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HomeMy WebLinkAbout~Master - Change Order No. 4 to Professional Services Agreement for Legal Services for Service Area Boundaries Dispute with USDA RESOLUTION NO. 21-549 RESOLUTION APPROVING CHANGE ORDER NO. 4 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 is 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 of revenue 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, Change Order No. 2, was approved on November 26, 2019, in the amount of $50,000 to complete this work,and Change Order No.3 was approved on July 16,2020,in the amount of$24,900; and, WHEREAS, on June 23,2021,the Iowa Utilities Board issued the"Order Setting Procedural Schedule,"and the parties including AMES, filed direct testimony on August 19,rebuttal testimony on September 19, and reply testimony on September 30, 2021; and, WHEREAS,the parties will be participating in a hearing at the IUB on October 29,2021;and, WHEREAS, at this time,the funds in the current Purchase Order have nearly exhausted and staff is requesting that the City Council approve Change Order No. 4 in an mount of$50,000; and, WHEREAS, this action will increase the overall authorized amount to $174,700, which is needed to cover the cost of the hearing, the filing of post-hearing briefs, and possible settlement negotiations;with the filing of post-hearing briefs and the possible outcome,the City may need to be prepared to appeal the ruling to District Court. NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of Ames,Iowa,that Change Order No. 4 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 October, 2021. Diane . Voss, City Clerk John A. Haila, Mayor Introduced by: Betcher Seconded by: Beatty-Hansen Voting aye: Beatty-Hansen, Betcher, Corrieri, Gartin, Junck, Martin Voting nay: None Absent: None Resolution declared adopted and signed by the Mayor this 26t' day of October, 2021.