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Black Hills Energy_Contract for Water Meter ReadingMasterpiece on the Mississippi 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: February 10, 2010 Dubuque kraal NI- America City 2007 Finance Director Ken TeKippe recommends City Council approval of the renewal of the City of Dubuque water meter reading contract with Black Hills Energy, effective July 1, 2010, for an 18 -month period (July 1, 2010 through December 31, 2011). This is the final contract required for reading water meters due to new Automated Meter Reading technology. concur with the recommendation and respectfully request Mayor and City Council approval. MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Ken TeKippe, Finance Director Michael C. Van Milligen Masterpiece on the Mississippi TO: Mike Van Milligen, City Manager FROM: Ken TeKippe, Finance Director 07124Yfr SUBJECT: Water Meter Reading Contract with Black Hills Energy DATE: February 9, 2010 INTRODUCTION The renewal of the City of Dubuque water meter reading contract with Black Hills Energy, effective July 1, 2010, is recommended for an 18 -month period (July 1, 2010 — December 31, 2011). Due to the current water meter replacement project, 18 months should cover the final install of new water meters. Plans call for completion by late summer 2011. 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 18 -month contract is enclosed. City Attorney Barry Lindahl has reviewed the contract. This is the final contract required for reading water meters due to new Automated Meter Reading (AMR) technology. BACKGROUND Dubuque A1- America CAy 11111! 2007 Rose Hoerner, Utility Billing Supervisor, 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 $11,825 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: RECOMMENDATION 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 2009 0.538 0.00 Authorization to renew the agreement for 18 months is requested. If you would like additional information on this agreement, please let me know. KT /jg Enclosures cc: Barry Lindahl, City Attorney Rose Hoerner, Utility Billing Supervisor Chris Kohlmann, Information Services Manager Joe Pregler, Lead Application /Network Analyst 1 monthly rate per meter 1 $ 0.538 1 $ 0.538 1 $ 0.509 1 $ 0.509 1 $ 0.493 1 $ 0.477 1 $ 0.464 1 $ 0.457 1 $ 0.451 1 $ 0.442 1 July $ 11,899.19 $ 11,170.96 11,169.43 $ 11,087.99 11,104.79 $ 10,865.01 10,579.93 $ 10,087.99 10,767.56 $ 9,586.53 10,129.48 $ 9,556.84 9,750.40 $ 9,361.39 9,579.66 $ 9,195.81 9,577.07 $ 8,967.43 9,603.21 August 11,913.71 September 11,913.71 11,183.17 11,121.08 10,411.53 10,445.78 10,044.10 9,614.39 9,512.09 9,411.94 9,293.49 October 12,080.33 11,849.74 11,131.26 10,871.42 10,599.66 10,064.62 9,635.39 9,502.04 9,414.65 9,295.26 November 11,893.82 11,844.37 11,149.58 12,411.74 10,491.65 10,108.98 9,598.40 9,546.79 9,414.65 9,291.72 December 11,868.56 11,802.44 11,020.80 11,032.00 10,478.82 10,087.51 9,601.60 9,542.68 9,425.93 9,291.72 January 11,777.72 11,074.25 11,043.71 10,303.73 10,017.87 9,624.89 9,515.28 9,434.95 9,072.93 February 11,851.89 10,880.83 10,922.57 10,462.06 10,079.88 9,578.31 9,534.01 9,443.08 9,152.05 March 11,873.93 11,095.12 11,057.96 10,462.55 10,094.19 9,623.06 9,539.03 9,404.27 9,084.43 April 11,885.76 11,168.92 11,075.77 10,549.85 10,101.34 9,617.58 9,548.62 9,375.38 9,202.44 May 11,914.24 11,176.56 11,071.19 10,550.83 9,788.91 9,607.08 9,558.21 9,382.60 9,216.58 June 11,900.81 11,166.38 11,058.47 10,528.15 10,078.45 9,591.55 9,547.25 9,369.07 $ 112,849.40 9,183.88 $ 110,655.14 Fiscal year total $ 71,569.32 $ 140,224.46 $ 133,177.56 $ 132,401.30 $ 125,728.63 $ 120,181.86 $ 115,399.49 $ 114,287.05 2010 Amounts represent expense by month. 2009 2008 2007 F: \123DATA \Finance \Utility \Black Hills (formerly Aquila) Water Meter Reading Contract \Black Hills Energy Expenditures March 10, 2009 City of Dubuque Water Meter Reading Contract with Black Hills Energy Expense History Fiscal Year 2006 2005 2004 2003 2002 2001 Mack lMEnemy Meter Reading Services Agreement between Black Hills Iowa Gas Utility Company LLC d/b /a Black Hills Energy City of Dubuque, Iowa 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 day of February, 2010, 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 is entering into a project which will convert all City water meters to AMR (the Project); 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: SECTION 1. PERFORMANCE OF SERVICES. 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 1 5) Deliver daily to Customer the water meter readings. SECTION 2. FEES. In consideration of the performance of the Services, Customer 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. 2 SECTION 7. MANNER OF PAYMENT. The monthly service fee shall be due and payable on or before the 15 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 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, 2010 and shall continue in full force and effect until midnight on December 31, 2011 or at such time as customer notifies BHE that the Project is complete. 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, 3 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 term or provision of this Agreement is held by any court to be illegal or unenforceable, 4 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 under 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. CITY OF DUBUQUE, IOWA BLACK HILLS /IOWA GAS UTILITY D /B /A BLACK HILLS ENERGY Roy D. Buol, Mayor Attest: Jeanne F. Schneider CMC, City Clerk 5 Typed Name Title 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 under 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. CITY OF DUBUQUE, IOWA Roy D/Buol, Mayor Attes anne F. Schneider CMC, City Clerk BLACK HILLS/IOWA GAS UTILITY D/B/A BLACK HILLS ENERGY Typed Name Title 5 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. 6 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. 7