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2003-047ORDINANCE NO. 2003-_�,� � " / w AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH R. J. COVINGTON CONSULTING, LLC FOR CONSULTING SERVICES RELATING TO TASK ORDER NO. 03-C, REGARDING ADDITIONAL PROFESSIONAL SERVICES RELATING TO THE DENTON MUNICIPAL ELECTRIC TRANSMISSION COST OF SERVICE FILING AND HEARING WITH THE PUBLIC UTILITIES COMMISSION OF TEXAS; AUTHORIZING THE EXPENDITIJRE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTNE DATE. WHEREAS, the City Council deems it in the public interest to engage the firm of R. J. Covington Consulting, LLC of Austin, Texas ("Covington"), to provide professional consulting services to the City relating to Task Order No. 03-C, including, without limitation, additional services incurred by Denton Municipal Electric ("DME") regarding the Transmission Service Cost of Service ("TCOS") filing and hearing with the Public Utility Commission of Texas; and WHEREAS, the City staff has reported to the City Council that there is a substantial need for the above-described specialized professional services, and that limited City staff cannot adequately perform the services and tasks with its own personnel; and WHEREAS, Chapter 2254 of the Texas Government Code, known as the "Professional Services Procurement Act", generally provides that a City may not select a provider of professional services on the basis of competitive bids, but must select the provider on the basis of demonstrated competence, knowledge, and qualifications, and for a fair and reasonable price; and WHEREAS, Covington has represented DME continuously over the past seven years, and has proven to be a valuable, affordable, competent, dependable professional resource that has expertise in and is well acquainted with the electric regulatory framework in Texas. Covington and his staff are particularly familiar with the characteristics and operations of DME; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the professional services, as set forth in the Professional Services Agreement; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: ECTION 1: That the City Manager is hereby authorized to execute a Professional Services Agreement with R. J. Covington Consulting, LLC of Austin, Texas, for professional consulting services relating to Task Order No. 03-C, to Denton Municipal Electric, in substantially the form of the Professional Services Agreement attached hereto and incorporated herewith by reference. SECTION 2: That the award of this Agreement by the City is on the basis of the demonstrated competence, knowledge, and qualifications of Covington and the ability of Covington to perform the professional services needed by the City for a fair and reasonable price. �_ CTION 3: That the expenditure of funds as provided in the attached Professional E. LL Services Agreement is hereby authorized. SECTION 4: That this ordinance shall become effective immediately upon its passage and approval. � u���� PASSED AND APPROVED this the ��"� �.���� c�:i" , 2003. � , , ,� � , � �� , �.� ` _� °` � � ���� �':°� � , � �n u � r '`�,��, �. �.,... f r �,., .............m�...... ....�.�.....................� EULINE BROCK, MAYOR ATTEST: JENNrFER WALTERS, CITY SECRETARY �, P �, � , • � By� �. � �` � .���: ��� �' ✓ � APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY ` � �.... ��, ..� By• � �k [ � . . � w� w .� �.�._ .� . ..� �...� ..._ S:\Our pocuments\Ordinances\03\R J Covington Consulting LLC-DME-Ord Aprv TO-3-C 2003.doc MEMORAND UM TO: Tom Shaw, Purchasing Agent FROM: Michael S. Copeland, Utiliiy Attorney �, .. � , ' �" ,� ,; � �����:�� ����� ����� ����:��,�� �� ,� � SUBJECT: Task Order No. 03-C (Professional Services Agreement of 2/18/03) City of Denton, Texas / R.J. Covington Consulting, L.L.C. ("RJC") TCOS Services for Denton Municipal Electric DATE: February 27, 2003 Task Order No. 03-C was considered by the City Council on February 18, 2003, and approved on the same date. The City Manager has signed the attached Professional Services Agreement regarding Task Order No. 03-C in an amount not to exceed $30,800. Enclosed herewith for your file is a conformed copy of the Ordinance No. 2003-047 and an executed original of the Professional Services Agreement regarding the above-referenced matter. By copy of this memorandum I am providing Jan Hill, Denton Municipal Electric with two copies of the conformed Ordinance and two original executed Professional Services Agreements ("PSA"). Jan will retain an original PSA for her contract administration file; and will forward the other ��������1 _P��. to RJC by U.S. Mail. Jan will also send RJC a copy of the co���s������� ��°c�i��n���. The City� Secretary has retained the original of the Ordinance and of one of the executed original PSA documents for her records. The Agreement will be administered through Denton Municipal Electric (Jan HilUSharon Mays). I have copied Sharon with this memorandum and am hereby requesting that her department prepare (if they have not already) the necessary paperwork to secure the issuance of a Purchase Order regarding this PSA. Thank you for your assistance in this matter. �., -��,, d� �� ..�Mich� � _ ��.. ..._�_�_m_. ..._� � ael S. �``��}� 1� a�::� MSC/rnc Attachments (2) cc: Michael A. Conduff, City Manager Howard Martin, Assistant City Manager/Utilities ��iaron Mays, Director of DME (Jan Hill w/copies as noted above) Jennifer Walters, City Secretary (w/originals previously reserved) Rick Covington, R.J. Covington Consulting, LLC., Austin, Texas S:\Our pocuments\Correspondenceuvlemos\03\Shaw-RJC PSA TO 03-C 2003.doc � oo ����� �� � ��m���i� i� �� � � �� '������ STATE OF TEXAS § COUNTY OF DENTON § PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES PERTAINING TO DENTON MUNICIPAL ELECTRIC THIS AGREEMENT is made and entered into as of the 18th day of February, 2003, by and between the City of Denton, a Texas Municipal Corporation, with its principal office at 215 East McKinney Street, Denton, Texas 76201 ("CITY"); and R. J. COVINGTON CONSULTING, LLC, A Texas Limited Liability Corporation, with its principal office at 13276 Research Blvd., Suite 201, Austin, Texas 78750, hereafter "COVINGTON"; acting herein by and through their duly authorized representatives. WITNESSETH, that in consideration of the covenants, promises and agreements herein contained, the CITY and COVINGTON do hereby AGREE as follows: ARTI('T,F, i EMPLOYMENT OF CONSULTANT The CITY hereby contracts with COVINGTON, as an independent contractor, and COVINGTON hereby agrees to perform the services herein in connection with the Scope of Services as stated in the Articles to follow, with diligence and in accordance with the highest professional standards customarily obtained for such services in the State of Texas. ARTTC:i.F. Ti SCOPE OF SERVICES A. COVINGTON shall provide to the CITY additional professional consulting services pertaining to t��� �������t���a����� �'�� '��'���:� ������� a►"� ���<a-� associated with the transmission cost of services filing with the 1�����:���ii�� �...1�ti0u�i�.���������:�������,��►� ��a������as ("PUC"). COVINGTON agrees to perform the services and t���;�� m���:,r���, gi��a�-��c�zl�����ly �t�.����sil��„��� in Task Order No. 03-C attached hereto and incorporated herewith by reference. B. To consult with the City Manager, Assistant City Manager/LJtilities, the Director of Electric Utilities, the Utility Attorney, and any other designated administrative personnel regarding any and all aspects of the services to be performed pursuant to this Agreement. ARTTC;T.F. TTT PERIOD OF SERVICE This Agreement shall become effective upon execution by both the CITY and COVINGTUN. The termination date of this Agreement shall be upon the earliest to occur of the following events: completion of the work described herein and in the attached Task Order No. 03-C; or upon the depletion and exhaustion of the $30,800 amount provided for herein; or upon fifteen (15) day's written notice to tenninate, issued by the Director of Electric Utilities, DME. "I�hi; Agreement may be saoner terminated in accordance with the provisions hereof. Time is of the essence in this Agreement. COVINGTON shall make all reasonable efforts to camplete the services set forth herein as expeditiously as possible and to meet the schedule established by the CITY, acting through its Directar of Electric Utilities. e: • ' • � A. COMPENSATION TERMS: "Direct Nan-Labor Expense" is defined as that expense for any assignment incurred hereunder by COVINGTON far supplies, long-distance telephone, telecapier, reproduction expense, overnight courier, photocapy expense, transportation, travel9 COITIIZZUILIC(�L1OlLSy subsistence and lodging away from home and similar incidental expenses reasonably incurred in connection with that assignment. : : • � •• 1. For and in consideration of the professional services ta be perfarmed by COVINGTON herein, the CITY agrees ta pay COVINGTON, a total fee, including reimbursement for direct non-labar expense, not ta exceed $30,800 far those services described in Task Order No. 03- C. 2. The fee for the services described in this Agreement to be performed by COVINGTON are ta be billed the rates as set forth in Exhibit A attached hereto and incarparated herewith by reference. Billing shall be reported in minimum one-quarter (1/4) hour increments. 3. Payments to COVINGTON will be made by the CITY on the basis of detailed manthly statements rendered to the CITY through its Director of Electric Utilities. The fees bills as submitted shall be allowed by the Directar of Electric Utilities; and they shall be examined and approved by the Utility Attorney. However, under no circumstances shall any monthly statement far services exceed the value af the work performed at the time a statement is rendered. 4. Nothing contained in this Article shall require the CITY to pay far any work which is unsatisfactory as reasonably determined by the City Manager or the Director of Electric Utilities, ar which is not submitted in campliance with the terms af this Agreement. The City shall not be required to make any payments to COVINGTON when COVINGTON is in default under this Agreement. 5. It is specifically understoad and agreed that COVINGTON shall not be authorized to undertake any work pursuant ta this Agreement which wauld require additional payments by the CITY far any charge, expense or reimbursement abave the maximum not-to-exceed fee as stated, without first having obtained written authorization from the CITY. p���� ?.. C. PAYMENT If the CITY fails to make payments due COVINGTON for services and expenses within forty (40) days after receipt of COVINGTON'S undisputed statement thereof, the amounts due COVINGTON will be increased by the rate of one percent (1%) per month from the said forly (40th) day, and in addition, COVINGTON may, after giving ten (10) days' written notice to the CITY, suspend services under this Agreement until COVINGTON has been paid in full all amounts due for services, expenses and charges provided. However, nothing herein shall require the CITY to pay the late charge of one percent (1 %) set forth herein if the CITY reasonably determines that the work of COVINGTON is unsatisfactory, in accordance with this Article IV, Compensation, and the CITY notifies COVINGTON in writing of any such defect. ARTICi,F. V OBSERVATION AND REVIEW OF THE WORK COVINGTON will exercise reasonable care and due diligence in discovering and promptly reporting ta the CITY any defects or deficiencies in his work or the work of any subconsultants performed hereunder. ARTICI.F. VI OWNERSHIP OF DOCUMENTS All documents, analyses and other data prepared by COVINGTON under this Agreement ("Work Products") are instruments of service and are and shall remain the property of CITY. COVINGTON shall have the right to make and retain capies and use all Work Products; provided, however, the use shall be limited to the intended use for which the services and Work Products are provided under this Agreement. COVINGTON may use and may copyright certain non-sensitive Work Products as property of COVINGTON; provided that prior written approval is obtained from CITY, whose approval shall not be unreasonably withheld, and providing that copywriting will not restrict CITY'S right to retain or make copies of the Work Products for its information, reference and use an the Praject or services under the Agreement. The Work Products shall not be changed or used far purposes other than those set forth in this Agreement without the prior written approval af COVINGTON. If CITY releases the Work Products to a third party without COVINGTON'S prior written consent, or changes or uses the Work Products other than as intended hereunder, CITY does so at its sole risk and discretion and COVINGTON shall not be liable for any claims or damages resulting from or connected with the release or any third party's use of the Work Products. ARTT(�:I,F. ViT 1NDEPENDENT CONTRACTOR COVINGTON shall provide services to the CITY as an independent contractor, not as an employee of the CITY. COVINGTON shall not have or claim any right arising from employee status. Page 3 ::1� 'r U' � ' ' COVINGTON shall indemnify and save and hald harmless the CITY and its officers, agents, and employees from and against any and all liability, claims, demands, damages, losses and expenses, including but nat limited to court costs and reasonable attomey's fees incurred by the CITY, and including without limitation, damages for bodily and personal injury, death and property damage, and damage for professianal malpractice resulting from the negligent acts or omissions of COVINGTON ar any subconsultants, in perfarmance of this Agreement. COVINGTON'S liabiliry under this Article VIII is expressly limited to the limit of COVINGTON'S insurance as set forth in Article IX. Nothing in this Agreement shall be construed ta create a liability to any person wha is not a party to this Agreement and nothing herein shall waive any af the ���dti��y"� t��6c�����`�, �:���rth at law ar equity, ta any claim, cause of action or litigatian filed by anyone t��a� A.� ����x��y� C�:a lY���; Agreement, including the defense of govemmental immunity, which defenses are l��r�a�I_�� �x��� ���,6y�° �°��served. :: . I '' ' During the performance of the Services under this Agreement, COVINGTON shall maintain the fallowing insurance with an insurance company licensed to da business in the State of Texas by the State Insurance Commission or any successor agency that has a rating with Best Rate Camers of at least an "A-" or abave: A. Comprehensive General Liability Insurance with badily injury limits of not less than $500,000 for each occurrence and not less than $500,000 in the aggregate, and with praperty damage limits of not less than $100,000 for each accurrence, and not less than $100,000 in the aggregate. B. Automobile Liability Insurance with bodily injury limits of nat less than $500,000 for each persan and not less than $500,000 far each accident; and with property damage limits of not less ihan $100,000 far each accident. C. Professianal Liability Insurance with policy limits of nat less than $1,000,000 annual aggregate. D. COVINGTON shall furnish insurance certificates or insurance palicies at the CITY's request to evidence such coverages. The insurance policies shall name the CITY as an additional insured on all such policies ta the extent legally passible, and shall contain a provision that such insurance shall not be canceled or modified without thirty (30) days prior written notice to CITY and COVINGTON. In such event, COVINGTON shall, prior to the effective date of the change or cancellatian, deliver substitute palicies furnishing the same coverage to the CITY. Page 4 •i , .•; �. � • � • � � � '' ' #, • The parties agree to settle any disputes under this Agreement by submitting the dispute to arbitration or other means of altemate dispute resolution such as mediation. Na arbitratian or altemate dispute resolution arising out af or relating to, this Agreement invalving one party's disagreement may include the other party to the disagreement without the other's approval. �.,' ! �i+ I • • ! • :' Ta the extent permitted by law, the total liability of COVINGTON ta CITY for any and all claims arising out af this Agreement, whether caused by negligence, errors, amissions, strict liability, breach of cantract or contribution, or indemnity claims based on third-party claims, shall not exceed one million dollars ($1,000,000). :: . � � . �. . In no event and under no circumstances shall COVINGTON be liable ta CITY for any interest, loss af anticipated revenues, earnings, profits, or increased expense of operations, ar for any consequential, indirect or special damages. :: . 'i• ���. �►1��.�� COVINGTON will perform services under this Agreement with the degree af skill and diligence normally practiced by prafessional engineers or consultants performing the same degree of similar services. No other warranty or guarantee, expressed or implied, is made with respect to the services furnished under this Agreement and all implied warranties are disclaimed. _: . . , ' � � , . A. Notwithstanding any other pravision of this Agreement, either party may terminate this Agreement by giving thirty (30) days advance written natice af termination to the other party. B. This Agreement may be terminated in whale or in part in the event of eithei- party substantially failing to fulfill its obligations under this Agreement. No such termination will be effected unless the other party is given: (1) written notice (delivered by certified mail, return receipt requested) of intent to terminate and setting forth the reasons specifying the nonperfoi�rnance, and nat less than ten (10) business days in which to cure the failure; and (2) an oppor�tunity for consultatian with the terminating party prior to terminatian. C. If this Agreement is terminated priar to completion af the services to be provided hereunder, COVINGTON shall immediately cease all seivices and shall render a final bill for services to Page 5 the CITY within 30 days after the date of termination. The CITY shall pay COVINGTON for all services properly rendered and satisfactorily performed and for reimbursable expenses to termination incurred priar ta the date of termination in accordance with Article IV, Campensation. Should the CITY subsequently contract with a new consultant far the continuation of services on the Praject, COVINGTON shall cooperate in praviding infarmatian. COVINGTON shall tum aver all documents prepared or fumished by COVINGTON pursuant ta this Agreement ta the CITY on or befare the date of terminatian, but may maintain capies of such documents far its use. :: . ` '•' : �' � ' 1 ' �' Approval by the CITY shall not constitute nor be deemed a release of the responsibility and liability of COVINGTON, or any sub-cansultants af COVINGTON, for the accuracy and competency of their designs or other work product. , i #'� :� :i �� • All notices, communications, and reports required or permitted under this Agreement shall be persanally delivered ar mailed to the respective parties by depositing same in the United States mail at the address shown below, certified mail, return receipt requested unless atherwise specified herein. Mailed natices shall be sent to the parties at the following addresses: To COVINGTON: R.J. Cavington Consulting, LLC Attn: Richard J. Covington 13276 Research Blvd., Suite 201 Austin, Texas 78750 � City of Dentan, Texas Attn: Michael A. Canduff, Ciry Manager 215 East McKinney Street Denton, Texas 76241 All natices shall be deemed effective upon receipt by the party ta wham such natice is given ar within three days after the date af mailing. � :1 • � .#fl . . . This Agreement consisting of nine (9) pages, and three (3) additional pages consisting of Task Order No. 03-C, canstitutes the complete and final expressian of the agreement of the parties and is intended as a complete and exclusive statement of the terms of their agreements and supersedes all prior cantemporaneous offers, promises, representations, negatiatians, discussions, conununications and agreemeuts which may have been made in coruiection with the subject matten c�rcof. IC�'I.�: X�IiIT If any provisian of this Agreement is found or deemed by a court of campetent jurisdictian to be invalid or unenforceable, it shall be cansidered severable from the remainder of this Agreement and shall not cause the remainder ta be invalid or unenforceable. In such event, the party shall reform this Agreement to replace such stricken provision with a valid and enforceable pravision which comes as close as passible to expressing the intention af the stricken provisian. �; . . • ' � ' COVINGTON shall comply with all federal, state, local laws, rules, regulations, and ordinances applicable ta the work covered hereunder as they may now read ar hereinafter be amended. ARTTC'T,F. XX DISCRIMINATION PROHIBITED In performing the services required hereunder, COVINGTON shall not discriminate against any person an the basis of race, color, religion, sex, national arigin or ancestry, age, or physical handicap. ..; .. . . � A. COWINGTON represents that he has secured, or will secure at his own expense any additional personnel required to perfarm all the services required under this Agreement. Such personnel shall be subcansultants of COVINGTON, and shall not he employees or officers of, nar have any contractual relations with the CITY. COVINGTON shall inform the CITY of any conflict of interest or potential conflict of interest that may arise during the term af this Agreement. B. All services required hereunder will be performed by COVINGTON or under his supervision. All personnel engaged in work shall be qualified and shall be authorized and peimitted under state and lacal laws to perfarm such services. ARTiCT .F. XXTi ASSIGNABILITY COVTNGTON shall nat assign any interest in this Agreement and shall not transfer any interest in this Agreement (whether by assignment, novation or atherwise) without the prior written cansent af the CITY. �. ► � �..., � ��I ��� . V.. � � ., � ... �� . No waiver or madification af this Agreement or of any covenant, condition, limitation herein contained shall be valid unless in writing and duly executed by the party ta be charged therewith and na evidence of any waiver ar modification shall be offered ar received in evidence in any proceeding arising between the parties hereta out of ar affecting this Agreement, or the rights ar abligations af the parties hereunder, and unless such waiver or modification is in writing, duly executed; and, the parties further agree that the provisions of this section will not be waived unless as herein set forth. : : • a .�:�►. ,# � • A. COVINGTON agrees that CITY shall, until the expiratian of three (3) years after the iinal payment under this Agreement, have access to and the right ta examine any directly pertinent baoks, dacuments, papers and records af COVINGTON involving transactians relating ta this Agreement. COVINGTON agrees that the CITY shall have access during normal working haurs to all necessary COVINGTON facilities and shall be pravided adequate and appropriate warking space in order ta conduct audits in compliance with this section. The CITY shall give COVINGTON reasonable advance notice of any intended audits. B. Venue of any suit or cause af action under this Agreement shall lie exclusively in Denton County, Texas. This Agreement shall be governed by, and construed in accordance with the laws af the State of Texas. C. COVINGTON shall commence, carry on, and complete the work required by this engagement with all applicable dispatch, in a sound, ecanomical, efficient manner and in accardance with the provisions hereof. In accomplishing the work, COVINGTON shall take such steps as are appropriate ta ensure that the work involved is properly coardinated with related wark being carried on by the CITY. D. The CITY shall assist COVINGTON by placing at COVINGTON's disposal all available informatian pertinent to the work required by this engagement, including previous reports, any other data relative to the project and arranging far the access ta, and make all provisions for COVINGTON to enter in or upan, public and private property as required for COVTNGTON to perform services under this Agreement. l�. The captions af this Agreement are far informational purpases only and shall not in any way affect the substantive terms or canditians of this Agreement. IN WITNESS WHEREOF, the City af Dentan, Texas has caused this Agreement to be executed in four ariginal counterparts, by its duly autharized City Manager; and R.J. Covington Consulting, LLC has executed this Agreement by its duly authorized officer on this the 18th day of February, 2003. ��d��;� � "CITY" CITY OF DENTON, TEXAS A Municipal Corporation �, � ���,� � �.��y �.� a ��. � � � ����� � � � � � �" �'� 'd "� �' �� n '�� � � �„� ,,� � �� ,� � � �' - � �� � �� �� ' � �. �� �� ^�,. � '" ��, � � — d�� �' — „�" „� � "°ivlat�I�K��V A. cao���l��i'9, �.,°;c��" �z.c�����,a� �.�.�� ATTEST: JENNIFER WALTERS, CITY SECRETARY � 1 �� � � � ���� ��'� ,� �r �� ,�r� By' ����'������ ;�i„�� � ,.�.4�!.�R�u..�:�..�� "..'�,..,,� C,�'Y^�.,,�n:�.'�.p. �� �r fd APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY � ����� �.��� �Wnm�u �,.��w i � By• � � . �W p ��& �� ....M+ �.�e�,......- .....-..... �.,..,�,�,._,. . ...�r. w � .. "COVINGTON" R.J. COVINGTON CONSULTING, LLC A Texas Limited Liability Corporation � � ,�' .µ�. m � � ��, ��, � ���� �..�, By. � RichardJ C �.��w����� �:a��'r, f'�a`��`�,���bt ATTEST: BY� . .m._ — �� �w�� _ _ ae S:\Our pocuments\Contracts\03\RJ Covington Consulting LLC-PSA-TO 03-G2003-DME.doc Page 9 . . � �r� �' . ' �, . � �•', � i� '� i � � ' ;i � � / , � . � � � � _ � i � TASK ORDER NO. 03-C Transmission Cost of Service Filing - 2002 — Additional Serv'rces This Attachment is a Task Order contemplated by and appended to the Professional Services Agreement entered into by and between the City of Denton, Texas and R.J. Covington Consulting, LLC. dated February 18, 2003, and approved by the City Council by Ordinance on this date. Work provided for in this Task Order is for R.J. Covington Consulting, LLC ("RJC") to continue to assist the City in the completion of the 2002 transmission cost of service study ("TCOS99) filed with the Public Utility Commission of Texas (66PUC") as Docket No. 26672. Background RJC, working with City staff, prepared and filed on September 20, 2002 an application to increase DME's rates for wholesale transmissian service in ERCOT. The application requests an increase in DME's TCOS fram $768,620 to $1,111,420. The TCOS iiling is the second such filing made by the City. The first was in 1996. Since that iirst filing, the Commission has instituted a"Non-IOU Rate Filing Package" that allows municipalities the option to include in its TCOS, capital requirements based on several options. In addition to the traditional "Rate of Retum Method" for determining capital requirements, a Non-IOU entity can file using the "Debt Service Coverage Methody99 the 66Cash Flow Method," or the "Times Interest Eamed Method." DME used the Cash Flow Method, a method it supported during the development of the Non-IOU RFP; a method particularly suited for systems that have historically cash funded their construction and repairs and replacement programs. At least one other municipality has filed using this method, but that case was settled and no precedents were set on the application of the Cash Flow Method. Although DME has entered settlement discussions with the PUC staff, it has not been able to reach agreement on a settlement. For this reason, after a number of ineetings, DME is set to go to hearings. The primary issue is the application of the Cash Flow Task Order No. 03-C 2002 Transmission Cost of Service Filing (Additional) Methad as appased ta the Rate of Return Method which has substantial negative impacts on DME's recovery af TCOS. This Task Order is to increase the budget needed to defend the 2002 TCOS. The services performed by RJC will include the preparatian and filing of supplemental testimony, review af Staff's filed case, preparation of rebuttal testimony, participation in hearing, reviewing and assisting in preparing briefs, and other activities needed to camplete the case. � 1 � 1. RJC will prepare and iile supplemental testimony ta address issues raised by PUC staff. 2. R3C will continue to participate in discussions with PUC staff ta explare opportunities to settle the case before actual hearings begin. 3. PUC staff testimony from ather cases will be reviewed for positions on issues being raised in this docket. Task B TCOS Hearin�s l. RJC will review testimony and exhibits filed by PUC staff and other parties and evaluate impacts of alternative positions of other parties. 2. Rebuttal testimony will be prepared to address issues raised by PUC staff in their direct-filed testimony. 3. RJC will assist attorneys in preparing cross of PUC staff and other parties. 4. RJC will attend hearings and present direct testimony to defend DME's position on the issues raised. Task �' Post ����z�,�� � ��°���+°ii.i�� 1. RJC will assist attarneys in preparing briefs, reviewing the Administrative Law Judge Preliminary Order, and will assist attorneys in filing exceptions to the Order if necessary. 2, RJC will review the Final Order, and rework numbers for the Final Order. : �,. The nat-to-exceed amount far the above scope of services, ����- q.��ack� �zc��.���ac��s��l 1�d���a�� 4ed��.� out-of-pocket expenses, is $30,800. This budget will no�. ��� a���°���:���`��� �������'����p� N����������a� written approval of the City. RJC wi11 bill monthly with �,ri�'������ l��'z� ���;������a����"a���►����a� �������� 2of3 Task Order No. 03-C 2002 Transmission Cost of Service Filing (Additional) activities performed. The termination date of this Task Order No. 03-C shall be upon the completion of the work as described in the Professional Services Agreement and the TO No. 03-C; or upon the depletion and exhaustion of the $30,800 amount provided for herein; or upon fifteen (15) days written notice to terminate, issued by the Director of Electric Utilities, DME, whichever event shall first occur. The work being performed will be under the supervision of the Director of Electric Utilities, DME and may be modified at any time upon appropriate notice to RJC. EXECUTED in four (4) original counterparts by a duly authorized officer of RJC and by a duly authorized officer of the City of Denton, Texas on the 18th day of February, 2003. AUTHORIZED BY: CITY OF DENTON, TEXAS �" "���� a��°� �" ���� � � �� �� �� �, � ��,���" a � � � �" � �� � ��� �� � � ��'���9��� � �°�����'� � � �' � �. �. ��"�-�����' ,�—. � °° 1V� � � �� � � � ��A. � , �a�� c� �� � � ,�� � �o��� �� ��, City Manager ACCEPTED BY: R. J. COVINGTON CONSULTING, LLC � � �" �� �, B ��^� ���"� �� � ,��"��""" �� y�� _ .�. .e. — � _... _ Richard J. �' ��^�Ni�� ��n �� � President JENNIFER WALTERS, CITY SECRETARY b . �, ' � � �` , � ��. �� i � � � f F ,r a! � r �'�" �� � �;� � � d �fi�� y l � � � � � �� �_ BY� a._��.�� � � �� r .�...�.. ' � p � � A�� � ��'�. ,� . ,. � ','� � �..... .� ._ � _ APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY .v By� ..����������� �� � � :��.� �, �"� ...,.__ �_ �,,, ��� � �,..��� S:\Our pocuments\Contracts\03�R J Covington Task Order 03-C TCOS-DME.doc 3 of 3