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Home My WebLink About2016-06-28 Agenda with BackupTuesday, June 28, 2016 City of Denton Meeting Agenda City Council 1:00 PM City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com Work Session Room After determining that a quorum is present, the City Council of the City of Denton, Texas will convene in a Work Session on Tuesday, June 28, 2016 at 1:00 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. Work Session Reports A. ID 16-805 Receive a presentation and hold a discussion regarding the Texas Woman's University (TWU) master planning activities, the conceptual planning of university facilities necessary for future campus development, and the service and infrastructure impacts on both the University and the City. B. ID 16-651 Receive a report, hold a discussion, and give staff direction regarding goals, accomplishments, and upcoming strategic priorities for the Department of Development Services. Attachments: Exhibit 1 - Development Services Update Presentation Exhibit 2 - Kaizen Team Recommendations C. ID 16-778 Receive a report, hold a discussion, and give staff direction regarding the Novaces Agile Economic Development consulting report and the goals, accomplishments, and upcoming strategic priorities of the Economic Development Division. Attachments: Exhibit 1 Novaces Report Exhibit 3 Ideal State RFP Response Exhibit 4 Denton Marketing Scorecard Exhibit 5 Presentation D. ID 16-498 Receive a report, hold a discussion, and give staff direction regarding the Economic Development Investment Fund and the Downtown Reinvestment Grant Fund. Attachments: Exhibit 1 Ordinance 2012-001 Exhibit 3 Downtown Grant ROI 2007-2015 Exhibit 4 Draft ED Investment Fund Ordinance 2 Exhibit 5 Presentation E. ID 16-776 Receive a report, hold a discussion and provide staff direction regarding the Street Maintenance Department and Traffic Operations Division's Annual Programs. City ofDenton Page 1 Printed on 6/24/2016 City Council Meeting Agenda June 28, 2016 Attachments: Exhibit 1 - Street Department OCI and Non OCI Expenditure HistorV Exhibit 2 - 20 Million Dollar 2012 Street Improvement Bond Program Exhibit 3 - 24 Million Dollar 2014 Street Improvement Bond Program Exhibit 5 - Presentation on Streets and Traffic Following the completion of the Work Session, the City Council will convene in a Closed Meeting to consider specific items when these items are listed below under the Closed Meeting section of this agenda. The City Council reserves the right to adjourn into a Closed Meeting on any item on its Open Meeting agenda consistent with Chapter 551 of the Texas Government Code, as amended, or as otherwise allowed by law. 1. Closed Meeting: A. ID 16-800 Deliberations regarding Real Property - Under Texas Government Code Section 511.072; Consultation with Attorneys - Under Texas Government Code Section 551.071. Receive information from staff, discuss, deliberate, and provide staff with direction regarding the potential acquisition of real property interests generally located in (1) the Gibson Myers Survey, Abstract No. 843, The Johnson, Green, Myers, and Brummell Survey, Abstract No. 1699, the Moses H. Davis Survey, Abstract No. 377, and the William Wilburn Survey, Abstract No. 1419, and (2) the William A. Thompson Survey, Abstract No. 1238, both located in the City of Denton, Denton County, Texas, for the possible construction of an electric generation facility where deliberation in an open meeting would have a detrimental effect on the position of a governmental body in negotiations with a third party. Consultation with the City's attorney's regarding legal issues associated with the acquisition of the real property interests described above where a public discussion of these legal matters would conflict with the duty of the City's attorneys to the City of Denton and the Denton 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 proceeding or potential litigation. B. ID 16-816 Consultation with Attorneys - Under Texas Government Code Section 551.071. Consult with City's attorneys with regard to Item 4 16-555 of the June 28, 2016 Special Called Meeting Agenda, as it concerns legal issues associated with that item where a public discussion of this legal matter would conflict with the duty of the City's attorneys under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. C. ID 16-817 Deliberations regarding a Personnel Matter under Government Code Section 551.074 - Consultation with Attorneys under Government Code Section 551.071. Consultation, discussion, and deliberation about the appointment and duties of the Interim City Manager; consultation with the City's attorneys regarding associated legal issues where discussion of these legal matters in an open meeting would conflict with the duty of the City's attorneys to the City of Denton and the Denton City ofDenton Page 2 Printed on 612412016 City Council Meeting Agenda June 28, 2016 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 proceeding or potential litigation. Following the completion of the Closed Meeting, the City Council will convene in a Special Called Meeting at which the following items will be considered: 1. ITEMS FOR INDIVIDUAL CONSIDERATION A. ID 16-555 Consider adoption of an ordinance of the City of Denton, Texas, authorizing the City Manager to execute a Professional Services Agreement with Sawko and Burroughs, P.C., for Professional Services related to collection of delinquent taxes on behalf of the City of Denton; and establishing an effective date. Attachments: Exhibit 1 -Evaluation and Ranking Sheet Exhibit 2 -Ordinance Exhibit 3 -Contract Exhibit 4 -Additional Clarification Responses B. ID 16-762 Consider adoption of an ordinance authorizing the City Manager, or his authorized designee to execute an agreement or agreements by and between the City of Denton, Texas and the Texas Municipal Power Agency (TMPA), that provides for terms and conditions under which the parities will be jointly manage the responsibility of the operations of TMPA, in substantial conformity with the attached exhibits; authorizing the expenditure of funds therefor; and providing an effective date. Attachments: Exhibit 1 - Ordinance and Aareement C. ID 16-797 Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager to execute a Second Amendment to a Professional Services Agreement by and between the City of Denton, Texas and Teague Nall and Perkins, Inc. for engineering and surveying services relating to the Fiscal Year 2015-2016 Wastewater Collection System Improvements Project; authorizing the expenditure of funds therefor; providing an effective date (File 5756 in the additional amount not -to -exceed $93,600; aggregating a total not -to -exceed $397,430). Attachments: Exhibit 1-Orignal Contract and Amendment Redacted Exhibit 2 -Ordinance Exhibit 3 -2nd Amendment D. ID 16-814 Consider adoption of an ordinance regarding settlement of the pending litigation entitled: The City of Denton, Texas v NRG Power Marketing, LLC, et al., Cause No. 15-01404-16 in the 16th Judicial District Court in and for Denton County, Texas; discuss, deliberate and provide staff with direction. Attachments: Ordinance NRG settlement E. ID 16-815 Consider approval of a resolution of the City Council of the City of Denton, Texas, appointing an Interim City Manager; setting forth the terms of the appointment; setting forth the Interim City Manager's salary; and providing an effective date. Attachments: Interim Manager Resolution City ofDenton Page 3 Printed on 6/24/2016 City Council Meeting Agenda June 28, 2016 2. CONCLUDING ITEMS A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. 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 , 2016 at o'clock (a.m.) (p.m.) CITY SECRETARY NOTE: THE CITY OF DENTON CITY COUNCIL WORK SESSION ROOM 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. City ofDenton Page 4 Printed on 6/24/2016 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 16-805, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: Utility Administration CM/ ACM: Howard Martin, 349-8232 Date: June 28, 2016 SUBJECT Receive a presentation and hold a discussion regarding the Texas Woman's University (TWU) master planning activities, the conceptual planning of university facilities necessary for future campus development, and the service and infrastructure impacts on both the University and the City. BACKGROUND In an effort to achieve the long term educational goals of TWU, the Chancellor has embarked on a vision to transform the campus facilities. The firm of HKS was hired to complete a master plan in collaboration with students and staff. The first step in this visioning process is to share the recently completed master plan with the community leaders and the citizens. This master plans outlines the vision for campus improvements and infrastructure over time. These proposed campus development activities will necessitate the City working closely with the University to assist in achieving the goals and objectives of the Master plan concept. RECOMMENDATION No recommendation at this time ESTIMATED SCHEDULE OF PROJECT Unknown at this time. PRIOR ACTION/REVIEW (Council, Boards, Commissions) No prior action FISCAL INFORMATION Unknown at this time. BID INFORMATION City of Denton Page 1 of 2 Printed on 6/24/2016 povveied by I_egivt9i IN File #: ID 16-805, Version: 1 None STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Organizational Excellence Related Goal: 1.6 Collaborate with local, regional, state, and federal partners Related Key Focus Area: Public Infrastructure Related Goal: 2.3 Promote superior utility services and facilities EXHIBITS Video Presentation during meeting Respectfully submitted: Howard Martin Assistant City Manager City of Denton Page 2 of 2 Printed on 6/24/2016 povveied by I_egist9i I;, City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 16-651, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: Development Services CM/ ACM: Jon Fortune Date: June 28, 2016 SUBJECT Receive a report, hold a discussion, and give staff direction regarding goals, accomplishments, and upcoming strategic priorities for the Department of Development Services. EXECUTIVE SUMMARY The Department of Development Services has undertaken several initiatives within the last year in order to increase levels of customer service, improve and streamline complex permitting and development processes, improve communication with stakeholders, and deliver more efficient and effective services to the Denton community. This Work Session is intended to review progress on those priorities and to discuss goals and objectives for the coming year. BACKGROUND In June of 2015, the City Council held a meeting at City Hall West to review and discuss projects and priorities for the Development Services Department. At that time, several priorities were discussed and endorsed by the City Council, including Lean Government initiatives, Customer Service improvement, analysis and improvement of the Development Review process, and Technology and Financial Assessments. The City Council also discussed and supported changes to the departmental organizational structure to accomplish the long-term objectives of the Council. Additionally, at the conclusion of that meeting, the Council indicated a desire to see Development Services relocate from City Hall West to a more effective and efficient office space and directed staff to begin seeking out space to lease. Many of these initiatives are now complete or are currently in the implementation phase. A full update will be provided and goals/priorities for the coming year will be presented for discussion. The Council will also discuss the alignment of Departmental goals with the City's overall Strategic Plan. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: City of Denton Page 1 of 2 Printed on 6/24/2016 povveied by I_egivt9i IN File M ID 16-651, Version: 1 Related Key Focus Area: Economic Development Related Goal: 3.4 Encourage development, redevelopment, recruitment, and retention EXHIBITS 1 - Presentation 2 - Kaizen Team Recommendations (Lean Government initiative) Respectfully submitted: Aimee Bissett Director of Development Services Prepared by: Aimee Bissett City of Denton Page 2 of 2 Printed on 6/24/2016 povveied by I_egist9i I;, 0- r— IT 4" *-4 VN I N LIS r.4 r 91 111-1 a Ali "WIn 11 'Al 'x F11,1 - JR ulb Ln, CL �14 CL �14 M. 51 V I—E Ln Ul C, V4 0- r— IT 4" *-4 VN I N LIS r.4 r 91 111-1 a 0 ell. N e4 1-4 U-4 eN City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 16-778, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: Development Services/Economic Development Division CM/ ACM: Jon Fortune Date: June 28, 2016 SUBJECT Receive a report, hold a discussion, and give staff direction regarding the Novaces Agile Economic Development consulting report and the goals, accomplishments, and upcoming strategic priorities of the Economic Development Division. EXECUTIVE SUMMARY Novaces Management & Strategy Consulting holistically reviewed the current processes and procedures for recruiting and locating desirable businesses in Denton, from initial contact to issuance of a certificate of occupancy. To effect a culture shift from regulating to facilitating economic growth, Novaces identified four critical success factors: 1. Making the interaction among the Chamber, City Economic Development, prospects, developers, and contractors seamless and expedient. 2. Quantifying the effectiveness of marketing activities. 3. Clearly defining and articulating priority industry sectors. 4. Ensuring constant and robust communication among all parties engaged in the economic development process. BACKGROUND In 2014, the City of Denton's Economic Development Department and the Denton Chamber of Commerce's Economic Development Office engaged DADCO Consulting, a firm specializing in economic development, to create a multi-year strategic action agenda for the Denton Economic Development Partnership (EDP). The process began in June 2014 with a stakeholder survey, leadership interviews, and a strategic planning retreat. In October 2014, the Strategic Action Agenda was presented to the EDP Board, and Action Teams were formed in November 2014. From December 2014 to January 2015, the teams met and developed goals, strategies, and tactics for each of five areas of work. In February 2015, the 2015 Action Plan was laid out to the EDP Board, with an Action Team responsible for each of the following areas: • Team 1 - Partnerships. Goal: Forming partnerships with industry and education to provide a more productive workforce. • Team 2 - Unique Culture. Goal: Celebrating Denton's unique culture and identity to attract creative companies and people. • Team 3 - Investment. Goal: Building support for increased investment in economic and community development. City of Denton Page 1 of 3 Printed on 6/24/2016 povveied by I_egivt9i IN File #: ID 16-778, Version: 1 • Team 4 - Business Friendly. Goal: Creating a business -friendly environment through streamlining of public processes. • Team 5 - Recruitment. Goal: Growing Denton's tax base and providing employment opportunities by utilizing Denton companies and higher education institutions in the recruitment process. Throughout 2015, teams executed their sections of the Action Plan. In January 2016, the EDP Board received an update from each team and charged the teams to develop their 2016 Action Plans for review and implementation in February 2016. As part of the 2015 Action Plan review and 2016 Action Plan development, Teams 4 and 5 identified an opportunity for a holistic review of Denton's development process, from the first contact by an economic development project seeking to locate or expand to the issuance of a certificate of occupancy for the project in Denton. The goal of the review was to identify key areas that would improve Denton's response to inquiries, minimize regulatory hurdles, cut incentive approval times, and make the City of Denton more competitive in business recruitment and expansion activities. In short, effecting a change in culture from regulating to facilitating economic growth. City of Denton's Economic Development Department and the Denton Chamber of Commerce's Economic Development Office engaged Novaces Management & Strategy Consulting, a firm with a core focus of improving speed and enterprise program effectiveness as measured by their customers. Novaces partnered with DADCO Consulting to develop the Agile Economic Development Framework, which is designed to identify key leverage points in an economic development organization's "eco -system" in order to increase its competitive position to attract and locate prospects. Novaces principals worked on-site and via videoconference in Denton January 6-8, 2016, interviewing staff members of both the City's Department of Development Services and the Denton Chamber of Commerce. Interviews provided information on the current processes and procedures in the process of securing leads, responding to requests for information/proposals, moving prospects through the decision-making process, negotiating/providing incentives, gaining zoning, licensing, and engineering approvals, granting necessary building or renovation permits, and issuing a certificate of occupancy. In addition, the Department of Development Services provided a variety of background documents for review, including the final 2014 Strategic Action Agenda prepared by DADCO Consulting, Inc., the 2015 Strategic Action Agenda Action Team Updates, the 2015 Contract between the City of Denton and the Denton Chamber of Commerce; Chamber of Commerce lead activity reports; the City of Denton Incentive Policy; tracking of assistance given to the Chamber of Commerce by Denton Department of Development Services staff, an estimate for improvements to the City's TrakIt and eTrakIt permitting approval systems; and a presentation on progress of the Strategic Action Agenda from February 2015. The methodology used to examine and recommend performance improvement is the Theory of Constraints, which is a systematic approach to managing constraints, commonly known as bottlenecks, and is an added dimension to the practice of the Lean Six Sigma performance improvement system utilized by Novaces. NOVACES developed a Goal Tree with "effecting a change in culture from regulating to facilitating economic growth" as the goal. The Goal Tree then identifies four critical success factors and the necessary conditions for those factors to be realized. The critical success factors are: • Making the interaction among the Chamber, City Economic Development, prospects, developers, and contractors seamless and expedient. • Quantifying the effectiveness of marketing activities. City of Denton Page 2 of 3 Printed on 6/24/2016 povveied by I_egist9i I;, File #: ID 16-778, Version: 1 • Clearly defining and articulating priority industry sectors. • Ensuring constant and robust communication among all parties engaged in the economic development process. The Goal Tree identifies the necessary conditions by which each of the above critical success factors can be achieved. Those necessary conditions provide the framework by which the Economic Development Division can set priorities and goals for the coming year. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Economic Development Related Goal: 3.4 Encourage development, redevelopment, recruitment, and retention EXHIBITS Exhibit I - Novaces Agile Economic Development Consulting Report Exhibit 2 - Current State RFP Response Exhibit 3 - Ideal State RFP Response Exhibit 4 - Denton Marketing Scorecard Exhibit 5 - Presentation Respectfully submitted: Aimee Bissett Director of Development Services Prepared by: Caroline Booth Assistant Director for Economic Development City of Denton Page 3 of 3 Printed on 6/24/2016 povveied by I_egist9i I;, Improving Economic Development Performance in Denton,, Texas Prepared for the City of Denton Department of Development Services Prepared by: NOVACES Focus,, Accelerate. Achieve, January 15, 2016 Introduction The City of Denton has been experiencing rapid growth for the past 25 years. As a consequence, the City has taken several steps to facilitate growth, including developing A Strategic Action Agenda in 2014, and most recently merging the Economic Development and Planning and Permitting Departments, creating the Department of Development Services. The Action Agenda was meant to guide Denton's growth over the following three years, and discussed the need to improve performance in generating, working with, and closing prospects, from beginning to end. According to staff and elected officials interviewed for the Action Agenda, the timeframe and difficulty of obtaining necessary approvals for new development was seen as unacceptable by business and industry. Improving coordination, collaboration, and performance throughout the development process is seen by the City as critical. In addition, the Action Agenda called on focusing economic development efforts on targeted high- value/high income industries. As a result, the process of marketing and attracting prospects, responding to expressions of interest such as requests for proposals, and measuring the effectiveness of marketing activities utilizing a customer -management return on investment model was also seen as important. In short, to drive growth toward higher wage, higher investment companies are directly related to the performance of both the City and Chamber, who together form the Economic Development Partnership. The Department of Development Services began discussion with NOVACES, LLC, a performance and project management firm based in New Orleans, LA, about application of process and performance improvement systems developed for the Texas Workforce Commission (TWC) to the activities of the Partnership. In developing improvement strategies for the TWC, Novaces reduced cycle time for an employer grant program almost in half, and made several other gains in both productivity and speed of response. Novaces suggested a reduced -price pilot project to examine Denton's current development process, mapping the system of marketing to, enticing, closing, and ensuring satisfactory completion until opening, those industries Denton most wants to locate and expand. This report is the result of that engagement and the recommendations are designed to improve processes, not as an indictment of any individual, department, or organization. Performance Improvement Process Novaces principals worked on-site and via videoconference in Denton on January 6, 7, and 8, interviewing staff members of both the Denton Department of Development Services and the Denton Chamber of Commerce. Interviews provided information on the current processes and procedures in the process of securing leads, responding to requests for information/proposals, moving prospects through the decision-making process, negotiating/providing incentives, gaining zoning, licensing, and engineering approvals, granting necessary building or renovation permits, and issuing a certificate of occupancy. In addition, the Department of Development Services provided a variety of background documents for review, including the final 2014 Strategic Action Agenda prepared by DADCO Consulting, Inc., the 2015 Strategic Action Agenda Action Team Updates, the 2015 Contract between the City of Denton and the Denton Chamber of Commerce; Chamber of Commerce lead activity reports; the City of Denton Improving Economic Development Performance in Denton, TX NOVACES, LLC 2 Incentive Policy; tracking of assistance given to the Chamber of Commerce by Denton Department of Development Services staff; an estimate for improvements to the City's Trackit and eTrackit permitting approval systems; and a presentation on progress of the Strategic Action Agenda from February 2015. The documents were extremely helpful in determining the current situation regarding economic development and parameters that both the City and Chamber of Commerce are required to operate within. A critical component of performance improvement is benchmarking a best practice, a recognized leader in the field of endeavor, to compare their processes and procedures. Charlotte, North Carolina, widely recognized as a high -performing city in national economic development circles, will be evaluated in their process for obtaining and handling prospects was evaluated and compared to the process currently followed by Denton. It will also be compared to the recommended processes to ensure that the recommendations were in alignment with best practices. The methodology to examine and recommend performance improvement was accomplished utilizing the Theory of Constraints, which is a systematic approach to managing constraints, commonly known as bottlenecks, an added dimension to the practice of the Lean Six Sigma performance improvement system utilized by Novaces, several areas where the permitting approval process was not performing at the highest level were identified. For example, in mapping the occupancy permitting process, 21 steps were identified, some of which were redundant or duplicative. Through application of Theory of Constraints, the process was reduced to 14 steps, while maintaining the necessary review processes to ensure compliance with Denton's zoning, engineering, fire, and safety codes. The Department of Development Services had already started to address performance issues through adoption of the Kaizen. Kaizen is continuous improvement that is based on certain guiding principles: Good processes bring good results; Go see for yourself to grasp the current situation; Speak with data, manage by facts; Take action to contain and correct root causes of problems; and Work as a team. Kaizen is related to Theory of Constrains in that both seek to make continuous and transformational improvements, both large and small, to increase the efficiency, effectiveness, and performance of an organization. The Kaizen process is currently being implemented in the engineering and hiring functions, and is seen as a completely complimentary process that will empower the Department to most quickly and effectively implement the changes recommended in this report. This combination of gaining a thorough understanding of Denton's processes, reports and agreements, ongoing efforts, and application of Six Sigma Theory of Constraints coupled with an examination of best practices in relation to the recommended changes described herein should result in increased performance, reduced cycle times, increased efficiency, and greater satisfaction by business and industry. This combination will increase Denton's competitive position with high -wage companies in targeted sectors poised to add significantly to Denton's economy and employment opportunities. The authors of the report would like to thank the staff of the Denton Department of Development Services (including Economic Development, Planning, Permitting, and Inspections), the Engineering and Fire Departments, and the Denton Chamber of Commerce for their contribution to this effort. The recommendations that follow are thanks, in large part, to their candor, cooperation, and willingness to describe both successful processes and those that may need improvement. The outcome of this effort is due, in large part, to their input and advice. In addition, the improvements in performance gained from this report will be dependent on both their willingness to effect change, and the support they receive. Improving Economic Development Performance in Denton, TX NOVACES, LLC 3 The Current System To identify the current constraints and measure improvements, it is important to develop a baseline for the processes identified in this project. As the primary objective of the exercise is to improve the performance of a specific component of economic development—recruitment and successful location of business and industry to Denton—the primary processes were evaluated and through a collaborative process, new versions of those processes were developed. In meetings with Chamber of Commerce staff, the front-end of the process was discussed, i.e. the process of developing leads, responding to requests for information and/or proposals, secondary information requests, initial site visits, making the "short list" of finalists for the location decision, secondary and tertiary site visits, initial discussion of incentives and the development process, and an orderly transition of the prospect (or if the final decision has been made to locate, the new company) from the Chamber to the City. This process is not insulated from the city; information is required on city capacity and services for one or more (usually 2-3) potential sites and specific requests for information on a wide variety of factors, from transportation to water and sewer to fire protection. Requests are made directly via e-mail or phone, and information is normally provided within 1-3 days. In addition, information is periodically sought from state agencies such as the Texas Workforce Commission and Texas Department of Transportation. The submission of proposals, however, is entirely the responsibility of the Chamber. Once a proposal is submitted, the Chamber may interact with City departments in response to follow-up information requests. If the prospect elects to make a preliminary site visit, the Chamber will coordinate with the City to ensure that needed staff and/or appointed and elected officials are present, and until/ unless the transition occurs to the City once the prospect has entered the incentive negotiation phase. From the initial marketing efforts, through to the transition, only a small portion of the activities in this phase are measured. There is currently no customer relationship management (CRM) system in place, as is there are no metrics to gauge the conversion rate of marketing activities into prospects. And, though the City and Chamber have targeted sectors, there is no further delineation as to specific types of companies most desired, and no scoring system to gauge the success in attracting those companies that most closely meet the goals of the City's economic development efforts. At the point of transition from the Chamber to the City, normally incentives have been discussed and the initial conversations involve those and the general process of ensuring necessary infrastructure is or can be provided to the site. From there, the company either makes a final decision to locate or begins the process of securing necessary approvals for construction and occupancy of a facility. Currently, from the time of an initial request for site permitting, the process currently involves 28 distinct steps until a Certificate of Occupancy (C/O) is issued. The company must deal with at least five separate entities (economic development, planning, permitting, engineering, fire, and inspection), some of which currently do not monitor the progress of each other. A simple spreadsheet was developed to outline each step in the site location and development process as it currently stands, and a diagram was constructed to contrast the current system and a simpler, streamlined system that includes robust communication and cross -training of staff to better understand the other elements of the development process (also a recommendation of the City's Kaizen initiative described above). This combination should provide a more effective development process. Improving Economic Development Performance in Denton, TX NOVACES, LLC 4 The Goal Tree A critical component of the performance improvement system, as applied to economic development in Denton, is the development of critical success factors and necessary conditions for those factors to be realized. The success factors are created to accomplish a specific goal as defined by the Strategic Action Agenda. This is known as the Goal Tree, and it may be applied to any of the goals of the Action Agenda; however, the Department of Development Services wished to focus on the marketing, prospect development, incentive negotiation, location, and planning/permitting component, which is commonly referred to as recruitment. The goal most closely related to the recruitment process is stated in the Action Agenda as "To effect a change in culture from regulating to facilitating economic growth". To achieve this goal, the following diagram outlines critical success factors and necessary conditions for those factors to be realized. By using a simple color scheme to indicate the state of each of the critical success factors and necessary conditions, Denton is able to assess the current state of the elements of the Goal Tree: ✓ Green: The element is in place and functioning well ✓ Yellow: In place, but not delivering the results needed ✓ Red: Either not in place or not functioning By utilizing the Goal Tree, Denton's economic development effort can move from its current state to the realization of its stated goal of facilitating economic growth in those industries with the greatest impact. Improving Economic Development Performance in Denton, TX NOVACES, LLC 5 Proposed Recruitment and Location Development System The Goal Tree identifies four critical success factors in achieving Denton's goal. Each of those factors is, in turn, reliant on two necessary conditions that must be realized in order for the factors to function. Each will be discussed in detail, along with specific recommendations for implementation, below: Critical Success Factor 1: Making interaction among the Chamber of Commerce, City Economic Development, Prospects, Developers, and Contractors seamless and expedient. ✓ In the current system, interaction between and among the entities engaged in the recruitment and development process only occurs on an "as needed" basis. There is a basic lack of understanding from one entity to the next of the process and their role in it relative to other entities. According to staff interviews, this has often caused confusion and delays. For example, in one instance it was reported that the fire inspector was deployed to a site to certify the sprinkler system, only to find that water lines were not yet in place to the site. ✓ From the City's standpoint, there is a stated need for better interaction with the Chamber of Commerce, particularly in the time leading up to the transition from prospect interaction with the Chamber to location development in which the primary interaction is with the City. Necessary Condition 1: Streamlining the Incentive Application Process. ✓ Applying for and negotiation of incentives has historically been the hand-off point between the Chamber of Commerce and City in the recruitment process. The application itself is lengthy and may be evaluated to ensure the most relevant and useful information is being asked. In addition, the further delineation of sectors, as further outlined in this report, should help the Necessary Condition 2: Online Accessibility of Incentive Applications. ✓ Currently, although the licensing and permitting process is conducted online via the Trackit and e-Trackit system, the incentive application and approval process is still manually -driven. This was cited as a particular issue of concern to many companies that would prefer the incentive process to be integrated into the overall location process. There is already discussion and a quote from Trackit/e-Trackit on improvements to the system, so it is recommended to find if the incentive application, negotiation, and approval process can be placed on that system. If that is not feasible, exploring putting the application on the city's website may be the best option. Necessary Condition 3: Clearly understanding the interaction between prospects and all parties involved in the economic development process. ✓ A recurring theme from the time of creation of the 2014 Action Agenda was the need for better coordination between the various entities involved in the economic development process, from gathering information for response to requests for information through until issuance of a certificate of occupancy. According to staff members, historically much of the dissatisfaction with the licensing and permitting process expressed by investors has centered on a perceived lack of coordination between and among the various entities (planning, licensing, engineering, etc.) responsible for approving development and occupancy. The creation of the Department of Development Services (DDS) was a major step in solving this problem. Improving Economic Development Performance in Denton, TX NOVACES, LLC 6 Although this has achieved closer cooperation within the Department, there are still issues with coordination of functions outside DDS. In particular, coordination between permitting and engineering functions was cited as problematic, but there were instances cited between all departments, and functions within departments. According to process mapping conducted during staff interviews, there are at least 34 separate steps in the development process, and depending on the nature of the project, there may be as many as 50. Necessary Condition 4: Cross -Training of Staff on Other Steps in the Development Process ✓ One way to begin efforts not to go back -and -forth in the process and begin combining steps and simplifying the process is for staff members involved in decision making to be cross -trained in all areas outside their function to gain a clear and thorough understanding of all steps involved and their relationship to each other. Staff should then hold a facilitated retreat to share what they have learned about constraints, overlaps, and redundancy and streamline those processes under the framework of the current Kaizen initiative. Critical Success Factor 2: Quantifying the success of marketing activities. ✓ As the marketing arm of Denton's economic development effort, common wisdom indicates that the Denton Chamber of Commerce has been effective in recruiting new jobs and investment to Denton. In the arena of performance improvement, however, metrics are necessary to set a baseline from which to measure performance over time and ensure that return on investment of marketing dollars by both the City and Chamber is maximized. Necessary Condition 1: Qualifying conversion of leads to prospects then to successful locations through the evaluation of marketing activities. ✓ Many leading economic development organizations throughout the nation measure the effectiveness of their marketing activities. According the International Economic Development Council's Economic Development Research Publication "Making it Count -Metrics for High - Performing EDOs", 70% of all economic development organizations utilize performance metrics, and many utilize Customer Relationship Management (CRM) systems. There are CRM systems designed specifically for economic development, and basic systems are easy to use and affordable. A CRM would facilitate better communication between the Chamber and City, and ensure the Chamber receives timely and accurate information from the City when needed. Finally, a CRM would ensure continuity of operations should an unforeseen event (illness, emergency, etc.) occur that could impact key staff members. Necessary Condition 2: Utilization of a CRM system integrated with a marketing effectiveness scoring system. ✓ As the front end of the location process, marketing and recruitment activities are of paramount importance. Measuring the effectiveness of various marketing activities (trade shows, direct prospect visits, consultant visits) can result in more effective allocation of resources and activities. A simple system has been developed, and is currently utilized by leading economic development organizations to quantify the effectiveness of those efforts, and should be utilized. Improving Economic Development Performance in Denton, TX NOVACES, LLC 7 Critical Success Factor 3: Clearly Defining and Articulating Prioritv Industry Sectors ✓ As a rapidly growing city, Denton faces large capacity issues. While available land is plentiful, land that is "shovel ready' with required infrastructure is scarce, and unoccupied building space is rare. In this situation, Denton must be diligent in selecting which industries will provide the greatest positive economic impacts, public revenues, and opportunities for wealth creation for its citizens. Denton has a large number of highly qualified workers, two major universities that produce a both a large number of graduates who may be enticed to stay in the community via high wage career -oriented jobs, plus significant research and development capacity, and a strategic location within one of the most vibrant large metro areas on earth. This dictates that, in order to prevent capacity issues from damaging economic development performance, Denton be very specific in targeting industry sectors. Necessary Condition 1: Creation of Very Specific Parameters for Targeted Industry Sectors Necessary Condition 2: Choosing Subsectors that Will Most Likely Produce Higher Value and Higher Paying Jobs ✓ To achieve the maximization of positive impacts, very specific parameters must be developed for targeted sectors. Within each the four sectors, many subsectors exist, some of which are extremely high value-added, and that pay very high wage jobs. Within these same sectors, there are also subsectors that are not high-value/high wage. These sectors should be researched to determine the difference, and strategies should be developed to target and recruit those companies with the best combination of investment, added value, wages, and tax revenues Critical Factor 4: Ensuring Constant and Robust Communication Among All Parties Involved in the Economic Development Process ✓ The last critical factor is undoubtedly the most important, and its implementation will undoubtedly have the greatest impact if implemented properly. In the initial interview with staff members of the Development Services Division and related units (Fire Department), the word "communication" was used over 40 times while describing critical constraints, or bottlenecks, that need to be addressed. The most often cited complaint leveled by prospects, developers, and contractors in the economic development process was the disconnect, whether real or perceived, between the entities involved, from start to finish. Curing this issue will undoubtedly produce more efficiencies, cut cycle times, increase conversion from prospect to operating company, give staff more satisfaction and less stress resulting in greater productivity, and provide more and better opportunities for Denton. Necessary Condition 1: Development of both Constant and Regularly Scheduled Communication Among All Parties Involved in the Process. ✓ Both constant communication via web -based capability, and regularly scheduled face-to-face meetings, are necessary to effectively change the unproductive dynamics that have limited the performance of economic development. Communication should include every entity that has a hand in the process, from the Chamber of Commerce to the Fire Department. There are several organizational communications systems that are unobtrusive and can be easily adopted. Improving Economic Development Performance in Denton, TX NOVACES, LLC 8 Best Practice: Charlotte North Carolina The Balanced Scorecard is a framework for evaluating metrics for both financial and operational performance that includes evaluating an organization's ability to create value moving ahead.2 The "balanced scorecard" was developed with the purpose of "focus(ing) the attention of a company's top executives on a short list of critical indicators of current and future performance." The model outlines four perspectives that answer four key questions. Their "innovation perspective and learning perspective" is what they call the "driver of future performance." • Customer perspective — How do customers see us? • Internal business perspective — What must we excel at? • Innovation and learning perspective— Can we continue to improve and create value? • Financial perspective — How do we look to shareholders/investors/taxpayers The Charlotte Regional Partnership's economic development balanced scorecard includes metrics for the state's goal of "engaging private and public stakeholders in an effort to improve the efforts to market the region, and to maintain adequate funding and support for the program regionally." These metrics include private -sector funding increases, private -sector funding retained, State of North Carolina funding retained, and benchmarks for stakeholder attendance at its annual meeting. The Partnership is often cited as one of the best examples of EDOs utilizing the balanced scorecard approach. Some state EDOs have also experimented with this, such as the Pennsylvania Department of Community and Economic Development. The implementation of the Balanced Scorecard at the City and Chamber economic development level can produce similar results. Charlotte Regional Partnership CEO Ronnie L. Bryant, CEcD/FM/HLM teaches the balanced scorecard approach, and may be engaged for a reasonable fee to provide assistance in implementing balanced scorecard for the Denton Economic Development Partnership. Summary Denton's economic development process is not in distress, to the contrary, Denton is a successful, rapidly growing community. The purpose of this exercise is to build upon that success and create a more streamlined, faster, easier process. This will increase Denton's competitive advantage, and will also help the great people who make the recruitment, development, and new location occupation process possible. None of the issues uncovered throughout this engagement were due to lack of dedication and willingness of people. Denton is very fortunate in that regard. The issues were all due to issues involved in the development process. These issues can be addressed, and free Denton's people to do their job better, with more satisfaction. That will translate to more companies, more jobs, and more wealth creation for an already outstanding city. Exhibits The following exhibits are included for explanative and illustrative purposes: 1. A "before" mapping of the process for recruitment and location of businesses in Denton. 2. An "after" outline of the recommended, more efficient process after recommendations. 3. A compilation of notes from interviews and meetings during the site visit January 6-8, 2016. Improving Economic Development Performance in Denton, TX NOVACES, LLC 9 o o \lo o {OL\ o k\)( _ -- j $}}_ u - <u��~ -Z§!§ Z}\/ /\\j �u�� \\\\} \ \ in,h \ \\\: o o \ \{)E 5o \�� u�\\ { 0 \ I� S? ° DOM Allo M. }§){§§ )[\§ ac 5 \\21- �w u u lo �)// }) wE \\w \\\> \\ \�\\ o- {\{ƒ/\ /\!�/� \\ f\{E r`!tz® %ow » /f7`« Z\{# j\r ® }$ \\\\{ o 16 f{\/% 2{\{ f{w3 E2 & ;! \\\\\ {7/t\ u�� })/u) � E-5 )ƒ[ / ! o 0-2 § ! ,—w 11—w \ The Denton Marketing Scorecard Measuring the Effectiveness of Economic Development Marketing Efforts Introduction Marketing a community to potential business and industrial investors is challenging and requires significant resources. In an environment of both intense competition and increasing accountability, coupled with decreasing resources, economic development organizations must make informed decisions based on quantifiable results. The Denton Marketing Scorecard is designed to provide the Denton Department of Development Services with quantifiable, comparable data on the results of multiple marketing and business/industry recruitment efforts. The Scorecard is based on a scoring system developed for the Tennessee Valley Authority's Industrial Development Association, which was comprised of six regional economic development organizations representing eight states. The Scorecard uses a weighted system that quantifies the results of marketing efforts in a wide variety of forms, from magazine ads to use of social media to site visits and conferences. The system weighs these efforts by cost, and can add an additional weight for targeted, primary, and/or high -wage industries. The Scorecard is easy to input and monitor. It may also be changed or added to as new marketing channels are added. The site location process can be viewed as a funnel. At the top are prospect contacts, inquiries, and expressions of interest. From there, the process narrows as prospects are identified and qualified. Further down are a much smaller group that ask for proposals, makes site visits, and choose Denton as a finalist in their search. Finally, there are the few that decide to make the investment and announce. The last step are those that open and begin operations. Op ns Scoring and Weighting Scoring will be based on each of the steps in the decision making "funnel', as follows: • Initial Contact/Expression of Interest: 10 points • Follow Up and Prospect Qualification: 20 points • Proposal Requested and Site Visit: 40 points • Declared a Finalist: 60 points • Decision to Invest: 80 points • Begin Operations: 100 points Weighting will be added to the score depending on cost of each lead and if they are targeted: • Cost per lead: o $0-$500: 100 points o $500-$1,000 75 points o $1,000-$2,500 50 points o $2,500-$5,000 25 points o Over $5,000 0 points • Bonus if prospect is a targeted industry 50 points • Bonus is prospect is a "traded" sector 50 points For example, if four prospects are initially contacted, and express initial interest through participation in a trade show that costs $8,000, and all are targeted and in a traded sector, the following score would be assigned for the trade show: • Expression of Interest 40 points • Cost per lead: $2,000 200 points • Targeted sector bonus 200 points • Traded sector bonus 200 points • Score per Prospect 640 points If three of those prospects are qualified and express further interest in locating, 60 points would be added to the score. If two request proposals and schedule site visits, 80 points would be added, and if one declares Denton a finalist, another 60 points, then if Denton wins the location another 80 points. If the project opens and begins operation, a final 100 points would be added. These scores would be added and divided by 4 because there were four inquiries. • Qualified/follow-up: 180 points • Proposal/Site Visit: 160 points • Finalist 60 points • Announcement: 80 points • Ribbon Cutting: 100 points • Score per prospect 145 points The total score for the investment of $8,000 in the trade show would be 640 base points and 145 additional points for a total of 785 points. Using this system, the trade show score could be compared to results from such activities as magazine ads, web site promotions, prospect visits, and any other marketing and recruitment activity. Although not a perfect system, the Scorecard can provide Denton with a quantitative -based comparison of the relative effectiveness of its marketing efforts and a guide for future marketing strategies. Implementation and Summary Denton can implement the system immediately through building a template within project management software such as Microsoft project. It may also be able to build it within CRM programs such as Salesforce, with reminders to post to the System after CRM objectives are met. Providing a measurable system to gauge return on marketing investments, and having the ability to make direct comparisons between different activities in attempting to recruit companies can help Denton make better choices and produce better results for its investment in business and industrial recruitment activities. City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 16-498, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: Department of Development Services/Economic Development Division CM/ ACM: Jon Fortune Date: June 28, 2016 SUBJECT Receive a report, hold a discussion, and give staff direction regarding the Economic Development Investment Fund and the Downtown Reinvestment Grant Fund. EXECUTIVE SUMMARY The purpose of this Work Session is to discuss two separate economic development -related funds: 1) the existing Downtown Reinvestment Grant Program, and 2) the new Economic Development Investment Fund. These two items are being discussed together in order to look holistically at the range of economic development tools available to the City and to compare the purpose and policies of each fund. BACKGROUND Downtown Reinvestment Grant Program - Created in 2007 Purpose: To provide small ($5,000-$25,000) cash reimbursement grants for capital improvements to buildings in the downtown area. The grant program is designed to assist downtown building and business owners with projects, and it is tied to preserving the history of Denton by restoring the buildings. It also gives the Downtown Task Force, Economic Development Partnership Board, and City Council control over the design of rehabilitations and new construction, as there are no design standards in place for downtown. The program is strictly for capital improvements, not operating costs. It is set up as a single -payment reimbursement to property owners per buildingibusiness, and in some situations, tenants. Reimbursement grants are available for the following types of projects: • Facade Rehabilitation is defined as the removal of slipcovers or non-historic/added facades, repointing brick or replacing mortar joints, replacing or restoring cornices, removing paint from brick, replacing windows, restoring transom windows, roof and foundation work. • New Awnings & Signs is defined as replacing, adding or repairing awnings & signs. Signs may include signboards, projecting signs and pedestrian signage (includes window sign, hanging sign and awning/canopy sign). • Impact Fee Reimbursement is the reimbursement for City of Denton water, wastewater, and roadway impact fees • Utility Upgrades includes upgrades to water, wastewater and electrical service, including interior upgrades as well as exterior service upgrades City of Denton Page 1 of 4 Printed on 6/24/2016 povveied by I_egivt9i IN File #: ID 16-498, Version: 1 In FY 2013-14, the grant fund was increased from $50,000 to $100,000 per year and is currently funded through mixed beverage tax revenues to the City. Grants of $10,000 or less are subject to review by the Downtown Task Force and approval by the City Manager; grants of more than $10,000 are reviewed by the Downtown Task Force and the Economic Development Partnership Board and approved by City Council. Since October 1, 2007, 41 grants have been awarded for a total of $401,195. Of those, seven expired without the recipient receiving the grant due to issues with the projects (spreadsheet attached). The Return on Investment (ROI) over the life of the grant has been $1 (City) to $30 (private investment). Staff Recommendation Staff recommends continuing the grant program given its success in preserving Denton's history via restoration of Downtown buildings and the increase in property values that can be attributed to those restorations. However, based on Council direction, the scope of the grant program should be expanded to add targeted redevelopment areas in addition to Downtown, such as major development corridors and entryways into the city. Staff proposes renaming the program to "Small Business Improvement Grant Program." Economic Development Investment Fund - Created in 2015 Purpose: To provide a cash grant program in order to increase the City's ability to compete for large or targeted economic development projects. In April 2014, the City of Denton's Tax Abatement Policy was broadened to apply Chapter 380 of the Texas Local Government Code in order to implement a wider range of incentive programs. Such programs could include cash incentives to gain a competitive position when in direct competition for a project. While the expanded 2014 Tax Abatement and Incentive Policy gave the City the ability to offer cash incentives, no mechanism was put in place at that time to create a cash fund for incentive purposes. In August 2015, the Economic Development Partnership Board recommended to the City Council the creation of an economic development incentive fund with the following criteria for eligibility for a cash grant under the program: • A company must meet at least two of the following three criteria: 1) higher -wage or knowledge-based jobs 2) substantial capital investment 3) address a recruitment or supplier target Higher -wage jobs are defined as having an average annual wage of $55,000 or greater for all positions or at least 25% of the positions having an annual wage of $65,000 or greater. Knowledge-based jobs are defined as occupations which: • Require specialized and theoretical knowledge, usually acquired through a college education or through work experience or other training which provides comparable knowledge; • Require some research, analysis, report writing and presentations; • Require special licensing, certification, or registration to perform the job task. Substantial capital investment under the Economic Development Investment Fund is a minimum of $15 City of Denton Page 2 of 4 Printed on 6/24/2016 povveied by I_egist9i I;, File M ID 16-498, Version: 1 million. Recruitment or supplier targets include aviation; advanced manufacturing; renewable energy; research and development; information technology; supply chain logistics and distribution and large consumers of municipal utilities. In conjunction with the FY 2015-16 Proposed Budget, the City Council directed staff to create the Economic Development Investment Fund. This fund, created under Governmental Accounting Standards Board Statement Number 54, will allow unspent funds to be rolled over from one year to the next and utilized in future years. The City Council recommended committing $150,000 in mixed beverage taxes previously accounted for in the General Fund. This investment falls under HBU 2833301, and the revenue will provide a dedicated mechanism to account for investment in economic development projects. Staff Recommendation Staff recommends adoption of an ordinance establishing the fund as outlined above and enabling its use. PRIOR ACTION/REVIEW (Council, Boards, Commissions) January 5, 2016 - During a work session, Council reviewed both funds and directed staff to further define criteria for the Economic Development Investment Fund and target areas for the Downtown Reinvestment Grant Program. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Economic Development Related Goal: 3.4 Encourage development, redevelopment, recruitment, and retention EXHIBIT Exhibit 1 - Current Downtown Reinvestment Grant Program Fund Ordinance & Policy Exhibit 2 - Draft Revisions to Downtown Reinvestment Grant Program Policy Exhibit 3 - Downtown Reinvestment Grant Program Return on Investment Exhibit 4 - Draft Economic Development Investment Fund Ordinance Exhibit 5 - Presentation Respectfully submitted: Aimee Bissett Director of Development Services City of Denton Page 3 of 4 Printed on 6/24/2016 povveied by I_egist9i I;, File M ID 16-498, Version: 1 Prepared by: Erica Sullivan, Economic Development Analyst Economic Development Division, Department of Development Services City of Denton Page 4 of 4 Printed on 6/24/2016 povveied by I_egist9i I;, UodadWepartmentsVegaRour documents\ordinances112\ecodevo downtown grant program.doc ORDINANCE NO. 2012-001_ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, AMENDING THE DOWNTOWN INCENTIVE REIMBURSEMENT GRANT PROGRAM; AND PROVIDING AN EFFECTVE DATE. WHEREAS, on February 14, 2007, the Downtown Task Force unanimously recommended creating an incentive program to promote desired development/redevelopment in the downtown area of the City of Denton; and WHEREAS, on April 3, 2007, the City Council of the City of Denton adopted the Downtown Incentive Reimbursement Grant Program; and WHEREAS on October 13, 2011, the Downtown Task Force recommended changes to the original Downtown Incentive Reimbursement Grant Program; and WHEREAS on November 1, 2011, the Economic Development Partnership Board recommended the changes to the City Council of the City of Denton, including changing the name of the program to "Downtown Reinvestment Grant Program;" and WHEREAS, on December 6, 2011, the City Council reviewed changes to the Downtown Reinvestment Grant Program; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Council of the City of Denton hereby approves the changes to the Downtown Reinvestment Grant Program, which is attached to and made a part of this ordinance for all purposes. SECTION 2. The City Council will fund the program in an amount to be considered annually. SECTION 3. This Ordinance shall become effective immediately upon its passage and approval. Lh PASSED AND APPROVED this the day of jvolza" '2012, sAlegahour documents\ordinances112\ecodevo downtown grant program.doc ATTEST: JENNIFER WALTERS, CITY SECRETARY BY; APPOVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY / c BY: / o' DENTON POLICY FOR DOWNTOWN REINVESTMENT GRANT PROGRAM I. GENERAL PURPOSE AND OBJECTIVES The City of Denton Economic Development department promotes Denton and its unique character through the redevelopment and revitalization of Downtown, historic preservation, community involvement, and by providing educational and technical assistance to business and property owners. With Downtown as a key focus area of the Economic Development Program, the City of Denton City Council adopted the following Downtown Reinvestment Grant Program. Each fiscal year (October 1 through September 30), the City Council considers allocation of funds in the City's budget for the grant program. Applications are considered as they are received, and may be funded, if approved, until funds are depleted. H. GRANT GUIDELINES 1. Commercial fagade rehabilitation grant funds are available for exterior work on building facades that immediately overlook public streets located in the Downtown area as defined in the Downtown Implementation Plan (DTII'), see attached map, page 5. 2. Roof and foundation work on commercial buildings in the DTIP area may also be eligible for grant funds, providing costs do not exceed 50% of the grant request. 3. No grant applications will be accepted for work that has already been started or complete, or for work that is covered by insurance. 4. Grants are awarded on a reimbursement basis once completed work has been verified by City staff as compliant with the plans proposed in the approved application. Any deviation from the approved grant project may result in the total or partial withdrawal of the grant. Grants are awarded as a single payment to the applicant. 5. All submitted work will be reviewed based on the Secretary of the Interior's Standards for Rehabilitation (see page 7) and the City of Denton's Municipal Codes and Ordinances. 6. Grant applications and awards can be made in any of the reimbursable activities listed below and may be combined for any single property or project. However, the maximum award amount available annually per project is $25,000. 7. An applicant is defined as an eligible property within the DTIP area. A single owner of multiple properties may apply for grant funds for each property owned, but may not receive more than $25,000 per property. 8. If an applicant is awarded a reinvestment grant for fagade, awning or sign work and the facade, sign or awning is altered for any reason within one (1) year from construction, the applicant may be required to reimburse the City of Denton immediately for the full amount of the grant. 9. Projects will be reviewed and ranked with the following considerations in mind: • Project results in an increase in property valuation and/or generates sales tax revenue • Project rehabilitation reflects historic accuracy • Project improves the capacity of water, wastewater and electric utility services • Water/Wastewater impact fees are assessed • Project results in a significant increase in downtown population (residents and/or day or night users) • Location (i.e., proximity to the square, transit station or catalyst project) • Other appropriate impacts may be considered on a case-by-case basis M. PROGRAM DETAILS Reinvestment grants are available for the following types of projects: Facade Rehabilitation and Building Renovation Definition: Removing slipcovers or non-historic/added facades, repointing brick or replacing mortar joints, replacing or restoring cornices, removing paint from brick, replacing windows, restoring transom windows, painting, roof and foundation work. Grant Limits: Fagade rehabilitation and building grants are limited to a 50% match of the eligible projects costs, with a cap of $25,000 per grant for fagade, roof and foundation work. Roof and foundation repair may constitute no more than half of the request and shall only be considered for funding if included as a portion of a larger project. Paint -only grants are limited to a 50% match with a cap of $5,000 per grant. Awnings & Signs Definition: Replacing, adding or repairing awnings & signs. Signs may include signboards, projecting signs and pedestrian signage (includes window sign, hanging sign and awning/canopy sign). Grant Limits: Awning grants are limited to a 50% match with a cap of $5,000 per grant. Sign grants are limited to a 50% match with a cap of $500 per grant. Impact Fee Reimbursement Defmition: Reimbursement for City of Denton water and wastewater impact fees Grant Limits: Impact Fee grants are limited to a 50% match with a cap of $25,000 per grant. Utility Upgrades Definition: Upgrades to water, wastewater and electrical service, includes interior upgrades as well as exterior service upgrades Grant Limits: Utility Upgrade grants are limited to a 50% match with a cap of $25,000 per grant. Downtown Reinvestment Grant Program Policy 2 IV. GRANT APPLICATION PROCESS 1. Contact Economic Development Program Administrator to discuss project and determine eligibility. If requested, the Program Administrator will set up an appointment with the Texas Main Street Center's Architectural Assistance Program, which provides free assistance in selecting paint, color schemes and building and sign materials for building facade and signs. 2. Complete grant application form and sign the agreement form. Return the completed application form with all original itemized work estimates, color samples, drawings and example sign material of the proposed work to the Economic Development office at 215 E. McKinney no later than 5 pm the first Monday of each month. Applications should include: a. Drawings of all proposed grant work to be done. Drawings may be prepared by the Texas Main Street Architect, the project architect, or contractor. b. Color samples of all final paint selections and/or final building or sign material selections must be included with the application. c. Itemized work estimates on all project work from contractors or project architects must be included with the application. (Self -contracted work will be reimbursed for eligible expenses, excluding labor.) d. Photos of the building's exterior, interior, roof or foundation (areas where work is to be performed). 3. The approval process will include without limitation the following: a. All projects must meet current building standards and codes, as well as building permit requirements. b. Applicants are required to attend and present their grant reinvestment project to the Downtown Task Force (DTTF). Grants of $10,000 and less will be subject to a recommendation by the DTTF and approval by the City Manager. The DTTF meets monthly, as needed. c. Grants of more than $10,000 must be reviewed and approved by the Economic Development Partnership Board (EDPB) prior to consideration by the Denton City Council. The EDPB meets monthly and will review submitted applications and consider the DTTF's recommendation. d. If recommended by the EDPB, grants of more than $10,000 will be placed on the City Council agenda and the Denton City Council will review the recommendations from the DTTF and EDPB. The DTTF and EDPB recommendations are advisory only, and no recommendation shall be binding on the Denton City Council. The Denton City Council has the final discretion with regard to funding and reserves the right to modify or reject any project or elements of any project. e. Applications must be complete and contain all required information. Additional information requested by the DTTF, EDPB or the Denton City Council must be provided prior to consideration of the grant. f. All construction bids submitted by an applicant must be current and must be dated no earlier than ninety (90) days prior to the application request. Bids shall be submitted on the contractor's or project architect's letterhead and shall contain the contractor' name, address, telephone number and shall itemize the bid in a manner that allows the DTTF, EDPB and Denton City Council to determine the bid components and authenticity of the bid. Downtown Reinvestment Grant Program Policy 3 g. An applicant whose application that has been denied by the Denton City Council shall not be eligible to re -submit a grant application for six (6) months from the date the prior application was declined by the Denton City Council. h. Applicants receiving approval shall commence construction described within the application within ninety (90) days from the date the grant is awarded. All applicants must complete the construction described in the application within one (1) year from the date the grant is approved. If the applicant is unable to commence construction within ninety (90) days from the date the grant is approved or complete construction within one (1) year from the date the grant is approved, the applicant may submit a written request for an extension for the commencement date or completion date provided the extension request is made prior to the ninety (90) day or one (1) year time limit. The DTTF or Denton City Council shall not be obligated to allow extensions, but may do so for good cause determined solely by the entity which authorized the grant. The extensions, if granted, shall be for the term and for the conditions determined exclusively by the entity which authorized the grant. An extension denial cannot be appealed and shall be final. i. As a condition of this grant application, the applicant consents and shall allow the Economic Development staff to request City inspections to determine that the grant, if awarded, will not be used for construction on any building that is not in compliance with the City Municipal Codes and Ordinances that are applicable to the construction contemplated in the application. j. No applicant has a proprietary right to receive grant funds. Each request will be considered on a case-by-case basis. k. The applicant shall be required to furnish photographs of the building's exterior, roof and foundation after the construction is completed, as a condition of final grant reimbursement. 1. The applicant is required to obtain all applicable City permits and City approvals required for the construction if a grant is awarded. in. An applicant should attend DTTF, EDPB and Denton City Council meetings in which consideration of the application occurs. 4. Reimbursement: When the grant project has been satisfactorily completed and reviewed, the applicant shall present the Economic Development office with copies of all paid invoices, including copies of cancelled checks and/or credit card receipts, for a single payment reimbursement of the approved funding. In addition, the applicant must complete a City of Denton Vendor Form and a Form 1099 to receive payment from the City. Vendor forms and 1099's will be provided by the Economic Development office. Downtown Reinvestment Grant Program Policy 4 DOWNTOWN IMPLEMENTATION PLAN AREA MAP Downtown Reinvestment Grant Program Policy 5 Legend Lo Withers DTIP Boundry M 0 - Historic Courthouse Square Parkway W Mc Kinne Mc Kinne Oak Hick ry Sycamore N N E v �g wE W J S use only as a reference. Date depicted A Registered Surveyor for the Mlles 0.225 0.3 This map is not is a graphic representation prepared by the City of Denton and is intended for guaranteed for accuracy and may be subject to revision at any time without notification. 0 0.0376.075 D.15 State of Texas was not consulted. For Survey level accuracy, supervision and certification of the produced data by a Registered Professional Land Surveyor for the State of Texas would need to be performed. Downtown Reinvestment Grant Program Policy 5 EXHIBIT A D NTON CITY OF DENTON DOWNTOWN REINVESTMENT GRANT PROGRAM APPLICATION City of Denton Department of Economic Development 215 E. McKinney Street Denton, TX 76201 940-349-7732 www.ciiyofdenton.com Julie.l�gcityo fdenton. com Downtown Reinvestment Grant Program Policy 6 Downtown Reinvestment Grant Program Application Please return completed with necessary attachments and signature to Economic Development office, 215 E. McKinney no later than 5 pm by the first Monday of each month. If you have any application questions, please contact the Economic Development Program Administrator at 940- 349-7732. Applicant Name Date Business Name Mailing Address Contact Phone Email Address Building Owner (if different from applicant) Historical/Current Building Name Project Site/Address Type of Work: (check all that apply) Paint Only Fagade & Building Renovation Signage Awnings Utility Upgrades Impact Fees Details of Planned Improvements relating to Grant Request (attach additional information if necessary) Downtown Reinvestment Grant Program Policy 7 How will this project benefit Downtown? Project Expenditures Estimated Costs Grant Requested FagadeBuilding Rehab Awnings Signs Impact Fees Utility Upgrades Totals TOTAL COST OF PROPOSED PROJECT $ TOTAL GRANT REQUEST (May not exceed 50% of TOTAL COST up to $25,000) Attach with all required color samples of paint, awning/canopy, sign design, etc., as well as photographs of building's exterior facade, roof and foundation. Applicant's Signature Date Downtown Reinvestment Grant Program Policy 8 DOWNTOWN REINVESTMENT GRANT AGREEMENT FORM Please complete and return with Downtown Reinvestment Grant Application to Economic Development office, 215 E. McKinney no later than 5 pm by the first Monday of each month. If you have any questions, please contact the Economic Development Program Administrator at 940- 349-7732. I have met with the Economic Development Program Administrator, and I have read and fully understand the Downtown Reinvestment Grant procedures established by the Denton City Council. I intend to use this grant program for the aforementioned renovation projects to advance the efforts of revitalization and historic preservation of Denton's historic downtown. I have not received, nor will I receive insurance monies for this revitalization project. I understand that if I am awarded a Downtown Reinvestment Grant by the City of Denton, any deviation from the approved project may result in the partial or total withdrawal of the grant. (If I am awarded a reinvestment grant for facade, awning or sign work and the fagade, sign or awning is altered for any reason within one (1) year from construction, I may be required to reimburse the City of Denton immediately for the full amount of the grant.) Business/Organization Name Applicant's Signature Printed Name Date Building Owner's Signature (if different from applicant) Printed Name Date - -------se-c--tio--n---is---to ---b-e--co--m--plete------d--b--y------c-o-m--i-c ---De--v--e-1-o-p--m--- ent----- staff f-------------------------------------------------- This E Date considered by DTTF Recommendation Staff Signature Date considered by City Manager Recommendation City Manager Signature Date considered by EDPB Recommendation Staff Signature Downtown Reinvestment Grant Program Policy 9 REVIEW PROCESS Total project scores can range from 0 to 30 points. Recommendations will be based on: 0 - 14 points = No funding 15-19 points = Grant recommendation up to $5,000 20-24 points = Grant recommendation up to $10,000 25-30 points = Grant recommendation up to $25,000 Grants more than $10,000 will be subject to a recommendation by the Denton Economic Development Partnership Board and approval by the Denton City Council. Grant applications will be scored based on: • Economic Impact — 0-5 Points o Total investment dollars as provided in the grant application o Investment in structure construction or renovation (excluding purchase price) o Investment in furniture, fixtures and equipment; estimated taxable sales • Historic Accuracy — 0-5 Points o New construction/complements existing buildings o Restores building to historic accuracy o Renovation of building with historic marker (Local, state or national historic marker) Upgrades to Utilities/Impact Fees -- 0-5 Points o Requires upgrades in electrical service o Increases existing water/wastewater capacity o No existing utilities to structure o Extends water/wastewater lines (improves additional properties) o Impact fees may be ranked depending upon percentage of fees to eligible expenses • Increases Population -- 0-5 Points o Increases consumer traffic (day or night) o Increases quality or high end residential units • Location -- 0-5 Points o Near square or transit area o Potential to spur adjacent or nearby development o Catalyst project area • Other -- 0-5 Points o Partners with other businesses (i.e., shared parking) o Project is a "target" business (i.e., grocery, pharmacy, "Denton Store") o Promotes development of Denton Arts and Entertainment District Downtown Reinvestment Grant Program Policy 10 Grant Scoring System 0 1 2 3 4 5 Economic impact Historic accuracy Utility Upgrades/Impact fees Increases population Location Other Totals Downtown Reinvestment Grant Program Policy 11 POLICY FOR SMALL BUSINESS IMPROVEMENT GRANT PROGRAM L GENERAL PURPOSE AND OBJECTIVES The City of Denton Economic Development department promotes Denton and its unique character through the redevelopment and revitalization of Denton, historic preservation, community involvement, and by providing educational and technical assistance to business and property owners. The City of Denton City Council adopted the following Small Business Improvement Grant Program. Each fiscal year (October 1 through September 30), the City Council considers allocation of funds in the City's budget for the grant program. Applications are considered as they are received, and may be funded, if approved, until funds are depleted. IL GRANT GUIDELINES 1. Facade rehabilitation grant funds are available for exterior work on building facades that immediately overlook public streets. 2. Roof and foundation work on commercial buildings may also be eligible for grant funds, providing costs do not exceed 50% of the grant request. 3. No grant applications will be accepted for work that has already been started or complete, or for work that is covered by insurance. 4. Grants are awarded on a reimbursement basis once completed work has been verified by City staff as compliant with the plans proposed in the approved application. Any deviation from the approved grant project may result in the total or partial withdrawal of the grant. Grants are awarded as a single payment to the applicant. 5. All submitted work will be reviewed based on the City of Denton's Municipal Codes and Ordinances. Historic buildings will also be reviewed based on the Secretary of the Interior's Standards for Rehabilitation (see page 7) and. 6. Grant applications and awards can be made in any of the reimbursable activities listed in the Program Details (pages 2-3) and may be combined for any single property or project. However, the maximum award amount available annually per property is $25,000. 7. An applicant is defined as an eligible commercial property within targeted redevelopment areas consistent with the Denton 2030 Plan, or on major corridors which include, but are not limited to: the Downtown Implementation Plan Area, industrial corridor near the Euline Brock Downtown Transit Center, Fry Street Area, and entryways into the City (University Drive, Dallas Drive, Elm, Locust, Carroll, etc.). A single owner of multiple properties may apply for grant funds for each property owned, but may not receive more than $25,000 per property. If an applicant is awarded a reinvestment grant for building improvement, and the improvement is altered for any reason within one (1) year from construction, the applicant may be required to reimburse the City of Denton immediately for the full amount of the grant. 9. Projects will be reviewed and ranked with the following considerations in mind: • Project results in an increase in property valuation and/or generates sales tax revenue • Project rehabilitation reflects historic accuracy or compatible design to the area • Project improves the capacity of water, wastewater and electric utility services • Water/Wastewater impact fees are assessed • Project results in a significant increase in population (residents and/or day or night users) • Location (i.e., targeted redevelopment areas) • Other appropriate impacts may be considered on a case-by-case basis III. PROGRAM DETAILS Reinvestment grants are available for the following types of projects: Facade Rehabilitation and Building Renovation Definition: Removing slipcovers or non-historic/added facades, repointing brick or replacing mortar joints, replacing or restoring cornices, removing paint from brick, replacing windows, restoring transom windows, painting, roof and foundation work. Grant Limits: Facade rehabilitation and building grants are limited to a 50% match of the eligible projects costs, with a cap of $25,000 per grant for facade, roof and foundation work. Roof and foundation repair may constitute no more than half of the request and shall only be considered for funding if included as a portion of a larger project. Paint -only grants are limited to a 50% match with a cap of $5,000 per grant. Awnings & Signs Definition: Replacing, adding or repairing awnings & signs. Signs may include signboards, projecting signs and pedestrian signage (includes window sign, hanging sign and awning/canopy sign). Grant Limits: Awning grants are limited to a 50% match with a cap of $5,000 per grant. Sign grants are limited to a 50% match with a cap of $500 per grant. Impact Fee Reimbursement Definition: Reimbursement for City of Denton water, wastewater, and roadway impact fees Grant Limits: Impact Fee grants are limited to a 50% match with a cap of $25,000 per grant. Utility Upgrades Small Business Improvement Grant Program Policy 2 Definition: Upgrades to water, wastewater and electrical service, includes interior upgrades as well as exterior service upgrades Grant Limits: Utility Upgrade grants are limited to a 50% match with a cap of $25,000 per grant. IV. GRANT APPLICATION PROCESS 1. Contact Economic Development Program Administrator to discuss project and determine eligibility. If requested, the Program Administrator will set up an appointment with the Texas Main Street Center's Architectural Assistance Program, which provides free assistance in selecting paint, color schemes and building and sign materials for building facade and signs for historic buildings within the DTIP area only. 2. Complete grant application form and sign the agreement form. Return the completed application form with all original itemized work estimates, color samples, drawings and example sign material of the proposed work to the Economic Development office at 215 E. McKinney no later than 5 pm the first Monday of each month. Applications should include: a. Drawings of all proposed grant work to be done. b. Color samples of all final paint selections and/or final building or sign material selections must be included with the application. c. Itemized work estimates on all project work from contractors or project architects must be included with the application. (Self -contracted work will be reimbursed for eligible expenses, excluding labor.) d. Photos of the building's exterior, interior, roof or foundation (areas where work is to be performed) The approval process will include without limitation the following: a. All projects must meet current building standards and codes, as well as building permit requirements. b. Applicants are required to attend and present their grant reinvestment project to the Small Business Improvement Task Force. Grants of $10,000 and less will be subject to a recommendation by the Small Business Improvement Task Force and approval by the City Manager. The Small Business Improvement Task Force meets monthly, as needed. c. Grants of more than $10,000 must be reviewed and approved by the Economic Development Partnership Board (EDPB) prior to consideration by the Denton City Council. The EDPB meets monthly and will review submitted applications and consider the Small Business Improvement Task Force's recommendation. d. If recommended by the EDPB, grants of more than $10,000 will be placed on the City Council agenda and the Denton City Council will review the recommendations from the Small Business Improvement Task Force and EDPB. The Small Business Improvement Task Force and EDPB recommendations are advisory only, and no recommendation shall be binding on the Denton City Council. The Denton City Council has the final discretion with regard to funding and reserves the right to modify or reject any project or elements of any project. e. Applications must be complete and contain all required information. Additional information requested by the Small Business Improvement Task Force, EDPB or the Denton City Council must be provided prior to consideration of the grant. Small Business Improvement Grant Program Policy 3 f. All construction bids submitted by an applicant must be current and must be dated no earlier than ninety (90) days prior to the application request. Bids shall be submitted on the contractor's or project architect's letterhead and shall contain the contractor' name, address, telephone number and shall itemize the bid in a manner that allows the Small Business Improvement Task Force, EDPB and Denton City Council to determine the bid components and authenticity of the bid. g. An applicant whose application that has been denied by the Denton City Council shall not be eligible to re -submit a grant application for six (6) months from the date the prior application was declined by the Denton City Council. h. Applicants receiving approval shall commence construction described within the application within ninety (90) days from the date the grant is awarded. All applicants must complete the construction described in the application within one (1) year from the date the grant is approved. If the applicant is unable to commence construction within ninety (90) days from the date the grant is approved or complete construction within one (1) year from the date the grant is approved, the applicant may submit a written request for an extension for the commencement date or completion date provided the extension request is made prior to the ninety (90) day or one (1) year time limit. The Small Business Improvement Task Force or Denton City Council shall not be obligated to allow extensions, but may do so for good cause determined solely by the entity which authorized the grant. The extensions, if granted, shall be for the term and for the conditions determined exclusively by the entity which authorized the grant. An extension denial cannot be appealed and shall be final. i. As a condition of this grant application, the applicant consents and shall allow the Economic Development staff to request City inspections to determine that the grant, if awarded, will not be used for construction on any building that is not in compliance with the City Municipal Codes and Ordinances that are applicable to the construction contemplated in the application. j. No applicant has a proprietary right to receive grant funds. Each request will be considered on a case-by-case basis. k. The applicant shall be required to furnish photographs of the building's exterior, roof and foundation after the construction is completed, as a condition of final grant reimbursement. 1. The applicant is required to obtain all applicable City permits and City approvals required for the construction if a grant is awarded. in. An applicant should attend Small Business Improvement Task Force, EDPB and Denton City Council meetings in which consideration of the application occurs. 5. Reimbursement: When the grant project has been satisfactorily completed and reviewed, the applicant shall present the Economic Development office with copies of all paid invoices, including copies of cancelled checks and/or credit card receipts, for a single payment reimbursement of the approved funding. In addition, the applicant must complete a City of Denton Vendor Form and a Form W-9 to receive payment from the City. Vendor forms and 1099's will be provided by the Economic Development office. Small Business Improvement Grant Program Policy 4 DOWNTOWN IMPLEMENTATION PLAN AREA MAP +4 i�;'i I�k�lAli t r(Ilyl �tl i{(Il��IrIV Legend lrtil �`'1 �lsa Withers �il'1 l�s��llrli ® DTIP Boundry ¢ I tl t O Itlll�itbt'�ikt� Historic Courthouse �i'1{flub` Square 141�.� ... <ls S S�II �Itt tt�}Ili r' i Ili � I lrlljwl� t��}3 �i�;tl f3 1 (1 li Parkway w �" �'k� 111�1fy� McKinne "a, Mc Kinne Oak Hick ry {� 4r i'ME( II If nylpa rnt f 3d 7 } 1(', S camore I Rfflfi z �tl �ylsi E V N Q7�' wE lT3 w J ,fll,ll 1 1ji fn's 1j11 I" 1„ MIIes This map is a graphic representation prepared by the City of Denton and is intended for use only as a reference. Data depicted 0 0.0376.075 0.15 0.225 0.3 is not guaranteed for accuracy and may be subject to revision at any time without notification. A Registered Surveyor for the State of Texas was not consulted. For Survey level accuracy, supervision and certification of the produced data by a Registered Professional Land Surveyor for the State of Texas would need to be performed. Small Business Improvement Grant Program Policy 5 EXHIBIT A CITY OF DENTON SMALL BUSINESS IMPROVEMENT GRANT PROGRAM APPLICATION City of Denton Department of Economic Development 215 E. McKinney Street Denton, TX 76201 940-349-7732 www.cityofdenton.com Julie. GloverL cityofdenton. com Small Business Improvement Grant Program Policy 6 Small Business Improvement Grant Program Application Please return completed with necessary attachments and signature to Economic Development office, 215 E. McKinney no later than 5 p.m. by the first working day of each month. If you have any application questions, please contact the Economic Development Program Administrator at 940-349-7732. Applicant Name Date Business Name Mailing Address Contact Phone Email Address Building Owner (if different from applicant) Historical/Current Building Name Project Site/Address Type of Work: (check all that apply) Paint Only Facade & Building Renovation Signage Awnings Utility Upgrades Impact Fees Details of Planned Improvements relating to Grant Request (attach additional information if necessary). Small Business Improvement Grant Program Policy 7 How will this nroiect benefit Denton? Project Expenditures Estimated Costs Grant Requested Facade/Building Rehab Awnings Signs Impact Fees Utility Upgrades Totals TOTAL COST OF PROPOSED PROJECT $ TOTAL GRANT REQUEST (May not exceed 50% of TOTAL COST up to $25,000) Attach with all required color samples of paint, awning/canopy, sign design, etc., as well as photographs of building's exterior facade, roof and foundation. Applicant's Signature Date Small Business Improvement Grant Program Policy 8 SMALL BUSINESS IMPROVEMENT GRANT AGREEMENT FORM Please complete and return with Small Business Improvement Grant Application to Economic Development office, 215 E. McKinney no later than 5 pm by the first day of each month. If you have any questions, please contact the Economic Development Program Administrator at 940-349- 7732. I have met with the Economic Development Program Administrator, and I have read and fully understand the Small Business Improvement Grant procedures established by the Denton City Council. I intend to use this grant program for the aforementioned renovation project to advance the efforts of building Denton's business community. I have not received, nor will I receive insurance monies for this project. I understand that if I am awarded a Small Business Improvement Grant by the City of Denton, any deviation from the approved project may result in the partial or total withdrawal of the grant. (If I am awarded a reinvestment grant for facade, awning or sign work and the facade, sign or awning is altered for any reason within one (1) year from construction, I may be required to reimburse the City of Denton immediately for the full amount of the grant.) Business/Organization Name Applicant's Signature Printed Name Date Building Owner's Signature (f different from applicant) Printed Name Date ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- This section is to be completed by Economic Development staff Date considered by DTTF Recommendation Staff Signature Date considered by City Manager Recommendation City Manager Signature Date considered by EDPB Recommendation Staff Signature Small Business Improvement Grant Program Policy 9 REVIEW PROCESS Total project scores can range from 0 to 30 points. Recommendations will be based on: 0 - 14 points = No funding 15-19 points = Grant recommendation up to $5,000 20-24 points = Grant recommendation up to $10,000 25-30 points = Grant recommendation up to $25,000 Grants more than $10,000 will be subject to a recommendation by the Denton Economic Development Partnership Board and approval by the Denton City Council. Physical Improvement Grant applications will be scored based on: • Economic Impact — 0-5 Points o Total investment dollars as provided in the grant application o Investment in structure construction or renovation (excluding purchase price) o Investment in furniture, fixtures and equipment; estimated taxable sales • Historic Accuracy — 0-5 Points o New construction/complements existing buildings o Restores building to historic accuracy o Renovation of building with historic marker (Local, state or national historic marker) Upgrades to Utilities/Impact Fees -- 0-5 Points o Requires upgrades in electrical service o Increases existing water/wastewater capacity o No existing utilities to structure o Extends water/wastewater lines (improves additional properties) o Impact fees may be ranked depending upon percentage of fees to eligible expenses • Increases Population -- 0-5 Points o Increases consumer traffic (day or night) o Increases quality or high end residential units • Location -- 0-5 Points o Near square or transit area o Potential to spur adjacent or nearby development o Catalyst project area • Other -- 0-5 Points o Partners with other businesses (i.e., shared parking) o Project is a "target" business (i.e., grocery, pharmacy, "Denton Store") o Promotes development of Denton Arts and Entertainment District Small Business Improvement Grant Program Policy 10 Physical improvement scoring Grant Scoring System 0 1 2 3 4 5 Economic impact Historic accuracy*/Design Utility Upgrades/Impact fees Increases population Location Other Totals *if applicable Small Business Improvement Grant Program Policy 11 N fb N m lD co a fT co a O N coO n N� O O 7! ci O 7! ci N N n O Ln ci ci ci a/ O_ / C CL Y C: 0 CL u fu fu D f0 f0 '6 tw fu a/ fu fu a) y O 110O_ ut lea fu a a/ C f0 O_ u f O fu L pa u V C Y V _ Ya/ f0 2200 2200 3 a •� � Q y .Y i 7 o O NV CL tw tw fu EL v D m v � CL o v I v � Q D Q D u �e 3 3 O .E V N O CO N OV 0 O_ w w O A2 A2 to fu C fu w O fu E> bb • blo b.0 "fu O v o u O m a) M v 0o i ON C O_ N i— O_ Y i o O rl O_ i ut C fu ho Y 'fp t/? ° 'O � f0 o a) L? 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I„ o O O Yi o : , 'i C Y Y r Z, O O OzCO �w O o v 0 m v O O 00 d m E%,`' d m n0 00 o o o m 0=� o N0 d N N Ln N N c -I .--I J Iz i N N m � f0 o O N i N Q Q 0 H - +� O C O. CL N Nate-+ Y N S 7 O Q v w N m 3 °r-I�° ++ C Q:, i ; u Eo N (n C Y �, v m LL y .�,p, 2 d c c o n v c E ,c O fo Y fM v 'F f0 fu KT 0 2 fn 0 a fn H (7 0 ;tom,. U mLn rq O N c -I O N s:Alegal\our documents\ordinances\16\ed investment fiord ord 051916.docx ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, ESTABLISHING AN ECONOMIC DEVELOPMENT INVESTMENT FUND; DEFINING AND COMMITTING CERTAIN REVENUES OF THE CITY; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Denton elects to establish a Special Revenue Fund to be called the Economic Development Investment Fund; and WHEREAS, the Governmental Accounting Standards Board ("GASB") has adopted Statement 54, which states that Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects; and WHEREAS, the City Council of the City of Denton elects to commit $150,000 annually of the mixed beverage taxes previously accounted for in the General Fund for Economic Development activities beginning with fiscal year ending September 30, 2016; and WHEREAS, the City Council of the City of Denton approved a budget of $150,000 for FY 2015-16 for Economic Development activities; and WHEREAS, the City Council of the City of Denton elects to establish the Economic Development Investment Fund in conjunction with its financial statements beginning with fiscal year ending September 30, 2016; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Council hereby creates the Economic Development Investment Fund, an official fund of the City of Denton, Texas. SECTION 2. In order to be eligible to receive a grant under this program, a company must meet at least two of the following criteria: 1) providing higher -wage or knowledge-based jobs; 2) making a substantial capital investment; and 3) addressing a recruitment or supplier target. Higher -wage jobs are defined as having an average annual wage of $55,000 or greater for all positions or at least 25% of the positions have an annual wage of $65,000 or greater. sAlegal\our documents\ordinances\16\ed investment fund ord 051916.docx Knowledge-based jobs are defined as occupations which: • Require specialized and theoretical knowledge, usually acquired through a college education or through work experience or other training which provides comparable knowledge; • Require some research, analysis, report writing and presentations; and • Require special licensing, certification, or registration to perform the job task. Substantial capital investment under the Economic Development Investment Fund is a minimum of $15 million. Recruitment or supplier targets include aviation; advanced manufacturing; renewable energy; research and development; information technology; supply chain logistics and distribution, and large consumers of municipal utilities. SECTION 3. If any section, subsection, paragraph, sentence, clause, phrase or word in this ordinance, or application thereof to any person or circumstances is held invalid by any court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this ordinance, and the City Council of the City of Denton, Texas hereby declares it would have enacted such remaining portions despite any such validity. SECTION 4. This Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2016. ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: / Page 2 CHRIS WATTS, MAYOR `7 EN 6 c I f- �z w -- City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 16-776, Version: 1 DEPARTMENT: CM/ ACM: Date: Water Utilities Howard Martin June 28, 2016 Legislation Text Agenda Information Sheet SUBJECT Receive a report, hold a discussion and provide staff direction regarding the Street Maintenance Department and Traffic Operations Division's Annual Programs. BACKGROUND The Street Maintenance Department The Street Maintenance Department (aka the Street Department) has the responsibility for the maintenance of the City's roadway system including all publicly owned street pavements, curbs and gutters, public sidewalks, bridges and guardrails. The Street Department is funded by the Street Improvement Fund and is the only Department or Division funded by this Fund created in FY 2012 (by Ordinance 2011-154 on September 20, 2011 and subsequently amended by Ordinance 2013-219 on September 10, 2013). Prior to the creation of the Street Improvement Fund, the Department was funded out of the City's General Fund. The Street Department has a staff of 40 full time employees with an annual Operations and Maintenance Budget of over 11.1 million dollars in FY 2015/2016. The primary functions and activities of the Street Department are: • Asphalt Pavement Maintenance • Concrete Pavement Maintenance • Curb and Gutter Repairs/Replacements • Sidewalk Repairs/Replacements • Bridge Maintenance, Repairs and Replacements • Guardrail Repairs/Replacements • Snow and Ice Removal • Emergency Response and Support during Storm Events. The City of Denton's roadway network consists of 426.4 miles of asphalt and concrete streets with an estimated replacement value of 385 million dollars, making this one of the largest asset the City owns and manages. It is estimated that there are approximately 1,000,000 vehicle trips using this roadway network City of Denton Page 1 of 7 Printed on 6/24/2016 povveied by I_egivt9i IN File #: ID 16-776, Version: 1 system every day. To help manage this large asset, the Street Department periodically conducts a comprehensive pavement condition survey every 6 years to observe and document pavement conditions for every street segment in their roadway system. Each street segment (consisting of a single street from one intersection to the next) is given a score referred to as an Overall Condition Index (OCI) with a 0 to 100 rating. These ratings are used in conjunction with the City's GIS data base and mapping software along with a Pavement Management Software program to help assist staff in managing the roadway network assets. The City's pavement management system uses two software modules from Cartegraph called Pavement View and Pavement View Plus. What this software allows the city staff to do, in conjunction with our periodic overall street condition surveys, is to track the benefits associated with various street maintenance work activities over time and to perform various what if scenarios on funding levels and their impacts over time on overall street condition OCI levels. It also assists staff in identification of various street improvement candidates for inclusion in the annual O&M budget funded programs or bond funded reconstruction programs since recommended street improvements are tied to a fairly narrow range of street OCI levels. Since it also ties to the street department's work order and job cost tracking process, it also allows the staff to keep track of project costs, modify average unit costs, and help manage cost estimating and the budget preparation processes. Staff has been using this software for the past thirteen years ever since the first comprehensive street condition survey was performed in 2003. To date, the City has conducted three comprehensive street condition surveys, in 2003, 2009 and in 2015. In the early years of the Water Utility's management of the street maintenance program, Overall Condition Index (OCI) improvements were funded by a portion of the Street Department O&M budget, GO and CO debt issuance and for a brief period, through the DCTA Enhanced Local Assistance Program (ELAP). OCI improvements include, pavement overlays, street reconstruction, crack sealing, concrete panel replacements and asphalt micro seals. Routine street maintenance such as pothole repairs and base failures do not improve the OCI of a street and would be analogous to repairing a broken water main with a repair clamp. It fixes a short term defect or problem to keep the asset in service but does not extend the life of an asset like a pipeline rehabilitation or replacement would. Additional street programs like bridge repair, guard rail replacement, sidewalk repairs and replacements, street closures and barricades, snow and ice removal, etc. are other examples of Street Department O&M funding needs that are not considered OCI investments in extending the life of the street assets. The estimated portion of the total street maintenance O&M budget that is non OCI type expenditures is approximately 30 to 50 %. This can vary depending upon many variables but staff would typically expect about 2/3rd of the O&M budget be directed toward OCI preventative street maintenance functions and about 1/3 rd to go to fund other street department programs. Exhibit 1 shows the various OCI and non OCI funding sources and expenditure history for the past twelve years from FY 2004 through FY 2016. This exhibit shows the recent progress made in increasing the funding of the street OCI program but also demonstrates how much of this is currently dependent upon debt funding as opposed to annual reoccurring income revenue. In the past, debt funding through COs and GOs has been limited to only funding street reconstruction projects and has not been used for funding other street maintenance activities. The first two comprehensive pavement surveys conducted in 2003 and 2009 clearly indicated that the City had a larger than desired percentage of its streets that had deteriorated to a point they could not be salvaged with routine street maintenance using a mill and overlay. These streets required a much more expensive City of Denton Page 2 of 7 Printed on 6/24/2016 povveied by I_egist9i I;, File #: ID 16-776, Version: 1 reconstruction effort and debt funding was used as a means to reduce this "backlog" (typically defined as a poor or very poor street with an OCI less than 45) in the interim as funding gradually increased in the annual O & M budget. This increased funding was accomplished by the policy decision of the City Council in creating the Street Improvement Fund and dedicating the growth in income in the utility franchise fees to be used solely for the Street Improvement Fund. This funding strategy "capped" the use of the utility franchise fee income at 6.2 million dollars for use in the General Fund while the growth in this revenue stream was dedicated to the Street Improvement Fund. As the City of Denton continues to try and get its street backlog under control and funded in the short term through debt funding, there has been a longer term strategy proposed to gradually shift the remaining 6.2 million dollars in franchise fees that is still used for balancing the budget and funding other city programs in the General Fund and moving these funds incrementally over a period of time (8 to 10 years) into the Street Improvement Fund. This proposal would impact available funding in the General Fund but it would provide the City of Denton with a funding plan to more fully address street maintenance needs on a long term sustainable basis and help prevent the potential for funding levels to gradually decline over time through the budget process. This is what occurred previously from approximately 1970 through 2005 when funding for the Street Department fell to approximately 5 % of the General Fund revenues. The utility franchise fee income represented approximately 15 % of the General Fund prior to the creation of the Street Improvement Fund and would keep the city's streets in better condition and allow them to be maintained at a lower cost, since more expensive street reconstruction projects could be delayed through more O & M funding for preventative maintenance programs. This pavement asset management approach is often referred to as a "Best First" vs a "Worst First" strategy since lower cost preventative maintenance work (Crack Seals, Micro Seals and Mill and Overlays) are done earlier in the street pavement life cycle to extend service life and improve ride quality. Differed street maintenance programs that result in excessive street backlog results in a much greater investment in more expensive street reconstruction. This proposal to gradually transfer the remaining 6.2 million dollars of utility franchise fee income from the General Fund into the Street Improvement Fund is articulated in the City's Strategic Plan: Key Focus Area 2: Public Infrastructure Strategic Outcome 42: Improve Overall Condition Index (OCI) from an average of 65 to 70 by 2025 with a backlog of reconstruction projects of not more than 15% (Dataset: Average OCI street assessment score). Key Action Step 1: Transition all franchise fee revenue to the Street Improvement Fund over the next 8- 10 years (Finance). Key Action Step 2: Transition the funding of street reconstruction activities from bond funding to revenue funding for the smaller street projects (Finance). Since the City's street maintenance program has been historically underfunded, the City was faced with a very large backlog of deteriorated streets that could not be maintained and had to be reconstructed. In 2005, the City's bond program included 9.6 million dollars for street reconstruction. In 2012, the City voters approved a 20 million dollar street reconstruction bond package for 4.0 million dollars over a five year period (2013, 2014, City of Denton Page 3 of 7 Printed on 6/24/2016 povveied by I_egist9i I;, File M ID 16-776, Version: 1 2015, 2016 and 2017). This bond package funded 208 street segments (a length of street from one intersection to the next intersection and can be from two lanes to six lanes in width and varying in length from under 250 feet to over a few thousand feet in length). These 208 street segments represented at that time about 20% of the failed street segments in need of reconstruction. Exhibit 2 has a map and a listing of the proposed street projects included in the 2012 bond package for street reconstruction. So far 82 street segments have been completed and 8 other street segments are currently under construction from the 2012 street reconstruction bond program. In 2014, the voters approved a larger and more diverse bond program designed to address infrastructure needs for the community that included an additional 24 million dollars for street reconstruction over a six year period (2015, 2016, 2017, 2018, 2019 and 2020). This 24 million dollar program was designed to ramp up the 2012 bond program from 4.0 million per year to 6.0 million per year beginning in 2015. This funded an additional 195 street segments that represented at that time about 28% of the unfunded backlog of failed streets within the City of Denton that were not included in the 2012 bond program. Exhibit 3 has a map and a listing of the proposed street projects included in the 2014 bond package for street reconstruction. So far 7 street segments have been completed and 25 other street segments are currently under construction from the 2014 street reconstruction bond program. It is staff's recommendation to only use debt funding as a funding source for: 1. Street reconstruction projects only. 2. A funding source to play catch-up on differed street maintenance programs. 3. To be used as an interim solution to help transition to a more sustainable revenue funded annual street maintenance program. The 2015 comprehensive pavement survey, analysis and final report by IMS has been completed recently. The final report will be provided to the City Council through an Administrative Staff Report and if desired, staff can also schedule a separate City Council work session item to go over the report in greater detail. A couple of key findings from the study are: • The increased funding levels in street maintenance had stabilized the prior trend in declining overall average OCI scores and coupled with new development the network average OCI was 65. • Backlog remains above the desired target of 10 to 15% and was observed to be 20%. • Collector streets were observed to be in poorer condition compared to arterials while residential streets tended to be either very good to excellent or poor (or very poor). • Streets are proving to last a little longer than earlier projected in the earlier models and the annual costs require to maintain the roadway network has dropped slightly to 10.5 million per year for OCI improvements. This is one of the key benefits of routinely conducting pavement network surveys. This provides the City of Denton with a calibrated model for managing a pavement asset management program from a financial planning and capital implementation and coordination perspective. City of Denton Page 4 of 7 Printed on 6/24/2016 povveied by I_egist9i I;, File #: ID 16-776, Version: 1 The study also has a benchmarking comparison and analysis on Section 3.4 of the report (Exhibit 4) showing where the City of Denton's current pavement conditions and funding levels compare with 47 other agencies that IMS has performed pavement management studies on in the past. The agencies are ordered based upon average OCI scores and the City of Denton is ranked 33rd out of 48 agencies on OCI rating and has one of the highest backlog percentages of all of the other agencies. The analysis also shows that the current O & M funding level is inadequate to sustain the roadway network condition unless the current level of debt funded street reconstruction effort is added to this annual total. The comparison also demonstrates that agencies with higher average OCI scores and lower backlog (i.e. "best first" preventative maintenance dominated programs) have a lower overall cost per lane mile to maintain their street network than cities like Denton that have a lower average OCI score and much higher backlog to manage (i.e. a deferred maintenance "worst first" maintenance program dominated by more expensive street reconstruction projects). Other emerging issues/challenges facing the Street Department more recently include: • Increased public demand for alternative transportation facilities for pedestrians, bicyclists and handicapped individuals. • Utility coordination for major street reconstruction projects both internally and with private franchise utility entities. • High demand and competition for skilled construction labor, heavy equipment operators and technical support personnel in the metroplex. • High demands being placed upon the private sector venders, material suppliers and contractors in the area that have historically been used by the City of Denton to outsource major portions of the Street Department's projects and workload. The Traffic Operations Division The Traffic Operations Division has a total of 12 full time employees with an annual O & M budget of approximately 2.1 million dollars in FY 2016 with supplemental one time funding packages of an additional 0.8 million dollars. The primary responsibilities of this division are to manage and maintain: • Traffic control signals at 116 signalized intersections. • Flashing beacons at 44 locations for school zones, pedestrian crossings and advance warning lights. • 17,354 Traffic signs. • 1,432,391 linear feet of pavement markings. In addition to these primary responsibilities, the Traffic Operations Division staff also performs these functions: • Monitors and records traffic volumes through use of traffic counters. • Annually inspects traffic signal structures to insure structural integrity and look for signs of cyclic fatigue failure due to wind loading. • Installs and/or hires and oversees contractors in the construction of new and/or replacement signalized intersections. • Maintains wireless communications and Automated Traffic Management System (ATMS). • Installs and maintains all traffic signal preemption equipment for exclusive use by fire and police emergency response vehicles. City of Denton Page 5 of 7 Printed on 6/24/2016 povveied by I_egist9i I;, File #: ID 16-776, Version: 1 • Reviews traffic related issues for all new developments. • Assures compliance with federal, state and local codes, standards and ordinances. • Responds to citizen inquiries, complaints and requests. • Conducts reflectivity studies for all signs to insure visibility at night. • Works closely with the City's Traffic Engineer, City Engineer and Engineering Services staff to provide, install and maintain new signage for intersections, no parking zones, pedestrian crosswalks, school crossings etc. to respond to the changing needs of the community and new transportation related capital projects. The Traffic Operations Division plays a very important role in insuring public safety for the motoring public, pedestrians and bicyclists within the City of Denton and aides significantly in accident prevention/reduction through the performance of their daily duties. For example, the staff insures all traffic signs meet the Manual on Uniform Traffic Control Devices (MUTCD) for consistently and familiarity to the motoring public and are periodically inspected to meet federal requirements for light reflectivity standards for adequate visibility during nighttime hours. Similar to the Street Department, the Traffic Operations Division uses a Cartegraph software program called Traffic View to track maintenance work orders on all of their assets. Using hand held portable devices, all signs are located, given a unique identifying numbering system, located on GIS using GPS coordinates along with an installation date, maintenance history, repair costs and other relevant data to help keep track of these smaller assets in the city street right of ways. Some of the issues and challenges that the Traffic Operations Division currently is faced with include: • Funding for new traffic signals for a growing community with increased traffic congestion. Many intersections throughout the City of Denton currently have enough traffic to meet warrant conditions for installation of a traffic signal instead of being managed by two way or four way stop signs but there is not sufficient funding available for installing these new signals. In some instances, the City has helped mitigate these costs by installing less expensive (slack wire span) traffic signals in advance of TexDOT highway widening projects to establish an existing signal presence to help leverage TexDOT funding for a more permanent traditional (pole and mast arm) traffic signalized intersection with the TexDOT highway project. • Funding for modernizing and replacing existing signalized intersections due to aging infrastructure and reduced reliability, pedestrian safety and ADA compliance. The City currently owns and maintains 116 signalized intersections with an average age of 19 years. Thirty three (28%) are at least 30 years old while a total of forty nine (42%) are at least 20 years or older. The estimated life span of a modern traffic control signal system is between 20 to 30 years with some components having a useable life of 10 years while the pole structures may last up to 30 plus years with proper annual inspections. • As the City of Denton continues to grow, the asset management responsibilities of the Traffic Operations Division continues to grow. It often difficult to keep staffing levels and annual O & M budgets in pace with this growth. • Most of the larger asset replacement projects (traffic signals) are currently debt funded through COs or GOs and would be funded at a lower overall cost through annual revenues in the O & M Budget. • There is an increased public demand for alternative transportation accommodations for bicyclists and City of Denton Page 6 of 7 Printed on 6/24/2016 povveied by I_egist9i I;, File #: ID 16-776, Version: 1 pedestrians. As the City of Denton works to expand these facilities through its capital planning and implementation efforts, the maintenance of these new facilities needs to also be considered in the Traffic Operations O & M Budget. • ADA compliance represents a growing demand for improvements for handicapped citizens at signalized intersections. Most of the City's older traffic signals are not compliant with current ADA design standards. There is a growing desire for the City of Denton to have better traffic management for emergency management, events and growing traffic congestion through the development of an Intelligent Traffic System (ITS). These systems are more commonplace in newer urban environments but require significant investments in communication and control infrastructure and require modern traffic signals to build this type of system. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Choose an item. Related Goal: Choose an item. EXHIBITS 1. Street Department OCI and Non OCI Expenditure History 2. 20 Million Dollar 2012 Street Improvement Bond Program 3. 24 Million Dollar 2014 Street Improvement Bond Program 4. City of Denton Comparison to Other Agencies (Section 3.4, IMS 2016 Road Survey Report) 5. Presentation Respectfully prepared and submitted: Tim Fisher Assistant Director Water Utilities City of Denton Page 7 of 7 Printed on 6/24/2016 povveied by I_egist9i I;, Ln CD 1 k.0 CD $ T- 0 11 00 CD 1 (IT) CD, 1 CD T -i 1 r -i r -q 1 N rHi t Irn r--1 t Tt r -i I Ln rH I �_O T--4 Tzr Ln t-0 r- c Vt w w 11- CD m Ln Q0 lf N rH 00, Ml 0 N 0 N 0 N r14 rq N vzr 0) N W -t r -I �o r -%j ;,o LO N 0 tT r --A 0 Ct) rn b 0 a) 4zt d VH to LD N 00 00 (7) N VH 0: -- Lf) I I I I -- -1 1 iA- 0 to Z 0 0 0 x Lr) CT) 0) r - r -4 iH ry) V) ro m O 0 0 0 C) c 0 0 0 C) 00 0 0 0 C) V) 0 I -H I�zt 0 co Ul) 0 0 0 0 +o CZ x rq r --i 00 00 r- ol Ln Ln L-01 kl N to Ln rl LLJ c --i N r-4 'zt M 0) T:r ,H LO N r -i 00 oo r-, od to a) rq m i F4 Ln �,o Ln Q) r -- CD C 0 Ln r- �o tlo TH k4o N r--4 ol 0 C-4 (-4 Cq t-4 N! N rn M KT Ln tD r, 0 00 rH m 110 m 0) 1%- --1 00 TH 0) LL m kD a) 00 N 10 0 00 M lr� N 00 r-,oo Zo m o C r�j r�l r�j rA i�ll v --j 4� 0 loo m r-. 00 0 rq rq M tct M k.0 Ln loo oo �-b Lb Ln r,4 Ln co a) u,) M lzt rH til') M tl' M --i (Y) rH ro rn zt vi- zt -zt v) t -o r-- co o r --i co r-4 r--4 Ln CD 1 k.0 CD $ T- 0 11 00 CD 1 (IT) CD, 1 CD T -i 1 r -i r -q 1 N rHi t Irn r--1 t Tt r -i I Ln rH I �_O T--4 Tzr Ln t-0 r- w (7) 0 r --i N m l7f LA 0 N CD N 0 N 0 N 0 N 0 N 0 N 0 N 0 r4 CD N 0 N 0 N Street Bond Program 2013-17 - Status updated on June 22, 2016 DENTON Legend �N 2013-17 Completed (82 segments) MENEEME 2013-17 In Progress (8 segments) ,air 2013-17 Remaining (118 segments) L _ ; City Limit e NOT TO S—E 0 0.5 1 2 Miles Street Bond Program 2015-20 - Status updated on June 22, 2016 DENTON Legend lovirim 2015-20 Completed (7 segments) NEENEM 2015-20 In Progress (25 segments) ENEWI �� 2015-20 Remaining (172 segments) i_._._! City Limit e NOT TO S—E 0 0.5 1 2 Miles 3.4 DENTON COMPARISON TO OTHER AGENCIES The following table presents the steady state versus actual funding levels of various agencies that use similar reporting and analysis software. The list is by no means representing all agencies that use a pavement management system, but rather is a sampling of what other agencies are doing. Agency Funding Comparison Controlling Controlling Actual Actual Mileage Budget Budget Funding Funding Rate Funding Network Agency State Year (m i) PCI Backlog ($M/yr) Rate ($/mi) ($M/yr) ($/m i) Ratio % Index Comments Agency CB CA 2016 344 80 0% 3.00 9,000 3.50 10,000 111 80 Fully funded Agency E TX 2014 128 77 2% 0.80 6,000 0.80 6,000 100 75 Fully funded, excellent backlog Agency EA CO 2015 39 77 0% 0.70 18,000 0.20 5,000 28 77 Underfunded but solid backlog Agency B SD 2014 40 76 4% 0.35 9,000 0.35 9,000 100 73 Fully funded Agency MF OR 2014 270 76 2% 3.00 11,000 2.28 8,000 73 75 Slightly underfunded, very low backlog Agency IB CA 2016 45 76 1% 0.95 21,000 1.00 22,000 105 75 Low Backlog, solid PCI, fully funded Agency P TX 2014 381 75 2% 3.75 10,000 0.43 1,000 10 74 Underfunded, but solid backlog Agency GI NE 2013 284 74 1% 2.50 9,000 3.00 11,000 122 73 Fully funded Agency FT CA 2015 504 73 7% 7.25 14,000 5.00 10,000 71 68 Slightly underfunded, low backlog Agency S AZ 2015 896 72 1% 8.00 9,000 9.40 10,000 111 71 Well funded, looking to improve Agency ST WA 2015 75 72 1% 0.95 12,700 1.00 13,300 105 71 Fully funded, solid PCI, low backlog Agency F NO 2012 438 72 9% 6.00 14,000 4.00 9,000 64 66 Underfunded Agency SV WA 2015 436 72 10% 7.50 17,000 3.08 7,000 41 65 Underfunded - looking for alternate funding Agency GI AZ 2014 905 72 4% 7.50 8,000 2.83 3,000 38 69 Underfunded, but solid backlog Agency BR MO 2016 87 72 1% 0.88 10,000 1.34 15,000 150 71 Well funded, solid PCI, excellent backlog Agency PO ID 2016 247 71 2% 1.10 4,000 1.00 4,000 100 69 Fully funded, excellent backlog Agency SS GA 2015 297 71 7% 4.25 14,000 3.10 10,000 71 66 Slightly underfunded, increasing backlog Agency CC MO 2016 82 71 4% 0.90 11,000 1.45 18,000 164 68 Good PCI and Excellent Backlog Agency FS CO 2014 60 70 1% 0.63 10,000 0.20 3,000 30 69 Underfunded, but solid backlog and PCI Agency SF SD 2015 772 70 4% 16.00 21,000 13.90 18,000 86 67 Slightly underfunded, solid backlog and PCI Agency LAC NM 2016 102 69 5% 1.70 17,000 3.95 39,000 229 66 Fully Funded Agency LY CO 2016 114 69 3% 1.30 11,000 0.65 6,000 55 67 Underfunded, but solid backlog and PCI Agency MC SD 2014 353 69 4% 4.00 11,000 4.00 11,000 100 66 Fully funded, solid backlog and PCI Agency H TX 2015 155 69 2% 1.53 10,000 1.00 6,000 60 68 Underfunded, solid backlog and PCI Agency SB CA 2016 42 67 14% 0.80 19,000 0.50 12,000 63 58 Under funded, solid PCI, working to control Backlog Agency P WA 2015 24 67 7% 0.28 11,000 0.50 21,000 191 62 Well funded, solid backlog and PCI Agency RC OK 2015 156 67 4% 1.40 9,000 1.40 9,000 100 64 Fully funded Agency B WA 2014 140 67 15% 1.50 11,000 0.60 4,000 36 57 Backlog a concem, Underfunded Agency D GA 2013 147 66 23% 3.00 20,000 2.00 14,000 70 51 Underfunded, increasing backlog Agency L CO 2014 160 66 15% 2.30 14,000 2.30 14,000 100 56 Backlog a concern Agency B OK 2015 121 66 6% 0.95 8,000 0.95 8,000 100 62 Fully funded Agency WF TX 2012 170 66 15% 1.40 8,000 0.66 4,000 50 56 Underfunded, decreasing PCI Agency DN TX 2016 426 65 20% 10.50 25,000 5.67 36,000 64 52 Backlog a concern, Underfunded Agency KW FL 2012 65 65 7% 0.75 12,000 0.75 12,000 100 60 Fully funded and working to increase PCI Agency BV OK 2012 152 65 11% 1.25 8,000 1.25 8,000 100 58 Fully funded Agency GL AZ 2015 747 65 5% 15.50 21,000 8.00 11,000 52 62 Underfunded, but solid backlog Agency FC GA 2015 162 64 10% 2.25 14,000 2.38 15,000 107 58 Fully funded, working to control backlog Agency LO CO 2016 105 64 11% 1.85 18,000 1.40 13,000 72 57 Actual funding to be determined, working to increase PCI Agency C CO 2012 443 64 12% 6.00 14,000 5.00 11,000 79 56 Slightly underfunded Agency PTC GA 2015 111 63 5% 1.40 13,000 1.50 14,000 108 60 Fully funded, low backlog Agency LC NM 2012 455 63 17% 5.60 12,000 3.00 7,000 58 52 Underfunded and concerned about backlog Agency O CA 2014 410 61 9% 7.50 18,000 5.10 12,000 67 55 Underfunded Agency B GA 2013 118 60 17% 1.30 11,000 1.50 13,000 118 50 Slightly underfunded, increasing backlog Agency LB CA 2014 786 60 21% 30.90 39,000 14.80 19,000 49 47 Severely Underfunded, High Backlog Agency V CA 2012 472 60 14% 7.50 16,000 2.50 5,000 31 52 Underfunded and concerned about backlog Agency T WA 2016 746 59 11% 28.50 38,000 17.60 24,000 63 53 BL Control, underfunded, sharp B/L Increase expected Agency LC PA 2012 102 59 15% 1.00 10,000 0.75 7,000 70 50 Underfunded Agency CB TX 2015 179 51 20% 2.00 11,000 1.00 6,000 55 41 Underfunded, concerning backlog Average: 16,300 In comparison to other agencies, Denton's control budget requirement of approximately $10.51VI/year ($25,000/mile) is well above the sample average of $16,300. This is consistent with a network that has a moderate average condition coupled with higher than desired backlog. IMS Infrastructure Management Services Denton Report Rev3.doc Page 37 Figure 22 compares the overall network health of various agencies by comparing funding against an aggregation of Network PCI and Backlog. The X axis is the Network Index — a relative scoring of the overall pavement condition and backlog. An agency with a OCI of 100 and no backlog would score a perfect Network Index of 100. A very well managed network would score above 71, while one in healthy condition would fall between 58 and 71 representing a OCI score of 65 with no more than 10% backlog up to a OCI of 75 with only 5% backlog. The minimum target Network Index is 51 representing a OCI of 60 with 15% backlog. Denton's current Network Index is 52 placing it at the lower end of the Minimum Target Zone (shown as the red circle around the blue diamond). At the current level of funding ($6.67M/year), the network would drop into the critical zone (shown as the thick black vertical line) with an index of 47 (solid red circle). 125 - - e.. 10a -j Nd t, vrvO dy 6 trader# Figure 22 — Network Index h@59 2�@VtCO@i i?2V@?�'. h2d rescnt Imp - scMretfuzRlnvY^...d ave —YO,Y:O,r gf., {t -ding t0 Pet,,,n 80 90 100 IMS Infrastructure Management Services Denton Report Rev3.doc Page 38 Al!lent) IUOWOABd 0 H oil CL L a o CLLO 00 LO s m � 3 £ O oo 0 = EA o Q O N U o 0 60- 0 0 °o °O LL a° a° w d d Al!lent) IUOWOABd 0 H IA m 00 r- 0 m Ln r-4 Q V) ry N N �t m N �t r�4 H cc M LL Lr) r- 00 S7 C) 1-1 co 1-1 U') (o Ln r-4 c6 6 ceLri r-- Lri r--: 00 0 C) m 0 It H �o 00 00 C) r1i H 0 cli CD a) 0 QD r1i 1-1 (.0 r14 0 Lf) ryL6 cr C4 zz� ryi r,� 06 U -1 ID -LA � -LA �0- 0 0 m o rH Ln -1 r4 LA Q) v 0 Ln ca rn o o 0 0 0 cc 0 0H c- r� C� CD Lr) — co 0 0 H r 0 H :i- CC Lf) cy) m Q -0 Q)ti n .0 r4 4-j x VI H 0000 r- 0 Lf) Lr) Lo Cr r1i 0 Lf) rH Wj " N q m r7) q -A m r -j --i no clr-� cl Ili l75 rl lyi rW Lri Lq oca r- m m rl r- m r- co r - Ln H = w m m CNJ 0 00 u C� C� Lrp r-- 'Ci 'C� c tl 'C� N C� ri C7 0 N N N m m Ln ko r 0 = ru r Lr r31 1 C) r- r- r- t 1 0 CD LL li- k.0 1-1 00 0 Ln �.c li- m Q) c cr 06 rl r� 6 06 re r4 ca - Q) —U Ln m r, m m N m Asa m r, m Q) 0 n b� -i k -k n :� -k a rH -H rl rH rH rH r4 r-4 r i rn d It 0 4-j z 00 rn r- X 0 N N M ,I- M ea Ln H H II r- m m It m r, 0 N r- r rl� :� C ` cv -i r-- ry Ui 00 -1 W 0 W Ln r4 Ln W M -I Ln m m m m Ln r- 0 d Ln r- x Ln rc r" Do c) q c i N rig -zi- Ln 4c 4m (D r- w m o r� 4 LA 0 0 0 �j 0 LD . . . . . . LL City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com DEN, ` ON Legislation Text File #: ID 16-800, Version: 1 Agenda Information Sheet SUBJECT Deliberations regarding Real Property - Under Texas Government Code Section 511.072; Consultation with Attorneys - Under Texas Government Code Section 551.071. Receive information from staff, discuss, deliberate, and provide staff with direction regarding the potential acquisition of real property interests generally located in (1) the Gibson Myers Survey, Abstract No. 843, The Johnson, Green, Myers, and Brummell Survey, Abstract No. 1699, the Moses H. Davis Survey, Abstract No. 377, and the William Wilburn Survey, Abstract No. 1419, and (2) the William A. Thompson Survey, Abstract No. 1238, both located in the City of Denton, Denton County, Texas, for the possible construction of an electric generation facility where deliberation in an open meeting would have a detrimental effect on the position of a governmental body in negotiations with a third party. Consultation with the City's attorney's regarding legal issues associated with the acquisition of the real property interests described above where a public discussion of these legal matters would conflict with the duty of the City's attorneys to the City of Denton and the Denton 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 proceeding or potential litigation. City of Denton Page 1 of 1 Printed on 6/24/2016 povveied by I_egivt9i IN City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com DEN, ` ON Legislation Text File #: ID 16-816, Version: 1 Agenda Information Sheet SUBJECT Consultation with Attorneys - Under Texas Government Code Section 551.071. Consult with City's attorneys with regard to Item # 16-555 of the June 28, 2016 Special Called Meeting Agenda, as it concerns legal issues associated with that item where a public discussion of this legal matter would conflict with the duty of the City's attorneys under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. City of Denton Page 1 of 1 Printed on 6/24/2016 povveied by I_egivt9i IN City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com DEN, ` ON Legislation Text File #: ID 16-817, Version: 1 Agenda Information Sheet SUBJECT Deliberations regarding a Personnel Matter under Government Code Section 551.074 - Consultation with Attorneys under Government Code Section 551.071. Consultation, discussion, and deliberation about the appointment and duties of the Interim City Manager; consultation with the City's attorneys regarding associated legal issues where discussion of these legal matters in an open meeting would conflict with the duty of the City's attorneys to the City of Denton and the Denton 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 proceeding or potential litigation. City of Denton Page 1 of 1 Printed on 6/24/2016 povveied by I_egivt9i IN City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 16-555, Version: 1 Legislation Text AGENDA INFORMATION SHEET DEPARTMENT: Materials Management ACM: Bryan Langley AGENDA DATE: June 28, 2016 SUBJECT Consider adoption of an ordinance of the City of Denton, Texas, authorizing the City Manager to execute a Professional Services Agreement with Sawko and Burroughs, P.C., for Professional Services related to collection of delinquent taxes on behalf of the City of Denton; and establishing an effective date. BACKGROUND: The City of Denton's contract for delinquent property tax collection services was originally awarded to the law firm of Sawko & Burroughs, LLP, on July 1, 2005. The City of Denton approved a new contract for delinquent tax collection services with Sawko & Burroughs on November 4, 2008, following an extensive Request for Proposal (RFP) process. The original contract stipulated an initial term beginning December 1, 2008, and ending June 30, 2011, and it now expires in June 2016 as a result of various contract extensions. Due to the impending expiration of this contract, staff issued a Request for Qualifications (RFQ) for delinquent tax collection services in February 2016. According to state statute, law firms receive a 20% fee for collection services associated with delinquent property taxes. These fees are in addition to the actual amount of delinquent taxes owed and are paid by the delinquent taxpayers, not the City of Denton. Since collection fees are established by statute, an evaluation of potential services is limited to a review of a particular law firm's historical collection performance, professional qualifications, and collection procedures. Accordingly, the following evaluation and weighting criteria was developed to evaluate responses to the RFQ. ➢ Demonstrated qualifications, experience, and credentials of firms providing proposals. (20%) ➢ Historical performance levels and demonstrated capabilities. (60%) ➢ Delinquent tax collection procedures for accounts, technological capabilities, available legal services, oral presentation, and overall response to the solicitation. (20%) In response to the RFQ, the City of Denton received four responses from the following law firms. ➢ Sawko & Burroughs ➢ Perdue, Brandon, Fielder, Collins, and Mott in association with Minor and Jester ➢ McCreary, Veselka, Bragg, and Allen in association with Hayes, Berry, White, and Vanzant ➢ Linebarger, Goggan, Blair, and Sampson City of Denton Page 1 of 3 Printed on 6/24/2016 povveied by I_egivt9i IN File #: ID 16-555, Version: 1 Following the submission of these qualifications, staff performed an extensive review of the materials and heard oral presentations from each firm on April I". The selection panel consisted of Bryan Langley, Assistant City Manager, Chuck Springer, Director of Finance, Antonio Puente, Assistant Director of Finance, and Elton Brock, Purchasing Manager. An evaluation/ranking sheet is included as Exhibit 1. RECOMMENDATION: After carefully evaluating all of the written proposals and oral presentations, staff recommends that the firm of Sawko & Burroughs, PC, be awarded the contract for delinquent tax collection services. The principal reasons for this recommendation are as follows: ➢ Strong history of delinquent tax collection performance in the City of Denton. ➢ Strong level of demonstrated responsiveness to the City of Denton. ➢ Principal tax collection attorneys work in Denton and maintain a strong local presence to assist staff and taxpayers with issues that may arise. ➢ Sawko & Burroughs also collects for the Denton Independent School District which leverages resources to optimize collections. ➢ Evidence of assisting taxpayers with information and payment arrangements. ➢ Led effort to collect delinquent property taxes for Nuview Molecular Trace Linac business personal property accounts which represented a very complex and time consuming task. ➢ Led effort to collect pro rata share of property taxes related to Texas Department of Transportation property condemnations. ➢ Led effort to establish proactive collection arrangements for key bankruptcy accounts. ➢ From 1987-2015, initiated more than 65% of the delinquent tax property auction proceedings in Denton County. The firm of McCreary, Veselka, Bragg, and Allen, LLP, received the second highest ranking from the selection panel. This firm collects delinquent property taxes for Denton County and represents several municipalities in the county. However, the firm was not able to provide Denton County collection information for Denton accounts, and the local law firm affiliated with McCreary will have a limited role in providing collection services. As a result, staff rated this firm slightly lower than Sawko & Burroughs. While the Perdue and Linebarger law firms have extensive experience in delinquent tax collections, staff has rated their proposals equally as the third highest ranking. The ranking evaluations for each firm are shown in Exhibit 1. On April 26th, staff conducted a work session with the City Council and was directed to include a contract with Sawko and Burroughs for consideration at a subsequent meeting. On June 21st, staff presented this contract for consideration, and the City Council requested additional information on the 70% collection rate guarantee (excluding bankruptcy and other accounts not subject to collection) offered by one of the law firms. Additionally, the Council asked whether any of the other law firms would offer such an arrangement. Accordingly, staff sent each of the law firms a request for additional clarification on June 22nd. Based on this request, the following documents in Exhibit 4 were received. Staff will be prepared to discuss these items in detail with the Council at the meeting. City of Denton Page 2 of 3 Printed on 6/24/2016 povveied by I_egist9i I;, File #: ID 16-555, Version: 1 PRINCIPAL PLACE OF BUSINESS Sawko and Burroughs, P.C. Denton, TX ESTIMATED SCHEDULE OF PROJECT This is a five (5) year contract that expires on June 30, 2021. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Organizational Excellence Related Goal: 1.1 Manage financial resources in a responsible manner EXHIBITS Exhibit 1: Evaluation and Ranking Sheet Exhibit 2: Ordinance Exhibit 3: Contract Exhibit 4: Additional Clarification Responses Respectfully submitted: Chuck Springer, 349-8260 Director of Finance For information concerning this acquisition, contact: Bryan Langley at 349-8224. City of Denton Page 3 of 3 Printed on 6/24/2016 povveied by I_egist9i I;, i N O C V C_ J C U U w X w mo s 00 U& C o o ~ O O 3 w 001 � i O M w 2 o LL C 3 C i o m (7 } } } } v El [O O 0 � C— � N m i m L 0. J J U W bA a3 m 00 0 00 O O O O N w i N w -i Ol w C OC. E O. O J w bA N Y (� O. LL ❑� ❑y 0 m Y � O. 3 •V w O � T J J w H Y T a m .O i C O w O of VV w -i Ol m W m N CL .0 OC i bA NN U bA N v m M T C a3 �0. C C p } } } } U N ba MO w 3 O w v m X fy O O 3 C) m aw O~ c O cq O w O cq O W oti a c a O 3 U r r > r U v, a LJ O O 0 rl o V o N ++ w 3 tw � •�-� N C O O O N E O bA U N ij U �". _0 E Q �5 _0w w w w 7 N .0 f0 O 5 �y � U U .� — a� N c� 0 0 0 v i w ,� N -O W z N N vv� U w — to C f0 ? c�j L i�l f0 >to E A O•C N N w0 N O ? , ~ �--� U •U O o x f0 ++ w 0 m, W G�Zo w "; E N w _0 c Ij cd N ns o E c O ai c o O n c N ccdj CL N _0 aUi E E w w w c � m W EXHIBIT 2 ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH SAWKO & BURROUGHS, P.C., FOR PROFESSIONAL SERVICES RELATED TO COLLECTION OF DELINQUENT TAXES ON BEHALF OF THE CITY OF DENTON; AND ESTABLISHING AN EFFECTIVE DATE (FILE 6062). WHEREAS, The professional services provider (the "Provider) mentioned in this ordinance is being selected as the most highly qualified on the basis of its demonstrated competence and qualifications to perform the proposed professional services; and WHEREAS, The 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. That the City Manager is hereby authorized to enter into a professional service contract with Sawko & Burroughs, P.C., to provide delinquent tax collection services for the City of Denton, a copy of which is attached hereto and incorporated by reference herein. SECTION 2. The City Manager is authorized to expend funds as required by the attached contract. SECTION 3. The City Council of the City of Denton, Texas hereby expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under RFP 6062 to the City Manager of the City of Denton, Texas, or his designee. SECTION 4. The findings in the preamble of this ordinance are incorporated herein by reference. SECTION 5. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2016. CHRIS WATTS, MAYOR EXHIBIT 2 ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: EXHIBIT 3 CONTRACT BY AND BETWEEN CITY OF DENTON, TEXAS AND SAWKO & BURROUGHS, P.C. (FILE 6062) THIS CONTRACT is made and entered into this date June 21, 2016, by and between SAWKO & BURROUGHS, P.C. a professional corporation, whose address is 1172 Bent Oaks Drive, Denton, Texas 76210, hereinafter referred to as "Contractor," and the CITY OF DENTON, TEXAS, a home rule municipal corporation, hereinafter referred to as "City," to be effective upon approval of the Denton City Council and subsequent execution of this Contract by the Denton City Manager or his duly authorized designee. For and in consideration of the covenants and agreements contained herein, and for the mutual benefits to be obtained hereby, the parties agree as follows: SCOPE OF SERVICES Contractor shall provide services in accordance with the City's document RFQ 6062, a copy of which is on file at the office of Purchasing Agent and incorporated herein for all purposes. The Contract consists of this written agreement and the following items which are attached hereto and incorporated herein by reference: (a) Special Terms and Conditions (Exhibit "A"); (b) Request for Qualifications (Exhibit "B" on File at the Office of the Purchasing Agent); (c) City of Denton Standard Terms and Conditions (Exhibit "C") (d) Insurance Requirements (Exhibit "D"); (e) Certificate of Interested Parties Electronic Filing (Exhibit "E"); (f) Form CIQ — Conflict of Interest Questionnaire (Exhibit "F"); (g) Contractor's Proposal. (Exhibit "G"); These documents make up the Contract documents and what is called for by one shall be as binding as if called for by all. In the event of an inconsistency or conflict in any of the provisions of the Contract documents, the inconsistency or conflict shall be resolved by giving precedence first to the written agreement then to the contract documents in the order in which they are listed above. These documents shall be referred to collectively as "Contract Documents." Contract 4 6062 EXHIBIT 3 City shall pay the Contractor, to the extent of funds Appropriated or otherwise legally available for such purposes, for all goods delivered and services performed and obligations incurred prior to the date of termination in accordance with the terms hereof. 29. FRAUD: Fraudulent statements by the Contractor on any Offer or in any report or deliverable required to be submitted by the Contractor to the City shall be grounds for the termination of the Contract for cause by the City and may result in legal action. 30. DELAYS: A. The City may delay scheduled delivery or other due dates by written notice to the Contractor if the City deems it is in its best interest. If such delay causes an increase in the cost of the work under the Contract, the City and the Contractor shall negotiate an equitable adjustment for costs incurred by the Contractor in the Contract price and execute an amendment to the Contract. The Contractor must assert its right to an adjustment within thirty (30) calendar days from the date of receipt of the notice of delay. Failure to agree on any adjusted price shall be handled under the Dispute Resolution process specified in paragraph 49. However, nothing in this provision shall excuse the Contractor from delaying the delivery as notified. B. Neither party shall be liable for any default or delay in the performance of its obligations under this Contract if, while and to the extent such default or delay is caused by acts of God, fire, riots, civil commotion, labor disruptions, sabotage, sovereign conduct, or any other cause beyond the reasonable control of such Party. In the event of default or delay in contract performance due to any of the foregoing causes, then the time for completion of the services will be extended; provided, however, in such an event, a conference will be held within three (3) business days to establish a mutually agreeable period of time reasonably necessary to overcome the effect of such failure to perform. 31. INDEMNITY: A. Definitions: i. "Indemnified Claims" shall include any and all claims, demands, suits, causes of action, judgments and liability of every character, type or description, including all reasonable costs and expenses of litigation, mediation or other alternate dispute resolution mechanism, including attorney and other professional fees for: (1) damage to or loss of the property of any person (including, but not limited to the City, the Contractor, their respective agents, officers, employees and subContractors; the officers, agents, and employees of such subContractors; and third parties); and/or (2) death, bodily injury, illness, disease, worker's compensation, loss of services, or loss of income or wages to any person (including but not limited to the agents, officers and employees of the City, the Contractor, the Contractor's SubContractor's, and third parties), ii. "Fault" shall include the sale of defective or non- conforming deliverables, negligence, willful misconduct or a breach of any legally imposed strict liability standard. B. THE CONTRACTOR SHALL DEFEND (AT THE OPTION OF THE CITY), INDEMNIFY, AND HOLD THE CITY, ITS SUCCESSORS, ASSIGNS, OFFICERS, EMPLOYEES AND ELECTED OFFICIALS HARMLESS FROM AND AGAINST ALL INDEMNIFIED CLAIMS DIRECTLY ARISING OUT OF, INCIDENT TO, CONCERNING OR RESULTING FROM THE FAULT OF THE CONTRACTOR, OR THE CONTRACTOR'S AGENTS, EMPLOYEES OR SUBCONTRACTORS, IN THE PERFORMANCE OF THE CONTRACTOR'S OBLIGATIONS UNDER THE Contract 4 6062 EXHIBIT 3 CONTRACT. NOTHING HEREIN SHALL BE DEEMED TO LIMIT THE RIGHTS OF THE CITY OR THE CONTRACTOR (INCLUDING, BUT NOT LIMITED TO, THE RIGHT TO SEEK CONTRIBUTION) AGAINST ANY THIRD PARTY WHO MAY BE LIABLE FOR AN INDEMNIFIED CLAIM. 32. INSURANCE: The following insurance requirements are applicable, in addition to the specific insurance requirements detailed in Appendix D for services only. The successful CONTRACTOR shall procure and maintain insurance of the types and in the minimum amounts acceptable to the City of Denton. The insurance shall be written by a company licensed to do business in the State of Texas and satisfactory to the City of Denton. A. General Requirements: i. The Contractor shall at a minimum carry insurance in the types and amounts indicated and agreed to, as submitted to the City and approved by the City within the procurement process, for the duration of the Contract, including extension options and hold over periods, and during any warranty period. ii. The Contractor shall provide Certificates of Insurance with the coverage's and endorsements required to the City as verification of coverage prior to contract execution and within fourteen (14) calendar days after written request from the City. Failure to provide the required Certificate of Insurance may subject the Offer to disqualification from consideration for award. The Contractor must also forward a Certificate of Insurance to the City whenever a previously identified policy period has expired, or an extension option or hold over period is exercised, as verification of continuing coverage. iii. The Contractor shall not commence work until the required insurance is obtained and until such insurance has been reviewed by the City. Approval of insurance by the City shall not relieve or decrease the liability of the Contractor hereunder and shall not be construed to be a limitation of liability on the part of the Contractor. iv. The Contractor must submit certificates of insurance to the City for all subContractors prior to the subContractors commencing work on the project. v. The Contractor's and all subContractors' insurance coverage shall be written by companies licensed to do business in the State of Texas at the time the policies are issued and shall be written by companies with A.M. Best ratings of A- VII or better. The City will accept workers' compensation coverage written by the Texas Workers' Compensation Insurance Fund. vi. All endorsements naming the City as additional insured, waivers, and notices of cancellation endorsements as well as the Certificate of Insurance shall contain the solicitation number and the following information: City of Denton Materials Management Department 901B Texas Street Denton, Texas 76209 vii. The "other" insurance clause shall not apply to the City where the City is an additional insured shown on any policy. It is intended that policies required in the Contract, covering both the City and the Contractor, shall be considered primary coverage as applicable. viii. If insurance policies are not written for amounts agreed to with the City, the Contractor shall carry Umbrella or Excess Liability Insurance for any differences in amounts specified. If Excess Liability Insurance is provided, it shall follow the form of the primary coverage. ix. The City shall be entitled, upon request, at an agreed upon location, and without Contract 4 6062 EXHIBIT 3 expense, to review certified copies of policies and endorsements thereto and may make any reasonable requests for deletion or revision or modification of particular policy terms, conditions, limitations, or exclusions except where policy provisions are established by law or regulations binding upon either of the parties hereto or the underwriter on any such policies. x. The City reserves the right to review the insurance requirements set forth during the effective period of the Contract and to make reasonable adjustments to insurance coverage, limits, and exclusions when deemed necessary and prudent by the City based upon changes in statutory law, court decisions, the claims history of the industry or financial condition of the insurance company as well as the Contractor. xi. The Contractor shall not cause any insurance to be canceled nor permit any insurance to lapse during the term of the Contract or as required in the Contract. xii. The Contractor shall be responsible for premiums, deductibles and self-insured retentions, if any, stated in policies. All deductibles or self-insured retentions shall be disclosed on the Certificate of Insurance. xiii. The Contractor shall endeavor to provide the City thirty (30) calendar days' written notice of erosion of the aggregate limits below occurrence limits for all applicable coverage's indicated within the Contract. xiv. The insurance coverage's specified in within the solicitation and requirements are required minimums and are not intended to limit the responsibility or liability of the Contractor. B. Specific Coverage Requirements: Specific insurance requirements are contained in the solicitation instrument. 33. CLAIMS: If any claim, demand, suit, or other action is asserted against the Contractor which arises under or concerns the Contract, or which could have a material adverse effect on the Contractor's ability to perform thereunder, the Contractor shall give written notice thereof to the City within ten (10) calendar days after receipt of notice by the Contractor. Such notice to the City shall state the date of notification of any such claim, demand, suit, or other action; the names and addresses of the claimant(s); the basis thereof, and the name of each person against whom such claim is being asserted. Such notice shall be delivered personally or by mail and shall be sent to the City and to the Denton City Attorney. Personal delivery to the City Attorney shall be to City Hall, 215 East McKinney Street, Denton, Texas 76201. 34. NOTICES: Unless otherwise specified, all notices, requests, or other communications required or appropriate to be given under the Contract shall be in writing and shall be deemed delivered three (3) business days after postmarked if sent by U.S. Postal Service Certified or Registered Mail, Return Receipt Requested. Notices delivered by other means shall be deemed delivered upon receipt by the addressee. Routine communications may be made by first class mail, telefax, or other commercially accepted means. Notices to the Contractor shall be sent to the address specified in the Contractor's Offer, or at such other address as a party may notify the other in writing. Notices to the City shall be addressed to the City at 901B Texas Street, Denton, Texas 76209 and marked to the attention of the Purchasing Manager. 35. RIGHTS TO BID, PROPOSAL AND CONTRACTUAL MATERIAL: All material submitted by the Contractor to the City shall become property of the City upon receipt. Any portions of such material claimed by the Contractor to be proprietary must be clearly marked as such. Determination of the public nature of the material is subject to the Texas Public Information Contract 4 6062 EXHIBIT 3 Act, Chapter 552, and Texas Government Code. 36. NO WARRANTY BY CITY AGAINST INFRINGEMENTS: The Contractor represents and warrants to the City that: (i) the Contractor shall provide the City good and indefeasible title to the deliverables and (ii) the deliverables supplied by the Contractor in accordance with the specifications in the Contract will not infringe, directly or contributorily, any patent, trademark, copyright, trade secret, or any other intellectual property right of any kind of any third parry; that no claims have been made by any person or entity with respect to the ownership or operation of the deliverables and the Contractor does not know of any valid basis for any such claims. The Contractor shall, at its sole expense, defend, indemnify, and hold the City harmless from and against all liability, damages, and costs (including court costs and reasonable fees of attorneys and other professionals) arising out of or resulting from: (i) any claim that the City's exercise anywhere in the world of the rights associated with the City's' ownership, and if applicable, license rights, and its use of the deliverables infringes the intellectual property rights of any third parry; or (ii) the Contractor's breach of any of Contractor's representations or warranties stated in this Contract. In the event of any such claim, the City shall have the right to monitor such claim or at its option engage its own separate counsel to act as co -counsel on the City's behalf. Further, Contractor agrees that the City's specifications regarding the deliverables shall in no way diminish Contractor's warranties or obligations under this paragraph and the City makes no warranty that the production, development, or delivery of such deliverables will not impact such warranties of Contractor. 37. CONFIDENTIALITY: In order to provide the deliverables to the City, Contractor may require access to certain of the City's and/or its licensors' confidential information (including inventions, employee information, trade secrets, confidential know-how, confidential business information, and other information which the City or its licensors consider confidential) (collectively, "Confidential Information"). Contractor acknowledges and agrees that the Confidential Information is the valuable property of the City and/or its licensors and any unauthorized use, disclosure, dissemination, or other release of the Confidential Information will substantially injure the City and/or its licensors. The Contractor (including its employees, Sub - Contractors, agents, or representatives) agrees that it will maintain the Confidential Information in strict confidence and shall not disclose, disseminate, copy, divulge, recreate, or otherwise use the Confidential Information without the prior written consent of the City or in a manner not expressly permitted under this Agreement, unless the Confidential Information is required to be disclosed by law or an order of any court or other governmental authority with proper jurisdiction, provided the Contractor promptly notifies the City before disclosing such information so as to permit the City reasonable time to seek an appropriate protective order. The Contractor agrees to use protective measures no less stringent than the Contractor uses within its own business to protect its own most valuable information, which protective measures shall under all circumstances be at least reasonable measures to ensure the continued confidentiality of the Confidential Information. 38. OWNERSHIP AND USE OF DELIVERABLES: The City shall own all rights, titles, and interests throughout the world in and to the deliverables. A. Patents. As to any patentable subject matter contained in the deliverables, the Contractor agrees to disclose such patentable subject matter to the City. Further, if requested by the City, the Contractor agrees to assign and, if necessary, cause each of its employees to assign the entire right, title, and interest to specific inventions under such patentable subject matter to the City and to execute, acknowledge, and deliver and, if necessary, cause each of its employees to execute, Contract 4 6062 EXHIBIT 3 acknowledge, and deliver an assignment of letters patent, in a form to be reasonably approved by the City, to the City upon request by the City. B. Copyrights. As to any deliverables containing copyrightable subject matter, the Contractor agrees that upon their creation, such deliverables shall be considered as work made -for -hire by the Contractor for the City and the City shall own all copyrights in and to such deliverables, provided however, that nothing in this Paragraph 38 shall negate the City's sole or joint ownership of any such deliverables arising by virtue of the City's sole or joint authorship of such deliverables. Should by operation of law, such deliverables not be considered works made -for -hire, the Contractor hereby assigns to the City (and agrees to cause each of its employees providing services to the City hereunder to execute, acknowledge, and deliver an assignment to the City of) all worldwide right, title, and interest in and to such deliverables. With respect to such work made - for -hire, the Contractor agrees to execute, acknowledge, and deliver and cause each of its employees providing services to the City hereunder to execute, acknowledge, and deliver a work - made -for -hire agreement, in a form to be reasonably approved by the City, to the City upon delivery of such deliverables to the City or at such other time as the City may request. C. Additional Assignments. The Contractor further agrees to, and if applicable, cause each of its employees to, execute, acknowledge, and deliver all applications, specifications, oaths, assignments, and all other instruments which the City might reasonably deem necessary in order to apply for and obtain copyright protection, mask work registration, trademark registration and/or protection, letters patent, or any similar rights in any and all countries and in order to assign and convey to the City, its successors, assigns and nominees, the sole and exclusive right, title, and interest in and to the deliverables. The Contractor's obligations to execute, acknowledge, and deliver (or cause to be executed, acknowledged, and delivered) instruments or papers such as those described in this Paragraph 38 a., b., and c. shall continue after the termination of this Contract with respect to such deliverables. In the event the City should not seek to obtain copyright protection, mask work registration or patent protection for any of the deliverables, but should desire to keep the same secret, the Contractor agrees to treat the same as Confidential Information under the terms of Paragraph 37 above. 39. PUBLICATIONS: All published material and written reports submitted under the Contract must be originally developed material unless otherwise specifically provided in the Contract. When material not originally developed is included in a report in any form, the source shall be identified. 40. ADVERTISING: The Contractor shall not advertise or publish, without the City's prior consent, the fact that the City has entered into the Contract, except to the extent required by law. 41. NO CONTINGENT FEES: The Contractor warrants that no person or selling agency has been employed or retained to solicit or secure the Contract upon any agreement or understanding for commission, percentage, brokerage, or contingent fee, excepting bona fide employees of bona fide established commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty, the City shall have the right, in addition to any other remedy available, to cancel the Contract without liability and to deduct from any amounts owed to the Contractor, or otherwise recover, the full amount of such commission, percentage, brokerage or contingent fee. 42. GRATUITIES: The City may, by written notice to the Contractor, cancel the Contract without Contract 4 6062 EXHIBIT 3 liability if it is determined by the City that gratuities were offered or given by the Contractor or any agent or representative of the Contractor to any officer or employee of the City of Denton with a view toward securing the Contract or securing favorable treatment with respect to the awarding or amending or the making of any determinations with respect to the performing of such contract. In the event the Contract is canceled by the City pursuant to this provision, the City shall be entitled, in addition to any other rights and remedies, to recover or withhold the amount of the cost incurred by the Contractor in providing such gratuities. 43. PROHIBITION AGAINST PERSONAL INTEREST IN CONTRACTS: No officer, employee, independent consultant, or elected official of the City who is involved in the development, evaluation, or decision-making process of the performance of any solicitation shall have a financial interest, direct or indirect, in the Contract resulting from that solicitation. Any willful violation of this section shall constitute impropriety in office, and any officer or employee guilty thereof shall be subject to disciplinary action up to and including dismissal. Any violation of this provision, with the knowledge, expressed or implied, of the Contractor shall render the Contract voidable by the City. The Contractor shall complete and submit the City's Conflict of Interest Questionnaire. 44. INDEPENDENT CONTRACTOR: The Contract shall not be construed as creating an employer/employee relationship, a partnership, or a joint venture. The Contractor's services shall be those of an independent Contractor. The Contractor agrees and understands that the Contract does not grant any rights or privileges established for employees of the City of Denton, Texas for the purposes of income tax, withholding, social security taxes, vacation or sick leave benefits, worker's compensation, or any other City employee benefit. The City shall not have supervision and control of the Contractor or any employee of the Contractor, and it is expressly understood that Contractor shall perform the services hereunder according to the attached specifications at the general direction of the City Manager of the City of Denton, Texas, or his designee under this agreement. The Contractor is expressly free to advertise and perform services for other parties while performing services for the City. 45. ASSIGNMENT -DELEGATION: The Contract shall be binding upon and ensure to the benefit of the City and the Contractor and their respective successors and assigns, provided however, that no right or interest in the Contract shall be assigned and no obligation shall be delegated by the Contractor without the prior written consent of the City. Any attempted assignment or delegation by the Contractor shall be void unless made in conformity with this paragraph. The Contract is not intended to confer rights or benefits on any person, CONTRACTOR or entity not a party hereto; it being the intention of the parties that there are no third party beneficiaries to the Contract. 46. WAIVER: No claim or right arising out of a breach of the Contract can be discharged in whole or in part by a waiver or renunciation of the claim or right unless the waiver or renunciation is supported by consideration and is in writing signed by the aggrieved party. No waiver by either the Contractor or the City of any one or more events of default by the other party shall operate as, or be construed to be, a permanent waiver of any rights or obligations under the Contract, or an express or implied acceptance of any other existing or future default or defaults, whether of a similar or different character. 47. MODIFICATIONS: The Contract can be modified or amended only by a writing signed by both parties. No pre-printed or similar terms on any the Contractor invoice, order or other Contract 4 6062 EXHIBIT 3 document shall have any force or effect to change the terms, covenants, and conditions of the Contract. 48. INTERPRETATION: The Contract is intended by the parties as a final, complete and exclusive statement of the terms of their agreement. No course of prior dealing between the parties or course of performance or usage of the trade shall be relevant to supplement or explain any term used in the Contract. Although the Contract may have been substantially drafted by one parry, it is the intent of the parties that all provisions be construed in a manner to be fair to both parties, reading no provisions more strictly against one party or the other. Whenever a term defined by the Uniform Commercial Code, as enacted by the State of Texas, is used in the Contract, the UCC definition shall control, unless otherwise defined in the Contract. 49. DISPUTE RESOLUTION: A. If a dispute arises out of or relates to the Contract, or the breach thereof, the parties agree to negotiate prior to prosecuting a suit for damages. However, this section does not prohibit the filing of a lawsuit to toll the running of a statute of limitations or to seek injunctive relief. Either party may make a written request for a meeting between representatives of each party within fourteen (14) calendar days after receipt of the request or such later period as agreed by the parties. Each party shall include, at a minimum, one (1) senior level individual with decision-making authority regarding the dispute. The purpose of this and any subsequent meeting is to attempt in good faith to negotiate a resolution of the dispute. If, within thirty (30) calendar days after such meeting, the parties have not succeeded in negotiating a resolution of the dispute, they will proceed directly to mediation as described below. Negotiation may be waived by a written agreement signed by both parties, in which event the parties may proceed directly to mediation as described below. B. If the efforts to resolve the dispute through negotiation fail, or the parties waive the negotiation process, the parties may select, within thirty (30) calendar days, a mediator trained in mediation skills to assist with resolution of the dispute. Should they choose this option; the City and the Contractor agree to act in good faith in the selection of the mediator and to give consideration to qualified individuals nominated to act as mediator. Nothing in the Contract prevents the parties from relying on the skills of a person who is trained in the subject matter of the dispute or a contract interpretation expert. If the parties fail to agree on a mediator within thirty (30) calendar days of initiation of the mediation process, the mediator shall be selected by the Denton County Alternative Dispute Resolution Program (DCAP). The parties agree to participate in mediation in good faith for up to thirty (30) calendar days from the date of the first mediation session. The City and the Contractor will share the mediator's fees equally and the parties will bear their own costs of participation such as fees for any consultants or attorneys they may utilize to represent them or otherwise assist them in the mediation. 50. JURISDICTION AND VENUE: The Contract is made under and shall be governed by the laws of the State of Texas, including, when applicable, the Uniform Commercial Code as adopted in Texas, V.T.C.A., Bus. & Comm. Code, Chapter 1, excluding any rule or principle that would refer to and apply the substantive law of another state or jurisdiction. All issues arising from this Contract shall be resolved in the courts of Denton County, Texas and the parties agree to submit to the exclusive personal jurisdiction of such courts. The foregoing, however, shall not be construed or interpreted to limit or restrict the right or ability of the City to seek and secure injunctive relief from any competent authority as contemplated herein. 51. INVALIDITY: The invalidity, illegality, or unenforceability of any provision of the Contract Contract 4 6062 EXHIBIT 3 shall in no way affect the validity or enforceability of any other portion or provision of the Contract. Any void provision shall be deemed severed from the Contract and the balance of the Contract shall be construed and enforced as if the Contract did not contain the particular portion or provision held to be void. The parties further agree to reform the Contract to replace any stricken provision with a valid provision that comes as close as possible to the intent of the stricken provision. The provisions of this section shall not prevent this entire Contract from being void should a provision which is the essence of the Contract be determined to be void. 52. HOLIDAYS: The following holidays are observed by the City: New Year's Day (observed) MLK Day Memorial Day 4th of July Labor Day Thanksgiving Day Day After Thanksgiving Christmas Eve (observed) Christmas Day (observed) New Year's Day (observed) If a Legal Holiday falls on Saturday, it will be observed on the preceding Friday. If a Legal Holiday falls on Sunday, it will be observed on the following Monday. Normal hours of operation shall be between 8:00 am and 4:00 pm, Monday through Friday, excluding City of Denton Holidays. Any scheduled deliveries or work performance not within the normal hours of operation must be approved by the City Manager of Denton, Texas or his authorized designee. 53. SURVIVABILITY OF OBLIGATIONS: All provisions of the Contract that impose continuing obligations on the parties, including but not limited to the warranty, indemnity, and confidentiality obligations of the parties, shall survive the expiration or termination of the Contract. 54. NON -SUSPENSION OR DEBARMENT CERTIFICATION: The City of Denton is prohibited from contracting with or making prime or sub -awards to parties that are suspended or debarred or whose principals are suspended or debarred from Federal, State, or City of Denton Contracts. By accepting a Contract with the City, the Vendor certifies that it's CONTRACTOR and its principals are not currently suspended or debarred from doing business with the Federal Government, as indicated by the General Services Administration List of Parties Excluded from Federal Procurement and Non -Procurement Programs, the State of Texas, or the City of Denton. 55. EQUAL OPPORTUNITY A. Equal Employment Opportunity: No Offeror, or Offeror's agent, shall engage in any discriminatory employment practice. No person shall, on the grounds of race, sex, age, disability, creed, color, genetic testing, or national origin, be refused the benefits of, or be otherwise subjected to discrimination under any activities resulting from this RFQ. B. Americans with Disabilities Act (ADA) Compliance: No Offeror, or Offeror's agent, shall engage in any discriminatory employment practice against individuals with disabilities as defined in the ADA. 56. BUY AMERICAN ACT -SUPPLIES (Applicable to certain federally funded Contract 4 6062 EXHIBIT 3 requirements) The following federally funded requirements are applicable. A. Definitions. As used in this paragraph — i. "Component" means an article, material, or supply incorporated directly into an end product. ii. "Cost of components" means - (1) For components purchased by the Contractor, the acquisition cost, including transportation costs to the place of incorporation into the end product (whether or not such costs are paid to a domestic CONTRACTOR), and any applicable duty (whether or not a duty-free entry certificate is issued); or (2) For components manufactured by the Contractor, all costs associated with the manufacture of the component, including transportation costs as described in paragraph (1) of this definition, plus allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the end product. iii. "Domestic end product" means - (1) An unmanufactured end product mined or produced in the United States; or (2) An end product manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind as those that the agency determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Scrap generated, collected, and prepared for processing in the United States is considered domestic. iv. "End product" means those articles, materials, and supplies to be acquired under the contract for public use. v. "Foreign end product" means an end product other than a domestic end product. vi. "United States" means the 50 States, the District of Columbia, and outlying areas. B. The Buy American Act (41 U.S.C. 10a - 10d) provides a preference for domestic end products for supplies acquired for use in the United States. C. The City does not maintain a list of foreign articles that will be treated as domestic for this Contract; but will consider for approval foreign articles as domestic for this product if the articles are on a list approved by another Governmental Agency. The Offeror shall submit documentation with their Offer demonstrating that the article is on an approved Governmental list. D. The Contractor shall deliver only domestic end products except to the extent that it specified delivery of foreign end products in the provision of the Solicitation entitled "Buy American Act Certificate". 57. RIGHT TO INFORMATION: The City of Denton reserves the right to use any and all information presented in any response to this contract, whether amended or not, except as prohibited by law. Selection of rejection of the submittal does not affect this right. 58. LICENSE FEES OR TAXES: Provided the solicitation requires an awarded Contractor or supplier to be licensed by the State of Texas, any and all fees and taxes are the responsibility of the respondent. 59. PREVAILING WAGE RATES: The Contractor shall comply with prevailing wage rates as defined by the United States Department of Labor Davis -Bacon Wage Determination at hqp://www.dot.gov/whd/contracts/dbra.htm and at the Wage Determinations website www.wdol.,gov for Denton County, Texas (WD -2509). Contract 4 6062 EXHIBIT 3 60. COMPLIANCE WITH ALL STATE, FEDERAL, AND LOCAL LAWS: The Contractor or supplier shall comply with all State, Federal, and Local laws and requirements. The Respondent must comply with all applicable laws at all times, including, without limitation, the following: (i) §36.02 of the Texas Penal Code, which prohibits bribery; (ii) §36.09 of the Texas Penal Code, which prohibits the offering or conferring of benefits to public servants. The Respondent shall give all notices and comply with all laws and regulations applicable to furnishing and performance of the Contract. 61. FEDERAL, STATE, AND LOCAL REQUIREMENTS: Respondent shall demonstrate on- site compliance with the Federal Tax Reform Act of 1986, Section 1706, amending Section 530 of the Revenue Act of of 1978, dealing with issuance of Form W -2's to common law employees. Respondent is responsible for both federal and State unemployment insurance coverage and standard Workers' Compensation insurance coverage. Respondent shall ensure compliance with all federal and State tax laws and withholding requirements. The City of Denton shall not be liable to Respondent or its employees for any Unemployment or Workers' Compensation coverage, or federal or State withholding requirements. Contractor shall indemnify the City of Denton and shall pay all costs, penalties, or losses resulting from Respondent's omission or breach of this Section. 62. DRUG FREE WORKPLACE: The Contractor shall comply with the applicable provisions of the Drug -Free Work Place Act of 1988 (Public Law 100-690, Title V, Subtitle D; 41 U.S.C. 701 ET SEQ.) and maintain a drug-free work environment; and the final rule, government -wide requirements for drug-free work place (grants), issued by the Office of Management and Budget and the Department of Defense (32 CFR Part 280, Subpart F) to implement the provisions of the Drug -Free Work Place Act of 1988 is incorporated by reference and the Contractor shall comply with the relevant provisions thereof, including any amendments to the final rule that may hereafter be issued. 63. RESPONDENT LIABILITY FOR DAMAGE TO GOVERNMENT PROPERTY: The Respondent shall be liable for all damages to government-owned, leased, or occupied property and equipment caused by the Respondent and its employees, agents, subContractors, and suppliers, including any delivery or Cartage Company, in connection with any performance pursuant to the Contract. The Respondent shall notify the City of Denton Procurement Manager in writing of any such damage within one (1) calendar day. 64. FORCE MAJEURE: The City of Denton, any Customer, and the Respondent shall not be responsible for performance under the Contract should it be prevented from performance by an act of war, order of legal authority, act of God, or other unavoidable cause not attributable to the fault or negligence of the City of Denton. In the event of an occurrence under this Section, the Respondent will be excused from any further performance or observance of the requirements so affected for as long as such circumstances prevail and the Respondent continues to use commercially reasonable efforts to recommence performance or observance whenever and to whatever extent possible without delay. The Respondent shall immediately notify the City of Denton Procurement Manager by telephone (to be contacted in writing within five (5) calendar days of the inception of such occurrence) and describe at a reasonable level of detail the circumstances causing the non-performance or delay in performance. 65. NON -WAIVER OF RIGHTS: Failure of a Party to require performance by another Party under the Contract will not affect the right of such Party to require performance in the future. No Contract 4 6062 EXHIBIT 3 delay, failure, or waiver of either Party's exercise or partial exercise of any right or remedy under the Contract shall operate to limit, impair, preclude, cancel, waive or otherwise affect such right or remedy. A waiver by a Party of any breach of any term of the Contract will not be construed as a waiver of any continuing or succeeding breach. 66. NO WAIVER OF SOVEREIGN IMMUNITY: The Parties expressly agree that no provision of the Contract is in any way intended to constitute a waiver by the City of Denton of any immunities from suit or from liability that the City of Denton may have by operation of law. 67. RECORDS RETENTION: The Respondent shall retain all financial records, supporting documents, statistical records, and any other records or books relating to the performances called for in the Contract. The Respondent shall retain all such records for a period of four (4) years after the expiration of the Contract, or until the CPA or State Auditor's Office is satisfied that all audit and litigation matters are resolved, whichever period is longer. The Respondent shall grant access to all books, records and documents pertinent to the Contract to the CPA, the State Auditor of Texas, and any federal governmental entity that has authority to review records due to federal funds being spent under the Contract. Should a conflict arise between any of the contract documents, it shall be resolved with the following order of precedence (if applicable). In any event, the final negotiated contract shall take precedence over any and all contract documents to the extent of such conflict. 1. Final negotiated contract 2. RFQ/Bid documents 3. City's standard terms and conditions 4. Purchase order 5. Supplier terms and conditions Exhibit D INSURANCE REQUIREMENTS AND WORKERS' COMPENSATION REQUIREMENTS Upon contract execution, all insurance requirements shall become contractual obligations, which the successful Contractor shall have a duty to maintain throughout the course of this contract. STANDARD PROVISIONS: Without limiting any of the other obligations or liabilities of the Contractor, the Contractor shall provide and maintain until the contracted work has been completed and accepted by the City of Denton, Owner, the minimum insurance coverage as indicated hereinafter. Contractor shall file with the Purchasing Department satisfactory certificates of insurance including any applicable addendum or endorsements, containing the contract number and title of the project. Contractor may, upon written request to the Purchasing Department, Contract 4 6062 EXHIBIT 3 ask for clarification of any insurance requirements at any time; however, Contractor shall not commence any work or deliver any material until he or she receives notification that the contract has been accepted, approved, and signed by the City of Denton. All insurance policies proposed or obtained in satisfaction of these requirements shall comply with the following general specifications, and shall be maintained in compliance with these general specifications throughout the duration of the Contract, or longer, if so noted. • Each policy shall be issued by a company authorized to do business in the State of Texas with an A.M. Best Company rating of at least A or better. Any deductibles or self-insured retentions shall be declared in the proposal. If requested by the City, the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its officials, agents, employees and volunteers; or, the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Liability policies shall be endorsed to provide the following: ■ Name as Additional Insured the City of Denton, its Officials, Agents, Employees and volunteers. ■ That such insurance is primary to any other insurance available to the Additional Insured with respect to claims covered under the policy and that this insurance applies separately to each insured against whom claim is made or suit is brought. The inclusion of more than one insured shall not operate to increase the insurer's limit of liability. • Cancellation: City requires 30 day written notice should any of the policies described on the certificate be cancelled or materially changed before the expiration date. • Should any of the required insurance be provided under a claims made form, Contractor shall maintain such coverage continuously throughout the term of this contract and, without lapse, for a period of three years beyond the contract expiration, such that occurrences arising during the contract term which give rise to claims made after expiration of the contract shall be covered. • Should any of the required insurance be provided under a form of coverage that includes a general annual aggregate limit providing for claims investigation or legal defense costs to be included in the general annual aggregate limit, the Contractor shall either double the occurrence limits or obtain Owners and Contractors Protective Liability Insurance. • Should any required insurance lapse during the contract term, requests for payments originating after such lapse shall not be processed until the City receives satisfactory evidence of reinstated coverage as required by this contract, effective as of the lapse date. If insurance is not reinstated, City may, at its sole option, terminate this agreement effective on the date of the lapse. Contract 4 6062 EXHIBIT 3 SPECIFIC ADDITIONAL INSURANCE REQUIREMENTS: All insurance policies proposed or obtained in satisfaction of this Contract shall additionally comply with the following marked specifications, and shall be maintained in compliance with these additional specifications throughout the duration of the Contract, or longer, if so noted: [X] A. General Liability Insurance: General Liability insurance with combined single limits of not less than $1,000,000.00 shall be provided and maintained by the Contractor. The policy shall be written on an occurrence basis either in a single policy or in a combination of underlying and umbrella or excess policies. If the Commercial General Liability form (ISO Form CG 0001 current edition) is used: Coverage A shall include premises, operations, products, and completed operations, independent Contractors, contractual liability covering this contract and broad form property damage coverage. • Coverage B shall include personal injury. • Coverage C, medical payments, is not required. If the Comprehensive General Liability form (ISO Form GL 0002 Current Edition and ISO Form GL 0404) is used, it shall include at least: • Bodily injury and Property Damage Liability for premises, operations, products and completed operations, independent Contractors and property damage resulting from explosion, collapse or underground (XCU) exposures. • Broad form contractual liability (preferably by endorsement) covering this contract, personal injury liability and broad form property damage liability. [] Automobile Liability Insurance: Contractor shall provide Commercial Automobile Liability insurance with Combined Single Limits (CSL) of not less than $500,000 either in a single policy or in a combination of basic and umbrella or excess policies. The policy will include bodily injury and property damage liability arising out of the operation, maintenance and use of all automobiles and mobile equipment used in conjunction with this contract. Satisfaction of the above requirement shall be in the form of a policy endorsement for: • any auto, or • all owned hired and non -owned autos. [] Workers' Compensation Insurance Contractor shall purchase and maintain Workers' Compensation insurance which, in Contract 4 6062 EXHIBIT 3 addition to meeting the minimum statutory requirements for issuance of such insurance, has Employer's Liability limits of at least $100,000 for each accident, $100,000 per each employee, and a $500,000 policy limit for occupational disease. The City need not be named as an "Additional Insured" but the insurer shall agree to waive all rights of subrogation against the City, its officials, agents, employees and volunteers for any work performed for the City by the Named Insured. For building or construction projects, the Contractor shall comply with the provisions of Attachment 1 in accordance with §406.096 of the Texas Labor Code and rule 28TAC 110.110 of the Texas Workers' Compensation Commission (TWCC). Owner's and Contractor's Protective Liability Insurance The Contractor shall obtain, pay for and maintain at all times during the prosecution of the work under this contract, an Owner's and Contractor's Protective Liability insurance policy naming the City as insured for property damage and bodily injury which may arise in the prosecution of the work or Contractor's operations under this contract. Coverage shall be on an "occurrence" basis and the policy shall be issued by the same insurance company that carries the Contractor's liability insurance. Policy limits will be at least $500,000.00 combined bodily injury and property damage per occurrence with a $1,000,000.00 aggregate. Fire Damage Legal Liability Insurance Coverage is required if Broad form General Liability is not provided or is unavailable to the Contractor or if a Contractor leases or rents a portion of a City building. Limits of not less than each occurrence are required. Professional Liability Insurance Professional liability insurance with limits not less than $1,000,000.00 per claim with respect to negligent acts, errors or omissions in connection with professional services is required under this Agreement. Builders' Risk Insurance Builders' Risk Insurance, on an All -Risk form for 100% of the completed value shall be provided. Such policy shall include as "Named Insured" the City of Denton and all subContractors as their interests may appear. Environmental Liability Insurance Environmental liability insurance for $1,000,000 to cover all hazards contemplated by this contract. Riggers Insurance The Contractor shall provide coverage for Rigger's Liability. Said coverage may be provided by a Rigger's Liability endorsement on the existing CGL coverage; through and Installation Floater covering rigging Contractors; or through ISO form IH 00 91 12 11, Contract 4 6062 EXHIBIT 3 Rigger's Liability Coverage form. Said coverage shall mirror the limits provided by the CGL coverage [ ] Commercial Crime Provides coverage for the theft or disappearance of cash or checks, robbery inside/outside the premises, burglary of the premises, and employee fidelity. The employee fidelity portion of this coverage should be written on a "blanket" basis to cover all employees, including new hires. This type insurance should be required if the Contractor has access to City funds. Limits of not less than $ each occurrence are required. [ ] Additional Insurance Other insurance may be required on an individual basis for extra hazardous contracts and specific service agreements. If such additional insurance is required for a specific contract, that requirement will be described in the "Specific Conditions" of the contract specifications. ATTACHMENT 1 [] Workers' Compensation Coverage for Building or Construction Projects for Governmental Entities IGW oniit11are M, Certificate of coverage ("certificate") -A copy of a certificate of insurance, a certificate of authority to self -insure issued by the commission, or a coverage agreement (TWCC-81, TWCC-82, TWCC-83, or TWCC-84), showing statutory workers' compensation insurance coverage for the person's or entity's employees providing services on a project, for the duration of the project. Duration of the project - includes the time from the beginning of the work on the project until the Contractor's/person's work on the project has been completed and accepted by the governmental entity. Persons providing services on the project ("subContractor" in §406.096) - includes all persons or entities performing all or part of the services the Contractor has undertaken to perform on the project, regardless of whether that person contracted directly with the Contractor and regardless of whether that person has employees. This includes, without limitation, independent Contractors, subContractors, leasing companies, motor carriers, owner - operators, employees of any such entity, or employees of any entity which furnishes persons to provide services on the project. "Services" include, without limitation, providing, hauling, or delivering equipment or materials, or providing labor, transportation, or other service related to a project. "Services" does not include activities unrelated to the project, such as food/beverage vendors, office supply deliveries, and delivery of portable toilets. Contract 4 6062 EXHIBIT 3 B. The Contractor shall provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any overage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all employees of the Contractor providing services on the project, for the duration of the project. C. The Contractor must provide a certificate of coverage to the governmental entity prior to being awarded the contract. D. If the coverage period shown on the Contractor's current certificate of coverage ends during the duration of the project, the Contractor must, prior to the end of the coverage period, file a new certificate of coverage with the governmental entity showing that coverage has been extended. E. The Contractor shall obtain from each person providing services on a project, and provide to the governmental entity: 1. a certificate of coverage, prior to that person beginning work on the project, so the governmental entity will have on file certificates of coverage showing coverage for all persons providing services on the project; and 2. no later than seven days after receipt by the Contractor, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project. F. The Contractor shall retain all required certificates of coverage for the duration of the project and for one year thereafter. G. The Contractor shall notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the Contractor knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project. H. The Contractor shall post on each project site a notice, in the text, form and manner prescribed by the Texas Workers' Compensation Commission, informing all persons providing services on the project that they are required to be covered, and stating how a person may verify coverage and report lack of coverage. I. The Contractor shall contractually require each person with whom it contracts to provide services on a project, to: 1. provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all of Contract 4 6062 EXHIBIT 3 its employees providing services on the project, for the duration of the project; 2. provide to the Contractor, prior to that person beginning work on the project, a certificate of coverage showing that coverage is being provided for all employees of the person providing services on the project, for the duration of the project; 3. provide the Contractor, prior to the end of the coverage period, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project; 4. obtain from each other person with whom it contracts, and provide to the Contractor: a. a certificate of coverage, prior to the other person beginning work on the project; and b. a new certificate of coverage showing extension of coverage, prior to the end of the coverage period, if the coverage period shown on the current certificate of coverage ends during the duration of the project; 5. retain all required certificates of coverage on file for the duration of the project and for one year thereafter; 6. notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the person knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project; and 7. Contractually require each person with whom it contracts, to perform as required by paragraphs (1) - (7), with the certificates of coverage to be provided to the person for whom they are providing services. By signing this contract or providing or causing to be provided a certificate of coverage, the Contractor is representing to the governmental entity that all employees of the Contractor who will provide services on the project will be covered by workers' compensation coverage for the duration of the project, that the coverage will be based on proper reporting of classification codes and payroll amounts, and that all coverage agreements will be filed with the appropriate insurance carrier or, in the case of a self-insured, with the commission's Division of Self -Insurance Regulation. Providing false or misleading information may subject the Contractor to administrative penalties, criminal penalties, civil penalties, or other civil actions. K. The Contractor's failure to comply with any of these provisions is a breach of contract by the Contractor which entitles the governmental entity to declare Contract 4 6062 EXHIBIT 3 the contract void if the Contractor does not remedy the breach within ten days after receipt of notice of breach from the governmental entity. Contract 4 6062 EXHIBIT 3 Exhibit E Certificate of Interested Parties Electronic Filing In 2015, the Texas Legislature adopted House Bill 1295, which added section 2252.908 of the Government Code. The law states that the City may not enter into this contract unless the Contractor submits a disclosure of interested parties (Form 1295) to the City at the time the Contractor submits the signed contract. The Texas Ethics Commission has adopted rules requiring the business entity to file Form 1295 electronically with the Commission. Contractor will be required to furnish an original notarized Certificate of Interest Parties before the contract is awarded, in accordance with Government Code 2252.908. The Contractor shall: 1. Log onto the State Ethics Commission Website at: htlps://www.ethics.state.tx.us/whatsnew/elf info forml295.htm 2. Register utilizing the tutorial provided by the State 3. Print a copy of the completed Form 1295 4. Enter the Certificate Number on page 2 of this contract. 5. Sign and notarize the Form 1295 6. Email the notarized form to purchasingLCityofdenton.com with the contract number in the subject line. (EX: Contract 1234 — Form 1295) The City must acknowledge the receipt of the filed Form 1295 not later than the 30th day after Council award. Once a Form 1295 is acknowledged, it will be posted to the Texas Ethics Commission's website within seven business days. Contract 4 6062 EXHIBIT 3 Exhibit F CONFLICT OF INTEREST QUESTIONNAIRE - FORM CIQ For vendor or other person doing business with local governmental entity This questionnaire reflects changes made to the law by H.B. 23, 84th Leg., Regular Session. This questionnaire is being filed in accordance with Chapter 176, Local Government Code, by a vendor who has a business relationship as defined by Section 176.001(1-a) with a local governmental entity and the vendor meets requirements under Section 176.006(a). By law this questionnaire must be filed with the records administrator of the local government entity not later than the 7th business day after the date the vendor becomes aware of facts that require the statement to be filed. See Section 176.006(a-1), Local Government Code. A vendor commits an offense if the vendor knowingly violates Section 176.006, Local Government Code. An offense under this section is a misdemeanor. Name of vendor who has a business relationship with local governmental entity. SAWKO & BURROUGHS, P.C. 2 El Check this box if you are filing an update to a previously filed questionnaire. (The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7th business day after the date on which you became aware that the originally filed questionnaire was incomplete or inaccurate. 3 1 Name of local government officer about whom the information in this section is being disclosed. Name of Officer This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the vendor has an employment or other business relationship as defined by Section 176.001(1-a), Local Govemment Code. Attach additional pages to this Form CIQ as necessary. A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the vendor? = Yes No B. Is the vendor receiving or likely to receive taxable income, other than investment income, from or at the direction of the local government officer named in this section AND the taxable income is not received from the local govemmental entity? Yes = No C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer selves as an officer or director, or holds an ownership of one percent or more? = Yes No D. Describe each employment or business and family relationship with the local government officer named in this section. 4 ❑I have no Conflict of Interest to disclose. 5 Signature of vendor doing business with the governmental entity Date Contract 4 6062 EXHIBIT 3 IN WITNESS WHEREOF, the parties of these presents have executed this agreement in the year and day first above written. CONTRACTOR mm AUTHORIZED SIGNATURE Date: Name: Gregory J. Sawko Title: CEO 940-382-4357 PHONE NUMBER _sg awko2dentonlawyer.com EMAIL ADDRESS 2016-41062 TEXAS ETHICS COMMISSION CERTIFICATE NUMBER CITY OF DENTON, TEXAS BY: GEORGE C. CAMPBELL, CITY MANAGER Date: ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY Contract 4 6062 EXHIBIT 3 Exhibit A Special Requirements, Terms and Conditions 1. INDEPENDENT CONTRACTOR STATUS City agrees to contract with the Contractor as an independent contractor. CONTRACTOR hereby agrees to enforce, by suit or otherwise, the collection of all delinquent taxes, penalties, and interest owing to CITY. All references herein to CITY shall also incorporate reference to CITY's contract with Denton County, Texas to collect taxes. A. CONTRACTOR shall initiate collection on current and prior year delinquencies as of July 1, 2016, and shall initiate collection on subsequent delinquencies as of each subsequent July 1st anniversary. B. With respect to delinquent personal property taxes only, CONTRACTOR shall have the option to initiate collection on March 1st of the year in which they become delinquent; however, CITY shall not owe the CONTRACTOR a fee on current year delinquent personal property taxes collected between March 1st and June 30th unless attorney fees are collected pursuant to Texas Property Tax Code 33.11 or 33.48. C. CONTRACTOR shall perform all those services set forth in City's Request for Qualifications (RFQ 46062), the CONTRACTOR's response to the RFQ, which are on file with the office of the CITY's Purchasing Agent, and this Contract. CONTRACTOR hereby agrees to perform these services with diligence and in accordance with the highest professional standards customarily associated with such services in the State of Texas. CONTRACTOR shall provide services to the CITY as an independent Contractor, not as an employee of the CITY. CONTRACTOR shall not have or claim any right arising from employee status. 2. PROVISION OF INFORMATION The CITY agrees to furnish its delinquent tax information to the CONTRACTOR on all property within the boundaries of the CITY, including name, identity, location of necessary parties, and property description. 3. INVESTIGATION AND ASSISTANCE CONTRACTOR agrees to investigate the address of each taxpayer, and the location of the property, where such information may be incorrect on the delinquent tax record. CONTRACTOR shall bring to the attention of the appropriate tax official of CITY any errors, double assessments, discrepancies, or inaccuracies detected by CONTRACTOR in the delinquent tax record. CONTRACTOR further agrees to provide CITY any advice or assistance in updating the tax rolls. Contract 4 6062 EXHIBIT 3 4. COLLECTION Upon initial receipt of computer readable delinquent tax records, CONTRACTOR agrees to initiate collection of the full amount due from each taxpayer. Within a reasonable time frame, but not more than 60 days from CONTRACTOR's receipt of the delinquent tax records, CONTRACTOR hereby agrees to send, by first class mail, a notice of delinquency to each and every delinquent taxpayer, requesting said taxpayer to remit the full amount due and owing to CITY, except in cases where the taxes have been deferred or made the basis of a lawsuit against the Denton County Appraisal District to determine value. 5. REVIEW AND AUTHORIZATION TO SUE Following transmittal of the notice of delinquency as specified above, CONTRACTOR will aggressively pursue collection, in anticipation of litigation. CITY shall have absolute discretion over the decision to file suit. Transmittal of the delinquent tax information from CITY to CONTRACTOR shall constitute authorization to file suit, following the mailing of the initial notice of delinquency. Upon written notice, CITY may, at any time, withdraw authorization to file suit. CITY may at any time withdraw authorization to foreclose and sell the property, and said withdrawal shall be in writing. 6. TAXPAYER SERVICES In addition to litigation, CONTRACTOR further agrees to provide taxpayer service without charge. As such, CONTRACTOR agrees: (I) to provide CITY legal advice and written opinions regarding property tax matters upon request; (2) to respond to taxpayer inquiries and to advise CITY, in writing; and (3) make any recommendations concerning installment payment agreements and settlement agreements proposed by the taxpayer. CITY shall have final determination in acceptance of all installment payments or settlement agreements within parameters established by CITY. CONTRACTOR shall have discretion to enter into installment agreements, subject to CITY's prerogative of final determination. In all demand letters and all communications with taxpayers, CONTRACTOR shall inform and instruct the taxpayer to remit payment to CITY. If remittance is received by CONTRACTOR, it must be transmitted in its entirety to CITY and received for processing by 11:30 a.m., the following business day. Checks made payable to CONTRACTOR shall be endorsed by CONTRACTOR to CITY. No check, cash, or money order for payment of delinquent taxes shall be deposited in any CONTRACTOR account except into a trust account for the sole purpose of reissuing payment to proper parties when combined in one deposit instrument by a taxpayer. 7. LITIGATION RESPONSIBILITIES A. CONTRACTOR agrees to commence litigation, prosecute, and reduce to judgment all delinquent accounts, including all pending lawsuits that CONTRACTOR deems to warrant, or upon which CITY has specifically requested action in writing. Each suit filed shall seek: personal judgment against the individual taxpayer for all taxes upon which the taxpayer can be held personally liable; penalty and interest; foreclosure of any tax lien which may exist by operation of law; any and all court costs incurred in prosecuting the lawsuit; and any collection fees or attorney fees which the taxpayer is obligated to pay. CONTRACTOR shall perform litigation responsibilities and protect CITY's legal remedies, Contract 4 6062 EXHIBIT 3 including appeals, preparation of any documents required, post judgment activities, and any other actions necessary in order to collect the delinquent taxes. B. CONTRACTOR will assume the representation of CITY in all lawsuits, including all pending lawsuits, involving the collection of delinquent taxes and enforcement of tax liens, including, but not limited to bankruptcy litigation, claims, and actions required to be filed with federal agencies such as FDIC, FSLIC and RTC, interventions in suits filed on behalf of any other taxing units' current suits, and any other suit or litigation which may involve or relate to the collection of delinquent taxes. CONTRACTOR will inform CITY of any counterclaims or cross -actions filed against CITY. C. Upon request, CONTRACTOR agrees to provide legal advice and assistance to CITY in the acquisition of property for public purpose use, pursuant to the Property Tax Code. 8. PROGRESS REPORTS CONTRACTOR agrees to make delinquent tax collection progress reports to CITY monthly and quarterly, in a format containing information requested by CITY's Director of Finance. Progress reports may include, without limitation: a. Number and type of communication with delinquent taxpayers; b. Summary of all delinquent accounts collected; C. Number of suits filed; d. Detailed list of suits filed; e. Number of judgments rendered; f Detailed list of judgments rendered; g. Number of warrants issued/served; h. Detailed list of bankruptcies and status of those properties; 1. Number of properties submitted to courts for auction; j. Detailed list of properties submitted to courts for auction, with date submitted and most recent status; k. Number of properties sold; and L Detailed list of properties sold or reverting to taxing entity because of non -sale. Within parameters established at the initiation of the collection program, CONTRACTOR shall advise CITY of any case in which CONTRACTOR's investigation has revealed that the taxpayer cannot be found, the enforcement of the tax lien cannot be accomplished, or further attempts at tax collection would be futile, and shall provide CONTRACTOR's recommendation regarding the proper disposition of the case. In such cases, CITY shall advise CONTRACTOR as to the appropriate disposition of the account. Contract 4 6062 EXHIBIT 3 9. COMPENSATION A. As compensation for the services rendered hereunder by the Contractor, the City hereby agrees that the Contractor may retain 20% of the total amount of all delinquent taxes, penalties, and interest for the tax years covered by this Contract, as authorized by Texas Property Tax Code 6.30(c). Said 20% shall constitute an additional penalty, to defray costs of collection as set forth in Texas Property Tax Code 33.07. All compensation set forth above shall become the property of the Contractor at the time payment of taxes, penalties, and interest are received by the City. The 20% collection fee will only be retained on taxes which remain delinquent after July 1st of the year on which they became delinquent, pursuant to Texas Property Tax Code 33.07, or after the dates set forth under Texas Property Tax Code 33.08 or 33.11, if applicable. Contractor shall not be entitled to the aforesaid 20% unless and until the Contractor has taken some action in connection with recovering delinquent taxes. The transmittal of a notice of delinquency shall constitute sufficient action in order to entitle the Contractor to the aforementioned fee. As compensation for the services rendered hereunder by the Contractor for the collection of taxes which are not eligible for the additional penalty authorized by Texas Property Tax Code 33.07, and upon which suit has been filed, the compensation shall be reasonable attorney fees approved by the Court, not exceeding 15% of the total amount of taxes, penalties, and interest due to the City. In no event shall the Contractor be entitled to any fee, unless and until the City actually collects the delinquent taxes, penalties, interest, court costs, collection costs, or attorney fees from the taxpayer, or from the proceeds of a forced sale or foreclosure. In no event shall the Contractor be entitled to any fee, unless said fee is collected by the City during the term of this contract, or fee is collected by the City on accounts upon which the Contractor is attorney of record at the time of judgement. No interest shall accrue on any late payment from the City to the Contractor. B. The compensation set forth in paragraphs 9, 10, and 11 of this Contract shall be the total compensation due to the Contractor for all services provided pursuant to this Contract, and in no event shall the Contractor seek any additional compensation from the City. 10. COLLECTION OF OTHER DELINQUENT ACCOUNTS The Contractor shall, upon written request of the City, undertake the collection of delinquent accounts for paving assessment liens, substandard housing demolition liens, and weed liens. The collection of these accounts shall be undertaken on the basis of attorney fees assessed to and collected from the debtors. The City agrees to pay the Contractor, as compensation, all amounts received as attorney fees on delinquent accounts for paving assessment liens, substandard housing demolitions liens, and weed liens which are collected as a result of the Contractor's collection efforts during the term of this contract. 11. ATTORNEY FEES In eminent domain and other judicial proceedings, the Contractor will be entitled to only those attorney fees awarded by the Court, and then only if collected by the City. In bankruptcy proceedings, the Contractor shall be entitled to a fee of 20% of the tax, penalties, and interest actually collected by the City. The Contractor agrees to file and diligently pursue all property tax claims on behalf of the City in bankruptcy, eminent domain, and other judicial or administrative proceedings, whether Federal or State, in nature. Contract 4 6062 EXHIBIT 3 12. CONTRACT TERM This contract shall not exceed a five (5) year period, and requires no annual renewals, which begins on July 1, 2016. The City and the Awarded Contractor will be required to commence within fourteen (14) days of delivery of a Notice to Proceed, or issuance of the Purchase Order. At the sole option of the City of Denton, the Contract may be further extended as needed, not to exceed a total of twelve (12) months. The City may terminate the contract for any reason, with or without cause in accordance with Exhibit 2 - City of Denton Terms and Conditions 427 and 428, and upon thirty (30) days' written notice to the CONTRACTOR. The City will allow CONTRACTOR an additional six (6) months to reduce to judgment all suits filed prior to the expiration of the contract. The CONTRACTOR must provide for the orderly delivery of copies of all complete tax files to be turned over to the City Attorney when the contract is terminated. 13. CONFLICTS OF INTEREST CONTRACTOR agrees not to represent any client who has an adversarial position with the City of Denton or engage in any conflict of interest, and agrees to comply fully with the Texas Disciplinary Rules of Professional Conduct (Subtitle G - Texas Government Code) for the duration of this Contract. 14. TAX WARRANTS Upon request and authorization of CITY, CONTRACTOR shall prepare and pursue the issuance of tax warrants. CONTRACTOR shall then coordinate the seizure of personal property, pursuant to warrant. CONTRACTOR shall accompany the Tax Collector to the location of the personal property which is to be seized to insure that all necessary procedures have been followed. 15. SETTLEMENTS No settlements or compromises of taxes, penalties, or interest shall be effected where prohibited by law, and only upon approval by CITY where authorized by law. If a taxpayer requested waiver is upheld as provided by Tex. Prop. Tax Code §33.011, CONTRACTOR will bear the costs of suit if it failed to notify the taxpayer of the delinquency prior to filing of the suit. 16. NOTICE Any notice or other written instrument 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 Postal Service, postage prepaid, registered, or certified, return receipt requested, addressed to the CITY or CONTRACTOR, as the case may be at the following addresses: Contract 4 6062 CITY: City of Denton, Texas Attn: City Manager 215 East McKinney Street Denton, Texas 76201 purchasing Cityofdenton.com EXHIBIT 3 CONTRACTOR: Sawko & Burroughs, P.C. Attn: Gregory Sawko 1172 Bent Oaks Drive Denton, Texas 76210 GSawko(a�dentonlawyer.com Either parry may change its mailing address by sending notice of change of address to the other at the above address by electronic communication. 17. COLLECTION REQUIREMENTS CONTRACTOR agrees to collect, between July 1, 2016 and June 30, 2017, not less than 60% of the total dollar value of the adjusted base tax of the 2015 delinquency existing on July 1, 2016, and not less than 30% of the aggregate delinquent tax roll for the prior year. For each subsequent year of this agreement, CONTRACTOR agrees to collect, between July Ist and June 30th of each year, not less than 60% of the total dollar value of the adjusted base tax from the most recent tax year of the delinquency existing on July Ist of each respective year, and not less than 30% of the aggregate delinquent tax roll each 12 months. 18. 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, Texas. Any litigation involving this Contract shall be tried in a court of competent jurisdiction sitting in Denton County, Texas. 19. ACCEPTANCE OF CONTRACT In consideration of the terms, covenants, and mutual agreements hereinabove stated, CONTRACTOR hereby accepts the contract with the CITY, and undertakes the performance of this Contract as above stated. 20. DIRECTIVES All directives between CONTRACTOR and CITY shall be continued in writing. 21. COVENANT NOT TO SUE CONTRACTOR further agrees not to bring any cause of action against CITY relative to this Contract. Should CONTRACTOR bring any cause of action against CITY, CONTRACTOR agrees the liquidated damages shall not exceed $1.00, and the filing of such cause of action shall be considered a material breach of this Contract. 22. AMBIGUITY Any ambiguity within this Contract shall be liberally interpreted in favor of CITY. Contract 4 6062 EXHIBIT 3 23. PERSONNEL AND EQUIPMENT A. CONTRACTOR represents that it has or will secure, at its own expense, all personnel 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, CITY. CONTRACTOR shall inform CITY of any conflict of interest or potential conflict of interest that may arise during the term of this Contract. B. All services required hereunder will be performed by CONTRACTOR, 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. CONTRACTOR represents that it has or will secure, at its own expense, the hardware, software, and other resources required to perform, all the services required under the terms of this contract in a timely manner. 24. MODIFICATION 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. 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 Contract, or the rights or obligations of the parties hereunder, unless such waiver or modification is in writing and duly executed. The parties further agree that the provisions of this section will not be waived unless as herein set forth. 25. MISCELLANEOUS A. For the purpose of this Contract, the key person who will perform most of this work hereunder shall be Gregory Sawko. However, nothing herein shall limit CONTRACTOR from using other qualified and competent members of its CONTRACTOR to perform the services required herein. B. CONTRACTOR 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 services hereunder, CONTRACTOR shall take such steps as are appropriate to ensure that the work involved is properly coordinated with related work being carried on by CITY. C. CITY shall assist the CONTRACTOR by placing at the CONTRACTOR's disposal all available information pertinent to the services outlined in this contract, including previous reports and any other data relative to the services outlined in this Contract, and arranging for access thereto. CITY shall make all provisions necessary for CONTRACTOR to enter in or upon public and private property as required for CONTRACTOR to perform services under this contract. Contract 4 6062 EXHIBIT 3 26. TIME OF THE ESSENCE Time is of the essence with respect to all matter covered by this Contract. Contract 4 6062 EXHIBIT 3 F,xhihit C Standard Purchase Terms and Conditions These standard Terms and Conditions and the Terms and Conditions, Specifications, Drawings and other requirements included in the City of Denton's contract are applicable to contracts/purchase orders issued by the City of Denton hereinafter referred to as the City or Buyer and the Seller or respondent herein after referred to as Contractor or Supplier. Any deviations must be in writing and signed by a representative of the City's Procurement Department and the Supplier. No Terms and Conditions contained in the seller's proposal response, invoice or statement shall serve to modify the terms set forth herein. If there is a conflict between the provisions on the face of the contract/purchase order these written provisions will take precedence. The Contractor agrees that the contract shall be governed by the following terms and conditions, unless exceptions are duly noted and fully negotiated. Unless otherwise specified in the contract, Sections 3, 4, 5, 6, 7, 8, 20, 21, and 36 shall apply only to a solicitation to purchase goods, and sections 9, 10, 11, 22 and 32 shall apply only to a solicitation to purchase services to be performed principally at the City's premises or on public rights-of-way and Sections 12, 13, 14, 15, 16, 19, 23, & 56 shall not be applicable to the contract. 1. CONTRACTOR'S OBLIGATIONS. The Contractor shall fully and timely provide all deliverables described in the Solicitation and in the Contractor's Offer in strict accordance with the terms, covenants, and conditions of the Contract and all applicable Federal, State, and local laws, rules, and regulations. 2. EFFECTIVE DATE/TERM. Unless otherwise specified in the Solicitation, this Contract shall be effective as of the date the contract is signed by the City, and shall continue in effect until all obligations are performed in accordance with the Contract. 3. CONTRACTOR TO PACKAGE DELIVERABLES: The Contractor will package deliverables in accordance with good commercial practice and shall include a packing list showing the description of each item, the quantity and unit price unless otherwise provided in the Specifications or Supplemental Terms and Conditions, each shipping container shall be clearly and permanently marked as follows: (a) The Contractor's name and address, (b) the City's name, address and purchase order or purchase release number and the price agreement number if applicable, (c) Container number and total number of containers, e.g. box 1 of 4 boxes, and (d) the number of the container bearing the packing list. The Contractor shall bear cost of packaging. Deliverables shall be suitably packed to secure lowest transportation costs and to conform to all the requirements of common carriers and any applicable specification. The City's count or weight shall be final and conclusive on shipments not accompanied by packing lists. 4. SHIPMENT UNDER RESERVATION PROHIBITED: The Contractor is not authorized to ship the deliverables under reservation and no tender of a bill of lading will operate as a tender of deliverables. 5. TITLE & RISK OF LOSS: Title to and risk of loss of the deliverables shall pass to the City only when the City actually receives and accepts the deliverables. Contract 4 6062 EXHIBIT 3 6. DELIVERY TERMS AND TRANSPORTATION CHARGES: Deliverables shall be shipped F.O.B. point of delivery unless otherwise specified in the Supplemental Terms and Conditions. Unless otherwise stated in the Offer, the Contractor's price shall be deemed to include all delivery and transportation charges. The City shall have the right to designate what method of transportation shall be used to ship the deliverables. The place of delivery shall be that set forth the purchase order. 7. RIGHT OF INSPECTION AND REJECTION: The City expressly reserves all rights under law, including, but not limited to the Uniform Commercial Code, to inspect the deliverables at delivery before accepting them, and to reject defective or non -conforming deliverables. If the City has the right to inspect the Contractor's, or the Contractor's SubContractor's, facilities, or the deliverables at the Contractor's, or the Contractor's SubContractor's, premises, the Contractor shall furnish, or cause to be furnished, without additional charge, all reasonable facilities and assistance to the City to facilitate such inspection. 8. NO REPLACEMENT OF DEFECTIVE TENDER: Every tender or delivery of deliverables must fully comply with all provisions of the Contract as to time of delivery, quality, and quantity. Any non -complying tender shall constitute a breach and the Contractor shall not have the right to substitute a conforming tender; provided, where the time for performance has not yet expired, the Contractor may notify the City of the intention to cure and may then make a conforming tender within the time allotted in the contract. 9. PLACE AND CONDITION OF WORK: The City shall provide the Contractor access to the sites where the Contractor is to perform the services as required in order for the Contractor to perform the services in a timely and efficient manner, in accordance with and subject to the applicable security laws, rules, and regulations. The Contractor acknowledges that it has satisfied itself as to the nature of the City's service requirements and specifications, the location and essential characteristics of the work sites, the quality and quantity of materials, equipment, labor and facilities necessary to perform the services, and any other condition or state of fact which could in any way affect performance of the Contractor's obligations under the contract. The Contractor hereby releases and holds the City harmless from and against any liability or claim for damages of any kind or nature if the actual site or service conditions differ from expected conditions. The Contractor shall, at all times, exercise reasonable precautions for the safety of their employees, City Staff, participants and others on or near the City's facilities. 10. WORKFORCE A. The Contractor shall employ only orderly and competent workers, skilled in the performance of the services which they will perform under the Contract. B. The Contractor, its employees, subContractors, and subContractor's employees may not while engaged in participating or responding to a solicitation or while in the course and scope of delivering goods or services under a City of Denton contract or on the City's property. i. use or possess a firearm, including a concealed handgun that is licensed under state law, except as required by the terms of the contract; or ii. use or possess alcoholic or other intoxicating beverages, illegal drugs or controlled substances, nor may such workers be intoxicated, or under the influence of alcohol or drugs, on the job. C. If the City or the City's representative notifies the Contractor that any worker is incompetent, Contract 4 6062 EXHIBIT 3 disorderly or disobedient, has knowingly or repeatedly violated safety regulations, has possessed any firearms, or has possessed or was under the influence of alcohol or drugs on the job, the Contractor shall immediately remove such worker from Contract services, and may not employ such worker again on Contract services without the City's prior written consent. Immigration: The Contractor represents and warrants that it shall comply with the requirements of the Immigration Reform and Control Act of 1986 and 1990 regarding employment verification and retention of verification forms for any individuals hired on or after November 6, 1986, who will perform any labor or services under the Contract and the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 ("IIRIRA) enacted on September 30, 1996. 11. COMPLIANCE WITH HEALTH, SAFETY, AND ENVIRONMENTAL REGULATIONS: The Contractor, it's SubContractors, and their respective employees, shall comply fully with all applicable federal, state, and local health, safety, and environmental laws, ordinances, rules and regulations in the performance of the services, including but not limited to those promulgated by the City and by the Occupational Safety and Health Administration (OSHA). In case of conflict, the most stringent safety requirement shall govern. The Contractor shall indemnify and hold the City harmless from and against all claims, demands, suits, actions, judgments, fines, penalties and liability of every kind arising from the breach of the Contractor's obligations under this paragraph. Environmental Protection: The Respondent shall be in compliance with all applicable standards, orders, or regulations issued pursuant to the mandates of the Clean Air Act (42 U.S.C. §7401 et seq.) and the Federal Water Pollution Control Act, as amended, (33 U.S.C. §1251 et seq.). 12. INVOICES: A. The Contractor shall submit separate invoices in duplicate on each purchase order or purchase release after each delivery. If partial shipments or deliveries are authorized by the City, a separate invoice must be sent for each shipment or delivery made. B. Proper Invoices must include a unique invoice number, the purchase order or delivery order number and the master agreement number if applicable, the Department's Name, and the name of the point of contact for the Department. Invoices shall be itemized and transportation charges, if any, shall be listed separately. A copy of the bill of lading and the freight waybill, when applicable, shall be attached to the invoice. The Contractor's name, remittance address and, if applicable, the tax identification number on the invoice must exactly match the information in the Vendor's registration with the City. Unless otherwise instructed in writing, the City may rely on the remittance address specified on the Contractor's invoice. C. Invoices for labor shall include a copy of all time -sheets with trade labor rate and deliverables order number clearly identified. Invoices shall also include a tabulation of work -hours at the appropriate rates and grouped by work order number. Time billed for labor shall be limited to hours actually worked at the work site. D. Unless otherwise expressly authorized in the Contract, the Contractor shall pass through all Subcontract and other authorized expenses at actual cost without markup. E. Federal excise taxes, State taxes, or City sales taxes must not be included in the invoiced amount. The City will furnish a tax exemption certificate upon request. 13. PAYMENT: A. All proper invoices need to be sent to Accounts Payable. Approved invoices will be paid within Contract 4 6062 EXHIBIT 3 thirty (30) calendar days of the City's receipt of the deliverables or of the invoice being received in Accounts Payable, whichever is later. B. If payment is not timely made, (per paragraph A); interest shall accrue on the unpaid balance at the lesser of the rate specified in Texas Government Code Section 2251.025 or the maximum lawful rate; except, if payment is not timely made for a reason for which the City may withhold payment hereunder, interest shall not accrue until ten (10) calendar days after the grounds for withholding payment have been resolved. C. If partial shipments or deliveries are authorized by the City, the Contractor will be paid for the partial shipment or delivery, as stated above, provided that the invoice matches the shipment or delivery. D. The City may withhold or set off the entire payment or part of any payment otherwise due the Contractor to such extent as may be necessary on account of i. delivery of defective or non -conforming deliverables by the Contractor; ii. third party claims, which are not covered by the insurance which the Contractor is required to provide, are filed or reasonable evidence indicating probable filing of such claims; iii. failure of the Contractor to pay SubContractors, or for labor, materials or equipment; iv. damage to the property of the City or the City's agents, employees or Contractors, which is not covered by insurance required to be provided by the Contractor; v. reasonable evidence that the Contractor's obligations will not be completed within the time specified in the Contract, and that the unpaid balance would not be adequate to cover actual or liquidated damages for the anticipated delay; vi. failure of the Contractor to submit proper invoices with purchase order number, with all required attachments and supporting documentation; or vii. failure of the Contractor to comply with any material provision of the Contract Documents. E. Notice is hereby given that any awarded CONTRACTOR who is in arrears to the City of Denton for delinquent taxes, the City may offset indebtedness owed the City through payment withholding. F. Payment will be made by check unless the parties mutually agree to payment by credit card or electronic transfer of funds. The Contractor agrees that there shall be no additional charges, surcharges, or penalties to the City for payments made by credit card or electronic funds transfer. G. The awarding or continuation of this contract is dependent upon the availability of funding. The City's payment obligations are payable only and solely from funds Appropriated and available for this contract. The absence of Appropriated or other lawfully available funds shall render the Contract null and void to the extent funds are not Appropriated or available and any deliverables delivered but unpaid shall be returned to the Contractor. The City shall provide the Contractor written notice of the failure of the City to make an adequate Appropriation for any fiscal year to pay the amounts due under the Contract, or the reduction of any Appropriation to an amount insufficient to permit the City to pay its obligations under the Contract. In the event of none or inadequate appropriation of funds, there will be no penalty nor removal fees charged to the City. 14. TRAVEL EXPENSES: All travel, lodging and per diem expenses in connection with the Contract shall be paid by the Contractor, unless otherwise stated in the contract terms. During the term of this contract, the Contractor shall bill and the City shall reimburse Contractor for all reasonable and approved out of pocket expenses which are incurred in the connection with the performance of duties hereunder. Notwithstanding the foregoing, expenses for the time spent by the Contractor in traveling to and from City facilities whall not be reimbursed, unless otherwise negotiated. Contract 4 6062 EXHIBIT 3 15. FINAL PAYMENT AND CLOSE-OUT: A. If a DBE/MBE/WBE Program Plan is agreed to and the Contractor has identified SubContractors, the Contractor is required to submit a Contract Close -Out MBE/WBE Compliance Report to the Purchasing Manager no later than the 15th calendar day after completion of all work under the contract. Final payment, retainage, or both may be withheld if the Contractor is not in compliance with the requirements as accepted by the City. B. The making and acceptance of final payment will constitute: i. a waiver of all claims by the City against the Contractor, except claims (1) which have been previously asserted in writing and not yet settled, (2) arising from defective work appearing after final inspection, (3) arising from failure of the Contractor to comply with the Contract or the terms of any warranty specified herein, (4) arising from the Contractor's continuing obligations under the Contract, including but not limited to indemnity and warranty obligations, or (5) arising under the City's right to audit; and ii. a waiver of all claims by the Contractor against the City other than those previously asserted in writing and not yet settled. 16. SPECIAL TOOLS & TEST EQUIPMENT: If the price stated on the Offer includes the cost of any special tooling or special test equipment fabricated or required by the Contractor for the purpose of filling this order, such special tooling equipment and any process sheets related thereto shall become the property of the City and shall be identified by the Contractor as such. 17. RIGHT TO AUDIT: A. The City shall have the right to audit and make copies of the books, records and computations pertaining to the Contract. The Contractor shall retain such books, records, documents and other evidence pertaining to the Contract period and five years thereafter, except if an audit is in progress or audit findings are yet unresolved, in which case records shall be kept until all audit tasks are completed and resolved. These books, records, documents and other evidence shall be available, within ten (10) business days of written request. Further, the Contractor shall also require all SubContractors, material suppliers, and other payees to retain all books, records, documents and other evidence pertaining to the Contract, and to allow the City similar access to those documents. All books and records will be made available within a 50 mile radius of the City of Denton. The cost of the audit will be borne by the City unless the audit reveals an overpayment of I% or greater. If an overpayment of 1% or greater occurs, the reasonable cost of the audit, including any travel costs, must be borne by the Contractor which must be payable within five (5) business days of receipt of an invoice. B. Failure to comply with the provisions of this section shall be a material breach of the Contract and shall constitute, in the City's sole discretion, grounds for termination thereof. Each of the terms "books", "records", "documents" and "other evidence", as used above, shall be construed to include drafts and electronic files, even if such drafts or electronic files are subsequently used to generate or prepare a final printed document. 18. SUBCONTRACTORS: A. If the Contractor identified SubContractors in a DBE/MBE/WBE agreed to Plan, the Contractor shall comply with all requirements approved by the City. The Contractor shall not initially employ any SubContractor except as provided in the Contractor's Plan. The Contractor shall not substitute any SubContractor identified in the Plan, unless the substitute has been accepted by the City in writing. No acceptance by the City of any SubContractor shall constitute a waiver of any rights or remedies of the City with respect to defective deliverables provided by a Sub Contractor. If a Plan Contract 4 6062 EXHIBIT 3 has been approved, the Contractor is additionally required to submit a monthly Subcontract Awards and Expenditures Report to the Procurement Manager, no later than the tenth calendar day of each month. B. Work performed for the Contractor by a SubContractor shall be pursuant to a written contract between the Contractor and SubContractor. The terms of the subcontract may not conflict with the terms of the Contract, and shall contain provisions that: i. require that all deliverables to be provided by the SubContractor be provided in strict accordance with the provisions, specifications and terms of the Contract; ii. prohibit the SubContractor from further subcontracting any portion of the Contract without the prior written consent of the City and the Contractor. The City may require, as a condition to such further subcontracting, that the SubContractor post a payment bond in form, substance and amount acceptable to the City; iii. require SubContractors to submit all invoices and applications for payments, including any claims for additional payments, damages or otherwise, to the Contractor in sufficient time to enable the Contractor to include same with its invoice or application for payment to the City in accordance with the terms of the Contract; iv. require that all SubContractors obtain and maintain, throughout the term of their contract, insurance in the type and amounts specified for the Contractor, with the City being a named insured as its interest shall appear; and v. require that the SubContractor indemnify and hold the City harmless to the same extent as the Contractor is required to indemnify the City. C. The Contractor shall be fully responsible to the City for all acts and omissions of the SubContractors just as the Contractor is responsible for the Contractor's own acts and omissions. Nothing in the Contract shall create for the benefit of any such SubContractor any contractual relationship between the City and any such SubContractor, nor shall it create any obligation on the part of the City to pay or to see to the payment of any moneys due any such SubContractor except as may otherwise be required by law. D. The Contractor shall pay each SubContractor its appropriate share of payments made to the Contractor not later than ten (10) calendar days after receipt of payment from the City. 19. WARRANTY -PRICE: A. The Contractor warrants the prices quoted in the Offer are no higher than the Contractor's current prices on orders by others for like deliverables under similar terms of purchase. B. The Contractor certifies that the prices in the Offer have been arrived at independently without consultation, communication, or agreement for the purpose of restricting competition, as to any matter relating to such fees with any other CONTRACTOR or with any competitor. C. In addition to any other remedy available, the City may deduct from any amounts owed to the Contractor, or otherwise recover, any amounts paid for items in excess of the Contractor's current prices on orders by others for like deliverables under similar terms of purchase. 20. WARRANTY — TITLE: The Contractor warrants that it has good and indefeasible title to all deliverables furnished under the Contract, and that the deliverables are free and clear of all liens, claims, security interests and encumbrances. The Contractor shall indemnify and hold the City harmless from and against all adverse title claims to the deliverables. 21. WARRANTY — DELIVERABLES: The Contractor warrants and represents that all deliverables sold the City under the Contract shall be free from defects in design, workmanship or manufacture, and conform in all material respects to the specifications, drawings, and descriptions Contract 4 6062 EXHIBIT 3 in the Solicitation, to any samples furnished by the Contractor, to the terms, covenants and conditions of the Contract, and to all applicable State, Federal or local laws, rules, and regulations, and industry codes and standards. Unless otherwise stated in the Solicitation, the deliverables shall be new or recycled merchandise, and not used or reconditioned. A. Recycled deliverables shall be clearly identified as such. B. The Contractor may not limit, exclude or disclaim the foregoing warranty or any warranty implied by law; and any attempt to do so shall be without force or effect. C. Unless otherwise specified in the Contract, the warranty period shall be at least one year from the date of acceptance of the deliverables or from the date of acceptance of any replacement deliverables. If during the warranty period, one or more of the above warranties are breached, the Contractor shall promptly upon receipt of demand either repair the non -conforming deliverables, or replace the non -conforming deliverables with fully conforming deliverables, at the City's option and at no additional cost to the City. All costs incidental to such repair or replacement, including but not limited to, any packaging and shipping costs shall be borne exclusively by the Contractor. The City shall endeavor to give the Contractor written notice of the breach of warranty within thirty (30) calendar days of discovery of the breach of warranty, but failure to give timely notice shall not impair the City's rights under this section. D. If the Contractor is unable or unwilling to repair or replace defective or non -conforming deliverables as required by the City, then in addition to any other available remedy, the City may reduce the quantity of deliverables it may be required to purchase under the Contract from the Contractor, and purchase conforming deliverables from other sources. In such event, the Contractor shall pay to the City upon demand the increased cost, if any, incurred by the City to procure such deliverables from another source. E. If the Contractor is not the manufacturer, and the deliverables are covered by a separate manufacturer's warranty, the Contractor shall transfer and assign such manufacturer's warranty to the City. If for any reason the manufacturer's warranty cannot be fully transferred to the City, the Contractor shall assist and cooperate with the City to the fullest extent to enforce such manufacturer's warranty for the benefit of the City. 22. WARRANTY — SERVICES: The Contractor warrants and represents that all services to be provided the City under the Contract will be fully and timely performed in a good and workmanlike manner in accordance with generally accepted industry standards and practices, the terms, conditions, and covenants of the Contract, and all applicable Federal, State and local laws, rules or regulations. A. The Contractor may not limit, exclude or disclaim the foregoing warranty or any warranty implied by law, and any attempt to do so shall be without force or effect. B. Unless otherwise specified in the Contract, the warranty period shall be at least one year from the Acceptance Date. If during the warranty period, one or more of the above warranties are breached, the Contractor shall promptly upon receipt of demand perform the services again in accordance with above standard at no additional cost to the City. All costs incidental to such additional performance shall be borne by the Contractor. The City shall endeavor to give the Contractor written notice of the breach of warranty within thirty (30) calendar days of discovery of the breach warranty, but failure to give timely notice shall not impair the City's rights under this section. C. If the Contractor is unable or unwilling to perform its services in accordance with the above standard as required by the City, then in addition to any other available remedy, the City may reduce the amount of services it may be required to purchase under the Contract from the Contract 4 6062 EXHIBIT 3 Contractor, and purchase conforming services from other sources. In such event, the Contractor shall pay to the City upon demand the increased cost, if any, incurred by the City to procure such services from another source. 23. ACCEPTANCE OF INCOMPLETE OR NON -CONFORMING DELIVERABLES: If, instead of requiring immediate correction or removal and replacement of defective or non- conforming deliverables, the City prefers to accept it, the City may do so. The Contractor shall pay all claims, costs, losses and damages attributable to the City's evaluation of and determination to accept such defective or non -conforming deliverables. If any such acceptance occurs prior to final payment, the City may deduct such amounts as are necessary to compensate the City for the diminished value of the defective or non -conforming deliverables. If the acceptance occurs after final payment, such amount will be refunded to the City by the Contractor. 24. RIGHT TO ASSURANCE: Whenever one party to the Contract in good faith has reason to question the other party's intent to perform, demand may be made to the other party for written assurance of the intent to perform. In the event that no assurance is given within the time specified after demand is made, the demanding party may treat this failure as an anticipatory repudiation of the Contract. 25. STOP WORK NOTICE: The City may issue an immediate Stop Work Notice in the event the Contractor is observed performing in a manner that is in violation of Federal, State, or local guidelines, or in a manner that is determined by the City to be unsafe to either life or property. Upon notification, the Contractor will cease all work until notified by the City that the violation or unsafe condition has been corrected. The Contractor shall be liable for all costs incurred by the City as a result of the issuance of such Stop Work Notice. 26. DEFAULT: The Contractor shall be in default under the Contract if the Contractor (a) fails to fully, timely and faithfully perform any of its material obligations under the Contract, (b) fails to provide adequate assurance of performance under Paragraph 24, (c) becomes insolvent or seeks relief under the bankruptcy laws of the United States or (d) makes a material misrepresentation in Contractor's Offer, or in any report or deliverable required to be submitted by the Contractor to the City. 27. TERMINATION FOR CAUSE: In the event of a default by the Contractor, the City shall have the right to terminate the Contract for cause, by written notice effective ten (10) calendar days, unless otherwise specified, after the date of such notice, unless the Contractor, within such ten (10) day period, cures such default, or provides evidence sufficient to prove to the City's reasonable satisfaction that such default does not, in fact, exist. In addition to any other remedy available under law or in equity, the City shall be entitled to recover all actual damages, costs, losses and expenses, incurred by the City as a result of the Contractor's default, including, without limitation, cost of cover, reasonable attorneys' fees, court costs, and prejudgment and post- judgment interest at the maximum lawful rate. Additionally, in the event of a default by the Contractor, the City may remove the Contractor from the City's vendor list for three (3) years and any Offer submitted by the Contractor may be disqualified for up to three (3) years. All rights and remedies under the Contract are cumulative and are not exclusive of any other right or remedy provided by law. 28. TERMINATION WITHOUT CAUSE: The City shall have the right to terminate the Contract, in whole or in part, without cause any time upon thirty (30) calendar days' prior written notice. Upon receipt of a notice of termination, the Contractor shall promptly cease all further work pursuant to the Contract, with such exceptions, if any, specified in the notice of termination. The Contract 4 6062 EXHIBIT 3 City shall pay the Contractor, to the extent of funds Appropriated or otherwise legally available for such purposes, for all goods delivered and services performed and obligations incurred prior to the date of termination in accordance with the terms hereof. 29. FRAUD: Fraudulent statements by the Contractor on any Offer or in any report or deliverable required to be submitted by the Contractor to the City shall be grounds for the termination of the Contract for cause by the City and may result in legal action. 30. DELAYS: A. The City may delay scheduled delivery or other due dates by written notice to the Contractor if the City deems it is in its best interest. If such delay causes an increase in the cost of the work under the Contract, the City and the Contractor shall negotiate an equitable adjustment for costs incurred by the Contractor in the Contract price and execute an amendment to the Contract. The Contractor must assert its right to an adjustment within thirty (30) calendar days from the date of receipt of the notice of delay. Failure to agree on any adjusted price shall be handled under the Dispute Resolution process specified in paragraph 49. However, nothing in this provision shall excuse the Contractor from delaying the delivery as notified. B. Neither party shall be liable for any default or delay in the performance of its obligations under this Contract if, while and to the extent such default or delay is caused by acts of God, fire, riots, civil commotion, labor disruptions, sabotage, sovereign conduct, or any other cause beyond the reasonable control of such Party. In the event of default or delay in contract performance due to any of the foregoing causes, then the time for completion of the services will be extended; provided, however, in such an event, a conference will be held within three (3) business days to establish a mutually agreeable period of time reasonably necessary to overcome the effect of such failure to perform. 31. INDEMNITY: A. Definitions: i. "Indemnified Claims" shall include any and all claims, demands, suits, causes of action, judgments and liability of every character, type or description, including all reasonable costs and expenses of litigation, mediation or other alternate dispute resolution mechanism, including attorney and other professional fees for: (1) damage to or loss of the property of any person (including, but not limited to the City, the Contractor, their respective agents, officers, employees and subContractors; the officers, agents, and employees of such subContractors; and third parties); and/or (2) death, bodily injury, illness, disease, worker's compensation, loss of services, or loss of income or wages to any person (including but not limited to the agents, officers and employees of the City, the Contractor, the Contractor's SubContractor's, and third parties), ii. "Fault" shall include the sale of defective or non- conforming deliverables, negligence, willful misconduct or a breach of any legally imposed strict liability standard. B. THE CONTRACTOR SHALL DEFEND (AT THE OPTION OF THE CITY), INDEMNIFY, AND HOLD THE CITY, ITS SUCCESSORS, ASSIGNS, OFFICERS, EMPLOYEES AND ELECTED OFFICIALS HARMLESS FROM AND AGAINST ALL INDEMNIFIED CLAIMS DIRECTLY ARISING OUT OF, INCIDENT TO, CONCERNING OR RESULTING FROM THE FAULT OF THE CONTRACTOR, OR THE CONTRACTOR'S AGENTS, EMPLOYEES OR SUBCONTRACTORS, IN THE PERFORMANCE OF THE CONTRACTOR'S OBLIGATIONS UNDER THE Contract 4 6062 EXHIBIT 3 CONTRACT. NOTHING HEREIN SHALL BE DEEMED TO LIMIT THE RIGHTS OF THE CITY OR THE CONTRACTOR (INCLUDING, BUT NOT LIMITED TO, THE RIGHT TO SEEK CONTRIBUTION) AGAINST ANY THIRD PARTY WHO MAY BE LIABLE FOR AN INDEMNIFIED CLAIM. 32. INSURANCE: The following insurance requirements are applicable, in addition to the specific insurance requirements detailed in Appendix D for services only. The successful CONTRACTOR shall procure and maintain insurance of the types and in the minimum amounts acceptable to the City of Denton. The insurance shall be written by a company licensed to do business in the State of Texas and satisfactory to the City of Denton. A. General Requirements: i. The Contractor shall at a minimum carry insurance in the types and amounts indicated and agreed to, as submitted to the City and approved by the City within the procurement process, for the duration of the Contract, including extension options and hold over periods, and during any warranty period. ii. The Contractor shall provide Certificates of Insurance with the coverage's and endorsements required to the City as verification of coverage prior to contract execution and within fourteen (14) calendar days after written request from the City. Failure to provide the required Certificate of Insurance may subject the Offer to disqualification from consideration for award. The Contractor must also forward a Certificate of Insurance to the City whenever a previously identified policy period has expired, or an extension option or hold over period is exercised, as verification of continuing coverage. iii. The Contractor shall not commence work until the required insurance is obtained and until such insurance has been reviewed by the City. Approval of insurance by the City shall not relieve or decrease the liability of the Contractor hereunder and shall not be construed to be a limitation of liability on the part of the Contractor. iv. The Contractor must submit certificates of insurance to the City for all subContractors prior to the subContractors commencing work on the project. v. The Contractor's and all subContractors' insurance coverage shall be written by companies licensed to do business in the State of Texas at the time the policies are issued and shall be written by companies with A.M. Best ratings of A- VII or better. The City will accept workers' compensation coverage written by the Texas Workers' Compensation Insurance Fund. vi. All endorsements naming the City as additional insured, waivers, and notices of cancellation endorsements as well as the Certificate of Insurance shall contain the solicitation number and the following information: City of Denton Materials Management Department 901B Texas Street Denton, Texas 76209 vii. The "other" insurance clause shall not apply to the City where the City is an additional insured shown on any policy. It is intended that policies required in the Contract, covering both the City and the Contractor, shall be considered primary coverage as applicable. viii. If insurance policies are not written for amounts agreed to with the City, the Contractor shall carry Umbrella or Excess Liability Insurance for any differences in amounts specified. If Excess Liability Insurance is provided, it shall follow the form of the primary coverage. ix. The City shall be entitled, upon request, at an agreed upon location, and without Contract 4 6062 EXHIBIT 3 expense, to review certified copies of policies and endorsements thereto and may make any reasonable requests for deletion or revision or modification of particular policy terms, conditions, limitations, or exclusions except where policy provisions are established by law or regulations binding upon either of the parties hereto or the underwriter on any such policies. x. The City reserves the right to review the insurance requirements set forth during the effective period of the Contract and to make reasonable adjustments to insurance coverage, limits, and exclusions when deemed necessary and prudent by the City based upon changes in statutory law, court decisions, the claims history of the industry or financial condition of the insurance company as well as the Contractor. xi. The Contractor shall not cause any insurance to be canceled nor permit any insurance to lapse during the term of the Contract or as required in the Contract. xii. The Contractor shall be responsible for premiums, deductibles and self-insured retentions, if any, stated in policies. All deductibles or self-insured retentions shall be disclosed on the Certificate of Insurance. xiii. The Contractor shall endeavor to provide the City thirty (30) calendar days' written notice of erosion of the aggregate limits below occurrence limits for all applicable coverage's indicated within the Contract. xiv. The insurance coverage's specified in within the solicitation and requirements are required minimums and are not intended to limit the responsibility or liability of the Contractor. B. Specific Coverage Requirements: Specific insurance requirements are contained in the solicitation instrument. 33. CLAIMS: If any claim, demand, suit, or other action is asserted against the Contractor which arises under or concerns the Contract, or which could have a material adverse effect on the Contractor's ability to perform thereunder, the Contractor shall give written notice thereof to the City within ten (10) calendar days after receipt of notice by the Contractor. Such notice to the City shall state the date of notification of any such claim, demand, suit, or other action; the names and addresses of the claimant(s); the basis thereof, and the name of each person against whom such claim is being asserted. Such notice shall be delivered personally or by mail and shall be sent to the City and to the Denton City Attorney. Personal delivery to the City Attorney shall be to City Hall, 215 East McKinney Street, Denton, Texas 76201. 34. NOTICES: Unless otherwise specified, all notices, requests, or other communications required or appropriate to be given under the Contract shall be in writing and shall be deemed delivered three (3) business days after postmarked if sent by U.S. Postal Service Certified or Registered Mail, Return Receipt Requested. Notices delivered by other means shall be deemed delivered upon receipt by the addressee. Routine communications may be made by first class mail, telefax, or other commercially accepted means. Notices to the Contractor shall be sent to the address specified in the Contractor's Offer, or at such other address as a party may notify the other in writing. Notices to the City shall be addressed to the City at 901B Texas Street, Denton, Texas 76209 and marked to the attention of the Purchasing Manager. 35. RIGHTS TO BID, PROPOSAL AND CONTRACTUAL MATERIAL: All material submitted by the Contractor to the City shall become property of the City upon receipt. Any portions of such material claimed by the Contractor to be proprietary must be clearly marked as such. Determination of the public nature of the material is subject to the Texas Public Information Contract 4 6062 EXHIBIT 3 Act, Chapter 552, and Texas Government Code. 36. NO WARRANTY BY CITY AGAINST INFRINGEMENTS: The Contractor represents and warrants to the City that: (i) the Contractor shall provide the City good and indefeasible title to the deliverables and (ii) the deliverables supplied by the Contractor in accordance with the specifications in the Contract will not infringe, directly or contributorily, any patent, trademark, copyright, trade secret, or any other intellectual property right of any kind of any third party; that no claims have been made by any person or entity with respect to the ownership or operation of the deliverables and the Contractor does not know of any valid basis for any such claims. The Contractor shall, at its sole expense, defend, indemnify, and hold the City harmless from and against all liability, damages, and costs (including court costs and reasonable fees of attorneys and other professionals) arising out of or resulting from: (i) any claim that the City's exercise anywhere in the world of the rights associated with the City's' ownership, and if applicable, license rights, and its use of the deliverables infringes the intellectual property rights of any third party; or (ii) the Contractor's breach of any of Contractor's representations or warranties stated in this Contract. In the event of any such claim, the City shall have the right to monitor such claim or at its option engage its own separate counsel to act as co -counsel on the City's behalf. Further, Contractor agrees that the City's specifications regarding the deliverables shall in no way diminish Contractor's warranties or obligations under this paragraph and the City makes no warranty that the production, development, or delivery of such deliverables will not impact such warranties of Contractor. 37. CONFIDENTIALITY: In order to provide the deliverables to the City, Contractor may require access to certain of the City's and/or its licensors' confidential information (including inventions, employee information, trade secrets, confidential know-how, confidential business information, and other information which the City or its licensors consider confidential) (collectively, "Confidential Information"). Contractor acknowledges and agrees that the Confidential Information is the valuable property of the City and/or its licensors and any unauthorized use, disclosure, dissemination, or other release of the Confidential Information will substantially injure the City and/or its licensors. The Contractor (including its employees, Sub - Contractors, agents, or representatives) agrees that it will maintain the Confidential Information in strict confidence and shall not disclose, disseminate, copy, divulge, recreate, or otherwise use the Confidential Information without the prior written consent of the City or in a manner not expressly permitted under this Agreement, unless the Confidential Information is required to be disclosed by law or an order of any court or other governmental authority with proper jurisdiction, provided the Contractor promptly notifies the City before disclosing such information so as to permit the City reasonable time to seek an appropriate protective order. The Contractor agrees to use protective measures no less stringent than the Contractor uses within its own business to protect its own most valuable information, which protective measures shall under all circumstances be at least reasonable measures to ensure the continued confidentiality of the Confidential Information. 38. OWNERSHIP AND USE OF DELIVERABLES: The City shall own all rights, titles, and interests throughout the world in and to the deliverables. A. Patents. As to any patentable subject matter contained in the deliverables, the Contractor agrees to disclose such patentable subject matter to the City. Further, if requested by the City, the Contractor agrees to assign and, if necessary, cause each of its employees to assign the entire right, title, and interest to specific inventions under such patentable subject matter to the City and to execute, acknowledge, and deliver and, if necessary, cause each of its employees to execute, Contract 4 6062 EXHIBIT 3 acknowledge, and deliver an assignment of letters patent, in a form to be reasonably approved by the City, to the City upon request by the City. B. Copyrights. As to any deliverables containing copyrightable subject matter, the Contractor agrees that upon their creation, such deliverables shall be considered as work made -for -hire by the Contractor for the City and the City shall own all copyrights in and to such deliverables, provided however, that nothing in this Paragraph 38 shall negate the City's sole or joint ownership of any such deliverables arising by virtue of the City's sole or joint authorship of such deliverables. Should by operation of law, such deliverables not be considered works made -for -hire, the Contractor hereby assigns to the City (and agrees to cause each of its employees providing services to the City hereunder to execute, acknowledge, and deliver an assignment to the City of) all worldwide right, title, and interest in and to such deliverables. With respect to such work made - for -hire, the Contractor agrees to execute, acknowledge, and deliver and cause each of its employees providing services to the City hereunder to execute, acknowledge, and deliver a work - made -for -hire agreement, in a form to be reasonably approved by the City, to the City upon delivery of such deliverables to the City or at such other time as the City may request. C. Additional Assignments. The Contractor further agrees to, and if applicable, cause each of its employees to, execute, acknowledge, and deliver all applications, specifications, oaths, assignments, and all other instruments which the City might reasonably deem necessary in order to apply for and obtain copyright protection, mask work registration, trademark registration and/or protection, letters patent, or any similar rights in any and all countries and in order to assign and convey to the City, its successors, assigns and nominees, the sole and exclusive right, title, and interest in and to the deliverables. The Contractor's obligations to execute, acknowledge, and deliver (or cause to be executed, acknowledged, and delivered) instruments or papers such as those described in this Paragraph 38 a., b., and c. shall continue after the termination of this Contract with respect to such deliverables. In the event the City should not seek to obtain copyright protection, mask work registration or patent protection for any of the deliverables, but should desire to keep the same secret, the Contractor agrees to treat the same as Confidential Information under the terms of Paragraph 37 above. 39. PUBLICATIONS: All published material and written reports submitted under the Contract must be originally developed material unless otherwise specifically provided in the Contract. When material not originally developed is included in a report in any form, the source shall be identified. 40. ADVERTISING: The Contractor shall not advertise or publish, without the City's prior consent, the fact that the City has entered into the Contract, except to the extent required by law. 41. NO CONTINGENT FEES: The Contractor warrants that no person or selling agency has been employed or retained to solicit or secure the Contract upon any agreement or understanding for commission, percentage, brokerage, or contingent fee, excepting bona fide employees of bona fide established commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty, the City shall have the right, in addition to any other remedy available, to cancel the Contract without liability and to deduct from any amounts owed to the Contractor, or otherwise recover, the full amount of such commission, percentage, brokerage or contingent fee. 42. GRATUITIES: The City may, by written notice to the Contractor, cancel the Contract without Contract 4 6062 EXHIBIT 3 liability if it is determined by the City that gratuities were offered or given by the Contractor or any agent or representative of the Contractor to any officer or employee of the City of Denton with a view toward securing the Contract or securing favorable treatment with respect to the awarding or amending or the making of any determinations with respect to the performing of such contract. In the event the Contract is canceled by the City pursuant to this provision, the City shall be entitled, in addition to any other rights and remedies, to recover or withhold the amount of the cost incurred by the Contractor in providing such gratuities. 43. PROHIBITION AGAINST PERSONAL INTEREST IN CONTRACTS: No officer, employee, independent consultant, or elected official of the City who is involved in the development, evaluation, or decision-making process of the performance of any solicitation shall have a financial interest, direct or indirect, in the Contract resulting from that solicitation. Any willful violation of this section shall constitute impropriety in office, and any officer or employee guilty thereof shall be subject to disciplinary action up to and including dismissal. Any violation of this provision, with the knowledge, expressed or implied, of the Contractor shall render the Contract voidable by the City. The Contractor shall complete and submit the City's Conflict of Interest Questionnaire. 44. INDEPENDENT CONTRACTOR: The Contract shall not be construed as creating an employer/employee relationship, a partnership, or a joint venture. The Contractor's services shall be those of an independent Contractor. The Contractor agrees and understands that the Contract does not grant any rights or privileges established for employees of the City of Denton, Texas for the purposes of income tax, withholding, social security taxes, vacation or sick leave benefits, worker's compensation, or any other City employee benefit. The City shall not have supervision and control of the Contractor or any employee of the Contractor, and it is expressly understood that Contractor shall perform the services hereunder according to the attached specifications at the general direction of the City Manager of the City of Denton, Texas, or his designee under this agreement. The Contractor is expressly free to advertise and perform services for other parties while performing services for the City. 45. ASSIGNMENT -DELEGATION: The Contract shall be binding upon and ensure to the benefit of the City and the Contractor and their respective successors and assigns, provided however, that no right or interest in the Contract shall be assigned and no obligation shall be delegated by the Contractor without the prior written consent of the City. Any attempted assignment or delegation by the Contractor shall be void unless made in conformity with this paragraph. The Contract is not intended to confer rights or benefits on any person, CONTRACTOR or entity not a party hereto; it being the intention of the parties that there are no third party beneficiaries to the Contract. 46. WAIVER: No claim or right arising out of a breach of the Contract can be discharged in whole or in part by a waiver or renunciation of the claim or right unless the waiver or renunciation is supported by consideration and is in writing signed by the aggrieved party. No waiver by either the Contractor or the City of any one or more events of default by the other party shall operate as, or be construed to be, a permanent waiver of any rights or obligations under the Contract, or an express or implied acceptance of any other existing or future default or defaults, whether of a similar or different character. 47. MODIFICATIONS: The Contract can be modified or amended only by a writing signed by both parties. No pre-printed or similar terms on any the Contractor invoice, order or other Contract 4 6062 EXHIBIT 3 document shall have any force or effect to change the terms, covenants, and conditions of the Contract. 48. INTERPRETATION: The Contract is intended by the parties as a final, complete and exclusive statement of the terms of their agreement. No course of prior dealing between the parties or course of performance or usage of the trade shall be relevant to supplement or explain any term used in the Contract. Although the Contract may have been substantially drafted by one party, it is the intent of the parties that all provisions be construed in a manner to be fair to both parties, reading no provisions more strictly against one party or the other. Whenever a term defined by the Uniform Commercial Code, as enacted by the State of Texas, is used in the Contract, the UCC definition shall control, unless otherwise defined in the Contract. 49. DISPUTE RESOLUTION: A. If a dispute arises out of or relates to the Contract, or the breach thereof, the parties agree to negotiate prior to prosecuting a suit for damages. However, this section does not prohibit the filing of a lawsuit to toll the running of a statute of limitations or to seek injunctive relief. Either party may make a written request for a meeting between representatives of each party within fourteen (14) calendar days after receipt of the request or such later period as agreed by the parties. Each party shall include, at a minimum, one (1) senior level individual with decision-making authority regarding the dispute. The purpose of this and any subsequent meeting is to attempt in good faith to negotiate a resolution of the dispute. If, within thirty (30) calendar days after such meeting, the parties have not succeeded in negotiating a resolution of the dispute, they will proceed directly to mediation as described below. Negotiation may be waived by a written agreement signed by both parties, in which event the parties may proceed directly to mediation as described below. B. If the efforts to resolve the dispute through negotiation fail, or the parties waive the negotiation process, the parties may select, within thirty (30) calendar days, a mediator trained in mediation skills to assist with resolution of the dispute. Should they choose this option; the City and the Contractor agree to act in good faith in the selection of the mediator and to give consideration to qualified individuals nominated to act as mediator. Nothing in the Contract prevents the parties from relying on the skills of a person who is trained in the subject matter of the dispute or a contract interpretation expert. If the parties fail to agree on a mediator within thirty (30) calendar days of initiation of the mediation process, the mediator shall be selected by the Denton County Alternative Dispute Resolution Program (DCAP). The parties agree to participate in mediation in good faith for up to thirty (30) calendar days from the date of the first mediation session. The City and the Contractor will share the mediator's fees equally and the parties will bear their own costs of participation such as fees for any consultants or attorneys they may utilize to represent them or otherwise assist them in the mediation. 50. JURISDICTION AND VENUE: The Contract is made under and shall be governed by the laws of the State of Texas, including, when applicable, the Uniform Commercial Code as adopted in Texas, V.T.C.A., Bus. & Comm. Code, Chapter 1, excluding any rule or principle that would refer to and apply the substantive law of another state or jurisdiction. All issues arising from this Contract shall be resolved in the courts of Denton County, Texas and the parties agree to submit to the exclusive personal jurisdiction of such courts. The foregoing, however, shall not be construed or interpreted to limit or restrict the right or ability of the City to seek and secure injunctive relief from any competent authority as contemplated herein. 51. INVALIDITY: The invalidity, illegality, or unenforceability of any provision of the Contract Contract 4 6062 EXHIBIT 3 shall in no way affect the validity or enforceability of any other portion or provision of the Contract. Any void provision shall be deemed severed from the Contract and the balance of the Contract shall be construed and enforced as if the Contract did not contain the particular portion or provision held to be void. The parties further agree to reform the Contract to replace any stricken provision with a valid provision that comes as close as possible to the intent of the stricken provision. The provisions of this section shall not prevent this entire Contract from being void should a provision which is the essence of the Contract be determined to be void. 52. HOLIDAYS: The following holidays are observed by the City: New Year's Day (observed) MLK Day Memorial Day 4th of July Labor Day Thanksgiving Day Day After Thanksgiving Christmas Eve (observed) Christmas Day (observed) New Year's Day (observed) If a Legal Holiday falls on Saturday, it will be observed on the preceding Friday. If a Legal Holiday falls on Sunday, it will be observed on the following Monday. Normal hours of operation shall be between 8:00 am and 4:00 pm, Monday through Friday, excluding City of Denton Holidays. Any scheduled deliveries or work performance not within the normal hours of operation must be approved by the City Manager of Denton, Texas or his authorized designee. 53. SURVIVABILITY OF OBLIGATIONS: All provisions of the Contract that impose continuing obligations on the parties, including but not limited to the warranty, indemnity, and confidentiality obligations of the parties, shall survive the expiration or termination of the Contract. 54. NON -SUSPENSION OR DEBARMENT CERTIFICATION: The City of Denton is prohibited from contracting with or making prime or sub -awards to parties that are suspended or debarred or whose principals are suspended or debarred from Federal, State, or City of Denton Contracts. By accepting a Contract with the City, the Vendor certifies that it's CONTRACTOR and its principals are not currently suspended or debarred from doing business with the Federal Government, as indicated by the General Services Administration List of Parties Excluded from Federal Procurement and Non -Procurement Programs, the State of Texas, or the City of Denton. 55. EQUAL OPPORTUNITY A. Equal Employment Opportunity: No Offeror, or Offeror's agent, shall engage in any discriminatory employment practice. No person shall, on the grounds of race, sex, age, disability, creed, color, genetic testing, or national origin, be refused the benefits of, or be otherwise subjected to discrimination under any activities resulting from this RFQ. B. Americans with Disabilities Act (ADA) Compliance: No Offeror, or Offeror's agent, shall engage in any discriminatory employment practice against individuals with disabilities as defined in the ADA. 56. BUY AMERICAN ACT -SUPPLIES (Applicable to certain federally funded Contract 4 6062 EXHIBIT 3 requirements) The following federally funded requirements are applicable. A. Definitions. As used in this paragraph — i. "Component" means an article, material, or supply incorporated directly into an end product. ii. "Cost of components" means - (1) For components purchased by the Contractor, the acquisition cost, including transportation costs to the place of incorporation into the end product (whether or not such costs are paid to a domestic CONTRACTOR), and any applicable duty (whether or not a duty-free entry certificate is issued); or (2) For components manufactured by the Contractor, all costs associated with the manufacture of the component, including transportation costs as described in paragraph (1) of this definition, plus allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the end product. iii. "Domestic end product" means - (1) An unmanufactured end product mined or produced in the United States; or (2) An end product manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind as those that the agency determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Scrap generated, collected, and prepared for processing in the United States is considered domestic. iv. "End product" means those articles, materials, and supplies to be acquired under the contract for public use. v. "Foreign end product" means an end product other than a domestic end product. vi. "United States" means the 50 States, the District of Columbia, and outlying areas. B. The Buy American Act (41 U.S.C. 10a - 10d) provides a preference for domestic end products for supplies acquired for use in the United States. C. The City does not maintain a list of foreign articles that will be treated as domestic for this Contract; but will consider for approval foreign articles as domestic for this product if the articles are on a list approved by another Governmental Agency. The Offeror shall submit documentation with their Offer demonstrating that the article is on an approved Governmental list. D. The Contractor shall deliver only domestic end products except to the extent that it specified delivery of foreign end products in the provision of the Solicitation entitled 'Buy American Act Certificate". 57. RIGHT TO INFORMATION: The City of Denton reserves the right to use any and all information presented in any response to this contract, whether amended or not, except as prohibited by law. Selection of rejection of the submittal does not affect this right. 58. LICENSE FEES OR TAXES: Provided the solicitation requires an awarded Contractor or supplier to be licensed by the State of Texas, any and all fees and taxes are the responsibility of the respondent. 59. PREVAILING WAGE RATES: The Contractor shall comply with prevailing wage rates as defined by the United States Department of Labor Davis -Bacon Wage Determination at htip://www.dol.gov/whd/contracts/dbralltm and at the Wage Determinations website www.wdol.gov for Denton County, Texas (WD -2509). Contract 4 6062 EXHIBIT 3 60. COMPLIANCE WITH ALL STATE, FEDERAL, AND LOCAL LAWS: The Contractor or supplier shall comply with all State, Federal, and Local laws and requirements. The Respondent must comply with all applicable laws at all times, including, without limitation, the following: (i) §36.02 of the Texas Penal Code, which prohibits bribery; (ii) §36.09 of the Texas Penal Code, which prohibits the offering or conferring of benefits to public servants. The Respondent shall give all notices and comply with all laws and regulations applicable to furnishing and performance of the Contract. 61. FEDERAL, STATE, AND LOCAL REQUIREMENTS: Respondent shall demonstrate on- site compliance with the Federal Tax Reform Act of 1986, Section 1706, amending Section 530 of the Revenue Act of of 1978, dealing with issuance of Form W -2's to common law employees. Respondent is responsible for both federal and State unemployment insurance coverage and standard Workers' Compensation insurance coverage. Respondent shall ensure compliance with all federal and State tax laws and withholding requirements. The City of Denton shall not be liable to Respondent or its employees for any Unemployment or Workers' Compensation coverage, or federal or State withholding requirements. Contractor shall indemnify the City of Denton and shall pay all costs, penalties, or losses resulting from Respondent's omission or breach of this Section. 62. DRUG FREE WORKPLACE: The Contractor shall comply with the applicable provisions of the Drug -Free Work Place Act of 1988 (Public Law 100-690, Title V, Subtitle D; 41 U.S.C. 701 ET SEQ.) and maintain a drug-free work environment; and the final rule, government -wide requirements for drug-free work place (grants), issued by the Office of Management and Budget and the Department of Defense (32 CFR Part 280, Subpart F) to implement the provisions of the Drug -Free Work Place Act of 1988 is incorporated by reference and the Contractor shall comply with the relevant provisions thereof, including any amendments to the final rule that may hereafter be issued. 63. RESPONDENT LIABILITY FOR DAMAGE TO GOVERNMENT PROPERTY: The Respondent shall be liable for all damages to government-owned, leased, or occupied property and equipment caused by the Respondent and its employees, agents, subContractors, and suppliers, including any delivery or Cartage Company, in connection with any performance pursuant to the Contract. The Respondent shall notify the City of Denton Procurement Manager in writing of any such damage within one (1) calendar day. 64. FORCE MAJEURE: The City of Denton, any Customer, and the Respondent shall not be responsible for performance under the Contract should it be prevented from performance by an act of war, order of legal authority, act of God, or other unavoidable cause not attributable to the fault or negligence of the City of Denton. In the event of an occurrence under this Section, the Respondent will be excused from any further performance or observance of the requirements so affected for as long as such circumstances prevail and the Respondent continues to use commercially reasonable efforts to recommence performance or observance whenever and to whatever extent possible without delay. The Respondent shall immediately notify the City of Denton Procurement Manager by telephone (to be contacted in writing within five (5) calendar days of the inception of such occurrence) and describe at a reasonable level of detail the circumstances causing the non-performance or delay in performance. 65. NON -WAIVER OF RIGHTS: Failure of a Party to require performance by another Party under the Contract will not affect the right of such Party to require performance in the future. No Contract 4 6062 EXHIBIT 3 delay, failure, or waiver of either Party's exercise or partial exercise of any right or remedy under the Contract shall operate to limit, impair, preclude, cancel, waive or otherwise affect such right or remedy. A waiver by a Party of any breach of any term of the Contract will not be construed as a waiver of any continuing or succeeding breach. 66. NO WAIVER OF SOVEREIGN IMMUNITY: The Parties expressly agree that no provision of the Contract is in any way intended to constitute a waiver by the City of Denton of any immunities from suit or from liability that the City of Denton may have by operation of law. 67. RECORDS RETENTION: The Respondent shall retain all financial records, supporting documents, statistical records, and any other records or books relating to the performances called for in the Contract. The Respondent shall retain all such records for a period of four (4) years after the expiration of the Contract, or until the CPA or State Auditor's Office is satisfied that all audit and litigation matters are resolved, whichever period is longer. The Respondent shall grant access to all books, records and documents pertinent to the Contract to the CPA, the State Auditor of Texas, and any federal governmental entity that has authority to review records due to federal funds being spent under the Contract. Should a conflict arise between any of the contract documents, it shall be resolved with the following order of precedence (if applicable). In any event, the final negotiated contract shall take precedence over any and all contract documents to the extent of such conflict. 1. Final negotiated contract 2. RFQ/Bid documents 3. City's standard terms and conditions 4. Purchase order 5. Supplier terms and conditions Exhibit D INSURANCE REQUIREMENTS AND WORKERS' COMPENSATION REQUIREMENTS Upon contract execution, all insurance requirements shall become contractual obligations, which the successful Contractor shall have a duty to maintain throughout the course of this contract. STANDARD PROVISIONS: Without limiting any of the other obligations or liabilities of the Contractor, the Contractor shall provide and maintain until the contracted work has been completed and accepted by the City of Denton, Owner, the minimum insurance coverage as indicated hereinafter. Contractor shall file with the Purchasing Department satisfactory certificates of insurance including any applicable addendum or endorsements, containing the contract number and title of the project. Contractor may, upon written request to the Purchasing Department, Contract 4 6062 EXHIBIT 3 ask for clarification of any insurance requirements at any time; however, Contractor shall not commence any work or deliver any material until he or she receives notification that the contract has been accepted, approved, and signed by the City of Denton. All insurance policies proposed or obtained in satisfaction of these requirements shall comply with the following general specifications, and shall be maintained in compliance with these general specifications throughout the duration of the Contract, or longer, if so noted. • Each policy shall be issued by a company authorized to do business in the State of Texas with an A.M. Best Company rating of at least A or better. Any deductibles or self-insured retentions shall be declared in the proposal. If requested by the City, the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its officials, agents, employees and volunteers; or, the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Liability policies shall be endorsed to provide the following: ■ Name as Additional Insured the City of Denton, its Officials, Agents, Employees and volunteers. ■ That such insurance is primary to any other insurance available to the Additional Insured with respect to claims covered under the policy and that this insurance applies separately to each insured against whom claim is made or suit is brought. The inclusion of more than one insured shall not operate to increase the insurer's limit of liability. • Cancellation: City requires 30 day written notice should any of the policies described on the certificate be cancelled or materially changed before the expiration date. • Should any of the required insurance be provided under a claims made form, Contractor shall maintain such coverage continuously throughout the term of this contract and, without lapse, for a period of three years beyond the contract expiration, such that occurrences arising during the contract term which give rise to claims made after expiration of the contract shall be covered. • Should any of the required insurance be provided under a form of coverage that includes a general annual aggregate limit providing for claims investigation or legal defense costs to be included in the general annual aggregate limit, the Contractor shall either double the occurrence limits or obtain Owners and Contractors Protective Liability Insurance. • Should any required insurance lapse during the contract term, requests for payments originating after such lapse shall not be processed until the City receives satisfactory evidence of reinstated coverage as required by this contract, effective as of the lapse date. If insurance is not reinstated, City may, at its sole option, terminate this agreement effective on the date of the lapse. Contract 4 6062 EXHIBIT 3 SPECIFIC ADDITIONAL INSURANCE REQUIREMENTS: All insurance policies proposed or obtained in satisfaction of this Contract shall additionally comply with the following marked specifications, and shall be maintained in compliance with these additional specifications throughout the duration of the Contract, or longer, if so noted: [X] A. General Liability Insurance: General Liability insurance with combined single limits of not less than $1,000,000.00 shall be provided and maintained by the Contractor. The policy shall be written on an occurrence basis either in a single policy or in a combination of underlying and umbrella or excess policies. If the Commercial General Liability form (ISO Form CG 0001 current edition) is used: Coverage A shall include premises, operations, products, and completed operations, independent Contractors, contractual liability covering this contract and broad form property damage coverage. • Coverage B shall include personal injury. • Coverage C, medical payments, is not required. If the Comprehensive General Liability form (ISO Form GL 0002 Current Edition and ISO Form GL 0404) is used, it shall include at least: • Bodily injury and Property Damage Liability for premises, operations, products and completed operations, independent Contractors and property damage resulting from explosion, collapse or underground (XCU) exposures. • Broad form contractual liability (preferably by endorsement) covering this contract, personal injury liability and broad form property damage liability. [] Automobile Liability Insurance: Contractor shall provide Commercial Automobile Liability insurance with Combined Single Limits (CSL) of not less than $500,000 either in a single policy or in a combination of basic and umbrella or excess policies. The policy will include bodily injury and property damage liability arising out of the operation, maintenance and use of all automobiles and mobile equipment used in conjunction with this contract. Satisfaction of the above requirement shall be in the form of a policy endorsement for: • any auto, or • all owned hired and non -owned autos. [] Workers' Compensation Insurance Contractor shall purchase and maintain Workers' Compensation insurance which, in Contract 4 6062 EXHIBIT 3 addition to meeting the minimum statutory requirements for issuance of such insurance, has Employer's Liability limits of at least $100,000 for each accident, $100,000 per each employee, and a $500,000 policy limit for occupational disease. The City need not be named as an "Additional Insured" but the insurer shall agree to waive all rights of subrogation against the City, its officials, agents, employees and volunteers for any work performed for the City by the Named Insured. For building or construction projects, the Contractor shall comply with the provisions of Attachment 1 in accordance with §406.096 of the Texas Labor Code and rule 28TAC 110.110 of the Texas Workers' Compensation Commission (TWCC). Owner's and Contractor's Protective Liability Insurance The Contractor shall obtain, pay for and maintain at all times during the prosecution of the work under this contract, an Owner's and Contractor's Protective Liability insurance policy naming the City as insured for property damage and bodily injury which may arise in the prosecution of the work or Contractor's operations under this contract. Coverage shall be on an "occurrence" basis and the policy shall be issued by the same insurance company that carries the Contractor's liability insurance. Policy limits will be at least $500,000.00 combined bodily injury and property damage per occurrence with a $1,000,000.00 aggregate. Fire Damage Legal Liability Insurance Coverage is required if Broad form General Liability is not provided or is unavailable to the Contractor or if a Contractor leases or rents a portion of a City building. Limits of not less than each occurrence are required. Professional Liability Insurance Professional liability insurance with limits not less than $1,000,000.00 per claim with respect to negligent acts, errors or omissions in connection with professional services is required under this Agreement. Builders' Risk Insurance Builders' Risk Insurance, on an All -Risk form for 100% of the completed value shall be provided. Such policy shall include as "Named Insured" the City of Denton and all subContractors as their interests may appear. Environmental Liability Insurance Environmental liability insurance for $1,000,000 to cover all hazards contemplated by this contract. Riggers Insurance The Contractor shall provide coverage for Rigger's Liability. Said coverage may be provided by a Rigger's Liability endorsement on the existing CGL coverage; through and Installation Floater covering rigging Contractors; or through ISO form IH 00 91 12 11, Contract 4 6062 EXHIBIT 3 Rigger's Liability Coverage form. Said coverage shall mirror the limits provided by the CGL coverage [ ] Commercial Crime Provides coverage for the theft or disappearance of cash or checks, robbery inside/outside the premises, burglary of the premises, and employee fidelity. The employee fidelity portion of this coverage should be written on a "blanket" basis to cover all employees, including new hires. This type insurance should be required if the Contractor has access to City funds. Limits of not less than $ each occurrence are required. [ ] Additional Insurance Other insurance may be required on an individual basis for extra hazardous contracts and specific service agreements. If such additional insurance is required for a specific contract, that requirement will be described in the "Specific Conditions" of the contract specifications. ATTACHMENT [] Workers' Compensation Coverage for Building or Construction Projects for Governmental Entities I -W onifflmir:M, Certificate of coverage ("certificate") -A copy of a certificate of insurance, a certificate of authority to self -insure issued by the commission, or a coverage agreement (TWCC-81, TWCC-82, TWCC-83, or TWCC-84), showing statutory workers' compensation insurance coverage for the person's or entity's employees providing services on a project, for the duration of the project. Duration of the project - includes the time from the beginning of the work on the project until the Contractor's/person's work on the project has been completed and accepted by the governmental entity. Persons providing services on the project ("subContractor" in §406.096) - includes all persons or entities performing all or part of the services the Contractor has undertaken to perform on the project, regardless of whether that person contracted directly with the Contractor and regardless of whether that person has employees. This includes, without limitation, independent Contractors, subContractors, leasing companies, motor carriers, owner - operators, employees of any such entity, or employees of any entity which furnishes persons to provide services on the project. "Services" include, without limitation, providing, hauling, or delivering equipment or materials, or providing labor, transportation, or other service related to a project. "Services" does not include activities unrelated to the project, such as food/beverage vendors, office supply deliveries, and delivery of portable toilets. Contract 4 6062 EXHIBIT 3 B. The Contractor shall provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any overage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all employees of the Contractor providing services on the project, for the duration of the project. C. The Contractor must provide a certificate of coverage to the governmental entity prior to being awarded the contract. D. If the coverage period shown on the Contractor's current certificate of coverage ends during the duration of the project, the Contractor must, prior to the end of the coverage period, file a new certificate of coverage with the governmental entity showing that coverage has been extended. E. The Contractor shall obtain from each person providing services on a project, and provide to the governmental entity: 1. a certificate of coverage, prior to that person beginning work on the project, so the governmental entity will have on file certificates of coverage showing coverage for all persons providing services on the project; and 2. no later than seven days after receipt by the Contractor, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project. F. The Contractor shall retain all required certificates of coverage for the duration of the project and for one year thereafter. G. The Contractor shall notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the Contractor knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project. H. The Contractor shall post on each project site a notice, in the text, form and manner prescribed by the Texas Workers' Compensation Commission, informing all persons providing services on the project that they are required to be covered, and stating how a person may verify coverage and report lack of coverage. I. The Contractor shall contractually require each person with whom it contracts to provide services on a project, to: 1. provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all of Contract 4 6062 EXHIBIT 3 its employees providing services on the project, for the duration of the project; 2. provide to the Contractor, prior to that person beginning work on the project, a certificate of coverage showing that coverage is being provided for all employees of the person providing services on the project, for the duration of the project; 3. provide the Contractor, prior to the end of the coverage period, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project; 4. obtain from each other person with whom it contracts, and provide to the Contractor: a. a certificate of coverage, prior to the other person beginning work on the project; and b. a new certificate of coverage showing extension of coverage, prior to the end of the coverage period, if the coverage period shown on the current certificate of coverage ends during the duration of the project; 5. retain all required certificates of coverage on file for the duration of the project and for one year thereafter; 6. notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the person knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project; and 7. Contractually require each person with whom it contracts, to perform as required by paragraphs (1) - (7), with the certificates of coverage to be provided to the person for whom they are providing services. J. By signing this contract or providing or causing to be provided a certificate of coverage, the Contractor is representing to the governmental entity that all employees of the Contractor who will provide services on the project will be covered by workers' compensation coverage for the duration of the project, that the coverage will be based on proper reporting of classification codes and payroll amounts, and that all coverage agreements will be filed with the appropriate insurance carrier or, in the case of a self-insured, with the commission's Division of Self -Insurance Regulation. Providing false or misleading information may subject the Contractor to administrative penalties, criminal penalties, civil penalties, or other civil actions. K. The Contractor's failure to comply with any of these provisions is a breach of contract by the Contractor which entitles the governmental entity to declare Contract 4 6062 EXHIBIT 3 the contract void if the Contractor does not remedy the breach within ten days after receipt of notice of breach from the governmental entity. Contract 4 6062 EXHIBIT 3 Exhibit E Certificate of Interested Parties Electronic Filing In 2015, the Texas Legislature adopted House Bill 1295, which added section 2252.908 of the Government Code. The law states that the City may not enter into this contract unless the Contractor submits a disclosure of interested parties (Form 1295) to the City at the time the Contractor submits the signed contract. The Texas Ethics Commission has adopted rules requiring the business entity to file Form 1295 electronically with the Commission. Contractor will be required to furnish an original notarized Certificate of Interest Parties before the contract is awarded, in accordance with Government Code 2252.908. The Contractor shall: 1. Log onto the State Ethics Commission Website at : https://www.ethics.state.tx.us/whatsnew/elf info forml295.htm 2. Register utilizing the tutorial provided by the State 3. Print a copy of the completed Form 1295 4. Enter the Certificate Number on page 2 of this contract. 5. Sign and notarize the Form 1295 6. Email the notarized form to purchasingCityofdenton.com with the contract number in the subject line. (EX: Contract 1234 — Form 1295) The City must acknowledge the receipt of the filed Form 1295 not later than the 30th day after Council award. Once a Form 1295 is acknowledged, it will be posted to the Texas Ethics Commission's website within seven business days. Contract 4 6062 EXHIBIT 3 Exhibit F CONFLICT OF INTEREST QUESTIONNAIRE - FORM CIQ For vendor or other person doing business with local governmental entity This questionnaire reflects changes made to the law by H.B. 23, 84th Leg., Regular Session. This questionnaire is being filed in accordance with Chapter 176, Local Government Code, by a vendor who has a business relationship as defined by Section 176.001(1-a) with a local governmental entity and the vendor meets requirements under Section 176.006(a). By law this questionnaire must be filed with the records administrator of the local government entity not later than the 7th business day after the date the vendor becomes aware of facts that require the statement to be filed. See Section 176.006(a-1), Local Government Code. A vendor commits an offense if the vendor knowingly violates Section 176.006, Local Government Code. An offense under this section is a misdemeanor. Name of vendor who has a business relationship with local governmental entity. SAWKO & BURROUGHS, P.C. 2 El Check this box if you are filing an update to a previously filed questionnaire. (The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7th business day after the date on which you became aware that the originally filed questionnaire was incomplete or inaccurate.) 3 1 Name of local government officer about whom the information in this section is being disclosed. Name of Officer This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the vendor has an employment or other business relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary. A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the vendor? = Yes No B. Is the vendor receiving or likely to receive taxable income, other than investment income, from or at the direction of the local government officer named in this section AND the taxable income is not received from the local governmental entity? Yes = No C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer serves as an officer or director, or holds an ownership of one percent or more? = Yes No D. Describe each employment or business and family relationship with the local government officer named in this section. 4 ❑I have no Conflict of Interest to disclose. 5 Signature of vendor doing business with the governmental entity Date Contract 4 6062 Shareholders: 1172 Bent Oaks Drive Gregory J. Sawko Denton, Texas 76210 Mark A, Burroughs www.Den42nLawjer.c= (940) 382-4357 Telephone fiSywkoQDentonLawyer.com (940) 591-0991 Telecopy June 22, 2016 Via l"nnail to I:Iton.11rcitV0Iaientolixo it Mr. Elton D. Brock, MBA, CTPM, CTCM, CPM, CPSM Manager — Materials Management 901 B Texas Street Denton, Texas 76209 RE: RFQ#6062 Delinquent Tax Collection Service for the City of Denton Supplemental Request for Qualifying Criteria Received 6/22/16 Dear. Mr. Brock: In response to your request referenced above, Sawko & Burroughs, P.C. offers the following: Sawko & Burroughs, P.C. does hereby agree to match the "guaranteed" collection rate for taxes in the current year, not including over age 65 homestead deferrals and accounts under protection of a Bankruptcy Court, as offered by McCreary, Veselka, Bragg, and Allen and presented to the City at the Denton City Council meeting of June 21, 2016 under Agenda Item 5A, which is a "guaranteed" collection rate of seventy percent (70%), from July 1 to June 30 of each year of the contract, beginning July 1, 2016 for current year 2015 taxes. It is understood that the amount of over age 65 homestead and Bankruptcy Court protected amounts for unpaid 2015 taxes currently total $102,246 out of total $575,562 unpaid. 2. In addition, Sawko & Burroughs, P.C. does hereby agree to match any competing law firm's highest "guaranteed" rate of collections as defined herein that may be offered to the City in response to this supplemental request. We believe that in the spirit of the RFQ process, by making this commitment, we have done everything we can do to meet the new criteria discussed by the Denton City Council and provide an "apples to apples" comparison of Mr. -Elton D. Brock ,un,e, 22, 2016 Fag-, 2 of 2 qualifications given the additional direction to staff and this request for supplemental RFQ response. We have been delighted to represent the City of Denton and even more delight that the City of Denton has rated our firm the highest among the competitors for tll contract. We hope and trust that we have fully addressed this supplemental request"I order to remove any ambiguity related to our qualifications to continue to perforrm th highly specialized professional service. O.NMXGI GjS/MAB/MM MATERIALS MANAGEMENT DIVISION @ 901-B TEXAS STREET * DENTON,TEXAS 76209 940.349.7100 * FAX 940.349.7302 To: Gregory J. Sawko, Attorney — Sawko & Burroughs, P.C. gaawko&dentonlawyer.corki From: Elton D. Brock, Manager — Materials Management Subject: RFQ #6062 Delinquent Tax Collection Services for the City of Denton In accordance with the provisions of Texas Government Code 2254 (Professional Services Procurement Act), the City of Denton is requesting additional clarification from all respondents. Please review the question below and respond accordingly by Friday, June 24, 2016 at 10:00 am. Please provide a "guaranteed" collection rate for taxes in the current year, not including over age 65 homestead deferrals, and accounts under protection of a Bankruptcy Court, given the following tax base facts: a. For the 2015 tax year, the amount of delinquent accounts for the City of Denton was $575,562, and the amount of homestead deferrals and Bankruptcy Court protected accounts totaled $102,246. 0 •- I , -I I Best regards, --- - -* 0417-0—MP, I "I", .I I" Elton D. Brock, MBA, CTPM, CTCM, CPM, CPSM Manager — Materials Management 901B Texas Street Denton, Texas 76209 940-349-7133 elton.brock(o-),cityofdenton.com "Dedicated to Quality and Service www.cityofdenton.com Shareholders: Gregory I Sawko Mark A. Burroughs www.DentonLawyer.com t r-SWKO BU & ATTORNEYS AT LAW 1172 Bent Oaks Drive Denton, Texas 76210 (940) 382-4357 Telephone (940) 591-0991 Telecopy June 23, 2016 Via E Maid: elton.broct@ci&ofdenton.com Mr. Elton D. Brock, Manager — Materials and Management City of Denton, Texas Via E --Maid: bI3 an.langle�citvofdenton.com Mr, Bryan Langley, Assistant City Manager City of Denton, Texas AttvBurrou¢hsAa DentonLawyer.com RE: RFQ #6062 — Delinquent Tax Collections Services for the City of Denton Mayor Watts' Question on Comparing Collection Rates Criteria Dear Elton and Bryan: We have been able to bring together the City's last two collections year histories for the current Denton RFQ target collections rate for current -year collections of 60% of the total delinquency roll (no deductions) collected from July 1 to June 30 each year, compared with the 70% collections rate (deducting bankruptcies and over -65 homestead deferrals) for the same period. Although a few clarifications and/or assumptions must be made, as identified herein, I believe Mayor Watts' question regarding the substantive difference in outcomes between the two criteria, 60% total collections currently used versus 70% collections after the exclusions referenced by the McCreary "guarantee", is addressed quite well. 2014 Current -Year Collections (for 2015-16 collections period) As of the end of May 2016, $204,749 2014 City taxes remain unpaid of the original $575,562 starting balance on July 1, 2015. (Note: June 2016 figures are not yet in to complete year.) Under current 60° criteria: 64.43 % has been collected to -date. Under 70% with exclusions criteria: 72.74% has been collected to -date (assumption: only accounts marked bankruptcy and over -65 deferral are deducts, amounting to $2,555 and $45,265, respectively). Page I of Elton D. Brock Bryan Langley Page Two June 23, 2016 Under 70% with exclusions criteria: 80.85% has'been collected to -date (assumption: added to exclusions are accounts flagged "different delinquency date" by the Tax Office, which appear to include many additional homestead deferrals, plus rollbacks, quarterly payments, Tax Office partial payment agreements and other legally uncollectible accounts) 2013 Current -Year Collections (for 2014-15 collections period) As of June 30, 2015, $187,955 total 2013 City taxes remain unpaid of the original $520,005 starting balance on July 1, 2014. Under 60% criteria: 63.86% was collected. Under 70% criteria: 71.77% was collected (with same first assumption as above). Under 70% criteria: 81.72% was collected (with same second assumption as above). The reason for the two different sets of assumptions on the 70% collections criteria for applying the exclusions of "legally unenforceable" delinquents is that the rolls we receive from the Denton County Tax Office contain designations of unenforceable accounts that we cannot immediately verify. It appears some crossover of over -65 homestead deferrals appears within "different delinquency date" designations. Since neither category is legally enforceable in most if not all instances, it has not previously mattered to us to clarify the designations. With the supplemental criteria/question about the 70% "guarantee" raised by the City Council on RFQ #6062, the designations of homestead deferral differentiated from other not legally collectible accounts has become important for the first time. Thus, we included the alternative assumptions to provide a more complete answer to the Mayor's question. Also, trying to follow the spirit of the Council discussion initiated by Mr. Hayes on behalf of McCreary, et al, the "guarantee" of 70% collections was only after removal from the computation those accounts that cannot be legally enforced due to two particular statutory designations. However, there are many more such legally unenforceable categories that prevent us from moving on accounts than just the over -65 deferrals and bankruptcies referenced at the Council meeting. Texas Property Tax Code Sections 33.02 - partial payment agreements; Section 31.031 - quarterly payment plans; Section 23.55 — ag rollback; Appraisal District supplements; miscellaneous exemptions; local Probate Court pre-emption; expiration of statutes of limitations; etc., are all examples that prevent enforcement action by us on City accounts right now, encompassing thousands of additional uncollectible dollars in base taxes (until and unless the designation changes on each account). We do not address all of these additional categories of legally unenforceable accounts. However, the second assumption used on our chart above for the second 70% collections "guarantee" computation adds to the subtracted exclusions the "different delinquency date" designation that encompasses several of these legally uncollectible categories so as to include all homestead deferrals in the exclusion from the new 70% collections rate computation. Rage 2 of 3 Elton D. Brock Bryan Langley Page Three June 23, 2016 This is the best we can do given the short notice and. limited information provided about the McCreary conditional 70% "guarantee" criteria (we, of course, do not have access to their response to the RFQ so cannot comment on their exact suggested criteria). We hope this is helpful in your analysis of our services currently being provided given the Council request for clarification/response to the 70% collections rate "guarantee" suggestion. I am enclosing breakouts of the City's tax roll upon which much of this analysis is based, which breakouts in turn are principally based on the Denton County Tax Office public records. Sincerely, SAWKO & BURROUGHS, PIQ. ell Mark A,,Bu, �ghs Attorney at Law Enclosures G/ToYJCurrentJurisdictiondCityDentWCorrespondent'Brwk-Lmgley062316 Page 3 of 2 41 2 d d a * . w »;r: «�« » Q w « ... . . .;t : : y : t � . - . . \./ � � �� ^ � � � � � \�» \ / \�� '! � � � \ � f \ � \ \ � & \ � � - � � � � % � � � . v v a ? '?�\ /�® :;&�y \:;» � � � � � \ � § � 3 D � b � k �\�/ ■� \ ,� � b � k q 0 w MATERIALS MANAGEMENT DIVISION a 901-B TEXAS STREET ® DENT®N, TEXAS 76209 940.349.7100 9 FAX 940.349.7302 To: Gregory J. Sawko, Attorney — Sawko & Burroughs, P.C. GSawko _,dentonlawyer.com From: Elton D. Brock, Manager — Materials Management Subject: RFQ #6062 Delinquent Tax Collection Services for the City of Denton In accordance with the provisions of Texas Government Code 2254 (Professional Services Procurement Act), the City of Denton is requesting additional clarification from all respondents. Please review the question below and respond accordingly by Friday. June 24, 2016 at I0r00 a. 1. Please provide a "guaranteed" collection rate for taxes in the current year, not including over age 65 homestead deferrals, and accounts under protection of a Bankruptcy Court, given the following tax base facts: a. For the 2015 tax year, the amount of delinquent accounts for the City of Denton was $575,562, and the amount of homestead deferrals and Bankruptcy Court protected accounts totaled $102,246. Inquiries and responses should be directed to elton.brock ,cityofdenton.com. Best regards, Elton _ Brock, MBA, CTPM, CTCM, CPM, CPSM Manager — Materials Management 901B Texas eet Denton, Texas 76209 940-349-7133 clton.b 2gk@9i13mAj01Qn= "Dedicated to Quality and Service" www.cityofdenton.com PerdueBrandonFielderCollinS&Mott LLP ATTORNEYS AT LAW 1919 S, SHILOH RD., SUITE 640, LB 40 GARLAND, TEXAS 75042 TELEPHONE 972-278-8282 FAX 972-278-8222 www.pbfcm.com June 24, 2016 Elton D. Brock, MBA, C.P.M., CPSM Manager, Materials Management City of Denton RFQ # 6062 for Delinquent Tax Collection Services 901-B Texas Street Denton, Texas 76209 Dear Mr. Brock, In response to the City's request for clarification, our firm "guarantees" that we would achieve an eighty percent (80%) collection rate for taxes in the current tax year, not including homestead deferrals and accounts under protection of the Bankruptcy Court. Please let me know if you need any further information. Sincerely, J. Douglas Burnside AMARILLO ARLINGTON AUSTIN CONROE GARLAND HOUSTON LUBBOCK MCALLEN MIDLAND SAN ANTONIO TYLER WICHITA FALLS Springer, Chuck W From: C. Corey Fickes <Corey.Fickes@lgbs.com> Sent: Friday, June 24, 2016 10:40 AM To: Brock, Elton D Subject: Response - Additional informatoin for RFQ#6062 Elton Please permit this as our response to the request for additional information. The City has asked whether each firm can guarantee a collection rate of 70%. Although we are confident that our collection activities would reach these goals based on our average collection rate for similar entities, as a law firm the State Bar prohibits us from guaranteeing outcomes in legal matters. As to the additional offer by one firm to write a check for any missed goal, this is an area of legal uncertainty and we do not wish to be a party to placing the City in a vulnerable or embarrassing position by enticing the City in a misguided effort to gain an advantage in the selection process. In addition, for the City, we advise caution in this matter. What a vendor is willing to agree to in order to get a contract is not necessarily in the best interests of the City. Our success in our prior representation of the City for delinquent tax collection services and our current efforts with the municipal court are indicative of the level of performance we provide and hope the City finds that to be compelling. If there are any additional questions, please do not hesitate to contact me. Thank you Corey Fickes C. Corey Fickes Partner Linebarger Goggan Blair & Sampson, LLP Attorneys at Law Corey.Fickes@lgbs,com 100 Throckmorton Suite 300 Fort Worth, TX 76102 Main: (817) 877-4589 Direct: (817) 317-9556 Fax: (817) 877-0601 http://www.igbs.com/ CONFIDENTIALITY STATEMENT This transmission may be: (1) subject to the Attorney -Client Privilege, (2) an attorney work product, or (3) strictly confidential. If you are not the intended recipient of this message, you may not disclose, print, copy or disseminate this information. If you have received this in error, please reply and notify the sender (only) and delete the message. Unauthorized interception of this e-mail is a violation of federal criminal law. City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 16-762, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: Denton Municipal Electric CM/ ACM: Howard Martin, Utilities 349-8232 Date: June 28, 2016 SUBJECT Consider adoption of an ordinance authorizing the City Manager, or his authorized designee to execute an agreement or agreements by and between the City of Denton, Texas and the Texas Municipal Power Agency (TMPA), that provides for terms and conditions under which the parities will be jointly manage the responsibility of the operations of TMPA, in substantial conformity with the attached exhibits; authorizing the expenditure of funds therefor; and providing an effective date. BACKGROUND The City of Denton is a member of the TMPA who owns transmission, generation and related assets that deliver electric power to TMPA member cities including the City of Denton. For many years the sole agreement governing the arraignments between TMPA and its members has been a Power Sales Contract that came to being in the mid-1970s. That agreement left unaddressed a great number of important issues like the decommissioning of generation, environmental remediation, disposition of assets, transmission, and the dissolution of TMPA itself. Recognizing the need to address these issues in an orderly fashion, the member cities of TMPA began a negotiation between themselves to create an agreement that does so. The agreement herein is the culmination of that process. This is the result of a careful and methodical process by the representatives of the TMPA and the City of Denton, the City of Bryan, the City of Garland, the City of Greenville, Texas. OPTIONS 1. Approval an ordinance authorizing the City of Denton to enter into a Joint Operating Agreement between TMPA and its member cities. 2. Do not approve an ordinance authorizing the City of Denton to enter into a Joint Operating Agreement between TMPA and its member cities. RECOMMENDATION 1. DME recommends that the City Council approve an ordinance authorizing the City Manager, or his designee to execute the Joint Operating Agreement between TMPA and its member cities in substantial City of Denton Page 1 of 2 Printed on 6/24/2016 povveied by I_egivt9i IN File #: ID 16-762, Version: 1 conformity with the attached version. EXHIBITS Ordinance (contains proposed Joint Operating Agreement as Exhibit "A") Respectfully submitted: Phil Williams General Manager Prepared by: Smith Day Compliance Manager City of Denton Page 2 of 2 Printed on 6/24/2016 povveied by I_egist9i I;, ORDINANCE NO. 2016 - AN ORDINANCE OF THE CITY COUNCIL OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE A JOINT OPERATING AGREEMENT AMONG AND BETWEEN THE TEXAS MUNICIPAL POWER AGENCY, CITY OF BRYAN, TEXAS, THE CITY OF DENTON, TEXAS, THE CITY OF GARLAND, TEXAS AND THE CITY OF GREENVILLE, TEXAS REGARDING THE PROCEDURES FOR DECOMMISSIONING AND/OR DISPOSITION OF ASSETS, ENVIRONMENTAL REMEDIATION AND LIABILITY, OPERATIONS OTHER THAN SALES OF POWER AND ENERGY, AND THE DISSOLUTION OF TMPA; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Denton, Texas is a Member City of Texas Municipal Power Agency ("TMPA"), a Joint Powers Agency; and TMPA consists of four Member Cities, being the Cities of Bryan, Texas, Denton, Texas, Garland, Texas, and Greenville, Texas; and WHEREAS, the principal contractual agreement between TMPA and Member Cities is the Power Sales Contract which addresses sales of power and energy. This agreement does not address transmission or mining operations, decommissioning of generation, environmental remediation or indemnity, disposition of assets, or dissolution of TMPA; and WHEREAS, the Joint Operating Agreement addresses matters which include the operations and decommissioning of the plant, transmission and mining operations, ultimate disposition of assets, environmental remediation, and environmental liability, and the dissolution of TMPA.; and WHEREAS, it is appropriate for the City to execute this "Joint Operating Agreement Between Texas Municipal Power Agency, the City of Bryan, Texas, the City of Denton, Texas, the City of Garland, Texas and the City of Greenville, Texas" (the "Agreement"); NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON ORDAINS: SECTION 1. The recitals in the preamble are true and correct and are incorporated herewith by reference. SECTION 2. The City Manager, or his designee, is authorized to execute and deliver the "Joint Operating Agreement Between Texas Municipal Power Agency, the City of Bryan, Texas, the City of Denton, Texas, the City of Garland, Texas and the City of Greenville, Texas", a copy of which Agreement is attached as Exhibit "A," and which Agreement is incorporated by reference. SECTION 3. The City Manager, or his designee, is authorized to execute and deliver the Agreement and any other and further documents related to the said Agreement as are necessary to effectuate, finalize and deliver said Agreement. SECTION 4. This ordinance shall be and become effective immediately upon and after its adoption and approval; provided however, that the Texas Municipal Power Agency, the City of Bryan, Texas, the City of Garland, Texas, and the City of Greenville, Teaxs have each approved said Agreement. PASSED AND APPROVED this the day of 2016. ATTEST: JENNIFER WALTERS, CITY SECRETARY IN APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY By: J CHRIS WATTS, MAYOR 2 EXHIBIT "A" JOINT OPERATING AGREEMENT BETWEEN TEXAS MUNICIPAL POWER AGENCY AND CITY OF BRYAN, TEXAS CITY OF DENTON, TEXAS CITY OF GARLAND, TEXAS CITY OF GREENVILLE, TEXAS Effective: September 1, 2016 JOINT OPERATING AGREEMENT TABLE OF CONTENTS Page ARTICLE 1. TERM, DEFINITIONS, RELATION TO AND ORDER OF PRECEDENCE WITH REGARD TO OTHER CONTRACTUAL COMMITMENTS ...................... 2 ARTICLE II. OPERATIONS OF THE AGENCY .............................................. 5 ARTICLE III. AGREEMENT REGARDING MINING OPERATION AND DISPOSITION OF MINING ASSETS ................................ 12 ARTICLE IV. AGREEMENT REGARDING TRANSMISSION OPERATIONS AND DISPOSITION OF TRANSMISSION ASSETS......................................................................................... 13 ARTICLE V. POWER SALES CONTRACT TERM, DECOMMISSIONING, DISPOSITION OF GENERATION ASSETS, AND MATTERS RELATING TO DISSOLUTION OF THE AGENCY ................. 17 ARTICLE VI. INSURANCE AND INDEMNITIES ............................................ 22 ARTICLE VII. OTHER MATTERS....................................................................... 25 ARTICLE VIII. MISCELLANEOUS PROVISIONS .............................................. 26 SCHEDULES: SCHEDULE A GENERATION ASSETS SCHEDULE B MINING ASSETS SCHEDULE C TRANSMISSION ASSETS SCHEDULE D ADMINISTRATIVE ASSETS AND ALLOCATIONS SCHEDULE E PROPORTIONAL SHARES OF EACH PARTICIPATING PUBLIC ENTITY AS OF SEPTEMBER 30, 2015 SCHEDULE F DECOMMISSIONING ESCROW AGREEMENT SCHEDULE G MINE RECLAMATION PLAN SCHEDULE H INDEMNITY ESCROW AGREEMENT 1 JOINT OPERATING AGREEMENT BETWEEN TEXAS MUNICIPAL POWER AGENCY AND CITY OF BRYAN, TEXAS CITY OF DENTON, TEXAS CITY OF GARLAND, TEXAS CITY OF GREENVILLE, TEXAS This Joint Operating Agreement ("Agreement") is made and entered into between the Texas Municipal Power Agency ("the Agency" or "TMPA"), a municipal corporation and political subdivision of the State of Texas established pursuant to the provisions of Chapter 163 of the Texas Utilities Code, and the City of Bryan, the City of Denton, the City of Garland, and the City of Greenville, Texas each of which cities is a municipal corporation of the State of Texas and a home rule city (herein collectively "Cities" or individually "City"). WITNESSETH: WHEREAS, in 1975, in recognition that each City desired an economical, reliable source of Power and Energy to meet the growing demands of its customers, the Cities enacted concurrent ordinances, as defined by Tex. Util. Code 163.051 and its predecessors, creating the Agency for the purpose of generation, transmission and sale or exchange of electric energy to the Cities, and WHEREAS, subsequent to the creation of the Agency, the Agency designed, constructed and operates the Gibbons Creek Steam Electric Station in Grimes County, acquired property and other assets in connection with its operations, and each City has purchased Power and Energy from the Agency, financed various assets of the Agency through the purchase of Power and Energy and the issuance of bonds payable from revenues of the City's electric operations, and holds interests in Agency assets in the event of its dissolution; and, WHEREAS, pursuant to S.B. 776, enacted by the 84th Texas Legislature, the Cities, being all of the existing Participating Public Entities in the Agency, have elected governance for the Agency under Tex. Util. Code Section 163, Subchapter C-1, by adoption of concurrent ordinances; and WHEREAS, the Agency and each Participating Public Entity have determined that further contractual agreements between and among the Agency and each Participating Public Entity to address operations of the Agency in matters other than the purchase of Power and Energy and to provide for the mutual rights and responsibilities of the Parties as to the operations of the Agency, including asset management, decommissioning, environmental remediation, indemnities, and the winding up of affairs of the Agency upon dissolution, are necessary and appropriate and consistent with S.B. 776, Now, THEREFORE, in consideration of the mutual covenants herein contained, the Agency and each Participating Public Entity, intending to be legally bound, agree as follows: ARTICLE 1. TERM, DEFINITIONS, RELATION TO AND ORDER OF PRECEDENCE WITH REGARD TO OTHER CONTRACTUAL COMMITMENTS. SECTION 1.1. TERM OF AGREEMENT. This Agreement shall become effective on September 1, 2016, after the adoption by each Participating Public Entity of an ordinance authorizing the execution of this Agreement, the adoption of this Agreement by the affirmative vote of a majority of the TMPA Board, and the execution of this Agreement by all Parties. Unless earlier terminated in accordance with the terms contained herein for termination, this Contract shall remain in effect until such time as the Agency shall have been dissolved. SECTION 1.2. DEFINITIONS. As used herein: (a) "Act" shall mean Chapter 166, Acts of the 63rd Legislature, Regular Session, 1973, as amended by Chapter 143, Acts of the 64th Legislature, Regular Session, 1975, as amended by Chapter 85, Acts of the 65" Legislature, Regular Session, 1977, and as further amended by Chapter 1162, Acts of the 84th Legislature, Regular Session, 2015, now codified in Chapter 163 of the Texas Utility Code, and all laws amendatory thereof or supplemental thereto. (b) "Agency" shall mean the Texas Municipal Power Agency as created and established (pursuant to the Act) and concurrent ordinances adopted by the governing bodies of the Cities, or its successor. (c) "Annual System Costs" are as defined in the Power Sales Contract. Effective September 1, 2018, this term excludes all costs (including capital costs, depreciation, debt service, operations and maintenance, and administrative costs, and all taxes, assessments or other governmental charges) associated with the Transmission System, as herein defined. (d) "Annual Budgets" shall mean, with respect to a fiscal year, the budgets of the Agency prepared in accordance with Section 2.6 of this Agreement. (e) "Approval" when referring to an approval required by this Agreement of a City or Participating Public Entity shall mean approval in such manner as is determined appropriate by each such City or Participating Public Entity, in its individual discretion, unless approval by a concurrent ordinance is expressly required, in which instance "approval" shall require adoption of a concurrent ordinance by each City or Participating Public Entity whose approval is required. (f) "Bonds" shall mean all bonds issued by the Agency pursuant to a Bond Resolution, as defined herein. 2 (g) "Bond Resolution" shall mean the following resolutions of the Agency adopted prior to the Effective Date of this Agreement authorizing an issue of Bonds or subordinated indebtedness: (i) the "Texas Municipal Power Agency Refunding Revenue Bonds, Series 1993," (ii) the "Texas Municipal Power Agency Subordinate Lien Revenue Refunding Bonds, Series 2008," (iii) "Texas Municipal Power Agency Junior Subordinate Lien Revenue Refunding Bonds, Series 2013," (iv) the "Texas Municipal Power Agency Commercial Paper Notes, Series 2005," (v) the "Texas Municipal Power Agency Subordinate Lien Revenue/Transmission Revenue Converting Security Refunding Bonds, Series 2010," and (vi) any commercial paper notes issued prior to the date of this Agreement to refund all or a portion of the commercial paper notes referenced in clause (iv), and any resolution adopted after the Effective Date of this Agreement pursuant to which Transmission Debt as defined herein may be issued. (h) "City" shall mean each of the following: the City of Bryan, Texas, the City of Denton, Texas, the City of Garland, Texas, or the City of Greenville, Texas, being the public entities that originally created the Agency; and "Cities" shall mean all four Cities, collectively. Each City is also a "Participating Public Entity" as defined herein unless and until such City is removed from the Agency under Section 163.076 of the Act. (i) "Debt" shall mean any form of debt of the Agency whether bonds, notes, commercial paper or obligations of any kind for borrowed money, and includes "New Debt" as defined herein. 0) "Effective Date" of this Agreement shall mean September 1, 2016. (k) "New Debt" shall mean any form of debt of the Agency whether bonds, notes, commercial paper or obligations of any kind for borrowed money, incurred by the Agency from and after September 1, 2016. (1) "Power Sales Contract" shall mean those identical contracts titled "Power Sales Contract Between Texas Municipal Power Agency and City of Bryan, Texas, City of Denton Texas, City of Garland, Texas and City of Greenville, Texas" dated September 1, 1976, as amended. (m) "Participating Public Entity" shall mean each City, unless and until such City is removed from the Agency under Section 163.076 of the Act, and any public entity added to the Agency as provided in the Act. (n) "Party" shall mean the Agency or a City and "Parties" shall refer to the Agency and the Cities collectively. (o) "Series 2010 Bond Resolution" shall mean Resolution No. 2010-6-2 adopted by the TMPA Board on June 24, 2010. (p) "Super Majority Vote" shall have the following meaning: (i) When the Agency or a business category shall have eight board members, for a Super Majority Vote, six members of the TMPA Board shall constitute a quorum, and a Super Majority Vote shall require the affirmative vote of at least six (6) members of the TMPA Board with at least one (1) member of the TMPA Board appointed by each Participating Public Entity voting in favor of such action. 3 (ii) When the Agency or a business category shall have fewer than eight board members, for a Super Majority Vote, one-half of the TMPA Board plus one additional board member shall constitute a quorum, and a Super Majority Vote shall require the affirmative vote of at least one- half of all members of the TMPA Board plus one additional TMPA Board member with at least one (1) member of the TMPA Board appointed by each Participating Public Entity voting in favor of such action. (q) "System" shall mean all properties owned by the Agency, but, after September 1, 2018, shall exclude the Transmission System. (r) "System Debt" shall have the same meaning as in the Power Sales Contract and includes bonds, commercial paper notes and other obligations for borrowed money (but not capitalized leases or other agreements that are payable thereunder as an Operating and Maintenance Expense), which are secured by payments made by the Cities hereunder and in existence as of the date of execution of this Agreement. However, as used herein, from and after September 1, 2018, "System Debt" does not include Transmission Debt. (s) "TMPA Board" shall mean the Board of Directors of the Agency, or, for any business category, the Board of Directors for the business category. The TMPA Board for any business category shall consist of the board members appointed by the Participating Public Entities participating in that business category. (t) "Transmission Debt" shall have the same meaning as the term "Transmission Debt" as stated in the Series 2010 Bond Resolution. (u) "Transmission Facilities" shall mean all electric transmission facilities wherever located and acquired and/or constructed and owned by the Agency, including, without limitation, such facilities owned in fee simple in their entirety or in an indivisible ownership interest or other ownership interest. (v) "Transmission Revenues" shall have the same meaning as "Transmission Gross Revenues" as defined in the Series 2010 Bond Resolution. (x) "Transmission System" shall mean the Agency's ownership and contractual rights and all other interests in all Transmission Facilities owned or operated by or on behalf of the Agency from time to time, and the operation thereof. SECTION 1.3. SCOPE OF THIS AGREEMENT. This Agreement is intended to provide terms of agreement for (1) Agency operations outside the scope of the Power Sales Contract, (2) matters relating to decommissioning of the power plant at such time as it may be removed from service, (3) disposition of Agency assets, and (4) matters relating to dissolution of the Agency, at such time as it may be dissolved. This Agreement is not intended to require a Participating Public Entity to hold an election in order to exercise any right or to carry out any obligation under this Agreement. SECTION 1.4. RELATION TO AND ORDER OF PRECEDENCE WITH REGARD TO OTHER CONTRACTUAL COMMITMENTS. This Agreement shall not amend, modify, supersede or replace the Power Sales Contract, or the Global Compromise and Settlement 11 Agreement dated December 17, 2009, entered into by the Agency and each City, or any existing written agreement of the Agency and one or more of the Cities. To the extent possible, this Agreement should be interpreted as consistent with such prior written agreements and in pari materia therewith. Additionally, this Agreement shall not amend, modify, supersede or replace any right or obligation as between the Agency and its Bondholders under any Bond Resolution adopted prior to the effective date of this Agreement. ARTICLE II. OPERATIONS OF THE AGENCY. SECTION 2.1. ORGANIZATION OF AGENCY FUNCTIONS. The operations of Agency shall be organized into three business categories: (1) Generation — consisting of the operation and management of the Gibbons Creek Steam Electric plant and sales of the power produced by the plant to the Participating Public Entities, (2) Mining — consisting of the operation and management of real property associated with the Agency's lignite mining property, and (3) Transmission — consisting of the operation and management of Transmission Facilities. SECTION 2.2. IDENTIFICATION OF TMPA ASSETS BY BUSINESS FUNCTION. 2.2.1. IDENTIFICATION OF ASSETS. As of the Effective Date of this Agreement, each and every asset of the Agency comprising the Agency's three business categories, Generation, Mining and Transmission, and the Agency's administrative assets shall be identified on one of the attached schedules, as follows: Schedule A: Generation Business assets. Schedule B: Mining Business assets. Schedule C: Transmission Business assets. Schedule D: Administrative assets. 2.2.2. ADMINISTRATIVE ASSETS. Assets associated with administrative and general functions are identified on Schedule D and allocated between Generation, Mining and Transmission as shown on Schedule D. 2.2.3. AFTER-ACQUIRED ASSETS; ANNUAL UPDATE TO ASSET SCHEDULES. Assets acquired after the effective date of this Agreement shall be identified at the time of acquisition as either Generation Business assets, Mining Business assets, Transmission Business assets. Administrative assets acquired after the Effective Date of this Agreement shall be allocated to Generation Business, Mining Business or Transmission Business as of the date of acquisition and listed on the associated schedule for the business category to which the asset has been allocated. Schedules A, B and C shall be updated periodically as assets are acquired, retired, sold or transferred, or upon allocation of Administrative assets to the Generation, Mining or Transmission Business, with such updates to occur at least annually. In the event a Participating Public Entity shall object to the identification of an asset to a business category, the dispute resolution procedures of Section 8.10 shall apply. 5 SECTION 2.3. BUDGETING; BOOKS AND RECORDS OF THE AGENCY. The Agency shall budget its operations by business category and shall prepare an annual budget for each business category. The annual budget for each business category shall be approved by a majority vote of the TMPA Board. The Agency shall cause its books of account to be organized in a manner consistent with the three business categories and associated assets identified in Section 2.2.1 and Schedules A -D. All such records shall be current, accurate, complete, and maintained in accordance with generally accepted accounting principles or other accounting principles as may be required by law. SECTION 2.4. PARTICIPATING PUBLIC ENTITIES' INTEREST IN AGENCY ASSETS. 2.4.1. GENERAL RULE. Under the Power Sales Contract and annual budget and rate resolutions of the TMPA Board, payments by each Participating Public Entity to the Agency have provided all funds necessary for the acquisition of all assets and payment of all costs of operation of the Agency. The Power Sales Contract provides that, upon termination of the Power Sales Contract and dissolution of the Agency, each Participating Public Entity has an interest in the assets of the Agency in proportion to the amount that each Participating Public Entity has paid into the Agency. This Section 2.4 states how the proportional interest of each Participating Public Entity will be determined and may be changed in the instances stated in this Section. 2.4.2. FORMULAS FOR DETERMINING EACH PARTICIPATING PUBLIC ENTITY'S INTEREST IN AGENCY ASSETS. The following formulas shall be used to determine each Participating Public Entity's proportional interest in the Agency assets, except to the extent otherwise expressly provided in this Agreement. The formulas shall apply to determine each Participating Public Entity's proportional share in the net proceeds of the sale or other disposition of Agency assets after (i) payment of debts of the Agency and (ii) provision for reserve funds, escrows, retentions, insurance or indemnities as provided in this Agreement in Articles III - VI. The General Formula provided in this Section shall apply, unless a formula specified in Section 2.4.3 shall apply, to determine each Participating Public Entity's residual interest in the net proceeds of the sale or other disposition of any Agency assets, or upon dissolution of the Agency, as follows: General Formula = Amount paid to TMPA by Participating Public Entity from Inception Date to the fiscal year end preceding the date of sale or other disposition of the asset Amounts paid to TMPA by all Participating Public Entities from Inception Date to the fiscal year end preceding the date of sale or other disposition of asset For purposes of this Article II, "Inception Date" shall mean September 1, 1976, the effective date of the initial Power Sales Contract between TMPA and each Participating Public Entity. The proportional shares of the Participating Public Entities in Agency assets according to the General formula as of the end of the Agency's September 30, 2015 fiscal year are as shown on Schedule E. I 2.4.3. CHANGES IN A PARTICIPATING PUBLIC ENTITY'S INTEREST IN AGENCY ASSETS. 2.4.3.1. RECREATION OF THE AGENCY BY DELETION OF A PARTICIPATING PUBLIC ENTITY. Each Participating Public Entity and the Agency recognize that, pursuant to Section 163.076 of the Act and the concurrent ordinances by which the Cities created the Agency, each Participating Public Entity reserved the right to its governing body to join with the other Participating Public Entities to provide for the re-creation of the Agency by the addition and deletion, either or both, of a Participating Public Entity, as defined in said Act, so long as there is no impairment of any existing obligations of the Agency. In the event that the Agency is re-created by the deletion of a Participating Public Entity, the deleted entity's percentage share in Agency assets shall thereafter be determined by the formula provided in Section 2.4.3.2. No Participating Public Entity that is deleted from the Agency may sell its interest in Agency assets except to the extent such sale is approved in the ordinances that re-create the Agency. 2.4.3.2. CHANGE IN PROPORTIONAL SHARE IN AGENCY ASSETS DUE TO DELETION OF A PARTICIPATING PUBLIC ENTITY PURSUANT TO SECTION 163.076 OF THE ACT. In the event the Agency is recreated pursuant to Section 163.076 of the Act by the deletion of a Participating Public Entity, the deleted Participating Public Entity's proportional interest as stated in Section 2.4.2 shall change, as follows: Formula = Amount paid to TMPA by Participating Public Entity from Inception Date to the fiscal year end preceding the date of deletion Amounts paid to TMPA by all Participating Public Entities from Inception Date to the fiscal year end preceding the date of sale or other disposition of asset 2.4.3.3. CHANGE IN PROPORTIONAL SHARE IN AGENCY ASSETS DUE TO ADDITION OF A PARTICIPATING PUBLIC ENTITY PURSUANT TO SECTION 163.076 OF THE ACT. A Participating Public Entity added to the Agency pursuant to Section 163.076 of the Act after the effective date of this Agreement ("newly added Participating Public Entity") shall be included in the calculation of the percentage share of the assets of the Agency, to the extent of the payments to the Agency made by the newly added Participating Public Entity, according to the following formula: Formula = Amount paid to TMPA by newly added Participating Public Entity from initial payment to the fiscal year end preceding the date of sale or other disposition of asset Amounts paid to TMPA by all Participating Public Entities from Inception Date to the fiscal year end preceding the date of sale or other disposition of asset 2.4.3.4. MODIFICATION OF FORMULA IN THE EVENT A PARTICIPATING PUBLIC ENTITY EXITS A BUSINESS CATEGORY BUT THE AGENCY IS NOT RECREATED TO DELETE THE PARTICIPATING PUBLIC ENTITY FROM THE 7 AGENCY. In the event a Participating Public Entity exits one business category of the Agency (for example, Generation), but continues to participate in other business categories of the Agency, the Agency shall calculate such Participating Public Entity's proportional interest in assets of the business category from which the Participating Public Entity has exited as of the date of exit. The Agency shall also record the total amounts paid into the Agency by business category as of the Participating Public Entity's date of exit. Thereafter, as to the assets in the business category from which the Participating Public Entity has exited, such exiting Participating Public Entity shall not share in any increase in the numerator in the formula for the exited business category. To the extent such Participating Public Entity pays into the Agency amounts related to other business categories, the Participating Public Entity shall share in the increase in the formula for those business categories in proportion to the amounts paid into the Agency by all Participating Public Entities in those business categories. 2.4.3.5. EXCEPTION AS TO TRANSMISSION ASSETS. The Parties agree that, due to the differences in the manner in which the Transmission Business has been funded, the formulas in Sections 2.4.1, 2.4.2 and 2.4.3.1-2.4.3.4 do not apply to determine the Participating Public Entities proportional interest in Transmission Assets. The applicable formulas for determining each Participating Public Entity's proportional interest in Transmission Assets are stated in Article IV. SECTION 2.5. ANNUAL CALCULATION OF PROPORTIONAL SHARES. Annually, the TMPA Board shall direct the TMPA Staff to calculate the total payments made to TMPA, each Participating Public Entity's annual sum of payments to TMPA, and to do so by business category in the event any Participating Public Entity withdraws from the Agency or a business category. For each Fiscal Year, the Staff shall update the proportional share calculations, showing the proportional interest of each Participating Public Entity, each deleted Participating Public Entity, and any newly added Participating Public Entity, on an annual basis, by business category. The calculation and supporting information shall be submitted to the TMPA Board for review and approval on an annual basis. In the event a Participating Public Entity shall object to the proportional share calculation, the dispute resolution procedures of Section 8.10 shall apply. SECTION 2.6. ANNUAL BUDGET, RECOVERY OF COSTS OF AGENCY OPERATIONS INCURRED PURSUANT TO THIS AGREEMENT; LIMITATIONS ON NEW DEBT. 2.6.1. BUDGETING AND COST RECOVERY. 2.6.1.1. FOR THE PERIOD FROM THE EFFECTIVE DATE AND ENDING SEPTEMBER 30, 2018. For the period effective October 1, 2016, and annually thereafter to September 30, 2018, the TMPA Board shall adopt annual budgets, by business category. For periods prior to September 30, 2018, such Annual Budgets shall be for informational purposes. Recovery of the costs of Agency operations for this period shall be through the (i) Annual System Costs under the Power Sales Contract of the Agency and (ii) Transmission Revenues. From the Effective Date through September 30, 2018, funds otherwise available to be returned to the Cities under Section 7(a)(3) of the Power Sales Contract shall be applied to the following uses: (i) first, to fund the Decommissioning Reserve Account up to the cap for that account as stated in Section 5.5, and (ii) then, to fund the Indemnity Reserve Account up to the cap for that account as stated in Section 6.5. Any net proceeds remaining after the obligations described in (i) -(ii) shall be apportioned to each Participating Public Entity based on the following percentages: Bryan - 21.7%; Denton - 21.3%; Garland - 47%; Greenville - 10%. 2.6.1.2. FOR PERIODS COMMENCING FROM AND AFTER OCTOBER 1, 2018. For the fiscal year commencing October 1, 2018, and annually thereafter, the TMPA Board shall adopt annual budgets, by business category, and adopt charges for the recovery of the costs of operations by business category, according to the specific requirements in Articles III, IV, and V, respectively. 2.6.1.3. CHARGES IN THE EVENT A NEW PUBLIC ENTITY IS ADDED TO THE AGENCY OR A PARTICIPATING PUBLIC ENTITY IS REMOVED FROM THE AGENCY UNDER SECTION 163.076, TX. UTIL. CODE. In the event that the Agency is re-created by the deletion of a Participating Public Entity, the deleted entity shall remain bound by this Agreement for its proportionate share of obligations incurred prior to its deletion. In the event the Agency is re-created by the deletion of an existing Participating Public Entity or addition of a new Participating Public Entity, the concurrent ordinances by which such action is taken shall address the obligation of such deleted or added Participating Public Entity as to charges thereafter assessed for each business category. 2.6.2. ADDITIONAL TERMS REGARDING BUDGETING IN ALL PERIODS. In addition to the provisions of Section 2.6.1, the following terms shall apply: 2.6.2.1. ADMINISTRATIVE COSTS. Administrative costs which cannot be directly assigned to a business category shall be allocated to each business category as a part of the annual budget process or at the time budgeted (if incurred by budget amendment). Such allocations shall be substantially in accordance with the Transmission Cost of Service Rate Filing Package Instructions for Non -Investor Owned Transmission Service Providers (or its equivalent) published by the Public Utility Commission of Texas. 2.6.2.2. WORKING CAPITAL. In setting the annual budget for each business category, the TMPA Board shall include working capital levels sufficient to sustain the operation and capital needs of each business category. 2.6.2.3. BUDGET AMENDMENTS. The terms of this Section shall not prevent the TMPA Board from approving such budget amendments as may be necessary, or from billing for such amended costs immediately, so long as the amendments meet the otherwise applicable approval requirements of this section. 2.6.2.4. LIMITATIONS ON BUDGET INCREASES. To the extent the budget, for a business category, together with any amendment, would require the issuance of New Debt by the Agency (other than Transmission Debt), or cause the annual budget or charges to the Participating Public Entities, excluding fuel and debt service on Transmission Debt, to increase by more than 20% compared to the previous year's budget or charges, excluding fuel and debt service on Transmission Debt, Approval of all Participating Public Entities in that business category shall be required. 2.6.2.5. LIMITATIONS ON DEBT. From and after September 1, 2016, the Agency shall not incur any form of Debt other than Transmission Debt, whether bonds, notes, 7 a new commercial paper program or increase in an existing commercial paper program, or obligation for borrowed money of any kind, unless such Debt is: (1) attributed to a single business category, (2) approved by a Super Majority Vote of the TMPA Board and by concurrent ordinances of each Participating Public Entity in the business category to which the debt is attributed, and (3) secured solely by assets or revenues or operations of the business category to which it is attributed. From and after September 1, 2016, the Agency shall not incur any form of Transmission Debt, whether bonds, notes, commercial paper or obligations of any kind, unless: (1) prior notice of at least 60 days has been given to each Participating Public Entity in the Transmission Business category of the proposed issuance of such Transmission Debt, which notice shall include the principal terms on which such Debt is proposed to be issued, and (2) such proposed Transmission Debt is: (i) after September 1, 2018, payable solely from Transmission Revenues, and (ii) approved by a Super Majority Vote of the TMPA Board . The restrictions in this Section relating to Debt shall not apply to mine reclamation bonds or to banking agreements, including letters of credit, associated with such bonds. For clarification, Approval of the Participating Public Entities shall not be required for (i) the issuance by TMPA of Transmission Debt or (ii) the issuance by TMPA of commercial paper notes or a commercial paper program established prior to September 1, 2016, that is: (a) payable in full on or before September 1, 2018 or (b) by its terms, to be converted to Transmission Debt on or before October 1, 2018. 2.6.2.6. LIMITATIONS ON OTHER NEW LONG-TERM OR SIGNIFICANT OBLIGATIONS. In addition to the limitations on incurrence of Debt provided in Section 2.6.2.5, from and after September 1, 2016, the Agency shall not incur any other form of long-term obligation unless such obligation is: (1) attributed to a single business category, (2) approved by a Super Majority Vote of the TMPA Board and by concurrent ordinances of each Participating Public Entity in the business category to which the obligation is attributed, and (3) secured solely by assets and/or revenues of the business category to which it is attributed. For purposes of this paragraph 2.6.2.6, "long-term or significant obligation" shall mean any contract or other form of obligation (i) having a term in excess of twenty-four (24) months unless the contract may be cancelled by the Agency for convenience without penalty at any time after the giving of notice and the expiration of a contractual notice period not to exceed one hundred twenty (120) days, or (ii) in an amount in excess of ten million ($10,000,000.00) dollars. The restrictions in this Section relating to long-term or significant obligations shall not apply to mine reclamation bonds and to banking agreements, including letters of credit, associated with such bonds. SECTION 2.7. NATURE OF PARTICIPATING PUBLIC ENTITY OBLIGATIONS; RATE COVENANT. Each Participating Public Entity hereby binds itself to pay such costs as may be properly assessed by the Agency for recovery of the cost of the services undertaken by the Agency pursuant to this Agreement. Each Participating Public Entity shall establish, maintain and collect rates and charges for the electric service of its electric system which shall produce revenues at least sufficient, together with other revenues available to such electric system and available electric system reserves, to enable it to pay to the Agency, when due, all amounts payable by such Participating Public Entity under this Agreement. A Participating Public Entity's payment obligations under this Agreement shall constitute an operating expense of its electric system, and are payable exclusively from such revenues. SECTION 2.8. REPORTS. The Agency will prepare and issue the following reports for each business category (Generation, Transmission, Mining) for each fiscal year: (i) financial and operating statement relating to Generation, Transmission, and Mining; (ii) status of construction 10 for any facility under construction; and (iii) analysis of operations relating to each of the three business categories of the Agency. Each business category report shall be made available to the Participating Public Entities in that business category. Within one hundred and twenty (120) days of the close of each fiscal year, the Agency shall cause an audited report of financial operations for the prior fiscal year for each business category to be sent to each Participating Public Entity in that business category. Such reports shall have been audited annually by an independent certified public accountant. SECTION 2.9. RECORDS AND ACCOUNTS. The Agency will keep accurate records and accounts relating to each business category in accordance with applicable accounting standards [uniform system of accounts] including depreciation. SECTION 2.10. ACCESS. Each Participating Public Entity, for any business category in which the Participating Public Entity participates, shall at all times have reasonable access to examine any and all books and records of the Agency for that business category and to examine any facility of the Agency in that business category. SECTION 2.11 DECISION TO EXIT A BUSINESS CATEGORY. 2.11.1. LIMITATIONS ON EXITING A BUSINESS CATEGORY. A Participating Public Entity intending to exit a business category other than the Generation Business category shall do so by giving notice to the Agency and all Participating Public Entities in writing at least one hundred eighty (180) days in advance of the effective date of the exit. No Participating Public Entity may exit the Generation Business unless it has elected to terminate its Power Sales Contract in the manner and with the notice as required in Section 5.1 of this Agreement and no such exit from the Generation Business may become effective in advance of the date of termination of the exiting Participating Public Entity's Power Sales Contract with TMPA. No Participating Public Entity may exit the Mining Business prior to October 1, 2018, or before the reclamation obligations of TMPA are completed and the Mining Business assets are released from reclamation bonding. No Participating Public Entity may exit the Transmission Business on a date to be effective prior to October 1, 2018. 2.11.2. BOARD PARTICIPATION. Effective on the date of exit, the exiting Participating Public Entity agrees to recuse itself from participating in any deliberation or voting of the TMPA Board in matters regarding the exited business category, and agrees that the TMPA Board may amend its bylaws to provide (i) that the Agency board members appointed by the exiting entity shall recuse themselves and not participate in TMPA matters regarding that business category and (ii) for separate boards for one or more business categories. 2.11.3. OBLIGATIONS OF EXITING ENTITY. Prior to the effective date of exit, the exiting Participating Public Entity shall pay all sums due the Agency with respect to the exited business category for periods prior to the date of exit. From and after the date of exit, the exiting Participating Public Entity shall have no responsibility for any Debt incurred in that business category after the date of exit, but to the extent that any debt instrument shall be secured by revenues or other assets of a Participating Public Entity, the exiting Participating Public Entity shall retain responsibility for its proportional share of such debt attributable to the exited business category, incurred before, arising before, or attributable to operations in that business category before the date of exit. The exiting Participating Public Entity's obligation (if any) with regard to 11 annual operating costs incurred in the exited business category after its exit of that business category and its percentage share of the net proceeds of any sale of assets in the exited business category shall be determined in the manner set forth in Article III, IV or V for the exited business category. 2.11.4. SALE OF INTEREST PROHIBITED. An exiting Participating Public Entity may not sell its interest in assets of a business category upon exiting a business category but will continue to hold its proportional interest in Agency assets, in the proportion defined in Section 2.4 of this Agreement, until such assets are disposed of by the Agency in the manner provided by this Agreement. SECTION 2.12. SALES OF ASSETS. When a sale of assets is undertaken, the Agency shall use its best efforts to market and dispose of such assets upon the terms and conditions that maximize the asset's market value. Except as permitted in Section 3.2.3, no individual contract for the sale of an asset having a value in excess of $10,000,000.00, or successive contracts in a twelve-month period for the sale of assets in any one business category which together have a value in excess of $10,000,000.00, shall be undertaken except upon prior Approval of all Participating Public Entities. Further, no contract for the sale of an asset having a value less than $10,000,000.00, shall be undertaken except upon compliance with all other terms of Articles III, IV and V as applicable to the category of the asset to be sold. Additionally, the Agency covenants and agrees that in the event properties of the System which were acquired with funds received from the sale of Bonds are sold, the proceeds from the sale of such properties shall be applied in accordance with the provisions of the applicable Bond Resolution unless and until such Bonds have been paid. The Agency shall apply any remaining proceeds from the sale of properties in accordance with this Agreement. ARTICLE III. AGREEMENT REGARDING MINING OPERATION AND DISPOSITION OF MINING ASSETS. SECTION 3.1. IDENTIFICATION OF MINING LANDS. The properties and assets shown on Schedule B shall comprise the "Mining Assets." Mining Assets shall include all mineral and other property interests associated with the real properties identified on Schedule B. SECTION 3.2. OPERATION, RECLAMATION AND DISPOSITION OF MINING ASSETS. 3.2.1. BUDGETING AND OPERATIONS. From and after October 1, 2018, charges for recoupment of such costs as are included in the Annual Budget for the Mining Business category shall be assessed to each Participating Public Entity according to the following percentages: Bryan - 21.7%; Denton - 21.3%; Garland - 47%, Greenville - 10%, unless a different schedule of charges shall be adopted by the unanimous approval of all of the Participating Public Entities in the Mining Business category. In the event a Participating Public Entity exits the Mining Business as permitted under Section 2.11.1, it shall remain responsible for the same percentage share of costs incurred after its exit as set forth above, such that the same percentages shall apply to each exited and remaining Participating Public Entity for any costs of the Mining Business category until all Mining Assets are sold. 12 3.2.2. RECLAMATION. The Agency's mine reclamation plan is attached as Schedule G. The Agency shall proceed to obtain the release of properties from reclamation bonding and do all things necessary to complete the mining reclamation plan as expeditiously as is commercially reasonable. 3.2.3. SALE OF MINING ASSETS. Upon completion of mine reclamation, as described in Section 3.2.2, the Agency may sell Mining Assets, either piecemeal or in the aggregate, on such terms as may be agreed by the TMPA Board. All net funds received from the sale of the Mining Assets after payment of any costs of reclamation shall be placed into a MINING RESERVE ACCOUNT to be held by the Agency, with the proceeds to be used for the following purposes, in the priority stated: (1) First priority — for the payment of any System Debt, including any commercial paper attributable to the System; (2) Second — for the payment of New Debt, if any, incurred in the Mining Business; (3) Third - to the Decommissioning Reserve Account described in Section 5.5, as necessary to establish an account balance in the amount stated in Section 5.5, or such other amount as determined by the unanimous Approval of all Participating Public Entities; (4) Fourth - to the funding of the Indemnity Reserve Account described in Section 6.5, as necessary to establish an account balance as stated in Section 6.5, or such other amount as determined by the unanimous Approval of all Participating Public Entities; (5) Fifth — the remaining proceeds shall be distributed to the Participating Public Entities according to the applicable formula set forth in Section 2.4. ARTICLE IV. AGREEMENT REGARDING TRANSMISSION OPERATIONS AND DISPOSITION OF TRANSMISSION ASSETS. SECTION 4.1. TRANSMISSION ASSETS. The property and assets shown on Schedule C, together with any future additions to Transmission Assets acquired, constructed, or under construction, after the effective date of this Agreement, comprise the "Transmission Assets." These assets consist of geographically -located transmission lines and substations, together with the associated property interests identified in Section 4.5, owned, used, or under construction, by TMPA to provide transmission service within ERCOT pursuant to Chapter 35 of the Texas Utility Code. SECTION 4.2. APPLICATION OF PROCEEDS FROM ANNUAL OPERATIONS OF THE TRANSMISSION BUSINESS. Effective September 2, 2018, all net proceeds from the annual operations of the Transmission Business category (after payment of the annual costs of the Transmission System and debt service on Transmission Debt) shall be used: (i) first, to fund the Decommissioning Reserve Account up to the cap for that account as stated in Section 5.5, and (ii) then, to the Indemnity Reserve Account up to the cap for that account as stated in Section 6.5. Any net proceeds remaining after the obligations described in (i) -(ii) shall be apportioned to each Participating Public Entity based on the following percentages: Bryan - 21.7%; Denton - 21.3%; 13 Garland - 47%; Greenville - 10%. In the event that Transmission Revenues are insufficient to pay the annual costs of the Transmission Business category, then each Participating Public Entity having an interest in Transmission Assets shall fund the shortfall in the percentages stated above. From and after September 2, 2018, in the event that a Participating Public Entity exits the Transmission Business category, the percentage of net proceeds from the annual operations of the Transmission Business category held by the exiting entity shall be apportioned among the remaining Participating Public Entities in proportion to the percentages stated above for apportionment of net proceeds effective September 2, 2018. SECTION 4.3. PARTICIPATING PUBLIC ENTITIES INTEREST IN TRANSMISSION ASSETS. Each Participating Public Entity's proportional interest in Transmission Assets and in the net proceeds from the sale of any Transmission asset is its fixed percentage as set forth on Schedule E, which percentage shall apply unless and until the Agency is recreated under Section 163.076. In the event the Agency is recreated under Section 163.076 by the addition or deletion of a Participating Public Entity, Schedule C shall be updated to the effective date of such ordinances and the Schedule E percentages shall be applied to determine each existing Participating Public Entity's proportional interest in Transmission Assets shown on Schedule C as of the effective date of the concurrent ordinances. The concurrent ordinances recreating the Agency shall state the proportional interests of all Participating Public Entities in Transmission Assets acquired from and after the effective date of such ordinances. SECTION 4.4. TERMS OF DISPOSITION OF TRANSMISSION ASSETS. 4.4.1. TERMS OF DISPOSITION. The Agency shall own and operate the Transmission Assets until disposed of in the manner provided in this Section. Any disposition of Transmission Assets shall conform to the following terms: (1) Participating Public Entity's Interest in Transmission Assets. Each Participating Public Entity shall be accorded a proportional interest in Transmission Assets equal to the Participating Public Entity's percentage interest as specified on Schedule E. (2) Transfer of Ownership of Transmission Assets to the Participating Public Entities. The TMPA Board shall approve a transfer of ownership of Transmission Assets from the Agency to the Participating Public Entities at such time as a majority of the governing bodies of the Participating Public Entities in the Transmission Business category shall determine and agree that it is in their best interests to transfer ownership of Transmission Assets. Upon such Approval, the Parties agree that each Transmission Asset shall be transferred to a Participating Public Entity pursuant to the procedures stated in Paragraph (3) of this Section. Pending such a transfer, all or a portion of the Transmission Assets may be sold to a third party if such a sale is Approved by all of the Participating Public Entities. The Participating Public Entities further agree that, if there is Transmission Debt outstanding, the disposition of such assets shall occur at a single time, and not piecemeal. Any transfer of Transmission Assets to a Participating Public Entity shall occur in a manner consistent with any Bond Resolution authorizing Transmission Debt and only upon payment or defeasance of all Transmission Debt as may be required by the Bond Resolution. (3) Procedure for Transfer of Ownership of Transmission Assets to the Participating Public Entities. 14 (i) Determination of Total Transmission Asset Dollar Value and the Value of each Transmission Asset. The value of each Transmission Asset shown on Schedule C shall be set in the manner described herein and the sum of such values shall be the "Total Transmission Asset Dollar Value" as used herein. Each Transmission Asset in service shall be valued at its net book value and each Transmission Asset under construction shall be valued at its recorded construction work in progress ("CWIP") as of the effective date of the transfer. In the event of any disagreement as to the value of a Transmission Asset, the affected Participating Public Entities agree to submit the dispute to an independent third party whose valuation shall be binding. (ii) Participating Public Entity's Transmission Asset Interest. Each Participating Public Entity's Transmission Asset Interest shall be determined by applying its percentage ownership interest as set forth on Schedule E to the Total Transmission Asset Dollar Value. (iii) Transfer of specific Transmission Assets. Upon approval of the transfer of ownership of Transmission Assets to the Participating Public Entities as specified in 4.4.1(2), each Participating Public Entity shall be initially assigned specific Transmission Assets in its geographic region from the list of Transmission Assets shown in Schedule C. Differences between a Participating Public Entity's Transmission Asset Interest and the sum of the values of the Transmission Assets initially assigned to the Participating Public Entity shall be trued -up among the Participating Public Entities until each Participating Public Entity's Transmission Asset Interest is reached. A Participating Public Entity for whom the sum of the values of its initial geographically -assigned Transmission Assets exceeds its Transmission Asset Interest shall prioritize its initially -assigned Transmission Assets for selection by those Participating Public Entities whose sum of the values of their initially -assigned Transmission Assets is less than their Transmission Asset Interest. If, for more than one Participating Public Entity, the sum of the values of its initially -assigned Transmission Assets is less than its Transmission Asset Interest, the order of selecting Transmission Assets from Participating Public Entities the sum of whose initially -assigned value of Transmission Assets exceeds their Transmission Asset Interest shall be in the order beginning with the Participating Public Entity having the greatest difference in value between its initially -assigned Transmission Assets and its Transmission Asset Interest, and ending with the Participating Public Entity having the least such difference. The Participating Public Entity order of selection will adjust as selections are made. Consideration shall be given during the selection process to minimize any operational issues. If a dispute in the disposition process arises, an independent third party may be employed to assist. Any remaining dispute shall be subject to the dispute resolution procedures set forth in Section 8.10 of this Agreement. (4) Certificates of Convenience and Necessity. Once the specific Transmission Assets to be distributed to each Participating Public Entity have been identified pursuant to this Section, each acquiring Participating Public Entity shall be responsible for obtaining or amending its certificate of convenience and necessity (CCN) as required to own and operate the Transmission Assets to be transferred to it. No Party to this Agreement shall oppose another Participating Public Entity's CCN application for approval of the transfer of the asset from the Agency to the Participating Public Entity. (5) Payment or defeasance of Transmission Debt. Payment or defeasance of Transmission Debt shall be accomplished in the following manner: Transmission Debt outstanding as of the date of disposition of Transmission Assets shall be allocated to each Participating Public 15 Entity based on its percentage interest in Transmission Assets set forth on Schedule E. A Participating Public Entity shall pay to the Agency at the date of disposition of the Transmission Assets the amount equal to the Transmission Debt allocated to it for the sole purpose of the Agency paying off outstanding Transmission Debt. (6) Transfers prior to final disposition. Nothing herein shall prohibit a transfer of a Transmission Asset or portion thereof to a Participating Public Entity pursuant to the TMPA Transmission Asset Ownership Policy. In the event that any Transmission Asset, or portion thereof, is transferred to a Participating Public Entity pursuant to such policy after the Effective Date of this Agreement, but prior to the transfer of ownership of Transmission Assets described in Paragraph (3) above, the following shall occur in the process in subsection (3)(iii) above: (i) the value of the asset at the date of transfer shall be included in the Total Transmission Asset Dollar Value and (ii) the value of the asset at the date of transfer of that asset shall be attributed to the receiving Participating Public Entity for purposes of determining the value of the Transmission Assets initial geographically -assigned to the receiving Participating Public Entity. (7) Transfers after final disposition. Nothing in this Agreement shall preclude a Participating Public Entity from selling or purchasing another Participating Public Entity's Transmission Assets after transfer of ownership from the Agency to the Participating Public Entity. (8) Transfers of transmission projects under construction. For any transfer involving a transmission project under construction, the Agency and the Participating Public Entity acquiring the Project shall enter into such other agreements and assignments as are necessary to effect the transfer. SECTION 4.5. EASEMENTS, RIGHTS-OF-WAY, AND ACCESS. Any sale or disposition of Transmission Assets shall include the sale or disposition of associated easements, rights-of-way, or other rights of access as are associated with each Transmission Asset currently held by TMPA. To the extent such rights-of-way, easements or rights of access lie within or cross real property constituting Generation Assets, the fee title to the underlying property shall be retained by and remain a part of the Generation Assets. To the extent that the Agency has located, or will in the future locate, Transmission Assets in the easements, rights-of-way, or other properties of a Participating Public Entity pursuant to Section 29 of the Power Sales Contract, such license or right to use the property of the Participating Public Entity shall continue in effect under this Joint Operating Agreement for as long as such Transmission Assets are owned by the Agency and shall transfer to a Participating Public Entity upon distribution or sale of such assets to the Participating Public Entity. In the event a Transmission Asset is sold to a third party, the Participating Public Entity shall use its best efforts to enter into a new agreement with the third party as to the easements, rights-of-way or other license providing a right of use of such property on which a Transmission Asset may be located. SECTION 4.6. PROCEEDS FROM THE SALE OF TRANSMISSION ASSETS. In the event any Transmission Assets are sold to a third party, all net funds received from the sale of Transmission Assets shall be placed into the TRANSMISSION RESERVE ACCOUNT to be held by the Agency, with proceeds to be used for the following purposes, in the priority stated: (1) First priority — for payment of Transmission Debt, and New Debt, if any, attributable to the Transmission Business; 16 (2) Second — to the Decommissioning Reserve Account described in Section 5.5, as necessary to establish an account balance in the amount stated in Section 5.5, or such other amount as determined by the unanimous Approval of all Participating Public Entities; (3) Third — to the funding of the Indemnity Reserve Account described in Section 6.5, as necessary to establish an account balance as stated in Section 6.5, or such other amount as determined by the unanimous Approval of all Participating Public Entities; (4) Fourth —to the extent funds remain after the obligations described in (1) - (4), such funds shall be distributed to the Participating Public Entities according to the applicable percentages set forth on Schedule E. ARTICLE V. POWER SALES CONTRACT TERM, DECOMMISSIONING, DISPOSITION OF GENERATION ASSETS, AND MATTERS RELATING TO DISSOLUTION OF THE AGENCY. SECTION 5.1. MATTERS RELATING TO TERM OF POWER SALES CONTRACTS. 5.1.1. ELECTION TO EXTEND TERM OF POWER SALES CONTRACTS. As of the Effective Date of this Agreement, each Participating Public Entity and the Agency are parties to Power Sales Contracts by which each Participating Public Entity, as a purchaser of power and energy, may elect to extend the term of its contract beyond September 1, 2018, the otherwise effective date of termination of the contract. Such elections are to be made by September 30, 2016, under the existing Power Sales Contracts. TMPA shall cease production of power and energy effective September 1, 2018, unless (i) on or before September 30, 2016, all Participating Public Entities have elected to continue their Power Sales Contracts, or (ii) on or before September 1, 2018, an agreement is reached by which the Participating Public Entities that have elected to extend their Power Sales Contract, and/or any newly added Participating Public Entity, contract for one hundred percent (100%) of the output of the plant. 5.1.2. ELECTION TO TERMINATE POWER SALES CONTRACT AFTER SEPTEMBER 1, 2018. Each Participating Public Entity that elects to extend its Power Sales Contract beyond September 1, 2018, shall have the right thereafter to elect to terminate its Power Sales Contract upon such notice as is required by this Section. The Participating Public Entity shall effect the termination of its Power Sales Contract by providing notice to the Agency and each other Participating Public Entity of its decision to terminate its Power Sales Contract. Such notice shall be given at least twenty-four months prior to the date of termination. On the date of termination stated in the notice, which may not precede September 1, 2018, the Participating Public Entity's Power Sales Contract shall terminate and all obligations of TMPA to provide power and energy to such Participating Public Entity shall terminate. Additionally, on the termination date, the Power Sales Contracts between TMPA and all other Participating Public Entities shall terminate and TMPA shall cease production of power and energy unless an agreement has been reached by which the remaining Participating Public Entities and any newly added Participating Public Entity elect to contract for one hundred percent (100%) of the output of the plant. 17 SECTION 5.2. EFFECT OF ELECTION TO EXTEND THE POWER SALES CONTRACTS. 5.2.1. If, pursuant to Section 5. 1.1 above, one or more Participating Public Entities and/or newly added Participating Public Entity elect to extend the term of their Power Sales Contracts beyond September 1, 2018 and such Participating Public Entities collectively contract for 100% of the output of the plant, then: (i) Generation Assets shall continue to be used for the generation of power and energy for the term of the extended Power Sales Contracts; (ii)the Agency's provision of power and energy under the Power Sales Contracts shall be governed by such contracts, and (iii)from and after September 1, 2018, until the Power Sales Contracts terminate, all of the costs incurred in the Generation Business category shall be included in the annual budget for the Generation Business category and recouped from the Participating Public Entities having a power sales contract with the Agency through their Power Sales Contracts. 5.2.2. If a Participating Public Entity elects to terminate its Power Sales Contract with TMPA ("Exiting Participating Public Entity"), but other Participating Public Entities contract for 100% of the output of the plant and continue their Power Sales Contract with TMPA as provided for in Section 5.1.2, then: (1) Such Exiting Participating Public Entity shall be deemed to have exited the Generation Business and such Exiting Participating Public Entity's proportional interest in Generation Assets shall be reduced by the proportionate amount of payments made by the entities that purchase power from the Gibbons Creek plant after the date of termination of the Exiting Participating Public Entity's Power Sales Contract in the manner described in the formula in Section 2.4.3.4. As described, the Exiting Participating Public Entity's numerator remains constant, but the denominator increases by the amount of payments to TMPA for power and energy made by the remaining Participating Public Entities in the Generation Business from and after the date the Exiting Participating Public Entity's Power Sales Contract terminates. (2) The exiting Participating Public Entity agrees to recuse itself from participating in any deliberation or voting of the TMPA Board in matters regarding the Generation Business, and agrees that the TMPA Board may amend its bylaws to provide that the exiting Participating Public Entity's board members shall recuse themselves and not participate in TMPA Board matters regarding the Generation Business. (3) The exiting Participating Public Entity shall share in any insufficiency of the Decommissioning Reserve Account as provided in Section 5.5.2. SECTION 5.3. DECOMMISSIONING PLAN. 5.3.1. ADOPTION OF DECOMMISSIONING PLAN. Within 12 months of the adoption of this Agreement, the TMPA Board shall adopt a plan for the decommissioning of the Gibbons Creek plant. Such plan shall address (i) the timetable for filing of and obtaining all necessary approvals to cease generation; (ii) the demolition of the physical plant; (iii) environmental remediation of the plant site and all related structures, including the reservoir, landfills, and ash ponds, in compliance with and addressing the Standard of Operation set forth in Section 5.3.2; (iv) sales of all salvageable materials; and (v) options as to the sale, future use and/or management of the plant site and all remaining Generation Assets identified in Schedule A. The IN Decommissioning Plan shall be updated periodically as determined by the TMPA Board to be appropriate. The initial Decommissioning Plan and all updates to the Plan shall be made available to each Participating Public Entity. 5.3.2. MINIMUM STANDARDS FOR ENVIRONMENTAL REMEDIATION. 5.3.2.1. STANDARDS. The Decommissioning Plan for environmental remediation shall require compliance with the following standards for environmental remediation: (A) Unauthorized Releases. The Agency shall operate the Generation Assets in such a manner that hazardous substances, solid wastes, and/or coal combustion residuals will not contaminate, or be released, leaked or spilled on or into, or discharged to the environment, to the extent prohibited by state or federal law other than as permitted by the most stringent of any applicable standards. (B) Notification and Reporting_ The Agency shall be responsible for fulfilling all notification and reporting requirements established by applicable law related to any unauthorized release of hazardous substances, solid wastes, coal combustion residuals or chemicals into the environment from or in connection with its operation and management of the Agency's Generation Assets. (C) Assessment Required. The Agency shall conduct an assessment of the generation operations to determine whether any environmental remediation is required. The Agency shall be responsible for any remediation required by applicable law. (D) Cleanup and Costs. The Agency shall remediate any material release of hazardous substances, coal combustion residuals, or chemicals by the Agency to the extent required by applicable law making use of any restrictions or other use limitations consistent with the then current use of the relevant property. (E) Residuals Management. The Agency shall manage and dispose of any hazardous substances, solid wastes, coal combustion residuals or other chemicals in accordance with applicable law. (F) Acceptable Disposal Site Information. The Agency shall keep and maintain such logs, records, manifests, bills of lading or other documents as are required to be kept or maintained under applicable law pertaining to the transport and/or disposal of any hazardous substances, solid wastes, coal combustion residuals or chemicals, together with all weights and measures data and information relating to residuals quantities generated and disposed of hereunder. (G) Definitions. For purposes of this section, (i) "hazardous substances" shall mean any hazardous waste, hazardous product, contaminant, toxic substance, deleterious substance, dangerous good, pollutant, waste, reportable substance, and any other substance, in respect of which the storage, manufacture, handling, disposal, treatment, generation, use, transport, remediation or release into or presence in the environment is prohibited, controlled or regulated under applicable law pertaining to the environment or otherwise, or is capable of causing harm to human health or other the environment, including "hazardous substances" as defined under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601, et 19 seq., and applicable regulations, as amended from time to time ("CERCLA"), and "hazardous waste" as defined under the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., and applicable regulations promulgated thereunder, as amended from time to time; (ii) "coal combustion residuals" shall have the meaning assigned by 40 C.F.R. Part 257, as amended from time to time, and (iii) "solid waste" shall have the meaning assigned by applicable state or federal environmental laws. 5.3.2.2. DISPOSAL OF WASTEWATER. The Agency shall manage all wastewater produced at the generation site and in accordance with applicable law. 5.3.3. SUBMISSION OF NOTICE TO ERCOT APPROVAL OF CESSATION OF PRODUCTION OF POWER. Upon termination of the Power Sales Contract, TMPA shall submit such notices as may be required by ERCOT in connection with cessation of production of power and energy. SECTION 5.4. PROCEEDS FROM THE SALE OR DISPOSITION OF GENERATION ASSETS. The properties identified on Schedule A shall be referred to as the "Generation Assets." The net funds from the sale or other disposition of Generation Assets shall be placed into the Generation Reserve Account to be held by the Agency, with income and principal of such account to be used for the following purposes, in the priority stated: (1) First — to the payment of all System Debt, including any commercial paper attributable to the System; (2) Second — for the payment of New Debt, if any, incurred in the Generation Business; (3) Third — to the Decommissioning Reserve Account described in Section 5.5, as necessary to establish an account balance in the amount stated in Section 5.5, or such other amount as determined by the unanimous Approval of all Participating Public Entities; (4) Fourth — to the funding of the Indemnity Reserve Account described in Section 6.5, as necessary to establish an account balance as stated in Section 6.5, or such other amount as determined by the unanimous Approval of all Participating Public Entities; (5) Fifth — the remaining proceeds shall be distributed to the Participating Public Entities according to the applicable formula set forth in Section 2.4. SECTION 5.5. DECOMMISSIONING RESERVE ACCOUNT. A Decommissioning Reserve Account is to be established and held in escrow in the name of TMPA pursuant to a Decommissioning Escrow Agreement substantially in the form attached hereto as Schedule F. As provided in in Sections 3.2.3, 4.2, 4.6 and 5.4 of this Agreement, as net funds become available for application to the Decommissioning Reserve Account, such funds shall be applied to this account as necessary to establish a maximum account balance of Thirty Million ($30,000,000.00) dollars, or such other amount as determined by a Super -Majority Vote of the TMPA Board for the Generation Business. Funds in the account shall be applied to the purposes specified in 5.5.3. 5.5.1. DECOMMISSIONING RESERVE ACCOUNT BALANCE. In setting the account balance, to the extent the fair market value of the Mining Assets held by TMPA exceeds 20 any remaining System Debt or New Debt in the Mining Business, such net fair market value shall be added to the cash funds held in the account, such that the account balance is the sum of the net fair market value of the Mining Assets plus the cash funds in the account. The fair market value of the Mining Assets shall be established by a third party appraisal, to be conducted within one - hundred eighty (180) days of the adoption of this Agreement. Subsequent appraisals shall be conducted no less frequently than every third year, or upon request of a majority of the TMPA Board for the Generation Business. 5.5.2. INSUFFICIENCY OF FUND BALANCE OR CASH. In the event that the Decommissioning Reserve Account has insufficient funds or cash to meet the obligations of the account ("shortfall"), each Participating Public Entity having an interest in the assets of the Generation Business, including both those Participating Public Entities that may have exited the Generation Business or have been deleted from the Agency but that hold an interest in Generation Assets under Section 2.4, shall contribute to the Decommissioning Reserve Account such funds as are necessary to meet current obligations and shall bear a share of the shortfall in the same percentage as its interest in Generation Assets under Section 2.4. In the event that the Agency is recreated to add a new Participating Public Entity to the Generation Business, terms of agreement regarding decommissioning funding shall be addressed in the agreements adopted at the time of entry. 5.5.3. PURPOSES OF THE DECOMMISSIONING RESERVE ACCOUNT. Funds in the Decommissioning Reserve Account shall be used for costs of decommissioning Generation Business assets according to the approved Decommissioning Plan, costs of environmental remediation in furtherance of the Decommissioning Plan as set out in Section 5.3 above, and the costs of funding such general liability and environmental insurance as may be required of the Agency or as the Agency shall determine appropriate under Section 6.1(e) with respect to its decommissioning activities, including any self-insured retention for any residual environmental liability associated with the operation of the Gibbons Creek power plant as provided in Section 6.1(e). Any amounts remaining in the escrow account after these designated purposes are satisfied shall be disbursed to the Participating Public Entities according to the applicable formula in Section 2.4 of this Agreement upon the written notice of the Agency and the Participating Public Entities as provided in Sections 3.2.2 or 3.3.2 of the Decommissioning Escrow Agreement. 5.5.4. QUALIFICATIONS FOR ESCROW AGENT AND RELATED TERMS. The Decommissioning Reserve Account Escrow Agent shall meet the terms of qualification substantially in the form set forth in Schedule F to this Agreement. 5.5.5. DISTRIBUTION OF EXCESS FUNDS IN DECOMMISSIONING RESERVE ACCOUNT. In the event the TMPA Board determines the Decommissioning Reserve Account has funds in excess of costs identified in Section 5.4, then the excess shall be applied to the purposes and in the order stated in Section 5.4. 5.5.6. DISSOLUTION OF DECOMMISSIONING RESERVE ACCOUNT. The Decommissioning Reserve Account is to be held until Decommissioning Completion pursuant to Section 3.2 of the Decommissioning Escrow Agreement, or a Disposition Event pursuant to Section 3.3 of the Decommissioning Escrow Agreement and thereafter disbursed in accordance with Section 5.5 above and the Decommissioning Escrow Agreement. 21 ARTICLE VI. INSURANCE AND INDEMNITIES. SECTION 6.1. INSURANCE RELATED TO OVERALL OPERATIONS OF THE AGENCY. The Agency shall maintain, or cause to be maintained in force for the benefit of the Agency, such insurance with respect to its operations as shall be reasonably available and as is usually carried by municipal electric utilities constructing, owning and operating mining, generating and transmission facilities including such environmental insurance as may be required of the Agency or as the Agency shall determine appropriate with respect to the operations of the Agency including any self-insured retention. In addition: (a) The Agency may establish and create a special fund for the purpose of providing a self-insurance fund. Amounts to be deposited in or credited to such fund in any fiscal year shall be accounted for as operating and maintenance expenses and allocated among the business categories. Any claims against the self-insurance fund shall be charged to the associated business category from which the claim arose. The balance of said fund must at all times meet or exceed any self-insured retention or deductible imposed upon TMPA in order to trigger the applicable insuring agreement's indemnity and/or defense obligations. (b) The Agency shall maintain, or cause to be maintained, in force, insurance in such amounts and against such risks as required by any Bond Resolution. (c) The Agency will secure and maintain adequate fidelity insurance or bonds on all officers and employees handling or responsible for funds of the Agency. (d) In the event the Agency obtains insurance as permitted by this Section, the annual premium and retention shall be accounted for as operating and maintenance expenses and allocated among the business categories. Any claims against the retention shall be charged to the associated business category from which the claim arose. (e) Upon cessation of the Generation Business, costs of such insurance as is provided for in (a) — (c) above with respect to the Agency's decommissioning activities, together with costs incurred in the satisfaction of any costs of any residual environmental liability associated with the prior operation of the Gibbons Creek power plant, including the costs of insurance coverage for such purposes, shall be funded from the Decommissioning Reserve Account. SECTION 6.2. LIMITATION OF REMEDIES, LIABILITY AND DAMAGES. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY FOR ANY SUCH DAMAGE. THE OBLIGOR'S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY HEREIN PROVIDED, THE 22 OBLIGOR'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. SUBJECT TO THE RIGHT OF INDEMNIFICATION UNDER ARTICLE VI, UNLESS EXPRESSLY HEREIN PROVIDED, NO PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES IS WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OR STRICT LIABILITY OF ANY PARTY, WHETHER SUCH NEGLIGENCE OR STRICT LIABILITY IS SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, OR TO BE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ESTIMATED HARM OR LOSS. SECTION 6.3. AGENCY'S INDEMNIFICATION OF PARTICIPATING PUBLIC ENTITIES. 6.3.1. INDEMNITY. THE AGENCY SHALL INDEMNIFY, HOLD HARMLESS, AND DEFEND EACH PAST, PRESENT AND FUTURE PARTICIPATING PUBLIC ENTITY, COLLECTIVELY AND INDIVIDUALLY, AND ITS RESPECTIVE PAST, PRESENT AND FUTURE COUNCIL MEMBERS, APPOINTEES TO THE TMPA BOARD, UTILITY DIRECTORS, UTILITY COMPANIES OR ENTITIES, EMPLOYEES, AGENTS, CONTRACTORS, SUBCONTRACTORS, INVITEES, REPRESENTATIVES AND PERMITTED ASSIGNS ("PARTICIPATING PUBLIC ENTITY'S INDEMNITEES") FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITIES, COSTS, LOSSES, DAMAGES, EXPENSES (INCLUDING REASONABLE ATTORNEY AND EXPERT FEES) ASSERTED BY ANY PRIVATE PERSONS OR GOVERNMENT AUTHORITIES, AND/OR PENALTIES OR FINES IMPOSED BY GOVERNMENT AUTHORITIES, BOTH STATE AND FEDERAL, IN ANY LEGAL OR REGULATORY ACTION OR PROCEEDING BROUGHT BY ANY SUCH PRIVATE PERSONS OR GOVERNMENT AUTHORITY AGAINST ANY ONE OR ALL OF THE PAST, PRESENT AND FUTURE PARTICIPATING PUBLIC ENTITIES FOR ANY AND ALL ENVIRONMENTAL DAMAGE OR ENVIRONMENTAL CLAIM OF ANY KIND ARISING IN ANY WAY FROM THE OPERATIONS OF THE AGENCY ALLEGED TO HAVE CAUSED DAMAGE TO THE AGENCY PROPERTY, SURROUNDING PROPERTY OWNED BY UNAFFILIATED THIRD PARTIES, GROUND WATER, SOIL, AIR, OR ANY OTHER ENVIRONMENTAL INJURY OF ANY KIND, ALONG WITH INJURY TO OR THE DEATH OF ANY PERSON (COLLECTIVELY AND INDIVIDUALLY "DAMAGES"), WHETHER OR NOT SUCH DAMAGES ARE DIRECTLY CAUSED BY THE NEGLIGENCE, MISCONDUCT, OR STRICT LIABILITY OF THE AGENCY OR THE PAST, PRESENT AND FUTURE PARTICIPATING PUBLIC ENTITY OR PARTICIPATING PUBLIC ENTITIES AGAINST WHICH ANY SUCH CLAIMS ARE MADE OR THE OPERATIONS OF THE AGENCY AND ANY SUBSEQUENT REMEDIATION OR COMPLIANCE EFFORTS. THIS FULL AND UNQUALIFIED 23 INDEMNITY SHALL EXTEND TO INCLUDE AS INDEMNITEES, EACH PAST, PRESENT AND FUTURE PARTICIPATING PUBLIC ENTITY AND ITS RESPECTIVE PAST, PRESENT AND FUTURE COUNCIL MEMBERS, APPOINTEES TO THE TMPA BOARD, UTILITY DIRECTORS, UTILITY COMPANIES OR ENTITIES, EMPLOYEES, AGENTS, CONTRACTORS, SUBCONTRACTORS OR INVITEES. 6.3.2. INSURANCE. The Agency's indemnity obligations under this Section shall not be limited by any coverage exclusions or other provisions in any policy of required insurance or other insurance maintained by the Agency which is intended to respond to such events. Notwithstanding the foregoing, the Participating Public Entities' right to indemnification pursuant to this Section shall be reduced by all insurance, settlement proceeds or third -party indemnification proceeds actually received by the Participating Public Entity. This Section may be relied upon by the current or former Participating Public Entities and may be enforced directly by any of them against the Agency in the same manner and for the same purpose as if pursuant to a contractual indemnity directly between them and the Agency. SECTION 6.4. INSURANCE RELATED TO THE AGENCY'S INDEMNIFICATION OF PARTICIPATING PUBLIC ENTITIES. The indemnity obligation assumed by the Agency pursuant to Section 6.3 shall be funded and satisfied from funds held in the Indemnity Reserve Account or, upon the Approval of all Participating Public Entities, by an insurance policy providing full coverage for all such governmental, regulatory and private claims identifying each past, present and future Participating Public Entity as an Additional Insured with all rights and benefits due under such insurance policy. If the indemnity obligation assumed by the Agency is funded by insurance, the Agency may have a retention of liability under the policy which shall not exceed $1,000,000 provided that the balance in the Indemnity Reserve Account exceeds the amount of the retention. Any such insurance policy shall have aggregate and per claim/occurrence policy limits of no less than $5,000,000. The insurance coverage permitted by this Section may be implemented at such time as directed by the Participating Public Entities and shall remain in effect for a period not less than five years after the agency completes all environmental remediation associated with Generation Assets. Upon cessation of Generation, the annual premium associated with the insurance requirements permitted herein and any associated self-insurance retention may be funded through the Indemnity Reserve Account as provided in Section 6.6. In the event the Indemnity Reserve Account has a shortfall in funds necessary to cover the self-insured retention, then the shortfall shall be apportioned among the current and former Participating Public Entities in the proportion that each Participating Public Entity holds an interest in Generation Assets. SECTION 6.5. INDEMNITY RESERVE ACCOUNT. As funds become available from the disposition of Agency assets as provided in Articles III, IV, and V, and in furtherance of the indemnity and insurance required by Section 6.3 of this Agreement, the Agency shall place such funds in an "Indemnity Reserve Account" established pursuant to an Indemnity Escrow Agreement attached hereto as Schedule H. As provided in this Agreement, funds shall be applied to this account to establish an account balance of Five Million ($5,000,000.00) Dollars or such other amount as may be agreed upon by the unanimous Approval of all Participating Public Entities. The parties to this Agreement agree and acknowledge that funds held in the Indemnity Reserve Account shall be disbursed according to the terms of Schedule H, and that any amounts remaining in the escrow account after these designated purposes are satisfied shall be disbursed to the Participating Public Entities according to the applicable formula in Section 2.4 of this Agreement 24 upon the written notice of the Participating Public Entities as provided Section 3.2 of the Indemnity Escrow Agreement. SECTION 6.6. PURPOSES OF THE INDEMNITY RESERVE ACCOUNT. Funds in the Indemnity Reserve Account shall be used solely to fund the Agency's indemnification obligations under Section 6.3, including the costs of insurance as described in Section 6.4 and any claims, demands, suits, losses, liabilities, damages, obligations, payments, costs or expenses (including, without limitation, the cost and expense of any action, suit, proceeding, assessment, judgment, settlement or compromise relating thereto and reasonable attorneys' fees and reasonable disbursements in connection therewith) relating to, resulting from or arising out the indemnification obligations under Section 6.3 of this Agreement. The account may be used to pay the premiums for insurance requirements specified in Section 6.3, and for the self-insured retention associated with such insurance. SECTION 6.7. QUALIFICATIONS FOR ESCROW AGENT AND RELATED TERMS. The Indemnity Reserve Account Escrow Agent shall meet the terms of qualification substantially in the form set forth in Schedule H to the Agreement. ARTICLE VII. OTHER MATTERS. SECTION 7.1. JOINDER REQUIRED FOR ANY NEW PARTICIPATING PUBLIC ENTITY. The Parties agree that the concurrent ordinances adding a new entity as a Participating Public Entity in the Agency shall require that such Participating Public Entity join into and be bound by the terms of this Agreement. Such joinder shall be evidenced by concurrent ordinance of the governing body of the Participating Public Entity adopting the terms of and agreeing to be bound by this Agreement, together with such other action as may be required by law to ensure enforceability. SECTION 7.2. MODIFICATION. This Agreement may be modified only upon the mutual consent of all Parties, in writing. SECTION 7.3. TERMINATION. This Agreement shall be terminated: (i) upon the mutual consent of all Parties, in writing; or (ii) upon dissolution of the Agency and the winding up of its affairs. Notwithstanding any other provision of this Agreement, this Section and the following Sections hereof will survive the expiration or any earlier termination of this Agreement. SECTION 7.4. SURVIVAL. Sections 3.2.3, 4.5, 4.6, 5.4, 5.5 and 6.2 through 6.7 shall survive termination of this Agreement. 25 ARTICLE VIII. MISCELLANEOUS PROVISIONS. SECTION 8.1. AGENCY'S CONTRACTUAL AUTHORITY. The Agency may contract with one or more Participating Public Entities to carry out one or more of the responsibilities of the Agency under this Agreement. SECTION 8.2. COVENANTS OF THE AGENCY. 8.2.1. BEST EFFORTS REQUIRED. The Agency shall use its best efforts to provide the services and undertake the actions required by this Agreement. The Agency covenants and agrees that it will operate, maintain and manage the Agency or cause the same to be operated, maintained and managed in an efficient and economical manner, consistent with prudent business practices. 8.2.2. ENFORCEMENT. The Agency shall diligently enforce and take all reasonable steps, actions and proceedings necessary for the enforcement of all terms, covenants and provisions of this Agreement. SECTION 8.3. COMPLIANCE WITH APPLICABLE LAW. The Agency shall exercise its rights and powers hereunder in a manner that is consistent with applicable law, including provisions of federal tax law relating to its Debt. SECTION 8.4. REMEDIES IN THE EVENT OF DEFAULT. (1) If any Participating Public Entity fails or defaults in meeting the terms, conditions and covenants of this Agreement and such default continues for a period of fifteen (15) days, the Agency shall give notice (in the manner contemplated by Section 8.12 of this Agreement) to the Participating Public Entity. The defaulting Participating Public Entity shall, from the date of the mailing of such notice, have a period of thirty (30) days to cure the default. (2) If any Participating Public Entity fails to make any payment (hereinafter called a default in payment) to the Agency that is required to be made under the provisions of this Agreement, and such default in payment continues for a period of fifteen (15) days, the Agency shall give notice to the Participating Public Entity. The defaulting Participating Public Entity shall, from the date of the mailing of such notice, have a period of thirty (30) days to pay the full amount then due to the Agency, together with interest thereon, as hereinafter provided. (3) If the Participating Public Entity does not cure its default within such period of thirty (30) days, then, so long as such Participating Public Entity remains in default, and in addition to any other rights which the Agency has under this Agreement and at law and in equity, the Agency may charge to and collect from such Participating Public Entity each calendar month interest on the amount then due, until paid in full. Termination of service hereunder shall not reduce or change the obligation of the defaulting Participating Public Entity under the other provisions of this Agreement. (4) If the Agency fails or defaults in meeting the terms, conditions and covenants of this Agreement, and such default continues for a period of 15 days after a Participating Public Entity 26 has given the Agency notice of such default in the manner contemplated in this section, then the Parties shall proceed in accordance with Section 8.10. SECTION 8.5. INTEREST. In the event that a Participating Public Entity fails to make any payment at the time herein specified, interest on such delinquent amount shall accrue at the rate of ten percent (10%) per annum, or if less, the maximum amount allowed by law, from the date such payment becomes due until paid in full, and the Agency may institute a proceeding for a mandatory injunction requiring the payment of the amount due and interest thereon, such action to be instituted in a court of competent jurisdiction. SECTION 8.6. DUE DATES. Payments required to be made by a Participating Public Entity under the terms of this Agreement shall be due and payable within thirty (30) days following the date the Agency renders the bill, and the Participating Public Entity shall have no right of setoff, recoupment or counterclaim against any payment required to be made hereunder. Should a dispute arise as between any party to this Agreement, each Party shall nevertheless be obligated pay such amounts as may not be in dispute pending the resolution of such dispute, provided a Party may elect to pay any disputed amount. If the Party elects not to pay the amount in dispute and the dispute is resolved against such Party, the amount ultimately found to be due plus interest at 10% per annum, or, if less, the maximum amount allowed by law (calculated from the date the same was originally due) shall be paid by the Party within 15 days of the resolution of the controversy. Attorneys' fees shall be assessed as court costs. SECTION 8.7. ASSIGNMENT RIGHTS OF A PARTY. Neither the Agency nor a Participating Public Entity may assign any of its rights under this Agreement to another entity unless such assignment is approved by all Parties to this Agreement. Such approval shall not be unreasonably withheld. SECTION 8.8. FORCE MAJEURE. If for any reason of "force majeure" any of the Parties hereto shall be rendered unable, wholly or in part, to carry out its obligations under this Agreement, other than the obligation of a Participating Public Entity to make the payments required under the terms of this Agreement, then if such Party shall give notice and the full particulars of such reasons in writing to the other Party within a reasonable time after the occurrence of the event or cause relied on; the obligation of the Party giving such notice, so far as it is affected by such "force maj eure," shall be suspended during the continuance of the inability then claimed, but for no longer period, and such Party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "force majeure" as employed herein shall mean acts of God, strikes, lockouts, or other industrial disturbances, acts of the public enemy, orders or actions of any kind of the Government of the United States or of the State of Texas or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, restraints of government and people, civil disturbances, explosions, breakage or accident to dams, machinery, pipelines, or canals or other structures or machinery, on account of any other cause not reasonably within the control of the party claiming such inability. It is understood and agreed that the settlement of strikes and lockouts shall be entirely within the discretion of the Party having the difficulty, and that the above requirement that any "force majeure" shall be remedied with all reasonable dispatch shall not require the settlement of strikes and lockouts by acceding to the demand of the opposing parties when such settlement is unfavorable to it in the judgment of the Party having the difficulty. 27 SECTION 8.9. GOVERNMENTAL RULES, REGULATIONS AND LAWS. The Agreement shall be subject to all valid rules, regulations and laws applicable thereto, as promulgated by the United States of America, the State of Texas, or any other governmental body or agency having lawful jurisdiction or any authorized representative or agency of any of them. SECTION 8.10. GOVERNING LAW AND DISPUTE RESOLUTION. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. With the exception solely for a claim seeking equitable relief, any dispute, need of interpretation, claim, counterclaim, demand, cause of action, or other controversy arising out of or relating to this Agreement or the relationship established by this Agreement, any provision hereof, the alleged breach thereof, or in any way relating to the subject matter of this Agreement, involving the Parties and/or their respective representatives (for purposes of this Section 8.10 only, collectively, the "Claims"), even though some or all of such Claims allegedly are extra -contractual in nature, whether such Claims sound in contract, tort, or otherwise, at law, under state or federal law, whether provided by statute or the common law, for damage , shall be resolved by binding arbitration before a panel of three arbitrators in accordance with this Section 8.10. Arbitration shall be conducted in accordance with the rules of arbitration of the Texas General Arbitration Act, Tex. Civ. Prac. & Rem. Code Sec. 171.001 et seq. and, to the extent an issue is not addressed by the Texas arbitration law, by the Comprehensive Arbitration Rules & Procedures promulgated by Judicial Arbitration and Mediation Services ("JAMS") as the same may be in effect from time to time to the extent not in conflict with this Section 8.10 and shall be subject to the Texas General Arbitration Act. The Parties shall request a list of twelve neutrals from JAMS and each party shall be entitled to exercise one strike from the list and report such strike to JAMS. If a party fails to timely exercise its strike, the party shall forfeit its strike. Upon receiving the list of neutrals from JAMS after the exercise of strikes, each Party shall designate its preferred candidates for serving as neutrals in order of priority, and the three neutrals receiving the highest aggregate priority score shall be designated as the appointed neutrals for the dispute. The Chair shall be the neutral receiving the highest aggregate priority score. In the event of a tie, the neutral who has served the longest tenure as a state or federal judge (or if no such person is available the person who has served as Chair of the most arbitrations where an award was rendered following hearing on the merits) shall be selected as a member of the panel or Chair as the case may be. In exercising its strikes or prioritization, a party shall have twenty-four hours (exclusive of hours falling on Saturday, Sunday or federal holidays) to exercise its strikes or provide its priority scoring to JAMS. If a Party fails to designate its prioritization of neutrals within the time specified, the appointment shall be based upon the highest aggregate priority score from those designations that are provided in a timely fashion. Each Party shall pay its pro rata share of the expenses incurred by the appointed arbitrators. In the event that JAMS is unable to provide a list of twelve neutrals, the parties shall request a list of twelve neutrals from the American Arbitration Association and shall use the procedures provided in the prior paragraph except that the to the extent an issue is not addressed by the Texas arbitration law, by the Commercial Arbitration Rules and Mediation Procedures of the American Arbitration Association as the same may be in effect from time to time to the extent not in conflict with this Section 8.10 and shall be subject to the Texas General Arbitration Act. The validity, construction, and interpretation of the arbitration provisions of this Agreement and all procedural aspects of the arbitration conducted pursuant hereto, shall be decided by the arbitrator. In deciding the substance of the Parties' Claims and defenses, the arbitrator shall refer to the governing law. Only damages allowed pursuant to this Agreement may be awarded and, without limitation of the foregoing, the arbitrator shall have no authority to award damages contravening in any way the limitation of liability agreed to by the Parties pursuant to this Agreement. The arbitration shall take place in Waco, Texas. It is understood and agreed that judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. It is agreed that the arbitrator shall not have the authority to make rulings of law other than rulings as to the interpretation of this Agreement. SECTION 8.11. WAIVER OF JURY TRIAL. Each Party expressly waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any proceedings relating to this Agreement or any dispute between the Parties arising in connection with any aspect of this Agreement, and acknowledges that this waiver is a material inducement to the other Parties' entering into this Agreement. However, if the Parties in dispute unanimously agree to submission of their dispute to a court of law as an alternative to arbitration, it is agreed that such Parties may have a non jury bench trial in respect of any proceedings relating to this Agreement or any such dispute. SECTION 8.12. NOTICES. Any notice, request, demand, statement or bill provided for in this Agreement shall be in writing and shall be considered to have been duly delivered when sent by registered or certified mail, or by nationally recognized courier service, addressed as follows, unless another address has been designated, in writing, by the Party entitled to receive same: Texas Municipal Power Agency 12824 FM 244 Anderson, Texas 77830 936-873-1123 Attention: General Manager City of Bryan 300 S. Texas Avenue Bryan, Texas 77803-3937 979-209-5100 Attention: City Manager With copy to: General Manager Bryan Texas Utilities 205 E. 28th Street Bryan, TX 77803 29 City of Denton 215 E. McKinney St. Denton, Texas 76201-4229 940-349-8307 Attention: City Manager With copy to: General Manager Denton Municipal Electric 1659 Spencer Road Denton, Texas 76205 City of Garland 200 N 5th Street Garland, Texas 75040 972-205-2000 Attention: City Manager With copy to: General Manager and CEO Garland Power & Light 217 N. 5th Street Garland, Texas 75040 Deputy General Manager and COO Garland Power & Light 217 N. 5th Street Garland, Texas 75040 City of Greenville 2821 Washington St. Greenville, Texas 75401 903-457-3116 Attention: City Manager With Copy to: General Manager GEUS 6000 Joe Ramsey Blvd. Greenville, Texas 75402 SECTION 8.13. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall constitute an original but both or all of which, when taken together, shall constitute but one instrument. This Agreement may be delivered by the exchange of signed signature pages by facsimile transmission or by attaching a pdf copy to an email, and 30 any printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page. SECTION 8.14. GENERAL. 8.14.1. GOVERNING LAW. (i) This Agreement and all rights and obligations of the Parties hereunder are subject to all applicable State and Federal laws and all applicable duly promulgated orders and regulations and duly authorized actions taken by the executive, legislative or judicial branches of government, or any of their respective agencies, city councils, public utility boards, departments, authorities or other instrumentalities having jurisdiction. (ii) This Agreement was executed in the State of Texas and must in all respects be governed by, interpreted, construed, and shall be exclusively enforced in accordance with the laws of the State of Texas. It is agreed that the provisions and obligations of this Agreement are performable in Waco, McLennan County, Texas. Venue shall lie for any lawsuit dealing with this Agreement in the appropriate state district courts in and for McLennan County, Texas. (iii) Should a Party or Parties to this Agreement commence an arbitration or, by unanimous agreement between the disputing Parties, the allowed limited legal proceedings against another Party or Parties to enforce the terms and provisions of this Agreement, the Party or Parties who do not prevail in the proceeding(s) shall pay a reasonable amount of attorney's fees and expenses (including, but not limited to expert witness fees and deposition expenses) incurred by the prevailing Party or Parties. 8.14.2. RELATIONSHIP OF THE PARTIES. Nothing in this Agreement is intended to create a partnership, joint venture or other joint legal entity making any Party jointly or severally liable for the acts of the other Party. Each Party shall be solely liable for the payment of all wages, taxes, and other costs related to the employment of persons by that Party to perform under this Agreement, including all federal, state, and local income, social security, payroll and employment taxes and statutorily mandated workers' compensation coverage. None of the persons employed by any Party shall be considered employees of any other Party for any purpose; nor shall any Party represent to any person that such persons are or shall become employees of any other Party. 8.14.3. ENTIRE AGREEMENT. This Agreement, including all schedules made part hereof, is the Parties' complete and exclusive statement of the terms of the Agreement and the matters contemplated herein. Except as expressly provided in Section 1.4, all prior written and oral understandings, offers or other communications of every kind pertaining to the subject matter of this Agreement are hereby superseded. It is understood and agreed that this Agreement contains the entire Agreement between the Parties and, except as expressly provided in Section 1.4, supersedes any and all prior agreements, arrangements or understandings between the Parties relating to the subject matter. This Agreement cannot be changed or terminated orally and no written modification of this Agreement shall be effective unless executed and signed by all Parties. 8.14.4. WAIVER. Delay by any Party in enforcing its rights under this Agreement shall not be deemed a waiver of such rights. The failure of a Party to this Agreement to insist, on 31 any occasion, upon strict performance of any provision of this Agreement will not be considered to waive the obligations, rights, or duties imposed upon the Parties. No waiver of any breach or violation of any term of this Agreement shall be deemed or construed to constitute a waiver of any other breach or violation, whether concurrent or subsequent, and whether of the same or of a different type of breach or violation. 8.14.5. SEVERABILITY/MATERIAL ADVERSE CHANGE. If the federal government or the State of Texas adopts, enacts, or otherwise imposes a new law, rule or regulation which either makes a Parry's performance under this Agreement unlawful or makes this Agreement unenforceable, and such governmental action does not constitute a force majeure event under Section 8.8 of this Agreement, (i) the remainder of the terms, conditions, covenants restrictions and other provisions of this Agreement shall remain in full force and effect unless such an interpretation would materially alter the rights and privileges of any Party hereto; and (ii) the Parties shall negotiate in good faith to amend the terms of this Agreement and to determine the appropriate changes, if any, so that any Parry affected by such change in law or regulation is able to lawfully perform the entirety of its obligations without materially adversely affecting the financial benefit hereunder to any other Party. 8.14.6. HEADINGS AND CAPTIONS. Section headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. Whenever used herein the singular number shall include the plural, the plural shall include the singular, and the use of any gender shall include all genders. 8.14.7. NO THIRD -PARTY BENEFICIARIES. This Agreement is not intended to and does not create rights, remedies, or benefits of any character whatsoever in favor of any persons, corporations, associations, or entities other than the Parties, and the obligations herein undertaken and assumed are solely for the use and benefit of the Parties, their successors -in -interest and, where permitted, their assigns. 8.14.8. ACKNOWLEDGMENT OF THE PURPOSES OF THE AGREEMENT AND APPLICATION OF TEX. LOCAL GOVT. CODE CHAPTER 271. The Participating Public Entities acknowledge and agree that this Agreement is a contract entered into by them in their proprietary capacities for the provision of public utility services, namely the acquisition of power and energy and associated transmission services by the Participating Public Entities to be supplied to their respective municipal utilities through TMPA, a joint powers agency created by them. Each of the Parties acknowledge and agree that the execution and performance of this Agreement is within its authority and authorized by Chapter 163, Subchapter C-1, of the Public Utilities Code. The Parties further acknowledge and agree that this Agreement is (i) a contract for the sale of goods and services between TMPA and the Participating Public Entities, within the definition of "contract subject to this subchapter" as defined in Tex. Local Govt. Code § 271.151(2)(A), and (ii) entered into by each of the Parties with the further acknowledgment that all terms hereof are intended be enforceable as between the Parties. 8.14.9. CONSTRUCTION OF AGREEMENT. The Parties acknowledge and agree that this Agreement has been negotiated at arm's length and has been drafted and negotiated by all Parties and their respective legal counsel from the date of the inception of negotiations until the execution of this final Agreement by the Parties' authorized representatives. Accordingly, the Parties agree that none of them may be properly deemed to be the author of this Agreement, and 32 further agree that no Party shall be presumptively entitled to have any provision of this Agreement construed against the other. The Parties acknowledge and agree that this Agreement shall be interpreted in accordance with Texas law governing the construction of contracts negotiated on an arm's length basis between sophisticated parties, with each represented by legal counsel. This Agreement shall become effective as of September 1, 2016, upon execution by the Agency and each Participating Public Entity, all by the proper officer duly authorized by the Agency and each Participating Public Entity to execute this Agreement for an on behalf of the executing Party. TEXAS MUNICIPAL POWER AGENCY Name: Title: Date: Attest: Approved as to form: Counsel for Texas Municipal Power Agency CITY OF BRYAN, TEXAS By: Name: Title: Date: Attest: Approved as to form: Counsel for the City of Bryan, Texas 33 CITY OF DENTON, TEXAS By: Name: Title: Date: Attest: Approved as to form: Counsel for the City of Denton, Texas CITY OF GARLAND, TEXAS Name: Title: Date: Attest: CITY OF GREENVILLE, TEXAS By: Name: Title: Date: Attest: 34 GEUS, acting on behalf of the City of Greenville pursuant to its Charter Name: Title: Chair of the Board of Trustees of the Electric Utility Board Date: Attest: 35 SCHEDULE A - GENERATION ASSETS SCHEDULE B - MINING ASSETS SCHEDULE C - TRANSMISSION ASSETS SCHEDULE D - ADMINISTRATIVE ASSETS AND ALLOCATIONS SCHEDULE E - PROPORTIONAL SHARES OF EACH PARTICIPATING PUBLIC ENTITY AS OF SEPTEMBER 30, 2015 SCHEDULE F - DECOMMISSIONING ESCROW AGREEMENT SCHEDULE G - MINE RECLAMATION PLAN SCHEDULE H - INDEMNITY ESCROW AGREEMENT 36 g:Ab\bryan\tmpa restructureAoperating agreement\6-15-16 draft clean final.docx 37 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 16-797, Version: 1 Legislation Text AGENDA INFORMATION SHEET DEPARTMENT: Materials Management ACM: Bryan Langley AGENDA DATE: June 28, 2016 SUBJECT Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager to execute a Second Amendment to a Professional Services Agreement by and between the City of Denton, Texas and Teague Nall and Perkins, Inc. for engineering and surveying services relating to the Fiscal Year 2015-2016 Wastewater Collection System Improvements Project; authorizing the expenditure of funds therefor; providing an effective date (File 5756 in the additional amount not -to -exceed $93,600; aggregating a total not -to -exceed $397,430). BACKGROUND The City of Denton is currently under contract with Teague Nall and Perkins, Inc. (File45756) to design new sanitary sewer lines to replace existing defective sanitary sewer lines as part of the annual wastewater replacement and rehabilitation program. The scope of work for the existing contract includes the design of approximately 19,000 linear feet of sanitary sewer lines plus design survey. The original contract was approved by Council on February 15, 2015 in the amount of $286,730. Amendment 41 was approved in November 2015 in the amount of $17,100 and added 3,300 feet of water line to the contract. The total existing contract amount is currently $303,830. During the design phase of the Fiscal Year 2016 portion of the project, the Water Department indicated that there were two additional water line replacement locations that overlapped the wastewater lines under design. These locations have been identified and a proposal has been received to add the design of the replacement water lines to the existing contract. The two locations are on Hickory Street between Bonnie Brae and Carroll (approximately 7,400 ft.) and on Paisley Street between Frame and Ruddell (approximately 2,100 ft.). These additions for water line design are outside the current scope of work for the project and require a second amendment to the contract. The engineer's opinion of probable construction cost for the additional water line work is $1,785,000.00. The cost of the extra design work is approximately 4.3% of this estimated construction cost. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On June 27, 2016, the Public Utilities Board (PUB) will consider a recommendation to approve and forward this item to the City Council for consideration. RECOMMENDATION City of Denton Page 1 of 3 Printed on 6/24/2016 povveied by I_egivt9i IN File #: ID 16-797, Version: 1 Approve a Second Amendment to a Professional Services Agreement by and between the City of Denton, Texas and Teague Nall and Perkins, Inc. in the additional amount not -to -exceed $93,600 for a total contract amount not -to -exceed $397,430. PRINCIPAL PLACE OF BUSINESS Teague Nall and Perkins, Inc. Denton, TX ESTIMATED SCHEDULE OF PROJECT Teague Nall and Perkins, Inc. is prepared to begin the services associated with Amendment 42 immediately after Council approval with the goal of completing design within four months. Construction of the designed facilities is being handled by in-house water crews and will be initiated shortly after the design is finalized. FISCAL INFORMATION The funding for this design agreement will be paid from the Water Utilities Capital Fund account 630357517.1360.21100. The existing Purchase Order# 172292 will be revised to add the funding upon Council approval. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Public Infrastructure Related Goal: 2.3 Promote superior utility services and facilities FxHIRITC Exhibit 1: Original Contract and First Amendment Exhibit 2: Ordinance Exhibit 3: Second Amendment Respectfully submitted: Chuck Springer, 349-8260 Director of Finance For information concerning this acquisition, contact: Jim Wilder at 349-8953. City of Denton Page 2 of 3 Printed on 6/24/2016 povveied by I_egist9i I;, File M ID 16-797, Version: 1 City of Denton Page 3 of 3 Printed on 6/24/2016 povveied by I_egist9i I;, EXHIBIT I FOR ARCHITECT OR ENGINEER Tl -115 AGRIT'MENT is made and entered into as of the 12 day of 2015, by and between the City of Denton, Texas, a Texas municipal tcorpor=atio, with its principal office at 215 East McKinney Street, Denton, Denton County, Texas 76201, hereinafter called "Owner" and Teague Nall and Perkins, with its corporate office at 1517 Centre Place Drive, Suite 320, Denton, Texas 76205 hereinafter called "Design Professional," acting herein, by and through their duly authorized representatives. In consideration of the covenants and agreements herein contained, the parties hereto do mutually agree as follows: SECTION 1 The Owner hereby contracts with the Design Professional, a licensed Texas architect or engineer, as an independent contractor. The Design Professional hereby agrees to perform the services as described herein and in the Proposal, the General Conditions, and other attachments to this Agreement that are referenced in Section 3, in connection with the Project. The Project shall include, without limitation, Professional Engineering and Surveying Services for 2015 and 2016 Wastewater Collection System Improvement Project (includes Attachments A and B) Page I SAproposalsWenton SS Rehab 2015 and 2016\TNP 2015-2016 SS Rehab Agreement.doc EXHIBIT 1 The Owner shall compensate the Design Professional as follows: 2.1 BASIC SERVICES 2.1.1 For Basic Services the Fixed Fee compensation shall be $ 190,730. 2.1.2 Progress payments for Basic Services shall be paid based upon the Design Professionals estimate of the percentage of the work effort that has been completed. 2.2 SPECIAL SERVICES 2.2.1 Compensation for Special Services shall be $93,500. 2.2.2 Progress payments for Special Services shall be paid based upon the Design Professionals estimate of the percentage of the work effort that has been completed. 2.3.1 Compensation for Additional Services shall be based on negotiated fees for each item of service provided, as mutually agreed to by the ENGINEER and CITY. 2.3.2 Compensation for Additional Services of consultants, including additional structural, mechanical and electrical engineering services shall be based on a multiple of 1.10 times the amounts billed to the Design Professional for such additional services. 2.3 REIMBURSABLE EXPENSES Reimbursable Expenses shall be a multiple of 1.00 times the expenses incurred by the Design Professional, the Design Professional's em- ployees and consultants in the interest of the Project as defined in the General Conditions but not to exceed a total of 2,500 without the prior written approval of the Owner. 2.4 TOTAL CONTRACT AMOUNT $ 286,730 Page 2 SAproposals\Denton SS Rehab 2015 and 2016\TNP 2015-2016 SS Rehab Agreement.doc EXHIBIT 1 Not M 1 I D191 I,. This Agreement includes this executed agreement and the following documents all of which are attached hereto and made a part hereof by reference as if fully set forth herein: City of Denton General Conditions to Agreement for Architectural or Engineering Services. 2. Attachments A through B . This Agreement is signed by the parties hereto effective as of the date first above written. CITY OF DENTON BY:.... ........ - ............. v U Opa.. ..... m._._. l C. CAMPBELL ATTEST: IL.N 11 Ell WALTERS, C. "Y SECRETARY BY: APPROVED AS TO LEGAL FORM: ANITA i3 U R(J ESS, CITY ATTORNEY r, r Teague Nall and Perkins, Inc. <1V 1YAA G7�c:j Vickery, P.E, Prl WITNESS: Page 3 SAproposals\Denton SS Rehab 2015 and 2016\TNP 2015-2016 SS Rehab Agreement.doc EXHIBIT 1 CITY OF DENTON GENERAL CONDITIONS TO AGREEMENT FOR ARCHITECTURAL OR ENGINEERING SERVICES ARTICLE 1. ARCHITECT OR ENGINEER'S RESPONSIBILITIES 1.1 The Architect or Engineer's services consist of those services for the Project (as defined in the agreement (the "Agreement") and proposal (the "Proposal") to which these General Conditions are attached) performed by the Architect or Engineer (hereinafter called the "Design Professional") or Design Professional's employees and consultants as enumerated in Articles 2 and 3 of these General Conditions as modified by the Agreement and Proposal (the "Services"). 1.2 The Design Professional will perform all Services as an independent contractor to the prevailing professional standards consistent with the level of care and skill ordinarily exercised by members of the same profession currently practicing in the same locality under similar conditions, including reasonable, informed judgments and prompt timely actions (the "Degree of Care"). The Services shall be performed as expeditiously as is consistent with the Degree of Care necessary for the orderly progress of the Project. Upon request of the Owner, the Design Professional shall submit for the Owner's approval a schedule for the performance of the Services which may be adjusted as the Project proceeds, and shall include allowances for periods of time required for the Owner's review and for approval of submissions by authorities having jurisdiction over the Project. Time limits established by this schedule and approved by the Owner shall not, except for reasonable cause, be exceeded by the Design Professional or Owner, and any adjustments to this schedule shall be mutually acceptable to both parties ARTICLE 2 SCOPE OF BASIC SERVICES 2.1 BASIC SERVICES DEFINED The Design Professional's Basic Services consist of those described in Sections 2.2 through 2,6 of these General Conditions and include without limitation normal structural, civil, mechanical and electrical engineering services and any other engineering services necessary to produce a complete and accurate set of Construction Documents, as described by and required in Section 2.4. The Basic Services may be modified by the Agreement. 2.2 SCHEMATIC DESIGN PHASE (See attachments for detailed scope info tion) 2.2.1 The Design Professional, in consultation with the Owner, shall develop a written program for the Project to ascertain Owner's needs and to establish the requirements for the Project. 2.2.2 The Design Professional shall provide a preliminary evaluation of the Owner's program, construction schedule and construction budget requirements, each in terms of the other, subject to the limitations set forth in Subsection 5.2.1. 2.2.3 The Design Professional shall review with the Owner alternative approaches to design and construction of the Project. 2.2.4 Based on the mutually agreed-upon program, schedule and construction budget requirements, the Design Professional shall prepare, for approval by the Owner, Schematic Design Documents consisting of drawings and other documents illustrating the scale and relationship of Project components. The Schematic Design shall contemplate compliance with all applicable laws, statutes, ordinances, codes and regulations. 2.2.5 The Design Professional shall submit to the Owner a preliminary detailed estimate of Construction Cost based on current area, volume or other unit costs and which indicates the cost of each category of work involved in constructing the Project and establishes an elapsed time factor for the period of time from the commencement to the completion of construction 2.3 DESIGN DEVELOPMENT PHASE (N/A) 2.3.1 Based on the approved Schematic Design Documents and any adjustments authorized by the Owner in the program, sche- dule or construction budget, the Design Professional shall prepare for approval by the Owner, Design Development Documents consisting of drawings and other documents to fur and describe the size and character of the Project as to architectural, structural, mechanical and electrical systems, materials and such other elements as may be appropriate, which shall comply with all applicable laws, statutes, ordinances, codes and regulations. Notwithstanding Owner's approval of the documents, Design Professional warrants that the Documents and specifications will be sufficient and adequate to fulfill the purposes ofthe Project. 2.3.2 The Design Professional shall advise the Owner of any adjustments to the preliminary estimate of Construction Cost in a further Detailed Statement as described in Section 2.2.5. 2.4 CONSTRUCTION DOCUMENTS PHASE (See attachments for detailed scope Information) 2.4.1 Based on the approved Design Development Documents and any further adjustments in the scope or quality of the Project or in the construction budget authorized by the Owner, the Design Professional shall prepare, for approval by the Owner, Construction Documents consisting of Drawings and Specifications setting forth in detail requirements for the construction of the Project, which shall comply with all applicable laws, statutes, ordinances, codes and regulations. 2.4.2 The Design Professional shall assist the Owner in the preparation of the necessary bidding or procurement information, bidding or procurement forms, the Conditions of the contract, and the form of Agreement between the Owner and contractor. Page 4 S:\proposals\Denton SS Rehab 2015 and 2016\TNP 2015-2016 SS Rehab Agreement.doc EXHIBIT 1 2.4.3 The Design Professional shall advise the Owner of any adjustments to previous preliminary estimates of Construction Cost indicated by changes in requirements or general market conditions. 2.4.4 The Design Professional shall assist the Owner in connection with the Owner's responsibility for filing documents required for the approval of govemmental authorities having jurisdiction over the Project. 2.5 CONSTRUCTION CONTRACT PROCUREMENT (See attachments for detailed scope information) 2.5.1 The Design Professional, following the Owner's approval of the Construction Documents and of the latest preliminary detailed estimate of Construction Cost, shall assist the Owner in procuring a construction contract for the Project through any procurement method that is legally applicable to the Project including without limitation, the competitive sealed bidding process. Although the Owner will consider the advice of the Design Professional, the award of the construction contract is in the sole discretion ofthe Owner. 2.5.2 If the construction contract amount for the Project exceeds the total construction cost of the Project as set forth in the approved Detailed Statement of Probable Construction Costs of the Project submitted by the Design Professional, then the Design Professional, at its sole cost and expense, will revise the Construction Documents as may be required by the Owner to reduce or modify the quantity or quality of the work so that the total construction cost of the Project will not exceed the total construction cost set forth in the approved Detailed Statement of Probable Construction Costs. 2.6 CONSTRUCTION PHASE - ADMINISTRATION OF THE CONSTRUCTION CONTRACT (See attachments for detailed scope Information) 2.6.1 The Design Professional's responsibility to provide Basic Services for the Construction Phase under this Agreement commences with the award of the Contract for Construction and terminates at the issuance to the Owner of the final Certificate for Payment, unless extended under the terns of Subsection 8.3.2. 2.6.2 The Design Professional shall provide detailed administration of the Contract for Construction as set forth below. For design professionals the administration shall also be in accordance with AIA document A201, General Conditions of the Con- tract for Construction, current as of the date of the Agreement, unless otherwise provided in the Agreement. For engineers the administration shall also be in accordance with the Standard Specifications for Public Works Construction by the North Central Texas Council of Govemments, current as of the date of the Agreement, unless otherwise provided in the Agreement. 2.6.3 Construction Phase duties, responsibilities and limitations of authority of the Design Professional shall not be restricted, modified or extended without written agreement of the Owner and Design Professional. 2.6.4 The Design Professional shall be a representative of and shall advise and consult with the Owner (1)during construction, and (2) at the Owner's direction from time to time during the correction, or warranty period described in the Contract for Con- struction. The Design Professional shall have authority to act on behalf of the Owner only to the extent provided in the Agreement and these General Conditions, unless otherwise modified by written instrument. 2.6.5 The Design Professional shall inspect the construction site at least two times a week, regardless of whether construction is in progress, to become familiar with the progress and quality of the work completed and to determine if the work is being performed in a manner indicating that the work when completed will be in accordance with the Contract Documents. Design Professional shall provide Owner a written report subsequent to each on-site visit. On the basis of on-site observations the Design Professional shall keep the Owner informed of the progress and quality of the work, and shall exercise the Degree of Care and diligence in discovering and promptly reporting to the Owner any defects or deficiencies in the work of Contractor or any subcontractors. The Design Professional represents that he will follow Degree of Care in performing all Services under the Agreement. The Design Professional shall promptly correct any defective designs or specifications furnished by the Design Professional at no cost to the Owner. The Owner's approval, acceptance, use of or payment for all or any part of the Design Professional's Services hereunder or of the Project itself shall in no way alter the Design Professional's obligations or the Owners rights hereunder. 2.6.6 The Design Professional shall not have control over or charge of and shall not be responsible for construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection with the work. The Design Professional shall not be responsible for the Contractor's schedules or failure to carry out the work in accordance with the Contract Documents except insofar as such failure may result from Design Professional's negligent acts or omissions. The Design Professional shall not have control over or charge of acts or omissions of the Contractor, Subcontractors, or their agents or employees, or of any other persons performing portions of the work. 2.6.7 The Design Professional shal I at all times have access to the work wherever it is in preparation or progress. 2.6.8 Except as may otherwise be provided in the Contract Documents or when direct communications have been specially authorized, the Owner and Contractor shall communicate through the Design Professional. Communications by and with the Design Professional's consultants shall be through the Design Professional. 2.6.9 Based on the Design Professional's observations at the site of the work and evaluations of the Contractor's Applications for Payment, the Design Professional shall review and certify the amounts due the Contractor. Page 5 SAproposals\Denton SS Rehab 2015 and 2016\TNP 2015-2016 SS Rehab Agreement.doc EXHIBIT I 2.6.10 The Design Professional's certification for payment shall constitute a representation to the Owner, based on the Design Professional 's observations at the site as provided in Subsection 2.6 5 and on the data comprising the Contractors Application for Payment, that the work has progressed to the point indicated and that the quality of the Work is in accordance with the Contract Documents. The foregoing representations are subject to minor deviations from the Contract Documents correctable prior to completion and to specific qualifications expressed by the Design Professional. The issuance of a Certificate for Payment shall further constitute a representation that the Contractor is entitled to payment in the amount certified. However, the issuance of a Certificate for Payment shall not be a representation that the Design Professional has (1) reviewed construction means, methods, techniques, sequences or procedures, or (2) ascertained how or for what purpose the Contractor has used money previously paid on account of the Contract Sum 2.6.11 The Design Professional shall have the responsibility and authority to reject work which does not conform to the Contract Documents. Whenever the Design Professional considers it necessary or advisable for implementation of the intent of the Contract Documents, the Design Professional will have authority to require additional inspection or testing of the work in accordance with the provisions of the Contract Documents, whether or not such Work is fabricated, installed or completed. However, neither this authority of the Design Professional nor a decision made in good faith either to exercise or not exercise such authority shall give rise to a duty or responsibility of the Design Professional to the Contractor, Subcontractors, material and equipment suppliers, their agents or employees or other persons performing portions of the work. 2.6.12 The Design Professional shall review and approve or take other appropriate action upon Contractoes submittals such as Shop Drawings, Product Data and Samples for the purpose of (1) determining compliance with applicable laws, statutes, ordinances and codes; and (2) determining whether or not the work, when completed, will be in compliance with the requirements of the Contract Documents. The Design Professional shall act with such reasonable promptness to cause no delay in the work or in the construction of the Owner or of separate contractors, while allowing sufficient time in the Design Professional's professional judgment to permit adequate review. Review of such submittals is not conducted for the purpose of determining the accuracy and completeness of other details such as dimensions and quantities or for substantiating instructions for installation or performance of equipment or systems designed by the Contractor, all of which remain the responsibility of the Contractor to the extent required by the Contract Documents The Design Professional's review shall not constitute approval of safety precautions or, unless otherwise specifically stated by the Design Professional, of construction means, methods, techniques, sequences or procedures. The Design Professional's approval of a specific item shall not indicate approval of an assembly of which the item is a component. When professional certification of performance characteristics of materials, systems or equipment is required by the Contract Documents, the Design Professional shall be entitled to rely upon such certification to establish that the materials, systems or equipment will meet the performance criteria required by the Contract Documents. 2.6.13 The Design Professional shall prepare Change Orders and Construction Change Directives, with supporting documentation and data if deemed necessary by the Design Professional as provided in Subsections 3. 1.1 and 3.3.3, for the Owner's approval and execution in accordance with the Contract Documents, and may authorize minor changes in the work not involving an adjustment in the Contract Sum or an extension of the Contract Time which are not inconsistent with the intent of the Contract Documents. 2.6.14 On behalf of the Owner, the Design Professional shall conduct inspections to determine the dates of Substantial Completion and Final Completion, and if requested by the Owner shall issue Certificates of Substantial and Final Completion. The Design Professional will receive and review written guarantees and related documents required by the Contract for Construction to be assembled by the Contractor and shall issue a final certificate for Payment upon compliance with the requirements of the Contract Documents 2.6.15 The Design Professional shall I interpret and provide recommendations on matters concerning performance of the Owner and Contractor under the requirements of the Contract Documents on written request of either the Owner or Contractor. The Design Professional's response to such requests shall be made with reasonable promptness and within any time limits agreed upon. 2.6.16 Interpretations and decisions of the Design Professional shall be consistent with the intent of and reasonably inferable from the Contract Documents and shall be in writing or in the form of drawings. When making such interpretations and initial decisions, the Design Professional shall endeavor to secure faithful performance by both Owner and Contractor, and shall not be liable for results or interpretations or decisions so rendered in good faith in accordance with all the provisions of this Agreement and in the absence of negligence. 2.6.17 The Design Professional shall render written decisions within a reasonable time on all claims, disputes or other matters in question between the Owner and Contractor relating to the execution or progress of the work as provided in the Contract Documents. 2.6.18 The Design Professional (1) shall render services under the Agreement in accordance with the Degree of Care; (2) will reimburse the Owner for all damages caused by the defective designs the Design Professional prepares; and (3) by acknowledging payment by the Owner of any fees due, shall not be released from any rights the Owner may have under the Agreement or diminish any of the Design Professional's obligations thereunder. 2.6.19 The Design Professional shall provide the Owner with a digital copy and one set of reproducible prints showing all significant changes to the Construction Documents during the Construction Phase. The reproducible prints will be based on information provided to the Design Professional by others. Page 6 SAproposalsWenton SS Rehab 2015 and 2016\TNP 2015-2016 SS Rehab Agreement.doe EXHIBIT I MR01—AlIaMm. 3.1.1 The services described in this Article 3 are not included in Basic Services unless so identified in the Agreement or Proposal, and they shall be paid for by the Owner as provided in the Agreement in addition to the compensation for Basic Services. The services described under Sections 3.2 and 3.4 shall only be provided if authorized or confirmed in writing by the Owner. If services described under Contingent Additional Services in Section 3.3 are required due to circumstances beyond the Design Professional's control, the Design Professional shall notify the Owner in writing and shall not commence such additional services until it receives written approval from the Owner to proceed. If the Owner indicates in writing that all or part of such Contingent Additional Services are not required, the Design Professional shall have no obligation to provide those services. Owner will be responsible for compensating the Design Professional for Contingent Additional Services only if they are not required due to the negligence or fault of Design Professional. 3.2 PROJECT REPRESENTATION BEYOND BASIC SERVICES 3.2.1 If more extensive representation at the site than is described in Subsection 2.6.5 is required, the Design Professional shall provide one or more Project Representatives to assist in carrying out such additional on-site responsibilities. 3.2.2 Project Representatives shall be selected, employed and directed by the Design Professional, and the Design Professional shall be compensated therefore as agreed by the Owner and Design Professional. 3.3 CONTINGENT ADDITIONAL SERVICES 3.3.1 Making material revisions in Drawings, Specifications or other documents when such revisions are: 1. inconsistent with approvals or instructions previously given by the Owner, including revisions made necessary by adjustments in the Owner's program or Project budget; 2. required by the enactment or revision of codes, laws or regulations subsequent to the preparation of such documents, or 3. due to changes required as a result of the Owner's failure to render decision in a timely manner. 3.3.2 Providing services required because of significant changes in the Project including, but not limited to, size, quality, complexity, or the Owners schedule, except for services required under Subsection 2.5.2. 3.3.3 Preparing Drawings, Specifications and other documentation and supporting data, and providing other services in connec- tion with Change Orders and Construction Change Directives. 3.3.4 Providing consultation concerning replacement of work damaged by fire or other cause during construction, and furnishing services required in connection with the replacement of such work. 3.3.5 Providing services made necessary by the default of the Contractor, by major defects or deficiencies in the work of the Contractor, or by failure of performance of either the Owner or Contractor under the Contract for Construction. 3.3.6 Providing services in evaluating an extensive number of claims submitted by the Contractor or others in connection with the work. 3.3.7 Providing services in connection with a public hearing, arbitration proceeding or legal proceeding except where the Design Professional is party thereto. 3.3.8 Providing services in addition to those required by Article 2 for preparing documents for alternate, separate or sequential bids or providing services in connection with bidding or construction prior to the completion of the Construction Documents Phase. 3.3.9 Notwithstanding anything contained in the Agreement Proposal or these General Conditions to the contrary, all services described in this Article 3 that are caused or necessitated in whole or in part due to the negligent act or omission of the Design Professional shall be performed by the Design Professional as a part of the Basic Services under the Agreement with no additional compensation above and beyond the compensation due the Design Professional for the Basic Services. The intervening or concurrent negligence of the Owner shall not limit the Design Professional's obligations under this Subsection 33.9. 3.4.1 Providing financial feasibility or other special studies. Page 7 SAproposalsWenton SS Rehab 2015 and 2016\TNP 2015-2016 SS Rehab Agreement.doe EXHIBIT I 3.4.2 Providing planning surveys, site evaluations or comparative studies of prospective sites 3.4.3 Providing special surveys, environmental studies and submissions required for approvals of governmental authorities or others having jurisdiction over the Project. 3.4.4 Providing services relative to future facilities, systems and equipment. 3.4.5 Providing services to investigate existing conditions or facilities or to make measured drawings thereof. 3.4.6 Providing services to verify the accuracy of drawings or other information furnished by the Owner. 3.4.7 Providing coordination of construction performed by separate contractors or by the Owner's own forces and coordination of services required in connection with construction performed and equipment supplied by the Owner, 3.4.8 Providing detailed quantity surveys or inventories of material, equipment and labor. 3.4.9 Providing analyses of operating and maintenance costs. 3.4.10 Making investigations, inventories of materials or equipment, or valuations and detailed appraisals of existing facilities. 3.4.12 Providing assistance in the utilization of equipment or systems such as testing, adjusting and balancing, preparation of operation and maintenance manuals, training personnel for operation and maintenance and consultation during operation 3.4.13 Providing interior design and similar services required for or in connection with the selection, procurement or installation of furniture, furnishings and related equipment. 3.4.14 Providing services other than as provided in Section 2.6.4, after issuance to the Owner ofthe final Certificate for Payment and expiration of the Warranty period of the Contract for Construction. 3.4.15 Providing services of consultants for other than architectural, civil, structural, mechanical and electrical engineering por- tions of the Project provided as a part of Basic Services. 3.4.16 Providing any other services not otherwise included in this Agreement or not customarily furnished in accordance with generally accepted architectural practice. 3.4.17 Preparing a set of reproducible record drawings in addition to those required by Subsection 2.6.19, showing significant changes in the work made during construction based on marked -up prints, drawings and other data furnished by the Contractor to the Design Professional, 3.4.18 Notwithstanding anything contained in the Agreement, Proposal or these General Conditions to the contrary, all services described in this Article 3 that are caused or necessitated in whole or in part due to the negligent act or omission of the Design Professional shall be performed by the Design Professional as a part of the Basic Services under the Agreement with no additional compensation above and beyond the compensation due the Design Professional for the Basic Services. The intervening or concurrent negligence of the Owner shall not limit the Design Professional's obligations under this Subsection 3.4.18. 4.1 The Owner shall consult with the Design Professional regarding requirements for the Project, including (1) the Owners objectives, (2) schedule and design constraints and criteria, including space requirements and relationships, flexibility, expendability, special equipment systems and site requirements, as more specifically described in Subsection 2.2.1. 4.2 The Owner shall establish and update an overall budget for the Project including the Construction Cost the Owner's other costs and reasonable contingencies related to all ofthese costs. 4.3 If requested by the Design Professional, the Owner shall furnish evidence that financial arrangements have been made to fulfill the Owners obligations under this Agreement. 4.4 The Owner shall designate a representative authorized to act on the Owners behalf with respect to the Project. The Owner or such authorized representative shall render decisions in a timely manner pertaining to documents submitted by the Design Professional in order to avoid unreasonable delay in the orderly and sequential progress of the Design Professional's services. 4.5 Where applicable, the Owner shall famish surveys describing physical characteristics, legal limitations and utility locations for the site of the Project, and a written legal description of the site. The surveys and legal information shall include, as ap- plicable, grades and lines of streets, alleys, pavements and adjoining property and structures; adjacent drainage; rights-of-way, restrictions, easements, encroachments, zoning, deed restrictions, boundaries and contours of the site; locations, dimensions and necessary data pertaining to existing buildings, other improvements and trees; and information concerning available utility services and lines, both public and private, above and below grade, including inverts and depths. All the information on the survey shall be referenced to a project benchmark. Page 8 SAproposalsWenton SS Rehab 2015 and 2016\TNP 2015-2016 SS Rehab Agreement.doc EXHIBIT I 6.1 The Drawings, Specifications and other documents prepared by the Design Professional for this Project are instruments of the Design Professional's service and shall become the property of the Owner upon termination or completion of the Agreement. The Design Professional is entitled to retain copies of all such documents. Such documents are intended only be applicable to this Project and Owner's use of such documents in other projects shall be at Owner's sole risk and expense. In the event the Owner uses any of the information or materials developed pursuant to the Agreement in another project or for other purposes than are specified in the Agreement, the Design Professional is released from any and all liability relating to their use in that project 6.2 Submission or distribution of documents to meet official regulatory requirements or for similar purposes in connection with the Project is not to be construed as publication in derogation of the Design Professional's reserved rights. 7.1 The Design Professional may terminate the Agreement upon not less than thirty days written notice should the Owner fail substantially to perform in accordance with the terms of the Agreement through no fault ofthe Design Professional, Owner may terminate the Agreement or any phase thereof with or without cause upon thirty (30) days prior written notice to the Design Professional. All work and labor being performed under the Agreement shall cease immediately upon Design Professional's receipt of such notice. Before the end of the thirty (30) day period, Design Professional shall invoice the Owner for all work it satisfactorily performed prior to the receipt of such notice. No amount shall be due for lost or anticipated profits. All plans, field surveys, and other data related to the Project shall become property of the Owner upon termination of the Agreement and shall be promptly delivered to the Owner in a reasonably organized form. Should Owner subsequently contract with a new Design Professional for continuation of services on the Project Design Professional shall cooperate in providing information. 7.2 If the Project is suspended by the Owner for more than 30 consecutive days, the Design Professional shall be compensated for services satisfactorily performed prior to notice of such suspension. When the Project is resumed, the Design Professional's compensation shall be equitably adjusted to provide for expenses incurred in the interruption and resumption of the Design Professional's services. 7.3 The Agreement may be terminated by the Owner upon not less than seven days written notice to the Design Professional in the event that the Project is permanently abandoned. If the Project is abandoned by the Owner for more than 90 consecutive days, the Design Professional or the Owner may terminate the Agreement by giving written notice. 7.4 Failure of the Owner to make payments to the Design Professional for work satisfactorily completed in accordance with the Agreement shall be considered substantial nonperformance and cause for termination. 7.5 If the Owner fails to make payment to Design Professional within thirty (30) days of receipt of a statement for services properly and satisfactorily performed, the Design Professional may, upon seven days written notice to the Owner, suspend performance of services under the Agreement. 7.6 In the event of termination not the fault of the Design Professional, the Design Professional shall be compensated for services properly and satisfactorily performed prior to termination. 8.1 DIRECT PERSONNEL EXPENSE 8.1.1 Direct Personnel Expense is defined as the direct salaries of the Design Professional's personnel engaged on the Project and the portion of the cost of their mandatory and customary contributions and benefits related thereto, such as employment taxes and other statutory employee benefits, insurance, sick leave, holidays, vacations, pensions and similar contributions and benefits. 8.2 REIMBURSABLE EXPENSES 8.2.1 Reimbursable Expenses are in addition to compensation for Basic and Additional Services and include expenses incurred by the Design Professional and Design Professional's employees and consultants in the interest of the Project, as identified in the following Clauses. 8.2.1.1 Expense of transportation in connection with the Project expenses in connection with authorized out-of-town travel; long-distance communications; and fees paid for securing approval of authorities having jurisdiction over the Project. 8.2.1.2 Expense of reproductions (except the reproduction of the sets of documents referenced in Subsection 2.6.19), postage and handling of Drawings, Specifications and other documents. 8.2.1.3 If authorized in advance by the Owner, expense of overtime work requiring higher than regular rates. 8.2.1.4 Expense of renderings, models and mock-ups requested by the Owner. 8.2.1.5 Expense of computer-aided design and drafting equipment time when used in connection with the Project. Page 10 S:\proposals\Denton SS Rehab 2015 and 2016\TNP 2015-2016 SS Rehab Agreement.doc EXHIBIT I 8.2.1.6 Other expenses that are approved in advance in writing by the Owner 8.3.1 Payments for Basic Services shall be made monthly and, where applicable, shall be in proportion to services performed within each phase of service, on the basis set forth in Section 2 of the Agreement and the schedule of work. 8.3.2 If and to the extent that the time initially established in the Agreement is exceeded or extended through no fault of the Design Professional, compensation for any services rendered during the additional period of time shall be computed in the manner set forth in Section 2 of the Agreement 8.3.3 When compensation is based on a percentage of Construction Cost and any portions of the Project are deleted or otherwise not constructed, compensation for those portions of the Project shall be payable to the extent services are performed on those portions, in accordance with the schedule set forth in Section 2 of the Agreement based on (1) the lowest bona fide bid or (2) if no such bid or proposal is received, the most recent preliminary estimate of Construction Cost or detailed estimate of Construction Cost for such portions of the Project, 8.4.1 Payments on account of the Design Professional's Additional Services and for Reimbursable Expenses shall be made monthly within 30 days after the presentation to the Owner of the Design Professional's statement of services rendered or expenses incurred. 8.5 PAYMENTS WITHHELD No deductions shall be made from the Design Professional's compensation on account of penalty, liquidated damages or other sums withheld from payments to contractors, or on account of the cost of changes in the work other than those for which the Design Professional is responsible. 8.6 DESIGN PROFESSIONAL'S ACCOUNTING RECORDS Design Professional shall make available to Owner or Ownces authorized representative records of Reimbursable Expenses and expenses pertaining to Additional Services and services performed on the basis of a multiple of Direct Personnel Expense for inspection and copying during regular business hours for three years after the date of the final Certificate of Payment, or until any litigation related to the Project is final, whichever date is later. ARTICLE 9 INDEMNITY 9.1 The Design Professional shall indemnify and save and hold harmless the Owner and its officers, agents, and employees from and against any and all liability, claims, demands, damages, losses, and expenses, including, but not limited to court costs and reasonable attorney fees incurred by the Owner, and including, without limitation, damages for bodily and personal injury, death and property damage, resulting from the negligent acts or omissions of the Design Professional or its officers, shareholders, agents, or employees in the execution, operation, or performance of the Agreement. 9.2 Nothing herein shall be construed to create a liability to any person who is not a party to the Agreement, and nothing herein shall waive any of the parties' defenses, both at law or equity, to any claim, cause of action, or litigation filed by anyone not a party to the Agreement, including the defense of governments] immunity, which defenses are hereby expressly reserved. ARTICLE 10 INSURANCE During the performance of the Services under the Agreement, Design Professional 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: 10.1 Comprehensive General Liability Insurance with bodily injury limits of not less than $1,000,000 for each occurrence and not less than $1,000,000 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. 10.2 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. 10.3 Worker's Compensation Insurance in accordance with statutory requirements, and Employers' Liability Insurance with limits ofnot less than $100,000 for each accident including occupational disease. 10.4 Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate. 10.5 The Design Professional shall furnish insurance certificates or insurance policies to the Owner evidencing insurance in compliance with this Article 10 at the time of the execution of the Agreement. The General Liability and Automobile Liability insurance policies shall name the Owner as an additional insured, the Workers' Compensation policy shall contain a waiver of subrogation in favor of the Owner, and each policy shall contain a provision that such insurance shall not be canceled or modified without thirty (30) days' prior written notice to Owner and Design Professional. In such event, the Page I I .......... EXHIBIT I Design Professional shall, prior to the effective date of the change or cancellation, furnish Owner with substitute certificates of insurance meeting the requirements of this Article 10. 11.1 The Agreement shall be governed by the laws of the State of Texas. Venue of any suit or cause of action under the Agreement shall lie exclusively in Denton County, Texas. 11.2 The Owner and Design Professional, respectively, bind themselves, their partners, successors, assigns and legal represen- tatives to the other party to this Agreement and to the partners, successors, assigns and legal representatives of such other party with respect to all covenants of this Agreement. The Design Professional shall not assign its interests in the Agreement without the written consent of the Owner. 11.3 The term Agreement as used herein includes the executed Agreement, the Proposal, these General Conditions and other attachments referenced in Section 3 of the Agreement which together represent the entire and integrated agreement between the Owner and Design Professional and supersedes all prior negotiations, representations or agreements, either written or oral. The Agreement may be amended only by written instrument signed by both Owner and Design Professional. When interpreting the Agreement the executed Agreement, Proposal, these General Conditions and the other attachments referenced in Section 3 of the Agreement shall to the extent that is reasonably possible be read so as to harmonize the provisions. However, should the provisions of these documents be in conflict so that they can not be reasonably harmonized, such documents shall be given priority in the following order: I. The executed Agreement 2. Attachments referenced in Section 3 of the Agreement other than the Proposal 3. These General Provisions 11.4 Nothing contained in the Agreement shall create a contractual relationship with or a cause of action in favor of a third party against either the Owner or Design Professional 11.5 Upon receipt of prior written approval of Owner, the Design Professional shall have the right to include representations of the design of the Project including photographs of the exterior and interior, among the Design Professional's promotional and professional materials, The Design Professional's materials shall not include the Owner's confidential or proprietary information if the Owner has previously advised the Design Professional in writing of the specific information considered by the Owner to be confidential or proprietary. The Owner shall provide professional credit for the Design Professional on the construction sign and in the promotional materials for the Project, 11.6 Approval by the Owner shall not constitute, nor be deemed a release of the responsibility and liability of the Design Professional, its employees, associates, agents, subcontractors, and subconsultants for the accuracy and competency of their designs or other work; nor shall such approval be deemed to be an assumption of such responsibility by the Owner for any defect in the design or other work prepared by the Design Professional, its employees, subcontractors, agents, and consultants. 11.7 All notices, communications, and reports required or permitted under the Agreement shall be personally delivered or mailed to the respective parties by depositing same in the United States mail to the address shown below signature block on the Agreement, certified mail, return receipt requested, unless otherwise specified herein. All notices shall be deemed of upon receipt by the party to whom such notice is given, or within three (3) days after mailing. 11.8 If any provision of the 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 the Agreement and shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform the 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. 11.9 The Design Professional 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. 11.10 In performing the Services required hereunder, the Design Professional shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap. 11.11 The captions of the Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of the Agreement. Page 12 S:\proposals\Denton SS Rehab 2015 and 2016\TNP 2015-2016 SS Rehab Agreement.doc EXHIBIT 1 ATTACHMENT'A' ITEMIZED SCOPE OF SERVICES 2015 and 2016 Wastewater Collection System Improvements Project CITY OF DENTON BASIC SERVICES PROJECT DESCRIPTION The scope set forth herein defines the work to be performed by the ENGINEER in completing the project. Both the CITY and ENGINEER have attempted to clearly define the work to be performed and address the needs of the Project. WORK TO BE PERFORMED The project involves the replacement of existing sanitary sewer lines in public right-of-way at the following locations: 2015 Wastewater Collection System Rehabilitation Project Sycamore: From MH 425' west of Bernard to the alley east of Bernard and down alley, approximately 1,130' Briercliff: From Brighton to Regal, approximately 1,020' Bernard: From Prairie to Eagle, approximately 1,290' 6illcrest: From Panhandle to Scripture, approximately 1,000' Malone: From 170' south of Broadway to Jagoe, approximately 1,050' Scripture: From 180' west of Ector to Jagoe, approximately 1,300' Sena: From Ector to Bradley & from Gober to 100' west of Malone, approximately 650' Panhandle: From Aileen to Malone, approximately 1,070' Total Length approximately 8,510'. 2016 Wastewater Collection System Rehabilitation Project Uland: From Railroad Ave to 90' east of Rose, approximately 1,200' Paisley: From 150' east of Frame to Ruddell, approximately 2,000' Wood: From Mulberry to Sycamore, approximately 300' Kendolph: From 600' south of Underwood to 500' north of Willowwood, approximately 930' Ave B: From Margie to Underwood, approximately 420' West Hickory: From Bonnie Brae to 85' east of Ave H, approximately 560' West Hickory: From Ave D to Ave C, approximately 610' West Hickory: At West Hickory and Welch, approximately 70' West Hickory: From Bernard to Denton, approximately 670' Thomas: From Linden to Panhandle, approximately 730' Rose: From 60' south of Paisley to 150' north of Lehrman, approximately 420' N Texas Blvd: From Chestnut to Hickory & from Ave D to Ave F, down Ave F to Stella, approximately 3,150' Total Length approximately 11,060'. Unless indicated otherwise, segments of replacement will terminate at manholes, either existing or proposed. Attachment A - Page 1 of 8 EXHIBIT 1 Assumptions and Clarifications The following assumptions were used by the ENGINEER for the preparation of this scope of Basic Services: 1. The 2015 rehab project scope of work will consist of three phases: design, bidding and construction. Alternatively, the 2016 rehab project will only be composed of the design phase, with the construction phase to be performed by in-house forces. 2. The approximate lengths indicated above are based on exhibits provided by the City. 3. The City will provide TV inspection data and other information regarding the condition of the sanitary sewer lines for use by the ENGINEER in making recommendations. 4. Field surveys are included as a part of the scope of this agreement. Because the relocation proposed near Fouts Street will require services to be run from the street to the rear of the house, additional survey will be necessary to ensure a suitable route for the services exists. 5. A detailed Subsurface Utility Engineering investigation is not a part of the scope of this agreement. The ENGINEER will attempt to have DIGTESS locate existing utilities prior to the field surveys. 6. It is assumed that all of the rehabilitation work in the 2015 project will be bid as one project. 7, Plan and profile sheets will be prepared for all of the replacements listed above, assuming open cut replacement. Plan and profile sheets will be prepared as 24"x 36" sheets, using a 1" = 40' scale. Existing property owners will not be shown on the plans, but street addresses will be shown. 8. The CITY will make GIS shape files available that show buildings and other pertinent data. 9. No traffic control plans will be prepared as part of the scope of this agreement, other than to provide performance requirements that the contractor must comply with in his preparation of a traffic control plan. 10. A geotechnical investigation is not a part of the scope of this agreement. 11. Materials testing during construction is not included in the scope of work. 12. ENGINEER assumes that no geotechnical work will be associated with this scope of services. Efforts related to providing or coordinating any geotechnical work shall be considered an additional service. The ENGINEER shall coordinate with the CITY to determine the pavement section to be used for the pavement replacement work. Attachment A - Page 2 of 8 EXHIBIT 1 13. ENGINEER assumes that no system modeling will be associated with this scope of services. 14. Public meetings are not anticipated, and are not a part of the scope of this agreement. Scope of Basic Services The scope of this work is described as follows: A. Design Meetings 1. The ENGINEER will conduct a project kickoff meeting with City staff to clarify responsibilities, to specify phasing and other issues not yet finalized, and to review the project schedule, which the ENGINEER will provide at the meeting. 2. The ENGINEER will meet regularly as needed with the City of Denton staff during the development of the final design phase of the project. PRELIMINARY DESIGN (60 PERCENT) Preliminary plans and specifications shall be submitted to CITY per the approved Project Schedule. ENGINEER will develop the preliminary design of the infrastructure as follows. 1. Development of Preliminary Design Drawings and Specifications shall include the following: • Cover Sheet and General Notes Sheet • _Overall Sewer Layout and Control Sheets. The sewer layout sheet shall identify the proposed sewer main improvement/ existing sewer mains in the vicinity and all sewer appurtenances. • Coordinates on all P.C.'s, P.T.'s, P.I.'s, manholes, valves, mainline fittings, etc., in the same coordinate system as the Control Points. • Sewer Plan and profile sheets at 1"=40' which show the following: proposed sewer plan/profile and proposed pipe size, manhole locations, existing service lines, existing utilities and utility easements, and all pertinent information needed to construct the project. Street addresses shall be provided on the plan view. It is anticipated that all of the existing sewer lines will be reconstructed in place to the ROW line. Right-of-way lines will be approximate and nominal, based on GIS data and/or readily available plat data. The field survey effort will not include locating lot corners or ownership research. • The ENGINEER shall make provisions for reconnecting all identifiable sewer service lines which connect directly to any main being replaced, including replacement of existing service lines within City right-of-way or utility easement. When the existing alignment of a water and sanitary sewer main or lateral is changed, provisions will be made in the final plans and/or specifications by the ENGINEER to relocate all service Attachment A - Page 3 of 8 EXHIBIT 1 lines which are connected to the existing main and connect said service lines to the relocated main. • The ENGINEER will prepare special details for water and sewer line installation and/or replacement that are not already included CITY's standard details. 2. Constructability Review • Prior to the 60 percent review meeting with the CITY, the ENGINEER shall schedule a project site visit to walk the project. The CITY will be notified of the site visit and may attend if desired. If the CITY attends, the ENGINEER will summarize the CITY's comments from the field visit and submit this information to the CITY in writing. 3. Utility Clearance • The ENGINEER will consult with the CITY's Water Utilities Department, and other CITY departments, public utilities, private utilities and government agencies in an attempt to determine the approximate location of above and underground utilities, and other facilities (current and future) that have an impact or influence on the project. 4. Traffic Control Plan • Traffic Control and Phasing shall be the responsibility of the construction contractor. 5. Storm Water Pollution Prevention Plan • The SWPPP shall be the responsibility of the construction contractor. DELIVERABLES • 4 copies of the preliminary design plans will be delivered to the City along with the Preliminary Opinion of Probable Construction Cost (2015 Wastewater Collection System Rehabilitation Project). • ENGINEER shall prepare and distribute meeting minutes from the Preliminary Design Review meeting. • ENGINEER shall not proceed with Final Design activities without obtaining the CITY's approval of the Preliminary Design Plans. FINAL DESIGN (90 PERCENT) AND FINAL CONSTRUCTION DOCUMENTS (100 PERCENT). Upon approval of the Preliminary plans, ENGINEER will prepare construction plans as follows: 1. Development of Final Design Drawings and Specifications shall include the following: • The final plans shall include completed versions of all plan sheets associated with the preliminary plan submittal plus the CITY's standard details and any other plan sheets that were identified during the review of the preliminary plans or the development of the final plans. • Proposal, technical specifications and documents not covered by the CITY's standard specifications and contract documents. The bid documents will be Attachment A - Page 4 of 8 EXHIBIT 1 structured such that each replacement identified above will be a separate section and could be eliminated from the construction project after bids are received, at the CITY's discretion. • Final plans and specifications will be submitted to CITY per the approved Project Schedule. • Following a 90% construction plan review meeting with the CITY, the ENGINEER shall submit Construction Documents (100%) to the CITY per the approved Project Schedule. Each plan sheet shall be stamped, dated, and signed by the ENGINEER registered in State of Texas. • The ENGINEER shall submit a final opinion of probable construction cost with both the 90% and 100% design packages. DELIVERABLES • 4 copies of the final design plans (90% and 100%) will be delivered to the City. For the 2015 Wastewater Collection System Rehabilitation Project, specifications and a final Opinion of Probable Construction Cost. • ENGINEER shall prepare and distribute meeting minutes from the Final Design Review meeting. BIDDING & CONTRACT AWARD PHASE (2015 PROJECT ONLY) For the 2015 Wastewater Collection System Rehabilitation Project, the ENGINEER will provide to the CITY a Notice to Bidders for advertisement of the project for bid. The CITY shall bear the cost of advertisement. The ENGINEER shall provide up to 15 CDs and hardcopy sets of construction plans, specifications and contract documents for use in obtaining bids, awarding contracts, and constructing the project. Additional sets of plans required will be considered Additional Services and will be paid for by the CITY at commercial printing rates. The CITY shall be responsible for dispersing all plans and specifications from its purchasing department to prospective bidders. 2. ENGINEER will provide technical support to the CITY during the Bidding & Contract Award phase by responding to bidder and CITY questions, attending a Pre -Bid meeting, attending the Bid Opening, reviewing the bids, preparing a bid tabulation (if requested), reviewing bidder qualifications and references, and making a recommendation of award to the CITY. ENGINEER will prepare necessary addenda during the bidding phase for distribution by the City of Denton Purchasing Department. Attachment A - Page 5 of 8 EXHIBIT 1 CONSTRUCTION PHASE 1. Construction Support The ENGINEER will provide limited construction support for the project within the scope of Basic Services as outlined below. Detailed daily construction inspection and project oversight will be performed by the CITY. Any construction phase services requested by the CITY beyond those described below will be provided as Additional Services. Prepare and submit record drawings (electronic and Mylar) based on information provided by the Contractor and the City inspector. The fee shown for preparation of record drawings assumes that the project is constructed substantially in conformance with the plans and specifications. Extensive deviations from the plans will require additional record drawing effort that is not anticipated in the scope of this agreement. This determination will be made jointly by the CITY and the ENGINEER. Preparing record drawings that include significant changes will be provided as Additional Services. SPECIAL SERVICES FIELD DESIGN SURVEY TNP survey field crews will perform an As -Built design survey with spot elevations locating all above ground visible improvements within the existing ROW for said streets including all intersections and driveway approaches. 2. All visible above -ground utilities within the current right of way of said streets shall be located horizontally and vertically with measure downs. Crews will attempt to locate cleanouts situated within the property lines of the adjoining landowners and will survey approximate Finish Floor elevations of all structures for service rerouting near Fouts Street between Oak Street and Hickory Street (N. Texas Blvd.). The City will obtain Right of Entry for those lots along Oak Street and Hickory Street that will require services to be constructed to the rear of the structures. All other data will be acquired without entering private property. 3. All survey data collected will be processed drafted and created within Autodesk Civil 3d. An electronic cadd file will be provided according to the City of Denton's standards showing all improvements located. All vertical data will be based on the City of Denton's benchmark datum. 4. No boundary or right-of-way data will be acquired, lot corners will not be tied, and no property research will be conducted. Attachment A - Page 6 of 8 EXHIBIT 1 ITEMS TO BE PROVIDED BY CITY TO THE ENGINEER The CITY or the CITY's designee will provide or make available to, or assist the ENGINEER in obtaining the following services, information and materials upon request: 1. Available past studies, correspondence, materials, TV logs and/or tapes, and mapping relative to the project. 2. GIS shape files that include layers such as buildings and existing utilities. 3. City will obtain Right of Entry for lots on Oak Street and Hickory Street (N. Texas Blvd.) so that surveyors can obtain information to the rear of the houses. 4. Assistance in obtaining data from third party sources which is available to the CITY at no cost to the ENGINEER. 5. Current City of Denton Standard Details, Specifications and/or Contract Document data, such as required prevailing wage rates. PROJECT SCHEDULE 1. For the 2015 Wastewater Collection System Rehabilitation Project Field Surveys Complete within five (5) weeks of written Notice to Proceed from the City. Preliminary Design Design will commence on each section of the project as field data is made available. Complete within ten (10) weeks of written Notice to Proceed from the City. Final Plans Final plans and specifications, at 90% complete, will be submitted within four (4) weeks of CITY approval of Preliminary design. If there are major design changes required, this schedule may need to be modified. Bid Documents Complete plans and bid documents (100%) will be submitted within two (2) weeks of receipt of final plan review comments from the City staff. Attachment A - Page 7 of 8 EXHIBIT 1 2. For the 2016 Wastewater Collection System Rehabilitation Project Field Surveys Complete within twelve (12) weeks of written Notice to Proceed from the City. Preliminary Design Design will commence on each section of the project as field data is made available. Complete within twenty four (24) weeks of written Notice to Proceed from the City. Final Plans Final plans and specifications, at 90% complete, will be submitted within four (4) weeks of CITY approval of Preliminary design. If there are major design changes required, this schedule may need to be modified. This schedule assumes an orderly progression of the ENGINEER's services. Delays beyond the control of the ENGINEER may be cause for extension of this period of service. If CITY has requested significant modifications or changes in the general scope, extent or character of the Project, the time of performance of ENGINEER's services shall be adjusted equitably. Attachment A - Page 8 of 8 EXHIBIT 1 ATTACHMENTS' 2015 and 2016 Wastewater Collection System Improvements Project CITY OF DENTON A. BASIC SERVICES: For work performed by the ENGINEER within the scope identified in ATTACHMENT A, Itemized Scope of Services, the ENGINEER will be reimbursed as described below: 1, Labor The following fixed fees shall be paid to the ENGINEER for labor involved in the various items of work within the scope of Basic Services identified in EXHIBIT A: 2015 Rehabilitation Project Design Phase $ 82,980 Bid Phase $ 3,600 Construction Phase 2,300 Subtotal $ 88,880 2016 Rehabilitation Project Design Phase $ 99,550 Construction Phase 2,300 Subtotal $ 101,850 Z Direct Expenses Direct Expenses such as printing, reproductions, automobile mileage, delivery/courier services, etc. will be reimbursed to the ENGINEER at his direct invoice expense with a not -to -exceed amount of: $ 2,500 3, Total Fee for Basic Services TOTAL (BASIC SERVICES) $ 193,230 Attachment B— Page 1 EXHIBIT 1 B. SPECIAL SERVICES: Work performed by the ENGINEER outside the scope of Basic Services identified in ATTACHMENT A, Itemized Scope of Services, shall be considered Special Services, as identified in ATTACHMENT A, SSoecial Services to be provided by Engineer. The ENGINEER will be reimbursed for Special Services as described below: Labor The following fixed fees shall be paid to the ENGINEER for labor involved in the various items of work within the scope of Special Services identified in ATTACHMENT A: Design Field Survey (2015 Project) $41,000 Design Field Survey (2016 Project) $52,500 Progress payments for these Special Services shall be paid to the Engineer by the City on a monthly basis based on the estimated percentage (%) of the total work effort completed during that month less any payments for previously invoiced services. C. ADDITIONAL SERVICES: Work performed by the ENGINEER outside that scope identified in EXHIBIT A, Scope of Basic Services, shall be considered Additional Services. No Additional Services are anticipated for this project. The ENGINEER will be reimbursed for Additional Services, should they be requested, as described below: Labor ENGINEER shall be reimbursed on the basis of negotiated fees for each item of service provided, as mutually agreed to by the ENGINEER and CITY. 2. Direct Expenses Direct Expenses such as printing, reproductions, automobile mileage, delivery/courier services, etc. will be reimbursed to the ENGINEER at his direct invoice expense. Attachment B— Page 2 EXHIBIT 1 I_��rL'i l�'�/1:�Z•7 y ��1 1. Basic Services 2015 Rehabilitation Project Design Phase $ 82,980 Bid Phase $ 3,600 Construction Phase $ 2,300 Subtotal $ 88,880 2016 Rehabilitation Project Design Phase $ 99,550 Construction Phase $ 2,300 Subtotal $ 101,850 Direct Reimbursable Expenses $ 2,500 TOTAL (BASIC SERVICES) $ 193,230 2. Special Services Design Field Survey (2015 Project) $ 41,000 Design Field Survey (2016 Project) $ 52,500 TOTAL (SPECIAL SERVICES) $ 93,500 3. Total Fees for Project TOTAL FEES $ 286,730 Attachment B— Page 3 I, EXHIBIT 1 ADDITIONAL SERVICES 2015 and 2016 Wastewater Collection Systems Improvements Project TNP No. DEN15065 This amendment is to add design of proposed water line improvements in Bernard Street, Hillcrest Street and Malone Street to the project scope. The locations are as follows: Bernard 8" line, approx. 1,000 linear feet Hillcrest 8" line, approx. 1,000 linear feet Malone 12" line, approx. 1,300 linear feet The 8" lines will be depicted in plan view only, while the 12" line will be profiled as well. In addition, water details will be added as necessary, and the general notes sheet and bid documents will reflect the water lines in addition to the sewer lines. The plans will show existing and proposed valves, meter boxes and services, and connections to existing water lines. The existing survey will be used, supplemented at the south end of Malone to fill in the gap between the survey of Malone and the survey of Scripture. No Subsurface utility Engineering is included. For Additional Services performed by the ENGINEER as described above, the ENGINEER will be compensated an estimated fee of $ 17,100. SUMMARY OF AMENDED CONTRACT Original Contract Fee Basic Services $ 103,230 Special Services 03 500 Total $ 286„730 Amendment No. 1 Total $ 17,100 Amended Contract Fee $ 303,830 City of Denton Teague Nall and Perki s, Inc �. -,il 2A?i Gary L. V”' eery, P.E. Date Date ORDINANCE NO. 2016 - AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A SECOND AMENDMENT TO A PROFESSIONAL SERVICES AGREEMENT BY AND BETWEEN THE CITY OF DENTON, TEXAS AND TEAGUE NALL AND PERKINS, INC. FOR ENGINEERING AND SURVEYING SERVICES RELATING TO THE FISCAL YEAR 2015-2016 WASTEWATER COLLECTION SYSTEM IMPROVEMENTS PROJECT; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; PROVIDING AN EFFECTIVE DATE (FILE 5756 IN THE ADDITIONAL AMOUNT NOT -TO -EXCEED $93,600; AGGREGATING A TOTAL NOT -TO -EXCEED $397,430). WHEREAS, the City Council deems it necessary and appropriate and in the public interest to continue to engage the engineering firm of Teague Nall and Perkins, Inc., a Texas Corporation, located in Denton, Texas to provide the City with professional engineering services pertaining to the Fiscal Year 2015-16 Wastewater Collections System Improvements project; and WHEREAS, the City staff has reported to the City Council that there is a substantial need for the hereinabove described professional services by the City of Denton, and that limited City staff cannot adequately perform the specialized engineering and other professional 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 of professional services on the basis of demonstrated competence, knowledge, and qualifications, and for a fair and reasonable price; and WHEREAS, the City Council hereby finds and concludes that Teague Nall and Perkins, Inc. is appropriately qualified under the provisions of the law, to be retained as an engineering firm for the City, respecting this engagement; and WHEREAS, the City Council has provided in the City budget for the appropriation of funds to be used for the procurement of the foregoing professional services, as set forth in the "Second Amendment to Agreement for Professional Engineering Services;" NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The recitations contained in the preamble hereto are true and correct and are incorporated herewith as a part of this Ordinance. SECTION 2. The City Manager is hereby authorized to execute a "Second Amendment to Agreement for Professional Engineering Services" (the "Second Amendment") with the firm of Teague Nall and Perkins, Inc., in the additional amount of not -to -exceed $93,600, for professional engineering services pertaining to the interests of the City as hereinabove described, in substantially the form of the Second Amendment which is attached hereto as Exhibit "A" which is incorporated herewith by reference. 1 SECTION 3. The award of this First Amendment is on the basis of the demonstrated competence and qualifications of the firm of Teague Nall Perkins, Inc., and their ability to perform the professional engineering services needed by the City for a fair and reasonable price. SECTION 4. The expenditure of funds as provided for in the attached First Amendment is hereby authorized. SECTION 5. This ordinance shall become effective upon its passage and approval. PASSED AND APPROVED this the day of , 2016. ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY in 2 CHRIS WATTS, MAYOR EXHIBIT 3 AMENDMENT No. 2 TO PROFESSIONAL SERVICES AGREEMENT ADDITIONAL SERVICES 2015 and 2016 Wastewater Collection Systems Improvements Project TNP No. DEN15065 This amendment adds to the project scope the design of proposed water line improvements in: 8" - Paisley from Frame to Ruddell (approximately 2,100 feet) 12" — Hickory Street from Bonnie Brae to Carroll Blvd (approximately 7,400 feet). The 8" water line will be depicted in plan view only. The 12" water line will be depicted in both plan and profile view. The plans will show existing and proposed valves, meter boxes and services, and connections to existing water lines. The existing survey will be used, supplemented by additional survey on several portions of Hickory Street and portions of Paisley Street. No Subsurface Utility Engineering is included. All other terms and provisions in the original agreement will apply to this amendment. Assumptions • It is assumed that the plans to be prepared under this amendment will be constructed by City forces, so no bid support services or bid documents are included in this amendment. • It is also assumed that these plans will be added to the FY 2016 Wastewater Collections System Rehabilitation Project set of plans. • The survey along Hickory Street west of Bonnie Brae will include only the south half of the divided arterial, assuming that the existing water line is on that side and the proposed water line will also be placed on that side. Fee Breakdown: Design Phase $ 77,100 Design field Survey 16,500 Total $ 93,600 For Additional Services performed by the ENGINEER as described above, the ENGINEER will be compensated a fixed fee of $ 93,600. SUMMARY OF AMENDED CONTRACT EXHIBIT 3 Amendment No. 2 2015 and 2016 Wastewater Collection System Rehabilitation March 22, 2016 Page 2 of 2 Original Contract Fee Basic Services Special Services Total Amendment No. 1 Amendment No. 2 Amended Contract Fee City of Denton Date $ 17,100 $ 93,600 $ 397,430 Teague Nall and Gary L. �l�ery, P.E.. Date C. City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 16-814, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: Denton Municipal Electric CM/ ACM: Howard Martin, ACM Date: June 28, 2016 SUBJECT Consider adoption of an ordinance regarding settlement of the pending litigation entitled: The City of Denton, Texas v NRG Power Marketing, LLC, et al., Cause No. 15-01404-16 in the 16' Judicial District Court in and for Denton County, Texas; discuss, deliberate and provide staff with direction. BACKGROUND This litigation pertains to a "Full Requirements Wholesale Electric Power Service Agreement" (the "Agreement") entered into by the City and NRG Power Marketing, LLC ("NRG") on May 17, 2011. The term of the Agreement was from July 1, 2011 until September 30, 2014. At all times during the Agreement, Denton had not yet qualified to be its own QSE. QSE and ancillary services were part of the services rendered by NRG to the City. The City and NRG each performed their part of the contract. In October 2014, immediately upon the City becoming its own QSE, Denton Municipal Electric began investigating the disposition of Congestion Auction Revenue Distributions ("CARD") which had been paid by the Electric Reliability Council of Texas ("ERCOT"). The City immediately inquired of NRG, asking to review the applicable ERCOT invoices that were issued to NRG who was serving as the City's QSE. NRG refused to produce the requested invoices. The City filed this lawsuit in February 2015 in order to recover funds and an accounting from NRG for its actions as QSE. Denton was a Load Serving Entity ("LSE") who had no standing to obtain such documents or an accounting from ERCOT for itself. Extensive discovery has taken place in this case. Oral depositions have also taken place. The City uncovered information leading it to believe that there were two other NRG entities involved in this transaction. A mediation occurred on June 20, 2016 in Dallas, Texas between the City and the NRG entities. After an all -day mediation, the City staff, City Attorney, Mayor Watts and the City's legal counsel, and the NRG entities and their legal counsel, tentatively reached a settlement amount that was mutually satisfactory to both parties. The City conditioned the settlement on the approval of the Board on June 27, 2016 and the Council on June 28, 2016. The amount of this settlement payable to the City, will be disclosed in your closed meeting on this lawsuit earlier in today's meeting. OPTIONS City of Denton Page 1 of 2 Printed on 6/24/2016 povveied by I_egivt9i IN File #: ID 16-814, Version: 1 Recommend approval of the Ordinance Recommend disapproval of the Ordinance RECOMMENDATION Staff recommends that the Ordinance be adopted by the Council. ESTIMATED SCHEDULE OF PROJECT The settlement will proceed to consummation once the City Council has approved the Ordinance. Defendants NRG Power Marketing, LLC, et al, will then pay the City the amount provided for in the settlement, shortly thereafter. Then the case will be dismissed. PRIOR ACTION/REVIEW (Council, Boards, Commissions) Reviewed extensively by the Public Utilities Board in the years 2014, 2015 and 2016. Reviewed extensively by the City Council in the years 2014, 2015 and 2016. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Public Infrastructure Related Goal: 2.3 Promote superior utility services and facilities EXHIBITS Proposed Ordinance Respectfully submitted: General Manager Denton Municipal Electric Prepared by: Mike Copeland Deputy City Attorney City of Denton Page 2 of 2 Printed on 6/24/2016 povveied by I_egist9i I;, ORDINANCE NO. AN ORDINANCE AUTHORIZING THE CITY MANAGER TO APPROVE A COMPROMISE SETTLEMENT AGREEMENT, AND SUCH OTHER DOCUMENTS RECOMMENDED BY THE CITY'S ATTORNEYS AS NECESSARY OR APPROPRIATE TO EFFECTUATE SUCH TERMS OF SETTLEMENT OF LITIGATION STYLED THE CITY OF DENTON, TEXAS V, NRG POWER MARKETING, LLC, ET AL, CAUSE NO. 15-01404-16, CURRENTLY PENDING IN THE 16"" JUDICIAL DISTRICT COURT IN AND FOR DENTON COUNTY, TEXAS; AUTHORIZING THE RECEIPT AND EXPENDITURE OF BUDGETED FUNDS THEREFOR; AND DECLARING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Council hereby approves the proposed settlement of litigation styled, The City of Denton, Texas v. NRG Power Marketing, LLC, et al, Cause No. 15-01404-16, currently pending in the 16t" Judicial District Court in and for Denton County, Texas, in substantially the form of the Settlement Agreement attached hereto and incorporated herein. SECTION 2. The City Manager, or his designee, and the City's Attorneys are hereby authorized to act on the City's behalf in approving and executing any and all documents necessary or appropriate to effectuate the terms of the settlement, including the receipt and expenditure of budgeted funds, and to take other actions necessary to finalize the settlement. SECTION 3. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2016. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY itz APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY i City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 16-815, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: Legal Department CM/ ACM: Anita Burgess, City Attorney Date: June 28, 2016 SUBJECT Consider approval of a resolution of the City Council of the City of Denton, Texas, appointing an Interim City Manager; setting forth the terms of the appointment; setting forth the Interim City Manager's salary; and providing an effective date. BACKGROUND The appointment of an Interim City Manager is needed while the City conducts a recruitment search for a permanent City Manager. Respectfully submitted: Anita Burgess City Attorney City of Denton Page 1 of 1 Printed on 6/24/2016 povveied by I_egivt9i IN RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, APPOINTING AN INTERIM CITY MANAGER; SETTING FORTH THE TERMS OF THE APPOINTMENT; SETTING FORTH THE INTERIM CITY MANAGER'S SALARY; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, City Manager George Campbell's last day of employment with the City of Denton, Texas is Friday, July 1, 2016; and WHEREAS, the appointment of an Interim City Manager is needed while the City conducts a recruitment search for a permanent City Manager; and WHEREAS, the City Council desires to appoint in the capacity of Interim City Manager during the recruitment process of a permanent City Manager; and WHEREAS, the City Council finds that the appointment of an Interim City Manager during the recruitment process for a permanent City Manager is in the public interest: NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES: SECTION 1. The recitals and findings contained in the preamble of this Resolution are incorporated into the body of this Resolution. SECTION 2. The City Council hereby appoints as Interim City Manager with an effective date of July 2, 2016. SECTION 3. This appointment is subject to the following terms: a. This appointment is a temporary assignment. b. It is anticipated that the term of this appointment shall end on or before a permanent City Manager is hired by the City Council. C. The City Council may reverse the appointment at any time. d. If the Interim City Manager was an employee of the City of Denton upon his/her appointment, then upon reversal, will resume his/her position of e. As Interim City Manager, 's salary will be $ . Payment of this salary shall be made in bi- weekly installments in accordance with same pay schedule as all other City employees are paid. SECTION 4. This Resolution shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2016. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY ;r .a BY:�� in