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Agenda Packet 08/13/2002
UTILITY ADVISORY COMMITTEE CITY COUNCIL CHAI~IBERS PORT ANGELES~ WA AUGUST I 3, 2:00 ~.M. AG~NOA I. CALL TO ORDER II. R~LL CALL III, APPROVAL ~F ~INUTE~ FOR ~ULY A. I-NET ~A~T-T~A~K APPROVAL B. ~AFE WATER iNITIATIVE (VERBAL) UTILITY ADVISORY COMMITTEE SPECIAL MEETING Port Angeles, Washington July 30, 2002 I. Call to Order: ~ Chairman Bentley called the meeting to order at 2:05 p.m. II. Roll Call: Members Present: Chairman Bentley, Councilman Campbell, Councilmcmber Erickson, Councilmember Rogers, Dean Rccd Members Absent: None StaffPrcscnt: Craig Knutson, Glerm Cutler, Scott McLain, Larry Dunbar, Cate Rinehart Others Present: Capacity Provisioning Craig Johnson Bob Jcnscn Bill Roberds Kriln Consulting Jeremy Noetzelman Foundry Networks Bryan Boretsky Northland Cable Pete Grigorieff Mike Sturgeon Olypen Terry Kennedy Chuck Beaudette Clallam PUD Dennis Bickford Fred Mitchell Doug Harrison Ten Forward Sheldon Koehler Olympic Memorial Hospital Gary Smith Sheriff's Office Mary Wilgocki School District Steve Baxter Port of Port Angeles Bill James Clallam County Dave Meyer Dan Engelbertson Olympus Net Ned Schumann III. Approval of Minutes: Chairman Bentley asked if there were any additions or corrections to the meeting minutes of July 23, 2002. Councilman Campbell moved to approve the minutes. Councilmember Erickson seconded the motion, which carried unanimously. Note: Due to a technical problem which occurred during the copying of the three cassette tapes which recorded the session, tape A2 experienced audio failure. IV. Discussion Items: A. PUD Fiber Optic Discussion Fred Mitchell, Assistant General Manager for the Clallam County PUD, briefed the committee on the District's policies which included thc fiber system backbone plan, interconnections, and the 40 inch rule regarding pole attachments. There was a brief discussion with concerns expressed pertaining to cooperation between the City and thc District and possible problems with a single service provider to I- Net customers. No action taken. Information only. B. Capacity Provisioning Institutional Network Services Agreement Northland Cable Wide Area Network Use Agreement Capacity Provisioning Master Permit PUD Right-Of-Way And Connections Permit Amendment (Note: Although these subjects were originally listed as separate items each one is contingent upon thc other therefore they have been addresses as a single unit). Larry Dunbar, Power Resources Manager, gave a general outline of the background with reference to the fast-track concepts and approach. A general summary was given on thc various agreements, amendment, and Master Permit. It was noted that thc PUD Right-Of-Way Permit Amendment was no longer necessary because thc District would provide an interconncction outside of the City limits. Recommendations included approval of thc I-Net Services Agreement, WAN Agreement, Cable Television Franchise Amendment and Master Permit. A discussion followed on the possibility of further information to be gathered before thc decision making process. Councilman Campbell motioned to table the recommendation for two weeks to allow the exploration of opportunities between the City, Clallam County PUD, Capacity Provisioning, Northland, and others to review what changes regarding the seamless network issue may be required, resolving the single point of interconnection issue, and what would be the impact of direct service by the PUD on the proposal. Dean Reed seconded the motion, which carried unanimously. The PUD was requested to submit a concrete written proposal which would include items which had not been addressed and tasks left to do. It was noted that there were 10 working days left before the next meeting to investigate any findings. V. Next Meeting: The next regular meeting will be August 13 at 2 p.m. VI. Adjournment: Thc meeting adjourned at 5:15 p.m. UTILITY ADVISORY COMMITTEE July 30, 2002 Allen Bentley, Chairman Cate Rinehart, Administrative Assistant 8/5/02 N:~PWKS~LIGHT~CONS\CATE\j uly30meet.wpd WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: AUGUST 13, 2002 TO: UTILITY ADVISORY COMMITTEE FROM: Larry Dunbar, Power Resources Manager RE: Proposed Fiber Optic Wide Area Network Use Agreement Summary: As a result of thc direction o£the Utility Advisory Committee (UAC) and City Council to staff on the institutional network (X-Net) fast-track concepts and approach, a Fiber Optic Wide Area Network (WAN) Use Agreement has been negotiated with Northland Cable Television to enable early activation of thc I-Net dark fiber backbone and nodes. As part of the proposed Agreement, construction of fiber optic infrastructure is required and an option to include an additional 12 dark fibers throughout the I-Net is being recommended. Recommendation: Subject to a favorable recommendation on the proposed I-Net Services Agreement (separate staff report), forward a favorable recommendation to the City Council to approve the proposed Fiber Optic Wide Area Network Use Agreement, amendment No. 1 to the Cable Television Franchise Ordinance No. 3116, and right-of-way easements for l-Net node enclosures with Northland Cable Television. Background: This report repeats important information from the July 29, 2002 UAC meeting and incorporates the proposed amendment and easement request. On May 14, 2002, staff provided an information only presentation to the UAC on I-Net activation and site drop alternatives. At the direction of the UAC, staff began to develop a fast-track concept and approach to compress the I-Net completion schedule, which is anticipated no later than April 27, 2004. On June 11, 2002, the UAC authorized staff to proceed with the fast-track concepts and approach. On June 17, 2002, the City Council approved consulting services in support of the fast-track concepts and approach and construction of the I-Net. On June 24, 2002, the UAC provided guidance to staff on the final draft Fiber Optic WAN Use Agreement. On July 9, 2002, the UAC postponed action on the Fiber Optic WAN Use Agreement until the I-Net Services Agreement negotiation is completed with Capacity Provisioning, Inc. On July 29, 2002, the UAC postponed action on the fast-track for two weeks in order to provide the Clallam County PUD an opportunity to submit a proposal. Analysis: The proposed Fiber Optic WAN Use Agreement includes City lease of two (2) existing dark fibers and construction of fiber optic infrastructure necessary to reach planned I-Net node locations. As part of the fast-track, partial City payment for the I-Net will need to be made earlier than that required by the Cable Television Franchise Agreement No. 3116 (Franchise). The City would assign the Agreement to Capacity Provisioning, Inc., which would install Proposed Fiber Optic WAN Use Agreement Page 2 August 13, 2002 equipment in the I-Net node enclosures, construct site drops from the I-Net nodes to the City and potential I-Net and business users, and provide wholesale and retail telecommunications services (excluding Cable Television services). As part of the proposed Agreement, construction of about 4 miles of fiber optic infrastructure is required and an option under the Franchise to include an additional 12 dark fibers is recommended throughout the I-Net for an additional cost of $100,000. Earlier this year, Council approved an option to include an additional 12 dark fibers in a section of the I-Net that extends from 16th and C Streets to 16th and I Streets. The remaining additional dark fiber expense is a wise investment that will delay node equipment and fiber splicing expenses over the I-Net's anticipated minimum fifteen year service life. The fiber optic infrastructure will be connected to six node enclosures within the City. The node enclosures are required for network electronic equipment that are proposed to be placed on City property. Placement of all of the node enclosures on City property simplifies Northland's acquisition of necessary fight-of-way easements and ongoing access, operation and maintenance needs. City approval of the necessary right-of-way easements is necessary. Northland would collect a $55,000 project management fee upon completion and testing of the fiber link and nodes. The project management fee consists of an $18,000 expense for node enclosures and $37,000 for material, shipping, and labor cost premiums to meet the aggressive fast-track schedule. It should be noted that Northland is cooperating with the City and Capacity Provioning, Inc. on the fast-track, although it exceeds their obligations under the Cable Television Franchise Agreement. The aggressive fast-track approach will take about four months to complete before services under the proposed I-Net Services Agreement (separate staffreport) are available. Approval of the proposed Agreement with Northland is a critical element of the fast-track plan and approach. Please refer to Attachment A for a summary of the main sections of the proposed Agreement. A copy of the proposed Agreement is included as Attachment B. The proposed Agreement would create several potential conflicts with the I-Net provisions within the Cable Television Franchise Ordinance No. 3116. Although more housekeeping than substance, the Franchise payment provisions, quantity of fibers (24), and node locations should be amended to be consistent with the proposed Agreement. The proposed amendment to the Franchise is included as Attachment C. A summary of the milestones and schedule under the Agreement is provided in Attachment D. The schedule has been revised by two weeks in consideration of the opportunity the UAC provided the PUD to submit a proposal. Attachment A Summary of the proposed Fiber Optic Wide Area Network Use Agreement Main sections Section summary Northland is responsible for design, construction and testing of the fiber optic link and nodes. The City must approve the plans and specifications Design and prior to construction. The City must approve construction and testing construction prior to payment toward its cost of the I-Net. Due to the construction of 3~1 fiber infrastructure as part of this Agreement, a decision under the franchise to include 24 fibers throughout the I-Net is recommended which will increase the City's cost of the I-Net by $100,000. Grant of license The City would be granted an exclusive and assignable license to use the 3~2 fiber link and I-Net nodes. I-Net early payment: $245,000 Project management fee: $37,000 Additional I-Net nodes charge: $18,000 Fiber link and node contingency: $27,500 Compensation ........................................................................... 3s-3 Monthly service charges (until 12/31/2002): $1,400/Month Monthly service charges (until 12/31/2003): $1,900/Month Monthly service charges (ending 4/27/2004): $2,400/Month The City would pay its share of the I-Net and node costs earlier than that agreed upon as part of the franchise. The term of the agreement would be until April 27, 2004 which is the date Term of that the I-Net is anticipated to be fully complete, capable of operation, and agreement accepted by the City. Upon mutual consent, the agreement may be 3~4 extended. Ownership Northland would own the Fiber Link and nodes provided under the ~8 agreement which is consistent with the franchise. City payment shall not be made until the fiber link and nodes has been completed, tested and approved. Either party reserves the right to terminate the agreement upon breach of the other party. After the I-Net is constructed, the City will be given the first right of refusal to use two of Risk management Northland's reserve fibers under the franchise for commercial services. In & termination the event the 1-Net is not constructed in accordance with the franchise, the 3~10 City will have a right to use the Fiber Link and nodes through May 31, 2017 for commercial and non-commercial services. The City can also terminate the agreement if it discontinues use of the Fiber Link and Nodes. Attachment 13 FIBER OPTIC WAN USE AGREEMENT This Fiber Optic Wide Area Network or WAN Use Agreement ("Agreement") is made this day of ., 2002, by and between NORTHLAND CABLE TELEVISION, INC., a Washington corporation ("Northland") and the CITY OF PORT ANGELES, a municipality governed under the laws of the State of Washington ("City"). Background Northland is the cable television operator serving the City of Port Angeles, Clallam County, Washington, and nearby areas. The City desires to acquire an exclusive right to activate and use a certain portion of the dark fiber optic filaments (which have been or wiJl be constructed by Northland) to establish a fiber optic wide area network (the portion of such dark fiber optic filaments set aside for the exclusive use of the City being the "Fiber Link") for use in providing telecommunications services to public institutions and businesses but not to the general public. The City's exclusive fight to activate and use a certain portion of the dark fiber optic filaments includes: use of two existing dark fiber optic filaments that are within Northland's cable sheath that varies in size from four to one hundred and forty four dark fiber filaments, that each are approximately five miles in length; use of two dark fiber optic filaments that will be constructed by Northland that are within Northland's cable sheath containing a total of thirty six dark fiber filaments, that each are approximately four miles in length; and partial use of the space within seven nodes for electronic equipment to activate the network. The City or its assigned entity may use the Fiber Link and nodes for non-commercial and commercial purposes other than Cable Services as defined by the Cable Television Franchise Ordinance No. 3116. By entering into this Agreement, Northland has not fully satisfied Section 8 - Institutional Network, of Cable Television Franchise Ordinance No. 3116. Agreements Northland and the City hereby agree as follows: 1. Design and Construction of the Fiber Link. 1.1 Northland shall construct a node-to-node wide area network using dark fiber optic transmission filaments to connect the nodes identified in Exhibits A and C. Northland shall have no responsibility to construct any portion of the Fiber Link from the nodes to any public institutions or businesses. Northland shall have no responsibility to activate any of the dark fibers constituting the Fiber Link. 1.2 Design and Performance Characteristics. Design services for the Fiber Link have been and shall be performed by Northland and by qualified engineers and other Page 1 professionals selected by Northland in its sole and absolute discretion. The specific design, including but not limited to the specific dark fibers designated for the City's exclusive use, and performance characteristics of the Fiber Link are set forth in Exhibits A and C. The drawings, designs, blueprints and other documents annexed to this Agreement or otherwise provided or furnished to the City in connection with the subject matter of this Agreement are copyrighted materials containing proprietary and confidential material owned by Northland and shall not become the property of nor be used or disclosed by the City or any person or entity employed by or affiliated with the City, whether or not the Fiber Link is completed, except with the prior written consent of Northland, which consent may not be withheld when legally required to be disclosed pursuant to Chapter 42.17 RCW. Submission or distribution of the drawings, designs, blueprints, specifications and other documents annexed to this Agreement or otherwise furnished to the City in connection with the subject matter of this Agreement to meet regulatory requirements or for other purposes necessary or convenient to the construction of the Fiber Link shall not be construed as publication, disclosure or use in derogation of Northland's common law copyright or other reserved rights. 1.3 Construction Activities. The construction of the Fiber Link and nodes shall be performed by Northland and/or by qualified construction contractors and suppliers selected by Northland in its sole and absolute discretion; provided, however, Northland shall have no responsibility to perform or have performed any construction-related activities from the nodes to buildings or within the buildings or any appurtenances thereto. The City shall be responsible for all construction-related activities from the nodes to buildings and within the buildings or any appurtenances thereto, including but not limited to the installation of any conduit described in Exhibit A. Construction specifications not otherwise set forth in Exhibit A shall be governed by the requirements set forth in either the latest edition of the National Electric Safety Code or the local electrical regulations, whichever is more stringent. 1.4 Construction Permits and Other Authorizations. Commencing on the mutual execution of this Agreement and the City's prepayment specified at Section 3.2, Northland shall use its commercially reasonable efforts to obtain all necessary permits, licenses or similar grants of authority to construct the Fiber Link and nodes. Northland shall submit plans and specifications on or before the effective date of this Agreement for City approval in accordance with Cable Television Franchise Ordinance No. 3116. The City shall cooperate and use its commercially reasonable efforts to assist Northland in filing the appropriate documentation required to obtain any permits, licenses or similar grants of authority needed to construct the Fiber Link and nodes. 1.5 Completion of Construction. Northland shall use its commemially reasonable efforts to complete the construction of the Fiber Link and nodes on or before October 21, 2002, after obtaining all necessary permits, licenses or similar grants of authority to construct the Fiber Link and nodes. The City shall promptly conduct a final inspection to verify completion of construction. 1.6 Testing of Completed Fiber Link and Nodes. Upon Northland's completion of the construction of the Fiber Link and nodes, Northland shall, on or before Page 2 October 28, 2002, in accordance with the testing procedures set forth in Exhibit B, test or have tested the Fiber Link and nodes to demonstrate that the Fiber Link performs in accordance with the specifications set forth in Exhibit A or as otherwise agreed by the parties. Upon City verification of completion of construction and testing by Northland, the City will issue formal written acceptance of the Fiber Link and nodes, which acceptance shall not be unreasonably withheld or delayed, and make payment in accordance with Subsection 3.1(2). 1.7 City Exercise of Institutional Network Fiber Option. In accordance with Subsection 8.1.2.(1) of Cable Television Franchise Ordinance No. 3116, the City exercises its option to include a minimum of 24 single-mode fibers in the institutional network backbone. 1.8 Amendment No. I to Cable Television Franchise Ordinance No. 3116. In accordance with Subsection 13.2 of Cable Television Franchise Ordinance No. 3116, upon execution of this Agreement the City and Northland hereby agree to execute amendment No. 1 to the Cable Television Franchise No. 3116. 2. Grant of License. Nonhtand hereby grants the City an exclusive, assignable license to use the Fiber Link and nodes, as identified in Exhibits A and C, during the Initial Term and the Extended Term, if any, of this Agreement. Nothing herein shall be deemed or construed to prevent Northland from entering into similar agreements with other parties with respect to the use of fiber optic filaments and nodes or other distribution facilities that are not the subject of this Agreement. The City may sublease, or otherwise allow use of the License under this Agreement to Capacity Provisioning, Inc. or to any other person or entity provided that no assignment, sublease or grant of any fights to any third party by the City hereunder shall release the City from any of its duties or obligations under this Agreement. In the event that the City subleases, or otherwise allows use of the License under this Agreement, the City's assigned entity may, if so designated by the City, serve as a single point-of-contact to Northland for all activities relating to this Agreement. 3. Compensation. As partial consideration for Northland's performance hei-eunder, the City shall make the following payments to Northland: 3.1 Institutional Network Payment. As provided in Subsection 1.6, the City shall reimburse to Northland costs not to exceed $208,000.00 to construct and interconnect the Fiber Link and nodes in exchange for the City's right of use under this Agreement and in addition, the City will pay Northland a project management fee not to exceed $37,000.00 or 20% of cost. The total payment of $245,000.00 shall be deducted from the City's cost of the Institutional Network as specified in Subsection 8.11 of Cable Television Franchise Ordinance No. 3116. Furthermore, as added incentive to accelerate the completion of this phase of the Institutional Network the City agrees to pay Northland an additional project management fee of $55,000.00. In no event shall payments under this agreement exceed $300,000.00. In addition, the City has established a contingency for expenses that are approved by the City in an amount not to exceed ten percent (10%) of the total Fiber Link and node costs. Any payment for contingent expenses shall be deducted from the City's cost of the Institutional Nelwork as specified in Subsection 8.11 of Cable Television Franchise Ordinance No. 3116. Page 3 The City's cost to construct and interconnect the Fiber Link and nodes shall be verified by the City and payments shall be made by the City within fourteen (14) days of Grantee's request for payment as follows: (1) Payments including reimbursements of costs and pro rata project management fees upon City receipt of Grantee's request for payment containing all appropriate and complete invoices. (2) Final payment representing payment of the $55,000 additional project management fee following formal City acceptance of the "Initial Proof of Performance" described in subsection 1.6 herein, upon City's receipt of Grantee's request for payment containing all appropriate and complete invoices. 3.2 Monthly Payments. Commencing with the acceptance of the Initial Proof of Performance as set forth in Subsection 1.6 herein, the City shall prepay to Northland a prorated amount of one thousand four hundred dollars ($1,400.00) (equal to seven hundred dollars and no cents ($700.00), for each terminated fiber, with a total of two (2) total fibers to be provided), if any for the first month, and the full amount of one thousand four hundred dollars (1,400.00) per month, through December 31, 2002. Commencing January 1, 2003 through December 31, 2003 the City shall pay to Northland the monthly sum of nineteen hundred dollars ($1,900.00) (equal to nine hundred and fifty Dollars ($950.00) for each terminated fiber, with a total of two (2) total fibers to be provided). Commencing January 1, 2004 through the last month of the Initial Term of this Agreement, the City shall pay to Northland the monthly sum of two thousand four hundred dollars ($2,400.00) (equal to one thousand two hundred dollars ($1,200.00) for each terminated fiber, with a total of two (2) total fibers to be provided). Commencing with the commencement of the Extended Term (defined below), if any, and continuing each month during the Extended Term, if any, the City shall pay to Northland the monthly sum equal to the amount negotiated by the parties. Except for the institutional network payment and the prepayment, which shall be paid by the City as specified in Subsection 3.1 and 3.2 respectively, the City shall pay to Northland the above-stated amount, in advance, on or before the fifteenth (15th) day of each month during the Initial Term and the Extended Term, if any, of this Agreement. The City shall mail or otherwise deliver its monthly payments to Northland at the address specified in Section 26 or to such other address as Northland may specify in writing. Any amounts not paid as set forth above shall be subject to a late payment charge often pement (10%) of the amount then owing. The City's payment of monthly payments shall be contingent on Northland's performance of its obligations under this Agreement. 3.3 Excess Costs and Fees. The monthly payments described in Section 3.2 do not include any sales taxes, use taxes, rental taxes, gross receipt taxes, federal, state or local regulatory assessment fees, federal, state or local excise taxes, or any oth*r taxes, fees, assessments, charges or levies which may be imposed by federal, state or local governments, or agencies thereof, with respect to this Agreement or the subject matter thereof (collectively, the "Taxes"). In the event that Northland, as a direct or indirect consequence of the exclusive use of the Fiber Link granted to the City as contemplated by this Agreement, incurs (i) Taxes, or (ii) any Page 4 costs, fees or expenses associated with utility pole attachment or utility conduit use, which are in excess of the charges paid by Northland prior to the dale of this Agreement and which are attributable to the Fiber Link or any services provided thereon, or, in the event that future legislative and/or regulatory proceedings affect Northland's obligations pursuant to this Agreement, such costs will be passed on to the City and shall, in Northland's discretion, be added to the monthly payment provided in Section 3.2 upon written notice to the City or shall be paid by the City within 30 days of Northland's billing therefore. In accordance with Cable Television Franchise Ordinance No. 3116, franchise fees shall not be imposed upon or collected from Northland by the City as a result or consequence of this Agreement. 4. Term of Agreement. This Agreement shall commence as of the date first written above and shall continue until April 27, 2004 (the "Initial Term"); provided, however, the City may, on or before February 1, 2004 request an extension to this Agreement. Upon Northland's approval of the City's extension request (the "Extended Term"), the parties will be bound to the same terms and conditions as set forth herein (other than the pricing which may be negotiated by the parties subject to the terms hereof). Upon completion of the institutional network in accordance with the Cable Television Franchise Ordinance No. 3116, on or before February 27, 2004, Northland shall provide the City or to any other person or entity assigned by the City the first right of refusal to use two (2) of Northland's reserve fibers, which are not otherwise subject to the City's or its assignee's exclusive use, pursuant to the Cable Television Franchise Ordinance No. 3116 and this Agreement, for commercial purposes other than Cable Services. In the event that Northland fails to complete the institutional network in accordance with Cable Television Franchise Ordinance No. 3116 by February 27, 2004, at the option of the City or its assignee, which shall be provided to Northland in writing no later than February 27, 2004 and annually thereafter through May 31,2017, Northland shall continue to be bound to the same terms and conditions as set forth herein at no additional or continuing cost to the City in accordance with Section 8.3.1 of the Cable Television Franchise Ordinance No. 3116. To the extent the Fiber Link and Node infrastructure provided under this Agreement is still in use and needed by the City beyond May 31, 2017, continued use of the Fiber Link and Node infrastructure under the same terms and conditions as set forth herein (other than the pricing which may be negotiated by the parties subject 'to the terms hereof) shall be allowed. 5. Representations and Warranties. The following representations, warranties and covenants are material inducements for the parties to enter into this Agreement. 5.1 The City and its assigned entity shall not use the Fiber Link in violation of any applicable federal, state or local law, regulation, ordinance, franchise, or in violation of any applicable court order. The City and its assigned entity shall not use the Fiber Link in violation of Cable Television Franchise Ordinance No. 3116. 5.2. None of the facilities of the City or its users or anyone acting on its behalf or pursuant to its authority shall interfere with the operational integrity of Northland's television cable system. Page 5 5.3 Northland is a corporation in good standing and has the corporate power and authority to enter into and perform this Agreement. Northland shall maintain the Fiber Link and nodes, which shall be fully capable of operation, beginning from the date the City formally accepts the Fiber Link and nodes and continuing through the term of this Agreement. 5.4 The City is a Washington municipality and has the power and authority to enter into and perform this Agreement. 5.5 The City or its assigned entity may use the Fiber Link and nodes for non- commercial and commercial purposes other than Cable Services as defined by the Cable Television Franchise Ordinance No. 3116. 5.6 Northland shall warrant the Fiber Link and nodes for a period of one year following formal City acceptance and be responsible to promptly correct, at its own expense, all defects and errors in materials and/or construction that may arise during the warranty period. 6. Indemnification. 6.1 In addition to its indemnification obligations found elsewhere in this Agreement, the City or its assigned entity, if any, shall jointly and severally, defend, indemnify, protect and hold Northland and its officers, directors and employees harmless from and against any and all claims, demands, actions, judgments, costs (including without limitation reasonable attorneys' and experts' fees), losses, expenses and liabilities of every kind or nature whatsoever which may arise in connection with or result, directly or indirectly, from (i) the City's or its assignee's use of the Fiber Link, (ii) the management or conduct of the City's or its assignee's activities, or (iii) any breach of or default in the terms, conditions, restrictions, representations, warranties or covenants agreed to or made by the City contained in this Agreement. 6.2 Northland shall defend, indemnify, protect and hold the City, its successors, assigns, officers, employees and elected officials harmless ~om and against any and all claims, demands, actions, judgments, costs (including without limitation reasonable attorneys' and experts' fees), losses, expenses and liabilities of every kind or nature whatsoever which may arise in connection with or result, directly or indirectly, from any breach of or default in the terms, conditions, restrictions, representations, warranties or covenants agreed to or made by Northland contained in this Agreement. 7. Node Access. 7.1 Northland shall provide to the City or its assigned entity access to the nodes for the purpose of connecting site drops, testing and inspection. The City or its assigned entity shall comply with Northland's node access policies and procedures. Page 6 7.2 The City or its assigned entity shall provide to Northland reasonable access to any of their facilities for the purpose of testing, inspection and maintenance of the Fiber Link. 8. Ownership of the F/O Filaments and Nodes; Taxes. Subject only to the limited rights granted hereunder to the City, all of the fiber optic filaments and nodes in Northland's cable system, including without limitation that portion that constitutes the Fiber Link, shall be owned by Northland and shall not be merged or otherwise annexed to any real or personal property connected thereto. The City or its assigned entity shall have no right to pledge, mortgage or otherwise permit a security interest or lien to attach to the Fiber Link or any part of Northland's cable television system. The City or its assigned entity shall indemnify, defend, and hold Northland harmless from and against any and all claims, demands and costs (including reasonable attorney fees) liabilities, causes of action or judgments arising out of or in any way related to any security interest, lien, encumbrance or legal process against the Fiber Link arising from any action or omission of the City or its assigned entity or asserted by any creditor of the City, or otherwise arising out of the use granted to the City or its assigned entity. Each party shall be responsible for all property taxes imposed on its property. 9. Insurance. Northland and the City or its assignee agree that they will obtain and maintain sufficient insurance coverage, or self-insurance, to adequately protect their respective interest in the Fiber Link. 10. Early Termination of this Agreement. 10.1 Northland and the City or its assignee reserve the right to terminate this Agreement at any time upon breach by the other party of a material term or condition of this Agreement; provided lhat the non-breaching party has first given 60 days written notice specifying in reasonable detail the alleged breach or failure of compliance and demanding the cure of/he breach. If said breach or failure to comply cannot reasonably be cured in 60 days, and the breaching party shall proceed promptly to cure the same with due diligence, the time for curing such failure to comply shall be extended for such period of time as may be reasonably necessary to complete such cure. 10.2 Without limiting the foregoing, Northland may terminate this Agreement at any time on 60 days prior written notice to the City or its assignee if any of the following events have occurred: 10.2.1 Northland's pole attachment andJor conduit use rights are terminated or expire and are not renewed, or become subject 1o conditions or restrictions such that continuation of this Agreement or the City's or its assignee's continued use of the Fiber Link and nodes as provided herein would be in violation of such conditions or restrictions. 10.2.2 Northland's franchise to provide cable television service or any easements, fights-of-way or other similar authorizations are terminated or expire and are not renewed, or become subject to conditions or restrictions such that continuation of this Agreement Page 7 or the City's or its assignee's continued use of the Fiber Link and nodes would be in violation of such conditions or restrictions. 10.2.3 The City or its assigned entity uses the Fiber Link in violation of Cable Television Ordinance No. 3116, any applicable federal, state or local law, statute, regulation, ordinance, code or other legal requirement. 10.2.4 The City or its assigned entity uses the Fiber Link in violation of any applicable final order of any court or regulatory authority of competent jurisdiction. 10.2.5 Nothing in Subsections 10.2.3 or 10.2.4 shall be deemed to prevent the City from appealing the validity of any such legal requirement or order. If appeals procedures permit, the City or its assignee shall have the right to seek a stay in the enforcement of the legal requirement or order and to continue to use the Fiber Link during the appeals process. 10.3 Without limiting the foregoing, the City or its assignee may terminate this Agreement after December 31, 2002 upon 60 days prior written notice to Northland if any of the following events have occurred: 10.3.1 The City or its assigned entity discontinues the use of the Fiber Link and nodes. 10.3.2 The City's assigned entity discontinues performance of its contractural obligations to the City. 10.4 In the event of termination of this Agreement in accordance with this Section 10 after completion of construction in accordance with Subsection 1.5 or expiration of this Agreement, the monthly fee specified at Subsection 3.2 shall terminate, but no portion of the Institutional Network Payment or prepayment specified at Section 3 shall be refunded. 11. Limitation of Liability; Disclaimer of Representations and Warranties. 11.1 NORTHLAND SHALL NOT BE RESPONSIBLE OR LIABLE IN ANY WAY FOR THE CONTENT OF THE DATA OR FOR THE LOSS OF ANY DATA CARRIED OR TRANSMITTED OVER THE FIBER LINK OR FROM ANY INTERRUPTION OF SERVICE, INCLUDING BUT NOT LIMITED TO ANY DOWNTIME OF THE CITY'S OR 1TS ASSIGNED ENTITY'S OPERATIONS, NOR SHALL NORTHLAND BE RESPONSIBLE OR LIABLE IN ANY WAY FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR SPECIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, LOST REVENUES, LOST INCOME OR LOST COST SAVINGS) INCURRED BY THE CITY OR ITS ASSIGNED ENTITY AS A RESULT OF ANY INTERRUPTION OF SERVICE OR BREACH OR PARTIAL BREACH OF THIS AGREEMENT OR ARISING OUT OF ANY ACT OR OMISSION BY NORTHLAND OR ITS AFFILIATES, SUCCESSORS AND ASSIGNS, OR ITS OR THEIR EMPLOYEES, SERVANTS AND/OR AGENTS OR OTHERWISE Page 8 ARISING UNDER THIS AGREEMENT. THE FOREGOING SHALL APPLY EVEN IF NORTHLAND HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH DAMAGES. 11.2 EXCEPT AS EXPRESSLY SET FORTH HEREIN, NORTHLAND HEREBY DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED. 12. Electrical Power. Northland shall directly pay the City for electric service within the City as and when due, including all charges, taxes, levies and assessments for electric service and all electrical power used in connection with the nodes within the Fiber Link. 13. Maintenance and Repair of the Fiber Link. Subject only to Force Majeure Events, Northland will perform maintenance and repair of the Fiber Link in accordance with the standards set forth in Exhibit A, or as otherwise mutually agreed in writing, throughout the Initial Term and the Extended Term, if any, of this Agreement; provided, however, the City sha]l promptly remit payment to Northland, within 30 days of Northland's billing therefore, at Northland's then-existing applicable rates for materials (including, among other things, fiber and fiber splices) and labor (including any applicable overtime), for maintenance or repair resulting from the City's, its assigned entity's, its employees', and agents' negligence or intentional misconduct or repair resulting from any Catastrophic Break. As used herein, a "Catastrophic Break" shall be any cut in the Fiber Link, however caused or severe, resulting in a disruption of service within the Fiber Link. The City shall provide written notice to Northland of any operational problems with the Fiber Link and will cooperate with Northland to effect any needed repairs. 14. Force Maieure. No party to this Agreement shall be considered in default in the performance of any of its obligations hereunder to the extent that the performance of such obligations, except the payment of money, is prevented or delayed by any cause beyond the reasonable control of the affected party, including, but not limited to, acts of God, acts of a public enemy, terrorists, war, riots, epidemics, earthquakes, fires, storms, hun-icanes, blizzards, and other inclement weather, washouts, sinkholes, civic disturbances, explosions, strikes, lockouts, union jurisdictional disputes, inability to obtain or maintain permits or rights-of-way, inability after reasonable effort in the exercise of due diligence to obtain parts or materials or equipment, actions of utilities (not to be construed to include the parties), and any other cause (except inability to make monetary payments or obtain financing) not within the reasonable control of the parties (any such event being hereinafter referred to a "Force Majeure Event"). Each party to this Agreement shall give notice promptly to the other of the nature and extent of any event of Force Majeure Event claimed to delay or prevent its performance under this Agreement. 15. Severability. The invalidity under applicable law of any provision of this Agreement shall not affect the validity of any other provision of this Agreement, and in the event that any provision hereof is determined to be invalid or otherwise illegal, this Agreement shall remain effective and shall be construed in accordance with its terms as if the invalid or illegal provision were not contained herein. Page 9 16. Waiver. No modification, amendment or waiver of or with respect to any provision of this Agreement, nor consent by either party to the breach of or departure fi.om any of the terms and conditions hereof, shall in any event be effective or binding against such party unless it shall be in writing and signed by such party, and then such waiver or consent shall be effective only in the specific instance and for the particular purpose for which given. Neither any failure nor delay by either party in exercising any fight, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exemise thereof preclude any future or further exercise thereof or the exercise of any other right, power or privilege. 17. Captions and Headings. The captions and headings are inserted in this Agreement for convenience only and shall in no event be deemed to define, limit, or describe the scope or intent of this Agreement, or of any provision hereof, nor in any way affect the interpretation of this Agreement. 18. No Inference Against Author. No provision of this Agreement shall be interpreted against any party because such party or its legal representative drafted such provision. 19. Legal Expenses. If any proceeding is brought by either party to enforce or interpret any term or provision of this Agreement, the substantially prevailing party in such proceeding shall be entitled to recover, in addition to all other relief as set forth in this Agreement, such party's reasonable attorneys' and experts' fees and expenses. 20. Exhibits. Each of the Exhibits listed below shall be incorporated into and shall for all purposes be deemed a part of this Agreement: Exhibit A -- Design and Performance Characteristics Exhibit B -- Testing Procedure Exhibit C -- Node Location Map. Any of such Exhibits may be later amended or revised by the mutual consent of the parties and such Exhibit, as so amended or revised, shall be incorporated into and shall for all purposes be deemed a part of this Agreement. 21. Counterparts. This Agreement may be executed in one or mom counterparts, all of which taken together shall constitute one instrument. 22. Survival of Representations and Obligations. Sections 3.1, 6, and 11 shall survive termination or expiration of this Agreement, together with any accrued but unpaid payment obligations which arose prior to such termination or expiration. 23. Further Assurances. At any time and fi.om time to time, upon the request of one party, the other party shall execute, deliver and acknowledge or cause to be executed, delivered and acknowledged, such further agreements, documents, and instruments and to do such other acts and things as the requesting party may reasonably request in order to fully effect the intent of this Agreement. Page 10 24. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous written or oral agreements and representations between the parties with respect thereto. 25. Relationship of the Parties. Nothing herein shall be deemed or construed to create or constitute a partnership, joint venture or agency relationship between the parties, and neither party is authorized to hold itself out or to act toward third parties or the public in any manner that would indicate the existence of any such relationship with the other. 26. Assignment. This Agreement, license, and the rights and obligations of the City hereunder may be assigned to Capacity Provisioning, Inc. or to any other person or entity provided, however, that prior to any such assignment by the City, the City shall provide Northland with a copy of the agreement, executed by the City and the potential assignee, whereby the potential assignee agrees to assume all of the obligations of the City herein, as of the date of such assignment. Northland shall have the right to assign and delegate this Agreement and its rights and obligations hereunder, in whole or in part, from time to time for any purpose; provided, however, that prior to any sale by Northland of the Fiber Link and nodes, Northland shall provide the City with an assignment and assumption agreement, executed by Northland and the potential buyer of the Fiber Link and nodes, whereby Northland agrees to assign all of its rights herein and such potential buyer of the Fiber Link and nodes agrees to assume all of the obligations herein, as of closing date of any such sale. 27. Notices. All notices required to be in writing hereunder shall be deemed given when personally delivered, or if mailed by certified or registered mail, three (3) days following deposit in the United States mail, postage prepaid, or if via telecopy or facsimile, when received, or if sent by courier service providing evidence of delivery, when actually delivered by such service, and sent to the following: If to the City: City of Port Angeles P.O Box 1150 Port Angeles, WA Glenn Cutler, P.E. Phone: (360) 417-4800 Facsimile: (360) 417-4709 If to Northland: Northland Cable Television, Inc. 120i Third Avenue, Suite 3600 Seattle, WA 98101 Attention: Legal Department Phone: (206) 621-1351 Facsimile: (206) 623-9015 with a copy to: Northland Cable Television 725 East First Street Port Angeles, WA 98362 Attn.: System Manager Page 11 Phone: (360) 452-8466 Fax: (360) 457-5901 Either party may change its designated address for notification by sending notice of such change in the manner provided above. IN WITNESS WHEREOF, the authorized representatives of the parties have executed this Agreement as of the date first set forth above. THE CITY NORTHLAND CITY OF PORT ANGELES NORTHLAND CABLE TELEVISION, INC. By By Richard I. Clark, Executive Vice President Its Page 12 EXHIBIT A This is Exhibit A to that certain Fiber Optic WAN Use Agreement made on the __ day of ., 2002 (the "Agreement"), by and between NORTHLAND CABLE TELEVISION, INC., a Washington corporation (herein "Northland") and the CITY OF PORT ANGELES, a municipality governed under the laws of the State of Washington (herein, the "City"). Design and Performance Characteristics 1. Fiber Link Description - The Fiber Link will be designed and constructed as a wide area network connecting nodes by the following number of dark fibers. Any changes to node locations shall be mutually agreed upon in writing, and such changes shall satisfy the node location provisions of the Cable Television Franchise Ordinance No. 3116. Northland shall be responsible for obtaining all required easements to construct nodes. · Two (2) single mode dark fibers originating at the Clallam County Public Utility District intercounection, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Clallam County Public Utility District intercormection, to the Washington Street Substation node, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Clallam County Public Utility District interconnection, to a splice case located at 3rd and Penn Streets, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Washington Street Substation node, to the William Shore Memorial Pool node, identified in Exhibit C; · Two (2) single mode dark fibers originating at the William Shore Memorial Pool node, to the Valley Substation node, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Washington Street Substation node, to the Laurel Substation node, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Laurel Substation node, to the Corp Yard node, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Corp Yard node, to the 16th and I Street node, identified in Exhibit C; 4. The demarcation points will be each node, unless an alternate demamation point is mutually agreed to in advance of construction. Unless a different connector type is agreed to in advance, each fiber filament will terminate in a bulkhead cabinet using a SC/APC type connector. 5. Optical Fiber Description - The fiber optic filaments per manufacturer's specification will be matched clad type with a typical field mode diameter of 8.8 - 9.6 gm at a wavelength of 1310 ran and 10.5 ± 1.0 pm at a wavelength of 1550 nm. The maximum attenuation of the fiber cable will be 0.35 dB/km at 1310 nm and 0.25 dB/km at 1550 nm. Page 13 6. System Design - A design of the Fiber Link system will be provided to the City and its assignee prior to construction. Included in the package will be proposed route drawings, cable storage locations, splice point locations and fiber splice matrix. Additionally, for each of the fiber paths calculated lengths fibers and path losses at 1310 and 1550 nm wavelengths will be illustrated. 7. System Construction - The Fiber Link construction will follow good construction and engineering practices as generally described in the Aerial Cable Placement and Buried and Underground Cable Placement sections of the Society of Cable Telecommunications Engineers (SCTE) "Recommended Practices for Optical Fiber Construction and Testing" handbook. Page 14 EXHIBIT B This is Exhibit B to that certain Fiber Optic WAN Use Agreement made on the __ day of ,2002 (the "Agreement"), by and between NORTHLAND CABLE TELEVISION, INC., a Washington corporation (herein "Northland") and the CITY OF PORT ANGELES, a municipality governed under the laws of the State of Washington (herein, the "City"). Testing Procedure Fiber Link Field Testing - Testing of the Fiber Link will be done in two phases during the Fiber Link construction: 1. Pre-installation - AIl dark fiber filaments will be tested at the time of material delivery for proper quality, quantity, and reliability, including but not limited to length, attenuation, and discontinuities. 2. After Node Installation and Splicing (Final Acceptance) - All dark fiber filaments will be tested alter node installation and splicing for proper quality, quantity, and reliability, including but not limited to total path length, end-to-end attenuation, discontinuities, and splice loss. Testing will be done using procedures described in Sections 10.1 through 10.4 of the 1996 edition of Society of Cable Telecommunications Engineers' ("SCTE") "Recommended Practices for Optical Fiber Construction and Testing" handbook. A copy of the SCTE handbook is available at Northland's local business office. All test results will be documented for future reference. Page 15 EXHIBIT C Pump Stati, #7 I-Net Node included in Cable Tele, ision Franchise Ordinance ~ [o. 3116 reloc~ ed to 16th and I Library Node included in Cable Port o£Port Angeles Television Franchise Node included in Ordinance No. 3116 Cable Television relocated to Laurel '~' Franchise Ordinance Substation : No. 3116 relocated to Valley Substation City Hall Node included in Cable Television Franchise Ordinance No. 3116 relocated to William Shore Memorial Pool PUD intercormection using splice case Page 16 Attachment C Proposed Amendment No. 1 to the Cable Television Franchise Ordinance No. 3116 ORDINANCE NO. AN ORDINANCE of the City of Port Angeles amending Section 8 - Institutional Network and Exhibits "B" and "C" of the non-exclusive Franchise granted on May 21, 2002 to Northland Cable Television, Inc. and amending Ordinance 3116. WHEREAS, the City and Northland Cable Television, Inc. have agreed to enter into a Fiber Optic Wide Area Network Use Agreement that is generally consistent, but conflicts in several respects, with the Cable Television Franchise Ordinance 3116; and WHEREAS, the parties have agreed to amend the Franchise accordingly; and WHEREAS, Northland Cable Television, Inc. has accepted this amendment to the Franchise, as set forth in the attached Exhibit "A"; NOW THEREFORE, the City Council of the City of Port Angeles, does hereby ordain as follows: Section 1. Section 8 of Ordinance 3116 is amended to read as follows: Section 8 - Institutional Network. 8.1 Provision of Institutional Network 8.1.1 As a condition of this Franchise, Grantee shall furnish to the City on a cost plus a twenty percent (20%) project management fee, a dark fiber Institutional Network (I-Net) backbone including in addition 12 single mode reserve fibers capable of bi-directional delivery of broadband communications services as identified in Exhibit "C", as described herein, within eighteen (18) months after City approval of the Grantee's I-Net plans and specifications as provided for in Subsection 8.6.1. The I-Net fibers and reserve fibers shall be located in the same sheath, wherever practicable. The cost of the fiber backbone construction will be shared as set forth in Subsection 8.11. The Fiber Optic Wide Area Network Use Agreement between the City and Grantee shall not satisfy the I-Net requirements of this Section. 8.1.2 Fiber Optic Infrastructure. The I-Net transmission infrastructure shall physically consist off (1) A minimum of 12 24 single mode fibers in the backbone in accordance with Exhibit C. -1- (2) (2) ~Six (6) fiber node locations, including a City right to use up to fifty one (51) rack-anils within each enclosure, and one (1) network interconnection along the I-Net backbone as identified in Exhibits "B" and "C". (3) The Grantee shall allow the extension of fiber drops from the I- Net nodes identified in Exhibits "B" and "C", to sites identified in Exhibit B, that are situated along Rights-of-Way to which Grantee has reasonable access and upon the request of the City shall construct such additional drops, subject to the City's payment to Grantee of any and all costs, expenses, and fees associated with the requested drops including a twenty (20) percent project management fee from the City. (4) Each I-Net site connection shall be terminated within fifty (50) feet of entering the applicable building at a point of demarcation in a Grantee standard termination panel, mounted on a City furnished backboard, unless the City, at the City's cost, provides another means of termination, in which case the City, at the City's cost, shall provide all necessary termination equipment. All terminations will use SC/APC fiber connectors. 8.1.3 The Fiber Optic reserve transmission infrastructure shall physically consist of: (1) A minimum of 12 single mode reserve fibers in the I-Net backbone in accordance with Exhibits "B" and "C". (2) The Grantee shall allow the extension of fiber drops, consisting of a minimum of four (4) single mode fibers to each business, from the I-Net fiber optic nodes to requesting businesses, and shall construct such additional drops, subject to the requesting business' pre-payment to Grantee of any and all costs, expenses, and fees associated with the requested drops including a twenty (20) percent project management fee from the requesting business. (3) Each business connection shall be terminated within fifty (50) feet of entering the building at a point of demarcation in a termination panel, mounted on a backboard furnished by the business, unless the business, at the business's pre-paid cost and expenses, provides another means of termination, in which case the business, at the business's pre-paid cost and expenses, shall provide all necessary termination equipment. All terminations will use SC/APC fiber connectors. 8.2 I-Net Ownership. Grantee shall have full ownership of the I-Net and 12 single mode reserve fiber infrastructure and associated facilities up to and including the Grantee provided termination panels or up to the termination splices in City provided -2- termination panels, within the fiber backbone at each node. Unless otherwise agreed by the user making payment and Grantee, all 1-Net and reserve fiber drops not within Grantee's sheath or lashed to Grantee's sheath from the I-Net node to user sites shall be owned and maintained by the user making payment for said drop. 8.3 City's Exclusive Rights. 8.3.1 The City shall have an exclusive right of use of the I-Net infrastructure at no charge to the City and these free and exclusive rights shall be irrevocable by Grantee, or successor companies, if any, during the term of this Franchise. Maintenance charges shall be as provided in Subsection 8.7. 8.3.2 In the event of any transfer, assignment or sale of any ownership interest whatsoever of the I-Net owned by the Grantee to any successor or other person, the Grantee shall notify the City and the prospective successor or person of the irrevocable rights of the City. In the event such notice is not given, the City may exercise all rights under law, including enjoining the prospective transfer of ownership. 8.3.3 To the extent the I-Net infrastructure provided under this Franchise is still in use and needed by the City, continued use of the I-Net infrastructure under the same conditions set forth in this Franchise shall be a condition of any renewal. 8.4 Use of Institutional Network 8.4.1 The City may use the I-Net described in Subsection 8.1.2 for any communications, in any form, for any non-commercial (a) governmental purpose (proprietary or governmental); (b) educational purpose; (c) public purpose other than public access as contemplated by the 1996 Telecommunications Act; or (d) for use of the Access Channels on the subscriber Network. The I-Net may be linked to any other communications network used by the City, or to any non-commercial I-Net user authorized by the City (or an entity under the City's control) and approved by Grantee in writing, which approval shall not be unreasonably withheld. Notwithstanding any other provision of the Franchise, Grantee agrees that mutually authorized non-commercial I-Net users may provide Interuet services or access to Internet services to the public, schools and governmental entities over the I-Net described in Subsection 8.12. 8.4.2 In the Event of Bi-Directional Usage. Upon future activation of an integrated upstream broadband infrastructure, Grantee shall allow the City bi-directional access to the subscriber network, for such uses mutually agreed upon, which may include meter reading, utility 10ad monitoring and utility control. In the event there is a charge for such bi-directional usage, the City will be charged the Grantee's most favorable rate, subject to acceptance by the City. 8.5 Use of Reserve Fibers -3- 8.5.1 Reserve fibers may be used for I-Net purposes and as allowed under this subsection. (1) Grantee or Grantee approved third parties may use 12 single mode reserve fibers for commercial purposes other than Cable Services. Grantee or each Grantee approved third party shall be permitted to use no more than four (4) reserve fibers for commercial purposes, unless mutually agreed upon by the City and Grantee. Grantee shall be permitted to charge a fee and impose contractual restrictions based on competitive market conditions to approved third parties for use of 12 single mode reserve fibers. (2) Subject to all of the provisions of this Subsection 8.5.1, the Grantee shall permit third parties to use 12 single mode reserve fibers for private wide area networks (WAN). Grantee approved third parties using reserve fibers for private wide area networks shall be further limited as follows: (a) No more than eight (8) of the 12 single mode reserve fibers may be used for such private WAN network use. (b) The Grantee shall permit use of reserve fibers by private WAN users only until such time as bandwidth is available from a commercial service provider using the reserve fibers, and Grantee will condition any contract for use of reserve fibers by private WAN users accordingly. (3) After the 12 single mode reserve fibers have been fully utilized, the City may allow unused I-Net fibers to be used by Grantee or Grantee approved third parties for commemial purposes other than Cable Services, subject to the same provisions listed in Subsections 8.5.1(1) and (2) and other such provisions mutually acceptable to the City and Grantee. Any compensation charge for such use shall be mutually agreed to by the Grantee and City and shared equally. (4) In the event that the Grantee or Grantee approved third parties have not utilized the 12 single mode reserve fibers throughout its fiber optic backbone for commercial or private WAN purposes other than Cable Services after two (2) years following City acceptance of the I-Net backbone, or a reduced time period as otherwise mutually agreed upon, upon City Council determination available reserve fibers may be used by the City or City and Grantee approved third parties for commercial purposes other than Cable Services. Any compensation charge for such use shall be mutually agreed to by the Grantee and City and shared equally. 8.6 Institutional Network Plans, Specifications, Cost Proposal and Construction -4- 8.6.1 Backbone Route Plan and Cost Proposal. The Grantee's fiber optic backbone route plan including node locations is identified in Exhibits "B" and "C". The Grantee shall provide a network interconnection at Map I.D. 130 identified in Exhibits "B" and "C". The cost to the City for the installation and construction of the I-Net fiber optic backbone, including single mode fiber optic strands, shall be as provided in Subsection 8.11. The Grantee shall be responsible for the installation and construction of the 12 single mode reserve fibers within the I-Net fiber optic backbone, including 12 single mode fiber optic strands. The Grantee shall submit plans and specifications within sixty (60) days of the Effective Date of this Franchise for City approval. The I-Net backbone and reserve fibers, including all splicing and testing, shall be fully complete, tested, and capable of operation within 18 months after the effective date of the City's approval of the Grantee's I- Net plans and specifications. The City shall promptly conduct a final inspection to verify completion. Upon verification of completion by the City and delivery by Grantee to the City of as-builts and a complete set of City approved fiber test results, the City will issue formal acceptance of the I-Net backbone and reserve fibers, which acceptance shall not be unreasonably withheld or delayed. 8.6.2 Site Drop Route Plans and Cost Proposal Procedure and Schedule. (1) The City may provide the Grantee detailed site plans for the I- Net sites for which it requests the Grantee to prepare a cost proposal. (2) Grantee may meet and confer with the City to clarify any of the I-Net user site location plans. (3) Grantee shall provide the City Manager the network outside plant plans and cost proposal, from the I-Net node locations to each I-Net site identified in the City's request, and a sufficiently documented I-Net site drop cost proposal, within ninety (90) days of the City's written request. (4) The City may request the Grantee to provide a cost proposal to build the City's I-Net fiber site drop infrastructure, in accordance with the following: (a) In preparing the plans, specifications and cost proposal, Grantee and the City agree to coordinate closely to ensure that the project requirements are met expeditiously. (b) Grantee's plans and specifications shall be in sufficient detail to permit identification, correlation, verification and understanding of the components of Grantee's cost proposal. (c) The City Manager will review the plans, specifications and cost proposal and shall provide written revisions or approval of the proposal within sixty (60) days of receipt of Grantee's submittal. (d) In no event shall the City have any liability for any expenses the Grantee incurs in preparation of such plans, -5- specifications or cost proposal until approval of such plans, specifications or cost proposal is given by the City Manager, which approval shall not be unreasonably withheld or delayed. (e) Grantee shall take steps to commence the I-Net fiber drop construction within a mutually agreed upon time frame from approval of the cost proposal by the City Manager. (f) Grantee shall provide the City, upon the City's prior written notice, with monthly updates indicating work completed, planned construction for next month, and projected time-line for project completion. (g) Taking into consideration any unforeseen circumstances and to the extent technically feasible, the I~Net fiber drops, including all splicing and testing, shall be fully complete, and capable of operation within a mutually agreed upon time frame after the construction start date. The City shall promptly conduct a final inspection to verify completion. (h) Upon verification of completion by the City and delivery by Grantee to the City of as-builts and a complete set of City approved fiber test results, the City will issue formal acceptance of the I-Net site drops. 8.6.3 Grantee shall warrant the I-Net backbone and fiber drop construction for a period of one year following City acceptance and be responsible to promptly correct, at its own expense, all defects and errors in materials and/or construction that may arise during the warranty period. 8.6.4 To the extent technically and economically feasible, Grantee shall include in its design the capability to provide for video feeds and/or data that need to be routed to the Grantee Subscriber network Educational Access Channel and Government Access Channel. 8.6.5 Interconnection and Extensions. The City reserves, at the City's sole cost and expense, the right to make extensions or drops to sites identified in Exhibit "B" and other sites that are within and outside of the City limits by itself or by the Grantee. All Interconnections shall be made by the Grantee or by other arrangements as mutually agreed upon, provided that all such Interconnections to the Grantee's network are performed only by the Grantee at agreed upon competitive commercial rates. 8.7 Demand Maintenance of the I-Net. Grantee shall provide demand maintenance twenty-four hours a day, seven days a week and shall maintain the I-Net infrastructure to the point of demarcation to operate at or above FCC standards at all times. 8.7.1 Normal Operating Conditions. Under normal operating conditions, Grantee shall respond to all outage reports within two hours and make necessary repairs to the -6- extent technically feasible to restore service within four hours of notification Monday through Sunday, 6 a.m. to 10 p.m.. Under normal operating conditions, Grantee shall respond to degradation reports within twenty-four hours. 8.7.2 Emergency Conditions. In emergency conditions, such as a natural emergency resulting from a windstorm, Grantee will perform emergency repair work on the I- Net fiber and field equipment in the course of conducting its own emergency repair work on its fiber systems. All fibers at a given damage location shall be repaired concurrently without preference to function. 8.8 Routine Maintenance of I-Net. Routine maintenance on the fiber used exclusively by the City for I-Net use will be conducted on the same schedule as routine maintenance on Grantee's fiber systems, or as mutually agreed upon. Any maintenance that may disrupt the use of the I-Net shall be performed by Grantee with minimum seven (7) days prior notice to the City. 8.9 Payment for Maintenance of I-Net. A mutually agreed upon fee shall be charged by the Grantee for maintenance and repair of the I-Net. Such fee will be payable quarterly, and at Grantee's option all or a portion thereof may be applied as a credit to the franchise fee payable by Grantee. 8.10 Administration, Maintenance and Management of I-Net Sites and Equipment. The City and any other I-Net user shall be responsible for the ongoing administration, maintenance and management of its I-Net sites and equipment. All such maintenance conducted by the City or any other I-Net user shall be performed in a workmanlike manner to industry standards, and any City-provided equipment shall comply in all respects with applicable governmental codes, laws, ordinances or regulations and the National Electric Safety Code. The City and any I-Net user shall indemnify and hold harmless Grantee from and against any and all claims for damages resulting from any acts or omissions in connection with this Subsection 8.10. 8.11 I-Net Cost. 8.11.1 The cost to the City for the installation and construction of the I-Net backbone shall be the incremental cost as defined in Subsection 8.12.1, plus a twenty percent (20%) project management fee and shall not exceed $250350,000.00, in accordance with Subsection 861 If'~'~r~;~''~'~ .......... ~c.~,~.~ ........ ~ .... ~,: ........ r.~c~.-~c,~,~.~! ',.n',,~.., $35©,©09.99. which includes a thirteen percent (13%) contingency for expenses that are approved by the City Manager, which approval shall not be unreasonably withheld, in accordance with Subsection 8.6.1. The Grantee shall be responsible for the cost of 12 single mode reserve fibers in accordance with this Subsection. The cost to the City for the instaI]ation and construction of the I-Net site drops shah not exceed the Grantee's cost proposal approved in accordance with Subsection 8.6.2. There shah be no charge by the -7- Grantee to the City or to any other authorized user for the use of the I-Net, except maintenance charges as provided in Subsection 8.9. 8.11.2 The City's cost-share for the I-Net backbone and site drops shall be verified by the City and payments shall be made by the City after the City approves the Grantee's I-Net pl ti ithi (14) ans and specifica OhS w n fourteen days .... ............... j ~.,,,~ ~,ar,-of Grantee s request for payment as follows: ......... Payments iucluding reimbursements of the City's cost share and pro rata proiect management fees -upon City receipt ~m-,~ .,,~. of Grantee's request for payment containing all appropriate and complete invoices. (2) Final payment ........... ........ ~, ....... j ~.,,,., ,~ representing pa~nent of the contingency for expenses that are approved by the City Manager, if any, in accordance with Section 8.11 following focal City acceptance of the I-Net in accordance with Section 8.6 herein, x'~:-~ ..... . ............. ~ ~,upon the City's receipt of Gr~tee's request for pa~ent containing all approphate and complete invoices. 8.12 Definition of Incremental, Direct and Indirect Costs 8.12.1 ~cremental Costs. ~cremental costs are that poaion of the direct costs solely attributable to the cost of materials, labor and final engineering desi~ of the I-Net for which the City is responsible for pa~ent under this Franchise. ~cremental costs include only the direct costs that would not have been incu~ed but for the providing of such I-Net ~d do not include indir~t costs. 8.12.2 Direct Costs. ~ respect to the obligation of the City to pay for the cost of 1-Net facilities to be provided by Gr~tee under this Franchise, the te~ "direct costs" includes those costs specified in this Section 8 and no indirect costs. "Direct costs" shall include costs such as: (1) cost of desto, materials and equipment necess~ or desirable for cons~ction; (2) pa~ents made by Grantee to subcontractors in accordance with the requirements of the subcontracts; (3) wages ~d salves and associated taxes ~d benefits of Gr~tee's employees perfo~ing work on the relevant potion of City-required facilities; (4) sales, excise, and other taxes paid by Grantee on materials, equipment, supplies ~d se~ices ch~geable to the relev~t poaion of the City-required facilities; -8- (5) any labor rome travel expenses directly chargeable to the work on the relevant portion of the City-required facilities; (6) cost of necessary licenses and permit fees, including rights-of-way construction permit fees and inspection fees, if any, related to the relevant portion of the City-required facilities; the City may review the applicability of such City permit fees, such as construction permit fees, construction impact fees, and construction inspection fees for the I-Net; (7) actual rental costs for the use of any necessary temporary facilities, or special machinery, equipment and hand tools used in the work on the relevant portion of the City-required facilities; (8) that portion attributable to this Franchise of premiums for insurance and bonds related to the design and construction of the City-required facilities; (9) any work destroyed or damaged prior to the City's acceptance, not compensated by insurance or otherwise, sustained by Grantee in connection with the work, provided the damage resulted from causes other than the fault or negligence of Grantee; (10) costs of removal of debris on the relevant portion of the City-required facilities; (11) costs incurred on the relevant portion of the City-required facilities, in taking action to prevent threatened damage, injury, loss in case of an emergency affecting the safety of persons and property; (12) any additional pole attachment costs to Grantee; and (13) other costs incurred on the relevant portion of the City-required facilities in the performance of the work if, and to the extent, approved in advance in writing by the City. 8.12.3 Indirect Costs. Indirect costs shall include: (1) salaries and other compensation of Grantee's employees stationed at Grantee's offices other than its office located within the Franchise Area, except as may be expressly included in Subsection 8.11.2 (3); (2) overhead and general expenses, except as may be expressly included in Subsection 8.12.2 (3); (3) Grantee's cost of capital (debt and equity); and (4) costs due to the fault or negligence of Grantee, including, but not limited to, costs for the correction of damage, defective or nonconforming work, disposal and replacement of materials and equipment incorrectly ordered or supplied, in making good damage to property not forming a part of the work. -9- 8.13 I-Net Costs not Franchise Fees. The parties agree that there shall be no charge to the City for the I-Net provided by Grantee, other than the charges specified in this Section 8. The parties agree that any capital costs to thc Grantee associated with the I-Net provided by Grantee are not Franchise fees and fall within one or more of the exceptions to 47 U.S.C. 542(g). 8.14 Pricing Guarantee. Notwithstanding any other provision of this Franchise, for any work that the City is obligated to use the Grantee to perform under this Franchise, the Grantee will make commercially reasonable efforts to ensure that the amount it charges will be consistent with the price the City could obtain through a competitive pricing process. Section 2. Exhibit "B" of Ordinance 3116 is hereby amended to read as set forth in the attached revised version of Exhibit "B". Section 3. Exhibit "C" of Ordinance 3116 is hereby amended to read as set forth in the attached revised version of Exhibit "C". Section 4 - Effective Date. This Ordinance shall take effect five days following the date of its publication by summary. PASSED by the City Council of the City of Port Angeles at a regular meeting of said Council held on the 20th day of August, 2002. Glenn Wiggins, Mayor APPROVED AS TO FORM: ATTEST: Craig D. Knutson, City Attorney Becky J. Upton, City Clerk PUBLISHED: August 25, 2002 By Summary EXHIBITS Exhibit A - Acceptance of Franchise Amendment No. 1 Exhibit B - Grantee Furnished Connections to Community Facilities Exhibit C - Northland Fiber Upgrade Plan and Node Areas F:~ ORDINANCES&RESOLUTIONS\2002-22.ord.doc -10- Exhibit A - Acceptance of Franchise Amendment No. 1 In accordance with Section 13.2 of the Cable Television Franchise Ordinance, the Grantee hereby submits this acceptance of Franchise Amendment No. 1 and all terms and conditions thereof to the City at the Clerk's Office. The Grantee hereby certifies that the undersigned is a duly authorized officer of the Grantee with the authority to execute acceptance of this Franchise amendment. ACCEPTED BY NORTHLAND CABLE TELEVISION, INC. Date: ,2002 Name and title ~11- Exhibit B - Grantee Furnished Connections To Community Facilities Map City Municipal CATV drops I-Net Drops ID Facilities Address initial furore initial future Node City Hall (includes sites 8. below) 321 E 5th Sa'eet I 1 [ 4 8. PA Police Department 1 mcl 8. i Dispatch 911 1 incl Veto Burton 166 Community Center 308 E 4th Street I 1 10. Fire Station 102 E 5th St I 1 69. Senior Center 328 E 7th St 1 1 72. Carnegie Library 205 S Lincoln St 1 1 73. Fine Arts Center 1203 E Lauridsen 1 1 75. William Shore Pool 225 E 5th St 1 1 1 86. Parks Maintenance 16th St F St 1 87. Cemetery-Office 3127 W 18th St 1 1 65. Civic Field 307 S Race St 1 1 Lincoln Park 70. Fairgrounds 1 1 71. Veterans Memorial 215 S LincolnSt 1 1 76. Crown Park 1901 W 4th St 1 1 77. Erickson Park 302 S Race St I 1 78. Lion's Park 600 Whidbey 1 1 79. Rains Park 915 E 8th St 1 1 80. Shane Park 613 S G St 1 1 82. Harbor View Park Ediz Hook 1 1 83. WolvertonPark AdB 11/10 Alley 1 1 85. Bmx Track 1521 W Lauridsen 1 1 132. Volunteer Park 16th and L 1 1 City & State CATV drops I-Net Drops Map (WSDOT) Traffic ID Signals Address initial future initial future Node 92. TI Front St LaurelSt PYa 1 93. T2 I st St Laurel St PYa 1 94. T3 Front St Oak St PYa 1 95. T4 1st St Oak St PYa 1 96. T5 8th St Race St PYa 1 97. T6 5th St Race St pYa 1 Lauridsen 98. T7 Blvd Race St n/a 1 99. T8 5th St I Peabody St pYa 1 100. T9 8th St Race St pYa 1 101. T10 8thSt CherrySt PYa 1 102. TI 1 (WSDOT) 8th St Lincoln St pYa 1 -12- City & State CATV drops l-Net Drops Map (WSDOT) Traffic ID Signals continuation Address initial future initial future Node 103. TI2 (WSDOT) 5th St Lincoln St n/a 1 104. TI3 (WSDOT) 1st St Lincoln St n/a 1 105. TI4 (WSDOT) Front St Lincoln St n/a 1 106. T15 (WSDOT) 1st St Peabody St n/a 1 107. TI6 (WSDOT) Front St Race St n/a I 108. T17 (WSDOT) 1st St Race St n/a 1 109. T18 (WSDOT) Front St Ennis St Wa 1 110. T19 (WSDOT) 1st St Ennis St n/a 1 Golf Course 111. T20 (WSDOT) Hwy 101 Rd n/a 1 112. T21 (WSDOT) Hwy 101 Del GuzziDr n/a 1 Tumwater 113. T22 (WSDOT) Marine Dr Route n/a 1 114. T23 (WSDOT) 14th St Lincoln St n/a 1 CATV drops I-Net Drops Map City Utility Systems ID Facilities Address initial future initial future Node 54. Landfill 3501 W 18th 1 1 55. Corp Yard 1703 S B St 1 1 1 56. Light Ops 240 W Front 1 1 Wastewater Treatment 57. Plant 1509 Columbia 1 1 11. Ranney Well Elwha River n/a 1 12. E St. Reservoir 1016 S E St n/a 1 13. Jones St. Reservoir 1200 E 9th St n/a 1 Black Diamond 14. Reservoir Black Diamond Rd n/a 1 Peabody Heights 15. Reservoir 600 Viewcrest n/a 1 16. Mill Creek Reservoir 600 Viewcrest n/a 1 17. Spruce Booster Station 1000 Spruce St n/a 1 18. Scrivner Pump 300 E Scrivner n/a 1 Mill Creek Pump 19. Station 600 Viewcrest n/a 1 McDougal Booster 20. Pump 3500 McDougal rda 1 21. Jones St. Pump Station 1200 E 9th St n/a 1 Jones St. Emergency 22. Pump Station 1200 E 9th St n/a 1 23. Water St. Pump Station Water St n/a 1 29. Pump Station #1 5th St & N St n/a 1 30. Pump Station #7 W 19th St n/a 1 J~ 30.~1 Fairm'ounds Parking 16th St & I St _1 31. Pump Station #10 1829.5 W 12thst n/a 1 32. Pump Station #3 Marine & Hill n/a 1 -13- CATV drops I-Net Drops Map City Utility Systems ID Facilities continuation Address initial future initial future Node 33. Pump Station #8 H St & 14th n/a 1 34. Pump Station #4 313 Marine Drive n/a 1 35. Pump Station #2 1/2 Alley & Cherty n/a 1 36. Pump Station #5 219 E 2nd St rda 1 37. Pump Station #9 Del Guzzi Dr. n/a 1 38. Pump Station #6 933 Church St n/a 1 39. Peabody Substation 2803 SPeabody n/a 1 40. Race Substation n/a 1 41. Albert Substation n/a 1 42. Laurel Substation 110 E 14th St n/a 1 ] 1_ 43. Washington Substation 224 S Washington n/a 1 1 44. College Substation 1306 E Park St n/a 1 45. Valley Substation 206 S Valley St n/a 1 I _1 46. A Street Substation 1616 S A St n/a 1 47. F Stxeet Substation 1604 S F St n/a 1 48. 1 Street Substation 1538 W 7th St n/a 1 49. CSOPS1 5thSt& NSt n/a 1 Railroad 50. CSO RR/Oak Ave & Oak St n/a 1 Railroad 51. CSO RR/Laurel Ave & Laurel St n/a 1 52. CSO Lincoln Lincoln & 2nd St n/a 1 53. CSO Francis Francis St & Caroline St n/a 1 Elwha Emergency S Milwaukie 88. Valve 2700 Dr n/a 1 89. PUD Intertie Baker St. n/a 1 90. PUD Intertie Monroe St. n/a 1 4 Map CATV drops l-Net Drops ID Clallam County Address initial future initial future Node County Courthouse 9. (includes sites below) 223 E 4th St 1 1 Health And Human 9. Services 1 9. Sheriff 1 126. Fairgrounds 1608 W 18th St 1 1 127. Juvenile Services 1912 W 18th 1 1 W Lauridsen 128. Maintenance Shops 1033 Blvd 1 1 Child Support 129. Enforcement 421 E 5thAve 1 1 163. ! Hospice 540 E8thSt I 1 Drug Task Force (site 56 56) 240 W Front 1 -14- CATV drops I-Net Drops Map Port Angeles ID Educational Address initial future initial future Node 1. Jefferson School 218 I E 12th St 1 1 Lauridsen 4. Peninsula College 1502 Blvd 1 1 5. Monroe School 102 Monroe Rd I 1 Roosevelt Middle I 1 6. School 106I Monroe Rd 1 59. Hamilton School 1822 i W 7th St t 1 North Olympic Library 66. System 2210 S Peabody St 1 1 4 160. Marine Lab 315 N Lincoln St I 1 162. Bus Garage 639 MonroeRd 1 1 2. P.A. High School 304 E Park Ave 1 1 S Washington 3. Franklin School 2505 St 1 1 60. Stevens Middle School 1139 W 14th St 1 1 151. The Choice 924 W 9th St 1 1 153. CentralServices 216 E4th St 1 1 154. Dry Creek School 25 Rife Rd 1 1 167. Faiiview 166 Lake Farm Rd i 1 CATV drops I-Net Drops Map ID Health Care Address initial furore initial future Node Olympic Memorial 7. Hospital 1005 Georgiana St 1 1 Olympic Medical 156. Center 920 Caroline St 1 1 Olympic Medical 168. Center - MRI 1102 E Front St 1 PCMH - Children's 157. Center 1004 W 16th St I 1 PCMH - Second Street 158. House 138 W 2nd St 1 1 PCMH - Horizon 159. Center 205 E 5th St 1 1 Olympic Medical 164. Center 939 Carolina 1 1 169. Virginia Mason 433 E 8th St 1 170. Virginia Mason 813 E 8th St 1 171. Virginia Mason 912 Caroline St 1 172. Virginia Mason 923 Georgiana St 1 -15- CATV drops I-Net Drops Map 1D Port of Port Angeles Address initial lucre initial futttre Node 61. Port Of PA 338 W lstSt 1 1 4 W Lautidsen 62. Port Of PA 2138 Blvd 1 1 Boat Haven 115. PABH 832 Drive 1 1 E Railroad 116. Port Of PA 115 Ave 1 1 117. Port Of PA 112 S Valley St I 1 118. Marine Terminal 202 N Cedar St 1 1 120. Port Of PA 2007 S O St I 1 W Lauridsen 12I. Port Of PA 1901 Blvd 1 1 W Lauridsen 122. Port Of PA 2203 Blvd 1 1 Fairchild International 123. Airport 1 1 124. Industrial Park East 1 1 125. Industrial Park West 1 1 173. Port Of PA 1301 Marine Drive 1 CATV drops I-Net Drops Map ID Regional Address initial future initial furore Node 130. Clallam County PUD. 2431 E Hwy 101 1 1 W Lauridsen 131. ClallamTransit 830 Blvd 1 1 I33. ClallamCounty PUD. 1936 W 18th St 1 1 I34. Housing Authority 2603 S Francis St 1 1 North Olympic Youth 135. Centers 535 E 1st St 1 1 Lower Elwha Klallam E 1 st St Suite 136. Tribe 1026 2 1 1 CATV drops I-Net Drops Map ID State of Washington Address initial future initial future Node Children & Family Services (includes site 137. below) 201 W 1st St 1 1 Community Services 137. Office 201 W 1st St 1 incl Juvenile Rehabilitation W 1st St, Suite 138. (includes sites below) 228 V 1 1 Dept. of Community 138. Corrections 228 W 1st St 1 incl Drivers License 138. Examimng Office 228 W 1st St 1 mcl -16- CATV drops I-Net Drops Map State of Washington ID continuation Address initial future initial future Node Developmental W 1st St, Suite 138. Disabilities 228 F 1 incl Home & Commumty 139. Services 235 W 1st St 1 1 E 1st St, Suite 140. Dept. of Revenue 734 B 1 1 Vocational E 1st St, Suite 141. Rehabilitation 1026 2 1 1 Dept. of Revenue and 142. L&I 1601 E Front St 1 1 I Dept. of Highway 143. Maintenance 1707 S C St 1 1 CATV drops I-Net Drops Map ID U.S. Government Address initial future initial future Node 64. Olympic National Park 600 E Park I 1 Social Security Admin. 144. (includes site below) 138 W 1st St 1 1 Olympic Coast National Marine 144. Sanctuary 138 W 1st St 1 Natural Resources E 3rd St, 145. Conservation Service 113 Room 2B I 1 146. Postal Service 424 E 1st St 1 1 Navy Recruiting 147. Station 721 E Ist St 1 1 Marines Recruiting 148. Station 701 E Front St 1 1 Army Recruiting 149. Station 703 E Front St I 1 Air Force Recruiting S.Critchfield 150. Station 1520 Rd 1 1 161. BPA PA Substation 1400 E Park Ave. n/a 1 -17- Exhibit C - Northland Fiber Upgrade Plan and Node Areas > Station #7 I-Net Node Cable Television Franchise Ordinance No. 3116 relocated to 16th and I Library Node Port of Port Angeles Node included in Cable included in Cable Television Television Franchise Franchise Ordinance No. Ordinance No. 3116 relocated to 3116 relocated to Laurel Substation ..... Valley Substation ~-[. ,, City Hall Node included in Cable Television Franchise Ordinance No. 3116 relocated to William Shore Memorial Pool PUD interconnection using splice case -18- Attachment D Fast-Track Milestones and Schedule Milestone Completion Date Agreement approval 8/20/2002 Due diligence~ 8/30/2002 City approval of site drop construction permit application~ 8/23/2002 Northland construction and node interconnection 10/7/2002 Northland fiber link and node testing 10/14/2002 Site drop construction completion~ 10/14/2002 Equipment installed~ 11/25/2002 Network testing~ 12/9/2002 Service Availability~ 12/23/2002 ' Local area network installation completion~ 12/20/2002 Interconnection for services outside of City limitst 1/t/2003 Service charges for Intemet access services available~ 10/1/2002 Service charges for Vol]? Services Available~ 10/1/2003 ~Completed under I-Net Services Agreement page 1 Utility Institu Agenda · Brief Background ~ Clallam PUD Concerns · :[-Net Services Agreement Changes . :[-Net Benefits . Recommendations m Questions and Answers 8/13/02 page 2 Northland Team , Pete Grigorieff~ Regional Manager - Mike Sturgeon, Senior Technician/Designer · Cable Resources, Network Design/Drafting · Diversified Northwest~ Contractor · Northwest Landworks, Testing 8/13/02 page 3 Capacity Provisioning Team · Bill Roberds, president · Bob 3ensenf vice president · Craig 3ohnsonf network engineer · Foundry Networks, Bryan Boretsky · Kriln Consulting, 3eremy Noetzelman Agreements Overview L I-Net Services Agreement ~ !Includes Inter,..~_... ~ca~l A_.:_ ?~LI WAN Use ~ Agreement Franchise Amendment ROW Easements 8/13/02 page 4 :[-Net Services & WAN Use Agreements LAN's C.P.L Last Mile Businesses Northland I-Net Backbone & Nodes Facilities City Facilities Putting It All Together 8/13/02 page 5 Capital ]:nvestment ci~/ 14% Northland 65% C,P.I. 21% Clallam County PUD Concerns , No proposal submitted - Wholesale access to retail ][SP's · Wholesale access to other SP's · Network equipment · Network operation and management · Additional interconnections 8/13/02 page 6 ;[-Net Services Agreement Revisions - Wholesale access to retail ISP's · Wholesale access to other SP's · Additional interconnections [-Net Node & Tnterconnection Revisions Planned PUD nection #; Po$~.ible~Pb O' 8/13/02 page 7 Node Enclosure Revisions Other Revisions . Transient packet loss . . Spare battery backup & HVAC · Reopener · Subcontracts/Assignment · Schedule 8/13/02 page 8 Fast-Track Schedule - Revised Agreement approval 8/20/2002 Due diligence 8/30/02 Site drop plans & specs approval 9/11/02 Backbone & node constructionZ 10/21/02 Backbone & node testingz 10/28/02 Site drop completion 11/11/02 Equipment installed 11/25/02 Network testing 12/9/02 Service availability 12/23/02 ZCompleted under WAN Use Agreement Other Corrections · Z-Net Services Agreement - Section 5.12 - October -1~28, 2002 · WAN Use Agreement staff report - Contingency 8/13/02 page 9 I-Net Benefits . Public Institutions and Businesses "~' Enables broadband services V Competitive rates due to Iow cost backbone ~ Gives user a choice of service providers · Capacity Provisioning & Future Providers ~; Ease of market entry ~! Wholesale/retail partnerships ",~ Reduced investment · Northland ~/Long term cable television franchise ~ Construction combined with network upgrade ~' New revenue opportunities~ e.g. fiber leases City of Port Angeles ~ Achieves City telecom and business plan goals ~ Enables competition & economic development ~ Eliminates need for City development ~ Reduced need for overbuilding ~/Municipal wide area network -,~ Fiber backbone at less than 15% of cost 8/13/02 page 11 Utility A( Comff Tnstitu 8/13/02 pORTANGEL, ES WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: AUGUST 13, 2002 TO: UTILITY ADVISORY COMMITTEE FROM: LaiTy Dunbar, Power Resources Manager RE: Proposed Institutional Network Services Agreement Summary: On July 29, 2002, the UAC postponed action on the fast-track when it provided thc Clallarn County Public Utility District No. 1 (District) an opportunity to submit a proposal as to how thc City and District could cooperate in providing l-Net services. Although the District did not submit a proposal, several changes lo the proposed Agreement have been made to address their concerns. Concerns raised by Clallam County have also been addressed. Recommendation: Subject to a favorable recommendation on the proposed Fiber Optic WAN Use Agreement (separate staff report), forward a favorable recommendation to the City Council to approve the proposed institutional Network Services Agreement and Telecommunications Master Permit with Capacity Provisioning, lnc. and authorize the City Manager to execute lnterlocal Agreements for the acquisition of 1-Net Services with public institutions. Additional changes ma3, be negotiated prior to City Council consideration. Background/Analysis: On July 29, 2002, the UAC postponed aclion on the fast-track when it provided the C]allam County Public Utility District No. 1 (District) an opportunity to submit a proposal as to how the City and District could cooperate in providing l-Net services. On July 30, 2002, Staff invited the District to submit a written proposal that would be considered at loday's meeting. On August 1, 2002, the District held a meeting with potential ]-Net users to discuss concerns about the City's fast-track plans and approach, followed by a meeting on August 2, 2002 with the District, potential l-Net users, and the City to discuss community network topics. The District did not submit a proposal for the UAC's consideration. As a result of the concerns and input from the District, Cia/lam County, and other potential l-Net users, several worthwhile changes to the proposed Agreement with C.P.1. have been made and in concept verbally agreed upon with the District. The changes to the proposed Agreement include: open access to the l-Net to retail lmernet service providers (section 2.10); wholesale access to the I-Net to other retail service providers (section 2.10(2)); if C.P.1. makes an arrangement with the District, additional intercormections with the District to mutually improve network redundancy and quality of service are allowed (section 2.10(D); a revision to the Service Levels exhibit for transient packet loss (Exhibit 6.4); and a reopener that would allow amendments to the proposed N:!UAC/Ofiginalq-Netse~ceag~eement6 w~i Proposed l-Net Services Agreement Page 2 August 13, 2002 Agreement (section 5.16). In addition, the opportunity for C.P.1. and the District to collaborate on l-Net equipment and network operation and management, was verbally agreed upon. Such a collaboration, if agreed upon by C.P.I. and the District, would require further discussions but would not require any changes to the l-Net Services Agreement. A copy of correspondence to the District and Clallam County are included in Attachmenl A. Agreement summary Please refer to Attachment B for a summary of the main sections of the proposed Agreement. A summary of the milestones and schedule is included as Attachment C. The schedule was revised by two weeks based on UAC direction at the July 30, 2002 meeting. A further revision was included to allow an additional month for network equipment to be installed in the event that there is a delay in Northland's schedule. The proposed I-Net Services Agreement is included as Attachment D. Telecommunications master permil As pan of the proposed l-Net Services Agreement, C.P.1. will construct site drops from the l-Net nodes lo businesses and public institutions within the City and will provide wholesale and retail telecommunications services to public institutions and business end users within the City. To enable such activities, as a housekeeping matter, a master permit is required by the City's telecommunications ordinance. City approval of the telecommunications master permit is subject to approval of the proposed l-Net Services Agreement. A copy of the proposed master permit was not included and is available upon request. Attachment A Correspondence to Clallam County Public Utility District No. I and Clallam County pORTANGELES WASHINGTON, U.S.A. PUBLIC WORKS & UTILITIES DEPARTMENT Wednesday, July 31,2002 Mr. Dennis Bickford General Manager Clallam County Public Utility District No. 1 P.O. Box 1090 Pod Angeles, WA 98362 Reference: Institutional Network Fast-Track Dear Dennis, As a follow up to the Utility Advisory Committee meeting yesterday, I invite the District to prepare a written proposal for the institutional network. City slaff would like to receive the District's proposal by noon on August 5, 2002. We would like to meet on August 6, 2002 at 9 a.m. to discuss your proposal. The shod time period is necessary to ensure that the I-Net fas, t-track agreements can be reconsidered at the Utility Advisory Committee s August 13tb meeting. Please address the following topics with sufficient detail for our analysis and review: 1. Last mile infrastructure 2. Universal availability of service within the City 3. Pancaking of rates at the network interconnection point(s) 4. PUD network redundancy within the City's I-Net 5. A pricing and rate schedule 6. How the District's totat network costs will be allocated to various proposed services 7. A proposed completion schedule. I am attaching a copy of several agreements and invite you to propose alternative language that would satisfy the District's needs and interests. The Agreements include: Fiber Optic Wide Area Use, I-Net Services, Master Permit, and the proposed amendment to the District's Right-of-Way License. Sincerely, Glenn Cutler, P.E. Director of Public Works and Utilities Cc Fred Mitchell PHONE: 360-417-4~)05 · FAX: 360-417-4542 · '[TY: 360-417-4645 E-MAIL: PU BWORKS~CI.PORT-ANGEL£S.WA.US WASHINGTON, U.S.A. PUBLIC WORKS & UTILITIES DEPARTMENT August 8, 2002 Mr. Dennis Bickford General Manager Clallam County Public Utility District No. 1 P.O. Box 1090 Port Angeles, WA 98362 Reference: Institutional Network Fast-Track Dear Dennis. Thank you for the discussion and dialogue on August 2 and August 6 concerning the City's I-Net fast-track plan and approach. Although the District did not submit a proposal, based on our discussions, the City and District were able to reach · significant verbal agreements. As a result of these agreements, the City has negotiated several worthwhile changes to the proposed I-Net Services Agreement with Capacity Provisioning, Inc. The changes include open access tc Internet service providers, wholesale access to other retail service providers, and additional network interconnections with the District. The verbal agreement we reached regarding the opportunity for C.P.I. and the District to collaborate on ,network operation and management does not require any changes to our proposed agreements but will necessitate fudher discussions as we implement the new system and become more aware of how to best manage it. We plan to request a recommendation from the Utility Advisory Committee to City Council on the proposed I-Net fast-track plan and approach on August 13, 2002. As par1 of the fast-track plan we would like to amend the District's right-of-way license to authorize the District to provide wholesale telecommunications services and interconnections within the City. Please let me know if there are any aspects of the amendment you received at our meeting earlier this week that need to be discussed. In order to present information to the Utility Advisory Committee on Tuesday, it would be appreciated if you could let me know by the close of business Monday. Sincerely, Glenn A. Cutler, P.[. Director of Public Works and Utilities Cc Fred Mitchell 321 EAST FIFTH STREET ® P. O BOX 1150 ® PORT ANGELES, WA 98362-O217 p_ ORTANCELES WASHINGTON, U.S.A. PUBLIC WORKS & UTILITIES DEPARTMENT August 8, 2002 Mr. Dan Engelbedson Clallam County Adminstrator 223 East Fourth Street P.O. Box 863 Port Angeles, WA 98362 Reference: Institutional Network Fast-Track Dear Dan, Thank you for meeting with Scott McLain and me today concerning Clallam County's interests in the City's I-Net fast-track plan and approach. Several changes to the I-Net Services Agreement have been negotiated in response to your concerns, including multiple interconnection points between the City's network and Clallam PUB's network, a future connection to allow a physically redundant path between Pod Angeles and Sequim, and wholesale access for other service providers. Capacity Provisioning Inc. and the PUD have also agreed to work toward cost savings on network operation and management. This will not require any changes to our proposed agreements but will necessitate further discussions as we implement the new system and become more aware of how to best manage it. The City looks forward to working with Clallam County in the future on meeting the needs to reduce costs and bring additional services over the I-Net, as well as helping drive the economic development engine for the City and County. Such future needs will include your expressed interest in securing dedicated fiber for the County's use. We appreciate the support that you have given to the development of broadband infrastructure and look forward to having the County as a key customer on the I-Net. We understand that you are now comfortable with the pricing structure that the City and its service providers have developed. We believe this pricing to be extremely beneficial for all of the users and potential users of fiber related services. We plan to request a recommendation from the Utility Advisory Committee to City Council on the proposed I-Net fasMrack plan and approach on August 13, 2002. The project will be considered by the City Council at its August 20th meeting. Sincerely, ~ G'~nn A. Cutler, P.E. Director of Public Works and Utilities 321 EAST FIFTH STREET ® P. O. BOX 1150 ® PORT ANGELES, WA 98362-O217 E-MAIL: PUSWORKS~CI.POR'f-ANGELES WA.US Attachment B Summary of the proposed Institutional Network Services Agreement Main sections Section summary The term of the agreement would be seven years unless extended by the City for a maximum term often years. A City required technical upgrade may increase the maximum term to fifteen years. The Fiber Optic WAN Use Agreement would be assigned to Capacity Provisioning, except that Special the City will be responsible for payments to Northland. A due diligence Provisions period is needed to provide time for Capacity Provisioning to secure financing, a surety bond, enter into a technical support agreement with the .~2 equipment manufacturer, prepare plans and specifications for the City's site drops, and undergo background checks. A revision to the Agreement provides open access to the I-Net by Internet service providers and wholesalers. A new section titled reopener has been negotiated to allow an amendment to the Agreement. C.P.I. will provide the City fully functional services for wide area Services and Site networking within the City, within the County, and hnternet access. A Drops total of 35 City facilities will be connected via fiber optic site drops to l- Net nodes. C.P.]. will be responsible for 1-Net operation, maintenance ~'3 and management. Furthermore, C.P.I. will be responsible for marketing, billing and all other wholesale and retail services under the Agreement. Non-recurring base service charge: $310,000 Non-recurring base charge contingency: $31,000 Non-recurring connection base charge: $600/Facility C.P.1. Charges . -L-°-c- -a 1 ?- _e_a_ _n_e_l}v_ _°-r-k- -i-n-st _al ?½ i _°_n_ ~ ~i_ [~ 5~?f~ ~ ............ _N_f_E__$_6_O_20_O__O_. ,q4 Wide area networking within City service charge: $6,523/Month Wide area networking within County service charge: TBD by 1/15/03 Monthly Internet access base service charge: TBD by 10/15/02 Monthly voice over Intemet-protocol service charge: TBD by 10/15/03 Local area network services charge (as needed): $80/Hour Non-recurring connection base charge: $600/Facility Wide area networking within City service charge: $165/Month Regular ........................................................................... Commercial Excess capacity charge (payable to the City): $55/Month Charges Wide area networking with County service charge: TBD by 1/15/20 .~4 ........................................................................... Monthly Internet access base service charge: TBD by 10/15/20 Monthly voice over Imernet-protocol service charge: TBD by 10/15/03 Attachment B - Continuation Summary of the proposed Institutional Network Services Agreement Main sections Section summary City Charges to ..C_i_t_y_l_-_N_~_e_l_e_x_c__e_s_s_c_a_p__a_ci_t_y__c_h_af~_e_: ........................ _$_5_5__fM__o_n_t__h_5'____o_rt_ C.P.I. Public ulility lax: 5.5% of C.P.I. gross revenues C.P.I. personnel with access to node equipment and network operation and management software will be sub. iect lo a background check. The network security for the virtual Ioca] area network (VLAN) that will be a Net'~,'ork Security common/shared network shall comply wilh industry standards. The City 3'2 and ~6 would coordinate and pay for addilional security measures if necessary, such as a virlual private network (VPN). wilh C.P.1. to ensure compatibility with the VLAN. Risk management features of the Agreemenl include City lermination of lhe Agreement if C.P.1. fails Io comply with the due diligence requirements or upon a breach of the Agreement by C.P.1. Additional risk Risk management management features include City pa~vment of the non-recurring base c~ Miscellaneous charge upon the availability of services, a City first fight of refusal lo Provisions acquire lhe l-Nel node equipment, customer premise equipment and site ,6'5 drops under certain conditions. The City can also file an equipment lien to secure its payment. Furthermore, lhe City can impose and col]ecl liquidated damages if C.P.I. fails to comply with the Agreement. The new section 2 reopener provision established a procedure for amending Agreement that also mitigates risk. Exhibit 6.1_ incorporates the Fiber Optic WAN Use Agreement into the Net Services Agreement. Exhibit 6.2 establishes the l-Nel services expedited schedule Exhibit 6.3 specifies the City site ]ocalions thal will be served and service requirements. Exhibit 6.4 includes the network service level requirements that C.P.I. Exhibits shall mainlain. A revision for transient packet loss was included Io ,~6 Section 5. Exhibit 6.5 provides the service charges for the City and regular commercial CUSlomers. Exhibit 6.6~ incorporates an inlerlocaI agreemenl for acquisition of l-Net services that would be available to extend the privileges of the Agreement to institutional agencies without a separale negotiation. Attachment C Fast-Track Milestones and Schedule Milestone Completion Date Agreement approval 8/20/2002 Due diligence 8/30/2002 City approval of site drop construction permit application 8/23/2002 Norlhland construction and node interconnection~ 10/7/2002 Northland fiber link and node testing~ 10/14/2002 Site drop construction completion 10/14/2002 Equipment installed (revised.) 11/25/2002 Network testing (revised) 12/9/2002 Service availability (revised) 12/23/2002 Local area network installation completion 12/20/2002 lmercormection for services outside of City limits 1/1/2003 Service charges for Intemet access services available 10/1/2002 Service charges for Vol? Services Available 10/1/2003 ~Completed under Fiber Optic Wide Area Network Use Agreement Attachment D - Proposed I-Net Services Agreement August 9, 2002 INSTITUTIONAL NETWORK SERVICES AGREEMENT BETYVEEN THE CITY OF PORT ANGELES AND CAPACITY PROVISIONING, INC. PURPOSE RECITALS 1. DEFINITIONS 2. SPECIAL PROVISIONS 2.1 Agreement is Non-Exclusive 2.2 Occupation License Required 2.3 Master Permit Required 2.4 Agreement Term 2.5 Cooperative Service Acquisition Agreements 2.6 WAN Agreement Assignment and Payments 2.7 Due Diligence 2.8 Surety Bond 2.9 Certification 2.10 Service Options 2.11 Local Area Neh¥ork (LAN) Services 2.]2 Background Checks 3. SERVICES AND SITE DROPS 3.1 City Service Locations 3.2 Additional City Sites 3.3 Services Provided to the City 3.4 Service Levels 3.5 Site Drop Ownership and Maintenance 3.6 City Site Drop Route Plans, Procedure and Schedule 3.7 Non-City Site Drops 4. SERVICE CHARGES AND PAYMENT 4.1 C.P.1. Base Service Charges 4.2 City 1-Net Excess Capacity Charge 4.3 City Public Utilil3, Tax 4.4 City Pole Attachment Charge Credit 4.5 Invoicing and Payment 5. MISCELLANEOUS PROVISIONS 5.1 Notices 5.2 Confidentiality 5.3 Reports 5.4 Indemnification/Hold Harmless 5.5 Assignment 5.6 Survival 5.7 Violations and Remedies 5.8 Termination 5.9 City Right to Purchase 530 l-Net Node Equipment Lien 5.11 Other Remedies 5.12 Force Majeure 5.13 Severabilitv 5.14 Entire Agreement page I Attachment D - Proposed I-Net Services Agreement August 9, 2002 5.15 Attorney's Fees 5.16 Reopeners 6. EXHIBITS 6.1 Fiber Optic WAN Use Agreement 6.2 I-Net Services Expedited Schedule 6.3 City Site Locations and Services Requirements 6.4 Service Levels 6.5 Service Charges 6.6 lnterloca] Agreement for Acquisition of Institutional Network Services page 2 Attachment D - Proposed I-Net Services Agreement August 9, 2002 INSTITUTIONAL NETWORK SERVICES AGREEMENT BETWEEN THE CITY OF PORT ANGELES AND CAPACITY PROVISIONING, INC. PURPOSE THIS INSTITUTIONAL NETWORK SERVICES AGREEMENT (the "Agreement") between the City of Port Angeles, a Washington municipal corporation, hereinafter the "City", and Capacity Provisioning lnc., a subchapter S Washington corporation, hereinafter "C.P.I." is to: (1) Effect the assignment by the City to C.P.I. of the City's Fiber Optic WAN Use Agreement ("WAN Agreement") with Northland Cable Television, Inc. ("North]and") dated , and attached liereto as Exhibit 6.]. (2) Set forth the terms and conditions for provision by C.P.I. of lnstitubona] Net~vork Services consisting o~ wide area networking, broadband lnternet access, voice over lnternet protocol, local aTea nehvork and other broadband telecommunications services ("]-Net Services") for non-commercial use by the City, and RECITALS WHEREAS the City is desirous of expediting l-Net Services for its own use as well as for other public institutions and businesses in Port Angeles in advance of the scheduled deadline of February 27, 200~], at which hme a dark fiber institutional network ('q-Net") for use by the City and service providers will be completed by Northland, and WHEREAS the City is in the process of implemen[ing an integrated soft~¥are and related hardware system for muinc]pa] business purposes that will rely upon local area networks w'ithm City facilities and the ]-Net for current and future applications that require broadband communications capability between City facilities, and WHEREAS, the City and Northland have entered into a WAN Agreement to permit use of existing excess Northland infrast~-ucture as a means of expediting l-Net services while the City l-Net is being constructed, and WHEREAS, Section 25 of the WAN Agreement permits the assignment by the City of said WAN Agreement, and the Ci~, agrees to assignment of said WAN Agreement to C.P.I., and WHEREAS, the City is desirous of receiving l-Net Services, and C.P.]. is desirous of providing said ]-Net Services and represents that it can do so in accordance with the City's expedited schedule attached hereto as Exhibit 6.2, and WHEREAS, C.P.1. represents that it is in full compliance with the laws of the State of Washington and/or other applicable requirements to provide said I-Net services, and WHEREAS, C.P.I. represents that it has the adequate background, experience, certifications, ability, and the techincaI, financial and legal resources available to perform the requirements of this Agreement, and has submitted its qualifications and those of its ]-Net node equipment vendor to the City and the City's l-Net Technical Advisor, CommiHee, and WHEREAS, the City and its l-Net Technical Advisory Committee, which consists of representatives ot various institutions in the City, have reviewed C.P.I.'s submittals and are satisfied that C.P.1. and its l-Net node equipment vendor are qua]flied to provide said ]-Net services in accordance with the terms and conditions of this Agreement, and WHEREAS, C.P.]. is a local Port Angeles business, recently incorporated in 2001, has invested in approximately ] 0 miles of fiber optic cable within the City. and an additional ] 0 miles are currently under construction, and the Ci~ in accordance with its fiber optic business plan goals, is striving to minimize the duplication of telecommunications irffrastrucVare and accomplish its economic development goals to page 3 Attachment D - Proposed I-Net Services Agreement August 9, 2002 support and promote diversification of the commu~ity in the areas of telecommunications and advanced technology, and YVHEREAS, C.P.]. has or will be investing approximately $620,000 in providing the infrastructure and equipment in fulfillment of its obligations under this Agreement; NOW, THEREFORE, in consideration of the above representations and the terms, conditions, covenants and agreements set forth below, the parties hereto agree as follows: 1. DEFINITIONS Words and terms shall be given their ordinary and usual meanings. The meanings shall be applicable to the singular, plural, masculine, feminine and neuter of the words and terms. Where used in this Agreement, the words and terms set forth in Section 1'1.14.020 of Chapter 11.14 of the Port Angeles Municipal Code (PAMC), Telecommunications Facilities within Rights-of-Way, and the Cable Television Franchise Ordinance No. 3116 shall be applicable to the same terms as used in this Agreement, except as modified herein. 2. SPECIAL PROVISIONS 2.1 Agreement is Non-Exclusive This is a non-exclusive Agreement for the purpose of providing retail telecommunications services within the City, excluding cable television services consistent with the Cable Television Franchise Ordinance No. 3116, by utilizing the l-Net backbone and nodes. Any other substantially similar I-Net services agreement entered into by the City shall be on a competitively neutral basis, taking into account without limitation C.P.I.'s obligations under this Agreement. 2.2 Occupation License Required From and after the effective date of this Agreement and throughout the Term of this Agreement, C.P.I. shall obtain an occupation license from the City pursuant to Chapter 5.80 PAMC, Licensing and Taxation. C.P.I.'s telecommunications services gross revenues, including all charges within Exhibit 6.5, shall be subject to a public utility tax, also in accordance with Chapter 5.80 PAMC, Licensing and Taxation. Telecommunications services gross revenues do not include the provision of Internet service as defined in the revised code of Washington (RCW) 82.04.297, in accordance with Chapter 5.80 PAMC. C.P.I. shall pay any additional federal, state, local and City taxes as may be levied, imposed or due from carriers, operators, providers, their customers or subscribers, or on account of the lease, sale, delivery or transmission of telecommunications services, provided said amounts may be added to the charges the City is required to pay pursuant to this Agreement. 2.3 Master Permit Required Prior to construction of any telecommurdcations facilities in, under, over or across any rights-of-way of the City to provide telecommunications service, C.P.]. shall first obtain a Master Permit from the City pursuant to Chapter I1.14 PAMC, Telecommunications Facilities within Rights-of-Way. C.P.I. shall not allow other wholesale or retail service providers to provide telecommunications services under this Agreement until such service providers have received all requisite licenses, certificates and authorizations from the City, Federal Communications Commission, the Washington Utilities and Transportation Commission, or any other federal or state agency having jurisdiction. 2.4 Agreement Term This Agreement shall commence as of the date of the execution of this Agreement and shall continue for seven (7) years (the ]nitial Term); provided, however, the City at its own discretion may, on or page 4 Attachment D - Proposed I-Net Services Agreement August 9, 2002 before 30 days prior to the expiration of the Agreement, grant annual one (1)),ear extensions of this Agreement, to exlend the total term up to a maximum of ten (10) years (the Extended Term), subject however to the governing terms of the City/Northland WAN Agreement, Cable Television Franchise Ordinance No. 3226 and the same terms and conditions as set forth herein (other than Exhibit 6.5 schedule 2 and 3 pricing which may be negotiated by the parties). Upon commencement of the Extended Term, if any, the City agrees to pay the base monthly service charge shown in Exhibit 6.5 Schedule ~ .A. for wide area networking and site drop services to City facilities included in Exhibit 6.3 schedules I and 2 for a total number of equivalent '100 Mbps Ethernet ports equal to eighteen (78). During the Extended Term, if any, the City, institutions, and businesses shall be provided at least thirty days advance notice of any changes to Exhibit 6.5 schedules 2 and 3. C.P.]. shall complete and return Exhibit 6.5 to the City, institutions, and businesses to satisfy the advance notice requirement. The Term of this Agreement may exceed the Initial and Extended Terms if the l-Net node equipment and/or customer premise equipment is upgraded to match current technology in accordance with Section 5.'16. The City and C.P.]. shall mutually agree upon the upgrade implementation schedule and an amendment to Section 2.4, Exhibit 6.5., and other terms and conditions of this Agreement. Upon completion and written City acceptance of such upgrade, the Term of this Agreement shall be increased by a minimum of five years. 2.5 lnterlocal Agreement for Acquisition of Institutional Network Services C.P.I. agrees to allow the City. to enter into lnterlocal Agreements with other governmental and public institutions, pursuant to RCW 39.34, to extend the privileges, terms and conditions of this Agreement made with C.P.I. to die extent permitted by law, to institutions entering into such lnterlocal Agreements with the City, and attached hereto as Exhibit 6.6. 2.6 WAN Use Agreement Assignment and Payments The CID., and Northland have entered into a WAN Agreement dated , and attached hereto as Exhibit 6.1. In the WAN Agreement, Northland has granted to the City or its assigned entity an exclusive right to activate and use certain portions of Northland's fiber optic infrastructure, to establish a fiber optic wide area network ("Fiber Link"), including Nodes, for use in providing retail telecommunications services to public mstntutions and businesses including home offices but not to the general public. The CID,, as sub]essor, agrees tu assign ail of its right, license and interest in its WAN Agreement with North]and to CP.I., as sub lessee, for C.P.I.'s use in providing retail telecommunications services to the City, public institutions and businesses including home offices but not to the general public consistent with Chapter 11.14 PAMC, Telecommunications Facilities within Rights-of-Way and the Cable Television Franchise Ordinance No. 3116. C.P.I. hereby assumes all obligations of the WAN Agreement, except as provided in this Secfon, and agrees to perform and discharge those obligations in accordance with its terms and conditions. C.P.I. agrees lo indemnify the City against any losses, claims, damages or liabilities to which either or both parties may become subject to or which arise out of, or in connection with, the WAN Agreement. The CiD, shall be responsible for and timely pay to Northland the l-Net payment required by Section 3.1 and the monthly payments required by Sections 3.2 and 3.3 of the assigned WAN Agreement. Upon die completion of the l-Net under the Cable Television Franchise Ordinance No. 3116, which is anticipated no later than February 27, 2004, C.P.I. shall interconnect the l-Net fibers to l-Net node equipment for CiD, and institutional use and shall have continuing City consent to use up to twenty five (25) rack-units within each I-Net node enclosure and up to eight (8) dark fibers throughout the I-Net backbone. Upon C.P.I. request, additional rack-units and dark fibers may be provided by the City subject to a charge to be paid by C.P.I. and reasonable contractual restrictions by the City based on competitive market conditions. To the extent the l-Net will be utilized by businesses after February 27, 2004, as the City's assignee and in accordance with the Fiber Optic WAN Agreement, C.P.1. shall be provided the first page 5 Attachment D - Proposed I-Net Services Agreement August 9, 2002 right of refusal to use two (2) of Northland's reserve fibers under the Cable Television Franchise Ordinance No. 31'16 for commercial use subject to a charge to be paid by C.P.I. and reasonable contractual restrictions by Northland based on competitive market conditions and shall have continuing City consent to use up to laYenty five (25) rack-units within each l-Net node enclosure and up to eight (8) dark fibers throughout the 1-Net backbone. To the extent that C.P.]. requires continued use of l-Net enclosures beyond termination, cancellation or expiration of this Agreement, upon C.P.]. written request which must be received by the City within sixty (60) days of termination, cancellation or expiration of this Agreement, C.P.]. shall be entitled to irrevocable use of up to twenty five (25) rack-units within each I-Net node enclosure, subject to a charge to be paid by C.P.I. and reasonable contractual restrictions by the City based on competitive market conditions, continuing beyond termination, cancellation or expiration of this Agreement, as provided in Section 5.6, Survival. 2.7 Due Diligence On or before August 26, 2002, C.P.]. shall provide the Cii?_, a list of names, addresses, and social security, numbers for C.P.]. personnel that will be permitted to have access to ]-Net node equipment and nela¥ork operation and management sofia,,are. Such C.P.]. personnel may be subject to a background check in accordance with Section 2.12 On or before August 30, 2002, C.P.]. shall submit evidence that: ]t has the financial resources to fulfill its obligations under this Agreement and shall file contemporaneously with the execution of 1-Net node equipment loan agreements, if any, a Uniform Commercial Code U.C.C.-I Financing Statement with the Washington State Department of Licensing. (2) ]t has obtained a surety, bond, if required, in accordance with Section 2.8. (3) it has entered into an agreement, including techincal support, with an ]-Net node equipment manufacturer and that the service levels described in Exhibit 6.4 will be met. (4) The City. site drop route plans in accordance with Section 3.6 have been submitted to the city. 2.8 Surety Bond ]f C.P.1. needs to obtain financing to fulfill its obligations under this Agreement, then C.P.]. shall provide a surety bond with a surety company approved by the Ci~', in an amount equal to the cost of the l- Net node equipment and customer premzse equipment at City sites financed during the initial 'ferm of this Agreement, 1o secure C.P.I.'s performance of its obligations and faithful adherence to all requirements of this Agreement. The bond shall contain the followmg endorsement: "It is hereby understood and agreed that this bond may not be canceled by the surety nor any intention not to renew be exercised by the surety until thirty (30) days after receipt by the City, by certified mail, of wriPlen notice of such intention to cancel or not The rights reserved to the City with respect to the bond are in addition to all other rights of the City, whether reserved by this Agreement or authorized by law; and no action, proceeding or exercise of a right with respect to such bond shall affect the City's rights to demand full and faithful performance under this Agreement or limit C.P.I.'s liability for damages. 2.9 Certification C.P.I. certifies that the l-Net node equipment, customer premise equipment, and all work and materials furnished under this Agreement shall comply with the service ]eve] standards described in Exhibit 6.4 and accepted industry standards. page 6 Attachment D - Proposed I-Net Services Agreement August 9, 2002 2.10 Service Options (1) C.P.I. shall make reasonable eftorts to make arrangements with the Clallam County PUD No. 1 (District), and/or North]and, and/or Qwest to interconnect the C.P.I. network to provide wide area networking service with the District, Northland, and/or Qwest no later than January ]5, 2003. Such arrangement shall provide wide area networking within both the City limits and C]allam County service areas, to the extent comparable wide area networking services within the Clallam County service area is available and commercially reasonable. C.P.I. shall complete and fearn Exhibit 6.5 Schedule 3 to the City no later than January 15, 2003. In addition, C.P.I. shall provide a detailed description of the network securi~, to be provided by such mlerconnection which shall be considered confidential in accordance with Section 5.2 On or before August 20, 200'L within ninety (90) days of the City's request, C.P.I. shall provide another interconnection point, that provides a diverse ~hysica] route from Port Angeles to Sequim, to be specified by the City. The City shall not incur any charges until the City provides notice in writing to C.P.1. agreeing to pay the wide area neix*,orkmg service charges within Exhibit 6.5 Schedule 3 and the cost of the intercormections. l] C.P.I. makes an arrangement with the District, the City may require that the arrangement includes a second redundant logical intercormectdon, in addition to the 1VAN Agreement, from an l-Net node to a District intercormection point to be specified by the City.. The City shall not incur any charges until die City provides notre in writing to C.P.I. agreeing to pa5, for the cost of the interconnections. (2) C.P.I. shall make reasonable efforts to make arrangements with qualified service providers and commercial monthly charges shall be established for retail broadband lnternet access services within the City limits. C.P.I. shall complete and return Exhibit 6.5 Schedule ] .E. and provide a schedule for regular commercial lnternet access service charges to the City, for each retail service provider entering into an agreement wifh C.P.I., no later than January 15, 2003 to satisfy this requirement. C.P.I. charges to the Cih, for retail broadband lnternet access services shall be in addition to the charges included in Exhibit 6.5 schedule ] for wide area networking. Upon the request of a qualified retail service provider, C.P.I. shall provide wholesale services subject to a charge to be paid by the retailer and reasonable contractual restricnons bv C.P.I. based on competitive market conditions. The City shall not i~acur any charges until the City provides notice in writing to C.P.I. agreeing to pa5, the retail broadband lnternet access service charges. C.P.I. agrees to make reasonable efforts to negotiate agreements with retail Internet service providers, whether affiliated or unaffiliated with C.P.I, to provide retail broadband lnternet access services within the City. CPA. agrees to negotiate with all retail lnternet service providers that currently conduct business on the North Olympic Peninsula and express an interest m such an arrangement with C.P.I. first; provided that it no such arrangements have been reached by October 15, 2002, C.P.I. may negotiate with any qualified retail lntemet service provider. Said arrangements shall be subject to C.P.I. and retail lnternet service providers reaching an agreement based on commercially reasonable terms and conditions. C.P.I. shall be permitted to provide wholesale broadband lnternet access. C.P.I. shall also be permitted to charge a fee for wholesale lnternet access, wholesale use of the l-Net, and wholesale use of C.P.I. l-Net node equipment, site drops, and all other appurtenant infrastructure. Furthermore, CP.I. shall be permitted to impose page 7 Attachment D - Proposed I-Net Services Agreement August 9, 2002 reasonable contractual restrictions based on competitive market conditions to retail broadband lntemet service providers. C.P.]. shall use commercially reasonable efforts to ensure that the retail broadband Internet access services provided over the 1-Net will conform substantially to the following standards: A. The platform will be kept current with standards for interoperability with internet protocol applications. B. The City, institutions and businesses that receive the service will be able to reach the lnternet. C. The City hereby recognizes that C.P.] may provide wholesale lnternet access and qualified service providers may provide retail lnternel access services without obtaining other Ci~, approvals. 3. Upon written City request, C.P.I. shall establish a City base charge for fully scalable VoIP services including a suite of enhanced phone features for municipal ~'acilities. Within ninety days of the City's written request, C.P.I. shall complete and return Exhibit 6.5 Schedules 1 .D. to the City to satisfy this requirement. The City and C.P.I. shall mutually agree upon the VoIP implementation schedule. Upon completion and written City acceptance of such implementation, the City shall begin to incur a monthly base charge for VolP services. The City shall not incur any charges until the City provides notice in writing to C.P.I. agreeing to pay VolP service charges. Upon written City request, C.P.I. shaI] also establish a commercial monthly charge for VolP sen, ices for institutions and businesses. 2.11 Local Area Network (LAN) Services During the first year of the Initial Term of this Agreement, upon establishing a mutually agreed upon schedule that is approved m writing by both parties, C.P.]. shall provide one hundred (100) hours of LAN services at no charge for sen'ices requested by the Ci~ including, but not limited to, LAN plans and specifications within municipal tacilities, security, and lnternet Protocol (J.P.) re-addressing planning and implementation. C.P.1. shall obtam written City approval of LAN plans and specifications and the I.P. re- addressing plan. The tinp]ementation schedule for the I.P. re-addressing plan shall be mutually agreed upon in advance of performing services and shall occur outside of normal City business hours. Upon written Ci~' approval of the LAN plans and specifications and cost schedule in accordance with Exhibit 6.2, C.P.I. shall provide LAN materials, hardware, and installation services tor municipal facilities. Upon writlen City acceptance of the LAN installation services, the City, agrees to pay for the LAN services in an amount not to exceed the cost schedule, actual cost of LAN materials, hardware, and installation services, or $60,000.00, whichever is the ]east amount. Upon written City request, C.P.1. shall provide additional LAN services for a charge, including but not limited to plans and specifications, training, nem.,ork operation, network management, securib, and demand maintenance support for the City's LANs within municipal facilities. LAN demand maintenance services shall be available twenty-four hours a day, seven days a week. During normal operation conditions, C.P.I. shall respond to all demand maintenance services requests within two hours and make necessary repairs to the extent feasible to restore services within four hours of notification Monday through Sunday, 6 a.m. to 10 p.m. The charge for additional LAN services shall be in accordance with Exhibit 6.5 Schedule 1.D. Upon written Ci~ request, C.P.I. shall also provide LAN materials, hardware, and installation services for municipal facilities. The charges for LAN materials, hardware and installation services shall be mutually agreed upon prior to commencing work. 2.12 Background Checks C.P.1. personnel and any of C.P.I.'s subcontraclor personnel that are permitted to have access to l- Net node equipment and network operation and management sofPa'are during the term of this Agreement page 8 Attachment D - Proposed I-Net Services Agreement August 9, 2002 may be subject to a background check that shall be completed and approved by the City in its sole discretion which shah be considered confidential in accordance with Section 5.2. The information that may be included in a background check includes, but is not limited to, driving records, vehicle registration, credit records, criminal records, social security number, education records, professional certifications, State licensing records, court records, workers' compensation, bankruptcy, character references, neighbor interviews, medical records, property ownership, employment verification, and military service records. 3. SERVICES AND SITE DROPS 3.1 City Service Locations C.P.I. will provide l-Net Services at the City site locations listed in Exhibit 6.3. C.P.I. shall be responsible for all costs to provide fully functional l-Net Services, which have been included in its charges in Section 4 and within Exhibit 6.5. C.P.1. will provide limited universal availability of services to additional City, institution, and business site locaiSons within the City. Limited universal availability of services within the City shall include expansion of C.P.I. l-Net node equipment within three (3) nodes that may be required to provide more than seventy-two (72) Ethernet ports. Limited universal availability of services within the City shall also include a standard overhead facility site drop from a site location that is within 1,500 hnea] feet of the nearest ]-Net node or '1,500 lineal feet of C.P.I. owned infrastructure. For any site locations not included in Exhibit 6.3 that require overhead facilities beyond ~,500 lineal feet or underground drops, C.P.I. may charge the City, institutions, and businesses for the actual cost for any such additional overhead facilities or underground drop installation. 3.2 Additional City Sites Additional City sites may be added during the term of this Agreement and ail additional drops shall be governed by the same terms and conditions specified in this Agreement. The cost for additional site drops 1o City, facilities not included in Exhibit 6.3 schedules 1 and 2 shall be in accordance with Exhibit 6.5 schedule 2.A. 3.3 Sep,'ices Provided to the City C.P.]. shall provide wide area net~¥orking l-Net Services to the City in accordance with the service requirements contained in Exhibit 6.3. At no additional charge to the City, C.P.I. shall provide the l-Net node equipment, expansions to 1-Net node equipment capacity as required, and l-Net operation, maintenance and management services required to meet its obligations to the City under this Agreement. C.P.I. shall also be responsible for marketing, billing and all other retail services necessary to provide regular commercial services under this Agreement. 3.4 Service Levels C.P.1. shall provide l-Net Services to the City and institutions and regular commercial services to businesses in accordance with the service levels contained in Exhibit 6.4 at~ached. 3.5 Site Drop Ownership and Maintenance All site drops, whether to City or non-City sites, shall be owned and maintained by C.P.]. unless otherwise agreed upon. Upon termination or expiration of this Agreement, C.P.I. agrees that all site drops will be "open access," available to other service providers who may use the drops ia provide services. However, upon termination of this Agreement, use of non-City site drops by other service providers shall be subject to competitive, industry standard access charges. 3.6 City Site Drop Route Plans, Procedure and Schedule. C.P.1. shall provide fiber drops, consisting of a minimum of two (2) single mode fibers to each City site to be served as listed in Exhibit 6.3 schedules 1 and 2. page 9 Attachment D - Proposed I-Net SerMces Agreement August 9, 2002 Each site drop connection shah be terminated within fifty (50) feet of entering the applicable building using a City provided path at a mutually agreed upon point of demarcation in a C.P.I. standard termination panel, mounted on a City furnished backboard. C.P.I. shall prepare a site drop route plan from the apphcable l-Net node to each City site to be served and detailed site plans for written City approval and permitting purposes in accordance with the I- Net Services Expedited Schedule (Exhibit 6.2), and as follows: (1) In preparing the plans and specifications, C.P.I. and the City agree to coordinate closely to ensure that the project requirements are met expeditiously. (2) CP.I.'s plans and specifications shall be in sufficient detail to permit identification, correlation, verification and understanding of the components of C.P.I.'s plans and specifications. (3) The City will review the plans and specifications and shah provide written approval. (4) If revisions are required by the Cib,, the plans shah be resubmil~ed by C.P.I. to the City and the City shall provide written approval (5) In no event shall the City have any liability for any expenses C.P.l. incurs in preparation of such plans and specifications. (6) All site drop fibers and other C.P.l. provided fibers necessary, to provide the services described in this Agreement shall be ]abe]ed at termination points to readily enable identification and ownership. (7) The site drops, l-Net node equipment, and customer premise equipment, including aH splicing and testing, shall be fully complete, and operational in accordance with the l-Net Services Expedited Schedule (Exhibit 6.2). The City shall promptly conduct a final inspection to verify, completion. (8) C.P.I. shall deliver as~builts of C.P.I.'s infrastructure and the site drops to City facilities, and an electronic copy of the as-but]ts in a mutually agreed upon format, showing identification and labeling of fibers 3.7 Non-City Site Drops. Non-City site drops shall consist of a minimum of two (2) single mode fibers. C.P.I. shall construct such drops, subject to the requesting party's acceptance of an interlocal agreement (see exhibit 6.6) for acquisition of I-Net services in accordance with Section 2.5 or execution of an agreement with C.P.I.. Payment for non-City site drops shall be incorporated with and as part of the maximum monthly service charges per Exhibil 6.5 Schedule 2.A, unless other payment arrangements are approved by C.P.I. The minimum term l'or non-City site drop charges shall be consistent with the lnitial Term of this Agreement, unless otherwise approved by C.P.I.. Each site drop connection shall be terminated within fifty (50) feet of entering the applicable building using a customer provided path at a point of demarcation mutually agreed upon by C.P.1. and the customer in a C.P.I. standard termination panel, mounted on a customer furnished backboard. 4. SERVICE CItARGES AND PAYMENT 4.1 C.P.I. Base Service Charges Upon the availability of services in accordance with Exhibit 6.2 the City agrees to pay a non- recurring base service charge in the amount of S310,000.00, which includes $140,000.00 for I-Net node equipment and $170,000.00 for City site drops C.P.I. shall be responsible for all costs to provide fully functional l-Net node equipment and City site drops, which have been included in the non-recurring base service charge. In addition, the City has established a contingency for expenses that are approved by the City in an amount not to exceed ten percent (10%) of the non-recurring base service charge in the amount ot $31,000. The CitY's payment for its site drops shall entitle it to exclusive, irrevocable use of the site drops without any further ongoing charges during the Initial Term and Extended Term, if any, continuing beyond page 10 Attachment D - Proposed I-Net Services Agreement August 9, 2002 termination, cancellation or expiration ot this Agreement, as provided in Section 5.6, Survival. However, in the event the City continues its use ot the site drops beyond termination, cancellation or expiration of this Agreement, the City shall pay a pro-rata share of C.P.L's reasonable maintenance costs for City site drops. Upon the availability of services in accordance with Exhibit 6.2 continuing throughout the lnitial Term of this Agreement the City agrees to pay the base monthly service charge shown in Exhibit 6.5 schedule 1 .A./or wide area networking and site drop services to City tacilit~es within the City included in Exhibit 6.3 schedule I and 2 for a total number of eighteen (18) equivalent 100 Mbps Ethernet ports. City pump stations and electrical substations shall utilize three (3) equivalent 100 Mbps Ethernet ports of the eighteen (18) equivalent 100 Mbps Ethernet ports. TILe City agrees tu pay the non-recurring connection charge shown in Exhibit 6.5 Schedule 1.B. for a C.P.1. standard termination panel and customer premise equipment instal]ed at each City site Upon written City request and acceptance of C.P.I. LAN services, the City agrees to pay the LAN charges shown in Exhibit 6.5 Schedule 1 .C The regular commercial monthly service charges shown in E×hibJt 6.5 schedules 2 and 3 shall be available to additional City facilities, inshtutions, and businesses including home offices not included in Exhibit 6.3 schedules I and 2. The City base service charge and monthly service charges shall not be available to instituhons or businesses During the lnitial Term, if mutually agreed upon in accordance with ~C, ection 5.16, Exhibit 6.5 may be amended it more than three (3) 1-Net nodes are required to have 1-Net node equipment or an expansion to C.P.I.'s I-Net node equipment within lhree (3) 1-Net nodes is required by the City. Chmges shown in Exhibit 6.5 do not include any required local area network equipment expenses within facilities beyond the C.P.I. standard termination panel and customer premise equipment. C.P.I.'s customer count will be calculated and expressed as the total number of equivalent 100 Mbps Ethernet ports. The service charges within Exhibit 6.5 schedules 1 and 2 for wide area networking within tile City shall be in effect throughout the Initial Term of this Agreement 4.2 City l-Net Excess Capacity Charge C.P.l. shall be responsible for and timely pay the City an l-Net excess capacity charge in accordance with Exhibit 6.5 schedule 2.B. to be added to uhlity tax payments to be paid by C.P.I. to the City. The l-Net excess capacity charge shall be collected from all institutions and businesses, excluding the City. 4.3 City Public Utility Tax The monthly service charges shown in Exhibit 6.5 do not include any City public utility taxes. C.P.I. shall collect uhlily taxes from all institutions and businesses, and remit such taxes to the City, in accordance with Section 2.2. 4.4 City Pole Attachment Charge Credit C.P.I. shah be responsible for and timely pay the City pole a~tachment charges in accordance with the Master Permit required in Section 2.3 and Chapter 13.14 PAMC. On or about July ~ of each year, C.P.I. shall determine the total number of its pole contacts on City-owned poles as of the preceding day. C.P.l. may request a credit against the annual charges payable to the City ~or the total number of C.P.l. pole contacts for site drop intrastrucPare made under this Agreement that are tot the sole purpose of serving the City. The credit request shall be accompanied by a C.P.l. network route map that identifies all C.P.I. contacts on City-owned poles, all C.P.]. contacts on City-owned poles made under this Agreement that are for the sole purpose of serving the City, and all customer locations receiving C.P.I.'s services. If the City determines that the C.P.I. pole contacts are for the sole purpose of serving the City then the City shall grant the credit requested. page 11 Attachment D - Proposed I-Net Services Agreement August 9, 2002 4.5 Invoicing and Paymenl C.P.I. charges will be invoiced to the City monthly (12 invoice periods per year). City payment is due within 30 days of receipt of invoice. Thereafter, interest of 1.0% per month will be charged on the balance due. C.P.]. payment of City public uti]itv taxes and l-Net excess capacity charges shall be paid to the City monthly. C.P.I. payment is due within 30 days of the end of the preceding calendar month. Each payment shall show the certified customer count and gross revenue subject to utility tax in accordance with this Agreement. 5. MISCELLANEOUS PROVISIONS 5.'1 Notices Ali notices required to be in wribng hereunder shall be deemed given when personally delivered, or ii' mai]ed by certified or registered mail, three (3) days following deposit in the United States mail, postage prepaid, or if via telecopy or facsimile, when received, or if sent by courier service providing evidence of delivery, when actually delivered by such service. Ali notices from C.P.I. to the Ci~, pursuant to this Agreement shall be directed to the City Manager at City Hall, 32~ East Fifth Street, P.O. Box '1'150, Port Angeles, WA 99362-02'17, or 1o such officer as designated by the City Manager. AIl notices from the City to C.P.I pursuant to this Agreement shall be directed to Mr. Bill Roberds, President, at Capacity Provisioning, Inc., 54 West Misty Lane, Port Angeles, WA 98362. 5.2 Confidentiality The City.' will maintain confidentialil5, of any and all information provided or made available by C.P.I. to the extent permitted by la,a, when C.P.1. has noddied the CIV,, of the confidential nature of the information. C.P.I. shall maintain confidenhali~ of all information about the City's LANs, WANs, neha, ork i~iformation and data under this Agreement. C.P.1. will maintain confidentiality of any and ali additional informahon provided or made available bv the City to the extent permitted by law when the City has notified C.P.I. of the confidential nature o[ the in:formation. 5.3 Reports CP.I. shall report to the City such information relating to this Agreement as the City may reasonably require to demonsb'ate C.P.]Fs compliance with the terms and conditions of this Agreement and shall comply with the City's reasonable determination of forms for reports, the time for reports, the frequency wifh xYhich any reports are to be made, and if reports are to be certified. 5.4 Indemnification/Hold Harmless. C.P.I. shall defend, indemnify and hold harmless the City, its officers, officials, employees, and volunteers harmless from any and all claims, injuries, damages, losses or suits, including attorney fees, arising or issuing out of or in connechon with this Agreement or the WAN Agreement, except as may be caused by the sole negligence or willful conduct on the part of the Cit~,. 5.5 SubcontractqAssignment. C.P.h shall not subconb'act, assign or transfer any right, tide or interest under the terms of this Agreement or the WAN Agreement without the prior written approval of the City. Such approval shall not be unreasonably withheld or delayed, provided it is demonstrated to the City's satisfaction that the assignee has the background, experience, certifications, ability, and the technical, financial and legal resources to perform the requirements of this Agreement p~e12 Attachment D - Proposed I-Net Services Agreement August 9, 2002 5.6 Survival. The provisions covering WAN Use Agreement Assignment and Payments, site drops, service charges and payment, and indemnification/hold harmless shall survive termination, cancellation or expiration of this Agreement. 5.7 Violations and Remedies If the City has reason to believe that C.P.I. is in violation of this Agreement, after informal and cooperative eHorts have failed after two (2) meetings or ten ('10) business days, whichever occurs first, the City shall notify C.P.I. in writing of the violation setting forth the nature of such violation. Within thirty (30) days of C.P.1. receipt of such notice, or such longer period specified by the City, C.P.I. shall respond in wri~rg that the violation has been cured, provide a cure plan or schedule thai reasonably satisfies the City, provide explanations in refutation or excuse with documentation to support that an alleged violation did not occur, refute the City's denial of C.P.I.'s cure plan, or refute the City's denial of an additional time period to complete the cure plan. The City shah act on the C.P.l.'s cure plan, ff any, within thirty (30) days of City receipt of such plan. The Cfi3., shall provide wrJHen acceptance or deina] of C.P.].'s cure plan, which acceptance shall not be unreasonably withheld or delayed. C.P.]. shall be allowed thirty (30) days to cure violations after written City acceptance of C.P.I.'s cure p]an is received. If the nature of the violation is such that it cannot be fully cured within 30 days due to ciicumstances not under C.P.l.'s commercially reasonable control, the period of time in which C.P.I. must cure the violation shall be extended by the City in wrifing for such additional time reasonably necessary to complete the cure, provided that (1) C.P.I. shall have promptly commenced to cure, and (2) C.P.]. is diligently pursuing its efforts to cure in the City's reasonable judgment. If the violation has not been cured within the time allowed under this section, then C.P.I. shall be liable for liquidated damages for the roi]owing violations: (1) Failure to promptly comply with Section 2: $] 00.00 per day; provided, however, in no event shall the aggregate amount for all such violations exceed $2,500.00 per year. (2) Failure to comply with Section 3:$100.00 per daF,; provided, however, in no event shall the aggregate amount for ail such violations exceed $2,500.00 per year. (3) Failure to comply with Section 4:$'100.00 per daF,; provided, however, in no event shall the aggregate amount for ail such violations exceed $2,500.00 per year. (4) Failure to with Section 5:$100.00 per day; provided, however, in no event shall the aggregate amount for all such violations exceed $2,500.00 per year. (5) Failure to comply with Section 6:$100.00 per da),; provided, however, in no event shall the aggregate amount for ail such violations exceed $ 2,500.00 per year C.P.I. agrees that each of the foregoing failures shall result in injuries to the City, institutions and businesses, the compensation for which would be difficult to ascertain and to prove. Accordingly C.P.]. agrees that the foregoing amounts are liquidated damages, not a penalty or forfeiture. If C.P.I. fails to make full and complete liquidated damage payments as required by this Agreement within ten (]0) business days after receipt of written notice from the City, then the City may immediately take steps to deduct without further notice to C.P.1. the amount thereof from the service charges and payment due to C.P.]. in accordance with this Agreement. Liquidated damages shall accrue from whichever applies among the following: (1) thirty (30) days after City notice if no cure plan is submitted; (2) on the date of City denial of the C.P.]. 's cure plan; or (3) the date of the City accepted cure plan completion date. page 13 Attachment D - Proposed I-Net Services Agreement August 9, 2002 5.8 Termination The City reserves the right to terminate this Agreement if C.P.I. fails to comply with the due diligence requirements in accordance with Section 2.7. Each party reserves the right to terminate this Agreement at any time upon breach by the other party of a material term or condition of this Agreement; provided that the non-breaching party has first given 60 days written notice specifying in reasonable detail the alleged breach or failure of compliance and demanding the cure of the breach. If said breach or failure to comply cannot reasonably be cured in 60 days, and the breaching parD, shall proceed promptly to cure the same, the time for curing such failure to comply shall be extended for such period of time as may be reasonably necessary to complete such cure. In the event of termination of this Agreement, City payment of the service charges to C.P.I. specified in Section zt shall no longer be required. 5.9 City Right to Purchase The parties recognize that the City has received adequate consideration for the charges paid to C.P.1. to receive services under this Agreement. Nonetheless, to the extent permitted by law, in the event C.P.I. is not capable of perlorming its obligations under this Agreement, or the Agreement is terminated or otherwise expires or is not renewed, the City shall have the right of f~rst refusal to acquire the ]-Net node equipment, customer premise equipment and site drops owned by C.P.I., in the event it is to be sold, transferred, liquidated, or assigned, at fair market value ]ess the City's aggregate payment of base service charges for a period of sixty (60) days following the date of termination, expiration or non renewal of the Agreement. 5.10 l-Net Node Equipment Lien The City reserves the right to file an equipment lien in the amount of $140,000.00 to secure its payment of the non-recurring base service charge for ]-Net node equipment speci/ied in Section 4.1 of this Agreement if C.P.I. obtains financing to fulfill its obligations to purchase l-Net node equipment under this Agreement. 5.11 Other Remedies The remedies provided for in this section are not exclusive. The City shall also be entitled to pursue all other legally available remedies for breach of this Agreement. 5.12 Force Majeure The term "Force Majeure" shall mean delavs due lo Northland's failure to comply with section 1.6 of the WAN Agreement on or before October 1,4, 2002, acts of God, war, civil disturbances, fire, unavoidable casualty, construction delays due to weather, failure of supplier(s), or other similar causes beyond the control of C.P.I. The time within which C.P.1. shall be required to perform any act under the Agreement shall be extended by a period of time equal to the number of days performance is delayed due to a Force Majeure. C.P.]. shall not be subject to any penal~, hereunder because of acts or failure to act due to Force Majeure. 5.13 Severability Whenever possible, each provision of this Agreement will be interpreted to be effective and valid under applicable law. If any provision is found to be invalid, illegal or unenforceable, then such provision or portion thereof ',','ill be modified to the extent necessary to render it legal valid and enforceable and have the intent and economic effect as close as possible to the invalid, illegal and unenforceable provision. If it is not possible to modi~, the provision to render it legal, valid and enforceable, then the provision will be severed from the rest of this Agreement and ignored. The invalidity, illegality or unenforceability of any provision will not affect the validity, legality or enforceability of any other provision of this Agreement, which will remain valid and binding. page 14 Attachment D - Proposed I-Net Services Agreement August 9, 2002 5.1Zl Entire Agreement This Agreement and its Exhibit(s) represent the entire agreement between the parties hereto with respect to the subject ma.er hereof and supersede ali prior oral negotiations and agreements. 5.15 Attorney's Fees. If any suit or other action is instituted in connection with any conh'oversy arising under this Agreement, 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. 5.]6 Reopeners. ]t is the intent of both parties that each party shall enjoy all rights and be subject to all obligations of this Agreement ~or the entire term of this Agreement and, to the extent any provisions have continuing effect, after its expiration. However, both parties recogmze that the technology, of tdecommunicatJons services is in a state of flux. The occurrence of any of the following shall be grounds for the City or C.P.]. to reopen this Agreement as further provided in this Section: (1) Any proposed or actual use of the ]-Net and/or charges by C.P.l. or the City that are no! expressly provided for in this Agreement that may or may not invalidate or substantially negate or expand the effect of any material provision of this Agreement. (2) Any proposed I-Net node equipment and/or customer premise equipment substitutions thai will result in an increase or decrease in C.P.I.'s cost of more than five percent (5%). (3) Any proposed I-Net node equipment and/or customer premise equipment upgrade to match current technology: in accordance with Section 2.4, ~ here C.P.I. asserts that the proposed upgrade or implementation is not technically or commercially feasible. (4) Any proposed subcontract by C.P]. that will result in an increase or decrease in C.P.I.'s cesi of more than five percent (5%) to provide l-Net operation, maintenance and management services to the Cil3d. (5) Any other matter pertaining to this Agreement. The Cil",, or C.P.I. shall make a determination thai grounds exist to implement the reopener provisions of this Section and shall formally notify the other party in writing and in reasonable detail oJ that determination, the grounds for it, and the proposed amendment deemed necessary to address the event giving rise to the reopener. Within thirty (30) days of the receipt of the proposed amendment, the City or C.P.I. shall either provide written notice to the other party to rejec~ the proposed amendment or the City and C.?.]. shall agree to proceed with negotiation of an amendment to this Agreement. Any amendment lo this Agreement shall be mutually agreed upon in writing. AGREED TO BETWEEN THE PARTIES on the last date written below. CAPACITY PROVISIONING, 1NC. By: Its: Date CITY OF PORT ANGELES By: ]ts: Date ATTEST: APPROVED AS TO FORM: page 15 Attachment D - Proposed I~Net Services Agreement August 9, 2002 City Clerk City Attorney EXHIBITS 6.1 Fiber Optic WAN Use Agreement 6.2 I-Net Services Expedited Schedule 6.3 City Site Locations and Service Requirements 6.4 Service Levels 6.5 Service Charges 6.6 lnterlocal Agreement for Acquisition of l-Net Services page 16 Attachment D - Proposed I-Net Services Agreement August 9, 2002 EXHIBIT FIBER OPTIC WAN USE AGREEMENT To be inserled page 17 Attachment D - Proposed I-Net Services Agreement August 9, 2002 EXHIBIT 6.2 I-NET SERVICES EXPEDITED SCHEDULE SITE DROP CONSTRUCTION Site plans for City approval and permitting due 8/30/02 City revisions or approval 9/3/02 If revisions required, date due 9/6/02 Revisions approved by Cib, 9/11/02 Construction complete 11 / 11 / 02 I-NET NODE EQUIPMENT AND CUSTOMER PREMISE EQUIPMENT Equipmenl installed 11/25/02 Neh~,ork lestmg 12/9/02 Services available 12/23/02 LAN SERVICES LAN plans and specifications tot City. approval 11/29/02 Ci~, revisions or approval 12/6/02 It revisions required, dale due 12/11/02 Revisions approved by Ci~, 12/16/02 LAN is~stallation complete 1/3/03 page 18 Attachment D - Proposed I-Net Services Agreement August 9, 2002 EXHIBIT 6.3 CITY SITE LOCATIONS AND SERVICE REQUIREMENTS 1. CITY SITE LOCATIONS AND SERVICE REQUIREMENTS City Municipal Facilities Se~viCeDatalRequirementMbps Site Description 5 100 1000 8 Node CityHa 321 E 5th Street t 8 PA Police Department 8 Dispatch 911 166 Vern Burton Community (.enler 1 10 Fire Station 102 E 5th St 1 69 Senior Center 328 E 7th St 1 72 Carnegie Library 205 S Lincoln St 1 73 Fine Arts Center 1203 E Laurldsen 1 75 William Shore Pool 225 E 5th S~ 1 86 Parks Maintenance 16ih Si F St 87 £emetery-Office 3127 W 18th S~ 1 55 Node Corp Yard 1703 S B S~ 1 57 Wastewater'[reatment Plant 1509 Columbia 56 Light 0ps 240 W Front 1 54 Landfill 3501 W 18th 29 Pump Station #1 5th St & N St 1 30 Node Pump Station #7 W 19th St 1 31 Pump Station #10 1829.5 W 121hs~ 32 Pump Station #3 Marine & Hill 1 Station #8 H St & 14~ I 1 Pump 34 Pump Station #4 313 Marine Drive 35 Pump Station #2 1/2 Alley & Cherry 1 36 Pump Station #5 219 E 2nd St 37 Pump Station #9 Del Guzzi Dr i 1 38 Pump Station #6 933 Church St 2. CITY SITE LOCATIONS AND SERVICES COVERED BY THIS AGREEMENT Service Requirement :iCy Municipal Fadlities Data~ Mbps Site Description 5 100 1000 39 Peabody Substation 2803 S Peabody 40 Race Substation 1 41 Albert Substation 1 42 Laurel Substation 110 E 14~ St 1 43 Washington Substation 224 S Washinglon St 44 College Substation 1306 E Park St 1 45 Valley Substation 206 S Valle), SI 1 46 A Street Substation 1616 A St 1 47 F Street Substation 1604 S F St 1 48 I Street Substation 1538 W 7~ St 1 page 19 Attachment D - Proposed I-Net Services Agreement August 9, 2002 EXHIBIT 6.4 SERVICE LEVELS 1. Network Equipment All network equipment shall be standards compliant, non-proprietary technology, able to support standards based interface types such as Ethernet/IP, ATM, and SONET. The equipment shall be scalable to meet future network expansion needs. The equipment shall be interoperable with other standards based Ethernet networks, specifically that of the Clallam County PUD No. 1 (District), and/or Northland, and/or Qwest. The network shai] be capable of enabling cooperative use by related networks. 2. System Availability C.P.I. shah provide demand maintenance twenty-four hours a day, seven days a week and shall maintain the site drops from the oodes to the points of demarcation at all times. In emergency conditions, such as a natural emergency resulting from a windstorm, C.P.I. will perform emergency repair work on the fiber and field equipment. During an emergency, all fibers and tield equipment at a given damage location shall be repaired concurrently without preference to function. During normal operating conditions, customer circuits will be up and operating satisfactorily at ]east 99.9%, as measured over each billing period, not including scheduled maintenance time, (this requirement does not apply to routine maintenance outages that are scheduled in advance by C.P.I. and approved by the City). During normal operation conditions, C.P.I. shall respond to all outage reports within two hours and make necessary repairs to the extent feasible to restore service within four hours of notification Monday through Sunday, 6 a.m. to 70 p.m. Under normal operating conditions, C.P.1. shall respond to degradation reports within twenty-tour hours. 3. Reliability Recovery due to a logical network break in the 1-Net backbone under a ring configuration should not be greater than 12 ~nicroseconds under worst case conditions, with detection and rerouting typically occurring in approximately 300 microseconds. Recovery due to a physical network break or node enclosure power, battery backup, heat or air conditioning failure shall be coordinated with Northland, who is required by Subsection 8.7.1 of its Cable Television Franchise Ordinance No. 31] 6 to restore City l-Net breaks within four (4) hours ot outage notification. The City and/or NorthIand shall maintain a spare battery backup, heat and air conditioning unit in the event of a failure 4. Network Security C.P.1. shall provide protection against denial of service attacks with wire-speed extended access control lists, secure shell, secure copy, simple network management protocol version 3, and authentication with AAA, RADIUS or TACACS+. C.P.I. shall provide a dvnamic virtual local area network (VLAN) that permits simplified network address administration with logical assignment of users to virtual communities based on port, protocol, or subnet that minimizes broadcast traffic and ensures network security. C.P.I. shall also provide private VLANs that allow increased I.P. addressing flexibility by portioning port-based VLANs for security while sharing a common router port. The VLAN shall allow C.P.I. to segment users requiring access to sensitive information into separate VLANs flora the rest of the general user community regardless of physical location. Upon written City request, C.P.I. shall assist the City at a charge consistent with Exhibit 6.5 schedule ~ C. to determine compatibility of any virtual private network (VPN) hardware and software including but not limited to firewalls, lnternet security devices, encryption equipment and sotm, are, VPN servers, and VPN softw'are, that may be provided by the City at the cost of the City. page 20 Attachment D - Proposed I-Net Services Agreement August 9, 2002 5. Network Latency The l-Net network latency will average no greater than 3 milliseconds between directly connected switches at Layer 2 only, during standard operating condihons. Average end-to-end latency will not exceed 50 milliseconds during normal operating conditions. 6. Packet Loss Packet Loss across the l-Net backbone shall average 0.3% or less. If Packet Loss average across the l-Net backbone exceeds 0.3% during a calendar month, C.P.I. shall immediately take action to comply with this requirement. This p~ovision will take effect the first full calendar month after City's first use of the C.P.I. Backbone. 7. Monilorlng and Network Optimization C.P.1. will periodically monitor and optimize the l-Net backbone. Monitoring shall be done be~,een the furthest nodes using sol~tware and hardware components capable of accurately measuring traffic and responses at such nodes. The City acknowledges that such measurements may not measure the exact path traversed by the City's packets, and that such measurements constit-ute measurements across the l-Net backbone but not other net~¥orks to which the City may connect. C.P.]. shall provide the City with an initial baseline monitoring report upon completion of its ne~'ork and annual reports thereafter upon request by the Ci~' 8. Problem Reporting and Escalation Procedure The City shall first troubleshoot network problems to determine that the problem is a C.P.]. netw'ork problem prior to contacting the C.P.]. Ne~,ork Operations Center (NOC). A work order (trouble ticket) will be created based on the trouble call and the troubleshooting process and time clock will begin. C.P.]. will provide a problem reporting and escalation procedure to the City, and provide the City_ with progress and stal~s information on trouble calls. The City should receive an initial ca]iback regarding the status of the problem within thirty (30) minutes of the initial trouble report C.P.I. will al~empt to resolve most problems within 1 hour of the problem report initially being logged and a trouble ticket being generated. The NOC will notify the City regarding the status of the reported problem, and the estimated time to repair completion. If, after I additional hour, the problem has not been resolved (within the parameters of the C.P.1. escalation procedure), the Ci~, may contact C.P.l. to escalate the problem priority. At this point, C.P.I. will assess the situation, escalate the trouble ticket's priority as necessary, and provide a best estimate of time to complete the repair If a C.P.]. technician is required to visit a City sile to repair or troubleshoot a problem, the City may be charged for this service. There will be no charge ~ the problem necessitating the visit is d~e to a failure of C.P.I.'s equipment or netv,,ork that was not the result of City activity, or is caused by C.P.1. In all other situations, the City will be charged for repair or troubleshoot visits to City sites. The charge ~or this service will be in accordance with Exhibit 6.5 schedule 1.C., including t~avel time, with a minimum 1 hour charge. This charge w, ilI be added to the monthly invoice. 9. New Service For Sites already receiving C.P.1. service, C.P.I will add new services requlrmg only a software change within ten (10) Days from the receipt of a written request for the additional service ~rom the City and C.P.I. engineering approval of the change. Services requiring hardware changes will be scheduled with the City. For locations not receiving C.P.]. service, C.P.1. will add service to a new site where minimal ~aci]ities engineering and provisioning tasks are required within thirty (30) Days trom receipt o~ a written page 21 Attachment D - Proposed I-Net Services Agreement August 9, 2002 request for the service from the City. When more than minimal facilities engineering and provisioning tasks are required, the installation of service will be scheduled with the City. 10. Changes Ail requests for additions or changes to City sites shall be in writing A connectivity change request /orm will be available from C.P.]. and on-line at the C.P.]. Web Site as well. The change request will be evaluated to assess engineering issues, and to determine whether the change is a no-cost change or is an additional cost item under this Agreement. It it is an additional cost item, it shall be approved in writing by the City and the cost will be added to the invoice to the City. C.P.1. will provision new service within ten (10) Days of receipt of a signed change request order and C.P.I. engineering approval of the change. 11. l-Net Node Equipment Vendor Technical Support GEl. shall obtain and maintain through the term of the Agreement and any extensions thereof, the support services of its l-Net node equipment vendor at a minimum level of 7x24 technical support availability and 24 hour parts replacement response time. page 22 Attachment D - Proposed I-Net Services Agreement August 9, 2002 EXHIBIT 6.5 SERVICE CHARGES 1. C.P.I. BASE CHARGESa Wide Area Networking (Within the Cit),) Data Mbps = 100 A C.P.I. base charge per Ethernet Port per facility per month $345.00 including site drops during Initial "[erm for Exhibit 6.3 schedule l Cii~, sites B. C.P.]. non-recurring connection base charge $600.00 C. C.P.h Local Area Network Services Charge per hour. $80.00 D. C.PI VoIP Services Charge per month per desk phone (charge to $ be_p?vided upon request) Data Data Data E. Additional C.P.I. base charge per month for broadband lnterne! Mbps = I Mbps = 2 Mbps = 3 access (charges 1o be provided by October 15, 2002) S S S 2. REGULAR COMMERCIAL SERVICE CHARGES WITIt]N THE CITY~ Wide Area Netv,,orkmg _ (Within the City) Data Mbps = 700 A. C.P.]. Maximum Charge per Eflrernet Port per site location pet $165.00 month including standard overhead tacili~, site drop B. Cilx, Excess Capacity Charge per Ethernet Port per month $55.00 C. C.P.]. non-recurring connection charge $600.00 D. C.P.h VoIP Services Charge (charge to be provided upon request) $ ~Utility Taxes not included. page 23 Attachment D - Proposed I-Net Services Agreement August 9, 2002 EXHIBIT 6.5 SERVICE CHARGES 3. X~qDE AREA NETWORKING SERVICE ADDITIONAL CHARGESa Wide Area Networking (Within the City and CIal]am County service areas) Data Mbps = 100 A. Additional charge per Ethernet Port per month, including $ standard overhead facility, site drops charge within the Clallam Count, service area (charge to be provided January 15, 2003) B. Additional charge per Ethernet Port per month, excluding $ standard overhead facility site drop charge within Cla]]am Count}_, sen, ice area (charge to be provided January 15, 2003) ~Utili~ Taxes not included. page 24 Attachment D - Proposed I-Net Services Agreement August 9, 2002 EXHIBIT 6.6 INTERLOCAL AGREEMENT FOR ACQUISITION OF INSTITUTIONAL NETWORK SERVICES Pursuant to chapter 39.34 ot the Revised Code of Washington and other provisions of the law, , hereinafter called OTHER PARTY, and the CITY OF PORT ANGELES, a non- charter code City of the State of Washington, hereinafter called Ci"I-Y, hereby agree to cooperatively obtain services according to the following terms and conditions: 1. The City, has negotiated an institutional network sen, ices agreement with Capacity Provisioning, lnc. (VENDOR) for the purchase of telecommunications services, which is attached hereto as Exhibit A, and agrees to extend the privileges ot said negotiation to the OTHER PARTY to the extent permitted by law and agreed upon by the CITY, OTHER PARTY hereto, and the VENDOR. 2. This Agreement is limited to services under the Cih,/s inshlutional network services agreement with the VENDOR. 3. The OTHER PARTY accept responsibility for compliance with all laws and any additional or varying laws and regu]ahons governing its acquisition of services. Acquisition ot services by the OTHER PARTY shall be effected by a purchase order directed to the VENDOR. 4. The CITY accepts no responsibility for the performance of any purchasing contract by the VENDOR and accepts no responsibility for payment ot services by the OTHER PARTY to the VENDOR 5. Either the CITY or the OTHER PARTY may contract independently for the acquisition of services, with or without notice to each other. 6. This Agreement is tot services necessary tor the operabon of the CITY and the OTHER PARTY. 7. This Agreement shall remain in force until canceled by the CITY or the OTHER PARTY, which cancellahon may be ettected with or without notice to each other. CITY OF PORT ANGELES, WA , WA Authorized Name Authorized Name Tide Title Date Date page 25 pORTANGELES WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: AUGUST 13. 2002 To: UTILITY ADX ISORY COMMITTEE FROM: Larry Dunbar. Power Resources Manager RE: Proposed Clallam County PUD Righl-of-Way License Amendment Summary: An amendmenl Io lhe nghl-of-way license with the Clallam County Public Utility DJslricl No. ] (Dislricl) is nol necessary, at lhis time, because the Districl is willing to provide a second inlerconnection outside of the City limits, which is allowed by the current righl-of-way license. Recommendation: No action required. Background/Analysis: On September 1 ], 200], the DistrJcl accepted a righl-of-way license thal enabled construclion oflelecommunicafions infrastructure within the City for lhe District's own use. The license enabled construction o£telecommunicalions facilities along a specific route within the City but no! lhroughoul the City. The license did not authorize the Dislrict lo provide wholesale or retail le]econnnunJcalJons services, interconnect wilh olher networks, or connect their infl-astrucmre to any end users within lhe City. The District has limited legal authority to provide v,,holesale services and inlerconneclions to olher ne;works oulside of their service area. The City is not wilhin lhe District's service area. As pan oflhe l-Nel fasl-track plan and schedule, a proposed inlerconneclion al lhe Dislricl's headquarters, which is outside of the City limits, was anticipated and does nol require an amendment. If Capacity Provisioning, lnc. (C.P.1.) makes an arrangement with lhe District under lhe i-Nel Services A~eement, lhe District has slaled ils willingness and intent lo make a second intercom~eclion outside of the City limits al or near Black Diamond Road and Pine Streel. The interconnections oulside of the City limits would be made under the l-Net Services A~eemem wilh C.P.]. and the Fiber OplJc WAN Use A~eemenl with Norlhland Cable Television. ]nc. The inlerconnecfions outside oflhe Cily ]imils would allow lhe Dislnc! 1o provide wholesale telecommunications services, using Capacity Provisioning as lhe City's assigned wholesaler or relailer, to punic institutions and business end users wilhin the City. The additional Jntercormeclions oulside of the City limits with lhe Distncl would improve network redundancy and quality of service Proposed Clallam CounTy PUD Right-of-Way License Amendment Page 2 August 13, 2002 Due lo a significanl expense thal would be incurred by the District thal would ullimalely be shared or passed on to lhe City, institutions and businesses within the City, an inlerconnection within the City to provide a diverse physical route from Port Angeles Io Sequim will nol happen right away bul will be considered within the nexl two years. Prior to authorizing an inlercormeclion wilhin lhe CJly an amendment Io ~he District's right-of-way license would be necessary. A furore amendment lo consider an imerconnection wjlhJn the City limJls would need lo include Dismct indemnification of the City, wholesalers, retailers, and end users for damages that may arise relined ~o DislrJcl compliance with RCW 54.] 6.330. pORT'AtNGELES W A S H I N G T O N, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: AUGUST ! 3, 2002 TO: UTILITY ADVISORY COMMITTEE FROM: Larry Dunbar, Power Resources Manager RE: Institutional Network Implementation Consulting Services - Monthly Status Report Summary: This is an informational report on Metropolitan Communications Consultants activities during the month of July 2002. The advisory services include support with the l-Net fast-track and during construction of the l-Net backbone. Recommendation: Information only, no action required. l-Net Fast-Track Adviso~ Services ($20,000 authorized time & materials budget) Task July Activity Billing Foundy Networks equipment evaluation, Project Management Support conference calls, other lechnical services $3,022.50 l-Net Service Agreement Developmenl Completed during prior month. $0.00 Initial negotiation session, cost survey, Service Agreement Negotiation other technical services $3,412.50 Total $6,435.00 J-c~e~ ~acKoone ~onstrucnon ^ov~sory ~erv]ces [~,z~,uuu aumonzeo romp sum ouc ~e~) Task July Activity Billing Project Management Support None $0.00 Plans & Specifications Review None $0.00 Construction Phase Engineering None $0.00 Fiber Testing Observation None $0.00 Final Inspection None $0.00 Total $0.00 N ?,U A C ~Ofiginal~ncc s tai~srepor t2 w~l pORTANGEI. ES WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: August 13, 2002 To: UTILITY ADVISORY COMMITTEE FROM: Glenn A. Cutler, Director of Public Works and Utilities RE: SAFE Water Initiative Summary: The attached briefing paper addresses potential state legislative actions for funding the SAFE(Salmon, Agriculture and Families Enhancement) Program. Recommendation: None. Information Only Background/Analysis: The attached SAFE Water Initiative briefing paper was received from the Washington Water Utilities Council in mid July 2002. The paper summarizes potential legislation that would assistance with water system improvements, need for fish and a number of other related issues. It also addresses potential funding sources. The information is provided for information only. Attachment: SAFE Water Initiative Briefing Paper SAFE Water Initiative Background The SAFE (Salmon, aghculture and families enhancement program) would fund critically needed water infrastructure to provide safe and secure drinking water, increased municipal and agricultural water conservation, promote water reuse, develop water storage projects for multiple purposes, and provide water for essential fish needs. Failure to act will slow or stop economic recovexy in many areas of the state, impede the ability to improve and protect drinking water sources in a timely manager, and fail to address some critical fisheries needs for water. Failure to act will also cause increased conflicts and litigation. Instead of moving towards certainty will be moving towards chaos and an inability to provide for our long-term future. The 1999 Infrastructure Study indicated that there was a financing gap of over $3 billion at the local level with nearly $600 million missing to finance critical domestic water supply issues. Another $300 million was needed to finance storm water system improvements. The study did not address the needs for water storage, agricultural efficiencies, or the requirements to meet salmon recovery goals. While there are programs to help finance improvements to domestic water supply systems, they were inadequate to meet needs that existed prior to the emergence of new federal water qt!ality standards, such as the arsenic limits. Multi-purpose storage and conveyance has virtually no state assistance, and resources to purchase or lease water to leave in streams for fish have been largely drought related. What the bill does for financing The bill addresses a number of high priority items that require public financing. 1. Domestic water system improvements, including enhanced security and conservation; 2. Assist small and growing communities 3. Water storage enhancements for domestic, irrigation, and fisheries purposes; 4. Water system improvements within the agricultural community, including conservation efforts; 5. Water leasing, purchasing, or other actions to provide water to meet the needs offish; 6. Improve culverts and diversions to improve fish survival and access to habitat; and 7. Implementation of locally based watershed plans across the state. The bill earmarks $1 billion to finance these areas over the next ten years. Originally, the figure was set at $1.5 billion, but budget constraints and concerns about the economy moved the number down. C:SAFE Wa~er Initiative Currently, the distribution formula being proposed is: Safe and secure drinking water improvements 32.0% Water storage projects 32.0% Water for agricultural efficiencies 11.0% Culvert removal or improvements 10.0% Water for fish 7.5% Watershed planning projects 7.5% The strategy to finance the $1 billion is based on the distribution of bond proceeds over a ten- year period. The bonds would be secured and paid through revenue provided from two sources. The selection of the sources was guided by a number of guiding principles. 1. There had to be a discemable relationship between water use and the revenue source; 2. The source should represent the broadest base of citizens as possible; 3. The source had to provide a meaningful level of revenue; 4. The source had to be associated with an existing system to collect the revenue and the collection process should be able to be incorporated into that system. 5. The amount of revenue generated would be phased in over a minimum of two years so as to mirfimize the economic impact on the citizens and businesses. 6. The initial revenue collected should be in the range needed to fully fund the bonds debt service at approximately $60 million per year. A number of sources were considered against these criteria including: a. Real estate excise tax; b. Sales tax; c. Tax on phone services; d. Surcharge on water connections; and e. Surcharge on electricity consumption or electric connections; The proposal is a combination ora surcharge on water connections and energy consumption that most closely meets the guiding principles. The rationale for the surcharge on municipal water connections centers on: · Group A systems (greater than 15 connections) account for the vast majority of water users in the state; · The systems already handle revenue and deposits to the state; · The systems and their customers are direct beneficiaries of the program's improvements; · The systems have the options to create their own, individualized means of generating the revenue; · The revenue, set initially at $1.00 per connection and rising to $1.50 per connection in 2005, will generate about 1/3 of the $60 million required to retire the bond debt. C:SAFE Water Initiative The rationale for the surcharge on electricity consumption centers on: · Most electricity throughout the state is in some way connected to water. A tax on electricity consumption effectively engages everyone in the revenue generation necessary to finance the program. Electricity is used by private well owners, small water systems, irrigated agriculture and other water users; · Revenue is based on usage and the impact of the cost can be controlled through conservation; · The revenue, set initially at .0015 cents per kwh and rising to .005 cents per kwh in 2005, will generate about 2/3 of the $60 million required to retire the bond debt. · The average cost per household will start at $2.00 per year and rise to $6.80 when fully implemented. C:SAFE Water Initiative pORT_A?¢t s WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: August 13, 2002 To: UTILITY ADVISORY COMMITTEE FROM: Tom McCabe, Solid Waste Superintendent RE: Port Angeles Landfill Bluff Erosion and Slope Stabilization Summary: Shoreline erosion has been identified on the north side of the landfill along the beach area between wells MW-1 and MW-2. The erosion is related to an apparent undercutting of the toe of the slope by wave action. An update on the situation is being provided to the UAC. Recommendation: Information only. Background/Analysis: During a September 2001 routine inspection of the Port Angeles Landfill by Clallam County Health, officials observed an erosion and slope stabilization problem exposing materials previously placed at the landfill, on the north side, along the beach area. The erosion is related to an apparent undercutting of the toe of the slope by wave action. The City's consultant, Parametrix Inc., has performed an investigation and has provided a draft report on their findings and recommendations. The waste material observed was garbage, disposed of over the natural high bank shoreline bluff in the 1960's and 1970's. It is comprised of very degraded municipal solid waste, glass, metal including car bodies, tanks, and scrap, and extends approximately 600 feet along the shoreline. Findings and a plan of action are being developed for submittal to the Clallam County Health Department for review prior to continuing with our efforts. A more detailed report will be provided at the UAC meeting. The preliminary cost for the remediation action is $1,300,000. One of staff's actions will be the pursuit of grants to fund the project. It is tentatively planned to perform design in 2003 with construction in 2004. N :\UACXFinal\UACBlulTErosion_A.wpd pORTANGELES WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: August 13, 2002 To: UTILITY ADVISORY COMMITTEE FROM: Glenn A. Cutler, Director of Public Works and Utilities RE: Implementation of Stormwater Utility Summary: At the July 23, 2002 special UAC meeling il was decided that an additional meeting was required to review the proposed revenue projections and pro.am levels that can be achieved based on chosen funding alternatives along with a revised proposed ordinance. Recommendation: Review new information and proposed revised ordinance. Discuss any remaining issues/revisions required prior to going to Cit.,,' Council. If acceptable, direct staff to forward proposed ordinance Io City Council to set dates for public heariug and action. Background/Analysis: At the July 23, 2002 Utility Advisory. Committee. it was decided to proceed with the $3.00 per month basic stonnwater fee with a 10 ESU cap on non- residential/duplex properties. In addition, suggested revisions to the proposed Stormwater Utility ordinance have been made and a copy is attached. The proposed Stormwater Management budget is also attached which shows current funding from street, solid waste, and wastewater along with proposed net revenue from the stormwater management fee. The proposed budget includes costs for O & M, administrafion, and capital improvements. The proposed costs shown are those anticipated initially to move toward meeting the minimum requirements of State and Federal regulalions and improve the City's stormwater system. The Capital Improvements costs will vary in future years depending on available funding, negotiated permit requirements, and the ag~essiveness of the compliance schedule. A revised table showing current preliminary projections for revenues and impacts of including City properties is also attached. It is envisioned that upon approval of the stormwater management ordinance a manager would be one of the first actions, with a start date of early January 2003 to start shaping the program. Attachments: Proposed Ordinance Revised Compliance Dates Memo Proposed Stormwater Utility Budgel and Pro.ams Stormwater Utility Fee and Revenue Initial Projections pORTANGELES WASHINGTON, U.S.A. PUBLIC WORKS & UTILITIES DEPARTMENT DATE: June 7, 2002 TO: GLENN A. CUTLER, DIRECTOR OF PUBLIC WORKS AND UTILITIES FROM: GARY W. KENWORTHY, P.E.. DEPUTY DIRECTOR OF ENGINEERING/CITY ENGINEER SUBJECT: STORM WATER MANAGEMENT COMPLIANCE DATE REQUIREMENTS; ESA, NPDES PHASE II, AND CSOs ESA, Compliance Date January 1, 2001 The City of Pon Angeles being located on lhe Strait of Juan de Fuca which is a water body through which listed endangered species migrale and taking waler from the Elwha watershed which also is habitat for endangered species falls under lhe regulations of the Environmenlal Species Act (ESA). The ESA regulations took effecl in January_ 2001 following listing of the Chinook salmon in July 2001 and subsequent lisling of the bull trout. ESA prohibits taking of a listed species. The National Marine Fisheries Service (Chinook Salmon) and U.S. Fish and Wildlife Service (Bull Trout) are the primary leads for implementing and enforcing the federal land management, stormwater managemenl. and road maimenance requiremenls of ESA. The City and County are working logether in developmen! of a road maintenance program which will satisfy some of these requirements. In an effort to maimain continuity and avoid "reinventing the wheel" our programs will follow the Tri- County (King, Snohomish, and Pierce) regional road maintenance program which is currently under review by NMFS. If needed we will modify lhe pro,am as necessary to meel our unique local envirommem. These modificalions will require federal approval. Adoption of the DOE Slormwaler Manual for Weslem Washinzon and our parlicipation in the WRIA 18 watershed planning process will help to meet the ESA requirements. NPDES Phase II. Compliance Dale March 10, 2003 The City of Port Angeles is specifically listed in the Federal EPA regulalions as a MS4 (Small Municipal Storm Sewer Systems) entitv. Even though we are located outside of an urbanized area our population and density place us in an urban classification (Over 10.000 and greater than 1,000 per square mile) place us in a group which will be evaluated for lhe need of a permit. In the we havea combined sewer overflow system (CSO) we will more than likely remain on the list of Cities lhat will require permitting under the NPDES Phase I1 regulations. According 1o EPA rules the Washington Department of Ecology must issue a genera] permit for ali Phase I1 municipalities by December 2002 and the City must have permit coverage by March 2003. Should DOE fail to meet the December 2002 deadline we will have to apply to the EPA for a permit to avoid being out of compliance. CSOs, Compliance by 2015 with interim milestone dales. The City of Port Angeles has a combined sanitary and storm system in lhe older (downtown) sections of the Cily. During storm events the syslem is overloaded and overflows inlo the Strait of Juan de Fuca and Pon Angeles harbor. In our NPDES Waste Discharge Permit for the WWTP, issued May 31, 2002 by DOE, we have conditions placed which require us to meel the requirement of one CSO per outfall per year by 2015. In addition we have complete construclion of pump stations I and 3 to maximum pump size by December 31, 2003. N :~PROJ ECTS~21- ] 2 S TRM $'~compliance dales.wpd PROPOSED STORMWATER UTILITY BUDGET July 29, 2002 Funding Sources ACTIVITY STREET SOLID WASTE STORM PROPOSED FUND WASTE WATER UTILITY STORM UTILITY UTILITY BUDGET O&M STREET SWEEPING $0 $120.000 $© $0 $120,000 CATCH BASIN REPAIRS & $45,000 $0 $0 $45,000 $90,000 CLEANING (50% lo 75%) DITCH/CULVERT CLEANING $45,000 $0 $0 $30,000 $75,000 (33% to 67%) CULVERT INSTALLATION & $40,000 $0 $0 $10,000 $50,000 UNSCHEDULED WORK O & 51 SUBTOTAL $130,000 $120.000 S0 $85,000 $335,000 ADMIN., ENGINEERING, & $20,000 $0 S20,000 $95,000 $135,000 PLANNING CAPITAL IMPROVEMENTS $0 $0 S60.000 S85,000 $145,000 TOTAL STOR3'IWATER PROGRAM S150~000 $120.000 S80,000 $265,000 $615,000 Notes: The Proposed Stormwater pro,am assumes the following: O&M 1. Continuing streel sweeping, culvert replacements, and emergency repairs al our current level. 2. Increasing catch basra cleaning and repairs from 50%/Year to 75%/Year. 3. Increasing ditch and culvert cleaning from 33%/Year Io 67%/Year 4. Increasing 2 & 3 above catch basin and ditch/culverl maintenance includes I FTE Utility Worker I1. To further increase 2 & 3 to 100% will require and additional I FTE Utility Worker ($55,000) 5. Train crews in methods of water quality proteclion. 6. Repair/Replacement ofeductor truck Admin.. En~ineerine & Plannine 1. Develop and implement a public educalion, outreach, participation and involvemenl. 2. implement and enforce guidelines and procedures in Stormwater Manual for Western Washington. 3. Provide engineenng planning, design, and construction management for capital improvement prqiects. 4. Update stormwaler management plan and develop small works and CFP projects for pnorilization and funding. 5. Pursue grant and low inleresI loan assistance. 6. Monilor water quality. 7. Review development permitting and design for compliance with new manual. 8. The above engineering activities includes 1 FTE Engineer/Manager position. 9. Planning support (0.5 FTE Assoc.Plarmer, $40,000) is nol included N:kPROJECTS~2] -12STKM $\proposed budget wpd PROPOSED STORMWATER PROGRAM kugust 9, 2002 CURRENT PROGRAM PROPOSED PROGRAM FULL PROGRAM ACTIVITIES COST ACT1VITY COST ACT1VITY COS]- ACT1VITY LEVEL LEVEL LEVEL O&M STREET SWEEPING $120,000 100% $120.000 100% $120,000 100% CATCH BASIN REPAIRS $45,000 50% $90,000 75% $120,000 100% & CLEANING DITCH/CULVERT $45,000 33% $75,000 67% $110,000 100% CLEANING CULVER~I $40,000 100% $50.000 100% $50,000 100% INSTALLATION & UNSCHEDULED WORK O & NI SUBTOTAL $250,000 63% $335,000 84% $400,000 100% ADMIN.. ENGINEERING, $20,000 13% $95.000 63% $150.000 100% & PLANNING CAPITAL $60,000' 20% $85.000* 28°/. $300.000~ 100% IMPROVEMENTS I'OTAL STORNI X. VATER $330,000 39% $515.000 61% $850~000 100% PROGRAM Capital Improvement funding shown for currenl pro,am is for annual syslem improvements and does noI include pecific funded projects for Crown Park Overflow ($100k) and Lincoln S~reet Storm Line ($100k). The capital mprovemenls required to meel future NPDES I1. ESA, and CSO are unknown, bul will be al negotialed value and chedu]e. N 5PROJECTS ~21 - 12 S TRM $',proposedp~m w'pd STORMWATER UTILITY FEE AND REVENUE INITIAL PROJECTIONS Updated July 30. 2002 $3.00/ESU; 4.000 SF PER NON-RESIDENTIAL ESU; CAPPED ~ 10 ESUs ProperD, Descriptions Total Capped Monthly Annual Net Annual ESUs ESUs Fees Fees Revenues* Residential business & Misc 7,339 7,335 $22,005 $264,060 $242,935 Cily of Pon Angeles 545 234 $702 $8,424 $7,750 Clallam County. 79 71 $213 $2,556 $2,352 Washinglon State 198 41 $123 $1,476 $1,358 Federal Government 191 41 $123 $1,476 $1,358 Port Angeles School Dislnct 291 63 $189 $2.268 $2,087 Port of Port Angeles 1,591 ** 17 $51 $612 $563 Clallam Transit 41 10 $30 $360 $331 -- Hospital & Care Faci]ilies 83 30 $90 $] ,080 $994 Library 19 10 $30 $360 $331 Clallam Co. Hist. Soc. 5 5 $15 $180 $166 Places of Worship 170 122 $366 $4,392 $4,041 Totals 10,552 7,979 $23,937 $287,244 $264,264 Revenues shown reflecl deduclion for 8% utility tax ** Majority of Port properly is at north airport induslrial park. Note: Businesses, al this lime. are spread lhroughoul Iris breakdown depending on the properties ,,,,,here they are localed (ie Residential, Port, Federal, Hospilal & Care) Each additional $1 of fee will generates approximalely $88,000 of net revenue. N:\PROJECTS~21-12STRM$~revenue table4 v,,pd ORDINANCE NO. AN ORDINANCE of the City of Porl Angeles, Washington, establishing a stormwaler utility, eslablishing a monlhly stormwaler utility charge, adopting slormwater regulations and provisions for the management and operation of the stormwater utility, and amending Ordinance 2394 and Ch. 13.63 of the Port Angeles Municipal Code. THE CITY COUNC]L OF THE CITY OF PORT ANGELES DOES HEREBY ORDAIN as follows: Section 1. Ordinance 2394 and Chaplet 13.63 of the Pon Angeles Municipal Code are hereby amended by amending Chapter 13.63 PAMC to read as follows: Chapter 13.63 STORMWATER - REGULATIONS AND UTILITY Seclions: 13.63.005 Purpose. ] 3.63.010 Stormwater Discharge Nol Permitted. ] 3.63.020 Unpollmed Discharge Shall Have Approved Outlet. 13.63.030 Stormwater Connection Not Permined in Sanitary System. 13.63.040 Utility eslablished. 13.63.050 Jurisdiction. 13.63.060 Plan adopted. 13.63.070 Transfer of property. 13.63.080 Definitions. 13.63.090 Monthly charge 13.63.100 Privale slormwater retention system rate reduction. ] 3.63. ] 10 Application for rate reductions - Appeal. 13.63.120 Billing and paymenl. 13.63.130 Remedies. 13.63.140 Inspections - Right of entry - Emergency. -1- Seclions: 13.63.005 Purpose. The purpose of this Chapter is Io establish a storm and surface water management program in order to accomplish the fo]lowing goals: to promole sound development policies and construction procedures, which respect and preserve the City's watercourses: B.~ 1o minimize waler quality degradalion and control of sedimentation of creeks, slreams, ponds, and other waler bodies: to protecl property owners adiacent to developinp, and developed land from increased runoff rates, which could cause erosion of abuuin~ property: to protec! downstream ov, mers: to preserve and enhance the suitability of waters for contact recrealion and fishing: 1o preserve and enhance the aesthelic quality of waters: lo provide public education, outreach, participation, and involYemenl in proleclion of waler quality: Io maintain safe Cily slreels and rights-of-way: and 1o decrease draina[ze-related damage_to public and privale propertY. The slorm and surface water managemenl program shall consisl of stormwaler regulations and a stormwaler utility, which shall be implemented and operaled bY lhe CiW's Deparlmem of Public Works and Utililies in accordance with standards eslablished by the appropriate governmental entities with jurisdiction. 13.63.010 Slonnwaler Discharge Not Permined. No person shall discharge or cause to be discharged any stormwater, surface water, ground water, roof runoff., subsurface drainage, uncontaminaled cooling water, or unpollmed industrial process walers into any sanilary sewer, un]ess olherwise approved by lhe Director. (Ord. 2394 Ch. IV §1, 6/2/86) 13.63.020 Unpolluted Discharge Shall Have Approved Oullel. Stormwater and all olher unpolluted drainage shall be discharged 1o such sewers as are specifically designated as combined sewers or storm sewers, or to a natural outlet approved by the Director. Industrial cooling water or unpolluted process waters may be discharged on approval of the Direclor to a storm sewer or natural oul]el. (Ord. 2394 Ch. IV §2.6/2/86) 13.63.030 Stormwater Connection Nol Permitted in Sanitary System -2- A. No person shall make connection of roof downpours, exterior foundation drains, area drains, or other sources of slormwater surface runoff or groundwater to a building sewer or building drain which in turn is connected directly or indirectly to a public sanitary, sewer, unless such conneclion is otherwise approved by the Director. B. Slorm drainage from hard-surfaced or graded areas, such as parking lots, service station yards, and slorage yards, shall enter lhe public slorm sewer system or other oullet approved by the Director and as required by this Chapter and as such facilities are available. Such storm drainage shall not be connected to or enter a sanitary, sewer, unless otherwise approved. (Ord. 2394 Ch. IV §3, 6/2/86) 13.63.040 Slormwaler Utility established. There is created and established a storm and surface water utility (also referred 1o as the "slormwater utility"). The slormwaler utiliLy shall be _administered under direction of the Director of Public Works and Utilities. The stormwater utility shall perform the functions, and have the authoril3_,, as set forth in Chaplet 35.67 RCW for managine. reeulating, and controlling lhe City's slormwater managemenl program. 13.63.050 Jurisdiclion. The City shall have jurisdiction over all storm and surface xt aler facilities within the Cily's boundaries. No modifications or addilions shall be made to the Cilv's SlOrm and surface waler facililies withoul the prior approval of the City. I3.63.060 Plan adopted. The stormwater utility shall be managed and operated in accordance with (1) the Stonnwater Management Plan prepared bi' Economic and Engineering Services ]nc. daled June 1996 and adopled by the Ci_w Council on December 17, 1996, (2) applicable sections oflhe Urban Services Standards and Guidelines daled October 1995. and (3) the Slormwaler Management Manual for Western Washington, dated August 2001. The Urban Services Standards and Guidelines shall be revised to reflect the requirements of the Stormwater Management Manual for Weslern Washinglon and Io take imo accounl any exceptions Io the those requirements necessary lo reflect the City's particular conditions. The effective date of adoplion for the Slormwater Management Manual for Western Washington shall be either: (1) the effective dale of the stormwater manual adoption requirement in an NPDES permit to be issued by the Washinglon Stale Department of Ecology to lhe City of Port Angeles. which dine shall be no sooner than March t0. 2003. or (2) the effective date ora Clallam County Salmon Recovery_ Plan stormwater manual adoplion requiremenl for compliance with lhe Endangered Species Act pursuant 1o the Nalional Marine Fisheries Service's 4(d) rule for Pugel Sound chinook salmon, whichever effeclive date is sooner. 13.63.070 Transfer of property. All equipment, properties and property righls and imerests owned or held by lhe Cily, however acquired, insofar as they relate to or concern storm or surface water sewage, are hereby transferred to the slormwaler utility. This includes by way of examples and not limilation, all properties and property rights and interests acquired bv adverse possession or by prescriplion in and lo the drainage and storage of storm or surface walers over and -3- under lands, watercourses, streams, ponds and sloughs lo the full exteI~t of inunda6on caused by the largesl slorm or flood condition. 13.63.080 Definitions. The £ollowing definitions shall apply to lhis Chapter: A._~. "Commercial/multiple property" means all property zoned or used for multifamilv, commercial, retail, public, government, non-profit, and all other non-residential uses. "l~mpervious area" means any pan of any parcel 9f ]and thai has been modified by the action of persons lo reduce the land's natural abiliv,, to absorb and hold rainfall. This includes areas which have been cleared, graded, paved or compacted. Excluded, however, are all lawns, agricultural areas, and landscaped areas. C_~ "__Single -family and duplex propenv" means and j~cludes all property u~ed for single family and duplex residential uses. 13.63.90 Monthly Charge. & Effective ,lanuary !, 2003, lhe o'amers of all real properly in the CiW shall pay a monlhly stormwater utility charge al the rale as set forth in lhis Section. Single-family and duplex residential fees. The monthly st0rmwater utility charge for each single-family and duplex residential property shall be $ 3.00. The monthly stormwater ulilitv charge for all commercial/multiple properly, shall be calculated by dividJn~g lhe lola] impervious area in square feet by 4000 square feel, with lhe result rounded do'am to the whole number, times the single family and duple, residential fee. The minimu~ monlhlv fee for a commercial/multiple properv,, shall be not ess than the monthly fee for a single-family dwelling, and the maximum monthly fee shall be not more than $39.00. City slreels, Stale highways, private slreels with slorm and surface facilities in place meeting Cily standards~ and other public or private owned properties or portions thereof ravine their own NPDES permiued slorm and surface water runoff facilities which do not di_schar~_e to CiIs.' facilities shall be exempt from the monthly charges set forth in this Section. 13 63 ]00 Private slormwaler retention system rate reduction. For any property_ other than a single-family residence or duplex residential dwelling, if the property owner (1) has been required by the CJI)' since January_ 1 ~ 1993 to inslall a private stormwaler retemion system as a condition of the property's development or (2) has inslalled voluntarily sit, ce January_ 15, 1993 a private stormwaler retention system serving the property and meeting City standards at the time of insla]lation, the Civ.' ma5' al its sole discretion reduce momhl,,, stormwater charges for the property pursuant to PAMC 13.63.090D by up to 25 percenl for systems meeting or exceeding the minimum requirements oflhe 1992 Slormwater Management Manual for Western Washineton and up lo 50 percenl for syswms meelJng or exceeding the minimum requirenoents of Ibe 2001 Slormwater Management Manual for Western Washington. The rate reduction authorized by this Section shall not be used in conjunction with any other rale reduction authorized in Title 13 PAMC. 13.63.110 Application for rme reductions - Appeal. A_.,. In order lo qualify_ for exemplions or rate reduclions set forth in PAMC 13.63.100 and 13.63.110, the property o~mer must file an application with the Director of Public Works and Utilities by November 151h of the year prior to the year in which the rate reduction is to be effective. excepl that for the ,,,ear 2003 lhe property owner shall have until March 31. 2003 to file the application. B_.. An), person aggrieved by any decision of the Director of Public Works and Utilities relaling to an applicalion for exemption or rme reduclions authorized by PAMC 13.63.100 and 13.63.110 may appeal the DJreclor s deckmn to lhe City Manager within 30 days of the date of the Director's decision. The City Manager's decision may be appealed to lhe City Council within 30 days oflhe date of the City Manager's decision. 13.63.120 Billing_ and payment. The City shall bill stormwater utility service accounts monlhly and shall bill lO property owners in the same manner as water and sewer. The amount to be billed shall be included on the existing utilities bill as a separate line ilem. A "smrmwater only" billing will be sent Io lhose property_ owners who are nol curren! City_ uli]ities customers. Utility rales and charges specified in this Chapter shall be the responsibility oflhe owner in fee of any property chargeable for such service. Such charges shall be billed to the owner in fee oflhe property served last made known Io the Cilx, and lo the ]asl knov, m address, it shall be the duty of every_ propertY- owner within lhe City to notify lhe office of the Finance Director of the fact of ownership and the address lo which billing should be made. An), purchaser of properp,, within the City shall notify the office of the Finance Director of the date of purchase and the proper billing address immediately upon acquisilion of such interest; provided, however, thai an3' owner in fee max, designate another party 1o receive billing statemenls (such as a tenant), il' such owner shall do so in writine toeether with a waiver of notice of such bills or any liens for delinquent accounts. This shall not relieve the owner from final liability for utility_ charges. O,amers of multiple contiguous parcels within the Citw may apply to the Director of Public Works and Utilities for consideration of consolidating the billing for such parcels. 13.63.130 Remedies. Termination of water service. The Director of Public Works and Ulililies or designee is authorized ~o lerminale waler service to an), properly owner who fails to pay the stormwater utilits, service fees imposed by this Chapter in the same manner as delinquent waler bills. 3 ermination of such wmer service shall nol limit other remedies available Io the City. B.~ Lien for delinquenl charges - lmeres~. Pursuant to RCW 35.67.200 et seq. the Cilv shall have a lien for delinquent and unpaid slormwaler charges. A stormwater lien shall be effective for a total not to exceed one 3'ear's delinquenl service charges wilhout lhe necessity of any writing or recording of lhe lien with the County Auditor. Enforcement and foreclosure of any stormwater lien shall be in the manner provided by stale law. lmerest on the unpaid balance shall be eight percent per annum or such rale as max, hereafter be authorized by law. Other remedies. The City shall have all other legally available remedies for enforcing and collecline delinquent and unpaid slormwater charges. 13.63.140 Inspections - Right ofemrv - Emergency. The Ci_ty is authorized to enter at all reasonable times in or upon any property, public or private, for the purpose of operating or maintaining the storm and surface water facilities, or to inspect or investigate any condition relatine to the stormwater utility provided that the City_ shall first obtain permission to enter from the owner or person responsible for such premises. If entry is refused, the City shall have recourse to ever3_, remedy provided by law to secure entry. Notwithstanding the foregoing, whenever it appears to the City that conditions exist requiring immediate action to protect the public health or safety, the City is authorized to enter at all reasonable times in or upon any property, public or private, for the purpose of inspecting, investigating or correcting such emergency condition. Section 2 - Severability. If any provisions of this Ordinance. or its application to any person or circumstances, is held invalid, the remainder of the Ordinance, or application of the provisions of the Ordinance to other persons or circumstances, shall not be affected. Section 3 - Effective Date. This Ordinance shall take effect five days following the date of its publication by summary. PASSED by the City Council of the City of Port Angeles at a regular meeting of said Council held on the day of August. 2002. MAYOR ATTEST: Becky J. Upton, City Clerk APPROVED AS TO FORM: Craig D. Knutson, City Attorney PUBLISHED: August 11. 2002 By Summary -6-