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HomeMy WebLinkAbout1999-01-19 City Council (13)C ty City of Palo Alto Manager’s Report TO: FROM: DATE: HONORABLE CITY COUNCIL CITY MANAGER JANUARY 19, 1999 DEPARTMENT: UTILITIES CMR: 120:98 SUBJECT:APPROVAL OF A CONSULTING CONTRACT WITH FLYNN & ASSOCIATES TO ASSIST THE CITY WITH ELECTRIC REGULATORY AFFAIRS RECOMMENDATION Staff recommends that the Council authorize the Mayor toexecute the consulting agreement (Attachment 1) with Flyrm & Associates for the scope of work and fee schedule shown in Exhibits A and B for a maximum total amount of $70,000 in FY 1998-99, $125,000 in FY 1999-00 and $135,000 in FY 2000-01. DISCUSSION Consultant Services Description Staff has identified the need for consulting services in the electric regulatory area to augment internal resources and provide strategic advice, specialized knowledge and monitoring services. A major focus of these services is continuing to prepare the City for restructuring of the electricity industry in California, monitoring and influencing regulatory changes related to the operation of the Independent System OperatOr (ISO) and the Power Exchange (PX), and protecting the City’s existing contact rights. The attached scope of work outlines the tasks involved in providing these services. Selection Process A Request for Proposals was sent on August 31, 1998 to 16 consulting firms with relevant expertise for providing consulting services to the City in three specific work areas: (I) electric regulatory affairs, (ii) gas regulatory affairs, and (iii) risk management. The consultants were CMR:120:98 Page 1 of 3 asked to offer services in any or all areas. By September 29, 1998, the due date, 7 firms responded with proposals to offer services in the electric regulatory area. A utilities staff evaluation committee reviewed the proposals and short-listed two firms based on the evaluation criteria contained in the RFP. These two firms were invited to make presentations to the evaluation committee, and Flynn & Associates was selected as the consultant to work with the City in the electric regulatory area. The evaluation committee decided that Flynn & Associates is better informed about the regulatory process, ISO/PX developments and specific transmission related issues for the San Francisco Bay Area. They are already working in this field and supporting the City of San Francisco in the regulatory area. They also have direct knowledge of issues important for municipal utilities and experience of working with them. RESOURCE IMPACT The required funds ($70,000) for providing consulting services are included in the FY 1998- 99 budget. Continued work under this contract for FY 1999/2000 and FY 2000/2001 will be subject to satisfactory performance by the consultant and appropriation of required funds in these fiscal years. The contract can be terminated with 30 days written notice with or without cause. POLICY IMPLICATIONS This recommendation is consistent with existing City policy. ENVIRONMENTAL REVIEW These services do not constitute a project for the purposes of the California Environmental Quality Act. CMR: 120:98 Page 2 of 6 ATTACHMENTS Attachments 1: Contract for consulting services with Flyrm Associates. PREPARED BY:Girish Balachandran, Manager, Supply Resources Shishir Mukherjee, Resource Planner DEPARTMENT HEAD APPROVAL: Director of Utilities CITY MANAGER APPROVAL: EMILY HARRISON Assistant City Manager CMR: 120:98 Page 3 of 3 EXHIBIT A SCOPE OF SERVICES AND TIME SCHEDULE FOR FLYNN & ASSOCIATES Electric Utility: Technical consulting, Legislate and Regulatory_ Services Flynn & Associates (the CONTRACTOR) will assist the City of Palo Alto (CITY) to respond to the challenges related to electric industry restructuring in California in areas including, but not limited to: Assistance with monitoring and/or influencing any of the ISO/PX, CPUC, FERC and investor-owned utility (PG&E, SCE, and SDG&E) activities and filings, ISOiPX tariff amendments, grid management charges, administrative charges, protection of CITY’s existing contract rights, and participation in the Existing Rights Working Group (ERWG). Assistance with transmission and other ISO and FERC related issues, including transmission pricing (transmission access and usage fees), congestion management and setting up of congestion zones, firm transmission rights (FTR) auction and auction of existing rights as FTRs, and transmission owner’s tariff with specific emphasis on San Francisco Bay Area Transmission issues. Assistance with issues related to municipal utilities, and California Municipal Utilities association (CMUA), including those related to jurisdiction, tax-exempt bonds, independence in setting rates, and related to their San Francisco Bay area Transmission issues. Assistance with interventions in selected proceedings before CPUC and FERC, including technical assistance, drafting of testimony, and/or analysis of related litigation directly on behalf of the CITY or in collaboration with other interested utilities, or through Transmission Agency of Northern California (TANC), Northern California Power Agency (NCPA) and/or CMUA. Other related areas as needed TASK 1 CMR: 120:98 Page 4 of 6 The CONTRACTOR will perform technical consulting, legislative and regulatory services within the overall scope until June 30, 1999 for an amount not to exceed $70,000. The CONTRACTOR will work with the CITY staff and at the direction of the Project Manager or his designee, and concentrate his activities in the following areas: 1.CITY’s Exposure to Usage Charges/Congestion Fees The CONTRACTOR will monitor developments at the ISO which may affect the exposure the CITY has to paying marginal priced congestion fees as part of a transmission cost. Unless and until a formal ISO stakeholder process is developed covering the adjustment of or designation of zones, this monitoring will be concentrated in ISO and PG&E stakeholder processes which concern pricing incentives for new generation and satisfying the must run requirements of the ISO. 2.Access Fee The CONTRACTOR will monitor developments at the ISO with respect to the design of a successor access fee to replace the current utility specific one contained in the Transmission Owner’s Tariff (TOO) of each of the three major investor-owned utilities in California. This may involve participation in CMUA, TANC, NCPA and/or other stakeholder group meetings which may be developing positions on the subject. In addition, .the CONTRACTOR will assist CITY staff follow FERC decisions and developments on the current utility specific access fee which may set precedence for the future rate. o Grid Management Charges (GMC) The CONTRACTOR will monitor developments at the ISO with respect to the unbundling of the GMC based on the ISO appointed consultant’s report and negotiations related to revised allocation of GMC on the basis of flows, transactions and other billing parameters, and its impact on the CITY. This may involve participation in CMUA, TANC, NCPA and/or other stakeholder group meeting which may be developing positions on the subject. Other issues The CONTRACTOR will monitor other activities at the ISO, PX, FERC, CPUC and Western which will/may have an effect on the CITY’s ability to maintain an CMR:120:98 Page 5 of 6 economical power supply..These include: The effort to define system units to allow Pal. Alto and other municipal utilities to supply ancillary services in the ISO markets. The effort at the Existing Rights Working Group (ERWG) to allow the designation of a Metered Subsystem (MSS) and different levels of ISO membership. Co Development of and issuance of Firm Transmission Rights (FTR) by the ISO, and the possibility to auction existing contract rights at the FTR auctions. The effect on Western of the new ISO/PX environment and changes to it which might impact the price and/or the flexibility of this source of power for Pal. Alto. In addition to the above monitoring activities, within the allocated budget, the CONTRACTOR will also work with the CITY staff to perform analytical studies of the effect of proposed changes in the areas listed above. On the same basis, the CONTRACTOR will develop position papers and assist the CITY in developing positions on policy issues and strategies for dealing with them. The CONTRACTOR will develop and submit quarterlyreports before March 31, 1999, and June 30, 1999, which describe the current state of regulatory issues that are critical to the CITY and recommend a strategy for future CITY efforts. TASK ASSIGNMENT PROCEDURE The CONTRACTOR will be assigned various tasks during the duration of the contract, in addition to Task 1 above. For tasks beyond the above Task 1, which terminates on June 30, 1999, the CONTRACTOR will propose future tasks in writing. However, future work is only authorized under this Contract if such future work is authorized by the City’s Project Manager. CMR: 120:98 Page 6 of 6 CONTRACT NO. BETWEEN THE CITY OF PALO ALTO AND FLYNN & ASSOCIATES FOR CONSULTING SERVICES This Contract No.is entered into , by and between the CITY OF PALO ALTO, a chartered city and a municipal corporation of the State of California ("CITY"), and FLYNN & ASSOCIATES, a sole proprietorship, located at 4200 Driftwood Place, Discovery Bay, CA 94514-9267 (~CONTRACTOR"). RECITALS: WHEREAS, CITY desires certain consulting services (~Services"), as more fully described in Exhibit ~A"; and WHEREAS, CITY desires to engage CONTRACTOR, including its employees, if any, in providing the Services by reason of its qualifications and experience in performing such Services, and CONTRACTOR has offered to provide the Services on the terms and in the manner set forth herein; NOW, THEREFORE, in consideration of thecovenants, terms, conditions, and provisions of this Contract, the parties agree: SECTION i. TERM I.i This Contract will commence on the date of its execution by CITY and will expire on June 30, 2001. CONTRACTOR will commence work on tasks as directed by the CITY’s project manager. In the event that the Services are not completed within the specified time schedule on account of CONTRACTOR’s default, CITY’s city manager will have the option of extending the time schedule for any period of time. This provision will not preclude the recovery of damages for delay caused by CONTRACTOR. SECTION 2. CONTRACTOR OUALIFICATIONS.STATUS, AND DUTIES QF 2.1 CONTRACTOR represents and warrants that it has the expertise and professional qualifications to furnish or cause to be furnished the Services. CONTRACTOR further represents and warrants that the project director and every individual charged with the performance of the Services under this Contract are duly licensed or certified by the State of California, to the extent such licensing or certification’ is required by law to. perform the Services. 981224 syn 0071566 1 2.2 In reliance on the representation and warranty set forth in Section 2.1, CITY hires CONTRACTOR to perform, and CONTRACTOR covenants and agrees that it will furnish or cause to be furnished, the Services. 2.3 CONTRACTOR will assign BARRY FLYNN, President, as the project director to have supervisory responsibility for the performance, progress, and execution of the Services. If circumstances or conditions subsequent to the execution of this Contract cause the substitution of the project director for any reason, the appointment of a substitute project director will be subject to the prior written approval of the project manager. 2.4 CONTRACTOR represents and warrants that.it will: 2.4.1° Procure all permits and~ licenses, pay all charges and fees, and give all notices which may be necessary and incident to the due and lawful prosecution of the Services; 2.4.2 Keep itself fully informed of all existing and future Federal, State of California, and local laws, ordinances, regulations, orders, and decrees which may affect those engaged or employed under this Contract, any materials used in CONTRACTOR’s performance under this. Contract, or the performance of the Services; 2.4.3 At all times observe and.comply with, and cause its employees and contractors (and consultants), if any, who are assigned to the performance of this Contract to observe and comply with the laws, ordinances, regulations, orders and decrees mentioned above; and 2.4.4 Will report immediately to the project’manager, in writing, any discrepancy or inconsistency it discovers, in the laws, ordinances, regulations, orders, and decrees mentioned above in relation to any plans, drawings, specifications or provisions of this Contract. 2.5 Any reports, information, data or other material given to, or prepared or assembled by, CONTRACTOR or its contractors, if any, under this Contract will become the property of CITY and will not be made available to any individual or organization by CONTRACTOR or its contractors, if any, without the prior written approval of the city manager. 2.6 CONTRACTOR will provide CITY with five (5), copies of any documents which are part of the deliverables upon their completion and acceptance by CITY. 981224 syn 0071566 2 2.7 If CITY requests additional copies of reports, drawings, specifications or any other material which CONTRACTOR is required to furnish in limited quantities in the performance of the Services, CONTRACTOR will provide such additional copies and CITY will compensate CONTRACTOR for its duplication costs. 2.8 CONTRACTOR will be responsible for employing or engaging all persons necessary to perform the Services. All contractors of CONTRACTOR will be deemed to be directly controlled and supervised by CONTRACTOR, which will be responsible for their performance. If any employee or contractor of CONTRACTOR fails or refuses to carry out the provisions of this Contract or appears to be incompetent or to act in a disorderly or improper manner, the employee or contractor will be discharged immediately from further performance under this Contract on demand of the project manager. 2.9 In the execution of Services, CONTRACTOR and its consultants, if any, will at all times be considered independent contractors and not agents or employees of CITY. SECTION 3. DUTIES OF CITY 3.1 CITY will furnish or cause to be furnished the specified services, if any, set forth in Exhibit ~A" and such other information regarding its requirements as may be’reasonably requested by CONTRACTOR. 3.2 The city .manager will represent CITY for all purposes under this Contract. GIRISH BALACHANDRAN, Manager, Supply Resources, is designated as the project manager for the city manager. The project manager ~will supervise the performance, progress, and execution of the Services, and will be assisted by SHISHIR MUKHERJEE, Resource Planner. 3.3 If CITY observes or otherwise becomes aware of any default in the performance of CONTRACTOR, CITY willuse reasonable efforts to give written notice thereof to CONTRACTOR in a timely manner. SECTION 4 - COMPENSATIQN 4.1 In consideration of the full performance of the Services by CONTRACTOR, CITY will pay CONTRACTOR within thirty (30) days of submission by CONTRACTOR of its itemized billings, in triplicate, in accordance with the following fee schedule set forth in Exhibit ~B". 981224 syn 0071566 3 SECTION 5~ AUDITS 5.1 CONTRACTOR will permit CITY to audit, at any reasonable time during the term of this Contract and for three (3) years thereafter, CONTRACTOR’s records pertaining to matters covered by this Contract. CONTRACTOR further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Contract. SECTION 6. INDEMNITY 6.1 CONTRACTOR agrees to protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents from any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, caused by or arising out of CONTRACTOR’s, its officers’, agents’, subcontractors’ or employees’ negligent acts, errors, or omissions, or willful misconduct, or conduct for which applicable law may impose strict liability on CONTRACTOR in °the performance of or failure to perform its obligations under this Contract. SECTION 7.WAIVERS 7.1 The waiver by either party of any breach’ or violation of any covenant, term, condition or provision of this Contract., or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. The subsequent acceptance by either party of any fee or other money which may become due hereunder will not be deemed to be a waiver of any preceding breach or violation by the other party of any term, covenant, condition or provision of this Contract or of any applicable law or ordinance. 7.2 No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Contract. SECTION 8.INSURANCE 8.1 CONTRACTOR, at its sole cost and expense, will obtain and maintain, in full force and effect during the term of this contract, the insurance coverage described in Exhibit "C", insuring not only CONTRACTOR and its contractors, if any, but also, with the exception of workers’ compensation, employer’s liability, and professional liability insurance, naming CITY as an additional insured concerning CONTRACTOR’s performance under this Contract. 981224 syn 0071566 4 8.2 All insurance coverage required hereunder will be provided through carriers with Best’s Key Rating Guide ratings of A:VII or higher which are admitted to transact insurance business in the State of California. Any and all contractors of CONTRACTOR retained to perform Services under this Contract will obtain and maintain, in full force and effect during the term of this Contract, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 8.3 Certificates of such insurance, preferably on the forms provided by CITY, will be filed with CITY concurrently with the execution of this Contract. The certificates will be subject to the approval of CITY’s risk manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled or altered by the insurer except after filing with CITY’s city clerk thirty (30) days’ prior written notice of such cancellation or alteration, and that the City of Palo Alto is named as an additional insured except in policies of workers’ compensation, employer’s liability, and professional liability insurance. Current certificates of such insurance will be kept on file at all times during the term of this Contract with the city clerk. 8.4 The procuring of such required policy or policies of insurance will not be construed to limit CONTRACTOR’s liability hereunder nor to fulfill the indemnification provisions of this Contract. Notwithstanding the policy or policies of insurance, CONTRACTOR will-be obligated for the full and total amount of any damage, injury, or loss caused by or~directly arising as a result of CONTRACTOR’s negligent acts, errors, or omissions or willful misconduct in the Services performed under this Contract, including such damage, injury, or loss arising after the Contract is terminated or the term has expired. SECTION 9. WORKERS’ COMPENSATIQN 9.1 CONTRACTOR, by executing this Contract, certifies that it is aware of the provisions of the Labor Code of the State of California which require every employer to be insured against ~liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that Code, and certifies that it will comply with such provisions, as applicable, before commencing the performance of the Services. SECTION I0. SERVICES TERMINATION OR SUSPENSION OF CONTRACT OR I0.i The city. manager may suspend the performance of the Services, in whole or in part, or terminate this Contract, with or without cause, by giving thirty (30) days’ prior written notice 98 I~224 syn 0071566 5 thereof to CONTRACTOR. Upon receipt of such notice, CONTRACTOR will immediately discontinue its performance of the Services. 10.2 CONTRACTOR may terminate this Contract or suspend its performance of the Services by giving thirty (30) days’ prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY or in the event CITY indefinitely withholds or withdraws its request for the initiation or continuation of the Services to be performed. 10.3 Upon such suspension or termination by CITY, CONTRACTOR will be paid for the Services, including expenses incurred, actually rendered to CITY on or before the effective date of suspension or termination; provided, however, if this Contract is suspended or terminated on account of a default by CONTRACTOR, CITY will be obligated to compensate CONTRACTOR only for that portion of the Services which are of direct and immediate benefit to CITY, as such determination may be made by the city manager acting in the reasonable exercise of her discretion. 10.4 Upon such suspension or termination, CONTRACTOR will deliver to the city manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONTRACTOR or its contractors, if any, or given to CONTRACTOR or its contractors, if any, in~ connection with this Contract. Such materials will become the property of CITY. 10.5The failure of CITY to agr4e with CONTRACTOR’s independent findings, conclusions, or recommendations, if the same are called for under this Contract, on the basis of differences in matters of judgment, will not be construed as a failure on the part of CONTRACTOR to fulfill its obligations under this Contract. SECTION ii.ASSIGNMENT ii.I This Contract is for the personal services of CONTRACTOR, therefore, CONTRACTOR will not assign, transfer, convey, or otherwise dispose of this Contract or any right, title or interest in or to the same or any part thereof without the prior written consent of CITY. A consent to one assignment will not be deemed to be a consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void and, at the option of the city manager, this Contract may be terminated. This Contract will not be assignable by operation of law. 981224 syn 0071566 6 SECTION 12. NOTICES 12.1 All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY:Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 COpy to:Department of Utilities City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 Attn: Girish Balachandran To CONTRACTOR: Flynn & Associates 4200 Driftwood Place Discovery Bay, CA 94514-9267 Attn: Barry Flynn, President SECTION 13. CONFLICT OF INTEREST 13.1 In accepting this ~Contract, CONTRACTOR covenants that it presently has no ihterest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. CONTRACTOR further agrees that if any conflict of interest arises during the performance of this Contract, it wi!l notify and consult with the CITY. If no other solution is satisfactory to the CITY, CONTRACTOR shall not undertake conflicting representation unless and until the following has occurred: 13.1.1’ CONTRACTOR representation for the CITY. has arranged for alternate 13.1.2 representation. The CITY has agreed to accept-such alternate 13.2 CONTRACTOR further covenants that, in the performance of this Contract, it will not employ any contractor or person having such an interest. CONTRACTOR certifies that no person who has or will have any financial interest under this Contract is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 981224 syn 0071566 SECTION 14. NONDISCRIMINATION 14.1 As set forth in the Palo Alto Municipal Code, no discrimination will be madein the employment of any person under this Contract because of the age, race, color, national.origin, ancestry, religion, disability, sexual preference or gender of that person. If the value of this Contract is, or may be, five thousand dollars ($5,000) or more, CONTRACTOR agrees to meet all requirements of the Palo Alto Municipal Code pertaining to nondiscrimination in employment, including completing the. requisite form furnished by CITY and set forth in Exhibit "D". 14.2 CONTRACTOR agrees that each contract for services with an independent provider will contain a provision substantially as follows: "[Name of Provider] will provide CONTRACTOR with a certificate stating that [Name of Provider] is currently in compliance with all Federal and State of California laws covering nondiscrimination in employment; that [Name of Provider] will pursue an affirmative course of action as required by the Affirmative Action Guidelines of the City of Palo Alto; and that [Name of Provider] will not discriminate in the employment of any person under this contract because of the age, race, color, national origin, ancestry, religion, disability, sexual preference or gender of such person." 14.3 If. CONTRACTOR is found in violation of the nondiscrimination provisions of the State of California Fair Employment Practices Act or similar provisions of Federal law or executive order in the performance of this Contract, it will be in default of this Contract. Thereupon, CITY will have the power to cancel or suspend this Contract, in whole or in part, or to deduct the sum of twenty-five dollars ($25) for each person for each calendar day during which such person was subjected to acts of discrimination, as damages for breach of contract, or both. Only a finding of the State of California Fair Employment Practices Commission or the equivalent federal agency or officer will constitute evidence of a breach of this Contract. 14.4 If CONTRACTOR is in default of the nondiscrimination provisions of this Contract or the Affirmative Action Guidelines pertaining to this Contract, CONTRACTOR will be found in material breach of this Contract. Thereupon, CITY will have the power to cancel or suspend this Contract, in whole or in part, or to deduct from the amountpayable to CONTRACTOR the sum of two hundred fifty dollars ($250) for each calendar day during which CONTRACTOR is not 981224 syn 0071566 8 in compliance with this provision as damages for breach of contract, or both. SECTION 15.MISCELLANEOUS PROVISIONS 15.1 CONTRACTOR represents and warrants that it has knowledge of the requirements of the Americans with Disabilities Act of 1990, and the Government Code and the Health and Safety Code of the State of California, relating to access to public buildings and accommodations for disabled persons, and relating to facilities for disabled persons. CONTRACTOR will comply with or ensure by its advice that compliance with such provisions will be effected in the performance of this Contract. 15.2 This Contract will be governed by the laws of the State of California, excluding its conflicts of law. 15.3 In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California or in the United States District Court for the Northern District of California in the County of Santa Clara, State of California. 15.4 The prevailing party in any action brought to enforce the provisions of this Contract may recover its reasonable costs and attorneys’ fees expended in connection with that action. 15.5 This document represents the entire and integrated agreement between the parties and supersedes all prior negotia- tions, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 15.6 All provisions of this Contract, whether covenants or conditions, will be deemed to be both covenants and conditions. 15.7 The covenants, terms, conditions and provisions of this Contract will apply to, and will bind, the .heirs, Successors, executors, administrators, assignees, and contractors, as the case may be, of the parties. 15.8 If a court of competent jurisdiction finds or rules that any provision of this Contract or any amendment thereto is void or unenforceable, the unaffected provisions of this Contract and any amendments thereto will remain in full force and effect. 15.9 All exhibits referred to in this Contract and any addenda, appendices, attachments, and schedules which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Contract and will be deemed to be a part of this Contract. 981224 Syn 0071566 9 15.10 This Contract may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one and the same instrument. 15.11 This Contract is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Contract will terminate without any penalty (a) at the end of any fiscal year in t~e event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal ~year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Contract are no longer available. CONTRACTOR shall be entitled to compensation due under this contract for services performed and expenses incurred, prior to notification by the CITY. This Section 15.11 shall take precedence in the event of a conflict with any other covenant, term, condition~ or provision of this Contract. IN WITNESS WHEREOF,’ the parties hereto have by their duly authorized representatives executed this Contract on the date first above written. ATTEST:CITY OF PALO ALTO City Clerk APPROVED A~ TO FORM: Senior Asst. City Attorney Assistant City Manager Director of Utilities Mayor FLYNN & ASSOCIATES By: Name: Title: Director of Administrative Services Risk Manager Attachments : EXHIBIT "A" : EXHIBIT "B": EXHIBIT "C": EXHIBIT "D": SCOPE OF SERVICES AND TIME SCHEDULE FEE SCHEDULE INSURANCE NONDISCRIMINATION COMPLIANCE FORM 981224 syn 0071566 10 CERTIFICATE OF ACKNOWLEDGMENT (Civil Code ~ i189) COUNTY OF ) On /" ~- ~ , before me, ~~ ~/~A/7~/~ , a Notary Public in and for said County and State, personally appeared ~~ ~. ~ Y/U~t/ , personally known to me or proved to me on the basis of satisfactory evidence to be the person(~ whose name~4) is/~-r~.-subscribed to the within instrument and acknowledged to me that he/s4~y executed the same in his/h~ir authorized capacity(is), and that by his/h~ir signature~) on the instrument the person~), or the entity upon behalf of which the person(~) acted, executed the instrument. WITNESS my hand and official seal. Signature of Nol ary Public -_:~- .- FRED J. HUNTER --- --: It Commission # I17~77~: ~z Notory Public- CoIifomk~ ~ .Contra Costa C~n~ ~ [ 981224 syn 0071566 11 EXHIBIT A SCOPE OF SERVICES AND TIME SCHEDULE FOR FLYNN & ASSOCIATES Electric Utility.: Technical consulting, Legislate and Regulatory Services Flynn & Associates (the CONTRACTOR) will assist the City of Palo Alto (CITY) to respond to the challenges related to electric industry restructuring in California in areas including, but not limited to: Assistance with monitoring and/or influencing any of the ISO/PX, CPUC, FERC and investor-owned utility (PG&E, SCE, and SDG&E) activities and filings, ISO/PX tariff amendments, grid management charges, administrative charges, protection of CITY’s existing contract rights, and participation in the Existing Rights Working Group (ERWG). Assistance with transmission and other ISO and FERC related issues, including transmission pricing (transmission access and usage fees)~ congestion management and setting up of congestion zones, firm transmission rights (FTR) auction and auction of existing rights as FTRs, and transmission owner’s tariff with specific emphasis on San Francisco Bay Area Transmission issues. Assistance with issues related to municipal utilities, and California Municipal Utilities association (CMUA), including those related to jurisdiction, tax-exempt bonds, independence in setting rates, and related to their San Francisco Bay area Transmission issues. Assistance With interventions in selected proceedings before CPUC and FERC, including technical assistance, drafting of testimony, and/or analysis of related litigation directly on behalf of the CITY or in collaboration with other interested utilities, or through Transmission Agency of Northern California (TANC), Northern California Power Agency (NCPA) and/or CMUA. Other related areas as needed TASK 1 The CONTRACTOR will perform technical consulting, legislative and regulatory services within the overall scope until June 30, 1999 for an amount not to exceed $70,000. The CONTRACTOR will work with the CITY staff and at the direction of the Project Manager or his designee, and concentrate his activities in the following areas: CITY’s Exposure to Usage Charges/Congestion Fees The CONTRACTOR will monitor developments at the ISO which may affect the exposure the CITY has to paying marginal priced congestion fees as part of a transmission cost. Unless and until a formal ISO stakeholder process is developed covering the adjustment of or designation of zones, this monitoring will be concentrated in ISO and PG&E stakeholder processes which concern pricing incentives for new generation and satisfying the must run requirements of the ISO. 2.Access Fee The CONTRACTOR will monitor developments at the ISO with respect to the design of a successor access fee to.replace the currentutility specific, one contained in the Transmission Owner’s Tariff (TOO) of each of the three major investor-owned utilities in California. This may involve participation in CMUA, TANC, NCPA and/or other stakeholder group meetings which may be developing positions on the subject. In addition, the CONTRACTOR will assist CITY staff follow FERC decisions and developments on the current utility specific access fee which may set precedence for the future rate. 3.Grid Management Charges (GMC) The CONTRACTOR will monitor developments at the ISO with respect to the unbundling of the GMC based on the ISO appointed consultant’s report and negotiations related to revised allocation of GMC on the basis of flows, transactions and other billing parameters, and its impact on the CITY. This may involve participation in CMUA, TANC, NCPA and/or other stakeholder group meeting which may be developing positions on the subject. Other issues The CONTRACTOR will monitor other activities at the ISO, PX, FERC, CPUC and Western which-will/may have an effect on the CITY’s ability to maintain an economical power supply. These include: go The effort to define system units to allow Palo Alto and other municipal utilities to supply ancillary services in the ISO markets. b. The effort at the Existing Rights Working Group (ERWG) to allow the designation of a Metered membership. Subsystem (MSS) and different levels of ISO do Development of and issuance of Firm Transmission Rights (FTR) by the ISO, and the possibility to auction existing contract rights at the FTR auctions. The effect on Western of the new ISOiPX environment and changes to it which might impact the price and/or the flexibility of this source of power for Palo Alto. In addition to the above monitoring activities, within the allocated budget, the CONTRACTOR will also work with the CITY staff to perform analytical studies of the effect of proposed changes in the areas listed above. On the Same basis, the CONTRACTOR will develop position papers and assist the CITY in developing positions on policy issues and strategies for dealing with them. The CONTRACTOR will develop and submit quarterly reports before March 31, 1999, and June 30, 1999, whichdescribe the current state of regulatory issues that are critical to the CITY and recommend a strategy for future CITY efforts. TASK ASSIGNMENT PROCEDURE The CONTRACTOR will be assigned various tasks during the duration of the contract, in addition to Task 1 above. For tasks beyond the above Task 1, which terminates on June 30, 1999, the CONTRACTOR will propose future tasks in writing. However, future work is only authorized under this Contract if such future work is authorized by the City’s Project Manager. EXHIBIT ~B" FEE SCHEDULE The maximum compensation due and payable to CONTRACTOR, whose hourly rates also ~are set forth in this Exhibit "B", is subject to CITY’s budget of $70,000 in FY 1998-99, $125,000 in FY 1999-2000, and $135,000 in FY 2000-01 pursuant to CITY’s Request for Proposals No. 109355 and CITY’s appropriations for this service contract. No representation or warranty is made by CITY that CONTRACTOK shall be entitled to a minimum amount of compensation under this Contract. The attached billing rates may be adjusted at the renewal date, if any, of this contract to reflect the change in rates officially established by the CONSULTANT’s Board of Directors. Reproduction, printing, communications, computer servic@s, and other miscellaneous supportservices shallbe billed at 10% (ten percent) of the labor costs for the billing period. This additional ~non-labor" cost will be included for each billing period. All travel, food, lodging and miscellaneous expenses, except automobile mileage, associated with the provision of services hereunder shall be billed at cost. Automobile mileage will be billed at the rate approved by the Internal Revenue Service. 981224 syn 0071566 RATES Mr. Flynn’s hourly rate for the three (3) year duration of this consulting services project are as follows: Year 1 - $190 per hour Year 2 - $200 per hour Year 3 - $210 per hour 981224 syn 0071566 PART II - CERTIFICATION OF NONDISCRIMINATION SECTION 410 Certification of Nondiscrimination: As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below certify that they do n, ot discriminate in employment with regards to age, race, color, religion, sex, national odgin, ancestry, disability, or sexual preference; that they are in compliance with all Federal, State, and local directives and executive orders regarding nondiscrimination in employment Firm: Signature: Title: Date:, Flvnn & Associates President 9-28-98 CiTY OF PALO ALTO RFP 109355 PAGE 1 OF 1