GAS SYSTEM STUDY
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NA TURAL GAS STUDY CONTRACT
THIS AGREEMENT entered into this
/gJ: day of }7LL~
A.D. 1979, by and between the CITY OF CLEARWATER, FLORIDA, a
municipal corporation, hereinafter called IICityll and DUFF AND PHELPS,
INC., an Illinois corporation, hereinafter called "Contractorll;
WITNESSETH:
WHEREAS, the City of Clearwater, Florida, functioning as a utility
presently operates a natural gas system; and
WHEREAS, the City wishes to undertake a complete study of the
system to determine its value, its market potential and the future role it
should playas a retail supplier of natural gas; and
WHEREAS, on September 21, 1978, the City Commission directed
that proposals to make the study be obtained; and
WHEREAS, from the proposals submitted Duff and Phelps, Inc. has
submitted the lowest, responsive and responsible bid; and
WHEREAS, the City Commission at its meeting conducted February
15, 1979, authorized the City to enter into an agreement with the Contractor;
NOW, THEREFORE, in consideration of the promises and covenants
herein contained the parties agree as follows:
1. The Contractor agrees to undertake and complete a full study
and survey of the natural gas operation presently conducted by the City and
as a part of such study and survey, Contractor agrees to perform the following:
(a) Perform in-depth interviews with the following:
(1) Utility management
(2) City management
(3) Other local utilities
(4) Major area employers
(5) Industrial development agencies
(6) Chamber of Commerce
(7) Real estate developers
(8) Other individuals as deemed necessary and appropriate.
(b) Analyze area economic developments and population trends.
(c) Obtain and analyze statistics on local utility connections and
customers and area housing starts and commercial and industrial
development.
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(d) Review and analyze existing investment in utility property and
plant, proposed expansion and construction and other cost factors,
and funding requirementsof such facilities.
(e) Review and analyze source of supply of utility commodities as to
availability and contractual commitments.
(f) Review and analyze franchise agreements with other municipalities
in utility's service area and any other contractual obligations
of the gas utility.
(g) Detailed historical analyses of the utility's customers, sales,
revenues, expenses and earnings.
(h) In coordination with the utility's management, develop factors
and as sUInptions needed to prepare financial projections.
(i) Prepare five year financial projections including income accounts
(revenues, expenses and earnings), construction budgets, and changes
in financial position and cash flow for identified alternatives.
(j) Review proposed construction and financing programs with the
utility's management to obtain needed report information.
(k) Examine the utility's management systems including budget prepara-
tion, financial reporting, cost controls, personnel and other items
as may be required.
(1) DocUInent all material findings in a report acceptable for publication.
(m) Coordinate the contents of the report with the utility's and City's
manag ement.
(n) Participate in preliminary review meetings with and final pre-
s entation to the utility and City officials.
2. The City for the purpose of assisting the Contractor in carrying out
and completing the study agrees to provide the following:
(a) Provide office space for two men, together with appropriate
desk, telephone and lighting facilities.
(b) Provide automotive transportation during the initial two (2) weeks
of interviews and data collection, and thereafter as is required
during the preliminary report review and final report presentation.
(c) Provide in a timely fashion the following materials required as
a part of the study:
(1) Utility audited financial statements for the most recent
five years.
(2) Unaudited supplementary financial data for the same period.
(3) Unaudited interim financial data for the most recent period.
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(4)Copies of gas supply purchase agreements, retail rate
schedules, franchise agreements and any other contracts
or agreements that would have a bearing upon the study.
In addition, any policy or personnel manuals that might be
available should be furnished.
(5) Utility utilization statistics for the past five years including
customers, sales, revenues, gas purchased volumes,
unaccounted for gas, operating expenses and merchandising
sales and statistics.
(6) Information on employees of the gas utility including organization,
job classifications, payroll, length of service, civil service
benefits and union agreement provisions.
(7) Chronological and brief descriptions of the major changes in
the utility's physical facilities and modes of operation since
commencement of operations.
(8)Proposed additions and changes in the gas distribution system
and details as to any construction program and the cost estimates
of such programs. It is as sumed that the City and/or the Gas
Utility Consulting Engineers will be available to provide any
required construction designs or costs for alternate options
required for the gas distribution physical facilities, as well
as information on construction and design of the existing
natural gas system.
(9) Estimated sources and uses of funds in connection with any
planned construction projects and any proposed financing.
(10) Other materials discovered to be needed as the study progresses.
3. Upon execution of this agreement, Contractor agrees to immediately
commence the study and survey covered by this contract following receipt from
the City Manager of a notice to proceed. Following receipt of the notice to
proceed, the Contractor agrees to deliver to the City Manager within sixty
(60) days a preliIninary draft of the study report. Following receipt of review
comments, the Constractor agrees to submit a final study report to the City
Commission within the following thirty (30) days. It is understood that adherence
to the time schedule provided herein will depend upon timely receipt from the
City of the information provided in paragraph two (2) of this agreement and
upon timely access to outside parties to be contacted as a part of the study
and survey.
4. Following analysis and study, and after preliminary review with
the City Manager's staff, the Contractor agrees to deliver a final written report
such as would be suitable for public dissemination and presentation to the
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City Commission. Such final report shall cover the following topics:
(a) Summary and opinion letter
(b) Business and economy - service area population, employers
and economic development
(c) Utility property and construction
(d) Gas supply and rate considerations
(e) Contractual arrangements
(f) Earnings - historical and proj ected
(g) Financing:
Source and use of proceeds
Financial condition - current and projected
(h) Management, personnel and administration
(i) Valuation of "going Concern Value" under municipal
or corporate management
Changes to the report outline set out above may be made where both
parties agree that a change should be made to provide a more effective
presentation of the relevant factors affecting the natural gas distribution
utility.
5. As compensation for conducting the study and survey outlined in
this agreement and providing the written report outlined herein, the City
agrees to remit to the Contractor the total suni of Forty-five Thousand Dollars
($45,000.00). Such tota11ump sum will include all professional time and
out-of-pocket expenses including travel, lodging, meals and miscellaneous
expenses and additionally includes all work required by the scope of services
outlined herein and the preliminary and final reports. Payment of the
lump sum provided for herein shall be on the following basis:
Completion of field work and preliminary
analysis - 30 days after contract award
20%
$9, 000
Delivery of Preliminary Report (Estimated
5/1/79)
60%
27,000
Delivery of Final Report and acceptance by
City of Clearwater Utilities Director
(Estimated 6/1/79)
20%
9,000
Total
$45,000
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Where the City authorizes expansions in the scope of work authorized
herein or where significant time extensions are required due to delays caused
by the City's failure to provide the information and materials provided here in,
then, the City after first reviewing cost estimates, agrees to reimburse
Contractor for such professional time and out-of-pocket expenses over and
above the lump sum provided above.
6. Both parties agree that this agreement may be cancelled at any
time upon twenty (20) days written notice. Where the City or Contractor
elects to cancel the agreement by giving such notice, the Contractor shall
be paid that portion of the total lump sum due for work performed to the date
of actual cancellation. All materials, notes, reports and other study
docwnents generated to the point of cancellation shall become the property
of the City to be used as it sees fit.
7. Any notices or other writing under this agreement shall be forwarded
to the following:
City:
City Manager
PO Box 4748
Clearwater, Florida 33518
Contractor:
Duff and Phelps, Inc.
c/o Royce A. Hoyle Jr., Vice President
55 East Monroe Street
Chicago, Illinois 60603
8. This agreement represents the entire agreement of the parties
and shall be governed by the laws of Florida.
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IN WITNESS WHEREOF, the parties hereto have executed
count~~Sig,ned,: (, /
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t (1 a {/~ " .!:. /v Ax,Le-
Maybr- Commissioner
Witnesses:
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By
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Attest:
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City Clerk
DU4. '. PH4S, ;. /l r
By .. . h ~,
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