2007-118ORDINANCE NO. ~0~7' ~l~
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN AMENDMENT
TO A PROFESSIONAL SERVICES AGREEMENT WITH THE FIRM OF R.J. COVINGTON,
LLC TO PREPARE AND COORDINATE DENTON MUNICIPAL ELECTRIC'S 2007 EARNING
MONITORING REPORT; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND
PROVIDING AN EFFECTIVE DATE (FILE 3747 IN AN AMOUNT NOT TO EXCEED $31,500
FOR A TOTAL CONTRACT AMOUNT OF $116,500.).
WHEREAS, on February 19, 2007, the City Manager approved a Professional Services
Agreement with R.J. Covington, LLC, in the amount of $85,000 for consulting services pertaining to
Denton Municipal Electric;
WHEREAS, the Staff having recommended, and the City Manager having recommended to
the Council that Task Order DEN 07-B be authorized to amend such contract agreement with respect
to the scope of work and an increase in the payment amount, and said task order fees under the
proposed contract 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 Task Order No. DEN 07-B, increasing the amount of the professional
services agreement between the City and R.J. Covington, LLC, which is on file in the office of the
Purchasing Agent, in the amount of Thirty One Thousand Five Hundred and 00/100 ($31,500.00)
Dollars, is hereby approved and the expenditure of funds therefore is hereby authorized in
accordance with said task order. The total purchase order amount increases to $116,500.00
SECTION 2. This ordinance shall become effective immediately upon its passage and
approval. '
~~
PASSED AND APPROVED this the day of '~ ,2007.
.l'/GC~1-'C~
PERK . McNEILL, MAYOR
ATTEST:
JENNIFER WALTERS,_CITY SECRETARY
BY:
AS Tb LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
BY:
3-ORD e3747
ATTACHMENT
PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF DENTON, TEXAS AND
R.J. COVINGTON CONSULTING, LLC
TASK ORDER NO. DEN 07-B
2007 Earning Monitoring Report Filing
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 ("City") and
R.J. Covington Consulting, LLC, ("RJC") as approved by the Denton City Council.
Work provided for in this Task Order is for R.J. Covington Consulting, LLC ("RJC") to
work with Denton Municipal Electric (DME) staff in preparing the filing of the 2007
Annual Earning Monitoring Report (EMR) to be filed with the Public Utility Commission
of Texas (PUC). RJC will prepare the earning monitoring filing package and coordinate
with City's legal counsel to file the EMR for 2007. To prepare the report, RJC will
submit data request to DME forinformation required in the filing, review all data
received for consistency, prepare the forms and respond to the questions required as part
of the annual filing, and assist in responding to question from PUC staff regarding
clarification of data filed. This scope does not include budget for extended discussions
with PUC staff should staff contest DME's level of earnings. As part of this task, RJC
will train DME staff regarding the filing in order to allow staff the ability to prepare
future filings with minimal outside assistance.
Scope of Services
Task A Data Collection and Review
1. RJC will provide DME staff a data request to obtain data for FY 2006.
2. The data will be reviewed and discussed with staff. The review will be to spot
check data to insure that corrections of known past problems in DME FERC
reported data were completed and insure that the data ties back to the City's
Comprehensive Annual Financial Report (CAFR).
3. RJC will review with DME staff new construction projects and financing for
those projects since the last TCOS.
4. The Transmission Cost of Service (TCOS) schedules and Final Order from
Docket No. 30358 will be reviewed in order to update the allocation factors used
in the EMR.
Task Order No. DEN 07-B
2007 Earning Monitoring Report Filing
Task B Preaare EMR Filing Package
1. The reviewed data and TCOS information will be used to complete the EMR
schedules for FY 2007.
2. RJC will meet with DME staff to train them on preparation of the EMR filing
package and process for filing.
3. RJC will evaluate possible issues that may arise from PUC staff due to DME's
use of the cash flow method for determining the return component of rates rather
than the traditional rate of return methodology preferred by PUC staff.
4. Potential issues will be discussed with DME staff and the City's attorneys.
Task C Filing of EMR
l . The filing package will be completed and reviewed with DME staff.
2. Once DME staff has approved the final EMR, RJC will work with City's legal
counsel to file the EMR with the PUC.
3. RJC will respond to questions from the PUC staff for clarification of data
contained in the EMR as necessary.
Budget
The budget for the above scope of services for labor and expenses for this Task Order is
not to exceed $31,500. The actual costs may vary if significant issues with DME
accounting data are encountered and depending on the extent of interaction with PUC
staff required to support the filing. This budget will not be exceeded without prior
approval of the City. RJC will bill monthly with supporting documentation of activities
performed. 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.
,,......//~~ lTCLICdi
EXECUTED thisZ~day of May, 2007.
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Task Order No. DEN 07-B
2007 Earning Monitoring Rcport Filing
AUTHORIZED BY:
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
Bv: ~ G
GEORGE C. CAMPBELL,
Dated: C~/,,'/7~ , / . ~~rJ
U '
ATTEST:
JENNIFER WAL
By:
ACCEPTED BY:
R.J. COVINGTON CONSULTING, LLC
A Texas Limited Liability Corporation
B,./'%~'~~i~
W. C. Starnes,
Vice-President
Dated: ~ 0
CITY SECRETARY
APPRQ`~ED AS TO LEGAL FORM;
EDWIN M. SNYDER, CITY ATTORNEY
By: ~ ~~
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