1998-060 NOTE' Amended by Ordinance No. 98-230.
O A CENO
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A
PROFESSIONAL SERVICES AGREEMENT WITH REED CONSULTING GROUP
PROVIDING FOR CONSULTING SERVICES RELATED TO ELECTRIC
RESTRUCTURING, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND
PROVIDING FOR AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I. That the City Manager ~s hereby authorized to execute a Profesmonal
Servmes Agreement prowdmg for profesmonal consulting services related to electric
restructuring w~th Reed Consultmg Group, a copy of whmh agreement is attached hereto and
incorporated herein
SECTION II That the expenditure of funds as prowded in the attached Agreement ~s
hereby authorized
SECTION III. That th~s ordinance shall become effective immediately upon its passage
and approval
PASSED AND APPROVED tlus the,ff~dayof ~~ ,1998
JACK~L~R, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPR~)~VED ASk~TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
S \Our Doeuraenta\Ordlnanees\98~Reed Consulting Ord doc
STATE OF TEXAS §
COUNTY OF DENTON §
PROFESSIONAL SERVICES AGREEMENT
Thls Agreement as entered into this ,fl~-'~ day of March, 1998, by and between Reed
Consulting Group ("REED"), a Massachusetts corporaUon, w~th ~ts pnnc~pal office at 200
Wheeler Road, Burhngton, Massachusetts, 01803, and the C~ty of Denton, Texas ("CITY"), a
Texas mume~pal corporation, with ~ts pnnelpal office at 215 East McKanney Street, Denton,
Texas, 76201, for professional and related consulting services to be prowded to C~ty, both partaes
aetang by and through their duly authorized representatives
WHEREAS, that m consideration of the covenants and agreements hereto contained,
REED and the CITY do hereby mutually AGREE as follows
ARTICLE I
SCOPE OF SERVICES
The CITY hereby engages REED, and REED hereby agrees to prowde to C~ty the
services set forth an the individual Task Order made an attachment to flus Agreement The Task
Order generally prowdes for a prehnunary evaluation of alternatives available to the CITY at tins
point m ~me related to the stranded costs assocmted wath Texas Mumc~pal Power Agency
("~g?^")
ARTICLE II
FEES FOR SERVICES
For serwces prowded by REED to CITY pursuant to th~s Agreement, CITY shall pay
REED m accordance w~th the rates and charges set forth m Exhth~t "A", "Fees for Services"
attached hereto and made a part of th~s Agreement for all purposes, provided however such
charges and rates shall not exceed $75,000 00 unless the CITY agrees by an amendment to th~s
Agreement to increase the maximum fee for services for tins engagement
ARTICLE III
BILLING AND PAYMENT
REED shall submit a monthly statement to CITY settang forth the amount due for
servmes and ~temlzmg amounts due for expenses CITY shall pay the full amount of such
statement w~thm thirty (30) days at~er receipt Any sums billed, not dasputed m written form
setUng forth speaific exceptions and unpaid after thirty (30) days from the date of receapt, shall
be subject to a late payment charge equal to one (1) percent for each month or fraction thereof
past due Nottung contamed m th~s article shall reqmre the CITY to pay for any work which as
unsatmfaetory as reasonably determined by the Assistant Caty Manager/Utilities for the CITY, or
whmh as not subm~ttad in eomphance w~th the terms of thas Agreement No late charge shall
apply to may such unsatisfactory or chsputed work The CITY shall not be required to make any
payments to REED when REED is in default under this Agreement
ARTICLE 1V
INDEPENDENT CONTRACTOR
REED shall pmmde services to CITY as an ~ndependent contractor, not as an employee
of CITY REED shall not have or clmm any right ansang from employee status REED agrees to
perform the servaces hereunder m connection wath the project as stated in thas Agreement w~th
due dlhgence, and m accordance wath the highest professional standards obtmned for such
services m the State of Texas
ARTICLE V
TERM AND TERMINATION OF AGREEMENT
A Unless otherwise termmated as provided herein, th~s Agreement shall become effectave
upon execution by the parties and shall termanate when (1) the servmes provided for herem have
been fully and completely performed, or (2) July 1, 1998, whichever event shall occur first Tfus
Agreement may be sooner terminated m accordance with the provaslons hereof T~me ~s of the
essence m thas Agreement REED wall make all reasonable efforts to complete the services set
forth hereto as expedat~ously as possible to meet the schedule estabhshed by the CITY
B N0tWlthstanrhng any other pmvaslon of this Agreement, either party may terminate this
Agreement by gavmg tharty (30) days advance written notice to the other party
C Th~s Agreement may be terminated m whole or an part an the event of eather party
substantmlly fathng to fulfill ~ts obhgatlons under the Agreement No such termmataon will be
affected, unless the breacbang party is gaven (1) written notice, delivered by certffied marl, return
receipt requested, of intent to terminate, and not less than tharty (30) calendar days to cure the
failure, and (2) an opportumty for consultataon with the terminating party prior to termanataon
D If the Agreement as terminated prior to completaon of the services to be provided
hereunder, REED shall ammedaately cease all servmes and shall render a final bill for services to
CITY wl~hm tturty (30) days after the date of termanatlon, and CITY shall pay REED for all
services properly rendered and reimbursable expenses to termanatlon incurred prior to the date of
termanatlon in accordance w~th Artaale III hereof Should the CITY subsequently contract wath a
new conslaltant for contmuataon of servaces on the project as defined ~n the attached Task Order,
REED shall fully cooperate an provadmg mformataon All documents prepared or furnished by
REED pursuant to thas Agreement shall become the property of the CITY but REED may
mmntaln copies of such documents for ats use
Professaonal Services Agreement
Reed Consulting Group - Page 2
ARTICLE VI
INSURANCE
Dunng the performance of the services under this Agreement, REED shall mmntam the
followmg insurance with an insurance company licensed to do business in the State of Texas by
the State Insurance Commission or any successor agency that has a rating with Best Rate
Camers of at least an "A-" or above
A Comprehensive General Liability Insurance with bodily injury hm~ts of not less
than $1,000,000 for each occurrence and not less than $1,000,000 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 Automobtle 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' Liability 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 REED shall furmsh insurance certificates or insurance policies at the CITY's
request to evidence such coverages The insurance policies shall name the CITY
as an additional insured on all such policies to the extent lawfully possible and
shall contmn a prowslon that such insurance shall not be canceled or modified
without thirty (30) days prior written notice to CITY and REED In such event,
REED shall, prior to the effective date of the change or cancellation, promptly
deliver to CITY substitute policies or certificates providing or evidencing the
same coverage
ARTICLE VII
LIABILITY
A REED shall indemnify and hold harmless the CITY, its officials, employees, attorneys
and agents, from and agmnst any and all liability, claims, demands, damages, losses, and
expenses, including, but not limited to, court costs and reasonable attorney's fees incurred by
CITY, for winch REED is determmed to be legally liable resulting from negligent acts, errors,
or omissions by REED, its chrectors, officers, agents, and employees in performance of services
required iby tins Agreement Liability, clmms, demands, damages, losses, or expenses resultmg
from the negligent acts, errors or omissions, whether active or passive, by CITY, its officials,
employees, attorneys, and agents are excluded from REED's obligations pursuant to this
paragraph
Professional Services Agreement
Reed Consulting Group - Page 3
B REED's indemmfication of the CITY, as provided m Article VII A above, as to any act
or omission constituting professional malpractice, shall be expressly limited to the amount of
fees payable to REED as set forth in Article II of this Agreement
C REED's mdemmficatlon of the CITY, as provided in Article VII A above, resulting from
any negligent acts, errors, or omissions of REED, other than professional malpractice, shall be
expressly hmlted to the proceeds of Its apphcable insurance coverage, as identified in Article
VI A, B & C of this Agreement
D Notlung m this Agreement shall be construed to create a liability to any person who is not
a party to this Agreement and notlung hereto shall waive any of either party's defenses, both at
law or eqtuty, to any clmm, cause of action or litigation filed by anyone not a party to this
Agreement, lneluchng the defense of governmental immunity, wlueh defenses are hereby
expressly reserved
ARTICLE VIII
OBSERVATION AND REVIEW OF THE WORK
REED shall exercise reasonable care and due diligence in dlscovenng and promptly
reporting to the CITY any defects or deficiencies in the work of REED or of any contractors,
subcontractors, or subconsultants working on the project
ARTICLE IX
RESPONSIBILITY FOR CLAIMS AND LIABILITIES
Approval by the CITY shall not constitute nor be deemed a release of the responsibility
and liability of REED, its employees, associates, agents and consultants for the accuracy and
competency of their designs or other work Nor shall such approval be deemed to be an
assumption of such responsibility by the CITY for any defect in the work prepared by REED,
its employees, associates, agents and consultants
ARTICLE X
ATTORNEY'S FEES
If either party hereto shall become involved in htlgatlon arising out of this Agreement or
the performance thereof, the prevailing party shall be entitled to reasonable attorney's fees,
costs and expenses This provision shall be construed as applicable to the entire Agreement
ARTICLE XI
NOTICES
A Any notice, demand, information, invoice, report, or item otherwise required, authonzed,
or provided for m this Agreement, unless otherwise specified herein, shall be deemed properly
given If delivered m person or sent by United States Mall, First Class Postage prepaid
Professional Serwees Agreement
Reed Consulting Group - Page 4
CITY REED
Howard Martin, Assistant City Manager/Utlht~es Reed Consulting Group, Inc
City of Denton, Texas Janaes Coyne, Vice President
215 E McKmney Street 200 Wheeler Road
Denton, TX 76201 Burlington, MA 91803
B All notices mmled shall be deemed effective upon receipt by the party to whom such
notice is given
ARTICLE XII
ARBITRATION AND ALTERNATE DISPUTE RESOLUTION
The parties may agree to settle any disputes under this Agreement by submittang the
dispute to arbitration or other means of alternate dispute resolution such as mediation No
arbxtrat~on or alternate dispute resolutaon arising out of or relating to, this Agreement involving
one party's disagreement may include the other party to the disagreement without the other's
approval
ARTICLE XIII
OWNERSHIP OF DOCUMENTS
All documents prepared or furnished by REED (and REED's subcontractors or
subconsultants) pursuant to this Agreement are ~nstmments of service and shall become the
property of the CITY upon the termination of this Agreement REED is entitled to retain copies
of all such documents The documents prepared and furmshed by REED are intended only to
be applicable to thxs project and the CITY's use of these documents in any other project shall be
at the CITY's sole risk and expense In the event the CITY uses the documents in another
project or for other purposes than specified hereto any of the reformation or materials developed
pursuant to this Agreement, REED is released from any and all liability relating to their use m
that project
ARTICLE XIV
ACCESS TO RECORDS OF REED BY CITY
REED agrees that the CITY shall, until the expiration of three (3) years after the final
payment under fins Agreement, have access to and the right to examine any directly pertinent
books, documents, papers and records of REED ~nvolvlng transactions relating to this
Agreement REED agrees that the CITY shall have access dunng normal working hours to all
necessary REED facilities and shall be provided adequate and appropriate working space in
order to conduct audits in compliance with fins section The CITY shall give REED reasonable
advance notxee of Intended audits
Professional Serwces Agreement
Reed Consulting Group - Page 5
ARTICLE XV
PERSONNEL
A REED represents that tt has or will secure at its own expense all personnel reqmred to
perform all the servtees reqmred under thts Agreement Such personnel shall not be employees
or officers of, or have any contractual relatmns wtth the CITY REED shall inform the CITY of
any conflaet of interest or potential confltct of interest that may arise dunng the term of thts
Agreement
B All services required hereunder will be performed by REED or under its supervtston All
personnel engaged tn work shall be quahfied and shall be authorized and permttted under state
and local laws to perform such sermces
ARTICLE XVI
DISCRIMINATION PROHIBITED
In performmg the servtces reqmred hereunder, REED shall not dtscnmtnate against any
person on the basts of race, color, rehglon, sex, national ongtn or ancestry, age, or physteal
handtcap.
ARTICLE XVII
COMPLIANCE WITH LAWS
REED shall comply w~th all federal, state, local laws, roles, regulations, and ordinances
apphcable to the work covered hereunder as they may now read or hereinafter amended
ARTICLE XVIII
COORDINATION OF WORK ON THE ENGAGEMENT
A REED shall commence, carry on, and complete flus engagement w~th all apphcable
dtspatch,, tn a sound, economical, efficient manner, and, ~n accordance wtth the promstons
hereof In accomphshmg the project, REED shall take such steps as are appropriate to ensure
that the work revolved ~s properly coordinated wtth related work being earned on by the CITY
B The CITY shall asstst REED by placmg at REED's dtsposal all avmlable tnformat~on
perttnen~ to the project, mcludmg prevtous reports, any other data relative to the project and
arranging for access to, and make all provtstons for REED to enter m or upon, pubhc and
private property as required for REED to perform services under this Agreement
C REED agrees to cooperate fully wtth Resource Management Intemat~onal, Inc ("RMI"),
R J Covmgton Consulting ("Covmgton") and Ctty staff, together w~th the CITY's outside
attorneys and consultants tn acluevmg an effective, effictent evaluatton REED agrees to work
m close coordmatton wtth RMI, Covington, Ctty staff, as well as wtth the CITY'S outstde
attorneys and consultants m order to max~nnze the effimency and qualtty of the project
Professional Services Agreement
Reed Consulting Group - Page 6
dehverables to the CITY cons~denng the aggressive schedule of tlus project The CITY ~s
relying upon REED to mamtmn open hnes of commumcat~on w~th RMI and Covington at all
t~mes m order to coordinate the work and to avmd any conflmt or any unnecessary dupheat~on
of effort Dunng the course oftlus project the CITY expects, and REED agrees to refrmn from,
any actxon agmnst any consultant lured by the CITY on tlus project wluch m~ght d~smpt or
~mpmr the course of work being performed for the CITY on th~s project
ARTICLE XIX
SEVERAL OBLIGATIONS
Except where specffically stated ~n tlus Agreement to be otherwise, the dutms, obhgat~ons
and habfl~t~es of the partms are ~ntended to be several and not jmnt or collective Nothing
contmned m thru Agreement shall be construed to create an assomat~on, trust, partnerslup, or
joint venture or ~mpose a trust or parmerslup duty, obhgat~on, or habfl~ty on or w~th regard to
e~ther party Each party shall be ~nd~vldually and severally hable for ~ts own obhgat~ons under
tlus Agreement
ARTICLE XX
MODIFICATION
No wmver or modfficaUon of this Agreement or of any covenant, cond~Uon, hm~taUon
herein contained shall be vahd unless in writing and duly executed by the party to be charged
therewith and no credence of any wmver or modfficat~on shall be offered or received ~n
evidence m any proceeding arising between the part~es hereto out of or affecting this
Agreement, or the rights or obhgat~ons of the part,es hereunder, and unless such waiver or
modffication ~s ~n writing, and duly executed The parties further agree that the provisions of
tlus Article will not be waived unless as hereto prowded
ARTICLE XXI
ASSIGNABILITY
REED shall not assign any ~nterest m this Agreement and shall not transfer any ~nterest m
tlus Agreement (whether by assignment, novation or otherwise) w~thout the prior written
consent 0fthe CITY
ARTICLE XXII
SUCCESSORS IN INTEREST
This Agrement shall be binding on, and inure to the benefit of, each party's successors
and assigns
Professional Services Agreement
Reed Consultmg Group - Page 7
ARTICLE XXIII
ENTIRE AGREEMENT
This Agreement 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 and contemporaneous offers, promises, representations, negotiations,
discussions, commumcatlons, and agreements which may have been made in connection with
the subject matter hereof
ARTICLE XXIV
SEVERABILITY
If any prowslon of th~s Agreement is found or deemed by a court of competent
jtmsdlctlon to be mvahd or unenfomeable, ~t shall be considered severable from the remmnder
of this Agreement and shall not cause the remmnder to be invalid or unenfomeable In such
event, the party shall reform this Agreement to replace such stricken provision with a valid and
enfomeable prowslon which comes as close as possible to expressing the intention of the
stricken provision
ARTICLE XXV
GOVERNING LAW
Thas Agreement shall be construed and interpreted according to, and the rights of the
parties shall be governed by, the laws of the State of Texas Venue of any suit or cause of
action under this Agreement shall lie exclusively in Denton County, Texas
ARTICLE XXVI
WAIVER
Any wmver at any time by either party of its rights with respect to a default under this
Agreemont, or with respect to any other matters arising ~n connection with this Agreement, shall
not be deemed a waaver with respect to any subsequent default or other matter
ARTICLE XXVII
CAPTIONS
The capttons of this Agreement are for ~nformatlonal purposes only and shall not in any
way affect the substantive terms or conditions of th~s Agreement
1N WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be
executed by its duly authorized City Manager and RI~}D has executed this Agreement through
its duly anthonzed undersigned officer on th~s the.~~'g~ day of March, 1998
Professional Servtces Agreement
Reed Consulting Group - Page 8
"CITY"
CITY OF DENTON, TEXAS
A Texas Mumc~pal Corporation
Ted Benawdes, C~ty Manager
ATTEST
JENNIFER WALTERS, CITY SECRETARY
By~ ~ k~ ~
"REED"
REED CONSULTING GROUP
A Massachusetts Corporataon
Its ~.'£~' '
WITNESS
By
\\CH-LGL\VOL 1 Xsharedkle'pt\LOL\Our Documents\Contr aets\98h't, eed Consulhng Group2 doc
Professional Services Agreement
Reed Cons¢ltmg Group - Page 9
EXHIBIT A
FEES FOR SERVICES
Professional and support services, except for testimony, shall be billed at the following rates
President $300 per hour
Executive Vice President $240 per hour
Semor Vice President $230 per hour
Vice President $230 per hour
Assistant Vice President $190 per hour
Semor Economist $170 per hour
Semor Project Manager $170 per hour
ProJect Manager $160 per hour
Semor Consultant $145 per hour
Staff Consultant $130 per hour
Semor Techmcal Consultant $110 per hour
Consultant $110 per hour
Assistant Consultant $ 90 per hour
Research Librarian $ 75 per hour
Admlmstrat~ve Assistant $ 45 per hour
The above rates shall be adjusted each year, commencing July 1, 1998, to reflect the change in
rates officmlly established by REED
Testimony shall be billed at one and one-half (1 ½) times the above stated hourly rates
Reproduction, pnntmg, commumcatlons, computer services, and other miscellaneous support
services shall be billed at rates for such services as determined fi.om time to tune and officially
established by REED
All travel, food, lodging, and miscellaneous expenses, except automobile mileage, assocmted
with the prowslon of services hereunder shall be billed at cost Automobile mileage shall be
billed at $0 32 per mile
CITY shall reimburse REED for any applicable sales tax imposed on services rendered by REED
to CITY
ATTACHMENT TO
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
REED CONSULTING GROUP
THE CITY OF DENTON
DATED February 24, 1998
Financial Adwsory Services - Options Assessment
This Task Order defines a Scope of Services and Budget for work by Reed Consulting
Group (REED) for the City of Denton, Texas (City) The acUvitles in this Task Order
are designed to study and present alternatives to the City for resolution of its Investment
and related financial obligations primarily associated with the Texas Municipal Power
Agency (TMPA)/Glbbons Creek Power Plant Other generation assets owned by the
Cities may also be considered, particularly those with debt obligations
This work ~s intended to serve as a precursor to the financial advisory role previously
discussed Prior to proceeding w~th a d~vest~ture plan, the City reqmres an evaluation of
the alternatives for its existing generation ownership which satisfactorily addresses the
C~ty's potentml stranded costs and bond obhgatlons in the deregulating electric
environment
sCOpE OF SERVICES
Task A - Identify the Alternatives
1 REED wall first examine the City's ownership in electric generation assets (and
contracts for output) to fully understand the current s~tuatlon related to generating
assets The focus of this task will be to determine
· Ownership structure
· Contractual obligations
· Financial obhgatwns
2 Review the status of electric restructuring in Texas
·Legislative status
· Pubhc Utd~t~es Commission reqmrements and proposals
IOU and municipal precedents in the state on generation ownership and
stranded cost resolution ~ssues
3 Review municipal precedent m comparable situations · Financial restructuring
· Asset sales
· Stranded cost recovery mechanisms
4 Based on REED's experience ~n generatxon asset dtvestlture and electric
unbundhng, REED wxll work with the C~ty and its adwsor(s) to develop
alternatxves for its exxst~ng generatxon asset related obhgatlons These alternatives
may include
· Proceed w~th divestiture
a) alone
b) with Garland
c) w~th Garland, Greenville and Bryan
· Mmntatn status quo
· Conduct an asset appraisal and approach the legislature for stranded cost
assistance
· Securitization
· Release the assets to unregulated memhant plant status
· Others to be identified
Task B - Evaluate the Alternatives
1 Provxde a bas~s for financml evaluation of the alternatives
· Examine the financial models constructed for this purpose and build on and
complete evaluations already begun
· To the extent possible, complete this model to allow for financial scenario
evaluation
· If the cresting model ~s not capable, create a new model to capture the
essenttal financial lmphcat~ons of alternative scenarios
· Develop basehne market assumptions with assistance from the City, pubhc
sources, and REED market knowledge
2 Quant~tatively (where possible) and qualitatively evaluate the alternatives
Stranded cost exposure
· Cash flows available for debt
· Impacts on customer rates, and taxpayers
· Bond covenants
Task C - Present and D~scuss Findings, Conclusions and Recommendations
1 Summarize results of Tasks A and B m summary presentation form
2 Review w~th the City Manager, Utdlty Board management, and other Advisors
3 Present the findings, conclusions, and recommendations to the C~ty Council
PROJECT TEAM
2
REED will provide a highly quahfied project team The team wall draw on the firm's
extensive experience in finance and electric asset rat~onahzatlon Consulting staff, whmh
will effectively leverage the experience of semor staff to manage overall project costs,
will support senior staff The following project team ~s proposed
Hourly
Name T~tle Rate Area of Responsibility
John J Reed President $300 ProJect Adwsor
Malcolm R Ketchum Executive Vice President $240 Project Adwsor
Mark C Pocmo Sr Vice PresIdent $230 Ftnancml Advisor
James,M Coyne Vice President $230 Project Manager
Frederick J Nemergut Vice President $210 Electric Mummpal/Finance
Prescott C Hartshorne Sr ProJect Manager $170 Finance/Bond Covenants
Saj~d Mahk Staff Consultant $130 Consulting Support
Natalie D Cameron Consultant $110 Consulting Support
In addtt~on to the core project team, REED will rely upon other members of ~ts staff for
specffic areas of project expertise and consulting support
BUDGET and TIMING
Budget for work performed under thts Task Order ~s difficult to estimate w~th certmnty
due to some unknowns concerning the financml modehng status, the number of
altemattves evaluated and the depth of analys~s the C~ty will reqmre The estimated
budget for thts Task Order ~s $75,000 All work w~ll be billed on a monthly bas~s w~th
supporting documentation of act~vtt~es performed
The estimated ttme reqmred to complete th~s assignment ~s apprommately 6 weeks once
work commences
This Task Order is authorized and made an attachment to the aboveqdentlfied
Professional Services Agreement through the signatures below
Authorized by Accepted by
City of Denton, Texas Reed Consulting Group
By~ By~/~~4~ j]~
W\00l\MRK\Profess~onalScrv~cesAgreement\ProfServ~ceAgreement Denton Fmancml
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH REED
CONSULTING GROUP FOR CONSULTING SERVICES RELATED TO ELECTRIC
RESTRUCTURING BY ADDING A TASK ORDER AND AUTHORIZING THE PAYMENT
OF ADDITIONAL COMPENSATION, AND PROVIDING FOR AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the City Manager is hereby authorized to execute an amendment to
the Professional Services Agreement ("Agreement") between Reed Consulting Group ("REED")
and the City, heretofore entered into by the parties on March 3, 1998 for professional services
with regard to the City's investment and related financial obhgatlons primarily associated with
the Texas Municipal Power Agency/Gibbons Creek Power Plant, which amendment is in
substantially the form of Task Order No 98-A, a copy of which task order is attached hereto and
made a part of this ordinance for all purposes, which Agreement is amended by adding
additional professional services to be rendered by Reed and providing for an additional amount
of fees and expenses not to exceed $100,000 00 for the additional professional services to be
performed by Reed
SECTION II That the expenditure of funds as provided for in the attached Task Order
No 98-A is hereby authorized
SECTION III That this ordinance shall become effective immediately upon its passage
and approval
PASSED AND APPROVED this the '-l' day of~, 1998
J~.,~MILLER, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
BY ~tff.~ ~
HERBERT L PROUTY, CITY ATTORNEY
\~Svc utd~VOL 1 ~shared\dept~Legal\MlkeCopeland's Work,Reed Amended Ord doe
ATTACHMENT TO
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
REED CONSULTING GROUP AND
THE CITY OF DENTON
TASK ORDER NO. 98-A
Financial Advisory Services - Options Assessment - Phase II
This Agreement amends the Professional Services Agreement (the "Agreement") entered into by
the parties hereto on March 3, 1998, and defines a Scope of Services and Budget for addltmonal
professiOnal services to be performed by Reed Consulting Group ("REED") for the City of
Denton, Texas ("CITY") The activities m this Task Order are designed to complete the
evaluation of alternatives for the City with regard to ~ts investment and related financial
obligations primarily associated with the Texas Municipal Power Agency ("TMPA")/Glbbons
Creek Power Plant
SCOPEIOF SERVICES
Task A - Refine the Analysis
1 Revisit analysis of Denton's cost of generation
2 Run additional scenarios
3 Compare/contrast with Garland
4 Revise Base Case as needed
Task B - Support the City m Discussions with other Parties
1 Other TMPA Cities
2 First Southwest Company
3 Legal Advisors of City
Task C - Present and Discuss Findings, Conclusions and Recommendations
1 Rewew with the City Manager, Public Utility Board members, City Utility Management,
and other City Advisors
2 Present the findings, conclusions, and recommendations to the City Council
PROJECT TEAM
REED wall provide a continuation of its existing project team
Hourly
Name Title Rate Area of Resnonslbditv
John J Reed President $300 ProJect Advisor
James M Coyne Vice Presidem $230 ProJect Manager
Prescott,C Hartshome Sr ProJect Manager $170 Financial Analysis
In addition to the core project team spectfied ~n the March 3, 1998 Professional Semces
Agreement between the parties, REED will rely upon other members of its staff for specffic areas
of project expertise and consulting support as the project reasonably dictates
BUDGET AND TIMING
REED shall perform the professional services prowded for in this Task Order on a time and
expense basis in accordance with the provisions of the Professional Services Agreement between
Reed and the City, dated March 3, 1998
The budget for work to be performed under flus Task Order is highly dependent upon the steps
required to reach successful negotiations with other TMPA c~tles and the depth of additional
analysis which the City may require The estimated budget for this Task Order is not to exceed
$100,000 for professional services and expenses All work will be billed on a monthly basis w~th
itemized documentation of activities performed clearly set forth In each billing invoice
Reed and the City AGREE, that except as amended by this Task Order No 98-A, all the terms,
conditions, covenants and provisions of the Professional Services Agreement between
themselves, dated March 3, 1998, shall mmmn in full fome and effect
This Task Order No 98-A is APPROVED and AGREED TO, and is made an attachment to, and
is incorporated by reference to the above-identified Professional Services Agreement as
evidenced by the signatures of the parties' duly-authorized signatonas set forth herelnbelow
Authorized by Accepted by
CITY OF DENTON, TEXAS REED CONSULTING GROUP
Dated ~/~t//~ ~ TI ~,
ATTEST
JENNIFER WALTERS, CITY SECRETARY
\\Sv¢ utfl\VOL l\shared\dopt\Legal~IVhkeCopoland's Work\Reed Amended Task Order doe