HomeMy WebLinkAbout03-31-2015 C7 Digital West Conduit Agreement AmendmentCity of San Luis Obispo, Council Agenda Report, Meeting Date, Item Number
FROM: Jason Stilwell, Interim Director of IT & Financial Planning
Prepared By: Steve Schmidt, Information Technology Manager
SUBJECT: AMENDMENT NO. 1 TO THE CITY/DIGITAL WEST FIBER OPTIC
INFRASTRUCTURE AGREEMENT
RECOMMENDATION
Approve and authorize the Mayor to execute a First Amendment to the City/Digital West Fiber
Optic Infrastructure Agreement (“First Amendment”) which allows Digital West to expand its
fiber optic network within City owned conduits by granting Digital West a nonexclusive license
to designated portions of the City’s conduit system.
BACKGROUND
In April of 2011, City staff released a Request for Proposals (“RFP”) to lease portions of the City’s
conduit system to private communications companies. Digital West was the only company that
responded to the City’s RFP or otherwise showed any interest in leasing space within the City’s
conduit system.
On September 20, 2011, City and Digital West entered into an Agreement for Installation of
Conduit and Conduit Use (“Agreement”) whereby City agreed to provide a nonexclusive license to
a portion of the City’s conduit system for use by Digital West in exchange for web hosting services
and other related services (“Prado Conduit Project”). A copy of the original agreement is included
as Attachment 4.
DISCUSSION
Under the proposed First Amendment (Attachment 1) to the existing Agreement, Digital West
agrees to pay the City the industry standard amount of $0.45 per linear foot as shown in the example
document from AT&T for industry pricing (Attachment 3) for 22,090 linear feet of space within
City conduits as a “Conduit License Fee.” The City conduits already contain cabling for City
services and will not be affected by Digital West placing an additional fiber cable. The 22,090 linear
feet of fiber cable that Digital West will be placing for their needs in spare conduit space will
involve the following City conduits as shown on Attachment 2 and below:
• Mill to Foothill – Entering at the City vault at Mill and Johnson, continuing on Johnson
under Highway 101 to California St, to Foothill Rd and south to Ferrini Rd.
• Hathway to Oak – Adjacent the 101 South exits at Montalban St and Hathway, extending
along Montalban to Oak St. at Lemon St.
• Chorro St. – The Chorro St. conduit between Walnut St. and Pacific St.
• Madonna Rd – From Elks Rd under Highway 101, extending the length of El Mercado to
Madonna Rd, south to Los Osos Valley Road and west to Diablo Dr.
By licensing this additional conduit to Digital West, the City’s fiber optic infrastructure will be
significant expanded.
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City/Digital West Conduit Infrastructure Amendment Page 2
FISCAL IMPACT
There is no cost to the City as a result of the First Amendment. There will be a positive fiscal
impact of approximately $10,000 per year associated with the increase in revenue to the City as a
result of this amendment.
ALTERNATIVE
Do not approve the amendment. Council may choose to not approve the amendment to the
existing City/Digital West Agreement. This is not recommended due to the increasing need for
fiber continuity in the City that will be met with these and additional future conduit licensing
agreements.
ATTACHMENTS
1. Amendment No. 1
2. Digital West proposed conduit map
3. Conduit pricing
4. Original City/Digital Agreement
T:\Council Agenda Reports\2015\2015-03-31\Amendment No. 1 to the City-Digital West Conduit Infrastructure Agreement
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FIRST AMENDMENT TO AGREEMENT FOR
INSTALLATION OF CONDUIT AND CONDUIT USE
This First Amendment to Agreement for Installation of Conduit and Conduit Use (“First
Amendment”) is made, entered and effective as of this ____ day of _________________, 2015
(the “Effective Date”) by and between the City of San Luis Obispo, a municipal corporation and
charter city (“City”) and Digital West Networks, Inc., a California corporation (“Digital West”).
RECITALS
WHEREAS, the City owns a conduit system located in certain portions of the City’s right-of-
way;
WHEREAS, in April of 2011, City issued a Request for Proposals (“RFP”) to lease portions of
the City’s conduit system to private communications companies. Digital West was the only
company that responded to the City’s RFP or otherwise showed any interest in leasing the City’s
conduit system;
WHEREAS, on September 20, 2011, City and Digital West entered into that certain Agreement
for Installation of Conduit and Conduit Use (“Agreement”) whereby City agreed to provide a
nonexclusive license to a portion of the City’s conduit system for use by Digital West in
exchange for web hosting services and other related services (the “Prado Conduit Project”). A
copy of the Agreement is attached hereto as Exhibit “A” and incorporated herein by this
reference;
WHEREAS, by this First Amendment, City desires to allow Digital West to expand its fiber
optic network within the City by granting Digital West with a nonexclusive license to additional
portions of the City’s conduit system subject to certain terms and conditions; and
WHEREAS, for purposes of efficiency, the terms and conditions of this new project will be
added to the Agreement pursuant to this First Amendment.
AGREEMENT
NOW THEREFORE, in consideration of their mutual promises, City and Digital West agree as
follows:
1. Recitals. The recitals above are true and correct and are incorporated into the body of this
Agreement by this reference.
2. Capitalized Terms. All capitalized terms not defined herein shall have that same meaning
as set forth in the Agreement.
3. Term. Unless otherwise agreed in writing between City and Digital West, the term of this
First Amendment shall run concurrent with the term of the Agreement as set forth in
Section 19, and may be independently extended for two (2) additional five (5) year terms,
Attachment 1
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subject to the notification procedures set forth in Section 19.1 of the Agreement and
mutual agreement of the parties.
4. Scope of Agreement. Section 2 of the Agreement is hereby amended to add the following
subsections regarding the new project:
2.4 Pursuant to this First Amendment, the scope of services is hereby amended to
include the additional scope described below:
2.4.2 City hereby grants to Digital West a nonexclusive license to use additional
portions of the City’s Conduit System to install, operate and maintain
Cable and Innerducts at the locations depicted in Attachment 2 to this First
Amendment attached hereto and incorporated herein by this reference (the
“Conduit License”). City and Digital West each acknowledge and agree
that the Conduit License entails approximately 22090 linear feet of
Conduit. City and Digital West each acknowledge and agree that Sections
2.3.1 – 2.3.6 of the Agreement apply to Digital West’s use of this portion
of the City’s Conduit System as provided in this First Amendment.
5. Fees and Compensation. Section 3 of the Agreement is hereby amended to add the
following subsection.
3.1 In consideration of City granting to Digital West the Conduit License
pursuant to this First Amendment, Digital West shall pay to City during
the Initial Term, or any extension thereof or during any Successive Term,
an annual Conduit license fee (“Conduit License Fee”) in the amount of
forty five cents ($0.45) per linear foot ($9,940 total) of Conduit licensed to
Digital West under this First Amendment. The Conduit License Fee shall
be paid on an annual basis with each payment due and payable on the
beginning of each year, and prorated for partial years. The AT&T pricing
guide was used to depict the industry standard.
3.1.1 The Conduit License Fee provided for in Section 3.1 above shall be
subject to an adjustment every term anniversary following the Effective
Date as follows:
The base for computing the adjustment is the Consumer Price
Index for All Urban Consumers – Los Angeles published by the
United States Department of Labor, Bureau of Labor Statistics (the
“Index”), which is published for the month nearest the
commencement date for each annual term (the “Beginning Index”).
If the Index published nearest the adjustment date (the “Extension
Index”) has increased over the Beginning Index, the basic annual
rent until the next rent adjustment shall be set by multiplying the
Conduit License Fee set forth in Section 3.1 above by a fraction,
the numerator of which is the Extension Index and the denominator
Attachment 1
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of which is the Beginning Index. In no case shall the basic annual
rent be less than the basic annual rent set forth in Section 3.1
above. If the Index is discontinued or revised during the Lease
term, such other government index or computation with which it is
replaced shall be used in order to obtain substantially the same
result as would be obtained if the Index had not been discontinued
or revised.
6. Incorporation of Terms and Conditions of Agreement. All provisions in the Agreement
shall apply to this First Amendment. Except as modified herein, all terms and conditions
of the Agreement shall remain in full force and effect. To the extent there is a conflict
between terms and conditions between the Agreement and this First Amendment, the
term or condition of this First Amendment shall control.
IN WITNESS WHEREOF, City and Digital West have caused this First Amendment to be
executed the day and year first written above.
CITY OF SAN LUIS OBISPO
_____________________________
Jan H. Marx, Mayor
Attest:
_____________________________
Anthony Mejia, City Clerk
APPROVED AS TO FORM:
_____________________________
J. Christine Dietrick, City Attorney
DIGITAL WEST NETWORKS, INC.
By:_____________________________
Tim Williams
Its: CEO
Attachment 1
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Exhibit “A”
Location of Network Project
Phase 1 – The sections of City conduit to be used by Digital West in Phase 1 are as follows:
1. Mill to Foothill – Entering at the City vault at Mill and Johnson, continuing on
Johnson under Highway 101 to California St, to Foothill Rd and south to Ferrini
Rd.
2. Hathway to Oak – Adjacent the 101 South exit at Montalban St and Hathway,
extending along Montalban to Oak St. at Lemon St.
3. Chorro St. – The Chorro St. conduit between Walnut St. and Pacific St.
4. Madonna Rd – From Elks Rd under Highway 101, extending the length of El
Mercado to Madonna Rd, south to Los Osos Valley Road and west to Diablo Dr.
Attachment 1
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Exhibit “B”
Attachment 1
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Attachment 1
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0 0.5 10.25 Miles
SLO Comm Phase 1
Phase 1
Map created on 2/23/2015
Attachment 2
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Revised 9/07 (2010 exhibit d - rates.doc)
EXHIBIT D / APPENDIX 1
Pacific Bell
ANNUAL FEES FOR POLE ATTACHMENTS AND CONDUIT OCCUPANCY
Year Pole Attachment Rate
2010 $4.87
Year Conduit Occupancy Rate
2010 (Innerduct) $0.45/ft.
All pole and conduit license fees are for a period of one year from January 1 through
December 31, effective January 1, 2010 and billable semiannually in advance in January
and July of each year.
D-1
Attachment 3
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