ORDINANCE NUMBER 16-10825
AN ORDINANCE GRANTING TO NEX-TECH, INC. A FRANCHISE FOR THE RIGHT TO CONSTRUCT, OPERATE, MAINTAIN AND EXTEND A TELECOMMUNICATIONS SYSTEM AND PROVIDE LOCAL EXCHANGE SERVICE IN THE CITY OF SALINA, KANSAS.
WHEREAS, Nex-Tech, Inc. (“Grantee”) is a telecommunications local exchange service provider, which desires to provide local exchange service within the City of Salina, Kansas (“City”); and
WHEREAS, pursuant to K.S.A. 12-2001, the City is authorized to grant a non-exclusive contract franchise ordinance, authorizing the Grantee to provide telecommunications local exchange services within the City; and
WHEREAS, Grantee has submitted a written application to the City, accompanied by the required franchise application fee deposit, requesting a telecommunications contract franchise ordinance pursuant to K.S.A. 12-2001; and
WHEREAS, the Kansas Corporation Commission has issued Grantee a certificate of convenience and authority, in accordance with the provisions of K.S.A. 66-131, to provide local exchange and exchange access service in the State of Kansas; and
WHEREAS, in addition to the terms and conditions of this non-exclusive contract franchise ordinance, Grantee’s construction, operation, and maintenance of its telecommunications system shall be subject to all applicable laws and statutes, and all rules, regulations, policies, resolutions and ordinances now or hereafter adopted by the City, including but not limited to the City’s comprehensive right-of-way management ordinance, which, in addition to the terms of this contract franchise ordinance, shall control Grantee’s rights, powers, and liabilities with respect to operations and activities in the public right-of-way; and
WHEREAS, the Governing Body finds that Grantee meets all the lawful requirements to obtain the requested contract franchise ordinance, and therefore approves Grantee’s application, SO NOW THEREFORE,
BE IT ORDAINED by the Governing Body of the City of Salina, Kansas:
SECTION 1. Grant of Franchise. Pursuant to K.S.A. 12-2001, a non-exclusive contract franchise ordinance is hereby granted to Grantee, for the purpose of providing telecommunications local exchange services within the City of Salina, Kansas, subject to the terms and conditions set forth below. The initial term of this contract franchise ordinance shall be for a period beginning on the effective date established by Section 29 below, and ending on June 30, 2018. Thereafter, this contract franchise ordinance will automatically renew for additional one (1) year terms, unless either party notifies the other party of its intent to terminate the contract franchise ordinance at least ninety (90) days before the expiration of the then current term. Any such additional term shall be deemed a continuation of this contract franchise ordinance and not as a new contract franchise ordinance or amendment. Pursuant to K.S.A. 12-2001(b)(2), under no circumstances shall this contract franchise ordinance exceed twenty (20) years from the effective date hereof.
SECTION 2. Definitions. For the purpose of this contract franchise ordinance, the following words and phrases and their derivations shall have the following meanings:
“Access line” shall mean and be limited to retail billed and collected residential lines; business lines; ISDN lines; PBX trunks and simulated exchange access lines provided by a central office based switching arrangement where all stations served by such simulated exchange access lines are used by a single customer of the provider of such arrangement. Access line may not be construed to include interoffice transport or other transmission media that do not terminate at an end user customer’s premises, or to permit duplicate or multiple assessment of access line rates on the provision of a single service or on the multiple communications paths derived from a billed and collected access line. Access line shall not include the following: Wireless telecommunications services, the sale or lease of unbundled loop facilities, special access services, lines providing only data services without voice services processed by a telecommunications local exchange services provider or private line service arrangements.
“Access line count” means the number of access lines serving consumers within the corporate boundaries of the City on the last day of each month.
“Access line fee” means a fee determined by the City, up to a maximum as set out in K.S.A. 12-2001 and amendments thereto, to be used by a telecommunications local exchange service provider in calculating the amount of access line remittance.
“Access line remittance” means the amount to be paid by a telecommunications local exchange service provider to the City, the total of which is calculated by multiplying the access line fee, as determined in the City, by the number of access lines served by that telecommunications exchange service provider within the City for each month in that calendar quarter.
“City regulations” shall refer to all laws, rules, and regulations of the City, whether established by ordinance, resolution, or other authorized method.
“Gross receipts” means only those receipts collected from within the corporate boundaries of the City enacting the franchise and which are derived from the following: (A) Recurring local exchange service for business and residence which includes basic exchange service, touch tone, optional calling features and measured local calls; (B) recurring local exchange access line services for pay phone lines provided by a telecommunications local exchange service provider to all pay phone service providers; (c) local directory assistance revenue; (D) line status verification/busy interrupt revenue; (E) local operator assistance revenue; and (F) nonrecurring local exchange service revenue which shall include customer service for installation of lines, reconnection of service and charge for duplicate bills. All other revenues, including, but not limited to, revenues from extended area service, the sale or lease of unbundled network elements, nonregulated services, carrier and end user access, long distance, wireless telecommunications services, lines providing only data service without voice services processed by a telecommunications local exchange service provider, private line service arrangements, internet, broadband and all other services not wholly local in nature are excluded from gross receipts. Gross receipts shall be reduced by bad debt expenses. Uncollectible and late charges shall not be included within gross receipts. If a telecommunications local exchange service provider offers additional services of a wholly local nature which if in existence on or before July 1, 2002, would have been included with the definition of gross receipts, such services shall be included from the date of the offering of such services in the City.
“Local exchange service” means local switched telecommunications service within any local exchange service area approved by the state corporation commission, regardless of the medium by which the local telecommunications service is provided. The term local exchange service shall not include wireless communication services.
“Public right-of-way” means only the area of real property in which the City has a dedicated or acquired right-of-way interest in the real property. It shall include the area on, below or above the present and future streets, alleys, avenues, roads, highways, parkways or boulevards dedicated or acquired as right-of-way. The term does not include the airwaves above a right-of-way with regard to wireless telecommunications or other nonwire telecommunications or broadcast service, easements obtained by utilities or private easements in platted subdivisions or tracts.
“Telecommunications local exchange service provider” means a local exchange carrier as defined in subsection (h) of K.S.A. 66-1,187, and amendments thereto, and a telecommunications carrier as defined in subsection (m) of K.S.A. 66-1,187, and amendments thereto, which does, or in good faith intends to, provide local exchange service. The term telecommunications local exchange service provider does not include an interexchange carrier that does not provide local exchange service, competitive access provider that does not provide local exchange service or any wireless telecommunications local exchange service provider.
“Telecommunications services” means providing the means of transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.
SECTION 3. Compensation. Compensation made pursuant to this contract franchise ordinance shall be paid on a quarterly basis without invoice or reminder from the City and paid within forty-five (45) days after the last day of the applicable quarter. For the first partial calendar year of this contract franchise ordinance, said compensation shall be a sum equal to five percent (5%) of gross receipts. Thereafter, compensation for each calendar year of the remaining term of the contract franchise ordinance shall continue to be based on a sum equal to five percent (5%) of gross receipts; unless the City notifies Grantee prior to ninety (90) days before the end of the calendar year that it intends to increase or decrease the percentage of gross receipts for the following calendar year or that it intends to switch to an access line fee for the following calendar year. In the event the City elects compensation based on an access line fee, nothing herein precludes the City from switching back to a gross receipts fee provided the City notifies Grantee prior to ninety (90) days before the end of the calendar year that it intends to elect a gross receipts fee for the following calendar year. Any increased access line fee or gross receipt fee shall be in compliance with the public notification procedures set forth in subsections (l) and (m) K.S.A. 12-2001.
SECTION 4. Examination of Records. The City shall have the right to examine, upon written notice to the Grantee, no more than once per calendar year, those records necessary to verify the correctness of the compensation paid pursuant to this contract franchise ordinance.
SECTION 5. Compliance with Law. As a condition of this contract franchise ordinance, Grantee is required to obtain and is responsible for any necessary permit, license, certification, grant, registration or any other authorization required by any appropriate governmental entity, including, but not limited to, the City, the Federal Communications Commission (FCC) or the Kansas Corporation Commission (KCC), subject to Grantee’s right to challenge in good faith such requirements as established by the City, FCC, or KCC. Grantee shall also comply with all applicable laws, statutes and city regulations (including but not limited to those relating to the construction in and use of the public right-of-way), subject to Grantee’s right to challenge in good faith such laws, statutes, and city regulations.
SECTION 6. Use of the Public Right-of-Way.
A. Pursuant to K.S.A. 17-1902, and amendments thereto, and subject to the provisions of this contract franchise ordinance, Grantee shall have the right to construct, maintain and operate its facilities along, across, upon and under the public right-of-way. Such appurtenances and facilities shall be so constructed and maintained as not to obstruct or hinder the usual travel or public safety on such public ways or obstruct the legal use by other utilities. All installations of Grantee’s facilities under hard surfaces shall be installed via the boring method, unless otherwise agreed by the City upon Grantee’s showing of undue hardship. For purposes of this Section 6, the term “hard surfaces” shall mean concrete, asphalt, or any other hard surface with similar structural characteristics.
B. The authority of Grantee to use and occupy the public right-of-way shall always be subject and subordinate to the reasonable public health, safety, and welfare requirements and regulations of the City. The City may exercise its home rule powers in its administration and regulation related to the management of the public right-of-way, provided that any such exercise must be competitively neutral and may not be unreasonable or discriminatory. Grantee shall be subject to all applicable laws and statutes, and all rules, regulations, policies, resolutions and ordinances now or hereafter adopted by the City, including but not limited to the City’s comprehensive right-of-way management ordinance, which, in addition to the terms of this contract franchise ordinance, shall control Grantee’s rights, powers, and liabilities with respect to operations and activities in the public right-of-way.
C. Nothing in this contract franchise ordinance shall be interpreted as granting Grantee the authority to construct, maintain or operate any facility or related appurtenance on property owned by the City outside of the public right-of-way.
D. This contract franchise ordinance does not provide Grantee the right, privilege, or franchise to act as a “competitive infrastructure provider” pursuant to K.S.A. 17-1902, as amended, for purposes of locating facilities in the right-of-way and leasing, selling, or otherwise conveying such facilities, or the capacity or bandwidth of such facilities, to third-party carriers to provide telecommunications services, internet services, or other intrastate or interstate traffic. If, during the term of this franchise, Grantee desires to act as a competitive infrastructure provider, Grantee shall promptly notify the City of its desire to do so and renegotiate this contract franchise ordinance in accordance with applicable law prior to providing such service.
E. Grantee shall participate in the Kansas One Call utility location program with respect to all of its facilities in the public right-of-way.
SECTION 7. Limitation on Use of Portion of Right-of-Way. The City shall have the authority to prohibit the use or occupation of a specific portion of public right-of-way by Grantee due to a reasonable public interest necessitated by public health, safety and welfare so long as the authority is exercised in a competitively neutral manner and is not unreasonable or discriminatory. A reasonable public interest shall include the following:
A. The prohibition is based upon a recommendation of the city engineer, is related to public health, safety and welfare, and is nondiscriminatory among providers, including incumbent providers;
B. Grantee has rejected a reasonable, competitively neutral and nondiscriminatory justification offered by the City for requiring an alternate method or alternate route that will result in neither unreasonable additional installation expense nor a diminution of service quality;
C. The City reasonably determines, after affording Grantee reasonable notice and an opportunity to be heard, that a denial is necessary to protect the public health and safety and is imposed on a competitively neutral and nondiscriminatory basis; or
D. The specific portion of the public right-of-way for which Grantee seeks use and occupancy is environmentally sensitive as defined by state or federal law or lies within a previously designated historic district as defined by local, state or federal law.
SECTION 8. Repair of Damage to Right-of-Way. Grantee shall repair all damage to the public right-of-way caused by the activities of Grantee, or of any agent, affiliate, employee, or subcontractor of Grantee, while occupying, installing, repairing or maintaining facilities in a public right-of-way and return the right-of-way to its functional equivalence before the damage pursuant to the reasonable requirements and specifications of the City. If Grantee fails to make the repairs required by the City, the City may effect those repairs and charge Grantee the costs of those repairs. If the City incurs damages as a result of a violation of this subsection, then the City shall have a cause of action against Grantee for violation of this subsection, and may recover its damages, including reasonable attorney fees, if Grantee is found liable by a court of competent jurisdiction.
SECTION 9. Fees. Pursuant to K.S.A. 17-1902(n), and amendments thereto, the City may assess any of the following fees against Grantee for use and occupancy of the public right-of-way, provided that such fees reimburse the City for its reasonable, actual and verifiable costs of managing the public right-of-way, and are imposed on all such providers in a nondiscriminatory and competitively neutral manner:
A. A permit fee in connection with issuing each construction permit to set fixtures in the public right-of- way within the City, to compensate the City for issuing, processing and verifying the permit application.
B. An excavation fee for each street or pavement cut to recover the costs associated with construction and repair activity of Grantee, its assigns, contractors and subcontractors with the exception of construction and repair activity required pursuant to subsection (l) of K.S.A. 17-1902 related to construction and maintenance activities directly related to improvements for the health, safety and welfare of the public; provided, however, imposition of such excavation fee must be based upon a regional specific or other appropriate study establishing the basis for such costs which takes into account the life of the city street prior to the construction or repair activity and the remaining life of the city street. Such excavation fee is expressly limited to activity that results in an actual street or pavement cut.
C. Inspection fees to recover all reasonable costs associated with the City’s inspection of the work of Grantee in the right-of-way.
D. Repair and restoration costs associated with repairing and restoring the public right-of-way because of damage caused by Grantee, its assigns, contractors, and/or subcontractors in the right-of-way.
E. A performance bond, in a form acceptable to the City, from a surety licensed to conduct surety business in the state of Kansas, insuring appropriate and timely performance in the construction and maintenance of facilities located in the public right-of-way.
SECTION 10. Indemnification and Hold Harmless.
A. It shall be the responsibility of Grantee to take adequate measures to protect and defend its facilities in the public right-of-way from harm or damage. If Grantee fails to accurately or timely locate facilities when requested, in accordance with the Kansas Underground Utility Damage Prevention Act, K.S.A. 66-1801 et seq., it shall have no claim for costs or damages against the City and its authorized contractors unless such parties are responsible for the harm or damage caused by their gross negligence or intentional conduct. The City and its authorized contractors shall be responsible to take reasonable precautionary measures including calling for utility locations and observing marker posts when working near Grantee’s facilities.
B. Grantee shall indemnify and hold the City and its officers and employees harmless against any and all claims, lawsuits, judgments, costs, liens, losses, expenses, fees (including reasonable attorney fees and costs of defense), proceedings, actions, demands, causes of action, liability and suits of any kind and nature, including personal or bodily injury (including death), property damage or other harm for which recovery of damages is sought, to the extent that it is found by a court of competent jurisdiction to be caused by the negligence of Grantee, any agent, officer, director, representative, employee, affiliate or subcontractor of Grantee, or its respective officers, agents, employees, directors or representatives, while installing, repairing or maintaining facilities in the public right-of-way.
C. The indemnity provided by this subsection does not apply to any liability resulting from the negligence of the City, its officers, employees, contractors or subcontractors. If Grantee and the City are found jointly liable by a court of competent jurisdiction, liability shall be apportioned comparatively in accordance with the laws of the State of Kansas without, however, waiving any governmental immunity available to the City under state law and without waiving any defenses of the parties under state or federal law. This section is solely for the benefit of the City and Grantee and does not create or grant any rights, contractual or otherwise, to any other person or entity.
SECTION 11. Insurance and Performance Bond.
A. Grantee agrees to procure and maintain, during the term of this contract franchise ordinance and any extension thereof for their use and operations in the public right-of-way; (a) commercial general liability insurance with limits not less than $1,000,000 each occurrence of bodily injury and/or property damage, including the risk of explosion, collapse & underground; (b) $500,000 personal and/or advertising injury limit, $1,000,000 products and completed operations and $2,000,000 general aggregate; (c) $500,000 auto liability for all owned, hired and non-owned autos; and (d) statutory worker’s compensation insurance; Grantee is responsible to ensure their independent contractors carry coverage equal or greater than that required of the Grantee.
B. City shall be named as an additional insured on the Grantees’ policies. Grantee shall keep on file with the City a certificate of Insurance that shows compliance with its obligations as set forth herein. Grantee agrees to obtain insurance coverage or self-insure itself for contents or owned equipment associated with its own operations(s). Grantee or its insurance representative shall provide for at least thirty (30) days prior written notice of cancellation or any changes of insurers to City. Grantee shall make available to the City on request the policy declarations page and a certified copy of the policy in effect, so that limitations and exclusions can be evaluated for appropriateness of overall coverage.
C. The insurance limits outlined above represent the minimum coverage limit and do not infer or place a limit of liability of the Grantee nor has the City assessed the risk that may be applicable to the Grantee. The Grantee’s liability program will be primary and any insurance maintained by the City (including self-insurance) will not contribute with the coverage maintained by the Grantee. Coverage limits outlined above may be met by a combination of primary and excess liability insurance programs. The City will only accept coverage from an insurance carrier who offer proof that it is admitted to do business in the State of Kansas, and carries a Best’s rating of “A:X” or better; or is a company mutually agreed upon by the City and the Grantee.
D. Grantee shall, as a material condition of this contract franchise ordinance, prior to the commencement of any work in the public right-of-way, deliver to the City a performance bond in the amount of $50,000.00, payable to the City to ensure the appropriate and timely performance in the construction and maintenance of facilities located in the public right-of-way. The required performance bond must be with a good and sufficient surety, authorized to transact business in the State of Kansas, and satisfactory to the City in form and substance.
SECTION 12. Notification of Claims. Grantee or the City shall promptly advise the other in writing of any known claim or demand against Grantee or the City related to or arising out of Grantee’s activities in a public right-of-way.
SECTION 13. Removal or Relocation of Facilities. If requested by the City, in order to accomplish construction and maintenance activities directly related to improvements for the health, safety, and welfare of the public, Grantee shall remove its facilities from the public right-of-way or shall relocate or adjust its facilities within the public right-of-way at no cost to the City. Such relocation or adjustment shall be completed as soon as reasonably possible within the time set forth in any request by the City for such relocation or adjustment. Any damages suffered by the City or its contractors as a result of Grantee’s failure to timely relocate or adjust its facilities shall be borne by Grantee.
SECTION 14. Tree Trimming. Permission is hereby granted to Grantee to trim trees upon and overhanging the public right-of-way so as to prevent the branches of such trees from coming in contact with Grantee’s facilities. Grantee agrees that all such tree trimming shall be conducted in accordance with the American National Standard for Tree Care Operations (ANSI Standard Z133.1), and that said trimming shall also comply with all applicable laws, statutes and city regulations.
SECTION 15. Resold Access Lines. Grantee shall collect and remit compensation as described in Section 3 on those access lines that have been resold to another telecommunications local exchange service provider.
SECTION 16. Termination. In the event of Grantee’s breach of this contract franchise ordinance, the City shall have the right to terminate this contract franchise ordinance in accordance with the following procedure. The City shall first serve a written notice upon Grantee, setting forth in detail the nature of the breach, and the Grantee shall have thirty (30) days thereafter to cure such breach. If the City deems the breach uncured at the end of the thirty (30) day period, the City may terminate this contract franchise ordinance after reasonable notice and a public hearing before the City’s governing body.
SECTION 17. Transfer and Assignment. Subject to and not in conflict with K.S.A. 12-2001, this contract franchise is granted solely to the Grantee and shall not be transferred or assigned without the prior written approval of the City; provided that such transfer or assignment may occur without written consent of the City to a wholly owned parent or subsidiary, or between affiliates or wholly owned subsidiaries, and to a lender of the Grantee to secure financing arrangements, upon notice to the City.
SECTION 18. Reservation of Rights. In entering into this contract franchise ordinance, neither the City’s nor Grantee’s present or future legal rights, positions, claims, assertions or arguments before any administrative agency or court of law are in any way prejudiced or waived. By entering into the contract franchise ordinance, neither the City nor Grantee waive any rights, but instead expressly reserve any and all rights, remedies, and arguments the City or Grantee may have at law or equity, without limitation, to argue, assert, and/or take any position as to the legality or appropriateness of this contract franchise ordinance or any present or future laws, ordinances, and/or rulings which may be the basis for the City and Grantee entering into this contract franchise ordinance.
SECTION 19. Notices. Grantee shall at all times maintain with the City a local point of contact who shall be available at all times to act on behalf of Grantee in the event of an emergency. Grantee shall provide the City with said local contact’s name, address, telephone number, fax number and e-mail address. Emergency notice by Grantee to the City may be made by telephone to the City Clerk or the Public Works Director. All other notices between the parties shall be in writing and shall be made by personal delivery, depositing such notice in the U.S. Mail or Certified Mail, return receipt requested. Any notice shall be deemed delivered five (5) calendar days after the date of such deposit in the U.S. Mail unless otherwise provided. “Business day” for purposes of this section shall mean Monday through Friday, City-observed holidays excepted.
City Clerk Nex-Tech, Inc.
City of Salina, Kansas Attn: Rhonda Goddard, Chief Financial Officer
P.O. Box 736 P.O. Box 158
Salina, KS 67402-0736 Lenora, KS 67645
SECTION 20. Confidentiality. Information provided to the City under K.S.A. 12-2001 et seq. shall be governed by confidentiality procedures in compliance with K.S.A. 45-215 and 66-1220a, et seq., and amendments thereto. Grantee agrees to indemnify and hold the City harmless from any and all penalties or costs, including attorneys’ fees, arising from the actions of Grantee, or of the City at the written request of Grantee, in seeking to safeguard the confidentiality of information provided by Grantee to the City under this contract franchise.
SECTION 21. Failure to Enforce. The failure of either party to enforce and remedy any noncompliance of the terms and conditions of this contract franchise ordinance shall not constitute a waiver of rights nor a waiver of the other party’s obligations as provided herein.
SECTION 22. Payment of Publication Costs. In accordance with K.S.A. 12-2001, Grantee shall be responsible for payment of all costs and expense of publishing this contract franchise ordinance, and any amendments thereof.
SECTION 23. Severability of Ordinance. If any clause, sentence, or section of this contract franchise ordinance shall be held to be invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remainder, as a whole or any part hereof, other than the part declared invalid.
SECTION 24. Compliance with K.S.A. 12-2001. Grantee has entered into this contract franchise ordinance as required by the City and K.S.A. 12-2001. If any clause, sentence, section, or provision of K.S.A. 12-2001, and amendments thereto, shall be held to be invalid by a court of competent jurisdiction, either the City or Grantee may elect to terminate the entire contract franchise ordinance. In the event a court of competent jurisdiction invalidates K.S.A. 12-2001, and amendments thereto, if Grantee is required by law to enter into a contract franchise ordinance with the City, the parties agree to act in good faith in promptly negotiating a new contract franchise ordinance.
SECTION 25. Force Majeure. Each and every provision hereof shall be subject to acts of God, fires, strikes, riots, floods, war and other disasters beyond Grantee’s or the City’s control.
SECTION 26. Applicable Law. This contract franchise ordinance is made under and in conformity with the laws of the State of Kansas.
SECTION 27. Acceptance of Terms. Grantee shall have thirty (30) days after the final passage and approval of this ordinance to file with the City Clerk its acceptance, in writing, of the provisions, terms and conditions of this ordinance, which acceptance shall be duly acknowledged before an officer authorized by law to administer oaths; and when so accepted, this ordinance and acceptance shall constitute a contract between the City and Grantee subject to the provisions of the laws of the state of Kansas, and such contract shall be deemed effective on the date of publication pursuant to Section 29 below.
SECTION 28. Summary of Ordinance for Publication. Upon receipt of Grantee’s written acceptance of this ordinance, the City Clerk is directed to publish a summary of this ordinance in the Salina Journal in the following format:
Ordinance No. 16-10825 Summary
On March 14, 2016, the City of Salina, Kansas, passed Ordinance No. 16-10825. The ordinance grants to Nex-Tech, Inc. a non-exclusive contract franchise for the purpose of providing local exchange services within the City of Salina, Kansas, and prescribing the terms and conditions under which Nex-Tech, Inc. may construct, operate, and maintain a telecommunications system in the public right-of-way. A complete copy of the ordinance is available at www.salina-ks.gov or in the office of the city clerk, 300 W. Ash Street, free of charge. This summary is certified by the city attorney.
SECTION 29. Effective Date of Ordinance. This ordinance shall take effect and be in full force from and after its passage by the governing body, receipt of Grantee’s written acceptance of terms, and publication of a summary thereof in the official newspaper of the City.
Introduced: March 7, 2016
Adopted: March 14, 2016
Jon R. Blanchard, Mayor
Shandi Wicks, CMC, City Clerk
Certification of Publication Summary:
Greg A. Bengtson, City Attorney