2017-289ORDINANCE NO. 2 1 -2899
AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE APPROVAL OF
A SECOND AMENDMENT TO A CONTRACT BETWEEN THE CITY OF DENTON AND
DELOITTE & TOUCHE, LLP., TO PERFORM A FISCAL YEAR 2017-18 BENCHMARK
ANALYSIS AND RISK ASSESSMENT OF THE CITY OF DENTON ENERGY MAINTENANCE
ORGANIZATION (EMO) IN THE AMOUNT OF $145,000, AMENDING THE CONTRACT
APPROVED BY PURCHASING STAFF ON MAY 25, 2017 IN THE AMOUNT OF $26,000,
AND A FIRST AMENDMENT APPROVED BY THE CITY MANAGER ON JULY 25, 2017 IN
THE AMOUNT OF $60,000; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR;
AND PROVIDING AN EFFECTIVE DATE (FILE 6469—PROVIDING FOR AN ADDITIONAL
EXPENDITURE AMOUNT NOT -TO -EXCEED $145,000, WITH THE TOTAL CONTRACT
AMOUNT NOT -TO -EXCEED $231,000.)
WHEREAS, on May 25, 2015, Purchasing staff awarded a Professional Services Agreement
for Consulting Services (hereafter the "Agreement") to Deloitte & Touche, LLP., in the amount of
$26,000 for professional consulting services regarding an assessment of the Energy Management
Organization for Denton Municipal Electric; and
WHEREAS, on July 25, 2017, the City awarded an amended Professional Services
Agreement for Consulting Services to Deloitte & Touche LLP., (hereafter the "First Amendment") in
the further amount of $60,000 aggregating a not -to -exceed amount of $86,000, for additional
services to be rendered regarding the assessment of the Energy Management Organization and said
Agreement was approved by the City Manager in accordance with his delegated authority; and
WHEREAS, there appears to the Council that further professional services must be
completed; and Staff having recommended, the Public Utilities Board having approved, and the City
Manager having recommended to the Council that the Second Amendment to Professional Services
Agreement with Deloitte & Touche, LLP., (hereafter the "Second Amendment") be authorized to
amend such Agreements, with respect to the scope of work and an increase in the payment amount
by $145,000; and said fees under the proposed Second Amendment are fair and reasonable, and are
consistent with and not higher than the recommended practices and fees published by the
professional associations applicable to the provider's profession; and such fees do not exceed the
maximum provided by law; NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager is hereby authorized to enter into the " Amendment to
Professional Services Agreement" with Deloitte & Touche, LLP., (hereafter the "Second
Amendment"), in substantially the form that is attached hereto as Exhibit "A," and incorporated
herewith by reference, which increases the amount of the engagement by and between the City of
Denton, Texas and Deloitte & Touche, LLP., which Agreement is on file in the office of the
Purchasing Agent, in the additional amount of $145,000, which amount is hereby approved; and the
expenditure of funds therefor is hereby authorized in accordance with said Second Amendment. The
total purchase order amount therefore increases to the amount of not -to -exceed $231,000.
SECTION 2. The City Council of the City of Denton, Texas hereby expressly delegates the
authority to expend funds and to take any actions that may be required or permitted to be performed
by the City of Denton, Texas under File 6469, to the City Manager of the City of Denton, Texas, or
his designee.
SECTION 3. The recitations and statements contained in the preamble hereto are
incorporated herewith as a part of this Ordinance for all purposes.
SECTIONw 4. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the .. � day of (�Le,� " :' r, 2017.
CHRIS WATTS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
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By: ' ,p
APPROVED AS TO LEGAL FORM:
AARON LEAL, INTERIM CITY ATTORNEY
DocuSign Envelope ID: F3E32C78-946E-43E9-BC3F-DEB718F2BCF0
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DocuSign Envelope ID: F3E32C78-946E-43E9-BC3F-DEB718F2BCF0
THE STATE OF TEXAS §
§
COUNTY OF DENTON §
SECOND AMENDMENT TO CONTRACT
BY AND BETWEEN THE CITY OF DENTON, TEXAS
AND DELOITTE & TOUCHE, LLP
CONTRACT NO. 6469
THIS SECOND AMENDMENT TO CONTRACT NO. 6469 by
and between the City of Denton, and Deloitte & Touche, LLP
Consultant);
The original Agreement provided by Deloitte & Touche, LLP for professional
services related to Agreement for and Energy
as is contained in Contract # 6469. The initial
agreement for the Basic Services was approved on May 25, 2017, in the not-to-exceed
amount of $26,000. The first amendment for additional assessment services was approved
on July 26, 2017, in the not-to-exceed amount of $60,000.
The CITY deems it necessary to further expand the professional services provided
by CONSULTANT to the CITY;
NOW THEREFORE,
1. ARTICLE II, SCOPE OF S amended
to read as follows:
C. CONSULTANT shall perform all those services set forth in the individual
task orders as described in Exhibit 1 Statement of Work, Drafted:
September 11, 2017, which shall be attached to this Agreement and made a
part hereof.
2. ARTICLE V
Agreement is hereby amended to read as follows:
services to be performed by the CONSULTANT herein, the OWNER agrees to
pay, based on the cost estimate detail shown in Exhibit A Engagement
Fees 1 Statement of Work, Drafted: September 11, 2017,
which are attached hereto and made a part of this Agreement as if written word
for word herein, a total fee not to exceed $231,000.
PSA 6469 Amendment No. 2 Page 1 of 2
DocuSign Envelope ID: F3E32C78-946E-43E9-BC3F-DEB718F2BCF0
All other provisions of the contract, as heretofore amended, remain in full force and effect.
IN WITNESS WHEREOF, the CITY and the CONSULTANT, have each executed
this Amendment, by and through their respective duly authorized representatives and
officers on this date _________________________.
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
By: __________________________________
TODD HILEMAN
CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By: __________________________________
APPROVED AS TO LEGAL FORM:
AARON LEAL, INTERIMCITY ATTORNEY
By: ___________________________________
CONSULTANT
Deloitte & Touche, LLP
ALimited Liability Partnership
By: _________________________________
AUTHORIZED SIGNATURE, TITLE
PSA 6469Amendment No. 2 Page 2of 2
DocuSign Envelope ID: F3E32C78-946E-43E9-BC3F-DEB718F2BCF0
Exhibit 1
STATEMENT OF WORK, DRAFTED: September 11, 2017
This Statement of Work is to confirm the engagement of Deloitte & Touche LLP (Consultant
analysis and
recommendations in support of establishing the FY 2017
EMOcost savings benchmark The
engagement is subject to the terms of the Professional Services Agreement for DME EMO
(designated by Client as File 6469) to which this Exhibit A is attached and made a part thereof.
SCOPE, APPROACH, AND ASSUMPTIONS
The nature of the Services that the Consultant is to perform for the Owner can be broken into the
following tasks:
Task 1: FY 2017 benchmark cost analysis
Task 2: EMO capability maturity assessment
The scope of work will focus on helping the Owner and DME establish a benchmark for FY
2017 that is representative of the capabilities of the EMO. The approach to providing these
services includes:
Task 1
Key Activities:
Assess the appropriateness of different methodologies for calculating the FY2017
cost savings, including the following:
o A benchmark method initially identified by DME for FY 2017: 3.5 heat rate adder
over the DAM ERCOT index for energy
o A benchmark method based on the following approach Compare actual
performance to the market forwards as of a particular date for the energy
component
Identify the advantages and disadvantages between benchmark different options
Recommend an
Deliverables
Executive summary of analysis, results and recommendation
The advantages and disadvantages of the different benchmark options
A recommendation on the appropriate benchmark to use in the cost savings
calculation
Duration and Fees:
Approximately 3 weeks and 150 hours
$35,000, inclusive of travel
DocuSign Envelope ID: F3E32C78-946E-43E9-BC3F-DEB718F2BCF0
Task 2:
Key Activities
Gain an
structure, control activities, resources and technology, including the possible risks
assumed by DME with the creation of the EMO
Interview specific Owner and DME personnel involved in the execution of the EMO
program in order to develop an in-
Identify potential gaps and develop recommendations utilizing our proprietary
Capability Maturity Model
Review our findings and recommendations with appropriate Owner and DME
personnel
Advise DME management in their preparation for specific stakeholder discussions
(e.g. Board of Directors, senior management, City Council) to gain agreement and
consensus on their desired future state program
Deliverables:
Risk Assessment Executive Summary
Detailed Assessment Findings
Advice and recommendation on the potential
to help achieve the desired future state and/or close identified gaps
Duration and Fees:
Approximately 5 weeks and 400 Hours
$110,000 inclusive of travel
ACKNOWLEDGMENTS AND AGREEMENTS
Substantial and meaningful involvement of key stakeholders in the risk assessment and
risk identification process of the Company is critical to the success of this engagement.
The Company shall be responsible for ensuring that the identified Company personnel
actively participate in both the planning and execution of this engagement.
The Services will not constitute an engagement to provide audit, compilation, review, or
attestation services as described in the pronouncements on professional standards issued
by the AICPA, the Public Company Accounting Oversight Board, or other regulatory
body and, therefore, we will not express an opinion or any other form of assurance as a
result of performing the Services.
Consultant will not make any management decisions, perform any management
functions, or assume any management responsibilities.
Observable inputs such as market data shall be provided by the Owner or agreed with
Owner for use in the assessment
The Services will be performed in accordance with the Statement on Standards for Consulting
Services issued by the American Institute of Certified Public Accountants (AICPA).
DocuSign Envelope ID: F3E32C78-946E-43E9-BC3F-DEB718F2BCF0
TIMETABLE
Based on our experience delivering similar engagements, we believe that the services described
can be provided in approximately six (6) weeks.
ENGAGEMENT FEES
The estimated fees for this engagement are estimated not to exceed $145,000 inclusive of travel,
based on the following rates and approximately 550 hours:
Resource Level Hourly Rate
Partner, Principal, Managing
$445
Director
Senior Manager $415
Manager $380
Senior Consultant $330
Consultant $280
US India Senior Consultant $91
Certificate Of Completion
Envelope Id: F3E32C78946E43E9BC3FDEB718F2BCF0Status: Completed
Subject: City Council Docusign Item - 6469 Amendment No. 2
Source Envelope:
Document Pages: 6Signatures: 4Envelope Originator:
Certificate Pages: 6Initials: 0Cindy Alonzo
AutoNav: EnabledCynthia.Alonzo@cityofdenton.com
EnvelopeId Stamping: EnabledIP Address: 10.102.101.11
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
Record Tracking
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