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2006-023 ORDINANCE NO. 2006- iJ 2. .3 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. 06-A; PROVIDING FOR SERVICES BEFORE THE PUBLIC UTILITIES COMMISSION OF TEXAS, INCLUDING, WITHOUT LIMITATION, COMPLIANCE ISSUES, PROTECTION OF DENTON MUNICIPAL ELECTRIC'S INTERESTS AND THE INTERESTS OF ITS RATEPAYERS, IMPLEMENTATION OF THE NODAL MARKET DESIGN, ISSUES RELATED TO MONITORING THE NEW MARKET, MARKET POWER ISSUES, RESOURCE ADEQUACY IN THE NODAL MARKET, AND OTHER ISSUES AFFECTING DME'S CONDUCT OF ITS BUSINESS; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council deems it in the public interest to continue to engage the firm of R. J. Covington Consulting, LLC of Austin, Texas ("Covington"), to provide further professional consulting services to the City r elating to Task Order No. 06-A; which includes, without limitation, services before the Public Utilities Board of Texas ("PUCT") including, without limitation, compliance issues, protection of Denton Municipal Electric's ("DME") interests and the interests of its ratepayers, implementation of the nodal market design, issues related to monitoring the new market, market power issues, resource adequacy in the nodal market, as well as other issues that affect the conduct of the DME business; 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 and ably over the last nine (9) years, and has proven to be a valuable, reliable, affordable, and competent professional resource that has expertise in, and is well-acquainted with the electric operations as well as the financial and regulatory framework of Denton Municipal Electric ("DME"), as well as its relations with the PUC and ERCOT. Covington's operations are located in Austin, Texas. Covington and his staff are particularly familiar with the characteristics, operations, and present rate structure ofDME: 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 I: 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. 06-A, to the City and to Denton Municipal Electric, in an amount of not to exceed $100,000; in substantially the form of the Professional Services Agreement that is 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 Covington to perform the professional services needed by the City for a fair and reasonable pnce. 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 and approval. PASSED AND APPROVED this the /7'f1t day of CJMjj.tllM{- , 2006. ~~AcL EULINE BROCK, MAYOR ATTEST: ~~~~=w:;;::RY ~ APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY!JW1~~~ S:\OUf Documents\Ordinances\06\R J Covington Consulting LLC-DME-Ord Aprv TO 06-A - 2006.do 2 <J STATE OF TEXAS ~ ~ ~ COUNTY OF DENTON PROFESSIONAL SERVICES AGREEMENT FOR CONSUL T1NG SERVICES PERTAINING TO DENTON MUNICIPAL ELECTRIC THIS AGREEMENT is made and entered into on the /11:/1 day of 2006, by and between the City of Denton, Texas, a Municipal Corporation, with it 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 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: ARTTrf F T 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 professional standards customarily obtained for such services in the State of Texas. A RTlrT F II SCOPE OF SERVICES A. COVINGTON shall provide to the CITY professional consulting services pertammg to assisting Denton Municipal Electric ("DME") in addressing issues associated with the Public Utilities Commission of Texas ("PUCT") regarding regulatory support of DME, including attending workshops and hearings at the PUCT, analyzing proposed rules and policies, preparation of comments, as well as industry monitoring and evaluation. This matter involves issues that will affect how DME conducts its business. The PUCT is currently addressing issues related to the implementation of the nodal market design, issues related to monitoring the new market, market power issues, and resource adequacy in the nodal market. COVINGTON will work with DME staff to develop and present the DME position on these issues effectively. COVINGTON agrees to perform those services and tasks more particularly and specifically described in Task Order No. 06- A attached hereto and incorporated herewith by reference. B. To consult with the City Manager, Assistant City ManagerlUtilities, 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. 1 ARTTrf F m 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 ("DME"). 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. 06-A; or upon the depletion and exhaustion of the $100,000 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. ARTTrT F TV COMPENSA nON 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: I. 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 $100,000 for those services described in Task Order No. 06-A. 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. 2 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. 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 (I %) set forth herein if the CITY reasonably determines that the work of COVINGTON is unsatisfactory, in accordance with this Article TV, Compensation, and the CITY notifies COVINGTON in writing of any such defect. ARTWI 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. ARTWI 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 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. 3 ARTTrT F vn INDEPENDENT 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. A RTTrT F VITI 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. A RTlrT 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 4 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. ARTTrI 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 party's disagreement may include the other party to the disagreement without the other's approval. ARTTrI F Xl 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). ARTTrI F xn 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. ARTTrI F xm 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. A RTTrI F XIV 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 terminated in whole or in part in the event of either party substantially failing to fulfill its obligations under this Agreernent. No such termination will be effected unless the other party is given: (I) written notice (delivered by certified mail, return receipt requested) of intent to terminate and setting forth the reasons specifYing the 5 nonperformance, 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. Ifthis Agreement is terminated prior to completion of the services to be provided hereunder, COVINGTON shall immediately cease all services and shall render a final bill for services to the CITY within thirty (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. ARTIf'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 subconsultants of COVINGTON, for the accuracy and competency of their designs or other work product. ARTTrI F XVI 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: To CITY: RJ. Covington Consulting, LLC Attn: Richard J. Covington, President 11044 Research Blvd., Suite A-325 Austin, Texas 78759 City of Denton, Texas Attn: City Manager 215 East McKinney Street Denton, Texas 76201 and to City of Denton, Texas Attn: Director of Electric Utilities 901-A Texas Street Denton, Texas 76205 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. 6 ARTTrT F XVTT ENTIRE AGREEMENT This Agreement consisting of nine (9) pages, and three (3) additional pages consisting of Task Order No. 06-A, 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. ARTTrT F xvm 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. ARTTrT 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. ARTTrT F XX DISCRIMINA nON 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. ARTTrr 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. 7 ARTTrT 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. ARTI('J F xxm 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 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. ARTTrT F XXN 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 property 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 8 V~/~'(~VV~ ~u;~~ rAA 141 002 executed in four (4) original counterparts, by its duly authorized City Manager; and R.~1~.ltngton Consulting, LLC has executed this Agreement by its duly authorized officer on this the day of ?fl.(j/)I/r ,2006. "CITY" CITY OF DENTON, TEXAS A Municipal Corporation . By ~a1A* Howard Martin, ~ City Mana.gcr :.IJJ-Iffl m ArrEST: JENNIFER WALTERS, CITY SECRETARY \ APPR D AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BytIMj)j)A ~ Q "COVINGTON" R. J. COVINGTON CONSULTING, LLC A Texas Limited Liability Corporation By: ~~~ Richard J Co' n, e' S:\Qur I)o(:Uln:nts\COIUTacts\06\RJ CovintlOn Con~ulting LLC-PSA.Reg SVC PLJCT TO 06-A DMF,;.doc: 9 EXHIBIT A PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND R.J. COVINGTON CONSULTING, LLC TASK ORDER NO. 06-A Regulatory Services This Task Order is for continuing assistance to Denton Municipal Electric staff ("Staff') as they address the continuing changes to the electric industry. Task Order No. 06-A specifically focuses on activities at the Public Utility Commission of Texas ("PUCT"). The PUCT is currently addressing issues that will affect the way DME conducts it business. It is important for DME to be aware of changes to remain in compliance with Texas regulations and to protect its interests and the interests of its ratepayers. In particular, the PUCT is now addressing issues related to the implementation of the nodal market design, issues related to monitoring the new market, market power issues, and resource adequacy in the nodal market. Covington ("RJC") will work with DME staff to develop and present the DME position on those issues that may affect DME and the City of Denton, Texas. The PUCT has concluded hearings on the nodal market design in Docket No. 31540 and RJC is currently working with DME staff and legal counsel preparing briefs in response to the testimony given during the hearings. If a satisfactory transition plan is not adopted by the PUCT Commissioners, DME may decide to challenge the decision through an appeal or in the courts. Without a reasonable transition approach between today's zonal market structure and the new nodal market, DME and its ratepayers could suffer rising electricity prices due to increased costs for delivery of energy in the Dallas-Fort Worth area. DME continues to work to achieve a transition plan that will allow for the different levels of transmission build-out in different regions. Because DME is in the North zone which has the largest concentration of generation owed by a single entity, DME must also be concerned about the issues of market power and the ability of ERCOT and the PUC to monitor market power in the nodal market. In addition, the issue of insuring there are adequate generation resources to serve load has never been more critical. In the nodal market, not only will insufficient generation reserves affect reliability, but it will also affect the pricing of generation. These activities at the PUCT will have a significant effect on DME as the new market unfolds. Task Order 06-B, executed even date herewith, allows RJC to supplement DME staffs efforts to keep track of the vast amount of information that is needed to keep up with activities at the PUCT and the Electric Reliability Council of Texas ("ERCOT"). RJC will assist the DME staff in identifying those issues needing DME's attention. In addition to surveying and reporting on ongoing activities at the PUCT and ERCOT, RJC is a resource providing extensive regulatory experience to assist DME's staff in the evaluation of the impact on DME of various issues. Task Order 06-A Regulatory Services Task Order No. 06-A addresses regulatory issues at the PUCT. Market issues at ERCOT are provided for in a separate task order (No. 06-B). All work performed at the PUCT is conducted under the direction of the Director of Electric Utilities. Scope of Services Task A PUCT Rel!ulatorv Support Task A-I Attending Workshops and Hearings at PUCT I. RJC will stay informed on activities at the PUCT and will attend workshops and hearings as directed by DME. 2. When appropriate, RJC will participate in workshops and hearings to represent interests ofDME and the City in accordance with the directions ofDME. 3. RJC will work with DME staff in development of positions that should be taken, and strategies for working with parties involved, during the nodal system design and implementation. Task A-2 Analyze Proposed Rules and Policies I. PUCT proposed new rules and rule changes will be analyzed. 2. RJC will discuss proposed new rules, and changes to existing rules with DME 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 PUCT staff and other parties as appropriate to discuss proposed rules, and present DME's concerns regarding such proposals. Task A-3 Preparation of Comments I. RJC will prepare or assist in preparing comments to be filed with the PUCT representing the City's position on issues brought up in proposed rules, projects and dockets. 2. These comments will be coordinated through DME staff and legal counsel. 3. RJC will assist the City's legal counsel as necessary in the preparation and filing of comments and testimony in dockets that have been identified by DME staff as requiring intervention to protect DME and the City's interest. Task B Industrv Monitorinl! and Evaluation I. RJC will maintain continuing communication with DME staff and legal counsel in order to monitor proposed industry changes and address those issues affecting municipalities. 2. An ongoing dialogue will be maintained with DME staff and the legal counsel in order to evaluate changing operating and market requirements and conditions, and evaluate their potential effects on DME 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 weekly. 2013 VJ..f.Lf/~UUV .10;".1 r~.. . ~004 Task Order 06-A Regulatory Services Budget This Task Order provides for a not to exceed amount of $100,000 for professional fees and expenses. This Task Order will not be exceeded without the prior written approval of the City. RJC will bill monthly with supporting documentation of activities performed and expenses incurred. 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 /1ilt day of (jdf1/M /J~, 2006. AUTHORIZED BY: "CITY' CITY OF DENTON, TEXAS A Texas Municipal Corporation B'~. Howard Martin Interim City Manager Dated: ;//7 / () (;; I I ATTEST: JENNIFER WALTERS CITY SECRETARY ACCEPTED BY: I'RJC" R.J. COVINGTON CONSULTING, LLC By: 1lco~t Dated: / /5/~~ APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER CITY ATTORNEY By: S:\Our I>oo.all1l:nts\Conrracts\06\R J CovingtOJl Conwlting - rask 0rdcI" 06-A.doc 30f3