HomeMy WebLinkAbout~Master - Approving Change Order No. 2 to Professional Services Agreement for Legal Services for Service Area Boundaries Dispute with USDA RESOLUTION NO. 19-606
RESOLUTION APPROVING CHANGE ORDER NO. 2 TO
PROFESSIONAL SERVICES AGREEMENT FOR LEGAL SERVICES FOR SERVICE
AREA BOUNDARIES DISPUTE WITH USDA
FOR THE CITY OF AMES,IOWA
WHEREAS, the USDA's National Center of Animal Health occupies 523 acres on the
northeast side of Ames and the property straddles the service territory boundary between Interstate
Power and Light Company(IPL) and Ames Municipal Electric System(AMES), such that 153.85
acres is in the AMES service territory; and,
WHEREAS, AMES serves several buildings in the area, including one identified by the
USDA as Building 21 and the USDA would prefer that Building 21 be served by IPL; and,
WHEREAS,the Iowa Legislature enacted exclusive territories for electric utilities in order
to "encourage the development of coordinated statewide electric service at retail, to eliminate or
avoid unnecessary duplication of electric utility facilities,and to promote economical,efficient,and
adequate electric service to the public;" and,
WHEREAS,AMES'records indicate that AMES began providing service to Building 21 in
2004 and in recent years Building 21 has averaged a peak load of 350 kW and represents annual
electric sales of about 2,533,656 kWh,for annual revenues to AMES of close to$200,000 per year;
and,
WHEREAS,the usage of Building 21 one of AMES' 15 largest customers in terms of usage
and revenue;losing this customer would have an adverse impact on the remaining retail customers
of AMES; and,
WHEREAS,the USDA has also made it known that they are planning a building expansion
and consolidating additional labs into Building 21;the loss ofrevenue could grow to nearly$500,000
/year; and,
WHEREAS, the USDA asked the Board to modify the service area boundaries around
Building 21 to assign the building to IPL's service territory or to "simply declare that it will not be
deemed a territorial violation by[IPL] if the USDA disconnects Building 21 from [AMES]."; and,
WHEREAS,the USDA's complaint states they have upgraded its electrical systems served
by IPL to provide redundancy and reliable power to certain laboratory facilities and IPL delivers
service to USDA's facilities at a location known as Building 153, which has two feeders, backup
generators, and full-time monitoring; and,
WHEREAS,the USDA would like to connect Building 21 to Building 153, and AMES has
suggested a number of alternative solutions that would provide redundant, reliable service to
Building 21 with full-time monitoring, but the USDA has rejected those suggestions without
explanation; and,
WHEREAS, due to the USDA's complaint at the Iowa Utilities Board, specialized outside
legal services were needed and on September 26, 2018, the City Attorney signed an Engagement
Letter for legal services with BrownWinick law firm of Des Moines, Iowa,with a Purchase Order
being created for $24,900 to begin the work, with hopes of an agreeable settlement without a
hearing; and,
WHEREAS, negotiations stalled and Change Order No. 1 for $24,900 was approved on
August 15, 2019,to prepare and defend the initial complaint and a hearing was held on August 27,
2019; and,
WHEREAS, since the hearing,the IUB has reopened the hearing to request additional data
from AMES, IPL, and the USDA,which will require BrownWinick to perform additional work to
respond to the data requests and to review and respond to the responses made by the other parties;
and,
WHEREAS, staff is requesting that the City Council approve Change Order No. 2, to the
Professional Services Agreement with BrownWinick,of Des Moines,Iowa,for the additional work
rendered regarding the service territory ruling, in an amount of$50,000.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa,
that Change Order No. 2 in an amount of$50,000 to the Professional Services Agreement with
BrownWinick of Des Moines, Iowa, is hereby approved.
ADOPTED THIS 26"'day of November, 2019.
Diane R. Voss, City Clerk John A. Haila, Mayor
Introduced by: Nelson
Seconded by: Corrieri
Voting aye: Beatty-Hansen, Corrieri, Gartin, Martin,Nelson
Voting nay: None Absent: Betcher
Resolution declared adopted and signed by the Mayor this 26' day of November, 2019.