Loading...
1g Approval -Encroachment Agreement,KMC Telecom CITY OF CHANHASSEH 690 COULTER DRIVE. P.O. BOX 147. CHANHASSEN, MINNESOTA 55317 (612) 937-1900 . FAX (612) 937-5739 MEMORANDUM TO: Mayor and City Council Update: I originally had this item on the regular agenda. As I finished dictation, I realized that the city virtually cannot deny this application and the agreement itself does spell out each of the areas where we do have some control. Accordingly, I have moved this item to the consent agenda. DWA (5-21-97) FROl\-I: Don Ashworth, City Manager DATE: May2l,1997 SUBJ: Approval of Encroachment Agreement, KMC Telecom BACKGROUND The Telecommunications Act, as approved in 1996, will become one of the worst federal boondoggles and the ramifications of that Act will be felt by cities well into the next century. In essence, the FCC has provided cities with the authority to review and conduct hearings in regards to the placement of satellite antennas, but has mandated that the conclusion to the review process must be approval. Cities are given very minor discretion, i.e. we could have picked some other location for the satellite in the vicinity of Dell Road, but the conclusion that we did have to approve a site in that general vicinity and that the locational requirements must be reasonable was the predetermined conclusion. No where was not an acceptable answer. The FCC has mandated the same types of rules as it deals with companies proposing to provide high speed telecommunications services via the use of fiber optics. In the case of regulating companies proposing to provide high speed data communication, a city cannot use a franchise as a means to control the number of companies, cannot establish restrictions or regulations which would place one company in a more competitive position than another, cannot collect franchise fees, etc. The State of Minnesota provided cities with some relief via: passage of a right-of-way bill which allows us to ensure that companies do not damage our public right-of-ways and allows cities to establish bonds and other requirements to ensure that repairs are paid for and/or that reasonable regulations are put into effect to reduce future damage, i.e. requiring companies to burrow under roads, sidewalks, etc., permit cities the ability to establish routes and street locations, etc. CURRENT PROPOSAL KMC is a large national firm providing high speed communication services to businesses throughout the United States. They are proposing to provide this same type of service in Eden i -6 Mayor and City Council May 21, 1997 Page 2 Prairie, Chanhassen, and Chaska. They would propose to provide fiber services to all of the industrial parks in Eden Prairie, Eden Prairie Center, Chanhassen business parks including downtown, and complete their routing into the Chaska business parks and finally, downtown. They are hopeful of completing all work this summer. They do not currently provide cable television services with a majority of their business competing with T -1 services currently offered through AT & T. In light of the fact that all three cities would be affected, we have been conducting joint meetings between KMC and the three cities for the last 30-45 days. The conclusion of those meetings was the attached Encroachment Agreement which, hopefully, protects each of the three cities as much as possible. A concession was achieved in that KMC has agreed to provide "dark fiber" between five public buildings in each of the three cities. For Chanhassen, the five buildings would be the fire station, city hall, recreation center, public works building, and a fifth building to be determined at a future date. That concession should, after we make connection to the fiber, reduce our telecommunications costs about 20% to 25%. The second benefit would be the quality of service. Also included in the Encroachment Agreement is KMC's agreement to reimburse each ofthe cities their costs of negotiating this agreement. [Note: The cities agreed that it would probably be in our best interests to use one firm to negotiate in our behalf and the firm of Moss & Barnett was selected. Brian Grogan of Moss & Barnett specializes in interpreting the FCC regulations and negotiating franchises and agreements such as the one attached.] With the exception of the designation of buildings, the Encroachment Agreement, as enclosed, is exactly the same for each ofthe three cities. Approval is recommended. g:\mgr\kmc.doc MOSS & BARNETT A Professional Association MEMORANDUM TO: Don Ashworth, Dave Pokorney and Carl Jullie FROM: Brian Grogan CLIENT NOS: 27981.5, 31845.1 and 31883.1 DATE: May 1 9, 1997 RE: Revision to Final Encroachment Agreement George Breckenridge of KMC Telecom contacted me this morning with one small change to the Encroachment Agreement. The address for KMC's principal location in the first paragraph of the first page has been corrected. Please feel free to contact me if you have any questions regarding this matter. BTG/slo cc: Mr. George Breckenridge 109904!2CSWOlI.DOC ~O'd ~~O'ON fS:~T Lt" I) T ^CJ~l :GI 00617 along the Public Rights-of-Way for the purpose of providing Telecommunications Services. This Agreement shall not be sold, transferred, leased, assigned or disposed of, including but not limited to, by force or voluntary sale, merger, consolidation, receivership or other means without the prior written consent of the City, which consent shall not be unreasonably withheld. No consent from the City shall be required for a transfer in trust, mortgage, or other instrument of hypothecation, in whole or in part, to secure an indebtedness, or for a proforma transfer to a corporation, partnership or other entity controlling, controlled by or under common control with KMC. The term of said encroachment shall be for an initial period of five (5) years commencing on the date of the signing of this Agreement. The parties agree that the encroachment shall automatically renew for additional five (5)year periods, unless either party gives a minimum of ninety (90) days advance written notice to the other of intent to terminate prior to the end of said five (5) year period. 2. No Interference. Except as permitted by applicable Law and this Agreement, in the performance and exercise of its rights and obligations under this Agreement, KMC shall not interfere in any manner with the existence and operation of any and all private and Public Rights-of-Way, sanitary sewers, water mains, storm drains, gas mains, poles, overhead and underground electric and telephone wires, electrollers, cable television wires, and other telecommunications, utility and municipal property without the approval of the owner(s) of the affected property or properties. KMC agrees to use existing poles for installation and will not install new poles. 3. No Property Interest. This Agreement is not a grant by City of any fee simple property interest and is made subject to and subordinate to the prior and continuing right of City to use the Public Rights-of-Way as a street and for the purpose of laying, installing, maintaining, repairing, protecting, replacing and removing sanitary sewers, water mains, storm drains, gas mains, poles and for other municipal uses and with right of ingress and egress, along, over, across and in said Public Rights-of~Way . 4. Application for Perwjts. KMC shall apply for a permit for all work and for each job within the Public Rights-of-Way. KMC shall furnish detailed plans of the work and other such Information as required by City and by Law, and shall pay all processing, field marking, engineering, inspection, security and any other fees prior to issuance of permit in accordance with the rates in effect at the time of payment. KMC agrees to place its Facilities underground in all locations where the City requires other telecommunications providers to do the same. In those areas of the City where KMC's Facilities are located on above ground transmission or distribution facilities of a public utility or telecommunications provider, KMC agrees to relocate or install its Facilities underground at its own cost when: I (l1J56112cjdO llDOC 2 rOOd ZfO"ON PS:fl L6,61 ^l:H~ :GI 006P City and/or the construction, maintenance or operation of any other City underground or above-ground facilities. 12. Removal and Abandonment. If any portions of the Fiber Optic Network Facilities covered under this Agreement are no longer used by KMC, or are abandoned for a period In excess of twelve (12) months, KMC shall notify City and City shall determine whether KMC shall either promptly vacate and remove the Facilities at KMCs expense or abandon some or all of the Facilities in place to the extent perm itted by Law. 13. Restoration 91 Public Rilhts~f-W~. When removal or relocation of the Facilities are required under this Agreement, KMC shall, after the removal or relocation of the Fiber Optic Network Facilities, at its own cost, repair and return the Public Rights- of-Way on which the Facilities were located to the same or better condition existing before such removal or relocation. The work must be completed as promptly as the weather permits. If KMC does not properly perform and complete the work, remove all dirt, rubbish, equipment and material, and restore the Public Rights-of- Way to the same or better condition, the City may restore the Public Rights-of-Way to the same condition at the expense of KMC. KMC must, upon demand, pay to the City the direct and indirect cost of the work done for or performed by the City, including but not limited to, the City's administrative costs. 14. D~mage. KMC shall be responsible for damage to City street pavements, existing utilities, curbs, gutters and sidewalks due to KMC's installation, maintenance, repair or removal of its Fiber Optic Network Facilities in Public Rights-of-Way, and shall repair, replace and restore, the damaged Public Rights-offtWay at its sole expense and subject to approval by City. COMPENSATION 15. In consideration for said encroachment, KMC will agree to dedicate to the City, at no charge or cost to City, an Indefensible Right of Use (IRU) for four (4) dark fibers (unlit) in KMC's fiber optic backbone network, which network shall pass the City buildings and school facilities identified in Exhibit A attached hereto and incorporated by reference, for the City's telecommunications use, provided, however, that such fibers shall not be used by the City for commercial resale on a for-profit bases. KMC agrees that any maintenance of fiber dedicated to the City pursuant to the IRU granted herein shall be borne solely by KMC. KMC agrees to respond to technical problems on the City's fiber within four (4) hours with the exception of public safety or critical City communications. KMC shall respond immediately if there is a technical problem in the City's fibers where KMC is responding to a public safety concern or a problem critical to the City. "16. Other Fees. KMC shall pay all permit and user fees or any other fees to the City in accordance with applicable Law. KMC expressly acknowledges and agrees that I095nl/2cjdOllDOC 4 90"d ~~O'ON 9S:~1 ~E,,61 ,\tJw :01 lJ 0 f:, 17 b. Comprehensive - Automobile Liability Insurance, including owned, nonwowned and hired vehicles. (1 ) Bodily injury liability $1,000,000 each person $3,000,000 each occurrence (2) Property damage liability $3,000,000 each occurrence or (3) $3,000,000 single limit In lieu of (1) and (2) Bodily injury and property damage combined c. KMC agrees that with respect to the above-required insurance, contracts will contain the following required provisions: (1) the City and its officers, agents, employees, board members and elected officials shall be named as additional insured (as the interests of each may appear) as to all applicable coverage; and (2) contracts shall provide for thirty (30) days notices to the City prior to cancellation, revocation, nonwrenewal or material change. d. The amount and conditions of liability and comprehensive insurance may be increased upon 60 days written notice by the City should the protection afforded by this insurance be deemed by the City to be insufficient for the risk created by this Agreement. At no time, however, will the amount of required liability and comprehensive insurance exceed that which is customarily required of others for similar situations of risk. 20. Default. If KMC is in default in the performance of the work or occupancy authorized by this Agreement or any permit granted pursuant to this Agreement, including, but not limited to, restoration requirements or fee payments for more than thirty (30) days after receiving written notice from the City of the default, the City may tmminate the rights of KMC under this Agreement and any permit granted hereunder, subject to City's absolute right to revoke at any time in the exercise of City's police powers. The notice of default must be in writing and specify the provisions of this agreement or any permit under which the default is claimed and state the grounds of the claim. Any notice must be served on KMC by certified mail, return receipt requested at its principal place of business. If KMC is in default in the performance of the work or occupancy authorized by this Agreement or any permit granted hereunder, the City may, after the above notice to I ()t)56 I I2cjdO 1 !DOC 6 80'~ (fO'ON lS:f1 l6.61 Al:JH :01 006t7 Exhibit A City of Chanhassen, Minnesota City buildings to be passed by KMC's fiber optic backbone network. 1. City Hall 690 Coulter Drive 2. Fire Station 7610 Laredo 3. Public Works 1591 Park Road 4. Chanhassen Recreation Center 2300 Coulter Drive 5. To be determined by mutual consent. OT.d Z~O.ON 8S:~T l6.61 ^I::lv~ :01 I] elf:, t7 , City flood donations appear legal Cities across the state have responded to the Cities Helping Cities program. While a number of cities are offering personnel and equipment to flood affected cities, many also want to donate money. A number of those cities have contacted the League with questions about the legality of cities making donations for flood relief. Governor Carlson signed Chapter 75 into taw on May 1, which gives cities explicit authority to contribute money to flood affected cities. However. there are questions about the effective date of the new taw. While the effective date is being clarified, cities may want to rely on current law. Existing state law arguably provides cities authority to contribute money to flood affected cities. Minn. State. 471.85 provides authority for "any city . . . to transfer its personal property . . . without consideration to another public corporation for public use duly authorized by its governing body." In 1968, the attorney general opined that "personal property" includes money. The only restriction on the donations is that the money must be used for a "public use." While the 1968 Attorney General's Opinion says that public use must "directly relate to the public purpose of the transferring governing body," the opinion was not written in re- sponse to an issue such as a "emer- gency" or "disaster" rehef effort such as those contemplated under Minn. Stat. Chap. 12. In light of the broad cooperative powers found in Chapter 12, it would seem permissible for a city to donate ROW Continued from page 1 ~tUT-A!!t~.by-the--legistg::- tion. It would also require the MPUC to develop and adopt statewide construction standards by March I, 1998. An advisory task force would be formed to make recommendations on the statewide standards, and provide input on the calculation of degradation costs, mapping systems, liability conditions and indemnification, and model ordinances for local govern- ments. The bill would also give the MPUC the authority to review local decisions or regulations which are alleged to violate a statewide standard. Local governments would not be allowed to adopt an ordinance or regulation that conflicts with an MPUC construction standard. The bill also specifies that "a telephone company that provides cable television services shall, with respect to provisioning of those services in Minnesota, be subject to the same trancllise requirements, procedures, and fees, and public, educational, and government access requirements as a cable communication company...." It is unclear how this section of the bill is to be administered or enforced. Effective dates The effective dates of the bill are intricate and important. The section dealing with statewide standards becomes effective March I, 1998, or when the MPUC adopts rules (which- ever is earlier). However, local governments would be allowed to "exercise the authority that existed before November I, 1996, with regard to the powers" regarding construction standards until the rules are adopted. The intricacy of these interacting provIsions will be discussed in more detail when the League updates its model telecommunications ordinance and at the League's Annual Confer- ence next month. t" funds to another city or to the League of Cities for the purposes of disaster relief. However, because the law on this issue is not completely clear, cities should consult with their city attorney if they are considering making a cash donation Cities have also asked about the permissibility of donations to private relief organizations. The attorney general has concluded that cities cannot make donations to private nonprofit organization such as the Red Cross or the Salvation Army. t" Thanks for city histories About two months ago, the League sent a mailing to LMC member city mayors requesting city histories and various other information items about their communities. Almost immediately, we began receiving responses--Eveleth's return was the first to arrive, and Burnsville's came a day later. We would like to say thank YOll to all cities that responded to our request for information. The response has been great, and the assortment of unique items exceeded our expectations. Even a quick examination of the materials as they arrive has been informative and entertaining. If your city has not yet responded, there's still tIme. We'll gladly accept and greatly appreciate any packets of infornlation. If you need another copy of our original request and question- naire, let us know and we will send it to you. Please direct any questions, as well as completed questionnaires, city histories, and/or other community information to Bill Makela, LMC Collections, 145 University Avenue West, St. Paul MN 55103-2044 Telephone (612)281-1225 or (800) 925-1122, ext. 1225. Our fax number is (612) 281-1296. t" Page 6 LMC Cities Bulletin