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HomeMy WebLinkAbout2000-316ORDINANCE NO AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGED TO EXECUTE A FIRST AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT DATED JANUARY 5, 1999, BY AND BETWEEN THE CITY AND NAVIGANT CONSULTING, INC, FOR FURTHER CONSULTING SERVICES PERTAINING TO ELECTRIC RESTRUCTURING MATTERS AND THE POSSIBLE DIVESTITURE OF THE CITY'S ELECTRIC GENERATION ASSETS, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, PROVIDING FOR RETROACTIVE EFFECT OF THE AMENDMENT TO AGREEMENT, AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council deems it in the public interest to engage Navigant Consulting, Inc, Burlington, Massachusetts ("Navigant"), successor to the Reed Consulting Group to provide further professional consulting services to the City pertaining to the electric restructuring matters and the possible divestiture of the City's electric generation assets, and WHEREAS, on the 5"' day of January, 1999, the City Council passed and approved Ordinance No 99-010, which ordinance authorized the City Manager to execute a Professional Services Agreement ("Agreement") with Reed Consulting Group, a Massachusetts Corporation ("Reed") providing for professional consulting services, and WHEREAS, Navigant succeeded to and acquired the rights of Reed under the Agreement, with the approval of the City, and has been continuously providing professional services to the City respecting electric restructuring matters as well as the possible divestiture of the City's electric generation assets, and recently, the amounts provided for payment to Navigant have been exhausted pursuant to the Agreement, and the work of Navigant, although substantially complete, is not yet complete, and accordingly, the City Council believes that it is necessary and appropriate to continue Navigant's engagement respecting the matters described above for a time, so that the possible divestiture of the City's electric generation assets may be brought to a close, one way or the other Accordingly, the City Council desires to enter into a First Amendment (the "Amendment") to the above Agreement, a copy of which Amendment is attached hereto and incorporated herewith by reference, and WHEREAS, Chapter 2254 of the Texas Government Code, known as the "Professional Services Procurement Act", provides that a City may not select a provider of professional services on the basis of competitive bids, but must select the provider on the basis of demonstrated competence and qualifications, and for a fair and reasonable price, and WHEREAS, the professional fees as provided in the Professional Services Agreement are fair and reasonable, considering all relevant factors, as well as the magnitude of the protect for which Navigant Consulting Group is being engaged, and said professional fees do not exceed any maximum. provided by law for such professional services, and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the professional services, as set forth in the Professional Services Agreement, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 That the City Manager is hereby authorized to execute a First Amendment to the Professional Services Agreement dated January 5, 1999, by and between the City and Navigant, for professional consulting services pertaining to electric restructuring matters and the possible divestiture of the City's electric generation assets, in substantially the form of the First Amendment to Professional Services Agreement attached hereto and incorporated herewith by reference SECTION 2 That the award of this Agreement is on the basis of the demonstrated competence and qualifications of Navigant and the ability of Navigant to perform the services needed by the City for a fair and reasonable price SECTION 3 That the expenditure of funds as provided in the attached First Amendment to Professional Services Agreement is hereby authorized SECTION TION 4 That the above and foregoing First Amendment to the Professional Services ?agreement, dated January 5, 1999 is hereby ratified, confirmed, and retroactively approved, and shall be effective from and after January 1, 2000 SE TION 5 That except as otherwise provided in Section 4 above, this Ordinance shall become effective immediately upon its passage and approval / PASSED AND APPROVED this the � day of (540 7/%i?�./^ 2000 za` uc, Avg` EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY QI ) AS TO LEGAL FORM L PROUTY, CITY ATTORNEY ByA'^1 W S \Our Documents\Ordinances\ o\Navtgant Consulting lst Amended PSA DME Divestiture doe THE STATE OF TEXAS )( COUNTY OF DENTON )( FIRST AMENDMENTTOPROFESSIONAL IIIOYS ONAL SERVICES AGREEMENT THIS FIRST AMENDMENT to that certain Professional Services Agreement, dated January 5, 1999, heretofore entered into by and between the City of Denton, Texas, a Texas Municipal Corporation, and Reed Consulting Group, a Massachusetts Corporation, is made and entered into on this date by the City of Denton, Texas, a Texas municipal corporation, with its principal offices at 215 East McKinney Street, Denton, Denton County, Texas 76201 (hereafter called "City"), and Navigant Consulting, Inc, a Corporation, with its principal office at 200 Wheeler Road, Burlington, Massachusetts, 01803 (hereafter called "Navigant"), acting herein by and through their respective duly authorized representatives and officers WHEREAS, on January 5, 1999, the City entered into a Professional Services Agreement (hereafter the "Agreement") with Reed Consulting Group, a Massachusetts Corporation (heeaiz , intensive professional services ther rCity with its poss b el divestiture olf t electric generation and related involved assisting assets, and the City Council passed and approved Ordinance No 99-010 on that date, authorizing the City Manager to ecu, said Agreement, which, ong other fees and out of -poet expenses to the con consultant, in angamountinott toded or payment of professional exceed $2 025 000, and WHEREAS, thereafter, through this date, Reed Consulting Group, and now, its successor by merger Navigant Consulting, Inc, have diligently performed extensive and complex professional services for the City, as directed by the City, incident to the marketing, as well as the current re -marketing of the City's electric generation resources (the "Project"), with the focus of the present activity being limited by the City to the sale, disposition, or other divestiture of the City's Spencer Generation Plant as well as the two hydroelectric generation facilities situated in Denton County, Texas, owned by the City, and WHEREAS, at the time the Agreement was entered into by the City and Reed Consulting Group in January 1999, neither the City, nor Reed could predict with any certainty the length of time the professional engagement would entail, nor could they predict the market reception or reaction to the City's offering of its electric assets for sale, disposition, or other divestiture The parties, in determining the not -to -exceed compensation at that time could do no more than make a coordinated, reasonably informed, good -faith estimate about the likely period of time and the quantum Iof professional services needed to complete the engagement, and WHEREAS, by the close of 1999, the Project was not yet complete, but the funds provided for in the Agreement for the payment of professional fees to Reed, then to Navigant Consulting, Inc were nearly exhausted, and shortly thereafter, the City authorized Navigant to move forward with a re -marketing effort in hopes of maximizing the financial effects to the City of a possible sale, disposition, or divestiture of its local electric generation assets, by additional efforts to be made by Navigant with the remaining bidders, and at that time Navigant, in order to continue the Project, orally agreed with City Staff, in principle, that because of where the Protect stood, that Navigant would voluntarily restructure its compensation under the Agreement and any future amendment to the Agreement to m order entered into by an on ethe tween the Project withoutity and Navigant, effective as of January contain the City's out-of-pocket costs, in order to take into account a interruption, in order to slightly lesser amount of work then being per on the Protect, as well as to bear some risk of loss of its professional fees on the Project in the event that the City was not successful in selling, disposing of, or divesting its local electric generation assets, and the City and Navigant recognize that, as the properties being marketed by Navigant involve real property interests, an acceptable way to restructure a portion of Navigant's fee for professional services is to provide for an additional, fixed completion fee which is payable to Navigant solely in the event that there is a successful closing and funding of the sale, disposition, or divestiture of the Spencer Generation Plant (with or without the City 's two hydroelectric generation units), which event would satisfy the contingency, and WHEREAS, the City and Navigant, intend by this First Amendment to Professional Services Agreement, Dated January 5, 1999 (hereafter the "First Amendment") to provide for their respective rights and responsibilities, each to the other, effective from and after January 1, 200, until aosalle of the City's localthe Project is compleed, whetherelectric generation assets or by a cancellation of the Project, and funding of time as e NOW, THEREFORE, the City of Denton, Texas and Navigant Consulting, Inc (hereafter collectively referred to as the "Parties")' in consideration of their mutual promises and covents, as well as for other good and valuable follownconsiderations, g amendments to the terms and conditions of them Agreentdat d hereby y 55,, 1999, to wit I INCORPORATION OF PREAMBLE The parties agree that the preamble set forth heremabove is hereby incorporated into this First Amendment by reference for all purposes pertinent II CHANGE OF CONSULTANT'S NAME AND BINDING EFFECT ty ctin The parties agree that Navigant Consulting, oft shall be the Agreement sas novelle as trine Firs the performance of the terms and provisions Amendment, and that Navigant shall succeed to the rights of Reed under the Agreement for all purposes The parties stipulate that Reed was merged into Navigant, and that Navigant, for purposes of thorate nominal changeeof name the City expressly imthe perfoance of the consents to and hereby ratifies successor to Reed, which Page 2 III FEES FOR SERVICES AND PAYMENT OF EXPENSES The parties agree that the provisions of Article II of the Agreement, together with the applicable provisions of the "Attachment to Professional Services Agreement Between Reed Consulting Group and the City of Denton, Texas Dated January 5, 1999" (hereafter the "Attachment") shall be amended as follows 1 The total "not -to -exceed" amount for professional fees and direct out-of-pocket expenses incurred on the Project shall not exceed $2,425,000 e Navigant for 2 The City shall continue to expenses reasonably incurred in hesProject on a billed amonthly basis, at Nav gantes direct cost 3 The flat monthly fee of $150,000 per month for the duration of the engagement, shall be modified, effective as of January 1, 2000 as follows 4 The City shall pay Navigant a flat monthly fee of $25,000 for professional services rendered on he Project for the month of January 2000, then hly fee of 0,000 for ssional services 5 rendered one City ll pay theProject f for a flat the monthtof February22000, andpforeeach successive month hereafter, until such time as the City executes and delivers to a purchaser of the Spencer Generation Plant (with or without the City's two hydroelectric generation units) a definitive asset purchase agreement, then the parties agree that the $20,000 flat monthly fee provided for by this subparagraph shall be prorated on a daily basis, to be calculated ich the agreement is executed cand delivered by the City totive as of the daat suchpurchaser, then ve asset purchase then 6 In the event that the City executes and delivers a definitive asset purchase agreement providing for the sale or disposition of the Spencer Generation Plant (with or without he City's two hydroelectric generation units), then thereafter, the City shall pay Navigant, until the Project, and this engagement is closed, its professional fees on an as -needed, billed monthly, hourly fee basis, in such hourly amounts as are set forth in he "Standard Hourly Billing Rate Schedule (effective January 1, 2000)," attached hereto as Exhibit "1", and incorporated herewith by reference 7 In the event that he Project is not complete, and this engagement is not closed by January 1, 2001, and Navigant is rendering professional services to the City at that time, then Navigant may notify the City in writing that it elects to increase its hourly billing rates for its staff performing services on the project, effective as of JNavant 2001, to its standard hourly billing rates and the City shall accordingly pay g in accordance with such increased rates Page 3 8 In the event that the City is unable to successfully close and fund a successful sale, disposition, or other divestiture of its Spencer Generation Plant (with or without the Clty's two hydroelectric generation units) within the twelve (12) months immediately following the date of the execution and delivery of a definitive asset purchase agreement (as referred to heremabove), then, in that event the only sums owed by the City to Nat, from for professional f1, 20pursuant, shall be those earn d flat monthly fees eement and the First Amendment, from and after January as provided earned by Navigant, as provided foraphs III C I in n paragraphs III C 3 and III C 4 above d III C 2 above, and any as -needed, urly fees 9 In the event that the City is successful, and is able to close and fund a sale, disposition, or divestiture of the Spencer Generation Plant (with or without the City's two hydroelectric generation units), within the twelve (12) months immediately following the date of the execution and delivery of a definitive asset purchase agreement (as referred to above), then, in that event only, pursuant to the agreement of the parties providing for the restructuring of Navigant's professional fees for the period of time on and after January 1, 2000, the City shall pay to Navigant, within twenty days following closing and funding of the referenced sale, disposition, or other divestiture of the Spencer Generation Plant (with or without the City's two hydroelectric units) an additional fixed completion fee of $250,000, for Navigant's professional services previously rendered, earned, but deferred until the successful completion of the contingency described in this subparagraph IV NOTICES provisionsThe parties agree that the terms and amended to provide the following as the applicable notice addresses of the parties, to wit shall be CITY City of Denton, Texas Michael W Jez, Crty Manager 215 East McKinney Street Denton, TX 76201 NAVIGANT Navigant Consulting, Inc James M Coyne, Managing Director 200 Wheeler Road Burlington, MA 91803 V COORDINATION OF WORK ON THE ENGAGEMENT The parties agree that the terms and provisions of Article XVIII of the Agreement shall be amended to add the following provision D The parties agree that the principal members of the Project Team are, and shall be James M Coyne and Prescott Hartshorne Other Navigant consultants will continue to be utilized on roject on an as -needed basis as cipals pal members oflthePdetermined Project Team will remain active on the Project until itsncompletione O eritthe Page 4 course of completing this engagement, should principal members of the Project Team move to a new entity, unless Navigant arranges for continued services from the principal members of the Project Team (subcontracted or otherwise), the City reserves the right to have the Agreement and this First Amendment follow the Project Team to the new entity where the principals will be employed In that event, payment for services due to Navigant under the Agreement and the First Amendment will be limited to the flat monthly fees and as -needed hourly professional fees rendered through the date the Project is transferred to the Principals' new entity If, however, the Project has prossed Plant, Navigantht all be entitled executed tled too a -half the fixed co completion rlSpencer onfeeifthefinancial Generation closing is achieved VI SURVIVAL OF AGREEMENT The parties agree, that except as specifically provided by this First Amendment documentobligations of the partieseterms, covenants, conditions, agreemen, rihts, set forth in the Agreement, hall remain in full responsibilities, and that all of force and effect IN WITNESS WHEREOF, the City of Denton, Texas and Navigant Consulting, Inc have executed First Amendment to Professional Service Agreement Dated January 5, 1999 in four (4) original count arts, by and through their r s� tive duly authorized representatives and officers on this the C day of _o�� "CITY" CITY OF DENTON, TEXAS A Texas Municipal Corporation B �-- Michae W Je , it Manager ATTEST JENNIFER WALTERS, CITY SECRETARY By -- APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 5 ATTEST Im S \0m D .a .ts\Contra \oo\DM8 in A rded PSA Navtguat 0aa Dtveat da "NAVIGANT" NAVIGANT CONSULTING, INC A Corporation By James Coyne, Managing Director Page 6 Navigant" CONSULTING, INC NAVIGANT CONSULTING, INC. Financial Services Standard Hourly Billing Rate Schedule (effective January 1, 2000) Executive Managing Director $400 Senior Managing Director $325 Managing Director $325 $250 Director $25 Principal $200 Senior Engagement Manager $15 Senior Consultant $ Consultant $125 Associate $100 Technical Writer $100 Research Librarian $100 Analyst $45 Administrative Assistant $25 Clerical Assistant preparation for testimony and drbilling rates testimony may on e billed at one and one-half times the