Signed Contract_Black Hills EnergyTHE CITY OF Dubuque
DUB E A°~~'~~~
Masterpiece on the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Water Meter Reading Contract with Black Hills Energy
DATE: March 26, 2009
Finance Director Ken TeKippe recommends City Council approval to renew the City of
Dubuque water meter reading contract with Black Hills Energy, effective July 1, 2009,
for aone-year period.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
M' hael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Ken TeKippe, Finance Director
THE CITY OF Dubuque
DT Tj~ ~ AI-Am~icaC~y
~.J IJ ~ '
Masterpiece on the Mississippi.
2007
TO: Mike Van Milligen, City Manager
FROM: Ken TeKippe, Finance Director ~'~- '~~'~~'
SUBJECT: Water Meter Reading Contract with Black Hills Energy
DATE: March 24, 2009
INTRODUCTION
Due to the current water meter study and potential replacement of meters, the renewal
of the City of Dubuque water meter reading contract with Black Hills Energy, effective
July 1, 2009, is recommended for a one year period. The initial agreement began July
1, 1989 with Peoples Natural Gas and has been automatically renewed for five year
periods on July 1, 1994, July 1, 1999 and July 1, 2004 (with Aquila). Black Hills Energy
purchased the assets of Aquila, Inc. in July 2008 with City agreement with Aquila, Inc.
assigned to Black Hills Iowa Gas Utility Company, LLC d/b/a Black Hills Energy. A copy
of a new one year contract is enclosed. Future renewals will be one year if the City
moves ahead with meter replacements until the project is complete. City Attorney Barry
Lindahl has reviewed the contract.
BACKGROUND
Rick Till, Financial Analyst, Rose Hoerner, Utility Billing Coordinator, Joe Pregler, Lead
Application/Network Analyst and I recently discussed with representatives of Black Hills
Energy a number of contract and service issues. Overall, I believe the City is satisfied
with the services provided by Black Hills Energy and with the financial arrangements of
the contract. The City would not be able to provide this service for the amount currently
expended.
The number of monthly meters read is in the area of 22,000 for a cost of $11,823 and a
total fiscal year expense of approximately $142,000. The expense for the contract is
part of the meter reads/service activity under Utility Billing and funded by the water
operating fund. A recap of expense history by fiscal year is enclosed
A history of the rates paid by the City and increases based on the consumer price index
follows:
Fiscal Year Monthly Rate Percentage
Beginning July 1 per Meter Increase
1989 $0.320 Initial Contract
1990 0.335 4.69
1991 0.350 4.48
1992 0.361 3.14
1993 0.371 2.77
1994 0.381 2.70
1995 0.392 2.89
1996 0.404 3.06
1997 0.413 2.23
1998 0.420 1.69
1999 0.427 1.67
2000 0.442 3.51
2001 0.451 2.04
2002 0.457 1.33
2003 0.464 1.53
2004 0.477 2.80
2005 0.493 3.35
2006 0.509 3.25
2007 0.509 0.00
2008 0.538 5.70
RECOMMENDATION
Authorization to renew the agreement for one year is requested. If you would like
additional information on this agreement, please let me know.
KT/jg
Enclosures
cc: Barry Lindahl, City Attorney
Rick Till, Financial Analyst
Rose Hoerner, Utility Billing Coordinator
Chris Kohlmann, Information Services Manager
Joe Pregler, Lead Application/Network Analyst
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Meter Reading Services Agreement
between
Black Hills Iowa Gas Utility Company LLC
d/b/a Black Hills Energy
City of Dubuque, Iowa
This Agreement dated for reference purposes the 6th day of April , 2009, is
made and entered into by and between Black Hills Iowa Gas Utility Company LLC d/b/a
Black Hills Energy, (hereinafter referred to as "BHE"), and the City of Dubuque, Iowa
(hereinafter referred to as "Customer").
WITNESSETH THAT:
WHEREAS, Customer has the need for certain water meter reading services
("Services"), as more specifically defined herein; and
WHEREAS, BHE has the necessary personnel and experience to perform such
Services; and
WHEREAS, Customer desires to engage BHE to perform the Services and BHE
desires to undertake such performance under the terms, conditions and provisions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties do hereby agree as follows:
SECTI®N 1. PER®RMi4NCE ®F SER!/ICES. BHE shall perform for Customer the
following Services:
1) Reroute BHE's gas and Customer's water meter routes to optimize
efficiencies for jointly reading these meters;
2) Integrate on a daily basis the meter routes for BHE and Customer;
3) Read on a monthly basis all of Customer's water meters provided to BHE,
to the greatest extent possible. Customer plans to convert to remote read meters
over a period of time which will decrease the number of meters BHE is required
to read.;
4) Report daily to Customer any unusual conditions existing on Customer's
metering system (as found in Exhibit B); and
5) Deliver daily to Customer the water meter readings.
S CTI®N FEES. In consideration of the performance of the Services, Customer
1
agrees to pay to BHE:
1) A monthly fee of .537501 cents for each meter with outside remote read
device actually read and .537501 cents for all inside meters scheduled to be read
in the given month.
2) If BHE fails to read every inside meter at least six (6) times per contract
year, a credit of .537501 cents per meter not read at least this often
multiplied by six shall be credited to the Customer for those meters not read, at
the end of each contract year.
3) The monthly service fee and annual credit shall be adjusted on each
anniversary date of this Agreement to reflect changes, if any, in the
Consumer Price Index for all items (CPI-U) during the previous twelve (12)
month period. The adjustments shall be based on the CPI-U found in the
U.S. Department of Labor Bureau of Labor Statistics monthly report using the
1982-84 = 100 base.
SECTION 3. EXCLUSIONS. Services shall not include nor shall the monthly service
fee be deemed to compensate BHE for service work on water meters.
SECTION 4. NONPERFORMANCE. BHE agrees to provide Customer with meter
readings for water users to the greatest possible extent. BHE shall read at a minimum
all meters with outside read remote devices no less than ten (10) times per contract
year, but in no case shall outside meters not be read in two successive months. BHE
shall use its best efforts to read all inside meters (those meters without outside read
remote devices) no less than six times per year. Failure of BHE to comply with this
Paragraph 4 shall constitute nonperformance of the terms of this Agreement and
Customer shall have the option of negotiating with BHE an adjusted fee or termination
of this Agreement by written notice thereof to BHE.
SECTION 5. PERFORMANCE BOND. BHE shall procure and maintain for the
benefit of Customer a performance bond in the amount of $100,000, which shall assure
the faithful performance of all of BHE's obligations under this Agreement.
SECTION 6. CUSTOMER'S RESPONSIBILITIES. Customer shall. continue its efforts
to install outside read remotes on inside water meter sets. To the extent practicable,
such outside read remote installations will be placed as near as possible to the outside
gas meter locations. In addition, Customer shall provide to BHE services and
information in accordance with Exhibit A, attached hereto and by this reference made a
part hereof.
SECTION 7. MANNER OF PAYMENT. The monthly. service fee shall be due and
payable on or before the 15th day of the month following the month in which the
Services were performed and shall be based on the meter read fee in Paragraph 2.
Should Customer fail timely to pay part or all of the amounts on such invoices, interest
2
thereon shall accrue at the rate of one percent (1 %) per month from the due date until
the date of payment. If such failure to pay continues for sixty (60) days after payment is
due, BHE, in addition to any other remedy it may have, may refuse to provide further
Services until such amount, including interest, is paid.
SECTION 8. TERM. The term of this agreement shall begin on July 1, 2009 and shall
continue in full force and effect until midnight on June 30, 2010(the "Original Term").
After the expiration of the Original Term, this Agreement shall be automatically renewed
for successive terms of one (1) year each unless either party gives written notice of non-
renewal to the other party not less than one hundred eighty (180) days prior to the last
day of the Original Term or a successive term, whichever the case may be
SECTION 9. INDEPENDENT CONTRACTOR. In performing the Services hereunder,
BHE shall
operate as and have the status of an independent contractor, subject only to the general
direction of Customer regarding the Services to be rendered as opposed to the method
of performing the Services.
SECTION 10. PROPRIETARY INFORMATION. Any drawings, documentation,
specifications, prints, designs, ideas or other information provided by BHE to Customer
or otherwise obtained by Customer pertaining to the Services performed hereunder are
strictly confidential and proprietary to BHE. Except to the extent required by law,
Customer shall not, without the prior written consent of BHE, disclose any such
information to a third party or use any such information for its own benefit except in
connection with the operation of Customer's facilities and equipment pursuant to this
Agreement.
SECTION 11 ASSIGNMENT. Neither BHE nor Customer shall assign, in whole or in
part,
any of the rights, obligations or benefits of this Agreement, except to a parent, affiliate or
wholly-owned subsidiary, without the prior written consent of the other party. For
purposes of this Paragraph 11, an affiliate is defined as a company, the controlling
interest in which is owned by the parent of a party.
SECTION 12. INDEMNIFICATION. Each party ("the Indemnifying Party") shall
indemnify, hold harmless and defend the other party and its officers, directors,
shareholders, agents, employees and representatives (collectively, the "Indemnified
Party") from all claims, liabilities, fines, interest, costs, expenses and damages
(including reasonable attorneys fees) incurred by the Indemnified Party for any damage,
injury, death, loss or destruction of any kind to persons or property, to the extent the
damage, injury, death, loss or destruction arises out of or is related to the conduct,
negligence, error, omission, willful misconduct, misrepresentation or breach of this
Agreement on the part of the Indemnifying Party or any of its servants, representatives,
agents, employees or contractors.
SECTION 13. CONSEQUENTIAL DAMAGES. Neither party shall be liable to the
other for any special, indirect or consequential damages, including, without limitation,
loss of profit, loss of product, and loss of use, arising out of the performance of this
Agreement, irrespective of either party's fault or negligence.
SECTION 14. FORCE MAJEURE. Any delays in or failure of performance by either
party hereto of its duties hereunder (other than the payment of money), shall not
constitute default or give rise to any claims for damages if and to the extent such delays
or failure of performance are caused by occurrences beyond the control of the party
involved, including but not limited to, acts of God or the public enemy; expropriation of
facilities, compliance with any law, proclamation, regulation, ordinance or instruction of
any government or unit thereof, including Indian nations, having or asserting jurisdiction;
acts of war; rebellion or sabotage or damage resulting therefrom; fires; floods;
explosions; accidents; riots or strikes; delay by vendors in the delivery of materials and
equipment; delay by construction contractors in performing construction work; or any
other causes, whether or not of the same class or kind as those specifically named
above, which are not within the reasonable control of the party involved and which, by
the exercise of reasonable diligence, the party involved is unable to prevent or
overcome, provided, however, that such party shall give notice together with full
particulars of such causes or occurrences in writing or by telegraph to the other party as
soon as practicable after the occurrences and the causes or occurrences shall as far as
possible be remedied with all reasonable diligent dispatch by the party claiming such in
order to put itself in a position to carry out its obligation under this Agreement.
SECTION 15. NOTICES. All notices pertaining to this Agreement shall be in writing,
and if to Customer, shall be sufficient if sent by registered mail to Customer at the
following address:
City Hall
City of Dubuque
Attn: Finance Director
50 West 13th St.
1315 Central Avenue
Dubuque, IA 52001
And if to BHE, shall be sufficient if sent by registered mail to BHE at the following
address:
Black Hills Energy/Iowa Gas Utility LLC
1015 Cedar Cross Road
Attn: Operations Supervisor
Dubuque, Iowa 52101
Either party may change its' address for purposes of this Paragraph by giving the other
party hereto written notice of the new address in the manner set forth above.
SECTION 16. INVALIDITY OF PROVISION. BHE and Customer agree that if any
4
term or provision of this Agreement is held by any court to be illegal or unenforceable,
the remaining terms, provisions, rights and obligations shall not be affected and shall
remain in full force and effect.
SECTION 17. GOVERNING LAW. This Agreement shall be construed and enforced
in accordance with the laws of the state of Iowa.
SECTION 18. NON-WAIVER. No waiver by any party of any one or more defaults by
the other in performance of any of the provisions of this Agreement shall operate or be
construed as a waiver of any other existing or future default or defaults, whether of a
like or a different character.
SECTION 19. ENTIRE AGREEMENT. This Agreement, including all exhibits, sets
forth the entire understanding of the parties and supersedes all prior agreements,
communications, representations or warranties, whether oral or written, by any officer,
employee or representative of either party.
SECTION 20. AMENDMENT. No modification or amendment of this Agreement shall
be binding upon either party unless in writing and signed by both parties.
SECTION 21. CUSTOMER AS A REFERENCE. BHE shall have the right to use
Customer as a reference and to arrange visits to Customer's facilities, with Customer's
prior knowledge and consent, by potential users of services similar to the Services
provided by BHE udder this Agreement.
SECTION 22. RIGHTS TO PROPERTY AND PROCEDURES. Any and all computer
programs, licenses, documentation, procedures and instruction developed and used by
BHE in providing the Services are and shall remain the sole property of BHE. Customer
shall have no rights whatsoever to such property.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written below.
5
CITY OF ®UEUQUE, IO1/VA
Michael C. Van Milligen
City Manager.
r-~ .,
~~
Attest: ~ ~ ~ ' ~
Kevin S. Firnstahl
Assistant City Clerk
. LACK HILLS/1011VA GAS UTILITY
®//A EL~4CK HILLS ENERGY
Title
6
EXHIBIT "A"
SERVICES TO BE PERFORMED BY CUSTOMER
1. When additional water accounts are added to Customer's system, Customer will
endeavor to sequence the new accounts in the correct billing cycle and reading
route.
2. Provide for storing BHE's cycle, route, and sequence numbers on Customer's
billing system water accounts.
7
EXHIBIT "B"
UNUSUAL CONDITIONS TO BE REPORTED TO CUSTOMER
1. Evidence of bypassing of metering equipment.
2. Broken register.
3. Broken seal.
4. Evidence of tampering with metering equipment.
5. Broken wires to remove read devices, if evident.
6. Damage to outside remote read device.
7. Unattached outside remote read device.
8. Faded numerals on remote read device.
9. Inoperative remote read device.
10.Any other evidence of inordinate conditions existing in the meter system.
8