HomeMy WebLinkAboutReso. 1986 - 038 - Approving the consultation agreement between the city of redding and resource management international inc w •
RESOLUTION NO. gL• 1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
APPROVING THE CONSULTATION AGREEMENT BETWEEN THE CITY OF
REDDING AND RESOURCE MANAGEMENT INTERNATIONAL, INC.
REGARDING CONTRACT NEGOTIATIONS WITH THE WESTERN AREA POWER
ADMINISTRATION, AND AUTHORIZING THE MAYOR TO SIGNSAME.
BE IT RESOLVED by the City Council of the City of Redding as
follows:
1 . That the City Council of the City of Redding hereby
approves the attached Consultation Agreement, not to exceed the
sum of $34 ,500. 00, between the City of Redding and Resource
Management International, Inc. (RMI) , of which RMI ' s 'letter and
proposal to the City of Redding dated February 12 , 1986 , are a
part, regarding negotiations with the Western Area Power
Administration; and
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2 . That the Mayor of the City of Redding Ilis hereby
authorized and directed to sign all necessary documents on behalf
of the City of Redding, and the City Clerk is hereby ijauthorized
and directed to attest the signature of the Mayor and 'to impress
the official seal of the City of Redding on the aforesaid
documents, when appropriate; and
3. That a true copy of the Consultation Agreement referred
to herein is attached hereto and made a part hereof.
I HEREBY CERTIFY that the foregoing Resolution was
introduced and read at an/reguulrard meeting of the City Council of
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the City of Redding on the 20th day of February , 1986 ,
and was duly adopted at said meeting by the following vote:
AYES : COUNCIL MEMBERS: Demsher, Fulton, Pugh, & Gard
NOES : COUNCIL MEMBERS: None !
ABSENT: COUNCIL MEMBERS: Kirkpatrick
ABSTAIN: COUNCIL MEMBERS: None
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op,
AAIt' ALCE�! ^ Vice Mayor
City of Redding
ATTEST:
ETHEL A. NICHOLS, City Clerk
FORM APPROVED:
RAN ALL A. HAYS, ';City Attorney �I
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111pUBCE MANAGEMENT INTERNATIONAL410.4C.
1010 Hurley Way, Suite 500
Sacramento, CA 95825
• (916) 924-1534
CONSULTATION AGREEMENT ,
This is an agreement for Resource Management International, Inc. (RMI) to
provide consulting services to:
Client City of Redding
Address 760 Parkview Avenue
City Redding State CA Zip Code 96001 -
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CONSULTATIVE SERVICES
The services to be provided are as follows: (describe service, work methods,
location of work, time of performance, in appropriate detail).
Work in accordance with Proposal and letter to the City of
Redding dated February 12, 1986. ;I
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PROFESSIONAL AND PARAPROFESSIONAL FEES
The fees for services, except testimony, shall be billed as follows:
Managing Executive Consultant $ 95 per hour
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Principal Executive Consultant 89 per hour
Executive Consultant 75 per hour
Principal Consultant 68 per hour.
Supervising Consultant 62 per hour
Senior Professional 57 per hour
Associate Professional 52 per hour
Junior Professional 48 per hour
Research Assistant 16 ' per hour
Office Services 27 per hour
The fees for testimony shall be billed as $ • per:-day`or''fractu on thereof
for , and $ per day or fraction thereof for all
other personnel.
RMI fees shall be adjusted each year, commencing January 1, 198 , to reflect
the change in fees officially established by the Board of Directors of RMI.
III
SUPPORT SERVICE COSTS
Reproduction, printing, communications, computer services, word processing
services, graphics, and other miscellaneous support services shall be billed
at their cost plus ten percent expense reimbursement to RMI.
IV
CONSULTANTS
RMI may use the consultants listed below to assist in performing work here-
under. The services of such consultants will be billed at cost plus an amount
for expense reimbursement to RMI to compensate for the administrative,
financial, and organizational costs incurred in connectionwith the.
consultants' work. The consultants will function as an ,independent contractor
and will rely on RMI for all administrative and billing functions.
Billing Rate
Consultant's Name Task to Client
N/A
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V
TRAVEL AND EXPENSES
All travel, food, lodging, and miscellaneous expenses reasonably associated
with the provision of services hereunder shall be billed at' costo
VI
LIABILITY AND CANCELLATION RIGHTS
The liability of RMI for services performed hereunder shall be limited to the
• fees collected by RMI pursuant to this agreement or the limits of :its appli-
cable insurance coverage, whichever is larger.
RMI shall not be liable to third parties or others not a party to this agree'-
ment unless such potential liability is expressly recognized in this agreement
through client representation.
Either party may terminate this agreement by rendering written notice duly
posted to the other party at the address noted herein, fifteen (15) .days prior
to the desired termination date. Client shall pay for all fees earned and
expenses incurred prior to the termination date.
VII
BILLING AND PAYMENT
RMI shall submit a monthly billing statement to client setting forth the
amount due for services and itemizing amounts due for expenses. (Client shall
pay the full amount of such statement within thirty (30) days after receipt.
Client agrees that any sums billed, not disputed in written form setting forth
specific exceptions and unpaid after thirty (30) days from date of receipt
shall be subject to a late payment charge of one and one-half percent for each
month or fraction thereof past due. i
VIII
ATTORNEY'S FEES
Should services of an attorney be required in connection with enforcement or
performance of this agreement, the prevailing party shall be entitled to its
attorney's fees, expenses, and costs.
IB
AGREEMENT AND PARTIES
The parties agree that all changes or modifications hereto shall be in writing
and signed by both parties. This agreement is in lieu of all others expressed
or implied.
1,1
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Client President
Resource Management International, Inc.
masoymcw
MANaM
noaNT
?r Ft� INTa/.IV�T1oNAl
RESOURCE • Z '��
y"""'' I •'• MANAGEMENT CE 11 V,q-'
1/ :.` INTERNATIONAL
\ INC.
FEB 1 1986
1010 HURLEY WAY•SUITE 500
II
SACRAMENTO,CALIFORNIA 95825 CITY !!F REDOING
(916)924-1534 • ELECTRIC DEPT.
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February 12, 1986
Mr . Sam Lindley
Director of Electric Department
City of Redding
760 Parkview Avenue
Redding, CA 96001
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Dear Sam:
Resource Management International, Inc. (RMI) is pleased to
submit herewith our proposal for technical assistance to the City
of Redding (City) in the preliminary development of interutility
contracts. The enclosed proposal focuses on contractual work
which will be necessary for the City to proceed with more
confidence in the development of new resources. 1
RMI is ready to commence work on this project as soon as we
are so directed by the City. Please call if you need additional
information on our proposal.
Sincerely,
.r.(:) 0. isi ---..--,..—. .,...i.Ziza"
Lloyd H. Harvego f,
President
Enclosures
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I PROPOSAL
TO THE CITY OF REDDING TO ASSIST
IN THE PRELIMINARY DEVELOPMENT OF
IINTERUTILITY CONTRACTS
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February 1986
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PROPOSAL
l TO THE CITY OF REDDING TO ASSIST
t IN THE PRELIMINARY DEVELOPMENT OF
INTERUTILITY CONTRACTS -
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I. INTRODUCTION •
e Cit of Redding, California (City)
� In recent years, th y
has aggressively undertaken the development of its own local area
I , , power resources. The efficient utilization of power resources by
the City will require careful analysis and significant
modifications to the City' s agreements, particularly those
agreements with the Western Area Power Administration j }
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(Western) . Excess capacity and energy from the new resources
will need to be marketed to other entities, such as Western.
Resource Management In
ternational, Inc. (RMI) proposes to
I assist the City in its preliminary negotiation with Western and
other utilities. RMI' s activities would first include
preliminary discussions with Western regarding future operational
parameters. Second, RMI would work with Western to develop a
Letter Agreement to incorporate and formalize Principles for the
Ipreliminary understandings reached. RMI' s next task would be to
develop a market assessment for the layoff of any excess capacity
1 and/or energy which may be available. Following this
determination, potential arrangements will be identified. Next,
new contracts or contract modifications would be prepareld to
execute the Principles agreed to by Western. Finally, additional
assistance would be provided for the negotiation of new contracts
and/or contract modifications to enable the City to be able to
more confidently assess the overall viability of potential
resources.
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RMI would be pleased to assist the City in other
subsequent tasks (not included in this proposal) as requested at
11 a later date by the City.
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II. PROPOSED SCOPE OF WORK
RMI proposes that work on this Project be conducted in six
phases, described as follows:
, Phase I Preliminary Discussions with Western
The addition of the new power resources will
significantly affect the operation of the City as an electric
utility and cause an impact on the City's purchased power }
contracts. The Pacific Gas and Electric Company (PGandE) may
cancel its supplementary contract (power served under Rate
Schedule R-l) which could potentially affect the City' s ullility
operations. However , if particular emphasis is placed upon the
City' s relationships with Western and new, appropriate
agreements, alternative means of operating may be feasible.
It is RMI ' s present understanding that the City
desires to schedule power directly from Western on an hourly
basis. Second, the City desires to transform its present
contract rate of delivery with Western into a fixed, scheduled
allocation of power . Third, the City anticipates the opportunity
to shift a portion of the City's contract rate of delivery to
other preference customers. Fourth, the City anticipates
purchases and sales of power to third party utilities and
anticipates the need for wheeling services from Western.
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RMI will contact Western and discuss these general
understandings and prepare a brief letter report documenting
Western's position on these concepts.
B. Phase II - Identification of Operational Parameters
RMI will discuss with Western the specific operational
requirements regarding scheduling, curtailments, pricing I
considerations, additional points of delivery, and the basis for
scheduling CVP power from Western. Other considerations will be
discussed as they arise or if the understandings in Phase I are
modified or deemed unworkable by Western.
Issues to be resolved with Western include the
establishment of real-time dispatch of the City's power
allocation from Western, the scheduling of power wheeled by
Western for the City, including determination of rates and
losses, the overall determination of the City's monthly energy
deliveries associated with its Western power allocation, and the
establishment of multiple delivery points.
RMI will prepare a more detailed letter report which
documents the basic parameters to be negotiated with Western, a
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synopsis of which parameters are most important to each of the
parties, and a recommended negotiating posture.
C. Phase III - Agreement in Principle with Western
The work efforts in Phases I and II should culminate
in an executed Letter Agreement in Principle. This Letter
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Agreement should confirm the negotiated understanding of the City
and Western regarding the inclusion of the new resources in the
City's resource base and the operational changes which need to be
implemented to accommodate this addition.
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RMI proposes to assist City staff to negotiate
appropriate Principles with Western. Negotiations are always
uncertain and time and budget requirements are therefore
difficult to estimate. Enclosed later herein is an estimated
budget which represents RMI ' s best estimate of the resources
required to complete this task, based upon reasonable, good faith
negotiations.
If negotiations proceed well, RMI should deliver as a
work product an executable Letter Agreement as discussed. RMI
will keep the City closely informed on the progress of work on
this task, and may, instead, supply the City with a complete
detailed status report which details sufficiently the outstanding
issues remaining to reach final agreement. The City could either
authorize additional budget for RMI to proceed, or it could
complete the Western negotiations using other resources.
D. Phase IV - Finalization of Contracts with Western
Once the Letter Agreement defining Principles is
executed, new contracts or contractual modifications will be
required. If work is limited to minor contract revisions, this
phase should proceed relatively quickly. However , if new (start
from scratch) contracts are required, additional efforts may be
required. The budget included herein contains a limited
contingency to cover some delay in contract completion. It is
hoped that RMI should be able to provide the City with one or
more executable amendments/new contracts to properly implement .
the Letter Agreement and Principles at the conclusion of this
phase of work.
E. Phase V - Identification of Potential Markets
Based upon the work completed in Phase III and a
schedule of capacity and energy available for sale as provided by
the City, RMI will perform a market survey of utilities that may
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411 III 1
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be potential markets for excess power . It is anticipated that
the delivery points for excess power will be the Tracy, and
possibly Elverta switchyards. During this phase, each:eintity
' considered to be a viable potential market will be contacted to
ascertain an initial response to the offer . Letters of intent
will be drafted and discussed as appropriate. Because each
, entity may have needs unique to their system, additional analyses
will be performed as necessary to determine the best
Redding/contractor interaction with regard to the marketed
surplus power.
The City will be provided with a confidential letter
report at the conclusion of Phase V, identifying the best
potential contractors and the recommended types of
arrangements. Throughout this phase, the City' s staff will be
closely involved in the discussions with potential contractors
and alternative marketing strategies.
It should be noted that at the potential customer
contact stage, RMI may identify a potential conflict of interest
with any specific prospective customer . If RMI deems, in its
sole judgment, that such a conflict may arise, RMI will notify
the City of such conflict and specify the level of involvement at
which RMI could participate.
F. Phase VI - Negotiation of New/Modified Contracts
RMI will also assist the City in the preparation of
contract documents for the marketing of excess power from new
resources and will support the City's negotiations with the
selected entity. RMI will assist in negotiations as requested by
the City, to the extent the remaining available budget so allows.
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III. KEY PERSONNEL
The following key personnel would be assigned toathis
Project and utilized as appropriate. Resumes for these
individuals are provided as an appendix to this proposal°
Personnel responsibilities will be: •
. Lloyd Harvego, President Project Overview
Maury Kruth, Vice President Management of negotiations
with Western
Alan Hockenson, Project Director Contract and Letter Agreement -
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preparation, determination of
alternative markets and
arrangement
Other RMI planning, engineering, and economic analysis
staff will be utilized as necessary.
IV. PRELIMINARY SCHEDULE OF WORK
The following "target". schedule would apply, but mays be
revised as appropriate based upon the actual negotiations a'nd
discussions:
Week 0 Notice to Proceed.
Week 1 Preliminary discussions with Western.
Week 3 Letter Report on Phase I completed.
Week 6 Complete Phase II Letter Report to the City.
Week 12 Complete Phase III —Letter Agreement with
Principles.
Week 13 Initiate Phases IV and V.
Week 18 Complete Phase V - Market Analysis.
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Week 19 Initiate Phase VI - New Power Sales Agreements.
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Week 24 Completion of Phase IV - Contracts with
Western.
Week 30 7
Completion of Project - Power Sales Agreements
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V. BUDGET
RMI proposes to perform this work under its standard time
and expense contract, with the total cost not to exceed the limit
for each phase as listed below, unless subsequent approval is
provided by the City. Phases may be conducted individual4y or in
groups on the basis that required information from prior phases
be available for work not performed by RMI. No phase will be
initiated before a Notice to Proceed is issued by the City.
Budget"
Phase I Preliminary Discussions with Western I $ 3,000
Phase II Identification of Operational Parameters 5,000
Phase III Letter Agreement in Principle with Western 8,000
Phase IV Finalization of Contracts with Western 6,500
Phase V Identification of Potential Markets 3,500
Phase VI Negotiation of New Power Sales Contracts 8,500
$34,500
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