1999-012S \Our Docum~nts\Ordtnances\98~kmcndmant#3 RJ Covington Consulting doc
ORDINANCE NO qe-t57/~
AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY
MANAGER TO EXECUTE AMENDMENT NUMBER THREE TO THE PROFESSIONAL
SERVICES AGREEMENT FOR CONSULTING SERVICES WITH R J COVINGTON
CONSULTING RELATING TO THE DENTON MUNICIPAL ELECTRIC UTILITY, DATED
FEBRUARY 16, 1998, PROVIDING FOR ADDITIONAL PROFESSIONAL SERVICES TO
BE PERFORMED RELATED TO ELECTRIC RESTRUCTURING AND REGULATORY
MATTERS, BY ADDING TASK ORDER NO 98-E, AUTHORIZING THE EXPENDITURE
OF ADDITIONAL FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE
WHEREAS, on the 16th day of February, 1998 the City entered into a "Professional
Services Agreement For Consulting Services Relating To The Denton Municipal Electric
Utility" ("Agreement") with R J Covington Consulting ("Covington"), on the 28m day of April,
1998, the City and Covington entered into a First Amendment to said Agreement, on the 4th day
of August, 1998, the City and Covington entered into a Second Amendment to said Agreement,
tn all three of which Agreements, Covington agreed to perform professional consulting services
pertalmng to electnc utility restructuring and state regulatory matters impacting upon Denton
Municipal Electric, and
WHEREAS, several events have occurred since the Second Amendment to the
Agreement was entered into, which lmpaat upon the position of the City's Mumelpal Electric
Utility asl it approaches the upcoming Texas Legislative Session, and several pending projects
before the Pubhe Utilities Commission of Texas, which urgently require that Denton obtain
additional demonstrated competent and qualified professional and consulting services in order to
properly prepare, eommumeate, and protect its position and advance its interests, and
WHEREAS, Task Order No 98-E shall be added by the Third Amended Agreement, to
include slx areas where the City needs professional consulting services ~nmdent to proper
evaluation, planning, and related services incident to competitive issues, the operation of, and
possible divestiture of the Denton Murnc~pal Electric system, which amendment provides that
the City shall pay additional compensation to Covington attributable to Task Order No 98-E, not
to exceed $ 47,000 for professional fees and expenses, and
WHEREAS, the City Council deems it in the public interest to engage Covington to
provide the additional professional consulting services to the City and to accordingly enter into a
Third Amended Agreement providing for said services, NOW THEREFOR,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I. That the City Manager is hereby authorized to execute the Third
Amendment To Professional Services Agreement For Consulting Services Relating To The
Denton Municipal Electric Utlhty (the "Third Amended Agreement") with R J Covington
Consulting for the provision of additional professional consulting services respecting the above-
S \Our Documents\Ordmances\98~Amandment#3 RJ Covington Consulting doc
described aetlvmes pertaining to Denton Municipal Electric, in substantially the form of the
Third Amended Agreement attached hereto and incorporated herewith by reference
SECTION II That the award of this Third Amended Agreement is on the bas~s of the
demonstrated competence and quahficatlons of R J Covington Consulting and the ability of R
J Covington Consulting to perform the services needed by the City for a fair and reasonable
price
SECTION III That the expenditure of funds as provided in the attached Third Amended
Agreement is hereby authorized
S~CTION IV That this orchnanee shall become effective ~mmedmtely upon ~ts passage
and approval
//
JAC~I~LER, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROYED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
STATE OF TEXAS §
COUNTY OF DENTON {}
THIRD AMENDMENT TO PROFESSIONAL SERVICES
AGREEMENT FOR CONSULTING SERVICES
RELATING TO DENTON MUNICIPAL ELECTRIC
THIS THIRD AMENDMENT, to the Professtonal Services Agreement For Consulting
Servtees Relatmg To The Denton Mtm~ctpal Elecmc Utthty, entered mto on the 16~ day of
February, 1998, by and between R J Covington Consulting, a sole proprletorshtp, with nts prmetpal
offices at 13276 Research Boulevard, Su,te 204, Austin, Texas 78750 ("Covington"), and the Ctty
of Danton, Texas, a Texas Mumetpal Corporataon, wnth its pnnc,pal offices at 215 E McKnnney,
Denton, Texas 76201 ("Ctty") for professtonal and related consulting services provnded to the Ctty,
whteh Agreement ts heremafter referred to as the "Base Agreement", satd Base Agreement was
heretofore amended by Ftrst Amendment, entered into on the 28t~ day of April, 1998, by and
between Covington and the Ctty, whtch Agreement ns heremal~er referred to as the "Fnrst Amended
Agreement", satd Base Agreement was also heretofore amended by Second Amendment, entered
rotc on the fourth day of August, 1998, by and between Covington and the Ctty, whtch Agreement
~s heremafter referred to as the "Second Amended Agreement"
In cons,deratton of the mutual promtses of the partnes, the terms and condnttons set forth
hereto, and for other good and valuable constderatnons expressed hereto, the parties hereby
AGREE to amend the satd Base Agreement, the First Amended Agreement, and the Second
Amended Agreement as follows
I
That Arttcle II "Scope of Services" of the Base Agreement, the Fnrst Amended
Agreement, and the Second Amended Agreement ts hereby amended by addnng the following
addtttonal provtston
II E Covtngton shall provtde to the City those servnces set forth tn the Fnrst Amended
Task Order No 98-D (Tasks, A,B,C,D,E,F, and G )
II F Covington shall provnde to the Cnty those servnces set forth in an add~ttonal Task
Order, Task Order 98-E (Tasks A,B,C,D,E and F)
I1
That Arttcle III "Period of Servnce" of the Base Agreement, the Ftrst Amended
Agreement and the Second Amended Agreement ts hereby amended by addmg the followtng
add~ttonal provnston
As to the period of servtce respectnng the completnon of all Task Orders 98-A,B,C,D,and
E, the term of th~s Agreement shall expnre when all servtces provnded for m satd Task
Orders are completed, or upon the depletton of the budget provtded for under sand
Agreements
ThlrdAmendmentToProfesslomdServlces Page I
That Am¢le 1V B 1, "Compensatlon/Bflhng and Payment" of the Base Agreement, the
F~rst Amended Agreement, and the Second Amended Agreement ts hereby amended by adding the
following addmonal provmon
Wtth respect to the addmonal professional services to be performed by Covington
pursuant to Task Order 98-E, the Cay agrees to pay Covington, a further professional fee,
tneludtng reunbursement for threet non-labor expense, not to exceed $47,000
That Arttcle XIV "EnUre Agreement" of the Base Agreement, the First Amended
Agreement, and the Second Amended Agreement ts hereby amended to replace the enttre
paragraph contmned tn Arttcle XIV Wtth the fullowmg language, to wtt
TMs Agreement, consisting of nme (9) pages, plus Exhibit "A" (Fees For Servtees), Task
Order No 98-B, Task Order No 98-C, Task Order No 98-D, Ftrst Amended Task Order 98-D,
and Task Order 98-E, which Exhtbtt "A" and Task Orders are incorporated by reference herewith,
co9~mtes the complete and final expresston of the Agreement of the parttes and is intended as a
complete and exclusive statement of the terms of their Agreement and supersedes all prior
contemporaneous offers, promises, representauons, negotiations, discussions, commumcaUons and
agreements which may have been made tn cunnectton wah the subject matter hereof
V
1N WITNESS WHEREOF, the Cay of Denton, Texas has caused this Third Amended
Agreement to be executed tn four original counterparts, by its duly-authorized City Manager, and
Covington has executed this Agreement by tts duly-anthorlzed Owner and proprietor on this the
,"~&~ dayof~, 1999
"CITY"
CIT~ D, ENTON, TEXAS. /
ATTEST
JENNER WALTERS,~Iy SE_C~TARY
HERBERT L PROU.~f, CITY ATTORNEY
T~rd Amendment To Profe~lonal Serv~- l~g~ 2
"Covington"
R J COVINGTON CONSULTING
~chard J Covt~on, Presidial('
ATTEST
BY
Third Amendment To Prof~ss~ona~ Services Page3
AMENDMENT TO
PROFESSIONAL SERVICES AGREEMENT
DATED FEBRUARY 16, 1998
BETWEEN THE CITY OF DENTON AND
R J COVINGTON CONSULTING
TASK ORDER NO 98-E
CONSULTING SERVICES
This Task Order amends Article IV, B, 1 of the Professional Services Agreement and sets
forth specific services to be provided by R J Covington Consulting (RJC) to the City of
Denton (City) Tasks provided for in this Amendment may include the following
activities
1 ) Research of Competatlve Issues Facing City
2 ) Assistance With Analysis Of Customer Specific Questions
3 ) Assistance in Evaluation of Strategic Options
4 ) Assistance in Evaluation of and Development of Contracts and Agreements
5 ) Support of Distribution, Transrmsslon and Generation Planning
6 ) Other Services as Directed by Ctty
All specific achvltles performed by RJC under this Task Order will be at the direction of
the Director of Electric Utilities
Scope of Services
Task A Research of Competitive Issues Facing City
RJC will gather and review data on competitors and on compehtlve issues that affect
City This will included data from the PUC, ERCOT, and other industry sources
Information may be obtained as part of RJC's on-going achvlhes in the market place, or
research of particular issues as requested by staff Activities can include
Malntmnmg copy of competitors tariffs
2 Momtonng of competitor filings at PUC
3 Momtormg of power costs in North Texas
4 Monitoring of new generating plants proposed m North Texas
5 Review and momtorlng of transrmsslon constraints affecting North Texas
6 Researctung competitive issues as directed
Task B Assistance W~th Analysis Of Customer Specific Questions
RJC will work with Caty to evaluate questions which ar~se in serving City's customers
Such questions may include
Task Order No 98-E
Interconnect questions for on-rote generation
Buy-back rates from customer owned generation
Development of lnterruptible options for customers
Development of switch-over policy
Evaluation of conjunctive billing
Other issues as requested by staff
Task C Assistance In Evaluation of Strategic Options
RJC w~ll work with City staff m evaluating and developing options for services to lower
costs, enhance revenues and help protect against lost of customers to compehhon Such
achvltles may include
1 Evaluate new services to be offered to distribution customers to provide new
sources of revenues for City
2 Identify partnering opportumties to increase revenues
3 Evaluate load management options
Task D A~,~tance m Evahmhon of and Development of Contracts and Agreements
RJC w~ll provide assistance as requested for the development of and evaluahon of
agreements and contracts between the City and
1 DMEU customers
2 Other utiht~es
3 Control areas
4 Other Agreements as necessary to doing business in ERCOT
Task E Support ~n D~stnbuhon, Transmission and Generahon Planmng
RJC will provide assistance to staff as needed to model, evaluate and plan for the electnc
system Such activities may include
1 Evaluahon of transnusslon costs from alternahve resources
2 Review of forecast for system and substations
3 Evaluate transmusslon and d~stnbution faclhhes for upgrades and replacements
4 Prowde assistance m fflmg annual planned service apphcahon with ERCOT
2
Task Order No 98-E
Task F Other Sermces as D~rected by C~
RJC wlll prowde continued consulting services as spectfied m Article II - Scope of Services,
in the Professional Services Agreement As stated in Article II, such services are as follows
"A Covington shall prowde to the CITY professional services and techmcal
support, upon City's request, which shall relate to PUC and Texas leg~slattve
act~mt~es relating thereto, including without Imutatton, power marketing issues,
stranded cost issues, part~ctpatmn and review of the Excess Cost Over Market
("ECOM') model, pricing issues, TMPA ~ssues, and divestiture issues '
"B To consult with the City Manager, Assistant City Manager/Uhlmes, the
Director of Electric Utfl~tms, the City Attorney, and other designated adrmmstrative
personnel regarding any and all aspects of the services to be performed pursuant to
ti,as Agreement,
Budget
The budget for the above scope of serwces for time and expenses is estimated at $47,000
This budget will not be exceeded without prior approval of the City RJC will bill
monthly with supporting documentatton of act~mties performed
EXECUTED thls_.~?___~day of ~.~O~r-d ,199~;~
CITY CONSULTANT
CITY OF DENTON, TEXAS R J COVINGTON CONSULTING
' Ivflchaelj~V Jez - ~Jt~ I~nagor Richard J Co~gton ~