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2004-330FILE REFERENCE FORM [ 2004-330 I Additional File Exists Additional File Contains Records Not Public, According to the Public Records Act Other FILE(S) Date Initials Amendment to Service Contract (original is attached) 12/06/04 JR. ORDINANCE NO. 2004- .~.~7 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-D; PROVIDING FOR CONTINUED SUPPORT IN THE ONGOING ELECTRIC WHOLESALE MARKET DESIGN PROJECT 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-D; which includes, without limitation, services rendered regarding the ongoing Texas Public Utility Commission ("PUC")/Electric Reliability Council of Texas ("ERCOT") electric wholesale market design project; and WHEREAS, the City staffhas 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 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 l~amework of Denton Municipal Electric ("DME"), as well as its relations with the PUC and ERCOT. Covington and his staff are familiar with 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-D, to the City and to Denton Municipal Electric, in an amount of not to exceed $90,000; in substantially the form 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 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 and approval. PASSED AND APPROVED this the /~ dayof ~-(~ ,2004. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY By: S:\Our Doc umen ts\Ordinane es\04~q. J Covington Consulting LLC-DME-Ord Aprv TO 4-D-2004.doc 2 STATE OF TEXAS COUNTY OF DENTON PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES PERTAINING TO DENTON MUNICIPAL ELECTRIC THIS AGREEMENT is made and entered into on the'/~'a/c/(~ day of {/fi~Caa~ , 2004, by and between the City of Denton, Texas, a 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 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: ARTICI .lq 1 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. AR TII21 .lq 11 SCOPE OF SERVICES A. COVINGTON shall provide to the CITY professional consulting services pertaining to the participation of Denton Municipal Electric, a municipally-owned electric utility, in the Nodal Market Design of the Texas electric market. COVINGTON agrees to perform those services and tasks more particularly and specifically described in Task Order No. 04-D attached hereto and incorporated herewith by reference. B. To consult with the City Manager, Assistant City Manager/Utilities, 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. ARTTCI ,lq 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-D; or upon the depletion and exhaustion of the $90,000 not to exceed mount 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. ARTICJ .R 1V 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 fzom 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 $90,000 for those services described in Task Order No. 04- D. 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 increraents. 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. PAYMENT If the CITY falls 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. ARTICT .I~. 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. ARTTCI,E 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. A R TICI ,F. VII 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 fight arising from employee status. ARTtC2T.I~ VIII INDEMNITY AGREEMENT COVINGTON shall indemnify and save and hold harmless the CITY and its officers, agents, and employees fi.om 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 fi.om 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. AR TTC. I ,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 Carders of at least an "A-" or above: 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. 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. COVINGTON shall furrfish 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 ail 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. ARTT~T,1R X ARBITRATION AND ALTERNATE DISPUTE RESOLUTION The parties agree to settle any disputes under this Agreement by submiffmg the dispute to arbitration or other means of alternate dispute resolution such as mediation. No arbitration or altemate 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. ARTICI .IR X'T 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). ARTICT .1R ~ 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 .g. 3(III 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. ARTICT.F. XIV TERMINATION OF AGREEMENT 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. This Agreement may be terminated in whole or in part in the event of either party . substantially falling 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 mall, remm receipt requested) of intent to terminate and setting forth the reasons specifying the nonperformance, and not less than ten (10) business days in which to cure the failure; and (2) an oppommity for consultation with the terminating party prior to termination. If this 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 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 IV, 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. A R TICI .E 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. ARTIST ,F, X'VI 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: R.J. Covington Consulting, LLC Attn: Richard J. Covington 11044 Research Blvd., Suite A-325 Austin, Texas 78759 City of Denton, Texas Atto: Michael A. Conduff, City Manager 215 East MeKinney 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. ARTICI .~ XVIT ENTIRE AGREEMENT This Agreement consisting of nine (9) pages, and five (5) additional pages consist'rog of Task Order No. 04-D, 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. ARTIST .1R ~ SEVERAB1LITY 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 unenfomeable. 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. ARTICI.R X1X COMPLIANCE WITH LAWS COVINGTON shall comply with all federal, state, local laws, roles, regulations, and ordinances applicable to the work covered hereunder as they may now read or hereinafter be amended. A RTIITI ,F, 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. ARTIC1.1~ X'X] PERSONNEL 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. 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. ARTICT.I~ X;'XTI 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. 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 fights 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. ARTICI ,F. X'XIV MISCELLANEOUS 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. Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton County, Texas. This Agreement shall be govemed by, and construed in accordance with the laws of the State of Texas. 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. 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. The captious of tkis 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.J. Cov~gton Cons~t~ [LC has executed this Agreement by its duly authorized officer on this the /6/°t~ day of (/~f~rJ/Jfl~ ,2004. 8 ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY "CITY" CITY OF DENTON, TEXAS A Municipal Corporation BY: M k~ ~1 A~. Ci~~nager "COVINGTON" R.J. COVINGTON CONSULTING, LLC A Texas Limited Liability Corporation Richard J. Covi~on, Pr~s~kte/nt S:\Our Documents\ContraOs\04~RJ Covington Consulting LLC-PSA-TO 04-D 2004-Nodal Market Design.DME.doc ATTACItMENT PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND R.J. COVINGTON CONSULTING, LLC TASK ORDER NO. 04-D Nodal Market Design Work provided for in this Task Order is directed at continuing assistance to Denton Municipal Electric staff (Staff) in addressing issues associated with the Texas Nodal Team (TNT) process to implement a nodal market redesign in the Texas electric market. Because the nodal market design, with its Locational Marginal Price (LMP) settlement, can shift significant costs to the Dallas/Ft. Worth area (DFW), this process is of particular importance to the City of Denton, Denton Municipal Electric (DME), and DME's ratepayers. In continuing to work with Staff on this project, R. J. Covington Consulting, LLC (RJC) will assist in representing DME at the Public Utility Commission of Texas (PUC) and at the Electric Reliability Council of Texas (ERCOT) to develop and present the City's position on the proposed nodal market design. The scope of services includes continuing participation at the PUC in Project 26736 and participation at ERCOT on TNT committees and task forces developing rules for implementing the nodal system. RJC will also assist in developing materials for lobbying the Legislature to explain the impact on DME and the Dallas/Ft. Worth (D/FW) area of implementing a nodal market design. RJC has developed positions for DME to mitigate the impact on DME ratepayers (Market Transition Proposal) and will continue to push for including these positions in the nodal market design. RJC is also leading the TNT Cost/Benefit Concept Group to maintain an ongoing balance in the development of the study and reduce the bias that certain pro- nodal parties promote. RJC will continue in this role as Chair of the Cost Benefit Concept Group. All work on this Task Order will be at the direction of the Director of Electric Utilities. Background The PUC, in publishing Substantive Rule 25.501, stated its intent that ERCOT would implement a nodal system that would include LMP in ERCOT. LMP and the associated market changes will charge loads in congested areas of the state the costs of clearing that congestion. Currently those costs are uplifted to all loads in the state. Because the D/FW area has some of the highest level of transmission congestion in the state, this change could have a substantial negative impact on ratepayers in the D/FW area and other congested areas of the state. RJC has been actively working with other stakeholders and with PUC staff and Commissioners to inform parties of the potential significant negative impacts on the Task Order 04-D Nodal Market Design D/FW economy and on DME. Currently, PUC has developed a proposal that could significantly mitigate the impact on congested areas such as D/FW. PUC is actively working to gain support for this proposal from other market participants. This proposal will form the basis for positions at the PUC, the legislature, and the courts, as necessary. At the same time, PUC continues to work towards a fair cost benefit study that could give the PUC the reasons why moving to a nodal market may not in the best interest of the state. PUC has been providing education to attorneys, lobbyists and others that will support DME's efforts to prevent or mitigate the impact on D/FW consumers. To date, PUC has made significant headway in both of these efforts, gaining good support from market participants and the PUC. The schedule for implementing a nodal market design extends through 2006. The next immediate phases include: TNT sessions with major economists hired by the PUC and ERCOT to discuss the TNT nodal market design from Round 1 of the protocols · Round 2 of the protocols to incorporate changes from Round 1 based on input from the PUC and the economists · Filing of the cost benefit study (now scheduled for December timeframe) · Filing of the protocols (now scheduled for March 2005 timeframe) · Hearings at the PUC to discuss and approve the final protocols or have a decision to not proceed or delay the nodal market PUC will focus on the Transition Proposal and the Cost Benefit Concept Group. PUC will work with DME and Garland Power & Light staff as appropriate to cover Round 2 of the protocol review and subsequent hearings and workshops at the PUC. Because the schedule for implementing a nodal market design extends through 2006, additional work orders may be required to complete this work. PUC will keep the Director of Electric Utilities informed of the status of the budget and work may be stopped at any time by notification by the Director of Electric Utilities to PUC to cease work. Scope of Services Task A PUC Activities Task A-1 Attending Workshops and Hearings at PUC 1. PUC will stay informed on activities related to Project 26736 at the PUC and will attend workshops and hearings as needed. 2of5 Task Order 04-D Nodal Market Design 2. When appropriate, RJC will participate in workshops and hearings to represent interests of DME 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. 4. RJC will prepare or assist in preparing comments to be filed with the PUC representing DME's positions on proposed rules, projects and dockets related to nodal market design. Task A-2 Meetings with PUC Staff 1. RJC will meet with PUC staff and other parties as appropriate to discuss the proposed Market Transition Proposal, issues related to the cost benefit study, and present DME's concerns regarding the impact of PUC Substantive Rule 25.501 on D/FW area ratepayers. 2. As the nodal market protocols are developed, RJC will continue to analyze the potential impacts of the various components of the changes to the market. 3. RJC will meet with Commissioners and their aides as appropriate in order to educate them on the concerns of DME. Task B Assistance with ERCOT Task B-1 Attend TNT Committee and Cost Benefit Concept Group Meetings 1. RJC will stay informed on activities at the ERCOT Independent System Operator (ISO) and will attend meetings as directed by Staffthat are related to implementing the nodal market design. 2. RJC will participate in TNT and Cost Benefit Concept Group meetings to represent the interests of DME and to promote the Market Transition Proposal and the Cost Benefit Study. 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. RJC will review the new market design protocols proposed by the ISO and identify concerns. 2. RJC will meet with ERCOT staff and other stakeholders to discuss proposed market design issues and negotiate to mitigate the impact on D/FW loads. Task C Working with Other Affected Parties Task C-1 Coordination with Other Market Participates RIC will continue to work with other affected municipalities, orgarfizations, cooperatives, and associations where appropriate to promote the Market Transition Proposal and to otherwise mitigate the impacts of the nodal market on certain areas of the state. 3of5 Task Order 04-D Nodal Market Design 2. RJC will participate in meetings with other market participates to discuss strategy and positions. 3. RJC will coordinate with other parties, mayors and attorneys to communicate concerns to the PUC and Legislature. 4. RJC will continue to develop issues papers and statistics to assist in educating legislators, media and other market participates on the current market design and proposed changes. Task C-2 Work with Lobbyists and Publicists 1. RJC will work with the City's lobbyists to educate legislators on the issues. 2. RJC will work with the City's communication director and other spokespersons to inform the public of the impact on them of the Commission's push to a nodal market design. Budget The not-to-exceed amount for the above scope of services for both labor and out-of- pocket expenses is $90,000. This amount will not be exceeded with prior written 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. PUC 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 PUC. EXECUTED this the /~-~. day of _~,~]'~,- ,2004. AUTHORIZED BY: CITY OF DENTON, TEXAS A Texas Municipal Corporation ACCEPTED BY: R.J. COVINGTON CONSULTING, LLC Dated: 4of5 Task Order 04-D Nodal Market Design ATTEST: APPROVED AS TO LEGAL FORM: JENNIFER WALTERS, CITY SECRETARY HERBERT L. PROUTY, CITY ATTORNEY S:\Our Documents\Contracts\04~RJC TO 04-D 20tM-Nodal Market Design.doc 5 of 5 AMENDMENT TO SERVICE CONTRACT The Service Contract between the City of Denton, Texas and Family Health Care, Inc. , dated November 2, 2004 (the "Service Contract") and approved by Ordinance No. 2004-330 is hereby amended to decrease the maximum amount that the City is obligated under Paragraph 3, A to an amount not to exceed $ 26,000.00. A new Exhibit ,,B,, is also hereby attached and replaces the previous Exhibit "B" for all purposes. All other provisions of the contract shall remain in full force and effect unless in direct conflict with the provisions of this amendment. This amendment shall be attached to the original contract by the City Secretary. This amendment shall become effective on the completions of signatures of the parties. City Manager Dated: ATTESTED: JENNIFER WALTERS CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY CITY ATTORNEY FAMILY HEALTH CARE INC: Date: Exhibit B Budget FAMILY HEALTH CARE, INCORPORATED Allowable Expenditure Budget Amount Initial Visit $114.00 $26,000.00 Return or Postpartum $ 47.00 Ultrasound $105.00 Follow up Ultrasound $ 55.00 Non-Stress Test $ 35.00 Nutritionist Visit $ 45.00 Case Management $ 35.00 Total $26,000.00 Family Health Care, Inc. will be reimbursed on a fee for service basis for services provided to residents of Denton. Fees for particular services are described above.