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HomeMy WebLinkAboutR2004-050RESOLUTION NO./~f~-~.~ AN RESOLUTION OF THE CITY OF DENTON, TEXAS AUTHORIZING PARTICIPATION IN AND COOPERATION WITH A COALITION OF CITIES WITHIN COSERV GAS LTD'S SYSTEM INCLUDING THE AUTHORITY TO HIRE LEGAL AND CONSULTING SERVICES AND THE AUTHORITY TO NEGOTIATE WITH THE COMPANY AND TO DIRECT ANY NECESSARY LITIGATION; AUTHORIZING THE HIRING OF DIVERSIFIED UTILITY CONSULTANTS, INC. TO INVESTIGATE AND TO RESPOND TO THE FILINGS OF COSERV GAS LTD.; AUTHORIZING INTERVENTION IN ANY PROCEEDINGS AT THE RAILROAD COMMISSION; SUSPENDING THE EFFECTIVE DATE OF COSERV GAS'S REQUESTED GAS RATE CHANGES AS SET FORTH IN THEIR STATEMENT OF INTENT FILED WITH THE CITY SECRETARY TO PERMIT THE CITY TIME TO STUDY THE REQUEST AND ESTABLISH REASONABLE RATES; REQUIRING THE REIMBURSEMENT OF MUNICIPAL RATE CASE EXPENSES; REQUIRING NOTICE OF THIS RESOLUTION TO THE COMPANY; FINDING THAT THE MEETING COMPLIED WITH THE OPEN MEETINGS ACT; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, on or about August 25, 2004, CoServ Gas, Ltd., hereinafter referred to as CoServ, filed with the City of Denton, Texas, ("City") a Statement of Intent to Increase Gas Rates in all municipalities within the CoServ distribution system; and WHEREAS, the rate request by CoServ is system-wide and complex requiring specialized expertise of experts who specialize in ratemaking proceed'rags initiated by public utilities; and WHEREAS, the City needs time to analyze and study the rate requests filed by CoServ; and WHEREAS, the Gas Utility Regulatory Act grants local regulating authorities the right to suspend the effective date of proposed rate changes; and WHEREAS, on a systemwide basis the CoServ rate request totals about $1,165,525 in annual increases in gas rates in 25 cities including the City of Denton; and WHEREAS, the Gas Utility Regulatory Act provides that municipalities shall be reimbursed for their reasonable rate case expenses by the regulated utility; and WHEREAS, the Gas Utility Regulatory Act grants local regulatory authorities the right to intervene in rate proceedings before the Railroad Commission; and WHEREAS, the City Council believes it is reasonable for the City to cooperate with other cities in a review of CoServ's rate application and that the City should participate with other cities in such a coalition to coordinate the hiring and direction of legal counsel and consultants to negotiate with CoServ and direct any necessary litigation on behalf of the coalition of cities; and WHEREAS, the City Council believes it should also hire Diversified Utility Consultants, Inc., qualified experts in gas rate requests who have represented the City in previous gas rate change requests and who are being selected solely on the basis of their professional qualifications and expertise, in order to investigate and analyze this gas rate request on behalf of the City; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES: SECTION 1. That the findings set out in the preamble to this Resolution are hereby in all things approved and adopted. SECTION 2. The effective date of the tariff changes submitted by CoServ on or about August 25, 2004 with the City are hereby suspended for ninety days from the originally scheduled effective date of October 1, 2004 and for such additional time as the parties may agree upon in order to permit adequate time for the proper review of the CoServ Statement of Intent to Increase Gas Rates and to establish reasonable rates. SECTION 3. The City is authorized to cooperate with other cities in a coalition of cities and authorizes the Steering Committee of the coalition to hire, direct, and guide the lawyers and consultants who are representing said coalition of cities, to negotiate with CoServ, make recommendations to the City regarding reasonable rates and to direct any necessary litigation and administrative proceedings associated with an appeal of a rate ordinance. SECTION 4. The City Council approves the employment of Diversified Utility Consultants, Inc. to represent the City with regard to the CoServ's Statement of Intent filed with the City and authorizes the City Manager to execute a consultant contract with Diversified Utility Consultants, Inc. to analyze and investigate CoServ's gas rate request and to enter into a Non- Disclosure Agreement regarding confidential material with CoServ after the contract is drafted and approved as to form by the City Attorney. SECTION 5. The City, in coordination with the coalition of cities, shall review the invoices of its consultants for reasonableness before submitting such invoices for reimbursement pursuant to Section 103.022 of the Gas Utihty Regulatory Act. SECTION 6. That the City's reasonable rate case expenses shall be reimbursed by CoServ. SECTION 7. That the City is authorized to intervene in any appeal at the Railroad Commission regarding CoServ's rate case filed on or about August 25, 2004. SECTION 8. That the City Secretary is directed to send a true and correct copy of this Resolution to Charles D. Harrell, Chief Financial Officer, CoServ Gas, Ltd., 7701 South Stemmons, Corinth, Texas 76210-1842. Page 2 of 3 SECTION 9. That the meeting at which this Resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code Chapter 551. 2004. SECTION 10. This Resolution shall be effective immediately upon passage. PASSED AND APPROVED this the :,~ / ~.~.._Z'-. day of EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY B Xx~ APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: Page 3 of 3 PROFESSIONAL SERVICES AGREEMENT FOR PROFESSIONAL SERVICES REGARDING COSERV GAS STATEMENT OF INTENT TO INCREASE GAS RATES STATE OF TEXAS COUNTY OF DENTON § THIS AGREEMENT is made and entered into as of the 21st day of September, 2004, by and between the City of Denton, Texas, a Texas municipal corporation, with its principal office at 215 East McKirmey Street, Denton, Denton County, Texas 76201, hereinafter called OWNER" and Diversified Utility Consultants, Inc., with its corporate office at 12113 Roxie Drive, Suite 110, Austin, Texas 78729, hereinafter called "CONSULTANT," acting herein, by and through their duly authorized representatives. WITNESSETH, that in consideration of the covenants and agreements herein contained, the parties hereto do mutually agree as follows: ARTICLE 1 EMPLOYMENT OF CONSULTANT The OWNER hereby contracts with the CONSULTANT, as an independent contractor, and the CONSULTANT hereby agrees to perform the services herein in connection with the Project as stated in the sections to follow, with diligence and in accordance with the highest professional standards customarily obtained for such services in the State of Texas. The professional services set out herein are in connection with the following described project: The Project shall include, without limitation, investigation, examination, and analysis of CoServ Gas, Ltd.'s (CoServ) Statement of Intent to Increase Gas Rates in the City of Denton, Texas (Statement of Intent) dated August 25, 2004. ARTICLE 2 SCOPE OF SERVICES The CONSULTANT shall perform the following services in a professional manner: The CONSULTANT shall perform all those services as necessary and as described in the CONSULTANT's proposal of September 14, 2004 with CONSULTANT's cost proposal, which is attached hereto as Exhibit "A" to review, investigate, analyze and examine CoServ's Statement of Intent. CONSULTANT shall perform all those services set forth in individual task orders, if any, which shall be attached to this Agreement and made a part hereof for all purposes as separate agreements. CONSULTANT will consult with and submit a preliminary report to the Assistant City Manager for Fiscal & Municipal Services, City Attorney, and their staffs. CONSULTANT shall attend one City Council meeting - the meet'mg at which the Council makes a decision on CoServ Gas rate request. CONSULTANT shall not have to attend additional Council meetings unless additional consultant fees to cover the cost of its services are added to the maximum compensation set forth in Article 5. CONSULTANT shall provide a final report indicating its recommendations and shall provide ten copies of its report to OWNER. If there is any conflict between the terms of this Agreement and the exhibits attached to this Agreement, the terms and conditions of this Agreement will control over the terms and conditions ofthe attached exhibits or task orders. ARTICLE 3 ADDITIONAL SERVICES Additional services to be performed by the CONSULTANT, if authorized by the OWNER, which are not included in the above-described Basic Services, are described as follows: Attending additional City Council meetings or appearing before regulatory agencies or courts as an expert witness in any litigation, including, without limitation, testimony in rate proceedings before the Texas Railroad Commission, the Public Utilities Commission, or other state and federal agencies. Any other additional services specifically requested by the OWNER not included with'm the scope of this Agreement and its exhibits. ARTICLE 4 PERIOD OF SERVICE This Agreement shall become effective upon execution of this Agreement by the OWNER and the CONSULTANT and upon issue of a notice to proceed by the OWNER, and shall remain in force for the period which may reasonably be required for the completion of the Project, includ'mg Additional Services, if any, and any required extensions approved by the OWNER, provided however, the Project shall be completed within 60 days of the date of the notice to proceed, unless an extension of time is granted by the OWNER. This Agreement may be sooner terminated in accordance with the provisions hereof. Time is of the essence in this Agreement. The CONSULTANT shall make all reasonable efforts to complete the services set forth herein as expeditiously as possible and to meet the schedule established by the OWNER in Exhibit "A", acting through its City Manager or his designee. ARTICLE 5 COMPENSATION A. COMPENSATION TERMS: Subcontract Expense" is defined as expenses incurred by the CONSULTANT in employment of others in outside firms for services. Page 2 Direct Non-Labor Expense" is defined as that expense for any assignment incurred by the CONSULTANT for supplies, transportation and equipment, travel, commurdcations, subsistence, and lodging away from home, and similar incidental expenses in connection with that assignment. BILLING AND PAYMENT: For and in consideration of the professional services to be performed by the CONSULTANT herein, the OWNER agrees to pay, based on the cost estimate detail at an hourly rate shown in Exhibit "B", from CONSULTANT to OWNER and attached manpower and cost requirements to provide an investigation of CoServ's gas rate request on behalf of OWNER, a total fee, including reimbursement for direct non-labor expenses not to exceed $20,000.00. Partial payments to the CONSULTANT will be made on the basis of detailed monthly statements rendered to and approved by the OWNER through its Assistant City Manager for Fiscal & Municipal Services and its City Attorney or his designee; however, under no circumstances shall any monthly statement for services exceed the value of the work performed at the time a statement is rendered. The OWNER may withhold the fmal five percent (5%) of the contract amount until completion of the Project. Nothing contained in this Article shall require the OWNER to pay for any work which is unsatisfactory, as reasonably determined by the City Manager or his designee, or which is not submitted in compliance with the terms of this Agreement. The OWNER shall not be required to mak~ any payments to the CONSULTANT when the CONSULTANT is in default under this Agreement. It is specifically understood and agreed that the CONSULTANT shall not be authorized to undertake any work pursuant to this Agreement which would require additional payments by the OWNER for any charge, expense, or reimbursement above the maximum not to exceed fee as stated, without first having obtained written authorization from the OWNER. The CONSULTANT shall not proceed to perform the services listed in Article 3 "Additional Services," without obtaining prior written authorization from the OWNER. ADDITIONAL SERVICES: For additional services authorized in writing by the OWNER in Article 3, the CONSULTANT shall be paid based on the Schedule of Charges at an hourly rate shown in Exhibit "A". Payments for additional services shall be due and payable upon submission by the CONSULTANT, and shall be in accordance with subsection B hereof. Statements shall not be submitted more frequently than monthly. PAYMENT: If the OWNER fails to make payments due the CONSULTANT for services and expenses within 60 days after receipt of the CONSULTANT's undisputed statement thereof, the amounts due the CONSULTANT will be increased by the rate of one percent (1%) per month from the said sixtieth (60th) day, and, in addition, the CONSULTANT may, after giving seven days' written notice to the OWNER, suspend services under this Agreement until the CONSULTANT has been paid in full all amounts Page 3 due for services, expenses, and charges, provided, however, nothing herein shall require the OWNER to pay the late charge of one percent (1%) set forth herein if the OWNER reasonably determines that the work is unsatisfactory, in accordance with this Article 5, Compensation." ARTICLE 6 OBSERVATION AND REVIEW OF THE WORK The CONSULTANT will exercise reasonable care and due diligence in discovering and promptly reporting to the OWNER any defects or deficiencies in the work of the CONSULTANT or any subcontractors or subconsultants. ARTICLE 7 OWNERSHIP OF DOCUMENTS All documents prepared or furnished by the CONSULTANT (and CONSULTANT's subcontractors or subconsultants) pursuant to this Agreement are instruments of service, and shall become the property of the OWNER upon the termination of this Agreement. The CONSULTANT is entitled to retain copies of all such documents. The documents prepared and furnished by the CONSULTANT are intended only to be applicable to this Project, and OWNER's use of these documents in other projects shall be at OWNER's sole risk and expense. In the event the OWNER uses any of the information or materials developed pursuant to this Agreement in another project or for other purposes than specified herein, CONSULTANT is released fi.om any and all liability relating to their use in that project. ARTICLE 8 INDEPENDENT CONTRACTOR CONSULTANT shall provide services to OWNER as an independent contractor, not as an employee of the OWNER. CONSULTANT shall not have or claim any right arising fi.om employee status. ARTICLE 9 INDEMNITY AGREEMENT The CONSULTANT shall indemnify and save and hold harmless the OWNER and its officers, agents, and employees from and against any and all liability, claims, demands, damages, losses, and expenses, including, but not limited to court costs and reasonable attorney fees incurred by the OWNER, and including, without limitation, damages for bodily and personal injury, death and property damage, resulting fi.om the negligent acts or omissions of the CONSULTANT or its officers, shareholders, agents, or employees in the execution, operation, or performance of this Agreement. Nothing in this Agreement shall be construed to create a liability to any person who is not a party to this Agreement, and nothing herein shall waive any of the parties' defenses, both at law or equity, to any claim, cause of action, or litigation filed by anyone not a party to this Page 4 Agreement, including the defense of governmental immunity, which defenses are hereby expressly reserved. ARTICLE 10 INSURANCE During thc performance of thc services under this Agreement, CONSULTANT shall maintain the following insurance with an insurance company licensed to do business in the State of Texas by the State Insurance Commission or any successor agency that has a rating with Best Rate Carriers of at least an A- or above: Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate. The CONSULTANT~ shall furnish insurance certificates or insurance policies at the OWNER's request to evidence such coverages. The insurance policies shall name the OWNER as an additional insured on all such policies, and shall contain a provision that such insurance shall not be canceled or modified without 30 days' prior written notice to OWNER and CONSULTANT. In such event, the CONSULTANT shall, prior to the effective date of the change or cancellation, serve substitute policies furnishing the~ same coverage. ARTICLE 11 ARBITRATION AND ALTERNATE DISPUTE RESOLUTION The parties may agree to settle any disputes under this Agreement by submitting the dispute to arbitration or other means of alternate dispute resolution, such as mediation. No arbitration or alternate dispute resolution arising out of or relating to this Agreement, involving one party's disagreement, may include the other party to the disagreement without the other's approval. ARTICLE 12 TERMINATION OF AGREEMENT Notwithstanding any other provision of this Agreement, either party may tertr/mate by giving 30 days' advance written notice to the other party. This Agreement may be terminated in whole or in part in the event of either party substantially failing to fulfill its obligations under this Agreement. No such termination will be affected unless the other party is given (1) written notice (delivered by certified mail, return receipt requested) of intent to terminate and setting forth the reasons specifying the non-performance, and not less than 30 calendar days to cure the failure; and (2) an opportunity for consultation with the terminating party prior to termination. If the Agreement is terminated prior to completion of the services to be provided hereunder, CONSULTANT shall immediately cease all services and shall render a final bill for services to the OWNER within 30 days after the date of termination. The OWNER shall pay CONSULTANT for all services properly rendered and satisfactorily Page 5 performed and for reimbursable expenses to termination incurred prior to the date of termination, in accordance with Article 5 "Compensation." Should the OWNER subsequently contract with a new consultant for the continuation of services on the Project, CONSULTANT shall cooperate in providing information. The CONSULTANT shall turn over all documents prepared or furnished by CONSULTANT pursuant to this Agreement to the OWNER on or before the date of tem~ination, but may maintain copies of such documents for its use. ARTICLE 13 RESPONSIBILITY FOR CLAIMS AND LIABILITIES Approval by the OWNER shall not constitute, nor be deemed a release of the responsibility and liability of the CONSULTANT, its employees, associates, agents, subcontractors, and subconsultants for the accuracy and competency of their designs or other work; nor shall such approval be deemed to be an assumption of such responsibility by the OWNER for any defect in the design or other work prepared by the CONSULTANT, its employees, subcontractors, agents, and consultants. ARTICLE 14 NOTICES All notices, communications, and reports required or permitted under this Agreement shall be personally delivered or mailed to the respective parties by depositing same in the United States mail to the address shown below, certified mail, return receipt requested, unless otherwise specified herein. Mailed notices shall be deemed communicated as of three days' mailing: To CONSULTANT:To OWNER: Dan Lawton Diversified Utility Consultants, Inc. 12113 Roxie Drive, Suite 110 Austin, Texas 78729 City of Denton Herbert L. Prouty, City Attorney 215 East McKinney Denton, Texas 76201 All notices shall be deemed effective upon receipt by the party to whom such notice is given, or within three days' mailing. ARTICLE 15 ENTIRE AGREEMENT This Agreement, consisting of ten pages and two exhibits, constitutes the complete and final expression of the agreement of the parties, and is intended as a complete and exclusive statement of the terms of their agreements, and supersedes all prior contemporaneous offers, promises, representations, negotiations, discussions, communications, and agreements which may have been made in connection with the subject matter hereof. ARTICLE 16 SEVERABILITY Page 6 If any provision of this Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of this Agreement and shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform this Agreement to replace such stricken provision with a valid and enfomeable provision which comes as close as possible to expressing the intention &the stricken provision. ARTICLE 17 COMPLIANCE WITH LAWS The CONSULTANT shall comply with all federal, state, and local laws, rules, regulations, and ordinances applicable to the work covered hereunder as they may now read or hereinafter be amended. ARTICLE 18 DISCRIMINATION PROHIBITED In performing the services required hereunder, the CONSULTANT shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap. ARTICLE 19 PERSONNEL The CONSULTANT represents that it has or will secure, at its own expense, all personnel required to perform all the services required under this Agreement. Such personnel shall not be employees or officers of, or have any contractual relations with the OWNER. CONSULTANT shall inform the OWNER of any conflict of interest or potential conflict of interest that may arise during the term of this Agreement. All services required hereunder will be performed by the CONSULTANT or under its supervision. All personnel engaged in work shall be qualified, and shall be authorized and permitted under state and local laws to perform such services. ARTICLE 20 ASSIGNABILITY The CONSULTANT shall not assign any interest in this Agreement, and shall not transfer any interest in this Agreement (whether by assignment, novation, or otherwise) without the prior written consent of the OWNER. ARTICLE 21 MODIFICATION No waiver or modification ofthis Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged P~e7 therewith, and no evidence of any waiver or modification shall be offered or received in evidence in any proceeding arising between the parties hereto out of or affecting this Agreement, or the rights or obligations of the parties hereunder, and unless such waiver or modification is in writing and duly executed; and the parties further agree that the provisions of this section will not be waived unless as set forth herein. ARTICLE 22 MISCELLANEOUS The following Exhibits are attached to and made a part of this Agreement: Exhibit A - CONSULTANT's Proposal Letter of September 14, 2004 and Exhibit B - CONSULTANT's Manpower and Cost Requirements. CONSULTANT agrees that OWNER shall, until the expiration of three years after the final payment under this Agreement, have access to and the right to examine any directly pertinent books, documents, papers, and records of the CONSULTANT involving transactions relating to this Agreement. CONSULTANT agrees that OWNER shall have access during normal working hours to all necessary CONSULTANT facilities and shall be provided adequate and appropriate working space in order to conduct audits in compliance with this section. OWNER shall give CONSULTANT reasonable advance notice of intended audits. Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton County, Texas. This Agreement shall be construed in accordance with the laws of the State of Texas. For the purpose of this Agreement, the key persons who will perform most of the work hereunder shall be Jack Pous, Dan Lawton, Ruth Runyon Wenzel, and Sara Coleman. However, nothing herein shall limit CONSULTANT from using other qualified and competent members of its firm to perform the services required herein. CONSULTANT shall commence, carry on, and complete any and all projects with all applicable dispatch, in a sound, economical, and efficient manner and in accordance with the provisions hereof. In accomplishing the projects, CONSULTANT shall take such steps as are appropriate to ensure that the work involved is properly coordinated with related work being carried on by the OWNER. The OWNER shall assist the CONSULTANT by placing at the CONSULTANT's disposal all available information pertinent to the Project, including previous reports, any other data relative to the Project, and arranging for the access thereto, and make all provisions for the CONSULTANT to enter in or upon public and private property as required for the CONSULTANT to perform services under this Agreement. The captions of this Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of this Agreement. Page 8 1N WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be executed by its duly authorized City Manager, and CONSULTANT has executed this Agreement through its duly authorized undersigned officer on this the 21st day of September, 2004. CITY OF DENTON, TEXAS CITY MANAGER ATTEST: JENNIFER WALTERS, CITY SECRETARY HERBERT L. PROUTY, CITY ATTORNEY DIVErSiFIED UTI~,~Y CONSULTANTS, WITNESS: BY: Page 9 Exhibit A DIVERSIFIED UTILITY O1WSULTANTS, INC. September 14, 2004 Herbert L. Prouty City Altomey City of Denton 215 East McKinney Street Denton, Texas 76201 RE: Cost Proposal to PerformAnalysis on CoServ's Proposed Rate lnerease Dear Mr. ?rouX3': Diversified Utilit7 Consultants, Inc. ("DUCI") is pleased to Submit this proposal to perform an analysis on behalfofthe City ofDenton ("City") in CoServ's ("Company")proposed rate request that was filed on or about August 25, 2004. DUCI is a Texas Corporation located in Austin, Texas, with an international client base. The principals of DUCI, Messrs. Pous and Lawtou, have over fifty (50) years of utility late and regulation experience between them. In particular, Messrs. Pons and Lawton have testified and/or made formal presentations before federal, state, municipal and provincial regulatory bodies, ILEA Cooperative Beards and U.S. Environmental Protection Agency review boards on all aspects of utility cost of service, ratemaking, and rate design. DUCI is well qualified to represent the CRy in its review of CoServ's proposed rate increase. Mr. Lawton assisted the City in the review of CoServ's initial rate setting procedure in 1999 and has worked with the City in numerous other proceedings. It is DUCI's understanding that the City anticipates a thorough analysis of CoServ's proposed increase. DUCI has reviewed the Company's Statement of Intent. For the City of Denton, CoServ is proposing an overall rate increase o£ 20% when cost of gas is considered. Keeping in mind that this is a base rate case and all that is being reviewed are Company expenses excluding gas costs, then the base rate increase is the most important measure of the Company's request. The Company has proposed a base rate increase of over 74% for the customers in the City. This is a significant increase that needs to be analyzed thoroughly. The analysis would consist of a review ofthe Company's proposed expenses, adjusted revenues, allocations among electric and gas, and cost of capital issues. DUCI will review whether the revenue and. expense levels proposed by the Company are reasonable and all known and measurable adjustments have been correctly made. The review of revenues and expenses will include analysis of each Company adjustment to the test year actual revenues and will consider whether all proper adjustments have been made. As it relates to the Company's capital structure and cost of capital (debt, preferred and common equity), it is DUCrs intent to perform a detailed ~alysis of the Company's current and projected capital structure and current and estimated capital cost rates. This analysis will inehide evaluation ofthe components ofcapital and the reasonableness of each item with a concentration on financing plans, and non-utility activities. This analysis will result in an overall cost of capital recommendation and will quantify its impact or~ the Company's cost of capital and operating ratios. DUCI will analyze the actual filing, attend meetings with the Company, and will issue data requests to determine the cost based revenue requirement. This will determine if CoServ's assumptions are reasonable and in compliance with RCT roles. DUCI will develop its reconu~aenfled revenue requirement and submit a report to the City of its findings. Based on our understanding of the City's request, DUC][ has set forth a not to exceed price of 20,000 to complete the review of CoServ's proposed revenue requirement. This price includes out~ of-pocket expe~lses. We would like to thank you for allowing DUCI to submit this proposal. We are prepared to commence work on this project iramediately upon selection, and would complete the project in a timely and efficient manner. Should you have any questions with regard to this proposal or ether matters, please feel free to contact Daniel Lawton and Sara Coleman at (512) 257-2600. Sincerely, Diversified Utility Consultants, Inc. ii Exhibit B MANPOWER AND COST REQUIREMENTS TO PROVIDE REVIEW OF COSERVE RATE FILING ON BEHALF OF THE CITY OF DENTON CHARGE Daniel LawtDn Sara Coleman TOTALLABOR HOURLY O_URB ~ C~IN~GES 41 $175 $7,175 1 O0 $t 25 $12,500 141 T.~O~TAL 19,675 EXPENSE REQUIRF.~EN[ CHARGE Printing & Copying Computer Postage 8, Delivery Phone Transportation Hotel & Meats Air *['ravel TOTALEXPENSE GRAND ToTAL 79 0 30 20 196 0 0