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1996-211E \WPDOCS\ORD\RMI TSK NOTE First Amendment to Contract - 96-276 Second Amendment to Contract - 97-264 ORDINANCE NO qG'g;I AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH RESOURCE MANAGEMENT INTERNATIONAL ("RMI"), AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the Cmty Manager Ks hereby authormzed to execute a professmonal services agreement wmth Resource Management International ("RMI"), a copy of whmch Ks attached hereto and incorporated heremn SECTION II That the expendmture of funds as provmded in the attached agreement ms hereby authormzed SECTION III That thms ordmnance shall become effectmve mmmedmately upon mrs passage and approval PASSED AND APPROVED thms the /~ day of~7~, 1996 ATTEST JENNIFER WALTERS, CITY SECRETARY BY fU __~ _ APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY STATE OF TEXAS § COUNTY OF DENTON § PROFESSIONAL SERVICES AGREEMENT and between Resource Management International, Inc ( RMI ), a Cahforrua corporation, and City of Denton, Texas ("City"), a Texas mumcipal corporation with its principle office at 215 East McKmney Street, Denton, Texas, 76201, for professional and related serwces to be provided to City, both parties acting by and through their duly authorized representatives I SCOPE OF SERVICES RMI shall prowde to City the servxces set forth m individual Task Order made an attachment to this Agreement II FEES FOR SERVICES For, services provided by RMI to City pursuant to this Agreement, City shall pay R.MI m accordanee with the rates and charges set forth m Exhibit A, "Fees for Services", attached hereto and made a part of flus Agreement for all purposes, provided however such charges and rates shall not exceed $25,000, unless the City agrees by an amendraent to this Agreement to increase the maramum fee for servlces III BILLING AND PAYMENT RIVII shall subrmt a monthly statement to City setting forth the amount due for services and itemmmg amounts due for expenses City shall pay the full amount of such statement within thirty (30) days after receipt Any sums bdled, not chsputed m written form setting forth specific exceptions and unpal~ after thirty (30) days from the date of receipt, shall be subject to a late payment charge equal to th~ lesser of one and one-half (1-1/2) percent or the maximum rate perrmtted by law, for each month or fraction thereof past due Nothing contamed in this article shall require the City to pay for any work wfuch is unsatisfactory as reasonably determined by the Executive Director of Utilities fo~ the City or which is not submitted m compliance with the terms of this contract Nor shall any late charge apply to any such unsatisfactory or dmputed work The Caty shall not be required tl make any payments to RMI when RMI is in default under this Agreement IV INDEPENDENT CONTRACTOR P, MI shall prowde serwces to City as an mdependent contractor, not as an employee of City RMI shall not have or claam any right arising from employee status RMI agrees to perform the services hereunder m connectaon with the project as stated m the seclaons to follow with diligence and m acco~clance with the tughest professional standards obtained for such services in the State of Texas V TERM AND TERMINATION OF AGREEMENT (a) Unless otherwise termmated as provided herein, flus Agreement shall become effectave upon execuhon by the parlaes and shall terminate when (0 the serwces provided for herem have been fully and completely performed or 01) December 31, 1998, wtuchever occurs first Tfus Agreement may be sooner terrmnated m accordance with the provisions hereof Time is of the essence m ti'us Agreement RMI will make all reasonable efforts to complete the services set forth herein as expedlhou$1y as pusslble to meet the schedule established by the City (b) Notwithstanding any other provision of ti'us Agreement, either party may termmate t?us Agreement by g~vlng flurty (30) days advance written noiace to the other party (c) ~bas Agreement may be terrmnated m whole or m part m the event of either party substantially failing to fulfill its obhgataons under the Agreement No such terrmnat~on will be affected, unless the breactung party is g~ven (1) written nohce, dehvered by certified mall, return receipt requested, of intent to terminate, and not less than tbarty (30) calendar days to cure the failure, and (2) an bpporturuty for consultation with the terminating party prior to terrmnahon (d) IIf the Agreement is terminated prior to completaon of the services to be provided hereunder, RMI shall immediately cease all services and shall render a final bill for services to City w~thm th~ (30) days after the date of termination, and City shall pay RMI for all services properly rendered and reimbursable expenses to terrmnataon recurred prior to the date of terrmnataon in accordance with Section III Should the City subsequently contract with a new consultant for continuation of serwces on the prolect, RMI shall cooperate m prowdmg mformataon All documents prepared ow furrushed by RMI pursuant to t?us Agreement shall become the property of owner, but RMI may rnamtam copies of such documents for its use VI INSURANCE (a) RMI shall maintain m effect at its own expense, employer's liability insurance, one million dollars ($~,000,000) aggregate of comprehensive general liability insurance (bodily injury and property damage), five hundred thousand dollars ($500,000) aggregate of comprehensive automobile liability insurance (bodily injury and property damage) with respect to employees and vehicles assigned tO the prosecution of work under flus Agreement, and one mflhon dollars ($1,000,000) aggregate [of professional hablhty insurance RMI shall also mamtaln statutory worker's compensalaon insurance 2 (b) RMI shall obtam and thereafter mamtam in effect, if available, such additional msurance as may be requested m writing by City, the cost of wl'uch w~ll be reimbursed by City (c) RMI shall furrush insurance certificates to evidence such coverages to City The City shall be named as an addit~onal insured on such pohcles The certificates shall contain a provision that such insurance shall not be canceled or mochfied without tturty (30) days prior written notice to City VII LIABILITY (a) RMI shall indemnify and hold harmless City, its directors, officers, partners, agents, and employees from and against any and all hablhty, claims, demands, damages, losses, and expenses, including but not hrmted to attorney's fees, for wtuch RMI is determined to be legally liable resultmg from negligent acts, errors, or omissionS by RMI, its directors, officers, agents, and employees in performance of services required by this Agreement Llabdlty, claims, demands, damages, losses, or expenses resulting from the neghgent acts, errors or omissions, whether active or passive, by City, its ch~ctors, officers, partners, agents, employees, are excluded from RMI's obhgahons pursuant to th~s paragraph (b) RMI's obhgat~ons to mdemmfy and hold City harmless shall be expressly limited to the proceeds of its applicable insurance coverage (c) In the event that City changes m any way or uses in another project or for other purposes any of the reformation or materials developed by RMI pursuant to this Agreement, RMI is released from any and all habfllty relating to their use in that project and to the extent allowed by law, City shall indemnify and hold harmless RMI, its directors, officers, agents, and employees from and against any and all hablhty, claims, demands, damages, losses, and expenses, lncludmg but not hmlted to attorney's fees, arising out of such changes or use (d) Nothing m ttus Agreement shall be construed to create a duty to, any standard of care with reference to, or any liability to any person not a party to this Agreement VIII SUCCESSORS IN INTEREST TI'us Agreement shall be bmdmg on, and inure to the benefit of, each party's successors in interest, mcludlng their heirs, legatees, assignees, and legal representatives IX WAIVER Any waiver at any t~me by either party of its r~ghts with respect to a default under this Agreement, or w~th respect to any other matters arising m counect~on with flus Agreement, shall not be deemed a waiver with respect to any subsequent default or other matter X SEVERAL OBLIGATIONS Except where specifically stated m this Agreement to be otherwise, the duhes, obhgahons, and hablhties of the parlaes are intended to be several and not joint or collective Nothing contained m thru Agreement shall be construed to create an association, trust, partnersinp, or joint venture or impose a trust or partnership duty, obhgation, or liability on or with regard to either party Each party shall be individually and severally liable for its own obhgahons under this Agreement XI AMENDMENT All changes or mochficataons to tins Agreement shall be m writing and signed by both parhes XII GOVERNING LAW Thru Agreement shallbe 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 stat or cause of action under tins Agreement shall lie exclusively in Denton County, Texas XIII ATTORNEY'S FEES If either party becomes involved m htlgation arising out of tins Agreement or the performance thereof, the prevailing party shall be entitled to reasonable attorney's fees, costs and expenses, m addation to any other relief to winch that party may be entitled This provision shall be construed As applicable to the entire Agreement XIV ENTIRE AGREEMENT Thru Agreement constatutes the complete and final expression of the agreement of the part~es 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, dmcusslons, commumcations, and agreements winch may have been made m connection with the subject matter hereof XV SEVERABILITY If any provision of tins Agreement is found or deemed by a court of competent jurisdiction to be mvahd or unenforceable, it shall be considered severable from the remainder of tins Agreement and shall not cause the remamder to be invalid or unenforceable In such event, the parties shall reform ttus Agreement to replace such stricken provision with a valid and enforceable provision winch comes as close as possible to expressing the retention of the stricken provision 4 XVI NOTICES (a) Any not~ce, demand, mformat~on, invoice, report, or item otherwise reqmred, authorized, or prowded for mttus Agreement, unless otherwme spectfied herein, shall be deemed properly g~ven if delivered m person or sent by Umted States Mall, First Class postage prepaid To RMI Resource Management International, Inc P O Box 15516 Sacramento, Ca 95852-1516 Copy to Resource Management International, Inc 8310 Capital of Texas Highway N, Suite 385 Austin, TX 78731-1026 To City Executive Director, Department of Utilities City of Denton, Texas 215 E McKmney Street Denton, TX 76201 (b) All notices shall be deemed effechve upon receipt by the party to whom such not~ce is given XVII RESPONSIBILITY FOR WORK Approval by the City shall not constitute nor be deemed a release of RMI, its employees, assocmtes, agents, and consultants for the accuracy and competency of their designs or other work Nor shall approvalbe deemed to be an assumption of such responsibility by the City for any defect m the work prepared by RMI, its employees, subcontractors, agents, and consultants XVIII CAPTIONS The captions of thru Agreement are for mformahonal purposes only and shall not m any way affect the substantive terms or conditions of tbas Agreement XIX SIGNATURE CLAUSE Thelslgnatorles hereto represent that they are authorized to enter into tl, us Agreement on behalf of the party for whom they sign City of Denton, Texas Resource Management International, Inc Approved as to Form Herbert L Prouty City Attorney 6 EXHIBIT A FEES FOR SERVICES 1996 Professional and support services, except for teshmony, shall be billed at the followmg rates Managing Executave Consultant $160 per hour Principal Executive Consultant $144 per hour Execuhve Consultant $137 per hour Principal Consultant $126 per hour Supervising Consultant $112 per hour Seruor Consultant $102 per hour Associate Professional $ 88 per hour Analyst $ 78 per hour Research Assistant $ 59 per hour Technician $ 51 per hour Office Services $ 47 per hour The above rates shall be adjusted each year, commencing January 1, 1997, to reflect the change in rates officially established by the RMI Board of Directors Testimony shall be billed at not less than eight (8) hours per day Reproductapn, printing, commumcatmns, computer services, and other miscellaneous support services shall be billed at rates for such services as deterrmned from t~me to t~me and officially estabhshedlby the RMI Board of Directors plus ten (10) percent All travel, food, lodging, and rmscellaneous expenses, except automobile mileage, associated with the provmon of serwces hereunder shall be btlled at cost Automobile mileage shall be billed at $0 30 per mile Chent shall reimburse RMI for any applicable sales tax imposed on services rendered by RMI to Client A-1 ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON TASK ORDER NO 96A TMPA COST ISSUE REVIEW Sennces provided under flus Task Order will address two ~ssues The first is a review of power costs from TMPA The second is a topical report or "White Paper" for the City to use m supporting its poslhon regarding stranded costs recovery at the legislature In Task A, power Cost Review, RMI will review the projected power costs from TMPA's Gibbons Creek plant, The purpose of the review is to provide the City of Denton (City) with an independent assessment of power costs projects by TMPA Key areas will include review of the new fuel and transportation contracts and the flow through of expenses wluch have been deferred related to hgrute mine t~rmmat~on costs and other factors The work will include the followmg primary areas of evaluation wtuch are described below as Tasks A-1 through A-5 Summary. of Tasks A-1 Review latest TMPA Power Sales Agreement, TMPA forecasts and most recent projections of power costs and assumptions used in making those projections A-2 Review fuel and transportation contracts A-3 Review accounting policies as they will affect rates, m particular the deferral of expenses as Other Assets and the hmmg of flow through of such expenses into rates A-4 Review TMPA project~ons of overhead costs and projected capital expenditures A-5 Prepare letter report documenting assumphons used in TMPA's projechon of costs and identifying areas where the electric restructuring process in Texas may suggest the need for modifications to TMPA's projections In Task B, RMI will prepare a Wl'ute Paper for the City to use m its lobbying efforts The WI'ute Paper will present the tustory of TMPA and describe how legislative and regulatory mandates affected the deciszon tolbulld a hgrute plant at Gibbons Creek The tustory w, ll be linked to the stranded costs that the City could become exposed to as a result of restructunng in Texas F~nally, a proposal for spreading some stranded costs to all ratepayers in Texas will be presented 96A -1 TASK A POWER COST REVIEW Subtask A-1 Review of TMPA Forecast 1 A meeting will be held with TMPA staff to lmtaate the Power Cost Analysis study 2 RM! will review TMPA's current power cost forecast and power price projections The assumphons used m the forecast and projectaous will be documented 3 RMI will obtain and review data used by TMPA ~n the POWERSYM model 4 A meeting with TMPA staff will be held to review the forecasts and price projectaons, to ask questions and receive input from TMPA staff 5 A stunmary will be written that describes the TMPA forecast process, the models used, and documents the assumptions used Subtask A.2 Review of Fuel Contracts and Transportation Contracts 1 The coal and rail transportahon contracts will be reviewed and summarized 2 The dehvered coal price prolectaons used by TMPA in its most recent forecast of power costs will be reviewed 3 A summary will be written that describes the contracts and delivered fuel cost projec~ons Subtask A-3 Review Rate Effect of Accounting Policies 1 RMI will rewew with TMPA staff and TMPA accountants the accountang policies associated with Other Assets as shown on the TMPA balance sheet These pohcies will be documented 2 The process by wtuch deferred expenses m Other Assets will be flowed through power rates to the TMPA c~taes will be investigated and documented 3 A summary will be written that describes accounting policies used and how they affect rates Task A-4 Review of Overhead Costs and Capital Expenditure Forecasts 1 The capital constructaon forecast and the taming and sources of funding for those expenchtures will be rewewed The allocataon of costs to generataon versus transmission will be rewewed 2 Overhead cost prolechons w~ll be reviewed, along with the allocataon of those costs to generation versus transmission cost of serwce 3 A summary will be written that summarizes the projected overhead costs and the allocation of those costs between generataon and transmission Th~s section will also address capital expenditures and projected funding reqturements Subtask A-5 Letter Report 1 A final letter report contmrung the summaries will be issued which provides a documented review of TMPA projected power costs and the assumptaons used in arriving at .the projected costs as evaluated in Tasks A-1 through A-4 above 96A -2 TASK B WHITE PAPER Subtask B-1 Research 1 Research history of TMPA's actions and industry condlhons leading to decision to build Gibbons Creek 2 Review TMPA enabling act and legislative discussion 3 Review Federal Fuel Use Act and its effect on building generahon plants in Texas at the time Gibbons Creek was being built 4 Identify mandates by Texas Railroad Commission winch may have contributed to decisions made at that t~me 5 D~scuss tustory with individuals involved in decision 6 Review study recommending construchon of Gibbons Creek Subtask B-2 1 Prepare a WI'ute Paper which examines the ~ssues that led to the City's decision to parhcipate m TMPA The Wtute Paper will present the ctrcumstances surrounding the decision to butld Gibbons Creek and also set forth the City's poslhon with respect to stranded cost recovery 2 The sources of potentially h~gh stranded costs attributed to Gibbons Creek will be ldenhfied Estimates of stranded costs will be provided based on the ECOM filing 3 The f~nanclal Impact on the City of restructuring will be discussed 4 The,operation of pubhc power uhhhes will be compared to investor-owned utlhhes, mcluded m Issues considered will be the return of profits to the commuxuty and local control 6 A plan to distribute stranded costs on a state-wide basis will be explored, quanhfied, and presented 7 Support for a state-wide recovery approach will be presented based on leglslatave and reglxlatory mandates ldenhfied w~thm the White Paper research Charges for, these services are eshmated to be $25,000 for hme and expenses The actual costs may vary depending on the extent of cooperation from TMPA staff Tins budget as established may be evaluated at anytime by RMI or the C~ty RMI w~ll bill monthly and will not exceed the $25,000 budget without approval from the City It is understood that this budget assumes that the City of Garland will parhcapate m a hke amount Should Garland not parttc~pate or participate in an amount chfferent from the $25,000, ttus budget will need to be adjusted In such event, the City must approve any changes before RMI will initiate work 96A -3 This Task Order is authonzed and made an attachment to the above identified Professional Services Agreement Ithrough the s~gnatures below Authorlzedlby Accepted by City of Denton, Texas Resource Management International, Inc By / By Dated:~.~O?]~l: /C]~ Dated 8 -~) ~O[~::~ 96A -4 J \NPDOCS\ORD\RM~AME#D ORD AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A FIRST AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH RESOURCE MANAGEMENT INTERNATIONAL ("EMI"); AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I That the City Manager is hereby authorized to execute the first amendment to the professional services agreement with Resource Management International ("RMI"), a copy of which is attached hereto and incorporated herein, along with any task orders and other documents necessary to the performance of the first amendment. SECTION II. That the expenditure of funds as provided in the attached agreement ~s hereby authorized. SECTION III. That th~s ordinance shall become effectlve immediately upon its passage and approval. PASSED AND APPROVED this the ~_~ day of ~-~~1996. JAC~ ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY STATE OF TEXAS COUNTY OF DENTON FIRST AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT This first amendment to the Professional Services Agreement entered into on the 17th day of September, 1996 by and between Resource Management International, Inc , a California corporation ("RMI") and the City of Denton, Texas, a Texas municipal corporation with its principal offices at 215 East McK~nney, Denton, Texas ("City") for professional and related services provided to the city, hereinafter referred to aa "Base Agreement" In consideration for the terms and conditions set forth herein, the parties hereby agree I That Section I "Scope of Services" of the Base Agreement is hereby amended to read as follows RMI shall provide to the City the services set forth in individual task orders made as attachments to this Agreement including without limitation, Task Orders No 96A and 96B II That Section II "Fees for Services" of the Base Agreement is hereby amended to read as follows For services provided by RMI to City pursuant to this Agreement, the City shall pay RMI in accordance with the rates and charges set forth in Exhibit A "Fees for Services," attached hereto and made a part of this Agreement for all purposes provided, however, such charges and rates shall not exceed $80,000 unless the City agrees by an amendment to this Agreement to increase the maximum fee for services III That save and except as amended hereby, all the terms, conditions, clauses, and sentences of the Base Agreement shall remain in full force and effect The signatories hereto represent that they are authorized to enter into this Agreement on behalf of the party for whom they s~gn CITY OF DENTON, TEXAS RESOURCE MANAGEMENT INT , INC APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY PAGE 2 Date December 3, 1996 CITY COUNCIL AGENDA ITEM TO' MAYOR AND MEMBER. S OF THE CITY COUNCIL FROM' Ted Benevides, City Manager SUBJECT: POWER SUPPLY OPTION STUDY RECOMMENDATION' The Electric Utlhty staff and the Pubh¢ Utthty Board recommends that the C~ty Manager be authorized to h~re RMI to develop, ~ssue and coordinate analysis of an RFP for power supply options for Denton SUMMARY: Denton ~s forecast to reqmre additional electric generating capacity m the near future In addition, the power supply market ~s changing rapidly as a result of market deregulation In order to make strategic decisions regarding the future of power production and purchase by the electric utility, the options available must be defined In th~s rapidly changing market, the only way to define the options that are available ~s to allow the compemlve market place to respond to an RFP The attached task order defines an RFP process that w~ll encourage consideration of all available options The ~mtlal task of th~s effort w~ll consist of a rewew of the ex~stmg load forecast, development of the RFP, ~ssuance of the RFP, and ~mt~al screemng of all proposals received The final task in this process w~ll be an ~n depth analysis and negotiation of the f'mahst proposals RMI was selected to perform th~s task because of their fam~llanty w~th Denton's existing resource s~tuat~on, the data base and production cost model development of the Denton system they have already completed, and their experience ~n performing th~s type of act~wty for other pubhc utthtles FISCAL IMPACT: The cost of the ~mtlal task for flus power supply option study ~s $55,000 A budget for the ~n depth review of fmahst proposals will be developed upon completmn of the ~mtml task Respectfully submitted, R E Nelson Fxecut~ve D~rector Utthnes Prepared by Sharon Mays D~rector of Electric Utlhtles ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON TASK ORDER NO 96B EVALUATION OF POWER SUPPLY ALTERNATIVES Services prowded under thru Task Order w~ll assist the City of Denton (C~ty) ~n evaluating the c~ty's options for power supply Resource Management International, Inc (RMI) wdl assist m 1) development of the Request for Proposals (RFP) document, 2) faclhtat~ng the RFP and commumcatmg the C~ty's desxre to consider a broad range of power supply options, and, 3) evaluation of proposals The work act~wty identified m ti'us Task Order will include a detailed review and ranking of a select number of proposals The work act~wty of RMI w~ll mclude fac~htatmg responses to the C~ty's Request For Proposals that will include a broad-based consideration of supply options The mtent w~ll be to encourage both tracht~onal and innovative solutions to reducing the City's power costs R_MI will mmntam contact w~th the proposers and encourage through d~scusslons creative approaches that consider not only Denton's incremental power needs, but also potential ophons to lower the C~ty's overall power costs through alternative uses of ex~stmg generation RMI w~ll maintain a tugh degree of on-going commurucot~on with ut~hty staff dunng the evaluation process RMI will conclude the work act~wty in the Task Order w~th a recommendation of the best ophon/ophons for the City to consider for further negohat~ons Task A Review of Load Forecast RMI will rewew the C~ty's Load Forecast and make recommendations where appropriate · A data request will be prepared requeshng supportmg data for the forecast (It ~s assumed the C~ty will be able to provide most of that mformatmn on d~sk) · Variables w~ll be examined for outhers and consistency between lustorlc and forecasted data pomts · The models and the statistics for those models will be reviewed · Staff will be ~nterwewed through a conference call to discuss procedures used ~n developing h~storlc and forecasted independent variables · A letter report will be written to present f~ndlngs and to make recommendations regarding the use of the forecast for planning purposes Task B Review of Request For Proposal RMI will work w~th the City in preparmg the RFP for power supply to the C~ty · RMI w~ll work w~th City staff to develop a RFP that will encourage respondents to prowde proposals that consider the City's overall power requirements Not only should respondents look at power supply options that meets the City's incremental power needs, but the C~ty w~ll also consider power options that may exceed the mcremental power reqturements of the City The RFP should be structured to allow such consideration while maintaining sufficient definition and parameters to allow a comparative evaluation of the submittals Alternatives which may be considered mchide traditional blocks of purchased power economy energy purchases lease arrangements entering into operating agreement to run city generation support of cogeneration projects repowermg of erastmg City umts pooling arrangements partnering with customers on generation projects new customer alhances mchidmg demand-side management m~tiatives full requirements supply incorporating credit for existing City resources others as proposed · The RFP will be comprehensive It will include suffic~ent information regarding City operations to allow development of detailed proposals Staff will be mstrumental in prowdmg the reformation to RMI Discussions w~th staff throughout development of RFP w~ll be held to evaluate handling of confidential information · Respondents will be encouraged to make mnovative use of the City's existing generation to arrive at a low cost, efficient and reliable solution to the City's power needs · A comprehensive description of the City's exlstmg resources and future projected power requirements w~ll be provided to allow proposers effechve consideration of the range of potential supply arrangements · The format of proposal responses will be structured to allow for effective comparison of proposals Task C RFP Process The RFP will be msued by RMI to a vvude group of pubhc power and investor-owned utilities, river authorities, power marketers and power developers Included m RMI's work activity will be · Identification of entities to be included on mallmg hst for RFP · Preparation of advertisement language and identification of publications to inform the public of the City's RFP · Distribution of the RFPs to maflmg list and m response to requests from advertisements · Planning for and chrectmg a pre-proposal meeting to allow for better understanding of City's requirements and existing resources, pre-proposal meeting activity ~rught include tour of City's Spencer Power Plant · Respondmg to proposers' questions regarding RFP Task D Evaluation of Proposals RMI will prepare a multi-step review of proposals Proposal review act~vities will be conducted to focus the majority of rewew effort on most desirable proposals Following receipt of proposals, each proposal will be reviewed and clarification of proposal language requested before comparative rewew is nutiated The evaluation will utihze a total system approach which judges the benefits of the proposal considering the City's involvement in TMPA and TMPP The following activities will be completed Phase I - Initial Screening · RMI's nutial review will include a screemng to ldennfy the most advantageous proposals The screemng criteria will include economic terms of power supply options financial strength of proposers experience with power supply in ERCOT Consideration of whether proposal is feasible wlttun given timeframe and other constraints · Results of n~tial rewew will be summarized and reviewed with City staff to establish proposers to receive more in-depth review Phase II - In-depth Review · In-depth review will include dmcusslon of proposal with proposer to assure proper understandmg of proposal terms evaluation of econormc terms over period of proposed supply period to include estimate of net present value of power supply option(s) coordination of cost and responslbthty for ancillary services and transrmsmon associated w~th dehvery of power supply identification and valuation of proposers' commitment to reduce City's responmblhty to assume cost variation risks PROSYM computer modelmg to be used to dispatch resources into City's resource rmx as stand alone system and as TMPP member to evaluate total cost benefits of proposal Task E Presentation of Results RMI will prepare a report summarimng findings and presenting recommendations to staff and to the Utility Board · Results of m-depth proposal rewews wtll be summarized and presented to City staff A meeting will be held to discuss results of proposal review and answer City staff questions · A final report will be prepared to present the results and recommendations from the RFP evaluation process · Another meeting will be held with the Utility Board to present the results of the evaluation and recommendations Development of an accurate project budget to complete these Tasks is difficult due to the breadth of proposal options to be considered and the fact that the number and complexity of proposals submitted are unknown Prehmlnary budget project, one are offered for portions of the work A budget of $55,000 is suggested for Tasks A through C, Phase I of Task D, and Task E The budget to complete m-depth proposal reviews will be very dependent upon the number of proposals reviewed and the complexity of the proposal evaluatmn (Expenses for detailed proposal reviews may be supported partmlly or fully by the proposers ) The work effort to prepare the m- depth rewew act~v, hes outlmed in Phase II of Task D are projected to range from $7,000 to $10,000 per proposal These estimates do not include engmeermg feasibility analysis of projects A budget to complete the detailed proposal rev,ewe m Phase II of Task D will be established following ldent~hcat~on of what proposals will be included m tlus review Ttus budget as established may be evaluated at anytime by RMI or the City RMI will bill monthly and will not exceed the authorized budget without approval from the City Ttus Task Order ~s authorized and made an attachment to the above ldenhhed Professional Services Agreement through the signatures below Authorized by Accepted by City of Denton, Texa~/~/if Resource Management International, Inc Bob Nelson, Executive Dxrector Dated Sharon Mays, Dated: Ted Benavxdes, C~ty Manager Dated: ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON TASK ORDER NO 96B EVALUATION OF POWER SUPPLY ALTERNATIVES Semces provided under this Task Order will assist the City of Denton (City) m evaluahng the city's options for power supply Resource Management International, Inc (RMI) will assist m 1) development of the Request for Proposals (RFP) document, 2) facilitating the RFP and communicating the City's desire to consider a broad range of power supply options, and, 3) evaluation of proposals The work actiwty identified m this Task Order will include a detailed review and ranking of a select number of proposals The work actiwty of RMI will include faclhtatmg responses to the City's Request For Proposals that will include a broad-based consideration of supply options The intent will be to encourage both trachtional and innova'ave solutions to reduong the City's power costs RMI will maintain contact with the proposers and encourage through discussions creative approaches that consider not only Denton's incremental power needs, but also potential options to lower the City's overall power costs through alternattve uses of existmg generation RMI will maintain a high degree of on-going commumcation with utthty staff during the evaluation process RMI will conclude the work activity in the Task Order with a recommendation of the best option/options for the City to consider for further negotiations Task A Review of Load Forecast RMI will review the City's Load Forecast and make recommendations where approprtate · A data request will be prepared requesting supporting data for the forecast (It is assumed the City will be able to provide most of that reformation on disk) · Variables will be examined for outhers and consistency between tustonc and forecasted data points · The models and the statistics for those models will be reviewed · Staff will be interviewed through a conference call to discuss procedures used in developing historic and forecasted independent variables · A letter report will be written to present findings and to make recommendations regardmg the use of the forecast for planmng purposes Task B Rewew of Request For Proposal RMI will work with the City m preparing the RFP for power supply to the City · RMI will work with City staff to develop a RFP that will encourage respondents to provide proposals that consider the City's overall power requirements Not only should respondents look at power supply ophons that meets the City's incremental power needs, but the City will also consider power options that may exceed the incremental power reqmrements of the City The RFP should be structured to allow such consideration while mamtammg sufficient defir~hon and parameters to allow a comparative evaluahon of the submittals Alternatives which may be considered include traditional blocks of purchased power economy energy purchases lease arrangements entering into operating agreement to run city generation support of cogeneratlon projects repowermg of exlstmg City units pooling arrangements partnering with customers on generation projects new customer alliances including demand-side management rmtiatives full requirements supply incorporating credit for existing City resources others as proposed · The RFP will be comprehensive It will mclude sufficient information regarding City operations to allow development of detailed proposals Staff will be instrumental in prowdmg the information to RMI Discussions with staff throughout development of RFP will be held to evaluate handling of confidential reformation · Respondents will be encouraged to make innovative use of the City's existing generation to arrive at a low cost, efficient and reliable solution to the City's power needs · A comprehensive description of the City's erastlng resources and future projected power requirements will be provided to allow proposers effective consideration of the range of potential supply arrangements · The format of proposal responses willbe structured to allow for effective comparison of proposals 2 Task C RFP Process The RFP will be ~ssued by RMI to a wide group of pubhc power and investor-owned utihties, river authorities, power marketers and power developers Included m RMI's work activity will be · Identificahon of entit~es to be included on mallmg list for RFP · Preparation of advertisement language and ldentlf~cation of pubhcat~ons to lrfform the public of the City's RFP · Distribution of the RFPs to maflmg list and m response to requests from advertisements · Planning for and chrectmg a pre-proposal meeting to allow for better understandmg of City's requirements and existing resources, pre-proposal meeting activity rmght include tour of City's Spencer Power Plant · Responding to proposers' questions regardmg RFP Task D Evaluation of Proposals RMI will prepare a multi-step review of proposals Proposal review achvlties will be conducted to focus the maJority of rewew effort on most desutable proposals Following receipt of proposals, each proposal will be reviewed and clarification of proposal language requested before comparahve rewew ~s tmtiated The evaluation will utilize a total system approach which judges the benefits of the proposal consldermg the City's involvement in TMPA and TMPP The following achvlhes w~l be completed Phase I - Initial $creemng · RMI's uutial review will include a screerang to identify the most advantageous proposals The screening criteria will mclude economic terms of power supply optmns fmanclal strength of proposers experience with power supply in ERCOT Consideration of whether proposal is feasible within given timeframe and other constramts · Results of Lrutial review will be summarized and reviewed with City staff to establish proposers to receive more in-depth review 3 Phase II - In-depth Rewew · In-depth review w~ll include discussion of proposal w~th proposer to assure proper understanding of proposal terms evaluahon of economic terms over period of proposed supply period to include estimate of net present value of power supply option(s) coordination of cost and respollslblhty for ancillary services and transmission associated wath delivery of power supply identification and valuation of proposers' commitment to reduce City's responsabfl~ty to assume cost variation risks PROSYM computer modelmg to be used to d~spatch resources mto City's resource rmx as stand alone system and as TMPP member to evaluate total cost benefits of proposal Task E Presentation of Results RMI will prepare a report summarizing findings and presenting recommendations to staff and to the Ut~hty Board · Results of m-depth proposal rewews will be summarized and presented to C~ty staff A meeting will be held to discuss results of proposal review and answer City staff questions · A final report willbe prepared to present the results and recommendahons from the RFP evaluahon process · Another meeting will be held with the Utuhty Board to present the results of the evaluation and recommendations Development of an accurate project budget to complete these Tasks m dlfhcult due to the breadth of proposal optmns to be considered and the fact that the number and compleraty of proposals submitted are unknown Prelmunary budget project~ons are offered for port~ons of the work A budget of $55,000 m suggested for Tasks A through C, Phase I of Task D, and Task E The budget to complete m-depth proposal reviews w~ll be very dependent upon the number of proposals rewewed and the complexity of the proposal evaluation (Expenses for detailed proposal reviews may be supported part~ally or fully by the proposers ) The work effort to prepare the m- depth rewew achvlt~es outlmed In Phase II of Task D are projected to range from $7,000 to $10,000 per proposal These estunates do not mclude engmeermg feasibility analysis of projects A budget to complete the detailed proposal reviews m Phase II of Task D will be established follow~ng ldent~ficahon of what proposals will be mcluded in t~s review Thru budget as established may be evaluated at anytune by RMI or the City RMI will bill monthly and will not exceed the authorized budget without approval from the City Thru Task Order m authorized and made an attachment to the above identified Professional Services Agreement through the signatures below Authorized by Accepted by C~ty of Denton, Texas ~ /jr Resource Management International, Inc By l~ob NelsOn, Executxve Dxrector By By: Sharon Mays, Electric Director Dated: By: Ted Benav~des, C~ty Manager Dated · 5 C \DOCS\ORD\RMI2ND ORD AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A SECOND AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH RESOURCE MANAGEMENT INTERNATIONAL, INC.; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I. That the City Manager is hereby authorized to execute the second amendment to the professional services agreement with Resource Management International, Inc. ("RMI"), a copy of which is attached hereto and Incorporated herein, along with any task orders and other documents necessary to the performance of the second amendment. ~ That the expenditure of funds as provided in the attached agreement is hereby authorized. s~ That this ordinance shall become effective immediately upon 1ts passage and approval. PASSED AND APPROVED this the~ day of 1997. ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY STATE OF TEXAS § COUNTY OF DENTON § SECOND AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT is the second amendment to the Professional Services Agreement entered into by and between Resource Management International, Inc , a California Corporation ("RMI") and the City of Denton, Texas, a Texas Municipal Corporation ("CITY"), on the 17th day of September, 1996, for professional and related services 9rovlded by RMI to the CITY, hereinafter referred to as the "Base Agreement", this second amendment further amends the First Amendment to Professional Services Agreement entered into by and between RMI and the CITY on the 3rd day of December 1996, which is hereinafter referred to as the "First Amended Agreement" In consideration of the terms and conditions set forth herein, and the mutual promises of the parties, the parties do hereby AGREE I That Section II "Fees For Services" of the Base Agreement and Section II of the First Amended Agreement are hereby amended to include the following provisions For services provided by RMI to the CITY pursuant to the parties' agreement respecting completion of the work in Phase I of the Evaluation Of Power Supply Alternatives RFP Project, pursuant to Task Order No 96B, the CITY shall pay RMI the total sum of $77,702 69, said sum representing the payment of an additional $22,702 69 in professional fees to RMI II That Section I "Scope Of Services" of the Base Agreement is hereby amended to add the followIng provisions RMI shall further provide to the CITY the services pertaining to the Evaluation Of Power Supply Alternatives-Phase II project as set forth in individual task orders made as attachments to this Agreement including, without limitation, Task Order No 97A, a copy of which Task Order is attached hereto as Exhibit "A" and incorporated herewith by reference III That Section II "Fees For Services" of the Base Agreement and Section II of the First Amended Agreement are hereby amended to add the following provisions Services to be provided by RMI to the CITY pursuant to the parties' agreement respecting completion of the Evaluation of Power Supply Alternatives-Phase II project, the CITY shall pay RMI in accordance with the rates and charges contained in the "Fees For Services" provisions of Exhibit "A" attached hereto CITY shall accordingly pay to RMI, pursuant to the terms of Task Order No 97A, professional fees and expenses in an amount not to exceed $97,000 00 IV That save and except as expressly amended by this Second Amendment to Professional Services Agreement, all the terms, conditions, and covenants of the Base Agreement and the First Amended Agreement shall remain in full force and effect IN WITNESS WHEREOF, the CITY has caused this Second Amendment To Professional Services Agreement to be executed by and through its duly authorized City Manager, and Resource Management Interna- tional, Inc has caused this Second Amendment To Professional Services Agreement to be executed by and thr_.Qugh, its. duly autho- rized officer on this the day of , 1997 CITY OF DENTON, TEXAS Ted'Benavldes, City Manager ATTEST JENNIFER WALTERS, CITY SECRETARY Page 2 APPROVED AS TO LEGAL FO~ HERBERT L PROUTY, CITY ATTO~EY RESO~CE MANAGEMENT INTE~ATIONAL, INC A California Corporation ATTEST Page 3 ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETvVEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON DATED September 17, 1996 TASK ORDER NO 97-A EVALUATION OF POWER SUPPLY ALTERNATIVES - PHASE II This Task Order dehnes a Scope of Sennces and Budget for work by Resource Management International, Inc (RMI) for the Czty of Denton, Texas (city) The activities m tlus Task Order continue the work performed under Task Order 96-B, Evaluation of Power Supply Alternatives (Phase I) Phase I included the development of a Request For Proposals for Power Supply (RFP) and the screening of proposals received m response to the RFP Phase II refocuses the RFP process to mcorporate reformation learned m Phase I Phase II wflllinclude ~dentffymg parties interested m the purchase of the City's TMPA assets and sohcatmg proposals for the best use of the C~ty's generation Phase II will also include negotiations w-xth those mterested parties to amve at an agreement for the sale of cer~a,n assets and the repowermg or other use of other assets Power supply contracts to replace power previously owned or operated by TIvIPA and/or the City will also be a part of Phase II activities SCOPE OF SERVICES The following outhnes representative activities to be completed under ttus Task Order · RMI will mtennew major national energy compames to describe the intent of Denton and Garland (Cities) w~th respect to TMPA and the City's owned local generation assets These meetings will provide a status report on the Denton RFSP 2035 and explain how the process will proceed Letters of interest m partiopatmg m the process will be sohcit~l from each company · Once the letters of mterest are returned (wathm one week of the meetmgs), RMI and Denton will identdy the companies w~th whom negohatlons w,.ll proceed · RMI will asemt the City m providing data to compames, arranging plant tours, coordinating and part~apaimg m meetings, and identifying and researclung questions related to the use or sale of assets The City will retain the necessary legal and bond counsel to provide legal opinions as necessary · RMI anticipates extensive negotmtions w~th 2 to 4 parties These negotmtions will belrelated to the sale of the City's share of TMPA, and various proposals for the best use of the City's other generatzon assets · RMI will evaluate the economic terms of the proposals and calculate the net present value of the different proposals m order to assist m determining the best offer 97A - 1 Exhibit "A" · In the evaluation, RMI wdl run, as needed, the PROSYM production cost program to model alternatsve generatmn and purchased power configurations to evaluate the economics aesocmted with different options under different scenarios · RMI wdl work w~th the City and the compames to address questions related to the provm~on of ancdlary serwces and transrmssaon These factors wdl be addressed m negotiations and mcluded m the econonuc analys~s · As part of negot~atmns, RMI wdl work w~th the Caty to ~dentffy and evaluate the comparues ab~hty to assume risk assocxated w~th variations m costs related to fuel, transnuss~on, and other factors · RMI will prowde presentations to staff, the Ut~hty Board, and members of Council as requested A final report will be prowded comparing alternative proposals should there not be a clear wmner RMI ~ perform servlces as necessary to support tlus process to secure power supply for the future, as chrected by C~ty staff BUDGET Budget for work performed under flus Task Order m chfflcult to estunate due to the vermbles mvolved, such as the number of part~es to be included m the negotiation process The esl~mated budget for tlus Task Order ~s $97,000 Tfus assumes that the City of Garland approves a hke amount. Should Garland not approve a hke budget, RIV[I wall submit a new Task Order and Budget All work wdl be bdled on a monthly basra Ttus Task Order m authorized and made an attachment to the above tdent~ed Professtonal Serwces Agreement through the s~gnatures below Accepted b/y-~ C~ty of Denton, Texas 97A - 2 FEES FOR SERVICES RESOURCE MANAGEMENT INTERNATIONAL, INC 1997 Professional and support services, except for testamony, shall be billed at the following rates Manag, ng Executave Consultant $166 )er hour Pnnclpal Executive Consultant $150 ~er hour Executave Consultant $142 ~er hour Prlncapal Consultant $131 ~er hour Supervasang Consultant $116 ~er hour Seruor Consultant $106 ~er hour Assocaate Professional $ 92 ~er hour Analyst $ 81 ~er hour Research Assistant $ 61 ~er hour Techrucian $ 53 ~er hour Office Servaces $ 49 ~er hour The above rates shall be adjusted each year, commencing January 1, 1998, to reflect the change ~n rates officaally establashed by the RMI Board of Directors TestL, nony shall be balled at not less than eight (8) hours per day Reproduction, printing, commurucations, computer serwces, and other reascellaneous support servaces shall be b~lled at rates for such servaces as deterrmned from tame to tame and officmlly estabhshed by the RMI Board of D~rectors plus ten (10) percent All travel, food, lodgang, and nuscellaneous expenses, except automobile mileage, assocaated w, th the provmmn of servaces hereunder shall be billed at cost Automobile rruleage shall be balled at $0 30 per male Chent shall reimburse RMI for any applicable sales tax ,mposed on servaces rendered by RMI to Chent