272426 �MMITE - CITY CLERK CO11I1C11
PINK - FINANCE ` �1
BLUERy - MAVORTMENT GITY OF SAINT PAUL File NO. � �� ������
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Council Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
RESOLVED, That the proper City Officers are
authorized and directed to execute and sign that
certain contract engaging Touche Ross & Company as
Public Utility Expert Witness, a copy of which is
attached hereto, and which calls for the performance
of certain services by said witness in connection with
an anlysis, investigation, and report on the character
of the Northern States Power Company public utility
gas rates now pending before the Minnesota Public
Service Commission at compensation payable to said
Rate Witness not to exceed $40,000. 00 and chargeable
to Account 50200 (Special Fund) upon the terms and
conditions in said contract contained.
COUNCILMEN
Yeas Nays Requested by Department of:
�'� � [n Favor
Hozza
Hunt
Levine �__ A gai n s t BY —
Maddox
Showalter
TedesCO Form A pproved by City Attorney
Adopted by ncil: Date — �� � 8 ��
Cert d Pass y Coun ' , c tar� BY
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61pp o by Mavor: Dat _�n � 9 t9� Approved by Mayor for Submission to Council
BY — — BY
pu�u'sNEO JAN 2 ? 1979
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AGREEMENT
THIS CONTRACT, Made and enter�d into this day of ,
1979, by and between the CI'TY OF SAINT PAUL, a municipal corporation of the State
of Minnesota, hereinafter referred to as "City," and TOUCHE ROSS dc Co., a
partnership, 2000 American National Bank Building, Saint Paul, Minnesota, hereinafter
referred to as "Contractor,"
WITNESSETH:
1. Contractor warrants to City that it is professionally competent to
conduct studies of gas utiiity rate mafiters as they relate to regulated �
public utilities, and is able to do the work referred to herein in a �
workmanlike manner, and as needed by City.
2. Contractor further warrants to City:
(a) That it has a branch office within the City of Saint Paul which has
personnel officing consistently there and in no other office during a
normal work day and work week, and that it had such branch office
operating for at least one year prior to December 13, 1978, the
date on which Contractor submitted its Proposal to the City of
Saint Paul. Such branch office is located at 2000 American
National Bank Building, Saint Paul, Minnesota 55101. �
(b) That it has an office within the State of Minnesota at which
personnel qualified to testify in respect to rate of return on
capitalization and rate base, and in respect to rate design and cost
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of service study are off�cing, although actual testimony may be
presented by out-of-sta#e expert who is readily available for
consultation and discussion; and that it had such local office in
operation for at least one year prior to December 13, 1978, the
date on which Contractor submitted its Proposal to the City of
Saint Paul. Such office in Minnesota is located at the 780
Northstar Center, 608 Second Avenue South, Minneapolis, Minne-
sota 55402.
(c) That its personnel, as specified in paragraph 2 (b) above, have rate
of return experience with respect to capitalization consisting of
preparation of testimony, examination of capitalization elements,
familiarity with purpose of capitalization determination, and
appearance in at least two prior utility hearings before a public
service commission, hearing officer, or examiner.
(d) That its personnel, as specified in paragraph 2 (b) above, have rate
design and cost of service analysis experience to such extent as to
prepare a cost of service study, analyze cost allocations, and
determine zone determination, and have appeared in at least two
prior utility hearings before a public service commission, hearing
officer, or examiner.
(e) That it, through its personnel and experts, is able to follow the line
of approach with respect to developing rate of return on rate base,
and on rate design that is presented by Thomas J. Stearns in his
Report of November 6, 1978 to the Saint Paul City Council.
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3. Relying upon the warranties m�de herein, City engages �ontractor ta \`�
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provide Expert Witness services with �ap�ropriate documentation with
resect to rate of return on capitalization and rate of return on rate base
of NSP in the matter of the Petition by NSP filed before the Minnesota
Public Service Commission, for an increase in its natural gas rates, MPSC
Docket No. G-002/GR-78-1052; HE Docket No. PSC-7&067-BS, as partic- .
ularized and at the cost designated as that of providing section "A"
services hereafter.
. 4. That Contractor will undertake the agreement for its providing Expert
Revenue/Cost Analysis Witness services with respect to rate of return on
capitalization and rate of return on rate base in two phases as follows:
(a) Section A, Phase I Services. It will analyze the relevant portion of
the NSP filing and f acts concerning the gas industry cost of capital
and business risk trends to determine the feasibility of developing
tenable positions that would aid the City's position, both as to the
requisites of the gas division of NSP as to stock issue and the
revenue increase of not more than $4,480,790 during test year
1979.
(b) In consideration of the analysis by Contractor, as detailed in 4 (a)
above, City agrees to pay Contractor for its services the portion of
the total amount bid in Contractor's Proposal of $10,000.00, to wit:
$3,500.00 upon completion of this phase of the work, and upon a
billing from Contractor, as approved by Thomas J. Stearns, such
payment to be out of funds provided for such purpose.
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(c) Section A, Phase II. Upon completion of the analysis by Contractor
as specified in 4 (a) above, which determines the tenable positions
that would aid the City's position with reference to the need for a
stock issue and with reference to approving a gross revenue
increase, if any, of no more than $4,480,790 for the natural gas
service of NSP with respect to the NortMern Natural Gas Service
Area in Minnesota, the Contractor may then proceed, upon mutual
agreement between it and the City, as below:
(1) Contractor will conclude fact gathering and analysis, and
preparation and presentation of expert testimony, and, in so
doing, cooperate with Thomas J. Stearns, as representative
of the City.
(2) Contractor will submit direct testimony to Thomas J.
Stearns for examination, discussion, amplification, syn-
chronization, and revision on or before March 9, 1979.
(3) Any further testimony will be reviewed by Thomas J.
Stearns befare the hearing on it as permitted by the hearing
schedule in effect under the Order of the Hearing Examiner,
dated December 12, 1978.
(d') In consideration of the matter ancillary to the preparation and
presentation of the testimony, as detailed in 4 (c), (1), (2), and (3)
above, City agrees to pay Contractor for its services the balance
of the total amount bid in Contractor's Proposal of $10,000.00, to
wit: $6,500.00, upon completion of this phase of the work, and upon
a billing from Contractor, as approved by T'homas J. Stearns, such
payment to be out of funds provided for such purpose.
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5. Relying upon the warranties made herein, City engages Contractor to
provide Expert Witness services with appropriate documentation with
" respect to rate design of �VSP in the matter of the Petition by NSP filed
before the Minnesota Pub�lic Service Commission, for an increase in its
gas rates, MPSC Docket No. G-002/GR-78-1052; HE Docket No. PSC-78-
067-BS, as particularized and at the cost designated as that of providing
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section "B" services hereafter.
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E�..�� That Contractbr will undertake the agreement for its providing Expert
�,i '� Rate Design services with respect to rate design of natural gas rates of
NSP irr two phases as follows:
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(a) Section B, Phase I, Services. Conduct a preliminary investigation
� 'd#�relevant positions of NSP's filing, development of information
requests concerning hypothetical positions that could be advanced
to eliminate or reduce the effects of the NSP's proposal to
consolidate all existing rate zones to system-wide rate schedules, �
preliminary investigation of the information gathered and develop-
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ment of a plan for developing tenable positions in expert testi-
mony.
(b) "In consideration of investigation by Contractor as detailed in 5 (a)
�above, City agrees to pay the Contractor for its services the
portion of the total amount bid in Contractor's Proposal of
$30,000.00, to wit $10,000.00 upon completion of this phase of the
work, and upon a billing from Contractor, as approved by
Thomas J. Stearns, such payment to be out of funds for such
purpose.
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(c) Section B, Phase II Services. Upon completion of the analysis by i
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Contractor as specified in 5 (a) above, the Contractor may then �',
proceed, upon mutual agreement between it and the City as '
below: ',
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(1) Contractor will conclude fact analysis and investigation, '
development and presentation of expert testimony and, in so
doing, cooperate with Thomas J. Stearns, as representative '
of the City.
(2) Contractor will submit direct testimony to Thomas J.
Stearns for examination, discussion, amplification, syn-
chronization, and revision on or before March 9, 1979.
(3) Any further testimony by Contractor will be reviewed by
Thomas J. Stearns before the hearing on it as permitted by
the hearing schedule in effect under, the Order of the
Hearing Examiner, dated December 12, 1978.
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(d) In consideration of the matter ancillary to the preparation
and presentation of the testimony, as detailed in 5 (c) (1),
(2), and (3) above, City agrees to pay Contraetor for its
services the balance of the total amount bid in Contractor's
Proposal of $30,000.00, to wit: $20,000.00, upon completion '
of this phase of the work, and upon a billing from Contrac-
tor, as approved by Thomas J. Stearns,�such payment to be
out of funds provided for such purpose.
7. This contract may be terminated by City at the completion of Section A,
Phase I Services and of Section B, Phase I Services with no obligation
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other than to make payment to Contractor for services rendered to date
of termination as specified hereinabove.
8. This contract may be terminated by Contractor at the completion of
Section A, Phase I Services and of Section B, Phase I Services other than
to submit to City appropriate reports including the results of the investiga-
tion conducted under 5 (aj above.
IN WITNESS WHEREOF, the City and the Contractor have signed this contract
the day and year first above written.
CITY OF SAINT PAUL
Approved only as to form: By:
M ayor
Assist t City torney
By:
Director of the Department of Finance
and Management Services
TOUCHE ROSS & CO.
By:
Partner
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