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