of comprehensive automobile liability insurance (bodily injury and property damage) with respect to employees and vehicles assigned to the prosecution of work under this Agreement, and one million dollars ($1,000,000) aggregate�of professional habilnty insurance RMI shall also maintain statutory worker's compensation insurance (b) RMI shall obtain and thereafter maintain in effect, if available, such additional insurance as may be requested in writing by City, the cost of which will be reimbursed by City (c) RMI shall furnish insurance certificates to evidence such coverages to City The City shall be named as an additional insured on such policies The certificates shall contain a provision that such insurance shall not be canceled or modified without thirty (30) days prior written notice to City VII LIABILITY (a) RMI shall indemnify and hold harmless City, its directors, officers, partners, agents, and employees from and against any and all liability, claims, demands, damages, losses, and expenses, including but not limited to attorney's fees, for which RMI is determined to be legally liable resulting from negligent acts, errors, or omissions by RMI, its directors, officers, agents, and employees in performance of services required by this Agreement Liability, claims, demands, damages, losses, or expenses resulting from the negligent acts, errors or omissions, whether active or passive, by City, its directors, officers, partners, agents, employees, are excluded from RMI's obligations pursuant to this paragraph (b) RMI's obligations to mdemmfy and hold City harmless shall be expressly limited to the proceeds of its applicable insurance coverage (c) In the event that City changes in any way or uses in another project or for other purposes any of the information or materials developed by RMI pursuant to this Agreement, RMI is released from any and all liability relating to their use in that project and to the extent allowed by law, City shall indemnify and hold harmless RMI, its directors, officers, agents, and employees from and against any and all liability, claims, demands, damages, losses, and expenses, including but not limited to attorney's fees, arising out of such changes or use (d) Nothing in this Agreement shall be construed to create a duty to, any standard of care with reference to, or any liability to any person not a party to this Agreement VIII SUCCESSORS IN INTEREST This Agreement shall be binding on, and mure to the benefit of, each party's successors in interest, including their heirs, legatees, assignees, and legal representatives IX WAIVER Any waiver at any time by either party of its rights with respect to a default under this Agreement, or with respect to any other matters arising in connection with this Agreement, shall not be deemed a waiver with respect to any subsequent default or other matter X SEVERAL OBLIGATIONS Except where specifically stated in this Agreement to be otherwise, the duties, obligations, and liabilities of the parties are intended to be several and not joint or collective Nothing contained in this Agreement shall be construed to create an association, trust, partnership, or joint venture or impose a trust or partnership duty, obligation, or liability on or with regard to either party Each party shall be individually and severally liable for its own obligations under this Agreement XI AMENDMENT All changes or modifications to this Agreement shall be in writing and signed by both parties XII GOVERNING LAW This Agreement shall be construed and interpreted according to, and the rights of the parties shall be governed by, the laws of the State of Texas Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton County, Texas XIII ATTORNEY'S FEES If either party becomes involved in litigation arising out of this Agreement or the performance thereof, the prevailing party shall be entitled to reasonable attorney's fees, costs and expenses, in addition to any other relief to which that party may be entitled This provision shall be construed as applicable to the entire Agreement XIV ENTIRE AGREEMENT This Agreement 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 and contemporaneous offers, promises, representations, negotiations, discussions, communications, and agreements which may have been made in connection with the subject matter hereof XV 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 4 XVI NOTICES (a) Any notice, demand, information, invoice, report, or item otherwise required, authorized, or provided for in this Agreement, unless otherwise specified herein, shall be deemed properly given if delivered in person or sent by United States Mail, First Class postage prepaid To RMI Resource Management International, Inc P O Box 15516 Sacramento, Ca 95852-1516 Copy to Resource Management International, Inc 8310 Capital of Texas Highway N, Suite 385 Austin, TX 78731-1026 To City Executive Director, Department of Utilities City of Denton, Texas 215 E McKinney Street Denton, TX 76201 given (b) All notices shall be deemed effective upon receipt by the party to whom such notice is XVII RESPONSIBILITY FOR WORK Approval by the City shall not constitute nor be deemed a release of RMI, its employees, associates, agents, and consultants for the accuracy and competency of their designs or other work Nor shall approval be deemed to be an assumption of such responsibility by the City for any defect in the work prepared by RMI, its employees, subcontractors, agents, and consultants XVIII CAPTIONS 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 XIX SIGNATURE CLAUSE Theisignatories hereto represent that they are authorized to enter into this Agreement on behalf of the party for whom they sign City of Denton, Texas Approved as to Form By%'� '-L Herbert L Prouty City Attorney Resource Management International, Inc By I rl EXHIBIT A FEES FOR SERVICES 1996 Professional and support services, except for testimony, shall be billed at the following rates Managing Executive Consultant $160 per hour Principal Executive Consultant $144 per hour Executive Consultant $137 per hour Principal Consultant $126 per hour Supervising Consultant $112 per hour Senior Consultant $102 per hour Associate Professional $ 88 per hour Analyst $ 78 per hour Research Assistant $ 59 per hour Technician $ 51 per hour Office Services $ 47 per hour The above rates shall be adjusted each year, commencing January 1, 1997, to reflect the change in rates officially established by the RMI Board of Directors Testimony shall be billed at not less than eight (8) hours per day Reproduction, printing, communications, computer services, and other miscellaneous support services shall be billed at rates for such services as determined from time to time and officially establishedlby the RMI Board of Directors plus ten (10) percent All travel, food, lodging, and miscellaneous expenses, except automobile mileage, associated with the provision of services hereunder shall be billed at cost Automobile mileage shall be billed at $0 30 per mile Client shall reimburse RMI for any applicable sales tax imposed on services rendered by RMI to Client ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON TASK ORDER NO 96A TMPA COST ISSUE REVIEW Services provided under this Task Order will address two issues The first is a review of power costs from TMPA The second is a topical report or "White Paper" for the City to use in supporting its position regarding stranded costs recovery at the legislature In Task A, Power Cost Review, RMI will review the projected power costs from TMPA's Gibbons Creek plant, The purpose of the review is to provide the City of Denton (City) with an independent assessment of power costs projects by TMPA Key areas will include review of the new fuel and transportation contracts and the flow through of expenses which have been deferred related to lignite mine termination costs and other factors The work will include the following primary areas of evaluation which are described below as Tasks A-1 through A-5 Summary of Tasks A-1 Review latest TMPA Power Sales Agreement, TMPA forecasts and most recent projections of power costs and assumptions used in making those projections A-2 Review fuel and transportation contracts A-3 Review accounting policies as they will affect rates, in particular the deferral of expenses as Other Assets and the timing of flow through of such expenses into rates A-4 Review TMPA projections of overhead costs and projected capital expenditures A-5 Prepare letter report documenting assumptions used in TMPA's projection of costs and identifying areas where the electric restructuring process in Texas may suggest the need for modifications to TMPA's projections In Task B, RMI will prepare a White Paper for the City to use in its lobbying efforts The White Paper will present the history of TMPA and describe how legislative and regulatory mandates affected the decision to' build a lignite plant at Gibbons Creek The history will be linked to the stranded costs that the City could become exposed to as a result of restructuring in Texas Finally, a proposal for spreading some stranded costs to all ratepayers in Texas will be presented 96A -1 TASK A POWER COST REVIEW Subtask A-1 Review of TMPA Forecast 1 A meeting will be held with TMPA staff to initiate the Power Cost Analysis study 2 RMI will review TMPA's current power cost forecast and power price projections The assumptions used in the forecast and projections will be documented 3 RMI will obtain and review data used by TMPA in the POWERSYM model 4 A meeting with TMPA staff will be held to review the forecasts and price projections, to ask questions and receive input from TMPA staff 5 A summary will be written that describes the TMPA forecast process, the models used, and documents the assumptions used Subtask A-2 Review of Fuel Contracts and Transportation Contracts The coal and rail transportation contracts will be reviewed and summarized The delivered coal price projections used by TMPA in its most recent forecast of power costs will be reviewed A summary will be written that describes the contracts and delivered fuel cost projections Subtask A-3 Review Rate Effect of Accounting Policies 1 RMI will review with TMPA staff and TMPA accountants the accounting policies associated with Other Assets as shown on the TMPA balance sheet These policies will be documented 2 The process by which deferred expenses in Other Assets will be flowed through power rates to the TMPA cities will be investigated and documented 3 A summary will be written that describes accounting policies used and how they affect rates Task A-4 Review of Overhead Costs and Capital Expenditure Forecasts The capital construction forecast and the timing and sources of funding for those expenditures will be reviewed The allocation of costs to generation versus transmission will be reviewed Overhead cost projections will be reviewed, along with the allocation of those costs to generation versus transmission cost of service A summary will be written that summarizes the projected overhead costs and the allocation of those costs between generahon and transmission This section will also address capital expenditures and projected funding requirements Subtask A-5 Letter Report A final letter report containing the summaries will be issued which provides a documented review of TMPA projected power costs and the assumptions used in arriving at the projected costs as evaluated in Tasks A-1 through A-4 above 96A -2 TASK B WHITE PAPER Subtask B-1 Research 1 Research history of TMPA's actions and industry conditions leading to decision to build Gibbons Creek 2 Review TMPA enabling act and legislative discussion 3 Review Federal Fuel Use Act and its effect on building generation plants in Texas at the time Gibbons Creek was being built 4 Identify mandates by Texas Railroad Commission which may have contributed to decisions made at that time 5 Discuss history with individuals involved in decision 6 Review study recommending construction of Gibbons Creek Subtask B-2 1 Prepare a White Paper which examines the issues that led to the City's decision to participate in TMPA The White Paper will present the circumstances surrounding the decision to build Gibbons Creek and also set forth the City's position with respect to stranded cost recovery 2 The sources of potentially high stranded costs attributed to Gibbons Creek will be identified Estimates of stranded costs will be provided based on the ECOM filing 3 The financial impact on the City of restructuring will be discussed 4 The pperation of public power utilities will be compared to mvestor-owned utilities, included in issues considered will be the return of profits to the community and local control 6 A plan to distribute stranded costs on a state-wide basis will be explored, quantified, and presented 7 Support for a state-wide recovery approach will be presented based on legislative and regulatory mandates identified within the White Paper research Charges for these services are estimated to be $25,000 for time and expenses The actual costs may vary depending on the extent of cooperation from TMPA staff This budget as established may be evaluated at anytime by RMI or the City RMI will bill monthly and will not exceed the $25,000 budget without approval from the City It is understood that this budget assumes that the City of Garland will participate in a like amount Should Garland not participate or participate in an amount different from the $25,000, this budget will need to be adjusted In such event, the City must approve any changes before RMI will initiate work 96A -3 Tlus Task Order is authorized and made an attachment to the above identified Professional Services Agreement ithrough the signatures below Authorizedlby City of Denton, Texas r By Dated 107 C/ Accepted by Resource Management International, Inc By Dated..- 8-JQ-gc� 96A -4 J \WPDOCS\ORD\RMIAMEND ORD • I J AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A FIRST AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH RESOURCE MANAGEMENT INTERNATIONAL ("RMI"); AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I. That the City Manager is hereby authorized to execute the first amendment to the professional services agreement with Resource Management International ("RMI"), a copy of which is attached hereto and incorporated herein, along with any task orders and other documents necessary to the performance of the first amendment. SECTION II. That the expenditure of funds as provided in the attached agreement is hereby authorized. SECTION III. That this ordinance shall become effective immediately upon its passage and approval. ^� PASSED AND APPROVED this the � day of J��,Q�1996. JAC MILLER, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY.�" STATE OF TEXAS § COUNTY OF DENTON § FIRST AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT This first amendment to the Professional Services Agreement entered into on the 17th day of September, 1996 by and between Resource Management International, Inc , a California corporation ("RMI") and the City of Denton, Texas, a Texas municipal corporation with its principal offices at 215 East McKinney, Denton, Texas ("City") for professional and related services provided to the city, hereinafter referred to as "Base Agreement " In consideration for the terms and conditions set forth herein, the parties hereby agree I That Section I "Scope of Services" of the Base Agreement is hereby amended to read as follows RMI shall provide to the City the services set forth in individual task orders made as attachments to this Agreement including without limitation, Task Orders No 96A and 96B II That Section II "Fees for Services" of the Base Agreement is hereby amended to read as follows For services provided by RMI to City pursuant to this Agreement, the City shall pay RMI in accordance with the rates and charges set forth in Exhibit A "Fees for Services," attached hereto and made a part of this Agreement for all purposes provided, however, such charges and rates shall not exceed $80,000 unless the City agrees by an amendment to this Agreement to increase the maximum fee for services III That save and except as amended hereby, all the terms, conditions, clauses, and sentences of the Base Agreement shall remain in full force and effect The signatories hereto represent that they are authorized to enter into this Agreement on behalf of the party for whom they sign CITY OF DENTON, TEXAS RESOURCE MANAGEMENT INT , INC By / - By Its ClZ'Vl Mav-'CL? - It APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY PAGE 2 Date December 3, 1996 CITY COUNCIL AGENDA ITEM TO- MAYOR AND MEMBERS OF THE CITY COUNCIL FROM- Ted Benevides, City Manager SUBJECT: POWER SUPPLY OPTION STUDY RECOMMENDATION - The Electric Utility staff and the Public Utility Board recommends that the City Manager be authorized to hire RMI to develop, issue and coordinate analysis of an RFP for power supply options for Denton SUMMARY: Denton is forecast to require additional electric generating capacity in the near future In addition, the power supply market is changing rapidly as a result of market deregulation In order to make strategic decisions regarding the future of power production and purchase by the electric utility, the options available must be defined In this rapidly changing market, the only way to define the options that are available is to allow the competitive market place to respond to an RFP The attached task order defines an RFP process that will encourage consideration of all available options The initial task of this effort will consist of a review of the existing load forecast, development of the RFP, issuance of the RFP, and initial screening of all proposals received The final task in this process will be an in depth analysis and negotiation of the finalist proposals RMI was selected to perform this task because of their familiarity with Denton's existing resource situation, the data base and production cost model development of the Denton system they have already completed, and their experience in performing this type of activity for other public utilities FISCAL IMPACT: The cost of the initial task for this power supply option study is $55,000 A budget for the in depth review of finalist proposals will be developed upon completion of the initial task Respectfully submitted, R E Nelson Fxecutive Director Utilities Prepared by Sharon Mays Director of Electric Utilities ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON TASK ORDER NO 96B EVALUATION OF POWER SUPPLY ALTERNATIVES Services provided under this Task Order will assist the City of Denton (City) in evaluating the city's options for power supply Resource Management International, hic (RMI) will assist in 1) development of the Request for Proposals (RFP) document, 2) facilitating the RFP and communicating the City's desire to consider a broad range of power supply options, and, 3) evaluation of proposals The work activity identified in this Task Order will include a detailed review and ranking of a select number of proposals The work activity of RMI will include facilitating responses to the City's Request For Proposals that will include a broad -based consideration of supply options The intent will be to encourage both traditional and innovative solutions to reducing the City's power costs RMI will maintain contact with the proposers and encourage through discussions creative approaches that consider not only Dentori s incremental power needs, but also potential options to lower the City's overall power costs through alternative uses of existing generation RMI will maintain a high degree of on -going communication with utility staff during the evaluation process RMI will conclude the work activity in the Task Order with a recommendation of the best option/options for the City to consider for further negotiations Task A Review of Load Forecast RMI will review the City's Load Forecast and make recommendations where appropriate • A data request will be prepared requesting supporting data for the forecast (It is assumed the City will be able to provide most of that mformahon on disk) • Variables will be examined for outliers and consistency between historic and forecasted data points • The models and the statistics for those models will be reviewed • Staff will be interviewed through a conference call to discuss procedures used in developing historic and forecasted independent variables A letter report will be written to present findings and to make recommendations regarding the use of the forecast for planning purposes Task B Review of Request For Proposal RMI will work with the City in preparing the RFP for power supply to the City RMI will work with City staff to develop a RFP that will encourage respondents to provide proposals that consider the City's overall power requirements Not only should respondents look at power supply options that meets the City's incremental power needs, but the City will also consider power options that may exceed the incremental power requirements of the City The RFP should be structured to allow such consideration while maintaining sufficient definition and parameters to allow a comparative evaluation of the submittals Alternatives wluch may be considered include - traditional blocks of purchased power - economy energy purchases - lease arrangements - entering into operating agreement to run city generation - support of cogeneration projects - repowering of existing City units - pooling arrangements - partnering with customers on generation projects - new customer alliances including demand -side management initiatives - full requirements supply incorporating credit for existing City resources - others as proposed • The RFP will be comprehensive It will include sufficient information regarding City operations to allow development of detailed proposals Staff will be instrumental in providing the information to RMI Discussions with staff throughout development of RFP will be held to evaluate handling of confidential information • Respondents will be encouraged to make innovative use of the City's existing generation to arrive at a low cost, efficient and reliable solution to the City's power needs • A comprehensive description of the City's existing resources and future projected power requirements will be provided to allow proposers effective consideration of the range of potential supply arrangements • The format of proposal responses will be structured to allow for effective comparison of proposals Task C RFP Process The RFP will be issued by RMI to a wide group of public power and investor -owned utilities, river authorities, power marketers and power developers Included in RMI's work activity will be • Identification of entities to be included on mailing list for RFP • Preparation of advertisement language and identification of publications to inform the public of the City's RFP • Distribution of the RFPs to mailing list and in response to requests from advertisements • Planning for and directing a pre -proposal meeting to allow for better understanding of City's requirements and existing resources, pre -proposal meeting activity might include tour of City's Spencer Power Plant • Responding to proposers' questions regarding RFP Task D Evaluation of Proposals RMI will prepare a multi -step review of proposals Proposal review activities will be conducted to focus the majority of review effort on most desirable proposals Following receipt of proposals, each proposal will be reviewed and clarification of proposal language requested before comparative review is initiated The evaluation will utilize a total system approach which judges the benefits of the proposal considering the City's involvement in TMPA and TMPP The following activities will be completed Phase I - Initial Screening RMI's mihal review will include a screening to identify the most advantageous proposals The screening criteria will include - economic terms of power supply options - financial strength of proposers - experience with power supply in ERCOT - Consideration of whether proposal is feasible within given timeframe and other constraints Results of initial review will be summarized and reviewed with City staff to establish proposers to receive more in-depth review Phase II - In-depth Review In-depth review will include - discussion of proposal with proposer to assure proper understanding of proposal terms - evaluation of economic terms over period of proposed supply period to include estimate of net present value of power supply option(s) - coordination of cost and responsibility for ancillary services and transmission associated with delivery of power supply - identification and valuation of proposers' commitment to reduce City's responsibility to assume cost variation risks - PROSYM computer modeling to be used to dispatch resources into City's resource infix as stand alone system and as TMPP member to evaluate total cost benefits of proposal Task E Presentation of Results RMI will prepare a report summarizing findings and presenting recommendations to staff and to the Utility Board Results of in-depth proposal reviews will be summarized and presented to City staff A meeting will be held to discuss results of proposal review and answer City staff questions A final report will be prepared to present the results and recommendations from the RFP evaluation process Another meeting will be held with the Utility Board to present the results of the evaluation and recommendations Development of an accurate project budget to complete these Tasks is difficult due to the breadth of proposal options to be considered and the fact that the number and complexity of proposals submitted are unknown Preliminary budget projections are offered for portions of the work A budget of $55,000 is suggested for Tasks A through C, Phase I of Task D, and Task E The budget to complete in-depth proposal reviews will be very dependent upon the number of proposals reviewed and the complexity of the proposal evaluation (Expenses for detailed proposal reviews may be supported partially or fully by the proposers ) The work effort to prepare the in- depth review activities outlined in Phase II of Task D are projected to range from $7,000 to $10,000 per proposal These estimates do not include engineering feasibility analysis of projects A budget to complete the detailed proposal reviews in Phase II of Task D will be established following identification of what proposals will be included in this review Tlus budget as established may be evaluated at anytime by RMI or the City RMI will bill monthly and will not exceed the authorized budget without approval from the City This Task Order is authorized and made an attachment to the above identified Professional Services Agreement through the signatures below Authorized by Accepted by City of Denton, Texas Re: ✓(� By By Bob Nelson, Executive Director Management International, Inc DatedZI� �p Dated By:__�i���L Sharon Mays, Elect is Director Dated: l: By — Ted Benav>_des, City Manager Dated: ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON TASK ORDER NO 96B EVALUATION OF POWER SUPPLY ALTERNATIVES Services provided under this Task Order will assist the City of Denton (City) in evaluating the city's options for power supply Resource Management International, Inc (RMI) will assist in 1) development of the Request for Proposals (RFP) document, 2) facilitating the RFP and communicating the City's desire to consider a broad range of power supply options, and, 3) evaluation of proposals The work activity identified in this Task Order will include a detailed review and ranking of a select number of proposals The work activity of RMI will include facilitating responses to the City's Request For Proposals that will include a broad -based consideration of supply options The intent will be to encourage both traditional and innovative solutions to reducing the City's power costs RMI will maintain contact with the proposers and encourage through discussions creative approaches that consider not only Dentons incremental power needs, but also potential options to lower the City's overall power costs through alternative uses of existing generation RMI will maintain a high degree of on -going communication with utility staff during the evaluation process RMI will conclude the work activity in the Task Order with a recommendation of the best option/options for the City to consider for further negotiations Task A Review of Load Forecast RMI will review the City's Load Forecast and make recommendations where appropnate • A data request will be prepared requesting supporting data for the forecast (It is assumed the City will be able to provide most of that information on disk) • Variables will be examined for outliers and consistency between historic and forecasted data points • The models and the statistics for those models will be reviewed • Staff will be interviewed through a conference call to discuss procedures used in developing historic and forecasted independent variables A letter report will be written to present findings and to make recommendations regarding the use of the forecast for planning purposes Task B Review of Request For Proposal RMI will work with the City in preparing the RFP for power supply to the City RMI will work with City staff to develop a RFP that will encourage respondents to provide proposals that consider the City's overall power requirements Not only should respondents look at power supply options that meets the City's incremental power needs, but the City will also consider power options that may exceed the incremental power requirements of the City The RFP should be structured to allow such consideration while maintaining sufficient definition and parameters to allow a comparative evaluation of the submittals Alternatives which may be considered include - traditional blocks of purchased power - economy energy purchases - lease arrangements - entering into operating agreement to run city generation - support of cogeneration projects - repowering of existing City units - pooling arrangements - partnering with customers on generation projects - new customer alliances including demand -side management initiatives - full requirements supply incorporating credit for existing City resources - others as proposed • The RFP will be comprehensive It will include sufficient information regarding City operations to allow development of detailed proposals Staff will be instrumental in providing the information to RMI Discussions with staff throughout development of RFP will be held to evaluate handling of confidential information • Respondents will be encouraged to make innovative use of the City's existing generation to arrive at a low cost, efficient and reliable solution to the City's power needs • A comprehensive description of the City's existing resources and future projected power requirements will be provided to allow proposers effective consideration of the range of potential supply arrangements • The format of proposal responses will be structured to allow for effective comparison of proposals 2 Task C RFP Process The RFP will be issued by FM to a wide group of public power and investor -owned utilities, river authorities, power marketers and power developers Included in RMI's work activity will be • Identification of entities to be included on mailing list for RFP • Preparation of advertisement language and identification of publications to inform the public of the City's RFP • Distribution of the RFPs to mailing list and in response to requests from advertisements • Planrurig for and directing a pre -proposal meeting to allow for better understanding of City's requirements and existing resources, pre -proposal meeting activity might include tour of City's Spencer Power Plant • Responding to proposers' questions regarding RFP Task D Evaluation of Proposals RMI will prepare a multi -step review of proposals Proposal review activities will be conducted to focus the majority of review effort on most desirable proposals Following receipt of proposals, each proposal will be reviewed and clarification of proposal language requested before comparative review is initiated The evaluation will utilize a total system approach which judges the benefits of the proposal considering the City's involvement in TMPA and TMPP The following activities will be completed Phase I - Initial Screening RMI's initial review will include a screening to identify the most advantageous proposals The screening criteria will include - economic terms of power supply options - financial strength of proposers - experience with power supply in ERCOT - Consideration of whether proposal is feasible within given timeframe and other constraints Results of initial review will be summarized and reviewed with City staff to establish proposers to receive more in-depth review Phase II - In-depth Review In-depth review will include - discussion of proposal with proposer to assure proper understanding of proposal terms - evaluation of economic terms over period of proposed supply period to include estimate of net present value of power supply option(s) - coordination of cost and responsibility for ancillary services and transmission associated with delivery of power supply - identification and valuation of proposers' commitment to reduce City's responsibility to assume cost variation risks - PROSYM computer modeling to be used to dispatch resources into City's resource mix as stand alone system and as TMPP member to evaluate total cost benefits of proposal Task E Presentation of Results RMI will prepare a report summarizing findings and presenting recommendations to staff and to the Utility Board Results of in-depth proposal reviews will be summarized and presented to City staff A meeting will be held to discuss results of proposal review and answer City staff questions A final report will be prepared to present the results and recommendations from the RFP evaluation process Another meeting will be held with the Utility Board to present the results of the evaluation and recommendations Development of an accurate protect budget to complete these Tasks is difficult due to the breadth of proposal options to be considered and the fact that the number and complexity of proposals submitted are unknown Preliminary budget protections are offered for portions of the work A budget of $55,000 is suggested for Tasks A through C, Phase I of Task D, and Task E The budget to complete in-depth proposal reviews will be very dependent upon the number of proposals reviewed and the complexity of the proposal evaluation (Expenses for detailed proposal reviews may be supported partially or fully by the proposers ) The work effort to prepare the in- depth review activities outlined in Phase II of Task D are protected to range from $7,000 to $10,000 per proposal These estimates do not include engineering feasibility analysis of protects A budget to complete the detailed proposal reviews in Phase II of Task D will be established following identification of what proposals will be included in this review This budget as established maybe evaluated at anytime by RMI or the City RMI will bill monthly and will not exceed the authorized budget without approval from the City This Task Order is authorized and made an attachment to the above identified Professional Services Agreement through the signatures below Authorized by Accepted by City of Denton, Texas Resource Management International, Inc By By Bob Nelson, Executive Director Dated _ Dated By: Sharon Mays, Electric Director Dated: adf 0 By: Ted Benavides, City Manager Dated• 5 C \DOCS\ORD\RMI2ND ORD ORDINANCE NO. AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A SECOND AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH RESOURCE MANAGEMENT INTERNATIONAL, INC.; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SSECTION I. That the City Manager is hereby authorized to execute the second amendment to the professional services agreement with Resource Management International, Inc. ("RMI"), a copy of which is attached hereto and incorporated herein, along with any task orders and other documents necessary to the performance of the second amendment. SECTION II. That the expenditure of funds as provided in the attached agreement is hereby authorized. SECTION III. That this ordinance shall become effective immediately upon its passage and approval. lzd PASSED AND APPROVED this the day of %J% 1997. JACVMPLLER, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: I lid, W _ APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: U� �� STATE OF TEXAS § COUNTY OF DENTON § SECOND AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT is the second amendment to the Professional Services Agreement entered into by and between Resource Management International, Inc , a California Corporation ("RMI") and the City of Denton, Texas, a Texas Municipal Corporation ("CITY"), on the 17th day of September, 1996, for professional and related services provided by RMI to the CITY, hereinafter referred to as the "Base Agreement", this second amendment further amends the First Amendment to Professional Services Agreement entered into by and between RMI and the CITY on the 3rd day of December 1996, which is hereinafter referred to as the "First Amended Agreement" In consideration of the terms and conditions set forth herein, and the mutual promises of the parties, the parties do hereby AGREE E That Section II "Fees For Services" of the Base Agreement and Section II of the First Amended Agreement are hereby amended to include the following provisions For services provided by RMI to the CITY pursuant to the parties' agreement respecting completion of the work in Phase I of the Evaluation Of Power Supply Alternatives RFP Project, pursuant to Task Order No 96B, the CITY shall pay RMI the total sum of $77,702 69, said sum representing the payment of an additional $22,702 69 in professional fees to RMI II That Section I "Scope Of Services" of the Base Agreement is hereby amended to add the following provisions RMI shall further provide to the CITY the services pertaining to the Evaluation Of Power Supply Alternatives -Phase II project as set forth in individual task orders made as attachments to this Agreement including, without limitation, Task Order No 97A, a copy of which Task Order is attached hereto as Exhibit "A" and incorporated herewith by reference III That Section II "Fees For Services" of the Base Agreement and Section II of the First Amended Agreement are hereby amended to add the following provisions Services to be provided by RMI to the CITY pursuant to the parties' agreement respecting completion of the Evaluation of Power Supply Alternatives -Phase II project, the CITY shall pay RMI in accordance with the rates and charges contained in the "Fees For Services" provisions of Exhibit "A" attached hereto CITY shall accordingly pay to RMI, pursuant to the terms of Task Order No 97A, professional fees and expenses in an amount not to exceed $97,000 00 IV That save and except as expressly amended by this Second Amendment to Professional Services Agreement, all the terms, conditions, and covenants of the Base Agreement and the First Amended Agreement shall remain in full force and effect IN WITNESS WHEREOF, the CITY has caused this Second Amendment To Professional Services Agreement to be executed by and through its duly authorized City Manager, and Resource Management Interna- tional, Inc has caused this Second Amendment To Professional Services Agreement to be exec4ted by and thr ugh its duly autho- rized officer on this the a,K day ofQD2�C�/%[�iP.f� 1997 CITY OF DENTON, TEXAS BY Ted Benavides, City Manager ATTEST JENNIFER WALTERS, CITY SECRETARY BY Page 2 APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY /f l� RESOURCE MANAGEMENT INTERNATIONAL, INC A California Corporation ATTEST C \DOCS\K\waxsrm x Page 3 ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON DATED September 17,1996 TASK ORDER NO 97-A EVALUATION OF POWER SUPPLY ALTERNATIVES - PHASE II This Task Order defines a Scope of Services and Budget for work by Resource Management International, Inc (RMI) for the City of Denton, Texas (City) The activities in this Task Order continue the work performed under Task Order 96-B, Evaluation of Power Supply Alternatives (Phase I) Phase I included the development of a Request For Proposals for Power Supply (RFP) and the screening of proposals received in response to the RFP Phase II refocuses the RFP process to incorporate information learned in Phase I Phase II williinclude identifying parties interested in the purchase of the City's TMPA assets and soliciting proposals for the best use of the City's generation Phase II will also include negotiations with those interested parties to arrive at an agreement for the sale of certain assets and the repowering or other use of other assets Power supply contracts to replace power previously owned or operated by TMPA and /or the City will also be a part of Phase R activities SCOPE OF SERVICES The following outlines representative activities to be completed under this Task Order • RMI will interview major national energy companies to describe the intent of Denton and Garland (Cities) with respect to TMPA and the City's owned local generation assets These meetings will provide a status report on the Denton RFSP 2035 and explain how the process will proceed Letters of interest in participating in the process will be solicited from each company • Once the letters of interest are returned (within one week of the meetings), RMI and Denton will identify the companies with whom negotiations will proceed • RMI will assist the City in providing data to companies, arranging plant tours, coordinating and participating in meetings, and identifying and researching questions related to the use or sale of assets The City will retain the necessary legal and bond counsel to provide legal opinions as necessary • RMI anticipates extensive negotiations with 2 to 4 parties These negotiations will beIrelated to the sale of the City's share of TMPA, and various proposals for the best use of the City's other generation assets • RMI will evaluate the economic terms of the proposals and calculate the net present value of the different proposals in order to assist in determining the best offer 97A -1 Exhibit "A" • In the evaluation, RMI will run, as needed, the PROSYM production cost program to model alternative generation and purchased power configurations to evaluate the econorrucs associated with different options under different scenarios • RMI will work with the City and the companies to address questions related to the provision of ancillary services and transmission These factors will be addressed in negotiations and included in the economic analysis • As part of negotiations, RMI will work with the City to identify and evaluate the companies ability to assume risk associated with variations in costs related to fuel, transmission, and other factors • RMI will provide presentations to staff, the Utility Board, and members of Council as requested A final report will be provided comparing alternative proposals should there not be a clear winner • RMI will perform services as necessary to support this process to secure power supply for the future, as directed by City staff BUDGET Budget for work performed under this Task Order is difficult to estimate due to the variables involved, such as the number of parties to be included in the negotiation process The estimated budget for this Task Order is $97,000 This assumes that the City of Garland approves a like amount. Should Garland not approve a like budget, RMI will submit a new Task Order and Budget All work will be billed on a monthly basis This Task Order is authorized and made an attachment to the above identified Professional Services Agreement through the signatures below Authorized by Accepted City of Denton, Texas Re By/� By International, Inc Date 97A-2 FEES FOR SERVICES RESOURCE MANAGEMENT INTERNATIONAL, INC 1997 Professional and support services, except for testimony, shall be billed at the following rates Managing Executive Consultant $166 per hour Principal Executive Consultant $150 per hour Executive Consultant $142 per hour Principal Consultant $131 per hour Supervising Consultant $116 per hour Senior Consultant $106 per hour Associate Professional $ 92 per hour Analyst $ 81 per hour Research Assistant $ 61 per hour Technician $ 53 per hour Office Services $ 49 per hour The above rates shall be adjusted each year, commencing January 1,1998, to reflect the change in rates officially established by the RMI Board of Directors Testimony shall be billed at not less than eight (8) hours per day Reproduction, printing, communications, computer services, and other miscellaneous support services shall be billed at rates for such services as determined from time to time and officially established by the RMI Board of Directors plus ten (10) percent All travel, food, lodging, and miscellaneous expenses, except automobile mileage, associated with the provision of services hereunder shall be billed at cost Automobile rruleage shall be billed at $0 30 per mile Client shall reunburse RMI for any applicable sales tax imposed on services rendered by RMI to Client