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1999-356AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH DIVERSIFIED UTILITY CONSULTANTS, INC, FOR CONSULTING SERVICES PERTAINING TO THE DEVELOPMENT OF A NEW ELECTRIC SERVICE RATE DESIGN FOR DENTON MUNICIPAL ELECTRIC, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council deems ~t m the public ~nterest to engage Diversified Utility Consultants, Inc, a Corporation ("DUC"), to provide professional consulting services to the City pertmmng to the development of a new electric service rate design for Denton Municipal Electric ("DME") m preparation for the expected transmon of the City into a competitive deregulated electric marketplace, and WHEREAS, the City staff has reported to the City Council that there is a substantial need for the above-described professional consulting services, and that hmlted City staff cannot adequately perform the services and tasks with its own personnel, and WHEREAS, Chapter 2254 of the Texas Government Code, known as the "Professional Services Procurement Act", generally provides that a City may not select a provider of professional services on the bas~s of competitive bids, but must select the prowder on the basis of demonstrated competence, knowledge, and qualifications, and for a fair and reasonable price, and WHEREAS, the C~ty Council has provided ~n the City Budget for the appropnaUon of funds to be used for the purchase of the professional consulting services, as set forth in the Professional Services Agreement, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the Cxty Manager ~s hereby authorized to execute a Professional Services Agreement w~th D~versffied Utility Consultants, Inc, a Corporation, for professional consulting services pertmmng to the development of a new electric service rate design for Denton Mtm~clpal Electric, m substantially the form of the Professional Services Agreement attached hereto and incorporated herewith by reference SECTION II That the award of this Agreement by the City is on the basis of the demonstrated competence, knowledge, and quahfications of DUC and the ability of DUC to perform the services needed by the City for a fmr and reasonable price SECTION III That the expenditure of funds as provided in the attached Professional Services Agreement is hereby authorized SECTION IV That this ordinance shall become effective ~mmedlately upon its passage and approval PASSED AND APPROVED th,s the ,~-~dayof ~/~ ,1999 ATTEST JENNIFERWALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORIVl HERBERT L PROUTY, CITY ATTORNEY S \Our Doeuments\Ord~nances\99\D~versffiodUtfi~ty Consultants PSA DME (rate design) doc STATE OF TEXAS § COUNTY OF DENTON § PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES PERTAINING TO THE DEVELOPMENT OF A NEW ELECTRIC RATE DESIGN FOR DENTON MUNICIPAL ELECTRIC ~THIS AGREEMENT ts made and emered ~nto as of the ~ day of ~ 1999, by and between the Ctty of Demon, Texas, a Texas Mumctpal Corporataon, w~th ~ts pnnc~pal offices at 215 E McKtnney Street, Denton, Texas 76201 (hereafter "OWNER") and Diversified Utdtty Consultants, Inc, Inc, a Texas Corporation, vath ~ts offices m 12113 Rox~e Drive, State 110, Austin, Texas 78729 (hereafter "CONSULTANT"), the part,es acting hereto, by and through thetr duly-anthonzed representatives and officers WITNESSETH, that tn cons~deratton of the covenants and agreements here~n contained, the part,es hereto do mutually AGREE as follows ARTICLE I EMPLOYMENT OF CONSULTANT The OWNER hereby contracts vath CONSULTANT, as an independent contractor, and the CONSULTANT hereby agrees to perform the serwces here~n ~n connection w~th the Project as stated ~n the Artmles to follow, wtth dlhgence and m accordance w~th the professional standards customarily obtmned for such servtces ~n the State of Texas The professmnal services set forth here~n are tn connectton w~th the following described project (the "ProJect") Professtonal consulting serwces pertmmng to the development of Phase II of a new electric service rate design analysts and tmbundhng study for Denton Mumctpal Electric ARTICLE II SCOPE OF SERVICES The CONSULTANT shall perform the following bas~c servmes m a professional manner A To perform those servmes as set forth and resolved in the followmg three (3) letters I OWNER'S Request for Proposal appended to the letter dated July 6, 1999 from Cheryl Davenport, CPA, ("Davenport") a Utd~ty Rate Admamstrator of OWNER, to Dan Lawton, a Pnnmpal of CONSULTANT (the "RFP"), winch consists of three (3) pages, a copy of winch RFP is attached hereto and incorporated herewith by reference as Attachmem"A" 2 CONSULTANT'S "Proposal to Rewew C~ty of Denton's Unbundhng and Rate Destgn," appended to the letter dated August 11, 1999 from CONSULTANT to Davenport (the "Proposal"), winch consists of 21 pages, a copy of winch Proposal is attached hereto and incorporated herewith by reference as Attachment"B" 3 CONSULTANT'S "Amended Proposal to Review and Perform City of Denton's Unbundhng Study and Rate Design Analysis" made in the letter dated August 18, 1999 from CONSULTANT to Davenport (the "Amended Proposal"), wbach consists of three (3) pages, a copy of wluch Amended Proposal is attached hereto and incorporated by reference as Attachment"C" B If there is any conflict between the terms of this Agreement and the three (3) Attachments appended to this Agreement, the terms and conditions of tins Agreement shall control over the terms and conditions of the Attachments ARTICLE III ADDITIONAL SERVICES Any additional services to be performed by the CONSULTANT, if authorized by the OWNER, which are not included as basic services in the above-described Scope of Services, set forth as provided by Article II above, shall be later agreed-upon by OWNER and CONSULTANT, who shall determine, in writing, the scope of such additional services, the amount of compensation for such addatlonal services, and other essential terms pertaining to the provision of such additional services by the CONSULTANT ARTICLE IV PERIOD OF SERVICE This Agreement shall become effectave upon execution by the OWNER and the CONSULTANT and upon the issuance of a notice to proceed by the OWNER, and shall remmn in force for the period which may reasonably be required for the completion of the Project, including Additional Services, if any, and any required extensions approved by the OWNER This Agreement may be sooner terminated in accordance wath the provisions hereof Time is of the essence in this Agreement CONSULTANT shall make all reasonable efforts to complete the services set forth herein as expedltlously as possible and to meet the schedule reasonably established by the OWNER, acting through its Director of Electric Utilities or her designee ARTICLE V COMPENSATION A COMPENSATION TERMS 1 "Subcontract Expense" is defined as those expenses, if any, incurred by CONSULTANT in the employment of others in outside firms, for services an the area of professional consulting, or related services Any subcontract or subconsultant billing reasonably incurred by the CONSULTANT in connection vath the ProJect shall be invoiced to OWNER at the actual cost 2 "Direct Non-Labor Expense" is defined as that expense, based upon actual cost, for any out-of-pocket expense reasonably incurred by the CONSULTANT in the performance of flus Agreement for long d~stance telephone charges, telecopy charges, messenger servlcas, pnntmg and reproduction expenses, out-of-pocket expenses for purchased computer ttme, prudently recurred travel expenses related to the work on the Project, and sxrmlar incidental expenses recurred ~n connectmn wtth the Project B BILLINO AND PAYMENT For and m cons~deratton of the professmnal services to be performed by the CONSULTANT hereto, the OWNER agrees to pay CONSULTANT, based upon the satisfactory completton of the basra services tasks set forth ~n the Scope of Serwces as shown ~n Article II above, as follows 1 CONSULTANT shall perform its work on thxs ProJect an hourly fee bas~s, plus reimbursement for all reasonably recurred out-of-pocket expenses, billed monthly CONSULTANT shall bill from time sheets, m munmum 'A hour increments, at the rates set forth m CONSULTANT'S"Manpower and Cost Reqmrements to Prowde Rewew of C~ty of Denton's Unbundhng and Rate Design on Behalf of the Cxty of Denton" schedules respecttng compensatton and expense price structure, whmh are ldenttfied as Part III of the Proposal, and as amended as Part III of the Amended Proposal, attached hereto as Attachment"B" and Attachment "C", respecttvely, which have been ~ncorporated herewith by reference The OWNER agrees to pay to CONSULTANT for ~ts professional services performed, and its out-of pocket expenses ~ncurred m the ProJect, a total amount not to exceed $ 65,000 00 2 Partxal payments to the CONSULTANT will be made monthly based on the percent of actual completion of the basic servmes, rendered to and approved by the OWNER through its D~rector of Electric Uttht~es or her designee However. under no circumstances shall any monthly statement for servmes exceed the value of the work performed at the ttme a statement ~s rendered The OWNER may w~thhold the final ten (10%) percent of the above not-to-exceed mount unttl sattsfactory completion of the Project by the CONSULTANT 3 Nothing contmned ~n this Article shall reqmre the OWNER to pay for any work which xs unsatisfactory as reasonably determined by the D~rector of Electric Utdxt~es or her desxgnee, or which Is not submitted by CONSULTANT to the OWNER ~n comphance wxth the terms of th~s Agreement The OWNER shall not be required to make any payments to the CONSULTANT at any t~me when the CONSULTANT is ~n default under th~s Agreement 4 It ~s specffically understood and agreed that the CONSULTANT shall not be authorized to undertake any work pursuant to flus Agreement which would reqmre addxttonal payments by the OWNER for any charge, expense or reimbursement above the not-to-exceed amount as stated heremabove, vathout first having obtained the prior written authonzatton from the OWNER CONSULTANT shall not proceed to perform any services to be later provided for under Artmle III "Add~ttonal Services" wtthout first obtmmng prior written authorization from the OWNER C ADDITIONAL SERVICES For add~taonal services authorized ~n writtng by the OWNER ~n Article III haremabove, CONSULTANT shall be prod based on a to-be-agreed-upon Schedule of Charges Payments for additional services shall be due and payable upon s,o~,s, con~.~euc, R.~,~.. ~.~ D~^~ Page 3 of 10 submission by the CONSULTANT, and shall be in accordance with Article V B heremabove Statements for basic services and any additional services shall be submitted to OWNER no more frequently than once monthly D PAYMENT If the OWNER fools to make payments due the CONSULTANT for services and expenses within sixty (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 and after the said sixtieth (60th) day, and in addition, thereafter, the CONSULTANT may, after giving ten (10) days written notice to the OWNER, suspend services under this Agreement until the CONSULTANT has been prod in full for all amounts then due and owing, and not disputed by OWNER, for services, expenses and charges Provided, however, nothing herein shall require the OWNER to pay the late charge of one percent (1%) per month as set forth herein, if the OWNER reasonably determines that the CONSULTANT's work is unsatisfactory, in accordance with Article V B ofthis Agreement, and OWNER has notffied CONSULTANT of that fact In writing ARTICLE VI 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 of its subcontractorsor subconsultants ARTICLE VII 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 the Agreement in another project or for other purposes than specified heroin any of the information or materials developed pursuant to this agreement, CONSULTANT is released from any and all liability relating to their use in that project ARTICLE VIII 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 from employee status ARTICLE IX INDEMNITY AGREEMENT The CONSULTANT shall indemnify and save and hold harmless the OWNER and its officials, officers, agents, attorneys and employees from and against any and all liability, claims, s~.~.~,,,co~c~.,.~ ~. D,~^~ Page 4 of 10 demands, damages, losses and expenses, including but not hmlted to court costs and reasonable attorney fees incurred by the OWNER, and including without limitation damages for bodily and personal l~ury, death, or property damage, resulting from the negligent acts or omissions of the CONSULTANT or ItS officers, shareholders, agents, attorneys and 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 wmve any of the party's defenses, both at law or equity, to any claim, cause of action or litigation filed by anyone not a party to this Agreement, including the defense of governmental immunity, which defenses are hereby expressly reserved ARTICLE X INSURANCE During the performance of the Services under th~s Agreement, CONSULTANT shall maintain the following insurance with an msurance company hcensed to do business m the State of Texas by the State Insurance Board or any successor agency, that has a rating with A M Best Rate Carriers of at least an "A-" or above A Comprehensive General Liability Insurance w~th bodily injury hm~ts of not less than $500,000 for each occurrence and not less than $500,000 m the aggregate, and with property damage limits of not less than $100,000 for each occurrence and not less than $100,000 in the aggregate B Automobile Liability Insurance with bodily injury hmlts of not less than $500,000 for each person and not less than $500,000 for each accident and with property damage hmlts for not less than $100,000 for each accident C Worker's Compensation Insurance in accordance w~th statutory requirements and Employer's Llabihty Insurance with limits of not less than $100,000 for each accident D Professional Liability Insurance w~th hm~ts of not less than $1,000,000 annual aggregate E CONSULTANT shall furnish insurance certificates or insurance policies at the OWNER's request to evidence such coverages The insurance pohc~es shall name the OWNER as an additional insured on all such policies to the extent that ~s legally possible, and shall contain a provision that such insurance shall not be cancelled or modified without thirty (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 of coverage, dehver cop~es of any such substitute pohelas, furnishing at least the same pohcy hmlts and coverage, to OWNER ARTICLE XI 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 arbitrat~on or alternate dispute resolution arising out of or relating to, this Agreement revolving one party's d~sagreement may melude the other party to the d~sagreement w~thout the other's approval s~,~,c~Duc~.~ ~.~ D~^~¢ Page 5 of 10 ARTICLE XII TERMINATION OF AGREEMENT A Notwithstanding any other provision of flus Agreement, either party may terminate this Agreement by providing thirty- (30) days advance written notice to the other party B Tlus Agreement may be terminated in whole or In part in the event of either party substantially failing to fulfill its obligations under this Agreement No such termination will be effected unless the other party is given (1) written notice (delivered by certified mall, return receipt requested) of intent to terminate and setting forth the reasons specifying the nonperformance or other reason(s), and not less than thirty (30) calendar days to cure the failure, and (2) an opportunity for consultation with the terminating party prior to termination C If the Agreement is terminated prior to completion of the services to be provided hereunder, CONSULTANT shall immediately cease all services upon receipt of the written notice of termination from OWNER, and shall render a final bill for services to the OWNER within twenty (20) days after the date of termination The OWNER shall pay CONSULTANT for all services properly rendered and satisfactorily performed, and for reimbursable expenses prior to notice of termination being received by CONSULTANT, in accordance with Article V of this Agreement Should the OWNER subsequently contract with a new consultant for the continuation of services on the ProJect, CONSULTANT shall cooperate in providing information to the OWNER and to the new consultant If applicable, OWNER shall allow CONSULTANT a reasonable time to transition and to turn over the ProJect to a new consultant CONSULTANT shall mm over all documents prepared or furnished by CONSULTANT pursuant to this Agreement to the OWNER on or before the date of termination, but may mmntmn copies of such documents for its files ARTICLE XIII RESPONSIBILITY FOR CLAIMS AND LIABILITIES Approval of the work by the OWNER shall not consutute nor be deemed a release of the responsibility and hablhty of the CONSULTANT, its officers, employees, agents, subcontractors, and subconsultants for the accuracy and competency of their designs or other work performed pursuant to this Agreement, nor shall such approval by the OWNER be deemed as an assumption of such responsibility by the OWNER for any defect an the design or other work prepared by the CONSULTANT, ItS principals, officers, employees, agents, subcontractors, and subconsultants ARTICLE XIV NOTICES All notices, communications, and reports required or permitted under this Agreement shall be personally delivered to, or telecopled to, or mailed to the respective parties by depositing same in the Umted ~States mail at the addresses shown below, postage prepaid, certified mall, return receipt requested, unless otherwise specified herein To CONSULTANT To OWNER Diversified Utility Consultants, Inc City of Denton, Texas Dan Lawton, Pnnclpal Sharon Mays, Director, DME 12113 Roxle Drive, Suite 110 901 -A Texas Street Austin, Texas 78729 Denton, Texas 76201 Fax (512) 257-2243 Fax (940) 349-7334 All notices under this Agreement shall be effective upon their actual receipt by the party to whom such notice is given, or three (3) days after mailing of the notice, whichever event shall first OC¢llr ARTICLE XV ENTIRE AGREEMENT This Agreement consisting of ten (10) pages and three (3) attachments 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, understandings, and agreements which may have been made in connection with the subject matter of this Agreement ARTICLE XVI SEVERABILITY If any provision of this Agreement is found or deemed by a court of competentjunsdmtion 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 the extent reasonably possible, to replace such stricken provision with a valid and enfomeable provision which comes as close as possible to expressing the original intentions of the parties respecting any such stricken provision ARTICLE XVII COMPLIANCE WITH LAWS The CONSULTANT shall comply with all federal, state, local laws, rules, regulations, and ordinances applicable to the work performed by CONSULTANT hereunder, as they may now read or as they may hereafter be amended ARTICLE XVIII DISCRIMINATION PROHIBITED In performing the services required hereunder, the CONSULTANT shall not discriminate agmnst any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap ARTICLE XIX PERSONNEL A CONSULTANT represents that at has or will secure at its own expense all personnel required to perform all the services reqmred under tins Agreement Such personnel shall not be employees or officers of, nor have any contractual relations with the OWNER CONSULTANT shall immediately inform the OWNER in writing of any conflict of interest or potential conflict of interest that CONSULTANT may discover, or which may arise dunng the term of this Agreement B OWNER requires that CONSULTANT carefully safeguard all documents, data, and information provided by OWNER to CONSULTANT incident to this engagement CONSULTANT recogmzes that such documents, data, and information involve sensitive, competative issues, in some cases confidential information, an some cases proprietary information, and the disclosure of such information by CONSULTANT to any third party, without the express written consent of OWNER, is expressly prohibited by OWNER, and would hkely cause slgnfficant economic loss and detriment to OWNER Any such disclosure of information by CONSULTANT shall constitute a material default of this Agreement CONSULTANT represents to OWNER that it will safeguard OWNER's mformat~on and will, upon OWNER'S request, provide OWNER with CONSULTANT'S pohcles regarding its procedures for identifying conflicts of interest, and its procedures and safeguards which are in place which would apply to CONSULTANT'S treatment and handling of OWNER'S documents, data, and information during this engagement C All services required hereunder will be performed by CONSULTANT or under its direct supervision All personnel engaged in performing the work provided for in this Agreement, shall he qualified, and shall be authorized and permitted under state and local laws to perform such services ARTICLE XX 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) wathout the prior written consent of the OWNER CONSULTANT shall promptly noUfy OWNER of any change of its name as well as of any significant change in ItS corporate structure or In ItS operations ARTICLE XXI MODIFICATION No wmver or modification of this Agreement or of any covenant, condition, limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith No evidence of any waiver or modification shall be offered or received in evidence In any proceeding arising between the parties hereto out of or affecting this Agreement, or the rights or obligations of the parties hereunder, unless such waiver or modfficatlon is in writing, duly executed The parties further agree that the provisions of this Article will not be waived unless as herein set forth S~r~o~,n~,s~Co~,c,~m~*D~,~ ~'~ ~^~' Page 8 of 10 MISCELLANEOUS A CONSULTANT agrees that OWNER shall, unttl the exp~ratlun of three (3) years after the final payment made by OWNER under this Agreement, have access to and the right to examine any d~reetly pertinent books, documents, papers and records of the CONSULTANT mvolwng transactmns relating to th~s Agreement CONSULTANT agrees that OWNER shall have access during normal working hours to all necessary CONSULTANT factlmes and shalllbe prowded adequate and appropriate working space m order to conduct exammatmns or audits m comphance w~th tbas Article OWNER shall g~ve CONSULTANT reasonable advance nottee of all intended examlnatmns or auahts B Venue of any stat or cause of actmn under th~s Agreement shall he exclusively m Denton County, Texas Thts Agreement shall be governed by and construed m accordance wtth the laws of the State of Texas C For purposes of tbas Agreement, the parttes agree that Dan Lawton, Pnnc~pal of CONSULTANT ("Lawton") shall serve as the Project Manager of CONSULTANT, respecting thts engagement Thts Agreement has been entered tnto wtth the understanding that Lawton shall serve as the CONSULTANT's Project Manager and the key person serving the OWNER on thts Project Any proposed changes requested by CONSULTANT, respectmg Lawton serving as the key person on the Project, shall be subject to the approval of the OWNER, whmh approval the OWNER shall not unreasonably w~thhold Nothing hereto shall~hm~t CONSULTANT from using other quahfied and competent members of tts firm to perform the other servmes reqmred herem, under tts supervts~on or control D CONSULTANT shall commence, carry on, and complete ~ts work on the Project w~th all apphcable dtspatch, and m a sound, econommal, efficient manner, and m accordance w~th the provlsmns hereof In accomphsbangthe Project, CONSULTANT shall take such steps as are appropriate to ensure that the work mvolved ts properly coordinated wtth related work being earned on by the OWNER E The OWNER shall assist the CONSULTANT by placmg at the CONSULTANT's dtsposal all avatlable mformatton pertinent to the ProJect, mclud~ng prevtous reports, any other data relative to the ProJect and arranging for the access to, and make all prows~ons for the CONSULTANT to enter tn or upon, pubhc and private property as reqmred for the CONSULTANT to perform professional servmes under th~s Agreement OWNER and CONSULTANT agree that CONSULTANT ~s entaled to rely upon tnformaUon furmshed to tt by OWNER wtthout the need for further mqutry or lnvesttgatlomnto such ~nformatton F The capUons of thts Agreement are for mformat~onalpurposes only and shall not ~n any way affect the substantive terms or condmons ofthts Agreement 1N WITNESS WHEREOF, the C~ty of Denton, Texas has executed thts Agreement tn four (4) original counterparts, by and through ~ts duly-authorized C~ty Manager, and CONSULTANT has executed this Agreement by and through tts duly-authorized understgned officer and Pnnctpal, on th~s the ,~TP~ dayof t~7~/~/ ,1999 "CITY" CITY OF DENTON, TEXAS ATTEST By '~li~el W~ez. City. er JENNIFER WALTERS. CITY SECRETARY APPROVED AS TO LEGAL FO~ HE~ERT L PROUTY, CITY A~O~EY "CONSULTANT" DIVERSIFIED UTILITY CONSULTANTS. INC A Iex~atT~ By /~ /~ ~~ ~a~on, Pnnc~pfl A~EST By S~ ~ July 6 1999 Dan Lawton D~verslfied Utility Consultants. 12113 ROXm Drive Austin. TX 78729 Dear Dan. I have attached a scope of work for the rate design and a copy of the electric system unbundhng study prepared by R W Beck We would hke to get th~s project moving very quickly because ~t was budgeted in the current fiscal year Therefore we need to encumber the funds before September 30 1999 Please return the unbundhng study w~th your proposal ! look forward to hearing from you Stnccrely, Cheil Davenport, CPA Utility Rate Administrator (90,0) 349-8466 davenport~cltyo fdenton corn REQUEST FOR PROPOSAL CITY OF DENTON DENTON, TEXAS The scope of work provides services to the City ot Denton tn two separate tasks · Task A - Unbundhng and Rate Design Services · Task B - Presentauon, Education and Public Process Serv;ces to be provided to the City Council and Pubhc Utthttes Board lask A and Task B services wtH be intertwined during the course of the study in order to keep the Board and C~ty Council current with study results Task A should develop rates that would provide a smooth transition to retail competmon Among the issues to be considered in developing rates are the sale of Denton s generaUon Senate Bill 7 and results of the PUC distribution tariffs workshop As Denton moves towards adoption of proposed rates developed in Task A the City will reqmre presentation, education, facilitation, or other services to help decision-makers evaluate the impact of proposed rates The education proces~ will be ongoing throughout the project and involve the Public Utilities Board and C~ty Council Each meeting will be tutolia[ and conducted tn a format to encourage questions and open dialogue Concepts as developed in thc course of Task A will be presented'and discussed as it apphes to Denton s s~tuation Proposals should price each task separately Task & should provide separate prices for each item hsted Task B should provide a price per meeting TASK A UNBUNDLING AND RATE DESIGN SERVICES ~ DEVELOPMENT OF TEST YEAR P~EVENUE REQUIREMENT 2 MARGINAL COST ANALYSTS AND PRODUCTION COST MODELING 3 UPDATERW BECK UNBUNDLING AND REVIEW RESULTS WITH CITY 4 DEVELOPMENT OF DAT,~BASE FOR RATE DESIGN AND PRICING ANALYSIS 5 RATE DESIGN TASK 13 ~,~ PRIESENTATION, EDUCATION, AND PUBLIC PROCESS SERVICES ~,Rat¢ Desil~nJ01 for traditional cost ot service allocation including examples of rat~s ,n use today t~y ~h or,he following · City of Denton · A Texas [OU · ^ company currently operating m a deregulated environment An additional one-day meeting with utihty staff as described in Task A 4 is included under the cost estimate for this meeting ]~o MEETING Pate Design for an Industry preparing for deregulation including new types of rates that would be necessary Examples should include rates specifically for Denton 3r° MEETING Ne~ Rate Design 'I heory for a Competmve Market including marginal cost and pricing Again specific examples for Denton should be included m the presentation with an emphasis on marginal costing and what ~t means 4TM MEETING Porttoho of tools needed in a deregulated market ~ncludmg the kind ot tool,~ available and the ones that woutd most benefil Denton STII MEETING Presentation of rate design for Denton 6~' MEETING Open meeting to revt¢,~ topics previously presented or d:~cus.-, ~lev~ top:c CONSULTAIW~P$. INC August ! 1, 1999 Cheryl Davenport, C P A Utility Rate Administrator 901-A Texas Street Denton, Texas 76201 RE Pro p os. aLt o .Re,.v.t cw__Cjl,~ .o. LD en ton;s, jJ. nbundl~ Ra~g~Des~gn Dear Ms Davenport Diversified Utihty Consultants, Ine ("DUCI') Is pleased to submit this proposal to the C~ty of Denton ("City") to analyze the unbundhng and rate design ~ssues DUCI Is a Texas Corporation located m Austin, Texas, with an intemat~onal client base The principals of DUCI, Messrs Pous and Lawton, have over forty (40) years of utility rate and regulation experience In particular, Messrs Pous and Law, on have testified and/or made formal presentatmns before federal, state, municipal, and provincial regulatory bodies, REA Cooperative boards and U S £nvlronmenta[ Protection Agency revtew boards on all aspects of unhty cost of service, ratemakmg, and rate design DUCI is well quahfled to perform the various services necessary to complete a thorough analysis of the C~ty's unbundhng and rate design issues DUCI's personnel have the extensive, current and relevant utility rate regulatlon experience necessary to re'~lew the accounting, engineering and economic ~ssues reflected m the Cltys request In add~uon, Messrs Pous and Lawton have been revolved m more than 200 different utility rate regulatmn proceedings and, moreover, have been project leader, negotiator and/or expert witness for the vast majority of such engagements As shown on the resumes of Mr Lawton and Mr Pous they are very famfimr with these types of issues As DUCI has been involved in numerous s~mfiar past reviews, DUCI has an excellent understanding of the numerous underlying methods, procedures and theories that most likely will be needed to perform the necessary studies DUCI's prior experience is set forth tn Part I of this proposal Based in part on thts pr]or experience, DUCI has set forth m Part II of this proposal ~ts understanding o£the scope of work necessary for this ease DUCI has further enumerated m Part II a detailed plan of action to complete the necessary tasks associated with a comprehensive rate review in a timely and cost efficient Ba~ort our understanding of the Company's pnor practices, DUCI has set forth tn Part III anestlmate~/pnce~of$16,625 to complete Task A m the proposal This.price mcludesall;out-of- pocket exp~o,~s, but does not include tho charge~ associated with any services or expenses that have or will be defined as additional services Also included In Part Ill is a breakout to complete Task B included m the proposal DUCI ha~ set forth an estimated total cost orS10,000 to prepare for and attend thc 8 meetings It Is our .intent and desire to provide thc City with the baghcst quahty analysc~ and work product at the most economical cost DUCI is prepared to modify the scope ofserv~ce and corresponding costs in order to meet any appropnate changes proposed by the C~ty As can bc seen from the resumes in Part 1 of this proposal, the personnel who will be avmlable to the C~ty for the analyse,s, discussions and educational meetings have substantial experience In the areas of cost ofservlc~ for electric, gas, water, and other types of utilities These staffmembers also have expenencc tn rate design analyses, cost allocations, corporatc auditing, as well as substantial expenencc with regard to review of revenue requirement issues DUCI personnel have testified before venous regulatory comm~ssions and arc very well experienced In working with electric utilities We would like to thank you for allowing DUCI to submit this Proposal We are prepared to commence work on this project immediately upon selection, and would complete the project in a timely and efficient manner Should you have any questions with regard to this proposal or other matters, please feel free to contact Dan Lawton at (:~ 12)257-2600 Sincerely, , Diversified Utfltty Consultants, Inc Enclosure '~,~}LE OF CONTENTS PART I - QUALIFICATIONS General Descnpnon Prior Experience In&v~dual Expenence Personnel Ref~'ence L~st PART II - WORK PLAN Project Summary Tasks Add~tmnal Services PART III - PRICE PROPOSAL General Manpower Materials, Supphes and Other Itemtzed D~rect Costs PART I QUALIFICATIONS Cent~l Power & Light Co (~) Noahwestem Utlhne~ Lmuted (2) null S~e UttlR~es (7) Per~enales El~mc Coo~rattve Mid Syste~,~ergy ~ourccs, Inc Pubhc Sew~ce Co.any of Oklahoma Hawaiian Blanc Company Sou~west Oas ~n~ ~s Albe~ ~c Pubhc S~tce l~a CtW ofNo~ Lt.lc Rock Elccmc Sou~ Caml~ Elccmc ~ G~ (3) Um~ I~gn~on D~s~ct Nova ~ Tr~s~sston Lm~d ~o~hwest Power Co~ratwn ~onton Power (2) El Pun Elcc~c Co (3) Sou~cm Umon Gas Company (7) West Texas U~hues (2) Engeras Company (4) Southwcsmm Pubhc Sew,ce Co (4) Indiana G~ Company Lower Colorado R,ver Authon~ (2) W~star Gas Trnnsmtss~on Co Louisiana Power ~ Light Co R~o Grande Gas Company Texas-N~w Mexico Power Co (3) Entex ~s Company (2) Tcx~ Utllmes Elec~tc Co (Z) Lone S~r Gas Company (5) Southern Gahfo~a Edt~n Elecmc United Cities Oas Company Flon~ Power ~ Light Co ' C~n~a Gas Limited Deve~ Canal System (2) C~ of Austin (5) Marne Ya~ Atomic Power Co (2) Indianapolis Water Company Carol~ Power & LngM Co CI~ of Round Rock Texas Water System Ste~ Pacific Power Co (4) Sccmc Oaks Water Supply Co Montana Power Company (3) United Imgahon Dish,ct Nevada Power Company (2) Hidalgo Coun~ I~igat~on Dtamct I~dtana Michigan Power Company Canadian Weste~ Na~ral Gas Company Albe~ Po~ ~m~d (3) Southern Uttht~ea Company Tr~Alta U~httes (3) El Paso ~un~ WCID-Wes~ay WCtD-~20 2 PART I QUALIFICATIONS PART I Q~ } ~ ~ IFICATION$ ~ DE$C RIP_I I1 ~.1~ DUCl ~ lll~.orporated in the S~e o~ Tex~ and prowd~s mto~t~onsl chant b~ DUCI w~ fotm~ on November 26. 1986, by ~e ~o pnnc~pal~ et the fi~, ~ la~b Pouz ~d Mr D~oI ~ La.on Both ptm~pal~ o~lh~ fi~ have extensive utility regulato~ b~kgo~ds, having work~ for a pubhc ~c~c~ co~sston ~ld an el~ttic utthtv company. ~ w~ll as an mtemattonfl utility comultmg fi~ r~pr~entmg th~ pubhc (non-mwstot ownS) utility sector PUt I'~ chent~ ore predominantly 8ove~ental ~nt~tt~s Slnc~ it's m~vpt~Otl, DUCI has oxpmd~ 1~ operation The cu~nt ~tztt hz~ obtained ~onpt thcm 7 under~aduat~ m~d g~aduat~ d~grees m engmeenng accounting, econom,c% busings ~d law ~ ~ h~ ~ oxt~nstw m~;m;omputet ~y~t;m to assist n In t~; perfo~ce of t~ks ~d eo~atlOn wgh oh~nts ~ n~oss~ to ;ompl~t~ ~y ~ugag*m~t~t wh;r~ such capaBllltt$~ ar~ r~qtured Thc relev~t come, at* ~p~t~;tt~; o~DUCI 1~ analyzing a uttlltV Dunng th~ l~t twelve (12) y~s DUCI has b~e. d.;ctlv revolved m ~he following rote cage~ or rate-r~lamd mv~otigatton~ (th~ figure ~ tthm th~ '( )' mdlcat;s d~ff;~m pAKT [ QUALIFICATIONS The professional pcrsonnel assigned to this pwject are as follows Dan Lawton Jack Pous Sara Coleman Ruth Runyon Wenz¢l The resumes of these individuals are provided at the end of this sectmn In addmon to the resumes, a hsttng of prior cases ~n which testimony has been presented is provided The prtmary work assignments for each individual are as follows Dan Lawton, a pnnctpal m DUCI, wRh an undergraduate and graduate degree m economics and a law degree, will be responsible for d~rectmg analyses of the unbundhng and rate design .Tack Pous, a pnnc~pal m DUC[, with an undergraduate degree tn engineering and a masters m management, wdl be responsible for dtrecting analyses ofengmeenng and accounting ~ssues Mr Pous will conduct the workshops discussed m Task B of your proposal to the C~ty Councd and Pubhc Utthtles Board on the development of the study, sale of generating units, Senate BAll 7 and the outcomes of workshops held by the PUCT regardmg d~stnbut~on tariffs Sara Coleman and Ruth Runyon Wenzel, Certified Pubhc Accountants wtth undergraduate degrees tn business admmtstratton, wall be responsible for analyzing accounting ~ssues t Mom important than the overall number of cases m which Messrs Pous ~d Lawton have b~ ~gag~ is ~ ~e ~d level of involvement The roles ~d duties of e~h of the proj~t 1~ ~n ~s proposal have been ~ proj~t leader, at.al ncgot~ato~ an&or as expe~ w~tnesses m ~e vast majonW or.ese c~es, ~d exclustvely m thee roles and positrons ~n all c~es under.eh m the p~t ~etve (12) years Most of these c~es revolved the remew ~d analysts of uttht~es' cost of semee Issues, depr~tatton studies, cost of capital, and rate de~ ~ssues We beheve thru the above noted mfomatwn details DUCI's quahficanons to analyze and ~s~st the Ctty ofD~nton mtts Unbundhng ~d Rate Des~ Se~m~ Fu~her confimatmn of DUCI's quahfieat~ons c~ be obtained ~om a review of the following professional resumes and testimony hatmgs of the key md~wduals ass~ to thts project, as well ~ by contacting the references m~luded m th~s s,ctmn of ~e proposal PART I QUALIFICATIONS The professional personnel assigned to this project are as follows Dan Lawton Jack Pous Sara Coleman Ruth Runyon Wenzei The resumes of these individuals are provided at the end of this section In addition to the resumes, a listing of prior cases m which testimony has been presented is provided The primary work assignments for each mdiwduai are as follows Dan Lawton. a pnnclpal m DUCI, with an undergraduate and graduate degree m economics and a law degree, will be responsible for d~rectmg analyses of the unbundhng and rate design Jack Pous, a pnnclpa[ In DUCI, with an undergraduaIe degree ~n cngmecnng and a mas~ers m management, wdl be responsible for dlrecnng analyses ofengm~nng and accounting ~ssucs Mr Pous will conduct the workshops discussed In Task B of your proposal to the City Council and Public Utdities Board on the development of the study, sale of generating umts. Senate Bill 7 and the outcomes of workshops held by the PUCT regarding distnbuuon tmaffs Sara C~leman and Ruth Runyon Wenzel, Certified Public Accountants with undergraduate degrees in business administration, will be responsible for analyzing accounting issues PART 1 QUALIFICATIONS hlall~lost all cases listed above, expert tasttmony was filed In tho rate proceeding b~fore a state, provlrt~:tal, or Federal regulatory agency DUCI and/or its personnel have relied upon their specific and general knowledge of the utihty operation involved, including gas distribution systems The key personnel Involved ii1 the above cases are those assigned to this project The two project leaders, Messrs Pous and Lawton, have analyzed well tn excess of 200 different rate fihngs of utthty compames wltlun the past 12 years In addmon, the number of mumc~pal, cooperative and/or state agency rate filings either developed and/or reviewed, substantially mcres~es the number of rate.related engagements in which Messrs Pous and Lawton have participated More unportant than the overall number of cases in which Messrs Pous and Lawton have been engaged ts the type and level of involvement The roles and duties of each of the project leaders {n this proposal have been as project leader, actual negotiators and/or as expert witnesses In the vast majority of these cases, and exclusively in these roles and positions in all cases undertaken in the past twelve (12) years Most of these cases involved the review and analysis of utilities' cost of service issues, depreciation studies, cost of capital, and rate design issues We beheve that the above noted information details DUCI's qualifications to analyze and assist thc City of Denton in its Unbundhng and Rate Design Services Further confirmation of DUCI's qualifications can be obtained from a review of the following professional resumes and testimony listings of the key individuals assigned to this project, as well as by contactmg the references included ill this section of the proposal 3 PART I I ~l QUALIFICATIONS The following hst of references Is comprised oflfidlvlduals thoroughly familiar with DUCts pro fessiomil quahficatlons and capabflRles Each of these ind,viduals can aRest to our abdltY to meet taght deadlines wtule still provtdmg a suponor work product Mr Metal Nunn Mr Norman Gordon Ctty Attorney Diamond Rash City of Amanllo 300 E Mare Street P O Box 1971 7th Floor Amanllo, Texas 79186 E1 Paso, Texas 79901 (806)378-3000 (915)533-2277 Mr Harry Wright Mr Jim Boyle CRy Attorney Law Offices of bm Boyle Ctty of Port Neches 1005 Congress Ave 1221 Duncanvflle Street Ste 550 Port Neches, Texas 77651 Austin, Texas 78701 (409)722.0~,86 (512)474-1 Mr Dave Cook John Michael Adrogna, Esq '~ C~ty of Datles Miller, Bahs & O'N'etl, P C City Controller's Office 1101 14th St'r, N W #1400 Revenue and Taxation Division Washington, D C 20005 1500 Mar'ilia 2BS (202)789-1450 Dallas. T~xas 75201 (21 n)670-3,~A2 Mr J~m Horwood Mr J' Alan Bryan Spiegel & McDtarm~d 2600 Manuhfe Place 1350 New York Avenue, N W 10180-101 Street Washington D C 20005 Edmonton, Alberta T6J 3Y2 (202)879-~,003 (403)423-5730 5 DANIEL J. LAWTON ~ PRINCIPAL, DIVERSlI~iED UTILITY CONSULTANTS, INC B A. ECONOMICS, MERRIMACK COLLEGE M.A ECONOMICS, TUFTS UNIVERSITY Prior to begmmng his own consulting pracuce, D~v~rslfied Utility Consultants, Inc, m 1986, Mr Law, on had been In the utility consulting business with a national engmeenng and consulUng firm In addmon, Mr Lawton has been employed as a senior analyst and statistical analyst with the Department of Pubhc Service of Minnesota Prior to Mr Lavaon's involvement in utlhty regulation and consulting he taught economics, econometrics, stausucs and computer science at Doane Colloge Mr Lawton has conducted numerous financial and cost of capital smdres on electric, gas and telephone utilities for various tntervenors before local, state and federal regulatory bodies In add~tion, Mr Lawlon has provided studies, analyses and expert testimony on statisncs, econometrics, accounting, forecasting, and cost of service issues Other projects In whlch Mr Lawton has been revolved include rate design, analyses for electric, gas and telephone utilities Mr Lawton has developed software systems, data bases and management systems for cost of service analyses In addition, Mr Law~on has developed and reviewed numerous forecasts of energy and demand used for utfllty generation expansion studies as well as mumc~pal financing Mr Lawton has represented numerous mumeipahues as a negouator in utility related matters Such negotiations ranged fi.om the settlement of electric rate cases to the negotlanOn of provisions in purchase power contracts A list of case~ in which Mr Lawton has provided testimony Is attached IACOB POUS, P E PRINCIPAL, DIVERSIFIED UTILITY CONSULTANTS, INC B S INDUSTRIAL ENGINEERING M.S MANAGEMENT I graduated from the University of Missouri m 1972, recmvmg a Bachelor of Science Degree tn £ngmeerlng, and I graduated w~th a Master of Science in Management from Rollins College in 1980 I have also completed a. senes of deprecmUon programs sponsored by Western Michigan Umverstty. and have attended numerous other uuhty related seminars Since my graduauon from college, I have been continuously employed m various aspects of the utility business I started w~th Kansas City Power & Light Company, working in the Rate Department, Corporate Planning arid Economic Controls Department, and for a short time tn a power plant My responsibilities included preparation of testimony and exhibits for retail and wholesale rate cases I part,clpated m cost of service studies, a loss of load probability study, fixed charge analys~s, and economic comparison studies I was also a pnncipal member of prolect teams that wrote, installed, maintained, and operated both a computerized series of depreciation programs and a computerized financial corporate model I joined the firm of R V~ Beck and A~soclates an international consulung engineering firm w~th over 500 employees performing predominantly utility related work m i976 as an Engineer in the Rate Department of ~ts Southeastern Regional Office While employed vath that firm ._. prepared and presented rate studies for various electric gas water, and sewer systems prepared and assisted in the preparation of cost of service studies, prepared depreciation and decommissioning analyses for wholesale and retail rate proceedings, and assisted in the development of power supply studies for electric systems I resigned from that firm m November 1986 in order to co-found Divers;fled Utility Consultants, Inc At the time of my resignat,on, held the titles of Executive Engineer, Associate and Super'asor o£ Rates m the Austin office of R W Beck and Associates As a principal of the firm of Diversified Uuhty Consultants, Inc, I have presented and prepared numerous electric, gas, and water analyses in both retail and wholesale proceedings These analyses have been performed on behalf of clients, including public utility commissions throughout the United States and Canada I have been revolved ~n over I00 different utility rate proceedings, many of which ha~e resulted tn settlements prior to the presentation of testimony before regulatory bodies I am registered to pracuce as a Professional Engineer m the states of Florida Texas M~ssissippi, North Carohna Anzm~a, New Mexico, Ark,ms,~s Oklahoma and SARA COL£ , DIVERSIFIED UTILITY CONSULTANTS, INC~ B B.A. - ACCOUNTING I graduated from the Umverstty of St Thomas ~n 1990, recmvmg a Bachelor of Business Admm~strauon m Accounung I am a Cemfied Pubhc Accountant hcensed to pracuce m the State of Texas I am a D,plomate of the American Board of Forensic Examiners I have also attended utility related seminars including the "Annual Regulato~ Studies Program" sponsored by the National Associauon of Regulatory Uuhty Commissioners and admm,stered by M~chigan State Umversity's Graduate School of Business I began worPung for the public accounting firm of Arthur Andersen & Company m Houston, Texas m July 1990 During my employment wxth Arthur Andersen & Company. I provided financial and audit services to public and pnvate corporations My respons,bflmes included all aspects of finanmal reporting, fmanc,al statements and footnote preparation Tl~,s included evaluauon of compliance w~th technical requirements and the Security Exchange Comm~ssion's reporung regulauons At the ume of my res~gnaUon. I was an Experienced Senior Auditor In July 1993, I lomed the Public Uuhty Commission of Texas as a Regulatory Accountant While employed at the Public Utility Commiss~on of Texas, I reviewed and analyzed various uuhty appl,cauons as they related to accounting ,ssues My respons,b~hues also included prepar,ng and testifying on accounting issues m various ut,hty hearings I resigned from the Pubhc Uul,ty Comm,ssmn of Texas in December ~996 I have been revolved tn several rate proceedings, many of which have resulted in settlements prior to the presentation of test,mony before regulatory bodies I lomed the firm of Diversified Uuhty Consultants, Inc as a Senior Consultant My responsibthttes include analyzing regulatory ~ssues m various uuht~ rate proceedings A hst of cases tn whtch I have provided tesumony is attached RUTH RUN'YON WENZ£L, C P A BBA, ACCOUNTING Msl Wenzel received a Bachelor of Business Admimstrauon degree uath a malor in Accounting from the Umvers~ty of Texas at Austin in 1981 She is a Certified Public Accountant licensed to pracuce in the State of Texas and has attended continuing professional education cotirses sponsored by the Texas Society of Certified Public Accountants In January 1982, Ms Wenzel began employment wath the public accounting firm of Gibson, Johnson & Co She was involved in areas of taxauon, audmng and management advasory semces In 1986 she ]omed the firm of Gibson, Melvin & Paddock where she continued her public accounting practice In 1987 Ms Wenzel was employed by the Pubhc Utility Commission of Texas as a regulatory accountant Her responsibdiues w~th the Texas Commission included preparation and analyses of studies revolving cost of serrate issues related to rate proceedings of elecmc utdtues She served as a tesufymg w~mess on behalf of the Commission through 1994 Ms Wenzel began employment wath Diversified Uuhty Consultants Inc m June, 1994 where she has participated m the analysis of numerous uul~ty rate proceedings before both state and federal regulatory authorities A list of cases tn which Ms Wenzel has provided testimony is attached PA~T II WOI~K PLAN The scope o£servlces necessa.~y to properly lnvesligate the numerou~ and complex fin~al, ~nomwal, ~bundhng, rate d~[~, ~d a~ountmg ~ssues r~m~s a ~nsult~t that ~ p~v~ously ~d success~lly perfo~ed m~y s~mfl~ ~alyses Th~s concur of extensive prior specffic experience ~s c~cml m t~s p~cul~ s~matmn due to the ~nd~ent~l &~les that are o~umng m ~he utility mdus~ ~d the C~W of Denton specifically The series oft~ dehneated m th~s s~t~on of the proposal reflect what DUCI beheves ~s necess~ to comply w~th a review of the C~ of Denton's ~b~dhng ~d rate des~ ~ssues ~d ad.ce on the pwper ~lato~ pomtwn~ m the changing re~lato~ env~w~ent Also w make reco~endat~ons ~d provide ~ucatmn~ d~scuss~ons w~th the C~W Council ~d the Pubhc Utilities Board re~dmg the rate des~ sludy, ~set sales, Senate Bill 7, ~d deregulation m the mdust~ Specifically, how these ~ssu~ effect the C~ty of Denton Once not~fied of selectton by the C~ty, a detailed review of the C~ty's unbundhng and rate desl~ ~d available cu~ent tin.oral mfomatmn will be conducted ~d d~scussed wtth the staffed offietals of the Ctty The City will pwmde ~ts revenue r~mrement and bflhng dete~mant frequency, by class The following ~s a general outhne ~d synopsts of the major tasks that we am~eipat~ by the C~ty m perfommg a comprehensive analysis for T~k A m the proposal TASK A MAN HOURS DESCRIPTION I ~2 Review and m~ke recommenda~mns on the C~t~ final revenue r~mrament 2 26 Review and utd~e R W Beck s unbundhng study and remew revision wRh City 3 64 Rat~ D~gn for Geaco, Transco, D~sco ~d Provider of Lut Resort (PLR) Services TASK.1. Review of City's existing revenue requirement and a review of historical and pro forma adjustments to the revenue requirement Propose necessary adjustments to be comphant w~th current regulatory reqmrements of the City Review prior year unbundhng study and make adjustments where necessary Throughout the process, keep the staff informed 6 PART II WORK PLAN D¢~¢lop and .~nal¥~'¢ thc price ~malys~s and rate destgn alternattves and dov¢lop a rake d~tgn for the Ctty taking into account the compcttttve changes taking place m the industry DUCI will provide the vanou.q work~hops and pre~e'ntation serv~c~ delmeatod m Section B of the proposal A 13DITTONAL~ RR~VT~-~ DUCI will provtde additional servtces as requested by the C~ty Additional services may Include, but are not limited to additional analyses, addttional cop~¢s, attendanc~ at additional meetings Charges for these services ar~ not included m the cost estimate set forth hereto Add~Uonal servtces will be charged at the hourly rates for the individual personnel set forth m Part III, plus out-of-pocket expenses Requests for additional servtces of an,~ member of DUCI should be made tn written form. ff time constraints pen'mt 7 PART III PRICE PROPOSAL DUC[ proposes to be compensated on an hourly fe~ basis plus reimbursement for all out-of- pocket expenses reasonably incurred DUCI proposes to invoice the City on a monthly basis for services rendorext and all out-o.f-pockct expenses incurred dunng that month The tables at the end oftlus Part sets forth the personnel, hourly fees and esttmated number of hours for each individual who will parttclpate m th~s project DUCI recognizes the C~ty's need to schedule public meetings and DUCI will attend such meetmss at a mutually agreed to time and date MATEP~k~,~I~s~.,A.~ELO_T~,R ITEMIZED DIRECT CO~TS The tables at the end of this Part hsts the various non-labor related costs anticipated to be incurred in the prosecunon of this project PART III PRICE PROPOSAL MANPOWER AND COST R~, QUlREMENTS ' TO PROVIDE REVIEW OF CiTY OFIDENTON'S UNBUNDMNG AND RATE DESIGN ON BEHALF OF THE CITY OF DENTON I..ABOR REQUIREMENTS - TASK A COLEMAN/ LAW'TON POUS WENZEL TOTAL TOTAL TASK ($1~1hrl ~ r$1~5~hrl HOURS AMOUNT I 24 8 10 42 $5 000 2 16 10 0 26 $3,250 Hours 88 27 18 133 ESTIMATED EXPENSES - TASK A Pnnt~ng $300 Postage & Oehvery $75 Phone Total Expenses $450 GRAND TOTAL - TASK A LABOR REQUIREMENTS - TASK B POU$/ LAV,rrON TOTAL TASK (_~ 12,~/nr I ,~ S~x Mee~ngs 05 $8,125 ESTIMATED EXPENSES - TASK B PnntJng $150 Poatags $30 Trsnsportaflon $245 Hotel & Meals $250 Nr Travel s1.200 Total Expenses $1 875 GRAND TOTAL - TASK A GRAND TOTAL - TASKS A & B ~' ~' ~ ~ ~ ~*' August 18, 1999 Cheryl Davenport, C P A Uuhty Rate Adnumstrator 901-A Texas Street Denton, Texas 76201 RE Amended Proposal to Kevlew and Perform C~ty of Denton's Unbundhng ~dy 8.nd P,.~4e OesLen Analvs~s Dear Ms Davenport Per our telephone conversauon earher th~s week, DUCI ~s submitung this amended proposal to the City of Denton ("City") to include the following addmonal ~emce~ that we discussed The follo~ng ~s a general descnpuon of addmonal settees to be performed m Task A · Task 4 - A Producuon Cost Model ~qll be developed ff generauon or producuon CGENCO") rates are reqmred to be calculated The Producuon Cost Analys~s ~ll review the opumal supply m,x to C~ty power supply costs Th~s analyms s~ll assist the Oty ;n budgeting for ~ts power supply m the compeuuve enwronment Th~s analys~s ~s esumated at 100 hours of labor ume · Task 5 - Development of the C:ty ~te Demgn and Pricing ~alysxs using ~e developed revenue reqmrement Th~s database, based on the C~ty's h~stoncal bill frequent, ~11 be used to analyze various rate dem~ "demand ults" m conluncuon ~th the unbundled revenue reqmrement by funcuonahzed costs and rate classes TNs ~s esumated at 120 hours · Imual consultauon ~th the C~W regarding detailed scope of each "c" task and development of informauon required to be provided by the City to the coflsultants for each task, This is esumated at 16 hours It{ DUel's original proposal, it estimated 6 meetings for Task B Given that the City Co~lncll and Regulatory Board meet on ~iifferent days, DUCI has included an additional 6 meetings as requested per our discussion Based on our understanding of the City's request, DUCI has set forth as Alternative B, its price proposal to include these additional semces DUCI has estimated a price of $45,000 to complete Task A and a price of $20,000 to complete Task B These are only meant to provide a general outline of DUel's analysis I hope this has provided enough detail for the additional services we discussed on the phone Once again we would like to thank you for allowing DUCI to submit thxs Proposal to the C~ty We are prepared to commence work on this project immediately upon selection, and would complete the prolect in a timely and effzcient manner Should you have any questxons w~th regard to this proposal or other matters, please feel free to contact Dan Lawton at (512)257-2600 Sincerely, PART Ill ~ ~ ~ ~ ~ RIGE PROPO~L cl~ o~ ~fi,~ u..u~fl~~'~ ~O ~; O~ON ALTERNAT~E B ~R~ RE~UIREMENT~ . T~KA PcmtaOe & Oellver/ $75 Phone $75 TOTAL EXPENSES ~D TOTAL . T~K A ~BOR RE~UIRPMFNT~. TA~K B POUS/ ~ON TOT~ TASK ~ ~OUNT fSTI~TEO PXPI~NRI~R . TASK B T~ - ~ Mee~ TOT~ ~PENGES G~D TOT~ - T~K B s;o DOD G~D TOTAL - T~K A &