08/11/1986 Meeting (2) - Laserfiche WebLink

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VI. STATUS OF NEGOTIATIONS WITH PACIFIC NORTHWEST BELL TELEPHONE COMPANY (memo distributed) . Assistant City Manager Dave Whitlow introduced the item. Susan Smernoff of the Finance Division gave the staff report. She said City and Pacific Northwest Bell (PNB) representatives have continued to negotiate but they have not resolved issues concerning payment by PNB of City permit fees, indemnification, which services will be considered competitive, and the percentage of the franchise fee. She said City and PNB representatives discussed a maintenance and use charge for the public right-of-way instead of a percentage of PNB1s gross revenue but the City staff would need about a year to calculate a maintenance and use charge. Ms. Smernoff said the franchise agreement with PNB ends today. Because of that and because progress toward a new franchise agreement has not been measurable recently, she suggested the council consider charging PNB a privilege fee for the use of the public way. She said State law limits a privilege fee to five percent. Answering questions from Mr. Miller, Ms. Smernoff said Portland charges PNB a privilege fee of five percent. She said Washington State law allows local jurisdictions to charge PNB six percent of gross revenues. She said PNB representatives have indicated that they think a six-percent charge would make the company a tax collector for the City because State law mandates that any charge to PNB of more than three percent must appear on PNB bills as a tax. However, PNB does pay more than three percent of gross revenues to many jurisdictions. . Mr. Holmer said he receives interest from a PNB fixed-interest rate bond. He said he does not think the bond would influence his judgement about City charges to PNB, but he asked for an opinion from the City Attorney and for advi ce from other councilors. City Attorney Tim Sercombe responded that the ownership of a fixed-interest rate bond would not create a conflict of interest for Mr. Holmer when the council considers an ordinance that would tax PNB. He said Mr. Holmer would not be using his official position for personal gain because the return on the bond will not be affected by PNB negotiations with the City. Replying to questions about a definition of PNB gross receipts from Mr. Hansen, Ms. Smernoff said the question of which services should be considered competitive services is being considered by the staff. She said the State law that indicates which revenues can be subtracted from PNB gross revenues is not clear. The City must interpret the State law. Mr. Whitlow said the City will continue to press for a franchise agreement and will present the matter to the council again in September. Answering a question from Mr. Hansen, City Attorney John Arnold said it is not clear whether home-rule cities such as Eugene are subject to the State law limitation of five percent for privilege fees. . MINUTES--Eugene City Council August 11, 1986 Page 10