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ITEM 7

City Council Memorandum Development Services Memo No. DS24-012

Date:

September 12, 2024

To:

Mayor and Council

Thru:

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

From:

Dennis Aust, Telecommunications and Utility Franchise Manager

Subject:

Resolution No. 5834, authorizing an amended and restated license agreement between Teleport Communications of America, LLC, and the City of Chandler for the 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. 5834, authorizing the Mayor to execute the amended and restated license agreement between the Teleport Communications of America, 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, and authorizing the City Manager or designee to execute other documents as needed to give effect to the agreement.

Background:

Teleport Communications of America (TCA, a subsidiary of AT&T, Inc.) has filed an application with the City to renew, with modified terms, its license to install, operate and maintain an underground fiber communications system that may provide both Class 4 telecommunications (lit services) and Class 5 non-telecommunications services (dark fiber). The agreement provides terms for both services and is similar to agreements the City has with other providers.

This item is for a five-year nonexclusive agreement. TCA currently has approximately 51 miles of fiber running throughout Chandler. TCA has been a provider of fiber services in Chandler since 2014 and seeks to expand its network in coming years, which may include providing fiber connections within the term of this agreement.

Financial Implications:

The City has waived the standard $3,000 license application fee as part of the modified terms because this is not a new application, but rather an amended and restated license that came about as a result of a settlement between both parties.

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 TCA’s gross revenues for services provided within the City of Chandler, whichever is less. This agreement includes the option to pay 2% gross revenues or the linear foot fee, whichever is less. The original license did not have the 2% gross revenue option.

The company will also pay all permit, inspection and pavement damage fees.

Attachments

Resolution No. 5834 and Agreement for Use of Public Property