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HomeMy WebLinkAboutFebruary 21, 2006 Agenda AGENDA CITY OF DENTON CITY COUNCIL February 21, 2006 After determining in Open Session that a quorum is present, the City Council of the City of Denton, Texas will convene in a Closed Session on Tuesday, February 21, 2006 at 3:30 p.m. in the Council Work Session Room at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be considered: 1. Closed Meeting: A. Consultation with Attorney - Under Texas Government Code Section 551.071 1. Consultation with the City's attorneys regarding legal issues, including defense of pending litigation filed by INC Denton Partners, LLC, associated with annexation of real property in the City's northern ETJ, under Annexation Case No. A05-0002, along with other legal issues related to the annexation, including zoning, land use and subdivision controls, plat applications, annexation plans, development agreements, annexation agreements, service plans, utility service, and legal issues implicated by alternative proposals advanced by individuals owning property within the proposed annexation area. A public discussion of these legal matters would conflict with the duty of the City's attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas or would jeopardize the City's legal position in any administrative proceedings or potential litigation. B. Consultation with the City Attorney - Under TEXAS GOVERNMENT CODE Section 551.071, Deliberations regarding economic development negotiations - Under TEXAS GOVERNMENT CODE Section 551.087, and Deliberations regarding certain real property - Under TEXAS GOVERNMENT CODE Section 551.072. 1. Consultation with the City's attorneys regarding legal issues associated with the right-of-way dedication or acquisition for and the construction of a portion of Lakeview Blvd by Holigan Land Development where a public discussion of these legal matters would conflict with the duty of the City's attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas or would jeopardize the City's legal position in any administrative proceedings or potential litigation. Deliberate the purchase and value of the real property to be dedicated or acquired. Deliberate and discuss commercial or financial information received from a business prospect, Holigan Land Development, and offers of financial or other incentives to the business prospect, for the purposes of economic development negotiations regarding its development, the Villages of Carmel. C. Consultation with Attorney - Under Texas Government Code Section 551.071 and Deliberations regarding Real Property - Under Texas Government Code Section 551.072 City of Denton City Council Agenda February 21, 2006 Page 2 1. Receive a confidential presentation by staff relating to assignments of a commercial airport operator's lease between JVC Real Estate, L.L.C. and 4845 LOCKHEED ASSOCIATES, LTD. and subsequent assignments and subleases to JVC Hangars, L.L.C., and consultations with the City's attorneys regarding legal issues regarding the approval of a fractional interest concept which subdivides the JVC Real Estate, L.L.C. lease into three units. A public discussion of these legal matters would conflict with the duty of the City's attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. D. Consultation with Attorney - Under Tex. Gov't Code §551.071. 1. Consider and discuss status of litigation styled McFarling, et al. v. City of Denton, Cause No. 2006-10032-16, currently pending in the 16th District Court of Denton County, Texas E. Deliberation regarding Personnel Matters - Under TEXAS GOVERNMENT CODE Section 551.074. 1. Deliberate and discuss the evaluation of the City Attorney, the Municipal Court Judge, and the City Manager, including a discussion of performance measures for and the duties of the City Council appointees. ANY FINAL ACTION, DECISION, OR VOTE ON A MATTER DELIBERATED IN A CLOSED MEETING WILL ONLY BE TAKEN IN AN OPEN MEETING THAT IS HELD IN COMPLIANCE WITH TEXAS GOVERNMENT CODE, CHAPTER 551, EXCEPT TO THE EXTENT SUCH FINAL ACTION, DECISION, OR VOTE IS TAKEN IN THE CLOSED MEETING IN ACCORDANCE WITH THE PROVISIONS OF §551.086 OF THE TEXAS GOVERNMENT CODE (THE `PUBLIC POWER EXCEPTION'). THE CITY COUNCIL RESERVES THE RIGHT TO ADJOURN INTO A CLOSED MEETING OR EXECUTIVE SESSION AS AUTHORIZED BY TEX. GOV'T. CODE, §551.001, ET SE Q. (THE TEXAS OPEN MEETINGS ACT) ON ANY ITEM ON ITS OPEN MEETING AGENDA OR TO RECONVENE IN A CONTINUATION OF THE CLOSED MEETING ON THE CLOSED MEETING ITEMS NOTED ABOVE, IN ACCORDANCE WITH THE TEXAS OPEN MEETINGS ACT, INCLUDING, WITHOUT LIMITATION §551.071-551.086 OF THE TEXAS OPEN MEETINGS ACT. Following the completion of the Close Session, the Council will convene in a Work Session to discuss the following: 1. Receive a report by the Certified Public Accountants firm of KPMG, LLP and hold a discussion regarding the annual independent financial audit. 2. Receive a report, hold a discussion and give staff direction on a proposed voluntary annexation of land for approximately 3,441.727 acres in the southwest portion of the City's ETJ. The subject property is generally located west of I-35 West, south of Tom Cole Road and east of C. Wolfe Road and extends south of F.M. 2499 approximately 5,400 feet. (A06-0001, Cole Ranch) 3. Receive a report, hold a discussion and give staff direction on a proposed fractional ownership concept as a development tool for the Airport and as it affects the approval process for subleases, transfers and assignments at the Denton Airport. City of Denton City Council Agenda February 21, 2006 Page 3 4. Receive a report, hold a discussion and give staff direction regarding gas well revenue, including a proposed audit of gas well proceeds, and potential uses of gas well revenue. 5. Receive a report, hold a discussion, and give staff direction on compensation. To the extent the discussion includes information on confidential competitive public power information pertaining to DME salaries and policies, the Council reserves the right to convene into a closed session, in compliance with Texas Government Code §551.086 - DELIBERATIONS REGARDING CERTAIN PUBLIC POWER UTILITIES: COMPETITIVE MATTERS. 6. Requests for clarification of consent agenda items listed on the consent agenda for today's City Council regular meeting of February 21, 2006. Regular Meeting of the City of Denton City Council on Tuesday, February 21, 2006 at 6:30 p.m. in the Council Chambers at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be considered: 1. PLEDGE OF ALLEGIANCE A. U.S. Flag B. Texas Flag "Honor the Texas Flag - I pledge allegiance to thee, Texas, one and indivisible." 2. PROCLAMATIONS/PRESENTATIONS A. Proclamations/Awards B. February Yard-of-the-Month Awards 3. CONSENT AGENDA Each of these items is recommended by the Staff and approval thereof will be strictly on the basis of the Staff recommendations. Approval of the Consent Agenda authorizes the City Manager or his designee to implement each item in accordance with the Staff recommendations. The City Council has received background information and has had an opportunity to raise questions regarding these items prior to consideration. Citizens may speak on items listed on the Consent Agenda. A Request to Speak Card should be completed and returned to the City Secretary before Council considers the Consent Agenda. Citizen comments on Consent Agenda items are limited to three minutes. Listed below are bids, purchase orders, contracts, and other items to be approved under the Consent Agenda (Agenda Items A - P). This listing is provided on the Consent Agenda to allow Council Members to discuss or withdraw an item prior to approval of the Consent Agenda. If no items are pulled, Consent Agenda Items A - P below will be approved with one motion. If items are pulled for separate discussion, they will be considered as the first items following approval of the Consent Agenda. A. Consider adoption of an ordinance of the City Council of the City of Denton, Texas authorizing the city manager to execute a contract with Gila Corporation, D.B.A. Municipal Services Bureau, for collection services relating to the collection of Municipal Court fines in accordance with the Code of Criminal Procedure; providing for retroactive effect; and providing an effective date. City of Denton City Council Agenda February 21, 2006 Page 4 B. Consider adoption of an ordinance accepting competitive bids and awarding an annual contract for the purchase of water treatment chemicals for the City of Denton Water Treatment Plants; providing for the expenditure of funds therefor; and providing an effective date (Bid 3445 - Annual Contract for Water Treatment Chemicals awarded to the lowest responsible bidder for each item in the annual estimated amount of $800,000). The Public Utilities Board recommends approval (6-0). C. Consider adoption of an ordinance accepting competitive bids and awarding a two year contract for the purchase of Traffic Signals for the City of Denton Traffic Division; providing for the expenditure of funds therefor; and providing an effective date (Bid 3443 - Two Year Contract for Traffic Signals awarded to the lowest responsible bidder for each item in the annual estimated amount of $105,000). D. Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute a change order to the contract with the Houston-Galveston Area Council of Governments (H-GAC) for the acquisition of 35, 65, and 95 gallon refuse carts for the City of Denton Solid Waste Department by way of an Interlocal Agreement with the City of Denton; and providing an effective date (File 3394 - Purchase of Refuse Carts at the new H-GAC contract prices shown in Exhibit A in the estimated amount of $91,558.47). The Public Utilities Board recommends approval (6-0). E. Consider adoption of an ordinance authorizing the City Manager to execute change order one to the contract between the City of Denton and James R. Kirkpatrick, Inc. dba Kirkpatrick Architecture Studio; providing for the expenditure of funds therefor; and providing an effective date (Ordinance No. 2005-192; RFSP 3324 - Architectural Design Services for Fire Station #7 awarded to James R. Kirkpatrick, Inc. dba Kirkpatrick Architecture Studio in the not to exceed amount of $250,000 and Change Order One in the amount of $68,117.50 for a total amount of $318,117.50). F. Consider adoption of an ordinance awarding a contract under the Texas Multiple Award Schedule (TXMAS) program for the purchase of Tires and Tubes as awarded by the State of Texas Building and Procurement Commission (Contract TXMAS-GSA-26 I); providing for the expenditure of funds therefor; and providing an effective date (File 3461 - Tires and Tubes awarded to Gray's Wholesale Tire Distributors, Inc. in the estimated amount of $150,000). G. Consider adoption of an ordinance awarding a contract for the purchase of materials, supplies, or services necessary for the purchase and maintenance of Oracle Database Enterprise Edition licenses and software support as approved by the State of Texas General Services Commission Department of Information Resources (DIR); providing for the expenditure of funds therefor; and providing an effective date (File 3472 - Purchase of Oracle Software awarded to Mythics, Inc. in the amount of $30,532). The Public Utilities Board recommends approval (6-0). City of Denton City Council Agenda February 21, 2006 Page 5 H. Consider adoption of an ordinance of the City of Denton, Texas accepting competitive sealed proposals and awarding a best value four year contract for patient care reporting and emergency medical services (EMS) billing for the City of Denton Fire Department; authorizing the expenditure of funds therefor; and providing an effective date (RFP 3403 - Emergency Medical Services (EMS) Billing awarded to Intermedix, Inc.). 1. Consider adoption of an ordinance of the City Council of the City of Denton, Texas approving an agreement between the City of Denton and the Denton Affordable Housing Corporation; providing for the terms of said contract; authorizing the City Manager to execute the agreement and to expend funds with respect to the agreement; and providing for an effective date. J. Consider adoption of an ordinance of the City Council authorizing the City Manager to execute a professional services agreement with R. J. Covington Consulting, LLC for consulting services relating to Task Order No. 06-D providing for a Cash Working Capital Study for Denton Municipal Electric; authorizing the expenditure of funds therefor; and providing an effective date. The Public Utilities Board recommends approval (6-0). K. Consider adoption of an ordinance of the City of Denton, Texas authorizing the Interim City Manager to execute an agreement for Professional Legal Services with the firm of Lloyd, Gosselink, Blevins, Rochelle & Townsend, P.C. for legal services pertaining to representation of the City before the Public Utility Commission of Texas, in connection with Docket No. 31540; authorizing the expenditure of funds therefor; providing for retroactive approval of the agreement; and providing an effective date. The Public Utilities Board recommends approval (6-0). L. Consider adoption of an ordinance of the City of Denton, Texas authorizing the Interim City Manager to execute an agreement for professional legal services with the firm of Lloyd, Gosselink, Blevins, Rochelle & Townsend, P.C. for legal services pertaining to representation of the City before the Public Utility Commission of Texas, in connection with the City's compliance with electric transmission service rules, and related rulemaking, proceedings, or any project relating thereto; authorizing the expenditure of funds therefor; providing for retroactive approval of the agreement; and providing an effective date. The Public Utilities Board recommends approval (6-0.) M. Consider approval of a resolution of the City Council of the City of Denton, Texas supporting the Denton Police Department Training Academy license renewal; and providing an effective date. N. Consider approval of tax refunds for the following property taxes: Name Reason year Amount 1. Justin lndustrlcs DCAD Supplcmcnta1 Changc 2004 $12.1)66.28 (~aluc Changc pcr Court OI'dcr) City of Denton City Council Agenda February 21, 2006 Page 6 Name Reason year Amount 2. Justin Industries DCAD Supplemental Change 2005 $ 9,063.64 (value change per Court Order) \Vcstgatc Vctcrinarv Hospital Duplicatc Pav mcnt 2005 $ L961.22 4. CountiA idc Homc Loans/ Duplicatc Pav mcnt 2005 $ 143-2.1)-5 Jamcs Gumfoi-\ US Dcpt of Housing & Urban Duplicatc PaN mcnt 200 $ 948.7 Dc\/ABN Mortgagc Group Inc 6. Countrywide Home Loans/ Duplicate Payment 2005 $ 811.78 Tara Gregory 7. Colonial Sayings/Robot & Duplicatc Pavmcnt 2005 S 758.76 Lcann Frcnch 8. Countrywide Home Loans/ Duplicate Payment 2004 $ 615.13 Anna Martinez 9. Hcidi LcN\is Duplicatc Pavmcnt 2005 $ 5-9.65 0. Consider approval of the minutes of: January 23, 2006 January 30, 2006 P. Consider adoption of an ordinance approving assignments of a certain commercial airport operator's lease between JVC Real Estate, LLC and 4845 Lockheed Associates, Ltd. and approving a subsequent assignment and sublease from 4845 Lockheed Associates, Ltd. to JVC Hangars, LLC; approving a fractional interest concept which subdivides the JVC Real Estate, LLC lease into three separate units allowing a partial transfer, sublease and assignment of these units subject to all improvements complying with applicable City Code requirements; delegating to the Airport Advisory Board the authority to approve assignments from JVC Hangars, LLC or any successor in interest of the fractional units; and providing an effective date. The Airport Advisory Board recommends approval (4-2). 4. ITEMS FOR INDIVIDUAL CONSIDERATION A. Consider adoption of an ordinance ordering a special election to be held in the City of Denton, Texas, on May 13, 2006 to fill a vacancy in Place 4 for the unexpired term ending in May, 2007, and if a runoff election is required, on June 17, 2006, for the purpose of electing a council member to Place 4 of the City Council of the City of Denton, Texas; designating a voting place; appointing election officials, providing for early voting; providing for bilingual notice of the special election, ordering that an electronic voting system be used, providing an open meetings clause, and providing an effective date. B. Consider adoption of an ordinance of the City Council of the City of Denton, Texas authorizing the Interim City Manager to execute a professional services agreement with the Messer Law Firm for professional legal services relating to litigation styled McFarling, et al. v. City of Denton, Cause No. 2006-10032-16, currently pending in the 16th District Court of Denton County, Texas; authorizing the expenditure of funds therefor; and providing an effective date. City of Denton City Council Agenda February 21, 2006 Page 7 C. Consider adoption of an ordinance of the City Council of the City of Denton, Texas authorizing the City Manager to make application to the Texas Department of Housing and Community Affairs, execute a grant agreement and take all other actions necessary to implement an Emergency Shelter Grant program; and providing for an effective date. D. Citizen Reports 1. Review of procedures for addressing the City Council. 2. Receive citizen reports from the following: A. Nita Acton regarding lost revenue due to wastewater run around. B. Robert Donnelly regarding drainage problems. C. Tomasa Garcia regarding Federacion Latino-Americana de Futbol Soccer. D. Willie Hudspeth regarding concerns of Southeast Denton. E. Jordan Hudspeth regarding concerns of Southeast Denton. F. Lanisha Hudspeth regarding concerns of Southeast Denton. G. Hagar Hudspeth regarding concerns of Southeast Denton. H. Nell Yeldell regarding Black history. 1. Bob Clifton regarding city business. J. (John) Koo-Hyun Kim regarding Municipal Court issue. E. New Business This item provides a section for Council Members to suggest items for future agendas or to request information from the City Manager. F. Items from the City Manager 1. Notification of upcoming meetings and/or conferences 2. Clarification of items on the agenda G. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the Texas Open Meetings Act. H. Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the Texas Open Meetings Act. CERTIFICATE I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the City of Denton, Texas, on the day of 2006 at o'clock (a.m.) (p.m.) CITY SECRETARY NOTE: THE CITY OF DENTON CITY COUNCIL CHAMBERS IS ACCESSIBLE IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING. PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY-TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED THROUGH THE CITY SECRETARY'S OFFICE. AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Finance ACM: Jon Fortune SUBJECT Receive a report by the Certified Public Accountants firm of KPMG, LLP and hold a discussion regarding the annual independent financial audit. BACKGROUND An independent audit of the previous year's financial statements is performed for the City of Denton annually. The audit is conducted in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The audit also includes an assessment of the accounting principles used as well as the overall financial statement presentation. The Audit Reports are composed of three major components, including the Comprehensive Annual Financial Report (CAFR), Management Letter, and Single Audit. On Friday, February 10, both the CAFR and Management Letter were provided to you. The Single Audit Report was not yet available; therefore, it is included in this report. The CAFR represents the entire financial position of the City of Denton, specifically for the time period, fiscal year ending September 30, 2005. The document includes the independent auditor's opinion of management's representations within the annual report. On page one in the Financial Section Tab, the report reads, "In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City as of September 30, 2005, and the respective changes in financial position, and, where applicable, cash flows thereof and the budgetary comparison for the General Fund for the year then ended in conformity with U.S. generally accepted accounting principles." The Management Letter is the independent auditor's recommendations to City management regarding specific areas for improvement. The Management Letter attached replaces the document provided to you on February 10 and includes an updated management response to the auditor's recommendations based on the City Council Audit Committee discussions on February 14. The Single Audit Report reflects the independent auditor's review of the City's financial reporting position, specific to the major federal grant programs. Agenda Information Sheet February 21, 2006 Page 2 The auditors express an opinion on the financial statements based on their independent audit. The City of Denton's annual financial report received a "clean" unqualified opinion from KMPG. An unqualified opinion states that the financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows of the entity in conformity with GAAP. This is the opinion expressed in the standard report. PRIOR ACTION/REVIEW (Council, Boards, Commissions) The independent auditor presented the results of their audit of the previous fiscal year to the City Council Audit Committee on February 14, 2006. Staff is preparing a written response to specific questions and clarification items requested during the Audit Committee meeting. Upon completion, this information will also be provided. In order to provide ample time for review, a follow-up Audit Committee meeting will be held on February 21 at 2:00 p.m., to discuss the Single Audit Report. FISCAL INFORMATION The Comprehensive Annual Financial Report for September 30, 2005, includes the independent auditors opinion on the financial statements based on their audit. EXHIBITS a) Comprehensive Annual Financial Report (provided under separate cover on February 10) b) Single Audit Report c) Management Letter Respectfully submitted: Diana G. Ortiz Chief Financial Officer CITY OF DENTON, TEXAS Independent Auditors' Reports on Federal Awards in Accordance with OMB Circular A-133 September 30, 2005 KPMG LLP Suite 3100 717 North Harwood Street Dallas, TX 75201-6585 Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards City Council City of Denton, Texas: We have audited the financial statements of the governmental activities, business type activities each major fund and the aggregate remaining fund information of the City of Denton, Texas (the City) as of and for the year ended September 30, 2005, which collectively comprise the City's basic financial statements and have issued our report thereon dated January 20, 2006. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion on internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that is required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the City in a separate letter dated January 20, 2006. KPMG l.LP, a U.S. limited liability partnership, is the U. S. member firm of KPMG International, a Swiss cooperative. This report is intended solely for the information and use of the Mayor and City Council, management, federal and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. January 20, 2006 2 KPMG LLP Suite 3100 717 North Harwood Street Dallas, TX 75201-6585 Independent Auditors' Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 City Council City of Denton, Texas: Compliance We have audited the compliance of the City of Denton, Texas (the City) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) CircularA-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended September 30, 2005. The City's major federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the City's management. Our responsibility is to express an opinion on the City's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the City's compliance with those requirements. In our opinion, the City complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended September 30, 2005. However, the results of our auditing procedures disclosed an instance of noncompliance with those requirements which are required to be reported in accordance with OMB Circular A-133 and which is described in the accompanying schedule of findings and questioned costs as item 05-2. Internal Control over Compliance The management of the City is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. 3 KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative. We noted certain matters involving internal control over compliance and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of internal control over compliance that, in our judgment, could adversely affect City's ability to administer a major federal program in accordance with the applicable requirements of laws, regulations, contracts, and grants. Reportable conditions are described in the accompanying schedule of findings and questioned costs as items 05-01 and 05-02. A material weakness is a reportable condition in which the design or operation of one or more internal control components does not reduce to a relatively low level the risk that noncompliance with the applicable requirements of laws, regulations, contracts, and grants caused by error or fraud that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of internal control over compliance would not necessarily disclose all matters in internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, of the reportable conditions described above we consider item 05-01 to be a material weakness. Schedule of Expenditures of Federal Awards We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended September 30, 2005, and have issued our report thereon dated January 20, 2006. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of the Mayor and City Council, management, federal and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. January 20, 2006 4 CITY OF DENTON, TEXAS Schedule of Expenditures of Federal Awards For the year ended September 30, 2005 September 30, 2005 Federal or state grantor/ Pass-through Federal passed pass-through grantor/ entity identifying CFDA through to program title number number Expenditures subrecipients Federal Awards: U. S. Department of Housing and Urban Development: Community Development Block Gran 14.218 $ 13,601 - Community Development Block Grani 14.218 30,500 - Community Development Block Gran 14.218 767 - Community Development Block Gram 14.218 6,087 - Community Development Block Gram 14.218 229 Community Development Block Gram 14.218 23,806 - Community Development Block Gran 14.218 164,098 - Community Development Block Gran 14.218 187,416 13,543 Community Development Block Gram 14.218 584,207 112,666 Community Development Block Gram 14.218 55,134 Supportive Housing Program 14.235 33,970 33,970 Home Investment Partnership 14.239 19,964 - Home Investment Partnership 14.239 4,789 - Home Investment Partnership 14.239 14,676 - Home Investment Partnership 14.239 122,503 - Home Investment Partnership 14.239 264,935 98,097 Home Investment Partnership 14.239 513,797 482,000 Home Investment Partnership 14.239 1,901 - HUD ALERT Grant 14.900 35,578 - Total Direct Funding U.S. Department of Housing and Urban Development 2,077,958 740,276 Passed-through Texas Department of Housing and Community Affairs: Emergency Shelter Grants 424117 14.231 61,042 58,765 Emergency Shelter Grants 524117 14231 12,168 10,975 Total U.S.Department of Housing and Urban Development 2,151,168 810,016 Federal Environmental Protection Agency: Water Quality Grant 66.436 77,725 - Hickory Creek Basin CWA Section 319 Grant 66.460 63,141 - Total Federal Environmental Protection Agency 140,866 - U. S. Department of Homeland Security: Fire Prevention Grant 97.044 32,243 - Total Direct Funding U.S. Department of Homeland Security 32,243 - Passed through State Department of Public Safety Governor's Division of Emergency Management 2004 State Homeland Security LETPP 2004-GE-T4-0015 97.004 39,624 - 2004 State Homeland Security Program 2004-GE-T4-0015 97.004 246,125 - State Homeland Security Grant Program 2003 1119972 97.008 28,797 - FY2003 Urban Area Security Initiative (UASI) Part 11 2003-EU-T3-0043 97.008 342,375 - Public Assistance Grants 3216-EM-TX 97.036 239,934 - Emergency Management Performance Grant 05TX-EMPG-039 97.042 67,198 - Total U.S. Department of Homeland Security 996,296 - U. S. Department of Justice: Local Law Enforcement Block Grant 16.592 16,988 - COPS in Schools Grant 16.710 52,111 - Secure Our Schools Grant 16.710 100,000 100,000 Total U. S. Department of Justice 169,099 100,000 5 (Continued) CITY OF DENTON, TEXAS Schedule of Expenditures of Federal Awards For the year ended September 30, 2005 September 30, 2005 Federal or state grantor/ Pass-through Federal passed pass-through grantor/ entity identifying CFDA through to program title number number Expenditures subrecipients U. S. Department of Agriculture: Passed-through Texas Department of Health and Human Services: Summer Food Services Grant 061-1002 10.559 $ 73,074 - Total U.S. Department of Agriculture 73,074 - U. S. Department of Transportation: Federal Transportation Grant 20.507 13,047 - Federal Transportation Grant 20.507 35,696 - Total Direct Funding U.S. Department of Transportation 48,743 - Passed-through Texas Department of Transportation: Airport Terminal 0218DENTN 20106 18,876 - Comprehensive STEP 585XXF6030 20.600 136,236 - Total U.S. Department of Transportation 203,855 - Total Expenditures of Federal Awards $ 3,734,358 910,016 See accompanying notes to schedule of expenditure of federal awards. 6 CITY OF DENTON, TEXAS Schedule of Expenditures of State Awards For the year ended September 30, 2005 Federal or state grantor/ Federal pass-through grantor/ Grant CFDA program title number number Expenditures State Awards: Office of the Governor - Criminal Justice Division: Denton Teen Court JB-02-J20-16512-1 N/A $ 15,723 Total Office of Governor - Criminal Justice Division 15,723 Texas State Library and Archives Commission: Loan Star Library Grant 442-04131 N/A 21,547 Library Awareness Mini Grant N/A N/A 2,497 Total Texas State Library and Archives Commission 24,044 North Central Texas Council of Government (NCTCOG): Bikebot Illegal Dumping Education Program 05-04-GO1 NIA 7,498 Total NCTCOG 7,498 Texas Department of Transportation Airport Maintenance Grant M518DNTON N/A 23,523 Installing of Traffic Signal Equipment 183XXH7002 N/A 170,226 Total Texas Department of Transportation 193,749 Texas Commission on Environmental Quality: Hickory Creek Basin CWA Section 319 Grant 582-5-70824 N/A 40,000 Total Texas Commission on Environmental Quality 40,000 Total Expenditures of State Awards $ 281,014 See accompanying notes to schedule of expenditure of federal awards. 7 CITY OF DENTON, TEXAS Notes to Schedule of Expenditures of Federal and State Awards Year ended September 30, 2005 (1) General The accompanying schedules of expenditures of federal and state awards presents the activity of all applicable federal and state awards of the City of Denton, Texas (the City). The City's reporting entity is defined in note 1 to the City's basic financial statements. Federal and state awards received directly from federal and state agencies as well as federal and state awards passed through other government agencies are included on the respective schedule. (2) Basis of Accounting The accompanying schedules of expenditures of federal and state awards is presented using the modified accrual basis of accounting, which is described in note 1 to the City's basic financial statements. (3) Schedule of Findings and Questioned Costs The Schedule of findings and questioned costs, including the summary of auditors' results for federal awards is included beginning on page 9. (4) Relationship to Federal Financial Reports Grant expenditures reports as of September 30, 2005, which have been submitted to grantor agencies will, in some cases, differ slightly from amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of the year-end accruals. The reports will agree at termination of the grant as the discrepancies noted are timing differences. 8 CITY OF DENTON, TEXAS Schedule of Findings and Questioned Costs Year ended September 30, 2005 (1) Summary of Auditors' Results Financial Statements Type of Auditor's report issued: Unqualified Internal control over financial reporting: • Material weaknesses identified: No • Reportable conditions identified that are not considered to be material weaknesses: None reported Noncompliance material to financial statements noted: No Federal Awards Internal control over major programs: • Material weaknesses identified: Yes • Reportable conditions identified that are not considered to be material weaknesses: Yes Type of auditor's report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB Circular A133: Yes Identification of major programs: CFDA Program number HOME 14.239 Homeland Security Cluster: State Homeland Security Grant Program 97.004 Law Enforcement Terrorism Prevention Program 97.004 Emergency Management Performance Grant 97.042 Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as a low-risk auditee: Yes (2) Findings Relating to the Financial Statements Reported in Accordance with Government Auditing Standards: None 9 (Continued) CITY OF DENTON, TEXAS Schedule of Findings and Questioned Costs Year ended September 30, 2005 (3) Findings and Questioned Costs Relating to Federal Awards: Finding 05-1 CFDA TITLE: HOME CFDA NUMBER: 14.239 FEDERAL AWARD NUMBER: M-04-MC-48-0223 FEDERAL AWARD YEAR: 2004-2005 FEDERAL AGENCY: U.S. Department of Housing and Urban Development PASS-THROUGH ENTITY: None Type of Finding: Material Weakness Procurement, Suspension & Debarment Criteria or Specific Requirement: Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred or whose principals are suspended or debarred. Under rules in effect prior to November 26, 2003, covered transactions included procurement contracts for goods or services equal to or in excess of $100,000. A change in the nonprocurement suspension and debarment rule took effect on November 26, 2003. As of that date only those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other specified criteria are considered "covered transactions." §-.220 of the governmentwide nonprocurement debarment and suspension common rule contains those additional limited circumstances. All nonprocurement transactions (i.e., subawards to subrecipients) are considered covered transactions-this was the case before November 26, 2003, and was not changed by the revised rules. Condition Found: There were three subrecipients with expenditures in excess of $25,000 entered into by the City during fiscal year 2005 that would have met the definition of a covered transaction under the revised nonprocurement, suspension and debarment requirements. These contracts did not include a provision stipulating that the subrecipient could not be suspended or debarred and there was no evidence provided by City personnel that indicated a review was performed to ensure the was not suspended or debarred before the contract was executed. I_PMG was able to verify that the subrecipient was not suspended or debarred by visiting the federal suspended or debarred website. Questioned Cost (Including How Computed): NIA 10 (Continued) CITY OF DENTON, TEXAS Schedule of Findings and Questioned Costs Year ended September 30, 2005 Information to Provide Prospective: The City entered into a subrecipient agreement to fund subrecipient's to develop a transitional housing program, to develop transitional housing units, to develop an affordable housing program, and to develop affordable single family housing units that met the definition of a covered transaction. Based on procedures performed within this program as well as other major programs, the lack of supportive evidence for suspension and debarment for "covered transactions" represents a pervasive systemic problem for all nonprocurement "covered transaction" that were processed through the subrecipient agreement. Possible Asserted Effect: The City's failure to maintain an adequate control environment over the procurement, suspension and debarment compliance requirement increases the risk that the City may be conducting business with an entity that is suspended or debarred. Additionally, as a result of this lack of an adequate control environment increases the risk of potential questioned costs related to noncompliance. Cause: City employees responsible for procurement contracts and monitoring were unaware that the subaward requirements set-forth by §_.220 of the governmentwide nonprocurement debarment and suspension common rule applied to not-for-profit entities. Recommendations: We recommend that the federal suspended or debarred website (http://epls.arnet.gov), which maintains listings of parties who have been suspended or debarred, be accessed and reviewed for the potential parties' name before each nonprocurement contract over $25,000 is awarded. Either a screen printout of the search results, manual note stating the results of the search, or a suspension and debarment clause in the contract should be maintained in each contract file as evidence this procedure has been performed. Views of Responsible Officials: Management will implement procedures requiring that all departments that receive grants to designate a person who will research the federal or debarred website to determine if contract recipients are barred from receiving federal funds. The designated department representative will conduct this research prior to awarding a contract. The Accounting Department will verify that the departments are complying with this process by requiring that proof of such documentation be sent to the Accounting Department upon contract implementation. 11 (Continued) CITY OF DENTON, TEXAS Schedule of Findings and Questioned Costs Year ended September 30, 2005 Finding 05-2 CFDA TITLE: Homeland Security Program CFDA NUMBER: 97.042 FEDERAL AWARD NUMBER: 05TX-EMPG-039 FEDERAL AWARD YEAR: 2004-2005 FEDERAL AGENCY: U.S. Department of Homeland Security PASS-THROUGH ENTITY: State of Texas Department of Public Safety/Governor's Division Type of Finding: Reportable Condition, of Emergency Management Noncompliance Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Procurement, Suspension and Debarment Criteria or Specific Requirement: For internal control and accountability purposes, grant expenditures should be properly reviewed and approved in accordance with procurement policies by an individual with sufficient knowledge of the grant requirements to verify that expenditures are allowable. Condition Found: The emergency management department did not have documentation of the Fire Chief's or Fire Marshall's prior approval for three of thirty expenditures for supplies and equipment that were to be utilized in the Central Fire Station. Questioned Cost (Including How Computed): Questioned costs were not assigned due to expenditures being appropriate under OMB Circular A-87 and the grant, prior approval was just not documented. Information to Provide Prospective: The purchases of the supplies and equipment were made in accordance with the State and City procurement policy but there was a lack of documentation of approval by the Fire Chief or Fire Marshall. The approval process is performed as a function of the accounting system whereas the appropriate individual must approve the transaction before it can be processed further. There was no documentation of the Fire Chief's of Fire Marshall's approval as the transaction was ordered and approved by another department. Possible Asserted Effect: The City's failure to maintain an adequate control environment over the activities allowed or unallowed and allowable costs/cost principles and procurement compliance requirements increases the risk of the misappropriation of funding. Additionally, as a result of this lack of an adequate control environment increases the risk of potential questioned costs related to noncompliance. 12 (Continued) CITY OF DENTON, TEXAS Schedule of Findings and Questioned Costs Year ended September 30, 2005 Cause: City employees responsible for ensuring policies and procedures are followed did not have adequate documentation that the transactions were approved by the Fire Chief or Fire Marshall. Recommendations: We recommend that the City implement procedures to ensure that a purchase order cannot be processed in the system without first going through the accounting system's workflow process which requires the appropriate member of management's approval. Views of Responsible Officials: Management will modify the current controls to ensure all expenditures of the Department of Homeland Security Funds will be approved by the Fire Chief or Fire Marshall prior to purchase. The approval will be documented by the accounting system. Copies of the approval documentation will be kept on file in the department. 13 CITY OF DENTON, TEXAS Management Letter September 30, 2005 s KPMG LLP Suite 3100 717 North Harwood Street Dallas, TX 75201-6585 January 20, 2006 Audit Committee City of Denton, Texas Ladies and Gentlemen: We have audited the financial statements of City of Denton, Texas (the City), for the year ended September 30, 2005, and have issued our report thereon dated January 20, 2006. In planning and performing our audit of the financial statements of the City, we considered internal control in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements. An audit does not include examining the effectiveness of internal control and does not provide assurance on internal control. We have not considered internal control since the date of our report. During our audit we noted certain matters involving internal control and other operational matters that are presented for your consideration. These comments and recommendations, all of which have been discussed with the appropriate members of management, are intended to improve internal control or result in other operating efficiencies and are summarized as follows: Sick Leave Accrual Observation While performing procedures over the Compensated Absences accrual, KPMG noted that the sick leave policy does not clarify the maximum amount of accruable sick hours for police or fire civil service employees. Recommendation Modify the sick leave policy to include the exact hours of maximum sick leave accrual for police and fire civil service employees. Management's Response Texas Local Government Code Chapter 143 governs the specific practice for sick leave accrual and payout for civil service employees. Human Resources will review the City's policy and, after discussion with public safety, legal staff and City Council, consider modifications to state the exact hours of maximum sick leave accrual for civil service employees. KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative. M-M Audit Committee City of Denton, Texas January 20, 2006 Page 2 Capital Asset Retirements Observation While performing procedures over the Capital Asset Retirements, it was noted that the capital assets policy to fill out a Disposal Form in order to retire an asset is not being followed. Recommendation KPMG recommends that the Fixed Asset Disposal policy be modified to include management approval of the disposal form before an asset can be disposed of. KPMG also recommends that the policy be enforced by accounting so that no fixed asset is disposed of without a properly approved Disposal form. Management's Response The City agrees with the recommendation. The fixed asset disposal policy will be modified to require the approval and signature of management prior to an asset being disposed (unless the asset is retired in the normal course of business, i.e. water meters, electric lines, and the like). In the case of assets that are disposed in the normal course of business, a list of disposed assets with the required signature will be provided to the Accounting Department as soon as possible. Accounting staff will ensure that the disposal policy is enforced. Our audit procedures are designed primarily to enable us to form an opinion on the financial statements, and therefore may not bring to light all weaknesses in policies or procedures that may exist. We aim, however, to use our knowledge of the company's organization gained during our work to make comments and suggestions that we hope will be useful to you. We would be pleased to discuss these comments and recommendations with you at any time. This report is intended solely for the information and use of the audit committee, Mayor and City's management, and federal and state awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, O>MC, LCP AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Planning and Development De artment CM: Howard Martin, 349-8232 SUBJECT -A06-0001: (Cole Ranch) Receive a report, hold a discussion and give staff direction on a proposed voluntary annexation of land for approximately 3,441.727 acres in the southwest portion of the City's ETJ. The subject property is generally located west of I-35 West, south of Tom Cole Road and east of C. Wolfe Road and extends south of F.M. 2499 approximately 5,400 feet. BACKGROUND Applicant: SLF Cole Property, LP Dallas, TX The applicant is proposing to annex approximately 3,441 acres of property and develop a mixed use development. The development anticipates an approximate full build-out of the following lot/unit counts and building square feet • Residential = 12,000 total lots or units • Commercial/Non-Residential = 3,350,000 total building square feet • Industrial = 2,300,000 total building square feet This schedule results in the annexation being completed by July 18, 2006. OPTIONS 1. Direct staff to pursue the annexation. 2. Direct staff to not pursue the annexation. 3. Direct staff to pursue the annexation with changes. 4. Table. ESTIMATED PROJECT SCHEDULE The proposed schedule is attached. 1 PRIOR ACTION/REVIEW The applicant presented the project to the City Council at a workshop on January 30, 2006. ATTACHMENTS 1. Proposed Schedule Respectfully submitted: ~„y~.~.tot.r Kelly Carpenter, AICP Director of Planning and Development 2 ATTACHMENT 1 ANNEXATION SCHEDULE Potential Annexation (A06-0001) Notices to Intent to Annex (30 day prior to 1St PH) will be send on September 2nd Tuesday, 02/21/06 City Council Work Session. Direction from City Council to proceed with annexation. Notices for Intent to Annex (30 day prior to 1St PH) will be send by March 17tH Tuesday, 04/18/06 City Council conducts first public hearing. • Public notice must be no less than 10 days and no more than 20 days before public hearing. ❑ Annexation Study prepared and available for public review. ❑ Service Plan prepared and available for public review. Wednesday, 04/26/06 Planning and Zoning Commission- make a recommendation to City Council regarding the proposed annexation Tuesday, 05/02/06 City Council conducts second public hearing. • Hearing must be 7-20 calendar days after 1St Public Hearing. 4/25) to (5/8). • Public notice must be no less than 10 days and no more than 20 days before public hearing. Tuesday, 05/23/06 City Council by a four-fifths vote institutes annexation proceedings. (Special Called Meeting) First reading of annexation ordinance. • Action must be more than 20 days after the second public hearing (5/22) but less than 40 days from the first public hearing (5/28). Sunday, 05/28/06 Ordinance published • The ordinance cannot be acted upon until at least 30 days after publication. (Special Called Meeting) Tuesday, 07/18/06 City Council by a four-fifths vote takes final action. Second reading and adoption of the annexation ordinance. City Council considers approval of zoning request. • Council action must be more than 30 days after publication of ordinance (5/28) and less than 90 days after council institutes annexation proceedings (5/23) ( 1St reading). • The second reading of the ordinance could be held any time between June 27, 2006 and August 21, 2006. • The July 18 date is proposed because it is the first regularly scheduled Council meeting at which the second - I - reading can be held and that also meets the required schedule. Annexations must be rigidly coordinated in conjunction with the City Council public hearing schedule due to specific timing mandates established by Texas State Law. The Texas Local Government Code requires that City Council institute annexation proceedings (1St Reading of the Ordinance) more than 20 days after the second City Council public hearing but less than 40 days from the first City Council public hearing. -2- AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Transportation Operations CM: Howard Martin, 349-8232 SUBJECT Receive a report, hold a discussion and give staff direction on a proposed fractional ownership concept as a development tool for the Airport and as it affects the approval process for subleases, transfers and assignments at the Denton Airport. BACKGROUND Dr. John Vann, JVC Real Estate L.L.C., has requested that the City of Denton consider the proposed assignment of the JVC Real Estate LLC commercial airport operator lease agreement to 4845 LOCKHEED ASSOCIATES LTD. to facilitate a fractional interest hangar ownership concept. JVC Real Estate, L.L.C. currently owns and operates a three-unit aircraft hangar totaling 10,800 square feet with each unit comprising approximately 3,600 square feet at 4845 Lockheed Lane on the Airport. The proposed concept involves a Limited Partnership (Partnership) - 4845 LOCKHEED ASSOCIATES LTD. - that would, through the assignment from JVC Real Estate, L.L.C., hold the master lease between the City of Denton and 4845 LOCKHEED ASSOCIATES, LTD. Three additional limited partnership interests would be made available via secondary assignments from the Partnership to the limited partners. The three limited partnership interests will correspond to the three 3,600 square foot hangar units. The Partnership will continue as the tenant under the master airport ground lease and, accordingly, will be responsible for the expenses of the tenant, including payment of rent, maintenance of insurance premiums, payment of utilities and maintain responsibility for all other known and unforeseen leasehold compliance issues. Each limited partner will be responsible to the Partnership for paying its share of the master ground lease expenses and other expenses of the Partnership, including rent, insurance premiums and utilities. The General Partner will collect such expenses from each of the limited partners and will cause the Partnership to pay all sums for which the Partnership is obligated under the master ground lease. The entire flow of the transaction from JVC Real Estate to the 4845 LOCKHEED ASSOCIATES, LTD Partnership to JVC Hangars, L.L.C. to the final limited partners is shown on the Ownership Diagram attached as Exhibit 1. The proposal was first discussed as a development option during the September 2005 Airport Advisory Board Meeting. It was agreed that the fractional ownership concept could provide positive benefits to the Airport by increasing the opportunity for aircraft owners and operators to own their own hangars. The concept allows for a developer to construct a series or cluster of hangars and sell a specific hangar unit or fractional share of the overall hangar development. In the scenario proposed by JVC Real Estate, the three-unit facility would allow for three limited partnerships interests (fractions) or three subleases. I In a review of other airports, the fractional ownership concept has been embraced and implemented by the following airports: ■ Addison Airport ■ Arlington Municipal Airport ■ Collin County Regional Airport (McKinney) ■ Fort Worth Aviation Department (Spinks Airport) ■ Georgetown Municipal Airport Management at each airport indicated that the concept has worked relatively well and would consider additional developments using this concept in the future. The efficiency of the leasehold management was a common theme each representative made. Creating multiple hangar units that increase capacity for additional based aircraft or businesses but allows the benefit of administering a single leasehold rather than multiple leaseholds or developments. Efficiencies in land use may also be realized in the development process where a single developer will facilitate the development of multiple hangar units rather than a case-by-case basis on single unit lots. Arlington Airport management did articulate one drawback to the concept that typically occurs when the third and fourth "generation" owners occupy the individual units. These "later generation" tenants may misinterpret the leasehold regulations or covenants and introduce non-standard uses or non-permitted activities to the leasehold or structure. This "change of use" creates a concern for both airport management and Fire Prevention staff. One solution to mitigate the occurrence of this issue is to conduct a general inspection as part of the assignment, transfer or sublease process. Another approach suggested during our review would be to anticipate the change in use of the individual units in the out years and provide appropriate fire safety requirements as part of the initial hangar development. In general, the concept allows aircraft owners and operators an opportunity for ownership of a hangar or hangar unit rather than the uncertainty of a sublease agreement through a commercial hangar operator. This ownership concept has also proven to instill a since of pride with hangar owners which can result in higher property values through continued investment in the structures by the owners. Furthermore, the concept will likely improve the professional image of the airport as hangar owners typically maintain their facilities at a higher level than subtenants. From a management prospective, the proposed concept also has the potential to reduce the number of overall leaseholds that airport management will be required to administer while achieving the same level or higher levels of airfield development. Airport staff and Fire Prevention staff have reviewed the proposed fractional development model as a long-term development tool for the Airport. The concept can be embraced as long as each proposed development has the appropriate fire protection and area separation between each unit in the structure. The sublease language must be specific in identifying the intended use of each hangar unit as a change in the type of use for one unit may affect how the Fire Code will impact other 2 units in the entire structure if appropriate fire walls or separation are not in place. For example, the Certificate of Occupancy for the 10,800 square foot JVC Real Estate hangar is for aircraft storage only. This use would not require any fire separation or fire suppression for the structure if the use is limited only to aircraft storage. However, should office use or maintenance use be contemplated, the structure would need to be retrofitted to attain area separation and/or fire suppression. In the current scenario, an office use has been introduced to one of the units and appropriate suppression or area separation will be necessary for the current facility to comply with local codes. For future developments these issues will have to be closely monitored, and Airport staff will continue to encourage and facilitate pre-development meetings with Fire Prevention staff to ensure that proper protection of life and property is achieved as part of the original construction. As a follow-up to this issue, the Fire Marshal has agreed to review the Fire Code as it relates to hangar development activities on the Airport. This review will provide an opportunity for a general discussion on airport specific components of the Fire Code and other opportunities that may be available to achieve requisite protection of life and property. The Airport Development Guide, attached as Exhibit 3, will assist in the proposed review. This review of the Fire Code may also help facilitate an overall policy as it relates to fractional ownership. For example, to mitigate the occurrence of non-standard uses or change of use of the individual hangar units, it may be determined that specific fire protection measures such as requiring firewall separation on fractional ownership development may be considered to reduce potential liability issues in the future as it relates to fire safety. An additional objective of a firewall requirement would be to provide increased flexibility of the structure(s) should a change of use be desired. Approval Policy The fractional ownership concept proposed in the JVC Real Estate, L.L.C. proposal would also delegate additional responsibility to the Airport Advisory Board and/or the City Manager by authorizing the right to approve subsequent assignments and subleases from time to time, not only with the JVC Hangars, L.L.C. proposal, but with other leaseholds should the concept be approved. This concept is a change in the current long-term lease and sublease policy in place at the Airport. The current long-term leasing procedure involves a single tenant who is responsible for the development of the facility, payment of all associated rental fees, payment of insurance premiums and is responsible to the airport management for all other leasehold compliance issues. The standard airport lease agreement contemplates and allows for the airport lessee to sublease a portion of the hangar as part of the standard commercial operator agreement. In some cases the airport lessee may have multiple sublease tenants in a single facility. The standard lease language does not allow for the lessee to assign or sublease more than 50 percent of the facility without approval by City Council. The interpretation of this clause has been that no single sublet is authorized to lease more than 50 percent of a specific leasehold nor can the leaseholder assign more than 50 percent of his or her leasehold without City Council approval. The JVC Real Estate proposal contemplates the assignment of three limited partnerships or three 33 percent shares at one time from 4845 LOCKHEED ASSOCIATES LTD. to JVC Hangars, L.L.C. JVC Hangars, L.L.C. will then seek approval from the Airport Advisory Board and Airport Management of the individual assignments at a later date. This proposal further formalizes the sublease and assignment process for the fractional ownership concept. 3 RECOMMENDATION Provide staff with direction on the fractional hangar ownership concept including development standards and policy direction on the approval of subsequent assignments and subleases associated with the fractional ownership concept. ESTIMATED SCHEDULE OF PROJECT JVC Real Estate, L.L.C. proposal is scheduled for action on the February 21, City Council Agenda. Fire Prevention and Airport Staff have agreed to review Fire Codes as part of an overall development policy for fractional ownership and general Airport development. PRIOR ACTION/REVIEW The Airport Advisory Board supports the fractional ownership concept. The City Attorney's Office has approved the concept. FISCAL INFORMATION N/A EXHIBITS 1. Ownership Diagram 2. Airport Terminal Drawing 3. Airport Development Guide Respectfully submitted: Mark Nelson Chief Transportation Officer 4 c N o T ~ o w CL a~i U . co o u cc ce v r.D c v ~ a y ~ O o U ~ v u, m cc v lop a ca p U v~ O tlyar ~ oa v li ~ v o ~U x ~r v as ea a w v C) o m lot cc ~Q Q / III Z F- aw I\ - 1T -4T - N w 00 a zw r i i II ,q OL/ Hi ~ a 0 °o T Q - j U-i g 1 h e ° TT i - TT T I I I _ aaa - J I I I III ~ ~ I -I I ~ II I~°I~ - ~I gm - - - - - - i I i w2o ~ :a z 0 \ w I x TII,II ° o \ k~s~~gaa as s~~a`z a 1~~~~~~~ a m I I'll w 88 z T I \ I \ I II\~ \ ~i ~11 I'. / Exhibit 3 DENTON AIRPORT THE NORTH TEXAS AIRPORT OF CHOICE in conjunction with City of Denton Building Inspections City of Denton Fire Marshal's Office Airport Development Guide Revised February 2006 Exhibit 4 WELCOME TO DENTON AIRPORT The City of Denton is pleased that you are interested in developing at Denton Airport. Staff members are committed to working with you to ensure a smooth development process. The following information is intended to serve as a guide to help you navigate the development process at the airport. This packet contains most, if not all of the forms and applications needed to develop your project. It is important that airport staff, the tenant and the contractor have a good working relationship. We firmly believe that your success is directly related to our success, and we look forward to ensuring that the relationships formed during the development process will create a foundation for success throughout your tenure at Denton Airport. Once again, thank you for choosing to develop at Denton Airport. We look forward to working with you. A list of names and numbers associated with developing at Denton Airport is included in the Appendix as Attachment A. 1 Table of Contents Section 1 Requirements for Aircraft Related Occupancies 3 Design Requirements 3 Architectural Barrier Act 3 Architectural Practices Act 3 Engineering Practices Act 4 Specific Code Requirements 4 Aircraft Storage Hangars Occupancy Classification S-2 5 Aircraft Maintenance Hangars Occupancy Classification S-1 5 Aircraft Paint Hangars Occupancy Classification S-1 or H-2 6 Section 2 The Development Process Overview 7 Phase 1 7 Phase 2 7 Phase 3 7 Permitting 8 Inspections 9 List of Mandatory Inspections 10 Section 3 Fire Code Requirements for Hangar Construction 12 Group I Aircraft Hangar 13 Group II Aircraft Hangar 13 Group III Aircraft Hangar 13 Group IV Aircraft Hangar 13 Fire Suppression Requirements 14 Fire Lane Access 14 Water Supply / Fire Hydrants 14 Inspections 14 Permitting 15 Plan Review (Fire Systems) 15 Fueling Systems 15 General Information Regarding Fire Protection at Denton Airport 16 Section 4 Fire Wall & Fire Suppression Illustrations 17 Illustration One 17 Illustration Two 18 Illustration Three 18 Illustration Four 19 Illustration Five 19 Appendix List of Attachments 20 2 SECTION I - REQUIREMENTS FOR AIRCRAFT RELATED OCCUPANCIES The City of Denton strongly advises any one who is considering constructing a building at the Denton Airport to set up a pre-design meeting through the Planning Department prior to preparing construction drawings. However, if you wish to proceed with plan preparation without a pre-design meeting, the City has compiled an "Aircraft Development Guide" which is available through the Airport, the Fire Department or through Building Inspections. This guide details requirements that are specific to aircraft related occupancies. It is compiled from the latest editions of the International Codes as adopted by the City of Denton. These codes include the Building, Fire, Mechanical, Plumbing, and Energy Conservation codes as well as the National Electrical Code and NFPA 409. Although this guide has been compiled to help answer many of the basic questions you may have when designing your building, it is not intended to be used as a substitute for the applicable codes and will not answer every technical question that may arise when designing an aircraft related project. This is one of many reasons why we continue to advocate the use of the pre-design process as the best source for information concerning the design of all projects. Preparing plans that include fire suppression systems or fire alarm systems must be designed by a State of Texas licensed designer. Design Requirements The State of Texas has numerous laws, which apply to all construction projects within the state. These laws regulate everything from who can design a project to how it must be designed. The following is a brief list of some of the laws, which may govern your proj ect. Architectural Barriers Act The State of Texas has created the "Texas Accessibility Standards" which have been approved by the Federal Government for use within the state to determine compliance with handicap accessibility requirements of the Americans with Disabilities Act. The Texas Department of Licensing and Regulations (TDLR) is the state agency charged with the over-site of these standards. All projects within the state are required to comply with the requirements set forth in the standards. However, only those projects with a total construction cost of $50,000.00 or more are required to actually submit plans to TDLR for review and comment. All applicants for projects, which meet the $50,000 threshold, must provide proof that the plans have been submitted to TDLR for review before a permit may be issued. Architectural Practices Act Due to the complex nature of the requirements under this law, the Texas Architectural Review Board has created a flow chart that may be used in order to determine which projects will be required to follow the law and more specifically, what aspects of the law 3 each project will be required to follow. This flow chart is included as Attachment A-1 at the end of this guide. Any other questions concerning the requirements for Architects sealed plans should be referred to the Texas Architectural Review Board. Engineering Practices Act Again, due to the complex nature of the requirements under this law, the Texas Engineering Review Board has also created a flow chart that may be used in order to determine which projects will be required to follow the law and more specifically, what aspects of the law each project will be required to follow. This flow chart is included as Attachment A-2 at the end of this guide. The basic requirements are that plans for any non-residential building over 5,000 square feet in area must be stamped by an engineer licensed to practice engineering in the State of Texas. This requirement pertains to all aspects of construction including structural, mechanical, electrical and plumbing. Any other questions concerning the requirements for Engineers sealed plans should be referred to the Texas Engineering Review Board. Specific Code Requirements The 2003 International Building Code (2003 IBC) divides aircraft hangars into four different categories. These are 1) Residential Aircraft Hangars 2) Aircraft Storage Hangars 3) Aircraft Maintenance Hangars and 4) Aircraft Paint Hangars. Category one, residential aircraft hangars, are those, which are "less than 2000 sq. ft. and less than 20 ft. in height, constructed on a one or two family residential lot..." These hangars, by there basic definition, will not be built on any airport property. However, each of the other 3 categories of aircraft hangars could possibly be built at the Denton Airport. The requirements for each of the categories escalates with the intensity of the uses allowed. Also, the requirements for each category are cumulative. Those required for each lesser category are also required for the more intense uses. In addition, Section 412 of the 2003 IBC contains requirements, which are specific to aircraft related occupancies. A copy of this section has been included as Attachment A-3 at the end of this guide. The requirements found in this section are in addition to the other requirements relative to the use and occupancy classification of the structure. One of the most stringent requirements found in this section is the fact that any exterior wall located within 30 feet of a property line, lot line or public way must be 2-hour rated construction. Due to the lot configurations and the proximity of the aircraft hangars currently located at the airport, almost all exterior walls except those adjacent to taxiways and access roads will be required to be of 2-Hr. rated construction. The plans for the hangar must include the UL approved assembly number for the required 2-Hr wall (these may be found on the Underwriters Laboratory web site at www.ul.com) as well as construction details for the wall. This section also requires that the floors of the hangar be graded to drain. The code does not stipulate that floor drains shall discharge through an oil separator to the sewer or to an outside-vented sump. 4 This section also requires that any heating equipment, other than unit heaters, must be installed within a 2-Hr. enclosure. The enclosure must be accessed from the exterior of the building or through a vestibule providing a two-doorway separation. However, there is an exception to the two-doorway requirement which allows a single door provided the ignition source for the equipment is located a minimum of 18" above the floor. Aircraft Storage Hangars Occupancy Classification S-2 An aircraft storage hangar is the most basic hangar found in the code. Most commercial hangars leased and or constructed for personal use fall under this category. Also, those hangars that are used for simply storing commercial aircraft fall under this category. There are numerous requirements throughout the code for an S-2 occupancy. The main areas of concern include construction type required, allowable height and area and separation of uses within the building. The different categories of construction type are found in section 602 of the International Building Code. This section has been included as Attachment A-4 at the end of this guide. The information on the allowable height and area of the proposed building may be found in Table 503 of the IBC. The IBC also allows numerous exceptions and modifications to the requirements found in Table 503. In order to determine whether your building meets any of these exceptions, please consult the table and the corresponding exceptions included as Attachment A-5 at the end of this guide. The requirements for separation between uses can be found in Table 302.3.3 of the IBC. However, the International Building Code is much more flexible than the old Uniform Building Code when dealing with occupancy separation requirements. Section 302.3 of the IBC allows the person designing the building to choose how they wish to deal with occupancy separation. The designer can simply follow the table and provide the required separation or they can choose to design the building as what the code calls a non-separated use. However, in order to design a building as a non-separated use, the building must meet a number of other requirements throughout the code. Due to the complex nature of these requirements, it is recommended that anyone choosing to build a hangar under the non-separated use requirements, consult a design professional in order to make sure that the project meets all the requirements applicable within the code. Aircraft Maintenance Hangars Occupancy Classification S-1 The major difference between the requirements for aircraft maintenance hangars and aircraft storage hangars is in the classification of the structure. Maintenance hangars must meet the requirements for an S-1 occupancy as opposed to an S-2 occupancy for storage hangars. Review the attached tables (Attachment A-6) to determine the requirements for your building. One problem that we have encountered in the past arises when an applicant wishes to convert a single compartment of a T-Hangar building into either a maintenance or a painting facility. As a general rule, we have allowed T-Hangar buildings to be classified as a single occupancy in much the same way as we would a parking garage. However, when a portion of the building is converted to a different use, that portion of the building would be considered a separate occupancy and would therefore be required to meet all code requirements including occupancy separation, 5 sprinkler requirements etc. This would require the addition of fire barriers and, depending upon the size of the space in question, possibly sprinkler systems as well. Aircraft painting operations where the quantities of materials used or stored on site do not exceed those listed in Table 307.7(1) are also classified as S-1 occupancies. However, depending upon the types of systems used in the painting operation, as well as the location of the building relative to other buildings on the site, numerous other requirements found throughout the code would apply. In light of the complicated nature of these requirements, the City of Denton Building Inspections Division strongly recommends that anyone wishing to construct or convert any facility at the Denton Airport for use as an aircraft painting facility should contact our office to set up a pre- design meeting in order to discuss these code requirements. Aircraft Paint Hangars Occupancy Classification S-1 or H-2 Aircraft painting operations where the quantities of materials used or stored on site exceed those listed in Table 307.7(1) are classified as H-2 occupancies. The H in the designation stands for "Hazardous Occupancy" and the number 2 is the category designation. Detailed requirements for all hazardous occupancies can be found in Section 415 of the 2000 IBC. Section 416 of the code also provides requirements for application of flammable finishes and section 417 contains requirements for drying rooms. These sections have been included as Attachment A-7 at the end of this guide. Depending upon the types of systems used in the painting operation, the quantities of materials used or stored on site, and the location of the building relative to other buildings on the site, numerous other requirements found throughout the code would apply. In light of the complicated nature of these requirements, the City of Denton Building Inspections Division strongly recommends that anyone wishing to construct or convert any facility at the Denton Airport for use as an aircraft painting facility should contact our office to set up a pre-design meeting in order to discuss these code requirements. In addition, anyone considering an operation that would fall under the Hazardous Occupancy classification must consult an architect and an engineer for the design and construction of the proposed facility. After receiving the appropriate approvals from the Denton Airport to proceed with your construction project, here are a few things you should know in order to help your project run smoothly. 6 SECTION 2 - THE DEVELOPMENT PROCESS OVERVIEW The development process at Denton Airport typically takes a total of 13-28 weeks to complete. The process begins with identifying a lot for development and ends with a certificate of occupation being issued and the lessee occupying the building. The process is broken into three phases. Phase 1 Phase 1 typically last 1 to 4 weeks and is driven by the lessee. The purpose of Phase 1 is to determine the needs of the prospective lessee and to identify a site on the airport that best meets the needs of the lessee and the current and future needs of Denton Airport. At the end of Phase 1, the lessee will have an understanding of the requirements needed to complete their proposed development and staff members will have an understanding of the intended use and purpose of the development. Depending on the lessee's motivation, this phase of the development process can be drastically shortened. Phase 2 Phase 2 typically takes 4 to 8 weeks and is completed through a cooperative effort between airport staff and the lessee. During Phase 2, the lessee and airport staff negotiate the lease agreement. The lessee provides airport staff the information they need to process the lease agreement for Legal Department's review, Airport Advisory Board review and City Council approval. At the end of Phase 2, the lessee will have an approved lease agreement and will be able to apply for a building permit. Phase 3 Phase 3 is the permitting and construction phase of the development process. Phase 3 typically takes 8 to 16 weeks to complete and is a two-step process. Step one is the permitting phase and usually takes 2-4 weeks for a building permit to be issued. Step two is the actual construction component to Phase 3. The construction element usually takes 4-16 weeks to complete, but this timeframe is highly dependent on the caliber/complexity of the building, weather and other uncontrollable variables. At the end of Phase 3, the lessee will have completed the proposed development, and the City of Denton will issue a Certificate of Occupation. Phase 3 is not an ending to a process, but rather a transition to a long-term relationship between the lessee and Denton Airport. The development process flowchart labeled Attachment B in the Appendix and the development checklist labeled Attachment C in the Appendix, are helpful tools to steer you through the development process at the Denton Airport. 7 Permitting When putting together plans to submit for approval, be sure to include 8 complete sets of plans. Each set of plans should include the following: A. Properly Sealed Architectural Plans including: (see attached copies of flow charts for Architectural and Engineering Practices Act(s) for required seals) 1. Structural drawings. 2. Mechanical, Electrical and Plumbing plans (if applicable). These plans should include electrical load calculations. 3. Floor plan of the building including uses for each area. 4. Exterior elevations. 5. Engineered foundation plans sealed by the designing engineer along with a statement that the foundation is designed for the soil conditions at the proposed site. 6. UL assembly numbers for any fire rated walls or partitions. AND B. Civil Plans including: 1. Site plan: Should include the building footprint, set backs from property lines, existing and proposed easements, proposed parking spaces with dimensions, and location of solid waste container with proposed screening. 2. Utility Site Plan: Should include all proposed water, sewer and electric service lines on the site. 3. City Water/Wastewater location map: (to be available at the Airport Office) 4. 8 1/2 x 11 Fire Lane Map: (if fire lanes are required) 5. Parking Lot Layout: Should include structural details for the proposed parking and drive isle surfaces. 6. Site Grading and Drainage Plan: Should include storm water runoff calculations for culverts or underground drainage flues. A licensed Engineer should provide calculations. AND C. Miscellaneous Forms 1. Proof of submittal to TDLR (required for projects valued over $50,000). 2. Commercial Energy Code Compliance Reports. When plans are complete and ready for submittal, please complete the Commercial Permit Application in the information packet obtained from the Denton Airport. The 8 application along with the 8 sets of plans should then be submitted to the City of Denton Building Inspections office located in City Hall West at 221 N. Elm St. After plans have been submitted, they will be distributed to the appropriate departments for review. The plans will be reviewed and comments made by each applicable department. Plan review comments will be available within 10 to 20 business days depending upon the complexity of the project under review. Upon completion of the initial plan review; our office will notify you that the permit is ready or that comments are available and revisions will be required. In some instances, a revision of the plans will be required in order to insure that all standards have been met. All plan review comments are available on our website at www.cilyofdenton.com or you may request a hard copy of all comments from the Building Inspections office. Should you receive comments that require revisions, plans will need to be revised and re- submitted to our office for a second review. The number of plans required for each re- submittal will depend upon the number of departments requiring revisions. Plan review comments for re-submittals will be available within 10 working days of the date they are re-submitted. Upon the approval of the plans for your project, and payment of the applicable permit fees (see attached fee schedule), you will be issued a Building Permit for your project. For more information about the permitting process contact Rodney Patterson, Commercial Plans Examiner, City of Denton Building Inspections at (940) 349-8360. Inspections After a permit has been issued for your project and construction begins, there are certain inspections that will be required during each stage of construction for your project. It will be the responsibility of the contractor to insure that the proper inspections are requested and approved prior to proceeding with construction. The following is a list of required inspections as well as a brief description of what will be inspected during each inspection. Attached you will find step-by-step instructions on how to request inspections through the Building Inspections Request Line as well as a complete list of all inspections performed by the Building Inspections Division. Only the inspections listed below are required for all projects. However, depending on the complexity of the project, inspections may be broken down into more specialized increments in order to enable the project to proceed through the process more efficiently. 9 List of Mandator Inspections #20 T-Pole/Saw Service The temporary power pole to be used by workers during construction. (Contractor must submit a complete Commercial Request for Service form before utilities will be connected #13 Plumbing Rough/Water & Sewer All in-ground plumbing including water and drain lines under slab and between slab and meter or sewer tie in. (contact plumber for requirements) #3 Foundation Foundation plan must be available on site at time of inspection. A Form Board Survey may also be required. Check comments on permit for Form Board requirement. Inspectors look at all steel and/or cables and compare to plan and make sure all copper is protected #43 Seconds Inspection Includes all electrical, plumbing, mechanical and framing in walls and possibly above ceiling. Call for seconds inspection before sheetrock is installed. If lay in ceiling tiles are to be installed, contractor may ask for walls only to be inspected at this stage so that sheetrock may be installed. If so, be sure to call for #50 Above Ceiling Inspection before installing ceiling tiles. #23 Temporary Power or Contractor may call for either of these #17 Temporary Gas or inspections in order to have electric and/or #49Temp. Utilities gas meters installed prior to final inspection. (includes gas and electric) All electrical must be substantially complete or capped and covered. Gas service lines must be pressurized with an air test at time of inspection. (Contact plumber for requirements) #44 Final Inspection All construction should be complete including site work. Also call Fire Department and Engineering (if applicable) for final approval. Final approval from all departments is required before a Certificate of Occupancy will be issued. Also, the proposed occupant of the building must submit a complete Certificate of Occupancy form as well as a Commercial Request for Service in order to receive a Certificate of Occupancy and to have the utilities transferred into their name. 10 For more information about the permitting process contact Bryan Cole, Chief Building Inspector, City of Denton Building Inspections at (940) 349-8360. Important Note: All plumbing, electrical and mechanical work must be performed by individuals who are properly licensed to do the work being performed. These individuals must register with the Building Official prior to starting work on your project. 11 SECTION 3 - FIRE CODE REQUIREMENTS FOR HANGAR CONSTRUCTION The City of Denton has adopted the 2000 International Fire Code (2000IFC) with local amendments. The 2000 IFC refers to the 2000 IBC for classification of aircraft hangars. These classifications include storage group 1 if it is used as a storage hangar. When the hangar is used as a repair area or refueling and defueling is being performed the hangar is classified as a hazardous 1 or 2 classification. When the hangar is used as a storage area and office or business occupancy the structure can have multiple occupancy classifications. This is important because area separation may be required and a fire suppression system may be required in all or part of the structure. The City of Denton has amended the 2000 IFC in section 903 to require non-combustible construction of 10,000 sq ft. and larger to install a fire suppression system. Combustible construction 7,500 sq ft. or larger must install a fire suppression system. The reasoning behind these requirements is that the Fire Department feels with current staffing and deployment of equipment that we can safely fight a fire in structures with no suppression system up to 10,000 sq ft. of non-combustible and 7,500 sq ft. of combustible construction. This amendment does not apply to aircraft hangars with the exception of a hangar that has multiple occupancies such as office/hangar, assembly/hangar or manufacturing/hangar occupancies. For example, if the hangar has an aircraft storage area of 12,000 sq ft. and office area of 3,500 sq ft. the office would have a suppression system but the hangar area would not. If the total aircraft storage area were open there would be no requirement for a suppression system. The City of Denton has amended the 2000 IFC to include National Fire Protection Association Standard 409, (NFPA 409) for aircraft hangars. This requirement is for the installation of fire suppression systems only. NFPA 409 classifies hangars in the following manner: Group I Aircraft Hangar. A group I aircraft hangar shall have at least one of the following features and operating conditions: (1) An aircraft access door height over 28ft. (2) A single fire area in excess of 40,000 sq ft. (3) Provision for housing an aircraft with a tail height over 28 ft. Group II Aircraft Hangar. A group 11 aircraft hangar shall have both of the following features: (1) An aircraft access door height of (28 ft.) or less (2) A single fire area for specific types of construction in accordance with Table 4.1.2 12 Table 4.1.2 Fire Areas for Group II Aircraft Hangars Type of Construction Square Feet Type I (443) and (332) 30,000-40,000 Type II (222) 20,001-40,000 Type III (111), Type III (211) and Type 15,001-40,000 IV 2HH Type II (000) 12,001-40,000 Type III 200 12,001-40,000 Type V (111) 8,001-40,000 Type V (000) 5,001-40,000 * Single fire area inclusive Group III Aircraft Hangar. A group III hangar shall have both of the following features: (1) An aircraft access door height of (28 ft) or less. (2) A single fire area that measures up to the maximum square footage permitted for specific types of construction in accordance with Table 4.1.3. Table 4.1.3 Maximum Fire Areas for Group III Aircraft Hangars Type of Construction Square Feet Type I 443 and 332 30,000 Type II 222 20,000 Type III (111), Type III (211) and Type 15,000 IV 2HH Type II (000) 12,000 Type III (200) 12,000 Type V (111) 8,000 Type V (000) 5,000 * Maximum single fire area Group IV Aircraft Hangar. A group IV aircraft hangar shall be a structure constructed of a membrane-covered rigid steel frame. Fire Suppression Requirements The protection of aircraft storage and servicing areas for Group I aircraft hangars, shall include a fire suppression system in accordance with chapter 6 of NFPA 409. The protection of aircraft storage and servicing areas of Group II aircraft hangars shall include a fire suppression system in accordance with Chapter 7 of NFPA 409. 13 The protection of aircraft storage and servicing areas for Group III aircraft hangars shall be constructed of any of the types of construction specified in NFPA 220. Group III hangars shall be limited to one story. Multi story hangars will be considered Group II type hangars. Where hazardous operations, including fuel transfer, welding, torch cutting, torch soldering, doping, and spray-painting, are performed in any Group III hangar, the group III hangar shall be protected with the fire protection specified in Chapter 7 of NFPA 409. Group IV hangars having a hangar fire area greater than 12,000 sq ft. and housing fueled aircraft shall have a fire suppression system installed throughout. Fire Lane Access Approved fire apparatus access roads shall be provided for every facility, building, or portion of a building hereafter constructed or moved into within the jurisdiction. Fire apparatus access roads shall be installed within 100 feet of all exterior portions of the building. The fire code official may increase this requirement to within 150 feet if the building has an approved fire suppression system. Fire lanes are 20 feet wide and unobstructed. The lane is marked with a six inch red stripe painted on the pavement with four inch blocked white letters every twenty feet stating, "FIRE LANE NO PARKING'. Water Supply/Fire Hydrants Fire hydrant locations and distribution shall be in compliance with Appendix C of the 2000 IFC. See attached Appendix C of the 2000 IFC. Fire Flow requirements shall be per Appendix B of the 2000 IFC. See attached Appendix B of the 2000 IFC. Inspections Each Hangar will be inspected annually for compliance with the fire code. There is no charge for the initial inspection. If a violation is found and it is not corrected in the presence of the inspector a fee of $15.00 per each 3,000 sq ft. will be assessed. Failure to comply with any correctional order or violation notification can result in a fine punishable up to $2,000.00 per violation per day. Fire suppression systems are required to be inspected in three areas underground piping, above ground piping and hydrostatic testing and is required to be witnessed by a fire inspector. The costs associated with these inspections are part of the permit fee. Fire alarm inspections are conducted with an acceptance test that is conducted when the contractor has completed their installation and testing. The cost associated with this inspection is covered when the permit is paid. 14 To schedule an inspection, contact the Fire Marshal's Office at 940-349-8863 24 hours in advance. Inspectors cannot accept payment in the field. Permitting A construction permit for the underground and above ground installation of fire suppression systems is required. Likewise, a construction permit for the installation of fire alarm systems, and the installation of fuel dispensing or storage units is required. A construction permit is $100.00. An operational permit is required for hot works, fuel farms, fuel dispensing, and assembly occupancies that occur within or associated with hangars. An operational permit is $200.00. Applications for permits can be found online at www.cityofdenton.com go to the fire department page and find prevention and look under permits. Plan Review (Fire Systems) The Building Officials Office at 321 North Elm Street is the location where building construction plans should be delivered for review. Plans for the installation of fire lanes, fire suppression and detection systems, and flammable/combustible liquids storage and handling should be delivered at 332 E Hickory Street. Please provide at least 2 sets of plans and applicable cut/calculation sheets. Please allow for a ten (10) day turn around on the review of these plans. Fueling Systems Fuel dispensing at any airport is inherently dangerous. Above ground storage tanks or underground storage tanks shall be in compliance with Chapter 34 of the 2000 IFC. This chapter is extensive and would need to be consulted if an individual or company wishes to dispense, use or sale flammable or combustible liquids in association with airport activities. Some of the general requirements are that the installation of fuel storage whether below or above ground will require permitting per the 2000 IFC. Dispensing and usage of these fuels shall be permitted within and association with each hangar or business located on airport property. Fuel storage and dispensing will need to be reviewed on a case-by-case basis. Plans and cut sheets of the materials used will need to be submitted for review by the fire department. A Hazardous materials inventory plan and hazardous materials management plan will need to be submitted if flammable or combustible fluids are used or stored. 15 General Information Regarding Fire Protection at Denton Airport The Denton Fire Department will respond a one-alarm assignment to a reported fire in a structure at the airport. A one-alarm assignment will include two engines, one truck, one medic and one battalion chief. This assignment includes a minimum of 13 personnel. The Denton Fire Department has a fire station located at the intersection of I-35 E and McCormick Street. There is approximately a 7 - 10 minute response time for the responding units to the Denton Airport. The units responding are not crash fire rescue units. Because the airport does not have a dedicated fire station on campus with crash fire rescue capabilities it creates a disadvantage for responding fire units. Most nationally recognized standards such as NFPA 409 and IBC/IFC assume that there is an adequate fire response for the particular hazard that is being regulated. This reality places a heavier burden that the applicable codes and standards are not deviated from. The codes and standards are developed and written to provide a reasonably safe environment for an individual or company to conduct business. It is our goal to provide a reasonable approach to enforcing codes related to building and maintaining hangars at the Denton Airport. 16 SECTION 4 - ILLUSTRATIONS Illustration One TAXIWAY • Hangar does not require a fire suppression system. HANGAR RAMP • Hangar is classified as an S-2. • No area separation is required. No interior walls exist. • Use of hangar is for storage purposes only. • Normal plan review and permitting is required. 12,000 SQ. FT. HANGAR MOTOR VEHICLE PARKING 17 Illustration Two TAXIWAY I I Lease lines I I Ramp Ramp I I I I I Less than 12,000 sq ft. Less than 12,000 sq ft. 30' 30' or or more more I I Vehicle Parking Vehicle Parking I I I I F • Hangars are classified as a S-2. • If maintenance is conducted the • No fire suppression requirement. classification changes to a S-2 • No exterior wall rating. • No Fire Suppression Required • Hangar shall be used as stora2c only. • No exterior rating required • Hangar used for storage and light maintenance Illustration Three TAXIWAY Lease line I I Ramp Ramp I I I 14 I I 2-hour Firewall I 4 Less than 12,000 sq. ft. 30' Less or I than Less than 12,000 sq. ft. more i 30' I I I Vehicle Parking Vehicle Parking I I------------------ I • No fire suppression required Classified as a S-2 • If welding torch work, painting or heavy repairs are • Two hour Firewall required on hangar less conducted the classification changes to an H than 30' from lot line • Fire Suppression system would be required • Hangar usage limited to storage only 0 Exterior wall shall be a 3 hour firewall Illustration Four TAXIWAY I I I I Ramp i Ramp I I I 2 hour fire Barrier I required I 8,000 sq ft. of Hangar space Hangar B Less than 12,000 sq. ft. Hangar A 30' Less 2-hr Firewall or I than more 30' 1 2,500 sq ft. Office I Parking Parking I I I * Hangar A would not require fire • Hangar B would require a fire suppression system in suppression. the office space only. • Hangar A would not require the • The hangar area of Hangar B would be classified as exterior wall to be rated. a S-2, the office are would be classified as a B. • Hangar A would be classified as an • A 2-hour fire barrier would be required between the S-1. S-2 and B occupancies. • The exterior wall would need to be a 2-hour firewall Illustration Five Taxiway 2-hour fire barrier Lease line • Fire suppression system required in both occupancies. Greater than • 2-hour Fire barrier Les 12,000 sq ft. required between s Hangar space office and hangar. • 2-hour Firewall 2-hour 2,500 sq ft office space required facing lease ~ firewall line. Parking 19 APPENDIX A Development Related Contact Information B Development Process Flow Chart C Development Process Checklist D Commercial Building Permit Application E Parking Lot Permit Application A-1 Texas Board of Architectural Examiners Chart A-2 The Texas Engineering Practice Act A-3 2003 IBC Section 412 A-4 Chapter 6 of the 2003 IBC A-5 Chapter 5 of the 2003 IBC A-6 Table 307.7 (1) 2003 IBC A-7 Section 414 2003 IBC A-8 Chapter 3 of the 2003 IBC 20 ATTACHMENT A L Denton Airport Contact Information NAME TITLE CONTACT INFO Mark Nelson Chief Transportation Officer (940) 349-7702 Office (940) 349-7289 Fax mark. nelson ci ofdenton.com Vacant Airport Manager (940) 349-7744 Office (940) 349-7289 Fax (888) 337-1013 Pager Julie Mullins Aviation Assistant (940) 349-7736 Office Julie.Mullins cit ofdenton.com H. Other Development Related Contact Information NAME TITLE CONTACT INFO Rodney Patterson Plans Reviewer Supervisor (940) 349-8539 Office (940) 349-7208 Fax rodney.patterson city ofdenton. com Rick Jones Fire Marshal (940) 349-8860 Office (940) 349-8109 Fax rick.'ones cit ofdenton.com Kurt Hansen Building Official (940) 349-8362 Office (940) 349-7208 Fax Mike Cagle Chief Building Inspector (940) 349-8371 Office (940) 349-7208 Fax mike. cagle cityofdenton.com 21 M N 3 r a j-0 o a q N w ice. 0 L. CO ro O W U U N b 'ro ~ C y ^0 w CC 5 y ~ c7 ro 0. ~ ~.G a R ~ ~ u o w o~ y y o o ro G a~' 3 y zuj W L ~ QI 0 Q O dj U a O L. N 0 a~i a~ ~a p~ 'O c~i ~ 0 N 'C bA O CQ ~ G~ cC ~ F ~ 0 cC ~ bA G~ ~ I-I ® ~ ~ N V N Y~i N ~ N Q Q ~ ~ N A cC ' ~ . N W 0 U ~ ® ~ N C G N v 0 a b ~ a. ro ~ 0 0 d , ro o ~ ow o ~ r :ti -o o ~ ~ ~ v J T O -d T o ~ is v G Q p O > p O O ~ u C Q 0-0 v G O C. "-4 v O w0 O ~ W U p ti 'O SJ 'd O d W ~u yy > W a W Kidd p'' ~ OfJ Pa. ^ O N O ~ Q - G .0-0 W ur p ro O G y Q w0 O Q w ~tl ro p. j3 C G 0. G w O - ti O O b aai .ti O O~ J = ~ O C O O d = _ Q d ~ d Q d~ Q~ _ ~ w ATTACHMENT C Denton Airport Development Process Checklist ITEM i ONF 1. Determine scope of development and desired activity. Action Item: Schedule meeting with Airport Director to discuss project and site needs. 2. Discuss proposed development requirements with city staff. Action Item: Schedule meeting with Airport, Building Inspections and Engineering (Airport staff will assist in scheduling meeting.) 3. Prepare design concept plans as required by city staff. Action Items: (1) Identify a general contractor if you have not selected one already; (2) Complete attached Commercial Building Permit; (3) Complete attached Parking Lot Permit, (4) Complete lot survey and legal description. 4. Airport staff submits an FAA Form 7460-1 and corresponding environmental impacts. Action Item: Airport staff will submit the appropriate forms and send you a copy. Staff will notify you when the FAA approves the development. 5. Complete lease negation with Airport Director. Action Item: Schedule a meeting with the Airport Director to discuss your lease agreement. Airport staff will submit lease to Legal for approval after negotiations are complete. 6. Airport Advisory Board reviews development proposal and lease agreement. Action Items: Airport staff will submit the lease agreement and development proposal to the Airport AdvisorBoard or review. 7. The Airport Advisory Board recommends lease agreements for approval to the City Council. Action Item: (1) Developer should have survey and legal description complete and submitted to Airport staff before lease agreement is sent to City Council for approval; (2) Airport staff will call you when the lease agreements are ready to be signed and will place the agreements on the next available Regular City Council Meeting agenda for Council approval. Staff will inform you when the lease will go before the Council or approval. 8. Apply for a Building Permit. Action Item: Upon Council approval of the lease agreement, you may submit the attached Commercial Building Permit and Parking Lot Permit and submit to Building Inspections. 9. Attend a pre-construction meeting / Airport construction safety meeting. Action Item: Schedule the meeting with airport staff to discuss construction safety requirements and construction equipment access at Denton Airport. 10. Developer tracks Building Permit and inspection process on City's website, www.cityofdenton.com Action Items: (1) Schedule necessary inspections as required by Building Inspections; (2) A l or a Certificate o Occupancy when Construction is complete. 24 AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Finance ACM: Jon Fortune SUBJECT Receive a report, hold a discussion and give staff direction regarding gas well revenue, including a proposed audit of gas well proceeds, and potential uses of gas well revenue. BACKGROUND INTRODUCTION The following information is provided at the request of the City Council. The report provides a complete history of the development of gas wells at the Airport and on other City property and includes a discussion on the policy development regarding the use of gas well revenue. The purpose of providing this information is to ensure that staff is implementing gas well revenue as directed by the City Council. The report includes a projection of Airport gas well revenue for the next seven years, and provides a comprehensive discussion of the assumptions used to make the projection. The report provides an analysis on the anticipated peak revenue period along with three options as to how the General Fund can be reimbursed from Airport gas well revenue for prior subsidy of Airport operations. HISTORY The City began receiving royalties from gas well production on gas wells at the Denton Airport in 2004. Gas wells produce multiple sources of revenue. The City collects ad valorem taxes, use taxes, fire inspection fees, platting fees, road damage fees, watershed protection permit and inspection fees, lease bonuses, surface agreements and royalties from development of gas wells. A detailed explanation of each revenue source is provided in Attachment A. In April of 2005, during the long range financial planning meeting with the City Council, there was considerable discussion regarding the proper use of the Airport gas well revenue. The information provided to the City Council during the long range forecast meeting is included in Attachment B. The current total amount of gas well revenue from all sources is listed below. CITY OF DENTON GAS WELL REVENUES AS OF JANUARY 31, 2006 FUND 01-02 02-03 03-04 04-05 *05-06 TOTAL AD VALOREM $0 $0 $8,171 $72,454 $112,033 $192,658 USE TAX 5,250 511 5,385 959 74,765 ' 86,870 FIRE INSPECTIONS 4,800 16,800 21,200 8,300 3,800 54,900 PLATTING FEES 53,018 42,211 30,831 17,581 11071 144,712 TOTAL-GENERAL FUND $63,068 $59,522 $65,587 $99,294 $191,669 $479,140 GENERAL DEBT SERVICE $0 $0 $4,652 $35,687 $45,760 $86,099 LEASE BONUS - NON-AIRPORT 0 0 101,172 0 36,183 137,355 LEASE BONUS-AIRPORT 110,826 0 8,261 0 0 119,087 SURFACE AGREEMENTS - AIRPORT 0 0 4,800 25,057 0 29,857 ROYALTIES - AIRPORT 0 0 46,713 619,842 264,975 931,530 ROAD DAMAGE 26,674 76,118 491,877 142,435 25,000 762,104 LEASE BONUS - ELECTRIC 0 0 3,013 0 0 3,013 ROYALTIES - ELECTRIC 0 0 0 696 488 1,184 WATERSHED PROTECTION PERMITS 0 0 0 9,100 0 9,100 WATERSHED PROTECTION INSPECTIONS 0 0 22,407 27,600 1,200 51,207 TOTAL - OTHER FUNDS $137,500 $76,118 $682,895 $860,417 $373,606 $2,130,536 TOTAL-ALLFUNDS $200,568 $135,640 $748,482 $959,711 $565,275 $2,609,676 'Oct. 05 - Jan. 06 ' According to State Comptroller's Office, this amount due to a one-time sale by a single drilling operator. Sales tax from that sale was $71,481.72. 1 During the April 2005 meeting staff understood that City Council direction was to set aside gas well revenue associated with lease bonuses, surface use agreements, and royalties to be used for one-time purposes. With the exception of revenue derived from a gas well on DME property, gas well revenue from these sources is currently deposited into one of two non-operating accounts: Airport Gas Well Revenue, and Non-Airport Gas Well Revenue. • This revenue is not included in the fund balance of the General Fund. Revenue (approximately $500-$700 per year) derived from a gas well on DME property is directly deposited into the Electric operating fund. Attachment C provides the current detailed balances for these funds. The balance for the Airport Gas Well Fund includes the most recent use of gas well revenue of $185,000 to support the matching funds agreement the City has with TxDOT for the taxiway realignment project. This expenditure was approved by the City Council on January 17, 2006. Other revenue derived from gas well activity such as inspections fees, platting fees, and ad valorem taxes are being deposited into the General Fund as these are considered reimbursement for services provided from the general operations on behalf of the gas well development. The City was recently notified by the Denton Central Appraisal District that the appraisal information included in the 2005 Certified Taxable Value for mineral accounts, which includes gas wells, did not include the correct number of accounts. The result is that the 2005 tax levy for mineral accounts will increase to $246,012, which is $7,546 more than the current estimate. Finally, revenue for road damage, watershed protection permits and inspections are being used to repair roads damaged by the gas well operator, to pay for the administration of the watershed protection program, and to cover the cost for inspections. At the April 2005 meeting, it was discussed that the Federal Aviation Administration (FAA) has ruled that since the FAA has provided grant funding to construct infrastructure at the Airport, revenue generated on the Airport must be used to support the Airport. The City Council also suggested that since gas well revenue is considered a short-term revenue source that will diminish over time, it cannot be considered to support the Airport's ongoing operating budget and should be used to meet one-time needs. Absent gas well revenue, the Airport does not generate sufficient revenue from leases to fully recover expenses and it is necessary for the General Fund to provide additional resources. The FAA has indicated that since the General Fund has provided financial support to the Airport, the City can, upon approval of a plan by the FAA, reimburse the General Fund from gas well revenues for the amount of financial assistance provided during the previous six-year period, which currently totals approximately $2.3 million. Attachment D provides the detail total of the additional resources necessary for Airport operations for the past six years. In April 2005, the City Council directed staff to develop a plan to utilize gas well revenue for the Airport with the possibility of making a payment back to the General Fund for the previous six years of support provided to the Airport. Staff met with the Airport Advisory Board to discuss this matter in July 2005 and developed a proposal that they endorsed and was included in the Proposed Budget presented to the City Council at the August 8, 2005 budget workshop. Attachment E is a copy of the Manager's Message included in the Proposed Budget and slides from the budget workshop presentation that describes the details of the plan. 2 The plan was developed to provide for the use of gas well revenue to further develop Airport infrastructure and includes the expenditure of gas well revenue to fund the local match necessary for major capital projects such as the runway extension, terminal building, and apron construction. Included in this plan was the change in the source of $700,000 to fund the local match for the runway extension. Previously, the source of this money was to come from Certificates of Obligation that were included on the CIP, but the source was changed to gas well revenue in the proposed plan. The plan also included the use of gas well revenue to pay the debt service on existing Airport debt that was previously funded out of the General Debt Service Fund. This resulted in an indirect benefit to the General Debt Service Fund allowing funds previously obligated to Airport debt to be reallocated. Finally, the plan provided for the investment in revenue generating opportunities, such as hangar development, to enable the Airport to maximize the use of one-time revenue to build additional on-going revenue opportunities to become fully self-supporting. During the August 8, 2005 budget workshop, staff understood that the City Council was supportive of the plan with the exception of using gas well revenue to invest in revenue generating ventures. The City Council also directed staff to consider a peak period of gas well revenue with the possibility of making a repayment, upon FAA approval, back to the General Fund. AIRPORT GAS WELL REVENUE ESTIMATE There are currently two gas wells in production at the Airport. Actual royalty payments for Gas Well 2-H, which started production in September 2004 and Gas Well 1-H, which started production in October 2005, are included in Attachment F. There is also a gas well lease on North Lakes park property that has generated a lease bonus and surface use rental revenues of $137,355, and a gas well on DME property that has generated total revenue of $4,197 as of January 31, 2006. Two additional gas wells are planned at the Airport and the possibility of a third exists. Staff has been told by the gas well operator, Stroud Energy, that construction of the new gas well sites will be timed with the construction of a planned gas pipe line to transport the gas to a distribution facility. According to Stroud Energy, Gas Well 3-H is currently "shut in" until a gathering pipeline is constructed. Gas well operators estimate that the four gas wells at the Airport could generate as much as $6 million in the first seven years of production. However, projecting a time period in which the City will be receiving maximum revenue from gas wells must take into account several factors. First as indicated by the operators, initial production is high and then tapers off substantially. Second, we do not have a date certain that the remaining two wells at the Airport will come on- line. The Airport received the bonus payment for gas wells in 2002. Though it was anticipated that drilling would begin shortly thereafter, approximately two years passed before the first well began production. Royalty payments are based on the percentage of mineral interest retained by the mineral owner. For Airport Gas Well 2-H, the mineral interest owned by the City of Denton is 20%. For Airport Gas Well 1-H and all other potential wells at the Airport, the mineral interest owned by the City of Denton is 25%. Land lease and bonus payments are secondary sources of revenue. Although the latter two are more stable sources of revenue, the growth potential is limited to a fixed or minimal growth rate. In the case of bonus payments, these are one-time sources limited to the number of gas wells drilled/operated on a given property. Land leases are annual payments for 3 the life of the gas well but have minimal growth typically tied to some inflationary index or fixed rate. Royalty revenue is both volatile and finite. The volatility, or fluctuation, of this revenue source makes revenue projection difficult. Use of historical production trends and current market conditions/projections are acceptable projection techniques but they should be viewed with caution. The finiteness of this revenue also attributes to the unreliability of a revenue projection. Gas wells promising to be have life expectancies of 10, 20 or 30 years may yield less than anticipated production, collapse, or experience a number of other unforeseen "acts of God." This has already been experienced with the Airport's Gas Well 2-H. According to Stroud Energy, the operator, Gas Well 2-H was "shut in" for 12 days in October 2005 because it was hit while fracing Gas Well 1-H. In order to get the gas well back into production, they had to move in a work-over rig to swab and clean it. The resulting impact was an unforeseen decrease in revenue to the operator and the City. All these factors, known and unknown, attribute to both the volatility and finiteness of gas well royalty revenue. In staff s attempt to produce a current, sound and conservative revenue projection, the following parameters are used: 1. A $4.00 per mcf price of natural gas. As of November 2005, the City's royalty payment was based on $8.93. 2. Production for gas wells 1-H, #3 and #4 is based on Gas Well 2-H's projected production activity and approximates the recommendation from both the Denton Central Appraisal District and their third party appraiser, Capitol Appraisals. 3. A proposed timeline from Stroud Energy for gas wells #3 and #4. Please note, history from the first gas well at the Airport has already demonstrated that the timing for drilling of a gas well can vary substantially from the operator's projection. In the case of Gas Well 2-H there was an approximate two-year delay. 4. Only incorporates the two gas wells currently in production and two other proposed wells. There is a potential for additional wells and an open space pooling but these are not included in the projection. 5. Does not account for the difference in mineral interest rates. Based on the above assumptions, the Airport gas wells will generate approximately $4.6 million dollars over the next seven years from royalties, surface use agreements, and bonuses. This information is provided in more detail in Attachment G, which includes a current projection based on the most recent data. The revenue projection provided to the City Council in the Proposed Budget is also included for your reference. 4 The chart below (Chart A) provides a graphic illustration of the trend line for our projected revenue stream from all gas wells at the Airport. As you can see from this illustration, the City should receive most of its revenue (peak revenue) between FY 2004-05 and FY 2008-09. Chart B illustrates the same trend line and peak revenue period but by individual gas well. These illustrations are based on the above referenced assumptions. CITY OF DENTON AIRPORT GAS WELL REVENUE FORECAST Chart A ALL GAS WELLS COMBINED Peak Revenue $1,400,000 i $1,200,000 i i I i $1,000,000 i i i i $800,000 i i i i $600,000 i i $400,000 i i I i $200,000 i $0 i i O~ OS 06. O) Od' Og 10 11 12 Airport Gas Wells CITY OF DENTON AIRPORT GAS WELL REVENUE FORECAST BY INDIVIDUAL GAS WELL Chart B Peak Revenue $700,000 i I i I $600,000 ' i i i i I ~ $500,000 i I d i I $400,000 i i I I $300,000 - i i i i $200,000 - _ I ~ I I $100,000 I I $0 r , O~ OS 06. O) Od, Oy IO II j1 2-H 1-H 3 4 Land Leases 5 Revenues from Gas Wells 2-H and 1-H through November 2005 are based on actual revenue. Based on reported activity, Gas Well 2-H reached its peak production in October 2004 with 81,652 mcf and a royalty payment of $67,513. However, its peak revenue was in November 2004 when the royalty payment was $74,517 with production of 70,086 mcf. The difference was the price of natural gas. For these two periods, the price of natural gas was at $3.04 for October 2004 and $4.37 for November 2004. Also, in its second month of production, Gas Well 1-H produced 57,865 mcf but the royalty payment was $119,771. Although Gas Well 1-H appears to be a less productive well than Gas Well 2-H, the price of natural gas for November 2005 was at $8.93 or 104% higher than the previous year. Chart C illustrates the trend line for natural gas prices, as reported to the City by the Dan A. Hughes Company and Stroud Energy. As reflected in this illustration, the price of natural gas climbed from $2.99 in September 2004 to $8.93 in November 2005. This is a 199% increase in the price of natural gas. To further illustrate the fluctuations in the price of natural gas, Attachment H provides the most recent price trend for natural gas at the Houston Ship Channel as measured by price of gas per MMBtu (One million British Thermal Units). CITY OF DENTON GAS PRICE PER MCF AIRPORT GAS WELLS Chart C $10 $9 $8 $7 /Or $6 $5 $4 $3 $2 $1 $0 OF ~F ~F ~F ~s ~s . OS OS OS os 19s ~s . OS OS OS Gas Prices 6 Chart D illustrates the trend line for natural gas production for Gas Wells 2-H & 1-H. Production for Gas Well 2-H peaked at 81,652 mcf in October 2004 and dropped to 14,276 mcf in October 2005. As stated earlier, the production activity for October 2005 was due to an unforeseen event but production did increase in November 2005 to 37,039 mcf. The lowest production, before this event occurred, was in September 2005 when the Gas Well produced 36,290 mcf. Although this drop in production was anticipated, the interesting fact is that production increased slightly after the Gas Well underwent some minor maintenance. This phenomenon is not uncommon and is most apparent after a gas well is refraced, according to most industry experts. Since Gas Well 2-H reached its production peak in its second month of production, the revenue projection assumes that production for Gas Welll-H will begin to decrease from this point. CITY OF DENTON GAS PRODUCTION (MCFs) AIRPORT GAS WELLS Chart D 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 OV 'IV ~s ~s ~s • ~s ~s ~s ps • OS . OS ~s ~s 2-H 1-H USE OF AIRPORT GAS WELL REVENUES As discussed above, the plan to use Airport gas well revenues as recommended by the Airport Advisory Board and presented in the Proposed Budget, included the one-time use of revenue to fund various capital projects. Given the desire expressed by the City Council to make a repayment back the General Fund for the previous six years of support provided to the Airport, staff has further developed three options for consideration based on the most recent revenue projections listed in Attachment G. Staff has developed these additional options at the request of City Council and it should be noted that none of them have been reviewed or approved by the Airport Advisory Board. Staff recommends that prior to the City Council selecting any of the options that the Airport Advisory Board be given an opportunity to review them and provide their endorsement. 7 All three options provide for the same capital projects to be completed as originally proposed, assumes the continued payment of debt service for existing Airport debt, and utilizes gas well revenue from royalties, surface use leases, and bonuses. All three options eliminate the use of gas well revenue to fund public hangar development and a self-service fuel island. Each of the options has been updated with the current revenue projection and include adjustments to project schedules based on current data and actual expenditure amounts. OPTION A Option A (Attached) most closely resembles the plan as originally recommended in the Proposed Budget. Based on the assumptions above, this plan provides for the completion of Airport capital projects by paying for them as direct expenditure items (pay-as-you-go). The plan includes information that demonstrates that in addition to funding the Airport projects and debt service as listed, a total of $1,425,000 could be reimbursed to the General Fund over the next seven years if approved by the FAA. This occurs in two payments of $500,000 in 2006-07 and 2007-08, and the remaining balance is paid in decreasing annual amounts during the last four years of the plan. While Option A provides the largest amount of direct repayment to the General Fund, it does so by spreading the repayment over the entire seven years. Approximately 1/3 of the repayment is scheduled for the later years. Due to the uncertainty of gas well production that far in advance, this represents a weakness when relying on this plan. OPTION B Option B (Attached) represents a substantial departure in methodology in funding Airport capital projects. Though option B utilizes gas well revenue to fund the same projects on the same time schedule as Option A, the revenue is used to support an additional $1,250,000 of debt issued to fund the runway extension, terminal building, SE access road, and SE drainage and utility projects. Recognizing that this gas well revenue is finite, the debt issued to implement this option is planned for a five-year debt service schedule. You can see this in the plan by referring to the Proposed Debt row listed in Option B. Option B allows for a smaller amount of revenue to be reimbursed to the General Fund ($1,100,000) but does so early in the plan: 2006-07 and 2007-08. While the use of debt to fund some of the larger Airport capital projects allows the gas well revenue to be leveraged in such a way to allow an early repayment of $1,100,000 to the General Fund, using a five-year debt schedule makes the annual debt service payment rather large. This represent a commitment that will have to be paid regardless as to whether gas revenue is sufficient to cover the payment and will have to be paid from the General Debt Service Fund. This also represents a weakness given the uncertainty of gas well revenue. OPTION C Option C (Attached) is essentially a hybrid of both Option A and Option B. It includes the issuance of only $700,000 in debt to fund the runway extension project. As mentioned earlier in the report, the original debt service plan as prepared for the last bond program, included the use of Certificates of Obligation to fund this project. In the plan provided in the Proposed Budget, this project is directly funded from gas well revenue (pay-as-you-go) rather than from debt. Option C also allows repayment to the General Fund, per FAA approval, of $1,400,000 by transferring $700,000 in 2006-07, $500,000 in 2007-08, and $200,000 in 2008-09. 8 Option C represents a balance between the first two options. Though there is additional debt service required over a five-year period to fund the runway extension, it is at a more manageable level and represents less risk should there be a change in the level of gas well revenue. Also, though this option does not allow for the maximum repayment of revenue to the General Fund, it is the second highest and does so much earlier in the plan at a time during the peak revenue period. As previously stated, the General Fund has provided financial support to the Airport in the amount of $2.3 million over the past six years. Absent a direct reimbursement to the General Fund, utilizing gas well revenue to fund existing Airport debt over the next seven years produces an indirect benefit to the General Fund of $1.2 million. Including a direct reimbursement provided in any of the three options ($1.1 million to $1.425 million) produces a total benefit to the General Fund of $2.3 million to $2.7 million. OPTION A OPTION B OPTION C Existing Airport Debt (7 years) $1,258,146 $1,258,146 $1,258,146 Direct Reimbursement $1,425,000 $1,100,000 $1,400,000 Total Benefit to General Fund $2,683,146 $2,358,146 $2,658,146 Each of these options can be modified and are provided to demonstrate various approaches to accomplish the City Council's goals. Regardless of which option is ultimately selected, staff recommends that the plan receive monthly review to determine if revenue is meeting expectations in order to accomplish the planned objectives. At any time that revenue deviates from projections, staff recommends that the adopted plan be reviewed again by the Airport Advisory Board and City Council for modification. Staff anticipates that the adopted plan will be revisited at least annually during the budget process for modification as necessary. AUDIT In June 2005, the Denton Airport Oil and Gas Lease for Gas Well 2-H and all other proposed wells was assigned to Stroud Energy from the Dan A. Hughes Company. Immediately after the lease assignment, City accounting staff noticed discrepancies in royalty payments and initiated discussions with the Dan A. Hughes Company and Stroud Energy. As a result of the discussions with Stroud Energy, the City was able to recoup $4,384 in prior period deductions of Gathering Costs. The deduction of these costs is prohibited by our lease agreement. In additional discussions with both operators, the City should anticipate additional refunds from Gas Well 2-H due to a severance tax abatement recently granted by the Railroad Commission of Texas. Preliminary projections by both operators estimate a possible refund of $30,000. Regarding Gas Well 1-H, Stroud Energy indicated that a severance tax abatement would be requested from the Railroad Commission of Texas and the City should receive a small refund if the abatement is granted. 9 In further reviewing royalty payments from both gas wells and after discussions with numerous individuals and entities, including the Railroad Commission of Texas, staff recommends that an auditing firm with industry insight be hired to further review these payments. This recommendation was based partly on the following: 1. Lease Agreement specifies how the price of natural gas should be determined and that the calculation be provided to the City. Staff s attempt to obtain this information has not proved successful yet. 2. Lease Agreement specifies that natural gas and other petroleum products produced by the gas well should be factored into the City's royalty payment. After the lease was assigned to Stroud Energy, compensation for other petroleum products was either not reported, consolidated into another category, or ceased to be produced/gathered. 3. Due diligence would dictate the need for an audit whenever a lease is assigned from one operator to another. At least two agreement compliance issues, deductible costs and compensable petroleum products, have been interpreted differently by both operators that only an audit can correct. 4. Both operator's disclosure, after being pressed by City accounting staff, of the granting and application of severance tax abatements. Non-disclosure of issues impacting compensation to the City should more than justify an audit. RECOMMENDATION Staff recommends that the City Council direct staff to present Option C to the Airport Advisory Board for further discussion and approval based on the conservative revenue projection included in Attachment G. Option C provides for the completion of the Airport capital projects as included in the Proposed Budget and provides for the direct reimbursement to the General Fund of $1.4 million and an indirect benefit to the General Fund of approximately $2.7 million. Upon approval of the Airport Advisory Board, staff recommends that the City Council officially endorse a plan for the use of gas well revenue. Upon endorsement by the City Council, FAA approval will be sought before implementing any direct reimbursement to the General Fund. Constant monitoring of monthly royalty revenue must be conducted. If deviations in revenue projections occur in a manner that has the potential to change the plan, staff recommends conducting additional work sessions with the Airport Advisory Board and City Council as necessary. Otherwise, staff recommends that the plan be revisited on an annual basis as part of the normal budget process. Further, staff recommends that the City Council authorize staff to utilize gas well revenue to conduct an audit of existing royalty payments to ensure that the City is being accurately paid per lease agreements. 10 EXHIBITS Attachment A - Gas Well Related Definitions Attachment B - Financial Forecast Information Attachment C - Airport Gas Well Fund Attachment D - Airport Operations Attachment E - Manager's Message Attachment F - Royalty Payments Attachment G - Gas Well Revenues 7-Year Forecast Attachment H - Houston Shipping Channel Option A Option B Option C Respectfully submitted: V1,94F4. Jon Fortune Assistant City Manager 11 Attachment A GAS WELL RELATED DEFINITIONS Ad Valorem - The property tax is an annual tax assessed, levied and administered on the values of all taxable real and personal property. • Operation & Maintenance (General Fund) • Interest and Sinking (Debt Service Fund) Use Tax - A tax imposed on the use of personal property and property purchased in another state; the purchaser buys items at wholesale and becomes liable for a use tax when those items are withdrawn from inventory for internal use. Surface Agreements - Recurring compensation, which varies by agreement, for the use of City property, since other uses are being foregone. Lease Bonus - One-time compensation for the permission to drill/operate on City property. Rovalties - A share of the profit or product reserved by the grantor, especially of an oil, gas or mining lease. Derived through the cooperation of the mineral owner and the working interest owner. Fire Inspection Fees - A service fee charged for inspection of gas wells to ensure public safety and compliance with Fire Code regulations. Platting Fees - A service fee charged to process a plat for consideration. Road Damage - Fees charged to compensate the City for expenses incurred from damage to roads. Watershed Protection Permit Fees - A service fee charged to fund the increased level of regulation necessary to reduce the risk of pollution to the community water supply or damage to wildlife habitat caused by gas well drilling in the FEMA Floodplain. The watershed protection permit includes monitoring components as follows: • Watershed Protection Permit o General inspection of the site o Enforcement o Environmentally Sensitive Area review and tree verification, if needed o Pit monitoring, if needed o Monitoring to ensure streams are not being affected Watershed Protection Inspection Fees - A service fee charged for the purpose of inspecting gas wells to assure compliance with Denton Development Code quality of life and environmental protection regulations. The watershed protection inspection includes monitoring components as follows: • Gas Well Inspection Fee: o General inspection of the site o Enforcement activities o Pit monitoring, if needed o Tree survey verification, if needed Mcf - One thousand cubic feet of natural gas measured at standard pressure and temperature conditions (see "cubic foot of gas"). Cubic Foot of Gas or Standard Cubic Foot of Gas - As a unit of volume, 1,728 cubic inches. As applied to water, 7.48 gallons. As applied to natural gas, the volume of gas which, when saturated with water vapor at 60°F and at a pressure of 30 inches of mercury occupies one cubic foot of volume. 2/17/2006 - 12:04 PM Severance Tag - A tax imposed on the market value of gas produced and saved in the state by the producer. • The High-Cost Gas Incentive. Gas from wells defined as high-cost gas wells under Section 107 of the old Federal Natural Gas Policy Act (NGPA) is eligible for a severance tax reduction under this incentive. 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T w 0) 0) 3 LL ELT ER ~ N 0) ~ i O U) a+ a 3 N x i LL X O N LL W E 4 Q N L O o O O U L ( ~3 CD N a G1 U) -6 D- i N N O c. o c in C7 0) a Q L N O S O -cf 2- 0 (1) o m y j w Q E o r a Q 6 N L r E r w N 7 i fl- m r C. O O C 0 N r N N N c O V U in X y CO >1 N N O a~ ) C '6 Q H V! H N C -O N C U) > N _0 Q O R C O N y 'a C O R y 0 U aLL O U Q LL + r C r N N y c0 i L N C O Q. a~ N LL L V! t Q Q' L O 3 0 R N N Q U r N Q Q a (7 O L m CO} N fp (!1 > O C 0 Q N °5 L U R V! Q N O r U) ~Np V N r r N v O y6 0 U O 0) U V 0 DD'S~~ 1 z z Q City of Denton - Proposed Annual Program of Services 2005-06 Attachment E F rc^'rn •.F.. RO OSED r SUBMITTED! TO THE MAYOR AND CITY COUNCIL BY MICHAEL A. CONDUFF CITY MANAGER ~ w JULY 30, 2005 ,f KATHY DUBOSE ASSISTANT CITY MANAGER a, _ 6 5 Lk City of Denton - Proposed Annual Program of Services 2005-06 l ry~f:Y!CY.R~" vf~ 10. AIRPORT A. Construction Projects - The Denton Municipal Airport has several construction projects currently in various phases. The design of a new 4,500 square-foot Airport Terminal Building is now in process with construction scheduled to begin later this year. The terminal bUl ldin~ is being partiall) funded from a 50;50 matching grant of $300,000 from the Texas Department of Transportation (TxDOT). Ochcr major construction projects are being funded from federal -rants of 90% with 1 U 't, local match. N,,,e include the expansion to the Airport terminal apron, wlli,h leas been designed Mth construction starting in August, and the ta-xiwav realigniment, which is currently being designed with +wonstruction to bc-in later this year. Funding; leas also been received from TxDOT to begin the process to construct a 1,000-foot : - ; extension to the runway:. The first ph ase of the runway extension is to complete the land acquisition for the extension and initiate the design phase of the project. These projects will increase the safety and capacity of the Airport, and TxDOT is responsible for overseein,; the design and construction. i i~ B. Airport Gas Well Revenue -During the past year, t fie C I t\ hC,Yan receiving; revenue from gas well leases on ° 19 City of Denton - Proposed Annual Program of Services 2005-00 Airport property. There is currently one gas well site in production at the Airport with three more planned in the near future. As a result, it is anticipated that at the end of the 2004-05 fiscal year approximately r s $840,000 in revenue will have been generated from gas wells at the Airport. Projecting future revenue from additional gas wells is difficult since initial production is high and then tapers off substantially. Staff has consulted with gas well operators and based on current revenue trends has estimated that as much as $6 million could be generated over the next seven years. The Federal Aviation Administration (FAA) has indicated that since the FAA has provided grant funding to construct infrastructure at the Airport, any revenue generated on the Airport must be used to support the Airport. Since gas well revenue is considered a short-term resource that will diminish over time, it cannot be considered to support the Airport's ongoing operating budget and should be used to meet one-time needs. Based on conversations with the City Council and Airport Advisory Board, staff has developed a multi- year plan to use Airport gas well revenue to fund Airport construction projects, capital project planning, WO. equipment, payment of existing Airport debt service requirements, and investing in revenue generating r ventures. More specifically, the plan provides for the expenditure of gas well revenue to fund the local match necessary for major capital projects such as the runway extension and taxiway and apron construction. It allocates funding for future planning and land acquisition, and provides contingency allocations to meet 4 unexpected needs. The plan provides for the upgrade and maintenance for items such as security fencing and streets at the Airport. k~ Perhaps the most noteworthy component of the plan is the investment to be made at the Airport to develop revenue-generating opportunities with the ultimate goal of the Airport becoming self-sufficient. The current operating model of the Airport allows tenants to lease land owned by the Airport to construct C'F their own aircraft hangar. After a 30-year lease, the hangar then becomes the property of the Airport. Current lease rates for land only range from $.08 to $.20 per square foot. In contrast the proposed multi- year plan provides funding for the Airport to construct and awn public aircraft hangers to lease at market T rates generating more revenue on an annual basis. Additionally, the multi-year plan provides for the investment in roads, utility (water and wastewater), and taxiway infrastructure in the southeast area of s the Airport, the last substantial area not de< <lotsed on the east side of the field, to promote and encourage further d,-%rTo piiient. Finally, the plan pro\ ,dts for the construction of a self-serve fueling island. Not only will this provide tenants fueling convc i i c nce and opportunity, the Airport will be able to generate additional revenue from fuel sales.. The chart (Exhibit A) describes the multi-ycat° plan for the use of Airport gas well revenue. The plain will be reviewed and updated on an annual basis based can need and current revenue estimates. 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O O O cQ O O Ci N M P P _6 C.0 M v N O °2 N ° N b4 H} EH 64 tPr b4 b4 to tR - C C O~ ~ u) V O R M P P V' Q d^ ~ O fP. ~ N h b ~ ~ ~ O d <Y N w t/} b4 b4 c'Y H} H} N C y N M O p v O p p O Q C O O N V h N 0-- 00 O 1 h P P O ~ 0 V O u O O3 oq O O O i' 7 - P O; O V _ M P N h~~ M h O O N N N O O C b N N cY N h N N O h O 3 N U1 ~ b9' tFF 64 tR b4 - b4 64 44 64 O d N ~ O O O O h O N ' O N U co h O h 0 0 0 O O O h. O C' N '.t) h ~ O O W ~ N O cl' .rq Oi v'j V P N V C7 O h V - W O M O 00 h N O M h M O M N O u. ~ s~ e-r ~t ~r bs- ~r ~r e~ c m M vy o0 O N O . . . i . . p p . . p p h h O O O oO O O O O O O N M ice. `O O i~ N V' •O O M1~ 'n 'n q O `o V '1'J C P O O oO u'i h C) N 1 O v V O N q O P N V M N u1 b N NO O W CL O N N Q y C _q a4 dr ~r ssetr - ~ evea w- Ci d o o~ O O O O O O h. d' O ~ OJ o ~r u} O O O O ~ h. t7 N c'7 O V' CV 'n O h h `o `o Q O A P Mh O r- ~ N b ON M m N r a v U N 6 > 2 a, * * ~ ~ v°i t"~6 * H Q 2 cc (D ° a v o w v.U o a0' z o o v c a(D o v 2 c° a p c m° 0> m o o LL o m H~~ o~ oooc°o c9'=°~°)°c zoo°c~ H - m u a u o> - U ° = o G) z ° O c c o v c c a o c O U F DI 7 U N = 'G' ° o o U Err N w O. `n c c Z c Z - O° x O c Q v U 0--- 0 o O) ~ N w= d x H O N d O U O -6 ° 6= O a d N a O N U O O= Q .a C~ W p a N t `C ° a O c L t w O Q w= U O 'O c vOi 9t c o m o L u o 3 3° a c o 0 o c E r° o°° 3 N? c w S n c m° U m c N 0 x X o o a c z¢ o X o c o a a a v~ o o = w w o s o o o m a° o o v> ° ° 11 'IDC O Q~~i ~4F-i- Q~4000 Oi-P jdcn v~~- .Q = LL II y ID o a F U U ~w cn U a ~2 AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Human Resources CM: Howard Martin, 349-8232 SUBJECT Receive a report, hold a discussion, and give staff direction on compensation. To the extent the discussion includes information on confidential competitive public power information pertaining to DME salaries and policies, the Council reserves the right to convene into a closed session, in compliance with Texas Government Code §551.086 - DELIBERATIONS REGARDING CERTAIN PUBLIC POWER UTILITIES: COMPETITIVE MATTERS. BACKGROUND During the budget process, the City Manager recommended that the Council authorize a compensation study, which would be funded over two fiscal years. Phase I of the study would include the positions in Utilities, Solid Waste, Police and Fire. Phase II would include the remainder of the positions in the organization. Because of the importance of this issue, staff sought input from Council at the October 11, 2005, City Council meeting before drafting and submitting an RFSP. During the meeting, Council requested that, before considering an RFSP, staff bring back a work session item to provide an overview of compensation, including but not limited to, various compensation philosophies, trends in compensation, and what other cities are doing with compensation. Rollie Waters with the Waters Consulting Group, Inc. provided a "Compensation 101" education session at the December 5, 2005, City Council luncheon. Although he did a good job at providing the Council a good overview, the Council was not given an overview of the City of Denton's compensation and classification program. Council was provided a fairly comprehensive report on Friday, February 3, 2006, that detailed the compensation and classification program since its implementation in 1992, how the program has evolved, and some of the challenges the organization is facing today. Staff will be reviewing some of the highlights of the report with Council during the work session. PRIOR ACTION/REVIEW (Council, Boards, Commissions) The Council was presented a "Compensation 101" education session on December 5, 2005. Additionally, the Council has been given a copy of a "Compensation Program Overview" report on February 3, 2006, that provides information specific to the City of Denton's compensation and classification program. 1 FISCAL INFORMATION One hundred thousand dollars ($100,000) has been included in the budget for FY 05/06 to cover the cost of Police and Fire. Another $100,000 has been included in the five-year financial forecast for Phase 11 of the study in FY 06/07. Utilities and Solid Waste will cover the cost for their positions from their budget Respectfully submitted: a ar a Ro e Director of Human Resources 2 AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Diana Ortiz 349-8224 ACM: Jon Fortune SUBJECT Consider adoption of an Ordinance of the City Council of the City of Denton, Texas authorizing the City Manager to execute a contract with Gila Corporation, D.B.A. Municipal Services Bureau, for collection services relating to the collection of Municipal Court fines in accordance with the Code of Criminal Procedure; providing for retroactive effect; and providing an effective date. RFP INFORMATION This contract for collection services for the Municipal Court includes the collection of warrants, unpaid fines, debts, and accounts receivables, which are collectible under Article 103.0031 of the Code of Criminal Procedure. Three proposals were received and evaluated by staff. The ranking criteria are included as Attachment 1. Based upon the ranking score, Gila Corporation, D.B.A. Municipal Services Bureau was determined to be the best-qualified firm. RECOMMENDATION Award to Gila Corporation, D.B.A. as Municipal Services Bureau for the provision of collection services. PRINCIPAL PLACE OF BUSINESS Gila Corporation, D.B.A. as Municipal Services Bureau Austin, TX ESTIMATED SCHEDULE OF PROJECT This is a five-year contract with an option to renew for additional one-year periods. FISCAL INFORMATION This is basically a self-funding agreement. The service provider is only paid based upon the success of their collection. The agreement has no budget expenditure impact. Agenda Information Sheet February 21, 2006 Page 2 Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: Vendor Ranking Sheet 1-AIS-RFP 3298 0 0 0 L2 0 00 OU N 00 00 c _ O N - = N N U c (n Q N > (1) . a) 0 O U U c E U Z m N° ° O O U U s N a°S rO m E0 O E C C O m N X O N p d (0 (0 N a) -p (0 E E N a) O- U m e U) > E> U m Q o o) (D .2 :E o x x C: a) ° H U O o a) U N>- aUi U) L M ° m m 0 a) N > a) U) U a) U ° O Q U Q N LU U E U (6 U X O p (0 > U U a U a~i a) o a) a) a) o U E E a) > v LU W W LU H O O O E Q a) O O O O 0 0 p N N ~ O a) N x 0 i _0_ N a) OU -O p m C a) N a) _ ° O O = C LO c) w C O C a)5 O N N j_ N -O O ° ~5 §i U U c E Z3 0 U C U) x a) O a) U E (O X U U) ~ m a-+ U C > U ¢ Q U O_ -O p u) C a) LU a) O T v~ E co: a) Q LO m U Q c N a) o 00 U X _0 N°° m a) c m= U U U Cl) CM cU a) 0 E U) 0) a) ° a) a) a) a) a) a) a) cr- > m > c E ° ° D- LL a) a) a) a) a) a) a) ° c (o E -0 a) Q N O o Tin ~e c> U U U U U U Q > L2 w w w w w w m (>I<) (u 2_ (°o (°o Q 0 L 0 LO LO 00 LO C) 'a O O O I~ U d U) L U) U a) U C i a) N a) O o E p i > O N ) 'IT ° U U U 7 Q> - C U C ) D O= (0 O U U N U C a) U) a) (D E- X (n U d X U fn N Q-' U) 'V a) C U E N ' O(D U L N° U U E X O u) U a) U) U > V H-0 T~ -0 ai m N U L O ' (0 C(D (O m a) c p (n U) U) o° U C C C C L a) C''~ a) a) a) a) a) - U N a U (n o a) o a) a) a) ~ ° U)) X o N U X X X X N x(D O D U > U) H LU W W LU m O m aXi O N N 0-0 N O N o U (n U o N C LO c X ° 0 0 0 o o p- N U o (n c N U !~2 LLJ a) U) O U a) t 2 a) V J ~ T ~ a) (0 U- N U) N O Q O x O O U O N C - j W a) 2 E a) E a O n5 Q T - co } of w a U U S:\prch\Agenda\Agenda 2005-2006\February 21, 2006\RFP 3298 Municipal Court Collection Services\3-ORD-RFP 3298.doc ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT WITH GILA CORPORATION, D.B.A. MUNICIPAL SERVICES BUREAU, FOR COLLECTION SERVICES RELATING TO THE COLLECTION OF MUNICIPAL COURT FINES IN ACCORDANCE WITH THE CODE OF CRIMINAL PROCEDURE; PROVIDING FOR RETROACTIVE EFFECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, Article 103.0031 of the Code of Criminal Procedure provides that the governing body of a municipality may enter into a contract with an attorney or private vendor for collection services and may also authorize the addition of collection fees in the amount of 30% on each debt or account receivable such as fines, fees, restitution and other debts and costs, not including forfeited bonds, that are more than 60 days past due and that have been referred to the private vendor or attorney; and WHEREAS, by Ordinance No. 2001-295, approved by the City Council on August 21, 2001, the City Council authorized the additional 30% collection fee allowed by Article 103.0031 of the Code of Criminal Procedure on each debt or account receivable such as fines, fees, restitution, and other debts or costs, not including forfeited bonds, that are more than sixty days past due and that have been referred to a private vendor or attorney; and WHEREAS, the City has previously retained and engaged the services of Gila Corporation, d.b.a. Municipal Services Bureau (hereinafter sometimes referred to as MSB) for the municipal court collection services most recently through the passage of Ordinance No. 2006-014, approved by the City Council on January 17, 2006, and MSB is currently under a contract with the City to provide municipal court collection services, which has demonstrated MSB's expertise of relevant issues concerning the City and its competence, knowledge and qualifications; and WHEREAS, City staff has reported to the City Council that there is a substantial need for the hereinabove described collection services, and that limited City staff cannot adequately perform these specialized collection services with its own personnel; and WHEREAS, the City Manager's staff has determined from an evaluation of responses to the City's Request for Proposal (RFP) for Municipal Court Collection Services that MSB is the best qualified firm; and WHEREAS, the City Council hereby finds and concludes that MSB is appropriately qualified under the provisions of the law to be retained as a municipal court collection agency for the City; and WHEREAS, the Code of Criminal Procedure provides for payment of the 30% additional collection fee for the foregoing services and the City Council deems it in the public interest to enter into a Contract For The Collection of Municipal Court Fines with MSB for municipal court collection services; NOW, THEREFORE, S:\prch\Agenda\Agenda 2005-2006\February 21, 2006\RFP 3298 Municipal Court Collection Services\3-ORD-RFP 3298.doc THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The recitations in the preamble are true and correct, and are incorporated herewith as part of this Ordinance. SECTION 2. The City Manager is hereby authorized to execute a Contract For The Collection Of Municipal Court Fines with Gila Corporation, d.b.a. Municipal Services Bureau, relating to municipal court collection services as set forth above and authorized by Article 103.0031 of the Code of Criminal Procedure, in substantially the form of the Contract attached hereto and incorporated herein by reference. SECTION 3. The award of this Agreement is on the basis of the demonstrated competence and qualifications of Gila Corporation, d.b.a. Municipal Services Bureau and the ability of MSB to perform the services needed by the City for a fair and reasonable price in accordance with the fees authorized by the Code of Criminal Procedure. SECTION 4. All actions taken by the City Manager, City staff and MSB to provide municipal court collection services which took place prior to the effective date of this Ordinance are ratified and approved. SECTION 5. This Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: Page 2 of 2 s:\Ow DocmnwntzlConUu=X)61Municipa1 Services Bumau.doc CONTRACT FOR THE COLLECTION OF MUNICIPAL COURT FINES THE STATE OF TEXAS § COUNTY OF DENTON § THIS CONTRACT is made and entered into by and between the City of Denton, 215 E. McKinney, Denton, Texas 76201 ("CITY"), acting herein by and through its governing body, and Gila Corporation, d.b.a. Municipal Services Bureau CF"", a corporation authorized to do business in Texas. 1. EMPLOYMENT OF FIRM i CITY agrees to employ and does hereby employ FIRM, as an independent contraetar, and FIRM hereby agrees to enforce by suit or otherwise the collection of all delinquent warrants on cases filed in the C1TY's Municipal Court, as well as any other debts, accounts receivable and other debts owing to the City (delinquent Municipal Court records) which may be collected under Section 103.0031 of the Texas Code of Criminal Procedure as requested by the City. The FIRM shall perform the following services: A. FIRM shall perform, any Municipal Court collection services authorized by the Section 103.0031 of the Texas Code of Criminal Procedure as may be requested by the City Manager or his designee. B. FIRM shall perform all these services set forth in the City of Denton RFP No. 3298 Municipal Court Contract for Collection Services and FIRM's proposal in response to RFP No. 3298 dated January 18, 2006, attached respectively as Exhibits A and B and made a part of this Contract for all purposes provided; however, in the event of any conflict between the terms of this Contract and Exhibits A and B, the terms of this Contract shall prevail. C. FIRM hereby agrees to perform the services herein with diligence and in accordance with the highest professional standards customarily obtained for such services in the State of Texas. 2. PROVISION OF INFORMATION CITY agrees to furnish all necessary warrants and other Municipal Court collection information to FIRM as indicated in the Exhibit A. 3. INVESTIGATION AND ASSISTANCE FIRM agrees to conduct investigations as to the address of each delinquent person where such information may be incorrect on utility bills, delinquent tax records and other sources. FIRM shall bring to the attention of the appropriate official of CITY any am s, discrepancies, or inaccuracies in the information provided on the delinquent Municipal Court fine records detected by FIRM. FIRM further agrees to provide CITY with any advice or assistance in connection with SAC)ur Domm=1t0Contmcts1061Municipu1 Sc vices Surwu.doe updating the Municipal Court records. CITY shall make available to FIRM information which CITY may have with regard to the name, identity, and location of necessary parties in connection with each delinquent account upon request by FMM. 4. PROCEDURES FOR COLLECTION Upon initial receipt of the delinquent Municipal Court records by FIRM in computer readable form, FIRM agrees to initiate procedures for the collection of the fezll amoumt due from each delinquent person. Within a reasonable time frame but not more than sixty (60) days from FIRM's receipt of the delinquent Municipal Court records, FIRM hereby agrees to send, by fast class mail, a notice of delinquency to each and every delinquent person, requesting said person to remit the full amount due and owing to CITY. 5. REVIEW AND AUTHORIZATION Following transmittal of the notice of delinquency as specified hereinabove, FIRM will commence procedures in anticipation of litigation or other substantial collection action for aggressive pursuit of collection. CITY shall have absolute discretion over those accounts on which suit should be filed and shall pursue litigation itself or through contractors other than FIRM. 6. COLLECTION SERVICES FIRM agrees (1) in provide CITY collections advice and written opinions regarding collection matters upon request; (2) to respond to delinquent person inquiries and to advise CITY, in writing, or, and make any recommendations concerning installment payment agreements and settlement agreements proposed by the delinquent person. CITY shall have final determination in acceptance of all insWhnent payments or settlement agreements within parameters established by CITY. FIRM shall have discretion to enter into installment agreements subject to Crlys prerogative of final determination and FIRM shall notify CITY of each installment agreement within one work day of the agreement. In all demand letters and all communications with delinquent persons, FIRM shall inform and instruct the person to remit the payment to FIRM. If remittance is received by CITY, it will be transmitted in its entirety to FIRM and received for processing within three business days. Checks made payable to CITY shall be endorsed by CTTY to FIRM. 7. MANAGEMENT REPORTS FIRM agrees to make delinquent collection management reports to CITY monthly and quarterly, in a format containing information as requested by Cr1 Y's Executive Director of Finance and Municipal Court A j ni error. Management reports may include, without limitation: 1. Number of phone or other delinquent person contacts within first 1.80-day period; 2. First demand letters mailed; 3. Number and value of bankruptcies filed; 4. Copies of proof of claims filed in bankruptcy court; Page 2 of 9 S ADur Docummts\Cont=ts1b6Uunieipa1 Services Bureau.$oc 5. Number and value of delinquent accounts not collected as a percentage of total delinquent accounts provided by CITY for collection. 6. Any other infbm ation which is indicated under "Exhibit A or B" or as may be required under the Contract. Within parameters established at the initiation of the collation program, FIRM shall advise CITY of any case in which FIRM's investigation has revealed that the delinquent person cannot be found, the enforcement of a judgment cannot be accomplished, or further attempts at collection would be futile and FIRM's recommcndation relative to the proper disposition of the case. In such cases, the CITY shall advise FIRM as to the appropriate disposition of the account. 8. COMPENSATION A. As compensation for the services rendered hereunder by FIRM, CITY hereby agrees that FIRM may collect a collection fee of thirty percent (30%) of the total amount of all delinquent amounts, as authorized by Section 103.0031(b) of the Code of Criminal Procedure. All compensation set Forth above shall become the property of CITY at the time payment of the delinquent fines or other amounts received by FIRM. Said collection fee will only be paid to FIRM after it has been received from the delinquent person as an additional amount added to the amount of unpaid fine or other debt owed. FIRM shall not be entitled to the aforesaid thirty percent (30 °/a) unless and until FIRM has taken some action in connection with recovering.delinquent amounts. The transmittal of a notice of delinquency skull= constitute sufficient action M. order- to entitle FIRM to the fee aforesaid. In no event shall FIRM be entity to any fee unless and until CITY actually receives the delinquent fines, other amounts or.court costs from FIRM. In no event shall FIRM be entitled to any fee unless said fee is collected by FIRM during the terra of this Contract or fee is collected by CTry on account(s) upon which FIRM is actively pursuing at the time of judgment. In no event shall FIRM be entitled to any fee in cases where payment is involuntary as in an arrest. FIRM shall pay said fines, other amounts or court costs to CITY by check monthly. B. The compensation set forth in this paragraph of this Conrt shall be the total compensation due to FIRM from CITY for all services provided pursuant to this Contract and in no event shall FIRM seek any additional compensation from CITY. CITY shall not be responsible to pay for any services which are unsatiisfactory or chat the CITY has not approved. 9. CONFLICTS OF llMREST FIRM agrees not to represent any client who has an adversary position with the CITY, engage in any conflict of interest and to fiilly comply with any applicable codes of professional conduct or ethics laws for the duration ofthis Contract. I4. TERM The term of this Contract shall be for five years beginning on February 21, 2006 and ending on the February 20, 2011 unless sooner terminated in accordance with Section 27 of this Contract. FIRM may renew this Contract for an additional one-year period upon giving CITY a notice in writing of its intent to anew not later than sixty (60) days before the expiration of the initial term. FIRM shall have an additional six months to assist the CITY in reducing to judgment and sale any Page 3 of 9 e S:NoUr DocwneM)CanVact11J "imicipal Services Bmmi.doc collection lawsuits filed and collect all bankruptcy claims filed prior to the termination date, and shall have a right to compensation of fees earned on any of these matters FIRM has exclusively handled during fts six month period. CITY shall have the right to sooner terminate this Contract by giving ten (10) days' written notice of such intention, or in the event of any of the events taldng place under Section 27 Termination of Agreement". In case of such termination, FIRM shall be entitled to receive and retain all compensation due up to the date of said termination, Upon termination, FIRM shall immediately deliver all files in their entirety to CITY at no cost to CITY. 11. SETTLEMENTS No settlements or compromises of fines or other collectable amounts shall be effected where prohibited by law and where authorized by law, only upon approval by CITY. 12. NOTICE Any notice or other written instnuncat required or permitted to be delivered pursuant to the terms of this Contract shall be deemed to have been delivered, whether actually received or not, when deposited in the United States mail, postage prepaid, registered or certified, return receipt requested, addressed to CITY or FlRivl, as the rase may be, -at the following addresses: CITY FIRM City of Denton, Texas Gila Corporation, d.b.a. ATTN: Assistant City Manager Municipal Services Bureau Fiscal & Municipal Services ATTN: Thomas M. Giamboi 215 E. McKinney President & CEO Denton, TX 76201 6505 Airport Blvd., Ste. 100 Austin, TX 78752 Either party may change its mailing address by sending notice of change of address to the other at the above address by certified mail, return receipt requested. 13. VENUE The terms, obligations and requirements of this Contract shall be construed in accordance with the laws of the State of Texas. The obligations and requirements of the parties hereto are performable in Denton County, Teams. Any litigation involving this Contract shall be tried in a court of competent jurisdiction sitting in Denton County, Texas. 14. ACCEPTANCE OF EMPLOYMENT In consideration of the terms, covenants and mutual agreements hereinabove stated, FIRM hereby accepts the employment of CITY and undertakes the performance of this Contract as above stated Page 4 of 9 SAOur Document6Coritacts D Municipal Services Sureau.d= 15. DIRECTIVES All directives between FIRM and CITY shall be confirmed in writing. 16. COVENANT NOT TO SUE FIFtM further agrees not to bring any cause of action against CITY relative to this Contract. Should FIRM bung any cause of action against CITY, FIRM agrees the liquidated damages shall not exceed $1.(14 and the filing of such cause of action shall be considered a material breach of this Contract. 17. AMBIGUITY Any ambiguity within this Conract shall be liberally interpreted in favor of CITY. IS. ASSIGNMENT 'The rights and responsibilities of CFTY under this Contract may be assigned by the City Council to another governmental unit in Denton County without approval of FIRM. It is understood and agreed that this is a specialized collection services contract and CITY is con#racting for the unique services of FIRM. FMWs rights and responsibilities under this Contract may not be assigned by FIRM to another firm or collection agency without written approval of the assignment by the City Council. 19. INDEMNITY AGREEMENT The FIRM shall mdannify and save and hold hamaless, and defend, at its own expense, the CITY and its officers, agents, servants, and employees from and against any and all liability, suits, claims, demands, damages, losses, and expenses, including, but not limited to court costs and reasonable attorney fees incurred by the CITY, and including, without limitation, dauaages for bodily and personal injury, death and property damage, of whatever kind or character, whether real or asserted, rem1 ing from the negligent acts or-omissions of the FIRM or its officers, shamholden, agents, or employees in the execution, operation, or performance of this Contract. Nothing in this Contract shall be construed to create a hability to any person who is not a party to this Contract, 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 Contra including-the defense of governmental immunity, which defenses are hereby expressly reserved. 20. INSURANCE During the performance of the services under this Contract, FIRM shall maintain the following insurance with an insurance company licensed to do business in the State of Texas by the State Inol, m,re Commission or any succor agency that has a rating with Best Rated Carriers of at least an A- or above: Page 5 of 9 S:+our DucurantslConaact \06Vduni6pal Services Bureau.doc Professional Liability Insurance with limits of not less than $1,004,000 annual aggregate. The FIRM shall furnish insurance certificates or insurance policies at the Cr1 Y's request to evidence such coverages. The insurance policies shall name the CITY as an additional insured on all such policies, and shall contain a provision that such insurance shall not be canceled or modified j without 30 days prior written notice to CITY and FIRM. In such event; the FIRM shall, prior to the effective date ofthe change or cancellation, serve substitute policies furnishing the same coverage. 21. ARBITRATION AND ALTERNATE DISPUTE RESOLUTION The parties may agree to settle any disputes under this Contract by submitting the dispute to arbitration or other means of alternate dispute resolution, such as mediation. No arbitration or altemate dispute resolution arising out of or relating to this Contract, involving one party's disagreement, may include the other party to the disagreement without the other's approval. 22. ENTIRE AGREEMENT This Contract, consisting of 9 pages and Exhibits A and B, 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. The pasties understand and agree that any previous amts or contracts between the parties are null and void and this Contract is the sole and exclusive contact or agreement between the parties. 23. COMPLIANCE WITH LAWS The FIRM 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 24. DISCRIMINATION PROHIBITED In performing the services required hereunder, the FIRM shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry; age, or physical handicap. 25. PERSONNEL AND EQUIPMENT A. The FIRM represents that it has or will secure, at its own expense, all pexsmmel required to perform all the services required under this Contract. Such personnel shall not be employees or officers of, or have any contractual relations with the CITY. FIRM shall inform the CITY of any conflict of interest or potential conflict of interest that may arise during the terns of this Contract. Page 6 of 9 SA0ur Docun=tslConftwW\06\MwuciPQ1 Smiow BUMU.&C B. All services required hereunder will be performed by the FIRM 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. C. The FIRM represents that it has or will. secure, at its own expense, the hardware, software, and other resources required to perform, iri a timely man=, all the services required under the terms of this Contract. 26. ASSIGNABILITY The FIRM shall not assign any interest in this Contract, and shall, not transfer any interest in this Contract (whether by assignment, novation, or otherwise) without the prior written consent of the CITY. 27. TERMINATION OF AGREEMENT A. Notwithstanding any other provision of this Contract, either party may terminate by giving thirty (30) days advance written notice to the other party. The City further shall have as a matter of right, the option to cancel this Contract upon giving the FIRM ten (10) days advance written notice. B. This Contract maybe terminated.in whole or in part in the event of either party substantially failing to fulfill its obligations under this Contract. 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 nonperformance, and not less than 30 calendar days to cure the fail=, and (2) an opportunity for consultation with the terminating party prior to termination. C. If the agreement is tern ninated prior to completion of the services to be provided hereunder, FIRM skull immediately cease all services and shall render a final bill for services to the CITY within 30 days after the date of termination. The CITY shall pay FIRM for all services properly rendered and satisfactorily perforated and for reimbursable expenses to termination incurred prior to the date of termination, in accordance with Article 9 "Compensation". Should the CITY subsequently contract with a new consultant for the continuation of services on the Project, FRW shall cooperate in providing information. The FIRM shall turn over all documents prepared or furnished by FIRM pursuant to this Contract to the CITY on or before the date of termination, but may maintain copies of such documents for its use. 28. EXCLUSIVE CONTRACT AND MODIFICATION This Contract and the attached Exhibits constitute the sole, exclusive and entire contract between the parties and replaces any previous contracts between the parties which are null and void. No waiver or modification of this Contract 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 skull be offered or received in evidence in any proceeding Page 7 of 9 S:1pur DocumeatslC=tmct!h06WunicipsI Services Bumu.dao arising between the parties hereto out of or affecting this Contract, 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 herein set forth. 29. INDEPENDENT CONTRACTOR FIRM shall provide services to CITY as an independent contractor, not as an employee of the CITY. FIRM shall not have or claim any right arising from employee status. 30. MISCELLANEOUS A. The following exhibits are attached to and made a part of this Contract: Exhibit "A!'- Task Order For Collection Services. B. FIRM agrees that CITY shall, until the expiration of three (3) years after the final payment under this Contract, have access to and the right to examine any directly pertinent boobs, documents, papers, and records of the FIRM involving transactions relating to this Contract. FIRM agrees that CITY shall have access during normal working hours to all necessary FIRM facilities and shall be provided adequate and appropriate working space in order to conduct audits in compliance with this section. CITY shall give FIRM reasonable advance notice of intended audits. C. For the purpose of this Contract, the key persons who will perform most of this work hereunder shall be Thomas Giamboi, Donald McKinley, Chris Powell and Yousef Gonzalez, one of whom is either an attorney, accountant, auditor, or now works in another well recognized professional services field However, nothing herein shall limit FIRM from using other qualified and competent members of its fam to perfoffi the services required herein. D. FIRM shall commence, carry on, and complete any and all projects with all applicable dispatch, in a sound, economical, efficient manner and in accordance with the provisions hereof. In accomplishing the projects; FIRM shall take such steps as are appropriate to ensure that the work involved is properly coordinated with related work being carried on by the CITY. E. The CITY shalt assist the FIRM by placing at the FMM'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 FIRM to enter in or upon public and private property as required for the FIRM to perform services under this Contract. 31. TIME OF THE ESSENCE Time is of the essence with respect to all matters covered by this Contract. Page 8 of 9 S-. 0Dw DocumentBZontrawti061bfunidpa1 Savices Bureamdoc 32. CAPTIONS The captions appearing at the first of each numbered section are inserted and included solely for convenience and shall never be considered or given any effect in cmswaing this Contract. This Contract is executed on behalf of MY by the presiding officer of its governing body who is authorized to execute this instrument by order heretofore passed and duly recorded in its minutes and by a partner of FIRM who, by execution of this Contract, represents and warrants that he or she has the authority to execute this document on behalf of FIRM. WITNESS the signature of all parties hereto in triplicate originals this the day of , 2006, Denton County, Texas. CITY OF DENTON, TEXAS HOWARD MARTIN INTERIM CITY MANAGER ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: GILA CORPORATION, D.B.A., MUA]IC S VICES BUREAU Y: TH M. GIAMBOI P & CEO Page 9 of 9 CITY OF DENTON RFP #3298 Municipal Court Contract for Collection Services I:Ca - dry - 1 Proposal Due Date: 2:00 p.m. (local time) Proposal Submitted by: Company Name CITY OF DENTON REQUEST FOR PROPOSAL 3298 CONTRACT FOR COLLECTION SERVICES 1. INFORMATION FOR CONTRACTOR A. Purpose The purpose of this document is to solicit Proposals to collect on capias pro fine warrants on cases filed in the Denton Municipal Court. All references to "Warrant" refer to Capias Pro Fine warrants, cases that have unsatisfied judgments. The agency (Contractor) submitting the successful Proposal must clearly demonstrate its ability to provide immediate and consistent efforts in collections and provide a timely return of the dollars collected. B. Proposal Submission One original and three copies of the Proposal(s) should be submitted in a sealed envelope bearing the name and address of the respondent. Once submitted, Proposals become the property of the City of Denton. A duly authorized official of the Contractor's organization must sign proposals. C. Proposal Section The Proposal contains four sections. SECTION I - INFORMATION FOR CONTRACTOR SECTION III - COLLECTIONS SERVICES SECTION III - METHOD OF AWARD SECTION IV - INFORMATION TO BE PROVIDED BY THE CONTRACTOR Purch/Proposals.3298 Municipal Court Collection Services II. COLLECTION SERVICES A. P_ _u__rMose The purpose of this Request is to solicit proposals to collect on Class C Misdemeanor violations that have been adjudicated and are past due and/or in warrant status, for the City of Denton. The objective of the Proposal process is to obtain the collection services of a collection agency (Contractor), who will provide immediate and consistent efforts in collections and a timely return of the maximum dollars by reimbursement on each case or warrant collected. B. Background The Municipal Court is responsible for the adjudication of Class C Misdemeanor violations (within the corporate city limits) provided by State Law and City Ordinances. The Court processes approximately 48,000 cases annually. Of these cases approximately 2,000 will have warrants issued. The average bond/fine is $245.00. The vast majority of persons for which warrants are issued have resident addresses within Denton or the Dallas/Fort Worth Metroplex. Approximately two percent of the warrant holder's addresses are out of State. All references to "Warrant" refer to Capias Pro Fine warrants, cases that have unsatisfied judgments. C. Nature of Services Required 1. The Court will provide files electronically to the Contractor of those persons having outstanding City of Denton Municipal Court cases. This information can include, but is not limited to the following: Person's name, personal identifiers and driver license number, last known residential address, last known telephone number, citation number, alleged offense committed, offense date, amount of fine, amount paid (if any), amount due, and if applicable, date of warrant and warrant number and amount of fine/bond. City will provide current file layouts. Electronic transfer of data must include the Contractor having a PC that enables the City of Denton to E-mail an attachment or to a secure FTP file via the Internet. Contractor must be able to receive and return files back and forth between City and Contractor. It will be the Contractor's responsibility to assure compatibility of City's data files and transmittal medium to the Contractors computer system. The Contractor shall bear all costs, if necessary, for data conversion to make the City's computer system compatible with that of the Contractor's and any incidental costs related to the data transfer. PurcWroposals3298 Municipal Court Collection Services 2. The City will send various outstanding cases to the Contractor for collection services on a monthly basis. These cases and warrants consist of the following types: a. Active Warrants - These are warrants in which a judgment has been entered assessing a sum owed by the defendant in order to discharge the defendant from liability, and the defendant is subject to immediate arrest; 3. The City will supply the Contractor with two separate listings. They shall be known as the HISTORY FILE, the, and the NEW WARRANT FILE. a. The History File shall be provided one time only. This file will contain the entire backlog of active warrants previously worked by the City's existing collection agency. The approximate number of outstanding cases is 500. b. The New Warrant File shall be sent on a monthly basis and shall contain warrants that were processed for two years by the Denton Police Department. This file will contain the most recent past dues processed for warrant, along with unresolved cases returned from the Contractor in the Pre-warrant File. The approximate number of new warrants each month is 200. 4. Contractor agrees to perform the following: a. Contractor will develop a series of contacts with the defendant that do not violate the defendant's statutory and constitutional rights. b. Contractor will attempt to contact the defendant named in any case or warrant submitted for collection service at least six (6) times in a I80-day period through a rotating telephone and letter cycle. Voice/telephone contact attempts shall be limited to between the hours of 9:_0_0_A_. M. and 9:00 P.M., Monday through Saturday. No Sunday contacts will be attempted. C. Contractor will submit transcripts of telephone contacts and written, communications for approval by the City for collection services. The Contractor shall pay all associated costs with the telephone contact and written communications. d. Contractor will instruct all defendants to forward no monies directly to the City of Denton Municipal Court. Should the Court receive a payment from a defendant, the Court shall forward payment directly to the contractor in the form of the original negotiable instrument received. Purch/Proposals.3298 Municipal Court Collection Services e. Contractor will send an acknowledgment (approved by the City) of receipt of payment on the City's behalf to all named defendants in cases and warrants which are collected by payment of sums owed. f. The Contractor shall make no contacts in person to the defendant. g. The City may recall at any time from Contractor a case previously referred to Contractor for collection efforts, when in the opinion of the City, the best interest of the City will be served by recalling the case and/or warrant. Contractor will return information on cases submitted for collection services including information developed by the Contractor regarding the defendant or his whereabouts. h. Contractor shall use due diligence, reasonable and ethical methods, and employ lawful means to effect collection on the City's outstanding cases. i. Contractor will guarantee that every defendant will be dealt with in a professional, courteous manner. i. Contractor will guarantee that a full-time customer service representative will be assigned to the City of Denton and available to address day-to-day issues. k. Contractor will guarantee that a management-level staff member will be available to meet with City of Denton staff on 24-hour notice. 1. Contractor will send to the City of Denton only the monies that are due the City. City will not collect nor distribute the collection fee. 5. Additional written and/or telephone contacts may be made at the choice of the Contractor within the hours stipulated above. 6. All information supplied by the City to the Contractor shall be kept confidential and not disclosed to parties other than the Contractor's employees on a need-to- know basis for the purpose of contract performance and to the defendant or the person answering the phone of defendant's residence. 7. Both the City and the Contractor will jointly review the appropriate cases for which payment is due to the City on a monthly basis. a. Contractor will not receive compensation for cases and warrants disposed of in which the City does not receive any payments, including but not limited to situations in which cases or warrants are disposed of by way of arrest, defendant's credit for sums owed by jail time credit, community service, dismissal of any case or if defendant is found not guilty, or for which no money is actually received by the Court. Purch/Proposals.3298 Municipal Court Collection Services b. Total collection fees received by the Contractor will not exceed the percentage as specified in the Contractor's Proposal. C. The City shall not be liable under the contract for any services which are unsatisfactory or which the City has not approved. d. Contractor will not be entitled to reimbursement for expenses incurred under the Contract. Indemnification: Contractor covenants and agrees to and does hereby indemnify, hold harmless and defend, at its own expense, Owner, its officers, servants and employees, from and against any and all claims or suits for property loss or damage and/or personal injury, including death, to any and all persons, of whatsoever kind or character, whether real or asserted, arising out of the Work and services to be performed hereunder by Contractor, its officers, agents, employees, subcontractors, licensees or invitees, whether or not caused, in whole or in part, by the alleged negligence of the officers, servants, employees, of the Owner. Contractor likewise covenants and agrees to, and does hereby, indemnify and hold harmless Owner during the performance of any of the terms and conditions of this Contract; whether arising out of in whole or in part, any and all alleged acts or omissions of officers, servants, or employees of Owner. The provisions of this paragraph are solely for the benefit of the parties hereto and not intended to create or grant any rights, contractual or otherwise, to any other person or entity. Purch/Proposals.3248 Municipal Court Collection Services s Hl, METHOD OF AWARD The awarding of this contract will be to the Proposalder who provides the service at the Best Value to the City of Denton based upon the factors listed below: 1. Contractor Qualifications a. Experience in the required area of collections (minimum of 5 years } Experience in the verification process regarding Failure to Maintain Financial Responsibility cases (minimum of 3 years) b. Experience in the number of Texas courts (minimum of 10 with at least 3 of those courts having similar volume to Denton) c. Experience and performance results from other Texas Municipal Courts for whom vendor has been doing business with for at least 24 months d. Experience in receiving /transmitting data electronically e. Experience and performance results in conducting an Amnesty and/or Warrant Round-Up Programs f Experience and stability of key staff 2. Fee Structure a. Commission rate for services on all new cases b. Guaranteed percentage rate for resolution of all cases referred to Contractor 3. Collection Procedures a. Collection techniques utilized including procedures for letter sending and telephone calls b. Implementation work plan, timetable and rate of recovery c. Customer Service Methodology of contacts and notices - handling customers' questions/problems d. Handling of non-English speaking customers e. Adequacy and sophistication of telephone resources f. Examples of collection letters and telephone scripts 4. Computer Network a. Adequacy and sophistication of data processing resources b. Proposed methodology and procedures for data transfer to/from city database c. On-line inquiry capabilities d. Record retention capabilities 5. Management Reports a. Reports provided to the City b. Flexibility in meeting City's reporting needs c. Responses to auditor inquiries and confirmation requests PorchlProposals.3298 Municipal Court Collection Services S 6. Vendors Past Relationship with the City IV. INFORMATION TO BE PROVIDED BY CONTRACTOR In order to simplify the review process and obtain the maximum degree of comparison, Proposals are to be outlined in the manner described below. Be specific about the agency's collection expertise in the sections that follow. 1. Contractor Qualifications a. Contractor submitting a response to Proposal should be in business, relevant to the service the City is seeking, a minimum of 5 years for collections and 3 years for verification of financial responsibility proof b. List references from current and previous clients in the Texas courts. c. List references of Contractors Texas Municipal Courts for whom vendor has been doing business with for at least 24 months. d. State the Contractor's experience with electronic data transfers. e. State the Contractor's case or warrant collection experience and as it applies to the Collection of outstanding capias pro fine warrant cases. State any other relevant experience referenced in IV (1) Contractor Qualification. Specifically list other public sector and utility clients that the Contractor has represented in the past five years and include what type of collections was carried out for them. Separate clients by a) Texas Municipal Courts, and b) Texas County Courts. f. State the location of the office as well as the number of professional staff employed at that office that will have primary responsibility for the service. 2. Collection Procedures a. Provide a summary of collection activities proposed to collect the City of Denton's outstanding cases and warrants. b. Provide a statement and methodology as to the expected rate of recovery and a specific timetable work plan. e. State the Contractor's methodology for handling customer questions/problems. d. State the Contractor's methodology for handling non-English speaking customers. e. Describe the telephone resources available f Provide examples of correspondence and telephone script that will be used for collecting delinquent fines. 3. Corn uter Network a. State a brief description of the computer system used and its update capabilities. b. Identify the form and frequency of electronic data transfers both to and from the Contractor. c. State whether terminal access will be made available to the City for on-line inquiry. Purch/Proposals3298 Municipal Court Collection Services d. Describe the Contractor's ability to maintain records of placements, collections, recovery and producing reports, and billing for an unlimited number of clients and debtors, and describe back-up capabilities 4. Management Reports It is agreed that the Contractor shall maintain and make available for inspection, audit and/or reproduction by authorized representatives of the City or any external auditor representing the City, the books, documents, and other relevant information pertaining to the collections carried out for the City and the expenses of this contract. The Contractor should acknowledge the need for a cooperative effort and open communication between the Contractor and the City. In this regard, the frequency of reporting and the content of data transmitted to the City should be identified. a. Provide examples of reports used to document collection results. Provide examples of reports used to track cases verified for financial responsibility. b. Describe reporting flexibility c. Frequency of reporting and the content of data transmitted to the City 5. Pronosal signature form PurchlProposals.3299 Municipal Court Collection Services r MUNICIPAL SERVICES BUREAU r-~ r~ r Proposal for: r~ City of Denton, TX RFP No. 3298 r, MUNICIPAL COURT CONTRACT FOR COLLECTION SERVICES Submitted by: Thomas M. Giamboi President Municipal Services Bureau 6505 Airport Blvd., Ste. 100 Austin, Texas 78752-3614 (512) 371-9995, ext. 3223 el. (800) 568-7004, ext. 3223 (512) 371-0776 (fax) ~tom.giamboi(a gilacorp.com r~ r M 6`1 B MUNICIPAL SERVICES BUREAU January 18, 2006 r www.msb-gfla.com Mr. Tom D. Shaw, C.P.M. 6505 AIRPORT BLVD. Purchasing Agent SUITE 100 City of Denton, TX AUSTIN, TEXAS Purchasing Department 78752.3614 901-B Texas Street 800.568.7004 Denton, TX 76201 r 512.371.9995 Dear Mr. Shaw: r1 Fax 512.371.9994 r` Thank you for the opportunity to respond to the City of Denton, TV Request for r^ Proposal No. 3298, Proposals for Municipal Court Contract for Collection Services. We look forward to the possibility of re-establishing a working relationship. Municipal Services Bureau presently has established working relationships with ell nearly 350 Texas clients. The company offers the detailed, written specifications for court collections, customer service and accounting that are necessary to maintain a relationship r of this complexity. We are the only firm nationwide that can offer the experience of working this volume of clients to collect court fines as well as EMS, Utility, and Municipality-owed debt. We are uniquely qualified to assist you in this endeavor; 4 providing collection services to Texas clients since 1991; r` 4 most recent court-client survey-99.6% of respondents rated our overall performance as good or excellent; 4 industry-specific software customized for court and debt collections; 4 extensive skip tracing resources including: '1 ✓ proprietary, one-of-a-kind software that allows us to electronically cross- reference Texas driver's license records for new address information; r ✓ we own a copy of the Texas DPS driver's license database, with all 18 million records updated weekly directly from DPS; ✓ we can cross-reference your cases with bad addresses against newer r` cases from our other Texas clients for new address, telephone and/or employment information; r. 4 we have a licensed attorney on staff; 4 we are not limited to working with only those clients who fully participate in the contract. In fact, we invite as few or as many of City of Denton departments wishing to participate in our collection program. The size of the client, number of cases or total value of cases does not influence the quality of our work in any way; 1^ r 4 we maintain a $1 million professional liability policy, $2 million business insurance policy and $250,000 client indemnity bond; 4 member of the National Association for Court Management (NACM), Texas Court Clerks Association and American Collectors Association; 4 we never close a case, continually searching for new address information or making another attempt to contact a customer on a periodic basis; 4 special programs that will enhance collections: ✓ dedicated large balance collectors; ✓ warrant round-up programs to assist law enforcement for court collections; r and are prepared to 4 customize a series of collection letters to meet the City of Denton's needs; 4 GUARANTEE that I will be available to meet with administration upon request for the duration of our relationship; r 4 GUARANTEE that every citizen will be dealt with in a professional, courteous manner, 4 GUARANTEE that a full-time client services representative will be assigned your r-, account and available to address day-to-day issues; and 4 GUARANTEE that efforts to resolve individual cases will be ongoing for as long s as we have the case. r I consider myself personally responsible for ensuring the success of this relationship and maintaining the City of Denton's good image. I would very much welcome a site visit as part of your evaluation of our firm and feel certain our highly qualified staff would instill confidence in anyone considering establishing a relationship with our firm. Usi e y y urs, s . Giamboi ent/CEO r. n TABLE OF CONTENTS r EXECUTIVE SUMMARY: I SECTION 1: CONTRACTOR QUALIFICATIONS ..............................................................................3 A. Experience in the Required Area of Collections .3 B. Experience in the Number of Texas Courts (Minimum of 10 with at least 3 of those having Similar Volume to Denton 5 C. Experience and Performance Results from other Texas Municipal Courts for whom Vendor has been doing Business with for at least 24 months 8 D. Experience in Receiving/Transmitting Data Electronically .............................................10 E. Experience and Performance and Results in Conducting Amnesty and/or Warrant Roundup Programs ............................................................................................................10 F. Experience and Stability of Key Staff .................................................................................11 r- SECTION 2: FEE STRUCTURE r" SECTION 3: COLLECTION PROCEDURES ...................................................................................20 A. Collection Techniques Utilized including Procedures for Letter Sending and Telephone Calls 20 B. Implementation Work Plan, Timetable and Rate of Recovery ...............47 C. Customer Service Methodology of Contacts and Notices-Handling Customers' Questions/Problems 48 r` D. Handling of Non-English Speaking Customers' Multilingual Issues .............................48 E. Adequacy and Sophistication of Telephone Resources ................................................49 F. Examples of Collection Letters and Telephone Scripts 50 SECTION 4: COMPUTER NETWORK .............................................................................................51 A. Adequacy and Sophistication of Data Processing Resources .......................................51 B. Proposed Methodology and Procedures for Data Transfer to/from City Database 60 C. On-line Inquiry Capabilities ................................................................................................61 D. Record Retention Capabilities ............................................................................................61 /-N SECTION 5: MANAGEMENT REPORTS ........................................................................................63 A. Reports Provided to the City 63 B. Flexibility in Meeting City's in Meeting City's Reporting Needs .....................................65 C. Responses to Auditor Inquiries and Confirmation Requests .........................................65 SECTION 6: VENDOR'S PAST RELATIONSHIP WITH THE CITY ................................................66 SECTION 7: VALIDITY OF THE PROPOSAL 67 r r n /"I[ y1 A4_61B 3 MUNICIPAL SERVICES BUREAU EXECUTIVE SUMMARY ell Municipal Services Bureau is highly automated and able to offer you a flexible, innovative solution to your collection needs, whether for a single entity or for five as this proposal expounds. We are a company capable of and experienced in managing the type and volume of cases r. proposed by the City. We successfully service hundreds of thousands of new accounts each year, which include cases from some of the largest jurisdictions in the state of Texas. Case information may be forwarded electronically via e-mail or FTP. Payment information may also be exchanged electronically. ^ Our proprietary software programs are designed specifically for the collection of delinquent accounts of all types; e.g., court fines, general debt, and medical debt. Within this software, MSB tracks broken promises by telephone and with reminder notices, thereby increasing revenue. We work all cases thoroughly regardless of age, balance amount or location of the individual. On average we are able to contact the average defendant, patient and/or debtor (hereinafter, "Customer") with a known address eight times during the first 120 days that we have the case-four times each in writing and by telephone. Contacting a Customer four times r-~ by telephone may actually mean making multiple attempts to reach him or her at home and our r1 predictive dialer technology allows us to do so in a cost-effective, non-intrusive manner. Additionally, we will re-contact each person periodically for as long as the case is outstanding. We also offer SPECIALTY campaigns such as our warrant roundup program for past due court r-. ^ fines, whereby we contact individuals in writing and by telephone, referencing specific time limitations, and then pass confirmed addresses on to an appropriate Law Enforcement agency. Whether we are collecting your delinquent debt or court payables we never give up on a case, continually searching for new address and telephone information and attempting to bring the case to closure. rte. r-. It is also anticipated that many cases will require extensive skip tracing efforts and we utilize a number of sources to locate Customers. Because of their value, we continually cross-reference r1 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 n Zl >L MUNICIPAL SERVICES BUREAU your cases against 1) our proprietary, one-of-a-kind database, comprised of the millions of names and addresses of our other Texas and national clients searching for repeat offenders and new address, employment and telephone information and 2) our owned-copy of the Texas drivers license database which is updated weekly directly from DPS documenting all new, renewal and change-of-address applications. Municipal Services Bureau is committed to maintaining the highest standards of professional conduct and business ethics following all Federal, state and local laws including the Federal Fair Debt Collection Practices Act. We work closely with each individual to help them resolve his or her obligations with dignity and all disputes followed up promptly. Our staff works closely with ^ Customers to determine the reasons for not paying their debt to the City or not appearing in court and then we attempt to overcome that objection. To prevent any language barrier between the Customer and the collecting agents, many of our collection agents are bilingual and our collection letters are printed in English and Spanish. Municipal Services Bureau also works closely with your staff to verify disputed cases. We may receive documentation indicating, for example, that insurance was in effect at the time of the citation or that the Customer is deceased or incarcerated or simply that the debt was paid prior to receiving the case. We temporarily cease collection activity on cases such as these and forward the appropriate information to the City. The philosophy behind our company is based upon satisfying the collection needs of our clients through careful identification of desired goals. This is accomplished by developing a close working relationship with the client based upon mutual trust. Our staff takes great pride in its ability to formulate creative and innovative solutions to complex problems. While our collection r, process is designed to obtain the highest possible rate of return in the shortest possible time frame, careful attention is paid to the sensitivity of the issues at hand. 2 r Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 M61B MUNICIPAL SERVICES BUREAU SECTION 1 CONTRACTOR QUALIFICATIONS r- A. EXPERIENCE IN THE REQUIRED AREA OF COLLECTIONS Gila Corporation d/b/a Municipal Services Bureau (MSB) was founded in 1991 specifically to provide collection services to Texas courts. The company now works with nearly 450 government entities nationwide, including 320 Texas jurisdictions. The firm is an active member of the AMERICAN COLLECTORS ASSOCIATION and an associate member of the TEXAS COURT CLERKS ASSOCIATION and NATIONAL ASSOCIATION FOR COURT r MANAGEMENT. MSB understands that the City of Denton ("City") desires a team player to work closely with staff to assist citizens in fulfilling their obligations with the City. r 1. CHRONOLOGICAL HISTORY OF MUNICIPAL SERVICES BUREAU January, 1991 Research begun to evaluate the potential of offering collection services to Texas courts March, 1991 50 court survey completed r ` May, 1991 Business plans completed; Gila Corporation formed; d/b/a Municipal Services Bureau June 15, 1991 Officially open for business at the Omni Centre, Austin Executive Suites, 240 square foot office; two employees, Thomas P. Bellavia, CEO and Thomas M. Giamboi, President; 0 clients September, 1991 Contracted with first client, City of Kerens, Texas March, 1992 Two full-time and five part-time employees, 16 clients; expanded 3 ell, Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 ar MUNICIPAL SERVICES BUREAU operation to 200 East 6th Street r'^ r., August, 1992 11 full-time employees; 67 clients; expanded facilities r^ r- January, 1993 19 full-time employees; contracted with 100th client r May, 1993 22 full-time employees; 118 clients; purchased customized collection software from GWA Information Systems, Inc., Waltham, MA r` August, 1993 25 full-time employees; 140 clients May, 1994 Entered into agreement to purchase an office building at 5912 Balcones r" Drive, Austin, Texas; 29 employees, 186 clients January, 1995 36 employees, 206 clients December, 1995 39 employees; more than 250 clients February, 1996 First out-of-state client - Broward County, Florida r-- r^ April, 1997 48 employees, 346 clients r r January, 1998 Completed acquisition of Data Ticket Inc., a firm specializing in parking citation recovery, based in Newport Beach, CA; now a specialty division r known as MSB-Parking r May, 1999 130 employees, more than 450 clients February, 2004 Relocated to new, state-of-the-art 20,000 square foot facilities r 4 ^ Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 r` r II 61B MUNICIPAL SERVICES BUREAU December, 2004 450 Government Clients October, 2005 Expanded by an additional 11,000 square feet at the Austin facility and ell, currently there are 175 total employees working for MSB r^, B. EXPERIENCE IN THE NUMBER OF TEXAS COURTS (MINIMUM OF 10 WITH AT LEAST 3 OF THOSE COURTS HAVING SIMILAR VOLUME TO DENTON* Municipal Services Bureau has been providing collection services for Texas courts since 1991. We have grown to successfully partner with over 450 courts nationwide including nearly 350 courts in Texas. Since our court client list is so extensive, documenting all client contact information would elongate this proposal tremendously. We have provided references for ten of our court clients, many similar in size to Denton. As requested, there is a former client listed. r- We have clients much larger (TXDPS, Miami-Dade County, FL, for example) and much smaller than Denton-all to show that we have the FLEXIBILITY to handle clients of all sizes and that no r one client is important than the other. r^ • Contact Rebecca Stark Address 700 East 7 Street Austin, TX 78701 r- Phone Number 512 974-4690 r Email Address rebecca.stark@ci.austin.tx.us Date of Contract Inception September, 2002 Court Client City of Lampassas, TX (Manual Submis.) Contact Sherrie Norred Address 312 East 3r St. Lam assas, TX 76550-2820 Phone Number 512 556-4909 Email Address snorred@ci.lampassas.tx.us Date of Contract Inception Ma v, 2004 r~ 10. 5 ^ Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 r" r,99r y ell, t A -61B MUNICIPAL SERVICES BUREAU Former Court Client City • Arlington, Submissions) Contact Winnie Kocot Address PO Box 231 i-. Arlington, TX 76004-0231 Phone Number 817 459-6988 Email Address Kocotw@ci.arlington.tx.us Date of Contract Inception Started May, 1993, Ended March, 2005 Denton Court Client (Elec. Submis.) Contact Sheri Groves Address 1029 W. Rosemeade Pkwy. Carrollton, TX 75007 Phone Number 972 434-7108 Email Address sheri.groves@dentoncounty.com October, 2005 Date of Contract Inception r-~ Court Client City of Plano, TX (Elec. Submissions) Contact Vicki Smith Address PO Box 860358 Plano, TX 75068-0358 i- Phone Number 972 941-2176 Email Address vickis@plano.gov Date of Contract Inception July, 1996 (Original Contract), July, 2004 r- Current Contract Date r~ Court Client City of Victoria, TX (Elec. Submissions) Contact Ma Dan sch Address PO Box 1758 Victoria, TX 77902 Phone Number 361 485-3050 Email Address mdanysch@victoriatx.org Janua , 1993 Date of Contract Inception r r-. ,r. 6 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 ell MUNICIPAL SERVICES BUREAU Court Client City • Garland, TX (Elec. Submissions) Contact Prudence Bobbitt Address 1791 West Avenue B Garland, TX 75042 Phone Number 972 205-2330 Email Address PBobbift@ci.garland.tx.us Date of Contract Inception January, 1995 (Original Contract), January, 2006 Current Contract Date Court Client City of Grand Prairie, TX (Elec. Submis.) Contact Steven Cher Address 200 W. Main St. Grand Prairie, TX 75053 Phone Number 972 237-8600 Email Address sdcherry@gptx.org r^ Date of Contract Inception June, 1999 Court Client City of Huntsville, TX (Elec. Submissions) r~ Contact Celia O'Dell Address 122011 Street r. Huntsville, TX 77340 Phone Number 936 291-5476 r Email Address codell@huntsvilletx.gov Date of Contract Inception May, 1994 .Benbrook, TX (Manual Submissions) City of Court Client _ Contact Susan Hill Address PO Box 26569 Benbrook, TX 76126-0569 Phone Number 817 249-3000 Email Address shill@cityofbenbrook.com Date of Contract Inception Jul , 1997 *Please see a complete Client List in Attachment "A. " Note that Municipal Courts are printed in black, County Courts are printed in red, and other clients such as ENS, Library, Waste Managemen4 and Utilities, etc. are printed in blue. References and the Client List r^ 7 Proposal for the City of Denton,. TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 11 elk MQB MUNICIPAL SERVICES BUREAU are proprietary and confidential. C. EXPERIENCE AND PERFORMANCE RESULTS FROM OTHER TEXAS MUNICIPAL COURTS FOR WHOM VENDOR HAS BEEN DOING BUSINESS WITH FOR AT LEAST 24 MONTHS All clients but Arlington, TX, and Denton County, JP6, above, have been our clients for more than the 24 month minimum requested here. Here is a subsequent listing of 10 additional clients who have been some of our oldest clients: r-, City of Kerens, TX (our original client and still so) T. City of Brownsville City of San Benito City of Rowlett City of Milford City of South Padre Island City of Lewisville City of Wascom City of Hill Country Village City of Karnes City City of River Oaks r, City of Rockwall !1 City of Hempstead City of University Park City of Highland Park r• City of Hopkins This listing is but a few of our clients, most of which have been with us since the early to mid- r 1990s. Please refer, again, to the Client List in Attachment "A." 8 r'-• Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 /1 MUNICIPAL SERVICES BUREAU Many factors go into analyzing rates of recovery or liquidity rates. Because so many factors go into determining what percent of your debtors will pay delinquencies, we would rather not attempt to estimate what this rate of recovery would be. r-, Some of the reasons that this estimate is difficult to predict are: • average age of accounts when forwarded for collection; level of internal collection efforts prior to submitting cases for collection; the percentage of accounts that have good phone numbers, social security numbers and/or places of employment; and • the type of account being collected demographics-unemployment rates, income levels, time of year. r r FINANCIAL REFERENCE Mr. Jason Thurman Business Banker PlainsCapital Bank 919 Congress Ave., Ste. 600 Austin, TX 78701 (512) 457-7541 ithurman(a)-plainscapital.com Municipal Services Bureau is an extremely stable company, founded in May, 1991, has never r-, filed bankruptcy and has never filed suit against any of its more than 500 total clients in its nearly 15-year history. There have been no suits filed against in the past 5 years. Please feel free to r~ pull our DUNS report, acct. number 78-643-8200 or 3823686. MSB's current rating is 80, the r r 9 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 r'l MUNICIPAL SERVICES BUREAU highest rating possible. r Please see a copy of our latest Audited Annual Consolidated Financial Statements as of December 31, 2004. Also, please see a copy of our Certificate of Account Status (Certificate of Good Standing) issued by the Texas Comptroller of Public Accounts and our Certificate of "Active" Status from the Texas Secretary of State. All of these are to be found in Attachment "B." D. EXPERIENCE IN RECEIVINGfTRANSMITTING DATA ELECTRONICALLY Municipal Services Bureau has been receiving and transmitting data for courts for more than 10 r' years. Although the process has changed greatly over the years, today most electronic transfer is done via a secured FTP site where data is delivered and picked up by either party, depending on the data being transferred and who the transferee is. The other method is by email attachment which would be sent via 168-bit encryption if sent through our VPN tunnel. In many instances, we have to write a special program to fit the needs of the clients. If this would be a necessity for the City of Denton to receive and process the data, this will be done. We have a "preferred" layout that we will provide you and/or your IT department when the time is appropriate. E. EXPERIENCE AND PERFORMANCE AND RESULTS IN CONDUCTING AMNESTY r^ AND/OR WARRANT ROUNDUP PROGRAMS r-, Municipal Services Bureau has been assisting various municipal courts in their Roundup procedures for 9 or more years. Depending on the constraints of the Court, results can vary r greatly. The most outstanding results for the Cities occur when we, in addition to the City's notices and advertisements of the Roundup, send our own letters to bolster the notice attempt to r. the defendant. The Roundup works well and even better when an additional letter is sent by MSB. We have also participated in Roundups where more than one municipality is involved. r- Most recently, central Texas courts joined together in one Roundup. This joint-venture worked r with great success and aided all cities concerned. For the Court cases and when a specific date 10 r Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services r January 19, 2006 A4QB MUNICIPAL SERVICES BUREAU or time frame is targeted for a warrant round-up, MSB mails a customized letter and attempts to make contact by telephone with the citizens in question. The day before the round up commences, we cleanse the caseload and provide specific data to local Law Enforcement. We will identify cases where the address in known to be valid, within certain balance ranges and r., even within certain zip codes. Law Enforcement's production is thereby maximized. r Whether Capias Pro Fine or Alias Warrant cases, MSB has had the experience in dealing with both since our founding in 1991. Generally, when a client sends both types of cases, two different client numbers will be assigned so that the collector can differentiate between the two for talk-off purposes. For all cases where the date of the offense is prior to June 18, 2003, the r~ add-on percentage of thirty percent (30%) can be added only to those cases which have been adjudicated (Capias Pro Fine Warrant Cases). For all cases with an offense date of June 18, r, 2003 or later, cases that have not been adjudicated (Alias Warrant Cases) can have the thirty percent (30%) fee added on provided they are more than 60 days old. All adjudicated cases with the offense date of June 18. 2003 or later can have the thirty percent (30%) add-on fee appended to the fines, costs and fees. For the City of Denton, we will add the thirty percent (30%) fee on the appropriate case when submitted to MSB. Should the City opt to add the fee r before submission, which is also acceptable. All other experience and MSB's collection methodology is described in Section 3, below. r`^ F. EXPERIENCE AND STABILITY OF KEY STAFF KEY CONTACT INFORMATION Gila Corporation, d.b.a. Municipal Services Bureau r^www.muniserv.com Corporate Office: 6505 Airport Blvd., Suite 100 Austin, TX 78752-3614 11 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services e- January 19, 2006 n MOB MUNICIPAL SERVICES BUREAU Incorporated Austin, TX May 2, 1991 FEIN: 74-2605908 Primary Contact & Contract Representative: ell, Thomas M. Giamboi (800) 568-7004, ext. 3223 (512) 371-9995, ext. 3223 _ (512) 371-0776 fax ~ tom.giamboi(cDgilacorp.com Contract Administrator: Thomas M. Giamboi, President/CEO (800) 568-7004, ext. 3223 (512) 371-9995, ext. 3223 r~ (512) 371-0776 fax tom.giamboi(D-gilacorp.com All work on this project will be done in our Austin office. r~ MSB has the experience to interact effectively with the City of Denton in all aspects of this r project. Thomas Giamboi, President & CEO, will remain as contract administrator for the duration of the relationship and will take the ultimate responsibility of ensuring a successful partnership. Mr. Giamboi will also oversee day-to-day operations from the input of the submissions to the output of the monthly invoice. Yousef Gonzalez, in particular, will be the City's initial point-of-contact within our client services department. All persons on this Organizational Chart shall be involved in the collections process as needed to comply with the r-City's needs. e 12 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 /l, t^ MUNICIPAL SERVICES BUREAU Thomas M. Giamboi President/CEO e-N Rollie Sidla, C.PA Chief Financial Officer Chris Powell Don McKinley R chard Butler Barbara Fugler Sr. Operations Collections V. P., Legal & Manager, Finance Manager Manager Compliance &Accts. Payable Yousef Gonzalez Collection Jessica Gallia Client Services Department Quality Assurance Rep. Manager PERSONNEL Participation by MSB employees in this project will not be limited to a select few. Rather, many of the functions are performed by a pool of people-eight people in accounting post payments, the entire collection department will handle incoming calls, IT as a whole will handle various aspects of communications, and so forth. In this way, there are no gaps when someone is on r` vacation or leaves the company and the work volumes' peaks and valleys associated with every rte, large client can be administered properly. 2. RESUMES* Thomas M. Giamboi, President & CEO* Primary resonsibilities relatinto this contract: contract administrator, liaison to purchasinrelatinto this contract: contract administrator, liaison to purchasin, global policy issues Policy issues Since co-founding Gila Corporation in 1991, Tom has become quite active within the billing and collection industry, lecturing nationally on government collections. He has served in the following capacities within the American Collectors Association (ACA): ACA Board of Directors e*N 13 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 t"N tax MUNICIPAL SERVICES BUREAU r~ (1998-present), President of ACA of Texas (1998-1999), Chairman of the Government Services Program (1996-1998), ACA Strategic Planning Committee (1996-1997), Chairman of ACA's Political Action Committee (2000-2002), Chairman of the Honorary Membership Committee r. (2002-present), State Legislative Director and National Legislative Director. In addition, he was r-• admitted to ACA's Red Coat Club in 1998 for membership and recruitment excellence and was named ACA's Outstanding Unit Education Chair of the Year for 1996-1997. rRollie Sidla, Chief Financial Officer* Primary responsibility relating to this contract: financial statement preparation, oversight of the 'A-* Accounting department Rollie started with MSB in 2003 as our comptroller and has recently been promoted to his current position. He graduated from the University of Minnesota with a Bachelor of Science in Business Administration. Rollie is a licensed CPA and maintains membership in the Texas Society of CPAs. Rollie's experience spans over fifteen years in manufacturing cost management, four years in public accounting and six years in controller/management positions. His previous employment included: Accounting Manager at CDS Engineering, Inc., Controller at Tenere, Inc., Manager of tax and small business at Babcock, Langbein & Company CPAs and Chief Accountant at Tetra Rex Packaging Systems, Inc. An instrument rated pilot, he received an honorable discharge from the US Marine Corps Reserve. Richard L. Butler, Esq., Vice President, Legal & Compliance* Primary responsibilities relating to this contract: legal and compliance issues Richard earned a Bachelor of Arts from the University of Houston in 1969 and continued his r1 education at South Texas College of Law, earning a Doctor of Jurisprudence in 1972. Practicing law from 1972 to 1979, he became Assistant Lead Attorney for the U.S. Small Business Administration in 1979 and in 1980 was named Lead Attorney. From 1979-1989 he was an Assistant Professor of the Conrad N. Hilton College of Hotel & Restaurant Management at the University of Houston, receiving the highest faculty evaluations ever recorded and winning seven r. 14 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 row B MUNICIPAL SERVICES BUREAU separate Outstanding Teaching Awards. Mr. Butler accepted the position of Training Specialist ell, at the Texas Municipal Courts Education Center (TMCEC) in Austin, Texas in 1990. He ell, administered all Supreme Court-mandated judicial education throughout Texas for 1200 municipal court judges and co-authored and edited the TMCEC (then, TMCTC) Judge's Manual. He is a member of the American Bar Association, the Texas State Bar Association, and the American Collectors Associations Member Attorney Program. Mr. Butler joined MSB in 1993 r~ and has coordinated computer, telephony and automated dialer evaluations while working with courts to ensure system compatibility and data transfer. He presently oversees the legal and compliance issues and assists in various research and development projects while working i` closely with the Chief Executive Officer. He is also responsible for co-developing the MSB collector-training program. Richard was General Counsel to the Texas Court Clerks Association for over ten years. Chris Powell, Senior Operations Manager Primary responsibilities relating to this contract: Oversight of the operations department A collections expert and technology professional, Chris' ten (10) years of experience in the government collections field has allowed him to hone his skills in project management, tracking and reporting, communication with management, and supervision of staff. He has received numerous certifications, including: r~ • ACA Child Support Collection and Locate Training FDCPA Training, ACA . Experience Credit Reporting Agency and Debt Collections, Experian • Working with Government Contracts; Record Retention Policies, TKN r^ Don McKinley, Coiiections Manager Primary responsibilities relating to this contract: Collections of City's Recoverables i Don earned his Bachelor of Business Administration degree from Saginaw Valley State ` University in May, 1990 majoring in Economics and Finance. Shortly after graduation, Don went 15 i~ Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 n MUNICIPAL SERVICES BUREAU to work for the State of Florida Department of Children and Families moving his way up through the Department in the Public Assistance arena. While there, he was one of five persons selected to start a pilot program for welfare reform in Alachua County (Gainesville) with the goal that each welfare recipient attain self-sufficiency within 24-36 months. In 1999, Don moved to r• Texas where he was hired as a Human Services Case Manager for the Fort Worth, TX Municipal Court. Here he developed customer time payment plans and subsequent compliance programs. He became the court's Customer Service Supervisor in 1999 overseeing warrants, NISI Bonds, and Probation and Driving Safety. Through his and his employees' efforts, he and his staff increased warrant section production by 22 percent in one year. In 2001, he moved to Austin and worked with the Austin Municipal Court as Operations Supervisor where he was e responsible for the court collections and warrant processing sections. Just prior to coming to MSB where he is currently responsible for MSB Warrant and Debt collections, Don was with the Texas Office of Court Administration where, as an Assistant Collections Specialist, he assisted criminal courts develop "in-house" court collection programs. He assisted Texas cities and counties plan successful warrant roundup and amnesty programs generating millions of dollars for the State. He conducted workshops and training courses in all areas of court collections including advanced telephone techniques, FDCPA compliance, extended payment plans and financial affidavits as well as face-to-face Customer interviewing techniques and motivating r^. Customers to comply with the various orders of the court. Don is married to the former Joan Gomez and has two stepchildren ages 13 and 10 and a three-month old son. Don is a Michigan r native and a died-in-the-wool Detroit Red Wings fan. n Yousef Gonzalez, Client Services Representative Primary responsibilities relating to this contract: Collections of City's Recoverables. r., Yousef graduated from The University of Texas at Austin with a Bachelor of Arts in Biochemistry e; and a minor in Business in 2005. He started with Municipal Services Bureau in July of 2005. His previous experience includes customer service with the Division of Recreational Sports at ell, The University of Texas at Austin. There he helped coordinate commencement ceremonies run by the division for various colleges inside the University. Also, Yousef helped coordinate various 16 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 r* N11QB - MUNICIPAL SERVICES BUREAU other events for the division including tailgate parties for visiting team football fans, Parents' day events, Texas Women's Volleyball set-up, Volleyball Playday with Austin ISD, various national women's club team volleyball tournaments, Texas Powerlifting events, and various other events planned by the division. rr His day-to-day duties included monitoring access to Recreational Sports facilities, and supervision of other staff members. He was in charge of checking payroll submissions, setup of activity areas for patron participation, in charge of personnel issues that arose and submitted them to upper management, and problems that arose with Recreational Sports patrons. He also acted as lead manager when the supervisor was out of town on business. r" Yousef also trained new facility employees and new front-end facility managers for the division. While working for the division, he was one of the few employees that helped save a patron's life using CPR. Other than Mr. Giamboi who founded the company in 1991, the key employees are very stable whose tenure range up to almost 13 years with MSB. r^ COLLECTORS All collectors are personally trained and are sent through our "boot camp" training once a year. Our collectors have experience ranging from 1 year to over 20 years. They are very ell knowledgeable in court collections and will be a vital part to the revenue generation that results in MSB's collection efforts, if awarded this contract. CLIENT SERVICES Municipal Services Bureau realizes the importance and convenience of having a Client Services Representative to interface with your staff on a per-need basis. Four full-time staff members are devoted to this department and one individual, in this case Yousef Gonzalez, will be designated ' as the primary representative on your account, with the other three providing backup. Yousef will 17 #0-%. Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services f~ January 19, 2006 MQB ~.►`<<; MUNICIPAL SERVICES BUREAU maintain all account records and is available during office hours to answer any questions. MSB wants an easy communication link with our clients. MSB's Client Services department is devoted to addressing the problems or questions that you may have whenever necessary. For example, payment history or account reviews can be r- acknowledged as needed. The Client Services personnel are committed to serving you as their r- highest priority and will assist you in any way possible. MSB maintains an excellent rapport with our clients, providing constant interaction between our systems and agencies. 3. KEEPING INFORMED i" Municipal Services Bureau employs an in-house counsel who is directly responsible for all legal and compliance issues that involve the collectors and the collection practices. He is also responsible for maintaining all licenses in those states requiring that the company maintain a license in order to collect. He attends a legal update class each year in the area of collection law. Please see Richard Butler's rdsume, above. MSB currently has one staff attorney, 2 accountants that are CPA's and an additional Manager of Accounts Receivable and Finance, 1 dedicated Customer Service Agent and 3 additional backup agents, 1 client accounting representative, 1 Collections Manager, 4 Collections Supervisors, 1 Payment Processing Manager and Payment Processing Supervisor, each, 3 payment processors, and 35 total collectors, all to ensure that the collections process is done professionally and according the all local, state and Federal laws, rules and regulations. rte. 18 ^ Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 s ~ 'IB MUNICIPAL SERVICES BUREAU ell, SECTION FEE STRUCTUR Delinquent Court Fines & Fees-From the wording in the City's RFP, we anticipate the 30% authorized by Article 103.0031 will be added to the balance due on applicable cases and our fee ell, r on those cases will be 23.077% of the amount collected. Example: $100 (original balance) x 130% (statutorily allowed add-on) _ $130 x 23.077% _ $30.00 fee to MSB, $100.00 returned to the City. r r-, On any cases not already currently submitted'to MSB and that are not subject to the thirty ,r. percent collection fee, MSB will take a ten percent (10%) fee from the dollars collected. ell r- rr^ r r~ 19 r-~ Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 ell 9 K., MQB MUNICIPAL SERVICES BUREAU SECTION COLLECTION TECHNIQUES UTILIZED INCLUDING PROCEDURES FOR LETTER SENDING AND TELEPHONE CALLS 1. THE COLLECTION PROCESS a. System Concept and Solution elk, In order to accomplish its objectives, the City of Denton must select a collection firm with proven qualifications experienced in providing services to Texas courts and cities. Municipal Services Bureau has the ability to perform the necessary functions set forth in the request for proposal and beyond, including: • An existing, turnkey solution that will allow MSB to immediately begin collecting on behalf of the City by providing existing: o Software and hardware components; r" o Call center and trained staff; o Accounting procedures; o Interface procedures; o Electronic reporting feature; and o Letter notification tool. rw^ /A). • Open communications in order to coordinate collection services; 0011 • An administrative and collection staff dedicated to the collection and resolution of your delinquent cases; 20 O Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services 004 January 19, 2006 i" /"l ell, MUNICIPAL SERVICES BUREAU eN, f, the case-four times each by letter and telephone. Nearly half of our collection staff is bilingual and, if needed, all letters may go out in Spanish. We have the ability to generate client-specific notices for each of Municipal Services Bureau's clients. Additionally, we will contact the defendant at least four more times in the next two months for a minimum total of 12 times in the first six (6) months. r Unless we have an invalid address, the initial contact is always in letter form and states the violation(s) or debts incurred, amount owed, date of debt(s)/violation(s) and name of court or governmental entity to which it pertains, if applicable. From this point forward, the system performs a series of functions to automatically route the cases for the most effective collection effort. Attempts to contact the individual by telephone begin the day the Stratasoft's StrataDial.vc2 predictive dialer receives the information, which is generally 25 days after the first letter is mailed. If there is no phone number, the case is immediately dropped into a queue that is sent on to skip tracing. Receipt of Information-Cases may be submitted for collection in a variety of formats. MSB currently accepts files from, and produces files for, hundreds of clients around the country. These files contain referral (new) case information, payment information, case disposition r information, and rescind (recall) information, as well as general information regarding r- individual cases. MSB has the knowledge and experience to successfully receive the City's data files. This experience will allow the City to seamlessly send data files to MSB without an interruption in collections. MSB can accept files from the City on any media (compact disc, P, magnetic tape, floppy disk, ftp, etc.) and in any format (comma, pipe, tilde delimited, fixed length, variable fixed length, etc.). On-line Access to Account&-The City of Denton will have the ability to access its own 23 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 1 d~ 2 L Y ..l~l~ MUNICIPAL SERVICES BUREAU cases online through the Navigate System. The City will be given a login name and password that will allow city employees to enter the secure site to review case information real time. Cases may be looked up by using several different fields such as name, case number, address, etc. You can also view all Action Codes, Result Codes, Status Codes, and Memo Codes depending on the criteria you provide. This technology allows the City to quickly find all information regarding a particular case including collectors' notes, payment arrangement schedules, updated address information and so forth. r-~ Letter Series to Customer. All notices, whether letters or telephone calls are made within all guidelines of the Fair Debt Collection Practices Act and in no way violate the defendants' statutory rights. The initial notice is mailed within 48 hours of the case being transferred to the collection department. Our written contacts are intentionally designed to be in letter format and may be customized to meet specific requirements of the City. r MSB utilizes bilingual collection notices with English on the front and Spanish on the r reverse side. Letters are mailed in a variety of envelopes to increase the likelihood of r-~ being opened and a return envelope for payment is enclosed. r Generally, a letter series is scheduled for each case upon upload into MSB's system, r. with the first notice being mailed to the individual on the following day. If there is a failure to respond to the first notice within a specified amount of time, a second notice is r automatically generated. This process is repeated until the scheduled letter series is exhausted. If a payment is posted in full or the case is canceled or closed for any r reason, the letters automatically cease. If a customer has multiple cases and payment in full is received on only one case, the letter series is modified and a new letter series appropriate to the situation is scheduled. If the City places the case on hold for any reason, the scheduled letter series is temporarily stopped until the City informs MSB to r continue collection activity. r r-, 24 r Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services n January 19, 2006 n MFZB MUNICIPAL SERVICES BUREAU Please reference sample collection letters in English and Spanish in Attachment r• Alias Versus Capias Cases: For court receivables, letters address the difference r. between the two case types. Additionally, staff is trained to discuss the appropriate options with the Customer. If it is an alias-type case, the Customer is given the option of paying or posting bond, while if it is a capias the matter is much more cut and dry-the money is owed, with the indigence issue being the primary exception. Predictive Dialer System: The StrataDial.vc2 predictive dialer by Stratasoft, is a system that automates the dialing process as a call center. The system dials telephone numbers downloaded from MSB's database and detects an answered call. It filters out calls with no answer, busy signals, and disconnected numbers, and passes only human-answered calls to the collector. The collector may also leave a message on voice mail or on an answering machine. l^ When a collector reaches an individual, the Customer's detailed case information r` appears on the monitor at the collector's workstation. The collector then updates the r^ database with verified information such as new telephone numbers, place of r employment, etc. Depending on the experience of the collector, the Dialer allows a collector to make as many as 300 contacts a day, amounting to a sevenfold increase in r. Customer contacts compared to manually-dialed calls. When the Dialer reaches a disconnected number, the case is passed to a skip tracing queue. A skip tracing queue is a group of selected cases with invalid information. Once valid information is found, the case is put back into circulation and collection activities are resumed. 25 r Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 f~ elf MUNICIPAL SERVICES BUREAU A variety of strategies are in place to deal with each circumstance. For example, when the Dialer receives a busy signal, the system can be programmed to re-dial that number every 15 minutes thereafter until the line is connected. Also, if the call is not answered, the Dialer might continue to call every 60 minutes until someone answers. rA dynamic advantage of this system is the inbound/outbound feature. The Dialer keeps r1 track of the number of collectors on the dialer system and the number of calls coming in. The Dialer then equally distributes the incoming and outbound calls, leaving no unanswered calls. r MSB realizes the importance of immediately working your cases while the information (phone number, address, etc.) is still valid; therefore, we stress quick activity. However, MSB also understands that various circumstances prevent one from paying an obligation immediately. In many instances, changes in personal situations enable the individual to pay at a later date. The Dialer generates individual reports pertaining to the performance of each collector. The Collections Manager evaluates each collector by the speed and thoroughness of his or her work (based on experience). The Dialer generates statistical information in the following areas: • Time the collector spent on the Dialer r-~ Number of messages left on voice mail or an answering machine r~ • Messages left with a person r. Wrong numbers called by the collector 26 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 B Mai ~ MUNICIPAL SERVICES BUREAU • Promises to pay n i• • Refusals to pay r- • Transferred calls from other collectors r' • Supervisor reviews because of dispute Address Management Services: Our integrated systems provides us the ability to pre- scrub Customer name and address data, enhance address information via Zip+4 appends, USPS FASTforward system Change of Address (COA) lookups, as well as National Change of Address (NCOA) lookups. r^ MSB's Address Management process is part of our family of products, all of which share comprehensive operational reports and statistics, costing reports tailored to customer requirements, and extremely fast processing turnaround times. r Key benefits of the Address Management process are: Automatically replaces address on file with the forwarding address, r-, prior to mailing, resulting in: o Faster delivery and fewer mail returns, accelerating recoveries r~• o Updated address upon which to base automated skip tracing r'N look-ups r` Name and address standardization reduces mail returns due to data r` quality errors r,. 27 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 A r MUNICIPAL SERVICES BUREAU t. . • Enhancement of the address "last line" via spelling corrections, USPS city mapping, and Zip+4 appends for USPS CASS certification r • COA lookups on all records via USPS FASTforward's 12-plus month database r~` • NCOA lookups on all FASTforward "no-hits", extending the Change of Address lookup to 3+ years Identification of "Known Bad Addresses," with ability to provide automated services on these Customers rte. Telephone Calls to Customers: While written contacts play an important part in the collection process, there is no substitute for speaking directly to the individual. Our r` telephone calls are designed to help the Customer voluntarily resolve their obligation. We are here to let the Customer know that there is an opportunity for them to resolve the matter voluntarily, without the risk of arrest in the case where warrants have been issued, r` and without the risk of further collection activity for debt collection. A toll-free telephone number is provided to all Customers. MSB does not use telephone scripts because each case is different. Our excellent and proven training program and length of service of our collectors (ranging from 1 to over 20 years total collections experience) provides us the confidence than scripts are not necessary in collection of court fines, fees and costs. Collection personnel are available for Customers Monday-Friday 8:00 AM to 9:00 PM and Saturday 8:00 to 2:00 PM. Payments may be made by Western Union Quick n Collect, money order, personal check, electronic check or with credit card information given over the phone or via a web-based, on-line payment. r-. 28 n Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services !1 January 19, 2006 rll. s.= M- B _ MUNICIPAL SERVICES BUREAU MSB has found through years of experience in performing collection projects for e,, hundreds of clients, active membership in American Collectors Association and participation in continued education on collection techniques that utilizing phone scripts is not an effective tool in collecting money. Our ability to speak with the Customer is e-, key in our success; therefore, we train our collectors to be effective listeners and communicators. This results in two positives. First, it makes the MSB collector the r- collector the Customer most wants to pay. Second, it significantly increases the i1 likelihood of promises kept. Execution of Payment Plans with Customers: The initial recommendation to the ~Customer will always be to resolve his or her obligation by payment in full (or posting bond and requesting a court date, if applicable). In the event a Customer has multiple court cases and indicates that he or she cannot pay in full, an effort will be made to have n them pay the first case in full, then the second and so on. At the same time, they are informed that any warrants on the other cases will remain until those cases are paid or they appear at the court. People that indicate they are indigent or request an appearance before a judge are referred back to the court. Obviously, Municipal Services Bureau never compromises the amount due without written authorization. In the end, we understand that only the City may establish guidelines as to a payment arrangement policy. Payment arrangements can be arranged for the Customer for other debts owed if n the City permits. Our collection software automatically flags individuals who have broken payment commitments within three working days after the payment was to have been made. At that time, a "broken promise" letter is sent automatically and a collector will re-contact the r., individual by telephone. Periodically Re-Contacting Customers After the Initial Collection Period; People go r. 29 r~. Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 ell, MUNICIPAL SERVICES BUREAU in cycles. During the initial period of contact, immediately after the case has been placed for collection, a person may be unemployed or still upset (however unjustifiably) about receiving the citation or incurring the debt. Re-contacting them six, twelve or eighteen months later sometimes finds them in a better position to resolve their obligation. Re- contacting Customers for as long as the case is outstanding gets results. It is a way for MSB to remind the City of Denton to know that cases do not drop into a dead file. i` Contacts by MSB in Person: MSB will make to contacts in person with the defendants or anyone else in attempting to collect the municipal debt. Credit Bureaus: MSB will work with the City to specify a collection program that best meets their needs. MSB has the ability to make requests for credit reports to assist in locating Customers and will do so when appropriate. MSB understands the importance of locating Customers when determining the success of a collection program. We have a vast array of proprietary tools, relationships with credit reporting agencies and the extensive experience needed to successfully locate Customers on behalf of the City. MSB currently utilizes the following vendors who supply National Change of Address programs as well as their own database of mail return information: r-w • Accurint ChoicePoint DirectoryNet . Dolan r FastData r" • MasterFiles RiskWise r Upon request, MSB can report some delinquent debts with the following credit bureaus: r, 30 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 i"1 _MUNICIPAL SERVICES BUREAU Equifax r.. • TransUnion Experian Large Balance Collectors: The level of time and effort to resolve a case with a $200 balance should not be the same as it is to resolve a case with a $2,000 balance. We often utilize dedicated collectors to exclusively pursue large-balance cases, allowing them to put forth extra skip tracing efforts and telephone calls. Customer Dispute and Complaint Resolution: Complaints are initially referred to Don McKinley, Collections Manager, and dealt with promptly. Municipal Services Bureau will respond in writing to any individual that requests such a response, when a dispute has not been resolved by telephone. Thomas M. Giamboi, President, is always available for dispute resolution. When a Customer states that the fine or debt was previously paid, insurance was in effect at the time the citation was issued, they had a driver's license when the citation was issued, etc., or paid the City before it went into collections, we ask the individual to provide the necessary documentation to support their claim. Upon receipt of documentation, the case is placed on "hold" and forwarded to the City or dealt with as per previously agreed-upon instructions. Upon clarification, the Customer is notified that their claim was accepted, of a new balance or the fact that their claim was r denied. Most importantly, Mr. McKinley or Mr. Giamboi or other executive will be available to meet with City Staff with a 24-hour notice. r Please reference the proposed collection flow-chart on the following page. r, r^ 31 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 r". MUNICIPAL SERVICES BUREAU MSB sends initial ell\ MSB receives MSS enters the National Change letter within 24 account 11. data into its of Address 10 hours of placements from system (NCOA) search placement the City No Offender No Telephone contact returns the Yes Left Message? is attempted call? Yes Is the Request Yes Disputes Yes Is contact Yes telephone documentation from made with the number account? Customer? the City orrect~ T No No Skip-tracing Yes Refuses to conducted pay? No Continue letter & telephone campaign Already paid? t~ Yes No Close and return account to the City Requests Yes Implement City- payment approved payment arrangemen arrangement i~ No Yes Promises to Yes Payment pay? received? No No Can balance No be recovered? Yes 32 / r^~ Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services e January 19, 2006 ai M61B MUNICIPAL SERVICES BUREAU b. Pricing/Payment Methodology MSB exists to provide the highest possible level of service to its clients. Therefore some aspects of the client/contractor relationship are not predefined in order to preserve the flexibility necessary to provide the highest possible degree of responsiveness. The area of client remittance is such an area because individual client requirements vary widely. Customers may choose from the following methods of payment: 1) Western Union 2) Money order 3) Personal check 4) Electronic check over the phone 5) Credit card over the phone 6) Web-based, on-line payment available 24 hours of the day MSB will set up the City of Denton as a "Pay-MSB" client whereby all payments will be mailed directly by Customers to MSB. MSB shall direct no payments to the City and, in the event, the city should receive a payment, City will send the original negotiable instrument to MSB. MSB will provide self-addressed envelopes to the City to give to defendants to mail in their payments to MSB. MSB shall, in return, send a Payment Acknowledgement Report showing the receipt of such payment(s). At the end of the month, an invoice detailing all payments and adjustment activity provided by the City during the previous activity cycle will be mailed to the City along with a check ONLY for all amounts collected less MSB's fee. The City of Denton may choose to remit payment and adjustment information to MSB r, twice or a month or monthly or as often as needed. MSB will submit daily payment reports to the Department showing all payments received for that day. At the end of the month, a report compiling all daily payments will be forwarded to the City. 33 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 -77 v- MUNICIPAL SERVICES BUREAU Municipal Services Bureau believes that one of its strongest and best qualifications to perform collection services on behalf of the City of Denton is the company's exclusive r, focus on the recovery of government receivables specifically Texas clients. MSB has grown to successfully partner with nearly 450 clients including 320 in Texas. Municipal Services Bureau provides its governmental clients with dramatically higher collection rates because of this specialization. We provide our clients with the assurance that our personnel are not only competent and experienced collectors as one would expect; they are competent and experienced at the very type of receivables that the City is attempting to collect. Thus, if awarded the contract, MSB will assign collectors to the tasks that have proven their individual competence in collecting the accounts proposed by the City. MSB provides best-in-class training to prepare these individuals for the real-world experiences they will face in collecting court fines and fees, utility and EMS debt or other miscellaneous debt. MSB understands the importance for the City to choose a vendor with the r, qualifications, experience, and knowledge to perform the type of work proposed by the City. MSB has developed and implemented hundreds of government collection n projects in the past that have given us the necessary tools to provide the City best-in- class collection procedures, reporting capabilities, data management, software and ell trained personnel. Our personnel development program specializes in training Municipal Services Bureau's staff to meet the specific requirements of our clients. Our staff is trained to work effectively with individuals to resolve and collect outstanding cases. Our Standard Operating Procedures require periodic monitoring of employee conversations with Customers in order to maintain quality assurance and compliance with laws and tom. r, regulations. 34 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 HQ - MUNICIPAL SERVICES BUREAU Municipal Services Bureau has come to realize that no matter how sophisticated a collection or computer system may be, it is well-trained and experienced personnel that ~ determine the success of any collection program. MSB is committed to providing the essential, quality-trained and supervised personnel necessary to accomplish the objective of resolving your cases. MSB Collectors are Trained in the Following Areas: r^ • Applicable Traffic Laws . Telephone Techniques • Establishing Payment Schedules • Bilingual Collector Contact • Western Union Quick Collect Rebuttal/Response Financial Counseling • Collection Software • Understanding Client Strategy r-, • Skip Tracing Techniques r^ • Handling Disputes • Company Policy r . American Collectors Association; Code of Ethics, Collection Manuals and Videos & Tapes r An initial five-day training program covering every phase of the operation is given to new MSB collectors. This includes a review of the Company Policy Manual, PC-based exercises, education on collection techniques, role-playing, a collection video and n computer-system orientation. Upon completion of this extensive training, the new collector is paired with a Collection Manager. During this time, the Manager assists in r* account handling and new collectors are taught the art of listening first, speaking second. 35 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 Nil -63 B MUNICIPAL SERVICES BUREAU r..,. An emphasis is placed on learning to respect and understand the Customer's situation to r. ultimately lead him or her to case resolution. A list of helpful hints is provided to the collectors to boost our success rate: r` ✓ Be prepared. You will be more successful if you are aware of the r circumstances of the case before you make the call. ✓ Always request payment in full. From there you are in a position to negotiate down and appear more flexible. Always create a sense of r'N urgency. The sense of urgency you transfer to the Customer will go a long way towards resolving the case. ✓ Put yourself in the Customer's shoes. He or she may be frustrated by, or ashamed of, his or her inability to pay, and may be receiving calls and collection letters from several different creditors. Don't take the defensiveness or anger personally. Your understanding will go a long way toward getting the problem solved. r^ ✓ Take control of the conversation. Always state your name and the nature of the call, clearly and immediately. ✓ Use the buddy system when you are having a tough time with a Customer. r When you have had difficulty making contact with the Customer, review all case notes to rN, determine when contact has occurred: r-., • Where have you reached the individual, at home? Or place of business? r~ r 36 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 n MUNICIPAL SERVICES BUREAU What time of day have you had contact? Days of the week? r-. Which telephone number was called when contact was achieved? How did you ask for the individual in the past? With continued on-the-job training, every MSB employee is well informed of the highly sophisticated program procedures our Company administers. MSB believes that ongoing, Continuing Education is the key to outstanding collector performance. Collection team leaders are assigned to small groups of collectors to ensure constant, r`* hands-on management. This support system monitors the day-to-day activity of each collector. Collectors are evaluated daily via management reports to ensure performance goals are achieved within established guidelines. Company goals are set each month and a reward system is utilized when the goals are met. d. Skip Tracing, Electronically and Manually It is anticipated that many cases submitted will require extensive skip tracing efforts. Skip tracing is an industry term describing the various processes used to attempt to locate a person whose current address or telephone number is unknown. Without a successful skip tracing program, collection results are significantly lower. After all, we cannot collect from someone we cannot contact. r~ MSB is successful in locating individuals because of the vast resources available to us for skip tracing. Our most successful resources are not available through other collection r-` agencies. Once it is determined that either the phone number or address is incorrect, we begin skip r 37 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 r e ell, HUN[CIPAL SERVICES BUREAU tracing procedures. Skip tracing is conducted on a local, regional and national basis and is ongoing as long as we have the case. Efforts include: 1) Cross Referencing Your Cases Against Our Proprietary Database: our most successful feature. This database is comprised of the millions of names and r-• addresses we have received from our other Texas and national clients. Often a client will have an older case with inaccurate address or telephone information but another client will have a newer case on the same individual with updated information. Your ^ cases are cross-referenced against our database on a daily basis. 2) Texas Drivers License Database: We own a copy of this database. We maintain all 18 million records in-house and receive weekly updates directly from the Department of Public Safety documenting all new, renewal and change-of-address applications. 3) Data Providers: MSB utilizes the following vendors who supply National Change of Address programs as well as their own database of mail return information. • Accurint • ChoicePoint • DirectoryNet • Dolan • FastData • MasterFiles t^ 38 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services /'1 January 19, 2006 ~^t ell, 61 B _ MUNICIPAL SERVICES BUREAU RiskWise 4) CD ROM Directories: Although various directories are utilized, the most prominent ones display all information typically found in a phone book or criss-cross directory. r-, This tool enables your customer's name, address or phone number to be cross- referenced with this system to match information. r`. 5) Additional skip tracing resources may include the following: • Multiple State and National Directory References • Address Correction Deposit on file with the Postmaster • Credit Bureaus • Utility Records e. Laws and Regulations MSB is in compliance with all Federal, State and local laws and will ensure that it maintains this status throughout the contract period. Furthermore, MSB shall conduct work done under this contract in strict compliance with all applicable laws related to the collection of debt in the State of Texas and is licensed according to industry standards. As with all our accounts, we will remain cognizant of the evolving changes of those laws r. and will adjust our practices as necessary to remain compliant throughout the term of the contract. Our in-house counsel keeps us updated continuously. Our training program is geared towards educating MSB's staff on current legal guidelines and our management team provides on-going notification of new laws and regulations in order to continuously r^, remain compliant. r~ e-N 39 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 r"'/"N MUNICIPAL SERVICES BUREAU ell, More than simply complying with all state, federal and local laws where we do business, we proactively maintain a compliance program that promotes prevention, detection and resolution of instances of any non-compliance. The collection industry is a sensitive business, in which we deal with financial issues that r-, affect our clients, their customers, our corporate reputation and ourselves. Our clients rely on us to assist them with the services we have contractually agreed upon in accordance with all laws and the highest standards of ethics. f. Code of Ethics Municipal Services Bureau is a strong believer in adhering to a strict code of ethics when performing collection activity. It shall be deemed professional misconduct for an employee of Municipal Services Bureau: • to knowingly violate the United States Fair Debt Collection Practices Act with reckless disregard for its provisions; • to knowingly violate any federal or state law pertaining to collection and credit r-N industry practices and procedures, with reckless disregard for its provisions; • to admit or consent to, or be convicted of, any crime under the laws of any U.S. jurisdiction which is a felony, a misdemeanor and essential element of which is r. dishonesty, or of any crime which directly relates to collection and credit industry practices and procedures; • to engage in conduct involving dishonesty, fraud, deceit, or misrepresentation including misrepresentation for the purpose of obtaining a license, certificate, or business-related insurance; 40 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 MUNICIPAL SERVICES BUREAU to harass a person on the basis of race, sex, age, creed, religion, color, national origin, disability, sexual preference, or marital status; or r► • to engage in dishonorable, unethical or unprofessional conduct of a character likely to deceive, defraud, or harm the public. r^, g. Accurate Collection Inforrnai3on ^ Municipal Services Bureau is committed to building a partnership with the City that will facilitate effective communication channels to ensure maximum compliance as well as ~ revenue generation. MSB maintains safeguards including thorough communications between City and MSB staff as well as efficient quality assurance practices to ensure accurate collection information and the most effective collection program for the City. MSB recognizes the City has an enforcement program consisting of warrant officers to assist the City in enforcing the orders of the Courts. This program should not change. In fact, the relationship between the warrant officers and MSB will become a working r-~ partnership. level One MSB Project Manager/The City of Denton e The first level in the relationship between MSB and the City is strategic in nature. The ell Principal Department Heads determine internal collection policies and procedures for the City. They also determine policies and procedures for interacting with the contractor. The lo~ MSB Project Manager assists in the implementation of those policies through contractor personnel. The MSB Project Manager exists to facilitate City policies and procedures relating to collection and to advise the City on applicable regulatory and legislative issues that will e.., 41 ell Proposal for the City of Denton, Tx Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 Y N161B MUNICIPAL SERVICES BUREAU AWN A affect outside collection activity. The Project Manager is familiar with best practices in jurisdictions across the country and will provide such information to the City on a regular r. basis. The Project Manager will keep the City apprised of legislative initiatives at the state and national level that may affect City policy or procedure. i^ The relationship between City Department Heads and The Project Manager is dynamic in nature. The key objectives of the relationship are to: t"N Maximize financial recoveries for the City by recommending best practices. Provide risk management services by keeping the City informed of ell, legislative and regulatory issues affecting the City's collection of r fines and fees and other debt. • Assure that collection efforts are optimal by frequent contact with r City and MSB staff. r~ Assist the City in forming or maintaining beneficial third-party relationships with other official bodies concerned with the City's court fines, fees and other debt. r Level Two MSB Collection Manager/City's Operations Staff Once a decision has been made to place cases for collection, The MSB Collection i-, Manager has the responsibility of performing collection services on behalf of the City. This entails the following: n 42 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 '/0-N /w 1- eNl 3.'". MUNICIPAL SERVICES BUREAU s~ r • Assure that all cases placed are loaded into the system immediately. ell, • Assure that all cases placed by the client are assigned a letter series in the shortest possible amount of time. r • Assure that all cases with bad or missing address information are r^ skip traced. • Assure that all collectors are performing their job on behalf of the City in a non-alienating fashion. Assure that cases receive live contact at the earliest possible date. ell, Assure that all cases are sent to credit reporting agencies, if requested and allowed by rule or law. ell, • Assure that adverse credit bureau reporting and the removal of r. adverse credit information is performed as contractually agreed. As the collection process unfolds the Collection Manager will undertake the following: Monitor partial payment agreements (installments) for Customer compliance. Monitor collector calls for client contract compliance. Monitor collector work standards to assure the maximum number of Customer contacts is achieved. r^, 43 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services rte` January 19, 2006 B MUNICIPAL SERVICES BUREAU • Monitor Customer disputes to assure: r, o The client is notified and proper investigation is done. o The case is placed in suspense pending the outcome of the investigation. • Monitor and resolve any Customer complaints OOON Request clarification from the Project Manager or client on any questioned fine, fee or procedure. ell, Level Three MSB Client Services/City Support Staff Typically, our clients have the most frequent contact with our client services staff. The City will be assigned a permanent client services representative responsible for managing the following: r` Acquiring client case submissions as instructed by the client. Providing customer service support. Provide acknowledgement of case submissions. • Provide client reports. • Provide client billing ,l`. • Perform client-requested case recalls and suspensions. 44 f' Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 r^ B MUNICIPAL SERVICES BUREAU t., • Advise and document Customer disputes. r. • Perform client-requested case file changes such as new address information. • Assure that client remittance is submitted as required by the r^ contract. r-, Often, MSB client services staff has regular daily contact with it's counterpart at the City. ' Questions or concerns dealing with case submissions, reports, remittance, disputes, corrections and clerical requirements will be dealt with by MSB client services. h. Quality Assurance MSB has a commitment to business excellence through leadership, best practice and absolute focus on the customer. We have a dedicated Quality Assurance Manager, Jessica r. Gallia, who reports directly to the Senior Operations Manager. This relationship ensures we meet key goals we strive for in our dealings with customers and partners: • Day-to-day responsiveness r, r• Open, honest and effective communication Data Integrity r Flexibility r Maximum effectiveness and efficiency in the project 45 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 Nimbi ~r MUNICIPAL SERVICES BUREAU Our Quality Assurance Manager will be involved in every step of the implementation of the f,. City's collection project, and will continue providing Quality Assurance throughout the life of f„ the project. r- Some of these functions include, but are not limited to: r, i, 1) During Implementation: n 100-^1 Validating system functions (notice & report generation) Providing additional training, as needed r^: Debugging systems problems, if required 2) During Ongoing Operations: r^ • Confirming receipt and appropriate processing of referrals and rescinds r^• Verifying monthly reconciliation with Accounting department ell Analyzing report data to determine trend • Reporting trends to management and initiate corrective action 3) Additional Internal Audit Tasks: ' Setting audit schedule 46 1 ^ Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 rIN i w A4 13 _ MUNICIPAL SERVICES BUREAU Conducting Internal Audits (IT, Operations, Accounting) 4) Report findings to management and initiate corrective action r^' B. IMPLEMENTATION WORK PLAN, TIMETABLE AND RATE OF RECOVERY Generally, MSB will accept a test data file, if necessary, to ensure that the data sent by the City of Denton and MSB and vice versa, is not only secure, but can be utilized by both parties within the time frame set by the parties. Once this has been sent and tested, a file of cases will be sent to MSB by the City and will be input into our system. Once in the system and tested for accuracy, letters will go out to the Defendants within 72 hours. From the time the first letter is mailed, if we have a good phone number, the first phone call is made within 3-4 days. From this time, all collection procedures are put into place (as described in detail in the beginning of Section 3, above). Until the defendant pays his fines, fees and costs, in full, or the e-N case is recalled by the City, the collection effort does not stop. Many factors go into analyzing rates of recovery or liquidity rates. Because so many factors go into determining what percent of your debtors will pay delinquencies, we would rather not attempt to estimate what this rate of recovery would be. r~ r Some of the reasons that this estimate is difficult to predict are: • average age of accounts when forwarded for collection; r, level of internal collection efforts prior to submitting cases for collection; i` the percentage of accounts that have good phone numbers, social security numbers r"and/or places of employment; and 47 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 MUNICIPAL SERVICES BUREAU !~R • the type of account being collected demographics-unemployment rates, income levels, time of year. ell r C. CUSTOMER SERVICE METHODOLOGY OF CONTACTS AND NOTICES-HANDLING CUSTOMERS' QUESTIONSIPROBLEMS For discussion on Customer Service Methodology of Contacts and Notices as well as handling customers' questions/problems, please refer to Section 3, above in various sections. D. HANDLING OF NON-ENGLISH SPEAKING CUSTOMERS MULTILINGUAL ISSUES In a diverse culture, it is important that proper tools are in place to ensure effective communication is made between our collection staff and Customers. One key tool in place at MSB is the utilization of multilingual notices. All letters go out in Spanish with English on the ell, obverse and Spanish on the reverse. Another important tool is multilingual personnel who are experienced in overcoming language barriers in order to help Customers find reasonable solutions to financial hurdles. In handling the calls for non-English speaking defendants, MSB provides a separate toll-free, 800 number for their use and this goes directly to collection queue that is presented in Spanish and the collectors are Spanish (and other languages-see chart below). Should a caller first go to the regular collection queue and then wish to speak to a non-English speaking collector, the call is transferred to another collector, or if non is immediately available, to the non-English collection queue. MSB is uniquely positioned by employing a staff that is able to communicate via the following means: r r. 48 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services P"' January 19, 2006 ell, _x 11B MUNICIPAL SERVICES BUREAU err, Language Number of Employees e'N Spanish 93 French 3 r German 3 r ' Portuguese 2 Japanese 1 Italian 1 Romanian 1 E. ADEQUACY AND SOPHISTICATION OF TELEPHONE RESOURCES MSB has recently upgraded its telephone and dialer equipment to a Nortel CS1000 system r1 which is an all digital phone system-a move from an analog system. This Nortel CS1000 can handle Voice Over IP (VoIP), controls the ACD incoming calls to the collection queues and can ell, grow to handle as many as 20,000 phone instruments in MSB (which is more than most collection agencies would ever need in one location. In connection with this new phone system, MSB purchased a new dialer, the StrataDial.vc2 predictive dialer by Stratasoft. This is a system that automates the dialing process as a call center. The system dials telephone numbers downloaded from MSB's database and detects an answered call. It filters out calls with no answer, busy signals, and disconnected numbers, and passes only human-answered calls to the collector. The collector may also leave a message on voice mail or on an answering machine. r /f the City of Denton would like to make a site visit to see our collection process along with our new telephone, dialer, and payment processing systems, please contact Mr. r` Thomas Giamboi at (800) 568-7004, ext. 3223 to make an appointment, We will be more than happy to give you a detailed tour and you can visit with all personnel involved with the collection process. 49 r" Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 i' MUNICIPAL SERVICES BUREAU F. EXAMPLES OF COLLECTION LETTERS AND TELEPHONE SCRIPTS f-, Please see Attachment "C" for sample collection letters. Scripts are not used for any of our collection processes because of our excellent training required of each employee. However, if scripts are absolutely required by the City of Denton, we. will develop them before the inception of the Contract, with the guidance and approval of the r' City. ell, ell, r-. 'e-11 r e e ,r. 'r^ r-. 50 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services F1, January 19, 2006 M61B MUNICIPAL SERVICES BUREAU ~ SECTION 4 COMPUTER NETWORK A. ADEQUACY AND SOPHISTICATION OF DATA PROCESSING RESOURCES In addition to our well-trained staff, MSB is committed to maintaining a state-of-the-art collection system by continually investing in improved technology. Throughout this proposal, you will not only see evidence of our commitment to "cutting edge" technology but a focus on proven, reliable features. As shown, a high priority is placed on continually striving to improve the quality of our collection services in order to provide you with the most cost efficient and effective r.. collection system available. ell MSB utilizes secure VPN tunnels for client communication. These tunnels are terminated in a ell, Cisco 3005 VPN concentrator. Servers are manufactured by Dell Corporation and run a combination of Microsoft Server 2000 and 2003. We also utilize a Linux based server running r^ Red Hat for the purpose of storing and manipulating client files for MSB. The ACD call center is based on the Nortel CS1000 system and the reporting engine is a Symposium server. Backups are accomplished via Backup Exec on a nightly, weekly and monthly basis for the purpose of disaster recovery. MSB is highly automated and has exceptional database capabilities allowing us to: ,ell ✓ Exchange large quantities of data effectively; ✓ Permanently document all collection activity on all cases; ✓ Acknowledge receipt of bad checks and other information as needed; ✓ Provide Customer fact sheets of collection activity; 51 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 f"` i MUNICIPAL SERVICES BUREAU ✓ Marry sophisticated predictive dialer technology and skip tracing procedures with our software; ✓ Submit cancel and return reports when efforts have been exhausted or when the r-, City feels it in its best interest to recall the case; and ✓ Generate extensive performance and analysis reports. MSB's collection software is the Collection Resource Software (CRS) from CR Software, Inc., of r Fairfax, VA. The software resides on a Red Hat Linux Advanced Server 2.1 operating system and utilizes the ICP/IP environment. Our hardware for this system is the Dell Poweredge 2650 with 4GB RAM which supports virtually unlimited users. We have virtually an unlimited ability to process information via the Internet. The recommended submission format via the Internet/FTP is a simple ASCII, fixed length file that allows us to transfer your data directly in the system, usually the same day we receive it. Data may also be forwarded by email, diskette or tape. We also have data manipulation tools that enable other formats to be converted. We have converted data from fixed ASCII, standard ASCII, EBCDIC, PFS/Pro File, IBM Filing Assistant, 123/Symphony, DIF, dBase, Excel and paradox formats. The Network Security Plan r MSB has identified five categories of network security to be addressed: 1. Physical Protection 2. User Authentication 3. Access Control 4. Encryption r. 5. Security Management r-. 52 I Ir Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 i M61B MUNICIPAL SERVICES BUREAU Physical Protection The offices of MSB are secured with an alarm system that utilizes motion detectors, door r., sensors and may utilize additional passive and/or aggressive systems. All visitors are required to register at the receptionist's desk and be escorted by an MSB employee. Access to the data ^ center, where all of the servers and electronic data are stored, requires a secured access token r, (key fob). The Network Administrator is required to verify and monitor any activity in the Data r-- Center. Adequate fire and smoke protection is maintained at all times. All backup tapes or other storage ^ media are stored offsite or in the data center until they are ready to be archived. All printed ^ records are also stored in secure locations until ready to be archived. Archived documents and media are stored off-site in the vaults of Iron Mountain. MSB protects back-door access to workstations and media as follows: r ✓ Train staff to log off the network during breaks, meal times, and at the end of the ^ work shift. ^ ✓ Provide employees with access to a secure bin for depositing unused sensitive media, such as disks, and sensitive paper files, that need to be destroyed. We utilize a refuse service that specializes in destroying sensitive media. ✓ Don't send passwords via e-mail, especially if the message is going to get archived ^ onto a server. ✓ Refrain from writing down personal identification codes or passwords. Put locking devices on portable equipment, such as laptops, external disk drives and tape backup systems. ✓ Require users to change passwords periodically and instructed not to share them 53 Proposal for the City of Denton, Tx Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 n 01^ _ N161B MUNICIPAL SERVICES BUREAU 10,, with anyone. User Authentication MSB utilizes Windows 2000 user authentication, which includes three different authentication methods: Kerberos V5, public key certificates, and NTLM. Proof of who you are provides a way to distinguish authorized users from possible intruders. To this end, an authentication system can determine what information the requester can access. For example, each collector can access records for his or her customers, but not the entire network. Digital certificates are an essential part of public key infrastructure or PKI, a security system ,l,, consisting of protocols, services, and standards to support public key cryptography applications. Public key cryptography validates digitally signed messages, which can be a simple e-mail r-.. message or protocol to establish a secure communications session. The sender of the 'r- authenticated message signs it with a private key. The recipient validates the message using ,r the sender's corresponding key, contained in the sender's digital certificate. The certificate can r^ be sent with the message or obtained form a certificate repository. MSB maintains its own secured certificate server. r^ Access Control A Cisco PIX 515 firewall and a Cisco 3005 VPN concentrator control access to MSB's network. The PIX 515 firewall is configured with the highest level of security and external administrative ports have been restricted. The VPN concentrator is utilized for secured client connections and will restrict access to a single controlled remote IP address. Any VPN connections will be configured to restrict access from MSB servers. 54 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 'ice MUNICIPAL SERVICES BUREAU Now, Encryption ell, The current security model for all secured connections must utilize DES or 3-DES encryption, - IPSec, IKE proposals, and Diffie-Hellman key exchange. MSB can use encryption for data traveling over any type of a network-within the corporate network, between the corporate network and customers' networks, or over the Internet to carry data to a virtual private network (VPN). Encryption systems include either shared key, public key, or secure key exchange. With shared key encryption, all parties get issued a key that unlocks the data. The sender provides the key to a shared symmetrical encryption algorithm used to encode the data before it gets placed in the packet headed for the remote site. To decode the data in the packet, the remote site must r. provide the key to same encryption algorithm. Public key encryption occurs when one party has a private unlocking key and makes a public locking key. Any sender can use the public key to encrypt the data. The receiver, in turn, uses its designated private key to decrypt the data. Secure key exchange requires that both parties r~ first authenticate themselves during a session to distribute the encryption key. The parties can i^ use the resulting key to encrypt and decrypt any forthcoming data. Security Management To promote more secure public transmission of data, MSB utilizes the Internet Engineering Task r^ Force developed Internet Protocol Security (IPSec), a standard security platform for IP networks. r IPSec enables the two communicating devices, such as routers, to establish the type of security to be used. A security policy database tracks the active security associations that a network uses. This capability enables us to monitor IPSec activity across the network, as well as to manage 55 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 1 I~ MUNICIPAL SERVICES BUREAU security systems at any given site. r., Security Audits and traffic analysis are performed monthly. An intrusion detection system is utilized at all times and protects against unauthorized access to sensitive information by r. correlating and reporting on suspect activity, and creating complete logs of all information r-~ transactions. This type of system links audit trails from disparate systems, such as firewalls and system event logs. The MSB end node of data transmission will be a Windows 2000 system r~ that is secured within our DMZ. The end node has a dedicated public IP address and each user will receive a unique username and password to access the system. All activity on this system will be monitored and logged. If an Internet connection is unavailable, an alternate means of transmission will be provided via a phone modem but this will require that an MSB technician make a temporary manual connection to a stand-alone system that will only allow one concurrent connection and will only operate on a callback mode. Security and encryption must r meet or exceed that of the replaced transmission method. 'r If approved by an officer of MSB, clients may be granted access to any computer they are ' e- transmitting data to for the sole purpose of verifying security. AN MSB Network Administrator will personally supervise that access and all activity will be logged. No unauthorized personnel will be given access to an MSB server at any time. Only an officer of the company may grant authorization to anyone who is not an MSB employee. MSB employs skilled Information Technology personnel including a Microsoft Certified System Engineer (MCSE). Through their efforts and skill we are currently supporting information interchange on fifty diverse host systems including PeopleSoft. A smooth transition to MSB is one hallmark of how we do business. Our company has invested significant sums in technology, training and qualified personnel to provide a transparent transition to the MSB system. Because of the credentials of our MCSE-led MIS staff, we have the necessary qualifications to quickly, quietly and efficiently put in place all necessary protocols, data record layouts and "0" 56 I~ Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 MUNICIPAL SERVICES BUREAU procedures to begin operations on behalf of the City. Strategic Direction e_-, Our total-solution approach helps us to be more efficient, proactive and better prepared to take on any situation. With the Collection Resource System (CRS), we can produce client status r- reports, client analysis reports, client remittance statements, client service contact and productivity reports, as well as performance and profitability reports. The CRS even helps MSB with letter production, client acknowledgement correspondence, client service monitoring, goal setting and collection strategies. With CRS, we can access client performance analysis reports, ^ client profitability data, and data integrity statistics that can help determine the best collection ^ strategies to pursue maximum collections. Our software tools also make it easier to conduct ^ business with outside vendors providing services such as mailing, skip tracing, credit reporting, electronic payment processing, etc. In short, the CRS allows us to offer a completely integrated total solution with the City's bottom line in mind. Virus Protection MSB understands the importance of protecting the City's systems and data. We use McAfee Virus scan on desktops and servers as well as McAfee Groupshield on the email servers which will provide the City top rated enterprise level virus defense. Virus definitions are updated weekly to maintain optimal protection. MSB has never experienced a production affecting virus- related issue. Internal Control Process to Maintain Confidentiality MSB shall maintain the confidentiality of all documents and information provided to MSB by the City pursuant to this agreement, except as to disclosure required by State and Federal laws and i^ 57 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services e-January 19, 2006 I 'OON >f B art MUNICIPAL SERVICES BUREAU regulations. Please see information, below, on how we ensure the security and confidentiality of client information. All MSB collectors are required to sign a Collector's Standards Acknowledgment. This form r. includes a statement that the collector will not disclose confidential information to any third party. The Acknowledgment affirms that the collector agrees to abide by the policies and procedures of the company. It also affirms that the collector has read, understands and will comply with all n provisions of all State laws as provided to the collector by management. r" Information Security and Data Integrity ^ MSB understands the importance of maintaining the security of all financial, statistical, personal, technical, and other data or information relating to this contract. This information is considered ell, confidential as defined by law or as designated by the client. MSB will protect this information from unauthorized use, disclosure, or destruction through the observance of all Federal and State information security and confidentiality laws and our own procedures described below. e'* MSB's collection system maintains a record of all case activity, including placement data, payment history and collection attempts. In addition, the system is a real-time, on-line system; r^ therefore, cases are immediately updated in the database when a collector performs any action e" on a case. This "footprint" function is active for all collectors with "routes" attached to their user number and is optional for management. This information is then available for the client or an MSB supervisor to review. A report can also be accessed. This is the first step in the protection against any misuse of case information. Further, the following procedures and control levels are also available and utilized by MSB to maintain security. Our collection system has multiple password-protected levels of control. At the collector level, it 'r incorporates a work standard "safety net," which requires that a collector adhere to the work plan presented by scheduling cases for review. Management has the ability to program work 58 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services ''rr` January 19, 2006 } MUNICIPAL SERVICES BUREAU standards into each client's portfolio. A collector may schedule cases more frequently for review, but cannot suspend activity without approval. The fundamental supervisory control is the scheduled case review, a feature unique to our system. Every active case in MSB's system also has a supervisory review automatically scheduled to the supervisor based on balance ranges. The supervisor also has access to on- line, real-time reports on how effectively a collector is moving through the queue. r* In addition to reports and a systematic case review process in place for various balance ranges, the supervisor requests an "audit trail" function on cases daily, based on an alpha breakdown, r^ balance criteria, collector file number, specific placement-date criteria, or a combination of any of ^ the above. The targeted audit process allows MSB to pinpoint a weak performance trend area and implement an immediate action plan to fix a collection problem. 10 Our collection system enables MSB to assure the City that cases are being worked in the exact sequence and in the manner agreed to when our relationship is established for this program. In addition, our on-line computer system enables us to send broadcast messages to any collector 'l or supervisor working the client's cases, keeping them updated on any new issues. This extensive communications network also allows us to establish and implement any new security r^ procedure(s). rN Communications Security All communications equipment located within the Data Center is fully secured under the security systems and procedures in place for the Data Center facility. As mentioned earlier, our systems are highly secured. Only users with authorized passwords can work cases. Our internal security modules guarantee that no unauthorized access to ell 59 / Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 r~ ~ I M_ B - MUNICIPAL SERVICES BUREAU sensitive data can occur. The system uses multi-tiered security system involving access limitations at each of the following: r* Terminal Level r~ Data Communications Network r-, Systems Software Level r Applications Software Level r B. PROPOSED METHODOLOGY AND PROCEDURES FOR DATA TRANSFER TO/FROM CITY DATABASE r^. MSB has the ability to handle an unlimited amount of accounts. MSB's collection system, CR ell, Software, is expandable and flexible to accommodate even the largest collection agencies in America. The largest client currently has 80 million plus accounts. MSB's volume of accounts is approximately one-tenth of that volume; therefore, we have plenty of flexibility in our capacity. r Municipal Services Bureau is highly automated and able to offer our clients a flexible, innovative solution to their collection needs. We are a firm capable of and experienced in managing an indefinite volume of accounts. We successfully service hundreds of thousands of new accounts each year, which include accounts from some of the largest jurisdictions in the nation. In order to send and receive data between the City of Denton and MSB, we can accept files and data through 1) a secure File Transfer Protocol (FTP) site that can be set up on either or both ends where one party can place the data to be retrieved and the other retrieve said data or vice versa; ,r or 2) sending and receiving the data and files via an email through a secure Virtual Private /111 Network (VPN) connection. Either of these can be worked out between the City of Denton and MSB after the contract is awarded to MSB. 60 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 1"` ~ rY _ p) MUNICIPAL SERVICES BUREAU 711 C. ON-LINE INQUIRY CAPABILITIES The City of Denton will have the ability to review its cases in our system at any time. Complete r. case information and collection activity, including a thorough history of all written and verbal contacts and detailed payment information, is available via a terminal session through a web ell interface. MSB places a high priority on data security. Only a select team of management and supervisory personnel is allowed to make adjustments to a case. This includes canceling cases, changing i" the amount due, adjusting the commission or altering the account balance. A secure login password for access protection is implemented within the computer network. These managers also have the right to assign various levels of network admission to each employee. If an ^ employee leaves MSB, the employee's login password is disabled immediately. ell\ When a change is made, our computer system stamps a permanent footprint with the collectors name or initials on each note or adjustment made to a case. Therefore, it is always known who made the various adjustments. Once a collector records his or her notes into the system, the computer does not allow anyone to delete or change the notes. For example, if a Customer files a complaint against an MSB collector in lieu of a conversation they had, the collector cannot reverse the documentation concerning the conversation once it has been recorded. At the time that a case is returned to a client, it is purged and collectors will no longer have access to it. r. D. RECORD RETENTION CAPABILITIES Cases may be retained on the system indefinitely. MSB's system has 281 Gigabytes of active space with only 35% of that being currently utilized. The Poweredge may be expanded up to several terabytes, potentially handling billions of records. This extraordinary hard disk space r•, management is accomplished through superior Linux system management, proprietary software programming from the vendor for the Poweredge/Linux and a well-defined nightly cleanup routine. In Q3, 2006, we are scheduled to purchase disk arrays which will increase our space to ell, 61 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 MUNICIPAL SERVICES BUREAU server terabytes (1,000 Gigabytes per terabyte). This will allow even further growth of clients ad client needs for data storage and retention of the City's data, placements, collection notes, recovery and producing of reports, and billing for an unlimited number of clients and delinquent individuals. r System Back-up ell The entire Poweredge/Linux operating system and Collection Resource Software is backed-up nightly using a modern, ultra-fast and accurate DLT System. Backup tapes are stored offsite. These nightly back-up tapes also allow MSB to retrieve any information or files that may have been deleted in the past as part of the cleanup process. CRS keeps a complete history on all cases in the system. For auditing purposes, all information is on the current database. ell However, if needed, the nightly back-up tapes do exist in the event that further research is needed. Nightly backup tapes are incremental and are overwritten each week. Weekend backup tapes are full backups for the week and are overwritten each month. Monthly backups are full system backups and are never overwritten and are retained indefinitely at Iron Mountain. 62 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 rl r-'s. M61B MUNICIPAL SERVICES BUREAU SECTION 5 MANAGEMENT REPORTS A. REPORTS PROVIDED TO THE CITY With hundreds of courts, our reports are time tested and provide you with the information you need. We also have experience in specializing reports to meet your needs. Our Client Services ~ department is responsible for forwarding these reports. All reports can be generated at any time the City requests them, though most have a pre-set schedule depending on the type of j.., report. All reports, collection notes and City data can be inspected at any time by the appropriate City representatives. MSB does and always has had a "open door' policy for its r. clients by welcoming site visits. Any audits that the City needs will be carried out within a reasonable time and at the cost shall be borne by MSB. The need for cooperation between the /ll City of Denton and MSB is paramount for a good working relationship and knowledge of business practices by both parties. MSB also monitors all internal collection activity daily. Reports are generated to show the productivity of each telephone collector and documents the number of calls made, number of contacts made, average length of calls, dollar results attributed to each collector, etc. Our 17 results for each client are also monitored monthly. Please see sample reports in Attachment .40^ "D r Small Sampling of Reports Available to the City: r Acknowledgment: Acknowledges the receipt of cases listed. This report includes client reference number, name and address of the Customer and fine amount. This report is provided to the City after each submission is received. Client History Analysis: Provides historical information regarding new business, collections, liquidity, cancellations, "Paid In Fulls" and average case age. This report is provided to the City 63 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 _ III d '-a-y. 'I [ fr Y2 " M61B ~r MUNICIPAL SERVICES BUREAU monthly. Detailed Client Analysis: Displays statistical data for each client covering the twelve month most recent reporting periods. This report is provided to the City at the City's discretion. Daily Status Report: This report is to confirm that a payment has been posted and includes the client reference number, name of the Customer, amount paid and balance. This report is ' provided to the City each day following when payments or adjustments are received by MSB. Monthly Invoke: Information includes your case number, name of the Customer, original balance, amount paid, to whom it was paid (MSB or City), and MSB's fee. This report is provided to the City by the 15th day of the month following the monthly activity. Case Status Report: Inventory of all cases on the system for each client. This report is ell provided to the City at the City's discretion. Client Data Integrity Report: Displays analysis tools for an individual client in the following categories: phone numbers, current balances, age of cases, and geographical location to provide statistics on the quality of the case information. This report is provided to the City at the City's discretion. ell, Customer Fact Sheet: Provided upon request, this report is hard copy documentation of all MSB collection activity on any given case. r^ Return Report: This report contains your case number, the name of the Customer, the balance and original date of referral. This report is provided to City after any case is returned to the City. Please see examples of the report in Attachment "D." n 64 r'te' Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 ~R v MUNICIPAL SERVICES BUREAU B. FLEXIBILITY IN MEETING CITY'S REPORTING NEEDS Municipal Services Bureau's CRS Collection system coupled with a CRS-dedicated programmer can produce any other reports and the City needs and can do so usually within a 30-day period, r, depending on the complexity of the report. P'` r^ C. RESPONSES TO AUDITOR INQUIRIES AND CONFIRMATION REQUESTS As in the past, MSB will work quickly and in a business-like fashion with the City Auditor regarding his or her inquiries and confirmation requests. r^ r r r, r^ 65 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services January 19, 2006 006 MQB MUNICIPAL SERVICES BUREAU r ^ SECTION 7 VALIDITY OF THE PROPOSAL r• This proposal shall be valid for a period of sixty (60) days from the date of the opening of the r* proposal by the City. Pte, r^ r. ell r^ 67 Proposal for the City of Denton, TX Request for Proposal No. 3298, Municipal Court Contract for Collection Services f January 19, 2006 r'` f', " D v ~ 3 CD ~ D r n rN CLIENT LIST (444), January 2006 TEXAS (319) State of Texas, DPS Surcharge DALLAS-FORT WORTH/NORTH TEXAS AREA (93) r. Aubrey Dallas County Court #8 Hutchins Aubrey Utilities Dallas County Court #9 Italy Balch Springs Utilities Dallas County Court #10 Jacksboro Bardwell Dallas Cnty. Ct. of Appeals #1 Keller Benbrook Dallas Cnty. Ct. of Appeals #2 Krum Benbrook EMS Denton Ladonia Blooming Grove Denton Cnty.-JP, Pct. #1 Lake Worth j" Cleburne Denton Cnty.-JP, Pct. #2 Lake Worth Utilities Cockrell Hill Denton Cnty.-JP, Pct. #3 Lakeside Collin Cnty.-JP, Pct. 1 Denton Cnty.-JP, Pct. #4 Lakeside Utilities C` Collin Cnty.-JP, Pct. 2 Denton Cnty.-JP, Pct. #6 Lancaster r` Collin Cnty.-JP, Pct. 3 Desoto Lavon Collin Cnty.-JP, Pct. 4 Desoto EMS Lewisville Crowley EMS DeSoto Utilities Malone Crowley Utilities Duncanville EMS Melissa Dallas Cnty.-Bond Forfeitures Ferris EMS Milford r., Dallas Cnty.-Child Support Garland Mineral Wells Dallas Cnty.-Work Release Granbury Mineral Wells EMS Dallas County Court #1 Grand Prairie Parker Dallas County Court #2 Grapevine EMS Pittsburg Dallas County Court #3 Highland Park Pittsburg Utilities r Dallas County Court #4 Highland Park EMS Plano Dallas County Court #5 Hillsboro Rice r Dallas County Court #6 Hillsboro EMS Richardson Dallas County Court #7 Howe River Oaks r` n Rockwall Sanger Stephenville Utilities Rowlett Sansom Park Sunnyvale Royse Savoy Tom Bean Royse Utilities Sherman EMS University Park Saginaw Stephenville Waxahachie r Saint Jo Stephenville EMS White Settlement HOUSTON/GALVESTON AREA (38) r-~ Bellaire Ganado EMS Orange County JP, Pct. 4 r Bellaire Utilities Hempstead Rose City r Bellville Jones Creek Santa Fe Brookside Village La Ward Seabrook r`Dayton Lake Jackson Spring Valley Edna Mont Belvieu Stagecoach Farms Edna EMS Morgan's Point Taylor Lake Village Edna Utilities Nederland Victoria Victoria Utilities El Campo Nederland Utilities Freeport Orange County Court West Columbia T Freeport Utilities Orange County JP, Pct. 1 West University Place r-~ Friendswood Orange County JP, Pct. 2 Willis Ganado Orange County JP, Pct. 3 T EAST TEXAS/UPPER COASTAL BEND AREA (26) Big Sandy Huntsville Utilities Trinity County Court Carthage Joaquin Trinity Cnty.-JP, Pct. 1 T Center Kerens Trinity Cnty.-JP, Pct. 2 Chandler Kerens Utilities Trinity Cnty.-JP, Pct. 3 Cuney Kilgore Waskom Groveton Nacogdoches Cnty.-JP, Pct. 1 Wells Hopkins Cnty.-JP, Pct. 2 Nacogdoches Cnty.-JP, Pct. 2 Wharton Hopkins County Court Reklaw Winnsboro Huntsville Trinidad T WEST TEXAS AREA (41) Abilene Ector Cnty. Ct. at Law Mason !1 Alpine Ector Cnty. Ct. at Law #2 Merkel EMS n Andrews Utilities Ector Cnty.-JP, Pct. 1 Odessa - Ballinger Ector Cnty.-JP, Pct. 2 Rising Star Bovina Ector Cnty.-JP, Pct. 3 Seminole Utilities Brown County Court Ector County-JP, Pct. 4 Taylor Cnty.-JP, Pct. 1 Buffalo Springs Edwards Cnty.-JP, Pct. 1 Taylor Cnty.-JP, Pct. 2 Burkburnett Hudspeth Cnty.-JP, Pct. 1 Taylor Cnty.-JP, Pct. 4 r Childress Hudspeth Cnty.-JP, Pct. 2 Tye Childress County Court Hudspeth Cnty.-JP, Pct. 4 Wichita Falls Chillicothe Junction Wink Cisco Kermit Winters Denver City EMS Kimble Cnty.-JP, Pct. 1 Winters Utilities r" Eastland Levelland r-, AUSTIN/CENTRAL TEXAS AREA (57) Austin Coryell County Court Leander Utilities Austin-Parking Tickets Fayette County EMS Llano Cnty.-JP, Pct. 1 Bartlett Fredericksburg Llano Cnty.-JP, Pct. 2 Blanco Cnty.-JP, Pct. 1 Georgetown Llano Cnty.-JP, Pct. 3 n Blanco Cnty.-JP, Pct. 4 Georgetown Utilities Llano Cnty.-JP, Pct. 4 Blanco County EMS Granite Shoals Lott !1 Blanco Volunteer Fire Dept. Harker Heights Manor Brenham Harker Heights EMS Marble Falls Bruceville-Eddy Johnson City Marlin Bryan EMS Killeen Mart Bryan-Risk Management Kyle Martindale Burton La Grange Mexia r-• Caldwell La Grange Utilities Mustang Ridge r Caldwell Utilities Lampasas Pflugerville Library n Columbus Utilities Leander Pflugerville Parks r` e-N r-N /'1 /'l Pflugerville Utilities Teague Weimar Schulenburg Teague Utilities Wimberley EMS Somerville Thrall Williamson Cnty.-JP, Pct. 1 Taylor Travis Cnty.-JP, Pct. 3 Williamson Cnty.-JP, Pct. 3 T` SAN ANTONIO/SOUTH TEXAS AREA (63) r'~ Alamo Heights Frio County EMS Premont Alamo Heights EMS Garden Ridge Primera Alton Gonzales County Court Progreso Balcones Heights Gregory Rio Grande r. Bandera Hidalgo Robstown F-. Bandera County EMS Hidalgo EMS Robstown EMS r- Bishop Hill Country Village San Benito Brownsville Hondo San Juan Bulverde/Spring Branch EMS Hondo Utilities Santa Fe Canyon Lake Fire/EMS, Inc. Karnes City Schertz Cuero Kerrville EMS Schertz EMS Shavano Park Duval Cnty.-JP, Pct. 1 Kirby Duval Cnty.-JP, Pct. 2 La Feria South Padre Island Taft Duval Cnty.-JP, Pct. 4 Laguna Vista Three Rivers Fair Oaks Ranch Helotes Live Oak Uvalde Floresville Freer Luling Uvalde EMS Willac Cnt JP, Pct. 1 Frio Cnty.-JP, Pct. 1 Luling EMS Y Y - Frio Cnty.-JP, Pct. 2 McMullen County EMS Willacy Cnty.-JP, Pct. 3 Frio Cnty.-JP, Pct. 3 Olmos Park Willacy Cnty.-JP, Pct. 4 Frio Cnty.-JP, Pct. 4 Portland Windcrest n r r- n STATE OF ALASKA (1) ell, Anchorage STATE OF ARKANSAS (8) r~ Bradley County Garland County Sebastian County Crawford County Hot Springs Van Buren Fort Smith Kibler r STATE OF CALIFORNIA (1) r. State of CA-Admin. Office n STATE OF CONNECTICUT (1) Various State Agencies r` STATE OF FLORIDA (27) Broward County Acct. Division Hernando County Civil Marion County Livestock Pav. - Broward County Animal Care Hernando County Misdemean. Marion County Misdemeanors Broward County Cons. Affrs. Indian River Cnty. Code Viols. Marion County Solid Waste r Broward County EMS Indian River CntY• Solid Waste Marion County Traffic Broward County Env. Services Indian River Cnty. Utilities Martin County Traffic n Broward County Revenue Marion County Civil Miami-Dade County Traffic Broward County Waste Mgt. Marion County Code Enforce. Monroe County Traffic Clay County EMS Marion County Fire and Rescue Polk County Traffic Gilchrist County EMS Marion County Felonies St. Lucie County Traffic n n n STATE OF GEORGIA (1) r~ Chatham County State Court STATE OF HAWAII (1) r~ State of Hawaii Judiciary STATE OF INDIANA (3) Marshall County Courts Harrison County Courts Miami County Courts r-. Marion County Superior Courts (Indianapolis) STATE OF KANSAS (60) Allen County Dist. Court Franklin County Dist. Court McPherson County Dist. Court n Anderson County Dist. Court Gray County Dist. Court Meade County Dist. Court r` Andover Greeley County Dist. Court Merriam EMS Barber County Dist. Court Hamilton County Dist. Court Montgomery County Dist. Court Barton County Dist. Court Harper County Dist. Court Nemaha County Dist. Court r Brown County Dist. Court Harvey County Dist. Court Neosho County Dist. Court Chautauqua County Dist. Court Hodgeman County Dist. Court Ness County Dist. Court n Cherokee County Dist. Court Jackson County Dist. Court Osage County Dist. Court Clark County Dist. Court Jefferson County Dist. Court Ottawa Clay County Dist. Court Johnson County Dist. Court Pawnee County Dist. Court Coffee County Dist. Court Kearney County Dist. Court Pottawatomie Cnty. Dist. Court Comanche County Dist. Court Kingman County Dist. Court Pratt County Dist. Court Crawford County Dist. Court Kiowa County Dist. Court Reno County Dist. Court Doniphan County Dist. Court Labette County Dist. Court Rice County Dist. Court Edwards County Dist. Court Lane County Dist. Court Riley County Dist. Court Ellis County Dist. Court Lawrence Rooks County Dist. Court Finney County Dist. 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Sharpe Hospital STATE OF WISCONSIN (1) Various State Agencies n n r ti INI IN 1 y C n n n r r r n r r r r-r r le~ r r r~ n r r r GILA CORPORATION Consolidated Financial Statements r-. December 31, 2004 r r r-, r f r r t~ r r, r rr r CARPENTER AND LANGFORD, P.C. ell, CERTIFIED PUBLIC ACCOUNTANTS 4407 Bee Cave Road Jean E. Carpenter-Backus, CPA/CFP r'N Bldg. 6, Suite 621 Joe D. Langford, CPA Austin, Texas 78746 James T Ragland, CPA (512) 795-0300 Curtis W Bulgerin, CPA Fax (512) 795-0103 Raven A. Herron, CPA Melinda K. Langford, CPA INDEPENDENT AUDITORS' REPORT Jennifer A.Plylc,CPA July 18, 2005 Board of Directors Gila Corporation 6605 Airport Blvd., Ste. 100 r` Austin, Texas 78752 10 -1 We have audited the accompanying consolidated statement of assets and liabilities of Gila r Corporation as of December 31, 2004, and the related consolidated statements of operations and retained earnings, and consolidated cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. n r-. Management has not adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets," which was effective for fiscal years beginning after December 15, 2001. SFAS No. 142 requires that as of January 1, 2002, goodwill would be subject to impairment testing on an annual basis. Management has not performed the impairment testing required by SFAS No. 142. The effect of this departure from accounting principles generally accepted in the United States of America has not been determined. In our opinion, except for the above referenced departure, the financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of Gila Corporation as of December 31, 2004, and the results of its operations and its changes in net assets for the year then ended in conformity with accounting principles generally accepted in the United States of America. T Z, r-. CARPENTER AND LANGFORD, P.C. Certified Public Accountants I'` e*k AIN GILA CORPORATION CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2004 r~ ASSETS r-^ CURRENT ASSETS Cash $ 4,315,477 ~ Accounts Receivable 1,140,484 r Allowance for Doubtful Accounts (7,000) Prepaid Expense 128,868 Total Current Assets 5,577,829 FIXED ASSETS Fixed Assets 815,338 Less: Accumulated Depreciation (366,703) Net Fixed Assets 448,635 r. OTHER ASSETS Deposits 43,117 Deferred Taxes Payable 20,895 Goodwill 247,507 Total Other Assets 311,519 n TOTAL ASSETS $ 6,337,983 LIABILITIES AND EQUITY r CURRENT LIABILITIES Accounts Payable - Trade $ 227,838 Accounts Payable - Client 3,989,151 Accrued Expenses 417,594 Other Payables 8,101 Current Portion of Capital Leases 70,127 Line of Credit Payable 500,000 Total Current Liabilities 5,212,811 r LONG-TERM LIABILITIES r~ Capital Leases 218,458 Less: Current Portion (70,127) Total Long-term Liabilities 148,331 TOTAL LIABILITIES 5,361,142 EQUITY Common Stock 1,111 Paid In Capital 1,828,026 Retained Earnings (852,296) - TOTAL EQUITY 976,841 r ' TOTAL LIABILITIES AND EQUITY $ 6,337,983 See Auditors' Report and Notes to Financial Statements. n T n r~. GILA CORPORATION r-~ CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS YEAR ENDED DECEMBER 31, 2004 r^ REVENUE $ 9,260,947 EXPENSES r Personnel expense 4,586,308 Occupancy expense 161,202 Travel expense 80,423 General and administrative expense 1,491,409 Interest expense 22,450 Depreciation expense 114,052 Other expense 130,304 r Total Expenses 6,586,148 r-~ Net Operating Income 2,674,799 OTHER INCOME AND EXPENSE Interest Income 4,220 Loss on disposal of fixed assets (9,562) Total Other Income and Expense (5,342) F Net Income before Taxes and Discontinued Operations 2,669,457 Provision for Federal Income Tax (45,890) r-~ INCOME FROM CONTINUING OPERATIONS 2,623,567 DISCONTINUED OPERATIONS Income from operations of discontinued subisdiary (net of applicable 123,185 income taxes of $9,515) Loss on disposal of subsidiary (1,002,218) r (879.,033) NET INCOME $ 1,744,534 RETAINED EARNINGS, BEGINNING OF YEAR 172,902 DIVIDENDS PAID (2,757,750) PRIOR PERIOD ADJUSTMENT (11,982) r° RETAINED EARNINGS, END OF YEAR $ (852,296) See Auditors' Report and Notes to Financial Statements. r^ GILA CORPORATION n CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2004 n OPERATIONS Net Income $ 1,744,534 Adjustments to Reconcile Cash to Net Cash Provided by Operations: Depreciation 125,074 Loss on Sale of Subsidiary 1,002,217 Loss on disposition of fixed assets 9,562 n (Increase) Decrease in: r` Accounts Receivable (582,242) r-. Inventory 4,018 Prepaid Expense 105,109 Deposits (100) Deferred Taxes Payable 69,822 Increase (Decrease) in: Allowance for Doubtful Accounts 3,495 Accounts Payable 114,703 Accounts Payable - Client 3,482,926 Client Deposits (316,026) Accrued Expenses 61,924 NET CASH FLOW PROVIDED BY OPERATIONS 5,825,016 INVESTING ACTIVITIES Proceeds from Sale of Subsidiary 440,000 Purchase of Fixed Assets (464,847) NET CASH FLOW USED BY INVESTING ACTIVITIES (24,847) FINANCING ACTIVITIES Dividends paid (2,757,750) Proceeds from Capital Leases 269,621 Repayments of Capital Leases (51,163) NET CASH FLOW USED BY FINANCING ACTIVITIES (2,539,292) n NET INCREASE IN CASH $ 3,260,877 CASH - BEGINNING OF YEAR 1,054,600 CASH - END OF YEAR $ 4,315,477 See Auditors' Report and Notes to Financial Statements. r, GILA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2004 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUSINESS ACTIVITY Gila Corporation (the Company), d/b/a Municipal Services Bureau and d/b/a Gila Group, is a Texas Corporation and a wholly owned subsidiary of First Partners, Inc., a Delaware Corporation. First Partners is strictly a holding company and conducts no business of it's own. The Company has two primary areas of business focus, government collections and delinquency control solutions for n financial institutions. These consolidated financial statements include Gila Corporation and it's two subsidiaries. One subsidiary, Data Ticket, Inc., was sold during the fiscal year ended December 31, 2004. Information about this sale is included in Note 9. CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, the Company considers all investments purchased with a maturity of three months or less to be cash equivalents. n ACCOUNTS RECEIVABLE The Company utilizes the allowance for doubtful accounts method of accounting for bad debts. This method is a generally accepted accounting principle. It provides for the matching of the expense of r` bad debts against the revenues from which they were generated. Generally accepted accounting principles require the use of an allowance for doubtful accounts to be set up with a provision made each period to expense this asset contra account, based on the Company's experience rate of bad r- debts to sales. As bad debts occur, they are charged to this account rather than an expense account. n FIXED ASSETS Fixed assets are stated at cost. Depreciation is computed principally by the straight-line method over the estimated useful lives of the respective assets. DESCRIPTION OF LEASING ARRANGEMENTS The Company leases office space in Texas. This lease is classified as an operating lease. INCOME TAXES Gila Corporation is a qualified subchapter S subsidiary of First Partners, Inc. for Federal income tax purposes. Therefore, the Company does not pay Federal corporate or deferred income taxes on its taxable income as it is not treated as a separate corporation under Federal tax law. Instead, all its tax items are treated as belonging to the parent company. Data Ticket, Inc. and Busch Management Systems, Inc. are both organized as C Corporations, and are subject to Federal income tax. Deferred income taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. n GILA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS n December 31, 2004 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) ADVERTISING The Company follows a policy of charging the costs of advertising to expense as incurred. - Advertising expense was $18,872 for the year ended December 31, 2004, and is included in General and Administrative expense in the financial statements. CONCENTRATION OF CREDIT RISK The Company places its temporary cash investments, which at times exceed federally insured limits, with a financial institution. This potentially subjects the Company to a concentration of credit risk. The Company manages this risk by placing its temporary investments with high quality financial institutions. USE OF ESTIMATES . The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and. liabilities and disclosure of contingent assets and r` liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 - FIXED ASSETS n Depreciation expense was $125,074 for the year ended December 31, 2004. Depreciation expense was $114,052 for continuing operations, and $11,022 for discontinued operations. The major classifications of fixed assets and their respective depreciable lives are summarized below: Years _ Classification Computer Equipment $ 201,701 5 Phone Equipment 166,046 5 Software 150,731 5 Furniture & Fixtures 141,758 7 Automobiles 8,084 5 Leasehold Improvements 128,703 5 Other 18,315 5 815,338 n Less: Accumulated Depreciation (366,703) $ 448.635 NOTE 3 - OPERATING LEASES The Company leases office space under a 75 month operating lease. The following is a schedule by years of future minimum rental payments required under the lease as of December 31, 2004: T Year ending December 31: n 2005 $ 191,583 2006 203,747 2007 204,600 2008 213,978 2009 196,928 2010 17,903 GILA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2004 r` NOTE 4 -PENSION PLAN The Company has a 401(k) plan covering all qualified employees. The qualifying period is one year. The Company matches 10% of employee contributions up to a total of 6% of qualified earnings. Pension expense for the year ended December 31, 2004 was $6,012. Of this amount, $4,170 is included in personnel expense in the financial statements and $1,842 is included in income from discontinued operations. r` NOTE 5 - GOODWILL The Company recorded goodwill in the amount of $1,523,964 as a result of the purchase of Data Ticket, Inc. and Busch Management, Inc. SFAS No. 142 requires management to subject goodwill to impairment testing on an annual basis and decrease the carrying amount of goodwill by the amount of impairment. Management has not performed the required impairment testing. The effect of this departure from accounting principles generally accepted in the United States of America has not been determined. NOTE 6 - LINE OF CREDIT The Company has a line of credit in the amount of $500,000 with Plains Capital Bank. The line of credit is secured by accounts receivable and accrues interest at the prime rate. Maturity date is January 30, 2006. As of December 31, 2004, the outstanding balance on the line of credit was $500,000. ell, NOTE 7 - LONG-TERM DEBT BALANCE CURRENT LONG-TERM AT 12/31/04 PORTION PORTION Capital Lease - Windows Software/Licensing, r. $1,718/month including interest of 13.9% $ 35,806 $ 16,666 $ 19,140 Capital Lease - Equipment & Fixtures, Due $4,738/month including interest of 6.57% 168,901 47,154 121,747 Capital Lease - Computer Equipment, Due n $678/month including interest of 16.7% 13,751 6,307 7,444 Totals $ 218.458 $ 70.127 $ 148,331 Maturities of debt are as follows: December 31, 2005 $ 70,127 December 31, 2006 76,263 -December 31, 2007 54,425 December 31, 2008 17,643 $ 218.458 r GILA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ell December 31, 2004 NOTE 8 - INCOME TAXES n Net deferred tax assets consist of the following components as of December 31, 2004: Loss carryforwards: Net Operating Deferred Loss Tax Asset Busch Management, Inc. deferred tax asset Available as of December 31, 2003 $ 171,242 $ 66,785 Used year ended December 31, 2004 (134,970) (45,890) Deferred tax carryforward to future tax years $ 36.272 $ 20.895 NOTE 9 - DISCONTINUED OPERATIONS The Company sold the stock of one of its subsidiaries, Data Ticket, Inc., during the fiscal year ended December 31, 2004. The sale resulted in a loss of $1,002,218, which was reported on the Company's income statement. Data Ticket, Inc. had net income of $123,185, which is reported as income from discontinued operations on the Company's consolidated income statement. NOTE 10 - POSSIBLE UNASSERTED CLAIM By letter dated October 1, 2003 addressed to the Company, the Business Software Alliance ("BSA") asserted possible instances of the Company's nonconformance with licensing requirements involving the proprietary software of certain companies represented by the BSA. This BSA correspondence offered the r Company the opportunity to conduct a review of its software licenses. The Company undertook the review and reported the results to BSA by letter dated November 20, 2003. The BSA, by letter dated January 26, 2004, asserted that the Company had infringed on software copyrights of certain of its member companies. The BSA and the Company have conducted numerous settlement discussions through the parties' respective counsel, and the Company has tentatively agreed to settle the claims asserted by the BSA, subject to review and agreement on the form and content of a written settlement agreement, for the payment of $60,000 and the taking of certain nonmonetary actions related to the Company's computers and its software licensing activities. The parties have been unable to agree upon certain key provisions of the proposed settlement agreement. As a result, the Company's legal counsel believes it is premature to evaluate at this time the merits or outcome of the BSA's claim, the Company's exposure or potential liability, if any, or a range of the amount any potential loss the Company may face, if it should ultimately n have any liability. Management has elected to accrue $75,000 expense related to this legal action, which is included in other expense in the financial statements. r` NOTE 11 - PRIOR PERIOD ADJUSTMENTS The Company had a prior period adjustment of $11,982 related to an income tax adjustment of its subsidiary, Data Ticket, Inc. The adjustment was made to correct the carrying amount of the deferred tax asset. n n n n Certificate of Account Status - Letter of Good Standing Page 1 of 1 TExAs COMP'TROLLER OF I`UBLic...Acco riTs CAROLE 1tC:C TON STRAYHORN * COMPTROLLER * AUS'fIN, TEXAS 8774 r" August 30, 2005 r` CERTIFICATE OF ACCOUNT STATUS THE STATE OF TEXAS COUNTY OF TRAVIS I, Carole Keeton Strayhorn, Comptroller of Public Accounts of the State of Texas, DO HEREBY CERTIFY that according to the records of this office GILA CORPORATION is, as of this date, in good standing with this office having no franchise tax reports or payments due at this time. This certificate is valid through the date that the next franchise tax report will be due May 15, 2006. This certificate does not make a representation as to the status of the corporation's Certificate of Authority, if any, with the Texas Secretary of State. n This certificate is valid for the purpose of conversion when the converted entity is subject to franchise tax as required by law. This certificate is r'` not valid for the purpose of dissolution, merger, or withdrawal. r' GIVEN UNDER MY HAND AND SEAL OF OFFICE in the City of Austin, this 30th day of August 2005 A.D. n Carole Keeton Strayhorn Texas Comptroller Taxpayer number: 17426059089 File number: 0119148800 n Form 05-304 (Rev. 02-03114) 8/30/2005 http://ecpa.cpa.state.tx.us/coa/servlet/cpa.app.coa.CoaLetter Corporations Section 0 Geoffrey S. Connor 00k P,O.Box 13697 0 In Assistant Secretary of State Austin, Texas 78711-3697 w X x Office of the Secretary of State n The undersigned, as Secretary of State of Texas, does hereby certify that the document, Articles Of Incorporation for GILA CORPORATION (filing number: 119148800), a Domestic Business Corporation, was filed in this office on May 02, 1991. n It is further certified that the entity status in Texas is active. n n r n In testimony whereof, I have hereunto signed my name officially and caused to be impressed hereon the Seal of State at my office in Austin, Texas on August 14, 2003. Geoffrey S. Connor Assistant Secretary of State /r Come visit us on the internet at http://wtivw.sos.state.tx.us/ PHONE(512) 463-5555 FAX(512) 463-5709 TTY7-1-1 Prepared by: Delores Eitt .V ~ ~ ~ ~ o. 1 1 1 1 1, 1 1 rr A PRIVATE CORPORATION 616-0166 (512) 454-4757 P .O. BOX 16755 / AUSTIN, TX 78761-6755 (800) 8AM - 9PM MON-FRI 8AM - 2PM SAT $$RD25$$ To pay using your Visa or Mastercard please visit: http://pay.muniserv.com** $$RD31$$ MUNICIPAL SERVICES BUREAU WARRANT RESOLUTION DIVISION PO BOX 16755 $$NAME2$$ AUSTIN TX 78761-6755 $$NAME3$$ /787616755990/ $$NAME4$$ Cc Reference: $$RD31$$ Total Fine Amount: $$$RD41$$ Amount Paid: $ DETACH UPPER PORTION AND RETURN WITH PAYMENT PLEASE INDICATE REFERENCE NUMBER ON YOUR CHECK Dear $$RD30$$: URGENT: The following remains outstanding: r$$DTL11$$ $$DTL12$$ $$DTL13$$ $$DTL14$$ $$DTL15$$ $$DTL16$$ $$DTL17$$ $$DTL18$$ $$DTL19$$ $$DTL110$$ $$DTL111$$ $$DTL112$$ $$DTL113$$ $$DTL114$$ $$DTL115$$ $$DTL116$ $$DTL117$$ $$DTL118$$ $$DTL119$$ r $$DTL120$$ $$RD30$$, please take this matter seriously. Municipal Services Bureau, a private r- corporation, has been authorized to assist you in resolving your case. To prevent the possibility of the r^court pursuing arrest, take one of the following steps immediately: Return this notice to the OR For municipal court cases only, address above with your if you wish to post bond and payment for the amount shown request a court date, contact this above. office at (512) 454-4757 or r, 1-800-616-0166 for instructions. The court will approve or deny your request. Sincerely, r' Warrant Resolution Division r" Por Favor ver el reverso. nn I -00 ] P~CF(1PP aoplok ~l1 (512) 454-4757 A PRIVATE CORPORATION (800) 616-0166 r~ P.O. BOX 16755 / AUSTIN, TX 78761-6755 8AM - 9PM MON-FRI 8AM - 2PM SAT ' To pay using your Visa or Mastercard please visit: http://pay.muniserv.com** r- $$RD25$$ $$RD31$$ MUNICIPAL SERVICES BUREAU WARRANT RESOLUTION DIVISION PO BOX 16755 $$NAME2$$ AUSTIN TX 78761-6755 $$NAME3$$ /787616755990/ $$NAME4$$ 9 Afi$$$ r-, Reference: $$RD31$$ Total Fine Amount: $$$RD41$$ Amount Paid: $ r- DETACH UPPER PORTION AND RETURN WITH PAYMENT PLEASE INDICATE REFERENCE NUMBER ON YOUR CHECK r' . $$DTL11$$ $$DTL12$$ $$DTL13$$ $$DTL14$$ $DTL15$$ $$DTL16$$ $$DTL17$$ $$DTL18$$ r, $$DTL19$$ $$DTL110$$ $$DTL111$$ $$DTL112$$ $$DTL113$$ $$DTL114$$ $$DTL115$$ $$DTL116$$ 10-1 $$DTL117$$ $$DTL118$$ $$DTL119$$ $$DTL120$$ Dear $$RD30$$: You have not responded as required to our last correspondence concerning your outstanding case. At the sole discretion of the court or applicable law enforcement authorities, you may be risking arrest and r. possible additional costs. ell, Send your payment to: Municipal Services Bureau Warrant Resolution Division P.O. Box 16755 r- - Austin, Texas 78761-6755 You may contact us at 512-454-4757 or 1-800-616-0166 to discuss payment. For municipal court cases only, if you wish to post bond and request a court date, contact this office for instructions. The court will approve or deny your request. Municipal Services Bureau, a private corporation, has been authorized to assist you in resolving this matter. Sincerely, r Warrant Resolution Division Por Favor ver el reverso. nm_nn? RPCFCIR~ r• r-, A PRIVATE CORPORATION (512) 454-4757 P.O. BOX 16755 / AUSTIN, TX 78761-6755 (800) 616-0166 8AM - 9PM MON-FRI 8AM - 2PM SAT $$RD25$$* To pay using your Visa or Mastercard please visit: http://pay.muniserv.com** $$RD31$$ MUNICIPAL SERVICES BUREAU WARRANT RESOLUTION DIVISION PO BOX 16755 $$NAME2$$ AUSTIN TX 78761-6755 $$NAME3$$ /787616755990/ r-, $$NAME4$$ r-. $$~BCJ$$ Reference: $$RD31$$ Total Fine Amount: $$$RD41$$ T Amount Paid: $ DETACH UPPER PORTION AND RETURN WITH PAYMENT PLEASE INDICATE REFERENCE NUMBER ON YOUR CHECK Dear $$RD30$$: r, j According to our records, you have received yet continually ignored our past correspondence sent to you regarding your outstanding warrants. Because of this, Municipal Services Bureau may forfeit its ability to r help you resolve these issues with the court. A RECENT DECISION HAS BEEN MADE BY THE COURT TO AGGRESSIVELY PURSUE ALL OUTSTANDING WARRANTS. Their goal is to give you every opportunity to resolve your obligation voluntarily and has contracted with our company to contact you regarding this matter. YOU ARE RUNNING A GREAT RISK OF ARREST. The court may, at its discretion, refer a warrant to authorities in the jurisdiction in which you reside and request that it be served immediately at home or work. You have been advised of the costly and embarrassing consequences regarding your noncompliance. Why risk so much when this can be resolved immediately. IMMEDIATELY UPON RECEIPT OF THIS LETTER, CONTACT THIS OFFICE AT 512-454-4757 el,, OR 1-800-616-0166 TO AVOID FURTHER COLLECTION ACTIVITY OR POSSIBLE ACTION BY THE COURT OR LAW ENFORCEMENT AGENCIES. Sincerely, r-. Warrant Resolution Division r• r' $$DTL11$$ $$DTL12$$ $$DTL13$$ $$DTL14$$ $$DTL15$$ $$DTL16$$ $$DTL17$$ $$DTL18$$ $$DTL19$$ $$DTL110$$ $$DTL111$$ $$DTL112$$ $$DTL113$$ $$DTL114$$ $$DTL115$$ $$DTL116$$ $$DTL117$$ $$DTL118$$ $DTL120$$$ r' Por Favor ver el reverso. nn~_noI P.RCF(l~~ T c~ C •J •J 'J J Ki ~ M M r O ut o °a a o a ° °o, .J r4 G p p rJ O O G'i C7 i 8 0 c o 0 o O o o CD 0 ~ sT5 M ~3 !mil O rp N O ~r/ C3 to w co ,ri ~ w r n'i r O o cs ILO to ~ (,0 ui rn m r~ J Sl'i pp W ~ O O ~ O ~ ~ ~ 3 O O ~ O 34 4-3 c cv e+i N N cv m cn r 14 ~J r1 O co O U U U lz O 6) ~:s 4-4 4J4-) 97 0 r.; r c n ro r s M ~ r .1 s~ it H 4-3 d• O -i ^J N r-I ri r-i r1 O O O O O '0 0 O O O O OO O O O O O r. rt O On r O; O OO O U S .J tti ~ v cn ~ ~ ~ O ft2 a re s t rt ~ a- f2 ~P E- / r-# +--1 ~ ~ ~ t~'t J ski rZ 1 ra ~-l 0-1 W -14 w m Z-P d--> ° 0 C) E-4 H (a to :E~ q-4 La d) cc, W U2 t~ r r clt ; a~ ra t i aa' uz ca' w vi w ~d Wz tz &4 ~ YY >4 C s 3 O W £ U ~ w 1 z ~ m n m n n m n ut g g t-! rH, Q E-4 0 >e p Y x1407 ~ w RS C7 z 0 cc~ ~ v-i 'a t ct ~ w m OD tr, 65 ~ n c~ o 0 0 J ,J J J J n c4 f-, QO 10 6~ 1! 1~ Ci tf] N m M N m M~ M +n lf• r-i .-t N O G, co a) iT) `,1 h ,r '9 u7 N N N N ri O M IN J r!] O O O O O O O O O O O O O G O O O O OC E O O O O C O O O O O O O O O G O C C Lpi C O O O O O O O O d. 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M M M M tf7 <r c ti! t ifa) f~ <Yl !*p~}~i Gl m 6'71 01 n 4l Gi G1 r- r- Ol OGl~ f6il~ .T 4G~~ d\ bl 6~ H 54 L~ ~ ~ i~ ~ ~ H H H H H r~C SG X .~C ~L aka. rte' H ~2 ~J J ..i .s ~.J .J .4: ,h J t f'1 U) ! b ~ C 1 4l ~ t r7 1 ~ i ° i a , v J 1 ~ El J a 0 0 c~ `J 0 ~ J v m N 0 M iS7 C7 -1 CIA CD N u a rt4 P w J H w ~ 0 a, p ~ f 04 O O t E-1 H w Ei v MUNICIPAL SERVICES BUREAU 6505 AIRPORT BLVD. SUITE 100 n AUSTIN, TX 75752 ANALYSIS HISTORY - Jan 10, 2006 LOCK COUNTY CLERK OF COURT 123 SE 6TH ST ROOM 123 rli~nr#~ 000001_7 r FT. LOCK, FL 35555 Attn. XXXXX XXX r NF A BUSINESS CDLLi; icNS I,I(UiDITY CCW - CZNG'E= # AVM: !^"4 - PERIOD $ AVE L'URR $ TO DATE NET GROSS TO RATE % # AAOUNT % PIF AGE. # Jan 2006 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 Fx , 2005 0.00 n_M d_dn n9. n.oo (A n% 0_00 n% n cf_nn 0.% n n 0. Do CA G 0.00 01 G 0 ~ Nov 2005 G 0.00 0.00 O.uC) O% 0.00 Oa O% Cut 2005 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 Sep 2005 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 p„n 2005 d 0 00 n:CK7 0-00 n% O,dd f4: 09% 0zrn C- 0 0i00 4% 0 n Jttl 2005 G G. Gd 0.00 0.00 0% 0.00 01 0% 0. CO 0% G 0.00 (A 0 C Jun 2005 306 51701.95 168.96 0.00 0% 3232.65 5% 6% 711.20 22% 290 69342.88 134% 15 1889 May 2005 0 0.00 0.00 0.00 0% 0,00 0% 0% 0.00 0% 0 0.00 0% 0 i~ Anr 2005 115:1 53317.25 1 F9 .74 0.00 0% 1713.40 F% MR-27 27% :iiR R{117F_? 1id% 1F 1R4.i Mar 2005 302 48128.00 159.36 0.00 G% 3025.35 5% 6% 665.57 22% 2f?7 64126.45 133°% 16 1914 f Eeb 2005 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 Jan 2005 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 T)- 2004 n no n_00 O:n nA Cl.O0 ,A n% 0200 C n n,rn n% n n Ilov 2004 548 98750.00 180.20 0.00 G% 10167.30 8% 1C 2236.31 22% 508 127630,,.00 129% 42 17 Cat 2004 428 64022.25 149.58 0.00 0% 11817.15 14% 18% 2599.78 22% 375 77829.50 122% 55 1789 Sep 2004 621 95461.00 153.72 0.00 0% 12100.15 10% 13% 2662.01 2296 565 120750.05 126% 62 1837 A, v4 2004 65F 3indtl_50 141.31 0.00 n% 10110_M R% 11% 77?4_Ir 22% GM 1?02FR_73 1?3% 4F, ISM Jul 2004 0 0.00 0.00 0.00 0% 0.00 m O% 0.00 0% 0 0.00 0% G 0 Jun 2004 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 May 2004 0 0.00 0.00 0.00 096 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 i-+ Ap, 2004 471 FR24:i._00 144.83 n_(',0. 0% 36,?7_CIO 118.. 14% ?11R_11 ?2% 431 R5R77.70 1?F% 40 1SM Mar 2004 0 0.00 0.00 0.00 0% 0.00 m G% 0.00 0% 0 0.00 Cc% G 0 Eeb 2004 344 41464.27 120.54 0.00 0% 4723.60 9% 1194 1039.20 22% 319 53435.17 129% 24 1904 r Jan 2004 1094 151042.00 138.06 0.00 0% 34837.45 1896 23% 7664.29 22% 969 177215.80 117% 128 2000 F),- c. 200" 1174 F4?26_00 1F3.4 F, n_0n 0% 4id7;_ 5 S`m FR% 95F4_20 229. 220 4d 071.20 F3% 170 437 Nov 2003 337 55164.80 163.69 0.00 Cr-, 40133.35 578 73% 8829.42 22% 173 33418.07 61"% 170 453 Ckt 2003 675 115504.30 171.12 0.00 0% 75588.17 51% 65% 16629.56 22% 390 78274.75 68% 300 477 Sep 2003 666 113926.35 171.06 0.00 0% 79303.82 54% 70% 17446.96 22% 358 71418.23 63% 321 446 tiro ?00i Ft32 *457i7.0n 153.0:1 0.0+7 0% F57R5.53 54% s-3% 1447'1.00 2?% ii? F04R4_F3 Fi% ?R5 4.54 221 43905.50 193.42 C,. C01 0% 29213.80 52% 67% 6427.06 22% 123 29312.62 67% 105 470 ' Jul 2003 Jun 2003 309 56028.00 181.32 0.00 0% 38692.60 54% 69% 8512.46 22% 167 35757.00 64% 146 516 May 2003 870 153823.40 176.81 0.00 0% 106078.47 54% 69% 23337.48 22% 456 96915.32 63% 433 411 Apr 2003 629 104654.25 166.38 0.00 G% 83470.74 62% 80% 18363.73 22% 312 55834.89 53% 340 410 Mar 2003 771 122213.40 158.51 0.00 0% 93746.18 60% 77% 20624.44 22% 368 70717.45 58% 421 421 r-•, r^~ HISTORY ANALYSIS - LOCK COUNTY CLERK OF COURT Page 2 OWN NEW BSISINESS COLLECTIONS _ - LIgJIDITY CCNM CANCELTED AVE PERIOD # $ AVE CURB 96 TO DATE NET GROSS TO DATE # AMOUNT.' % PIF AGE Feb 2003 782 135279.55 172.99 0.00 0% 103092.90 59% 76% 22680.67 22% 664 130367.32 96% 425 478 Jan 2003 747 124774.25 167.03 0.00 0% 97420.10 6144 18% 21432.57 22% 337 67611.08 54% 432 430 Dec 2002 777 125474.55 161.49 0.00 0% 98501.75 61% 79% 21670.74 22% 358 68609.86 55% 439 407 Nnv ?M? R4R 141 166.60 0.(ron nos 106773.16 .5% 758 25281.72 228 41'4 R0715. 6n 578 446 4,15 Oct 2002 687 111934.75 162.93 0.00 0% 85299.64 59,% 7626 18766.05 2246 326 62054.79 55- .3376 445 Sep 2002 1144 201124.60 175.81 0.00 0$ 153634.61 60% 76% 33799.95 22'6 565 106271.58 5346 604 455 Aug 2002 879 138395.05 157.45 0.00 0% 108846.70 61% 79% 23946.65 22% 405 68996.67 50% 493 453 Jul 2002 12,09 101115.°~tt 156_Cr2 n.ro - 1- --.11 71- 11415,79 224 658 122914.2; M 657 497 ^ Jun 2002 1596 252621.00 158.28 0.00 06 180167.78 56% 7145 39637.26 22% 827 164415.03 65% 796 509 May 2002 1068 168438.80 157.71 0.00 0% 109547.52 51% 65% 24100.66 22% 596 128368.46 76% 496 565 Apr 2002 931 156207.30 167.78 0.00 0% 107887.22 54% 69% 23735.36 22% 505 112758.90 72% 437 568 Mar 2002 1f4R 2?4514.)0 163.62 0.00 n4 IAOSWt_5.5 50% 054: 4776.R1 22% f42R ?nuR64 75% 745 5144 Feb 2002 1666 300076.05 180.12 0.00 0% 193067.44 50% 64% 42466.08 22% 888 197228.98 663 808 656 Jan 2002 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 Dec 2001 0 0.00 0.00 0.00 0%- 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 Nnv 2001 0 n_w n_nn n_(xl n8 0_M "A M. 0.00 n% n n.nn M n 0 Ok;t 2001 0 0.00 0.00 0.00 0% 0.00 Cos 046 0.00 0% 0 iIj.00 CA 0 0 ry. Sep 2001 0 0.00 0.00 4.00 0% 0.00 e% n% 0.00 045 n 0.00 o% o 0 Aug 2001 749 135109.40 180.39 0.00 0% 89841.79 52% 66% 19765.17 22% 389 86234.22 6444 378 660 A0 ?001 706 1?R666.7:i 1R2.25 n_(U.) - (A 7f; 376.16 478 608 16314.63 228 181. R3744.40 7n& 128 710 Jun 2001 1199 238150.25 198.62 0.00 0% 118141.46 394 50% 25991.19 22% 753 188361.66 79% 467 973 May 2001 1065 204950.00 192.44 0.00 046 84492.75 32% 41% 18588.40 22% 757 178827.99 87% 326 1362 Apr 2001 568 112301.56 197.71 0.00 0% 43507.52 30% 39% 9571.52 22% 396 100917.21 90% 173 1598 Mar 90nl l?R6 1553R4 .35 121.23 n_M 07, 17R72_?5 'A 118 K'4:i1.R4 22& 11RR 1840561.44 11874 101. 1451 Feb 2001 707 94778.72 134.06 0.00 0% 32838.74 27% 35% 7224.52 2245 536 89659.57 951 179 1893 Jan 2001 929 143538.50 154.51 0.00 0% 136170.33 74% 95% 30033.84 2244 247 49211.39 34% 693 354 Dec 2000 49 7652.00 156.16 0.00 0% 6318.50 6444 83% 1404.60 22% 17 3312.80 43% 33 432 Nn„ ?OM n n.M 0.40 n. r,0 CA r.nn m 0% r,-w 0% 0 0 or, 0% 0 6 Crt 2000 0 0.00 0.00 0.00 0% 0.00 Cols 0% 0.00 oi~ 0 0.00 0% 0 0 t Sep 2000 0 0.00 0.00 0.00 0.00 C]as 0% 0.00 0% 0 0.00 446 0 4 Aug 2000 0 0.00 0.00 0.00 0% 0.00 % 0% 0.00 0% 0 0.00 0% 0 0 T„1 2000 n n_nn n.nn n_nn 0% n_nn ) n_nn 11 n n.nn 0% n n Jun 2000 0 0.00 0.00 0.00 0=6 0.00 0% 0-% 0.00 046 0 0.00 Q% 0 0 May 2000 41 4811.50 117.35 0.00 0% 3465.00 56% 72% 789.22 23% 15 2978.85 62% 26 573 Apr 2000 175 23576.75 134.72 0.00 0% 20457.82 6746 87% 4641.17 23% 58 9311.81 39% 122 358 1+R~r 2000 0 0,00 0.n) 0.04 f14 ru) r~ AA )s no (A n n. ('fl M rt 0 Feb 2000 387 49501.50 127.91 0. u) G% 47912.58 754; 97% 10909.03 23% 93 15681.94 32% 201 332 Jan 2000 1344 220588.50 164.13 0.00 0% 190418.52 6744 86% 43123.18 23% 450 86569.07 3946 915 375 Dec 1999 1041 115020.61 110.49 0.00 0% 51386.61 35% 45% 11631.60 2346 774 93860.20 8296 282 2635 M.. 1333 447 503R5.77 114.06 n_M OS 11:115.23 4R8 618 7063.53 ?'18 243 iiMR_64 el546 212 1064 Cct 1999 1181 179512.05 152.00 0.00 0% 97570.94 424 54% 22011-.02 23% 727 133560.61 74% 476 1363 Sep 1999 475 48446.84 101.99 0.00 094 7625.85 1246 16% 1726.29 23% 414 54481.54 11244 64 2711 Aug 1999 928 120354.75 129.69 0.00 0% 91570.38 59% 7646 20846.84 236 427 53180.40 40- 529 1166 ,7111 1999 9(), 4356? .75 103, 1-4 t7. 00 (14< 55880.23 46°,c &A 326°_49: `_+0 2A 502 56237 ,14 609- 411 19-,,2 Jun 1999 575 82343.81 143.21 0.00 0% 75016.72 70% 91% 17063.63 23% 184 _7125.85 33% 407 423 May 1999 460 71764.05 156.01 0.00 0% 61536.64 66% 86% 13984.01 23% 145 26713.38 37% 322 423 Apr 1999 2233 327475.80 146.65 0.00 0%- 61379.52 15% 19% 13879.74 23% 1902 262091.36 80% 390 2446 Pt- 13143 1542 ?434R7.52 161.'73 0_M (A 207451.6% 1.48 Ri45 47?:13.50 714x 5111, 3R673.R5 408 101,1 412 Feb 1999 994 149625.60 150.53 0.00 0% 89150.20 4676 60s 20383.70 23% 1086 151286.55 101 581 557 Jan 1999 274 40309.70 147.12 0.00 Oa 2408.25 546 6% 541.25 22% 220 33709.85 848 56 37,04 Dec 1998 0 0.00 0.00 0.00 0% 0.00 0& 0% 0.00 0% 0 0.00 0% 0 0 Nnv l<34R /n? 42R02.61 141.7-1 n.w 08 6073.75 Sib 141k 1385.10 218 ?C 55364.11 R48 114 9237 a-t 1998 2187 282529.84 129.1-9 0.00 C~% 36607.73 1045 13'6 8385.19 23% 2856 235856.89 6316 318 2553 Sep 1998 1042 142395.82 136.66 0.00 016 16083.13 9% 11% 3669.34 23% 810 105360.75 74% 256 2739 r• 00% HISTORY ANALYSIS - LOCK COUNTY CLERK OF COURT Pa 3 NE"v3 BUSINESS COLLECTIONS LIQUIDITY W.. fQ~M CX C'ELLED # AVE PERIOD v~m# $ AVE CURB % TO DATE NET MOSS TO DATE % # X4 XM ~ PIF ACE Aug 1998 1708 248062.55 '._45.24 0.00 0% 13666.95 4% 6% 3112.32 23% 1269 188865.70 76% 482 3464 Jul. 1998 2736 442670.49 161.79 0.00 0% 211564.91 37% 48% 48362.29 23% 1454 213038.78 48% 1373 1151 Jun 1998 1144 169556.70 148.21 0.00 0% 37096.10 17% 22% 8477.98 23% 906 127531.60 75% 259 2246 4.57 1412 ~ *1(-.-,y :39R 11124 l"!?l a7 _Fn 1.5..1_20 0-00 M 7ia?1.47 4"i. lf; 14371 _77 ?i% W45 `a7451 _Q7 ~771 Apr 1998 197 32700.88 165.99 0.00 0% 16827.50 40% 51% 3845.65 23% 97 15788.63 48% 106 652 Mar 1998 0 0.00 0.00 0.00 01q 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 Feb 1998 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 096 0 0.00 0% 0 0 .7- 19AR 0 n. n0 0:00 0.00 0% O.On r,% CA r6,ru, 6% 0 n,OcS 0% n 0 Dec 1997 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 T-Z5 0 0.00 0% 0 0 Nov 1997 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 Oct 1997 628 94434.78 150.37 0.00 0% 50188.24 41% 54% 11642.82 2306 308 46206.54 49% 331 676 Sip 1997 481 1.-i113_61 139.90 0.00 m :iS945_{sR 442 57% R241_59 23& 204 290F,4.91 4CA ?52 544 Aug 1997 528 78371.93 148.43 0.00 0% 45862.24 45% Sys 10509.29 23% 216 34599.47 44% 320 506 Jul 1997 392 61677.72 157.34 0.00 0% 32605.06 41% 53% 7467.51 23% 201 32827.89 53% 197 525 Jun 1997 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 0% 0 0.00 096 0 0 Mav 1997 F6SF 9700R_30 1417-AR 0.00 0% 4 2i?1 .7? i4& 44& 9fi95.4R ?>-i% 171 5t=:495.9F~ 'i0? 107'i- Apr 1997 0 0.00 0.00 0.00 0% 0.00 0% Ohs 0.00 0% 0 0.00 0% 0 0 r 1997 0 0.00 0.00 0.00 0% 0.00 0% 0% 0.00 0% 0 0.00 0% 0 0 Feb 1997 314 45012.59 143.35 0.00 0% 19374.31 33% 43% 4429.27 23% 168 26140.78 58% 156 1290 ,7- 1997 31 i 434?R_0? 13R_75 0.00 0% 20477_52 47% Q~RF,_0(1 ?.'i"-& i:x 21' 9f:_: x"7 43 1t<7 14S6, Dec 1996 30^0 45117.86 146.49 0.00 0% 21860.61 37% 49% 5019.45 23% 157 24054.25 53% 158 1056 Nov 1996 357 52159.07 146.10 0.00 0% 22981.56 34% 44% 5272.68 23% 182 28531.24 55% 182 1201 Oct 1996 1025 149257.61 145.62 0.00 0% 68560.24 35% 46% 15720.41 23% 605 83953.37 56% 437 1016 G°T- iGGf X87 -0753i.00 i56.53 0.00 05R Aln70 95 32-1 4i¢ icON 97 ?'2& h91 (?515.7E 5sq 11:3 i35i Aug 1956 1159 1164/3.02 152.26 0.00 0% 68799.21 30% 39% lb/78.99 23% /59 1093/4./l 62% 433 1115 Total 62168 9628238.38 154.87 0.00 0% 5012380.77 40% 52%1118483.36 22% 38678 6757880.55 70% 25610 1219 r^ n n r^ 0^ MU I CI P L SERVICES BUREAU /"t 6505 AIRPORT BLVD. SUITE 100 1` AUSTIN, TX 78752 DETAILED t! T ANALYSIS LOCK COUNTY CLERK OF COURT Jan 10, 2006 123 SE 6TH ST ROOM 123 Client# 000001-7 FT. LOCK, FL 35555 Attn. xxxxx xxx r NEW BUSINESS RET(JRNLD PERIOD 1 # AVE $ AVE PiF (,'(.1"d"1 AVE 1,q)% Jan 2006 0.00 0 0.00 0.00 U 0.00 0 0.00 0.00 0 0.00 0.00% Dec 2005 0.00 0 0.00 0.00 0 0.00 0 0.00 0.00 0 0.00 0.00% !,bv 2005 0.00 0 0.00 0.00 0 0.00 0 0.00 0.00 0 0.00 0.00~ tk t LddS 0.00 0 0.00 0.00 0 0.00 0 0.00 0.00 0 0.00 0.00% Sep 2005 0.00 0 0.00 0.00 0 0.00 0 0.00 0.00 0 0.00 0.00% Aug 2005 0.00 0 0.00 0.00 0 0.00 0 0.00 0.00 0 0.00 0.00% P, 0.00 0 0.00 0,00 01 0.(11 0.00% ,3t_L 2005 0.0!? 0 0.00 0.00 J. 2005 51701.95 306 168.96 3232.65 20 161.63 15 711.20 69342.88 290 239.11 6.25% May 2005 0.00 0 0.00 0.00 0 0.00 0 0.00 0.00 0 0.00 0.00% Apr 2005 59917.25 353 169.74 3719.40 22 169.06 16 818.27 80176.25 338 237.21 6.21% PL,_, 2005 48128.00 302 159.36 3025.35 18 368.07 16 EA5,57 F,4126.45 287 223,44 6.29% Feb 2005 0.00 0 0.00 0.00 0 0.00 0 0.00 0.00 0 0.010 0.00% Previous 9471001.57 61207 154.745002403.37 32180 155.45 242021116288.32 6544234.97 37763 173.30 52.82% 9630748.77 62168 154.915012380.77 32240 155.47 242491118483.36 6757880.55 38678 174.72 52.05% r w m al 1 Caa as as C3 CD ao C) (D a0 t} U f 00 tna 00 ad 00 C) CD as rri nj 1 M OD C° O O G7 LO LO M M LO o LO (D c-I r-1 J C s'-I N c--1 c-I ~.D C'w co tf) a Co ~ 6r1 l ~ i -4 k t •H s `^J F-t U i O t 9) E a) 4-) 1 tU t9 t4 t4 Q0 w tO lfl ~4 l4 l9 l4 st3 I O O O O O O a C) . 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SUITE 100 r- AUSTIN, TX 78752 TAB` EIS " F ACCOUNT Account Number: 000017-8 Invoice Number: 19016 SMALLTOWN MUNICIPAL COURT Invoice Date: 06/30/05 BOX 1178 SMALLTOWN, MT 55555 Attn. XXXXX XXXXXXX For billing inquiries: 512-372-9995 r^ Previous Balance Invoices #18561 05/31/05 459.14 #18092 04/30/05 2946.03 #17592 03/31/05 3046.00 PMT 06/24/05 1232.62 Balance Forward. 5218.55 New Activity invoice I--nount Due Us : 496.75 invoice Amount Due You: 2207.59 T Remittance Summary Total Payable Upon Receipt: 5715.30 Our Check Enclosed: 2207.59 r^' r rrrr-r-r`• I 010 r' i" l' r-. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - To insure prnrFr cr `1i t, n_iaasP ri<=tanh this nrri.ion and raturn wit.n ramittane^a_ Remittance Document Account Nmlber: 000017-5 ~wmriV>13I~NICIPAL COURT 7nivoicc 13~1mh2r. 1gQ"i F ROX 117,3 Sry~hT,20GLn~, i i 5555 Invoiop Date. 06/301'0a Please remit payments to: Amount Due: $5715.30 Municipal services Bureau I 6505 Airport Blvd Suite 100 I AUSTIN, TX 7$752 I Prrount P-nclosead: r', op" O Ook tl~l r r r r r r T w O O O Q w m p p g o 0 0 0 0 0 o a o 0 0 0 o C o 0 w Co o o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O (D N O R m O o o o o o o 0 o o o o o o o o o o o r' oO O -P 8 r r (T }ii ~ r N O O O 0 0 0 0 0 0 0 0 ~I 0 0 0 0 0 0 0 ,-i 0 0 0 Ul 0 0 0 0 0 0 0 0 (Pa O O O O O G CV 0 0 o ci o 0 0 0 o cv o o ri 0 0 0 0 0 0 je^., H As *-i ![k~ji Sri/ m r r o LnNr r r o oO a r r .-1 r r O o O pH~ I~ J~j ~ v rl N N O N N H O N N r~ N N o O O H _ ^ r LO v I ri ci r-i OD E w po I' ° zz 0 0 0 0 0l O O O O Q O 0 0 0 0 0 0 0 0 - U 222y O O O O M O O O O O N O O M O O O O O O r M l7 r r r O +sa r r r o o r r r r o 0 o 0 N N N 0 0 0 0 ~A W H ~ N N N O N H N N O O H ri N H r VJ E-1 94 V 1~-~ r~ O O O O O O O O O O O O O O O O O O O O OH V J w PH4 r r r r r r r r r r r r r r N r r r r r a: rl ci .-i .-i H H H H O H H H H o CCS{ two tin coo c\o two two two w coo coo c~v coo coo coo O o o 0 0 0 O O O O o o o 0 o 0 o 0 0 Ln h~ a r' a a R HR 14 u) 'n H H ~ ~ H Cti d, ~z~~~ g~,z H i~ ~ ~ V1 Vl H a $ z z z z cl E-4 w d+ r` O M o a m m m o r n r m m m o m r N ko N W w w o a m r o N m N m m m w n N o m m o E H co o 'D L^ m o -I m H N r co "o N r m c1 oT o1 H Ln 0 r co m m r Lo to Lo co r ~n co r u~ m m m to }I co li7 r-i O r W n w m m m m cO M M W H U1 If1 m m ca m m m vi vl [ l In m rn m (n m n m m v] [-I Z U O IZ i i 1 1 1 i i I L L L. 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( I I ! 1 l 1 f L O~ O O Ol 0 0 0 O O 0 0 0 0 0 0 0 0 0 C) O O m 0 O 0 0 00000 Oft #%I 0004~ CLIENT DATA INTEGRITY ANALYSIS jan 10, 2006 r-- 000001-7 - LOCK COUNTY CLERK OF COURT % of Total % of Total --Turnover--- ---Collected- --Liquidity-- -Turnover-- -Collect-- Category i'A eber kriount NUYLnr Amunt # $ n $ $ / Bad Phone - Gd Addr 25210 3976966.27 11602 2231276.05 46.0% 56.1% 39.9% 40.6% 43.7% 44.5% Gd Home Ph - Gd Addr 7072 1021558.08 5315 932874.63 75.2% 91.3% 11.2% 10.4% 20.0% 18.6% r Gd Wk Ph - Gd Addr 153 26814.16 62 12682.06 40.5% 47.2% 0.2% 0.3% 0.2% 0.3% Gd FhVWk Ph - Cd Add 741 121313.09 599 121030.68 80.8% 99.8% 1.2% 1.2% 2.3% 2.4% Good Address 33176 5146711.60 17578 3297863.42 53.0% 64.1% 52.5% 52.6% 66.2% 65.8% Bad Phone - New Addr 1146 202302.60 177 37682.84 15.4% 18.6% 1.8% 2.1% 0.7% 0.8% Gd Home Ph - New Add 331 55607.79 120 22043.30 36.3% 39.6% 0.5% 0.696 0.5% 0.4% Gd Wk Ph - New Addr 8 1423.00 5 991.60 62.5% 69.7% 0.0% 0.0% 0.0% 0.0% Gd Hii/Wk Ph - New Ad 31 4975.75 17 3301.20 54.8% 66.3% 0.0% 0.1% 0.1% 0.1% Located New Addr 1516 264309.14 319 64018.94 21.0% 24.2% 2.4% 2.7% 1.2% 1.3% Bad Phone - Bad Addr 26463 4032957.75 7925 1513767.63 29.9% 37.5% 41.8% 41.2% 29.9% 30.2% Gd Home Ph - gad Add 1959 324296.51 661 125480.10 33.7% 38.7% 3.1% 3.3% 2.5% 2.5% Gd Wk Ph - Bad Addr 64 11073.00 21 4413.21 32.896 39.9% 0.1% 0.1% 0.1% 0.1% Gd fin/Wk Ph - Bad Ad 68 11115.25 36 6837.47 52.9% 61.5% 0.1% 0.1% M% 0.1% Bad Addr/Skip 28554 4379442.51 8643 1650498.41 30.3% 37.7% 45.1% 44.7% 32.6% 32.9°% r Total 63246 9790463.25 26540 5012380.77 42.046 51.2% Bad Phone 52819 8212226.62 19704 3782726.52 37.3% 46.1% 83.5% 83.9% 74.2% 15.5% Good Home Phone 9362 1401462.38 6096 1080398.03 65.1% 77.1% 14.8% 14.3% 23.0% 21.6% Good Work Phone 22,5 39370.16 88 18086.87 39.1% 45.9% 0.4% 0.4% 0.3% 0.4% Good Home/Work Phone 840 137404.09 652 131169.35 77.6% 95.5% 1.3% 1.4% 2.5% 2-6% Age of Account at Turnover 0 to 30 Davs 0 0.00 0 0.00 0.0% 0.0% 0.0% 0.0% 0.0°% 0.0% 31 to 60 Days 0 0.00 0 0.00 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 61 to 90 Days 0 0.00 0 0.00 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 91 to 120 Days 0 0.00 0 0.00 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 121 to 150 Days 1 184.00 1 239.20 100.0% 130.0% 0.0% 0.0% 0.0% 0.0% 151 to 180 Days 115 23741.75 88 21315.99 76.5% 89.8% 0.2% 0.2% 0.3% 0.4% 181 to 210 Days 390 64320.25 311 61924.87 79.7% 96.3% 0.6% 0.7% 1.2% 1.2% i 211 to 240 Days 779 131453.25 579 112432.15 74.3% 85.5% 1.2% 1.3% 2.2% 2.2% 241 to 270 Days 2520 488950.69 1598 358704.56 63.4% 73.4% 4.0% 5.0% 6.0% 7.2% 271 to 30D Days 3061 531835.10 2106 429107.68 68.8% 80.7% 4.816 5.4% 7.9% 8.6% 301 to 330 Days 3330 527376.72 2289 442260.97 68.7% 83.9% 5.3% 5.4% 8.6% 8.8% 331 to 360 Days 3499 532944.08 2262 413360.44 64.6% 77.6% 5.5% 5.4% 8.5% 8.2% 361 to 390 Days 3623 574006.84 2174 416931_25 60.0% 12_6% 5.7% 5.9% 8.2% 8.3% 391 to 420 ]Jays 3123 483656.62 1816 336968.40 58.1% 69.7% 4.996 4.9% 6.8% 6.7% 421 to 450 Days 2349 357944.70 1320 242789.20 .56.2% 67.8% 3.7% 3.7% 5.0% 4.8% 451 to 480 Days 1972 291422.88 1079 196568.21 54.7% 67.5% 3.1% 3.0% 4.1% 3.9% 481 to 510 Days 1665 258889.24 1565 1599733.22 52_0% 61.8% 2_6% 2_60 3.3% 3.2% ' 511 to 540 Days 1474 230577.25 760 142518.22 51.6% 61.8% 2.3% 2.4% 2.9'6 2.8% 541 to 570 Days 1293 202903.29 646 118993.11 50.0% 58.6% 2.0% 2.1% 2.4% 2.4% 571 to 600 Davs 1025 158893.87 508 93825.10 49.6% 59.0% 1.6% 1.6% 1.9% 1.9% 601 to 630 Days 936 145693.24 457 82028.47 48.8% 56.3% 1.5% 1.5% 1.7% 1.6% p OW CLIENT DATA INTEGRITY ANALYSIS Jan 10, 2006 000001-7 - LOCK COUNTY CLERK OF COURT $ of Total % of Total --Turnover--- ----Collected-- -Liquidity- --Turnover-- --Collect- Category Nmber mount Number Amunt # $ # $ # r`^ 631 to 660 Days 780 121929.35 407 76942.13 52.2% 63.1% 1.2% 1.2% 1.5% 1.5% 661 to 690 Days 624 98542.10 305 51933.95 48.9% 52.7% 1.0% 1.0% 1.1% 1.0% 691 to 720 Days 550 87841.09 265 53101.28 48.2% 60.5% 0.9% 0.9% 1.0% 1.1% 721 to 750 Days 467 75167.50 220 41260.70 47.1% 54.9% 0.7% 0.8% 0.8% 0.8% 751 to 780 Days 467 72372.00 210 39443.39 45.0% 54.5% 0.7% 0.7% 0.8% 0.8% 781 to 810 Days 450 71307.52 212 38308.59 47.1% 53.7% 0.796 0.7% 0.8% 0.8% 811 to 840 Days 553 867162.19 267 46383.63 48.3% 53.5"-% 0.9% 0.9% 1.0% 0.9% 841 to 870 Days 620 98357.29 283 48345.44 45.6% 49.2% 1.0% 1.0% 1.1% 1.0% 811 to 900 Days 547 88369.22 239 41992.26 43.7% 47.5% 0.9% 0.9% •0.9% 0.8% 901 to 930 Days 504 86922.57 218 40455.37 43.3% 46.5% 0.8% 0.9% 0.8% 0.8% 931 to 960 Days 547 90451.42 251 47947.25 45.9% 53.0% 0.9% 0.9% 0.9% 1.0% 961 to 990 Days 444 74948.67 201 38199.81 45.3% 51.0% 0.7% 0.8% 0.8% 0.8% 991 to 1020 Days 426 76023.10 186 36888.74 43.7% 48.5% 0.1% 0.8% 0.7% 0.7% 1021 to 1050 Days 368 61637.04 160 30612.24 43.5% 49.7% 0.6% 0.6% 0.6% 0.6% 1051 to 1080 Days 332 55"380.00 124 23883.61 37.3% 43.1% 0.5% O.G6 0.5% 0.5% 1081 to 1110 Days 324 55872.51 129 24772.38 39.8% 44.3% 0.5% 0.6% 0.5% 0.5% 1111 to 1140 Days 253 42640.06 105 20657.84 41.5% 48.4% 0.4% 0.4% 0.4% 0.4% 1141 to 1170 Days 237 42391.45 95 18717.70 40.1% 44.2% 0.4% 0.4% 0.4% 0.4% 1171 to 1200 Days 265 44497.34 109 201290.75 41.1% 45.6% 0.4% 0-5% 0.4'h 0.4% 1201 to 1230 Days 205 37126.52 83 16524.29 40.5% 44.5% 0.3% 0.4% 0.3% 0.3% r 1231 to 1260 Days 221 40723.82 86 17004.29 38.9% 41.8% 0.3% 0.4% 0.3% 0.3% 1261 to 1290 Days 218 42121.22 89 19842.94 40.8% 47.1% 0.3% 0.4% 0.3% 0.4% 1291 to 1320 Days 244 43634.49 96 206401.20 39.3% 47.38 0.4% 0.4% 0.4% 0.4% 1321 to 1350 Days 226 39819.30 77 14485.05 34.1% 36.4% 0.4% 0.4% 0.3% 0.3% 1351 to 1380 Days 196 35720.50 66 14797.10 33.7% 41.4% 0.3% 0.4% 0.2% 0.3% 1381 to 1410 Days 221 39722.02 86 17275.61 38.9% 43.5% 0.3% 0.4% 0.3% 0.3% 1411 to 1440 Days 212 336069.05 60 11915.05 28.3% 333.0% 0.3% 0.4% 0.2% 0.2% Over 1440 Days 21153 2968522.89 2988 500397.29 14.1% 16.9% 33.4% 30.395 11.3% 10.0% Age unknown 437 70797.25 64 9412.85 14.6% 13.3% 0.7% 0.7% 0.2% 0.2% Total 63246 9790463.25 26540 5012380.77 42.0% 51.2% Payment Code 12 1 176.40 0.0% 0.0% 13 155 -24567.27 0.5% -0.5% 16 5542 617697.84 16.9% 12.3% 22 1 149.40 0.0% 0.0% 80 -15932.96 0.2% -0.3% 23 26 26930 4434678.96 82.3% 88.5% 27 2 70.00 0.0% 0.0% 29 1 108.40 0.0% 0.0% f Total 32712 5012380.77 rte', r' Behavior Score 140 Score 39437 6152994.08 3173 509096.49 8.0% 8.3% 62.4% 62.8% 12.0-% 10.2% 0 to 99 6995 1109280.30 6716 1326686.30 96.0% 119.8% 11.1% 11.3% 25.3% 26.5% r~ 00% CLIENT DATA INTEGRITY ANALYSIS Jan 10, 2006 r-. 000001-7 - LOCK COUNTY CLERK OF COURT % of Total of Total --Turnover--- ----Collected- -li-quicb-ty- -Turnover-- -Collect-- category HuTber Amount Number Amount ff $ $ 4 $ r T 100 to 199 16039 2402823.03 15818 3012783.40 99.0% 125.4% 25.0 24.5% 59.8% 60.1% 200 to 299 730 118079.84 728 152021.68 99.7% 128.7% 1.2% 1.2% 2.7% 3.0% 300 to 399 45 7286.00 45 9792.90 100.0% 134.4% 0.1% 0.1% 0.2% 0.2% 400 to 499 0 0.00 0 0.00 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 500 to 599 0 0.00 0 0.00 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 600 to 699 0 0.00 0 0.00 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 700 to 799 0 0.00 0 0.00 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% r 800 to 899 0 0.00 0 0100 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Over 900 0 0.00 0 0.00 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total- 63246 9790463.25 26540 5012380.77 42.0% 51.2% r~r r r r r' rrr~ rr' r~ Oft FACT SHEET r CRS X75766 Client 000032-7 .ell Name: DOE, JANE MIAMI-DADE COUNTY TRAFFIC Address: 12345 SW 101 ST 112 Acct 0167DQS-086 City/State: MIAMI, FL 33157 Regarding: NO REGISTRATION CERT Home Phone: (786) 555-5555 Amt Refered: 89.50 r, Work Phone: (786) 555-5555 Current Bal: 0.00 Soc Sec No: - - Fee Schedule: 10 Employer: Costs: 0.00 Ck Chg/Fee: 0.00 Other 0.00 r Status: 90 RETURNED Interest Rate: 0.0006 Coll Unit: 690 LYNN HARLEN Interest Amt: 0.00 Date Last: 08/30/05 Date Received: 11/29/05 Activity Code: PF PAID IN FULL ACS Number DOB 05/12/68 DL # F4XXXXXXXXXXX DL STATE FL GENDER F r PLATE # A PLATE STATE EXP DATE - OFF LOC 123456 MAKE/MOD/YR WUQC PIF ON FILE - 1 6 r' PAYMENTS TRANSACTIONS-------------- --Date-- Amount Code Rate --DATE-- TIME AC/RC ----COMMENT---- ID 01/09/06 35.80 05 19690 25.06 11/29/05 09:44 TA/124 JLA 01/09/06 89.50 05 16690 25.06 11/29/05 09:44 TA/124 JLA r" 11/29/05 0.00 97 11/30/05 02:15 CS110 JOB 11/30/05 02:30 TA/124 JOB 12/01/05 02:31 TA/135 JOB 12/01/05 02:43 TA/140 JOB 12/02/05 02:33 TA/135 JOB E" 12/02/05 02:43 TA/140 JOB 12/03/05 02:29 TA/135 JOB 12/03/05 02:39 TA/140 JOB 12/05/05 02:19 TA/135 JOB 12/05/05 02:29 TA/140 JOB f` 12/05/05 08:19 SN/I4 -CB 12/06/05 02:18 TA/135 JOB 12/06/05 02:23 TA/140 JOB 12/07/05 02:31 TA/135 JOB Oft op X75766 FLOWERS, SOMWHANG Page 2 #40, 1 PAYMENTS TRANSACTIONS --Date-- Amount Code Rate --DATE-- TIME AC/RC ----COMMENT---- ID 12/07/05 02:41 TA/140 JOB 12/08/05 02:31 TA/135 JOB 12/08/05 02:41 TA/140 JOB 12/09/05 02:31 TA/135 JOB 12/09/05 02:42 TA/140 JOB 12/10/05 02:35 TA/135 JOB r' 12/10/05 02:45 TA/140 JOB 12/12/05 02:06 TA/135 JOB 12/12/05 02:14 TA/140 JOB r` 12/13/05 02:39 TA/135 JOB 12/13/05 02:45 TA/140 JOB 12/14/05 02:34 TA/135 JOB r. 12/14/05 02:45 TA/140 JOB 12/15/05 02:31 TA/135 JOB 12/15/05 02:41 TA/140 JOB 12/16/05 02:22 TA/135 JOB 12/16/05 02:30 TA/140 JOB 12/17/05 02:21 TA/135 JOB 12/17/05 02:29 TA/140 JOB 12/19/05 02:14 TA/135 JOB 12/19/05 02:22 TA/140 JOB 12/20/05 _ 02 : 31_ _ TA/135___ _ JOB 12/20/05 02:41 TA/140 JOB 12/21/05 02:31 TA/135 JOB 12/21/05 02:41 TA/140 JOB 12/22/05 02:31 TA/135 JOB 12/22/05 02:41 TA/140 JOB F^, 12/23/05 02:34 TA/135 JOB 12/23/05 02:45 TA/140 JOB 12/23/05 10:41 DC/PS 437.50 EACH 1M L2R 12/23/05 10:41 CS/20 L2R DEF WLL MKE QC PMT WCM WCB MTCN 12/23/05 10:43 TA/ 641 L2R 12/27/05 08:54 TR/LM REC L2R 12/28/05 08:25 TR/LM REC L2R 12/30/05 07:51 SN/I5 -CB 01/03/06 16:26 DC/CC LEH DEF CONF WILL SEND WUQC TONIGHT ADVSD CN W MTCN 01/03/06 16:55 CS/ 2 437.50 EACH 1M L2R 01/03/06 17:14 TA/ 695 10 DAY RULE S1C 01/04/06 10:39 CS115 LEH 01/04/06 10:40 CC/PP 437.50 ON 01-07 LEH 01/04/06 10:40 CS111 LEH RESET PER PRIOR NOTES l' 01/04/06 10:41 RM/CC LEH CB FOR WUQC PIF, 437.50, 1 5 01/04/06 11:04 TR/LM VMAIL LEH 01/05/06 10:51 TR/NA LEH 01/05/06 16:11 TR/LM VMAIL LEH 01/05/06 16:13 CC/CC LEH UNABLE TO VERF WUQC PYMT 01/06/06 16:00 DC/CO L2R DEF CI SAID SHE WLL MKE THE PMT BY OW Oft X75766 FLOWERS, SOMWHANG Page 3 I`• PAYMENTS TRANSACTIONS --Date-- Amount Code Rate --DATE-- TIME AC/RC ----COMMENT---- ID el QC ADV HER TO CB W MTCN 01/06/06 17:50 DC/CO P1V HELPED CUST FILL OUT WUQC FORM. ADV TO CB WITH MTCN 01/06/06 17:51 RM/CC C NTS P1V 01/06/06 17:56 TR/SC S2G DEF CI TO GET REF NUM TO WRITE ON WUQC 01/06/06 17:57 RM/CC C NOTES S2G r". 01/06/06 18:00 DC/CO PiV DEF CB WITH MTCN 5730719043 01/06/06 18:01 RM/CC C NUTS PiV 01/09/06 08:26 RM/CC LEH SEE WUQC PIF, 437.50, 1 6 01/09/06 08:27 TR/PP 437.50 ON 01-15 LEH 01/09/06 08:27 CS111 LEH RESET PER PRIOR AGENT S NOTES r• 01/09/06 11:04 CS111 LEH 01/09/06 11:04 CC/CC LEH HOLD PENDING POSTING WUQC PIF 01/09/06 11:42 CC/CC GLB ACTIVITY AC 0000327-0167DQS-086 01/09/06 11:42 CC/CC GLB ACTIVITY AC 0000327-0174DQS-086 01/09/06 11:42 CS/21 GLB 01/09/06 11:42 CC/CC GLB ACTIVITY AC 0000327-0175DQS-086 r^• 01/09/06 11:42 CC/CC GLB ACTIVITY PF 0000327-0175DQS-086 Date Printed: Jan 10, 2006 r RETURNED ACCOUNTS Dec 30, 2005 NUMBER NAME CLIENT BALANCE REASON X.57120 ABBOTT, BRADLEY F Re: FOLLO 000418-1 336.50 TERM. CLIENT X57120 ABBOTT, BRADLEY F Re: FAIL 000418-1 463.40 TERM. CLIENT K58302 ABRAHAM, JOETTE CEC 000418-1 172.00 TERM. CLIENT K.X,8., ~ E CEC 000418-1 254.00 TERM. CLIENT 30,,2 ABRAHAM, JOLTT K58302 ABRAHAM, JOETTE CE-- 000418-1 124.00 TERM. CLIENT K58302 ABRAHAM, JOETTE CEC 000418-1 124.00 TERM. CLIENT S69459 ABRAHA, YONAS T. Re: SPEEDI 000418-1 297.70 TERM. CLIENT X18529 ACKLIE, DOUGLAS N Re: SPEED 000418-1 284.70 TERM. CLIENT S71062 ACOSTA, ALEX Re: DISOBEY TR 000418-1 279.50 TERM. CLIENT S71062 ACOSTA, ALEX Re: NO INSURAN 000418-1 494.00 TERM. CLIENT K58258 ACOSTA, BRIDGET MO 000418-1 117.00 TERM. CLIENT K58258 ACOSTA, BRIDGET MO 000418-1 124.00 TERM. CLIENT K58258 ACOSTA, BRIDGET MO 000418-1 124.00 TERM. CLIENT K58258 ACOSTA, BRIDGET MO 000418-1 117.00 TERM. CLIENT S69460 ACOSTA, JAVIER Re: SPEEDING 000418-1 395.20 TERM. CLIENT 570090 ACOSTA, OMERO SEQ Re: EXPIR 000418-1 312.00 TERM. CLIENT S70091 ADAM, THOMAS JO Re: FAILURE 000418-1 208.00 TERM. CLIENT S70091 ADAM, THOMAS JO Re: NO DRIV 000418-1 208.00 TERM. CLIENT S70091 ADAM, THOMAS JO Re: CURFEW 000418-1 208.00 TERM. CLIENT 570091 ADAM, THOMAS JO Re: ATTEMPT 000418-1 208.00 TERM. CLIENT 570091 ADAM, THOMAS JO Re: MINOR 1000418-1 208.00 TERM. CLIENT S70091 ADAM, THOMAS JO Re: CURFEW 000418-1 208.00 TERM. CLIENT S70091 ADAM, THOMAS JO Re: MINOR 1000418-1 208.00 TERM. CLIENT 570091 ADAM, THOMAS JO Re: CONTEST 000418-1 208.00 TEPM. CLIENT S70091 ADAM, THOMAS JO Re: NO DRIV 000418-1 208.00 TERM. CLIENT 570091 ADAM, THOMAS JO Re: FAILURE 000418-1 208.00 TERM. CLIENT S70092 ADAMS, DERAL WAY Re: FICTIC 000418-1 396.50 TERM. CLIENT 570092 ADAMS, DERAL WAY Re: 110 INS 000418-1 494.00 TERM. CLIENT 570092 ADAMS, DERAL WAY Re: NO DRI 000418-1 338.00 TERM. CLIENT S70092 ADAMS, DERAL WAY Re: FAILUR 000418-1 195.00 TERM. CLIENT 570092 ADAMS, DERAL WAY Re: FAILUR 000418-1 195.00 TERM. CLIENT S70092 ADAMS, DEP.AL WAY Re: FICTIT 000418-1 305.50 TERM. CLIENT X18518 ADAMS, YULES C. Re: DISOBEY 000418-1 208.00 TERM. CLIENT S70093 ADCOCK, RONALD KE Re: THEFT 000418-1 305.50 TERM. CLIENT ,i^• K88751 ADENIJI, DEBORAH OM 000418-1 154.00 TERM. CLIENT 569461 AERY, JARION TE Re: NO INSU 000418-1 490.10 TERM. CLIENT S69461 AERY, JARION TE Re: EXPIRED 000418-1 312.00 TERM. CLIENT 569461 AERY, JARION TE Re: SPEEDIN 000418-1 395.20 TERM. CLIENT S69462 AGRON, JR. Re: FAILURE TO A 000418-1 226.20 TERM. CLIENT 569462 AGRON, JR. Re: SPEEDING 000418-1 260.00 TERM. CLIENT r-, 569462 AGRON, JR. Re: FAILURE TO A 000418-1 226.20 TERM. CLIENT r' S69462 AGRON, JR. Re: NO INSURANCE 000418-1 395.20 TERM. CLIENT X57304 AGUILAR, GABRIELA Re: CURFE 000418-1 190.40 TERM. CLIENT 569463 AGUILAR, MONICA Re: NO INSU 000418-1 490.10 TERM. CLIENT 569463 AGUILAR, MONICA Re: NO DRIV 000418-1 338.00 TERM. CLIENT 569463 AGUILAR, MONICA Re: EXPIRED 000418-1 312.00 TERM. CLIENT r' 076035 AGUILAR, TRACY RODR 000418-1 147.00 TERM. CLIENT 076035 AGUILAR, TRACY RODR 000418-1 147.00 TERM. CLIENT r' 076035 AGUILAR, TRACY RODR 000418-1 277.00 TERM. CLIENT 076035 AGUILAR, TRACY RODR 000418-1 140.00 TERM. CLIENT 571065 AGUILERA, II ARTHUR 000418-1 432.90 TERM. CLIENT S71065 AGUILERA, II ARTHUR 000418-1 377.00 TERM. CLIENT f ok RETURNED ACCOUNTS - Dec 30, 2005 Page 2 NUMBER NAME CLIENT BALANCE REASON 571065 AGUILERA, II ARTHUR 000418-1 559.00 TERM. CLIENT X57112 AGJ., rSTIF, .,rOHS. STEJ t 000418-1 335.00 TERM. CLIENT N r' X18519 AHUYON, LEONEL EL Re: NO IN 000418-1 396.50 TERM. CLIENT X18519 AHUYON, LEONEL EL Re: NO DR 000418-1 0.00 TERM. CLIENT 075922 AL-DOMOUR, KAMAL MOHA 000418-1 190.00 TERM. CLIENT X18520 ALANIS-CHAVEZ, ENRIQUE 000418-1 507.00 TERM. CLIENT X18520 ALANIS-CHAVEZ, ENRIQUE 000418-1 380.90 TERM. CLIENT W99708 ALBA, JOHN RENE Re: SPEEDIN 000418-1 289.90 TERM. CLIENT K88752 ALBARRAN, ALMA Re: SIMPLE A 000418-1 209.00 TERM. CLIENT 570096 ALBERTO, JORGE Re: THEFT UN 000418-1 435.50 TERM. CLIENT 571066 ALBERT, JAKAY NIC Re: NO DR 000418-1 338.00 TERM. CLIENT 571066 ALBERT, JAKAY NIC Re: SPEED 000418-1 409.50 TERM. CLIENT 571066 ALBERT, JAKAY NIC Re: NO IN 000418-1 494.00 TERM. CLIENT 569465 ALBERT, "ARIETA Re: SPEEDIN 000418-1 219.70 TERM. CLIENT X18530 ALCANTARA, ISIS ALEJ 000418-1 260.00 TERM. CLIENT K88753 ALDACO, PATTI ELIZ 000418-1 162.00 TERM. CLIENT X18905 ALDAPE, RODOLFO Re: NO DRIV 000418-1 240.50 TERM. CLIENT X18905 ALDAPE, RODOLFO Re: NO INSU 000418-1 396.50 TERM. CLIENT X18905 ALDAPE, RODOLFO Re: DISOBEY 000418-1 279.50 TERM. CLIENT X18531 ALEMAN, ARMANDO M Re: SPEED 000418-1 258.70 TERM. CLIENT X18531 ALEMAN, ARMANDO M Re: NO DR 000418-1 338.00 TERM. CLIENT 11/18531 ALEMAN, APMANDO M Re: NO IN 000418-1 396.50 TERM?. CLIENT 570098 ALEXANDER, CHLOE DAR 000418-1 388.00 TERM. CLIENT 570098 ALEXANDER, CHLOE DAR 000418-1 445.20 TERM. CLIENT 570098 ALEXANDER, CHLOE DAR 000418-1 395.20 TERM. CLIENT 670098 ALEXANDER, CHLOE DAR 000418-1 338.00 TERM. CLIENT 075948 ALEXANDER, DAVID ADAM 000418-1 232.00 TERM. CLIENT 076212 ALEXANDER, HERBERT H. 000418-1 212.00 TERM. CLIENT 076212 ALEXANDER, HERBERT H. 000418-1 212.00 TERM. CLIENT r" 076212 ALEXANDER, HERBERT H. 000418-1 212.00 TERM. CLIENT 569408 ALEXANDER, HERBERT H 000418-1 325.00 TERM. CLIENT r 569408 ALEXANDER, HERBERT H 000418-1 325.00 TERM. CLIENT 569408 ALEXANDER, HERBERT H 000418-1 325.00 TERM. CLIENT !10!i 14 A TERM. CLIENT 570099 ALEXANDER, REX BRAND 008-1 44.00 mERR. Cr ~IENm 570099 ALEXANDER, REX BRAND 000418-1 312.00 TERM. CLIENT K58347 ALEXANDER, WILLIE ZEA 000418-1 117.00 TERM. CLIENT K58347 ALEXANDER, WILLIE ZEA 000418-1 49.00 TERM. CLIENT 570100 ALFORD, CLITTON J Re: NO IN 000418-1 494.00 TERM. CLIENT 571069 ALFORD, GARY D Re: FAILURE 000418-1 195.00 TERM. CLIENT 571069 ALFORD, GARY D Re: NO INSUR 000418-1 559.00 TERM. CLIENT V77710 ALFORD, JAMES L. Re: FAIL T 000418-1 208.00 TERM. CLIENT X177710 ALFORD, JAMES L. Re: FAIL T 000418-1 208.00 TEI'M. CLIENT r\ 571070 ALFRO, JAIME Re: NO INSURAN 000418-1 494.00 TERM. CLIENT 571070 ALFRO, JAIME Re: NO DRIVER' 000418-1 338.00 TERM. CLIENT r 571070 ALFRO, JAIME Re: EXPIRED RE 000418-1 312.00 TERM. CLIENT 571071 ALI, ROSA ALIYA Re: THEFT U 000418-1 305.50 TERM. CLIENT 571071 ALI, ROSA ALIYA Re: THEFT U 000418-1 305.50 TERM. CLIENT 571072 ALLABEN, HEATHER L 000418-1 369.00 TERM. CLIENT 569466 ALLBRITTON, PHILLIP A 000418-1 312.00 TERM. CLIENT 569466 ALLBRITTON, PHILLIP A 000418-1 490.10 TERM. CLIENT /ry X57199 ALLEN, CAROL ALE Re: MUFFLE 000418-1 360.00 TERM, CLIEN'! 569467 ALLEN, DWAYNE ME Re: DISOBE 000418-1 137.80 TERM. CLIENT X18694 ALLEN, DAVID MIC Re: DISOBE 000418-1 514.00 TERM. CLIENT 076098 ALLEN, ERIC DWAYN Re: FAILU 000418-1 147.00 TERM. CLIENT 076098 ALLEN, ERIC DWAYN Re: SPEED 000418-1 177.00 TERM. CLIENT T` RETURNED ACCOUNTS - Dec 30, 2005 Page 3 r~ OW opk 0001, RETURNED ACCOUNTS - Dec 30, 2005 Page 135 NUMBER NAME CLIENT BALANCE REASON S71665 ZEDILLO, LUIS MANR 000418-1 494.00 TERM. CLIENT t S71665 ZEDILLO, LUIS MANR 000418-1 373.10 TERM. CLIENT V20887 ZEWDU, HANA BELA Re: NO INS 000418-1 494.00 TERM. CLIENT V20888 ZIMMERMAN, JOHN E. 000418-1 195.00 TERM. CLIENT V20888 ZIMMERMAN, JOHN E. 000418-1 393.90 TERM. CLIENT V20888 ZIMMERMA.N, JOHN E. 000418-1 351.00 TERM. CLIENT V20888 ZIMMERMAN, JOHN E. 000418-1 305.50 TERM. CLIENT S70088 ZOLFAGHARI, RAHIM Re: FICTI 000418-1 301.60 TERM. CLIENT S70088 ZOLFAGHARI, RAHIM Re: NO IN 000418-1 360.10 TERM. CLIENT 570088 ZOLFAGHARI, RAHIM Re: EXPIR 000418-1 182.00 TERM. CLIENT 571060 ZOUIKRI, XENIA SAS 000418-1 234.00 TERM. CLIENT 571060 ZOUIKRI, XENIA SAS 000418-1 234.00 TERM. CLIENT S71061 ZUNIGA, GRICELDA Re: SPEEDI 000418-1 380.90 TERM. CLIENT 571051 ZUNIGA., GRICELDA Re: NO DRI 000418-1 301.60 TERM. CLIENT 570089 ZUNIGA, REGINA IR Re: NO DR 000418-1 208.00 TERM. CLIENT 7382 Accounts 2357285.56 r, T. r. ok ~l CCU, t NICIP L ERVIC BUREAU t~ 6505 AIRPORT BLVD. SUITE 100 AUSTIN, TX 75752 ACCOUNT AGE REPORT SMALLTOWN MUNICIPAL COURT Jan 10, 2006 onv I 3 r11o-t nonnl-7-P 20 SMALLTOWN, NIT 55555 Attn. XXXXX XXXXXXXX YOUR MASTER ACC.(RJNT XT ACCCUflri NU-BER NUr1nER MIE Ar < 30 < 60 < 90 < i20 120+ 399 CR-2005-0000530 X69270 AANES, MARK 399.90 .90 CR-2005-0000613 X69270 AANES, "IRK 528.90 528.90 a5,15 _ Th`-200:i-0001482 X69270 AA1VF:5, MARK 45_15 915.90 TK-2004-0008029 X69270 AANES, MARK 915`90 2Q03TR0005459-1 V95261 ABAD, MARK %RGJS 348.39 348.39 2003TR0005459-2 V95261 ABAD, FARK AUQ7S 348.39 348.39 :i09.68 3DV.6R 2004(R1001249-1 V972R4 ARFYTA, YnTANnA AN 0.00 0.00 2003TR0008297-1 T06057 ABLES, JENNIFER M 270.90 270.90 CR-2005-0000502 X69271 ABRAHN-NSW, JAMIE -290.00 2004TR0005260-2 U06376 ACKERI N, CHARLES LA -290.00 367,74 2nQ4TRQD10138-1 \197315 ACTR14AN, 1{AT_7,7 AN'JE "267:74 85.00 85.00 2004TR0002027-1 524367 AGREE, SARAH LYNN 180.65 180.65 2002TR0001515-1 833632 AD7~hh5, FILM '736.30 Jr . TK-2005-0003994 X692.72 AMM, JORDAN 735'30 554.70 554.70 r'R-?Dn5-DC1Dl 653 7C7701 4 AT'rW~34, .7RM1TNi F'FR 2002TR0011715-1 W09479 ADAMS, MICHAEL EU 100.00 100.00 0.00 fl`Ofl 2004TR0003127-1 T06074 ADKINS, STEPHANIE 285,00 2004TR0005781-1 T06074 ADKINS, STEPRPME 285.00 - t5_m 0:00 2003TR0002655-2 T06048 AMM, R_H-?L1A DEE. 285.00 2004T'R0006889-1 T77841 AQJIL AR, ANCT;IA I"'IAA 285.00 238.71 238.71 2001CR1001243-1 U06147 At~JILAR, KRYSTLE 574,19 2001CR1002041-1 U06147 AGUILAR, KRYSTLE 574.19 6 2001T9.0006672-1 1106147 kR7TTAR7 i:RYSTT.F. n -on 9.8 9.6a 9.6a 2001TR0010621-1 U06147 Aajllp,, IMSTLE 187.10 187.10 2001TR0010621-2 U06147 AC~JIIAR, KRYSTLE 309.60 TK-2005-0002757 X69273 AGUINA, DAVID 309.60 1138 z71 188,71 2004TR000 3 7 4 1-1 U,06347 AIAFRC_, BILLY .7t1 100.00 100.00 2002180008527-1 V35413 ALftAIV, IvffG'HAEL D 100.00 100.00 r. 2002TR0008612-1 V35413 ALBAN, MICHAEL D 89,03 2004CR1000967-1 V97281 ALDEN, ED5WD NM 89.03 ' 170-r" 120'r5 2002TR0009422-1 R:i.if96 AT,DFN, T.Ff'Aal 322.53 322.58 2002TR0009422-2 R33696 ALDEN, LE(2J 335.48 335.48 2005CR1000056-1 V97328 ALDEN, SITYSI JOS 0.00 2003TR0005402-1 T06052 AlDRICI-I, JERK RAL 0.00 0.00 2003Tr,0005402-2 T06052 ALDRICH, -EM4y DAL 0.00 0,00 2003TR0005402-3 T06052 ALDRICH, JEREMY DAL 0.00 r~ ACCOUNT AGE REPORT - SMALLTOWN MUNICIPAL COURT Page 92 Yc7R MASTSR, - - ArCCnJNT AGE ACCOUNT NUISER NUABER NAME BAI ANCE < 30 < 60 < 90 < 120 120+ 2003CR1001216-1 T77827 WRIGHT, ROY EUNARD 400.00 400.00 r' 20010 81001216-2 T77827 WRIGHT, ROY F-TVQARD 425.81 425,81 2002TR0001710-2 V97223 WATT, JCNAMN C 225.81 225.81 r 2001TR0008831-1 524085 WYCKOFT, ANITA D 100.00 100,00 2003TR0008963-1 R34009 YANKS, BRIAN 83.87 83.87 19.35 21- 2003TR0001456-2 833871 YARTOr-FT, MWIA 219,35 00 00 100.00 2009TR0001983-1 524363 YARId7IT, NT.RLON LOOR 2004CR1001413-1 M9493 YRRLOTT, TONI 77.42 77.42 TK-2004-0008483 X69448 YATES, JOELIE 264.45 264.45 2001CR100152(Z-1 R33547 YAZZIE, RAEIF-W- 470.97 470,97 2004TR0002344-1 U06320 YEAR, MICHELLE R 114.19 114.19 561.29 561.29 2003TR0006209-2 S24237 YEA(ER:, TODD LARRY 2003TR0003922-2 524222 YEIGH, JASON D 148.39 148.39 2002TROOD5734-1 S24154 YELCCWTLE, C-MUS TAI-M 703.23 703.23 2002TR0005734-2 S24154 )7ELLCkd`lUIE, CYRUS TANZ, 348.39 348.39 2002TR0O05734-3 524154 YELLaA4JI.E, CYRUS TAHL 348.39 348.39 TK-2005-0000587 X69449 YELLO&ME, PlARY 361.20 361.20 2004TR0010573-1 V97257 YFLT_.._OBE, PAYNE W 0.00 0'00 2004TR0010573-2 V97257 YELLOWROBE, PAYNE W 0.00 0.00 Z004TR0010573-3 V97257 YELLCWROBE, PAYNE W 0.00 0.00 2004TR0001526-1 524333 YELIAWFtOBE, WALDO 100.00 100.00 2004(:R1001826-1 V97238 YERC-FA1, AM-AND C, .7 180.65 180.65 2004TR0008623-1 U11153 Y0393, DAVID WILL 85.00 85.00 2004TR0008623-2 U11153 YOUNG, DAVID WILL 285.00 285.00 2003CR1000825-1 R33785 YOUNG'InN, GENE G 445.16 445.16 C'R.-2005-0000531 X77008 `{OU-KTMUlD-aTkVIS, JEREMY 393.45 393.45 2003TR0010456-1 834037 YOUPEE, PIES 160.00 i60.00 1206.69 1206.69 CR-2004-0000319 X69450 ZAHN, TRISK TK-2005-0003077 X69450 ZAHN, TRISH 109.65 109.65 2003TR0007541-2 R33979 ZAPATA, ,TAKE 0.00 0.00 f CR-2005-0001629 X69451 7ASTRCW, JEFFREY 743.20 748.20 TK-2005-0007305 X69452 ZASTRCW, JEFFREY 135.45 135.45 2002TR0007201-1 T77816 ZAUHER, NEIL 0 100.00 100.00 99.13 99,13 2004TR00415$5-1 U06311 7-7WALA, DANIELLE G 85.00 2004TR0O04237-1 T06089 ZELIIER, KATHERINE 85.00 2004TR0009568-1 V97255 ZINNERMAN, aELSEY LE 0.00 0,00 2004TR0006190-1 U06267 ZINNIERWN, JACOB RICH 0.00 0.00 0.(k7 2004TR0008893-1 V97254 ZII MF'RMAN, KASEY NIOD 0.00 2004TR0008893-2 V97254 ZIIA-'ER?-i44, KASEY NICO 0. CA) 0.00 CR-2005-0001463 X69453 ZINMERMAN, VARK 118.90 118.90 TK-2005-0007412 X69454 ZOANNI, DALLAS 0.00 0.00 148.39 148.39 2003TR0008395-1 T06058 ZL>EFLSDORFF, CHRISTOPHE 435.77 2003TR0008395-2 T06058 ZUEiwSDORFF, C'EsRISTOPHE 496-77 r" 2003TR0008395-3 T06058 ZUEHISDORFF, CHRISTOPHE 109.68 109.68 0.00 0.00 2003TR0004518-1 U06205 ZUKOVdS1Q, TIIyKYI'HY PA 2002CRIO01016-1 R33600 ZWICKEL, JENNIFER 0.00 0.00 4942 Accounts Listed 1328926.71 0.00 1026.90 2499.80 14891.20 1310508.81 f\ AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Jim Coulter 349-7194 ACM: Jon Fortune SUBJECT Consider adoption of an Ordinance accepting competitive bids and awarding an annual contract for the purchase of water treatment chemicals for the City of Denton Water Treatment Plants; providing for the expenditure of funds therefor; and providing an effective date (Bid 3445- Annual Contract for Water Treatment Chemicals awarded to the lowest responsible bidder for each item in the annual estimated amount of $800,000). The Public Utilities Board recommends approval (6-0). BID INFORMATION This bid is for the annual contract to supply water treatment chemicals for the water production and wastewater treatment process. The chemicals are delivered in bulk quantities to on-site storage facilities. RECOMMENDATION Award to the lowest responsible bidder for each item as listed below: Item Description Price Vendor I LIQUID CHLORINE, NSF 60 CERTIFIED $0.2620/LB PC INDUSTRIES (ONE TON) INC. 2 LIQUID CHLORINE, NSF 60 CERTIFIED $0.2695/LB PC INDUSTRIES (BULK) INC. 3 CHLORINE 150# CYLINDER $0.8330/LB PC INDUSTRIES NSF 60 CERTIFIED INC. 4 SODIUM HYPOCHLORITE $0.0750/LB PC INDUSTRIES INC 5 LIQUID OXYGEN NSF 60 CERTIFIED $0.0459/LB AIR LIQUIDE 6 FLUROSILICIC ACID, $0.1140/LB ENNCO INC NSF 60 CERTIFIED 7 LIQUID CAUSTIC SODA $0.2290/LB STI NSF 60 CERTIFIED 8 POTASSIUM PERMANGANATE $1.8700/LB NIVAR 9 ANHYDROUS AMMONIA, $0.4700/LB PC INDUSTRIES NSF 60 CERTIFIED INC. 10 CATIONIC POLYMER, NSF 60 CERTIFIED $0.5870/LB OLYDYNE INC II LIQUID FERRIC SULFATE $0.0535/LB GENERAL CHEMICAL Agenda Information Sheet February 21, 2006 Page 2 RECOMMENDATIONCONTINUED) Item 7a is an alternate and will not be awarded. PRIOR ACTIONNIEW (COUNCIL, BOARDS, COMMISSIONS) The Public Utilities Board approved this item at its February 13, 2006 meeting. PRINCIPAL PLACE OF BUSINESS: DPC Industries Inc. FSTI Univar Cleburne, TX Manor, TX Dallas, TX Air Liquide Pennco Inc. Polydyne, Inc. Grand Prairie, TX San Felipe, TX Riceboro, GA General Chemical Performance Products, LLC Parsippany, NJ ESTIMATED SCHEDULE OF PROJECT This is an annual contract with the option to renew for additional one-year periods contingent upon all prices, terms, and conditions remaining the same. Delivery of individual chemicals varies from 3 days to 2 weeks and will be ordered as needed. FISCAL INFORMATION: Funding for these water treatment chemicals will come from account 630100.6334. Respectfully submitted: 117- Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: Tabulation Sheet I-AIS-Bid 3445 w g x O n LD LD -2 -2 LD LD LD LD LD LD LD .2 72 72 72 72 LD Q L Vl co co co co co co co co co co co co co co co co co z M m O O O O O O O O O O O O O O O O O W Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z > C 0 Ul 0 U1 x 'O 'O 'O 'O "O 'O "O 'O 'O 'O 'O "O O^ 'O 'O 'O Q m > n CO CO CO CO CO CO CO CO CO CO CO CO Q [0 [0 [0 Z Z O O O O O O O O O O O O z O O O W U L Z Z Z Z Z Z Z Z Z Z Z Z 0 Z Z Z > O 7 -bV m m V J d _ J W O G~l ui > o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q s y.o os m m m m m m m m m m m m m m v co co z U 'L M V O O O O O O O O O O O O O O 'i O O = J Y~ Z Z Z Z Z Z Z Z Z Z Z Z Z Z 0 Z Z V 9 m m 3 C J H J V p'~ 0 '6 '6 '6 '6 "6 '6 "6 '6 '6 '6 '6 "6 ^0 '6 '6 '6 ~ 01 Q %p CO CO CO CO CO CO CO CO CO CO CO CO Ln N CO CO CO Z 10 O O O O O O O O O O O O ° O O O W x Z Z Z Z Z Z Z Z Z Z Z Z 0 Z Z Z > m L L L a = m U J ko Q J O V V V1 U '6_ '6_ '6_ '6_ "6_ '6_ "6_ '6_ '6_ Z O _ _ _ _ _ 0 W N Q y '6'6'6'6'6 C m 0 m m m m m m m m co O i co co co co co Z M y 0 C C cr -4 06 O O O O O O O O O N ° O O O O O m V 7 'i Z Z Z Z Z Z Z Z Z C; Z Z Z Z Z ~O UA ii C N E 0 0 x U O O ~ ° -o_ -o_ -o_ -o_ -o_ -o_ °O -o -o co cu Q .2 V1 N N m m m m m m m (D N co m v (1) N Z L O O O O O O O O W m y O Z Z Z Z Z Z O Z Z O > x U 0 +Pr fPr fPr UA O x ° O Z Lri fQ o 0 U n o m O O ° O O E W x z O z z z o z a) 0 0 Ln L t Z Q _0 0 U O m 0 00 m o a g (7 U O _ Z c a~ n a~ n U a~ N o a~ n n a~ N d. 0 Z y s t t U y O t t t N Z Z ~ C O C C C C 00 C UI C W N O O O O O O O 0 co -4 U W o co ca m _0 w O w N w w w O V O N O L O N L L L T N L N t t o x o M J W U u E U U E u E _ E o E E z LD C: _0 O. (A Q 6 (n L 6 7 (n c 6 (n L O f6 (n L 6 L 7 7 (n L N J Z d J Z d J Z d w m z d J d LL aL Z d L V O W O f O O L ° p.~ V Q D. 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N 0 t a) O L °\n0~ Z U 'C M V N ' 0 d 7 J V d O V'p m m E ~o J H v O O H f6 v J c N 0 o-y c c ~ 6 .o 0 = V Q ~ n W k z u > cn axi a = m U J Q U ~ ~p J O V LL V 0 'Ui Ic a~+N N Q Z M y o C C Z m S m 'i U = Ln O cn Ln c a~ E M y X m v 0 V O ~ 0 i q a m -o Q _ Z U d > = U D E ~ M H N O L U 'E m Z t O V H = a ~ E U O a d W E aN m ~ N 0 E U O O L V q c o U ~ N O a E G7 u _ O t a~ _a U) L co N L ~ 0 0 C 0 41 ? d m O LL L _0 N 3 C 0 4e r V LA Z F- LU Z Mr'1_ Q m 3 Y.I 3 Q = W U ca c GJ Q C 'O_ 'O_ 'O_ 'O_ "O_ "O_ "O_ 'O_ 'O_ 'O_ 'O_ "O_ "O_ 0 p p y co co co co co co co co co co co co co co Z Gl W O O O O O O O O O O O O O O `o _ z z z z z z z z z z z z z z O0 LV U) a V_ 0 CC, y~ Q i V 10 V 10 -o '6 '6 '6 "6 "6 "6 '6 '6 '6 '6 "6 "6 "6 '6 '6 '6 S a n m m m m m m m m m m m m m m m m m Z y W 0 O'U Z O O O O O O O O O O O O O O O O O C w i i Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z > U d d M a a Ix M j p Gl ,V Y m m m m m m m m m m m m m m m m m W (A E O O O O O O O O O O O O O O O O O O > s = Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z U C ~C Ix O r O m aj 00 L°n -o -o -o o z -o_ -o_ -o_ -o_ -o_ i O O N N N m m m --i N N co co co co co Z _ O M r M r O O O O O O O O W Q a M 0 0 z z z O~ z z z z z > ' `o o U 2 Q O C C o 0 0 0 0 -o -o -o -o -o -o -o -o -o -o -o -o p V i m m m m m m m m m m m m m m m m m z > 1--4 O O O O O O O O O O O O O O O O O W a C O Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z > a V C N L/j O O d O. -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o 0 t ~ 'C o p c ci E Q m m m m m m m m m m m m m m m m m cu z = 7 N a O O O O O O O O O O O O O O O O O Q W .O Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z > c 7 O U) Uf O 2 0 O z o Ln Z U O 0) o f L o O O o O O zl zl zl - zl zl z Q v 0) V O W x O O~ m p m o 41 d g (7 U (1) O (1) (1) = p Z c a~ a~ U a~ o a~ a~ N m U Z~ Z t t t N t t O t C C C C C C E v) c W Z N O O O O O O 00 O 41 w ~ w ~ E ~ E Ln E L~ E 7 E ~ E O W m O m p = U d m w a) -o -o o s o o -o L Co a) a) a) u n7 LU 4- a c a) J N s E s -o E s E 2 E x E 'v -o E W J W U U L U U L U U L }Li u L Q L - U L }i O w O O w O w E O w w O O w d Q Z '6 '6 "6 C -o Ul 0 2 2 7 LPL U 7 U LPL U 7 LL U -o LL U 7 U U LL U UA Q 6 Ln L 6 7 Ln L 6 Ln L O O Ln L 6 L Ln L N C J Z d J Z d J Z d Ln o) Z d J d LL aL.i Z d L V O f O W 0 = p v v v v v v 0 ? a Z O U 41 W H u > N L W O O O O O 41 Q N 3 C H m> N O O O O O O V C O W Z~ O O O O O O m u Z S a O O tai O O co M n _ a U Q cC # LU 3 w 0 .--I N M Ln ko maa " V GJ O O• '0 '0 '0 -0 '0 "0 "O '0 -0 '0 '0 -0 "O "O -0 '0 '0 0 p y x co co co co co co co co co co co co co co co co co z = W O O O O O O O O O O O O O O O O O _ z z z z z z z z z z z z z z z z z d U) a V 0 O i V_ M V M 'O_ 'O_ 'O_ 'O_ 'O_ "O_ "O_ 'O_ 'O_ 'O_ 'O_ "O_ M 7 m m m m m m m m m m m co m Ln 0i N Z c E E 6 CZ O O O O O O O O O O O co O O O W L w D" Z Z Z Z Z Z Z Z Z Z Z Z Z Z 0 > U yaM a a M y Q 'V 0 p 0 0 d ,v Y co co co co co co co co co co co - N m m m 0. ko z O O O O O O O O O O O O `4 O O O LU U) a) C = Z Z Z Z Z Z Z Z Z Z Z C; Z Z Z U _ ~C a. O r O ° ° 0 0 0 -0 -0 D i O N m m m m m m m m m m m m Z _ C a+ N N O O O O O O O O O O O O W Q O• = O > 0 Z Z Z Z Z Z Z Z Z Z Z Z O O U 2 Q ti O c C o_ o_ o_ o_ o_ o_ o_ o_ o_ o_ o_ ° co co co co co co co co co co co 00 N N co co co Z >•H O O O O O O O O O O O O O O W y Z Z Z Z Z Z Z Z Z Z Z 0 Z Z Z > 0 V C O y 2D O• -0 -0 -0 -0 -0 -0 -0 -0 00 -0 -0 -0 -0 -0 -0 U 0 c V E Q m m m m m m m m N V) N m m m m m m m Z = 7 N M a O O O O O O O O U~ O O O O O O Q W 9 Z Z Z Z Z Z Z Z 0 Z Z Z Z Z Z > c 3 O Ln 0 L L U7 (n D O D p _ (V U -0 0) • O O O O 0 O O 0 Z 0 Z Z t o m ~ py L L 01 O N 0' O O F- s0 t0} O cn n0 N n0 m (1) (1) O (1) Ln (1) (1) _ m O a) m o (1) 'n (1) (1) V (1) V) 0 p ~I - 0 N ~I m ~I N rl aL rl aL O rl aL U d ' O i 0 m V) V 0 L E Ch W = -0 ~on E -o~on u °c'~ E ~ E m E E 41 to 0 = o m o m O L d m cn -0 cn o -0 E n -o E -o m -o o L U a) a) L a) E a) E a) a) U! w U! w a) t w Q w w U w O 0 L o L a L L o L L L E m a) a a~ L a~ L U o U v o m U U O c U U U U a goo 0 goo goo > E goo w 0 O w O w O N LL U .N LL ° N LL U t a LL u o LL u LL u a 6 m U) L 6 m O M U) L t U) L m U) L 0 U) L z a -71 co 3 z a z a Q z a U z a z a N co L V C C _ v v v v v v 4- 0 7••I w D d 0 U L L. J O O O O Ln 3= H m>- O O 0 0 00 O O O fC u z~ ~ cl Ln 00 M o M n _ a v LU 7 0~= W n ai W O~ 0 H a = H I~ ca V ~ d o o N w a N O m co p x N W OL W = = O- ~~l1 > a U) Q ~-0 ~Q V 0 > O i V 10 V M 7 cL n N Q Z = E" V z z W C w 0 0 > U d 0. M a o. Ix m 10 > O Y Q p , W (A W Z > U = Ln U _ d' O O m u _ L p i O a 0) Z O M N .-I O fLL6 > Q O O E E H Q ~ Q Ix d O = p V Q W ' 1.4 . z > d V _ N (/j o E O d C m Q U p = N= E Q v a. W > = 7 O Ln E L U ' m E _0 Z t O U E U Ch c O }1 W E Gl m N E ° p E U O O L d + w U V c O O a E CL N 6 O t u ° o c _a U co N L ~ 0 0 C 0 &a ? d m O L _0 Ln z z = m H p = 0 V) Z N W M n u a cC W 3 ~ ,n Q ~ = W U ca O v ,v v c -o -o -o -o_ -o_ - -o_ -o_ -o_ - -o_ o_ o_ -o_ -o_ o_ p C y co co co co co co co co co W N co co co co co s N o 0 0 0 0 0 0 0 0 0 z > y'p, 0 0 0 0 0 ~ 9 s O V= z z z z z z z z z C; z z z z z -bV Q J _ G7 CL p = L J o_ o_ o_ o_ o_ o_ o_ o_ o_ o_ o_ o_ Ln o_ o_ o_ 0 C U) O. X m m m m m m m m m m m m V N m m m Z= Uf H O O O O O O O O O O O O ° o o o W L 'O = = Z Z Z Z Z Z Z Z Z Z Z Z O Z Z Z > _ m Q ~ 'L^ V X O N m M 'O_ "O_ 'O_ 'O_ 'O_ i G7 O ° Ln Q d a+ V C l0 N kO N M N n N m m m m m M C L N r 4 N r -4 W 0 Z O O O O O W C 9 ~ O O O O Z Z Z Z Z > _ ifr ifr ifr ifr ~ U p -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o i co co co co co co co co co co co co co co co co co z U) O O O O O O O O O O O O O O O O O O W W Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z > L y Z p ~ C q -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o 0 3 0 co co co co co co co co co co co co co co co co co z y s o E O O O O O O O O O O O O O O O O O W d = Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z > Ln a) U ~ J N H E Ix > O O C w -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o co p v p - m m m m m m m m m m m m m m m m m Q Z m 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 W Z > 0 D y Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z a Z O = O Z in U O 0) o f L o 0 0 ~ o O o Z l zl zl - zl zl E t z ° Q v 1 0) V O 0 _0 W x O p m o 41 d g 0 U (1) O (1) (1) _ Z c a) a) U a) o a) a) N m Z~ t t t N t t 0~ t U Z C C C C C C E v) C W Z N O O O O a~.i O O 00 O 4+ w w E E Ln E .L E 7 E E 0 = U W O m OV) m m w Co a) -o -o o s a -o d o L a) a) a) U M a) _ c V J N s E t -o E s E _ a) E x E 'v -a E W M W U U L_ U U L_ U U L }Li u L O L - m u J L a Q Z ° o u O E O w N -O o Ul Q 6 IJ) C 0 (J) C 6 IJ) C o m (n C 0 C IJ) C N C J Z d J Z d J Z d (n m Z d J d L.L aL.i Z d L V O f O W 0 = D v v v v v v 0 ? a Z O W H V u > N L W O O O O O ad Q 1A 7 CF- H m O O O O O O 4e r O W Z~ W O O O O O O le mu Z 2a O O ni 0 O co M n _ a U Q cC # LU 3 w Q ~ 0 .--I N M Ln lO ca ca 0 V V V c '6 N "6_ "6_ '6_ '6_ p C y 10 0 m m m N m m m m m m m m m m m m Z y p, 2 - 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ~ V C 0 V= z z z z z z z z z z z z z z z G7 CL 0 = L J 0 0 0 0 p a vi a X co co co co co co co co co co co co co co co co co z= Uf H O O O O O O O O O O O O O O O O O W L •O = Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z > = m Q ~ 'L^ V X O i G7 6_ 6_ 6_ ~ 6_ 6_ 6_ 00 '0 "0 "0 '0 '0 '0 p U a+ V c co co co Ln V) m co m n (1) N m m m m m m Z p 7 m = O O O O O O v O O O O O O W Z Z Z ~ Z Z Z 0 Z Z Z Z Z Z > c a) ~ U J J J J 0 H L L "6 "6 '6 '6 '6 76 76 "2 "6 76 76 76 p °3: a N co co co co co co co co co co co Z (n O o in r O 00 r W W = m M o 0 0 0 0 0 0 0 0 0 0 0 Z Z Z Z Z Z Z Z Z Z Z Z 10 rq M -j > N ,-I N ,--I 00 00 L y Z a) a+ 0 C q o_ o_ o_ o_ o_ o_ o_ o_ o_ o_ o_ oo -o_ -o_ -o_ p 0 a co co co co co co co co co co co V- N m m m Z y= E O O O O O O O O O O O O O O = z z z z z z z z z z z 00 z z z ~ H U ~ J N H O O = d -o -o -o -o -o -o -o -o -o -o -o 00 -0 -0 -0 p v p• - m m m m m m m m m m m rn ~ N m m m Q Z m E O O O O O O O O O O o iO 0 0 0 W Z D y Z Z Z Z Z Z Z Z Z Z Z Z Z Z > a m z m 0 L L N (n ° O ° Y p (a U U N p u -0 0) • O O O O O O O Z Z Z O Z O Z Z a, E o cl~ M L L O N o' O O F- s0 t0} 0 cn Q O (1) Q O m ,n ,n 0 ,n Ln ,n ,n _ m o (1) n m_ O m a) w w N 'n a) N a) n a~ n 0 ° rl -r- p 'T N ~I m rl N rl aL rl aL O rl aL E W = E ~~0n U °c', E~ E m E a' E 41 d m U) o U) a o E, o -o a) -o -o L w U' N U' N L N E N E N (n N U1 w U1 w N t w Q w w U w L o L a L L o L L L 0-0 E a~ 0 a~ a a~ L a~ L m u o U U o m U U o c U U U Li U CL -0 o ~°o > E D 0 'E w o w O w 0 y = .N a U = .N -r- a a U t n a U ° a u = a u L C U) L f6 U) L O" U) L CL 2' f6 U) L O" f6 U) O M U) L N -j co z a -73 co 3 z a .4 z a Q w Z a U z a z a L V C 0 _ v v v v v v ~ U O L. L. J O O O 41 0 4e = 0 V) Z H O O O O O O O O (Q U W Z W W p W M O Mn_ a v W 3 D~ = W n a W rn 0 H a = H I~ ca p c z . N M z O_ N W 9 s a) CM ~ Q U J ~ _ Gl 'o S o. u o O p C ,L y J " x N O C N Z= Uf ,O H o u E W L = c a Q N m ~ u L cn N N H O p U rL. V c Q Z p 3 w 3 ch Z 111 4 > c y N U 6 U f6 C O 0 F- w -0 m Q i c N \ Z LL C Ln E Z q w N r-I L y Z o a0+ O O p ~ r z 0 III Q = E z N > V E \ O' _ H U o 0 ~ J N H E > m 0 V a Q Q W y Z Z Q Z E > U 6 m z E L U ' o z t O U O Ch c }1 W E fC p = N Gl m N E p ° E V o o L d + w u V c o O a E n a) -o o G7 L u -a o c _a L co N L ~ 0 Q C 0 4- ? d m O LL L _0 a.+ Q 4e = 0 LA Z H N W M n u a co W 3 ~ ,n Q ~ = W U c U) c a) Y O O ' Gl 'o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o p = m J u m m m m m m m m m m m m m m m m m Z E 0. c y O O O O O O O O O O O O O O O O O W d i Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z > Y O U m J r1l c z O p y v C -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o p m i m m m m m m m m m m m m m m m m m z " q a O O O O O O O O O O O O O O O O O > LL a i = z z z z z z z z z z z z z z z z z O U J C 0 Q O O Gl O -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o -o p fB a+ m [0 [0 [0 [0 [0 [0 [0 [0 [0 [0 [0 [0 [0 [0 [0 [0 [0 Z y 3 m O O O O O O O O O O O O O O O O O W w 3 > 0 = Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z cn O d U U) O = O O Z Ln V O o) o 2 z O z z Ln z z W V N V o O O Ln L m z 'Fu v Q U m f o Oo m 41 a g (7 u (1) O (1) (1) = p Z c a~ a~ U a~ o a~ a~ N d. 0 iy o t t t N s t t d U 0 Z Z H c c 1 O C c c ° c E v) C W Z N O O O O a~.i O -Y O 00 O 7 Ln p = Q (7 ° E m E ~ E N E S E V E U W -o V s o d m O m w w w o 0 w 2u w ~ O NOG O o N O u L T Q N /L v J N t E t -o a) E s a) E _ a) E x E ~ -o a) E W J W U U L U U L u U L_ AL.i U L Q L - LO U L z -2 ko _0 _0 LL u LL LL a) w Uf Q 6 Lf) C 6 7 Lf) C 6 Lf) L O io Lf) L 6 C (n C N CL x J Z d J Z d J Z a Ln ° Z a J a LL aL.i Z d L V O W O f 0 = p v v v v v v O w O a Z O U D W H u > Ln L W O O O O O Q C H iUy O O O O O O C O M LA Z~ OG O O ° O O O to u ZQ U a O O ni LLnn o co fC Q Y.I 3 W O ri N M V- Ln ko ca Uf c a) Y UT 0 O .2 N -o -o -o -o -o -o -o -o -o -o -o -o -o -o p q V = m m m m m m m m m m m m m m N Z E O.. y O O O O O O O O O O O O O o ~ W y i Z Z Z Z Z Z Z Z Z Z Z Z Z Z 0 > Y O U LO J c Z O 0 U, v c o0 -o -o -o -o -o -o -o -o -o -o -o -o -o -o p i, i -W 0 V) v a m m m m m m m m m m m m m m z a o > z O O O O O O O O O O O O O O Lo a _ > z z z z z z z z z z z z z z o U J c y 0 C d O Q -o_ -o_ -o_ -o_ -o_ -o_ -o_ -o_ -o_ -o_ -o_ p -o -o -o p U1 &I m m m m m m m m m co co O N m m m Z y 3 O O O O O O O O O O O W ~ O O O W w 3 Z Z Z Z Z Z Z Z Z Z Z 0 > 0 = Z Z Z V) O 0. U 0 L _0 L -0 )n VI ~ O 0 O i ~ O -0 U U V) ns U o) M C: -6 O O O m O O O O •E U Z p Z 00 Z Z Z E E 0) 00 O 0) 70- 0) fo 1 Q U° =O I t0° N I o I o I 0 Lf) 41 d Q O N p O 6 N (1) O (1) Lf \ N (1) _ n3 o a) V) n3 0 a) a; a) V) 'n (1) V) a) V a) w y D v rl yL D v N rl n3 ~I N ~I at rl aL O rl aL U 0 C i p a) N C V C - C C ns ns 7 O Un O O O O (1) 4+ W = -0 LOn E ~ LOn u C: E E co E ' E p = O O n3 O L - d m Un o Un a -o E E E o E -o o o L ' a) ' a) L a) E a) a) a) } 0 w ; N L L~ a) s w Q w w Lf) w ~ O N_0 L I N -O ~ L a U) U L I N L I O L I L L I v a) L a) a) E E u a) E a) E LO U O U L U O ns U 7 U L O C U L U U L LL U L }I !L O OU) O O i~ O i_- 'E O i~ p i~ 0. U) l0 -0 U) l0 N (h l0 E D ko LL 0 2 .N CL LL U o LL U LL U LL U .N LL ° N U t L 6 L i:i 6 m U) L 6 ns U) O (h U) L C t U) L ns U) U) O N a m z a m 3 z a z a Q u z a v z a J z a L V C _ v v v v v v 0 41 ? d !7 U L J O O O O Ln 3= H O O p p 00 O O O V W Z W W Lon co O v ~ IL 3 0 ~ = W n ai co rn O ca C d Y p q V v M Q C W y N .5 N z > Y O U m J C Z O 0 O p O i a0+ z 111 0 " m o z z > U. o. c O U J Ix O i = Q O p N a0+ > Q Q Z ' 3?r Z Z > O C cn O 0. U E L a) U a) ~ E t Q ~ Z U y m }1 W E fC p = N Gl m N E 0 ° E U O O L V c o U m O a E.~ N CL N 6 O d s U ° O c _a U co N L ~ 0 Q C 0 41 ? d m O LL L _0 Ln z ~ Q = z r- 0 Z W M n u W 3 3 = a~ D W U ca ORDINANCE NO. CONSIDER ADOPTION OF AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING AN ANNUAL CONTRACT FOR THE PURCHASE OF WATER TREATMENT CHEMICALS FOR THE CITY OF DENTON WATER TREATMENT PLANTS; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (BID 3445-ANNUAL CONTRACT FOR WATER TREATMENT CHEMICALS AWARDED TO THE LOWEST RESPONSIBLE BIDDER FOR EACH ITEM IN THE ANNUAL ESTIMATED AMOUNT OF $800,000). WHEREAS, the City has solicited, received and tabulated competitive bids for the purchase of necessary materials, equipment, supplies or services in accordance with the procedures of State law and City ordinances; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bids are the lowest responsible bids for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted therefor; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies or services approved and accepted herein; NOW, THEREFOR, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: BID ITEM NUMBER NO VENDOR AMOUNT 3445 1-4,9 DPC Industries, Inc. Exhibit A 3445 5 Air Liquide Industrial U. S. LP Exhibit A 3445 6 Pennco Inc. Exhibit A 3445 7 FSTI Exhibit A 3445 8 Univar Exhibit A 3445 10 Polydyne Inc. Exhibit A 3445 11 General Chemical Performance Exhibit A Products, LLC SECTION 2. By the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to pur- chase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid Invitations, Bid Proposals, and related documents. SECTION 3. Should the City and the winning bidder(s) wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the bids, the City Manager or his designated representative is hereby authorized to execute a written contract in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and related documents and to extend that contract as determined to be advantageous to the City of Denton. SECTION 4. By the acceptance and approval of the above enumerated bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this day of , 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: 3-ORD-BID 3445 I CL rn O L Ln N 0 C y J d O Z J 3 (A 111 0 > L c fPr Q ~ 'L^ V d O Ln O O O N rn M Ln 0 U V C l0 N N l0 N N M N N n N N Z d H C L N -4 N } -4 W } O ( W 0 9~ O O O O > C ifr ifr ifr ifr ~ U O w W = z LL ~ V ~ O a ov 0 0 X W = 0 > C C. d ~ a V > 10 C w c O L ,V V m = a " 0 = w L V Z W C w 0 ,N U d m a a = L 0 >V a0Q 'a C Q W Q ~ V t > d x W O 0 L VI z ; W 2 O U O Z c u ~ p O Lri E f m o W= n O ° o O O O O O v Z O Z Z Z p Z L V - Ln V Z W a) O _ g 0 o O ~ m o H o d 0 0 Z U O > Ln W ui Z c a~ a~ U a~ N o a~ a~ N Z O t t t N t t t v c Z ~ W ~ c c c c c p c O G) N N O O O a~ O O O O W 3 U W E E Ln E M -0 -0 W N .L w .L w .L w Q- w 01 Q w 0 -C -0 fa w W t t o s _ E x E u -a E O\ a Q Z U U L U f6 U L U U L }Li u L O L _ f6 U L 5 y = M O -0 O O O 7 O N O O C: 0 -Y ko LL u LL LL u LL U LL ) p •V w x 6 II II) (n 'i O io (n 'i 6 'L 7 7 II) 'i C w C C J Z d J a Z d J Z d (n m Z d J d LL aL Z d U L fC 0 a Z O 6 v v v v v LLI >U~f _j -j -j -j - ~-j IA 3= J x W O O O O O Q W U 0 c=C~.JF- N ~ 0 0 0 0 0 U L! =Z Mn ~wZ Ua o o ni L00 o 00 ~ Y.I 3 Q w M C p W .--I N M Ln l0 F; I CL O L 0 C y J a N Z J 3 (A > Q N i d O O U'~ ti O N Q a+ V C I\ N Z 0 3 M 3 ~ r M _ d ~ U J 'O U L i 0 N O H i 0 In V) C L W W C rn J E > N LU O ifr V y O H L Z V 0 LL 0 W = C O- a cn Q V jp u = aN+ _ Ln O v V m m CL Ln N N . Z 0 r z c O O C w " N (Pr U yam a a O = 00 Q 0 V c a Q ~ W in Q W Q~ V 0 r t > d X W U) x O O 0 0 i U1 I\ ( N Q Z C~ ~ Z W 0 > C m V) N N U D o ~ _ (1) 0 0 • E -0 U Ian f6 w O O O O T O O N z O 6 Z C7 ~ z z z c z = O m m U O O '6 U Z E° o) 0 0 3 o) m Y rl~ N O 00 O d Ul p_ 0 U) V N In N Lf \ N o N C LA •N 0 p f6 aN.i p f6 p 7 p L p 0 ~ W = -0 Lnn E °c) aaci E E co E °3 E E O M N H m U) o E E -o E o a~ -o -o L L p (D L a~ E LU E Lu cn G1 Gl a a Lu Q u o O 10 7 N E N 7 aN.i N d N L N O fC E E E E a~ E c O c ` d U O U L 7- U L O C U L U U L LL U L N O O 5 O (1) 0 O O O 0 a a ko LL ~ LL v CL a) a) N L 6 .N u ° N LL cu) s Q v LL cu) 0 2' f6 (n 'L O M cn 'L C L (n 'L f6 (n 'L 6 (n 'L t N 0 O w = J co z a d Z a Q V) Z a U Z a J Z a (n L T U fC O a L v v v v v O 0_j L L ~ ~ 19 41 LA 7 C J O O Q 0 0 0 0 0 muLAZ H O O 0 0 0 M p'1 W Z W `O W M 0 N 0 H C f U ~a = mca I I I m FF. 11 FTT21 I I I DRAFT 2 MINUTES 3 PUBLIC UTILITIES BOARD 4 February 13, 2006 5 6 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas was 7 present, the Chair of the Public Utilities Board convened into an Open Meeting on Monday, 8 February 13, 2006 at 10:23 a.m. in the Service Center Training Room, City of Denton Service 9 Center, 901-A Texas Street, Denton, Texas to consider the specific agenda items listed below 10 under the Open Meeting section of this agenda. 11 12 Present: Chair Newell, George Hopkins, Bill Cheek, John Baines and Phil Gallivan 13 14 Absent: Bob Bland 15 16 Chair Newell called the meeting to order at 10:23 a.m. 17 18 OPEN MEETING: 19 20 ITEMS FOR INDIVIDUAL CONSIDERATION: 21 22 2) Consider recommending approval of competitive bids and awarding an annual contract for 23 the purchase of water treatment chemicals (Bid 3445-Water Treatment Chemicals awarded 24 to the lowest responsible bidder in the total estimated amount of $500,000). 25 26 Tim Fisher presented this item and pointed out to the Board that the dollar amount of $500,000 27 had been carried over from prior year documents and was inaccurate. The Board requested that 28 the minutes reflect approval of the bid amount of $500,000 while recognizing that the budget 29 would more likely be in excess of $800,000. 30 31 Board Member Bill Cheek moved to approve Item 2 with a second from Baines. The 32 motion was approved by a vote of 6-0. AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Jim Coulter 349-7194 ACM: Jon Fortune SUBJECT Consider adoption of an Ordinance accepting competitive bids and awarding a two year contract for the purchase of Traffic Signals for the City of Denton Traffic Division; providing for the expenditure of funds therefore; and providing an effective date (Bid 3443-Two Year Contract for Traffic Signals awarded to the lowest responsible bidder for each item in the annual estimated amount of $105,000). BID INFORMATION This bid is for an annual contract for the purchase of traffic signals and related items. These materials will be utilized in the construction of new signals and in the maintenance of the existing traffic control system throughout the city of Denton. RECOMMENDATION Award to the lowest responsible bidder for related groups of items in the annual estimated amount of $105,000. Item # Vendor Items 1-6 Control Technologies Inc. Exhibit A Items 7-27, 40-41,43 Paradigm Traffic Systems Exhibit A Items 42 Consolidated Traffic Controls Exhibit A The lower cost Items 11, 12,13,14,20,21, 23-27 offered by Traffic Parts, Inc. will not interchange with existing Pelco hardware due to dimensions and are not made from the specified materials. Awarding line items 1-6, and 7-27 as group items will allow us to mix items to save on freight charges and create an ease of ordering. Items 28-39 will not be awarded at this time. PRINCIPAL PLACE OF BUSINESS Consolidated Traffic Paradigm Traffic Control Technologies Fort Worth, Texas Fort Worth, TX Tomball, TX Agenda Information Sheet February 21, 2006 Page 2 ESTIMATED SCHEDULE OF PROJECT This contract will remain in effect for two years from the date of award and may be renewed for additional one-year periods contingent upon pricing remaining the same. Delivery of materials is estimated to be 60 days or less. FISCAL INFORMATION These supplies and materials will be funded from account 352001.6520. Respectfully submitted: ~_-7- Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: Tabulation Sheet 1-AIS-Bid 3443 N y O H L (a O O O O O O O O O O 'a Cp O O O O O O O 0 O O 0 0 O O V N N V 00 LO N 0 V d) (O I- I- V (h d) d) O 1- 1- 00 I- 00 C w (FT ER ER ER ER ER ER O L U Q H N L (a H O O O LO O O LO O LO O O O 0 d O O O N O N N N O N O C V C V N 1 0 0000 6 O 00 ( ( O LO N N ( CY) LO (D (O > E r- 'IT (p C. 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ER N F- 2, x N C a CL si LO o O 'a 7 W W co rn d a V O N O O > C w EPI z ch LL d x L O O7 -a_ -a_ a L C R m m N O C O C O > U E z z c~ d 0 H w x p E °O O r- co 0) > :a a z 0 i co O O R LL a) a E U N co t; m O Q LO -a _0 _0 O c o m m T > d E O O l!7 O z z .2 '0 w CL 0 af a O L lC w 'a N WQ O 2 c O ca N OJ O 7 V! m Q lC O O O C y O H `m z Z a co a U O 5 LO V d J N Q' W J m u z z E i c Q (7 d H L 2 U L- a U c 4- O v o H 0 m co tUC a v d O O} U co 0 U (n E C co a V co o 0 co w r ~ O N H ~ ao N M ~ O N m O H H v v a ORDINANCE NO. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A TWO YEAR CONTRACT FOR THE PURCHASE OF TRAFFIC SIGNALS FOR THE CITY OF DENTON TRAFFIC DIVISION; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (BID 3443-TWO YEAR CONTRACT FOR TRAFFIC SIGNALS AWARDED TO THE LOWEST RESPONSIBLE BIDDER FOR EACH ITEM IN THE ANNUAL ESTIMATED AMOUNT OF $105,000). WHEREAS, the City has solicited, received and tabulated competitive bids for the purchase of necessary materials, equipment, supplies or services in accordance with the procedures of State law and City ordinances; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bids are the lowest responsible bids for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted therefor; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies or services approved and accepted herein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: BID ITEM NUMBER NO VENDOR AMOUNT 3443 1-6 Control Technologies Inc. Exhibit A 3443 7-27, 40-41, 43 Paradigm Traffic Systems Exhibit A 3443 42 Consolidated Traffic Systems Exhibit A SECTION 2. By the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to pur- chase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid Invitations, Bid Proposals, and related documents. SECTION 3. Should the City and the winning bidder(s) wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the bids, the City Manager or his designated representative is hereby authorized to execute a written contract in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and related documents and to extend that contract as determined to be advantageous to the City of Denton. SECTION 4. By the acceptance and approval of the above enumerated bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this day of , 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: 3-ORD-BID 3443 Exhibit A Bid #3443 Date: 01/05/2006 Two-Year Contract for Traffic Signals & Hardware ITEM QTY. DESCRIPTION Vendor Vendor Vendor Paradigm Traffic Control Consolidated Systems Technologies Traffic Controls Fort Worth, TX Tomball, TX Arlington, TX Principle Place of Business 3 -SECTION BLACK POLYCARBONATE SIGNAL HEAD 1 50 WITH BLACK VISORS, BLACK POLY BACKPLATE, AND $110.00 READY FOR LED LENSES. 5 - SECTION BLACK POLYCARBONATE SIGNAL HEAD 2 12 WITH BLACK VISORS, BLACK POLY BACKPLATE, AND $189.00 READY FOR LED LENSES. 5 - SECTION BLACK POLYCARBONATE CLUSTER 3 5 SIGNAL HEAD WITH BLACK VISORS, BLACK POLY $210.00 BACKPLATE, AND READY FOR LED LENSES. PEDESTRIAN HEAD, BLACK POLYCARBONATE, CLAM 4 12 SHELL MOUNT, READY FOR LED LENS $110.76 PEDESTRIAN HEAD, BLACK POLYCARBONATE, CLAM 5 24 SHELL MOUNT WITH LED COUNTDOWN TIMER LENS $300.00 6 12 PEDESTRIAN HEAD LENS, LED WITH COUNTDOWN $178.68 TIMER PELCO 3-SECTION ASTROBRAC ASSEMBLY WITH 84 7 75 INCH CABLE AND GUSSETED TUBE #AS-0125-3-84 $95.00 PELCO 5-SECTION ASTROBRAC ASSEMBLY WITH 84 8 25 INCH CABLE AND GUSSETED TUBE #AS-0125-5-84 $105.00 PELCO 5-SECTION ASTROBRAC CLUSTER ASSEMBLY 9 5 WITH 84 INCH CABLE AND GUSSETED TUBE #AS-0138- $171.00 2-84 PELCO 3-SECTION HORIZONTAL SPAN WIRE 10 50 ASSEMBLY WITH GUSSETED TUBE #AS-0127-3 $64.00 PELCO 5-SECTION HORIZONTAL SPAN WIRE 11 12 ASSEMBLY WITH GUSSETED TUBE #AS-0127-5 $74.00 12 24 PELCO 3-SECTION HORIZONTAL SPAN WIRE $160.00 ASSEMBLY FOR TETHER WIRE #SP-3058-TX-3-ALO 13 12 PELCO 5-SECTION HORIZONTAL SPAN WIRE $174.00 ASSEMBLY FOR TETHER WIRE #SP-3058-TX-5-ALO PELCO SPAN WIRE SIGN HARDWARE, 1 EA OF: #SE- 14 24 0338, SE-0508, SE-0510, AND SE-0507-72 $36.00 PELCO PEDESTAL POLE HARDWARE, 1 EA OF: #PB- 15 12 0543, PB-0545, PB-5306, PB-5325, PB-5401, FS-2039-SS, $243.00 AND PB-5100-8 PELCO PEDESTAL POLE HARDWARE, 1 EA OF: #PB- 16 12 0543, PB-0545, PB-5306, PB-5325, PB-5401, FS-2039-SS, $291.00 AND PB-5100-12 PELCO PEDESTAL POLE HARDWARE, 1 EA OF: #PB- 17 12 0543, PB-0545, PB-5306, PB-5325, PB-5401, FS-2039-SS, $331.00 AND PB-5100-16 18 50 PELCO ASTROBRAC W/ 84 INCH CABLE #AS-3009-84 $53.00 19 6 PELCO ASTROBRAC W/ 62 INCH CABLE #AS-3009-62 $49.00 Exhibit A Bid #3443 Date: 01/05/2006 Two-Year Contract for Traffic Signals & Hardware ITEM QTY. DESCRIPTION Vendor Vendor Vendor Paradigm Traffic Control Consolidated Systems Technologies Traffic Controls Fort Worth, TX Tomball, TX Arlington, TX Principle Place of Business 20 5 PELCO MINI ASTROBRAC CABLE MOUNT#AB-0160-45 $27.00 21 5 PELCO MINI ASTROBRAC CABLE MOUNT#AB-0163-45 $29.00 22 24 PELCO PED PUSH BUTTON STATION, BLACK#SE-2023- $42.00 08-P34 23 18 PELCO PED SIGN LEFT #SF-1030-05 FOR STATION #SE $10.00 2023-08 24 18 PELCO PED SIGN RIGHT #SF-1031-05 FOR STATION $10.00 #S E-2023-08 25 18 PELCO PED SIGN #SF-1020-05 FOR STATION #SE-2023- $11.00 08 26 24 PELCO PED PUSH BUTTON ASSEMBLY, BLACK #SE- $21.00 2009-08-P34 27 50 PELCO PED PUSH BUTTON SWITCH #SE-0211 $11.00 40 12 EDI ORACLE, 4-CHANNEL LCD LOOP DETECTOR CARD $323.00 41 6 EDI LM 604,4-CHANNEL LOOP DETECTOR CARD $186.00 42 12 3M C824-0,4-CHANNEL CANOGA LOOP DETECTOR $597.00 CARD 43 8 EDI SSM-12LE SIGNAL MONITOR $588.00 Shipment can be made in days from receipt of 60 - 90 30 - 45 30 - 90 order. 'Prices shall be bid F.O.B. Denton AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Vance Kemler 349-8444 ACM: Jon Fortune SUBJECT Consider adoption of an Ordinance of the City of Denton authorizing the City Manager or his designee to execute a change order to the contract with the Houston-Galveston Area Council of Governments (H-GAC) for the acquisition of 35, 65, and 95 gallon refuse carts for the City of Denton Solid Waste Department by way of an Interlocal Agreement with the City of Denton; and providing an effective date (File 3394-Purchase of Refuse Carts at the new H-GAC contract prices shown in Exhibit A in the estimated amount of $91,558.47). The Public Utilities Board recommends approval (6-0). INTERLOCAL AGREEMENT INFORMATION The City Council approved the Solid Waste Department's most recent cart purchase using H-GAC pricing on September 6, 2005. Since approval, the Department has ordered approximately $701,706 of carts for delivery in Fall 2005. H-GAC Unit Prices during September 2005 were as follows: Large (95 Gallon) - $38.13 Medium (65 Gallon) - $35.68 Small (35 Gallon)- $34.53 There has been a recent H-GAC refuse cart price increase to the following unit prices: Large (95 Gallon) - $47.65 Medium (65 Gallon) - $43.39 Small (35 Gallon)- $40.35 During the fiscal year 2006 budget planning period, the City of Denton City Council approved the conversion of the City of Denton's residential refuse collection system from a bagged system to a cart system. Voluntary cart collection citizens totaled approximately 53% of Denton's residential refuse customers prior to commencing the conversion to a citywide cart collection system. The mix of cart distributions by size during the citywide cart distribution period has created a need to increase inventory levels of the small and medium size carts. Agenda Information Sheet February 21, 2006 Page 2 PRIOR ACTIONNIEW (COUNCIL, BOARDS, COMMISSIONS) The Public Utilities Board approved this item at its February 13, 2006 meeting. RECOMMENDATION Award to Rehrig Pacific Company and Toter Incorporated as listed on attached Exhibit A. PRINCIPAL PLACE OF BUSINESS Houston-Galveston Area Council of Governments Rehrig Pacific Company Houston, Texas Lawrenceville, GA Toter Incorporated Charlotte, NC ESTIMATED SCHEDULE OF PROJECT Staff desires to utilize this purchase agreement for all refuse cart purchases for the term of the H-GAC contract. Delivery of truckload quantities can be received 30-45 days after receipt of order. FISCAL INFORMATION Funding for the carts will be provided from Solid Waste project account 660038588.1365.30100. Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: Rehrig H-GAC Contract Pricing Sheet Attachment 2: Toter H-GAC Pricing Sheet 1-AIS-File 3394 Change Order One Attachment 1 CONTRACT PRICING WORKSHEET Date 1/24/2006 For Catalog & Price Sheet Type Purchases Prepared: This Form nrtr,r he veep rred hr Contractor, anrlprovided to End t ,wr ra atia h to Prfri har r Order, with Copy to The If-GAC adnr nistratlt,et-, shall 1w ~alcrrfwtedand shown as a separate; aiw ileti, Plrrrrsar 1rpEurl:riuflc~ihli'. s°y1Qg City of Denton Contractor: Rebrig Pacific Company Agency: contact :Karen Smith Prepared sZach Martin Person: By: Phone: ;(940) 349-8436 Phone: :(214)292-4709 Fax: Fax: :(214) 638-7477 Contract GC01-05 Catalog lPricesneet :Form E Manufacturer's Options Pricing Name: No.: IF 1'. I,i4t Catalw~ i Price Shen Item being rmrchaced_ Attach additional shect(0 if neutitiart. Quan Description Unit Pr Total 1242 ;1-1A-2, ROC-65 $43.39 $53,89038 0 0 0 0 a 0 0 0 0 0 0 Total From Other Sheets, If Any: Subtotal A: $53,890.38 B. List 9nv Unpuhlished Option, Accessory or Sertice irenLs. atcach additional sheet(ci if necescarv: pie, i inp7alishcrj ltcttrtiar any which v, ere not suhn'iTiel aid ptwc,d in contraet,er hid ) Quan Description Unit Pr Total 0 0 0 0 Total From Other Sheets, If Any Subtotal S: r Check: Total cost of Unpublished Options (C) cannot exceed 25% of the total of the Base Unit Price plus Published Options A+B . For this transaction the percentage is: 1C. H-GAC Fee Calculation (From Current Fee Tables) Subtotal C: $808.36 1.5% D. List .nr,N it her allowances ol,speci:d dnconnts Subtotal D: 0 Delivery Date' It. Total Purchase Price (A-i-I3+ +D): 54698.74 Attachment 2 CONTRACT PRICING WORKSHEET Contract GCO1-05 Date i 1/24/2006 For Standard Equipment Purchases No.: Prepared: This Farm must he pic-pared iii Cofitracinr, and pruvided a Fnd 'Vi. er to attack to Purchase Ordcr, rtilh colt, to 77-'GA Ylte H-("AC adminirtrattve fce shall he culcula ed and shown us u separateline item. Plcutie tip/ic ur priru l~~iblr. Buying :City of Denton contractor: :"Toter Incorporated Agency: Contact Kevin Goodman Prepared Laura Gates Person: By: Phone: Phone: :8001424-0422 Fax: Fax: ;704/878-0734 Email: kevin.goodman(acityofdenton.com Email: Igates@toter.com Product ICI) Description: EVR 11 79248 Code- !A. Product Item Base Unit Price Per Contractor's H-GAC Contract: 37.53 B. Published Options Itemize below - Attach additional sheet(s) if necessary - Include Option Code in description if !applicable. M t-- PULl] Ji"i Opooi: al -a'bliiatcd ar , pTiCC"' fn CortraCioi- bid.) Description Cost Description Cost Body Hot Stamp - User Name/Logo Hot stamped on Side 0.50 of Container Body Granite Colors - Graystone, Sandstone, Brownstone, 1.45 Greenstone, Bluestone and Navy Granite Subtotal From Additional Sheets}: Subtotal B: 135 C. Unpublisbed Options - Itemize below / attach additional sheet(s) if necess;1r.N. (Note: L npuhhshOd ~'J'tioo gyre item, [(Ch s ere no t sui~mitred and piiccd in Contruc:ui'~- bid. p Description Cost Description Cost None Subtotal From Additional Sheet{s}: Subtotal C. 0 Check: Total cost of Unpublished Options (C) cannot exceed 25% of the total of the Base Unit: Price plus Published Options (A+B). For this transaction the percentage is: 07/ F P. Other Co,,( Items Not Itenrized!AWN e (e.g. lnstallatlopi Freight, Delisery,Etc.) Description Cost Description Cost Freight - Zone 4 ($781.66 for 100 to Full Truckload) 5781.661900 = 0.87 Subtotal D: 0.87 E. Total Cast Before, AnN Applicahfe'trade-In I Other allowances I Biwouats (a+B+C'+ll) Quantit. Ordered: )00 l Subtotal of B - C- p: 40..;5 = -,ubtotat E: ' 36,315.00 IF. I I-GAC Fee Ca leulation (From Current fee Tables) Subtotal F: 544.73 G. '1 ratie-Ina i Other AIlorti ances 1 special DDiscottnty Description Cost Description Cost one subtotal G:: 0 Delivery Date:; 6-8 Weeks ARO H. Total 'Purchase Price (E+F+G): 36,859.73 ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE A CHANGE ORDER TO THE CONTRACT WITH THE HOUSTON-GALVESTON AREA COUNCIL OF GOVERNMENTS (H-GAC) FOR THE ACQUISITION OF 35, 65, AND 95 GALLON REFUSE CARTS FOR THE CITY OF DENTON SOLID WASTE DEPARTMENT BY WAY OF AN INTERLOCAL AGREEMENT WITH THE CITY OF DENTON; AND PROVIDING AN EFFECTIVE DATE (FILE 3394- PURCHASE OF REFUSE CARTS AT THE NEW H-GAC CONTRACT PRICES SHOWN IN EXHIBIT A IN THE ESTIMATED AMOUNT OF $91,558.47). WHEREAS, pursuant to Ordinance 95-107, the Houston-Galveston Area Council of Government (H-GAC) has solicited, received, and tabulated competitive bids for the purchase of necessary materials, equipment, supplies, or services in accordance with the procedures of state law on behalf of the City of Denton; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described materials, equipment, supplies, or services can be purchased by the City through the Houston-Galveston Area Council of Government (H-GAC) programs at less cost than the City would expend if bidding these items individually; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies, or services approved and accepted herein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the numbered items in the following numbered file for materials, equipment, supplies, or services, are hereby approved. FILE NUMBER VENDOR AMOUNT 3394 H-GAC/Rehrig Pacific Company Exhibit A 3394 H-GAC/Toter Inc. Exhibit A SECTION 2. That by the acceptance and approval of the above numbered items set forth in the referenced file, the City accepts the offer of the persons submitting the bids to the H- GAC for such items and agrees to purchase the materials, equipment, supplies, or services in accordance with the terms, conditions, specifications, standards, quantities and for the specified sums contained in the bid documents and related documents filed with the H-GAC, and the purchase orders issued by the City. SECTION 3. Should the City and persons submitting approved and accepted items set forth in the attached purchase orders wish to enter into a formal written agreement as a result of the City's ratification of bids awarded by H-GAC, the City Manager or his designated representative is hereby authorized to execute the written contract; provided that the written contract is in accordance with the terms, conditions, specifications and standards contained in the Proposal submitted to H-GAC, quantities and specified sums contained in the City's purchase orders, and related documents herein approved and accepted. SECTION 4. By the acceptance and approval of the above enumerated items, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this day of , 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: 3-ORD-File 3394 Exhibit A File #3394 Change Order One Date: 2/21/06 Refuse Carts Item UOM Description VENDOR VENDOR HGAC/TOTER HGAC/REHRIG INC. PACIFIC CO. Principle Place of Business: Charlotte, NC Houston, TX 1 EA 35 GALLON CARTS $40.35 2 EA 65 GALLON CARTS $43.39 I DRAFT 2 MINUTES 3 PUBLIC UTILITIES BOARD 4 February 13, 2006 5 6 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas was 7 present, the Chair of the Public Utilities Board convened into an Open Meeting on Monday, 8 February 13, 2006 at 10:23 a.m. in the Service Center Training Room, City of Denton Service 9 Center, 901-A Texas Street, Denton, Texas to consider the specific agenda items listed below 10 under the Open Meeting section of this agenda. 11 12 Present: Chair Newell, George Hopkins, Bill Cheek, John Baines and Phil Gallivan 13 14 Absent: Bob Bland 15 16 Chair Newell called the meeting to order at 10:23 a.m. 17 18 OPEN MEETING: 19 20 ITEMS FOR INDIVIDUAL CONSIDERATION: 21 22 3) Consider recommending approval of the purchase of refuse carts, totaling $91,558.47, 23 through an interlocal agreement with the Houston-Galveston Area Council of Governments 24 (HGAC) statewide cooperative purchasing program. 25 26 Board Member Dick Smith asked about current cart inventory and whether all carts would 27 eventually be used. 28 29 Vance Kemler, Director of Solid Waste responded that after processing current requests, cart 30 inventory should be about 500 large, 900 medium, and less than 300 small. Kemler pointed out 31 that inventory would be needed for new construction, at approximately 1,000 homes per year, 32 and for replacement of damaged and lost carts. 33 34 Gallivan moved to approve with a second from Baines. The motion was approved by a vote 35 of 6-0. AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Ross Chadwick 349-8830 ACM: Jon Fortune SUBJECT Consider adoption of an Ordinance authorizing the City Manager to execute change order one to the contract between the City of Denton and James R. Kirkpatrick, Inc. dba Kirkpatrick Architecture Studio; providing for the expenditure of funds therefore; and providing an effective date (Ordinance No. 2005-192; RFSP 3324-Architectural Design Services for Fire Station #7 awarded to James R. Kirkpatrick, Inc. dba Kirkpatrick Architecture Studio in the not to exceed amount of $250,000 and Change Order One in the amount of $68,117.50 for a total amount of $318,117.50. CHANGE ORDER INFORMATION This Change Order is for additional administrative and engineering costs associated with Leadership in Energy and Environmental Design (LEED) certification for Fire Station #7. The invoice included as part of Attachment 1 gives a breakdown for each of the major cost factors. PRIOR ACTIONNIEW (COUNCIL, BOARDS, COMMISSIONS) Council awarded RFP 3324 Architectural Design Services for Fire Station #7 to James R. Kirkpatrick, Inc. dba Kirkpatrick Architecture Studio on July 19, 2005. RECOMMENDATION Approve Change Order One in the amount of $68,117.50 to James R. Kirkpatrick, Inc. dba Kirkpatrick Architecture Studio increasing the total amount of the contract to $318,117.50. PRINCIPAL PLACE OF BUSINESS James R. Kirkpatrick, Inc. dba Kirkpatrick Architecture Studio Denton, TX ESTIMATED SCHEDULE OF PROJECT Projected completion of construction on Fire Station #7 is January 2007. This change order will have no impact on the project's estimated completion date. Agenda Information Sheet February 21, 2006 Page 2 FISCAL IMPACT Funding for this Change Order will come from account number 100090443.1365.20100. Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: Change Order One 1-AIS-RFP 3324 Change Order One Attachment 1 CHANGE ORDER/CONTRACT REVISION CITY OF DENTON, TEXAS - OWNER DISTRIBUTED TO: OWNER [ ] CONTRACTOR [x] Kirkpatrick Architecture Studio SID/RFSP # P - O - If -123A9100" CHANGE ORDER # 3324- PROJECT: flcntnn Firm Cta#inn Nn 7 _ DATED: 01-19-06 CONTRACTOR : Kirkpatrick A CONTRACT DATE : 07-19-05 100 W. Mulber JDE ACCT # Denton TX 76201 THIS CHANGE ORDER/REVISION MAKES THE FOLLOWING CHANGES IN THIS CONTRACT: (written description or attach back up) THE ORIGINAL (CONTRACT SUQ~_, $ 2 n00_QQ_~ NET CHANGE BY PREVIOUSLY AUTHORIZED CHANGE ORDERS $ THE (CONTRACT SUM) PRIOR TO THIS CHANGE ORDER $ 250,000.00 THE (CONTRACT SUM) WILL BE (INCREASED) BY THIS CHANGE ORDER - $ 68.117.50 THE NEW (CONTRACT SUM) INCLUDING THIS CHANGE ORDER WILL E $ 318117,5Q~_ LltHEE CONTRACT TIME WILL BE (INCREASED) BY CIE DATE OF SUBSTANTIAL COMPLETION AS OF THE DATE OF HIS CHANGE ORDER THERFORE IS $ r-~ , dirk atrick Archite Aure Studio City of Denton _ OWNER ONTRACTOR (as above) 00W.Mulberry 901-B Texas Str. fMDRESS ADDRESS g X 76201 nton., TX 76209 RE GNATURE x f James R Kirk ap trick ~ ~ ~ra r PRINT NAME PR T AME/AND TITLE G Z ,F Z.r a 01-19-06 DATE DATE C•lnnrfi)aa*Irclr}eonno nrr2~r rvc,•i.cinn fnrm rlnr ORDINANCE NO. AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE CHANGE ORDER ONE TO THE CONTRACT BETWEEN THE CITY OF DENTON AND JAMES R. KIRKPATRICK, INC. DBA KIRKPATRICK ARCHITECTURE STUDIO; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (ORDINANCENO.2005-192; RFSP 3324-ARCHITECTURAL DESIGN SERVICES FORFIRE STATION #7 AWARDED TO JAMES R. KIRKPATRICK, INC. DBA KIRKPATRICK ARCHITECTURE STUDIO IN THE NOT TO EXCEED AMOUNT OF $250,000 AND CHANGE ORDER ONE IN THE AMOUNT OF $68,117.50 FOR A TOTAL AMOUNT OF $318,117.50. WHEREAS, on July 19, 2005 by Ordinance No. 2005-192, the City awarded a Professional Services Agreement to James R. Kirkpatrick, Inc. dba Kirkpatrick Architecture Studio in the amount of $205,500 for professional architectural services for the design of Fire Station #7; and WHEREAS, the Staff having recommended, and the City Manager having recommended to the Council that a change order be authorized to amend such contract agreement with respect to the scope of work and an increase in the payment amount, and said change order fees under the proposed contract are fair and reasonable and are consistent with and not higher than the recommended practices and fees published by the professional associations applicable to the Provider's profession and such fees do not exceed the maximum provided by law; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The Change Order No. One, increasing the amount of the professional services agreement between the City and which is on file in the office of the Purchasing Agent, in the amount of Sixty Eight Thousand One Hundred Seventeen and 50/100 ($68,117.50) Dollars, is hereby approved and the expenditure of funds therefor is hereby authorized in accordance with said change order. The total purchase order amount increases to $318,117.50. SECTION 2. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of, 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: 3-ORD-RFSP 3324 Change Order One Page 2 of 2 r KIRKPATRICK ARCHITECTURE STUDIO 100 West Mulberry Denton, Texas 76201 940.387.8182 voice 940.382.0262 fax I MEMORANDUM To 1Mth Laura Behrens Denton Fire and Rescue From Date Jim Kirkpatrick 11 January 2006 Project Regarding City of Denton, Fire Station #7 Costs associated with LEED certification Distribution Page 1of1 Memorandum/Discussions Responsibility Summary of administrative and consultant engineering costs Administrative/Engineering Costs LEED Registration $950 x 1.1 = $1,045.00 LEED Certification $1,875 x 1.1 = $2,062.50 Commissioning Agent $31,250 x 1.1 = $34,375.00 Additional Commissioning $8,300 x 1.1 = $9,130.00 Additional MEP Fee $12,000 x 1.1 = $13,200.00 Additional Geotechnical $6,250 x 1.1 = $6,875.00 Rainwater Harvesting Design 31.300 x 1.1 = 91.430.00 $61,925 $68,117.50 AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Tom Shaw 349-7133 ACM: Jon Fortune SUBJECT Consider adoption of an Ordinance awarding a contract under the Texas Multiple Award Schedule (TXMAS) program for the purchase of a Tires and Tubes as awarded by the State of Texas Building and Procurement Commission (Contract TXMAS-GSA-26 I); providing for the expenditure of funds therefore; and providing an effective date (File 3461-Tires and Tubes awarded to Gray's Wholesale Tire Distributors, Inc. in the estimated amount of $150,000). FILE INFORMATION The Texas Local Governments Code Chapter 271 Subchapter D allows for Local Governmental entities to participate in the State of Texas contracts awarded by the State of Texas Building and Procurement Commission. In this particular instance, the State of Texas has awarded a contract for tires and tubes that will be advantageous to the City of Denton (State of Texas Contract # 963-A1 for Tire and Tubes has been replaced by TXMAS Contract GSA-26 I). The contract includes all sizes and types of tires and tubes, local delivery, and complete stock in the Fort Worth Warehouse and Distribution Center. A large majority of local governmental entities in the DFW Metroplex utilize this contract. As a political subdivision of the State of Texas, the City of Denton is extended General Services Administration (GSA) Commission contract pricing through the TXMAS Cooperative Purchasing Program. Acquisition utilizing the TXMAS Program meets the competitive bidding requirements of the State of Texas. RECOMMENDATION Award to Gray's Wholesale Tire Distributors, Inc., in the estimated amount of $150,000. PRINCIPAL PLACE OF BUSINESS Gray's Wholesale Tire Distributors, Inc. Fort Worth, TX ESTIMATED SCHEDULE OF PROJECT This is an annual contract, which will be in effect through September 30, 2006 subject to annual extension. Individual orders are normally delivered the following workday or sooner. Agenda Information Sheet February 21, 2006 Page 2 FISCAL INFORMATION Tires and tubes will be ordered as needed and charged to Fleet Services Vehicle Maintenance account 820100.6404. Respectfully submitted: 4,~~~IIL Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: GSA/TXMAS Gray's Wholesale 1-AIS-File 3461 Attachment 1 January 19, 2006 Jody Hays Buyer City of Denton 901 B Texas Street Denton, TX 765209 Regarding: Letter of Notification Ms Hays: This letter is notification that Grays Wholesale Tire (vendor no. 26.1.010-1.0) is a vendor on the State of Texas TXMAS program. This program is effective f3ece leer 20, 20105 and will run through September 30, 2006. Pricing i available at w-w€v.thM.state.tx.us under Grays Wholesale Tire (vendor no, 261010-10) or by calling 1-800-792-8749. Thank youu, Rol; arrmd'z-~d'." Manager of Government Sales Grays Wholesale Tire P.O. Box 2561 •201 N Rupert - Fort Worth, Texas 76113 • Phone: 817-332-9113 • Metro: 817-429-4858 • Toll Free: 800-792-8749 • Fax: 817-877-5018 11236 Brittmoore Park Dr. - Houston. Texas 77041 • Phone: 713-937-7790 • Toll Free: 800-392-8604 • Fax: 713-937-7398 web site: bia,`wvrw.graatire.corn e-mail: tirepronL~~arrl The People Who Care About Your Business ORDINANCE NO. AN ORDINANCE AWARDING A CONTRACT UNDER THE TEXAS MULTIPLE AWARD SCHEDULE (TXMAS) PROGRAM FOR THE PURCHASE OF A TIRES AND TUBES AS AWARDED BY THE STATE OF TEXAS BUILDING AND PROCUREMENT COMMISSION (CONTRACT TXMAS-GSA-26 I); PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (FILE 3461-TIRES AND TUBES AWARDED TO GRAY'S WHOLESALE TIRE DISTRIBUTORS, INC. IN THE ESTIMATED AMOUNT OF $150,000). WHEREAS, pursuant to Resolution 92-019, the State Purchasing Building and Procurement Commission has solicited, received and tabulated competitive bids for the purchase of necessary materials, equipment, supplies or services in accordance with the procedures of state law on behalf of the City of Denton; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described materials, equipment, supplies or services can be purchased by the City through the Building and Procurement programs at less cost than the City would expend if bidding these items individually; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies or services approved and accepted herein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the numbered items in the following numbered purchase order for materials, equipment, supplies, or services, shown in the "Purchase Orders" listed hereon, and on file in the office of the Purchasing Agent, are hereby approved: FILE NUMBER VENDOR AMOUNT 3461 Gray's Wholesale Tire Distributors, Inc. $150,000 SECTION 2. That by the acceptance and approval of the above numbered items set forth in the attached purchase orders, the City accepts the offer of the persons submitting the bids to the Building and Procurement Commission for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, conditions, specifications, standards, quantities and for the specified sums contained in the bid documents and related documents filed with the Building and Procurement Commission, and the purchase orders issued by the City. SECTION 3. That should the City and persons submitting approved and accepted items set forth in the attached purchase orders wish to enter into a formal written agreement as a result of the City's ratification of bids awarded by the Building and Procurement Commission, the City Manager or his designated representative is hereby authorized to execute the written contract which shall be attached hereto; provided that the written contract is in accordance with the terms, conditions, speci- fications and standards contained in the Proposal submitted to the Building and Procurement Commission, quantities and specified sums contained in the City's purchase orders, and related documents herein approved and accepted. SECTION 4. By the acceptance and approval of the above-enumerated bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this day of , 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: 3-ORD-File 3461 AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Sharon Mays 349-8487 ACM: Jon Fortune SUBJECT Consider adoption of an Ordinance awarding a contract for the purchase of materials, supplies, or services necessary for the purchase and maintenance of Oracle Database Enterprise Edition licenses and software support as approved by the State of Texas Building and Procurement Commission Department of Information Resources (DIR); providing for the expenditure of funds therefore; and providing an effective date (File 3472-Purchase of Oracle Software awarded to Mythics, Inc. in the amount of $30,532). The Public Utilities Board recommends approval (6-0). FILE INFORMATION DME owns a geographic information system (GIS) that uses an Oracle database as the repository for the data records. The GIS is used by DME to map and store information on its underground and overhead electric systems and equipment. The geographic background maps come from the County and City GIS databases, which also use Oracle. DME's system resides on its own server, which must be licensed for Oracle. The City of Denton Information Technology Department recommended that DME replace the existing aging GIS server with a dual processor server to gain needed performance improvement and to bring the equipment up to industry standards. The new dual processor server was received in December 2005 and will be configured and placed in service March 2006. The dual processor server will allow the DME GIS and new Crew Manager software applications to reside on the same server and use the same Oracle software. The attached quote from Mythics, Inc. is for an additional 42 licenses. The amount for annual support includes consultation with Oracle on problems and also qualifies DME for all future updates of the product. Mythics, Inc. is Oracle's named reseller for Federal, State and Local Government sales. They are certified as a State of Texas Department of Information Resources vendor. Prices reflected on the attached quotation are from State of Texas DIR Contract #DIR-VPC-03-018. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) The Public Utilities Board approved this item at its February 13, 2006 meeting. RECOMMENDATION Award to Mythics, Inc. in the amount of $30,532. Agenda Information Sheet February 21, 2006 Page 2 PRINCIPAL PLACE OF BUSINESS Mythics, Inc. Virginia Beach, VA ESTIMATED SCHEDULE OF PROJECT The software can be delivered and installed approximately 30 days from receipt of order. FISCAL INFORMATION This item will be funded from account 600001.7804.9300A. Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: DIR Quote 1-AIS-File 3472 E w w - -o aq°v Ea - - n E a z z _ 3 E v ° v E w 'o w W rr L° v z z w `e- W ° z r a-_ w a oEr ny r qow` E Ea N TZ` to _ _ rn J ~`tym om vmNn - (6 ~5 ON ti - ° UO 9 o22m m - - - vo ->as _ 12 M, m E :E m vva0 =v Ex o a o _ Z aA -i -i o2-Ew - 3L a~ m > N 0 0. o a ~--I Ed °a q3q vE - E ytyomEv _ - r m v o n W O N CD o. m I~ a °o E `o o 1 02-o U °=0 o F » 0 ° _ w m a E E 10 o -z 10, -2 a V ° d o ` m E E T v - _ N n d o E m ° E 0 'T Lo . O O~ p O .L.. N 4-0 c 0 W - w m W -20 N N N N E a L O v v -0 o W 0 oO E0o- n `m 2o na oa (n Z U m m Z - c E m r N o E - Lim "-`wm W o_ 10 o E ~c'A U m = m2gE °5.. m Cz E J c a a a a n -0-2 v~oE o 0= a vaw m F d d v `wpm _ E - -0 o. 0 °E O- 7 7 c E ¢a V o E° w=- m - v 'a ,E°0 .E a o E _ O E v o R@Ev - - e'¢ME - U J Z Z E a a n E v - E v d - ` oc w` E 'o a _ a m v m E v v E - - .2 w w N t` v 0 - co N m E 20 m v s - 2° y a 3 a v -,o o l o 3 T N 3 0 o2.. a o --o. o - aorq 3aov a m = ~9 2 2 2 0. 2 t E^= a"~o A°am 21 "1 F .0 OE o - a ton 0- . n aEE 0 -,t m in 3 2 f a :E 0 E U - rn E o N v- o - d ° 0- x - E 2 :E - j2 m= -°'E a a m 0- d a o ~ ° 0- o `oa `v ~a E c O o° o o E a L v -o :E m = E m E ° mn E av c L E X o d w r ° o -E l Op ti v E E. :E c 00 V m _n J O E O m E E N m - E `o U) o o LE 0, CO 0 v n U`ml m v m -a 65 -0 m N O U N v E U E o tp IX C 4 - W O _ v o F -O m o E v v n E O O N _ T v U ,n v m E V E - U V 0_ N N E N ~2 a o as n m v Si c _2 m E tb 1 2> :E Mm r t d W 3 m q Q 0 c N C p N m m E Q w aa`O FLL T c 2 ton -F M m a v yoLLQ= _ ' s Mo@) ZL O E Ni Em q w a E vx' aNvE m E a°cN o L; x -x t-6 o. t -0 ,x N fV 3 N N a 0 Z c- - w a m -F w 0 ° N F LL EON .2 Lii w 0. EN x~ wE Em aO cx00. onna D r n w ~r~ ` ..j« aUn_ Zc > a'~q rEv ~N zc1c a `wZ q£m.'m N m M _m ain ii _ `mU ~E C! S o aO U m r H O I W > - N ORDINANCE NO. AN ORDINANCE AWARDING A CONTRACT FOR THE PURCHASE OF MATERIALS, SUPPLIES, OR SERVICES NECESSARY FOR THE PURCHASE AND MAINTENANCE OF ORACLE DATABASE ENTERPRISE EDITION LICENSES AND SOFTWARE SUPPORT AS APPROVED BY THE STATE OF TEXAS BUILDING AND PROCUREMENT COMMISSION DEPARTMENT OF INFORMATION RESOURCES (DIR); PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING AN EFFECTIVE DATE (FILE 3472-PURCHASE OF ORACLE SOFTWARE AWARDED TO MYTHICS, INC. IN THE AMOUNT OF $30,532). WHEREAS, pursuant to Resolution 92-019, the State Purchasing Building and Procurement Commission has solicited, received and tabulated competitive bids for the purchase of necessary materials, equipment, supplies or services in accordance with the procedures of state law on behalf of the City of Denton; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described materials, equipment, supplies or services can be purchased by the City through the Building and Procurement Commission programs at less cost than the City would expend if bidding these items individually; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies or services approved and accepted herein; NOW, THEREFOR, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the numbered items in the following numbered purchase order for materials, equipment, supplies, or services, shown in the "Purchase Orders" listed hereon, and on file in the office of the Purchasing Agent, are hereby approved: FILE N UMER VENDOR AMOUNT 3472 Mythics, Inc. $30,532 SECTION 2. That by the acceptance and approval of the above numbered items set forth in the attached purchase orders, the City accepts the offer of the persons submitting the bids to the Building and Procurement Commission for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, conditions, specifications, standards, quantities and for the specified sums contained in the bid documents and related documents filed with the Building and Procurement Commission, and the purchase orders issued by the City. SECTION 3. That should the City and persons submitting approved and accepted items set forth in the attached purchase orders wish to enter into a formal written agreement as a result of the City's ratification of bids awarded by the Building and Procurement Commission, the City Manager or his designated representative is hereby authorized to execute the written contract which shall be attached hereto; provided that the written contract is in accordance with the terms, conditions, speci- fications and standards contained in the Proposal submitted to the Building and Procurement Commission, quantities and specified sums contained in the City's purchase orders, and related documents herein approved and accepted. SECTION 4. By the acceptance and approval of the above enumerated bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: 3-ORD-File 3472 Page 2 of 2 I DRAFT 2 MINUTES 3 PUBLIC UTILITIES BOARD 4 February 13, 2006 5 6 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas was 7 present, the Chair of the Public Utilities Board convened into an Open Meeting on Monday, 8 February 13, 2006 at 10:23 a.m. in the Service Center Training Room, City of Denton Service 9 Center, 901-A Texas Street, Denton, Texas to consider the specific agenda items listed below 10 under the Open Meeting section of this agenda. 11 12 Present: Chair Newell, George Hopkins, Bill Cheek, John Baines and Phil Gallivan 13 14 Absent: Bob Bland 15 16 Chair Newell called the meeting to order at 10:23 a.m. 17 18 OPEN MEETING: 19 20 CONSENT AGENDA: 21 22 Approval of the Consent Agenda authorizes the Interim City Manager, or his designee, to 23 implement each item in accordance with the staff recommendations. The Public Utilities Board 24 has received background information, staff s recommendations, and has had an opportunity to 25 raise questions regarding these items prior to consideration. 26 Listed below are bids, purchase orders or other matters to be brought before the Public Utilities 27 Board to be considered and approved for payment or other action under Consent Agenda Item 1 28 through 3 inclusive. Detailed information is attached to each Consent Agenda item. This listing 29 is provided on the Consent Agenda to allow Public Utilities Board Members to discuss or 30 withdraw an item prior to approval of the Consent Agenda. If the item is pulled from 31 consideration for separate discussion, prior to its consideration, such item will be considered as 32 the first item(s) taken up under the "Items For Individual Consideration" section of the agenda, 33 set forth below. The remaining Consent Agenda Items will be approved with one motion, a 34 second, and by a majority vote of the Public Utilities Board Members who are present. 35 36 Items 2 and 3 were pulled from the Consent Agenda for individual considerations. Item 1 was 37 considered as part of the Consent Agenda. 38 39 1) Consider recommending approval of the purchase of forty-two Oracle user licenses with 40 annual support and maintenance using the Texas Department of Information Resources 41 (DIR) Contract DIR-VPC-03-018 from Mythics, Inc., in the amount of $30,532. 42 43 Board Member John Baines moved to approve Consent Agenda Item 1 with a second from 44 Board Member Phil Gallivan. The motion was approved 6-0. 45 AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Ross Chadwick 349-8830 ACM: Jon Fortune SUBJECT Consider adoption of an Ordinance of the City of Denton, Texas accepting competitive sealed proposals and awarding a best value four year contract for patient care reporting and emergency medical services (EMS) billing for the City of Denton Fire Department; authorizing the expenditure of funds therefor; and providing an effective date (RFP 3403-Emergency Medical Services (EMS) Billing awarded to Intermedix, Inc.). RFP INFORMATION The City received eight proposals for RFP #3403 outlining requirements for two components of Emergency Medical Services: Patient Care Reporting (PCR) field data entry, and EMS accounts receivable billing. Each component is extremely diverse in application but essential in integration of information to obtain quality control, demographic, and state required statistics and to assess billing for cost recovery of services provided. The proposals were reviewed by Laura Behrens, Management Assistant and Chief Randy Nickerson, Battalion Chief of Information Systems with input from DFD paramedics and Finance representatives. Each company was rated using the five criteria identified in the Request for Proposal as "Criteria for Proposal Acceptance": 1. Compliance with RFP request terms and conditions. (30 points) 2. Have the necessary experience, organization, and technical skill in the field of the ambulance billing services. (20 points) 3. Have a satisfactory record of performance in developing and implementing similar services. (20 points) 4. Provide a sample copy of the proposer's Patient Care Report. (10 points) 5. Rate Schedule (20 points) All submitted proposals were reviewed and scored based on the information provided. The top two scoring companies, Intermedix and Southwest General Services, were the only vendors that provided a web-based PCR system, which was a criteria listed in the RFP. Interviews were requested and scheduled with both vendors. Agenda Information Sheet February 7, 2006 Page 2 RFP INFORMATION (CONTINUED) The companies were scored as follows: Company Score Intermedix 86 Southwest General Services 81 ARS 79 National Reimbursement 77 Ambulance Billing Services 74 Advanced Data Processing 72 EMS Billing Services 69 Accordi s 64 Fire Department representatives along with Finance representatives interviewed both companies to obtain further information on issues and questions that had arisen from the proposals. Both companies provided requested information and were give the opportunity to demonstrate the proposed system of operation. A final review of all submitted proposals was conducted. New information obtained from interviewing Intermedix and Southwest General Services was considered in the review. All submittals were ranked based on the ability to provide the requested specifications of services. Fire Department and Finance personnel unanimously approved the final ranking of proposals. The final ranking is shown below: Company Rank Intermedix 1 Southwest General Services 2 ARS 3 National Reimbursement 4 Ambulance Billing Services 5 Advanced Data Processing 6 EMS Billing Services 7 Accordi s 8 Agenda Information Sheet February 7, 2006 Page 3 RECOMMENDATION Award a professional service agreement to Intermedix, Inc. for the provision of a patient care reporting system and emergency medical service billing at a rate of 11% of collections. PRINCIPAL PLACE OF BUSINESS Intermedix, Inc. Houston, TX ESTIMATED SCHEDULE OF PROJECT This is a four-year agreement that automatically renews for additional one-year periods unless notice is given before the end of the initial term by either party that it does not wish to extend the relationship. FISCAL INFORMATION This is basically a self-funding agreement. The service provider is only paid based upon the success of their collection. The agreement has no budget expenditure impact. Respectfully submitted: ~_-7- Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: RFP Selection Process I-AIS-RFP 3403 Attachment 1 Exhibit 1: RFP SELECTION PROCESS 1. Review each firm's submitted proposal. Rate each proposal according to criteria listed in RFP. Interview the top 2 or 3 companies based on scoring. 2. Invite the selected finalists to an interview to address issues and questions by the Denton Fire Department and Finance based on information provided in submitted proposals. Ask any questions that may be generated by a company's response to the questions/issues. 3. Re-evaluate ratings of interviewed companies based on information obtained in the interview. 4. Rank all submittals (with #1 being the most highly qualified) on ability to perform patient care reporting and emergency medical service billing. The final ranking will be approved by the Denton Fire Department and Finance. 6. Submit the proposed contract to the City Council for final approval. ORDINANCE. AN ORDINANCE OF THE CITY OF DENTON, TEXAS ACCEPTING COMPETITIVE SEALED PROPOSALS AND AWARDING A BEST VALUE FOUR YEAR CONTRACT FOR PATIENT CARE REPORTING AND EMERGENCY MEDICAL SERVICES (EMS) BILLING FOR THE CITY OF DENTON FIRE DEPARTMENT; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (RFP 3403-EMERGENCY MEDICAL SERVICES (EMS) BILLING AWARDED TO INTERMEDIX, INC.). WHEREAS, the City has solicited, received, and tabulated competitive best value bids, for the purchase of necessary materials, equipment, supplies or services in accordance with the procedures of State law and City ordinances based on the best value as determined by using the selection criteria set forth in the request for bids; and WHEREAS, the City's selection committee has reviewed and recommended that the herein described bids are the best value based on the selection criteria for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted; and WHEREAS, the City's Purchasing Agent has determined that the best value bid process provides the best value to the City for this procurement; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies or services approved and accepted herein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and conclusions set forth in the preamble of this ordinance are incorporated within the body of the ordinance. SECTION 2. The options in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, is hereby accepted and approved as being the best value based on the selection criteria contained in the request for bids for such items: RFP NUMBER DESCRIPTION VENDOR AMOUNT 3403 EMS Billing Services Intermedix, Inc. Exhibit A SECTION 3. By the acceptance and approval of the above items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid Invitations, Bid Proposals, and related documents. SECTION 4. The City Manager is hereby authorized to execute any and all necessary written contracts for the performance of the services in accordance with the bids accepted and approved herein, provided that such contracts are made in accordance with and relating to the items specified in Section 1, which written contract(s) shall be attached hereto; provided that the written contract is in accordance with the above Request to Submit Bids, Bid Proposals, and documents relating thereto specifying the terms, conditions, plans and specifications, standards, quantities and specified sums contained therein. SECTION 5. By the acceptance and approval of the above enumerated bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids. SECTION 6. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this day of ,2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: 3-ORD-RFP 3403 SERVICE AGREEMENT This Service Agreement ("Agreement") entered into by and between Intermedix, Inc., a Texas corporation with offices at 16225 Park Ten Place Drive, Suite 805, Houston, Texas 77084, Facsimile No. (866) 724-5995 (hereinafter referred to as "Intermedix"), and the provider of emergency medical and or ambulance transportation services as identified and with the address as set out on the signature page hereto (hereinafter referred to as "Provider"), is as follows: Recitals WHEREAS, Provider operates, as part or all of its overall activities, an ambulance service that provides emergency and/or non-emergency medical and ambulance services, including emergency medical responses, other patient encounters and/or patient ambulance transportation (the "Services"); WHEREAS, Intermedix is a company in the business of administrating and collecting accounts receivables that arise from services like the Services; and NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree as follows: Article One Term and Termination 1.01 Term. The initial term of this Agreement shall be for a period of one year unless earlier terminated pursuant to Sections 1.02 or 1.03 (such initial term, together with all extensions thereof, shall be referred to herein as the "Term"). Unless notice is given before the end of the initial Term by either party that it does not wish to extend the relationship, at the end of the initial Term, this Agreement shall be automatically extended for additional, one-year periods. 1.02 Optional Termination. Notwithstanding any provision of this Agreement to the contrary, this Agreement may be terminated by either party, without cause and without liability (except for continuing obligations during such period), upon 60 days advance written notice to the other party. 1.03 Termination on Default. Either party may terminate this Agreement if (a) the other party is in default under the terms and conditions of this Agreement and (b) the default is not cured within 60 days of receipt of written notice specifying the default. 1.04 Obligations During Notice Period. During the 60-day notice periods specified in Sections 1.02 and 1.03, Intermedix shall be entitled to receive compensation for all accounts billed and/or collected with respect to the Services and shall be entitled, after the end of the termination period to receive compensation for all amounts billed during the termination period but not collected until after the end of the termination period. Notwithstanding the foregoing, if the termination on default herein shall be "for cause", Intermedix agrees that it shall not make -1- HOU:357342v4 telephone calls to the citizens of the City of Denton upon receipt of the notice of default. For purposes of this section for cause means that Provider has terminated this Agreement, alleging as one or more of the reasons for termination that representatives of Intermedix have, in their dealings with the citizens of the City of Denton, (i) used threatening, harassing or abusive tactics in their collection efforts or (ii) engaged in behaviors that may otherwise violate Texas or federal laws, including those governing collection activities applicable to the activities undertaken by Intermedix. 1.05 Obligations on Termination. Upon termination of the Agreement, for whatever cause, Intermedix will immediately return all original medical records to Provider and may, at Intermedix's sole election, provide to Provider a digital copy on a CD-ROM of all paper records related to Provider. Article. Two Billing, Remittances of Collections and Other Services 2.01 Service Provided; Exclusivity. During the Term, Intermedix shall be exclusively responsible for the billing and collection of (a) all charges and fees relating to the Services provided by Provider, including but not limited to private insurance, Medicare, Medicaid, and other governmental programs relating to (b) all patient encounters that occur during the Term and (c) all other patient encounters forwarded to Intermedix for collection (each set of such charges and fees for the Services related to an individual patient encounter may be referred to herein as an "account" or, collectively, the "accounts"). 2.02 Rate Schedule. Absent specific, written instructions by Provider to the contrary, Intermedix shall provide a rate schedule for the Services based on prevailing charges on a national and regional basis and adjusted, as requested, for Provider's demographic service area. Intermedix will use its reasonable best efforts to determine and use standard pricing for the Services. The rate schedule for the Services will be available via the Web Access System (as such term is defined below) in a format or accessible determined by Intermedix in its sole discretion. Provider may from time-to-time and at any time, upon 30 days written notice to Intermedix, instruct Intermedix to change one or more scheduled charges. 2.03 Place of Payment. Intermedix may accept payments at any location designated by it and may accept payments in the name of Intermedix for the benefit of Provider or Provider. 2.04 Remittances of Collections. On each Wednesday (or the immediate following business day should any Wednesday not be a business day in the State of Texas) of each week -2- HOU35734h4 during the Term, Intermedix shall forward to Provider checks received but not deposited during the previous week. 2.05 Copies of Records. From time to time, Intermedix may receive requests from patients or the representatives of patients for copies of treatment records. Intermedix may bill patients or their representatives $40.00 (but not to exceed the maximum permitted by Texas or Federal Law, including the Texas Public Information Act) for preparation and release of records,. and the total amount billed and collected may be retained by Intermedix for its services rendered. Provider will not receive any portion of this payment and specifically waives any right, title or interest it may now or later claim in such payment. In return for the right to receive such payments, Intermedix will provide, at no charge to Provider, copies of patient treatment records and/or other records Intermedix maintains on behalf of Provider if Provider receives a subpoena,. discovery, or public information request for such records. Provider and Intermedix agree that the $40.00 charge referred to in this section may only be modified in writing, executed by both parties. Article Three Settlements and Alternative Collection Arrangements 3.01 Payment Arrangement Authority. Provider hereby grants Intermedix authority to enter into a payment arrangement on its behalf with patients charged for the Services if (a) the payment is for the full amount of a bill and (b) the length of the payments does not exceed 12 months. Provider must approve payment arrangements made for any period exceeding 12 months. 3.02 Termination of Collection Efforts. If active collection efforts with respect to any account have been unsuccessful for 240 days or more, Intermedix shall have the right to terminate collection efforts with respect to such account and close the account as an unpaid debt. In addition, Intermedix may terminate or suspend collection efforts if Provider has supplied Intermedix with incomplete or inaccurate billing and/or patient information. In either event, Intermedix shall upon termination or suspension, immediately forward to Provider all records of Intermedix collection efforts, at no charge to Provider, and cease all collection activity. Intermedix shall not be entitled to compensation under this Agreement with respect to accounts on which it has terminated collection efforts. 3.03 Termination of Activities after end of Term. Intermedix agrees that it will cease all collection activities on all accounts by 11:59:59 PM on the 90th day after the end of either the Term or the termination date, whichever occurs earlier. Article Four Compensation 4.01 Compensation. With respect to accounts collected during the Tenn. and all accounts billed during the Term and collected after the Term, Intermedix shall be compensated and paid in accordance with the following schedule: -3- HOU35734N4 a. 11.0% of the total amount collected on each account. b. An additional 1.8% if payment is made by a credit card. 4.02 Obligation for Payment. Payment in accordance with Section 4.01 shall be due and owing to Intermedix by Provider for all accounts collected during the Term and collected after the Term but billed during the Term regardless of whether payment was made to Intermedix or to Provider and regardless of whether Intermedix is used as the billing agent. Intermedix and Provider agree that the purpose of this section is to guarantee that Intermedix is the sole person engaging in billing services on behalf of Provider. Intermedix acknowledges that the Provider has an existing contract for accounts that are considered delinquent or in a "collections service" status and will not bill for those accounts. Intermedix will provide on-line reports via the web access system to the Provider outlining those accounts which have exceeded the 240-day limit as outlined in Section 3.02 above and are eligible for collections status. Article Five Records and Reporting 5.01 Secure Website Access. Intermedix shall maintain records regarding Provider's accounts, collections and patient encounters on a secure website (the "Web Database") accessible with the Web Access System (as such term is defined below). Provider understands and agrees that the medical information available on the Web Database is private and confidential medical data that is protected as PHI (as such term is defined in Section 11.01 hereof) under Federal Law. Provider further understands and agrees that the Web Database contains other proprietary and confidential information that Provider may not share with third parties. Provider agrees to maintain the confidentiality of such information. Further, Provider shall limit access to the Web Database to its authorized personnel who have completed and signed an access form. Provider understands and agrees that Intermedix must receive and review each access form prior to activating any person's access to the Web Database. Provider understands and agrees that to maintain the confidentiality of the Web Database; Provider must provide Intermedix immediate, written notice of the termination of any person with access to the Web Database. Provider understands and agrees that Intermedix shall use its reasonable best efforts to maintain the security of the Web Access System, and that it is the sole responsibility of the Provider to maintain password security relating to Provider's personnel or other breaches beyond Intermedix's reasonable control. 5.02 Records of Patient Encounters. (a) Provider shall use its reasonable best efforts to forward all original medical records of each patient encounter to Intermedix within 10 days of such patient encounter. Such records shall be deemed to be the property of Provider, but Intermedix shall have the right to duplicate and retain paper or electronic copies of the records. If the records exist only in electronic form, each electronic copy shall be deemed to be an original for the purposes of this Agreement. -4- HOU'.357342v4 (b) Provider acknowledges that Intermedix has no responsibility for complying with all provisions of Title 42 CFR Section 410.40 which states, in part, that an ambulance service bears the responsibility for obtaining Physician Certification Statements (PCS's). Provider further understands and concurs that Intermedix is neither an ambulance service nor ambulance provider within the definitions as set forth by the Centers for Medicare and Medicaid Services. 5.03 Requests for Copies. Requests for copies of medical records should be submitted directly to Intermedix. Either Intermedix or Provider may authorize release of the records such that the release is in accordance with the standards and time requirements established by State and Federal law. 5.04 Texas Department of State Health Services Reports. Intermedix will be responsible for reporting all required information regarding patient encounters and trauma to the Texas Department of State Health Services. 5.05 Activity Reports. Intermedix will grant to Provider electronic access to all records on file regarding Provider including, but not limited to, patient care reports, medical records, billing records, correspondence regarding accounts, and statistical records on the Provider's medical personnel. Other than during periods of routine systems maintenance, the aforementioned information will be dynamic, real-time information and made available 24 hours per day, 365 days per year, throughout the term of this agreement. 5.06 Information Received by Provider. To the extent that Provider receives payments or original copies of documentation directly, Provider shall forward to Intermedix copies of checks, Explanations of Benefits and/or other documentation within ten (10) days of the date of receipt of payment by Provider. 5.07 Statistical Data. Provider understands and agrees that Intermedix's Web Database will maintain statistical data regarding collections and medical encounters reflecting data as it is entered in the Web Database by Intermedix or Provider. The format and content of the statistical data reports available in the Web Database will be established and defined by Intermedix, and Intermedix may add, delete or.modify the content and types of reports available without notice to Provider. Notwithstanding its right to change the form of such reports the available data in the reports shall include, at a minimum, a list of the accounts open and closed, the statement amount due for each account, the amount paid for each account and the date each account was open and closed. Provider further understands and agrees that, to the extent that it enters information into the Web Database, such information will be used in calculating the statistical data. To the extent that the information Provider enters is in error, the statistical data and calculations may also contain errors. Provider understands and agrees that Intermedix shall not be responsible for any such statistical errors caused by incorrectly entered data or for the correction of incorrectly entered data. -5- HDU35734N4 Article Six Web Database Access and Data Management 6.01 Web Access System. Intermedix will grant to Provider electronic access to all records on file regarding Provider including, but not limited to, medical records, billing records, correspondence regarding accounts, and records on personnel including credentials. It shall be the responsibility of Provider to provide its own necessary computer equipment, computer communication equipment capable of connecting to the Internet and accessing Intermedix's Internet server (hereinafter referred to as "Web Access System") and Internet access. Provider will be solely responsible for maintaining and upgrading its computer equipment as necessary to access the Web Access System. Provider acknowledges and agrees that it may have obligations under various state and federal laws to maintain patient privacy with respect to certain patient information. 6.02 Web Access System Training. Upon written request of Provider, Intermedix will provide an annual, on-site training class on the use of the Web Access System at a time determined to be mutually convenient to the parties. 6.03 Compliance with Texas State Records Retention Schedule. The information Intermedix maintains on behalf of Provider shall be retained and maintained in accordance with the provisions of Local Schedule PS of the Texas State Records Retention Schedule as may be promulgated by the Texas State Library and Archives Commission from time to time and as adopted by Provider. Notwithstanding the foregoing, Provider understands and agrees that Intermedix is agreeing to maintain and retain such records only during the Term of and pursuant to the provisions of this Agreement. Provider further understands and agrees that Intermedix will comply with the provisions of this section at the termination of this Agreement by providing written or electronic copies of such records to Provider. After such copy is provided, Intermedix shall have no further obligations under this section. Article Seven Support Services Intermedix will provide patients and personnel of Provider with telephone support services during normal business hours (Monday - Friday from 9:00 a.m. to 5:00 p.m.) except on public holidays or other holidays as established by Intermedix. Article Eight Indemnification and Fidelity Bond 8.01 Intermedix's Indemnification.: Intermedix shall indemnify and hold harmless Provider from and against claims, damages, losses and expenses, including but not limited to attorneys' fees, arising out of or resulting from Intermedix's performance, but only to the extent caused by the willful misconduct or the negligent acts or omissions of Intermedix. The indemnification provided for herein shall not be applicable to any claim of adjustment or request for reimbursement made by an insurance company or any servicing agency for Medicare or Medicaid that may be made as the result of an audit of claims made or governmental regulations -6- HOU.357342v4 or laws, including Intermedix's fees charged, except for any adjustments or claims for reimbursement made as a direct result of Intermedix's error. 8.02 Fidelity Bond. Intermedix shall keep and maintain during the term of this Agreement a fidelity bond with a qualified insurer of no less than $50,000.00. 8.03 Insurance. Intermedix shall keep and maintain during the term of this Agreement general liability insurance with a qualified insurer of no less than $1,000,000.00. Article Nine Confidentiality 9.01 Web Database; Web Servers; Other Property of Intermedix. Provider agrees that the equipment, computer hardware and software, billing and collection processing, and other related systems and equipment are the property and trade secrets of Intermedix, and that Provider will not release any information regarding such trade secrets to any third party without the prior written consent of Intermedix. 9.02 Fact of Contractual Relationship May Be Disclosed. Notwithstanding the foregoing, either party may, without the prior written consent of the other party, disclose the existence of a contractual relationship between the parties. Article Ten Audit 10.01 Accurate Books and Records. During the Term and for a period of three (3) years thereafter, each party agrees to maintain accurate books and records associated with the billing and collections made the subject of this Agreement. 10.02 Right to Audit. Upon reasonable written notice, either party may audit the books and records of the other party insofar and only insofar as such books and records relate or pertain directly to this Agreement. Such audit shall be conducted at the office of the party being audited, shall be during normal business hours, and shall be at the sole cost and expense of the party conducting the audit. 10.03 Penalty for Underpayment. If an audit reveals that a party has failed to pay any amount or portion of any amount due or payable under this Agreement and such amount is in excess of $20,000, the party being audited shall pay to the auditing party the full cost of the audit and the full amount due or payable plus interest at the rate of ten percent (10%) per annum from the date(s) of nonpayment. Article Eleven Protected Health Information 11.01 HIPAA Compliance. Intermedix shall carry out obligations under this Agreement in compliance with the privacy regulations pursuant to Public Law 104-191 of -7- HOU35734h4 August 21, 1996, known as the Health Insurance Portability and Accountability Act of 1996, Subtitle F - Administrative Simplification, Sections 261, et seq., as amended ("HIPAA" to protect the privacy of any personally identifiable protected health information ("PHI") that is collected, processed or learned as a result of the services provided in this Agreement. In conformity therewith, Intermedix agrees that it will: a. Not use or further disclose PHI except as permitted under this Agreement or required by law; b. Use appropriate safeguards to prevent use or disclosure of PHI except as permitted by this Agreement. c. To mitigate, to the extent practicable, any harmful effect that is known to Intermedix of a use or disclosure of PHI by Intermedix in violation of this Agreement; d. Report to Provider any use or disclosure of PHI not provided for by this Agreement of which Intermedix becomes aware; e. Ensure that agents or subcontractors to whom Intermedix provides PHI, or who have access to PHI, agree to the same restrictions and conditions that apply to Intermedix with respect to such PHI; f. Make PHI available to Provider and to the individual who has a right of access as required under HIPAA within 10 days of the request by Provider on behalf of the individual; g. Incorporate any amendments to PHI when notified to do so by Provider; h. Provide an accounting of all uses or disclosures of PHI made by Intermedix as required under the HIPAA privacy rule within 60 days; and i. Make its internal practices, books and records relating to the use and disclosure of PHI available to the Secretary of the Department of Health and Human Services for purposes of determining Intermedix's and Provider's compliance with HIPAA. 11.02 HIPAA Disclosures. The specific uses and disclosures of PHI that may be made by Intermedix on behalf of Provider include: a. The preparation of invoices to patients, carriers, insurers and others responsible for payment or reimbursement of the services provided by Provider to its patients; b. Preparation of reminder notices and documents pertaining to collections of overdue accounts; -8- HOU:357342v4 c. The submission of supporting documentation to carriers, insurers and other payers to substantiate the health care services provided by Provider to its patients or to appeal denials of payments for same; d. The preparation and release of medical records to patients or their legal representatives as permitted by HIPPA privacy rule; e. Uses required for the proper management of Intermedix as a business associate; and f. Other uses or disclosures of PHI as permitted by HIPAA privacy rule. Article Twelve Miscellaneous 12.01 No Waiver. The failure of either parry to insist upon strict performance of any provision of this agreement shall not be construed as a waiver of any subsequent breach of the same or similar nature. 12.02 Provisions Construed Separately. The parties agree that each provision of this Agreement shall be construed as separable and. divisible from every other provision and that the enforceability of any one provision shall not limit the enforceability, in whole or in part, of any other provision hereof. In the event that a court of competent jurisdiction determines that any term or provision herein shall be invalid or unenforceable, the remaining terms and provisions of this Agreement shall not be affected thereby, and shall be interpreted as if the invalid term or provision were not a part hereof. 12.03 Final Agreement. This Agreement sets forth the entire, final and complete understanding between the parties hereto relevant to the subject matter of this Agreement. No waiver or modification of any of the terms or conditions of this Agreement shall be effective unless in writing signed on behalf of both parties. 12.04 Performance of Agreement, Venue; Choice of Law. Provider understands and agrees that Intermedix will be performing this contract in Harris County, Texas. The venue for any disputes or causes of action that may arise out of this Agreement is the state and county courts located in Denton County, Texas. The provisions of this Agreement shall be determined in accordance with the laws of the State of Texas excluding the choice of law provisions thereof. 12.05 Headings. The headings of this, Agreement are for ease of reference only and are not intended to limit or restrict the terms hereof. 12.06 Binding Nature of Agreement. This Agreement is binding upon the heirs, legal representatives, successors and assigns of the parties hereto. 12.07 Compliance with Laws Generally. Intermedix shall comply with all applicable laws, orders, rules, or regulations of all governmental agencies bearing on its performance -9- HOU:357342v4 hereunder. If so requested by Provider, Intermedix shall submit appropriate evidence of such compliance. 12.08 Independent Contractor. It is understood and agreed that Intermedix is an independent contractor. Nothing herein contained shall be construed to create any partnership, joint venture, or joint enterprise between the parties. 12.09 Non-Profit Status Determination Letter. If Provider is a not-for-profit entity, Provider shall provide a duplicate of its letter determining its not-for-profit status with the Internal Revenue Service. In providing such letter, Provider further represents and warrants to Intermedix that it has done every act necessary to maintain its not-for-profit status with the Internal Revenue Service and is not aware of any pending, threatened or actual revocation of its not-for-profit status. 12.10 Appendices. Intermedix and Provider may enter into various appendices to this Agreement from time to time and at any time regarding additional services. Such appendices shall be considered part of this Agreement as if set forth herein at length unless such appendix provides otherwise. 12.11 Notices. Intermedix's address and facsimile number are as listed in the opening paragraph above. Provider's address and facsimile number are as listed below its signature. Should either party change addresses or facsimile numbers, such party will notify the other of its new information, in writing, within 30 days of such change of information. Notices required or permitted to be given hereunder shall be deemed to be given the day they are mailed or faxed and shall be deemed to be received the same day if. by fax (provided the sender has a fax machine/fax database generated proof of receipt) and in three days if by mail. [ONLY SIGNATURE' SECTION TO FOLLOW] -10- HOU:35n42A EXECUTED on the day of 200, and EFFECTIVE as of the day of 200. INTERMEDIX PROVIDER Intermedix, Inc. Name: Type of Entity: By. Jeremy Mattern, President For Profit Not for Profit By: Name: Title: ADDRESS OF PROVIDER Facsimile No. PRO T ~ T N, TEXAS BY: -11- HOU:357342W AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Parks and Recreation/Communit Development CM: Howard Martin, 349-8232 SUBJECT Consider adoption of an ordinance of the City Council of the City of Denton, Texas approving an agreement between the City of Denton and the Denton Affordable Housing Corporation; providing for the terms of said contract; authorizing the City Manager to execute the agreement and to expend funds with respect to the agreement; and providing for an effective date. BACKGROUND The Denton Affordable Housing Corporation (DAHC) requested and received $105,015 in 2005 HOME funds for their Affordable Homeownership Opportunities Program. Under the program, DAHC purchases single-family units, remodels them and sells them to eligible homebuyers. The homebuyers are required to qualify for a mortgage loan. The City of Denton has funded this program for the past several years. Approximately four to six projects will be completed with the HOME funding. ESTIMATED PROJECT SCHEDULE All funds should be expended and all projects complete on or before December 2006. PRIOR ACTION/REVIEW (Councils, Boards, Commissions) City Council approved the 2005 Action Plan including the DAHC award on May 24, 2005. FISCAL INFORMATION Funds provided to DAHC are part of the City's 2005 Home Investment Partnership allocation. No general funds are used to administer the program. EXHIBITS 1. Ordinance 2. Agreement Respectfully submitted: n Janet Fitzgerald, Director Parks & Recreation Department Prepared by: r; Barbara Ross Community Development S:1Our Documentsl0rdinances1061Denton Affordable Housing Ord 2006.doe ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS APPROVING AN AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON AFFORDABLE HOUSING CORPORATION; PROVIDING FOR THE TERMS OF SAID CONTRACT; AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT AND TO EXPEND FUNDS WITH RESPECT TO THE AGREEMENT; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City has received funds from the U.S. Department of Housing and Urban Development under the National Affordable Housing Act of 1990 as amended by the Housing and Community Development Act of 1992; and WHEREAS, the City has adopted a budget for such funds included therein an authorized program budget for expenditure of funds, for operating costs and project funding for the Denton Affordable Housing Corporation ("DAHC"); and WHEREAS, the City Manager has determined that the DAHC is the only state-certified community housing development organization ("CHDO") that includes the required number of low income citizens from the City on its board of directors necessary to satisfy federal requirements to serve the City's geographical area and that DAHC has provided management services to the City to provide affordable housing within the City which as significantly benefited the community; and WHEREAS, DAHC has a demonstrated history of significant service to the community in the area of affordable housing; and WHEREAS, this Agreement, therefore, qualifies as a sole source procurement in accordance with §252.022(7)(f) of the TEX. LOC. GOV'T CODE and does not need to be competitively bid; and WHEREAS, DAHC is a neighborhood-based non-profit organization and this Agreement is also authorized by §373.005 of the TEX. LOC. GOVT CODE to meet the needs and objectives of the City's Community Development Plan; and WHEREAS, the City Council deems it in the public interest to enter into an agreement for an affordable housing program with the DAHC; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Council hereby approves the attached Agreement between the City and the DAHC to provide for an affordable housing program in accordance with the terms of this Agreement, which Agreement is made a part of this ordinance for all purposes, and authorizes the City Manager to execute this Agreement. Exhibit 1 S:1Our Aocu3nentsl0rdinances106\Denton Affordable Housing Ord 2006.doe SECTION 2. The City Council authorizes the expenditure of funds for operating costs and project funding for the DAHC in accordance with the terms of the attached Agreement. SECTION 3. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: U _ - if - - :E " _ x x al a 3 0-1 --ah"s-, I PIK Are- I NAM. a e+ I Exhibit 2 An 07, - -;+R- - - - _ - _ - r '~'''•4, is -so r. ,.z -111 h SIM I klm -a._-. a ' . • I-; n hod, Awl s S4Y 119 ::s:s ' ^-f - _ - _ -=1' Y .v ~~::ti.(•!•--~ it SL~~. .a-1•_ . ~4.'F. _ .1.....x ~ •wSC~ _ ~i.._... _ . a.;. _l:~t `f 1 i. w _ - - - OWL - - n - ~ _ . _ r. , 6"W"Wok wom, :rg _ _ _ E. , r •i MW W-M xi aw, M~,6, A 6 1 WIN% - - - - = - ---`rte=r= _ f i~l Am ~ i~-~ %-I - 0 i I- I IC-L= 9- F ~ lim ift a NO bill PIM .z r. _ .r-.. - ~.5. 5 n ~ t c .a . 1. - - .5 f; _ Ise i\ tv _ e - 4 a4-a j nom- ..s...x~, •r ~ rlovw- a--., -9 0-1-wo = fi- , mol _ 9 r •A y 'r n~f'~ ll~, .i x A - - - ~t - - - - •''ij 4l~ ~ r ;•ti ~yy r k• f' L Z+]~~ ~ S r- . W-1'1 ~~~~ocd.#tlL6'e~H~dBE.~pi / -W. @W { r r 51 - rr 1. . M ww -row ' .emu v irl ii low W, ot -1 10=0 00 ?t r MOP. O"o ow, ,.,r ,..xr•: L... .t ..fir..-. .i~ tip, =wsp ~.n.. E1 .-a... n=._--...-:-_=~=~.:: ::n. tom:-._,...l J.•.l _.___'~~'J. AZ`... R A r Int. _ ti a-.. y _ ~ _ - :rte. - _.L _ mo ~l • y 1. V ~T if r a' s:. ~ j-3r 1 1. a I ii- r.. - _ .a= x .M1. , -.s-'{APL } v _ MIRM"M ?r r s , . r. S ' !r is PM, rl. .ti t• R~ ARM.. OMP ~z ..ii. Fem. _~-_-....rr_:.... yi._~,.~_~_. _..n. i 5 Mid . r. ' •7 islimil i~ An,- W 'rF. w *10 '0 -W .i,: :v3 ~ - : - ~ r-~,i,..,. sue. J 'r`~ - ~ - - tip- - "'tit. _ - 'a--• - r? - - f,'_ - SEE v ;r - - - `i 1 j 4 .III AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Electric Utility CM: Howard Martin, 349-8232 SUBJECT Consider adoption of an ordinance of the City Council of the City of Denton, Texas authorizing the City Manager to execute a professional services agreement with R. J. Covington consulting, LLC for consulting services relating to Task Order No. 06-D providing for a Cash Working Capital Study for Denton Municipal Electric; authorizing the expenditure of funds therefor; and providing an effective date. The Public Utilities Board recommends approval (6-0.) BACKGROUND All businesses must maintain a sufficient amount of readily available funds to cover differences that occur between the inflow of revenues and the billing for expenses incurred by that business. The rating agencies that review and rate the City's financial condition prior to issuance of City and utility debt regularly express a high level of concern regarding the level of cash liquidity the City and its utilities are maintaining. In the case of DME, which experiences large changes from month to month in expenditures to pay for energy requirements, use of simplistic approaches to determining the appropriate working capital requirement (such as an arbitrarily number of days times average expenditure levels) can result in extremely large amounts of cash sitting idol for much of the year earning shot term interest rates and being permanently unavailable for other requirements. At the moment, DME retains $10 million dollars of working cash, apart from its Rate Stabilization Fund. This amount was determined by an informal, simplified, analysis several years ago. For the last two years, DME has assumed that the Rate Stabilization Fund must not be dropped below $5 million in order to maintain $15 million of liquidity for DME. The $15 million figure was determined by calculating 45 days of average annual expenditures. As DME continues to utilize its Rate Stabilization Reserve to maintain competitive rates, given its TMPA debt problem, the issue of how much of that fund must be left in tact to augment the $10 million becomes critical. It is critical both because of the need to assure that DME has sufficient working capital on hand without tying up too much of its reserves and because the rating agencies must be comfortable with DME's level of liquidity. In order for the rating agencies to be comfortable with DME's liquidity and the PUB and Council to be assured the prudent financial policies are being utilized by DME in the management of its reserve funds, it is time for DME to have a formal and detailed study of its cash requirements performed. Private electric utilities utilize detailed studies of revenue collection and expenditure patterns over time to determine their working capital requirements. Performing a study of this type is time consuming and requires gathering a significant amount of data from accounting records. Such studies are often performed by a private utility's accountants and sometimes validated by outside consultants, if the results of such a study will be used in a regulatory filing. However, the City's accountants are unfamiliar with the requirements and performance of such studies. Determination of such an important financial issue should be performed by individuals with experience in this field. This Task Order will allow R. J. Covington Consulting, LLC to perform the required study for DME. The lead accountant on this assignment will be Gerald Tucker. Mr. Tucker has performed many of these studies and served as an expert witness on this topic in regulatory hearings. In addition, Mr. Tucker and other members of the Covington firm will be working with DME's accounting records as part of the audit process, allowing some synergies, which will hopefully reduce the time required for both the consultant, city staff and DME staff to extract the accounting records needed for this study. Rick Covington will also provide support for Mr. Tucker on this assignment. As a result of work done on DME's TCOS filings, Mr. Covington is very familiar with the strengths and weaknesses in the existing DME accounting records and can assist Mr. Tucker in determining areas where data will need to be carefully reviewed before it is utilized in the study. Work on this project will be charged on an hourly basis. Only actual hourly charges billed will be spent. If DME's data is reasonably clean and DME staff and/or City accounting staff has time available to assist with a significant portion of the work, it is possible that the work can be completed without spending the entire estimated cost for the project. However, if problems with data are encountered and/or the Covington staff has to do more of the work than expected, the Task order may need to be revised. OPTIONS 1. Approve Task Order 06-D. 2. Do not perform working cash study. RECOMMENDATIONS DME recommends approval of Task Order 06-D PRIOR ACTION/REVIEW (Council, Boards, Commission) The Public Utilities Board approved Task Order 06-D at its February 13, 2006 meeting by a vote of 6 to 0 with 6 members present. FISCAL INFORMATION The cost of Task Order 06-D is not to exceed $19,700. Respectfully submitted: Sharon Mays Director of Electric Utilities ORDINANCE NO. 2006- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH R. J. COVINGTON CONSULTING, LLC FOR CONSULTING SERVICES RELATING TO TASK ORDER NO. 06-D PROVIDING FOR A CASH WORKING CAPITAL STUDY FOR DENTON MUNICIPAL ELECTRIC; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council deems it in the public interest to continue to engage the firm of R. J. Covington Consulting, LLC of Austin, Texas ("Covington"), to provide further professional consulting services to the City relating to Task Order No. 06-D; which includes, without limitation, services to perform an analysis of cash working requirements for Denton Municipal Electric utility department to provide adequate operating reserves for the electric system; and WHEREAS, the City staff has reported to the City Council that there is a substantial need for the above-described specialized professional services, and that limited City staff cannot adequately perform the services and tasks with its own personnel; and WHEREAS, Chapter 2254 of the Texas Government Code, known as the "Professional Services Procurement Act," generally provides that a City may not select a provider of professional services on the basis of competitive bids, but must select the provider on the basis of demonstrated competence, knowledge, and qualifications, and for a fair and reasonable price; and WHEREAS, Covington has represented DME continuously and ably over the last nine (9) years, and has proven to be a valuable, reliable, affordable, and competent professional resource that has expertise in, and is well-acquainted with the electric operations as well as the financial and regulatory framework of Denton Municipal Electric. Covington's operations are located in Austin, Texas. Covington and his staff are particularly familiar with the characteristics, operations, and present rate structure of DME: and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the professional services, as set forth in the Professional Services Agreement; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1: That the City Manager is hereby authorized to execute a Professional Services Agreement with R. J. Covington Consulting, LLC of Austin, Texas, for professional consulting services relating to Task Order No. 06-D relating to the City and to Denton Municipal Electric, in an amount not to exceed $19,700; in substantially the form of the Professional Services Agreement that is attached hereto and incorporated herewith by reference as Exhibit "A." I Exhibit 1 SECTION 2: That the award of this Agreement by the City is on the basis of the demonstrated competence, knowledge, and qualifications of Covington and the ability of Covington to perform the professional services needed by the City for a fair and reasonable price. SECTION 3: That the expenditure of funds as provided in the attached Professional Services Agreement is hereby authorized. SECTION 4: That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY By: S:\Our Documents\Ordinances\06\R J Covington Consulting LLC-DME-Ord Aprv TO 06-D 2006.doc 2 STATE OF TEXAS § COUNTY OF DENTON § PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES PERTAINING TO DENTON MUNICIPAL ELECTRIC THIS AGREEMENT is made and entered into on the day of , 2006, by and between the City of Denton, Texas, a Municipal Corporation, with its principal office at 215 East McKinney Street, Denton, Texas 76201 {"CITY"); and R. J. COVINGTON CONSULTING, LLC, a Texas Limited Liability Corporation, with its principal office at 11044 Research Boulevard, Suite A-325, Austin, Texas 78759, hereafter "COVINGTON"; acting herein by and through their duly authorized representatives. WITNESSETH, that in consideration of the covenants, promises and agreements herein contained, the CITY and COVINGTON do hereby AGREE as follows: ARTICLE I EMPLOYMENT OF CONSULTANT The CITY hereby contracts with COVINGTON, as an independent contractor, and COVINGTON hereby agrees to perform the services herein in connection with the Scope of Services as stated in the Articles to follow, with diligence and in accordance with the professional standards customarily obtained for such services in the State of Texas. ARTICLE II SCOPE OF SERVICES A. COVINGTON shall provide to the CITY professional consulting services pertaining to completion of a cash working capital study respecting Denton Municipal Electric ("DME") by means of a lead lag study, and providing analysis thereon. COVINGTON agrees to perform those services and tasks more particularly and specifically described in Task Order No. 06-D attached hereto and incorporated herewith by reference. B. To consult with the City Manager, Assistant City Manager/Utilities, the Director of Electric Utilities, the Utility Attorney, and any other designated administrative personnel regarding any and all aspects of the services to be performed pursuant to this Agreement. ARTICLE III PERIOD OF SERVICE This Agreement shall become effective on the date this Agreement is approved and upon the issuance of a notice to proceed by DME. The termination date of this Agreement shall be upon the earliest to occur of the following events: completion of the work described herein and in the attached Task Order No. 06-1); or upon the depletion and exhaustion of the $19,700 not-to-exceed amount provided for herein; or upon fifteen (15) day's written notice to terminate, issued by the Exhibit 2 Director of Electric Utilities, DME. This Agreement may be sooner terminated in accordance with the provisions hereof. Time is of the essence in this Agreement. COVINGTON shall make all reasonable efforts to complete the services set forth herein as expeditiously as possible and to meet the schedule established by the CITY, acting through its Director of Electric Utilities. ARTICLE IV COMPENSATION A. COMPENSATION TERMS: "Direct Non-Labor Expense" is defined as that expense for any assignment incurred hereunder by COVINGTON for supplies, long-distance telephone, telecopier, reproduction expense, overnight courier, photocopy expense, transportation, travel, communications, subsistence and lodging away from home and similar incidental expenses reasonably incurred in connection with that assignment. B. BILLING AND PAYMENT: 1. For and in consideration of the professional services to be performed by COVINGTON herein, the CITY agrees to pay COVINGTON, a total fee, including reimbursement for direct non-labor expense, not to exceed $19,700 for those services described in Task Order No. 06- D. 2. The fee for the services described in this Agreement to be performed by COVINGTON are to be billed the rates as set forth in Exhibit "A" attached hereto and incorporated herewith by reference. Billing shall be reported in minimum one-quarter (114) hour increments. 3. Payments to COVINGTON will be made by the CITY on the basis of detailed monthly statements rendered to the CITY through its Director of Electric Utilities. The fee bills as submitted, shall be allowed and approved by the Director of Electric Utilities. However, under no circumstances shall any monthly statement for services exceed the value of the work performed at the time a statement is rendered. 4. Nothing contained in this Article shall require the CITY to pay for any work which is unsatisfactory as reasonably determined by the City Manager or the Director of Electric Utilities, or which is not submitted in compliance with the terms of this Agreement. The City shall not be required to make any payments to COVINGTON when COVINGTON is in default under this Agreement. 5. It is specifically understood and agreed that COVINGTON shall not be authorized to undertake any work pursuant to this Agreement which would require additional payments by the CITY for any charge, expense or reimbursement above the maximum not-to- exceed fee as stated, without first having obtained written authorization from the CITY. C. PAYMENT If the CITY fails to make payments due COVINGTON for services and expenses within 2 forty (40) days after receipt of COVINGTON'S undisputed statement thereof, the amounts due COVINGTON will be increased by the rate of one percent (I%) per month from the said forty (40th) day, and in addition, COVINGTON may, after giving ten (10) days' written notice to the CITY, suspend services under this Agreement until COVINGTON has been paid in full all amounts due for services, expenses and charges provided. However, nothing herein shall require the CITY to pay the late charge of one percent (1 set forth herein if the CITY reasonably determines that the work of COVINGTON is unsatisfactory, in accordance with this Article IV, Compensation, and the CITY notifies COVINGTON in writing of any such defect. ARTICLE V OBSERVATION AND REVIEW OF THE WORK COVINGTON will exercise reasonable care and due diligence in discovering and promptly reporting to the CITY any defects or deficiencies in his work or the work of any subconsultants performed hereunder. ARTICLE VI OWNERSHIP OF DOCUMENTS All documents, analyses and other data prepared by COVINGTON under this Agreement ("Work Products") are instruments of service and are and shall remain the property of CITY. COVINGTON shall have the right to make and retain copies and use all Work Products; provided, however, the use shall be limited to the intended use for which the services and Work Products are provided under this Agreement. COVINGTON may use and may copyright certain non-sensitive Work Products as property of COVINGTON; provided that prior written approval is obtained from CITY, whose approval shall not be unreasonably withheld, and providing that copywriting will not restrict CITY'S right to retain or make copies of the Work Products for its information, reference and use on the Project or services under the Agreement. The Work Products shall not be changed or used for purposes other than those set forth in this Agreement without the prior written approval of COVINGTON. If CITY releases the Work Products to a third party without COVINGTON'S prior written consent, or changes or uses the Work Products other than as intended hereunder, CITY does so at its sole risk and discretion and COVINGTON shall not be liable for any claims or damages resulting from or connected with the release or any third parry's use of the Work Products. ARTICLE VII INDEPENDENT CONTRACTOR COVINGTON shall provide services to the CITY as an independent contractor, not as an employee of the CITY. COVINGTON shall not have or claim any right arising from employee status. 3 ARTICLE VIII INDEMNITY AGREEMENT COVINGTON shall indemnify and save and hold harmless the CITY 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's fees incurred by the CITY, and including without limitation, damages for bodily and personal injury, death and property damage, and damage for professional malpractice resulting from the negligent acts or omissions of COVINGTON or any subconsultants, in performance of this Agreement. COVINGTON'S liability under this Article VIII is expressly limited to the amount of COVINGTON'S insurance coverage as set forth in Article IX. 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 party's 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 IX INSURANCE During the performance of the Services under this Agreement, COVINGTON 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. Professional Liability Insurance with policy limits of not less than $1,000,000 annual aggregate. D. COVINGTON shall furnish insurance certificates or insurance policies at the CITY's request to evidence such coverages. The insurance policies shall name the CITY as an additional insured on all such policies to the extent legally possible, and shall contain a provision that such insurance shall not be canceled or modified without thirty (30) days prior written notice to CITY and COVINGTON. In such event, COVINGTON shall, prior to the effective date of the change or cancellation, deliver substitute policies furnishing the same coverage to the CITY. 4 ARTICLE X ARBITRATION AND ALTERNATE DISPUTE RESOLUTION The parties 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 arising 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 XI LIMITATION OF LIABILITY To the extent permitted by law, the total liability of COVINGTON to CITY for any and all claims arising out of this Agreement, whether caused by negligence, errors, omissions, strict liability, breach of contract or contribution, or indemnity claims based on third-party claims, shall not exceed one million dollars ($1,000,000). ARTICLE XII CONSEQUENTIAL DAMAGES In no event and under no circumstances shall COVINGTON be liable to CITY for any interest, loss of anticipated revenues, earnings, profits, or increased expense of operations, or for any consequential, indirect or special damages. ARTICLE XIII PROFESSIONAL STANDARDS COVINGTON will perform services under this Agreement with the degree of skill and diligence normally practiced by professional engineers or consultants performing the same degree of similar services. No other warranty or guarantee, expressed or implied, is made with respect to the services furnished under this Agreement and all implied warranties are disclaimed. ARTICLE XIV TERMINATION OF AGREEMENT A. Notwithstanding any other provision of this Agreement, either party may terminate this Agreement by giving thirty (30) days advance written notice of termination 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 effected 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 nonperformance, and not less than ten (10) business days in which to cure the failure; and (2) an opportunity for consultation with the terminating party prior to termination. C. If this Agreement is terminated prior to completion of the services to be provided hereunder, COVINGTON shall immediately cease all services and shall render a final bill for services to 5 the CITY within thirty (30) days after the date of termination. The CITY shall pay COVINGTON 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 IV, Compensation. Should the CITY subsequently contract with a new consultant for the continuation of services on the Project, COVINGTON shall cooperate in providing information. COVINGTON shall turn over all documents prepared or famished by COVINGTON pursuant to this Agreement to the CITY on or before the date of termination, but may maintain copies of such documents for its use. ARTICLE XV RESPONSIBILITY FOR CLAIMS AND LIABILITIES Approval by the CITY shall not constitute nor be deemed a release of the responsibility and liability of COVINGTON, or any subconsultants of COVINGTON, for the accuracy and competency of their designs or other work product. ARTICLE XVI 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 at the address shown below, certified mail, return receipt requested unless otherwise specified herein. Mailed notices shall be sent to the parties at the following addresses: To COVINGTON: To CITY: R.J. Covington Consulting, LLC City of Denton, Texas Attn: Richard J. Covington, President Attn: City Manager 11044 Research Blvd., Suite A-325 215 East McKinney Street Austin, Texas 78759 Denton, Texas 76201 and to City of Denton, Texas Attn: Director of Electric Utilities 901-A Texas Street Denton, Texas 76205 All notices shall be deemed effective upon receipt by the party to whom such notice is given or within three days after the date of mailing. ARTICLE XVII ENTIRE AGREEMENT This Agreement consisting of nine (9) pages, and three (3) additional pages consisting of Task Order No. 06-D, 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 6 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 XVIII 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 parry 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. ARTICLE XIX COMPLIANCE WITH LAWS COVINGTON shall comply with all federal, state, local laws, rules, regulations, and ordinances applicable to the work covered hereunder as they may now read or hereinafter be amended. ARTICLE XX DISCRIMINATION PROHIBITED In performing the services required hereunder, COVINGTON shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap. ARTICLE XXI PERSONNEL A. COVINGTON represents that he has secured, or will secure at his own expense any additional personnel required to perform all the services required under this Agreement. Such personnel shall be subconsultants of COVINGTON, and shall not be employees or officers of, nor have any contractual relations with the CITY. COVINGTON shall inform the CITY 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 COVINGTON or under his 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 XXII ASSIGNABILITY COVINGTON 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 CITY. 7 ARTICLE XXIII MODIFICATION No waiver or modification of this Agreement or of any covenant, condition, 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, duly executed; and, the parties further agree that the provisions of this section will not be waived unless as herein set forth. ARTICLE XXIV MISCELLANEOUS A. COVINGTON agrees that CITY shall, until the expiration of three (3) 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 COVINGTON involving transactions relating to this Agreement. COVINGTON agrees that the CITY shall have access during normal working hours to all necessary COVINGTON facilities and shall be provided adequate and appropriate working space in order to conduct audits in compliance with this section. The CITY shall give COVINGTON reasonable advance notice of any intended audits. B. Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton County, Texas. This Agreement shall be governed by, and construed in accordance with the laws of the State of Texas. C. COVINGTON shall commence, carry on, and complete the work required by this engagement with all applicable dispatch, in a sound, economical, efficient manner and in accordance with the provisions hereof. In accomplishing the work, COVINGTON shall take such steps as are appropriate to ensure that the work involved is properly coordinated with related work being carried on by the CITY. D. The CITY shall assist COVINGTON by placing at COVINGTON's disposal all available information pertinent to the work required by this engagement, including previous reports, any other data relative to the project and arranging for the access to, and make all provisions for COVINGTON to enter in or upon, public and private property as required for COVINGTON to perform services under this Agreement. E. 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 WHEREOF, the City of Denton, Texas has caused this Agreement to be executed in four (4) original counterparts, by its duly authorized City Manager; and R.J. Covington Consulting, LLC has executed this Agreement by its duly authorized officer on this the day of , 2006. 8 "CITY" CITY OF DENTON, TEXAS A Municipal Corporation By: Howard Martin, City Manager ATTEST: JENNIFER WALTERS, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY n r'N By: tl 19ki - U "COVINGTON" R. J. COVINGTON CONSULTING, LLC A Texas Limited Liability Corporation By: G Bill Starnes, Vice-President SA0ur DocutnentslContracts1061R.1 Covington Consulting LLC-PSA-Cash Wkg Capital Study-TO 06-D DME.doc 9 Task Order 06-D Cash Working Capital Study ATTACHMENT PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND R.J. COVINGTON CONSULTING, LLC TASK ORDER NO. 06-D Cash Working Capital Study This Attachment is a Task Order contemplated by and appended to the Professional Services Agreement entered into by and between the City of Denton, Texas ("City") and R.J. Covington Consulting, LLC, ("RJC") as approved by the Denton City Council. The work provided for in this Task Order is for RJC to provide an analysis of cash working capital requirements for the Denton Municipal Electric (DME) utility department to provide adequate operating reserves for the electric system. The analysis will be conducted by determining the cash needs utilizing a lead lag study approach. Cash working capital needs are commonly determined through a lead lag study. Such a study analyses the amount of cash reserves required by the utility owner to provide ongoing services to customers taking into account the time period necessary to collect cash from customers and the time before cash is required to pay for operating expenses. On the revenue side, the study will require an understanding of the amount of time between the provision of electric service to customers and the collection of cash from those customers. From the operating expense side, there will need to be a determination of the time period from the receipt of services from employees and vendors and the time payment is required by the utility. In order to gain an understanding of the payment patterns currently being experienced, the review will be conducted through a review of DME accounting and billing records and interviews of DME and City accounting staffs, RJC will provide the analysis with the assistance of DME staff as necessary to provide detailed documentation required for the review. Upon completion of the review, RJC will provide a briefing to DME staff and the appropriate City personnel describing the findings of the review. RJC understands that the City will provide personnel, as time permits, to prepare analysis as required. The estimated cost shown below assumes that a substantial portion of the detailed work of researching actual payment and receipt transactions will be performed by City personnel. If City personnel are not available for this effort, the cost of the services will require adjustment. The following scope of work is based on RJC's current understanding of the issues to be addressed. As the review progresses, this scope may be modified as directed by the Director of Electric Utilities. To the extent modifications are required, a revised budget will be provided. The list of work activities below are not necessarily sequential, and work may progress on several tasks at the same time, as appropriate. 1 Task Order Ob-D Cash Working Capital Study Scope of Services Task A - Interviews 1. RJC will conduct interviews of DME staff and City accounting personnel to identify the data required in preparation of the study and the source of the required data. Task B - Gather Detailed Payment and Receipt Information 1. With the assistance of DME and City staff, RJC will collect detailed data regarding payment of employees and vendors. 2. RJC will, with the assistance of DME and City staff, collect appropriate customer billing records including payment history to determine payment lag. 3. RJC will also collect data on the amount and timing of payments for other operating expenses and the timing of capital obligations. Task C - Prepare Lead Lag Study 1. RJC will prepare a computer model to calculate the lead and lag days for the various components of the study. 2. RJC will complete the study using the computer model and follow up as necessary with DME and City staff to collect additional data. 3. RJC will review the model results for reasonableness based on similar studies conducted in prior assignments. Task D - Develop Recommendations 1. RJC will meet with DME staff to discuss the preliminary findings, to correct errors in understanding, clarify concerns, and discuss a range of potential solutions. 2. Based on the review, RJC will develop a report providing a final recommendation of cash working capital requirements. Budget The estimated budget for this Task Order is not to exceed $19,700. This budget is based on hourly rates for labor and expenses necessary to complete this Task. This budget will not be exceeded without prior written approval of the City of Denton. RJC will bill monthly with supporting documentation of activities performed. The termination date of this Task Order shall be on the earliest to occur of the following events: upon the date of completion of the work described herein; or upon exhaustion of the $19,700 funds; or upon fifteen (15) days written notice to terminate, issued by the Director of Electric Utilities, DME. The work being performed will be under the supervision of the Director of Electric Utilities and may be modified at any time upon appropriate notice to RJC. 2 Task Order 06-D Cash Working Capital Study EXECUTED in four (4) original counterparts by a duly authorized officer of RJC and by a duly authorized officer of the City of Denton, Texas on this the day of 12006. AUTHORIZED BY: ACCEPTED BY: CITY OF DENTON, TEXAS R.J. COVINGTON CONSULTING, LLC A Texas Municipal Corporation By: By: Howard Martin Bill Starnes, Vice-President City Manager Dated: Dated: ATTEST: APPROVED AS TO LEGAL FORM: JENNIFER WALTERS, CITY SECRETARY EDWIN ///fff~~~Mfnr.PSNYDER, CITY ATTORNEY , I k L~ j By: By: VVV iiiVVV/// Dated: Dated: 1d~ SaOur DocumentslContracts1061R J Covington Consulting - Task Order 06-D.doc 3 I DRAFT 2 MINUTES 3 PUBLIC UTILITIES BOARD 4 February 13, 2006 5 6 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas was 7 present, the Chair of the Public Utilities Board convened into an Open Meeting on Monday, 8 February 13, 2006 at 10:23 a.m. in the Service Center Training Room, City of Denton Service 9 Center, 901-A Texas Street, Denton, Texas to consider the specific agenda items listed below 10 under the Open Meeting section of this agenda. 11 12 Present: Chair Newell, George Hopkins, Bill Cheek, John Baines and Phil Gallivan 13 14 Absent: Bob Bland 15 16 Chair Newell called the meeting to order at 10:23 a.m. 17 18 OPEN MEETING: 19 20 ITEMS FOR INDIVIDUAL CONSIDERATION: 21 22 7) Consider recommending approval of Task Order 06-D with R. J. Covington Consulting, LLC 23 for performance of a Lead Lag Study to determine the appropriate cash working capital 24 requirement for Denton Municipal Electric (DME) in an amount not to exceed $19,700. 25 26 Hopkins moved to approve with a second from Gallivan. The motion was approved by a 27 vote of 6-0. Exhibit 3 AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Electric Utility CITY MANAGER: Howard Martin, 8232 SUBJECT Consider adoption of an ordinance of the City of Denton, Texas authorizing the Interim City Manager to execute an agreement for Professional Legal Services with the firm of LLoyd, Gosselink, Blevins, Rochelle & Townsend, P.C. for legal services pertaining to representation of the City before the Public Utility Commission of Texas, in connection with Docket No. 31540; authorizing the expenditure of funds therefor; providing for retroactive approval of the agreement; and providing an effective date. (The Public Utilities Board recommends approval (6-0). BACKGROUND The PUC initiated redesign of the ERCOT electric wholesale market is continuing to move forward. That process has now moved to the formal hearing stage in which the PUCT Commissioners have received formal testimony from stakeholders regarding the nodal market design protocols, which were filed with the PUCT by the Electric Reliability Council of Texas (ERCOT) in November, and the initial briefs of the parties on that testimony. Reply briefs are due by the end of January. DME provided testimony in this docket focused on two areas. The first area was requesting that the transmission Congestion Revenue Rights (CRRs) in the nodal market be allocated to load serving entities (municipal utilities, cooperatives, and Retail Energy Providers) rather than auctioned off to the highest bidder, as proposed in the filed ERCOT protocols. DME's expert witness, Dr. Frank Wolak, an economist from Standford, explained why this change was necessary and outlined a methodology for performing the allocation. The second area of focus, supported by Bill Starnes of the Covington staff, was advocating that load zone changes be limited and requires PUC review and approval. DME also provided rebuttal testimony against proposals made by others that additional charges should be directly allocated to load zones rather than being uplifted across all of ERCOT, as proposed by the filed ERCOT protocols and filed its brief on the issues on January 13, 2006. Reply briefs are due by the end of January. Significant legal support is required for DME to participate in the proceeding at this level. All authorized funds for PUC support with the Lloyd, Gosselink firm have been expended. Additional Fund authorization is required in order to complete DME's efforts in this proceeding. In addition to this protocol review docket, the PUC has set up other dockets related to electric wholesale market redesign in areas such as consideration of market monitoring structures, market power issues, and development of methods to assure someone continues to build generation in Texas (resource adequacy). All of these issues will be important to DME's customers and should be at least monitored, with the potential need to actively participate in the workshops and hearings. DME cannot participate in these formal PUCT proceedings without legal representation. The City Utility Attorney cannot effectively perform this activity for the following reasons. First, his workload does not allow time to support this activity. This attorney supports the legal requirements of all the City utility departments. The legal needs of the other utilities would suffer greatly due to both the additional time required to perform the work and the fact that there is no way to control the timing of the workload. The PUCT sets the schedule for responses in their proceedings. Second, this work can be performed much more effectively and efficiently by someone located in Austin. Third, the utility attorney has no experience in regulatory law. Therefore, the time required for him to deal with such issues would be greater than the time required by an attorney who operates in that environment on a daily basis. Fourth, firms that work regularly with the PUCT staff and Commissioners have useful personal relationships with staff members that can assist in resolving issues. The City Utility Attorney does review and approve each fee bill submitted by all law firms under contract to DME. The Lloyd, Gosselink firm has no other contracts active with DME at this time. One other Agreement is proposed for the firm. That agreement, in the amount of $50,000, relates to support of Transmission Cost of Service (TCOS) proceedings and other proceedings that impact DME at the PUCT. OPTIONS 1. Approve the Agreement as proposed. 2. Approve the Agreement with a different dollar limit, at least large enough to cover completion of the present protocol review docket. 3. Do not approve the Agreement and cease participation in PUCT proceedings related to electric wholesale market design on DME's behalf. RECOMMENDATION DME recommends approval of the Agreement as proposed PRIOR ACTION/REVIEW (Council, Boards, Commissions) This item was presented to the Public Utilities Board at their February 13, 2006 regular meeting. The Public Utilities Board recommends approval 6-0. FISCAL INFORMATION Cost under the proposed Agreement not to exceed $60,000. EXHIBITS 1. Ordinance 2. Agreement 3. PUB Minutes Respectfully submitted, Sharon Mays Director of Electric Utilities ORDINANCE NO. 2006- AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE INTERIM CITY MANAGER TO EXECUTE AN AGREEMENT FOR PROFESSIONAL LEGAL SERVICES WITH THE FIRM OF LLOYD, GOSSELINK, BLEVINS, ROCHELLE & TOWNSEND, P.C. FOR LEGAL SERVICES PERTAINING TO REPRESENTATION OF THE CITY BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS, IN CONNECTION WITH DOCKET NO. 31540; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; PROVIDING FOR RETROACTIVE APPROVAL OF THE AGREEMENT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council deems that it is in the public interest to engage the law firm of Lloyd, Gosselink, Blevins, Rochelle & Townsend, P.C., of Austin, Texas (the "Firm") to provide professional legal services to the City of Denton, Texas ("City") pertaining to representation of the City and Denton Municipal Electric ("DME") before the Public Utility Commission of Texas ("PUC") in Docket No. 31540 entitled "Proceeding to Consider Protocols to Implement a Nodal Market in the Electric Reliability Council of Texas (ERCOT) Pursuant to PUC Subst. R. 25.501 and which engagement may well include numerous additional projects or dockets at the PUC in the near future; and WHEREAS, the City staff has reported to the City Council that there is a substantial need to for the City to utilize the above-referenced professional legal services, and that limited City staff cannot adequately perform the specialized services and tasks which are primarily centered in Austin, Texas, with its own personnel; and WHEREAS, the City has heretofore engaged the Firm by numerous previous Agreements for Professional Legal Services to perform similar services to those services provided for in the Agreement for Professional Legal Services attached hereto. The Firm has performed and provided legal services benefiting the City under on a continuous and uninterrupted basis, involving immediate deadlines imposed on litigants by the PUC, in order to safeguard and represent the interests of the City and DME and its ratepayers before the PUC. Accordingly, it is appropriate that the new Agreement for Professional Legal Services by and between the City and the Firm attached hereto, should be ratified and confirmed, and should be retroactively approved, confirmed, and made effective as of December 1, 2005, in order to properly compensate the Firm for its work that has already been done and which work has directly benefited the City, and which work was done at the specific instance and request of the City in continuing to conduct matters before the PUC; and WHEREAS, Chapter 2254 of the Texas Government Code, known as the "Professional Services Procurement Act", generally provides that a City may not select a provider of professional services on the basis of competitive bids, but must select the provider on the basis of demonstrated competence, knowledge, and qualifications, and for I Exhibit 1 a fair and reasonable price; and the Council hereby finds and concludes that the Firm is appropriately qualified under the provisions of that law to be retained as outside legal counsel for the City and DME respecting this engagement; NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1: The recitations set forth and contained in the foregoing preamble are expressly incorporated by reference into this Ordinance. SECTION 2: The Interim City Manager is hereby authorized to execute an Agreement for Professional Legal Services by and between the City and the law firm of Lloyd, Gosselink, Blevins, Rochelle & Townsend, P.C., of Austin, Texas, in an amount not to exceed $60,000, in substantially the form of the Agreement for Professional Legal Services attached hereto and incorporated herewith by reference. SECTION 3: The award of this Agreement by the City is on the basis of the demonstrated competence, knowledge, and qualifications of the Firm and the continued ability of the Firm to perform the services needed by the City for a fair and reasonable price. SECTION 4: The expenditure of funds as provided in the attached Agreement for Professional Legal Services is hereby authorized. SECTION 5: The above and foregoing Agreement for Professional Legal Services is hereby ratified, confirmed, and retroactively approved, and shall be effective from and after December 1, 2005. SECTION 6: Except as otherwise provided in Section 5 above, this Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY By: 2 APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY n } By: SA0ur Documents\0rdinances\06\Uoyd Gosselink-PSA-Design-Whls Power Mkt-2006.doc 3 STATE OF TEXAS § COUNTY OF DENTON § AGREEMENT FOR PROFESSIONAL LEGAL SERVICES THIS AGREEMENT, made and entered into this day of , 2006, by and between LLOYD GOSSELINK BLEVINS ROCHELLE & TOWNSEND, P.C., a Texas Professional Corporation (hereinafter "Consultant"), with Lambeth Townsend, Shareholder, having full authority to execute this Agreement on behalf of the firm, 816 Congress Avenue, Suite 1900, Austin, Texas, 78701; and the CITY OF DENTON, a Texas Municipal Corporation, 215 East McKinney, Denton, Texas, 75201 (hereinafter "City"), with Howard Martin, Interim City Manager, having full authority to execute this Agreement on behalf of the City. WITNESSETH: WHEREAS, the City deems it necessary and in the public interest to employ legal counsel to provide professional legal services with respect to protection of the City's interests relating to efforts by the Public Utility Commission of Texas ("PUC") to change the current design of the Electric Reliability Council of Texas ("ERCOT") wholesale power market in Texas, which efforts are presently being reviewed in Docket No. 31540, Proceeding to Consider Protocols to Implement a Nodal Market in the Electric Reliability Council of Texas (ERCOT) Pursuant to P.U.C. Subst. R. 25.501, but which may include numerous additional projects or dockets at the PUC in the near future; and WHEREAS, the Consultant is willing to perform such services in a professional manner as an independent contractor; and has competently and efficiently performed similar services for the City in numerous other matters before the PUC over the past several years; and the City has selected Consultant on the basis of demonstrated competence and qualifications necessary to perform the needed services; and WHEREAS, the City desires to engage the Consultant to render the professional services in connection therewith, for a fair and reasonable price; consistent with, and for a fee not higher than the recommended practices and fees published by the applicable professional associations; and such fees do not exceed any maximum provided by law; all in accordance with the provisions of Chapter 2254 of the Texas Government Code (the "Professional Services Procurement Act"); and the Consultant is willing to provide such services; NOW, THEREFORE, in consideration of the promises and mutual obligations herein, the City and Consultant do hereby mutually AGREE as follows, to wit: Exhibit 2 1060191060112 Denton Agreement Page 1 A. Services to be provided: 1. Consultant shall represent the City in Docket No. 31540, Proceeding to Consider Protocols to Implement a Nodal Market in the Electric Reliability Council of Texas (ERCOT) Pursuant to P. U.C. Subst. R. 25.501, in appeals from the Commission's final decision in Docket No. 31540, and in any related additional projects or dockets at the PUC involving similar issues of changes to the design of the ERCOT wholesale market, including without limitation, the professional and legal services attendant to preparing and submitting comments, responding to requests for information, and attending all hearings and other proceedings in relationship to market design issues, and to consult with the City through its Denton Municipal Electric staff with regard to all filings, hearings, appeals, and other issues related to market design issues, and to assist in any subsequent actions in response to the Commission's final order concerning market design issues. 2. To consult with the Interim City Manager, the Assistant City Manager for Utilities, the Director of Denton Municipal Electric, the Utility Attorney, and/or other designated administrative personnel or staff regarding any and all aspects of the professional services to be performed, including legal research, analysis, and advice with respect to protecting the City's position in ERCOT wholesale market design issues currently being reviewed by the PUC. This will include coordinating activities with the Director of Denton Municipal Electric and her respective staff to efficiently perform the services required and to preserve the Attorney/Client privilege, work product, and all other applicable exceptions to the discovery or disclosure of documents produced by the City and the Consultant under the Scope of Services hereinabove. B. The Consultant shall perform all the services required by this Agreement in a timely fashion, and shall complete them in compliance with schedules established by the City through its Director of Denton Municipal Electric as appropriate to carry out the terms and conditions of this Agreement. II. Term: This Agreement shall be approved, ratified and retroactively effective as of December 1, 2005. The Agreement shall terminate either upon the completion of the professional services provided for herein or upon the exhaustion of all professional fees provided for hereunder, whichever event shall first occur. This Agreement may be sooner terminated in accordance with the provisions hereof. Time is of the essence of this Agreement. Consultant shall make all reasonable efforts to complete the services set forth herein as expeditiously as possible during the term of this Agreement, and to meet the schedules established by the City, through its Director of Denton Municipal Electric, or her designee. 1060191060105 Denton Agreement Page 2 gr ment, and to eet the schedules establis~ by the City, trough its Dix r of Denton cipal Electric,kr her designee.. III. Compensation and Method of Payment: A. The Consultant shall charge the following fees for its professional services provided to the City hereunder, based upon the following hourly billing rates for the attorneys and support staff involved in this matter: Staff Hourly Rate Lambeth Townsend, Shareholder $ 250.00 Georgia Crump, Shareholder $ 240.00 Melissa E. Ramirez, Associate $ 190.00 Paralegal $ 95.00 Law Clerk $ 75.00 Consultant agrees that all charges for the legal services hereunder, including expenses as set forth in Section III. C. below, shall not exceed $60,000.00. B. The Consultant shall endeavor to have the attorneys and employees listed in Section III.A. above, reasonably attempt to reduce costs by utilizing other qualified shareholders, associates, and paralegals wherever feasible or possible. The Consultant shall bill the City through the submission of itemized invoices, statements, and other documentation, together with support data indicating the progress of the work and the services performed on the basis of monthly statements, showing hourly rates indicating who performed the work, what type of work was done, and descriptions and/or details of all services rendered, including a daily, and an entry-by-entry reflection of billable time spent on this engagement, along with specific descriptions and supporting documentation, if available, respecting any reasonable and necessary out-of-pocket expenses incurred by Consultant in performing the professional services provided for under this Agreement. Professional fees shall be billed in minimum one-tenth (1/10) hour increments. C. Additionally, the City shall either pay directly or reimburse the Consultant, as the case may be, for reasonable and necessary actual out-of-pocket expenses, including but not limited to, long-distance telephone, telecopier, reproduction, postage, overnight courier, and transportation and travel. All copies will be charged at the rate of fifteen cents ($.15) per copy for copies made within Consultant's offices, with as much photocopying as possible being done by outside vendors at bulk rates or by the City to reduce costs if bulk copying is necessary or appropriate. The parties agree that the charges for outgoing telecopier from Consultant shall be $.25 per page and that there will be no charge for incoming telecopies. D. The parties anticipate that invoices or statements for professional services will be generated on a monthly basis and that said invoices or statements will be sent to the 106019\060112 Denton Agreement Page 3 City by Consultant on or about the 15th day of each month. The City shall make payment to the Consultant within thirty (30) days after receipt of an appropriate itemized invoice or statement. To the extent that any fees or expenses are disputed by the City, the City shall notify Consultant within thirty (30) days after its receipt of the invoice or statement, and shall otherwise pay all undisputed amounts set forth in the invoice or statement within thirty (30) days after its receipt of the invoice or statement. All reimbursable expenses, including, but not necessarily limited to travel, lodging, and meals, shall be paid at the actual cost, pursuant to the terms, conditions, and limitations set forth herein. All invoices or statements shall be a reviewed by the Director of Denton Municipal Electric, or her designee; and shall be reviewed and approved by the Utility Attorney. E. It is understood and agreed that the Consultant shall work under the coordination and general supervision of the Director of Denton Municipal Electric, or her designee. F. All notices, invoices, statements, and payments shall be made in writing and may be given by personal delivery or by mail. As to notices: to Howard Martin, Interim City Manager, City of Denton, 215 East McKinney, Denton, Texas 76201 or to his designee. As to invoices, statements, or payments: to Michael S. Copeland, Utility Attorney, Utility Administration Department, at the same address, as to the City; and to Lambeth Townsend, Lloyd/Gosselink, 816 Congress Avenue, Suite 1900, Austin, Texas 78701, as to the Consultant. When so addressed, the notice, invoice, statement and/or payment shall be deemed given upon deposit of same in the U. S. Mail, postage prepaid. In all other instances, notices, invoices, statements, and/or payments shall be deemed given at the time of actual delivery. Changes may be made in the names and addresses of the responsible person or office to which notices, invoices, statements and/or payments are to be sent, provided reasonable notice is given. IV. Professional Competency: A. Consultant agrees that in the performance of these professional services, Consultant shall be responsible to the level of competency and shall use the same degree of skill and care presently maintained by other practicing professionals performing the same or similar types of work. For the purpose of this Agreement, the key persons who will be performing most of the work hereunder shall be Lambeth Townsend and Georgia Crump, Shareholders, and Melissa E. Ramirez, Associate. However, nothing herein shall limit Consultant from using other qualified and competent members of the firm to perform the services required herein if such delegation is reasonably appropriate and properly protects the City's interests. B. Any agreements, ordinances, notices, instruments, memoranda, reports, letters, and other legal documents prepared or obtained under the terms of this Agreement are instruments of service and the City shall retain ownership and a property interest therein. If this Agreement is terminated at any time for any reason prior 1060191060112 Denton Agreement Page 4 to payment to the Consultant for work under this Agreement, all such documents prepared or obtained under the terms of the Agreement shall upon termination be delivered to and become the property of the City upon request and without restriction on their use or further compensation to the Consultant. V. Establishment and Maintenance of Records: Full and accurate records shall be maintained by the Consultant at its place of business with respect to all matters covered by this Agreement. Such records shall be maintained for a period of at least three years after receipt of final payment under this Agreement. VI. Audits and Inspection: At any time during normal business hours and upon reasonable notice to the Consultant, there shall be made available to the City all of the Consultant's records with respect to all matters covered by this Agreement. The Consultant shall permit the City to audit, examine, and make excerpts or transcripts from such records, and to make audits of contracts, invoices, materials, and other data relating to all matters covered by this Agreement. VIL Accomplishment of Proiect: The Consultant shall commence, carry on, and complete this professional engagement with all practicable dispatch; in a sound, economical and efficient matter; and, in accordance with the provisions hereof and all applicable laws. In accomplishing the project, the Consultant shall take such steps as are appropriate to insure that the work involved is properly coordinated with any related work being carried on by the City. VIII. Indemnity and Independent Contractor Relationship: A. Consultant shall perform all services as an independent contractor not under the direct supervision and control of the City. Nothing herein shall be construed as creating a relationship of employer and employee between the parties. The City and Consultant agree to cooperate in the defense of any claims, action, suit, or proceeding of any kind brought by a third parry which may result from or directly or indirectly arise from any negligence and/or errors or omissions on the part of the Consultant or from any breach of the Consultant's obligations under this Agreement. In the event of any litigation or claim under this Agreement in which Consultant is joined as a parry, Consultant shall provide suitable counsel to defend City and Consultant against such claim, provided the Consultant shall have the right to proceed with the competent counsel of its own choosing. The Consultant agrees to defend, indemnify and hold harmless the City and all of its officers, agents, servants, and employees against any and all such claims to the extent of coverage by Consultant's professional liability policy. The Consultant agrees to pay all expenses, including but not limited to attorney's fees, and satisfy all judgments that may be incurred or rendered against the Consultant's professional liability insurance policy. Nothing herein constitutes a waiver of any rights or remedies the City may have to pursue under either law or equity, including, without limitation, a cause of action for specific performance or for damages, a loss to the City, resulting from Consultant's negligent errors or omissions, or breach of contract, and all such rights and remedies are expressly reserved. 1060191060112 Denton Agreement Page 5 B. Consultant shall maintain and shall be caused to be in force at all times during the term of this Agreement, a legally binding policy of professional liability insurance, listed by Best Rated Carriers, with a rating of "A-" or above, issued by an insurance carrier approved to do business in Texas by the State Insurance Commission. Such coverage shall cover any claim hereunder occasioned by the Consultant's negligent professional act and/or error, act, or omission, in an amount not less than $1,000,000 combined single limit coverage per occurrence. In the event of change or cancellation of the policy by the insurer, the Consultant hereby covenants to immediately notify the City in writing thereof, and in such event, the Consultant shall, prior to the effective date of change or cancellation, serve a substitute policy furnishing the same or higher amount of coverage. The Consultant shall provide a copy of the declarations page of such policy to the City through its Director of Denton Municipal Electric simultaneously with the execution of this Agreement. IX. Termination of Agreement: A. In connection with the work outlined in this Agreement, it is agreed and fully understood by the Consultant that the City may cancel or indefinitely suspend further work hereunder or terminate this Agreement at any time upon written notice to Consultant, Consultant shall cease all work and labor being performed under this Agreement. Consultant may terminate this Agreement by giving the City fifteen (15) days written notice that Consultant is no longer in a position to continue representing the City. Consultant shall invoice the City for all work satisfactorily completed and shall be compensated in accordance with the terms of this Agreement. All reports and other documents, or data, or work related to the project shall become the property of the City upon termination of this Agreement. B. This Agreement may be terminated in whole or in part, in writing, by either party in the event of substantial failure by the other party to fulfill its obligations under this Agreement through no fault of the terminating parry. Provided, however, that no such termination may be affected, unless the other parry is given [1] written notice (delivered by certified mail, return receipt request) 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 parry prior to termination. C. Nothing contained herein or elsewhere in this Agreement shall require the City to pay for any work which is unsatisfactory or which is not submitted in compliance with the terms of this Agreement. X. Alternate Dispute Resolution: The Consultant agrees that, if necessary, it will use its best efforts to resolve any disputes regarding the Agreement through the use of mediation or other forms of altemate dispute resolution set forth in Chapter 154 of the Texas Civil Practices and Remedies Code (V.A.T.C.S.). XI. Entire Agreement: This Agreement represents the entire agreement and understanding between the parties and any negotiations, proposals, or oral agreements are intended 1060191060112 Denton Agreement Page 6 to be integrated herein and to be superseded by this written Agreement. Any supplement or amendment to this Agreement, in order to be effective, shall be in writing and signed by the City and the Consultant. X11. Compliance with Laws: The Consultant shall comply with all federal, state, local laws, rules, regulations, and ordinances applicable to the work covered hereunder as they may now read or hereafter be amended, including but not limited to the Texas Disciplinary Rules of Professional Conduct. XIII. Governing Law: For the purpose of determining place of agreement and law governing same, this Agreement is entered into in the City and County of Denton, State of Texas, and shall be construed in accordance with, and governed by the laws of the State of Texas. Venue and jurisdiction of any suit or cause of action arising under or in connection with this Agreement shall lie exclusively in a court of competent jurisdiction sitting in Denton County, Texas. XIV. 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. XV. Personnel: A. Consultant represents that it has or will secure at its own expense all personnel required to perform the services required under this Agreement. Such personnel shall not be employees nor have any contractual relations with the City. Consultant shall inform the City of any conflict of interest or potential conflict of interest that may arise during the term of this Agreement, in accordance with Consultant's responsibilities under the Texas Disciplinary Rules of Professional Conduct. B. All services required hereunder will be performed by the Consultant or under its direct supervision. All personnel engaged in work shall be qualified and shall be licensed, authorized, or permitted under state and local laws to perform such services. XVI. 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 City thereto. XVII. Severability: All agreements and covenants contained herein are severable, and in the event any of them, with the exception of those contained in sections headed "Scope of Services", "Independent Contractor Relationship", and "Compensation and Method of Payment" hereof, shall be held to be invalid by any court of competent jurisdiction, this Agreement shall be interpreted as though such invalid agreements or covenants were not contained herein. XVIII. Responsibilities for Claims and Liability: Approval by the City shall not constitute nor be deemed a release of the responsibility and liability of the Consultant for the accuracy and competency of its work; nor shall such approval be deemed to be an assumption of 1060191060112 Denton Agreement Page 7 such responsibility of the City for any defect in any report or other documents prepared by the Consultant, its shareholders, associates, employees, officers, or agents in connection with this engagement. XIX. Modification of Agreement: 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. 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, unless such waiver or modification is in writing, duly executed as aforesaid. The parties further agree that the provisions of this article will not be waived as herein set forth. XX. 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. XXI. Binding Effect: This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors, and assigns, where permitted by this Agreement. IN WITNESS HEREOF, the City of Denton, Texas has executed this Agreement in four (4) original counterparts by and through its duly authorized Interim City Manager; and Consultant has executed this Agreement by and through its duly authorized undersigned Shareholder; dated this the day of 12006. CITY OF DENTON, TEXAS A Texas Municipal Corporation By: Howard Martin, Interim City Manager ATTEST: JENNIFER WALTERS, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY B 1060191060112 Denton Agreement Page 8 LLOYD GOSSELINK BLEVINS ROCHELLE & TOWNSEND, P.C. A Texas Professional Corporation 21 By: 6edc-l Lambeth Townsen , Shareholder ATTEST: By: 1060191060112 Denton Agreement Page 9 I DRAFT 2 MINUTES 3 PUBLIC UTILITIES BOARD 4 February 13, 2006 5 6 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas was 7 present, the Chair of the Public Utilities Board convened into an Open Meeting on Monday, 8 February 13, 2006 at 10:23 a.m. in the Service Center Training Room, City of Denton Service 9 Center, 901-A Texas Street, Denton, Texas to consider the specific agenda items listed below 10 under the Open Meeting section of this agenda. 11 12 Present: Chair Newell, George Hopkins, Bill Cheek, John Baines and Phil Gallivan 13 14 Absent: Bob Bland 15 16 Chair Newell called the meeting to order at 10:23 a.m. 17 18 OPEN MEETING: 19 20 ITEMS FOR INDIVIDUAL CONSIDERATION: 21 22 6) Consider recommending approval of a Professional Services Agreement with Lloyd, 23 Gosselink, Blevins, Rochelle & Townsend, P.C. for legal services required for the provision 24 of legal support during formal hearings and informal filings with the Public Utility 25 Commission of Texas (PUCT) related to electric wholesale market redesign; in an amount 26 not to exceed $60,000. 27 28 Cheek moved to approve with a second from Hopkins. The motion was approved by a vote 29 of 6-0. Exhibit 3 AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Electric Utility CM: Howard Martin, 8232 SUBJECT Consider adoption of an ordinance of the City of Denton, Texas authorizing the Interim City Manager to execute an agreement for professional legal services with the firm of LLoyd, Gosselink, Blevins, Rochelle & Townsend, P.C. for legal services pertaining to representation of the City before the Public Utility Commission of Texas, in connection with the City's compliance with electric transmission service rules, and related rulemaking, proceedings, or any project relating thereto; authorizing the expenditure of funds therefor; providing for retroactive approval of the agreement; and providing an effective date. (The Public Utilities Board recommends approval (6-0.) BACKGROUND In 1996, as a result of action required by the Texas Legislature, the Public Utility Commission of Texas (PUCT) established a statewide transmission system. All electric utilities in Texas (including municipal utilities) were required to pay for transmission they used and recover their investment in transmission they had built through a PUCT dictated methodology. In order to recover Denton Municipal Electric's transmission investment, DME must file its cost data with the PUCT and receive a ruling from the PUCT establishing a DME transmission rate. This filing is referred to as a Transmission Cost of Service (TCOS) filing. DME is also required to file a transmission Earnings Report on June 1 of each year. DME made its first TCOS filing in 1996. On September 20th, 2002, Denton filed with the PUC for its second TCOS. On October 25, 2004, DME filed with the PUC for its third TCOS. All of those proceedings have been completed. DME has been allowed to recover the consultant and attorney fees associated with preparation of each filing through a surcharge on its TCOS. DME will make its next TCOS filing when it has increased its transmission investment in an amount sufficient to warrant the effort of going through the rate filing process again. DME also monitors the annual PUCT staff filing of the statewide transmission cost payment matrix and files comments when errors in this matrix calculation are found. In addition to TCOS related filings, the PUCT regularly opens dockets for investigation of various issues that could impact DME and, on occasion, other entities make filings requesting actions by the PUCT that could impact DME. The time period the PUCT makes available for entities to respond to such actions is often quicker than the City's contract approval process can accommodate. DME monitors PUCT filings and dockets and participates as needed to protect DME's interest. This participation can be in the form of intervening simply to get on the service list so that DME receives the documentation filed and notices of activities scheduled in a proceeding, filing of detailed testimony or comments, or filing short statements in support of the positions taken by other participants in a proceeding. This contract provides the Electric Director the ability to utilize specific employees of the Lloyd, Gosselink firm, at specified hourly rates, to respond as needed to TCOS and other proceedings of the PUCT in a timely fashion. These employees must have the authorization of the Electric Director prior to spending any time working on DME's behalf. In the event that a specific proceeding or family of proceedings grows into a proceeding that will require a large amount of involvement by the firm, a separate contract is developed and brought to the PUB and City Council for approval. An example of such a situation is the separate contract utilized for support of activities related to the PUCT wholesale market design effort. The City Utility Attorney cannot effectively perform this activity for the following reasons. First, his workload does not allow time to support this activity. This attorney supports the legal requirements of all the City utility departments. The legal needs of the other utilities would suffer greatly due to both the additional time required to perform the work and the fact that there is no way to control the timing of the workload. The PUCT sets the schedule for responses in their proceedings. Second, this work can be performed much more effectively and efficiently by someone located in Austin. Third, the utility attorney has no experience in regulatory law. Therefore, the time required for him to deal with such issues would be greater than the time required by an attorney who operates in that environment on a daily basis. Fourth, firms that work regularly with the PUCT staff and Commissioners have useful personal relationships with staff members that can assist in resolving issues. The City Utility Attorney does review and approve each fee bill submitted by all law firms under contract to DME. The Lloyd, Gosselink firm has no contracts active with DME at this time. One other Agreement is proposed for the firm. That agreement, in the amount of $60,000, relates to the wholesale market redesign effort under way at the PUCT. OPTIONS 1. Approve the Agreement as proposed. 2. Approve the Agreement with a different dollar limit. 3. Do not approve the Agreement and cease participation in PUCT proceedings on DME's behalf. RECOMMENDATION DME recommends approval of the Agreement as proposed PRIOR ACTION/REVIEW (Council, Boards, Commissions) This item was presented to the Public Utilities Board at their February 13, 2006 regular meeting. The Public Utilities Board recommends approval 6-0. FISCAL INFORMATION Cost under the proposed Agreement not to exceed $50,000. EXHIBITS 1. Ordinance 2. Agreement 3. PUB Minutes Respectfully submitted, 4tt-t'- 0 k4'~r~ Sharon Mays Director of Electric Utilities ORDINANCE NO. 2006- AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE INTERIM CITY MANAGER TO EXECUTE AN AGREEMENT FOR PROFESSIONAL LEGAL SERVICES WITH THE FIRM OF LLOYD, GOSSELINK, BLEVINS, ROCHELLE & TOWNSEND, P.C. FOR LEGAL SERVICES PERTAINING TO REPRESENTATION OF THE CITY BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS, IN CONNECTION WITH THE CITY'S COMPLIANCE WITH ELECTRIC TRANSMISSION SERVICE RULES, AND RELATED RULEMAKING, PROCEEDINGS, OR ANY PROJECT RELATING THERETO; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; PROVIDING FOR RETROACTIVE APPROVAL OF THE AGREEMENT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council deems that it is in the public interest to engage the law firm of Lloyd, Gosselink, Blevins, Rochelle & Townsend, P.C., of Austin, Texas (the "Firm") to provide professional legal services to the City of Denton, Texas ("City") pertaining to representation of the City and Denton Municipal Electric ("DME") before the Public Utility Commission of Texas ("PUC") in connection with the electric transmission service rules, as well as any rulemaking, any proceeding, or any project relating to electric transmission service or to matters affecting municipally-owned utilities; and WHEREAS, the City staff has reported to the City Council that there is a substantial need to for the City to utilize the above-referenced professional legal services, and that limited City staff cannot adequately perform the specialized services and tasks which are primarily centered in Austin, Texas, with its own personnel; and WHEREAS, the City has heretofore engaged the Firm by numerous previous Agreements for Professional Legal Services to perform similar services to those services provided for in the Agreement for Professional Legal Services attached hereto. The Firm has performed and provided legal services benefiting the City under on a continuous and uninterrupted basis, involving immediate deadlines imposed on litigants by the PUC, in order to safeguard and represent the interests of the City and DME and its ratepayers before the PUC. Accordingly, it is appropriate that the new Agreement for Professional Legal Services by and between the City and the Firm attached hereto, should be ratified and confirmed, and should be retroactively approved, confirmed, and made effective as of December 1, 2005, in order to properly compensate the Firm for its work that has already been done and which work has directly benefited the City, and which work was done at the specific instance and request of the City in continuing to conduct matters before the PUC; and WHEREAS, Chapter 2254 of the Texas Government Code, known as the "Professional Services Procurement Act", generally provides that a City may not select a provider of professional services on the basis of competitive bids, but must select the provider on the basis of demonstrated competence, knowledge, and qualifications, and for 1 Exhibit 1 a fair and reasonable price; and the Council hereby finds and concludes that the Firm is appropriately qualified under the provisions of that law to be retained as outside legal counsel for the City and DME respecting this engagement; NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1: The recitations set forth and contained in the foregoing preamble are expressly incorporated by reference into this Ordinance. SECTION 2: The Interim City Manager is hereby authorized to execute an Agreement for Professional Legal Services by and between the City and the law firm of Lloyd, Gosselink, Blevins, Rochelle & Townsend, P.C., of Austin, Texas, in an amount not to exceed $50,000, in substantially the form of the Agreement for Professional Legal Services attached hereto and incorporated herewith by reference. SECTION 3: The award of this Agreement by the City is on the basis of the demonstrated competence, knowledge, and qualifications of the Firm and the continued ability of the Firm to perform the services needed by the City for a fair and reasonable price. SECTION 4: The expenditure of funds as provided in the attached Agreement for Professional Legal Services is hereby authorized. SECTION 5: The above and foregoing Agreement for Professional Legal Services is hereby ratified, confirmed, and retroactively approved, and shall be effective from and after December 1, 2005. SECTION 6: Except as otherwise provided in Section 5 above, this Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY By: 2 APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY i~ i By. S:1Our Documents\0rdinances\06\Lloyd Gosselink-PSA-Compliance-PUC Svc Rules-2006.doc I 3 STATE OF TEXAS § COUNTY OF DENTON § AGREEMENT FOR PROFESSIONAL LEGAL SERVICES THIS AGREEMENT, made and entered into this day of , 2006, by and between LLOYD GOSSELINK BLEVINS ROCHELLE & TOWNSEND, P.C., a Texas Professional Corporation (hereinafter "Consultant"), with Lambeth Townsend, Shareholder, having full authority to execute this Agreement on behalf of the firm, 816 Congress Avenue, Suite 1900, Austin, Texas, 78701; and the CITY OF DENTON, a Texas Municipal Corporation, 215 East McKinney, Denton, Texas, 75201 (hereinafter "City"), with Howard Martin, Interim City Manager, having full authority to execute this Agreement on behalf of the City. WITNESSETH: WHEREAS, the City deems it necessary and in the public interest to continue to engage legal counsel to provide professional legal services with respect to the City's compliance with Public Utility Commission of Texas ("PUC") electric transmission service rules as well as any rulemaking, proceeding, or any project relating to electric transmission service or to matters affecting municipally owned utilities, such as the City; and WHEREAS, the Consultant is willing to perform such services in a professional manner as an independent contractor; and has competently and efficiently performed similar services for the City in numerous other matters before the PUC over the past several years; and the City has selected Consultant on the basis of demonstrated competence and qualifications necessary to perform the needed services; and WHEREAS, the City desires to engage the Consultant to render the professional services in connection therewith, for a fair and reasonable price; consistent with, and for a fee not higher than the recommended practices and fees published by the applicable professional associations; and such fees do not exceed any maximum provided by law; all in accordance with the provisions of Chapter 2254 of the Texas Government Code (the "Professional Services Procurement Act"); and the Consultant is willing to provide such services; NOW, THEREFORE, in consideration of the promises and mutual obligations herein, the City and Consultant do hereby mutually AGREE as follows, to wit: L Scope of Services: The Consultant shall perform the following services in a professional manner working as an independent contractor not under the direct supervision and control of the City: 1060241060112 Denton Agreement Page 1 EXHIBIT 2 A. Services to be provided: 1. Consultant shall represent the City regarding its compliance with PUC electric transmission service rules, and rulemakings, proceedings, or any projects relating to electric transmission service or to matters affecting municipally owned utilities, including without limitation, the professional and legal services attendant to preparing and submitting comments, responding to requests for information, and attending all hearings and other proceedings in relationship to such compliance or to matters affecting municipally owned utilities, and to consult with the City through its Denton Municipal Electric staff with regard to all filings, hearings, appeals, and other issues related to such compliance or to matters affecting municipally owned utilities, and to assist in any subsequent actions in response to any Commission final order concerning such compliance or matters affecting municipally owned utilities. 2. To consult with the Interim City Manager, the Assistant City Manager for Utilities, the Director of Denton Municipal Electric, the Utility Attorney, and/or other designated administrative personnel or staff regarding any and all aspects of the professional services to be performed, including legal research, analysis, and advice with respect to protecting the City's position regarding its compliance with PUC electric transmission service rules, and rulemakings, proceedings, or any projects relating to electric transmission service or to matters affecting municipally owned utilities, currently being conducted by the PUC, or which the PUC undertakes in the future. This will include coordinating activities with the Director of Denton Municipal Electric, the City Attorney, and their respective staff to efficiently perform the services required and to preserve the Attorney/Client privilege, work product, and all other applicable exceptions to the discovery or disclosure of documents produced by the City and the Consultant under the Scope of Services hereinabove. B. The Consultant shall perform all the services required by this Agreement in a timely fashion, and shall complete them in compliance with schedules established by the City through its Director of Denton Municipal Electric as appropriate to carry out the terms and conditions of this Agreement. II. Term: This Agreement shall be retroactively effective as of December 1, 2005. The Agreement shall terminate either upon the completion of the professional services provided for herein or upon the exhaustion of all professional fees provided for hereunder, whichever event shall first occur. This Agreement may be sooner terminated in accordance with the provisions hereof. Time is of the essence of this Agreement. Consultant shall make all reasonable efforts to complete the services set forth herein as expeditiously as possible during the term of this Agreement, and to meet the schedules established by the City, through its Director of Denton Municipal Electric, or her designee. 10602 1 1060 1 05 Denton Agreement Page 2 III. Compensation and Method of Payment: A. The Consultant shall charge the following fees for its professional services provided to the City hereunder, based upon the following hourly billing rates for the attorneys and support staff involved in this matter: Staff Hourly Rate Lambeth Townsend, Shareholder $ 250.00 Georgia Crump, Shareholder $ 240.00 Melissa E. Ramirez, Associate $ 190.00 Paralegal $ 95.00 Law Clerk $ 75.00 Consultant agrees that all charges for the legal services hereunder, including expenses as set forth in Section III. C. below, shall not exceed $50,000.00. B. The Consultant shall endeavor to have the attorneys and employees listed in Section III.A. above, reasonably attempt to reduce costs by utilizing other qualified shareholders, associates, and paralegals wherever feasible or possible. The Consultant shall bill the City through the submission of itemized invoices, statements, and other documentation, together with support data indicating the progress of the work and the services performed on the basis of monthly statements, showing hourly rates indicating who performed the work, what type of work was done, and descriptions and/or details of all services rendered, including a daily, and an entry-by-entry reflection of billable time spent on this engagement, along with specific descriptions and supporting documentation, if available, respecting any reasonable and necessary out-of-pocket expenses incurred by Consultant in performing the professional services provided for under this Agreement. Professional fees shall be billed in minimum one-tenth (1/10) hour increments. C. Additionally, the City shall either pay directly or reimburse the Consultant, as the case may be, for reasonable and necessary actual out-of-pocket expenses, including but not limited to, long-distance telephone, telecopier, reproduction, postage, overnight courier, and transportation and travel. All copies will be charged at the rate of fifteen cents ($.15) per copy for copies made within Consultant's offices, with as much photocopying as possible being done by outside vendors at bulk rates or by the City to reduce costs if bulk copying is necessary or appropriate. The parties agree that the charges for outgoing telecopies from Consultant shall be $.25 per page and that there will be no charge for incoming telecopies. D. The parties anticipate that invoices or statements for professional services will be generated on a monthly basis and that said invoices or statements will be sent to the City by Consultant on or about the 15th day of each month. The City shall make payment to the Consultant within thirty (30) days after receipt of an appropriate itemized invoice or statement. To the extent that any fees or expenses are disputed 1060241060112 Denton Agreement Page 3 by the City, the City shall notify Consultant within thirty (30) days after its receipt of the invoice or statement, and shall otherwise pay all undisputed amounts set forth in the invoice or statement within thirty (30) days after its receipt of the invoice or statement. All reimbursable expenses, including, but not necessarily limited to travel, lodging, and meals, shall be paid at the actual cost, pursuant to the terms, conditions, and limitations set forth herein. All invoices or statements shall be a reviewed by the Director of Denton Municipal Electric, or her designee; and shall be reviewed and approved by the Utility Attorney. E. It is understood and agreed that the Consultant shall work under the coordination and general supervision of the Director of Denton Municipal Electric, or her designee. F. All notices, invoices, statements, and payments shall be made in writing and may be given by personal delivery or by mail. As to notices: to Howard Martin, Interim City Manager, City of Denton, 215 East McKinney, Denton, Texas 76201 or to his designee. As to invoices, statements, or payments: to Michael S. Copeland, Utility Attorney, Utility Administration Department, at the same address, as to the City; and to Lambeth Townsend, Lloyd/Gosselink, 816 Congress Avenue, Suite 1900, Austin, Texas 78701, as to the Consultant. When so addressed, the notice, invoice, statement and/or payment shall be deemed given upon deposit of same in the U. S. Mail, postage prepaid. In all other instances, notices, invoices, statements, and/or payments shall be deemed given at the time of actual delivery. Changes may be made in the names and addresses of the responsible person or office to which notices, invoices, statements and/or payments are to be sent, provided reasonable notice is given. IV. Professional Competency: A. Consultant agrees that in the performance of these professional services, Consultant shall be responsible to the level of competency and shall use the same degree of skill and care presently maintained by other practicing professionals performing the same or similar types of work. For the purpose of this Agreement, the key persons who will be performing most of the work hereunder shall be Lambeth Townsend and Georgia Crump, Shareholders, and Melissa E. Ramirez, Associate. However, nothing herein shall limit Consultant from using other qualified and competent members of the firm to perform the services required herein if such delegation is reasonably appropriate and properly protects the City's interests. B. Any agreements, ordinances, notices, instruments, memoranda, reports, letters, and other legal documents prepared or obtained under the terms of this Agreement are instruments of service and the City shall retain ownership and a property interest therein. If this Agreement is terminated at any time for any reason prior to payment to the Consultant for work under this Agreement, all such documents prepared or obtained under the terms of the Agreement shall upon termination be 1060241060112 Denton Agreement Page 4 delivered to and become the property of the City upon request and without restriction on their use or further compensation to the Consultant. V. Establishment and Maintenance of Records: Full and accurate records shall be maintained by the Consultant at its place of business with respect to all matters covered by this Agreement. Such records shall be maintained for a period of at least three years after receipt of final payment under this Agreement. VI. Audits and Inspection: At any time during normal business hours and upon reasonable notice to the Consultant, there shall be made available to the City all of the Consultant's records with respect to all matters covered by this Agreement. The Consultant shall permit the City to audit, examine, and make excerpts or transcripts from such records, and to make audits of contracts, invoices, materials, and other data relating to all matters covered by this Agreement. VII. Accomplishment of „Project: The Consultant shall commence, carry on, and complete this professional engagement with all practicable dispatch; in a sound, economical and efficient matter; and, in accordance with the provisions hereof and all applicable laws. In accomplishing the project, the Consultant shall take such steps as are appropriate to insure that the work involved is properly coordinated with any related work being carried on by the City. VIII. Indemni and Independent Contractor Relationshi : A. Consultant shall perform all services as an independent contractor not under the direct supervision and control of the City. Nothing herein shall be construed as creating a relationship of employer and employee between the parties. The City and Consultant agree to cooperate in the defense of any claims, action, suit, or proceeding of any kind brought by a third parry which may result from or directly or indirectly arise from any negligence and/or errors or omissions on the part of the Consultant or from any breach of the Consultant's obligations under this Agreement. In the event of any litigation or claim under this Agreement in which Consultant is joined as a party, Consultant shall provide suitable counsel to defend City and Consultant against such claim, provided the Consultant shall have the right to proceed with the competent counsel of its own choosing. The Consultant agrees to defend, indemnify and hold harmless the City and all of its officers, agents, servants, and employees against any and all such claims to the extent of coverage by Consultant's professional liability policy. The Consultant agrees to pay all expenses, including but not limited to attorney's fees, and satisfy all judgments that may be incurred or rendered against the Consultant's professional liability insurance policy. Nothing herein constitutes a waiver of any rights or remedies the City may have to pursue under either law or equity, including, without limitation, a cause of action for specific performance or for damages, a loss to the City, resulting from Consultant's negligent errors or omissions, or breach of contract, and all such rights and remedies are expressly reserved. B. Consultant shall maintain and shall be caused to be in force at all times during the term of this Agreement, a legally binding policy of professional liability insurance, 106024\060112 Denton Agreement Page 5 listed by Best Rated Carriers, with a rating of "A-" or above, issued by an insurance carrier approved to do business in Texas by the State Insurance Commission. Such coverage shall cover any claim hereunder occasioned by the Consultant's negligent professional act and/or error, act, or omission, in an amount not less than $1,000,000 combined single limit coverage per occurrence. In the event of change or cancellation of the policy by the insurer, the Consultant hereby covenants to immediately notify the City in writing thereof; and in such event, the Consultant shall, prior to the effective date of change or cancellation, serve a substitute policy furnishing the same or higher amount of coverage. The Consultant shall provide a copy of the declarations page of such policy to the City through its Director of Denton Municipal Electric simultaneously with the execution of this Agreement. IX. Termination of Agreement: A. In connection with the work outlined in this Agreement, it is agreed and fully understood by the Consultant that the City may cancel or indefinitely suspend further work hereunder or terminate this Agreement at any time upon written notice to Consultant, Consultant shall cease all work and labor being performed under this Agreement. Consultant may terminate this Agreement by giving the City fifteen (15) days written notice that Consultant is no longer in a position to continue representing the City. Consultant shall invoice the City for all work satisfactorily completed and shall be compensated in accordance with the terms of this Agreement. All reports and other documents, or data, or work related to the project shall become the property of the City upon termination of this Agreement. B. This Agreement may be terminated in whole or in part, in writing, by either party in the event of substantial failure by the other party to fulfill its obligations under this Agreement through no fault of the terminating party. Provided, however, that no such termination may be affected, unless the other party is given [1] written notice (delivered by certified mail, return receipt request) 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. C. Nothing contained herein or elsewhere in this Agreement shall require the City to pay for any work which is unsatisfactory or which is not submitted in compliance with the terms of this Agreement. X. Alternate Dispute Resolution: The Consultant agrees that, if necessary, it will use its best efforts to resolve any disputes regarding the Agreement through the use of mediation or other forms of alternate dispute resolution set forth in Chapter 154 of the Texas Civil Practices and Remedies Code (V.A.T.C.S.). XI. Entire Agreement: This Agreement represents the entire agreement and understanding between the parties and any negotiations, proposals, or oral agreements are intended to be integrated herein and to be superseded by this written Agreement. Any supplement or 1060241060112 Denton Agreement Page 6 amendment to this Agreement, in order to be effective, shall be in writing and signed by the City and the Consultant. XII. Compliance with Laws: The Consultant shall comply with all federal, state, local . laws, rules, regulations, and ordinances applicable to the work covered hereunder as they may now read or hereafter be amended, including but not limited to the Texas Disciplinary Rules of Professional Conduct. XIII. Governing Law: For the purpose of determining place of agreement and law governing same, this Agreement is entered into in the City and County of Denton, State of Texas, and shall be construed in accordance with, and governed by the laws of the State of Texas. Venue and jurisdiction of any suit or cause of action arising under or in connection with this Agreement shall lie exclusively in a court of competent jurisdiction sitting in Denton County, Texas. XIV. 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. XV. Personnel: A. Consultant represents that it has or will secure at its own expense all personnel required to perform the services required under this Agreement. Such personnel shall not be employees nor have any contractual relations with the City. Consultant shall inform the City of any conflict of interest or potential conflict of interest that may arise during the term of this Agreement, in accordance with Consultant's responsibilities under the Texas Disciplinary Rules of Professional Conduct. B. All services required hereunder will be performed by the Consultant or under its direct supervision. All personnel engaged in work shall be qualified and shall be licensed, authorized, or permitted under state and local laws to perform such services. XVI. Assitmability: 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 City thereto. XVII. Severability: All agreements and covenants contained herein are severable, and in the event any of them, with the exception of those contained in sections headed "Scope of Services", "Independent Contractor Relationship", and "Compensation and Method of Payment" hereof, shall be held to be invalid by any court of competent jurisdiction, this Agreement shall be interpreted as though such invalid agreements or covenants were not contained herein. XVIII. Responsibilities for Claims and Liability: Approval by the City shall not constitute nor be deemed a release of the responsibility and liability of the Consultant for the accuracy and competency of its work; nor shall such approval be deemed to be an assumption of such responsibility of the City for any defect in any report or other documents prepared by the 1060241060112 Denton Agreement Page 7 Consultant, its shareholders, associates, employees, officers, or agents in connection with this engagement. XIX. Modification of Agreement: 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. 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, unless such waiver or modification is in writing, duly executed as aforesaid. The parties further agree that the provisions of this article will not be waived as herein set forth. XX. 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. XXI. Binding Effect: This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors, and assigns, where permitted by this Agreement. IN WITNESS HEREOF, the City of Denton, Texas has executed this Agreement in four (4) original counterparts by and through its duly authorized Interim City Manager; and Consultant has executed this Agreement by and through its duly authorized undersigned Shareholder; dated this the day of , 2006. CITY OF DENTON, TEXAS A Texas Municipal Corporation By: Howard Martin, Interim City Manager ATTEST: JENNIFER WALTERS, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY By: ~ 1060241060112 Denton Agreement Page 8 r LLOYD GOSSELINK BLEVINS ROCHELLE & TOWNSEND, P.C. A Texas Professional Corporation By: Lambeth Townse d, Shareholder ATTEST: By: .~K 106024\060112 Denton Agreement Page 9 I DRAFT 2 MINUTES 3 PUBLIC UTILITIES BOARD 4 February 13, 2006 5 6 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas was 7 present, the Chair of the Public Utilities Board convened into an Open Meeting on Monday, 8 February 13, 2006 at 10:23 a.m. in the Service Center Training Room, City of Denton Service 9 Center, 901-A Texas Street, Denton, Texas to consider the specific agenda items listed below 10 under the Open Meeting section of this agenda. 11 12 Present: Chair Newell, George Hopkins, Bill Cheek, John Baines and Phil Gallivan 13 14 Absent: Bob Bland 15 16 Chair Newell called the meeting to order at 10:23 a.m. 17 18 OPEN MEETING: 19 20 ITEMS FOR INDIVIDUAL CONSIDERATION: 21 22 5) Consider recommending approval of a Professional Services Agreement with Lloyd, 23 Gosselink, Blevins, Rochelle & Townsend, P.C. for legal services required for the provision 24 of legal support during formal hearings and informal filings with the Public Utility 25 Commission of Texas (PUCT) related to Denton Municipal Electric (DME) Transmission 26 Cost of Service (TCOS) rate requirements and various other PUCT proceedings that may 27 arise; in an amount not to exceed $50,000. 28 29 Cheek moved to approve with a second from George Hopkins. The motion was approved by a 30 vote of 6-0. Exhibit 3 AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Police ACM: Jon Fortune SUBJECT Consider approval of a resolution of the City Council of the City of Denton, Texas supporting the Denton Police Department Training Academy License Renewal; and providing an effective date. BACKGROUND The Texas Commission on Law Enforcement Officer Standards and Education Commission (TCLEOSE) Rule 215.1 requires a licensed law enforcement academy to renew their license every five (5) years. TCLEOSE further requires that the agency seeking the academy license must have "a resolution of support from the governing body of the sponsoring agency." In 1989, The City of Denton Police Department applied to TCLEOSE for a law enforcement academy license. TCLEOSE granted the academy license. Since that time, The Denton Police Department has conducted thousands of hours of training for both Denton Police Officers and for officers of many other agencies as well. Historically, the Denton Police Department has hosted a fifty-hour Basic Tactical Police Officer course twice a year. That course will now be a 60-hour course. Officers from all over the State of Texas have attended this course. The Denton Police Department also hosts annual Basic Police Cyclist and Bicycle Maintenance courses that draw many students from Texas and other states. The Denton Police Department is part of a multi- agency consortium that provides TCLEOSE mandated training for peace officer intermediate certificates. An addition to these courses, the Denton Police Department provides regular "in- service" training for its own personnel. At this time, the Denton Police Department is exploring the costs and benefits of hosting its own basic law enforcement academy. As a result, the Denton Police Department is working to create a consortium with several agencies in Denton County in an attempt to start up a basic law enforcement academy in the City of Denton. PRIOR ACTIONNIEW (COUNCIL, BOARDS, COMMISIONS) Council first approved the request for a license for a permanent training facility on March 7, 1989. FISCAL INFORMATION There is no fiscal impact to the City. S:\Our Do-nts\Reso1utions\06\pd training acadenty.doc RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS SUPPORTING THE DENTON POLICE DEPARTMENT TRAINING ACADEMY LICENSE RENEWAL; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council desires to support the Denton Police Department in submitting a request for renewal of a license for a permanent training facility to the Texas Commission on Law Enforcement Officer Standards and Education; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES: SECTION 1. The City Council of the City of Denton hereby supports the Denton Police Department Training Academy. SECTION 2. The City Council hereby authorizes and directs the Interim City Manager, or his designee, to represent and act on behalf of the City of Denton in working with the Texas Commission on Law Enforcement Officer Standards and Education in obtaining a renewal of a license for the Denton Police Department Training Academy. SECTION 3. A copy of this resolution shall be forwarded to the Texas Commission on Law Enforcement Officer Standards and Education. SECTION 4. This resolution shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of 12006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Tax ACM: Jon Fortune SUBJECT Consider approval of tax refunds for the following property taxes: Tax Name Reason Year Amount I . Justin lndustrlcs DCAD Supplemental Change 2004 $12.966.28 aluc change per Court Order) 2. Justin Industries DCAD Supplemental Change 2005 $ 9,063.64 (value change per Court Order) \Vcstgatc VctcrMar\ Hospital Duplicate Pav mcnt 2005 $ 1.061.22 4. CountiA idc Homc Loans/Jamcs Gumfoi- Duplicate Pav mcnt 2005 $ 1.4 32.95 LIS Dcpt of Housing A Urban Dc\/ABN Duplicate Pav mcnt 2004 $ 948.47 Nlortgagc G-oup Inc 6. CountiA idc Homc Loans/Tara G-cgorv Duplicate Pav mcnt 2005 $ 811.78 7. Colonial Say ings/Robcrt k Lcaiui Frcnch Duplicate Pav mcnt 2005 $ 758.76 8. CountiA idc Homc Loans/Anna Nlartincz Duplicate Pav mcnt 2004 $ 615.1 ; 9. Heidi Lc\\ is Duplicate Pavmcnt 2005 $ 549.65 BACKGROUND Chapter 31.11 of the Texas Property Tax Code requires the approval of the governing body of the taxing unit for refunds in excess of $500.00. FISCAL INFORMATION The tax overpayment revenue fund would be reduced by $29,107.88. Respectfull submitted: J: Diana G. Ortiz Chief Financial Officer CITY OF DENTON CITY COUNCIL MINUTES January 23, 2006 After determining that a quorum was present, the City Council convened in a Special Called Meeting on Monday, January 23, 2006 at 11:30 a.m. in the Council Work Session Room. PRESENT: Mayor Brock; Mayor Pro Tern McNeill; Council Members Heggins, Kamp, Montgomery, and Mulroy. ABSENT: Council Member Thomson 1. The Council received a briefing, held a discussion and gave staff direction on a process and review criteria for multi-family tax credit projects. Kelly Carpenter, Director of Planning and Development, stated that at the January 10th council meeting, staff had been asked to add criteria concerning preferences for new construction commensurate with demolition and for rehabilitation. In the Multi-family Tax Credit Process Proposal two sentences were added to the definition portion of the proposal. Those statements indicated that a project should include a demolition, replacement and/or rehabilitation component. New construction without commensurate demolition would not be allowed. Section C dealing with "information to be submitted" would include three new bullet points indicating "number of units to be demolished, number of replacement units to be constructed and number of units to be rehabilitated". Section D, Review Criteria and Standards, would be revised to include "preference would be given to projects that demolished at least 100 multi-family units and preference would be given to projects that demolished multi-family units and replaced them with duplexes or single family units". Council discussion included: • Statements were in the proposal indicating a development must follow the Development Code - be clear that even with a special use permit a development must still follow all other aspects of Development Code. • The proposal was included as a zoning case but the first step should be to determine the criteria for these types of projects and then go into the zoning aspects. • This would be a first step and there might be a need to separate the two procedures. • Legally have to be careful with passage of an approval resolution for a project. Have to do initial steps first, then grant approval. • This was not a zoning issue or a development issue-the issue was that the city had more multi-family tax credit projects than the state average of units per capita supported by the programs. • An initial process would be to lay out the project even before starting the development process. The City had the ability to approve a project based on state law and conditions of the project could be enforced through the specific use permit process. • An outline of a proposal could be brought to council and council determine whether or not to approve the project and then work through the development process. The initial step would be to outline the proposal to council. Council would either give approval to proceed or indicate that they did not want the project. • The second step would be to start the specific use permit process and put the requirements above the standard development code. City of Denton City Council Minutes January 23, 2006 Page 2 • A procedure needed to be determined on how to treat offsite demolition. • Determine a minimum number of units to be demolished in the first step for consideration -consider a minimum of 50% - for every one unit going up, a half unit would have to be demolished. Consensus of the Council was to proceed with the recommended changes and return to Council for approval. Item #4 was considered. 4. The Council held a discussion and gave staff direction regarding the structure of Council meetings. Mayor Brock indicated that she had asked for this item to be placed on the agenda. She was concerned based on emails she had received, that there might not be adequate time for citizen participation during work sessions. She felt that Council deliberations might not be as good as they could be as citizens had limited ways to express concerns. Council Member Mulroy indicated that public hearings were held for adoption of certain ordinances. He was concerned about allowing citizens to speak in work sessions, as there might be an overload of citizen speakers that would hinder good council deliberation. Mayor Brock indicated that neighborhood groups had valuable input for council. Mayor Pro Tern McNeill suggested that rather than change council procedures, perhaps the board/committee structure needed to be changed. Perhaps there needed to be better publicizing when a committee or the council was working on an issue. Many citizens had email to respond to concerns, which would not overwhelm a meeting with many people speaking on the same issue with the same ideas at a meeting. Council Member Heggins stated that she agreed with the need for public input. However, she did not feel that committees were the best representation and that often boards did not bring information into the community. She felt it was easier to speak in an informal setting such as a work session rather than a formal setting at a regular meeting. Council Member Mulroy indicated that the committee level was more informal and flexible for discussion. The committee could bring forward citizen comments from those meeting. If the issue was a sensitive issue, there might be a need to hold a workshop with public meetings out in city and receive citizen input on the issue. The meaningful discussion of the council might be distracted with large public input during work sessions. Mayor Brock suggested scheduling a series of meetings in the community for public input such as code enforcement issues. Consensus of the Council was to schedule several neighborhood meetings this spring regarding code enforcement. Tentatively plan for sectional meetings on code enforcement and to continue City of Denton City Council Minutes January 23, 2006 Page 3 to look at the meeting structure. Staff would continue to work with neighborhood groups to strengthen contacts. Item #2 was considered. 2. The Council received a briefing, held a discussion and gave staff direction on proposed amendments to the Development Code related to infill development regulations. Kelly Carpenter, Director of Planning and Development, stated that an Infill and Redevelopment Zone was proposed. The purpose of the zone would be to provide standards for the development of infill lots in existing neighborhoods. The proposed regulations in this zone would apply to areas no greater than two acres in size. Boundaries for an Infill and Redevelopment Zone were proposed. Council discussion: • The section on impact fees indicated that fees might be discounted. This needed to be changed, as there should be no help with impact or development fees for these types of developments. • Regarding park fees - a park could not be placed in an existing neighborhood so park fees would be used for new parks outside neighborhood. • Check the boundaries of the district as some areas were excluded. • If compatibility with existing neighborhoods was stress too much there was a chance that infill development might not happen. • A common denominator needed to be raised but it should not be too high so as to not allow for infill development. Consensus of the Council was to proceed with the adjustments as noted. 3. The Council held a discussion and gave staff direction regarding Council procedures. Mayor Pro Tern McNeill stated that the City Charter determined how council was elected, how it met and how it got things done. He questioned the section relative to plat approval as to whether the Planning and Zoning Commission or the council approved plats. Was there a conflict with Section Q and Section 2.10? City Attorney Snyder indicated that there was no conflict. Mayor Pro Tern McNeill stated that Council had an arrangement with the former city manager that if they had a question; they could go directly to the Assistant City Manager for an answer with a copy to the City Manager. In recognizing the provisions of the Charter that did not allow council to be involved with the daily operations of the city, he questioned how the Interim City Manager wanted to operate. City of Denton City Council Minutes January 23, 2006 Page 4 Interim City Manager Martin stated that when there was more staff, there was no problem going directly to an assistant city manager to deal with an issue. However, as it stood today, that would be hard to do, as there was only one assistant city manager. He felt it would be acceptable for the council to contact employees on the director level and above for assistance as long as the assistant city manager and he were copied with the questions, etc. Council Member Mulroy left the meeting. Council discussed the sections of the Rules of Procedure dealing with placement of items on the agenda and suspension of the rules. Consensus of the Council was to draft revisions to these sections for easier placement of items on the agenda and clearer wording for suspension of the rules. With no further business, the meeting was adjourned at 1:25 p.m. EULINE BROCK MAYOR CITY OF DENTON, TEXAS JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON CITY COUNCIL MINUTES January 30, 2006 After determining that a quorum was present, the City Council convened in a Special Called Work Session on Monday, January 30, 2006 at 11:30 a.m. in the Council Work Session Room. PRESENT: Mayor Brock; Mayor Pro Tern McNeill; Council Members Heggins, Kamp, Montgomery, Mulroy, and Thomson. ABSENT: None 1. The Council received a presentation, held a discussion and gave staff direction on annexation, comprehensive plan amendment and zoning for the proposed Cole Ranch project. Kelly Carpenter, Director of Planning and Development, stated that the Cole Ranch had been under discussion for about the last year with various city departments. On January 23, 2006 the City received an annexation request, a request for a comprehensive plan amendment for a different zoning and a set of zoning requests. Processing of these applications would take about six months. Dave Dennison, Cole Ranch, made a presentation to Council. He stated that the ranch contained approximately 3500 acres. There was currently gas production on the property with existing or provisions for 14 gas wells. The surface agreements for each of these wells could not change without the property owner's approval. The property was currently outside the city limits and was contiguous with the Denton Municipal Airport. The proposed extension of Loop 288 would come through the property at some location as yet to be determined. The developers had met with the DISD School Superintendent to determine the school's needs in the area. Zoning and annexation plans had been filed last Monday. The developers were more than willing to work through the process in the Council's time frame. They were aware of the city's goals relative to density and the types of preferred homes. They had met with UNT for possible donation of property for UNT to build a new golf course. There were no set agreements at this time for the course. The developers were in support of the general alignment of the Comprehensive Plan for Loop 288 and he indicated that they would be willing to dedicate 135 feet of right-of-way to the city along with building at least one frontage road. A possible amendment to the zoning ordinance might be required to allow for a master planned community. Brian Moore reviewed the zoning proposal. He reviewed the current land uses indicating that the development would focus on NRMU and NRMU-12 zoning districts. "Village Centers" would be built on the property that would allow for commercial, residential and various land uses in the centers. Approximately 700-750 acres of the site would be dedicated to flood plain area of the 3500 total acres. Council asked how the density trade off would be handled with the potential golf course land donation. Carpenter stated that the general development plan would handle the density. After the plan was approved, the property would be donated to the university. Dennison continued that the current policy did not encourage reclamation of flood plain land. They were proposing to reclaim some land around the three existing lakes. The current dams would be rebuilt as they were originally built for agricultural reasons. When the dams were rebuilt, the storage capacity of the lakes will be increase to maintain the same shoreline thus reclaiming land around the dam. No 100-year flood plain land would be reclaimed. City of Denton City Council Minutes January 30, 2006 Page 2 Council discussion: • One concern was the ratio of multi-family to single family development. What was proposed for multi-family in the development? Dennison stated that the single-family ratio was approximately 80% as opposed to town homes or apartments for a total of 1200 units in the entire development. The higher density would be a homeowner type town home development. They were not locked into a particular amount at this time. • Council was considering changing the single-family/multi-family ratio for future developments. It might be better to restrict multi-family to owner occupied town homes. • The village concept appeared to be a great workable concept. • Was there a potential of single-family development around the golf course? Dennison replied that the land for the golf course would be donated to UNT so it probably would be the least available for development. • Council and the developer discussed the future location of Loop 288. • Begin the annexation of the property as soon as possible. • Appreciate looking ahead at future expansion of the airport. • Consider condos for a portion of the area instead of apartments. • Consider whether there were any historical areas of the Ranch to be preserved or the Cole homestead to be preserved. With no further business, the meeting was adjourned at 12:50 p.m. EULINE BROCK MAYOR CITY OF DENTON, TEXAS JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Transportation Operations CM: Howard Martin, 349-8232 SUBJECT Consider adoption of an ordinance approving assignments of a certain commercial airport operator's lease between JVC Real Estate, L.L.C. and 4845 LOCKHEED ASSOCIATES, LTD. and approving a subsequent assignment and sublease from 4845 LOCKHEED ASSOCIATES, LTD. to JVC Hangars, L.L.C.; approving a fractional interest concept which subdivides the JVC Real Estate, L.L.C. lease into three separate units allowing a partial transfer, sublease and assignment of these units subject to all improvements complying with applicable City Code requirements; delegating to the Airport Advisory Board and/or the City Manager the authority to approve assignments from JVC Hangars, L.L.C. or any successor in interest of the fractional units; and providing an effective date. Airport Advisory Board recommends approval 4-2. BACKGROUND Dr. John Vann, JVC Real Estate, L.L.C. has requested that the City of Denton consider the proposed assignment of the JVC Real Estate L.L.C. commercial airport operator lease agreement to 4845 LOCKHEED ASSOCIATES, LTD. to facilitate a fractional interest hangar ownership concept. JVC Real Estate, L.L.C. currently owns and operates a three-unit aircraft hangar totaling 10,800 square feet with each unit comprising approximately 3,600 square feet. This concept involves an additional assignment and sublease from 4845 LOCKHEED ASSOCIATES, LTD. (Partnership) to JVC Hangars, L.L.C. of three limited partnerships. JVC Hangars, L.L.C. will initially own all three limited partnerships with the right to transfer these limited partnership interests at a later date. The three limited partnership interests will correspond to the three hangar units totaling 3,600 square feet each. The Partnership, represented by the General Partner, LOCKHEED INVESTORS, L.L.C. will continue to be the tenant under the master airport ground lease and, accordingly, will be responsible for the expenses of the tenant, including paying rent and insurance premiums and other required administrative expenses. The Partnership will carry the insurance required under the master ground lease. Each limited partner will be responsible to the Partnership for paying its share of the master ground lease expenses and other expenses of the Partnership, including rent and insurance premiums. The General Partner will collect such expenses from each of the limited partners and will cause the Partnership to pay all sums for which the Partnership is obligated under the master ground lease. The entire flow of the transaction from JVC Real Estate, L.L.C to the LOCKHEED ASSOCIATES, LTD. Partnership to JVC Hangars, L.L.C. to the final limited partners is shown on the Ownership Diagram attached as Exhibit 5. The ordinance also delegates to the Airport Advisory Board and/or the City Manager the authority to approve any assignments and subleases from JVC Hangars, L.L.C. to the three I limited partnerships. The Airport Advisory Board and/or the City Manager would have the right to approve the final transfer of the three hangar units and any subsequent assignments of limited partnerships or subleases. This policy is contemplated to streamline the subleasing or assignment process for the prospective tenant. This is similar to the current practice of several large commercial hangar operators as it relates to subleasing activities on the Airport. Similar fractional ownership concepts have been embraced by at least four other area airports, Addison, Arlington, Collin County Regional and Fort Worth Spinks. The concept allows aircraft owners and operators an opportunity for ownership of a hangar or hangar unit rather than the uncertainty of a sublease agreement through a commercial hangar operator. This ownership concept has also proven to instill a since of pride with hangar owners which can result in higher property values through continued investment in the structures by the owners. It is anticipated that this development model will result in an improved professional image of the Airport as a whole as ownership serves as an incentive for owners to maintain their facilities at a higher level. This development option will allow airport developers the opportunity to recapture upfront capital and allow for reinvestment in additional hangar development on the airfield. This can benefit the airport through increased lease revenue and increase the number of based aircraft and businesses on the field. This concept may also enhance management efficiencies as it will reduce the number of individual leaseholds that would be directly administered by the Airport. As a condition to the assignment, 4845 LOCKHEED ASSOCIATES, LTD has agreed to the standard Assignment language requiring a $500 transfer fee and has agreed to pay attorneys fess and administrative costs associated with processing the assignment. OPTIONS 1. Approve the assignments and the fractional hangar ownership concept as a development option for the Airport and delegating authority to the Airport Board and/or the City Manager to facilitate subsequent assignments and/or subleases. 2. Approve initial assignments and the fractional ownership concept only. City Council maintains authority over subsequent assignments and sublease agreements. 3. Provide staff further direction on Airport Policy as it relates to fractional ownership. RECOMMENDATION Airport Advisory Board recommends Option 1. ESTIMATED SCHEDULE OF PROJECT The lease assignments, sublease and the amendment would become effective immediately, February 21, 2006 and continue through the term of the lease, September 20, 2034. 4845 LOCKHEED ASSOCIATES, LTD. will have the opportunity to return to the Airport Advisory Board and/or City Management at a later date to seek the approval of future assignments to the limited partnerships or future sublease agreements. 2 PRIOR ACTION/REVIEW The City Attorney's Office has reviewed the proposed assignment. The Airport Advisory Board recommends approval of the assignment, sublease and the fractional interest hangar concept 4-2 provided that the facility meets all applicable City Code requirements. FISCAL INFORMATION A $500 transfer fee will be required and an administrative fee for reasonable attorneys fees and staff time will also be due. No increase will be applied to the lease rate. EXHIBITS 1. Ordinance 2. Assignment to 4845 LOCKHEED ASSOCIATES, LTD. 3. Assignment to JVC Hangars, L.L.C. 4. Sublease Agreement 5. Ownership Diagram 6. Draft Airport Board Minutes Respectfully submitted: Mark Nelson Chief Transportation Officer 3 SA0ur Documents\Ordinances1061Assignment of pad site JVC-4845.doc ORDINANCE NO. AN ORDINANCE APPROVING ASSIGNMENTS OF A CERTAIN COMMERCIAL AIRPORT OPERATOR'S LEASE BETWEEN JVC REAL ESTATE, L.L.C. AND 4845 LOCKHEED ASSOCIATES, LTD. AND APPROVING A SUBSEQUENT ASSIGNMENT AND SUBLEASE FROM 4845 LOCKHEED ASSOCIATES, LTD. TO JVC HANGARS, L.L.C.; APPROVING A FRACTIONAL INTEREST CONCEPT WHICH SUBDIVIDES THE JVC REAL ESTATE, L.L.C. LEASE INTO THREE SEPARATE UNITS ALLOWING A PARTIAL TRANSFER, SUBLEASE AND ASSIGNMENT OF THESE UNITS SUBJECT TO ALL IMPROVEMENTS COMPLYING WITH APPLICABLE CITY CODE REQUIREMENTS; DELEGATING TO THE AIRPORT ADVISORY BOARD THE AUTHORITY TO APPROVE ASSIGNMENTS FROM JVC HANGARS, L.L.C. OR ANY SUCCESSOR IN INTEREST OF THE FRACTIONAL UNITS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, John Vann, President of JVC Real Estate, L.L.C. has proposed a'Tractional Interest Concept" ("Concept") whereby the hangar and office improvements erected on JVC Real Estate, L.L.C.'s Commercial Operator's Lease ("Lease") at the Airport dated September 21, 2004 of .455 acres of land would be split into three separate units which could be subsequently assigned, conveyed or subleased under a partnership agreement; and WHEREAS, the Airport Advisory Board ("Airport Board"), at its meeting of January 27; 2006, recommended the City Council approve this Concept and the Assignment of the Lease from JVC Real Estate, L.L.C. to a partnership known as 4845 LOCKHEED ASSOCIATES, LTD. ("Partnership") and a subsequent assignment and sublease from the Partnership to JVC Hangars, L.L.C., subject to the improvements meeting all applicable City Code requirements, including applicable fire suppression and/or area separation requirements; and WHEREAS, the Concept involves the ultimate transfer and sublease of the separate hangar/office units to limited partners of the Partnership provided that the Partnership and previous assignors remain fully liable and responsible for compliance with all the terms of the Lease in case of a default and the Partnership will remain primarily responsible for paying the rent and performing all the lessee's obligations under the Lease; and WHEREAS, the City Council deems it in the public interest to approve the Concept and the requested assignments and sublease and to delegate to the Airport Board the authority to approve the assignment transfer and sublease of the separate units under the Lease to the limited partners; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings set forth in the preamble of this Ordinance are incorporated by reference into the body of this Ordinance as if fully set forth herein. SECTION 2. The City Council approves the Concept set forth above subject to the hangar/office improvements meeting all applicable City Code requirements including, without limitation, applicable fire suppression and/or area separation requirements, the City Manager, or his designee, is hereby authorized to execute an Assignment of a leasehold interest in the Airport SA0ur Documents\Ordinances1061Assignment of pad site TVC-4845,doe Lease Agreement Commercial Operator at the Denton Municipal Airport described above from JVC Real Estate, L.L.C. to 4845 LOCKHEED ASSOCIATES, LTD., in substantially the form of the Assignment attached to and made a part of this Ordinance for all purposes, to evidence the City's consent to the Assignment. SECTION 3. After the improvements have met all applicable City Code requirements and the Lease has been assigned to 4845 LOCKHEED ASSOCIATES, LTD., the City Manager, or his designee is hereby authorized to execute an Assignment of a leasehold interest in the Airport Lease Agreement Commercial Operator at the Denton Municipal Airport described above and a Sublease of that interest from 4845 LOCKHEED ASSOCIATES, LTD. to JVC Hangars, L.L.C., in substantially the form of the Sublease and Assignment attached to and made a part of this Ordinance for all purposes, to evidence the City's consent to the Assignment. SECTION 4. The City Council hereby delegates the authority to the Airport Board to approve the assignments and subleases, and transfers of the separate hangar/office units under the Lease from JVC Hangars, L.L.C. to limited partners under the Concept provided that all previous assignors, including JVC Real Estate, L.L.C., the 4845 LOCKHEED ASSOCIATES, LTD. Partnership and JVC Hangars, L.L.C. shall remain fully responsible for compliance with the Lease terms and conditions in the event of a default and the Partnership shall remain primarily responsible for performance of all the obligations of the Lease. This additional authority amends Chapter 3 of the City Code and shall give the Airport Board final authority in approving this and similar transactions. SECTION 5. Save and except as amended hereby, all the remaining clauses, sentences, paragraphs, sections and subsections of Chapter 3 of the City Code shall remain in full force and effect. SECTION 6. This Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SN YDER, CITY ATTORNEY BY: AlwAtsi Page 2 of 2 V(ka Docurr= slCont 2=\06UVC-4845 Lockheed Assignmentdoc LEASE ASSIGNMENT OF COMMERCIAL OPERATORS LEASE AT DENTON MUNICIPAL AIRPORT DATE. February , 2006 ASSIGNOR: JVC Real Estate, LLC ASSIGNEE: 4845 Lockheed Associates, Ltd. LEASE: Date: September 21, 2004 Landlord: City of Denton, Texas Tenant: JVC Real Estate, LLC Premises: Approximately .455 acres of land located at 48845 Lockheed Lane, Denton, Texas 76207 and more fully described in the Attachment A and B which is made a part of this Assignment for all purposes. Assignor assigns to Assignee Tenant's interest in the lease. A. Assignee Agrees To: 1. Assume Tenant's Obligations under the Lease. 2. Accept the premises in their present "as is" condition. 3. Complete all obligations of purchase from Assignor prior to this Assignment becoming effective. Landlord consents to this assignment. Landlord agrees to notify Assignor within 30 days of any Assignee default. B. Assignor agrees as a condition of Landlord's consent to this ASsigninent that: 1. Assignor will remain liable on the Lease should Assignee default on the Lease. 2. Assignor will pay or will have the Assignee pay the Landlord a $500 transfer fee. 3. Assignor will pay or will have the Assignee pay all the Landlord's administrative costs of handling and processing this assignment, including without limitation, all Landlord's reasonable attorneys fees and Landlord's staff time associated with this assignment. PREVIOUS ASSIGNMENTS. None r C Real Estate LLC, John Vann, President, Assignor 1 wa Exhibit 2 S:lO-faoeMnent$\ConUacts106UVC-4845 Lockheed Assignment.doc F 4845 Lockheed Associates, Ltd, Assignee SI w City of Denton, Landlord Howard Martin, Interim City Manager Attest: Jennifer Walters, City Secretary By: Approved as to Legal Form: Edwin M. Snyder, City Attorney BY "-~ea Ayl~~6 ZVI STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the a day of ` 20 Ala, by John Vann, President of JVC Real Estate, LLC, a State of Texas corporation, on behalf of said corporation. [SEAL] Public, o of T BRANDY HEITZMAN Note Public, S" of Texas My Commission Expires ,S /Z D I A' F . ` My Commission Expires (or Notary Stamp) ~ of May 12, 2008 Page 2 of 3 I S:LO- DDC=efltslC0ntrUM\061JVC-4845 L.ockfmd Assignmentdoc STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the day of j 20010 , by Q~~ V of 4845 Lockheed Assoc Mates, Ltd. f SEAL] o Public, State of T ~m~~;..y~4*s BRANDT HEITZMAN ' _ Notary Public, State of Texas My Commission Expires My Commission Expires ~ H q, May 12, 2008 (or Notary stamp) STATE OF TEXAS COUNTY OF DENTON This instnunent was acknowledged before me on the day of 20____, by Howard Martin, Interim City Manager on behalf the City of Denton, Texas, a municipal corporation. f SEALI Notary Public, State of Texas My Commission Expires (or Notary Stamp) i Page 3 of 3 ;r r Attachment A Lockheed _ Ile- 5 f; 1,7i. _ _y~ Irk. ~ 3 tit- ~ to f.•,1..~ ~ V~ i ~1.~~~~-~ , E•' I 1 ~ ~ . 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Y pM1 'a Mel %i~ tit t' ^S r° :;3 lax nw'u a E ~ lu ifo ~wYl°i~ ~ n.rSY Ri ~fy WT" OcY E e' 00 ,[Ind fi i vH IJr ti.. ..'75 CY j;,j °u Oa pn (p4 ul m ,•f • Aluudl,ny~~ly+vudj ' vil; ~ III Cr'o i M„iro,sz.aa S L.r ~ I W ~ ly N I I I I_ U 1 l i yl I n' .ti< a w m I ay ~ ~ i•, I rI r o I I°~ a 4 I m I I 1 !w I I 0 t : n V d L'~ t 1rV D3 UI .r E of 4 p C CAF .f O 4 Y .Wi{Ii,~d^gg P r y ?n { j`g~1//~yy5~ ~0y7v ~.-•Q. 1 N T M ~Yn~I ~4 ~~y Ll~~LLii x9g Ab1 r !S3 W~p7 I'47 Y, 3,fhl _ pp M 4 W Ell . Ai, I O IAIl111II Yw......11111,.111 "WN I I o ~ I I ~ w Y 4u~ } I t ;aye I~ I I f ,I! Lvov .taro G 3..Mtz,00 N _ I LL WMOVT MOBBED SICAL rr 8? y'? r ("I ~ I,, • tG Kamm Los. xvMlxb~ ~ Sflour Documents\Coalzzd606U845 -Lnckheed-NC Hmgm AssignmwtAoc LEASE ASSIGNMENT OF COMMERCIAL OPERATORS LEASE AT DENTON MUNICIPAL AIRPORT DATE: February 2006 ASSIGNOR: 4845 Lockheed Associates, Ltd. ASSIGNEE: JVC Hangars, LLC LEASE: Date: September 21, 2004 Landlord: City of Denton, Texas Tenant: 4845 Lockheed Associates, Ltd. Premises: Approximately .455 acres of land located at 4845 Lockheed Lane, Denton, Texas 76207 and more fully described in the Attachment A and B which is made a part of this Assignment for all purposes. Assignor assigns to Assignee Tenant's interest in the lease. A. Assignee Agrees To: 1. Assume Tenant's Obligations under the Lease but Assignor shall remain primarily responsible for the performance of the obligation of the Lease. 2. Accept the premises in their.present "as is" condition. 3. Complete all obligations of purchase from Assignor prior to this Assignment becoming effective. Landlord consents to this assignment. Landlord agrees to notify Assignor within. .30 days of any Assignee default and to notify Assignee in the event of Assignor's default. B. Assignor agrees as a condition of Landlord's consent to this Assignment that: 1. Assignor will remain liable on the Lease and, should Assignor default on the Lease, Assignee will remain liable for performing all obligations under the Lease. 2. Assignor will pay or will have the Assignee pay the Landlord a $500 transfer fee. 3. Assignor will pay or will have the Assignee pay all the Landlord's administrative costs of handling and processing this assignment, including without limitation, all Landlord's reasonable attorneys fees and Landlord's staff time associated with this assignment. PREVIOUS ASSIGNMENTS: None Fo 4 5 Lockheed Associates, Ltd.., Assignor Exhibit 3 SAOu DocumcntAContrads106W84$ Lockheed-NC Hangars Assignrnent.doc Fo C Hangars, LLC, Assignee r.. -r- r City of Denton, Landlord Howard Martin, Interim City Manager Attest: Jennifer Walters, City Secretary f r By: j Approved as to Legal Form: Edwin M. Snyder, City Attorney By: STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the ' day of Janua4i 20_p 6, by 4845 Lockheed Associates, Ltd., a State of Texas corporation, on behalf of said corporation. [SEAL] Ab ,State o e My Commission Expires a*e►"'`pew BitANOi !#EfTZMAN (or Notary Stamp) _ IVo rY Public State of Texas My commission Expires May 12, 2008 Page 2 of 3 S:1our DocumentsT Amuacts106t484S Lockheed-.NC Hangars Assipment.doc STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the A day of gsyZ 20-Q~, by Tob k , of John Vann, President of NC Hangar LLC. [SEAL] tary Public, State of Tedd _.►"'mss BRANDY HE#T1MAN My Commission Expires ,S z A } . . _ !Votary iiUMC. State of Texas My Commission Expires (or Notary Stamp) May 12, 2008 STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the day of 2Q__, by Howard Martin, Interim City Manager on behalf the City of Denton, Texas, a municipal corporation. [SEAL] Notary Public, State of Texas My Commission Expires (or Notary Stamp) Page 3 of 3 ply _ Attachmmt A_ - Lockheed ;F r-l i 110 r,.•+ ~A .i., Ids lip 3. - 1 Sri } 1 i two TM' ISO. E ! is i f , SITE _ .fiI•. J.. _ Fl ! - .YN". ~ ' ~ lit - ao r cram . y 1i11w ' ~ Idilpi~Al+aolrs m #A,[ At 1'JE i10~19 rp ii1Ra~ OCI[EaPr~lr ue+e>8o 91 7!S aJ<> f _ AC16HIYC~OR 7MO J$ f" MY 740-1 a1~Q Q All" wa1glR.,it+CtainYlO 10 "1" 7/pOp-fi ar 0 ti1L /OOA~lf~ 1!1 EfR~ Oi411Ei , low +00111 r r l~.t .l, a-s-roaa ^ ax ' TMINAL AREA DRAWING DENTON AIRPORT DENTON, TEXAS °"41vrt swr1f s Attachment B y , Y l: t c ✓r^°r~ 03 c` e o ~o~ ~u `"`YV s,uur ..Y ~ i0 + ' O N I., N r - 4 6 ^ Ar ~I ; I "7 Gi A 4j b~.$a + Mi yr ti e t da~[AM ~,9 LJl r=F 4~Y W~~ 'X~ iW VK ~*OYI ~Y ~IY A ~ ~~ly ~ W r•~~ i'7'~,C ; 4J JV 4.r~P']y f7 W .r 1, r~ Y • ° - ! n i ^ it i ~ n ' ' W Ol b fr d! y ~ u~ v rr. 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PARTIES 1.1 The parties to this Sub-Lease are: 1.1.1 4845 Lockheed Associates, Ltd., a Texas limited partnership whose address is 1424 Gables Court, Plano, Texas 75075 (Attn: John Vann) ("Lessor"), and 1.1.2 JVC Hangars, L.L.C., whose address for purposes hereof is 1424 Gables Court, Piano, Texas 75075 (Attn: John Vann) ("Lessee") 2. GROUND LEASE; PARTNERSHIP; PREMISES 2.1 Lessor is the Lessee under that certain Airport Lease Agreement-Commercial Operator (the "Ground Lease") dated effective as of September 21, 2004, by and between the City of Denton, Texas, as Lessor, and JVC Real Estate, LLC, as Lessee, as assigned to Lessor, leasing and demising the real property and improvements described in Exhibit A (the "Properly") attached hereto and made a part hereof. This Sub-Lease is subject to the provisions of the Ground Lease as it exists or may from time to time be amended. 2.2 This Sub-Lease is executed in connection with Lessee's acquisition of the Class A Limited Partner partnership interest in Lessor. This Sub-Lease is also subject to the provisions of the 4845 Lockheed Associates, Ltd. partnership agreement (the "Partnership Agreement") as it exists or may from time to time be amended. 2.3 The "Premises" means and consists of "Unit A " as defined and described in the Partnership Agreement and as shown on the plat attached hereto as Exhibit B. In the event of conflict between the unit description in the Partnership Agreement and in this Sub-Lease, Exhibit B shall control. The "Premises" also includes the exclusive use of the two (_2_) parking spaces numbered A-1 and A-2, inclusive, as shown on Exhibit B. Exhibit 4 -t- 3. DENISE; QUIET ENJOYMENT; SUITABILITY 3.1 Lessor hereby LEASES and DEMISES the Premises to Lessee for the remaining term of the Ground Lease (that is, through September 20, 2034) and any renewals or extensions thereof (the "Sub-Lease Term"). TO HAVE AND TO HOLD the same unto Lessee, its successors i and assigns for the Sub-Lease Term. And Lessor does hereby bind itself, its successors and assigns to WARRANT and DEFEND for the Sub-Lease Term the Premises unto Lessee, its successors and assigns against the claims of all persons claiming by, through or under Lessor, but not otherwise, and subject, however, to the Ground Lease and Partnership Agreement. 3.2 Upon the condition that Lessee shall timely and fully keep and perform all its covenants and fulfill all conditions imposed thereunder, Lessee shall have and enjoy the peaceable and quiet possession of the Premises for the Sub-Lease Term, subject only to the Ground Lease, the Partnership Agreement, Lessor's right of entry provided in 9.2.4 hereof and the rights of Lessor's mortgagee, if any, under Article 10 hereof relating to subordination of this Sub- Lease to mortgages of the Property. This express covenant of quiet enjoyment is in lieu of and supercedes any implied covenant of quiet enjoyment. 3.3 Lessee acknowledges that it has inspected the Premises and has determined that the Premises are suitable for its intended use. Lessee further acknowledges that Lessor has made no representations or warranties concerning the suitability of the Premises or regarding the soundness, quality or condition of the Premises or any component thereof or of the Property. Lessor hereby disclaims any implied warranties regarding the Premises or the Property, including any implied warranties of suitability. -2- 4. RENT 4.1 Beginning February 7, 2006, Lessee shall pay as rent to Lessor at its offices on or before the first day of each month during the Sub-Lease Term an amount equal to 33.33% ("Lessee's Percentage@) of the monthly rent and any other recurring monthly charges due under the Ground Lease for that month Lessor will not charge a premium or a mark-up or profit on it's Master Lease from the City of Denton. 4.2 Lessee shall also pay to Lessor on request as additional expenses, Lessee's Percentage of (a) ad valorem taxes assessed against the Property; (b) any other rents, expenses or other charges payable by Lessor as Lessee under the Ground. Lease; (c) any insurance (hazard or liability) maintained by Lessor with respect to the Property; (d) costs incurred and reserves created by Lessor for repair, restoration and maintenance of the Property; and (e) any other cost or expenses for which Lessee as a limited partner of the Lessor is obligated under the Partnership Agreement, including, not exclusively, administrative expenses. Lessor will not charge a premium or a mark up or profit on it's Master Lease from the City of Denton. 4.3 Lessor, at its option may require Lessee to pay each month along with Lessee's Percentage of the Ground Lease rent, an amount equal to one-twelfth (I/ I 2th) of the annual amount of the additional expenses for which Lessee is obligated under the preceding 4.2 as estimated by Lessor in good faith. If this option in exercised, the amounts paid by Lessee pursuant to the 4.3 shall be held by Lessor in a separate account (with any interest earned thereon accruing to Lessee as its interest may appear) and the account shall be charged from time to time as necessary to pay 4.2 expenses. If there are insufficient funds in the account standing to the credit of Lessee to pay any 4.2 expenses due or to come due, Lessee shall pay the deficit to Lessor on request. -3- 5. USE 5.1 Lessee shall use the Premises only as an aircraft hanger is ordinarily used, and for other aviation-related purposes as permitted by the Ground Lease Lessor, and for no other purpose. 5.2 Lessee shall at all time strictly abide by all rules and regulations of the Ground Lease lessor, and shall not act or fail to act, or suffer on permit to suffer any act or omission in violation of such rules or regulation or in such a manner as to cause Lessor to be in violation of or suffer any penalty or sanction under the Ground Lease. 5.3 Lessee shall have, in common with the Lessees of Units B and C, the non-exclusive right to use the Property except for those portions set apart for the exclusive use of the Lessees of Units B and C respectively, subject, however, to such rules and regulations as Lessor may in its reasonable discretion establish from time to time, and provided that any such rules and regulations are nondiscriminatory and apply to all Lessees of the Property uniformly. 5.4 Any violation of the Ground Lease or the rules and regulations of the Ground Lease caused or suffered by any employee, licensee or invitee of Lessee shall he deemed to be a violation by the Lessee, regardless of whether Lessee has or exercises any control over the person causing or suffering the violation. 6. IMPROVEMENTS 6.1 Lessee shall make no alterations or improvements to the structural components of Premises or to the Properly without Lessor's prior written consent which may be given or withheld in Lessor's arbitrary discretion. Unattached, moveable trade fixtures shall not be considered as improvements, provided that they can be removed without injury either to the Premises or to the fixtures. HVAC equipment, communications antennae and any other device or equipment the installation of which requires penetration of the roof, foundation or exterior walls shall be -4- deemed improvements which require Lessor's consent. 6.2 Upon termination of this Sub-Lease, all structural alterations or improvements shall remain on the Premises and become the property of Lessor unless Lessor requests their removal. If Lessor requests removal Lessee shall remove same within seven days and shall repair to Lessor's satisfaction any penetrations or damage to the Premises caused by the installation, maintenance or removal. 7. MAINTENANCE; REPAIRS 7.1 Lessor shall maintain the roof, foundation and exterior walls of the hanger building and all i other portions of the Property other than those required to be maintained by any unit Lessee in good condition and working order. 7.2 Lessee shall maintain in good condition and working order the following: 7.2.1 aircraft ingress/egress door and all other exterior doors providing access to the Premises and all exterior windows (including glass replacement); 7.2.2 all lighting and electrical fixtures affixed to that part of the hanger building enclosing Lessee's unit; 7.2.3 any fixtures attached to or improvements contained in the Premises or installed by Lessee; 7.2.4 all IHVAC equipment, plumbing, conduits, pipes or wires providing service to the Premises to the extent that same are located in, above, below or adjacent to the Premises; 7.2.5 those portions of the Property set apart for Lessee's exclusive use; and 7.2.6 Lessee's portion of the interior demising wall(s). 7.3 In the event of fire or other casualty to the Property, Lessor will repair or replace those parts -5- of the Property which it is obligated to maintain and Lessee will repair or replace those parts which is obligated to maintain. There shall be no abatement of rent as a result of any fire or other casualty to the Property or Premises. Each party shall commence its work promptly and diligently prosecute same to completion. Lessor shall have and there is hereby created in its favor a security interest in any insurance proceeds which may become payable to Lessee as a result of any casualty to the Premises, to secure Lessor in Lessee's performance of its obligations to repair or replace. Lessor is appointed as Lessee's agent and attorney-in-fact to submit proofs of loss, adjust claims and to receive insurance proceeds. Any such proceeds shall be held by Lessor and applied to the cost of repair or restoration. 8. INSURANCE; SUBROGATION WAIVER; INDEMNITY 8.1 Lessor and Lessee shall each maintain all-risks insurance in amounts sufficient to provide 100% of replacement cost for those portions of the Property which each is respectively obligated to maintain and repair. Lessor's and Lessee's deductible shall not exceed $5,000, and each party and such parties as is required by Article XII of the Ground Lease, shall be named as an additional insured on the other's casualty loss and liability policies. Liability coverage shall be not less than the amount and type of coverage required under Article XII of the Ground Lease for the lessee thereunder. If Lessee, Lessor and Lessor's insurance carrier agree, in lieu of Lessee obtaining separate insurance for the casualty loss or liability protection, Lessee shall be named as an additional insured on Lessor's policy. In such event: 8.1.1 Lessee shall pay directly or reimburse Lessor for Lessee's percentage of the premiums on request; 8.1.2 Lessee shall pay in connection with any loss or claim Lessee's percentage or any deductible or retention; 8.1.3 In the case of a casualty loss policy proceeds shall be allocated first to the costs in excess of Lessor's portion of the deductible for repair or replacement of the portions of the Property which Lessor is obligated to maintain, and then to Lessee's repair or replacement cost in excess of Lessee's percentage of the deductible, with any surplus being allocated as provided in 8.1.2 with reference to deductible; 8.1.4 Lessee shall maintain separate casualty insurance for the Premises contents not covered by the joint policy and its own liability coverage for claims; and 8.1.5 Nothing in 8.1.1 - 8.1.4 shall affect the subrogation waiver in 8.2 or the claim waiver and indemnity provided in 8.3 not within the scope of coverage provided by the joint policy. 8.2 Lessor and Lessee on behalf of themselves and their respective insurance carriers each waive in favor of the other any claims for damages or reimbursement for or on account of any loss to the extent of insurance coverage required hereunder and also to the extent of any deductible and any excess or umbrella coverage. 8.3 LESSEE WANES ANY CLAIM NOW OR LATER ARISING AGAINST LESSOR, LESSOR'S GENERAL PARTNER, ANY MANAGER OR MEMBER OF THE GENERAL PARTNER AND ANY AGENT OR EMPLOYEE OF THEM FOR ANY LOSS OR DAMAGES, INCLUDING INCIDENTAL AND CONSEQUENTIAL DAMAGES SUFFERED OR INCURRED BY LESSEE AS A RESULT OF ANY ACT OR OMISSION BY ANY THIRD PARTY (THE "WAIVED CLAIMS") AND AGREES TO INDEMNIFY LESSOR, LESSOR'S GENERAL PARTNER, ANY MANAGER OR MEMBER OF THE GENERAL PARTNER AND ANY AGENT OR EMPLOYEE OF ANY OTHER THEM FOR ANY LOSS, DAMAGE OR LIABILITY -7- (INCLUDING COSTS OF DEFENSE AND AMOUNTS PAID IN GOOD FAITH IN SETTLEMENT) INCURRED BY REASON OF ANY CLAIM MADE BY LESSEE, ANY MEMBER, PARTNER, OFFICER, DIRECTOR, EMPLOYEE, AGENT, LICENSEE OR INVITEE OF LESSEE BASED IN WHOLE OR IN PART ON ANY OF THE WAIVED CLAIMS. 9. DEFAULT; REMEDIES 9.1 Lessor's Default; Remedies. 9.1.1 If Lessor shall fail to pay any rents or other amounts when due under the Ground Lease or if Lessor shall fail to perform any other covenant under the Ground Lease, Lessee may pay the amount due or perform Lessor's obligation. The amounts so expended by Lessee shall be paid to Lessee by Lessor on demand, and may be set- off by Lessee against any amounts next coming due Lessor under this Sub-Lease until the entire amount is reimbursed. 9.1.2 If Lessor shall default in the performance of any obligation under this Sub-Lease, Lessee shall have the right to perform Lessor's obligation. The amounts so expended by Lessee shall be reimbursable on demand, and may be set-off by Lessee against any amounts next coming due Lessor under this Sub-Lease until the entire amount is reimbursed. 9.1.3 The right to cure and to receive reimbursement shall be Lessee's sole remedies in the event of Lessor's breach. 9.2 Lessee's Default; Remedies. 9.2.1 If Lessee shall default in the payment of rent and such default shall continue for more than five (5) business days after written notice to Lessee, or if Lessee shall -8- default in the payment of any other amount owing to the Lessor hereunder and such default shall continue for more than ten (10) business days after written demand is made upon Lessee, then and in either event, Lessor may exclude Lessee and any sub-tenant or licensee from the Premises and may continue to so exclude Lessee (or its subtenant or licensee) from the Premises pursuant to and in accordance with the provisions of the Texas Property Code applicable in such cases to commercial tenancies. If Lessee shall fail to pay all amounts due and owing by 5:00 p.m. on the second business day following exclusion of Lessee from the Premises, then Lessor shall have the right, without further notice or demand, to terminate this Sub-Lease and to recover possession of the Premises through judicial process. 9.2.2 It Lessee shall fail to keep or perform any covenant or obligation imposed under Article 5 hereof Lessor shall have the right exercisable without notice or demand to cure the breach or default of Lessee's behalf. Any amounts so expended by Lessor shall become indebtedness due and owing on demand, and if not paid within the grace period under 9.2.1, Lessor shall have the rights and remedies provided in 9.2.1. If a breach of this Sub-Lease by Lessee in Lessor's judgment creates a risk of default under the Ground Lease then Lessor shall in addition to all other rights and remedies be entitled to immediate, ex parte injunctive relief and in any such proceeding, the existence of irreparable harm and the absence of adequate remedy at law shall be conclusively presumed. 9.2.3 Lessor may bring an action in debt to recover amounts due and owing by Lessee at any time without prejudice to the rights and remedies provided in 9.2.1, such remedies being cumulative and exercisable concurrently or consecutively. -9- 9.2.4 Lessor shall have the right, without notice or demand to enter the Premises to inspect same or in the exercise of its rights and remedies under 9.2.1 or 9.2.2. In its exercise of rights under this 9.2.4 or under 9.2.1 Lessor (its general partner, any member of its general partner and any of its or their agents or employees) shall not be liable for trespass or conversion of either the Premises or personal property contained therein, and shall not be liable for incidental, consequential or penal damages for breach of this Sub-Lease or on account of any act or omission in the exercise of rights hereunder or provided by law. 10. MORTGAGES; ALIENATION 10.1 By Lessor. Lessee agrees that this Sub-Lease is and shall remain subordinate to any existing or future mortgage of the Property by Lessor provided that Lessee and any mortgagee shall have entered into a non-disturbance and attornment agreement. The execution of such agreement is a condition precedent to the effectiveness of this Sub-Lease. 10.2 By Lessee. Lessee shall not transfer or encumber its interest in the Premises without Lessor's prior written consent which consent shall not be unreasonably withheld. Any absolute transfer shall be subject to the provisions of the Partnership Agreement imposing restrictions on transfer of partnership interests. Lessor's consent to an encumbrance shall not be unreasonably withheld. Lessor's consent may be conditioned upon receipt of a written undertaking from Lessee's mortgagee to provide Lessor with a copy of any notice of delinquency, default, intent to accelerate or acceleration of the mortgage debt. Lessor's consent to the mortgage includes its consent to foreclosure thereof in the event to Lessee's default. A mortgagee, trustee or receiver in possession of the Premises shall keep and perform all of Lessee's obligations hereunder and shall be subject to all the provisions of this Sub-Lease. The mortgagee or other purchaser at -10- foreclosure shall take its interest subject to this Sub-Lease and shall upon acquisition of Lessee's interest keep and perform all of Lessee's obligations thereunder. If at the time of foreclosure Lessee is in default in the payment of any obligation hereunder, the mortgagee or other purchaser at foreclosure shall have until the last business day of the month in which the foreclosure occurs to cure such default. Any subsequent transfer of this Sub-Lease by Lessee's mortgagee or purchaser at foreclosure shall be subject to and on the same terms as the provisions of the Partnership Agreement relating to transfer of interests in Lessor. 10.3 Estoppel Letters. Lessor and Lessee shall on request by either or by any mortgagee or prospective mortgagee or intcrest-transferee or either, furnish an Estoppel letter confirming that the Ground Lease and this Sub-Lease is in force according to its terms (if that is in fact the case) and stating whether, to the current, actual knowledge of the party providing the letter, there exists any event of default or condition which with the passage of time, the giving of notice or both, would constitute an event of default on the part of the other party. If the letter is not provided within 10 days after receipt of a written request, then the requesting person may conclusively presume that the Ground Lease and this Sub-Lease are in effect according to their terms, that the Lessor or Lessee as the case may be is not in default and that no potential default exists. 11. NO11CES 11.1 All notices by or to a party shall be in writing and shall be deemed received when actually received if delivered by commercial courier, or in the case of mail, on the next delivery day after deposit of the notice in the custody of the U.S. Postal Service in a first-class, certified mail, return receipt requested, postage pre-paid envelope correctly addressed to the recipient at the addresses stated in 1.1 hereof or such other address as either may designate by Notice -i 1- in accordance herewith. -12- EXECUTED to be effective February 7, 2006. 4845 LOCKHEED ASSOCIATES, LTD., a Texas limited partnership By: LOCKHEED INVESTORS, L.L.C., a exas limited liability company, rat Partner By: h11 V 4,hTaanager NC HANGARS, L.L.C., a T s limited liability company By: • 9aW,>F Vann, P esident vannWnton county airport hangar\sublease-Lrtf BRANDT HEITZMAN - Notary Public. 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S5 U ° L v lop a ca p U C;5 O " y oa v ~U x ~r v as ea a w v C) o m lot cc ~Q Q I DRAFT MINUTES 2 of the 3 AIRPORT ADVISORY BOARD SPECIAL CALLED MEETING 4 JANUARY 27, 2006 5 6 After determining that a quorum was present, the Airport Advisory Board convened in a Special 7 Called Meeting on Friday, January 27, 2006 at 7:30 a.m. in the Airport Terminal Building at 8 5000 Airport Road, Denton, Texas. 9 10 BOARD MEMBERS PRESENT: Chairman Rick Woolfolk, Vice Chairman Don Smith, Jay 11 Anderson, Larry Luce, Bob Eames and John Kristoferson. 12 13 BOARD MEMBERS ABSENT: John Vann with an excused absence. 14 15 STAFF MEMBERS PRESENT: Mark Nelson, Chief Transportation Officer, Julie Mullins, 16 Aviation Assistant, Herb Prouty, Consulting Attorney, Rick Jones, Fire Marshal, Dean Bray, Fire 17 Protection Engineer, Rodney Patterson, Senior Plans Examiner and Kevin Craven Airport 18 Maintenance. 19 20 PUBLIC PRESENT: Kirk Wilke, KW Builders 21 22 The meeting was called to order at 7:30 a.m. 23 24 I. Public Meeting 25 26 No public comments were made at this time. 27 28 II. Receive a report, hold a discussion, and consider a recommendation to City Council 29 on a proposal by JVC Real Estate, LLC on a condominium style property 30 development and management. The Board reserves the right to convene into 31 executive session for deliberations regarding real property - Under TEXAS 32 GOVERNMENT CODE Section 551.072. 33 34 Bob Eames arrived at 7:35 a.m. and Jay Anderson arrived at 7:40 a.m. 35 36 Mark Nelson introduced personnel from Fire Prevention and provided a brief report 37 on the action item indicating that the Board had previously approved the general 38 concept of fractional ownership as a development alternative for hangar development 39 at the airport during the November and December Regular Board Meetings. Mark 40 Nelson explained that he visited with representatives from Fire Prevention concerning 41 the interpretation of the Fire Code pursuant to the proposed fractional ownership 42 concept prior to the January 11, 2006 Airport Advisory Board Meeting. The issue 43 was brought to the Board with the understanding from that discussion that area 44 separation or firewalls would be needed to separate each of the three units in the 45 hangar. 46 Exhibit 6 AIRPORT ADVISORY BOARD MINUTES JANUARY 27, 2006 PAGE 2 1 Fire Marshal Rick Jones provided a detailed presentation of the current Fire Codes 2 and Building Codes that regulate development in the City and at the Airport. The 3 Airport Advisory Board held considerable discussion on the fire code and had several 4 follow up questions for Fire Prevention Staff. These questions addressed area 5 separation, construction material, fire suppression requirements, lease/lot lines and 6 general development regulations identified in the Airport Development Guide. 7 8 Mark Nelson added that a meeting was held with Dean Bray, Rodney Patterson, Rick 9 Woolfolk, Herb Prouty and John Vann to recap the JVC Real Estate proposal, after 10 the January 11, 2006 meeting. At this meeting it was determined that if the facility 11 was to be used as aircraft storage only, no office or other commercial use, then no 12 firewalls or fire suppression would be required. However, during this meeting it was 13 determined that an office had been constructed in the facility, without proper permits, 14 requiring area separation of the office or fire suppression of the office area. 15 16 Chief Jones further explained that if an office use existed in the current 10,800 square 17 foot hangar the office would have to have a firewall or fire suppression to protect the 18 office area only. If there were no office/lounge in a hangar, you would not have to 19 have a firewall. Chief Jones stated that the Fire Department would accept a 20 residential system in the office area and the attic area would not need to be sprinkled. 21 22 Larry Luce asked what if there is not a motion or action. Rick Woolfolk stated we 23 need to remove the previous action item (January 11, 2006 requiring firewalls 24 between each unit) from the City Council Agenda. 25 26 John Kristoferson made a motion to reconsider and rescind the Airport Board's 27 previous recommendation to City Council regarding the JVC Real Estate, LLC 28 assignment. Larry Luce seconded the motion. Motion carried 6-0 29 30 Larry Luce made a motion to adjourn. Rick Woolfolk declined the motion at this 31 time stating that we have an obligation to developers here at the Airport. 32 33 A motion was made by Bob Eames to approve the assignments of the commercial 34 airport operator's lease between JVC Real Estate, LLC and 4845 Lockheed 35 Associates, Ltd and approving a subsequent assignment and sublease from 4845 36 Lockheed Associates, Ltd to JVC Hangars, LLC; approving a fractional interest 37 concept which subdivides the JVC Real Estate, LLC lease into three separate units 38 allowing a partial transfer, sublease and assignment of these units subject to 39 compliance with city code requirements; delegating to the Airport Advisory Board 40 the authority to approve assignments from JVC Hangars, LLC or any successor in 41 interest of the fractional units. Don Smith seconded the motion. Motion carried 4-2. 42 AIRPORT ADVISORY BOARD MINUTES JANUARY 27, 2006 PAGE 3 1 Rick Woolfolk asked the Board if the Board had any desire to have input on the 2 International Building Codes before going to Council February 7, 2006. Mark Nelson 3 requested that Larry Luce serve on behalf of the Airport and attend the meeting with 4 the Fire Prevention discussing any changes. 5 6 John Kristoferson left meeting at 8:23 a.m. 7 8 III. Adj ournment 9 10 Meeting was adjourned at 8: 28 a.m. 11 12 13 AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: City Manager's Office CM: Howard Martin, Interim City Manager SUBJECT Consider adoption of an ordinance ordering a special election to be held in the City of Denton, Texas on May 13, 2006, to fill a vacancy in Place 4 for the unexpired term ending in May, 2007, and, if a runoff election is required, on June 17, 2006, for the purpose of electing a councilmember to Place 4 of the City Council of the City of Denton, Texas; designating a voting place; appointing election officials; providing for early voting; providing for bilingual notice of the special election; ordering that an electronic voting system be used; providing an open meetings clause; and providing an effective date. BACKGROUND Approval of this ordinance would formally call a special election to fill the unexpired term of Perry McNeill. Mayor Pro Tem McNeill is required by the City Charter to resign in order to be considered a candidate for Mayor in the May 13, 2006 election. The ordinance contains all of the provisions necessary to fulfill the requirements of the Texas Election Code, including election judges and alternate election judges. Respectfully submitted: Jennifer Walters City Secretary S:\Our Documents\Ordinances\06\Election Ordinance-District 4.doc ORDINANCE NO. AN ORDINANCE ORDERING A SPECIAL ELECTION TO BE HELD IN THE CITY OF DENTON, TEXAS ON MAY 13, 2006, TO FILL A VACANCY IN PLACE 4 FOR THE UNEXPIRED TERM ENDING IN MAY, 2007, AND, IF A RUNOFF ELECTION IS REQUIRED, ON JUNE 17, 2006, FOR THE PURPOSE OF ELECTING A COUNCILMEMBER TO PLACE 4 OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS; DESIGNATING A VOTING PLACE; APPOINTING ELECTION OFFICIALS; PROVIDING FOR EARLY VOTING; PROVIDING FOR BILINGUAL NOTICE OF THE SPECIAL ELECTION; ORDERING THAT AN ELECTRONIC VOTING SYSTEM BE USED; PROVIDING AN OPEN MEETINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on February 13, 2006 Mayor Pro Tem, Perry McNeill, submitted his written resignation as Place 4 Council Member to the City Secretary to be effective at the time of the canvass of the results of the next regularly scheduled election, for the purpose of filing as a candidate for Mayor at the next regularly scheduled election, as required by City Charter; and WHEREAS, pursuant to Section 3.01(e) of the City Charter, if the candidate's unexpired term would otherwise extend beyond the date of the next regularly scheduled election, the City Secretary shall notify the Council and a special election shall be held on the date of the next regularly scheduled election to fill the unexpired term of the resigning Council Member; and WHEREAS, the Council has been notified by the City Secretary of Mr. McNeill's written resignation and his filing as a candidate for Mayor; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this ordinance are true and correct and are hereby incorporated into the body of this ordinance by reference. SECTION 2. A special municipal election is ordered to be held in the City of Denton, Texas, on Saturday, May 13, 2006, such date being a uniform election date as defined in Tex. Elec. Code §41.001, as amended (the "Code"), for the purpose of electing a Council Member for Place 4 for the unexpired term ending in May, 2007. In the event a runoff is required, the runoff election shall be held on Saturday, June 17, 2006. SECTION 3. The polling place, which shall be open from 7:00 a.m. to 7:00 p.m, shall be as follows: Voters residing in District No. 4 shall vote at: DENIA PARK RECREATION CENTER 1001 PARVIN DENTON,TEXAS SECTION 4. The election officials for the election and the runoff, if any, shall be as follows: S:\Our Documents\Ordinances\06\Election Ordinance-District 4.doc 1. For District No. 4: Stanley Sawyer, Presiding Judge and Shirley Sawyer, Alternate Judge. 2. Jennifer Walters, City Secretary, shall conduct early voting under the Texas Election Code. 3. Connie Bell shall be Presiding Judge for the Early Ballot Board. The presiding judge of the Central Counting Station is authorized to appoint a sufficient number of clerks as necessary to assist them in the election, including bilingual assistants as required by law. The rate of pay for election judges and clerks shall be the maximum amount provided for by State law. SECTION 5. Early voting shall be conducted for the election, and the runoff election if necessary, by the Office of the City Secretary in the Municipal Building at 215 East McKinney Street in the City of Denton, Texas. The polls for early voting by personal appearance shall be open between the hours of 8:00 a.m. and 5:00 p.m. Monday through Friday, May 1, 2006 through May 5, 2006 and between the hours of 7:00 a.m. and 7:00 p.m., May 8 and 9, 2006. In addition, early voting shall be held on Saturday, May 6, 2006, between the hours of 10:00 a.m. and 2:00 p.m., at the same location as weekday early voting. SECTION 6. The City Secretary is hereby directed to provide notice of the election, and the runoff election if necessary, in accordance with Sections 4.002 and 4.003 of Texas Election Code and as required by other applicable provisions of the law, the notice to be printed in the Spanish language and the English language. SECTION 7. An electronic voting system using optically scanned ballots, meeting the requirements of Chapter 124 of the Code, shall be used for said election. Preparation of the necessary equipment and official ballots for the election shall conform to the requirements of the Code. In addition, each polling location will be equipped with a voting station that complies with Section 61.012 of the Code. SECTION 8. The City Secretary is authorized to prepare the official ballot for the election and perform every act required by the City Charter and laws of the State of Texas for holding elections. SECTION 9. The election officers named above shall make returns for the election in the manner required by law. The ballots that are properly marked in conformance with the provisions of the Texas Election Code for votes cast both during the period of early voting and on the date of the election shall be counted in the manner required by law. SECTION 10. The manner of holding such election and all questions pertaining thereto shall be governed by the election laws of the State of Texas. SECTION 11. Substantial copies of the Notice of Election in both English and Spanish shall serve as proper notice of the election and said notice shall be: (a) published at least once in a Page 2 S:\Our Documents\Ordinances\06\Election Ordinance-District 4.doc newspaper of general circulation published within the City, not less than the thirtieth day or later than the tenth day before the election; (b) posted, not later than the twenty-first day before the election day, at a public place in each election district that is in the jurisdiction of the city; (c) posted, not later than the twenty-first day before election day a copy of the notice, which must include the location of each polling place, on the bulletin board used for posting notices of meetings of the City Council of the City; and (d) posted, as may otherwise be required by Tex. Elec. Code §4.003 and other applicable law. SECTION 12. The City Council has found and determined that the meeting at which this ordinance is considered is open to the public and that notice thereof was given in accordance with provisions of the Texas open meetings law, Tex. Gov't Code ch. 551, as amended, and that a quorum of the City Council was present. SECTION 13. This ordinance shall become effective immediately upon its passage and approval. PRESENTED, PASSED AND APPROVED on the day of 2006, at a regular meeting of the City Council of the City of Denton, Texas, by a vote of ayes and nos at the regular meeting of the City Council of the City of Denton, Texas. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: Page 3 ■ . . . ■ ■ L IM= or v■; No ■ ■ ■ I _ ski + w AMMON i x ry Y ~ f4 i I _.r.. ■ ~x r ■ I f 4m 0 ■ k I S~ - s ~ f k ~--t z k d 4 5 4 r'S 1 I { i - _ I { ~Ir . PIMP@ 4. I rr ,r . I . ■ grL 4 ■ 1 ' . . . ■ 0 1 Jill h _ 1 i } i- - . Y~ A # M. 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It Ir 0 ■ 00 ■ ile ■ ■ ■ 1 ■ ■ i x _ Y ■ ■ ■ ■ ■ ■ v - - 1 1 w 1 _ ■ 5 w ■ ■ ■ I I ■ ■ ■ ■ ■ ■ ■ ■ AGENDA INFORMATION SHEET AGENDA DATE: February 21, 2006 DEPARTMENT: Parks and Recreation CM: Howard Martin, 349-8232 SUBJECT Consider adoption of an ordinance of the City Council of the City of Denton, Texas authorizing the City Manager to make application to the Texas Department of Housing and Community Affairs, execute a grant agreement and take all other actions necessary to implement an Emergency Shelter Grant program; and providing for an effective date. BACKGROUND On an annual basis, the Denton County Homeless Coalition (DCHC) membership reviews grant availability announcements. DCHC then works cooperatively to develop applications for those grants that appear to meet the needs of Denton County's homeless population. Since 2001, the City of Denton has requested and received Emergency Shelter Grant funds from the Texas Department of Housing and Community Affairs to support the homeless prevention and assistance efforts of local agencies. Below are the funding amounts: • 2001 - $55,120 • 2002 - $116,480 • 2003 - $114,520 • 2004 - $61,115 • 2005 - $156,832 The 2006-2007 grant application will request increased funding to support activities designed to assist the homeless and prevent homelessness such as: • Transitional Housing • Emergency Shelter • Homeless Management Information System development and maintenance • Childcare • Counseling services ESTIMATED PROJECT SCHEDULE The ESG contract period would be from September 1, 2006 through August 31, 2007. All funding will be expended by August 31, 2007. PRIOR ACTION/REVIEW (Councils, Boards, Commissions) The Denton County Homeless Coalition supports submission of the Emergency Shelter Grant Program application. FISCAL INFORMATION Five percent of the grant award is available for administration costs. ESG program administration costs not covered by the 5% allowance will be covered through the Community Development administration budget that includes CDBG, HOME and general fund dollars. EXHIBITS 1. Ordinance Respectfully submitted: Janet Fitzgerald, Director Parks and Recreation Prepared by: Barbara Ross Community Development Administrator S:\Our Documents\Ordinances\06\Emergency Shelter Grant Ord 06-07.doc ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO MAKE APPLICATION TO THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS, EXECUTE A GRANT AGREEMENT, AND TAKE ALL OTHER ACTIONS NECESSARY TO IMPLEMENT AN EMERGENCY SHELTER GRANT PROGRAM; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Denton, Texas, is concerned with the provision of services to residents who are homeless and with providing decent housing, a suitable living environment, and assisting homeless households to achieve self sufficiency; and WHEREAS, the City of Denton, Texas, has a developed and adopted a continuum of care for homeless and potentially homeless households; and WHEREAS, the City of Denton, Texas, wishes to submit a grant application requesting funds for various homeless assistance and homeless prevention activities through the Emergency Shelter Grant Program, as authorized by the Stewart B. McKinney Homeless Assistance Act of 1987 as amended (42 U.S.C. Sec. 11371 et seq.), and as administered through the United States Department of Housing and Urban Development; and WHEREAS, the Texas Legislature has designated the Texas Department of Housing and Community Affairs as the administering agency for the Emergency Shelter Grant Program pursuant to Sec. 2306.094, Texas Government Code; and WHEREAS, the City of Denton, Texas, intends to sub-contract with a local social service agencies to provide services through the emergency shelter grant program; and WHEREAS, the Texas Department of Housing and Community Affairs requires the appropriate certifications and the City Council deems it in the public interest to authorize the City Manager, if funding is awarded subsequent to application submission, to execute a grant agreement; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Council of the City of Denton, Texas, authorizes the City Manager to sign and submit to the Texas Department of Housing and Community Affairs and all appropriate officials thereof, an application and grant agreement together with all necessary certifications, and other documents as well as appropriate resources for entitlement of funds under the Stewart B. McKinney Homeless Assistance Act of 1987, as amended and Emergency Shelter Grant Program pursuant to Sec. 2306.094 of the Texas Government Code., and all other applicable laws, as necessary to obtain a grant under the Emergency Shelter Grant Program to provide services to homeless residents of Denton. The City Manager is authorized to take all other actions necessary to execute an agreement and administer this grant. Exhibit 1 S:\OUr Documents\0Cdi..-\06\Emerg.q ShOte, Grant Ord06-07.dm SECTION 2. The Community Development Administrator is authorized, under the supervision of the City Manager, to handle all fiscal and administrative matters relating to the administration of the Emergency Shelter Grant Program, if it is funded and all other matters connected therewith. SECTION 3. The City Secretary is hereby authorized to furnish true, complete, and correct copies of this ordinance to all interested parties. SECTION 4. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of 12006. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: Page 2 of 2