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Background Paper for Proposed
RESOLUTION
DATE:AGENDA ITEM # M-2
May 9, 2011
DEPARTMENT:
Law Department
Thomas J. Florczak, City Attorney
TITLE
A RESOLUTION ENGAGING WILLIAM H. McEWAN TO PROVIDE LEGAL SERVICES
RELATING TO PARTICIPATION IN PUC PROCEEDINGS CONCERNING BLACK
HILLS' RATE REQUEST
ISSUE
Should the City engage William H. McEwan to provide legal services relating to the
Colorado Public Utility Commission’s proceedings in Docket No. 11AL-387E, and any
related proceedings, concerning Advice Letter No. 643 and other rate filings by Black
Hills/Colorado Electric Utility Company, LP?
RECOMMENDATION
Approve the engagement.
BACKGROUND
The City’s electric bill paid to Black Hills for 2010 was approximately $3.2 million. Black
Hills Energy has filed Advice Letter No. 643 to implement a general rate increase via a
General Rate Schedule Adjustment of 22.2% to base rates. This would result in a
substantial increase in the City’s power costs.
It would be in the best interest of the City to engage the services of legal counsel
experienced in PUC rate increase regulation to assist the City in evaluating the rate
increase and participating in the PUC proceeding. Mr. McEwan has such experience
and will be representing other customers in the PUC proceeding.
FINANCIAL IMPACT
Funds for services to be performed and costs expended in such representation shall be
paid from the Council Contingencies account. The costs of participating in the rate
increase proceeding may be offset by reduction of the City's energy costs attributable to
any reduction in the amount of Black Hill's rate increase.
RESOLUTION NO. 12135
A RESOLUTION ENGAGING WILLIAM H. McEWAN TO PROVIDE
LEGAL SERVICES RELATING TO PARTICIPATING IN PUC
PROCEEDINGS CONCERNING BLACK HILLS' RATE REQUEST
WHEREAS, Black Hills/Colorado Electric Utility Company, LP ("Black Hills”) furnishes
and sells electricity to the City and its residents under a franchise granted in 2010, and
WHEREAS, Black Hills has filed with the Colorado Public Utilities Commission its Advice
Letter No. 643 to implement a general rate increase of 22.2% to base rates ("Rate Case”).
WHEREAS, the base rate increase would result in a substantial increase in the City’s
power costs; and
WHEREAS, it would be in the best interest of the City to engage the services of special
legal counsel experienced in rate regulation to assist the City in evaluating the request and
participating in the Rate Case; and
WHEREAS, William H. McEwan has such experience and is familiar with the structure
and activities of Black Hills in providing and furnishing electricity, and
WHEREAS, pursuant to Section 6-7 of the Charter of the City, the City Attorney
consents to and approves the engagement of William H. McEwan as special counsel to provide
legal services relating to the PUC proceedings involving the Rate Case.
NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Legal Services Agreement between William H. McEwan and the City of Pueblo, a
copy of which is attached hereto, having been approved as to form by the City Attorney, is
hereby approved. The City Attorney is authorized to execute the engagement letter on behalf of
the City.
SECTION 2.
Funds for services to be performed and costs expended in such representation shall be
paid from the Council Contingencies account.
INTRODUCED: May 9, 2011
By: Leroy Garcia
COUNCILPERSON
ORIGINAL
LEGAL SERVICES AGREEMENT
THIS LEGAL SERVICES AGREEMENT ( "Agreement ") is entered into between
Pueblo, a Municipal Corporation (hereafter "Client ") and William H. McEwan (hereafter
"Attorney ") on the date entered below
In consideration of the mutual promises contained herein, the parties agree as follows
1 Client hereby retains Attorney, to represent it as Special Counsel regarding
Colorado Public Utility Commission proceedings in regard to Black Hills /Colorado Electric
Utility Rate Case, Docket No 11A-387E and related proceedings. Pursuant to §6 -7 of the
Pueblo Charter, the City Attorney approves retention of Attorney, who shall serve solely under
his direction. The representation of Client under this Agreement is to be undertaken jointly with
representation of the Board of Water Works of Pueblo and the Fountain Valley Authority in the
same proceeding(s).
2. It is agreed that the attorney with principal responsibility for performing and
supervising the work for Client shall be William H. McEwan. Client understands that the current
billing rate for such attorney is $145 per hour Attorney reserves the right to associate with other
lawyers to assist in representation of the Client, if in Attorney's reasonable judgment that
becomes necessary The Client understands that the current billing rate for other lawyers does
not exceed $145 00 per hour Other personnel, such as law clerks and paralegal assistants, may
be assigned to Client's matters in the discretion of Attorney It is understood that the above
stated rates may be modified over time. Attorney's periodic statements to the Client shall reflect
the current rates in effect at the time the service was performed.
3 Out -of- pocket expenses incurred on behalf of Client, such as filing costs, service
of process, travel, photocopying, expert witness fees, and deposition and transcript costs, will be
in addition to the costs of legal services and Client agrees to pay all of said out -of- pocket
expenses.
4 Client understands that Attorney will submit itemized bills for time and
expenditures on a periodic, but not more frequent than monthly, basis. Client agrees that, subject
to appropriations for such legal services, it shall keep all billings paid on a current basis, and
shall not allow overdue balances to accumulate unless it is specifically agreed to by Attorney in
writing. Client shall endeavor to advise Attorney when no remaining available funds exist in any
appropriation for the legal services.
5 Fees for representation of multiple parties represented jointly shall be shared on an
equal basis, provided, however, that fees and costs incurred for representation that benefits or serves
the interests of only one or more parties but less than all parties shall be divided only among the
parties benefited or interested in such representation. By executing this Agreement, Client waives
any potential conflict of interest arising from the joint representation which may exist as of the date
of execution of this Agreement.
6 The provisions set forth in Exhibit "A ", attached hereto shall constitute additional
terms of this Agreement, as if set forth in full herein.
This Agreement becomes effective when it has been signed by the Client and delivered to
the Attorney This Agreement shall be binding on the parties, their heirs, successors, and
assigns.
ATTORNEY
Dated May 12, 2011 By
tiAtilumc . Ufa,
William H. McEwan
PUEBLO, a Municipal Corporation
Dated /Y X2 2a1J By .
•
Its �' /,
Exhibit "A"
State - Mandated or Related Contract Clauses
As used in this section, "Contractor" shall mean the firm or entity (whether referred to as Consultant,
Company, Contractor, Architect, Accountant or by other term) entering into this Agreement with
Pueblo, a Municipal Corporation (which may be referred to in this Agreement as City, Client,
Customer or by other term)
PERA LIABILITY Contractor shall reimburse the City for the full amount of any employer
contribution required to be paid by City to the Public Employees' Retirement Association ( "PERA ")
for salary or other compensation paid to a PERA retiree performing contracted services for the City
under this Agreement. Contractor shall fill out the questionnaire attached as Exhibit "1" and submit
the completed form to City as part of the signed Agreement.
STATE - IMPOSED MANDATES PROHIBITING ILLEGAL ALIENS FROM PERFORM -ING
WORK UNDER THIS CONTRACT
(a) At or prior to the time for execution of this Contract, Contractor shall submit to the
Purchasing Agent of the City its certification that it does not knowingly employ or contract with an
illegal alien who will perform work under this Contract and that the Contractor will participate in
either the E- Verify Program" created in Public Law 208, 104 Congress, as amended and expanded
in Public law 156, 108 Congress, as amended, that is administered by the United States Department
of Homeland Security or the "Department Program" established pursuant to section 8 -17 5-
102(5)(c), C.R.S that is administered by the Colorado Department of Labor and Employment in
order to confirm the employment eligibility of all employees who are newly hired for employment to
perform work under this Contract.
(b) Contractor shall not:
(I) Knowingly employ or contract with an illegal alien to perform work under
this Contract;
(II) Enter into a contract with a subcontractor that fails to certify to Contractor
that the subcontractor shall not knowingly employ or contract with an illegal alien to perform
work under this Contract.
(c) The following state - imposed requirements apply to this Contract:
(I) The Contractor shall have confirmed the employment eligibility of all
employees who are newly hired for employment to perform work under this Contract
through participation in either the E- Verify Program or Department Program.
(II) The Contractor is prohibited from using either the E- Verify Program or
Department Program procedures to undertake pre- employment screening of job applicants
while this Contract is being performed.
Y
(III) If the Contractor obtains actual knowledge that a subcontractor performing
work under this Contract knowingly employs or contracts with an illegal alien to perform
work under this Contract, the Contractor shall be required to
A. Notify the subcontractor and the Purchasing Agent of the City within
three (3) days that the Contractor has actual knowledge that the subcontractor is
employing or contracting with an illegal alien, and
B Terminate the subcontract with the subcontractor if within three (3)
days of receiving the notice required pursuant to subparagraph (c)(III)A. above the
subcontractor does not stop employing or contracting with the illegal alien, except
that the Contractor shall not terminate the contract with the subcontractor if, during
such three (3) days, the subcontractor provides information to establish that the
subcontractor has not knowingly employed or contracted with an illegal alien.
(IV) The Contractor is required to comply with any reasonable request by the
Colorado Department of Labor and Employment (hereinafter referred to as CDLE) made in
the course of an investigation that CDLE is undertaking pursuant to its authority under ' 8-
17.5- 102(5), C.R.S
(d) Violation of this Section by the Contractor shall constitute a breach of contract and
grounds for termination. In the event of such termination, the Contractor shall be liable for City's
actual and consequential damages.
(e) Nothing in this Section shall be construed as requiring the Contractor to violate any
terms of participation in the E- Verify Program.
EXHIBIT "1"
COLORADO PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
SUPPLEMENTAL QUESTIONNAIRE TO BE ANSWERED BY
ANY BUSINESS PERFORMING SERVICES FOR THE CITY OF PUEBLO
Pursuant to section 24 -51- 1101(2), C.R.S., salary or other compensation from the employment,
engagement, retention or other use of a person receiving retirement benefits (Retiree) through the
Colorado Public Employees Retirement Association (PERA) in an individual capacity or of any
entity owned or operated by a PERA Retiree or an affiliated party by the City of Pueblo to perform
any service as an employee, contract employee, consultant, independent contractor, or through other
arrangements, is subject to employer contributions to PERA by the City of Pueblo Therefore, as a
condition of contracting for services with the City of Pueblo, this document must be completed,
signed and returned to the City of Pueblo
(a) Are you, or do you employ or engage in any capacity, including an independent
contractor, a PERA Retiree who will perform any services for the City of Pueblo? Yes _, No
X
(b) If you answered "yes" to (a) above, please answer the following question. Are you an
individual, sole proprietor or partnership, or a business or company owned or operated by a PERA
Retiree or an affiliated party? Yes , No If you answered "yes" please state which
of the above entities best describes your business.
(c) If you answered "yes" to both (a) and (b), please provide the name, address and social
security number of each such PERA Retiree.
Name Name
Address Address
Social Security Number Social Security Number
(If more than two, please attach a supplemental list)
Failure to accurately complete, sign and return this document to the City of Pueblo may result
in your being denied the privilege or doing business with the City of Pueblo
If you answered "yes" to both (a) and (b), you agree to reimburse the City of Pueblo for any
employer contribution required to be paid by the City of Pueblo to PERA for salary or other
compensation paid to you as a PERA Retiree or paid to any employee or independent contractor of
yours who is a PERA Retiree performing services for the City of Pueblo You further authorize the
City of Pueblo to deduct and withhold all such contributions from any moneys due or payable to you
by the City of Pueblo under any current or future contract or other arrangement for services between
you and the City of Pueblo
Signed May 12, 2011
Idldluc+t sawOo+r 4
Name William H. McEwan
Title Attorney
For purposes of responding to question (b) above, an affiliated party includes (1) any person who is the named
beneficiary or cobeneficiary on the PERA account of the PERA Retiree; (2) any person who is a relative of the PERA
Retiree by blood or adoption to and including parents, siblings, half - siblings, children, and grandchildren, (3) any person
who is a relative of the PERA Retiree by marriage to and including spouse, spouse's parents, stepparents, stepchildren,
stepsiblings, and spouse's siblings, and (4) any person or entity with whom the PERA Retiree has an agreement to share
or otherwise profit from the performance of services for the City of Pueblo by the PERA Retiree other than the PERA
Retiree's regular salary or compensation.