12/16/1985 Meeting (2) - Laserfiche WebLink

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. M E M 0 RAN DUM , - December 16, 1985'. TO: Mayor and City Council FROM: Susan Smernoff, Financial Analyst SUBJECT: FRANCHISE AGREEMENT WITH AMERICAN TELEPHONE & TELEGRAPH Request Currently, the City does not have a franchise agreement with American Tele- phone & Telegraph Company (AT&T), and so we are in the process of negotiating such an agreement. We are asking you to act on the proposed AT&T franchise agreement. AT&T has indicated they will accept the terms of the agreement. Background With the divestiture of Pacific Northwest Bell (PNB) and AT&T, the City con- tinued to have a franchise agreement with PNB, but not with AT&T. Recentl y , AT&T has sought approval to use the public-way to place fiber-optic cable from lOth Avenue and Oak Street to to Blanton Heights. This use of the public-way gives the City the opportunity to negotiate a franchise agreement with AT&T. The authority to create franchise agreements is in the City Charter in Section e 43. The charter allows us to exact a percentage of the gross income from the franchisee. Because it is difficult to determine the gross income generated by AT&T within the city limits, we are proposing that the amount of the fran- chise agreement be $1.00 a linear foot for use of the public-way. This amount was arrived at by comparing the revenue received from current franchise hold- ers to the miles of line or pipe those franchise holders have in the public- way. The City of Eugene will be the first City in Oregon and one of the first cities in the country to negotiate a franchise agreement with AT&T. We feel that our proposed agreement is IImoderatell both in terms of the franchise holder requirements and the annual fee charged for the use of the public-way. The agreement is written so that the City has the opportunity to renegotiate the agreement within three years if we so desire. Estimated Revenue We assume that AT&T will have about five (5) miles of fiber-optic cable within the city. At a cost of $1.00 per linear foot, that would generate $26,400 in revenue for the City on an annual basis. Recommended Action We recommend that after a public hearing on December 16, 1985, the City Coun- cil take final affirmative action on the ordinance granting to the American - Telephone & Telegraph Company, through its interstate division, the privilege to use the pUblic way to construct and maintain public communication facil- ities within the city of Eugene. SLS:ch/1115S .