City of Alexandria, Virginia
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MEMORANDUM
DATE: SEPTEMBER 18, 2013
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: RASHAD M. YOUNG, CITY MANAGER /s/
DOCKET TITLE:
TITLE
Consideration of a License Agreement with Coxcom LLC., to Install Conduit and Fiber Optic Cable in the Public Rights-Of-Way.
BODY
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ISSUE: Whether to approve a five-year license agreement with CoxCom, LLC., to authorize the installation of conduits and fiber optic cable in the City of Alexandria's ("City") public rights-of-way.
RECOMMENDATION: That City Council approve the attached five year license agreement with CoxCom, LLC., and authorize the City manager to execute the license agreement and to take any other actions that are necessary to implement the agreement.
DISCUSSION: CoxCom, LLC. ("Cox") is the second largest telecommunications provider in Virginia, and has provided a broad range of telecommunications services in the City's neighboring jurisdictions such as Fairfax County, the cities of Fairfax and Falls Church and the towns of Herndon and Vienna. Cox seeks this license to provide telecommunications services, not cable television services, to healthcare facilities located along the City's rights-of-way and to industrial medical business parks within the City. Due to the critical, secure, and confidential nature of healthcare telecommunications, Cox seeks to construct an approximately five (5) mile fiber optic ring that will utilize Cox conduits and fibers to deliver these services.
Cox's proposed route is underground and relies on a "stitch-bore" type construction, whereby small access holes (typically two feet square) are made in the public rights-of way and from these holes the conduit is driven underground to the next hole location (typically 1,000 to 1,500 feet away or at the next intersection, whichever is closer). This fiber optic ring generally will be located to the east of King Street. More specifically, the route begins at the City's boundary with Fairfax County near the intersection of George Mason Drive and Seminary Road and continues southeast down Seminary Road to North Beauregard Street, to Sanger Avenue, to Richenbacher Avenue, to North Peagram Street, to Taney Avenue, to North Howard Street, to West Braddock Road, to North Beauregard Street, to King Street and continues heading northwest on King Street to the City boundary with Fairfax County. A detailed description and map of the proposed route is attached hereto as to the proposed license agreement as Attachment II, Exhibit 1.
Cox intends to build this route in a multiphase approach. The first phase of construction is scheduled to begin soon after the City Council and Transportation and Environmental Services (T&ES) approvals of the license agreement and permits. The construction will begin at the City's boundary with Fairfax County near the intersection of George Mason Drive and Seminary Road and continue for approximately one-half mile southeast down Seminary Road, to the intersection of Seminary Road and North Beauregard Street, where there will be a service drop to a healthcare facility on Seminary Road. Cox has identified December 31, 2013, as its date of completion for phase one of construction. The remaining phases will be coordinated with, and addressed in an annual report to T&ES, and the report will be modified based on the T&ES' director's review.
The significant provisions of the proposed agreement are summarized below.
The term of the agreement is for five years and runs from October 1, 2013 through September 30, 2018. It is not renewable. However, the agreement gives Cox the right to negotiate with the City for a new license at the conclusion of this agreement.
Second, as compensation for use of the public rights-of-way, Cox agrees to pay to the City, $3.50 per linear foot of the City's rights-of-way it occupies. Cox will continue paying the City's license fee until it demonstrates to the City that its facilities in the City are being used to provide telecommunications services to its City customers. At that time, the $3.50 per linear foot license fee will terminate, and the fees received by the City will transition to those derived from the statutory right-of-way fee imposed under Virginia Code § 56.468.1 and City Code § 5-2-160, et seq., which is imposed on end users in the City. The statutory right-of-way fee is calculated annually by the Virginia Department of Transportation ("VDOT") on a state-wide basis, and allocated to each locality based on a formula which accounts for the linear footage of conduit and number of users in the locality. The current fee is $ 0.97 per access line for the period of July 1, 2013 through June 30, 2014.
Third, as discussed above, the agreement requires Cox to submit an Annual Operations Plan to T&ES for each of the five years covered by the agreement. The operations plan requires that Cox describe all the activities to install the conduit and to pull cable that Cox intends to undertake in the public rights-of-way during the twelve month period covered by the plan, the sites where any activity in the public rights-of-way will occur and a tentative timetable. The director of T&ES must review the plan and determine whether the public rights-of-way upon which the construction is planned are appropriate sites for the proposed activity. These operations plans are intended to enable T&ES to coordinate Cox's activities, if any, with other planned construction in the City streets and public rights-of-way, thereby minimizing the disruption and inconvenience attendant to such work.
Fourth, the agreement requires Cox prior to undertaking any specific project within the rights-of-way to submit to T&ES, a plan which, among other things, will (i) identify the location of the project, (ii) describe the equipment to be installed and the techniques to be used, (iii) state the start and end dates, (iv) propose a traffic control plan and (v) verify that Cox has or will obtain all necessary approvals from other governmental entities including departments or agencies of the City.
Fifth, the agreement provides that the City can require Cox to remove or relocate, at Cox's expense to the extent permitted by law, any conduits, cables or other equipment when City staff has determined that the equipment interferes with or disturbs the operation, improvement, repair or maintenance of the rights-of-way or of other utility services.
Sixth, the agreement requires Cox to obtain permits from the City for any maintenance work and to repair all damages resulting from the work.
Seventh, the agreement provides that, upon its termination or non-renewal, Cox will remove all of its conduits, cable and other equipment from the City's rights-of-way.
Finally, the agreement provides that Cox must maintain adequate insurance to protect the City and any residents against claims arising from the system or the company's work on the system.
FISCAL IMPACT: The City potentially could receive $97,944 (27,981, linear feet x $3.50) under the terms of the agreement. However, because Cox is installing these facilities to provide telecommunication services to health care facilities in the City, more likely will not pay this "rental rate" but be subject to the statutory right-of-way fee imposed under Virginia Code §56.468.1 and City Code §5-2-160, et.seq. This fee is paid by companies to the Commonwealth for use of each locality's rights-of-way and then allocated and disbursed by the Commonwealth to each locality. The statutory rights-of-way fee is calculated annually by the Virginia Department of Transportation ("VDOT") on a state-wide basis and allocated to each locality based on a formula which accounts for the linear footage of cable and the number of users in the locality. The current fee is $0.97 per access line for the period July 1, 2013 through June 30, 2014.
ATTACHMENT:
Attachment 1 - Cox Agreement
STAFF:
Mark Jinks, Deputy City Manager
Richard Baier, Director, Transportation and Environmental Services
Lucky Stokes, Division Chief, Transportation and Environmental Services
Mitchell Bernstein, Civil Engineer, Transportation and Environmental Services