1h KMC Telecom Encroachment Agr
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone 952.227.1100
Fax 952,227.1110
Building Inspections
Phone: 952.227.1180
Fax 952,227.1190
Engineering
Phone: 952.227.1160
Fax: 952,227.1170
Finance
Phone: 952,227.1140
Fax: 952,227.1110
Park & Recreation
Phone: 952,227.1120
Fax 952,227.1110
Recreation Center
2310 Coulter Boulevard
Phone 952.227.1400
Fax: 952,227.1404
Planning &
Natural Resources
Phone 952.227.1130
Fax 952,227.1110
Public Works
1591 Park Road
Phone: 952,227.1300
Fax 952,227.1310
Senior Center
Phone 952.227.1125
Fax 952,227.1110
Web Site
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MEMORANDUM
TO:
Todd Gerhardt, City Manager
FROM:
Justin Miller, Assistant City Managef:::5"^
Rick Rice, Information Systems Coordinator '. l~r:)\
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April 4, 2005
DATE:
RE:
Assignment of KMC Telecom Encroachment Agreement to
CenturyTel Acquisition, LLC
BACKGROUND
KMC Telecom has been providing local and long distance services to all City
facilities since 1999. In addition, KMC provides the point to point fiber network
which connects City Hall to both the Public Works building and the Recreation
Center. Data and voice services are delivered to these building from City Hall
over these fiber connections. The fiber network will be expanded to include the
newly constructed Water Treatment Facility in 2006.
The Midwest operations of KMC Telecom, the City's current local and long
distance services provider, is in the process of being acquired by CenturyTel,
based out of Monroe, Louisiana. The transition is expected to be completed in
July 2005 and will not affect any of the services in place with the City of
Chanhassen. CenturyTel is included in the S&P 500 Index and is listed in the
NYSE as CTL.
In order for their acquisition to take place, CenturyTel is requesting that the City
of Chanhassen formally assign the existing encroachment agreement to them.
The City Attorney has reviewed this document and finds it to be satisfactory.
RECOMMENDATION (simple majority required)
Staff recommends that the City Council approve the attached resolution approving
the assignment of the KMC Telecom encroachment agreement to CenturyTel
Acquisition, LLC.
The City of Chanhassen . A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks, A great place to live, work, and play,
RESOLUTION
WHEREAS, KMC Telecom, Inc. ("KMC") and the City of Chanhassen,
Minnesota (the "City") entered into an Encroachment Agreement ("Agreement") which
took effect June 16, 1997 and which expires on June 15,2007 with an automatic renewal
for successive five year periods. As a result of a pending Asset Purchase Agreement
initiated by CenturyTel Acquisitions LLC ("CenturyTel") d/b/a KMC Telecom III to
purchase the network assets of KMC in Chanhassen, KMC has notified the City of its
intent to transfer and assign the rights and obligations ofKMC to CenturyTel and has
requested the consent of the City to transfer ~hose rights and obligations pursuant to the
Agreement; and
WHEREAS, CenturyTel and KMC have jointly filed an application at the
Minnesota Public Service Commission pursuant to Minnesota Statute §237.74(12) for the
transfer of assets and customers from KMC Telecom III LLC (f/k/a KMC Telecom, LLC;
KMC Telecom III, Inc.), a wholly owned subsidiary ofKMC Telecom Holdings, Inc. to
KMC Telecom III LLC, a wholly owned subsidiary of CenturyTel Acquisition, LLC,
WHEREAS, CenturyTel is qualified to provide the same services that KMC has
been providing in Chanhassen;
WHEREAS, CenturyTel agrees to adhere to all applicable provisions of the
Agreement;
WHEREAS, CenturyTel's acquisition of and continued operation ofKMC's
network assets in the City of Chanhassen will result in positive benefits for the
Chanhassen community in that it will promote local exchange competition.
NOW, THEREFORE, BE IT RESOLVED by the City Council ofthe City of
Chanhassen that consent to the transfer and assignment of the rights and obligations of
KMC pursuant to the terms of the Encroachment Agreement to CenturyTel is hereby
granted.
BE IT FURTHER RESOLVED that this Consent shall become effective as of
the date of the closing of the Asset Purchase ofKMC Telecom III LLC's assets in
Chanhassen by CenturyTel which is anticipated to be on or near June 30, 2005. In the
event that the Asset Purchase is not closed before or within ninety (90) after June 30,
2005, this Consent shall be null and void.
Adopted, this
day of
,2005.