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ITEM 8

City Council Memorandum Development Services Memo No.

Date:

November 4, 2024

To:

Mayor and Council

Thru:

Joshua H. Wright, City Manager
Andy Bass, Deputy City Manager
Kevin Snyder, Development Services Director
Ryan Peters, Strategic Initiatives Director

From:

Subject:

Resolution 5847, Authorizing an Amended and Restated License Agreement Between Zayo Group LLC and the City of Chandler for Use of Public Property for the Establishment of Class 4 and Class 5 Telecommunications Systems

Proposed Motion:

Move City Council pass and adopt Resolution No. 5847, authorizing the Mayor to execute the amended and restated license agreement between Zayo Group, LLC, and the City of Chandler for the use of facilities in the city's rights-of-way and public places to establish Class 4 and Class 5 Telecommunications Systems.

Background:

Zayo Group, LLC, has filed an application with the city to renew, with modified terms, its license to install, operate and maintain an underground communications system for either or both Class 4 telecommunications services (lit fiber/active services) and Class 5 non-telecommunications services (dark fiber/internet services). The agreement provides terms for both services and is similar to agreements the city has with other providers.

Zayo Group has been a provider of fiber service in Chandler since 2007 (previously as Abovenet Communications, Inc., and ATL Communications) and seeks to expand its network in the coming years, which may include providing fiber connections within the terms of this agreement. This item is for a five-year nonexclusive agreement with options to renew up to a maximum of 20 years.

To date in calendar year 2024, Zayo Group has paid the City approximately $47,000 for its current license. As part of the modified terms of this renewal agreement, Zayo Group estimates it will pay the City approximately $5,000 for the remainder of the 2024 calendar year.

Financial Implications:

A transaction privilege tax of 2.75% will be paid on any non-interstate telecommunications services (Class 4). Fiber that is not exempted by federal or state law and is used for non-telecommunications services (Class 5) is subject to an annual $2.65 per linear foot fee as prescribed by the city's fee schedule, or 2% of Zayo Group's gross revenues for services provided within the City of Chandler, whichever is less. The company will also pay permit, inspection and pavement damage fees.

Attachments

Resolution 5847 and Agreement for Use of Public Property