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<br /> II. PUBLIC HEARING: FRANCHISE AGREEMENT WITH AMERICAN TELEPHONE AND <br /> e TELEGRAPH COMPANY (memo, ordinance distributed) <br /> City Manager Micheal Gleason introduced the agenda item. He said the fran- <br /> chise agreement will permit American Telephone and Telegraph Company (AT&T) to <br /> use the public right-of-way for fibre optic cable lines. The franchise will <br /> provide the City about $26,000 in annual revenue. He said Susan Smernoff of <br /> the Finance Division was present if there were questions. <br /> Mayor Obie opened the pUblic hearing. There being no requests to testify, he <br /> closed the public hearing. <br /> Councilor Hansen said the ordinance indicated that the only way the City can <br /> raise the annual fee for the franchise is to threaten cancellation of the <br /> agreement. He thought the ordinance should include some way to trigger a <br /> review of the 15-year agreement so the fee can be adjusted without threatening <br /> to cancel the agreement. The ordinance as presented to the council would <br /> automatically renew the agreement every three years unless a threat of cancel- <br /> lation was made. He suggested the agreement should indicate the reasons the <br /> agreement would be cancelled. <br /> Ms. Smernoff said the provisions for fee adjustment in the proposed ordinance <br /> are similar to those in agreements with other franchise holders such as the <br /> Eugene Water and Electric Board (EWEB) and Pacific Northwest Bell (PNB). <br /> Answering questions from Councilor Holmer and Mayor Obie, Ms. Smernoff said <br /> e the average fee paid by present franchise holders in the city was used to <br /> calculate the fee that AT&T will pay. The City has agreements with four <br /> franchise holders. The fees are three to six percent of gross revenues earned <br /> within the city. However, it is difficult for AT&T to determine what revenue <br /> is generated within Eugene. Therefore, Ms. Smernoff calculated the average <br /> fee present franchise holders pay for each linear foot of pipe or line. The <br /> proposed fee for AT&T represents that average. She called other cities, the <br /> office of the National league of Cities, and the Mayor's Conference to find <br /> out how other cities charge AT&T, but she was told other cities have not <br /> devised a method for charging since the divestiture. For that reason, the <br /> proposed charge is conservative. <br /> Mayor Obie and Councilor Ehrman said Mr. Hansen's concern seemed valid. Mayor <br /> Obie said threatening to cancel the agreement seemed an extreme way to adjust <br /> the annual fee. <br /> Ms. Smernoff suggested the words "or renegotiate" be inserted in Section 11 of <br /> the ordinance. She discussed the termination and renegotiation of the <br /> agreement with PNB that will take place soon. <br /> Mr. Hansen said the wording suggested by Ms. Smernoff might indicate that the <br /> whole agreement would be renegotiated. He said agreements drafted by the City <br /> in the future should stipulate when annual fees will be renegotiated. He <br /> suggested the agreement indicate that six months before the end of every third <br /> year the City will notify AT&T of the expected fee for the next three years <br /> and failure to reach an agreement could result in cancellation by either party. <br /> e <br /> MINUTES--Eugene City Council December 16, 1985 Page 2 <br />