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HomeMy WebLinkAboutResolution - 2000-R0320 - Contract - CAM - Power Broker & Sales Consulting Services, LP&L - 09/13/2000Resolution No. 2000—RO320 September 13, 2000 Item No. 37 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Professional Services Contract between the City of Lubbock and CAM, I to provide professional power broker and sales consulting services to LP&L, and all related documents, Said Contract is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council this 13th day o Se tember 1000"- U � WINDY SI N, MAYOR APPROVED AS TO CONTENT: kE—.Thj—ompso Managing Directo of Electric Utilities APPROVED AS TO FORM: jMaew L. Wade Assistant City Attorney MLW:cp Cityatt/Matt &Ccdocs1CAMI.Res August 28, 2000 Resolution No. 2000-RO320 September 13, 2000 Item No. 37 PROFESSIONAL SERVICES CONTRACT STATE OF TEXAS § COUNTY OF LUBBOCK § KNOW ALL MEN BY THESE PRESENTS: This Contract and agreement, made and entered into on this the 13th day of September 2000, by and between the City of Lubbock, Texas, a Home Rule Municipal Corporation of the State of Texas, hereinafter referred to as the "City," and Contract Asset Management, Inc., a Texas Corporation hereinafter referred to as "CAM,I." WITNESSETH: WHEREAS, Lubbock Power & Light, hereinafter referred to as "LP&L", is the municipally owned utility of the City; and WHEREAS, the City has determined that it will, on a temporary basis, require the services of a professional power broker and sales consultant to be furnished to LP&L; and WHEREAS, the City has determined that it will be in the best interest of the City to retain the services of CAM,I to assist it in furnishing professional power broker and sales consulting services as required; and WHEREAS, the above corporation has agreed to furnish the services of one or more of its officers or employees on a temporary basis; and NOW THEREFORE, the parties hereto do covenant and agree as follows: I. The City does hereby engage and retain CAM,I to provide professional power broker and sales consulting services for LP&L on the terms and conditions hereinafter set forth. lI. (a) The term of this Contract shall be for the three (3) year period beginning on March 27, 2000. (b) This agreement may be extended for up to three additional one year terms by mutual agreement of the parties hereto expressed in writing prior to the end of the initial term or any extension thereof. (c) Either party hereto may terminate this Contract at any time during the term of this Contract by giving thirty (30) days written notice of its intention to terminate this Contract. (d) The City agrees to compensate CAM,I according to the terms of Exhibit "A", attached hereto and incorporated herein as though set forth fully herein. CAM,I agrees to furnish a qualified, diligent expert who will reside in the City service area and who will be assigned to perform the functions of the position of power broker, including performing the day-to-day functions as necessary. These functions include retail sales, wholesale sales, and wholesale purchase brokering. IV. CAM,I further covenants and agrees to furnish expert advisory services and/or consultation. Specific responsibilities of CAM,I and the power broker will include the following: (1) Retail sales, wholesale power sales, and wholesale power purchase brokering. (2) CAM,I will supply a list of prospects to be serviced exclusively for the term of the contract. This list will be subject to the approval of LP&L and may be modified from time to time in writing, upon the mutual consent of LP&L and CAM,I. (3) After one year the prospect list will be updated for possible modification. All such services rendered by CAM,I shall be subject to the reasonable supervision and control of the City. V. The City agrees to furnish CAM,I with all necessary information and assistance necessary to perform the services as contemplated under the terms of this contract. 2 VI. CAM,I or any officer or employee thereof, shall not be liable to the City for: (1) any claim arising from employment matters of City personnel or any claim arising as a result of personnel policies and practices of the City; or (2) any claim arising from delay or interruption of services of LP&L; or (3) any claim arising from strikes, lockouts, act of God, governmental restrictions, availability of fuel supplies, unavoidable casualty, or similar acts beyond the control of CAM,I. Notwithstanding the above, CAM,I will, however, be liable for all dishonesty or fraudulent misconduct committed or directed by any officer, employee or agent of CAM,I in the discharge of its obligations under this contract. Further, CAM,I shall be liable to the City for any act of gross negligence or negligence committed by it, its officers, agents and employees in discharging its obligations under the contract. VII. The City shall not be liable to CAM,I nor shall CAM,I be liable to the City for any claim arising for any failure, delay, interruption of service, nor for failure or delay in performance of any obligations under this agreement due to strikes, lockouts, act of God, governmental restrictions, availability of fuel supplies, unavoidable casualty or similar act beyond the control of City. VIII. Nothing contained herein shall be construed as creating the relationship of employer and employee between the City and CAM,I or between the City and the CAM,I's employees. CAM,I shall be deemed at all times to be an independent contractor. u Except as provided by paragraphs VI or VII of this Contract, CAM,I shall indemnify and hold harmless to the fullest extent permitted by law, the City, it's officers, employees, elected officials and agents from and against all claims for injury, death, losses, business losses, damages, claims or liabilities, of any kind or nature, which arise directly or indirectly, or are related to, in any way, manner or form, the activities contemplated hereunder, or the omission of the activities contemplated hereunder, occasioned by or in connection with any work performed by CAM,I, it's officers or employees, under this Contract. 3 CAM,I further covenants and agrees to defend any suits or administrative proceedings brought against the City and/or it's officers, employees, elected officials and/or agents on account of any such claim, and to pay or discharge the full amount or obligation of any such claim incurred by, accruing to, or imposed on the City resulting from any such suits, claims, and/or administrative proceedings. In addition, CAM,I shall pay to the City, it's officers, employees, elected officials and/or agents, as applicable, all attorneys' fees incurred by such parties in enforcing CAM,I's indemnity in this section. E4 CAM,I shall at all times observe and comply with all Federal, State and local laws, ordinances and regulations, which in any manner affect the contract or the work, and shall indemnify and save harmless the City against any claim arising from the violation of any such laws, ordinances and regulations whether by CAMJ or its employees. XI. This Contract and the terms of this Contract shall be held in the strictest confidence by the City and CAM,I and it is further understood that the terms of this Contract will not be disclosed to any third parties, except as required by federal, state or local law or when necessary to enforce the terms of this Contract. All signatories to this Contract hereby warrant that they have the authority to execute this Contract and bind their respective parties. XIII. This Contract states the entire agreement of the Parties with respect to the matters discussed herein, and supersedes all prior or contemporaneous oral or written understandings, agreements, statements or promises. XIV. This Contract may not be amended or modified in any respect except by a written instrument duly executed by all of the parties to this Contract. Xv. This Contract has been and shall be construed to have been drafted by all the parties to it so that the rule of construing ambiguities against the drafter shall have no force or effect. 4 XVI. If any portion of this Contract is held unenforceable by a court of competent jurisdiction, the remainder of this Contract shall not be affected and shall remain fully in force and enforceable. XVII. This Contract is entire as to all of the performances to be rendered under it. Breach of any obligation to be performed by CAM,I shall constitute a breach of the entire Contract and shall give the City the right to terminate this Contract. XVIII. CAM,I has consulted with whatever consultants, attorneys or other advisors CAM,I deems appropriate concerning the effect of the Contract and CAM,I assumes the risk arising from not seeking further or additional consultation with such advisors. XIX. This Contract is to be construed under Texas law, and all obligations of the parties created by this lease are performable in Lubbock County, Texas. Venue for any action brought pursuant to this Contract, or any activity contemplated hereby, shall lie exclusively in Lubbock County, Texas. g IN WITNESS WHEREOF, the parties hereto have executed this contract and agreement on the 13th day of September , 2000. Contract Asset Management, Inc 'ZS66 �)04 tu]j � Sharon Curry, President CITY OF LUBBOCK, J, /V WINDY SITtbN MAYOR I_1 City Secretary AS TO CONTENT: Paul E. Thompson, Managing Director of Electric Utilities APPROVED AS TO FORM: Gt/ Mat ew L. Wade, Assistant City Attorney — LP&L Resolution No. 2000-R 0320 September 13, 2000 Item No. 37 EXHIBIT "A" The City agrees to pay CAM,I as compensation for services rendered hereunder to the following commissions: (1) For existing individually metered apartment complexes a commission for the first year of $30.00 per meter shall be payable at the end of the month that service begins, a retention commission of $15.00 per meter for the second year shall be payable on the last day of the 12th month of service, and a retention commission of $15.00 per meter for the 3rd year shall be payable on the last day of the 24th month of service. If the existing individually metered apartment complex utilizes electric heating, the initial commission shall be $35.00 per meter, the retention commission for the second year shall be $17.50 per meter and the retention commission for the third year shall be $17.50 per meter. (2) For individually metered apartment complexes that are new construction, the initial commission for the first year of $40.00 per meter shall be payable at the end of the month that service begins, a retention commission of $20 per meter for the second year shall be payable on the last day of the 12th month of service, and a retention commission of $20.00 per meter for the third year shall be payable on the last day of the 24th month of service. If the new construction individually metered apartment complex utilizes electric heating, the initial commission shall be $45.00 per meter, the retention commission for the second year shall be $22.50 per meter and the retention commission for the third year shall be $22.50 per meter. (3) For other existing commercial projects (including apartment complexes that are not individually metered), the commission for the first year shall be computed by multiplying the number of kilowatt hours (MH) actually sold during the first year by $0.02 (two cents) and by multiplying the resulting product by the actual percentage load factor for the first year, provided that, the load factor used in the calculation shall not be less than 35%. The second and third year retention commissions shall be equal to 50% of the amount resulting from applying the same formula used to compute the first year commission, but utilizing the actual OM sold and the actual load factor for each year, provided that the percentage load factor used in the calculation shall not be less than 35%. Load factor is determined by dividing the annual MH actually used by the product resulting from multiplying the maximum demand during that year by the number of hours in a year (8,760 hours). Example: assuming annual usage of 1,000,000 kWH and a maximum demand during that year of 285 kW, the load factor would be 40% (1,000,000 divided by the product of 285 times 8,760). Computing an initial first year commission based on the example set forth, the initial commission would be $8,000.00 (1,000,000 kWH x $0.02 x 40%), and using the same figures for the purpose of example, the retention commission for the second and third year would be $4,000.00 per year. 7 (4) For newly constructed commercial projects (including apartment complexes that are not individually metered), the first year commission shall be equal to 120% of the commission for that project computed in the manner described above for existing commercial projects. The second and third year retention commissions shall be computed in the same manner as the second and third year retention commissions for existing commercial projects. (5) For the "house meters" on existing or newly constructed individually demand metered apartment complexes, the commission shall be computed according to the formula for existing or new construction commercial projects, respectively. Douse meters are defined as all meters at a complex that are not meters for individually metered rental units. Examples would include parking lot lighting, party house, recreational areas, managerial offices, and common areas. If there is no demand meter, CAM,I will be compensated as described in paragraphs (1) and (2) above. (6) For existing or new construction residential meters, the commission shall be $15.00 per meter payable at the end of the month that service begins, (7) All commissions computed pursuant to the formulas set forth in paragraph (3) above, will be payable as follows: (a) The initial commission for the first year will be estimated using the appropriate formula, if data exists from which to make such estimates. If there is little or no data upon which to base a reasonable estimate, a standard 7 watts per square foot and 35% load factor will be used. Fifty percent (50%) of the estimated initial commission for the first year will be payable at the end of the month that service begins. At the end of the 12th full month of service, the actual commission for the first year will be calculated and the balance obtained by subtracting the estimated commission payment from the first year actual commission will be payable on the 15th day of the 13th full month of service. In the event the estimated commission payment exceeds the actual commission, the difference will be refunded to LP&L. (b) The retention commission for the second year will be estimated based on the actual kWH consumption for the first year of service, and 75% of the estimated retention commission for the second year shall be payable on the 15th day of the 13th full month of service. At the end of the 24th full month of service, the actual retention commission for the second year will be calculated and the balance obtained by subtracting the second year estimated retention commission payment from the second year actual retention commission will be payable on the 15th day of the 25th full month of service. In the event the second year estimated retention commission payment exceeds the second year actual retention commission, the difference will be refunded to LP&L. 8 City of Lubbock InterOffice Memo TO: Bob Cass, City Manager FROM: Paul Thompson, Director of Electric Utilities DATE: September 6, 2000 SUBJECT: Agenda Item for September 13, 2000 City Council Meeting ITEM WSUBJECT: Consider a resolution authorizing the Mayor to execute a professional services contract between the City of Lubbock and Contract Asset Management, Inc. for professional power brokering and power sales consulting services. BACKGROUND/DISCUSSION: An existing three-year professional services contract LP&L had with Contract Asset Management, Inc. (CAM,I) recently expired. The intent of the original contract was to increase LP&L's commercial accounts by establishing a relationship with an outside sales consultant. That contract proved to be beneficial and LP&L would like to continue the relationship by executing a new three-year contract. CAM,I's compensation will continue to be straight commission based. There will be no cost to LP&L if CAM,I does not perform. The new contract is essentially the same contract as before with a few minor changes including clarifying language and fixing typographical errors. The commission schedule has also been fine tuned to make the contract easier to administer and to provide increased incentive for adding larger commercial accounts versus smaller commercial accounts. The new contract will also allow for three additional one-year extensions by mutual agreement. SUMMARY: Due to the beneficial nature of the previous contract and the expected continuation of that benefit under a new contract, LP&L recommends that the Mayor and City Council approve this professional services contract. Paul Thomps n Director of Electric Utilities (c) The retention commission for the third year will be estimated based on the actual WH consumption for the second year of service, and 75% of the estimated retention commission for the third year will be payable on the 15th day of the 25th full month of service. At the end of the 36th full month of service, the actual retention commission for the third year will be calculated and the balance obtained by subtracting the third year estimated retention commission payment from the third year actual retention commission will be payable on the 15th day of the 37th full month of service. In the event the third year estimated retention commission payment exceeds the third year actual retention commission, the difference will be refunded to LP&L. (d) If any of the commercial projects terminate service with LP&L before the end of the first, second or third year, the commission for the year in which service is terminated will be prorated using the actual consumption to the time of termination and the reduced time period for calculating load factor. Any resulting balance of commission unpaid for that year will be payable to CAM,I and any overpayment to CAM,I will be refunded to LP&L. (e) If any of the accounts or customers described in paragraphs(i ), (2), or (6) above terminate service with LP&L during a year for which a commission has been paid to CAM,I, the commission for that year shall be prorated, and CAM,I shall refund the unearned commission within 30 days of notice thereof. No commission shall be payable for any time period after service is discontinued. 9