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HomeMy WebLinkAboutAgenda Packet 04/09/2001 Utility Advisory Committee Public Works Conference room Port Angeles, WA 98362 April 9, 2001 3:00 p.m. AGENDA I. Call to Order II. Roll Call III. Approval of minutes of March 5, 2001 IV. Discussion items a. Surplus Substation Transformers b. Conservation Programs c. Compact Fluorescent Lamp Campaign d. Landfill Site Permit (Verbal) e. Telecommunications and related ordinances final report f. Pole Attachment Fee g. PUD Electric Franchise Agreement h. Fiber Optic Backbone Business Plan update i. Olympic National Park Franchise Agreement v. Next meeting - May 7, 2001 (Japan trip May 8 - 16) Vi. Late items vii. Adjournment REV 4~ UTILITY ADVISORY COMMITTEE Port Angeles, Washington March 5, 2001 I. Call to Order: Chairman Reed called the meeting to order at 3:00 p.m. ~ IL Roll Call: Members Present: Chairman Reed, Mayor Doyle, Orville Campbell, Larry Williams, Allen Bentley Members Absent: None Staff Present: Michael Quinn, Craig Knutson, Glenn Cutler, Brad Collins Tim Smith (5:05), Ken Ridout, Scott McLain, Gary Kenworthy, Doyle McGinley, Larry Dunbar, Steve Sperr, Cate Rinehart Others Present: Austin Ramsey - Peninsula Daily News Tom Thompson - Peninsula Daily News Richard Li - Metropolitan Communications Consultants Chuck Forman - Bonneville Power Administration Members of EMMT - Gary Gleason, Eloise Kailin, Don Schuba, Valerie Wilson, Matt Beime III. Approval of Minutes: Chairman Reed asked if there were any changes or additions to the agenda. Scott McLain, Deputy Director of Power Systems, indicated a report on Wholesale Power Rates would follow the Morse Creek Lease Agreement. Chairman Reed then asked if there were any additions or corrections to the meeting minutes of February 12, 2001. Mayor Doyle moved to approve the minutes with a minor spelling correction. Allen Bentley seconded the motion, which carried unanimously. IV. Discussion Items: A. Morse Creek Lease Agreement with EBEY Hill Hydroelectric Scott McLain, Deputy Director of Power Systems, noted a change in the agreement to set a minimal lease payment for the remainder of 2001, fix the lease payment for the next five years and set the lease payment at a percentage of gross power revenues for the remainder of the lease term. A discussion followed with some concerns expressed in reference to stream flow restrictions. Orville Campbell moved to recommend the City Council approve the 20 year lease agreement with EBEY Hill Hydroelectric Inc. for operation of the Morse Creek Hydroelectric project with additional language requiring a minimum payment during the 7 - 20 years of the lease. Mayor Doyle seconded the motion, which carried unanimously. UTILITY ADVISORY COMMITTEE March 5, 2001 B. Wholesale Power Rates Scott McLain, Deputy Director of Power Systems, introduced Chuck Forman, Account Executive with the Bonneville Power Administration. Mr. Forman reviewed the past several years citing a tight market and a bad water year as contributing factors in the rate process. A discussion followed with current indications that there will be a substantial increase in wholesale power costs this October. No action. Information only. C. Water Shortage Response Plan Doyle McGinley, Water, Wastewater Collection Superintendent, pointed out the original document was drafted in 1992 and consisted of five stages. These stages are internal preparation (information only), voluntary conservation (target high water users), critical impact (odd/even days for lawn watering), mandatory indoor/outdoor conservation (essential water only - no lawns), and regional disaster declaration (rationing). A short discussion followed. No action taken. Information only. D. Waterline Leak Location Project Doyle McGinley, Water, Wastewater Collection Superintendent, indicated that last year the leak survey identified seven leaks in the twenty miles of waterline inspected with a total annual water loss of 10.1 million gallons. The area included the Elwha transmission line (Ranney Well to Black Diamond Reservoir and E Street Reservoir) and Morse Creek transmission line from Peabody Reservoir east to Mount Pleasant Road. Mr. McGinely explained that this year the focus will be the vicinity of Lincoln and Race from 8th Street to Water Street. During the discussion that followed it was noted that the cost of this project is $5,000. No action taken. Information only. E. Industrial Waterline Repairs Stephen Sperr, Utility Engineer, explained several leaks in the Industrial Waterline will be repaired during the week of May 12, 2001 while a planned mill shutdown occurs. Mr. Sperr further indicated bids and specifications for the work would be ready sometime during the first two weeks in April. A short discussion followed. No action taken. Information only. F. Community Telecommunication Assessment and Business Plan Larry Dunbar, Power Resources Manager, introduced Richard Li of Metropolitan Communications Consultants. Mr. Li provided a brief overview indicating that the final draft of the telecommunications 2 UTILITY ADVISORY COMMITTEE March 5,2001 ordinance was almost done, the needs and interest assessment survey was in progress and the business plan was still being worked on. Mr. Li conveyed the identification of a number of opportunities which had the potential for negotiation, however, there was nothing substantial to report at this time. A short discussion followed. No action taken. Information only. V.. Late Items Glenn Cutler, Director of Public Works and Utilities reminded members that copies of the Cable Television Survey were available in the lobby of City Hall. VII. Next Meeting: The next meeting will be held April 9, 2001, at 3:00 p.m. in the Public Works Conference Room. VII1. Adjournment: The meeting adjourned at 5:30 p.m Mayor Doyle motioned the adjournment and Councilman Williams seconded. There was a late question regarding adjournment procedure which will be resolved before the next meeting. Dean Reed, Chairman Cate Rinehart, Administrative Assistant N:~PWKS\LIGHT~CONS\CATE\mar5 meet.wpd 3 WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DAI'E: APRIL 9, 2001 To: UTILITY ADVISORY COMMITTEE FROM: JIM HARPER SUBJECT: SURPLUS EQUIPMENT AND MATERIALS Summary: The City has three substation transformers and one substation control center which are no longer needed and a portion of their cost can be recovered by declaring them surplus and selling them. In addition, materials purchased for construction of the landfill cell (bentonite) and the downtown watermain replacement projects(silica sand) are no longer needed and should be sold. Recommendation: Recommend to the City Council that the transformers, bentonite, and :silica sand be declared surplus and that the Director of Public Works and Utilities be i authorized to proceed with advertising for bids for their sale. Background / Analysis: The City will have three substation transformers in excess of our needs. In addition, the City has significant excess sand and bentonite left over from the landfill and downtown watermain projects beyond maintenance and repair needs which are taking up valuable storage space. The first 7500 kVA transformer, rated at 69,000 volts to 13,800 volts, has been out of service and has been stored at the pole yard since its removal from Valley Substation in1995. This transformer was purchased from General Electric Co. in 1963. The City has only one 13,800 volt customer remaining, K-Ply, and they are served from the 12,470 volt system with a step-up transformer bank at their service point. The second 7500 kVA transformer with load tap changer, rated 69,000 volts to 4,160 volts and its associated control center, is located at Washington Substation and is no longer of any use. It was purchased from General Electric Co. in 1971. The completion of the conversion in 2000 of thc last of the 4,160 volt system to 12,470 volt operation eliminated any future use for this unit. The third 7500 kVA transformer with load tap changer, rated 69,000 volts to 12,470 volts, is located at "I" Street Substation and will be removed from service this summer to be replaced with a larger unit. It was purchased from Westinghouse Electric Co. in 1970. The 'T' Street 7500 kVA transformer was originally planned for use at the proposed Golf Course Road Substation. However, the construction of a substation at that location is now questionable and it has been delayed indefinitely. During the landfill cell construction the City included the purchasing of bentonite in the contract to have it in place in the event that our local materials could not meet stringent specifications for lining material permeability. This was done to avoid contract delays due to the long delivery time for bentonite and to assure that we could meet the need to have the liner in place as soon as possible to avoid weather problems. The contractor was able to meet the specifications without significant use of the bentonite. The last lined cell has been constructed at the landfill and we do not anticipate a need for a significant amount beyond that for minor repairs. The bentonite requires covered storage space and the sale will free that space. During the first phase of the Downtown Watermain and Sidewalk Replacement a silica sand was specified for the brick pavers. The gradation of the sand specified was such that it was difficult to work with and we authorized the contractor to utilize an improved gradation to avoid added costs and delays. In lieu of paying for the shipping to return the product we elected to retain what would be reasonablely needed for future maintenance and repair and surplus the balance. The surplus was delayed until the current phase was completed, in case some of the sand could be utilized. As with the bentonite the silica sand is stored under cover at the corporation yard, and the sale will free up needed storage space. The staff requests the UAC concur with and support the staff recommendation to the City Council to declare these items as surplus and direct the Director of Public Works and Utilities to proceed with their sale. N:\PWKS\LIGHq~NGR\PROJECTS\XFMRSALE~x fmruac3.wpd WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: April 9, 2001 TO: UTILITY ADVISORY COMMITTEE FROM: Larry Dunbar, Power Resources Manager SUBJECT: Conservation Program Summatw: The City has maintained its energy conservation program at a reduced level of operation since 1997 due to the reduction of Bonneville Power Administration (BPA) program funding. On October 17, 2000, the City Council approved the new BPA Power Sales Agreement that includes a conservation and renewables discount. Energy and water conservation have increased in importance due to a regional energy shortage and drought conditions that are anticipated to worsen in the near future. Recommendation: Recommend to City Council that the Director of Public Works and Utilities be authorized to implement conservation program measures that qualify for the Bonneville Power Administration conservation and renewables credit. Background/Analysis: The conservation and renewables discount evolved out of the "Regional Review" completed by the BPA in the late 1990's. The discount, anticipated to total approximately $300,000 per year, is available to the City to implement a program for five-years ending October 2006. On February 12, 2001, the City received the BPA conservation implementation manual, which provides most program requirements. A Regional Technical Forum (RTF) has been established to establish savings and credit amounts for each qualifying energy conservation measure. The BPA discount was the consensus of the region after tiered rates were abandoned and to mitigate the need for consumer choice legislation at the State level. If a new City program is not implemented, the discount is not available and the City will pay increased wholesale power costs. All energy conservation measures proposed by Staff qualify for the conservation and renewables discount. Approval of the energy conservation program will not effect retail rates. Although the discount was not planned to be available until October of 2001, BPA has authorized its utility customers to develop and implement programs as soon as possible. Several energy conservation measures can be implemented now although the RTF will not be able to provide a comprehensive list of savings and credit amounts until October 1, 2001. Staff and the Clallam County Public Utility District No. 1 are working together to develop a similar program offering for heat pumps, water heaters, appliances, and water saving devices. These program offerings are anticipated to be available in May of this year. By October of this year, Staff plans to complement these efforts with additional energy conservation measures. Funds used to implement the conservation measures will come from the Bonneville Power Administration through their conservation and renewables discount program. WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: April 9, 2001 To: UTILITY ADVISORY COMMITTEE FROM: Larry Dunbar, Power Resources Manager SUBJECT: Compact Fluorescent Lamp Campaign Summa~,: Beginning in April 2001, the Bonneville Power Administration will be offering its ntility customers the opportunity to participate in the ENERGY STAR® Labeled Compact Fluorescent Lamp Coupon Rebate program in response to its need to acquire resources through conservation acquisition. Recommendation,: Recommend To City Council that thc Mayor be authorized to sign the ENERGY ® STAR Labeled Compact Fluorescent Lamp Coupon Rebate Agreement. Background/Analysis: The ENERGY STAR® Labeled Compact Fluorescent Lamp Coupon Rebate program is anticipated to begin in early April 2001 and continue until a~ least September 2003. Over the term of thc agreement three similar offerings arc planned. Thc program will provide the City with coupons to distribute to its utility customers toward the purchase of the ENERGY STAR® Labeled Compact Fluorescent Lamps (CFL's). CFL's use about 1/4t~ of the energy of an incandescent lamp of similar light output. For example, a 100-watt incandescent lamp can be replaced with a 27-watt CFL while maintaining the same light output. Bonneville will hire a clearinghouse contractor who will provide the coupons, educational materials and lists of participating retailers. Although additional local retailers will be recruited, the only participating retailer in Port Angeles is Thurman's Electrical and Plumbing Supply at this time. The City will receive and distribute two coupons to each of its customers as an inser~ to its utility bills. The coupons will include the City's logo. The clearinghouse will handle redemption of the coupons for thc retailers. Thc clearinghouse will also provide a payment to the City in the amount ors1 per redeemed coupon to offset the City's cost of marketing and administration of the program. A copy of the ENERGY STAR® Labeled Compact Fluorescent Lamp Coupon Rebate Agreement is attached. The City Attorney has reviewed the attached agreement. Staff recommends that the Mayor be authorized to sign the ENERGY STAR® Labeled Compact Fluorescent Lamp Coupon Rebate Agreement. ENERGY STAR® LABELED COMPACT FLUORESCENT LAMP COUPON REBATE AGREEMENT This ENERGY STAR® Labeled Compact Fluorescent Lamp Coupon Rebate Agreement (Agreement) is executed by the UNITED STATES OF AMERICA, Department of Energy, acting by and through the BONNEVILLE POWER ADMINISTRATION (BPA), and Port Angeles City Light, a load following customer of BPA, organized under the laws of the State of Washington. BPA and Port Angeles City Light are sometimes referred to individually as "Party" and collectively as "Parties." RECITALS BPA and Port Angeles City Light believe that the use of ENERGY STAR® labeled compact fluorescent lamps (CFL) by Port Angeles City Light retail consumers will achieve energy savings and reduce the energy demands of the Port Angeles City Light. Port Angeles City Light desires to promote and make available the ENERGY STAR®CFL Coupon Rebate Program to its retail consumers as provided under this Agreement. The Parties agree: I. TERM This Agreement takes effect on the date signed by the Parties and shall continue in effect through September 30, 2003. 2. ENERGY STAR® CFL REBATE PROGRAM (a) Port Angeles City Light agrees to participate in the ENERGY STAR®CFL Coupon Rebate Program (Program) to be offered by BPA during the term of tiffs Agreement. (b) In electing to participate in the Program, Port Angeles City Light shall provide BPA written notice of such election 21 days prior to the start date of their participation in the Program, a request for rebate coupons in an amount necessary to supply two coupons per consumer billing account, and an electronic form of their logo, if they wish it to appear on the coupon. (c) Under the Program, Port Angeles City Light shall receive rebate coupons and educational materials on ENERGY STAR® labeled CFLs for the purpose of making them available to Port Angeles City Light's retail consumers. (d) ENERGY STAR® labeled CFLs of 13 watts or greater are the only illumination product that is eligible under the Program. 3. REBATE COUPONS (a) BPA or its agent shall supply Port Angeles City Light the following: (i) rebate coupons with a face value of six dollars (two per consumer billing account) as requested by Port Angeles City Light under section 2(b) of this Agreement; (ii) one educational brochure for every two rebate coupons describing the ENERGY STAR® labeled CFLs; (iii) copies of a list of retail vendors that carry the ENERGY STAR® labeled CFLs in the Port Angeles City Light's service area who have signed or are willing to sign a retailer participation agreement and who are willing to redeem rebate coupons supplied under this Agreement; and (iv) a utility support kit containing an explanation of the Program, a suggested consumer outreach strategy, a consumer outreach checklist, generic media advice, repayment and redemption information, and samples of the coupon and other materials. 4. PROGRAM IMPLEMENTATION (a) Port Angeles City Light agrees to implement the Program as follows: (i) when requested by BPA, to the best of the customer's ability, identify retail vendors in Port Angeles City Light's service area not already identified by BPA, who are willing to carry ENERGY STAR® labeled CFLs, who will sign a retailer participation agreement, and who will redeem the rebate coupons supplied under this Agreement; (ii) distribute to Port Angeles City Light's consumers the rebate coupons, educational materials, and lists of retail vendors that will redeem such coupons. Port Angeles City Light agrees to make such distribution either by mail or other means that is agreed to by the Parties. 5. PAYMENT FOR REBATED COUPONS (a) BPA or its agent agrees to pay Port Angeles City Light one dollar per rebate coupon redeemed in accordance with the terms of this Agreement. The amount of payment shall be based solely on the number of rebate coupons redeemed during each month of the Program and payment shall by made by BPA or its agent to Customer on the 5th working day following the end of each month. (b) The customer agrees not to restrict the use of the coupons for eligible products beyond the program specifications, nor to limit where the coupons may be used 6. SIGNATURES The signatories represent that they are authorized to enter into this Agreement on behalf of the party for whom they sign. Bonneville Power Administration (Agency Name) (Utility Name) (Printed Name of Signature) (Printed Name of Signature) (Signature / Date) (Signature / Date) BPA CF£ Contact Utility CFL Contact Name/Title: Shannon G-reene/EER Name / Title: Agency Name: BPA Utility Name: Agency Address: 909 First Avenue, Suite 380 Address: Seattle, WA 98104 Telephone: 206.220.6775 Telephone: E-Mail: skgreene~bpa.gov E-Mail: FAX: 206.220.6805 FAX: BPA COTR Don Davey Utility Energy Star Contact (if any) Name / Title: Telephone: E-Mail: Number of Accounts: Number of Coupons Requested: __ WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: April 9, 2001 TO: UTILITY ADVISORY COMMITTEE FROM: Larry Dunbar, Power Resources Manager SUBJECT: Telecommunications and Related Ordinances Final Report Summary: Following the public comment period, the City's consultant, Metropolitan Communications Consultants (MCC), the law firm of Dow, Cogbum and Friedman, and Staff prepared the final draft Telecommunications and Related Ordinances report. New or revised ordinances are being prepared for City Council consideration. Recommendation: Recommend to City Council adoption of the new Telecommunications., Pole Attachment, and Wireless Telecommunications Tower And Facilities ordinances and adoption of telecommunications related updates to existing Fees, General Provisions, Public Utility Tax, Construction or Excavation Work Within Right-of-Way, and Right-of- Way Use ordinances. Background/Analysis: On October 17, 2000, City Council approved the Community Telecommunications Action Plan ("Action Plan"). The Action Plan identified the need for a comprehensive approach to telecommunications policy including a Telecommunications ordinance that would reference other ordinances including Pole Attachment, Wireless Telecommunications Tower And Facilities, Fees, General Provisions, Public Utility Tax, Construction or Excavation Work Within Right- of-Way, and Right-of-Way Use. A comprehensive approach to telecommunications policy is needed to satisfy City economic development goals, comply with federal and state laws, and to improve management of public rights-of-way anticipating increased telecommunications construction demands. A public comment period on the draft ordinances was held from January 5, 2001 to February 16, 2001 to ensure that the ordinances satisfy the needs of telecommunications service providers. In consideration of the comments, changes to the ordinances underwent a second internal and extemal legal review. On March 28, 2001, the Planning Commission held a public hearing and recommended City Council adoption of the Wireless Telecommunications Towers and Facilities ordinance. Staff recommends that the City Council adopt the new ordinances for Telecommunications, Pole Attachment, and Wireless Telecommunications Tower and Facilities along with updates the the existing Fees, General Provisions, Public Utility Tax, Construction or Excavation Work Within Right-of-Way, and Right-of- Way Use ordinances. C ALARRY~TELECOMREPORT2.DOC WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: April 9, 2001 TO: UTILITY ADVISORY COMMITTEE FROM: Larry Dunbar, Power Resources Manager SUBJECT: Pole Attachment Fee ~ The City charges telecommunications service providers for use of its poles and! collects a cost-based fee. The last time the City reviewed and adjusted its pole attachment fee was in 1984. Economic and Engineering Services, Inc recently completed a cost of service analysis for a pole attachment fee. Recommendation: Recommend to City Council that the pole attachment fee be adjusted annually, beginning in the year 2002 through year 2005, in the amounts of $8.50, $9.00, $9.50 and $10.00 respectively. Background/Analysis: As part of the development of telecommunications and related ordinances, it was discovered that the last time the City adjusted its pole rental rates was in 1984. Completion of the pole rental rates analysis was included in a cost of service analysis (COSA) that is underway for the electric utility by Economic and Engineering Services, Inc. The majority of the work to complete the COSA is complete but final results are pending the Bonneville Power Administration's announcement of its wholesale power rate, which is anticipated in June of 2001. A copy of the pole rental rates analysis is attached. Economic and Engineering Services completed the analysis including several benchmarks and comparisons. Using the City's costs and the current Federal Communications Commission (FCC) formula, which is a recognized benchmark, the pole attachment fee would be $10.67. The FCC has established a revised formula that will be effective February 8, 2005. Using the City's costs and the revised FCC formula, the pole attachment fee would be $20.44. The FCC formula is the federally accepted way to establish a benchmark for dispute resolution for pole rental rates charged by private utilities. It is a fair and reasonable method to allocate the City's costs to telecommtmications service providers. The consultant recommended adjusting the City's fee beginning in 2001, which would result in a cost increase to Northland Cable from $6.81 to $8.00 per pole contact. All other parties of former pole rental agreements would not experience an increase until year 2002. Due to the hardship this would create, Northland Cable requested the increase is delayed until the year 2002. Staffrecommends that the pole attachment fee be adjusted annually, beginning in the year 2002 through year 2005, in the amounts of $8.50, $9.00, $9.50 and $10.00 respectively. Economic & Engineering March 2001 . Services. Inc. 12011 B¢I-Rcd Road, Suite 201, Bellevue, WA 98005 (425) 452.8100 Fax (425) 454-4189 Pole Rental Rates The City of Port Angeles (City) recently requested that Economic and Engineering Services, Inc. (EES) review the City's current pole rental rate. The last time the City adjusted its rate was in 1984. Pole rental rates are charged to telephone and cable television operators for use of City poles. These charges are an additional revenue source for the electric utility and help offset overall utility costs. The City is currently preparing comprehensive telecommunications ordinances and has sent cancellation notices to parties that have entered pole rental agreements. The purpose of this project is to review the City's current pole attachment fees and methodology to determine consistency with generally accepted practices and overall adequacy of rates. In addition, a comparison of other utility pole rental rates will be provided. NWPPA Survey The Northwest Public Power Association, as a service to its members, periodically conducts a line extension survey of Pacific Northwest public utilities. As a part of the survey, information on pole attachment fees and contracts is solicited. The last survey covering utilities in the State of Washington was published in April 8, 1997 and included information for 38 electric utilities. The survey results for Washington indicated that the average rate charged for cable was $7.37 per contact, per year. The full range was a low of $4.00 and a high of $13.55. For telecommunication attachments, the reported rates resulted in an average of $8.24 with a low of $4.00 and a high of $13.10. This survey is useful in providing an understanding of the market rate range for pole attachment rates in Washington. It is important to note that these rates were as of 1997 and some of the reported rates may have increased since that time. A detail of the Washington utilities included in the survey is included in Technical Appendix A. Federal Communications Commission When congress enacted the Pole Attachment Act of 1978, Public Law Number 95-234 (codified at 47 USC 224) it directed private utilities that, to be "just and reasonable", a rate must fall between the utility's incremental cost associated with the pole and the attaching company's proportionate share of the fully allocated pole related costs. The Act has been interpreted to permit the contracting parties or the Commission to determine a pole attachment rate somewhere between avoidable cost and fully allocated costs. As part of the Act, Congress directed the Federal Communications Commission (FCC) to establish a formula based on the Commission's best judgment of how to allocate Pole Rental Rates I costs between the utility and the attaching company. That formula as it stands today, follows: Maximum Rate Chargeable = Space Occupied by Attaching Company (x) Cost of a Bare Pole (x) Carrying Charge The FCC also established formulas for calculating such things as the Net Cost of a Bare Pole, Depreciation Expense, Administrative Expense, Maintenance Expense and Taxes (expressed as a percentage of Net Plant Investment). The FCC methodology recognizes that certain costs of owning and operating jointly occupied poles must be shared. However, it does not recognize that mechanical support and safety clearances are also being utilized by the attaching utility in addition to the space required for attachment. The FCC does not mandate the City use their methodology. However, should a rate complaint be filed with the FCC by a telephone or CATV operator, the FCC will use their methodology to determine if a fair and reasonable rate is in place. The State of Washington Public Utility Commission does not currently have a methodology in place for calculating pole attachment rates. In the past, development of pole attachment rates has been a matter of adopting contractually agreed upon rates using mutually acceptable methodologies on a utility-by-utility basis with each party. Therefore, the FCC formula established under the Pole Attachment Act of 1978 will continue as a federally accepted way to establish a benchmark for dispute resolution and is the methodology used in this review. Alternative Methodologies As stated previously, the State of Washington does not specify a specific method of calculating pole rental rates. Instead, different methodologies are developed to calculate the pole rental rate when negotiating rates with attaching entities. It is important to note that there is no single method for calculating a specific pole rental rate. Instead, establishing pole rental rates are a combination of reviewing alternative methodologies to determine an acceptable range of reasonableness. In order to assist the City calculate a range for pole rental rates, four (4) different methodologies were used since the State of Washington does not have a specified methodology. The methodologies reviewed include: · Federal Communications Commission Methodology (federal benchmark) · Cowlitz County PUD Methodology (represents a methodology used in Washington state) Pole Rental Rates 2 · Clallam County Public Utility District Oregon Public Utility Commission Formula (represents other methodologies used in Northwest) For each methodology reviewed, the City's financial information and infrastructure data was used to complete the calculation. Since estimating techniques and interpretations of financial data may vary, calculations should be considered approximations rather than definitive answers. FCC Methodology The first methodology reviewed was the FCC methodology. This methodology is used as a federal benchmark should dispute resolution be required. The FCC's formula used to determine the pole attachment rental rates is as follows: Rental Rate = Net Cost of a Bare Pole (x) Carrying Charges (x) Space Occupied The FCC has specified the various methods by which each of the rental rate components is determined. The net cost of a bare pole is determined by taking the original cost of total poles, less accumulated depreciation on the poles, compared to the total number of poles. The FCC methodology deducts 15% of the net pole investment to eliminate the investment in crossarms and other non-pole related items. Since the City provided the required information on poles only (not including guys, anchors, and crossarms), this factor was not applied. The carrying charges represent the cost incurred by the utility in owning and maintaining poles regardless of the presence of pole attachments. The carrying charges include the utility's depreciation expense, administrative & general costs, operating & maintenance costs and taxes. The information needed to develop the calculation was provided from the City's financial statements. The space occupied component is calculated by taking the space occupied by an attachment (total feet) by the total usable space on a pole. This calculation will provide the percentage of usable space that the attachment occupies on an average pole. The space occupied by an attachment can be utility specific, however, the FCC has assumed I foot of usable space per pole for attachments. The total usable space on the pole is determined by taking the total pole height (40 feet) and deducting the portion required to be underground (6 feet), the total required for ground clearance (20 feet) and the total required for safety clearance (4 feet). The total usable space utilized in the FCC calculation is 10 feet. Therefore, our usable space factor is. 10. A summary of the FCC annual rental rate is shown in Table 1. Pole Rental Rates 3 Table 1 Annual Rental Rate FCC Methodolo~l¥ Net Cost of a Bare Pole $448.41 Carrying Charges 0.279 Space Occupied 0.10 Annual Rental Rate $10.67 The FCC annual rental rate results £all within the range of the NWPPA survey. The results are an average of $3.62 higher than the City's current cable and telecommunication rental rates. This is due to the increase in pole costs and a slightly higher carrying charge from the current assumptions being used. It should be noted that the FCC general space assumptions have been used when calculating the annual rate. When using the City specific space assumptions, the rental rate increases to $15.57. The actual calculation, back up documentation and applicable assumptions that were used to calculate each component of the rental rate formula can be found in Technical Appendix B. Change in FCC Attachment Rates and Regulations On February 8, 2001, the formula which the FCC currently uses to calculate pole rental rates will change for attachments for telecommunications carriers, including cable operators providing telecommunications services. Although the FCC does not govern the City, it is important to keep the following change in mind as these rules may apply should any dispute resolution be required. The 1996 Act reaffirmed the current pole formula for cable operators that do not deliver telecommunications services. However it required the FCC to apportion the costs of non-usable pole space to CLEC's and to cable operators delivering telecommunications services according to the number of attaching entities, rather than proportionally according to the amount of usable space used. After February 8, 2001, there will be a five-year transition until on February 8, 2005, the rental rate for attachments carrying "telecommunications" will be fully governed by a new formula. The new telecom formula will allocate the costs associated with the usable space on a pole by the ratio of space used to usable space, and will allocate two-thirds of the remaining pole costs equally across the number of entities on the pole. All entities will count in sharing the burden. The new telecom formula is as follows: Pole Rental Rates 4 Maximum Pole Rate = Unusable Space Factor (+) Usable Space Factor Where: Unusable Space = 213 (x) Unusable SPace (x) ~et Cost of Bare Pole (x) Carrying Charge Pole Height Number of Attachers Usable Space=Soace Occupied by Attachment (x) Total Usable Sp(~ce (x) Total Usable Space Pole Height Net Cost of Bare Pole (x) Carrying Charge Based on the maximum pole rate formula above, the telecom rate is summarized as follows: Unusable Space Factor $17.77 Usable Space Factor $2.67 Maximum Pole Rate for Attachers $20.44 The following rate is another tool for the City to use when establishing the range of reasonableness for pole rental rates. A detail of the FCC telecom calculation can be found in Technical Appendix B. Cowlitz County PUD Methodology The second methodology to be reviewed was that used by Cowlitz County PUD (District). This particular calculation is very similar to the FCC calculation with some minor changes to the annual charge rate as well as consideration for the number of attachers. The formula used by the District when calculating pole rental rates is as follows: Rental Rate = Net Cost of a Bare Pole (x) Annual Charge Rate (x) Ownership Ratio Requirements for Party The calculation for net cost of a bare pole is identical to the calculation used in the FCC methodology. The difference occurs in the calculation of the annual charge rate. The annual charge rate in the District's formula includes interest, depreciation expense, utility tax, distribution O&M and administrative expenses. The components are defined as follows: · Interest- cost of money (6.5%) · Depreciation expense - based on life of poles (35 years) Utility tax - portion attributable to all other components of formula Pole Rental Rates 5 Distribution O&M expense - Administrative & General Expenses - portion applicable to distribution Each of the previous components when added together provides the annual rate charge factor. The main difference between the Cowlitz Methodology and the FCC Methodology is the District's methodology allocates total pole costs based on the number of attachers. Calculating the ownership ratio will determine the cost to allocate to the various attachers. City specific space assumptions have been used for this calculation. Ownership Ratio =Space Used by Attacher + (Unusable Space/Total Number of Attachers) Total Pole Height The ownership ratio for each attacher is calculated and applied to the net cost of a bare pole. For the Citfs Calculation, an assumed 1.85 feet of space used will be used to calculate the ownership ratio. A summary of the Cowlitz County PUD methodology for calculating annual pole rental rates is provided in Table 2. Table 2 Annual Rental Rate Cowlitz Count}/PUD Methodolo~ly Net Cost of a Bare Pole $448.41 Annual Charge Rate 0.198 Annual Rental Rate $88.92 Ownership Ratio (for 1,85 feet of space used) 0.274 Annual Rental Rate for Attachers (annual rate x ownership ratio) $24.36 The Cowlitz methodology results in an annual rental rate that is higher than the average in the NWPPA survey. The City's net cost of a bare pole appears to be the driver for this calculation. If the pole cost were reduced by $100, the annual rental rate for the attacher would be $18.39. The actual calculation, back up documentation and applicable assumptions that were used to calculate each component of the rental rate formula can be found in Technical Appendix C. Pole Rental Rates 6 Clallam County PUD Methodology The third methodology to be reviewed was that used by Clallam County PUD (District). This particular calculation is very similar to the Cowlitz County PUD calculation with some minor changes. The formula used by the Clallam when calculating pole rental rates is as follows: Rental Rate = Average Pole Value (x) Annual Cost Ratio (x) Pole Use Ratio The calculation for net cost of a bare pole is identical to the calculation used in the FCC and Cowlitz County PUD methodologies. The calculation of the annual cost ratio also includes the same costs as the Cowlitz methodology with the difference being the manner by which the formula is calculated. In particular, the tax calculation for the Clallam calculation takes total utility tax compared to total plant, where the Cowlitz calculation takes a ratio of all other costs to determine the tax cost. The Clallam methodology results in a higher tax figure being applicable. The components of the annual cost ratio for the Clallam calculation are defined as follows: Interest - cost of money (6.5%) Depreciation expense - based on life of poles (35 years). It should be noted that Clallam uses a 25-year life. · Utility tax - Utility tax compared to total plant · Distribution O&M expense - · Administrative & General Expenses - portion applicable to distribution Each of the previous components when added together provides the annual rate charge factor. The pole use ratio for the Clallam methodology is similar to what is called the ownership use ratio in the Cowlitz methodology. Both methodologies attempt to allocate total pole costs based on the number of attachers, thus, the more attachers on a pole, the less cost per attacher. The pole use ratio used by Clallam will determine the cost allocation per attacher. As a side note, the pole use ratio shown below results in the same value as the ownership ratio previously discussed. Pole Use Ratio=((Total Pole Len~th.-(Total Space All Attachers))+Space for Specific Attch. Total Number of Parties on Pole Total Pole Height The pole use ratio for each attacher is calculated and applied to the net cost of a bare pole. For the Citfs Calculation, an assumed 1.85 feet of space used will be used to calculate the pole use ratio. Pole Rental Rates 7 A summary of the Clallam County PUD methodology for calculating annual pole rental rates is provided in Table 3: Table 3 Annual Rental Rate Clallam County PUD Methodology Average Pole Cost $448.41 Annual Cost Ratio 0.2213 Annual Rental Rate $99.23 Pole Use Ratio (1.85 space for attachment) 0.2738 Annual Rental Rate for Attacher (annual rate x pole use ratio) $27.16 The Clallam calculation is also much higher than the average in the NWPPA survey. Both the average pole cost and the higher annual cost ratio increase the annual rental rate. The actual calculation, back up documentation and applicable assumptions that were used to calculate each component of the rental rate formula can be found in Technical Appendix D. Oregon PUC Methodology The final methodology reviewed is that used by the Oregon Public Utility Commission. The Oregon methodology has similar components to the FCC, however, the method of calculating the components are different. The equation used for calculating the Oregon pole rental rates is as follows: Rental Rate = Net Cost of a Bare Pole (including anchors and guys) (x) Carrying Charges (x) Space Occupied In the Oregon calculation, the net cost of a bare pole is generally similar to the FCC calculation with the exception of the safety clearance assumption. The FCC requires 4 feet where the Oregon methodology is set at 3.33 feet. The calculation of the carrying charge includes interest, depreciation expense, A&G expense, O&M expense and taxes. The carrying charge components are defined as follows: Interest - total interest paid on long-term debt to date / total long-term debt to date Depreciation Expense - based on 35 year life Admin. & General - % of net utility plant Pole Rental Rates 8 O&M Expense ~ % of distribution poles, anchors, guys, grounds plant Taxes - % of net utility plant Each of the previous components when added together provides the annual carrying charge factor. A summary of the Oregon PUC methodology for calculating annual pole rental rates is provided in Table 4. Table 4 Annual Rental Rate Oregon PUC Methodolog]/ Net Cost of a Bare Pole $630.96 Carrying Charges 0.32 Space Occupied 0.094 Annual Rental Rate $18.92 The Oregon PUC methodology is also higher than the NWPPA survey results. The contributing factor of the higher than average annual rental rate is the inclusion of support equipment (anchors, guys, grounds) being allowed in the calculation. In addition, the method of calculating interest (total interest paid on long-term debt/ total long-term debt) also increased the carrying charges. The actual calculation, back up documentation and applicable assumptions that were used to calculate each component of the rental rate formula can be found in Technical Appendix E. Current Pole Attachment Rates The City of Port Angeles currently has an annual cable TV pole rental rate of $6.81. This rate is below the median value of those utilities surveyed and $1.15 below the average of $7.25. The City's current annual pole rental rate for telephone is $8.00. The annual value is equal to the median of the comparing utilities and slightly be]ow the average of $8.24 but well below the $13.10 high. Because such things as accumulated pole value and carrying charges tend to change over time, it is important to update these charges on a regular basis. Summary Examinations of the results of the four methodologies show that significant differences can occur between different methodologies. All four different methodologies are above the survey highs and also above the current rates being charged by the City. Pole Rental Rates 9 One important point to note is that the rates being developed are for general pole rental rates. There are times where there is a rate difference between cable and telephone, telephone typically being the higher number. There is currently no "rule of thumb" in terms of a weighting to apply to telephone. Therefore, we have assumed that should the City desire a different rate for telephone vs. cable the same weighting currently in place would apply, or the City will develop an alternative weighting factor they feel is just and reasonable considering the specifics of the attaching entity. Conclusions and Recommendations Both the FCC formula and the Oregon formula are in place to provide a format for addressing complaints. In practice, pole rental rates are generally set by negotiated agreements between contracting parties. However, in Port Angeles, the majority of all utility poles are owned by the City and negotiation of rental rates is not necessary. Because methodologies are net a mandated means for setting rates they are frequently employed to provide a reference number or to establish a bargaining position. Should there be a complaint in Washington, it is likely that the FCC formula would be used as a benchmark. As mentioned earlier, there is a variance in the interpretation and application of utility financial information. Historically, contractually negotiated results generally approach but seldom reach levels established by full cost of service methodologies such as the Oregon PUC formula. Based on the results of this study, it appears that the City's pole rental rates approximate market averages. Although the $6.81 appears low based on current financial information, an immediate move to the $10.67 - $15.57 level indicated by the FCC methodology is likely to be met with considerable opposition. Acceptance of an increased rental rate will be more likely if the City phases the increases in over time. We recommend the City transition to the FCC formula that will be in effect on 2/08/05. For starters, in 2001, an attachment fee adjustment to $8.00 per contact per year would allow the City to begin to more fully approach cost recovery and still approximate market based pricing. In years 2002, 2003, 2004 and 2005, adjustments could be $8.50, $9.00, $9.50 and $10.00, respectively. Any attempt to raise fees may be met with opposition from companies who do not want to pay any more than is necessary. It is important to balance revenue generation for the City with minimizing the financial burden on attaching entities so that the rate does not cause an increase in illegal attachments. A fee increase fully supported by the market through research and review of alternative methodologies is easier to implement. However, maintenance of good customer relations may require a compromise on rates strictly suggested by numerical data. It is important when reviewing these methodologies and the resulting rates that the City's goals and objectives pertaining to pole rental rates also be considered. Pole Rental Rates Technical Appendix A NWPPA 1997 Survey Northwest Public Power Association 1997 Survey Washington Respondents City Telephone Cable Cowlitz $13.10 $7.96 Benton PUD 9.95 5,35 Benton REA 8,00 6.00 Big Bend 10.00 10.00 Chelan 8.00 8.00 Cheney 4.00 4.00 Clallam 12.38 12.38 Columbia REA 6.00 6.00 Douglas 12.80 12.80 Ellensburg 7.82 7.70 Elmhust 8.00 8.10 Ferry 7.50 7.50 Franklin 11.00 4.03 Grant 9,50 9.50 Grays Horbor 9.48 7.76 inland 8.50 8.50 Kittitas 4.50 4.50 Klickitat 9.28 9.28 Lewis 8,00 6,00 Mason #1 8.00 4.75 Mason #3 9.00 5.00 Modem 6.00 6.00 Nesplelem Valley 8.00 4.00 Okanogan 4.85 4.85 Okanogan PUD 8.01 10.67 Omas 8.00 8.00 Pacific #2 8.00 5.75 Pend Oreille 8,00 8.00 Pennisula 8.44 8.44 Port Angeles 8.00 8.81 Richland 9.57 13.55 Skamama 6.00 4.00 Tanner 7.20 6.10 Wahkakum 5.35 5.35 Maximum $13.10 $13.55 Minimum $4.00 $4.00 Average $8.24 $7,25 Median $8.00 $7,16 Technical Appendix B FCC Methodology FCC Methodology for Pole Rental Calculation Rental Rate = Net Cost of a Bare Pole X Carrying Charges X Space Occupied t Space Occupied = Space Occupied/Total Usable Space 2 Net Cost of a Bare Pole = Gross Pole Cost - Depreciation - 15% of Net Pole Investment # of Poles 3 Carrying Charges = Depreciation Expense + A&G + O&M + Taxes Space Occupied Average Pole Height [1] 40 ft Less: Underground [1] 6 ft Ground Clearance [1] 20 ft Safety Clearance [11 4 ff Avg Total Usable Space 10 ft Space Occupied [1] 1 ft Space Occupied = 0,100 [1] FCC Space Assumptions Average Pole Cost Net Investment $2,297,644 City provided Number of Poles 5,124 City provided Net Pole Investment $448.41 FCC Methodology for Pole Rental Calculation (cont.) Carrying Charges Depreciation = Depreciation Rate for Gross Plant X (Gross PoJe investment/Net Pole ~nvestment) Depreciation Rate 0.028571 Assumes 35 year depreciable life Gross Dist. Pole Inv $3,998,050 City Provided Net Pole Dist Inv $2,297,644 City Provided Depreciation Expense 0.0497 A&G Expense = Total A&G / (GrossPlant - Depreciation Reserve) Admin and General Exp $771,158 From combining statement of rev., exp. and changes in fund equity Gross Plant $25,315,904 City Provided Depreciation Reserve $9,933,045 City Provided A&G Expense 0.0501 O&M Expense = Maitenance of OH Lines/Net Distribution Plant Maintenance of OH Lines $370,464 factor of guys, arms, poles to total plant Net Distribution Plant $8,949,050 City provided O&M Expense 0.0414 Taxes = City tax and state utility / (Gross Plant - Depreciation Reserve) Taxes $1,486,121 City Provided Net Plant $15,382,859 City Provided Taxes 0.0966 TOTAL CARRYING CHARGES 0.2379 SUMMARY OF CHARGES Space Occupied 0.100 Pole Cost $448.41 Carrying Charges 0.2379 Total Pole Rental Charge $'10.67 FCC Methodology for Telecom Pole Rental Calculation Maximum Rate = Unusable Space Factor + Usable Space Factor t Unusable Space Factor 2~3(x)unusab~espace/p~eheight(x)netccst~fbarepcte~numb~r~fattachers(x)carryin~charge 2 Usable Space Factor space occupied by attachmant/total usable apace Ix) total usable space/pole height (x) net cost of bare pole (x) carrying charge Space Occupied Average Pole Height [1] 40 ff Less: Underground [1] 6 tt Ground Clearance [1] 20 It Safety Clearance [11 4 It Avg Total Usabte Space 10 It Space Occupied [1] 1 It [1] FCC Space Assumptions Average Pole Cost Net Investment $2,297,644 City provided Number of Poles 5~124 City provided Net Pole investment $448.41 Number of Attacbers 3 Carrying Charge (from original FCC calculation) 0.23785 Unusable Space Factor = 0.66667 (x) 0.75 (x) 149.47 (x) 0.23785 Total 17.7759 Usable Space Factor 0.1 (x) 0.25 (x) 448.41 (x) 0.23785 TotaJ 2.66638 Total Max Rate 17.78 (+) 2.67 (=) $20.44 Technical Appendix C Cowlitz PUD Methodology Cowlitz Methodology for Pole Rental Calculation Rental Rate = Accumulated Average pole Value X Annual Cost Ratio X Pole Usa Ratio Accumulated Pole Value = Pole Value - 36% Adjustment fo other equipment 2 Annual Cost Ratio = Currant Interest Rate + Depreciation Expense + A&G + Distribution + Taxes 3 Ownership Ratio Space Occupied (+) Unusable Space/Number of Attachers Total Pole Height Average Pole Cost Net Pole Investment[l~ $2,297,644 City provided Number of poles 5,124 City provided Net pole Investment $448.41 [1 ] ~juatment not applied due to City proving value of bales, sapamte from guys, anchors, etc. Annual Charges Interest = Average Interest Cost on Debt Interest Expense 0.0650 Depreciation = Depreciation Rate Based on 35 Year Life Depreciation Expense Ratio 0.0286 A&G Expense = Total A&G I (GrossPlant - Depreciation Reserve) Admin and General Exp $771,158 From combining statement of rev., exp. anti changes in fund equity Plant in Service $15,382,859 City provided A&G Expense 0.0601 O&M Expense = Maitenance of OH Lines/Net Distribution Plant Maintenance of OH Lines $370,464 factor of guys, arms, poles to total plant Net Distribution Plant $8,949,060 City provided O&M Expense 0.04'14 Utility Taxes = (Sum (O&M, A&G, Depreciation and Interest) X1 / (1-0.06657)) ~ Sum (O&M, A&G, Depreciation and Interest) Sum Int., Dap., A&G, O&M 0.1851 City provided Taxes 0.0132 TOTAL ANNUAL CHARGE 0.198 Cowlitz Methodology for Pole Rental Calculation (cont.) Ownership Ratio Average Pole Height [lJ 40 ft Less: Underground [1] 6 ft Ground Clearance [1] 18 ft Safety Clearance [11 3,3 fl Avg Total Usable Space 12.7 ft Space Occupied 1.85 ff Number of Attachers 3 Total Ownership Ratio 0,274 See Formula #3 above [1] peri Angeles averages SUMMARY Pole Cost 448.41 Annual Charge g. 198 Total Annual Rental $88.g2 Ownership Ratio 0.274 Total Pole Rental Charge $24.36 Technical Appendix D Clallam PUD Methodology Clallam Methodology for Pole Rental Calculation Rental Rate = Accumulated Average Pole Value X Annual Cost Ratio X Pore Use Ratio Aocumulated Pole Value Pole Varue- 15% Adjustment Number of Poles 2 Annual Cost Ratio = Current Interest Rate + Depreciation Expense + A&G + Distribution + Taxes 3 Pole Use Ratio = Total Pole Length - (Space 1 assigned + Space 2 assi~ne + Space assigned to attaching pad7 Number of Parties on Pole Total Pole Length Accumulated Pole Value Net Investment [1] $2,297,644 City provided Number of poles 5,124 City provided Pore Value $448.41 [1] 15% adjustment not applied due to City proving value of poles, separate from guys, anchors, etc. Annual Cost Ratio Interest = Average Interest Cost on Debt Interest Expense 0.0660 Depreciation = Depreciation Rate Based on 35 Year Life Depreciation Expanse 0.0286 A&G Expense = Total A&G / Total Plant Admin and General Exp $771,158 From combining statement of rev., exp. and changes in fund equity Gross Plant $25,315,904 City Provided Depreciation Reserve $9,933,045 City Provided A&G Expense 0.050t Distribution Expense = Operation & Maitenance / Distribution Plant Maintenance of OH Lines $370,464 factor of guys, arms, poles to total plant Net Distribution Plant $8,949,050 City pmvideci Distribution Expense 0.04'14 Taxes = State Utility / Total Plant Taxes $556,454 City Provided Total Plant $15,382,859 City Provided Taxes 0.0362 TOTAL CARRYING CHARGES 0.2213 Clallam Methodology for Pole Rental Calculation (cont.) Pole Use Ratio Space Assigned Utility 9.00 Space Assigned 1 1.85 Space Assigned 2 1.85 Total Pole Length 40 Total of Parties on Pole 3 Pole Use Ratio 0.2738 Formula #3 above SUMMARY OF CHARGES Pole Cost $448.41 Annual Cost Ratio 0.2213 Total Annual Rental $99.22 Pole Use Ratio 0.2738 Total Pole Rental Charge $27.16 Technical Appendix E Oregon PUC Methodology Oregon Methodology for Pole Rental Calculation Rental Rate = Net Cost of a Bare Pole X Canying Charges X Space Occupied Space Occupied = Space Occupied/Total Usable Space 2 Net Cost of a Bars Pole = Gross Pole Cost (including anchors and ~u~sI - Depreciation 3 CanTing Charges = Interst + Depreciation Expense + A&G + O&M + Taxes Space Occupied Average Pole Height 40 fl Less: Underground [1] 6 ft Ground Clearance [1] 20 ft Safety Clearance [1} 3.3 ft Avg Total Usable Space 10.7 ft Space Occupied [1] 1 It Space Occupied = 0.094 Formula I above [1] Oregon PUC Averages Net Cost of a Bare Pole ( including Anchors & Guys) A C Gross Value of Poles $3.998,050 City prOvided GrossValueofGuys $208,097 City provided Less: Depreciation 1,700,406 City provided Less: Depreciation 86,080 City provided Net Value of Poles $2,297,644 Net Value of Guys $122,017 Nurnber of Poles in Place 5,124 City provided NumberofGuysinPlace 1,319 City provided Net cost of Bare Pole $448.4t Net cost of Bare Po~e $92.5t B Gross Value of Anchors $153,507 City proviped Less: Depreciation 63,373 City provided Net Value of Anchors $90,134 Number of Anchors 1,001 City provided Net Cost per Anchor $SO.04 Net Cost of a Bare Pole (including Anchors and GuyS) (= A+B+C) $630.96 Oregon Methodology for Pole Rental Calculation (cont.} Carrying Charges Interest = Total Interest Paid on Long Term Debt / Total Long Term Debt Interest on Debt $419,541 Long Term Debt 5,105,000 Interest Expense 0.0822 Depreciation = Depreciation Rate for Gross Plant X (Gross Pole Investment/Net Pole Investment) Depreciation Rate 0.028571 = assumes 35 year depreciable life Gross D/st. Po~e Inv $3,998,050 City provided Net Pole Dist tnv $2,297,644 City provided Depreciation Expense 0.0497 A&G Expense = Total A&G / (GrossP~ant - Depreciation Reserve) Admin and General Exp $771,158 From combining statement of revenues, expenses and changes In fund equity Gross Plant $25,315,904 City provided Depreciation Reserve $9,903,045 City provided A&G Expense 0.0501 O&M Expense = Maitenance of OH Lines/Net Distribution Plant Maintenance of OH Lines $370,464 factor of guys, arms, poles to total plant Net Distribution Plant $8,949,050 City provided O&M Expense D.0414 Taxes = City tax and state utility I (Gross Plant - Depreciation Reserve) Taxes $1,486,121 City provided Net Plant $15,382,859 City provided Taxes 0.0966 TOTAL CARRYING CHARGES 0.3200 SUMMARY Space Occupied 0.094 Pole Cost $630.96 Carrying Charges 0.3200 Total Pole Rental Charge $t8.92 Technical Appendix F City Specific Space Requirements WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: April 9, 2001 TO: UTILITY ADVISORY COMMITTEE FROM: Larry Dunbar, Power Resources Manager SUBJECT: Proposed Electric Franchise Ordinance Summary,: The franchise agreement with Clallam County Public Utility District No. 1 (District) for their electric facilities located within the City limits of Port Angeles has expired. A franchise ordinance has been prepared and presented to the District for their review and acceptance. Council approval of the proposed franchise ordinance is scheduled for April 17, 2001, and Staff anticipates the District will formally accept the franchise no later than May 17, 2001. Recommendation: Recommend City Council adopt an ordinance granting the Clallam County Public Utility District No. 1 a franchise to operate and maintain infrastructure for the sole purpose of transmission and distribution of electric energy. Background/Analysis: On November 24, 1948, the City granted the District a fifty (50) year right to construct, maintain and operate an electric transmission system within a specific geographical area of the City. On November 13, 2000, Staff informed the Utility Advisory Committee that the franchise agreement expired and about the need to renew the franchise. On December 11,2000, Staff presented a summary of the proposed franchise ordinance to the Utility Advisory Committee. The Utility Advisory Committee supported Staff's recommendation to provide the proposed franchise ordinance to the District for their review and acceptance. On December 29, 2000, Staff shared a proposed franchise ordinance with the District. On January 17, 2001, Staffmet with representatives of the District and received comments on several franchise provisions. On February 21, 2001, another meeting with the District was held and additional comments were received. On March 7, 2001, the District provided written comments. Staff has carefully considered all of the District's comments and revised several provisions of the proposed franchise ordinance. 3/22/2001 Draft (Changes Accepted Copy) ORDINANCE NO. AN ORDINANCE of the City of Port Angeles, Washington, granting the Public Utility District No. I of Clallam County, Washington, the non-exclusive right, privilege, authority, and franchise to own, operate and maintain facilities on any street in the City for the sole purpose of transmission and distribution of electric energy and repealing Ordinance No. 1200. THE CITY COUNCIL OF THE CITY OF PORT ANGELES DOES HEREBY ORDAIN as follows: Section 1 - Specific Grant. There is hereby granted, subject to the District's acceptance of the terms of this franchise as provided herein, for a term as described below, unless otherwise terminated as provided for herein, to the District, its successors and assigns, the non-exclusive right, privilege, and authority to own, operate and maintain an overhead or underground electric transmission and distribution system, along and across portions of the franchise area,. This franchise is conditioned upon the terms and conditions contained herein and the District's compliance with any federal or state regulatory agencies with jurisdiction over the District. By granting this franchise, the City is not assuming any risks or liabilities by way of District activities therefrom, which shall be solely and separately borne by the District. The City is specifically granting the District authority to operate and maintain its existing facilities. No facilities within the City limits may be enlarged, improved, or expanded or retail customers served without obtaining the City's permission, which can not be unreasonably denied, pursuant to applicable ordinances, codes, resolutions, agreements, standards, and procedures that may require an amendment to this franchise. The District agrees to obtain all lawfully required City, state or federal permits, consents, or franchises or other "Franchise area" means all of the roads, streets, avenues, alleys, highways, and public ways of the City as now, and as may hereafter be, laid out, platted, dedicated, or improved within the present limits of the City and as such limits may be hereafter extended. "Facilities" means substations, poles (with or without cross arms), electric transmission and distribution wires, lines, conduits, cables, braces, guys, anchors, vaults, meters, and all necessary or convenient facilities and appurtenances thereto, whether the same be located overhead or underground. "Ordinance" means this Ordinance No. Xxxx, which sets forth the terms and conditions of this franchise. Section 3 - Franchise Term. The term of this franchise shall commence on February 20, 2001 and shall extend for a period of five (5) years. The District may obtain up to five (5) automatic extensions of the term of this franchise for additional five (5) year periods, not to exceed a maximum term of twenty-five (25) years, if the District is in substantial compliance with the material terms and conditions of this franchise as affirmatively determined by the City Manager and evidenced in the City Manager's written report to the City Council. Section 4 - Right-of-Way Constmction~ Use, Maintenance and Operation. In furtherance of the public interest in safety, health and public welfare and to facilitate the safe management of public rights-of-way, the maintenance and operation of the District's electric transmission and distribution facilities and property shall be subject to all generally applicable City requirements and ordinances as now or hereafter amended. Nothing in this franchise shall be deemed to impose any duty or obligation upon the City to determine the adequacy or sufficiency of the District's plans and designs or to ascertain whether the District's -3- The District may, at no charge, upon obtaining the City's permission, which cannot be unreasonably denied, attach to City owned utility poles and lay and permit to be laid, electric cables and conduits, and do and permit to be done, any underground and overhead work, and any attachment, restructuring, or changes in aerial facilities that may be deemed necessary or proper by the District in, across, along, over, or under any public street, alley, or right-of-way occupied by the City, within the City limits. The City and the District recognize that joint use of utility poles currently exists and that it is not the intent to require requesting permission of either party for those joint use areas. In the event that, during the term of this franchise, the City authorizes abutting landowners to occupy space under the surface of any public street, alley, or right-of-way, such grant to an abutting landowner shall be subject to the rights herein granted to the District. In the event that the City shall close or abandon any public street, alley, or right-of-way, which contains any portion of the District's electric transmission and distribution facilities, any conveyance of land contained in such closed or abandoned public street, alley, or right-of-way shall be subject to the rights herein granted. The City is required to grant an easement to the District prior to conveyance. During the term of this franchise, the District shall be liable for the acts or omissions of any entity used by the District (including an affiliate), when such entity is involved directly or indirectly in the operation and maintenance of the District's electric transmission and distribution facilities to the same extent as if the acts or omissions of such entity were the acts or omissions of the District. -5- In connection with City improvement of the franchise area, the City may by written notice to the District, request District to underground its existing distribution facilities (of 15,000 volts or less) within the franchise area improved by the City. If the District elects to install new overhead distribution facilities (of 15,000 volts or less) within the franchise area or a new extension of existing overhead distribution facilities w/thin the franchise area, the District shall apply for a City right-of-way construction permit. The City may by written notice to the District request the District to install such facilities underground within the franchise area. Section 6 - Safety Requirements. The District, in accordance with applicable national, state and local safety requirements, shall at all times employ ordinary care and shall install and maintain and use commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injury, or nuisance to the public. All structures and all lines, equipment and connections in, over, under and upon the streets, sidewalks, alleys, and public ways or places ora license, master permit, or lease area, wherever situated or located, shall at all times be kept and maintained in a safe, suitable condition, and in good order and repair. If a violation of the National Electrical Safety Code or other applicable regulation is found to exist, the City may, after discussion with the District, establish a reasonable time for the District to make necessary repairs. If the repairs are not made within the established time frame, the City may make the repairs itself or have them made and collect all reasonable costs thereof from the District. Section 7 - Annexation. -7- fee of a percentage, up to the maximum allowed by law, of the District's gross receipts from its business activities in the City, if the statutory prohibition is repealed or for other light and power activities not covered by the statutory prohibition. It is acknowledged that the District has paid an occupation license tax and will continue to do so as required. Section 9 - Accounts, Records and Reports. The City Manager or designee may, at any time, make written inquiries pertaining to the District's performance of the terms and conditions of this franchise. The District shall respond to such inquiries on a timely basis. Upon written request by the City Manager, as soon as reasonably available but no later than thirty (30) days from such request, the District shall provide, at City expense and as allowed by law, the City access or copies of customer addresses within the franchise area and records as to all matters in connection with or affecting the expansion, reconstruction, removal, maintenance, operation, and repair of the District's electric transmission and distribution facilities in the franchise area. The City shall emend the time for provision of such information upon a reasonable showing by the District that such extension is justified. The District shall keep complete and accurate books of accounts and records of its business and operations pursuant to this franchise in accordance with generally accepted accounting principles. Upon the City Manager's thirty (30) day written request, the District shall make available to the City, at City expense and to the extent allowed by law, its books and records to examine, audit, review, and/or obtain copies of the papers, books, accounts, documents, maps, plans, and other records of the District pertaining to all revenue derived by the District from the operation -9- shall have promptly commenced to cure and (ii) the District is diligently pursuing its efforts to cure in the City Manager's reasonable judgment. If the violation has not been cured within the time allowed above, the District shall be liable for liquidated damages for the following violations and in the following amounts: a) Failure to promptly provide data, documents, reports,, insurance, or information to the City, in accordance with this franchise: two hundred ($200) dollars per day for each day such failure continues; b) Failure to comply with lawful City requirements, including but not limited to: Revenue and Finance, Title 3 PAMC; Business Licensing and Regulation, Title 5 PAMC; Streets and Sidewalks, Title 11 PAMC; and Public Utilities, Title 13 PAMC, as now or hereafter amended, in accordance with this franchise: two hundred ($200) dollars per day for each day such failure continues. c) Failure to comply with lawful City requirements concerning payment of compensation in accordance with this franchise: two hundred ($200) dollars per day for each day such failure continues. d) Failure to comply with agreements referenced and incorporated into this franchise: two hundred ($200) dollars per day for each day such failure continues. e) Failure to comply with all other lawful City requirements incorporated into this franchise: two hundred ($200) dollars per day for each day such failure continues. The District agrees that each of the foregoing failures shall result in injuries to the City and its citizens, the compensation for which would be difficult to ascertain and to prove. Accordingly, the District agrees that the foregoing amounts are liquidated damages, not a penalty -11- damages, and costs as it may be adjudged to pay, and if the District does so correct and so pay within such time, forfeiture shall not become effective nor be enforced. Failure by the City or the District to enforce any rights under this franchise does not constitute a waiver of such rights. Section 11 - Insurance. The District shall obtain and maintain in full force and effect throughout the term of this franchise insurance with an insurance company licensed to do business in the State of Washington and acceptable to the City Manager. All companies will be required to be rated A- VII or better by A.M. Best or A or better by Standard and Poors or as approved by the City Manager. The District shall provide the City with certificates of the insurance required herein at the time of filing the acceptance of franchise. The City reserves the right to review these insurance requirements during the effective period of the franchise and to reasonably adjust insurance coverage and limits when deemed necessary and prudent by the City Manager based upon the recommendation of the Washington Cities Insurance Authority or changes in statutes, court decisions, or the claims history of the industry or the District. Subject to the District's right to maintain reasonable deductibles in such amounts as are approved by the City Manager, the District shall obtain and maintain in full force and effect for the duration of this franchise, at the District's sole expense, insurance coverage in the following type and minimum amounts: a) Comprehensive general liability insurance with limits not less than: 1. Five million dollars ($5,000,000.00) for bodily injury or death to each person; -13- The District agrees that with respect to the above-required insurance, all insurance certificates will contain the following required provisions: a) Name the City of Pon Angeles and its officers, employees, board members, and elected representatives as additional insured parties as to all applicable coverage (except worker's compensation); b) Provide for ninety (90) days notice to the City for cancellation, non-renewal, or material change; c) Provide for notice to the City Manager, by certified mail at: City of Port Angeles P.O. Box 1150 Port Angeles, WA 98362-0217 The policy clause "other insurance" shall not apply to the City of Port Angeles. It is the intention that insurance policies protecting the District and the City shall be primary coverage for all losses covered by the policies. Companies issuing the insurance policies shail have no recourse against the City of Port Angeles for payment of any premiums or assessments which all are set at the sole risk of the District. Insurance policies obtained by the District shall provide that the issuing company waives all right of recovery by way of subrogation against the City in connection with any damage covered by these policies. Section 12 - Indemnity. The District shall defend, indemnify, and hold the City harmless from and against all damages, costs, losses, or expenses for the repair, replacement, or restoration of the City's -15- person (including, but not limited to the City, its agents, officers, employees and subcontractors and the District, its agents, officers and employees, and third parties); and/or (ii) death, bodily injury, illness, disease, worker's compensation, loss of services, or loss of income or wages to any person (including but not limited to the agents, officers and employees of the City, the City's subcontractors, the District, and third parties), arising out of, incident to, concerning, or resulting solely from the negligence, willful misconduct or strict liability of the City, its agents, employees, and/or subcontractors, in the performance of all activities and services pursuant to this franchise, no matter how, or to whom, such loss may occur. In the event that any such damage, claim or loss is found by a court of competent jurisdiction to be caused by the concurrent fault of both the District and the City, then each party shall indemnify the other to the full proportionate extent that each party is determined to be at fault. It is the intention of the parties, and they expressly agrees, that the provisions of this section shall not exclude claims, damages, and losses caused in part, but not wholly, by the negligence of a party, even if said party is more negligent than the other. Should a court of competent jurisdiction determine that this franchise is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the District and the City, its officers, officials, employees, and volunteers, the parties' liability hereunder shall only be to the extent of each party's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the parties' waiver of immunity under Title 51 RCW, Industrial Insurance, solely for the purposes of this indemnification. This waiver has - 17- subject to reasonable notice and opportunity to cure. A material breach shall not be deemed to have occurred if the violation occurs without the fault of the District or occurs as a result of circumstances beyond its control; provided however, that the District shall not be excused from performance of any of its obligations under this franchise by economic hardship or misfeasance or malfeasance of its directors, officers, employees, subcontractors, or agents. A termination shall be declared only by a written decision of the City Council, by ordinance, resolution or motion, after an appropriate public proceeding which shall accord the District due process and full opportunity to be heard and to respond to any notice of grounds to terminate. The City shall provide the District at least fifteen (15) days prior written notice of any public proceeding concerning the proposed termination of this franchise. Such notice shall state the grounds for termination alleged by City. The City Council, after the public proceeding, and upon finding the existence of grounds to terminate, may either declare this franchise terminated or excuse such grounds upon a showing by the District of mitigating circumstances or good cause for the existence of such grounds. Neither the District's acceptance of this franchise, the District's appearance before the City Council at any public proceeding concerning the proposed termination of this franchise, nor any action taken by the City Council as a result of any such public proceeding, including a declaration of termination or a finding of grounds to terminate, shall be construed to waive or otherwise affect the District's right to seek dispute resolution of the rights and responsibilities of the parties under this franchise. Section 15 - Governing Law. -19- Section 18 - Acceptance of Franchise. The District shall, on or before May 17th, 2001, file in the office of the City Clerk a written instrument accepting this franchise and all terms and conditions thereof, signed and acknowledged by its proper officers in a form acceptable to the City, certificates of insurance, and a complete set of current drawings or in a computer readable electronic format if available, of the District's facilities within the City, including identification of transmission and distribution facilities within the City. All of said documents shall be in compliance with the requirements of this franchise ordinance. Section 19 - General Provisions. The 6/5/2000 Maintenance And Operating Agreement For Electric Transmission Lines 1 & 2 agreement in effect prior to acceptance of this franchise is attached hereto and is hereby incorporated into this franchise. Termination of any agreements incorporated into this franchise by said reference may require an amendment to this franchise, as determined by the City in its sole discretion. The City and the District agree to negotiate in good faith any additional agreements that may reasonably be required to implement the terms and conditions of this Agreement. Each party shall use reasonable best efforts to take all actions necessary or appropriate to enable it to carry out its obligations under this franchise. If any suit or other action is instituted in connection with any controversy arising under this franchise, the prevailing party shall be entitled to recover all of its costs and expenses including such sum as the court may judge reasonable for attorney's fees, including fees upon appeal of any judgment or ruling. -21 - Section 22 - Effective Date. This franchise shall take effect five days after publication, subject to acceptance by the District in accordance with the provisions of this franchise. PASSED by the City Council of the City of Port Angeles at a regular meeting of said Council held on the 17th day of April, 2001. MAYOR ATTEST: Becky J. Upton, City Clerk APPROVED AS TO FORM: Craig D. Knutson, City Attorney PUBLISHED: By Summary C:\Larry\PUDFRAN7.DOC. - 23 - WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: April 9, 2001 TO: UTILITY ADVISORY COMMITTEE FROM: Larry Dunbar, Power Resources Manager SUBJECT: Fiber Optic Backbone Business Plan Update Summary: Staff will provide a verbal report on the progress of the business plan during the last] month. Recommendation: A special meeting of the Utility Advisory Committee is requested theI l 2001 to present the business plan. Background/Analysis: On October 17, 2000, the City Council approved a professional services agreement with Metropolitan Communications Consultants (MCC) for completion of a telecommunications future needs and interests assessment and a business plan for the fiber optic backbone. On February 6, 2001, Council approved an agreement with MCC for Fiber Optic Backbone Engineering Services and withheld notice to proceed until business planning verifies overall feasibility. Business planning is underway by MCC and will evaluate the overall feasibility of the fiber optic backbone. The business plarming activities are substantially complete and MCC will prepare the final business plan report by mid-April. The business plan will include a strategic direction, overview of the project environment, implementation plan and business analyses. WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: April 9, 2001 TO: UTILITY ADVISORY COMMITTEE FROM: Scott McLain, Deputy Director of Power Systems SUBJECT: Olympic National Park Franchise Permits Summary: Two right-of-way permits from the National Park Service have expired and need to be renewed. These permits are for electrical service in the Park Headquarters area and the Visitor center area, and for the road appurtenances along Park street. Recommendation: Recommend to City Council that the Mayor sign the attached right-of- way permits with the National Park Service to allow City facilities along Park Street and within the Park headquarters and Visitor Center area. Background / Analysis: Right-of-Way permits that allow the City to construct and maintain electrical facilities and other road appurtenances along Park street, and in the headquarters and visitor center area of the National Park have expired. The attached permits replace the expired permits. This permit is at no cost to the City. Staff recommends that the Mayor sign the attached right-of-way permits with the National Park Service. N:\PWKSLLIGHT~POWM~MEMOS\uac040901 .wpd STATE OF WASHINGTON Right-of-Way Permit No.: RW-9500-00-003 (Replaces SUP No.: PNR-9500-6000-026) United States Department of the Interior National Park Service Right-of-Way Permit for City of Port Angeles WHEREAS, the City of Port Angeles, (hereinatler Permittee) has applied to the United States of America (hereinafter Permittor) for a fight-of-way to operate and maintain existing underground electric utility lines and surface-mounted equipment within the boundaries of Olympic National Park (hereinafter Park), a unit of the National Park System, United States Deparlxnent of the Interior; and WHEREAS, the National Park Service (hereinafter Service) administers the Park that was established as a unit of the National Park System, United States Department of the Interior pursuant to 16 U.S.C. § 251-255; and WHEREAS, the Director of the National Park Service (or Iris delegate) is required pursuant to 16 U.S.C. la-1 to authorize only those uses of land within the Park which will not be in deroga- tion of the values and purposes for which the Park was established, except as may have been or shall be directly and specifically provided by Congress; and WHEREAS, 16 U.S.C. 79 authorizes the use of rights-of-way through the Park for existing underground electric utility lines and surface-mounted equipment, provided that the Director (or his delegate) finds that the same is not incompatible with the public interest; and WHEREAS, the Service has promulgated regulations at Title 36 Code of Federal Regula- tions, Part 14, regarding rights-of-way over, across and upon the lands administered by the National Park Service; and WHEREAS, the Service has been delegated the authority to allow such rights-of-way over, across and upon land under the jurisdiction of the Service pursuant to 245 Depamnental Manual 5.1; and WHEREAS, the Service has determined that the proposed use of the park lands for the maintenance and operation of the subject underground electric utility lines and surface-mounted equipment is neither incompatible with the public interest nor inconsistent with the use of such lands for park purposes; and THEREFORE, The United States, through the Service, an agency of the Department of the Interior, acting pursuant to the authority of 16 U.S.C. 79 issues this permit to the City of Port Angeles, P.O. Box 1150, Port Angeles, WA 98362, for a right-of-way across Federal lands within Olympic National Park for the operation and maintenance of underground electric utility lines and surface-mounted equipment. 2 The permittee agrees to comply with and be bound by the Service regulations, 36 CFR Part 14, regarding rights-of way over, across and upon lands administered by the Service, in addition to the terms and conditions set forth in this permit. MAP AND LEGAL DESCRIPTION OF RIGHT-OF-WAY The right-of-way shall be 10 feet wide with 5 feet on either side of the described centerlhne for underground lines. Underground or overhead right-of-way descriptions contained herein which are parallel to a roadway shall not exceed 10 feetwith 5 feet on either side ofthe described centerline. For those parts of the permit which describe the City of Port Angeles appurte- nances such as switches, transformers, etc., the right-of-way shall be 5 feet centered on the equipment or as otherwise described. Lands within the NW ¼ of the NE ¼ of Section 15, Township 30 North, Range 6 West, W.M. and as described on the attached drawing. The underground electric utility lines and surface- mounted equipment serve the Headquarters and Visitor Center areas of Olympic National Park. AUTHORITY TO ENTER INTO AGREEMENT FOR RIGHT-OF-WAY The Permittee represents and warrants to the Permittor that: (1) It is duly authorized and empowered under applicable laws of the State of Washington and by its charter and bylaws to enter into and perform this agreement in accordance with the provisions; (2) Its City Council, or duly authorized executive committee, has duly approved, and has duly authorized the execution, delivery, and performance by it of this agreement by the City Manager; (3) All action that may be necessary or incidental to the approval of this permit, and the due execution, delivery, and performance by the Permittee has been taken; and (4) All of the foregoing approvals, authorizations, and actions are in full force and effect at the time of the execution and delivery of this agreement. PERMITTED USE OF RIGHT-OF-WAY BY THE PERMITTEE The right-of-way is for the sole purpose of operating and maintaining underground electric utility lines and surface-mounted equipment across the above described lands. That in utilizing the fight-of-way, the Permittee agrees to comply with and be bound by laws and regulations regarding the use and occupancy of the lands administered by the Service and by the terms of this permit. DEVIATION FROM APPROVED RIGHT-OF-WAY The Permittee agrees that it will not deviate fi.om the location of the approved right-of-way in its operation and maintenance of the subject underground electric utility lines and surface- mounted equipment. All ingress and egress for maintenance and operation of the underground electric utility lines and surface-mounted equipment shall be restricted to the right-of-way or existing roadways. In the event that the Permit-tee determines that ingress and egress over park lands not included in the right-of-way are necessary for the maintenance and operation of the subject underground electric utility lines and surface-mounted equipment, then the Permittee must apply, in writing, to the Superintendent for approval of such ingress and egress. EFFECTIVE DATE OF THE RIGHT-OF-WAY The effective date of this permit shall be the date of its execution by the Regional Director (or delegate) and the Permittee. The right-of-way pennit shall terminate TEN (10) years from the effective date, at noon, (State time) unless prior thereto it is relinquished, abandoned, or otherwise terminated pursuant to the provisions of this permit or of any applicable Federal law or regulation. RENEWAL OF RIGHT-OF-WAY Unless relInquished, abandoned, or otherwise terminated pursuant to the provisions of the permit or of any applicable Federal law or regulations, the Permittee may make application to the Superintendent, at least six months prior to its expiration date, for renewal of the right-of-way. The Permittee shall file a written application, SF 299, in accordance with the existing Service regulations, to renew the right-of-way. The Permittee shall agree to comply with all the laws and regulations existing at such application date governing the occupancy and use of the lands of the park for the purposes desired. The right-of-way permit may be renewed after full consideration of the apphcation. DISPOSAL OF PROPERTY ON TERMINATION OF RIGHT-OF-WAY Upon the termination of the right-of-way permit by expiration or by cancellation for cause, in the absence of any agreement to the contrary, if all monies due the Permitter have been paid, the Permittee shall be allowed six months, or such additional time as may be provided, in which to remove fi.om the right-of-way all property or improvements of any kind placed by them; and if not removed within the time allowed, all such properly and improvements shall become the property of the United States. 4 NONUSE OR ABANDONMENT It is understood and agreed by the parties that all or any part of the right-of-way may be terminated at the discretion of the Permitter in the event of nonuse or abandonment for a period of two years by the Permittee. In the case of termination, the Permitter will provide the Permittee with written notice including reasons for termination. FEES FOR USE AND OCCUPANCY The Permitter and Permittee understand and agree that the consideration for utilization of the lands, pursuant to the right-of-way, where the use is by a Federal governmental agency is waived according to 36 C.F.R. 14.26(c)(1). FEES AND REIMBURSEMENT OF COSTS Pursuant to 36 C.F.R. 14.22(a)(2), for State or local governments or agencies or instrumentalities thereof where the lands will be used for governmental purposes and continue to serve the general public and for Federal government agencies, payment of fees and costs incurred by the Service as a result of this permit are waived. TERMS AND CONDITIONS The permit is subject to the following terms and conditions: (1) This permit shall not be construed as a permanent interest in the land of the fight-of-way or as an abandonment of use and occupancy by the United States, but shall be considered a use of the land as described, anything contained to the contrary notwithstanding. (2) This fight-of-way permit may be terminated upon breach of any of the stated conditions or at the discretion of the Regional Director of the Service. Permittee will be given written notice and thirty (30) days to allow an opportunity for corrective actions before termination may occur. The written notice shall describe the specific violations of the permit. IfPermittee does not correct the violations to the satisfaction of the Service, or present a reasonable plan acceptable to the Service within the thirty (30) day period, then the N-PS shall be entitled to revoke this permit. (3) The Permittee shall comply with all applicable State and Federal laws and existing regulations promulgated thereunder in the operation and maintenance of the underground electric utility lines and surface-mounted equipment. (4) The Superintendent, Olympic National Park, shall be notified in writing no less than two weeks prior to the start of initial construction on park lands. An on-site meeting will be conducted no less than one week prior to start of construction between representatives of the park and the Permittee construction/maintenance supervisor to determine and clarify the scope of the project and any requirements of the Service. The Permittee construction/maintenance supervisor will contact the park on the morning of the first day of work and each morning thereafter prior to entering the park, advising the location and extent of work crews and equipment in the park. Except in extraordinary situations and with the agreement of the Superintendent, or as determined at or prior to the on-site meeting above, all work on park lands will be conducted on a Monday through Friday, 8 a.m. through 5 p.m. basis. All work on park lands shall be completed to the satisfaction of the Superintendent or his or her representative. (5) The Permittee shail have a right of ingress and egress within the right-of-way at all times for the purposes of maintaining and operating the existing underground electric utility lines and surface-mounted equipment and appurtenances. (6) If any portion of the underground electric utility lines and surface-mounted equipment is to be installed underground within the road shoulders of public roads, they shall comply with the specifications of the highway department having jurisdiction. Detailed procedures of installation are also subject to approval in advance of construction by the Superintendent or his or her representative. (7) If required, the Permittee shall file a performance bond with satisfactory surety payable to the Permittor to fully insure compliance with the permit terms and conditions. (8) The Permittee shall be responsible to pay the Permittor for any damage resulting from this permit which would not reasonably be inherent in the use which the Permittee is authorized to make of the land. The Permittor will g/ye the Permittee written notice of such damage and the Permittee will either take corrective action or pay the indicated amount as agreed upon and approved by the Superintendent. (9) Use by the Permittee of the land is subject to the right of the park to establish trails, roads, and other improvements and betterments over, upon or through said premises, and further to the use by travelers and others of such roads, trails, and other improvements already existing. If it is necessary to exercise such right, every effort will be made by the Park to refrain from unduly interfering with or preventing use of the land by the Permittee for the purposes intended under this permit. (10) The Permittee shall take adequate measures as directed and approved by the superin- tendent to prevent or mirfimize damage to park resources. This may include restoration, soil conservation and protection measures, landscaping, and repairing roads, trails, fences, etc. The Permittee shall dispose of brash and other refuse as required by the Superintendent. The Superintendent or his or her representative may inspect the right-of-way area as deemed necessary. (11) The Permittee will halt any activities and notify the Superintendent upon discovery of threatened or endangered species or archeological, paleontological, or historical findings. All artifacts unearthed remain the property of the park. (12) No vegetation may be cut or destroyed without first obtaining approval from the Superintendent. Any vegetation that must be removed shall be mitigated as specified by the Superintendent. (13) Use of pesticides and/or herbicides on park lands is prohibited without prior written approval fi~om the Superintendent. (14) ]n the event any facilities covered by this permit should interfere with future park construction, the Permittce agrees to terminate the usc or relocate them at no cost to the Service within 60 days after written notice. (15) The Permittee agrees to do everything reasonably within its power, both independently and on request of thc Superintendent, to prevent and suppress fires resulting from the Permittee's activities on and adjacent to the right-of-way. (16) The Permittee agrees that the right,of-way shall be subject to the express condition that the use will not unduly interfere with the management and administration by thc Service of'thc lands. Further, the Permittee agrees and consents to the occupancy and use by thc park, its Permittees, or lessees of any pan of the right-of-way not actually occupied or required by the project, or the full and safe utilization, for necessary operations incident to such management, administration, or disposal. (17) Upon expiration, revocation or termination of this permit, thc Permittee shall leave the lands subject to the permit in as nearly the original condition as possible, as directed and approved by the Superintendent (18) Thc Permittee agrees that in undertaking all activities pursuant to this permit, it will not discriminate against any person because of race, color, religion, sex, or national origin. (19) No member of or Delegate to Congress or Resident Commissioner shall be admitted to any share or pan of this permit or to any benefit that may arise therefi~om, but this provision shall not be construed to extend to this permit if made with a corporation for its general benefit. (20) No transfer of the permit will be recognized unless and until it is first approved in writing by the Regional Director of the Service. Such a transfer must be filed in accordance with existing regulations at the time of transfer, and must be supported by the stipulation that the assignee agrees to comply with and to be bound by the terms and conditions of the right-of-way. (21) This agreement is made upon the express condition that thc United States, its agents and employees shall be free fi-om all liabilities and claims for damages and/or suits for or by reason of any injury, or death to any person or damage to property of any kind whatsoever, whether to thc person or property of the Permittce, its agents or employees, or third parties, from any cause or causes whatsoever while in or upon said premises or any part thereof during the term of this agreement or occasioned by any occupancy or use of said premises or any activity carried on by the Permittee in connection herewith, and the Permittee hereby covenants and agrees to indemnify, ? defend, save and hold harmless the United States, its agents, and employees from all liabilities, charges, expenses and costs on account of or by reason of any such injuries, deaths, liabilities, claims, suits or losses however occurring or damages growing out of the same. (22) Any alterations to this permit mast be in writing and signed by the parties. Renewals will be subject to regulations existing at the time of renewal and such other terms and conditions deemed necessary to protect the public interest. (23) Any underground utilities previously located within this right-of-way which are damaged or disrupted during maintenance shall be repaired or restored by the Permittee within four hours. (24) The Permittee shall be responsible for the provision and maintenance of proper signs, barricades or other means of waming motorists and pedestrians of danger during all periods of repair and maintenance. (25) Nothing herein contained shall be construed as binding the Service to expend in any one fiscal year any sum in excess of appropriations made by Congress or administratively allocated for the purpose of tiffs permit for the fiscal year, or to involve the Service in any contract or other obligation for the further expenditure of money in excess of such appropriations or allocations. COMPLIANCE Failure of the Permittee to comply with any provision of this right-of-way permit shall constitute grounds for immediate termination of this permit. WAIVER NOT CONTINUING The waiver of any breach of any provision of this fight-of-way permit, whether such waiver be expressed or implied, shall not be construed to be a continuing waiver or a waiver of, or consent, to any subsequent or prior breach of the same or any other provision of this permit. IN WITNESS WHEREOF, the Regional Director of the National Park Service, acting on behalf of the United States, in the exercise of the delegated authority fi.om the Secretary of the Department of the Interior, has caused this Permit of Right-of-Way number RW-9500-00-003 to be executed this day of ,2000. David K. Morris, Superintendent Olympic National Park National Park Service United States Department of the Interior ACCEPTED THIS day of. ., 2000. (Title) City of Port Angeles Attest 'O~J S3'q39N¥ '.LB © 31_4 :ol!3 NOISIA3~J :~,)¢o(] uo!s!^aE 107~J :~r)(_~ '~OIci STATE OF WASHINGTON Right-of-Way Permit No.: RW-9500-00-004 Replaces SUP No.: PNR-9500-6000-025 United States Department of the Interior National Park Service Right-of-Way Permit for City of Port Angeles WHEREAS, the City of Port Angeles, (hereinafter Permittee) has applied to the United States of America (hereinafter Permittor) for a right-of-way to operate and maintain an existing street, including the construction and installation of culverts, curbs, gutters, sidewalks, and lraffic signs and other normal surface appurtenances; also to operate and maintain existing underground utility pipes and wires and overhead utility wires and supports including poles along Park Avenue (hereinafter surface and underground road improvements and above and underground utilities) within the boundaries of Olympic National Park (hereinafter Park), a unit of the National Park System, United States Department of the Interior; and WHEREAS, the National Park Service (hereinafter Service) administers the Park that was established as a unit of the National Park System, United States Department of the Interior pursuant to 16 U.S.C. § 251-255; and WHEREAS, the Director of the National Park Service (or his delegate) is required pursuant to 16 U.S.C. la-1 to authorize only those uses of land within the Park which will not be in deroga- tion of the values and purposes for which the Park was established, except as may have been or shall be directly and specifically provided by Congress; and WHEREAS, 16 U.S.C. 79 authorizes the use of rights-of-way through the Park for hereinafter surface and underground road improvements and above and underground utilities, provided that the Director (or his delegate) finds that the same is not incompatible with the public interest; and WHEREAS, the Service has promulgated regulations at Title 36 Code of Federal Regula- tions, Part 14, regarding rights-of-way over, across and upon the lands administered by the National Park Service; and WHEREAS, the Service has been delegated the authority to allow such rights-of-way over, across and upon land under the jurisdiction of the Service pursuant to 245 Departmental Manual 5.1; and WHEREAS, the Service has determined that the proposed use of the park lands for the maintenance and operation of the subject surface and underground road improvements and above and underground utilities is neither incompatible with the public interest nor inconsistent with the use of such lands for park purposes; and 2 THEREFORE, The United States, through the Service, an agency of the Department of the Interior, acting pursuant to the authority of 16 U.S.C. 79 issues this permit to the City of Port Angeles, P.O. Box 1150, Port Angeles, WA 98362, for a fight-of-way across Federal lands within Olympic National Park for the operation and maintenance of subject surface and underground road improvements and above and underground utilities. The permittee agrees to comply with and be bound by the Service regulations, 36 CFR Part 14, regarding rights-of way over, across and upon lands administered by the Service, in addition to the terms and conditions set forth in this permit. MAP AND LEGAL DESCRIPTION OF RIGHT-OF-WAY This fight-of-way begins 30' to the south of the section line along Park Avenue and shall be varying widths, ranging fi.om 15 - 150 feet, as shown on attachment A. For those parts of the permit that describe the City of Port Angeles appurtenances such as switches, transformers, etc., the right-of-way shall be 5__ feet centered on the equipment or as otherwise described. A tract or parcel of land in the North Half of the Northeast Quarter of Section 15, Township 30 North, Range 6 West of Willamette Meridian, in Clallam County, Washington, said tract or parcel being more particularly described as follows: Beginning at the North Quarter comer of said Section 15; Thence S 04°00'56" W along the West line of the Northeast Quarter of said Section 15, a distance of Thirty and Eight Hundredths (30.08) feet; Thence S 88°07'38'' E, a distance of One Thousand Five Hundred Eighty Five and One Tenth (1585.10) feet, which point is Ninety (90) feet Southerly of the North Line of said Section 15; Thence S 56°00'46" E, a distance of One Hundred Six and Fifty One Hundredths (106.51) feet, which point is One Hundred Fifty (150) feet Southerly of the North line of said Section 15; Thence N 89°42'01'' E, a distance of Six Hundred Eighty Six (686) feet more or less to the Easterly margin of Mount Angeles Road, which point is One Hundred Fifty (150) feet Southerly of the North line of said Section 15; Thence N 13047'59'' W along the Easterly margin of Mount Angeles Road a distance of One Hundred Fifty Four and Twenty Six Hundredths (154.26) feet to the North line of said Section 15; 3 Thence S 89°42'01'' W along the North line of said Section 15, a distance of Two Thousand Three Hundred Nineteen and Ninety Nine Hundredths (2319.99) feet more of less to the point of beginning, and as described on the drawing located at Exhibit A. AUTHORITY TO ENTER INTO AGREEMENT FOR RIGHT-OF-WAY The Permittee represents and warrants to the Permittor that: (1) It is duly authorized and empowered under applicable laws of the State of Washington and by its chatter and bylaws to enter into and perform this agreement in accordance with the provisions; (2) Its City Council, or duly authorized executive committee, has duly approved, and has duly authorized the execution, delivery, and performance by it of this agreement by the City Manager; (3) All action that may be necessary or incidental to the approval of this permit, and the due execution, delivery, and performance by the Permit'tee has been taken; and (4) All of the foregoing approvals, authorizations, and actions are in full force and effect at the time of the execution and delivery of this agreement. PERMITTED USE OF RIGHT-OF-WAY BY THE PERMITTEE The right-of-way is for the sole purpose of operating and maintairfing surface and underground road improvements and above and underground utilities across the above described lands. That in utilizing the right-of-way, the Permittee agrees to comply with and be bound by laws and regulations regarding the use and occupancy of the lands administered by the Service and by the terms of this permit. DEVIATION FROM APPROVED RIGHT-OF-WAY The Permittee agrees that it will not deviate from the location of the approved right-of-way in its operation and maintenance of the subject surface and underground road improvements and above and underground utilities. All ingress and egress for maintenance and operation of the subject surface and underground road improvements and above and underground utilities shall be restricted to the right-of-way. In the event that the Permittee determines that ingress and egress over park lands not included in the right-of-way are necessary for the maintenance and operation of the subject surface and underground road improvements and above and underground utilities, then the Permittee must apply, in writing, to the Superintendent for approval of such ingress and egress. 4 EFFECTWE DATE OF THE RIGHT-OF-WAY The effective date of this permit shall be the date of its execution by the Regional Director (or delegate) and the Permittee. The right-of-way permit shall terminate TEN (10) years from the effective date, at noon, (State time) unless prior thereto it is relinquished, abandoned, or otherwise terminated pursuant to the provisions of this permit or of any applicable Federal law or regulation. RENEWAL OF RIGHT-OF-WAY Unless relinquished, abandoned, or otherwise terminated pursuant to the provisions of the permit or of any applicable Federal law or regulations, the Permittee may make application to the superintendent, at least six months prior to its expiration date, for renewal of the right-of-way. The Permittee shall file a written application, SF 299, in accordance with the existing Service regulations, to renew the right-of-way. The Permittee shall agree to comply with all the laws and regulations existing at such application date governing the occupancy and use of the lands of the park for the purposes desired. The right-of-way permit may be renewed after full consideration of the application. DISPOSAL OF PROPERTY ON TERMINATION OF RIGHT-OF-WAY Upon the termination of the right-of-way permit by expiration or by cancellation for cause, in the absence of any agreement to the contrary, if all monies due the Permittor have been paid, the Permittee shall be allowed six months, or such additional time as may be provided, in which to remove from the fight-of-way all property or improvements of any kind placed by them; and if not removed within the time allowed, all such property and improvements shall become the property of the United States. NONUSE OR ABANDONMENT It is understood and agreed by the parties that all or any part of the right-of-way may be terminated at the discretion of the Permittor in the event of nonuse or abandonment for a period of two years by the Permittee. In the case of termination, the Permittor will provide the Permittee with written notice including reasons for termination. FEES FOR USE AND OCCUPANCY The Permittor and Permittee understand and agree that the consideration for utilization of the lands, pursuant to the right-of-way, where the use is by a Federal governmental agency, is waived according to 36 C.F.R. 14.26(c)(1). FEES AND REIMBURSEMENT OF COSTS Pursuant to 36 C.F.R. 14.22(a)(2), for State or local governments or agencies or instrumentalities thereof where the lands will be used for governmental purposes and continue to serve the general public, payment of fees and costs incurred by the Service as a result of this permit are waived. TERMS AND CONDITIONS The permit is subject to the following terms and conditions: (1) This permit shall not be construed as a permanent interest in the land of the right-of-way or as an abandonment of use and occupancy by the United States, but shall be considered a use of the land as described, anything contained to the contrary notwithstanding. (2) This right-of-way permit may be terminated upon breach of any of the stated conditions or at the discretion of the Regional Director of the Service. Permittee will be given written notice and thirty (30) days to allow an opportunity for corrective actions before termination may occur. The written notice shall describe the specific violations of the permit. If Permittee does not correct the violations to the satisfaction of the Service, or present a reasonable plan acceptable to the Service within the thirty (30) day period, then the NPS shall be entitled to revoke this permit. (3) The Permittee shall comply with all applicable State and Federal laws and existing regulations promulgated thereunder in the operation and maintenance of the surface and underground road improvements and above and underground utilities. (4) The Superintendent, Olympic National Park, shall be notified in writing no less than two weeks prior to the start of initial construction on park lands. An on-site meeting will be conducted no less than one week prior to start of construction between representatives of the park and the Permittee construction/maintenance supervisor to determine and clarify the scope of the project and any requirements of the Service. The Permittee construction/maintenance supervisor will contact the park on the morning of the first day of work and each morning thereafter prior to entering the park, advising the location and extent of work crews and equipment in the park. Except in extraordinary situations and with the agreement of the superintendent, or as determined at or prior to the on-site meeting above, all work on park lands will be conducted on a Monday through Friday, 8 a.m. through 5 p.m. basis. All work on park lands shall be completed to the satisfaction of the superintendent or his or her representative. (5) The Permittee shall have a right of ingress and egress within the right-of-way at all times for the purposes of maintaining and operating the existing surface and underground road improvements and above and underground utilities and appurtenances. (6) If any portion of the surface and underground road improvements and above and 6 underground utilities are to be installed underground wit~n the road shoulders of public roads, they shall comply with the specifications of the highway department having jurisdiction. Detailed procedures of installation are also subject to approval in advance of construction by the superintendent or his or her representative. (7) If required, the Permittee shall file a performance bond with satisfactory surety payable to the Permittor to fully insure compliance with the permit terms and conditions. (8) The Permittee shall be responsible to pay the Permittor for any damage resulting from this permit which would not reasonably be inherent in the use which the Permittee is authorized to make of the land. The Permittor will give the Permittee written notice of such damage and the Permittee will either take corrective action or pay the indicated amount as agreed upon and approved by the superintendent. (9) Use by the Permittee of the land is subject to the right of the park to establish trails, roads, and other improvements and betterments over, upon or through said premises, and further to the use by travelers and others of such roads, trails, and other improvements already existing. If it is necessary to exercise such right, every effort will be made by the Park to refrain fi'om unduly interfering with or preventing use of the land by the Permittee for the purposes intended under this permit. (10) The Permittee shall take adequate measures as directed and approved by the superin- tendent to prevent or minimize damage to park resources. This may include restoration, soil conservation and protection measures, landscaping, and repairing roads, trails, fences, etc. The Permittee shall dispose of brush and other refuse as required by the superintendent. The superintendent or his or her representative may inspect the right-of-way area as deemed necessary. (11) The Permittee will halt any activities and notify the superintendent upon discovery of threatened or endangered species or archeological, paleontological, or historical findings. All artifacts unearthed remain the property of the park. (12) No vegetation may be cut or destroyed without first obtaining approval from the superintendent. Any vegetation that must be removed shall be mitigated as specified by the superintendent. (13) Use of pesticides and/or herbicides on park lands is prohibited without prior written approval from the superintendent. (14) In the event any facilities covered by this permit should interfere with future park construction, the Permittee agrees to terminate the use or relocate them at no cost to the Service within 60 days after written notice. (15) The Permittee agrees to do everything reasonably within its power, both independently and on request of the superintendent, to prevent and suppress fires resulting from the 7 Permittee's activities on and adjacent to the right-of-way. (16) The Permittee agrees that the right-of-way shall be subject to the express condition that the use will not unduly interfere with the management and administration by the Service of the lands. Further, the Permittee agrees and consents to the occupancy and use by the park, its Permittees, or lessees of any part of the right-of-way not actually occupied or required by the project, or the full and safe utilization, for necessary operations incident to such management, administration, or disposal. (17) Upon expiration, revocation or termination of this permit, the Permittee shall leave the lands subject to the permit in as nearly the original condition as possible, as directed and approved by the superintendent (18) The Permittee agrees that in undertaking all activities pursuant to this permit, it will not discriminate against any person because of race, color, religion, sex, or national origin. (19) No member of or Delegate to Congress or Resident Commissioner shall be admitted to any share or part of this permit or to any benefit that may arise therefrom, but this provision shall not be construed to extend to this permit if made with a corporation for its general benefit. (20) No transfer of the permit will be recognized unless and until it is first approved in writing by the Regional Director of the Service. Such a transfer must be filed in accordance with existing regulations at the time of transfer, and must be supported by the stipulation that the assignee agrees to comply with and to be bound by the terms and conditions of the right-of-way. (21) This agreement is made upon the express condition that the United States, its agents and employees shall be free from all liabilities and claims for damages and/or suits for or by reason of any injury, or death to any person or damage to property of any kind whatsoever, whether to the person or property of the Permittee, its agents or employees, or third parties, from any cause or causes whatsoever while in or upon said premises or any part thereof dttring the term of this agreement or occasioned by any occupancy or use of said premises or any activity carded on by the Permittee in connection herewith, and the Permittee hereby covenants and agrees to indemnify, defend, save and hold harmless the United States, its agents, and employees fi'om all liabilities, charges, expenses and costs on account of or by reason of any such injuries, deaths, liabilities, claims, suits or losses however occurring or damages growing out of the same. (22) Any alterations to this permit must be in writing and signed by the parties. Renewals will be subject to regulations existing at the time of renewal and such other terms and conditions deemed necessary to protect the public interest. (23) Any underground utilities previously located within this right-of-way which are damaged or disrupted during maintenance shall be repaired or restored by the Permittee within four hours. 8 (24) The Permittee shall be responsible for the provision and maintenance of proper signs, barricades or other means of warning motorists and pedestrians of danger during all periods of repair and maintenance. (25) Nothing herein contained shall be construed as binding the Service to expend in any one fiscal year any sum in excess of appropriations made by Congress or administratively allocated for the purpose of this permit for the fiscal year, or to involve the Service in any contract or other obligation for the further expenditure of money in excess of such appropriations or allocations. COMPLIANCE Failure of the Permittee to comply with any provision of this right-of-way permit shall constitute grounds for immediate termination of this permit. WAIVER NOT CONTINUING The waiver of any breach of any provision of this right-of-way permit, whether such waiver be expressed or implied, shall not be construed to be a continuing waiver or a waiver of, or consent, to any subsequent or prior breach of the same or any other provision of this permit. IN WITNESS WHEREOF, the Regional Director of the National Park Service, acting on behalf of the United States, in the exemise of the delegated authority from the Secretary of the Department of the Interior, has caused this Permit of Right-of-Way number RW-9500-00-004 to be executed this day of ,2000. David K. Morris, Superintendent Olympic National Park National Park Service United States Department of the Interior ACCEPTED THIS day of ,2000. (Title) City of Port Angeles Attest ~> pOR A.N'CELES W A S H I N G T O N, U. $. A. ~TILITY AD¥I$ORY COmmITTEE ~E~O DATE: April 9, 2001 To: UTILITY ADVISORY COMMITTEE FROM: Scott McLain, Deputy Director of Power Systems SUBJECT: Contribution to Electric Utility Rural Economic Development Revolving Fund for 2001 Summary: The City Council established the Electric Utility Rural Economic Development Revolving Fund (Fund) in 1999. By contributing $75,000 into this fund, the Electric utility can receive a $25,000 Icredit on its excise taxes owed to the State. The Electric utility would like to contribute to this fund again for the year 2001 in the amount of $75,000. It is expected that the Economic Development Steering Committee will utilize these funds for the City's Economic Development efforts (Economic Developmen Director salary and expenses). Recommendation: Recommend City Council authorize transfer of $75,000 from Electric Fund to the Electric Utility Rural Economic Development Revolving Fund. Background / Analysis: In 1999, the City established the Electric Utility Rural Economic Development Revolving Fund (Fund) and the Electric Utility contributed $50,000 into the fund in 1999 and $75,000 in 2000. By contributing at least $50,000 to the Fund, the Electric Utility can receive a credit of $25,000 on its excise taxes for the year. The Electric Utility would like to contribute $75,000 to the Electric Utility Rural Economic Development Revolving Fund again this year so we may receive the $25,000 credit for 2001. Applications for this credit are accepted starting May I, 2001, and we would like to be prepared to submit our request as soon as possible as funds are limited to $350,000 per year for the entire State. The Electric fund has received a $25,000 credit for both 1999 and 2000. When the Fund was created in 1999, the Economic Development Steering Committee was designated as the board that oversees the fund. It is expected that this board will designate the funds to be used for the City's Economic Development efforts (Economic Development Director salary and expenses) as the qualifying project designed to achieve job creation or business retention. Staff recommends that $75,000 be transferred to the Electric Utility Rural Economic Development Revolving Fund. N 6PWKS~LIGHT~O~MO S\uacedt2001 ,wpd