2004-329ORDINANCE NO. 2004- .J'�o� �
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. 04-C; PROVIDING FOR CONT]NUED
PARTICIPATION 1N THE ONGOING ELECTRIC MATTERS BEFORE THE TEXAS
PUBLIC UTILITIES COMMISSION AND THE ELECTRIC RELIABILITY COUNCIL OF
TEXAS BY DENTON MUNICIPAL ELECTRIC; AUTHORIZING THE EXPENDITURE OF
FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE 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. 04-C; which includes, without limitation, services
to be rendered regarding ongoing electric matters at the Texas Public Utility Commission
("PUC") and the Electric Reliability Council of Texas ("ERCOT"); 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
Sez-vices 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 and ably over the last eight
(8) years, and has proven to be a valuable, affordable, competent, and dependable professional
resource that has expertise in, and is well-acquainted with the electric financial and regulatory
framework of Denton Municipal Electric ("DME"), as well as its relations with the PUC and
ERCOT. Covington and his staff are familiar witk� the characteristics, operations, and present
rate structure 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:
SECTION 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. 04-C, to the City and to Denton Municipal
Electric, in an amount of not to: exceed $60,000; in substantially the forni of the Professional
Services Agreement attached hereto and incorporated herewith by reference as Exhibit "A."
_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
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Covington to perform the professional services needed by the City for a fair and reasonable
price.
SECTION 3: That the expenditure of funds as provided in the attached Professional
Services Agreement is hereby authorized.
SECTION 4: That this ordinance shall become effective immediately upon its passage
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and approval.
PASSED AND APPROVED this the � day of, ����� ��� ��,w , 2004.
�Lti,�� ��
EULINE BROCK, MAYO �
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ATTEST:
JENNIFER WALTERS, CITY SECRETARY
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APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
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2
STATE OF TEXAS § ' °"°
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COUNTY OF DENTON § �
PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES
PERTAINING TO DENTON MUNICIPAL ELECTRIC
'� ���� ��►.����1+�1��i��1'l: �� ��¢�t�c:i� ��:r��:� ���tc,r��c� iN�i�� ���t t.d�c �'�..��� cl:�y c�i ���������'�°�m; ��_�� ��il���,
1:�� ��irc� ����,����� 1��� C,�t� c�i' C����Cc���� "������.�, �� �la�a�7cil��a� (�`��A���r:�r�t�ca��b witl�. �k;� }�rir.a,�i���l r�l`�i�ti� ��� °� � �
East McKinney Street, Denton, Texas 76201 ("CITY"); and R. J. COVINGTON CONSiJLTING,
LLC, a Texas Limited Liability Corporation, with its principal office at 11044 Research Boulevard,
Suite A-325, Austin, Texas 78759, 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:
ARTTC;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 accordarice with the professional
standards customarily obtained for such services in the State of Texas.
ARTTC'T.F. iT
SCOPE OF SERVICES
A. COVINGTON shall provide to the CITY professional consulting services pertaining to the
participation of Denton Municipal Electric, a municipally-owned elecfic utility, in various
workshops, investigations, and other proceedings at the Texas Public Utilities Commission ("PUC")
and at the Electric Reliability Council of Texas ("ERCOT"). COVINGTON agrees to perform those
services and tasks more particularly and specifically described in Task Order No. 04-C attached
hereto and incorporated herewith by reference.
B. To consult with the City Manager, Assistant City Manager/LTtilities, 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.
ARTiC"T,F. TTT
PERIOD OF SERVICE
This Agreement shall become effective on the date this Agreement is approved and upon the
issuance of a notice to proceed by Denton Municipal Electric. 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. 04-C; or upon the depletion and exhaustion of
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the $60,000 not to exceed amount provided for herein; or upon fifteen (15) day's written notice to
terminate, issued by the Director of Electric Utilities, DME. This Agreement may be sooner
terminated in accordance with the provisions hereof. Time is of the essence in this Agreement.
COVINGTON shall make all reasonable efforts to complete the services set forth herein as
expeditiously as possible and to meet the schedule established by the CITY, acting through its
Director of Electric Utilities.
ARTT('L.F, iV
COMPENSATION
A. COMPENSATION TERMS:
"Direct Non-Labor Expense" is defined as that expense for any assignment incurred hereunder
by COVINGTON for supplies, long-distance telephone, telecopier, reproduction expense,
overnight courier, photocopy expense, transportation, travel, communications, subsistence and
lodging away from home and similar incidental expenses reasonably incurred in connection
with that assignment.
B. BILLING AND PAYMENT:
1. For and in consideration of the professional services to be performed by COVINGTON
herein, the CITY agrees to pay COVINGTON, a total fee, including reimbursement for direct
non-labor expense, not to exceed $60,000 for those services described in Task Order No. 04-
C.
2. The fee for the services described in this Agreement to be performed by COVINGTON
are to be billed the rates as set forth in Exhibit "A" attached hereto and incorporated 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 monthly
statements rendered to the CITY through its Director of Electric Utilities. The fee bills as
submitted, shall be allowed and approved by the Director of Electric Utilities. However,
under no circumstances shall any monthly statement for services exceed the value of the work
performed at the time a statement is rendered.
4. Nothing contained in this Article shall require the CITY to pay for any work which is
unsatisfactory as reasonably determined by the City Manager or the Director of Electric
Utilities, or which is not submitted in compliance with the terms of 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 understood and agreed that COVINGTON shall not be authorized to
undertake any work pursuant to this Agreement which would require additional payments by
the CITY for any charge, expense or reimbursement above the maximum not-to-exceed fee as
stated, without first having obtained written authorization from the CITY.
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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 forty
(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.
ARTiC'T,F. V
OBSERVATION AND REVIEW OF THE WORK
COVINGTON will exercise reasonable care and due diligence in discovering and promptly
reporting to the CITY any defects or deficiencies in his work or the work of any subconsultants
performed hereunder.
ARTTC:T.F. VT
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 copies 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 on
the Project or services under the Agreement.
The Work Products shall not be changed or used for purposes other than those set forth in this
Agreement without the prior written approval of 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.
ARTiC'L,F. Vii
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.
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ARTTC:i,F. VTii
INDEMNITY AGREEMENT
COVINGTON shall indemnify and save and hold harmless the CITY and its officers, agents,
and employees from and against any and all liability, claims, demands, damages, losses and
expenses, including but not limited to court costs and reasonable attorney's fees incurred by the
CITY, and including without limitation, damages for bodily and personal injury, death and property
damage, and damage for professional malpractice resulting from the negligent acts or omissions of
COVINGTON or any subconsultants, in performance of this Agreement. COVINGTON'S liability
under this Article VIII is expressly limited to the amount of COVINGTON'S insurance coverage as
set forth in Article IX.
Nothing in this Agreement shall be construed to create a liability to any person who is not a
party to this Agreement and nothing herein shall waive any of the party's defenses, both at law or
equity, to any claim, cause of action or litigation filed by anyone not a party to this Agreement,
including the defense of governmental immunity, which defenses are hereby expressly reserved.
ARTTC'L.F, iX
INSURANCE
During the performance of the Services under this Agreement, COVINGTON shall maintain
the following insurance with an insurance company licensed to do business in the State of Texas by
the State Insurance Commission or any successor agency that has a rating with Best Rate Carriers of
at least an "A-" or above:
A. Comprehensive General Liability Insurance with bodily injury limits of not less than $500,000
for each occurrence and not less than $500,000 in the aggregate, and with property damage
limits of not less than $100,000 for each occurrence, and not less than $100,000 in the
aggregate.
B. Automobile Liability Insurance with bodily injury limits of not less than $500,000 for each
person and not less than $500,000 for each accident; and with property damage limits of not
less than $100,000 for each accident.
C. Professional Liability Insurance with policy limits of not less than $1,000,000 annual
aggregate.
D. COVINGTON shall furnish insurance certificates or insurance policies at the CITY's request
to evidence such coverages. The insurance policies shall name the CITY as an additional
insured on all such policies to the extent legally possible, 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 cancellation, deliver substitute policies furnishing the same coverage to the
CITY.
ARTTC'T .F. X
ARBITRATION AND ALTERNATE DISPUTE RESOLUTION
The parties agree to settle any disputes under this Agreement by submitting the dispute to
arbitration or other means of alternate dispute resolution such as mediation. No arbitration or
alternate dispute resolution arising out of or relating to, this Agreement involving one parly's
disagreement may include the other party to the disagreement without the other's approval.
ARTiC;T.F. XT
LIMITATION OF LIABILITY
To the extent permitted by law, the total liability of COVINGTON to CITY for any and all
claims arising out of this Agreement, whether caused by negligence, errors, omissions, strict
liability, breach of contract or contribution, or indemnity claims based on third-party claims, shall
not exceed one million dollars ($1,000,000).
ARTTC'T.F XTi
CONSEQUENTIAL DAMAGES
In no event and under no circumstances shall COVINGTON be liable to CITY for any
interest, loss of anticipated revenues, earnings, profits, or increased expense of operations, or for any
consequential, indirect or special damages.
ARTTC'T,F. XTTi
PROFESSIONAL STANDARDS
COVINGTON will perform services under this Agreement with the degree of skill and
diligence normally practiced by professional 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.
ARTTC;i ,F. XTV
TERMINATION OF AGREEMENT
A. Notwithstanding any other provision of this Agreement, either party may terminate this
Agreement by giving thirty (30) days advance written notice of termination to the other party.
B. This Agreement may be ternlinated in whole or in part in the event of either 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 nonperfornlance,
and not less than ten (10) business days in which to cure the failure; and (2) an opportunity for
consultation with the terminating party prior to termination.
C. If this Agreement is terminated prior to completion of the services to be provided hereunder,
5
COVINGTON shall immediately cease all services and shall reiider a final bill for services to
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 prior to the date of termination in accordance with Article N,
Compensation. Should the CITY subsequently contract with a new consultant for the
continuation of services on the Project, COVINGTON shall cooperate in providing
information. COVINGTON shall turn over all documents prepared or furnished by
COVINGTON pursuant to this Agreement to the CITY on or before the date of termination,
but may maintain copies of such documents for its use.
ARTTC'T.F. XV
RESPONSIBILITY FOR CLAIMS AND LIABILITIES
Approval by the CITY shall not constitute nor be deemed a release of the responsibility and
liability of COVINGTON, or any sub-consultants of COVINGTON, for the accuracy and
competency of their designs or other work product.
ARTTC'i.F. XVT
NOTICES
All notices, communications, and reports required or permitted under this Agreement shall be
personally delivered or mailed to the respective parties by depositing same in the United States mail
at the address shown below, certified mail, return receipt requested unless otherwise specified
herein. Mailed notices shall be sent to the parties at the following addresses:
To COVINGTON:
R.J. Covington Consulting, LLC
Attn: Richard J. Covington
11044 Research Blvd., Suite A-325
Austin, Texas 78759
To CITY:
City of Denton, Texas
Attn: Michael A. Conduff, City Manager
215 East McKinney Street
Denton, Texas 76201
All notices shall be deemed effective upon receipt by the party to whom such notice is given
or within three days after the date of mailing.
ARTTC'i .F. XViT
ENTIRE AGREEMENT
This Agreement consisting of nine (9) pages, and four (4) additional pages consisting of Task
Order No. 04-C, constitutes the complete and final expression of the agreement of the parties and is
intended as a complete and exclusive statement of the terms of their agreements and supersedes all
prior contemporaneous offers, promises, representations, negotiations, discussions, communications
and agreements which may have been made in connection with the subject matter hereof.
�
Task Order 04-C
Regulatory Services
Task C allows RJC to augment Staff's efforts to process the wide range of information
that is needed to keep up with activities at the PUC and ERCOT and to support staff in
evaluating which of the many issues that arise require DME's attention. In addition to
surveying and reporting on on-going activities at the PUC and ERCOT, RJC provides
technical assistance to answer specific questions Staff may have for their evaluation of
the impact on DME of various issues and in responding to questions from the Utility
Board and City Council.
Following is a detailed list of services to be provided under this Task Order:
Scope of Services
Task A PUC Re�ulatory Support
Task A-1 Attending Workshops and Hearings at PUC
1. RJC will stay informed on activities at the PUC and will attend workshops and
hearings as needed.
2. When appropriate, RJC will participate in workshops and hearings to represent
interests of City, based on directions of Staff.
3. RJC will work with Staff in developing positions that should be taken and
strategies for working with parties involved.
Task A-2 Analyze Proposed Rules and Policies
1. Proposed new rules and rule changes from the PUC will be analyzed.
2. RJC will discuss proposed new rules, and changes to existing rules with Staff and
legal counsel, helping to identify areas of concern and preparing positions that
represent the interests of the City.
3. RJC will meet with PUC staff and other parties as appropriate to discuss proposed
rules, and present the City's concerns regarding such proposals.
Task A-3 Preparation of Comments
1. RJC will prepare or assist in preparing comments to be filed with the PUC
representing City's position on issues brought up in proposed rules, projects and
dockets.
2. These comments will be coordinated through Staff and the City's legal team.
3. RJC will assist the City's legal team as necessary in the preparation and filing of
comments and testimony in dockets that have been identified by Staff as requiring
intervention to protect the City's interest.
2 of 4
Task Order 04-C
Regulatory Services
Task B ,�.:���:�������c� With ERCOT
Task B-1 Attending Committee and Working Group Meetings at ERCOT
1. RJC will stay informed on activities at the ERCOT Independent System Operator
("ISO") and will attend meetings as directed.
2. RJC will participate in discussions in meetings to represent interests of City,
based on directions of Staff.
3. RJC will work with Staff in developing positions that should be taken and
strategies for working with other ERCOT stakeholders.
Task B-2 Analyze Proposed Policies and Protocols
1. Proposed new policies and protocols from the ISO will be analyzed.
2. RJC will review proposed protocols with Staff, to identify areas of concern and
prepare responses that represent the position of the City on the issues before the
committees.
3. RJC will meet with ERCOT staff and other stakeholders to discuss proposed
protocols, and negotiate reconciliation of concerns.
Task B-3 Preparation of Comments
1. RJC will prepare or assist in preparing whitepapers and comments to be submitted to
the committees and be prepared to present such papers to represent the City's
position on issues.
2. These papers and comments will be coordinated through Staff and when necessary,
the City's legal team.
Task C Tndustrv Monitorin and F,valuation
l. RJC will have continuing communication with Staff and the City's legal team in
order to monitor proposed industry changes and address those issues affecting
municipalities.
2. An on-going dialog will be maintained with Staff and the legal team in order to
evaluate changing operating and market requirements and conditions, and
evaluate potential effects on City operations.
3. Information necessary to supplement and support the decision making process
will be provided as requested.
4. A summary of activities at the PUC and ERCOT will be provided to the Director
of Electric Utilities weekly.
Budget
The not-to-exceed amount for the above scope of services for both labor and out-of-
pocket expenses is $60,000. This amount will not be exceeded without prior written
3 of 4
Task Order 04-C
Regulatory Services
approval of the City of Denton, Texas. Because of the uncertainty regarding the level of
activity required, this budget is a good faith estimate. Additional Task Orders may be
required to complete this work. RJC will bill this Task Order monthly, with supporting
documentation of activities performed. The termination date of this Task Order shall be
on the earliest to occur of the following events: the date of completion of the work
described herein; or upon the depletion and exhaustion of the not-to-exceed amount
provided for herein; or upon fifteen (15) days written notice to terminate issued by the
Director of Electric Utilities, DME. The work being performed will be under the
supervision of the Director of Electric Utilities, and may be modified at any time upon
appropriate notice to RJC.
EXECUTED this the ���:�� ��� day of October, 2004.
AUTHORIZED BY:
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
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AT'TEST:
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JENNIFER WALTERS, City Secretary
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APPROVED AS TO LEGAL FORM:
HERBERL L. PROUTY, CITY ATTORNEY
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ACCEPTED BY;
R.J. COVINGTON CONSULTING, LLC
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S:\Our pocuments\Contracts\04\RJC TO 04-C 2004-Regulatory Services.doc
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FROM: Michael S. Copeland, Utility Attorney
SUBJECT: Professional Services Agreement for Consulting Services (T.O. Na. 04-C)
City of Denton, Texas/R.J. Covington Consulting, L.L.C. (RJC)
Regulatory Services
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The above Agreement and Task Order were cansidered by the City Council on October 19, 2004,
and approved on the same date. The City Manager has signed the Agreement and Task Order
No. 04-C. The amount approved is not to exceed $60,000. Also enclosed herewith for your file
is a confarmed copy of the Ordinance No. 2004- 329 and an executed original of the Agreement
and Task Order No. 04-C regarding the above-referenced matter.
By copy of this memorandum I am providing Jan Hill, Denton Municrpal Electric with two
copies of the conforrned Ordinance and two original executed Agreements and Task Orders No.
04-B. Jan will retain one original of the conformed Ordinance and ariginal Agreement (plus
Task Order No. 04-C) for her contract administration file; and she will mail the other original af
the conformed Ordinance and the original Agreement (plus Task Order No. 04-C} to Rick
Cavington. The City Secretary has retained the ariginal of the Ordinance and of ane original of
the Agreement (plus Task Order No. 04-C) for her records.
The Agreement will be administered through Denton Municipal Electric (Jan Hill/Sharon Mays).
I have copied Sharon with this memorandum and am hereby requesting that her department
prepare the necessary paperwork to secure the issuance of a purchase order regarding the
Agreement. Thank you for your assistance in this matter.
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Attachments (2)
cc: Michael A. Canduff, City Manager
oward Martin, Assistant City Manager/Utilities
haron Mays, Director of DME
Jennifer Walters, City Secretary (w/originals previously reserved)
Rick Covingtan, R.J. Covington Consulting, LLC., Austin, Texas
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ARTTC;T.F. XVTTT '
SEVERABILITY
If any provision of this Agreement is found or deemed by a court of competent jurisdiction to
be invalid or unenforceable, it shall be considered severable from the remainder of this Agreement
and shall not cause the remainder to be invalid or unenforceable. In such event, the party shall
reform this Agreement to replace such stricken provision with a valid and enforceable provision
which comes as close as possible to expressing the intention of the stricken provision.
ARTIC'T.F. XiX
COMPLIANCE WITH LAWS
COVINGTON shall comply with all federal, state, local laws, rules, regulations, and
ordinances applicable to the work covered hereunder as they may now read or hereinafter be
amended.
ARTTC'T.F. XX
DISCRIMINATION PROHIBITED
In performing the services required hereunder, COVINGTON shall not discriminate against
any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical
handicap.
ARTTC'T,F. XXT
PERSONNEL
A. COVINGTON represents that he has secured, or will secure at his own expense any additional
personnel required to perform all the services required under this Agreement. Such personnel
shall be subconsultants of COVINGTON, and shall not be employees or officers of, nor 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 of 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 permitted under
state and local laws to perform such services.
ARTiC;T ,F. XXTT
ASSIGNABILITY
COVINGTON shall not assign any interest in this Agreement and shall not transfer any
interest in this Agreement (whether by assignment, novation or otherwise) without the prior written
consent of the CITY.
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ARTiC'T.F. XXTTT "
MODIFICATION
No waiver or modification of this Agreement or of any covenant, condition, limitation herein
contained shall be valid unless in writing and duly executed by the party to be charged therewith and
no evidence of any waiver or modification shall be offered or received in evidence in any proceeding
arising between the parties hereto out of or affecting this Agreement, or the rights or obligations of
the parties hereunder, and unless such waiver or modifcation 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.
ARTTC'T.F. XXTV
MISCELLANEOUS
A. COVINGTON agrees that CITY shall, until the expiration of three (3) years after the final
payment under this Agreement, have access to and the right to examine any directly pertinent
books, documents, papers and records of COVINGTON involving transactions relating to this
Agreement. COVINGTON agrees that the CITY shall have access during normal working
hours to all necessary COVINGTON facilities and shall be provided adequate and appropriate
working space in order to 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 of action under this Agreement shall lie exclusively in Denton
County, Texas. This Agreement shall be governed by, and construed in accordance with the
laws of 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, economical, efficient manner and in accordance with
the provisions hereof. In accomplishing the work, COVINGTON shall take such steps as are
appropriate to ensure that the work involved is properly coordinated with related work being
carried on by the CITY.
D. The CITY shall assist COVINGTON by placing at COVINGTON's disposal all available
information pertinent to the work required by this engagement, including previous reports, any
other data relative to the project and arranging for the access to, and make all provisions for
COVINGTON to enter in or upon, public and private properiy as required for COVINGTON
to perform services under this Agreement.
E. The captions of this Agreement are for informational purposes only and shall not in any way
affect the substantive terms or conditions of this Agreement.
IN WITNESS WHEREOF, the City of Denton, Texas has caused this Agreement to be
executed in four (4) original counterparts, by its duly authorized City Manager; and R..��. C"c�wington
�;e�rr� ��ltir��� LLC has executed this Agreement by its duly authorized officer on this the ��`4`���� �'�, day of
..
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"CITY"
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ATTEST:
JENNIFER WALTERS, CITY SECRETARY
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APPROr` T�'1�� AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
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CITY OF DENTON, TEXAS
A Municipal Corporation
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Michael A. �" ��������; �:. �y� Manager
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"COVINGTON"
R.J. COVINGTON CONSULTING, LLC
A Texas Limited Liability Corporation
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Richard J l ,�a��� ���r�, �a'�^� c�iE;
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S:\Our pocuments\Contracts\04�R1 Covington Consulting LLC-PSA-TO 04-C 2004-Regulatory Services @ PUC.doc
ATTACHMENT
PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF DENTON, TEXAS AND
R.J. COVINGTON CONSULTING, LLC
TASK ORDER NO. 04-C
Regulatory Services
This Task Order is directed at assisting the Denton Municipal Electric staff ("Staff ') as
they address the continuing changes to the Texas electric market at the Public Utility
Commission of Texas ("PUC") and at the Electric Reliability Council of Texas
("ERCOT"). RJC will work with Staff to develop and present DME's position on those
issues that may affect DME and the City. Following is a discussion of the key services to
be provided under this Task Order.
Discussion
It is important for DME to be knowledgeable on issues at the PUC and ERCOT and to
participate in the discussions to represent the municipal electric utility market segment in
general, and DME customers specifically. Task A provides the scope of services for
continued participation at the PUC in dockets and projects that affect DME. Because
DME's transmission rates are now regulated by the PUC, it is important to stay up-to-
date on projects and dockets that may affect recovery of transmission costs from other
parties in ERCOT. The PUC also addresses issues from time to time that will either
directly, or indirectly, affect the way DME conducts it business. This Task Order
addresses regulatory issues such as Code of Conduct and Customer Safeguard rules, the
Project on defining Market Power in ERCOT, and similar rule-making related issues.
Because of the effort required for dealing with the PUC's Substantive Rule 25.501 related
to evaluation of changes in the ERCOT market design, the Nodal Market Design work is
addressed in a separate Task Order. All work performed at the PUC is conducted at the
direction of the Director of Electric Utilities.
In addition, there are issues that arise at ERCOT that are unrelated to the Nodal Market
Design. The scope of services listed in Task B addresses coverage of these issues. This
includes covering the ERCOT subcommittee that is responsible for changing protocols
that affect current market operations. It also include coverage of the Wholesale Market
Subcommittee which is responsible for evaluating and forwarding to ERCOT's Technical
Advisory Committee (TAC) proposed changes in the current market design that affect the
way utilities in ERCOT operate. RJC attends meetings and researches issues that assist
the Director in preparing for these monthly TAC meetings in Austin.