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50 CITY OF SAN MARCOS October 4, 1989 Mr. Fred Saffer Saffer Utility Consultants, Inc. 3655 Maguire Blvd., Suite 15Ø Orlando, Florida 328Ø3 In Re: Letter Agreement for Condulting S~rvice~ Dear Mr. Saffer: Please consider this letter the agreement of the City of San Marcos to engage Saffer Utility Consultants, Inc., to assist said City in reviewing the impact of the LCRA rate increase on the cost of service to SHEU customers and revise the electric tariffs accordingly, as well as to provide training to City and SMEU Staff in the rate review process under the terms and conditions set forth herein. Upon the direction of the City Manager of the City of San Harcos, Larry D. Gilley, Saffer Utilities Consultants, Inc. will begin the following tasks to expedite rate review and to prov ide training for City and SMEU Staff for a maximum fee of Twenty-five Thousand Dollars ($25,ØØØ.ØØ): 1. ~¡i thin three weeks of receiving authorization, revise the cost of serv ice models for SMEU to reflect the increase in LCRA wholesale rates and the Fiscal 89-9Ø SMEU Budget. Prepare and present an Executive Report to the SMEU Board showing the customer class increases and recommendations. 2. After receiving Board guidance on the rate review, revise the formal, detailed Rate Study Report and the electric tariffs. Provide 2Ø copies of the report for the City's and SMEU's use. If requested, attend one public hearing to present the Rate Study Report to the City Council and to answer questions from the public. 3. Prepare a step-by-step summary of the procedure which was followed in reviewing the electric rates and how the computer models were used. Present a two day seminar in San Marcos to the appropriate City and SMEU staff. Also provide a copy of all of the computer models. city hall' 630 e. hopkins . san marcos, texas 78666 512/353-4444