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98-07 O - Telephone Operating (COSERV) • ORDINANCE NO. 9 '(0 7 • AN ORDINANCE WHEREBY THE CITY OF PROSPER, TEXAS, AND COSERV, L.L.C.AGREE THAT,FOR THE PURPOSE OF OPERATING ITS COMMUNICATIONS BUSINESS, THE TELEPHONE COMPANY SHALL CONSTRUCT,ERECT, BUILD, EQUIP, OWN, MAINTAIN AND OPERATE IN, ALONG,UNDER, OVER AND ACROSS THE STREETS,AVENUES,ALLEYS, BRIDGES,VIADUCTS AND PUBLIC GROUNDS OF THE CITY, SUCH POSTS,POLES, WIRES, CABLES, CONDUITS AND OTHER APPLIANCES, STRUCTURES AND FIXTURES NECESSARY OR CONVENIENT FOR RENDITION OF TELEPHONE AND OTHER COMMUNICATION SERVICES IN SAID CITY AND FOR CONDUCTING A GENERAL LOCAL AND LONG-DISTANCE TELEPHONE BUSINESS; PRESCRIBING THE CONDITIONS GOVERNING THE USE OF PUBLIC RIGHTS-OF-WAY FOR THE TELEPHONE COMPANY'S COMMUNICATION BUSINESS; PRESCRIBING THE ANNUAL COMPENSATION DUE THE CITY UNDER THIS ORDINANCE; PROVIDING AN INDEMNITY CLAUSE; SPECIFYING GOVERNING LAWS; PROVIDING FOR ASSIGNMENT; FOR A PERIOD OF AGREEMENT; FOR FUTURE CONTINGENCIES; FOR REPEAL OF CONFLICTING ORDINANCES; FOR RELEASE OF ALL CLAIMS UNDER PRIOR ORDINANCES; FOR ALTERNATE DISPUTE RESOLUTION; FOR A LIMITATIONS PERIOD; FOR VENUE; AND FOR METHOD OF ACCEPTANCE. WHEREAS, CoServ, L.L.C.,hereinafter referred to as the Telephone Company, is now authorized by the Texas Public Utility Commission to engage in the communications business in the State of Texas and in furtherance thereof,will erect and maintain certain items of its physical plant in the City of Prosper, Texas,hereinafter referred to as the City,pursuant to such rights as have been granted it by and under the laws of the State of Texas, and subject to the reasonable exercise of the police powers granted by and under said laws to the City: and WHEREAS, it is recognized by the parties hereto that changes in the communications industry, changes in technology, changes in state and federal law, and changes in the accounting practices mandated by the uniform System of Accounts promulgated by the Federal Communications Commission("FCC"), along with regulatory requirements of the Public Utility Commission of Texas ("PUC"),have caused the traditional method of determining the amount of • compensation to municipalities to become impractical for communications utilities. In order to i7 • address these issues in a manner beneficial to both the City and the Telephone Company,the • City and the Telephone Company have chosen the method of determining the amount of compensation provided for in this Ordinance to eliminate the expense and time related to audits, to achieve administrative simplicity,to provide the City with predictable revenues and an opportunity for growth and to avoid the expense and delays of litigation which could be necessary to resolve any issues in controversy between the parties; and WHEREAS, it is to the mutual advantage of both the City and the Telephone Company that an agreement should be entered into between the Telephone Company and the City establishing the conditions under which the Telephone Company shall maintain and construct its physical plant in the public rights-of-way within the City's corporate limits in the future; NOW,THEREFORE,BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PROSPER,TEXAS,THAT: SECTION 1. DEFINITIONS Whenever used in this Ordinance,the following words and terms shall have the definitions and meanings provided in this section: (a) CITY: The City of Prosper, Texas (b) FACILITIES:.All Telephone Company duct spaces,manholes,poles, conduits, underground and overhead passageways, and other equipment, structures and appurtenances and • all associated Transmission Media,which are located in the City Rights-of-Way. (c) COMMUNICATIONS SERVICES: All services, of any nature, offered for sale by the Telephone Company to subscribers in the City,which services are delivered to such subscribers • by transmission over the Telephone Company's Transmission Media. • • (d) RIGHTS-OF-WAY: All present and future streets, avenues,highways, alleys, bridges, viaducts and public grounds within the City limits of the City. (e) TELEPHONE COMPANY: CoServ, L.L.C.. (f) TRANSMISSION MEDIA: All Telephone Company cables, fibers,wires or other physical devices used to transmit and/or receive communication signals,whether analog, digital or of other characteristics, and whether for voice,video, or data or other purposes,which are physically locate din the City Rights-of-Way. SECTION 2. CONSTRUCTION AND MAINTENANCE OF TELEPHONE PLANT AND SERVICE Pursuant to the laws of the State of Texas,the Telephone Company has the non- exclusive right and privilege to use and occupy the public rights-of-way in the City for the delivery of Communications Services and the operation of a communications system. The Telephone Company's Facilities and Transmission Media used in or incident to the provision of Communications Services and to the maintenance of a communications business by the Telephone Company in the City shall remain as now constructed, subject to such changes as under the conditions prescribed in this Ordinance may be considered necessary to the public health and safety by the City in the exercise of its lawful police powers and such changes and extensions as may be considered necessary by the Telephone Company in the pursuit of its communications business. The terms of this Ordinance shall apply throughout the City, and shall include the provision of communications services in any newly annexed areas upon the effective date of such annexation. • • SECTION 3. SUPERVISION BY CITY OF LOCATION OF POLES AND CONDUITS (a) All poles to be placed shall be of sound material and reasonably straight, and shall be so set that they will not interfere with the flow of water to any gutter or drain, and so that the same will interfere as little as practicable with the ordinary travel on the street or sidewalk. The location and route of all poles, stubs, guys, anchors, conduits, cables and any other facilities to be placed and constructed by the Telephone Company in the construction and maintenance of its communications system in the City, and the location of all conduits to be laid by the Telephone Company within the limits of the City under this Ordinance, shall be subject to the reasonable and proper regulation, control and direction of the City Council or of any City official to whom such duties have been or may be delegated. (b) The City expressly reserves the right to change the grade, install,relocate, or widen the public streets, sidewalks, bikeways, alleys,public thoroughfares,highways, landscaping, and public way and places within the present limits of the City and within said limits as same may from time to time by extended, and the Telephone Company shall relocate or place underground, at its own expense, its Facilities and Transmission Media, in order to accommodate the installation,relocation widening, or changing of the grade of any such public street, sidewalk, bikeway, alley,public thoroughfare,highway or public ways, including if necessary relocating such Facilities and Transmission Media to a sufficient distance from the edge of the pavement to permit a reasonable work area for machinery and individuals engaged in installing,relocating, 411, widening, or changing the grade of any public street, sidewalk, bikeway, alley,public thoroughfare,highway or public way. • (c) Whenever by reason of changes in the grade of a thoroughfare or in the location or • manner of constructing a water pipe, gas pipe, sewer, or other aboveground or underground • structure, it is deemed necessary by the City to remove, alter, change, adapt, or conform the underground or aboveground facilities of the Telephone Company,the Telephone Company shall make the alterations as soon as practicable when ordered in writing by the City without claim for reimbursement or damages against the City. (d) Whenever it shall be necessary to require Telephone Company to alter, change, adapt, or conform its facilities within the right-of-way, such alterations or changes shall be made promptly, with consideration given to the magnitude of such alterations or changes,without claim for reimbursement or damages against the City. If any such requirements impose a financial hardship upon the Telephone Company,the Telephone Company shall have the right to present alternative proposals to the City, and the City shall give due consideration to any such alternative proposals. If the City requires the Telephone Company to adapt or conform its facilities to enable any other entity or person, except the City,to use, or to use with greater convenience, rights-of-way or public property,Telephone Company shall not be required to make any such changes until such other entity or person shall reimburse or made arrangements satisfactory to Telephone Company to reimburse the Telephone Company for any loss and expense caused by or arising out of such change;provided,however,that the City shall never be liable for such reimbursement. Nothing in this Ordinance is intended to add to or detract from any authority granted by the Legislature of the State of Texas to the City. • SECTION 4. ATTACHMENTS TO POLES AND SPACE IN DUCTS Nothing contained in this Ordinance shall be construed to require or permit any pole • attachments for electric light or power wires or communications facilities or systems not • provided by the Telephone Company to be attached to the Telephone Company's poles or 41 other physical plant or placed in the Telephone Company's conduit. If the City desires pole attachments for electric light or power wires or communications facilities or systems not provided by the Telephone Company, or if the City desires to place communications facilities or systems for its internal use not provided by the Telephone Company in any Telephone Company duct,then a further separate,noncontingent agreement shall be prerequisite to such attachment(s)or such use of any duct by the City. Nothing contained in this Ordinance shall obligate or restrict the Telephone Company in exercising its rights voluntarily to enter into pole attachment,pole usage,joint ownership or other wire space or facilities agreements with light and/or power companies or with other wire-using companies which are authorized to operate within the City. SECTION 5. STREETS TO BE RESTORED TO GOOD CONDITION The surface of any street, avenue, alley,highway,viaduct or public ground within the City disturbed by the Telephone Company in building, constructing, renewing, or maintaining its communications system shall be restored within a reasonable time after completion of the work in compliance with the applicable provisions of the Code of Ordinances and maintained to the satisfaction of the City Council, or of any City official to whom such duties have been or may be delegated, for a period of one(1)year following completion of the restoration, after • which time responsibility for the maintenance shall revert to the City. No such street, avenue, alley,highway,viaduct or public ground shall be encumbered for a longer period than shall be necessary to execute the work. • • • SECTION 6. TEMPORARY REMOVAL OF AERIAL WIRES The Telephone Company on the request of any person shall remove or raise or lower its wires within the City temporarily to permit the moving of houses or other bulky structures. The expense of such temporary removal, raising or lowering of wires shall be paid by the benefitted party or parties, and the Telephone Company may require such payment in advance. The Telephone Company shall be given not less than forty-eight(48)hours advance notice to arrange for such temporary wire changes. The clearance of wires above ground shall conform to the basic standards of the National Electrical Safety Code,National Bureau of Standards, United States Department of Commerce, as promulgated at the time of erection thereof. SECTION 7. TREE TRIMMING In the pursuit of maintaining its communication system, the Telephone Company, its contractors, agents, successors and assigns shall have the right to trim trees upon and overhanging the streets, avenues, alleys, bridges, viaducts and public grounds of the City, so as to prevent the branches of such trees from coming into contact with the wires, cables or other facilities of the Telephone Company. SECTION 8. COMPENSATION TO THE CITY S (a) For the reason that the Rights-of-Way to be used and occupied by the Telephone Company in the provision of Telecommunications Services within the boundaries of the City • are valuable public properties, acquired and maintained by the City at great expense to its • taxpayers, and because the grant to the Telephone Company of the use and occupancy of said • Rights-of-Way is a valuable property right without which the Telephone Company would be required to invest substantial capital in right-of-way costs and acquisitions,the Telephone Company agrees to pay to the City an Annual Fee for each year during the term of this Agreement. (b) The initial Annual Fee shall be four percent(4%) of the Telephone Company's Gross Revenues from Basic Local Services provided and billed to subscribers within the City limits. As used in this paragraph 8(b)the term"Gross Revenues" shall mean the aggregate amount of all sales and charges calculated in accordance with Generally Accepted Accounting Principles that are attributable to Basic Local Services provided by the Telephone Company within the City during any period less discounts, credits, refunds, sales taxes, and uncollectible accounts actually charged off during the period. These services will remain in the base whether they are regulated or deregulated. (c) It is the intent of the City that all providers of Telecommunications Services within the City shall be required to pay compensation to the City for the use of the City's Rights-of-Way on a competitively neutral and non-discriminatory basis. The City and the Telephone Company agree that the Telecommunications Services upon which the Annual Fee is to be calculated pursuant to this Agreement shall initially be only Basic Local Services. (d) The Annual Fee payment shall be made in quarterly payments on or before the 20u'day • following the end of the preceding calendar quarter during the term of this Agreement. The first quarterly payment shall be due on . A quarterly payment shall be due on the 20t'day of each January,April, July, and October thereafter during the term of this Agreement. All • payments shall be made to the City by draft payable to the City of Prosper. The sum of the • • 1 quarterly payments is the Annual Fee for the year. With the payment for the last calendar quarter • of each year,the Telephone Company shall additionally provide the City with a report showing the Gross Revenues received by the Telephone Company for Basic Local Services. (e) The acceptance of any statement or payment shall not estop the City or the Telephone Company from asserting that the amount paid is not the amount due or from recovering any deficit or overpayment by any lawful proceeding. (f) The payment of the Annual Fee by the Telephone Company shall be in lieu;of business licenses,permit fees for work in the Rights-of-Ways, registration fees, special taxes'on poles or conduits and other fees sought to be assessed on the Telephone Company's use of the Rights- of-Way under this Agreement, but shall not be in lieu of ad valorem taxes (except for credit provided by State law). There shall be no deduction allowed for ad valorem taxes against the Annual Fee. (g) Grantee shall file annually with the City no later than one hundred and twenty(120) days after the end of the Grantee's fiscal year, a statement of Gross Revenues (for that year) attributable to the provision of Telecommunications Services within the City pursuant to this Agreement. This statement shall present, in a form prescribed by the City, a detailed breakdown of Gross Revenue for the year. (h) Any transactions which have the effect of circumventing payment of required fees and/or evasion of payment of fees by non-collection or non-reporting of Gross Revenue, bartering, or • any other means which evade the actual collection of revenues for business pursued by Grantee are prohibited. • SECTION 9. SUCCESSORS AND ASSIGNS • The rights,powers, limitations, duties and restrictions herein provided for shall inure to and be binding upon the parties hereto and upon their respective successors and assigns. SECTION 10. PERIOD OF AGREEMENT This agreement shall be in full force and effect for the period beginning with the effective date hereof and ending five(5)years after such date. This Ordinance may be extended for an additional five(5)year period if mutually agreed to in writing by both parties. SECTION 11. FUTURE CONTINGENCIES Notwithstanding anything contained in this Ordinance to the contrary, in the event that(1) / this Ordinance or any part hereof, (2) any statutory or regulatory authority by which the Telephone Company seeks to collect the charge imposed by this Ordinance, or(3)any procedure provided in this Ordinance, or(4) any compensation due the City under this Ordinance,becomes, or is declared or determined by judicial, administrative or legislative authority exercising its jurisdiction to be excessive, unrecoverable,unenforceable,void,unlawful or otherwise inapplicable, in whole or in part,the Telephone Company and the City shall meet and negotiate in good faith to obtain a new ordinance that is in compliance with the authority's decision or enactment; and, unless explicitly prohibited,the new ordinance shall provide the City • with a level of compensation comparable to that set forth in this Ordinance so long as such compensation is recoverable by the Telephone Company in a mutually agreed manner permitted by law for the unexpired portion of the term of this Ordinance. • • • SECTION 12. GOVERNING LAW (a) This Ordinance shall be construed in accordance with the City Charter and City Codes in effect on the date of passage of this Ordinance to the extent that such Charter and Codes are not in conflict with or in violation of the Constitution and laws of the United States or the State of Texas. (b) This Ordinance shall be construed and deemed to have been negotiated at arms length and drafted by the combined efforts of the City and the Telephone Company. SECTION 13. ALTERNATE DISPUTE RESOLUTION 111 (a) Notwithstanding any other provision of this Ordinance,the Parties hereto agree that any claim, cause of action or other dispute based upon or arising out of this Ordinance(a "dispute") shall be conducted, decided, determined and/or resolved pursuant to and in accordance with the provisions of this Section. The parties desire to resolve disputes arising out of this Ordinance without litigation. Accordingly, in the event of any dispute hereunder,the Parties hereto agree to attempt in good faith to resolve their dispute between themselves. At the written request of a party, each party will appoint a knowledgeable,responsible representative to meet and negotiate in good faith to resolve any dispute arising under this Ordinance. The parties intend that these negotiations be conducted by non-lawyer,business representatives. • (b) Except for action seeking a temporary restraining order or injunction related to the purposes of this Ordinance, or suit to compel compliance with this dispute resolution process,the parties agree to use the following alternative dispute resolution procedure, and also agree not to • sue any party to this Ordinance with respect to any controversy or claim arising out of or relating • to this Ordinance or its breach prior to exhausting the procedures set out in this section. • (c) If the Parties are unable to settle their dispute within sixty (60) days of the initial request, either party may, on written notice to the other party, initiate non-binding mediation of the dispute before a single mediator affiliated with Judicial Arbitration and Mediation Services, Inc. (JAMS)in Dallas County, Texas or another mediation service mutually agreeable to the parties. Mediation is a forum in which an impartial person,the mediator, facilitates communication between the Parties to promote reconciliation, settlement, or understanding among them. A Mediator may not impose his own judgment on the issues for that of the Parties. Unless expressly authorized by the Parties,the mediator may not disclose to either party information given in confidence by the other and shall at all times maintain confidentiality with respect to communications relating to the subject matter of the dispute. Unless the Parties agree otherwise, all matters, including the conduct and demeanor of the Parties and their counsel during mediation, are confidential and shall be inadmissible as settlement discussion pursuant to Rule 408 of the Federal Rules of Evidence or the applicable state rules. The mediator shall be selected by agreement of the Parties within thirty(30) days after each Party first requests mediation of the other. If a single mediator cannot be agreed upon,then each Party shall select its own Mediator from those on the JAMS approved list;those two mediators will then select a third independent mediator who will conduct the mediation session(s). The Mediator's fees will be borne equally by both Parties. In the event mediation is requested,the applicable statutes of • limitations shall be automatically tolled until the Mediator declares an impasse. In the event mediation fails,the Parties may then resort to means outside the scope of this Section. • • SECTION 14. LIMITATIONS PERIOD The City and the Telephone Company mutually agree that any dispute, claim or cause of action one party may have against the other party arising from or in any way related to this Agreement must be brought to the attention of the other party,by written notice received no later than four(4)years from the date of the act or omission giving rise to the dispute, claim or cause of action; otherwise, such dispute, claim or cause of action shall be waived and the party asserting such dispute, claim or cause of action shall be barred from pursuing the same. SECTION 15. INDEMNITY The Telephone Company shall indemnify and hold the City harmless from all costs, expenses (including reasonable attorney's fees) and damages to persons or property arising directly or indirectly out of the construction, maintenance or operation of the Telephone Company's facilities found to be caused solely by the negligence of the Telephone Company. This provision is not intended to create a cause of action or liability for the benefit of third parties but is solely for the benefit of the Telephone Company and the City. SECTION 16. REPEAL OF CONFLICTING PROVISIONS All other ordinances and agreements and parts of agreements and ordinances in conflict with the provisions of this Ordinance are hereby repealed. • SECTION 17. VENUE Venue for any proceeding under this Agreement shall be in Denton County, Texas. S • • SECTION 18. NOTICE For any purpose related to this Ordinance,notice to the City shall be to: City Manager City of Prosper, Texas P. O. Box 307 Prosper, Texas 75078 Notice to the Company shall be to: President CoServ, L.L.C. 3501 FM2181 Corinth, Texas 76205 Notice will be effective upon delivery at the above addresses until the City or the Company • notifies the other, in writing, of a change of address. SECTION 19. PARTIAL INVALIDITY AND REPEAL PROVISIONS If any section, sentence, clause or phrase in this Ordinance is for any reason held to be illegal,ultra vires or unconstitutional, such invalidity shall no affect the validity of the remaining portions. All ordinances and agreements and parts of ordinances and agreements in conflict herewith are hereby repealed. • SECTION 20. ACCEPTANCE OF AGREEMENT The Telephone Company shall have sixty(60) days from and after the passage and approval of this Ordinance to file its written acceptance thereof with the City Secretary. Upon • such filing,this Ordinance shall take effect and the effective date of this Ordinance shall be • deemed to be the first day of the month following the acceptance and it shall be in force from and • after such date, an shall effectuate and make binding the agreement provided by the terns hereof. APPROVED this the loth day of MARCH ,A.D. 1998. 1 MAY vi kAt (9, 0 ATTEST: 'City Secreta The City, acting herein by its duly constituted authorities,hereby waives the three separate meetings and hereby declares the foregoing Ordinance passed and fmally effective as of this 10th day of MARCH , 19 98 STATE OF TEXAS * COUNTY OF DENTON * I, SHTRT,EY JACKSON , City Secretary of the City of Prosper, Texas, do hereby certify that the above and foregoing is a true and correct copy of the right-of-way rental agreement between the City of Prosper, Texas, and CoServ,L.L.C. as indicated herein. The same is now recorded in Volume 5 ,Page 31 , of the Ordinance Records of the City of Prosper, Texas. WITNESS MY HAND this the 10th day of MARCH ,A.D. 19 98 - . Cia .) - City Secreta • (Seal) r ACCEPTANCE . WHEREAS,the City Council of the City of Prosper, Texas, did on the otr day of MARCH , 1998, enact an Ordinance entitled: AN ORDINANCE WHEREBY THE CITY OF PROSPER, TEXAS,AND COSERVE,L.L.C. INCORPORATED AGREE THAT,FOR THE PURPOSE OF OPERATING ITS TELECOMMUNICATIONS BUSINESS, THE TELEPHONE COMPANY SHALL CONSTRUCT,ERECT, BUILD,EQUIP, OWN, MAINTAIN AND OPERATE IN,ALONG,UNDER, OVER AND ACROSS THE STREETS,AVENUES,ALLEYS, BRIDGES,VIADUCTS AND PUBLIC GROUNDS OF THE CITY, SUCH POSTS,POLES, WIRES, CABLES, CONDUITS AND OTHER APPLIANCES, STRUCTURE AND FIXTURES NECESSARY OR CONVENIENT FOR RENDITION OF TELEPHONE AND OTHER COMMUNICATION SERVICES IN SAID CITY AND FOR CONDUCTING A GENERAL LOCAL AND LONG-DISTANCE TELEPHONE BUSINESS;PRESCRIBING THE CONDITIONS GOVERNING THE USE OF PUBLIC RIGHTS-OF-WAY FOR THE TELEPHONE COMPANY'S TELECOMMUNICATIONS BUSINESS; PRESCRIBING THE ANNUAL COMPENSATION DUE THE CITY UNDER THIS ORDINANCE; PROVIDING AN INDEMNITY CLAUSE; SPECIFYING GOVERNING LAWS; PROVIDING FOR ASSIGNMENT; FOR A PERIOD OF AGREEMENT; FOR FUTURE CONTINGENCIES; FOR REPEAL OF CONFLICTING ORDINANCES; FOR RELEASE OF ALL CLAIMS UNDER PRIOR ORDINANCES; FOR ALTERNATE DISPUTE RESOLUTION; FOR A LIMITATIONS PERIOD;FOR VENUE; AND FOR METHOD OF ACCEPTANCE; and WHEREAS, said Ordinance was on the 10th day of MARCH , 1998 duly approved by the Mayor of said City and the seal of said City was thereto affixed and attested by the City Secretary; NOW THEREFORE, in compliance with the terms of said Ordinance as enacted, approved and attested, CoServ,L.L.C. hereby accepts said Ordinance and files this its written acceptance with the City Secretary of the City of Prosper, Texas, in his office. Dated this 10th day of MARCH ,A.D. 19 98. COSERV, L.L.C. • By• & .,/g-91/-e -e----,.0.6.# President • ATTEST: S Assistant Secretary Acceptance filed in the office of the City Secretary of Prosper as,this 10th day of MARCH ,A.D. 1998. City ecreta 11 •