City Council Agenda Report
Meeting Date: August 6, 2024
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Senior Management Analyst
Subject
Attorney Services Agreement with Duncan, Weinberg, Genzer & Pembroke, P.C.
Recommendation
A. Pursuant to Sections 3.32.220(B) and 3.32.110(B)(3) of the Vernon Municipal Code (VMC), find that it is commercially unreasonable to rebid the proposed agreement for specialized utilityrelated legal services every three years due to the expected continuous large development projects and various deal points that will be negotiated in phases and may span multiple years; and
B. Approve and authorize the City Administrator to execute an Attorney Services Agreement with Duncan, Weinberg, Genzer & Pembroke, P.C. (DWGP), in substantially the same form as submitted, to provide specialized utility-related legal services to the Public Utilities Department in an amount not-to-exceed $1,160,382 for a five-year term.
Background
Vernon Public Utilities (VPU) has significant technical and operational requirements related to utility contract negotiations. This includes working with organizations such as the California Independent System Operator (CAISO), Federal Energy Regulatory Commission (FERC), and California Energy Commission (CEC). These utility needs call for specific legal expertise in the areas of water, electricity, and natural gas operations. However, VPU has found that not all legal firms possess the necessary detailed experience and familiarity with multiple utility services or with operational, financial, compliance, and regulatory requirements.
In recent years, VPU has experienced a departure of some of the City’s major industrial customer base from California. Consequently, the utility is seeking to support new industry sectors, including Green Commerce. These new businesses are proposing large developments that are new and unique to the city, necessitating expertise in the development and negotiation of various complex contracts. This will ensure the utility's future financial and operational stability and facilitate the establishment of new funding sources.
The City has utilized the services of Duncan, Weinberg, Genzer & Pembroke, P.C. (DWGP) for specialized utility-related legal services for VPU. On August 3, 2021, the City Council approved a three-year Attorney Services Agreement with DWGP to provide these specific legal services.
The current agreement is set to expire on August 2, 2024. As per Vernon Municipal Code (VMC) Section 3.32.080, on July 3, 2024, staff issued a Request for Proposals (RFP) to seek proposals from qualified firms or attorneys to continue providing specialized utility-related legal services.
The RFP was advertised on the City’s Planet Bids platform. The scope of services included specialized legal services for VPU regarding utility legal matters such as electric, water, natural gas, and dark fiber services. The scope includes drafting contracts, FERC and CAISO matters, litigation, and advisory services. The selected firm/attorney is expected to provide support for renewable energy, procurement, and load-serving matters, including power purchase agreements, financing agreements, and advice on rates and energy risk management.
Additionally, assistance is required for interpreting and complying with laws affecting California publicly owned utilities in federal, state, and local environmental regulatory matters, regulatory changes, and legislative matters related to electric, water, natural gas, and fiber utilities. Proposal packages were received from four firms by the July 16, 2024 deadline. A qualified panel thoroughly examined the proposals received based on the professional qualifications (60%), cost and fees to the City (20%), demonstrated competence (15%), and overall quality and responsiveness to the RFP (5%).
While all four firms met the minimum criteria, the proposal from DWGP demonstrated the highest competence, and of the firms interviewed, DWGP’s rates were among the lowest. The proposal submitted by DWGP ranked the highest score across the panel and was, therefore, deemed the most qualified. DWGP has over twenty-five years of experience representing California municipal utility clients, addressing issues related to their relationships with neighboring investor-owned utilities, fulfilling state agency requirements, and ensuring compliance with the North American Electric Reliability Corporation and the Western Electricity Coordinating Council. DWGP is highly qualified to provide the services set forth in the Scope of Work contained in the RFP and can continue to offer their expertise to the City and to VPU.
DWGP has significant experience in Vernon providing specialized legal services to VPU, including successfully assisted VPU to terminate its existing transmission contracts with Southern California Edison and the Los Angeles Department of Water and Power and assisted in withdrawing from the CAISO as a Participating Transmission Owner. DWGP has assisted VPU in managing its significant forecasted increase in load growth by providing guidance and creating and negotiating customized agreements.
The proposed Attorney Services Agreement will have a five-year term. Pursuant to Sections
3.32.220(B) and 3.32.110(B)(3) of the VMC, staff recommends the City Council deem the proposed agreement for specialized utility-related legal services is commercially unreasonable to be rebid every three years due to the expected continuous large development projects and various deal points that will be negotiated in phases and may span multiple years. To ensure accountability and flexibility with the development of these complex legal contracts and to maintain the continuity of the selected law firm, the utility recommends having the legal services align with the development timeline of five years. A three-year limit would make it unnecessarily challenging to manage a variety of work contracts, including environmental compliance and regulatory matters.
Staff recommends that the City Council approve an Attorney Services Agreement with DWGP to provide specialized utility-related legal services to the Public Utilities Department for a total amount not-to-exceed $1,160,382 over the term of five years.
The five-year cost is provided below:
Year 1: $210,000
Year 2: $220,500
Year 3: $231,525
Year 4: $243,101
Year 5: $255,256
Total: $1,160,382
The proposed Attorney Services Agreement has been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
The fiscal impact is not-to-exceed $1,160,382 for the services agreement five-year term.
Sufficient funds are available in the Electric Fund, Administration Department, Professional Services – Legal Account No. 055-050-580-529200 for the current fiscal year and sufficient funds will be budgeted in subsequent years.
Attachments
1. Attorney Services Agreement with Duncan, Weinberg, Genzer & Pembroke, P.C.