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034 of 1995 - Granting to Phoenix Fiberlink of Utah, and its successors, a telecommunication franchise0 95-1 C 95-308 SALT LAKE CITY ORDINANCE No. 34 of 1995 (Granting to Phoenix Fiberlink of Utah, and its successors, a telecommunication franchise) WHEREAS, Phoenix Fiberlink of Utah, a Utah corporation (the "Company") desires to provide certain telecommunication services within Salt Lake City, Utah (the "City"), and in connection therewith to establish a network in, under, along, over and across present and future streets, alleys and rights -of -way of the City, consisting of telecommunication lines and cables, together with all necessary appurtenances; and WHEREAS, the City, in the exercise of its police power, ownership or use rights over and in the public rights -of -way, and pursuant to its other regulatory authority, believes it is in the best interest of the public to provide to the Company, and its successors, a non-exclusive franchise to operate its business within the City; and WHEREAS, the City and the Company propose to enter into a Franchise Agreement, the substantially final form of which has been presented to the City Council at the meeting at which this Ordinance is being considered for adoption; and WHEREAS, the City desires to approve the execution and delivery of such Franchise Agreement and to otherwise take all actions necessary to grant the referenced franchise to the Company; and WHEREAS, the City believes this Ordinance to be in the best interest of the citizens of Salt Lake City, NOW, THEREFORE, be it ordained by the City Council of Salt Lake City, Utah, as follows: SECTION 1. Purpose. The purpose of this Franchise Ordinance is to grant to the Company, and its successors and assigns, a non-exclusive right to use the public streets, alleys and rights -of -way, for its business purposes, under the constraints and for the compensation enumerated in the Franchise Agreement attached hereto as Exhibit A, and by this reference incorporated herein, as if fully set forth herein (the "Franchise Agreement"). SECTION 2. Short Title. This Ordinance shall constitute the Phoenix Fiberlink Franchise Ordinance. SECTION 3. Franchise Description. There is hereby granted to the Company, and its successors and assigns, in accordance with the terms and conditions of the Franchise Agreement, the right, privilege, and franchise (collectively, the "Franchise"), to construct, maintain and operate in, under, along, over and across the present and future streets, alleys, and rights -of -way in the City, telecommunication lines and cables, together with all the necessary or desirable appurtenances (including, but not limited to, underground conduits and structures, poles, towers, wires and cables, for its own use) for the purpose of supplying telecommunication services to the City, the inhabitants thereof and persons and corporations beyond the limits thereof, for telecommunication purposes. 2 This Franchise Ordinance does not grant to the Company the right, privilege or authority to engage in community antenna (or cable) television business, although nothing herein contained shall preclude the Company (1) from permitting those lawfully engaged in such business to utilize the Company's facilities within the City for such purposes, or (2) from providing such service, if appropriate authority, including a franchise from the City, is obtained. SECTION 4. Term. The term of the Franchise is for a period from and after the effective date of this Ordinance and its acceptance by the Company, until January 1, 2010. The Company shall pay all costs of publishing this Ordinance. SECTION 5. Acceptance by Company. Within thirty (30) days after the effective date of this Ordinance, the Company shall file an unqualified acceptance of this Ordinance, in a form approved by the City Attorney, with the City Recorder of Salt Lake City; otherwise, this Ordinance and the rights granted hereunder shall be null and void. SECTION 6. Consideration and Payment Dates. The Company shall pay to the City for the Franchise a franchise fee (the "Franchise Fee"), equal to the greater of either: (a) The sum of Five Thousand Dollars ($5,000), with the initial payment due and tendered concurrent with the execution and delivery hereof. Thereafter, the Franchise Fee shall be due on or before July 1 of each year, and shall be 3 considered payment in advance for use of the Franchise for the next succeeding calendar year. On each payment date, the Franchise Fee payment shall be increased or decreased by the same percentage increase or decrease, if any, in the Consumer Price Index herein specified for the twelve-month period ending the day preceding the payment date on which such payment is due. The Consumer Price Index unit for this purpose shall be the U.S. City Average Geographic Index for the components including "all urban consumers" based on "all items" as published for the month of May of each year by the Bureau of Labor Statistics of the federal government. If publication of said Consumer Price Index should cease, such annual percentage increase shall be determined by reference to such similar index as shall replace it, or as agreed upon by the parties. OR (b) An amount equal to six percent (6%) per annum of the Company's Gross Revenue; provided, however, that any sum paid by the Company as a gross receipts based tax (including, by way of example and not limitation, the Business Occupation Revenue Tax under the provisions of Section 5.04.170 at sea. of the City Code, or successor provision), shall be credited against any fee due under this Section 6(b). In the event the statutory limit on gross receipt based taxes or other charges imposed by Section 11- 26-1, Utah Code, or any successor provision, is increased above six percent (6%), the Company shall, at the request of the City, enter into an amendment to this Franchise Ordinance and the 4 Franchise Agreement increasing the Franchise Fee to the level requested by the City, but not to exceed the increased statutory limit; provided, however, in no event shall the Company be obligated to pay a higher percentage of Gross Revenue than is paid by other fixed public utilities within the City. The term "Gross Revenue" as used herein is any revenue of the Company derived from the sale of its telecommunication services to its customers within the City, without regard to the billing address of the customer, except that Gross Revenue shall not include revenue derived by the Company from services provided to its parent, subsidiaries of its parent, or affiliated companies of the Company. SECTION 7. Rights Reserved to the City. Without limitation upon the rights that the City might otherwise have, the City expressly reserves the following rights, powers and authorities to: (a) Exercise its governmental powers now or hereafter to the full extent that such powers may be vested in or granted to the City; (b) Grant additional franchises to the same property covered by the Franchise within the City to others, under any conditions acceptable to the City; or (c) Exercise any other rights, powers, or Constitution of ordinances. SECTION 8. Extension of City Limits. Upon the annexation of any territory to the City, the right and Franchise hereby granted shall extend to the territory so annexed to the extent duties required or authorized, under the the State of Utah, 5 the law of Utah, or the City the City has authority. All facilities owned, maintained, or operated by the Company located within, under, or over streets, alleys and rights -of -way of the territory so annexed shall thereafter be subject to all terms hereof. SECTION 9. Early Termination or Revocation of Franchise. 9.1 The City may terminate or revoke the Franchise and all rights and privileges herein provided for any of the following reasons: (a) The Company fails to make timely payments of the Franchise Fee as required under Article II of the Franchise Agreement and does not correct such failure within ten working days after written notice by the City of such failure; (b) The Company, by act or omission, materially violates a duty or obligation herein set forth or set forth in the Franchise Agreement in any particular within the Company's control, and with respect to which redress is not otherwise herein provided. In such event, the City, acting by or through its City Council, may after hearing determine that such failure is of a material nature; and thereupon, after written notice given to the Company of such determination, the Company shall, within thirty (30) days of such notice, commence efforts to remedy the conditions identified in the notice, and will have six (6) months from the date it receives notice to remedy the conditions. After the expiration of such six (6) month period and failure to 6 correct such conditions, the City may declare the Franchise forfeited, and thereupon the Company shall have no further rights or authority hereunder; provided, however, that any such declaration of forfeiture shall be subject to judicial review as provided by law, and provided further that in the event such failure is of such nature that it cannot be reasonably corrected within the six (6) months time provided above, the City shall provide additional time for the reasonable correction of such alleged failure. (c) The Company becomes insolvent, unable or unwilling to pay its debts, is adjudged bankrupt, or all or part of its facilities should be sold under an instrument to secure a debt and is not redeemed by the Company within thirty (30) days; or (d) In furtherance of the Company policy or through acts or omissions done within the scope and course of employment, a director or officer of the Company knowingly engages in conduct or makes a material misrepresentation with or to the City or the Company's customers, that is fraudulent or in violation of a felony criminal statute of the State of Utah. 9.2 Nothing contained herein shall be deemed to preclude the Company from pursuing any legal or equitable rights or remedies it may have to challenge the action of the City. No Franchise revocation or termination may be effected until the City Council shall first adopt an ordinance terminating the 7 Franchise and setting forth the reasons therefor, following not less than thirty (30) days prior written notice to the Company of the proposed date of the ordinance adoption. The Company shall have an opportunity on said ordinance adoption date to be heard upon the proposed termination. SECTION 10. Severabilit'. 10.1. If any section, sentence, paragraph, term or provision of the Franchise Agreement or this Franchise Ordinance is for any reason determined to be or rendered illegal, invalid, or superseded by other lawful authority including any state or federal, legislative, regulatory or administrative authority having jurisdiction thereof or determined to be unconstitutional, illegal or invalid by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision and such determination shall have no effect on the validity of any other section, sentence, paragraph, term or provision hereof, all of which will remain in full force and effect for the term of the Franchise or any renewal or renewals thereof, except for Section 6 hereof and Article II of the Franchise Agreement. 10.2 Section 6 hereof and Article II of the Franchise Agreement are essential to the adoption of this Ordinance and should they be challenged by the Company, or determined to be illegal, invalid, unconstitutional or superseded, in whole or in part, the entire Franchise shall be voided and terminated, subject to the following: (a) In the event of a judicial, 8 regulatory or administrative determination that Section 6 hereof or Article II of the Franchise Agreement is illegal, invalid, unconstitutional or superseded, such termination shall be effective as of the date of a final appealable order, unless otherwise agreed upon by the City and the Company; (b) in the event of any legislative action that renders Section 6 hereof or Article II of the Franchise Agreement unconstitutional, illegal, invalid or superseded, such termination shall be effective as of the effective date of such legislative action. 10.3 Notwithstanding the foregoing, if the City stipulates in writing to judicial, administrative or regulatory action that seeks a determination that Section 6 hereof or Article II of the Franchise Agreement is invalid, illegal, superseded or unconstitutional, then a determination that Section 6 hereof or Article II of the Franchise Agreement is invalid, illegal, unconstitutional or superseded shall have no effect on the validity or effectiveness of any other section, sentence, paragraph, term or provision of the Franchise, which shall remain in full force and effect. 10.4 In the event this Franchise Ordinance or the Franchise Agreement is terminated pursuant to paragraph 10.2 hereof or paragraph 21.2 of the Franchise Agreement, the City grants to the Company a lease according to the same terms and conditions as set forth in the Franchise Agreement. Accordingly, the Company shall pay, as fair market rental value, the same amounts, at the same times, required for the payment of the Franchise Fee pursuant to 9 Section 6 hereof and Article II of the Franchise Agreement and shall be bound by all other terms and conditions contained herein; provided, however, that in no event will the Company be obligated to pay a higher percentage of revenues derived from the sale of telecommunication services within the City than is paid by other fixed public utilities serving within the City. SECTION 11. This ordinance shall take effect immediately upon publication. Passed by the City Council of Salt Lake City, Utah, this 1st day of June ATTEST AND COUNTERSIGN: (Cli(gr 6DEPUTY LRRA I DER Transmitted to the Mayor on Mayor's Action: ATTEST: s,tutt utru r R Bill 34 of 1995 Published June 13, 1995 , 19 95 . C IRPE'SON June 1. 1995 MAYOR 10 257 ACKNOWLEDGEMENT AND ACCEPTANCE Phoenix Fiberlink of Utah, a Utah corporation, in satisfaction of Sectionof the Franchise Ordinance to which this acceptance is attached, does hereby acknowledge and accept the terms and conditions of such Franchise Ordinance. Dated: Z Approved as to form: ssistant City Attorney G:\ORDINA95\PHOENIX.CEB:le 11 PHOENIX FIBERLINK OF UTAH, By a Utah corporation Its Senior Vice President ACKNOWLEDGMENT State of California ss County of Sacramento On , c�,. 2 2 , 1995, before me, Shf'i,v, r"j., m.rc) a notary public, personally appeared STEVE HUBBARD, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument, the person, or the entity on behalf of which the person acted, executed the instrument. [SEAL] WITNESS my hand and official seal. OffIck i Seal SHERRI EA, JOHNSON NOTARY PUBL IC - CAL IFONNIA SACRAMENT COUNTY My Comm Expires Nov. 17,1995 ee Notary Pu