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1998-371AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH REED-STOWE & CO, INCORPORATED FOR CONSULTING SERVICES PERTAINING TO THE DENTON WATER AND WASTEWATER UTILITIES' COST OF SERVICE AND RATE DESIGN STUDY, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council deems it ~n the public interest to engage Reed-Stowe & Co, Incorporated to prowde professional consulting services to the City pertmmng to a water and wastewater uttht~es cost of service and rate design study, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the City Manager is hereby authorized to execute a Professional Services Agreement with Reed-Stowe & Co, Incorporated for professional consulting services pertaxmng to the Denton Water and Wastewater Utlht~es' cost of service and rate design study, ~n substantmlly the form of the Agreement attached hereto and incorporated herewith by reference SECTION II That the expenditure of funds as prowded in the attached Agreement ~s hereby authorized SECTION III That this ordinance shall become effective ~mmedlately upon ~ts passage and approval PASSED AND APPROVED tI'ns the ~'/~dayof /t~//'r~/rff~ ,1998 JAylLLER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPR~ED AS ~O LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY STATE OF TEXAS § COUNTY OF DENTON § PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES PERTAINING TO THE DENTON WATER AND WASTEWATER UTILITIES' COST OF SERVICE AND RATE DESIGN STUDY /~/~ THIS~ AGREEMENT ~s made and entered ~nto as of the ,~"-~'~ day of //~/7/~7d , 1998, by and between the C~ty of Denton, Texas, a Texas niumclpal corporation, w~th ~ts pnnc~pal office at 215 East McK~nney Street, Denton, Texas 76201, hereinafter called "OWNER", and Reed-Stowe & Co, Incorporated, w~th ~ts offices at 1651 North Colhns Boulevard, State 115, R~chardson, Texas 75080, hereinafter called "CONSULTANT," each acting here~n, by and through their respective duly-authorized officmls and officers WITNESSETH, that in cons~darat~on of the covenants and agreements herein contmned, the parties hereto do mutually AGREE as follows ARTICLE I EMPLOYMENT OF CONSULTANT The OWNER hereby contracts w~th the CONSULTANT, as an ~ndependent contractor, and the CONSULTANT hereby agrees to perform the servmes here~n ~n connection w~th the Project as stated in the sections to follow, w~th dd~gence and ~n accordance with the h~ghest professional standards customardy obtmned for such services ~n the State of Texas The professional services set out here~n are in connection w~th the following described engagement The engagement (hereinafter the "Project") shall ~nclude, without hm~tat~on, completion of the Denton Water and Wastewater Utilities' Cost of Servme and Rate Design Study ARTICLE II SCOPE OF SERVICES The CONSULTANT shall provide the follovang Basic Services to the C~ty of Denton Water and Wastewatar Utd~t~es Departments and prowde documentation and reports related thereto, in a professional manner A WATER AND WASTEWATER UTILITIES COST OF SERVICE 1, WHOLESALE WATER & WASTEWATER COSTS OF SERVICE (UPPER TRINITY REGIONAL WATER DISTRICT) The CONSULTANT will beg~n the project by assimilating the reqmred ~nformatlon ~n preparation for completmg wholesale water and wastewater costs of service usmg the utility bas~s methodology, followed by their respective rate designs Priority should be g~yen to completmg the wholesale water cost of service and rate design, then the wholesale wastewater cost of service and rate desxgn Questions of s~gmficance, which will ~mpact the results of the wholesale costs of service, shall be d~rected to the Water Uttht~es admm~strauve and financml staff The test year for estabhshlng the rates for wholesale service shall be the projected year for whmh the rates are proposed to be apphcable (1999) Test year data shall be obtained from actual data of the second year prior to the test year with adjustments made for known or verifiable changes 2 RETAIL WATER AND WASTEWATER COSTS OF SERVICE Following the completmn of the wholesale portmn of the project, the retail water and wastewater costs of serwce are to be completed Agmn, questions of s~gnlfiCance, whmh would ultimately tmpact the results of the study, should be &rected to the appropriate admlmstrat~ve and finaneml staff The test years for estabhshlng retail water and wastewater rates for serwce shall be projected costs over the period 2000-2003 3 COMMODITY VOLUME AND FINANCIAL FORECASTING FOR LONG RANGE FINANCIAL ANALYSIS The CONSULTANT will rewew the Water and Wastewater Departments (1) forecasted water and wastewater billable volume methodologies, and (2) revenue forecasting methodologies Improved billable volume and revenue forecasting methodologies may be recommended Revenue forecasting methodologies for both the Water and Wastewater Departments should be rewewed ~n greater detail for the proposed budget year and the general methodology for use dunng future budget years Both the Water and Wastewater Departments utilize an annual cash-bas~s ~ncome statement to project future revenue reqmrements and expenses, and ultimately forecast the future profitabthty of each department Long-range departmental rate adjustments are determined from these ~ncome statements The CONSULTANT may recommend ~mproved long-range financial revenue and expense forecasting methodologies 0 e income statements), or more accurate methodologies for forecasting future long-range rate adjustments F~scal year 1999 budget and capital ~mprovement program (CIP) data has been provided Improved financml forecasttng methodologies are expected to prowde more accurate projections of future long-range rate adjustments and a more real~st~c long-range financml pro-forma Currently Water Department rate revenues are recovered through residential, commercml, governmental, and wholesale rates All retail water rates consist of a famhty charge and a volume charge No mm~mum water volumes are prowded through the facthty charge Residential water rates are subdlwded between those ~ns~de the mty hmlts and those outside the c~ty hmlts Both ms,de the c~ty and outside the c~ty res~dentml rates utthze ~nverted block rates m the summer months (May through October), and are without Page 2 blocking (Flat Rates) dunng the w~nter months (November through April) Outside the city rates are set approximately 15% higher than ~ns~de the city rates Commereml water rates are also subd~wded for customers mstde and outside the c~ty As ~n res~dentml water, outside the cay rates are approximately 15% h~gher All commercial and governmental rates have no blocking (t e Flat Rates) The wholesale rate ~s a three-part rate, consisting of a facility charge, a volume charge, and a peak demand charge Wastewater rates are subdimded into residentml, commercml, food servmes, equipment servmes, pretreatment, governmental, metered volumes, treated effluent, and wholesale classes All wastewater rates consist of a facility charge and a volume charge No mlmmum wastewater volume xs prowded through the famhty charge Res~dentml rates are based on a three-month w~nter average (December through February) All other rates are based on a percentage of water volume, except the metered volume rates (SCD, SM) and the wholesale rate (SSC), which are based on actual metered volumes Both the Water and Wastewater Departments are expected to continue to operate as fully self-supporting departments All water utIlmes' rates are to be designed to provide revenue that meets bond covenants Bond covenants require that pledged revenues be 1 25 t~mes average debt-serwee requirements B WATER AND WASTEWATER UTILITIES RATE DESIGN 1 WHOLESALE RATE DESIGN (UPPER TRINITY REGIONAL WATER DISTRICT) The CONSULTANT will give priority to the Water Utflmes' wholesale rate designs, ~mmedmtely following completion of the wholesale costs of service Wholesale water rate design should be expressed as a facility charge, a volume charge, and an annual demand charge per umt of peak-day usage The wholesale wastewater rate design will consist of a facthty charge and a volume charge Dascuss~on wath the CONSULTANT wall determine how cost recovery of wastewater pretreatment program charges and samphng and analys~s charges are recovered 2 EXISTING AND PROPOSED RETAIL RATE DESIGN The CONSULTANT wall evaluate the ex~st~ng retail rate design for each customer class Rates will be designed to recover the costs assocmted with each customer class to the greatest extent possible, but compet~uon ~s to be a major consideration ~n the design of the rates for each rate class Moderation with regard to significant changes ~n existing rates will need to be considered Proposed rate changes of s~gmficance should consider the magmtude of the change, and may reqmre a multi-year phaseqn approach Customer classes are to be of s~mflar description to the current rate-making practices of regional water and wastewater departments to the extent that they are apphcable to the Page 3 City of Denton Water and Wastewater Departments The CONSULTANT is to make recommendations for fewer or addatlonal rate classes that may be appropriate Consolidation of rate classes may or may not ultimately benefit more customers The costs for each current and proposed rate class should be initially determined utilizing a full cost methodology for all costs, direct and indirect The CONSULTANT shall consider other cost allocations utilizing indirect costs, and rate structures for the purpose of designing City of Denton water and wastewater rates that are more competitive Adjustments to any rate classes, from a full-cost bas~s, should be m recogmt~on of the following items (a) The establishment of new rate classes, or elimination of existing rate classes (b) The final allocation and assignment o£ ~ndirect costs The CONSULTANT will provide written comments related to the competitiveness or lack thereof of Denton's cresting water and wastewater rate classes These comments will further state the CONSULTANT's recommendations of how Denton may increase rate competitiveness within the Water and Wastewater Departments prior to beglnmng the rate design process (t e moving indirect costs between classes) 3 WATER & WASTEWATER CUSTOMER CLASS SUBSIDIZATION The CONSULTANT will identify any potential customer class rate subsidization which may be occurring The intent is that ff rate subsidies exist, they will be identified for potential elimination 4 WATER & WASTEWATER OUTSIDE THE CITY LIMIT RATES These customers should be analyzed, number, volumes, peaking requirements, revenues, asset base reqmred to serve, etc The CONSULTANT wall provide a recommendation concerning whether Denton should continue to prowde "outside the mty hmit" rates 5 WATER & WASTEWATER CUSTOMER CLASS CHARACTERISTICS The CONSULTANT will review the customer class charactenstms and load patterns of all water and wastewater rate classes The CONSULTANT will determine if sufficient class characteristics and/or usage differentiation continues to justify separate and d~stlnct rate classes for Denton's existing rate classes Th~s review may result in the recommendation of fewer, or potentially additional, rate classes 6 WATER & WASTEWATER MOBILE HOME PARK RATES The City of Denton's mobile home parks (approximately 15) are currently on vartous water and wastewater rates, due to various site factors The CONSULTANT wall review Page 4 a summary of th~s information, provided by Denton staff, and provide written recommendations to potentially provide better equltabihty and/or simphficatlon with the rate design for these types of customers Variances in rates assigned to Denton's mobile home parks (MHP's) are related to the following options These options have caused Denton to currently utilize two (2) water rates and five (5) different wastewater rates for their fifteen (15) MHP's (a) Receiving both water and wastewater service (b) Receiving only water or wastewater service (c) Assignment of either ~nslde or outside the city rates (d) Individual residential metering versus master metering 7 WATER & WASTEWATER FACILITY CHARGES Existing water and wastewater facility charges differ by rate class for the same meter size Water and wastewater facility charges may more appropriately be set at specific cost-recovery levels independent of their rate class The CONSULTANT will address this ~ssue during the rate design Specific and Identifiable costs should be identified for cost recovery through the facility charges 8 WATER IRRIGATION RATES Currently the local government water rate class has an intermptible and non-interruptlble lrrIgatxon rate Imgation rates are not currently available to any other rate classes The CONSULTANT should review and analyze, for possible implementation, the potential for the Water Utlhty to offer residential and/or commercial ~rr~gatlon rates In irrigation rate design, consideration should be given to the future avaIlabihty of Denton's water supply and the existing revenues generated utlhzmg current rates Irrigation rates should further consider Denton's available irrigation demand relative to the system demand, and the ~mgation impact on the current water supply A demand component may become an integral part of an imgat~on rate 9 RESIDENTIAL WATER RATE BLOCK STRUCTURE The CONSULTANT should analyze the resldentml water rate (WR) block structure The structure of the existing rate, three (3) blocks, w~th the first two (2) blocks holding 15,000 gallons each, should be analyzed to determine if th~s is the most beneficial structure for the rate class based upon spemfic management objectives The relationships of the block sizes, and the price differentials between the three (3) blocks should be studied to determine if they are appropriate 10 WASTEWATER BIOCHEMICAL OXYGEN DEMAND (BOD) AND TOTAL SUSPENDED SOLIDS (TSS) SURCHARGES P~e5 An analysis should be done to determine a treatment costtng methodology for both of these parameters Based upon treatment costs, the CONSULTANT wall determtne ffthe surcharge rate levels are appropriate, and provide written recommendations for their activation 11. WASTEWATER SAMPLING AND ANALYSIS CHARGES Several wastewater rates currently contatn samphng and analysts charges (for each sample and analysts) The CONSULTANT wdl determtne tf these servmes are recovenng the appropriate costs, and provide recommendations for cost recovery of these services A revtew should be made to determtne if the costs to be recovered are justffiably stgmficant for the rate 12 WASTEWATER CATEGORICAL & NON-CATEGORICAL MONITORING COSTS The extstmg wastewater rates contatn fixed monthly charges for categorical and non- categorical momtormg costs The CONSULTANT is to determtne ff these fixed charges are recovenng costs, and make a recommendatton regardtng the best method for cost recovery tn these areas 13 WATER & WASTEWATER RATE SCHEDULES After completion of the rate destgn, and prior to approval of rates by the Denton Ctty Counctl, the CONSULTANT may be asked to provtde asststance ~n wordtng spemfic water and wastewater rate schedules Clarity and stmphficatton of rate schedules ts tmportant tn order to obtatn full customer understandmg wtth all rates 14. SOFTWARE TRAINING The CONSULTANT wtll provide a m~mmum of one-half day of software trmnmg to enable Denton's staff to perform annual updates to the cost of servtce and rate destgn All proprietary software will be held confidential Denton Water Utthtles utthzes Mtcrosoft Office and Windows '95 C If there is any confhct between the terms of thts Agreement and the exhlbtt attached to thts Agreement, the terms and condttlons of thts Agreement shall control over the terms and condtttons of the attached exhibit ARTICLE III ADDITIONAL SERVICES Addtttonal servmes to be performed by the CONSULTANT, tf authorized by the OWNER, wluch are not included in the above-described Bastc Servmes, are described as follows A Any expert testtmony by CONSULTANT before any regulatory agency or court Page 6 ARTICLE IV PERIOD OF SERVICE This Agreement shall become effective upon execution of this Agreement by the OWNER and the CONSULTANT and upon issuance of a notice to proceed by the OWNER, and shall remain in force for the period which may reasonably be required for the completion of the Project, including Additional Services, If any, and any required extensions approved by the OWNER This Agreement may be sooner terminated in accordance with the provisions hereof Time is of the essence in this Agreement The CONSULTANT shall make all reasonable efforts to complete the services set forth herein as expeditiously as possible and to meet the schedule established by the OWNER, acting through its Director of Water Utilities or her designee ARTICLE V COMPENSATION A COMPENSATION TERIVIS "Direct Non-Labor Expense" is defined as that expense incurred in performing professional services under th~s Agreement by the CONSULTANT for supplies, transportation, travel, communications, subsistence, lodging away from home, and similar incidental expenses reasonably incurred in connection with the Project B. BILLING AND PAYMENT For and in consideration of the professional services to be performed by the CONSULTANT herein, the OWNER agrees to pay, based on the cost estimate detail, at the hourly rates set forth In the "Proposal to Perform Cost of Service and Rate Design Study (Revised Cost Proposal)" hereinafter referred to as the "Proposal," dated October 27, 1998, which is attached hereto as Exhibit "A" and incorporated herewith by reference, a total fee, including reimbursement for direct non- labor expenses not to exceed $ 59,784 00 Partial payments to the CONSULTANT will be made on the basis of detailed monthly statements rendered to and approved by the OWNER through ~ts Assistant City Manager for Utilities or his designee, however, under no circumstances shall any monthly statement for services exceed the value of the work performed at the time a statement is rendered The OWNER may withhold the final ten percent (10%) of the contract amount until satisfactory completion of the Project Nothing contained in this Article shall require the OWNER to pay for any work which Is unsatisfactory, as reasonably determined by its Assistant City Manager for Utilities or his designee, or which is not submitted in compliance with the terms of this Agreement The OWNER shall not be required to make any payments to the CONSULTANT when the CONSULTANT is in default under tlus Agreement It IS specifically understood and agreed that the CONSULTANT shall not be authorized to undertake any work pursuant to this Agreement which would require additional payments by the OWNER for any charge, expense, or reimbursement above the Page 7 maximum not to exceed fee as stated, without first having obtained written authorization from the OWNER The CONSULTANT shall not proceed to perform the services listed m Article III "Additional Services," without obtalmng prior written authorization from the OWNER C ADDITIONAL SERVICES For additional services authorized m writing by the OWNER m Article III, the CONSULTANT shall be paid based on the schedule of charges at the hourly rates set forth in Exhibit "A" hereto Payments for additional services shall be due and payable upon submission by the CONSULTANT, and shall be in accordance with subsection B hereof Statements shall not be submitted more frequently than monthly D PAYMENT If the OWNER falls to make payments due the CONSULTANT for services and expenses within sixty (60) days after receipt of the CONSULTANT's tmdlsputed statement thereof, the mounts due the CONSULTANT will be increased by the rate of one percent (1%) per month from and after the said s~xtleth (60th) day, and, ~n addition, the CONSULTANT may, after glwng seven (7) days written notice to the OWNER, suspend services under this Agreement tmtfl the CONSULTANT has been paid in full all amounts then due and owing for services, expenses, and charges, provided, however, nothing herein shall require the OWNER to pay the late charge of one percent (1%) set forth herein if the OWNER reasonably determines that the work is unsatisfactory, in accordance w~th this Article V, "Compensation" ARTICLE VI OBSERVATION AND REVIEW OF THE WORK The CONSULTANT will exercise reasonable care and due diligence m discovering and promptly reporting to the OWNER any defects or deficiencies in the work of the CONSULTANT ARTICLE VII OWNERSHIP OF DOCUMENTS All documents prepared or furnished by the CONSULTANT 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 apphcable to this Project, and OWNER's use of these documents m any other project(s) 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 specified herein, CONSULTANT is released from any and all hablhty relating to their use m that project Page 8 ARTICLE VIII INDEPENDENT CONTRACTOR CONSULTANT shall prowde services to OWNER as an independent contractor, not as an employee of the OWNER CONSULTANT shall not have or clmm any right arising from employee status ARTICLE IX INDEMNITY AGREEMENT The CONSULTANT shall ~ndemmfy and save and hold harmless the OWNER and ~ts officmls, officers, employees, and agents from and agmnst any and all hab~hty, clmms, demands, damages, losses, and expenses, mcludmg, but not hm~ted to court costs and reasonable attorney's fees lnctuxed by the OWNER, and mcludlng, without limitation, damages for boddy and personal ~njury, death and property damage, msult~ng from the neghgent acts or omissions of the CONSULTANT or as officers, employees, agents, subcontractors and subconsultants m the execution, operation, or performance ofth~s Agreement Nothing in this Agreement shall be construed to create a hab~hty to any person who ~s not a party to th~s Agreement, and nothing herein shall wmve any of the part,es' defenses, both at law or eqmty, to any clmm, cause of action, or litigation filed by anyone not a party to th~s Agreement, including the defense of governmental ~mmumty, whmh defenses are hereby expressly reserved ARTICLE X INSURANCE Dunng the performance of the servmes under th~s Agreement, CONSULTANT shall mmntmn at all t~mes, the following insurance coverage with an ~nsurance company or companies hcensed to do bus~ness m the State of Texas by the State Insurance Commission or any successor agency, that has a rating w~th A M Best Rate Careers of at least an "A-" or above A Comprehensxve General Lmbd~ty 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 Lmbfl~ty Insurance w~th bodily ~n.lury hm~ts of not less than $500,000 for each person and not less than $500,000 for each acmdent, and w~th property damage hm~ts of not less than $100,000 for each acmdent C Worker's Compensation Insurance ~n accordance w~th statutory reqmrements, and Employers' Lmb~hty Insurance w~th hm~ts of not less than $100,000 for each accident D Professional Lmbfl~ty Insurance w~th hm~ts of not less than $1,000,000 annual aggregate Page 9 E The CONSULTANT shall furnish insurance certificates or ~nsurance pohc~es at the OWNER's request to ewdence such coverages The insurance policies shall name the OWNER as an additional ~nsured on all such pohcles to the extent permitted by law, and shall contmn a prowsaon that such insurance shall not be cancelled or modified w~thout thirty (30) days' pr;or written not~ce to OWNER and CONSULTANT In such event, the CONSULTANT shall, prior to the effective date of the change or cancellation of coverage, deliver substitute pohales or certificates ewdenc~ng the same coverage ARTICLE XI ARBITRATION AND ALTERNATE DISPUTE RESOLUTION The part,es may agree to settle any d~sputes under th~s Agreement by submitting the d~spute to arbitration or other means of alternate d~spute resolution, such as medmt~on No arbitration or alternate thspute resolution arising out of or relating to this Agreement, ~nvolwng one party's d~sagreement, may include the other party to the d~sagreement without the other's approval ARTICLE XII TERMINATION OF AGREEMENT A Notw~thstandmg any other prowslon of th~s Agreement, e~ther party may tenmnate thts Agreement by g~vlng thirty (30) days' advance written notice to the other party B Th~s Agreement may be terminated ~n whole or m part in the event of e~ther party substantmlly falhng to fulfill ~ts obhgatlons under th~s Agreement No such terunnat~on will be effected unless the other party ns given (1) written not~ce (delivered by cemfied mall, return receipt requested) of ~ntent to terminate and setting forth the reasons spec~fylng the non-performance, and not less than thirty (30) calendar days to cure the failure, and (2) an opportunity for consultation w~th the terminating party prior to termination C If the Agreement ~s terminated prior to completion of the services to be prowded hereunder, CONSULTANT shall ~mmedmtely cease all services and shall render a final bill for services to the OWNER w~th~n thirty (30) days after the date of termination The OWNER shall pay CONSULTANT for all services rendered and satisfactorily performed, and for reimbursable expenses ~ncurred prior to the date of termination, in accordance w~th Article V hereof Should the OWNER subsequently contract w~th a new consultant for the continuation of services on the Project, CONSULTANT shall fully cooperate ~n prowdmg ~nfonnat~on The CONSULTANT shall turn over all documents prepared or furmshed by CONSULTANT pursuant to th~s Agreement to OWNER on or before the date of termination, but may mmntaln cop~es of such documents for ~ts own use Page 10 ARTICLE XIII RESPONSIBILITY FOR CLAIMS AND LIABILITIES Approval by the OWNER shall not constitute, nor be deemed a release of the responmblhty and habfllty of the CONSULTANT, its officers, employees, assocmtes, agents, subcontractors or subeonsultants for the accuracy and competency of their work, nor shall such approval be deemed to be an assumptmn of such respons~b~hty by the OWNER for any defect in the work prepared by the CONSULTANT, 1ts officers, employees, or agents ARTICLE XIV NOTICES All notmes, communications, and reports required or peruntted under th~s Agreement shall be personally dehvered or marled to the respective parties by depositing same in the Umted States mml to the respective parties at the addresses shown below, by means of certified mall, return receipt requested, unless otherwise specified herein To CONSULTANT To OWNER Reed-Stowe & Co, Incorporated C~ty of Denton Jack E Stowe, Jr, President Jdl Jordan, Director of Water Utdltles 1651 N Colhns Blvd, State 115 901-C Texas Street R~chardson, Texas 75080 Denton, Texas 76201 All notices shall be deemed effective upon receipt by the party to whom such notice is given ARTICLE XV ENTIRE AGREEMENT Th~s Agreement, consisting of fourteen (14) pages and one (1) exhibit, constitutes the complete and final expression of the agreement of the part,es, and ~s intended as the complete and exclustve statement of the terms of their agreements, and supersedes all prior contemporaneous offers, prounses, representations, negotiations, discussions, understandings, commumcatlons, and agreements which may have been made in connection w~th the subject matter hereof ARTICLE XVI SEVERABILITY If any prows~on of th~s Agreement ~s found or deemed by a court of competent junsd~ctmn to be invalid or unenfomeable, it shall be consadered severable from the remmnder of this Agreement and shall not cause the remmnder to be mvahd or unenforceable In such event, the part,es shall reform th~s Agreement to replace such stricken provision with a vahd and enforceable prowsmn which comes as close as possible to expressing the parties' ~ntentlon respecting the stricken prowslon Page 11 ARTICLE XVlI 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 hereafter be amended ARTICLE XVIII DISCRIMINATION PROHIBITED In performing the services required hereunder, the CONSULTANT shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap ARTICLE XIX 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 interest or potential conflict of interest that may arise during the term of this Agreement B All services required hereunder w~ll be performed by the CONSULTANT or under its direct 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 XX ASSIGNABILITY The CONSULTANT shall not assign any interest m 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 XXI MODIFICATION No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contmned shall be valid unless in writing and duly executed by the party to be charged therewith, and no evidence of any wmver or modification shall be offered or received in evidence in any proeeedmg arising between the partaes hereto out of or affecting this Agreement, or the rights or obligations of the parties hereunder, unless such waiver or modification is in writing and duly executed The parties further agree that the provisions of this Article will not be waived unless as set forth herein Page 12 ARTICLE XXII MISCELLANEOUS A The following exhibit is attached to, incorporated by reference, and 1s made a part of this Agreement Exhibit "A" - Proposal to Perform Cost of Service and Rate Design Study (Revised Cost Proposal) dated October 27, 1998 B CONSULTANT agrees that OWNER shall, until the expiration of three (3) years after the final payment under this Agreement, have access to and the right to examine any directly pertinent books, documents, papers, and records of the CONSULTANT involving transactions relating to this Agreement CONSULTANT agrees that OWNER shall have access during normal working hours to all necessary CONSULTANT facd~t~es and shall be provided adequate and appropriate working space in order to conduct authts in compliance with this section OWNER shall give CONSULTANT reasonable advance notice of intended audits C Venue of any suit or cause of action brought under this Agreement shall lie exclusively in Denton County, Texas This Agreement shall be governed by and construed in accordance w~th the laws of the State of Texas D For purposes of this Agreement, CONSULTANT designates the key person who will oversee and perform most of the work provided for hereunder, as Jack E Stowe, Jr, President of CONSULTANT, who shall also be OWNER's primary point-of-contact for the Project However, nottung herein shall limit CONSULTANT from using other qualified and competent members of its firm to perform the services required herein E CONSULTANT shall commence, carry on, and complete any and all projects with all applicable dispatch, in a sound, economical, and efficient manner and in accordance with the provisions hereof In accomplishing the projects, CONSULTANT shall take such steps as are appropriate to ensure that the work involved is properly coordinated with related work being carried on by the OWNER F The OWNER shall assist the CONSULTANT by placing at the CONSULTANT's disposal all available information pertinent to the ProJect, lncludmg previous reports, any other data relative to the ProJect, and arranging for the access thereto, and make all provisions for the CONSULTANT to enter in or upon public and private property as required for the CONSULTANT to perform services under this Agreement G The captions of this Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of this Agreement IN WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be executed in four original counterparts by and through its duly-authorized City Manager, and Page 13 CONSULTANT has e~e~guted th~s Agreemont by and through ~ts duly-authorized undersigned officer on th~s the ,~,e_~x~ dayof /~/Ot/~/~/~ ,1998 "OWNER" CITY OF DENTON, TEXAS M~O~I6"'L~rL 'W/JEZ, ~,IANAOER ATTEST JENNIFER WALTERS, CITY SECRETARY ^m~v~ ~o ~o^~ ~o~ HERBERT L PROUTY, CITY ATTORNEY "CONSULTANT" REED-STOWE & CO, INCORPORATED JA~/f STOWE, JR, PRES~JqT ATTEST BY S \Our Docum~nts\Contracts\98\W&WWCO$ and Rat~ Design [RFP] PSA doc Page 14