1999-279 NOTE. First Amendment - Ordinance No. 99-470
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO ENTER INTO SEPARATE
PROFESSIONAL SERVICES AGREEMENTS WITH DIVERSIFIED UTILITY
CONSULTANTS, INC TO PERFORM AUDITS AND FRANCHISE REVIEWS OF TXU
ELECTRIC AND GAS AND COSERV GAS COMPANY, AUTHORIZING THE
EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City Manager, after review by the Asmstant C~ty Manager for Fiscal &
Mumclpal Services, has determined that it would be ~n the best interests of the City to rewew the
current year franchise fee calculation and the past franchme fee calculation of TXU Electne and
Gas ("TXU") due to the fact that the recent audit by D~vermfied Utthty Consultants, Inc
indicated that TXU may owe the C~ty delinquent franchise fees, and the need to venfy the 1999
franchme fee payment under TXU's current franctuse, and
WHEREAS, under Senate Bill 7, the C~ty must commence an audit of an electnc
company's franchise pnor to September 1, 1999 on past franchme payments or ~t wall lose the
opportunity to audit such franchise payments, and
WHEREAS, CoServ Gas Company has made an initial revenue fihng which ~t would be
~n the pubhc ~nterest to review, NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION 1 That the City Manager is hereby authorized to enter into two separate
Professional Services Agreements with Dlvermfied Utility Consultants, Inc, substantially m the
form of the Professional Services Agreements attached, to perform audits and franchise reviews
of TXU Electric and Gas and to review the proposed tanff and revenue requirements of CoServ
Gas Company
~ That the City Manager ~s hereby authonzed to make the expenditures and
take the actions set forth m the attached Agreements
~ That this ordmance shall become effective ~mmedlately upon its passage
and approval
AND APPROVED this the ~/~ day of ~,~__,~, 1999
PASSED
JAILER, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
HERBERT L PROUTY, CITY ATTORNEY
Page 2
PROFESSIONAL SERVICES AGREEMENT FOR
PROFESSIONAL SERVICES REGARDING COSERV GAS COMPANY'S
PROPOSED TARIFF AND REVENUE REQUIREMENT
STATE OF TEXAS §
COUNTY OF DENTON §
THIS AGREEMENT is made and entered into as of the day of ,
1999, by and between the City of Denton, Texas, a Texas municipal corlJorai'lon, with its
pnnclpal office at 215 East Mcganney Street, Denton, Denton County, Texas 76201, hereinafter
called "OWNER" and Diversified Utility Consultants, Inc, with its corporate office at 12113
Roxle Drive, State ll0, Austin, Texas 78729, hereinafter called "CONSULTANT," acting
herein, by and through their duly authorized representatives
WITNESSETH, that m consideration of the covenants and agreements herein contmned,
the panics hereto do mutually agree as follows
EMPLOYMENT OF CONSULTANT
The OWNER hereby contracts w~th the CONSULTANT, as an independent contractor,
and the CONSULTANT hereby agrees to perform the services herein in connection with the
ProJect as stated m the sections to follow, with diligence and in accordance with the highest
professional standards customarily obtained for such services m the State of Texas The
professional services set out herein are m connection with the following descnbed project
The Project shall include, without limitation, investigation and analysis of CoServ Gas
Company's ("CoServ") proposed tariff and revenue requirement to make a determination of the
reasonableness of the lmtlal rates, based on analysis of that rate base, expenses, investment, and
rate of return of CoServ, along with any other factors which would bear on the reasonableness of
CoServ's rate request
SCOPE OF SERVICES
The CONSULTANT shall perform the following services in a professional manner
A The CONSULTANT shall perform all those services as necessary and as described in the
CONSULTANT's proposal to review CoServ's proposed tariff and revenue requirement
dated August 19, 1999, with CONSULTANT's cost proposal, which is attached hereto as
Exhibit "A"
B CONSULTANT shall perform all those services set forth an an&vadual task orders, af any,
which shall be attached to tbas Agreement and made a part hereof for all purposes as
separate agreements
C CONSULTANT wall meet w~th and submit status reports to the Assxstant City Manager
for F~scal & Mummpal Servaces, Caty Attorney, and thear staffs, wall be avmlable for at
least two C~ty Council meetings, and shall prowde a final report lndlcat~ng its
recommendations as set forth an Exhibit "A"
D If there ~s any conflmt between the terms of this Agreement and the exhibits attached to
this Agreement, the terms and condltaons of this Agreement wall control over the terms
and condatxons of the attached extnb~ts or task orders
ADDITIONAL SERVICES
Additional services to be performed by the CONSULTANT, ~f authorized by the
OWNER, whmh are not ancluded m the above-described Basic Services, are described as
follows
A Appeanng before regulatory agencaes or courts as an expert watness an any htlgatlon,
including, without hmltatlon, testimony m rate proceedings before the Texas Railroad
Commission, the Public Uttht~es Commission, or other state and federal agencies
B Any other additional services specffically requested by the OWNER not included w~thm
the scope of this Agreement and xts exhibits
ARTICLE 4
PERIOD OF SERVICE
Thas Agreement shall become effective upon execution of thas Agreement by the
OWNER and the CONSULTANT and upon issue of a notme to proceed by the OWNER, and
shall remmn m force for the period which may reasonably be reqmred for the completaon of the
Project, mchidlng Addxt~onal Serwces, ff any, and any reqmred extensxons approved by the
OWNER, promded however, the ProJect shall be completed wathm 180 days of the date of the
notxce to proceed, unless an extension of ttme is granted by the OWNER This Agreement may
be sooner terminated an accordance w~th the provlsxons hereof Txme is of the essence an thru
Agreement The CONSULTANT shall make all reasonable efforts to complete the servmes set
forth hereto as expechttously as possible and to meet the schedule estabhshed by the OWNER m
Exhlbat "A", actang through its Caty Manager or hxs desagnee
Page 2
ARTICLE 5
COMPENSATION
A COMPENSATION TERMS
1 "Subcontract Expense" xs defined as expenses incurred by the CONSULTANT m
employment of others m outsade firms for servaces
2 "Dareet Non-Labor Expense" ~s defined as that expense for any assignment
mcurred by the CONSULTANT for supphes, transportation and eqmpment,
travel, eommumcatlons, subsastence, and lodging away from home, and s~mflar
incidental expenses m connectton wath that assignment
B BILLING AND PAYMENT For and in consaderataon of the professional servaces to be
performed by the CONSULTANT hereto, the OWNER agrees to pay, based on the cost
estamate detail at an hourly rate shown m Exhibit "B", July 30, 1999 letter from
CONSULTANT to OWNER and attached manpower and cost reqmrements to provade
revaew of CoServ's tariff and apphcable revenue requirement on behalf of OWNER, a
total fee, mcluchng reambursement for direct non-labor expenses not to exceed
$17,000 00
Partial payments to the CONSULTANT wall be made on the basis of detmled monthly
statements rendered to and approved by the OWNER through its Assastant Caty Manager
for Faseal & Mumcapal Servaees and its City Attorney or his designee, however, under no
c~reumstanees shall any monthly statement for services exceed the value of the work
performed at the tame a statement as rendered The OWNER may withhold the final five
percent (5%) of the contract amount until completaon of the Project
Notbang contained m thas Artaele shall requare the OWNER to pay for any work whaeh ~s
unsatisfactory, as reasonably determmed by the City Manager or has desagnee, or whaeh is
not submitted m eomphance w~th the terms ofthas Agreement The OWNER shall not be
required to make any payments to the CONSULTANT when the CONSULTANT as an
default under th~s Agreement
It as speeafically understood and agreed that the CONSULTANT shall not be authorized
to undertake any work pursuant to this Agreement which would reqmre additional
payments by the OWNER for any charge, expense, or reambursement above the
maxamum not to exceed fee as stated, wathout first havang obttuned written authonzataon
from the OWNER The CONSULTANT shall not proceed to perform the services lasted
in Article 3 "Additional Servaees," wathout obtaanmg prior written authorization from the
OWNER
C ADDITIONAL SERVICES For adthtaonal services authorized in wntang by the
OWNER in Article 3, the CONSULTANT shall be paad based on the Schedule of
Charges at an hourly rate shown an Exhtbtt "A" Payments for addatlonal services shall
Page 3
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
D PAYMENT If the OWNER fmls to make payments due the CONSULTANT for
servmes and expenses within 60 days after receipt of the CONSULTANT's undisputed
statement thereof, the amounts due the CONSULTANT will be ~nereased by the rate of
one percent (1%) per month from the said sixtieth (60th) day, and, in addmon, the
CONSULTANT may, after gavmg seven days' written notice to the OWNER, suspend
services under tins Agreement until the CONSULTANT has been prod m full all amounts
due for servaees, expenses, and charges, provided, however, nothmg here~n shall require
the OWNER to pay the late charge of one percent (1%) set forth herein if the OWNER
reasonably determmes that the work is unsatisfactory, in accordance w~th ttus Artacle 5,
"Compensation"
OBSERVATION AND REVIEW OF THE WORK
The CONSULTANT will exerease reasonable care and due dlhgence m dlscovenng and
promptly reportang to the OWNER any defects or defic~encles in the work of the
CONSULTANT or any subcontractors or subconsultants
OWNERSHIP OF DOCUMENTS
All documents prepared or furmshed by the CONSULTANT (and CONSULTANT's
subcontractors or subconsultants) pursuant to thas Agreement are instruments of service, and
shall become the property of the OWNER upon the tennlnataon of thas Agreement The
CONSULTANT m entatled to ret~un cop~es of all such documents The documents prepared and
furnished by the CONSULTANT are intended only to be apphcable to thru Project, and
OWNER's use of these documents m 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 m another project or for other purposes than spemfied here~n, CONSULTANT ~s
released from any and all habflity relatmg to their use ~n that project
ARTICLE 8
INDEPENDENT CONTRACTOR
CONSULTANT shall provide servaces to OWNER as an ~ndependent contractor, not as
an employee of the OWNER CONSULTANT shall not have or chum any right arising from
employee status
Page 4
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 bo&ly and personal
injury, death and property damage, resulting from 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 flus Agreement, and nothing herein shall waive any of the parties' defenses, both at
law or eqtuty, to any claim, eanse of action, or litigation filed by anyone not a party to this
Agreement, mcludmg the defense of governmental lmmumty, which defenses are hereby
expressly reserved
ARTICLE 10
INSURANCE
Dunng the performance of the services under this Agreement, CONSULTANT shall
maintain the following msurance with an insurance company licensed to do business in the State
of Texas by the State Insurance Commission or any successor agency that has a rating with Best
Rate Carriers of at least an A- or above
A Comprehensive General Llablhty Insurance with bodily injury hmlts of not less than
$500,000 for each occurrence and not less than $500,000 in the aggregate, and with
property damage limits of not less than $100,000 for each occurrence and not less than
$100,000 in the aggregate
B At~tomoblle Liability Insurance with bodily injury limits of not less than $500,000 for
each person and not less than $500,000 for each accident, and with property damage
limits of not less than $100,000 for each accident
C Worker's Compensation Insurance in accordance with statutory requirements, and
Employers' Llablhty Insurance with limits of not less than $100,000 for each accident
D Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate
E 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 ansured 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
Page 5
effective date of the change or cancellatxon, serve substitute pohc~es furmshmg the same
coverage
ARBITRATION AND ALTERNATE DISPUTE RESOLUTION
The part, es may agree to settle any dmputes under this Agreement by submxttmg the
dxspute to arb~tratxon or other means of alternate dispute resolution, such as medlatxon No
arb~tratxon or alternate dispute resolution ansxng out of or relating to th~s Agreement, ~nvolwng
one party's d~sagreement, may include the other party to the disagreement wxthout the other's
approval
TERMINATION OF AGREEMENT
A Notw~thstandmg any other provision of thxs Agreement, exther party may terminate by
g~wng 30 days' advance written notice to the other party
B Tlus Agreement may be tennmated in whole or ~n part xn the event of e~ther party
substantmlly falhng to fulfill ~ts obhgatxons under th~s Agreement No such termxnat~on
will be affected unless the other party is gxven (1) written not, ce (dehvered by certxfied
mtul, return reeexpt requested) of xntent to termmate and settmg forth the reasons
specifying the non-performance, and not less than 30 calendar days to cure the failure,
and (2) an opportumty for consultation w~th the terminating party prior to tennmatxon
C If the Agreement is termmated prior to completxon of the services to be prowded
hereunder, CONSULTANT shall xmmedmtely cease all services and shall render a final
bill for services to the OWNER w~thln 30 days after the date of termination The
OWNER shall pay CONSULTANT for all servmes properly rendered and satisfactorily
performed and for reimbursable expenses to term~natxon incurred prior to the date of
termmatton, m accordance w~th Artxcle 5 "Compensatxon" Should the OWNER
subsequently contract wxth a new consultant for the contmuat~on of services on the
ProJect, CONSULTANT shall cooperate m provldmg mformatxon The CONSULTANT
shall turn over all documents prepared or fumxshed by CONSULTANT pursuant to this
Agreement to the OWNER on or before the date of termmatxon, but may mmntmn cop~es
of such documents for ~ts use
ARTICLE 13
RESPONSIBILITY FOR CLAIMS AND LIABILITIES
Approval by the OWNER shall not constitute, nor be deemed a release of the
respons~blhty and liability of the CONSULTANT, ~ts employees, assocmtes, agents,
subcontractors, and subconsultants for the accuracy and competency of their desxgns or other
work, nor shall such approval be deemed to be an assumption of such responslbflxty by the
Page 6
OWNER for any defect in the desl~ll or other work prepared by the CONSULTANT, its
employees, subcontractors, agents, and consultants
NOTICES
All hermes, communications, and reports reqmred or permitted under this Agreement
shall be personally dehvered or totaled to the respective part,es by depositing same m the Umted
States mml to the address shown below, certified marl, return receipt requested, unless otherwise
specified hercm Mailed notices shall be deemed communicated as of three days' mmhng
To CONSULTANT To OWNER
Jack Pous City of Denton
Diversified Utthty Consultants, Inc Herbert L Prouty, City Attorney
12113 Roxle Dnve, Suite 110 215 East McK~nney
Austin, Texas 78729 Denton, Texas 76201
All notices shall be deemed effective upon receipt by the party to whom such noUce ~s
g~ven, or w~thm three days' mathng
ARTICLE 15
ENTIRE AGREEMENT
Tlus Agreement, consisting of ten pages and two exhibits, constitutes the complete and
final expression of the agreement of the partxes, and is intended as a complete and exclusive
statement of the terms of their agreements, and supersedes all prior contemporaneous offers,
promises, representations, negotmtions, d~scusslons, communications, and agreements wluch
may have been made in connection wxth the subject matter hereof
SEVERABILITY
If any provision of this Agreement is found or deemed by a court of competent
junsdmt~on to be invalid or unenforceable, it shall be considered severable from the remainder of
th~s Agreement and shall not cause the remmnder to be ~nvahd or unenforceable In such event,
the parties shall reform thas Agreement to replace such stricken provision with a valid and
enforceable prows~on which comes as close as possible to expressing the retention of the stricken
provimon,
Page 7
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 discnmmate
against any person on the basis of race, color, rehgaon, sex, national origin or ancestry, age, or
physical handicap
ARTICLE 19
PERSONNEL
A 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 mterest or
potential conflict of interest that may arise dunng the term of this Agreement
B 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 may interest in flus Agreement (whether by assignment, novation, or otherwise) without
the prior written consent of the OWNER
ARTICLE 21
MODIFICATION
No waver or modification of flus Agreement or of any covenant, condition, or hmltatlon
hereto contaned shall be valid unless m writing and duly executed by the party to be charged
therew~th~ and no evidence of any waver 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
P~e8
ARTICLE 22
MISCELLANEOUS
A The following exhxblts are attached to and made a part of this Agreement A - Letter of
August 19, 1999, wxth CONSULTANT's cost proposal, B - July 30, 1999 letter from
CONSULTANT to OWNER
B CONSULTANT agrees that OWNER shall, untd the expiration of three years after the
final payment under tlus 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 dunng normal working hours to all necessary CONSULTANT facilities and shall
be provided adequate and appropriate working space ~n order to conduct audits in
compliance wxth tins section OWNER shall g~ve CONSULTANT reasonable advance
notice of ~ntended audits
C Venue of any stat or cause of action under this Agreement shall lie exclusively in Denton
County, Texas This Agreement shall be construed xn accordance with the laws of the
State of Texas
D For the purpose of this Agreement, the key persons who wall perform most of the work
hereunder shall be Jack Pous, Dan Lawton, Ruth Runyon Wenzel, and Sara Coleman
However, notlung herexn shall hmxt CONSULTANT from using other qualified and
competent members of ~ts firm to perform the services mqmred herein
E CONSULTANT shall commence, carry on, and complete any and all projects w~th all
applicable chspatch, ~n a sound, economical, and effiment manner and in accordance w~th
the provisions hereof In accomphshmg the projects, CONSULTANT shall take such
steps as are appropriate to ensure that the work involved ~s properly coordinated with
related work being earned on by the OWNER
F The OWNER shall assist the CONSULTANT by placing at the CONSULTANT's
disposal all avmlable information pertinent to the ProJect, including prewous reports, any
other data relative to the ProJect, and arranging for the access thereto, and make all
prowsions for the CONSULTANT to enter ~n or upon pubhc and private property as
required for the CONSULTANT to perform servmes under this Agreement
G The captions of thru Agreement are for informational purposes only, and shall not in any
way affect the substantive terms or conditions of thts Agreement
1N WITNESS HEREOF, the C~ty of Denton, Texas has caused this Agreement to be
executed by ~ts duly authorized C~ty Manager, and CONSULTANT has execute~;~th~s A ~p~reement
thro}I~.gh its duly anthonzed undersigned officer on this the r-~t9~ day of ~//~/~t~ ,
19j~Z__
Page 9
ATTEST
JENNIFER WALTERS, CITY SECRETARY
DIVERSIFIED UTILITY CONSULTANTS,
INC
WITNESS
Page 10
EXHIBIT "A"
C OI~ISITLTAI~I~ S, II~.
August 19, 1999
Herbe~ L Prouty ~0~ 2 0 ~
C~ty Attorney
C~ty of Denton Cl~ O~ D~N~ON
215 East McK~ey kgSAk DEPT
Denton, Texas 76201
De~ Mr Prouty
D~versffied Unhty Consult~ts, Inc ("DUCI") appreciates the C~ty of Denton's ("C~ty")
request to have DUCI rewew CoSe~ Gas Comp~y's ("CoSec") tmff ~d requested rates CoSe~
~s a new gas comply whmh presented a tariff to the City based on its estimate of costs over 30
ye~s
DUCI ~s a Texas Co.oration located in Austin, Texas, w~th a local as well as mtemanonal
chent b~e DUCI's perso~el have extensive, c~ent ~d relev~t Texas g~ ~d electric unhty rate
regulation experience necessaw to rewew the ~ssues ~n CoServ's tariff fihng
Another major reason DUCI xs quahfied to perfo~ a thorough analyms of CoSe~'s t~ff
~s our recent experience conducting ~ ~alysm of TXU-G's proposed rate increase m the C~ty As
such, DUCI h~ experience working w~th the C~ty staff ~d working w~thm the t~me constraints set
by the Cay As a new comply, CoSe~ has made m~y ass~pUons ~n developing ~ts rates W~th
DUCI's extenmve ratem~mg background it will be able to ~alyze the assumptions for
reasonableness, precedence ~d comphance with the Railroad Comm~ssmn of Texas ("RCT")
Subst~txve Rules
DUCI ~s proposmg to perfo~ the followmg general gmdehnes in the analys~s of CoSe~'s
tariff
COSERV'~R~O~TARIFF AND~VENUE ~QUl~MENT
· Complete analyms of the Comp~y's documented revenue reqmrements
· Data request ~d dlscusmons with the Company to dete~me its actual
revenue requirements
· Rewew the Comp~y's expenses, revenue calculation, rate base and
deprematlon ~ounts requested
Herbert L Prouty
Page 2
August 19, 1999
· Review each of CoServ's assumptions for reasonableness and comphance to
RCT Rules
· Verify allocation of costs between electric and gas and ensure they are
properly separated
· Verify that gas customers are charged for only their fmr share of costs
· Determine whether CoServ's rates are d~scnm~natory to TXU-G's
· Prepare a revenue reqmrement that ~s ~n compliance w~th the RCT roles
· Develop rates based on data received
· Prepare report to the City of DUCI's find,ngs
These are only meant to prowde a general outline ofDUCI's analys~s DUCI will perform
additional analysis on CoServ, as needed Another factor that will affect our analysis ~s the
cooperation that we receive from the Company's
I hope tins has prowded a general understandtng of the approach DUCI ~ntends on pursmng
If you have any questions, please do not hesitate to contact us We look forward to working with
you
Smcerely,
07/30/1~99 10:54 51225722~3 DUCI
EXHIBIT "B"
CONSUlTerS. n c.
~y 30, 1999
Herbert L Pfouty
C~ty A~tom~y
C~ty of Denton
Denton~ Tex~s 76201
De. Mr Prout~
("LSGC") ~se fee c~a~o~ ~r ~ ~t ye~, LSGC's ~sc fe~s pard m ~e p~t to
~mrcm~m
~ ~ ~te ~ ~c ~ ofLS~'s c~t y~ ~c fee c~c~uon ts b~ on
of~ ~ to ~vel ~ D~ton, ~e cost ~ay be clos~ to $4,000,
The cost es~c m ~ LS~'s p~t ~m~se f~ r~mres ~sc~ ~d some
co~ ~m ~e Compmy DU~ will m~e ~ effo~ to v~ whether LS~ h~ prod the
p~p~ ~c~se fee ~ ~e Ci~
~e ~ price ~pos~ relat~ ~ DUC~s ~ew of Cos~ G~ Comp~y's propos~
P~ o~ p~,na~ r~l~ of Cos~'s ~uest, it ~pe~s ~e
md ~phc~le ~u~ ~m~t ~s m not p~d ~
Ducrs op~, to ~pt mt~ b~ ~ ~ es~at~ costs of Cosc~
LS~ LS~ ~d cl~ m~ ~e ~mma~ ~e ~os~ ~hmp~tcs w~g closely ~
Cos~ ~d d~el~g r~es ~t ~ ~ md f~o~ble b~ on ~o~ ~d m~lc cos~
to sub~t ~s ~pos~ We ~ prep~
We would l~c to ~ you for ~lo~ DUCI completc ~c p~]~t m
to ~ce work ~ ~s ~ect ~la~ly upon sel~ton, ~d wo~d
a ~m~ly ~ e~c~t ~, Shoed ~ ~ve ~y qu~o~ wl~ ~$~ to t~s proposM or o~er
ma~, pl~e feel ~e to ~n~t Dm La. on at (512)257-2500
07/30/i999 i0 54 5i2257224~ 9UCI PAGE 05
PRICE PROPOSAL
MANPOWER AND COST REQUIREMENTS
TO PROVIDE REVIEW OF
COSERV GA8 COMPANY'S TARIFF AND
APPLICABLE REVENUE REQUIREMENT
ON BEHALF OF THE CITY OF DENTON
CHARGE HOURLY CHARGES TOTAL
~ .ouRs ~ I l
PRINCIPAL
Dan Lawton 20 $125 $2,500
Jack Pous 30 $125 $3,750
SR cONSULTANT
8ara Coleman go $100 $9,00D
TOTAL LABOR 140 '~
REQUIREMENT
CHARGE CHARGE~I TOTAL
Printing $0 10 Per Copy $325 00
Computer QI0 per Hour SS00 00
Postage Estimated $125 00
Phone E.~tlmated $126 00
Air Travel 2 T~ps to Denton ~400 00
Transportation ~/'5 00
Hotel & Meals Estimated $200 O0
TOTAL EXPENSE JJ~,,EJL~Q
GRAND TOTAL ~
PROFESSIONAL SERVICES AGREEMENT FOR
PROFESSIONAL SERVICES REGARDING TXU ELECTRIC AND GAS
CURRENT YEAR AND PREVIOUS YEAR FRANCHISE FEE CALCULATIONS
STATE OF TEXAS §
CO T¥ OFD ON
THIS AGREEMENT is made and entered into as of the ~ day of ~~,
1999, by and between the City of Denton, Texas, a Texas mumclpal corporatlo~, with its
pnnclpal office at 215 East McKmney Street, Denton, Denton County, Texas 76201, hereinafter
called "OWNER" and Diversified Utthty Consultants, Inc, w~th ~ts corporate office at 12113
Roxle Drive, State 110, Austin, Texas 78729, hereinafter called "CONSULTANT," acting
herein, by and through their duly authorized representatives
WITNESSETH, that m 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 here~n in connection with the
ProJect as stated in the sections to follow, with diligence and in accordance w~th the highest
professional standards customarily obtmned for such services in the State of Texas The
professional services set out herein are m connection with the following described project
The ProJect shall include, without hm~tatlon, investigation and analysis of TXU Elecmc
and Gas' ("TXU") current franchise fee calculations under the current franchise with OWNER,
TXU's past franchise fee calculations, and to perform an audit on TXU's franchise with the
OWNER m accordance with Senate Bill 7, along with any other services which would be
necessary to perform such audits and francluse fee calculations
ARTICLE 2
SCOPE OF SERVICES
The CONSULTANT shall perform the following services m a professional manner
A The CONSULTANT shall perform all those servmes as necessary and as described in the
CONSULTANT's letter proposal dated August 19, 1999, with CONSULTANT's cost
proposal, which is attached hereto as Exhibit "A", to rewew the various TXU current and
delinquent franchase fee calculations and TXU audit as set forth ~n Senate Bill 7
B CONSULTANT shall perform all those services set forth in Individual task orders, if any,
wluch shall be attached to tlus Agreement and made a part hereof for all purposes as
separate agreements
C CONSULTANT will meet wtth and submit status reports to the Assistant Ctty Manager
for Fiscal & Munmlpal Services, City Attorney, and thetr staffs, will be avmlable for at
least two City Council meetings, and shall promde a final report lndmatlng its
recommendations as set forth in the scope of work of Exhibit "A"
D If there is any conflict between the terms of this Agreement and the exhibits attached to
tlus Agreement, the terms and conditions of flus Agreement will control over the terms
and conditions of the attached extublts or task orders
ARTICLE 3
ADDITIONAL SERVICES
Adrhtlonal servmes to be performed by the CONSULTANT, ~f authorized by the
OWNER, which are not included in the above-described Bastc Services, are described as
follows
A Appeanng before regulatory agencies or courts as an expert witness tn any litigation,
mcludmg, without hmltatton, testimony m rate proceedangs before the Texas Rmlroad
Commission, the Public Utilities Commlsston, or other state and federal agencies
B Any other adchtlonal services specifically requested by the OWNER not included wtthln
the scope of this Agreement and its exhtblts
ARTICLE 4
PERIOD OF SERVICE
This Agreement shall become effective upon execution of thts Agreement by the
OWNER and the CONSULTANT and upon issue of a notice to proceed by the OWNER, and
shall remain tn force for the period which may reasonably be reqmred for the completion of the
ProJect, including Addatlonal Services, tf any, and any reqmred extensions approved by the
OWNER, provtded however, the Project shall be completed wtthln 120 days of the date of the
notice to proceed, unless an extension of ttme is granted by the OWNER This Agreement may
be sooner terminated m accordance with the provisions hereof T~me is of the essence m 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
Exhtblt "A", acting through its Ctty Manager or his designee
Page 2
ARTICLE 5
COMPENSATION
A COMPENSATION TERMS
1 "Subcontract Expense" is defined as expenses ancurred by the CONSULTANT an
employment of others m outside firms for services
2 "Direct Non-Labor Expense" is defined as that expense for any ass~gmnent
incurred by the CONSULTANT for supplies, transportataon and equipment,
travel, communications, subsistence, and lodging away from home, and similar
incidental expenses an connectaon with that assignment
B BILLING AND PAYMENT For and in consaderatlon of the professional services to be
performed by the CONSULTANT herem, the OWNER agrees to pay, based on the cost
estunate detml at an hourly rate shown in Exhibit "B", July 30, 1999 letter from
CONSULTANT to OWNER and attached manpower and cost reqmrements, a total fee,
including reimbursement for direct non-labor expenses not to exceed $13,500 00
Partml payments to the CONSULTANT wall be made on the basas of detmled monthly
statements rendered to and approved by the OWNER through ats Assastant Caty Manager
for Fiscal & Municipal Services and its City Attorney or has designee, however, under no
c~rcumstanees shall any monthly statement for services exceed the value of the work
performed at the t~me a statement as rendered The OWNER may withhold the final five
percent (5%) of the contract mount until completaon of the Project
Nothing contmned m thru Amcle shall reqmre the OWNER to pay for any work winch as
unsatisfactory, as reasonably determmed by the City Manager or has designee, or which as
not submitted m compliance w~th the terms of thas Agreement The OWNER shall not be
reqmred to make any payments to the CONSULTANT when the CONSULTANT is in
default under th~s Agreement
It ,is specifically understood and agreed that the CONSULTANT shall not be authorized
to undertake any work pursuant to this Agreement which would reqmre addmonal
payments by the OWNER for any charge, expense, or reimbursement above the
maximum not to exceed fee as stated, wathout first having obtained written authonzataon
from the OWNER The CONSULTANT shall not proceed to perform the servaces listed
in Article 3 "Additional Serwces,' wathout obtaining prior written authorization from the
OWNER
C ADDITIONAL SERVICES For addataonal services authorized m writing by the
OWNER in Artmle 3, the CONSULTANT shall be paid based on the Schedule of
Charges at an hourly rate shown m Exhibit "B" Payments for addataonal services shall
be due and payable upon submission by the CONSULTANT, and shall be in accordance
Page 3
w~th subsection B hereof Statements shall not be submitted more frequently than
monthly
D PAYMENT If the OWNER fmls to make payments due the CONSULTANT for
services and expenses w~tlun 60 days after receipt of the CONSULTANT's undisputed
statement thereof, the mounts due the CONSULTANT will be ~ncreased by the rate of
one percent (1%) per month from the smd sixtieth (60th) day, and, m addition, the
CONSULTANT may, after giving seven days' written not,ce to the OWNER, suspend
services under th~s Agreement until the CONSULTANT has been ptud in full all mounts
due for servmes, expenses, and charges, prowded, however, nothmg here~n shall reqmre
the OWNER to pay the late charge of one percent (1%) set forth here~n if the OWNER
reasonably determmes that the work ~s unsatisfactory, in accordance w~th th~s Article 5,
"Compensation"
ARTICLE 6
OBSERVATION AND REVIEW OF THE WORK
The CONSULTANT will exercme reasonable care and due dthgence in dlscovenng 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 furmshed by the CONSULTANT (and CONSULTANT's
subcontractors or subconsultants) pursuant to this Agreement are ~nstmments of servme, and
shall become the property of the OWNER upon the termlnat~on of th~s Agreement The
CONSULTANT ~s ant~tled to retmn cop~es of all such documents The documents prepared and
furmshed by the CONSULTANT are ~ntended only to be apphcable to tlus ProJect, and
OWNER's use of these documents m 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 th~s
Agreement m another project or for other purposes than specffied herein, CONSULTANT ~s
released from any and all habfl~ty relating to their use m that project
.a~ItTICLE 8
INDEPENDENT CONTRACTOR
CONSULTANT shall prowde services to OWNER as an ~ndependent contractor, not as
an employee of the OWNER CONSULTANT shall not have or claim any right arising from
employee status
Page 4
ARTICLE 9
INDEMNITY AGREEMENT
The CONSULTANT shall mdemmfy and save and hold harmless the OWNER and ~ts
officers, agents, and employees from and against any and all habthty, claims, demands, damages,
losses, and expenses, lneludmg, but not hm~ted to court costs and reasonable attorney fees
recurred by the OWNER, and ~nclud~ng, w~thout hm~tat~on, damages for bodily and personal
injury, death and property damage, resulting from the neghgent acts or ommsmns of the
CONSULTANT or ~ts officers, shareholders, agents, or employees ~n the execution, operatmn, or
performance of th~s Agreement
Nothing m this Agreement shall be construed to create a habfl~ty to any person who ~s not
a party to tlus Agreement, and nothing here~n shall waive any of the part~es' defenses, both at
law or eqmty, to any clmm, cause of action, or ht~gat~on filed by anyone not a party to th~s
Agreement, ~ncludmg the defense of governmental ~mmumty, whmh defenses are hereby
expressly reserved
INSURANCE
Dunng the performance of the services under th~s Agreement, CONSULTANT shall
malntmn the following insurance w~th an msurance company hcensed to do bus~ness ~n the State
of Texas by the State Insurance Commission or any successor agency that has a rating w~th Best
Rate Carriers of at least an A- or above
A Comprehensive General Lmbthty Insurance w~th bodily ~njury hm~ts of not less than
$500,000 for each occurrence and not less than $500,000 ~n the aggregate, and w~th
property damage hm~ts of not less than $100,000 for each occurrence and not less than
$100,000 m the aggregate
B Automobile Lmbthty Insurance w~th boddy ~njury hm~ts of not less than $500,000 for
each person and not less than $500,000 for each acmdant, and w~th property damage
hm~ts of not less than $100,000 for each accident
C Worker's Compensation Insurance ~n accordance w~th statutory reqmrements, and
Employers' Lmbthty Insurance w~th hm~ts of not less than $100,000 for each accident
D Professional L~abthty Insurance w~th hunts of not less than $1,000,000 annual aggregate
E The CONSULTANT shall furnish ~nsurance certfficates or insurance pohcles at the
OWNER's request to ewdance such coverages The insurance pohcles shall name the
OWNER as an additional msured on all such pohcles, and shall contain a provision that
such ~nsurance shall not be canceled or modified w~thout 30 days' prior written not,ce to
OWNER and CONSULTANT In such event, the CONSULTANT shall, prior to the
Page 5
effective date of the change or cancellation, serve substitute pohc~es fum~sNng the same
coverage
ARBITRATION AND ALTERNATE DISPUTE RESOLUTION
The parties may agree to settle any d~sputes under this Agreement by submitting the
dmpute to arbltrat~on or other means of alternate d~spute resolution, such as med~ation No
arb~trat~un or altemato d~spute resolution arising out of or relating to this Agreement, ~nvolving
one party's disagreement, may include the other party to the (hsagreement w~thout the other's
approval
ARTICLE 12
TERMINATION OF AGREEMENT
A Notwithstanding any other provision of th~s Agreement, e~ther party may terminate by
giving 30 days' advance written notice to the other party
B This Agreement may be ternunated ~n whole or ~n part ~n the event of e~ther party
substantially fmlmg to fulfill ~ts obhgat~ons under thru Agreement No such termination
will be affected unless the other party ~s g~ven (1) written notice (dehvered by certffied
marl, 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 tenmnatlon
C If the Agreement ~s terminated prior to completion of the servmes to be provided
hereunder, CONSULTANT shall ~mmed~ately cease all servmes and shall render a final
bill for servmes to the OWNER w~thm 30 days after the date of termination The
OWNER shall pay CONSULTANT for all services properly rendered and satisfactorily
performed and for reimbursable expenses to termmatton incurred prior to the date of
termination, m accordance with Article 5 "Compensation" Should the OWNER
subsequently contract with a new consultant for the continuation of servmes on the
ProJect, CONSULTANT shall cooperate ~n providing ~nformation The CONSULTANT
shall turn over all documents prepared or furnished by CONSULTANT pursuant to th~s
Agreement to the OWNER on or before the date of termination, but may mmntam cop~es
of Inch documents for its use
ARTICLE 13
RESPONSIBILITY FOR CLAIMS AND LIABILITIES
Approval by the OWNER shall not conmtute, nor be deemed a release of the
responsibility and habfl~ty 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 respons~blhty by the
Page 6
OWNER for any defect ~n the design or other work prepared by the CONSULTANT, ~ts
employees, subcontractors, agents, and consultants
NOTICES
All notices, commumcat~ons, and reports reqmred or permitted under this Agreement
shall be p0rsonally dehvered or mmled to the respective parties by depositing same m the Umted
States mml to the address shown below, certified mall, return receipt requested, unless otherwise
spemfied hereto Mtuled notices shall be deemed communmated as of three days' mmhng
To CONSULTANT To OWNER
Jack Pous C~ty of Denton
D~verslfied Utility Consultants, Inc Herbert L Prouty, City Attorney
12113 Rox~e Drive, Suite 110 215 East McKanney
Austin, Texas 78729 Denton, Texas 76201
All notices shall be deemed effective upon receipt by the party to whom such not,ce is
given, or w~thm three days' mmllng
ARTICLE 15
ENTIRE AGREEMENT
This Agreement, consmtlng of ten pages and two exhibits, constitutes the complete and
final expression of the agreement of the parhes, and is intended as a complete and exclusive
statement of the terms of their agreements, and supersedes all prior contemporaneous offers,
promises, representations, negotmt~ons, dmcuss~ons, communications, and agreements whmh
may have been made in connection w~th the subject matter hereof
ARTICLE 16
SEVERABILITY
If any proms~on of thxs Agreement ~s found or deemed by a court of competent
junsrhctmn to be ~nvahd or unenforceable, it shall be considered severable from the remmnder of
th~s Agreement and shall not cause the remainder to be mvahd or unenforceable In such event,
the part, es shall reform th~s Agreement to replace such stricken provision w~th a valid and
enforceable prows~on which comes as close as possible to expressing the intention of the stricken
provlslOn~
Page 7
ARTICLE 17
COMPLIANCE WITH LAWS
The CONSULTANT shall comply with all federal, state, and local laws, rules,
regulations, and ordmances apphcable to the work covered hereunder as they may now read or
hereinafter be amended
ARTICLE 18
DISCRIMINATION PROHIBITED
In performing the services reqmred hereunder, the CONSULTANT shall not discriminate
against any person on the basis of race, color, rehglon, sex, national ong~n or ancestry, age, or
physical handmap
ARTICLE 19
PERSONNEL
A The CONSULTANT represents that ~t has or will secure, at its own expense, all
personnel reqmred to perform all the services reqmred under th~s Agreement Such
personnel shall not be employees or officers of, or have any contractual relatmns w~th the
OWNER CONSULTANT shall reform the OWNER of any conflict of ~nterest or
potentml conflmt of ~nterest that may ar~se dunng the term of thru Agreement
B All services required hereunder will be performed by the CONSULTANT or under ~ts
supervm~on All personnel engaged in work shall be quahfied, and shall be authorized
and permitted under state and local laws to perform such servmes
ARTICLE 20
ASSIGNABILITY
The CONSULTANT shall not assign any interest ~n 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 wmver or modification of this Agreement or of any covenant, condition, or hm~tatlon
here~n contained shall be vahd unless m writing and duly executed by the party to be charged
therewith, and no ewdence of any wmver or modfficatmn shall be offered or received ~n ewdence
in any proceeding arising between the part, es hereto out of or affecting th~s Agreement, or the
rights or obhgat~ons of the part, es hereunder, and unless such wmver or modfficatmn ~s in
writing and duly executed, and the parties fiarther agree that the prowmons of flus section will not
be wmved unless as set forth hereto
P~e8
ARTICLE 22
MISCELLANEOUS
A The following exh~bats are attached to and made a part of this Agreement A - Letter of
August 19, 1999, w~th CONSULTANT's cost proposal, B - July 30, 1999 letter from
CONSULTANT to OWNER
B CONSULTANT agrees that OWNER shall, until the explrataon of three years after the
final payment under thas Agreement, have access to and the right to examine any darectly
pertanent books, documents, papers, and records of the CONSULTANT anvolmng
transactions relating to flus Agreement CONSULTANT agrees that OWNER shall have
access dunng normal working hours to all necessary CONSULTANT facilities and shall
be provaded adequate and appropriate working space in order to conduct andats m
comphance with thts section OWNER shall give CONSULTANT reasonable advance
not,ce of antended audits
C Venue of any stat or cause of actaon under th~s Agreement shall he exclusavely an Denton
County, Texas Thas Agreement shall be construed ~n accordance w~th the laws of the
State of Texas
D For the purpose of th~s 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, notlung hereto shall hm~t CONSULTANT l~om using other qualified and
competent members of ats firm to perform the services required herean
E CONSULTANT shall commence, carry on, and complete any and all projects with all
apphcable chspatoh, in a sound, economical, and effiment manner and m accordance w~th
the pmv~s~ons hereof In aceomphshmg the projects, CONSULTANT shall take such
steps as are appropriate to ensure that the work anvolved as properly coordinated w~th
related work being earned on by the OWNER
F The OWNER shall assist the CONSULTANT by placing at the CONSULTANT's
d~sposal all avmlable mformat~on pertinent to the ProJect, ancludmg premous reports, any
other data relative to the Project, and arrangang for the access thereto, and make all
prows~ons for the CONSULTANT to enter in or upon pubhc and private property as
reqmred for the CONSULTANT to perform servmes under this Agreement
G The captions of th~s Agreement are for mformataonal purposes only, and shall not an any
way affect the substantave terms or condataons of this Agreement
IN WITNESS HEREOF, the C~ty of Denton, Texas has caused thas Agreement to be
executed by ~ts duly authorized C~ty Manager, and CONSULTANT has executecl th~s Agreement
throl~gh ars duly anthonzed undersagned officer on thru the c~9t9 tS' day of ~'~7~.~[7-- ,
Page 9
CITY OF DENTON, TEXASJ
~V~ CI~d~L~' ~ MANAGER
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPRO'~D AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
DIVERSIFIED UTILITY CONSULTANTS,
INC
WITNESS
Page 10
EXHIBIT "A"
D U C I DIVERSII IED
CONSULTANTS, INC.
August 19, 1999
Herbert L Prouty
C~ty Attorney
C~ty of Denton
215 East Mc~ey
Denton, Texas 76201 LEGAL DEPT
Dear Mr Prouty
D~versffied Utdl~ Consultants, Inc ("DUCI") appreciates the C~ty of Denton's ("C~ty")
request to have DUCI ~mst ~n the rewew of TXU Gas Company's ("TXU-G") fr~ch~se payments
to the City In addmon, you would also hke DUCI to perfo~ an ~mt~al analyms on TXU-Electnc
fr~ch~se calculatmn as set fo~h ~n Senate Bill 7 ("SB-7")
DUCI ~s a Tex~ Co~orat~on located ~n Austin, Texas, w~th a local as well as ~nternat~onal
chent base DUCI's perso~el have extenmve, c~ent ~d relev~t Texas gas and electric utility rate
regulaUon experience necess~ to rewew the ~ssues ~n both the analys~s of TXU-G and TXU-
Electric fr~ch~se fee calculation
~other major reason DUCI ~s quahfied to perfo~ a thorough ~alyms of TXU Comp~y's
franchise payment ~s o~ recent experience conducting an ~alyms of TXU-G's proposed rate
~ncre~e ~n ~e C~ty As such, DUCI h~ experience wm~ng w~ the C~ty staff ~d working within
the time cons~mnts set by the C~ty ~o~er factor that quahfies DUCI to analyze T~ Comp~y's
fr~chlse fees ~s that we have recently completed m~ ~alyms of fr~chlse fees for several c~t~es ~n
the Rio Grade Valley of South Texas
DUCI ~s proposing to perfom the followang general gmdehnes ~n the ~alyms of TXU-G's
franchise calculation ~d TXU-Electnc audit per SB-7
TXU-17gS CIIRRENT YEAR FRANCHISE FEE CALCULATION
· Remew the Company's actual franchise fee calculation performed
· Rewew Company workpapers, RCT reports, and documentatmn
determ~mng the proper amounts to be included in the calculation
· Review weather normahzahon clause, and apphcable workpapers
Herbert L Prouty
Page 2
August 19, 1999
· Data requests to TXU-G's regarding input in calculation and other data
· Recalculate franchise fee due to the City
· Prepare report to the City of DUCI's findings
TXU-G~S PAST FRANCHISE FEE CALCULATION
· Review Company's past franchise fee paid to the City and components that
are part of the Company's calculation
· Analyze the franchise fee agreement(s)
· Review prior franchise fee reports from the Company
· Calculate past franchise fee due to the City and compare to amounts prod
· Prepare report to the City of DUCI's findings
TXU--ELECTRICAUDIT AS SET FORTH IN SB-7
· Perform an audit ofTXU-Electnc's francbase calculation, as set forth in SB-7
· Similar analysis will be performed as discussed in the TXU-G statements
above
· DUCI will also report to the Ctty its audit findings of TXU~Electnc
These are only meant to provide a general outline of DUCI's analysis DUCI will perform
additional analysis on both TXU-G and TXU-Electnc, as needed Another factor that will affect our
analysis is the cooperation that we receive from the Company's
I hope this has provided a general understanding of the approach DUC1 intends on pursuing
Herbert L Prouty
Page 3
August 19, 1999
If you have any questions, please do not hesitate to contact us We look forward to working w~th
you
S~ncerety,
D~vers~fie~l Utility Consultants, Inc
07/30/1999 10:54 51225722=3 DUCI
EXHIBIT "B"
Harbe~t L Prouty
City Attorney
City of Denton
215 East McKnmey
Denton, Texas 76201
Dear Mr Pwuty
Per your request, I am subnuttm~ to you cost estimates to review Lone Star Gas Company's
("LSGC") franchise fee calculations for the enrrent year, LSGC's franctuse fees paid m the past to
the City of Denton ("City") and a ~eview of Coserv Gas Company's tariffs and requested revenue
reqmremerRs.
The cost estimate for the rcauew of LSOC's current year fzanchmc fee calculation is based on
mmunal assistance v~th LSGC. If the Company cooperates end sends reformation to DUCI mstoad
of requn'ml~ us to t~aval to Denton, the cost may be closer to $4,000.
The cost estimate to review LSGC's past francinse fee reqmres research and some
cooperation from the Company DUCI vail make every effort to verify whether LSC_,C has paid the
proper franchise fee to the City
The final puce proposal relates to DUC~s review of Coserv Gas Company's proposed tariff
par ottr prehulmary review of Cosarv's request, ti appea~s the
and apphe~ble rev~ue requtrement. Tiros m not permitted In
Company has mcluded a forecasted rate base m its revenue requirement
Ducrs oph-n~m, to adopt rates based on future esinnated costs of Cosetw vail create problems with
LSOC LSGC could clann rate are discriminatorY The proposal anhcipates worlang closely vath
Coserv and developmg rates that are fatr and reasonable based on known and measurable costs
We would like to thank you for allowu~ DUCI to submit tins Proposal We ate prepared
to commence work on this lxojeot nnmcdiately upon selection, end would complete the project m
a timely ami efficient manner. Should you have any questions with re/iud to tins proposal or other
matters, please feel flee to contact Dm Lawton at (512)257-2600
Sin ely,
/ Sara Coleman
87/38/1999 18 54 51225722aq DUCI PAGE 83
PRICE PROPOSAl.
MANPOWER AND COST REQUIREMENT8
TO PROVIDE REVIEW OF
LONE STAR GAS COMPAN~S CURRENT YEAR
FRANCHISE FEE CALCULATION
ON BEHALF OF THE CITY OF DENTON
CHARGE HOURLY CHARGES TOTAL
PRINCIPAL
Dan Lawton 24 $126 $3,000
SR CONSULTANT
Sara Coleman 17 $100 $1,700
TOTAL LABOR 41 $4700
EXPI;H~IB REOUIRFMI;;NT
CHARGE CHARGE8 TOTAL
Printing SC) 10 Per Copy $75 00
)Jr Travel 1 Trip to Denton $200 00
PoMage, Phone $25 00
TOTAL EXPENSE ~
GRAND TOTAL ~
87/38/1999 18:54 51225722a3 DUCI ~u= ~-
PRICE PROPOSAL
MANPOWER AND COST REQUIREMENTS
TO PROVIDE REVIEW OF
LONE STAR GAS COMPANY'S
PA~T FRANCHISE FEE CALCULATION
ON BEHALF OF THE CITY OF DENTON
CHARGE HOURLY CHARGES TOTAL
pRINCIPAL
D~n l-~,'ton 40 $125 $5,000
SR CONSULTANT
8at1 Coleman 28 $100 $2,800
TOTAL LABOR
EXRINaE R;;OLIIRI=MENT
CHARGE CHARGES TOTAL
Pd~ng, Copying $O 10 Per (~OPY $125 00
Nr Travel 2 Trips to Denton $400 00
poetage, Phone $176 00
TOTAl. EXPENSE ~
GRAND TOTAL ~
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO ENTER INTO A FIRST
AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH DIVERSIFIED
UTILITY CONSULTANTS, INC TO PERFORM AN AUDIT AND A FRANCHISE REVIEW
OF TXU ELECTRIC AND GAS, AUTHORIZING THE EXPENDITURE OF FUNDS
THEREFOR, AND PROVIDING AN EFFECTIVE DATE
WHEREAS, by Orchnance No 99-279, passed by the City Council on August 24, 1999,
the City Council authorized the City Manager to enter into a Professional Services Agreement
with Diversified Utility Consultants, Inc to perform an audit and a franchise review of TXU
Electric and Gas ("TXU"), and
WHEREAS, due to TXU's fmlure to respond to requests for information completely and
in a timely fasbaon, it is necessary to extend this Professional Services Agreement for an
additional 30 days in order for Diversified Utility Consultants, Inc to complete the audit of these
franchise fee payments, and
WHEREAS, the City Council deems it in the public interest to enter into tins First
Amendment, NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION 1 That the City Manager is hereby authorized to enter into a First
Amendment to that Professional Services Agreement with Diversified Utility Consultants, Inc,
substantially in the form of the First Amendment attached and made a part of this ordinance for
all purposes to extend the term of the audit and ffancbase review of TXU Electric and Gas for an
additional 30 days
SECTION 2 That the City Manager is hereby authorized to make the expenditures and
take the actions set forth in the attached Agreement
SECTION 3 That this ordinance shall become effective immediately upon its passage
and approval
,/~
PASSED AND APPROVED tl~s the //Tl~
-- day of ~tT)~/~'~fl,1999
JACK~
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
FIRST AMENDMENT TO PROFESSIONAL SERVICES
AGREEMENT FOR PROFESSIONAL SERVICES REGARDING TXU
ELECTRIC AND GAS CURRENT YEAR AND PREVIOUS
YEAR FRANCHISE FEE CALCULATIONS
STATE OF TEXAS §
COUNTY OF DENTON §
Tins First Amendment to that certmn Agreement made and entered into as of the 24th day
of August, 1999, by and between the City of Denton, Texas, a Texas mumclpal corporanon, with
~ts pnnmpal office at 215 East McKmney Street, Denton, Denton County, Texas 76201,
hereinafter called "OWNER" and Dlversffied Utthty Consultants, Inc, with ~ts corporate office
at 12113 Roxte Drive, State 110, Austin, Texas 78729, heromalter called "CONSULTANT,"
acting heroin, by and through their duly authorized representatives, heromafter referred to as
"Base Agreement"
WHEREAS, OWNER entered rote the Base Agreement with CONSULTANT to perform
audits of TXU Electric and Gas' ("TXU") current year and previous year francinse fee
calculations, and
WHEREAS, due to the failure of TXU to answer requests for ~nformatton tn a t~mely and
complete manner, there m a need to extend the contract term for an additional 30 days, NOW,
THEREFORE,
WlTNESSETH, that tn consideration of the covenants and agreements here~n contamed,
the parties hereto do mutually agree as follows
SECTION 1 That Amcle 4 "Period of Service" of the Base Agreement m hereby
amended to extend the Base Agreement for an adthtlonal 30 days so that the same shall read as
follows
ARTICLE 4
PERIOD OF SERVICE
Tins Agreement shall become effective upon execution of tins Agreement by the
OWNER and the CONSULTANT and upon issue of a notme to proceed by the OWNER, and
shall remmn m force for the period winch may reasonably be reqmred for the complenon of the
ProJect, including Additional Sermeas, ff any, and any reqmred extanmons approved by the
OWNER, prowded however, the Project shall be completed within 150 days of the date of the
not,ce to proceed, unless an extension of t~me ts granted by the OWNER Tins Agreement may
be sooner terminated tn accordance w~th the prowmons hereof Time ts of the essence m this
Agreement The CONSULTANT shall make all reasonable efforts to complete the servtcas set
forth hereto as expedmously as possthle and to meet the schedule estabhshed by the OWNER m
Exinbtt "A", acting through ~ts Cxty Manager or bas demgnee
SECTION 2 That save and except as amended hereby all the onganal sections,
subsections, paragraphs, sentences, and clauses of the Base Agreement shall remain m full force
and effect
IN WITNESS HEREOF, the Cxty of Denton, Texas has caused flus Agreement to be
executed by gs duly authorized City Manager, and CONSULTANT has executed flus Agreement
through ~ts duly authorized undermgned officer on tbas the ~ ~' day of ~,~
19a~
CITY OF DENTON, TEXAS
'~M~C~L W ~, C~Y MANAOER
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
DIVERSIFIED UTILITY CONSULTANTS,
INC
JP~K POUS, PRINCIPAL
WITNESS