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Current Council Agenda and Past Meeting Information

 

CITY COUNCIL AGENDA ITEM NO. 16

Meeting Date: August 24, 2004

Subject/Title: Approve a Resolution Authorizing the City Manager to Execute an Agreement with Paxio, Inc. for Access to Public Right-of-Way and Use of City-Owned Conduit to Provide High-Speed Data, Internet Access, and Telecommute Services

Submitted By: John Stevenson, City Manager
____________________________________________________________________________

RECOMMENDATION
Approve a resolution authorizing the City Manager to execute a satisfactory agreement giving Paxio, Inc. access to the public right-of-way and the leasing to Paxio, Inc. of space in City-owned conduit to provide high-speed data, internet access, and telecommute services.

PREVIOUS ACTION
None.

BACKGROUND
On June 2, 2004, the City Attorney received a letter from Paxio, Inc. proposing to deploy “fiber to the home and high-speed data, internet access, and telecommute services to new home communities” within Brentwood beginning with the new Rose Garden development by Pulte Homes. To implement its network, Paxio needs access to the public right-of-way and wants to utilize the City-owned conduit where available. Paxio is willing to pay an appropriate usage fee.

After meetings with representatives of Paxio and Pulte Homes, the Telecommunications Subcommittee asked the City’s Telecommunications Consultant, David Kinley, to prepare an agreement for access to the public right-of-way and usage of the City’s conduit. The agreement now recommended by the Subcommittee has four (4) key points:

1. Access to the public right-of-way for Paxio to install its data network to provide high-speed data, internet access, and telecommute services but not Cable Services, as that term is defined in Chapter 5.24 of the Municipal Code (the cable regulatory ordinance);
2. Leasing of space in the City’s conduit outside of residential developments at the rate of twenty-eight cents ($0.28) per foot per year;
3. Transmission over Paxio’s network for remote reading of residential water meters in areas served by Paxio at no cost to the City; and
4. Payment by Paxio to the City of five percent (5%) of the gross revenues derived by Paxio from the network.

FISCAL IMPACT
Increased City revenues from the conduit usage fee and the 5% fee at no cost to the City.

Attachments:
Resolution

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH PAXIO, INC. FOR ACCESS TO THE PUBLIC RIGHT-OF-WAY AND USAGE OF CITY CONDUIT

WHEREAS, the City Council approved Ordinance No. 609 on February 9, 1999, which amended the Municipal Code to include advanced technology systems to the existing Subdivision Section of the Code; and

WHEREAS, the City Council passed Resolution No. 99-45 authorizing the City Engineer to solicit Requests for Proposals from advanced technology firms to assist the City in preparing standard plans, specifications, and testing criteria for installation of a fiber optic system and to develop a City-wide Advanced Technology Master Plan; and

WHEREAS, the City Council authorized the City Attorney to commence work to prepare a Telecommunications Franchise Agreement; and

WHEREAS, on May 11, 1999, by Resolution No. 99-121, the City Council authorized the City Manager to enter into a Professional Services Agreement with Media Connections Group for the design of an Advanced Technology (Fiber Optic) Master Plan; and

WHEREAS, on August 22, 2000, the City Council adopted the Advanced Technology (Fiber Optic) Master Plan (CIP Project No. 336-3107), and authorized the City Engineer to make revisions to the specifications and details as necessary in the future; and

WHEREAS, on June 2, 2004, Paxio, Inc. requested an agreement for access to the public right-of-way and usage of City conduit to provide fiber to the home and broadband services other than Cable Services. A copy of Paxio’s June 2, 2004 letter is attached hereto as Exhibit “A;” and

WHEREAS, the Telecommunications Subcommittee of the City Council has negotiated such an agreement providing significant benefits to the City; and

WHEREAS, the Telecommunications Subcommittee and City Staff recommend that the City enter into such an agreement.

NOW, THEREFORE, BE IT RESOLVED that the City Council hereby authorizes the City Manager to enter into an agreement substantially in the form of the draft agreement attached hereto as Exhibit “B.”

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 24th day of August 2004, by the following vote:

Attachments:
Exhibit “A” - Letter of June 2, 2004 from Paxio, Inc.
Exhibit “B” - Draft Conduit Lease Agreement between the City of Brentwood and Paxio, Inc.

Recording Requested By:
City of Brentwood

When Recorded Mail To:
City Clerk
City of Brentwod
150 City Park Way
Brentwood, CA 94513

For the Benefit of
City of Brentwood
Recorded Free
Gov. Code Sec. 27383

(Space above this line for Recorder’s Use)

CONDUIT LEASE AGREEMENT
BETWEEN THE CITY OF BRENTWOOD
AND PAXIO, INC.

This Conduit Lease Agreement (“Agreement”) is dated for identification on , 2004 by and between the CITY OF BRENTWOOD (herein termed “CITY”) and PAXIO, INC. (herein termed “LESSEE”).

RECITALS

WHEREAS, the City Council approved Ordinance No. 609 on February 9, 1999, which amended the Municipal Code to include advanced technology systems to the existing Subdivision Section of the Code; and

WHEREAS, the City Council passed Resolution No. 99-45 authorizing the City Engineer to solicit Requests for Proposals from advanced technology firms to assist the City in preparing standard plans, specifications, and testing criteria for installation of a fiber optic system and to develop a City-wide Advanced Technology Master Plan; and

WHEREAS, the City Council authorized the City Engineer and the City Manager to accept offers of dedication from Developers for the conduit system to facilitate the advanced technology system; and

WHEREAS, on May 11, 1999, by Resolution No. 99-121, the City Council authorized the City Manager to enter into a Professional Services Agreement with Media Connections Group for the design of an Advanced Technology (Fiber Optic) Master Plan; and

WHEREAS, on August 22, 2000, the City Council adopted the Advanced Technology (Fiber Optic) Master Plan (CIP Project No. 336-3107), and authorized the City Engineer to make revisions to the specifications and details as necessary in the future; and

WHEREAS, LESSEE is authorized to provide certain services in the state of California pursuant to a Certificate of Public Convenience and Necessity (Public Utilities Code Section 7901) by the Public Utilities Commission of the State of California (herein termed “PUC”); and

WHEREAS, CITY owns certain underground conduit within the Public Right-of-Way within CITY (“CONDUIT”) for the purpose of providing public services within the City; and

WHEREAS, LESSEE desires to place Network Facilities into the CONDUIT within the Public Right-of-Way and/or public utility or service easements within CITY to provide Telecommunications Services; and

WHEREAS, CITY has the authority to lease the CONDUIT and to regulate the terms and conditions for the use of Public Right-of-Way for the construction, installation and maintenance of Network Facilities by private telecommunications services providers.

AGREEMENT PROVISIONS

NOW, THEREFORE, in consideration of the recitals and the mutual promises contained herein, CITY AND LESSEE agree as follows:

DEFINITIONS

LESSEE--Shall mean PAXIO, Inc., a California corporation, and its lawful successors or assigns.

CITY—Means the City of Brentwood, a charter city and municipal corporation of the State of California, and includes the duly elected or appointed officers, agents, employees and volunteers of the City of Brentwood, individually or collectively.

Public Right-of-Way or Public Rights-of-Way-Means the surface, the air space above the surface and the area below the surface of any public street, highway, lane, path, alley, sidewalk, boulevard, drive, bridge, tunnel, parkway, dedicated public utility easement or similar property in which CITY now or hereafter holds any property interest which, consistent with the purposes for which it was dedicated, may be used for the purpose of installing and maintaining Network Facilities. No reference herein to a “Public Right-of-Way” shall be deemed to be representation or guarantee by CITY that its interest or other rights to control the use of such property is sufficient to permit its use for such purposes, and LESSEE shall be deemed to gain only those rights to use the property as the CITY may have the undisputed right and power to give.

Telecommunications Services-Means the transmission of voice, data or other information (not including broadcast video or other video services, or services defined as “Cable Service” in chapter 5.24.010 of the Brentwood Municipal Code) between two or more points along wires, optical fibers or other transmission media, or using radio waves or other wireless media, including but not limited to telephone services, cellular telephone services, personal communications services, internet services, and other similar services.

Network Facilities-Means any and all telecommunications cables, lines, fiber, conduits, access manholes/handholes, pedestals, boxes, and other similar equipment and devices owned or used by LESSEE in providing Telecommunications Services.

SCOPE OF USE OF PUBLIC RIGHT-OF-WAY

CITY hereby grants to LESSEE, subject to reservations, covenants and conditions herein contained, the right to construct, install, maintain and operate, and remove Network Facilities within Public Right-of-Way that are located within the corporate limits of the CITY to provide Telecommunications Services, subject to obtaining all required permits and approvals. LESSEE is authorized to utilize the available space in any CONDUIT to do so.
1. LESSEE is not authorized to place any facilities other than Network Facilities in the Public Right-of-Way, without first obtaining written authorizations and required permits (including any necessary franchises) from the CITY, nor may LESSEE provide service using any facilities it places in the public Right-of-Way without first obtaining written authorizations and required permits from the CITY, except that the foregoing does not apply to services where state law preempts any requirement for local authorization. Without limiting the foregoing, LESSEE may not install a Cable System or carry a Cable Service (as those terms are defined in Chapter 5.24.010 of the Brentwood Municipal Code) over those facilities without obtaining a franchise from the CITY.

2. LESSEE shall comply with any lawful provision that the CITY may adopt in the future requiring it to obtain a franchise or other authorization, and may be required to do so as a condition of the continued effectiveness of this Agreement. The City Manager shall be solely responsible for determining what written authorizations and/or permits are required. LESSEE agrees that once a written authorization and/or permit is determined to be required, LESSEE shall first apply for same and complete whatever process is required before challenging the requirement.

3. The construction, installation, operation, maintenance and/or removal of Network Facilities shall be accomplished without cost or expense to CITY subject to the written approval of CITY’s City Engineer in such a manner as not to endanger personnel or property, or unreasonably obstruct travel on any road, walk or other access thereon within said Public Right-of-Way.

4. This Agreement does not authorize use of any property other than the CONDUIT and Public Rights of Way. Any use of any other CITY property shall require a separate agreement.

5. This Agreement is not a grant by the CITY of any property interest but is made subject and subordinate to the prior and continuing right of CITY and its assigns to use all the Public Right-of-Way in the performance of its duty, including but not limited to, public use as a street and for the purpose of laying, installing, maintaining, repairing, protecting, replacing and removing sanitary sewers, water mains, storm drains, gas mains, poles, overhead and underground electrics, and telephone lines electroliers, cable television and other utility and municipal uses together with appurtenances thereof and with right of ingress and egress, along, over, across and in said Public Right-of-Way; and LESSEE shall have a duty to remove, relocate and rearrange its facilities within the time frame set forth by CITY, and at its own expense, in order to accommodate such uses, as further provided in Section 25.

6. The grant of rights in this Agreement is made subject to all easements, restrictions, conditions, covenants, encumbrances and claims of title which may affect the Public Right-of-Way, and it is understood that LESSEE, at its own costs and expense, shall obtain such permission as may be necessary consistent with any other existing rights.

7. If the CITY is not prohibited from charging for use of the Public Rights of Way by LESSEE by state or federal statute, it may do so, and the payment of any lawful compensation established by the CITY shall be a condition of the continued effectiveness of this Agreement.

8. The construction, operation or repair and maintenance of Network Facilities shall be in accordance with all applicable Federal, State and local laws, regulations, ordinances, construction standards or governmental requirements, including, without limitation, zoning laws, construction codes and Chapter 5.24 of the Brentwood Municipal Code, as the same may exist now, or be hereafter amended or revised; and any supplements thereto or revisions of this Agreement, and any Franchise or other authorization now or in the future. Nothing in this Agreement prevents the CITY from establishing additional or stricter conditions (even with respect to the matters specified in those sections), and requiring LESSEE to comply with the same. In the event of a conflict among codes and standards, the most stringent code or standard, as determined in the sole judgment of the City Engineer, shall apply.

CONSTRUCTION AND MAINTENANCE STANDARDS

9. LESSEE shall at all times employ reasonable care, within the meaning of applicable law, and shall install, maintain and use commonly accepted methods and devices for preventing failures and accidents that are likely to cause damage, injury or nuisance to the public.

10. LESSEE shall construct, operate and maintain its Network Facilities and use the CONDUIT so as not to endanger or interfere with improvements CITY shall deem appropriate to make or to interfere in any manner with the Public Right-of-Way or legal rights of any property owner or to unnecessarily hinder or obstruct pedestrian or vehicular traffic. LESSEE shall place facilities in strict conformance with the plans and drawings approved in writing by CITY and shall not place facilities, equipment or fixtures where they will interfere with any gas, electric, telephone, telecommunications, Cable System, water, sewer or other utility facilities or obstruct or hinder in any manner such entity’s use of any Public Right-of-Way. Any and all Public Rights-of-Way, public property or private property that is disturbed or damaged by LESSEE during the construction, repair, replacement, relocation, operation, maintenance or construction of a Network Facility or use of the CONDUIT shall be promptly repaired by LESSEE, to a condition equal to or better than that which existed prior to the damage.

11. Any contractor or subcontractor used for the construction, installation, operation, maintenance or repair of the Network Facility equipment or use of the CONDUIT shall be properly licensed under the laws of the State and all applicable local ordinances and each contractor or subcontractor shall have the same obligations with respect to its work as LESSEE would have under this Agreement and applicable law as if the work were performed by LESSEE. LESSEE shall be responsible for ensuring that the work of contractors and subcontractors is performed consistent with this Agreement and applicable law, shall be responsible for all acts or omissions of contractors or subcontractor and shall implement a quality control program to ensure that the work is properly performed. This section is not meant to alter tort liability of LESSEE to third parties.

12. LESSEE agrees to keep said Network Facilities in good and safe condition and free from any nuisance.

IDENTIFICATION OF COMMUNICATIONS EQUIPMENT

13. LESSEE shall identify the Network Facilities installed in each Right(s) of Way by means of an identification method mutually agreed upon by the Parties, or as directed by the City Engineer if the parties cannot mutually agree on an identification method. Such identification shall be detectable from ground level without opening the street.

SERVICE CHANGE

14. LESSEE provides intrastate and interstate Telecommunications Services in California pursuant to its Certificates of Public Convenience and Necessity received from the California Public Utilities Commission.

15. LESSEE hereby warrants that the type of service offered to its customers through the Network Facilities in Public Right-of-Way consists solely of business and/or residential Telecommunication Services, and the facilities it plans to install are pursuant to Section 7901, California Public Utilities Code.

16. The terms of this Agreement are based on the type of equipment, and service and/or product which LESSEE carries over the Network Facilities installed in the Public Right-of-Way. LESSEE acknowledges that any change in service or change in the law may increase the CITY’s regulatory authority over such services, product, and LESSEE’s use of Public Right-of-Way or CONDUIT, and may require modification of this Agreement, including increased payments to the CITY, and require LESSEE to obtain additional authorizations.

NO FRANCHISE RIGHTS CREATED

17. Nothing in the Agreement shall be construed as granting or creating any franchise rights, including but not limited to any rights under Chapter 5.24 of the Brentwood Municipal Code.

NO OWNERSHIP OR VESTED INTEREST CREATED

18. No use of any Public Right-of-Way or CONDUIT or other interest or property under this Agreement shall create or vest in LESSEE any ownership or other interest in the Public Right-of-Way, CONDUIT, streets or any other property or interest of the CITY.

PAYMENTS TO CITY

19. For the use of the Public Right-of-Way, LESSEE shall pay to City an amount equal to Five Percent (5%) of the gross revenues of the LESSEE derived from any and all services within the City.

20. For the use of the CONDUIT outside of residential developments LESSEE shall pay to CITY an amount equal to twenty-eight cents ($0.28) per linear foot per year for the CONDUIT used by LESSEE.

21. LESSEE shall make all payments under this Agreement quarterly in arrears.

22. LESSEE shall provide such records to CITY as CITY may require to confirm compliance with these payment requirements. The cost of any auditor to conduct such audit shall be borne by LESSEE if that audit discloses an underpayment of more than five percent (5%) of the amount remitted. Audits shall not be conducted more than biannually, and LESSEE or CITY shall pay or rebate such amounts discovered by the auditor within sixty (60) days of receipt of the audit report.

23. As additional compensation for LESSEE’S use of the Public Right-of-Way and the CONDUIT, LESSEE shall provide transport services to CITY over the Network Facilities for purposes of the remote reading of CITY water meters. Such transport services shall be made available by LESSEE at no cost to CITY.

REMOVAL AND RELOCATION

24. In the event of an emergency, or where Network Facilities create or are contributing to an imminent danger to health, safety or property, CITY may remove, relay or relocate any or all parts of those Network Facilities without prior notice; however, CITY shall make reasonable efforts to provide prior notice.

25. LESSEE shall promptly relocate its facilities to accommodate projects or needs of CITY, or other government agencies and third parties who are authorized to use the Public Rights-of-Way or CONDUIT. Should LESSEE be required to relocate its Network Facilities for any non-governmental third party and for reasons other than the above, the reasonable cost of the relocation shall be borne by the third party except where (i) the Network Facilities must be relocated because it was not properly installed by LESSEE, or was installed without obtaining necessary authorizations; or (ii) state or federal law requires otherwise. LESSEE may condition rearrangement of its facilities on an agreement by the third party to pay the reasonable cost of relocation, which agreement shall be subject to the exceptions listed above, except where relocation is necessary to protect and preserve the public health safety or welfare.

26. LESSEE shall remove or relocate, without cost or expense to CITY, any Network Facilities installed, used and maintained under this Agreement if and when made necessary by any lawful change of grade, alignment or width of any street, including the construction, maintenance or operation of any underground subway or viaduct by CITY and/or the construction, maintenance or operation of any other CITY underground or aboveground facilities.

27. In the event all or any portion of said Public Right-of-Way or CONDUIT occupied by said Network Facilities shall be needed by CITY for governmental purposes or in the event of the existence of said Network Facilities shall be considered detrimental to governmental activities, including but not limited to, interference with CITY construction projects, or is in conflict vertically and/or horizontally with any proposed CITY installation, LESSEE shall, by written direction of the City Engineer, remove and relocate said Network Facilities to such other location or locations on said Public Right-of-Way as may be designated by CITY. Said removal or relocation shall be completed within ninety (90) days of notification by CITY. In the event said Network Facilities are not removed or relocated within ninety (90) days after said notification, CITY may cause the same to be done at the sole expense of LESSEE.

28. LESSEE shall, by a time specified by CITY, protect, support, temporarily disconnect, relocate or remove any of its property when required by CITY or any other governmental entity by reason of traffic conditions; public safety; Public Rights-of-Way construction; Public Rights-of-Way maintenance or repair (including resurfacing or widening); change of Public Rights-of-Way grade; construction, installation or repair of sewers, drains, water pipes, power lines, signal lines, tracks or any other type of government-owned communication system, public work or improvement or any government-owned utility; Public Rights-of-Way vacation; or for any other purpose where the work involved would be aided by the removal or relocation of the Network Facility within or without the CONDUIT.

29. If any portions of the Network Facilities covered under this Agreement other than redundant facilities or facilities for emergency use are no longer used by LESSEE, or are abandoned for a period in excess of one (1) year, LESSEE shall notify CITY and shall either promptly vacate and remove the facilities at its own expense or, at the discretion of the City Engineer, may abandon some or all of the facilities in place. Notwithstanding the foregoing, this section shall not apply to Network Facilities installed to meet future demand or needs for capacity.

30. When removal or relocation is required under this Agreement, LESSEE shall, after the removal or relocation of the Network Facilities, at its own cost, repair and return the Public Right-of-Way or CONDUIT in which the facilities were located to a safe and satisfactory condition in accordance with the construction-related conditions and specifications as established by CITY. Before proceeding with removal or relocation work, LESSEE shall obtain and CITY shall issue a street encroachment permit from the CITY. Should LESSEE remove the Network Facilities from the Public Right-of-Way or CONDUIT, LESSEE shall, within ten (10) days after such removal, give notice thereof to CITY specifying the right-of-way affected and the location thereof as well as the date of removal.

CONSTRUCTION PERMIT AND FEES

31. LESSEE shall apply for an encroachment permit (and such other permits as may be required) for all work and each job within the Public Right-of-Way, or public utility or service easements or the CONDUIT. LESSEE shall furnish detailed plans of the work and other such information as required by the City Engineer and shall pay all processing, field marking, engineering and inspection fees prior to issuance of permit in accordance with the rates in effect at the time of payment. Said improvements shall be constructed and installed in accordance with the Brentwood Municipal Code, and as further provided for in the provisions of this Agreement.

32. Any encroachment permit shall set forth the description of the Network Facilities to be installed and the Public Right-of-Way or CONDUIT in which such facilities are to be located. CITY shall establish construction-related conditions and specifications, and these shall also be set forth in the encroachment permit.

PERFORMANCE BOND

33. Prior to the issuance of an encroachment permit, LESSEE shall provide CITY with a performance bond naming CITY as obligee in the amount equal to $25,000 to guarantee and assure the faithful performance of LESSEE’s obligations under this Agreement. CITY shall have the right to draw against the performance bond in the event of a default by LESSEE or in the event that LESSEE fails to meet and fully perform any of its obligations. The form of the performance bond shall be approved by the CITY. The performance bond shall remain in full force until the work to be performed is complete, inspected and accepted by the City Engineer and is released by CITY.

DAMAGE TO FACILITIES IN PUBLIC RIGHT-OF-WAY

34. LESSEE shall be responsible for any damage to CITY street pavements, existing utilities, curbs, gutters, sidewalks and all other public or private facilities due to its construction, operation, installation, maintenance, repair or removal of its Network Facilities in Public Right-of-Way or CONDUIT, and shall repair, replace and restore in kind the said damaged facilities at is sole expense.

35. Any premature deterioration of surface and subsurface improvements, such as pavement or concrete over the facility or trench or adjacent area, or reduction in the life of the Public Right-of-Way or CONDUIT as determined by City Engineer, which results from LESSEE’s acts or omissions shall be the responsibility of LESSEE. LESSEE shall complete all necessary repairs within thirty (30) days of notification by City Engineer. If LESSEE fails to make repairs within thirty (30) days of notice, CITY may have repairs made with the cost being billed to LESSEE. If the repair cannot fully reverse the deterioration or loss of life, the CITY may require LESSEE to pay for the damage suffered as a result. This obligation shall extend for a period not to exceed fifteen (15) years from the date of completion of work by LESSEE under CITY’s encroachment permit.

PREEXISTING INSTALLATIONS

36. If Public Right-of-Way or CONDUIT to be used by LESSEE has preexisting installation(s) placed therein, LESSEE shall assume the responsibility to verify the location of the preexisting installation and notify CITY and any third party owner of LESSEE’s proposed installation. The cost of any work required of such third party owner or CITY to provide adequate space or required clearance to accommodate LESSEE’s installation shall be borne solely by LESSEE. CITY is under no obligation to move its existing utilities out of the way to accommodate or make room for LESSEE’s Network Facilities.

RECORDS AND FIELD LOCATIONS

38. LESSEE shall maintain accurate maps and improvement plans of said Network Facilities located within the CITY. LESSEE shall, upon demand of the City Engineer, deliver free of charge to the CITY, and to other third parties interested in performing work within Public Right-of-Way or CONDUIT for a reasonable charge upon request, within thirty (30) days after such demand, such maps and plans as may be required to show in detail the exact location, size, depth, and description of all Network Facilities installed within said Public Right-of-Way or CONDUIT. LESSEE shall also submit the plan in digital electronic format as specified by CITY.

39. LESSEE shall be a member of the regional notification center for subsurface installations (Underground Service Alert) and shall field mark, at its sole expense, the locations of its underground Network Facilities upon notification in accordance with the requirements of Section 4216 of the State of California Government Code, as it now reads or may herein after be amended.

40. LESSEE shall provide books and records for copying and inspection, and LESSEE’s facilities shall be subject to such inspection by the CITY, as the CITY finds appropriate to request in the exercise of its rights under this Agreement and its jurisdiction over LESSEE.

HOLD HARMLESS AND INDEMNIFICATION

41. LESSEE, jointly and severally, for itself, is successors, agents, and LESSEE’s employees, agrees to indemnify, defend (with reasonable notice to LESSEE and with counsel reasonably acceptable to CITY) and hold harmless CITY, its officers, employees and agents and any successors to CITY’s interest from and against any and all claims, demands, losses, damages, liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial actions of any kind, and all costs and cleanup actions of any kind, all costs and expenses incurred in connections therewith, including, without limitation, reasonable attorney’s fees and costs of defense (collectively, the “Losses”) arising directly or indirectly out of the activities or Network Facilities or use of CONDUIT described in this Agreement and/or the installation, construction, operation, maintenance, removal and/or repair of the improvement and facilities thereto. However, LESSEE shall not indemnify the CITY, its officers, employees and agents and any successors to CITY’s interest for Losses arising directly or indirectly, from the CITY’s sole negligence. CITY shall not be responsible for any damages, losses, or liability of any kind occurring by reason of anything done or omitted to be done by CITY, except for acts which constitute the CITY’s sole negligence, or by any third party, including, without limitation, damages, losses or liability arising from the issuance by the CITY of a permit or approval to any third party or any interruption in service.

42. LESSEE, for itself and its successors and assigns, hereby waives all claims and causes of action, whether now existing or hereafter arising, against CITY or its officers, agents or employees, for damages, physical or otherwise, to any of the facilities covered by this Agreement from any cause whatsoever excluding those arising as a result of the CITY’s sole negligence. Under no circumstances shall either party be liable to the other party or otherwise be responsible for any loss of service downtime, lost revenue or profits or third-party damages.

INSURANCE

43. LESSEE shall maintain adequate insurance during the entire term of this Agreement against claims for injuries to persons or damages to property which in any way relate to, arise from, or are connected with the installation or use of communication equipment and Network Facilities in the Public Right(s)-of-Way or CONDUIT by the LESSEE, or any entity acting on its behalf, and shall keep insurance in effect in accordance with the minimum insurance scope the CITY may set from time to time. LESSEE initially shall maintain in full force and effect the insurance policies set for in Chapter 5.24.160 of the Brentwood Municipal Code. The other provisions of said Chapter shall also apply to this Agreement.

44. Worker’s Compensation Insurance: LESSEE shall obtain statutory Workers’ Compensation insurance and Employer’s Liability insurance in the amount of One Million Dollars ($1,000,000) per accident.

45. Acceptability of Insurers: Insurance is to be placed with insurers admitted and duly authorized to transact business under the laws of the State of California and with a current Best Rating of A:VII unless otherwise acceptable to CITY.

46. Verification of Coverage: Insurance, deductibles or self-insurance retentions shall be subject to CITY’s approval. Original Certificates of Insurance with endorsements shall be received and approved by CITY before work commences, insurance must be in effect for the duration of this Agreement. The certificate of insurance obtained by LESSEE shall be filed and maintained with the CITY during the term hereof.

Other Insurance Provisions:

47. The CITY, its officers, officials, employees, agents and volunteers are to be covered as additional insureds, by a comprehensive commercial general liability endorsement no less than Endorsement CG 20 10 11 85 or equivalent. NOTE: need to discuss necessity of this requirement.

a. For any claims related to the Network Facilities or LESSEE’S use of the CONDUIT under this Agreement, LESSEE’s insurance coverage shall be primary.

b. Each insurance policy required shall be endorsed that a thirty (30) day notice be given to CITY in the event of cancellation or modification to the stipulated insurance coverage.

c. It shall be the responsibility of LESSEE to ensure that all subcontractors comply with the same insurance requirements that are stated in this Agreement.

ASSIGNMENT

48. LESSEE shall not assign, sublet or transfer any interest in this Agreement nor the performance of any LESSEE’s obligations hereunder, without the prior written consent of CITY, which shall not be unreasonably withheld, and any attempt by LESSEE to so assign this Agreement or any rights, duties or obligations arising hereunder shall be void and of no effect. The transfer of the rights and obligations of LESSEE to a parent, successor, subsidiary, or other affiliate of LESSEE shall not be deemed an assignment for the purposes of this section. For the purposes of this section, the leasing or granting in the ordinary course of business of indefeasible rights of use or similar rights in dark fiber, fiber optic capacity, conduit and other network elements shall not require the express consent of the CITY, so long as LESSEE remains solely responsible for locating, placing, installing, maintaining, relocating and removing the Facilities.

THIRD-PARTY MODIFICATIONS

49. This Agreement shall be subject to such changes or modifications as may be required or authorized by any regulatory commission in the exercise of its lawful jurisdiction.

ENFORCEMENT

50. Failure to comply with the terms and conditions of this Agreement may, at CITY’s sole discretion, result in withholding issuance of any new encroachment permits and/or enforcement pursuant to the Brentwood Municipal Code.

TERM AND TERMINATION

51. This Agreement shall terminate Ten (10) years from the date hereof and be automatically renewed year-to-year thereafter unless written notice is given by either party more than One Hundred Twenty (120 days before the end of the current term. This Agreement may be terminated sooner under the following circumstances.

a. This Agreement may be terminated by CITY for failure, neglect or refusal by LESSEE to fully and promptly comply with any and all of the conditions of this Agreement, or to make any payment due hereunder for, or for nonuse in accordance with Section 29 herein, upon thirty (30) days written notice, unless LESSEE confirms within thirty (30) days of receipt of the notice that the cited condition has ceased, been corrected or, subject to CITY’s agreement, is diligently being pursued by LESSEE, which agreement shall not be unreasonably withheld.

b. This Agreement may be terminated if LESSEE’S Certificate of Public Convenience and Necessity terminates, is revoked, or is abandoned.

52. Upon termination of the Agreement, and upon written request by CITY, LESSEE, at its own cost and expense, agrees to remove, or at CITY’s discretion, abandon in place some or all of its Network Facilities from the Public Right-of-Way or CONDUIT and restore the Public Right-of-Way or CONDUIT as set forth in the Removal and Relocation provisions of this Agreement. Should LESSEE in such event fail, neglect or refuse to make such removals or restoration with one hundred eight (180) days of CITY’s written request, at the sole option of CITY, such removal and restoration may be performed by CITY at the expense of LESSEE, which actual expense including administrative and legal costs LESSEE agrees to pay CITY upon demand. If City allows LESSEE to abandon its Network Facilities in place, title to those Network Facilities shall pass to CITY and LESSEE shall, upon demand, promptly execute and deliver to CITY all documentation necessary to effectuate such transfer of ownership of the Network Facilities. Upon such transfer of ownership after abandonment and acceptance by CITY, LESSEE shall have no further obligations or liabilities under this Permit, with the exception of the repair obligations delineated in Section 35 above.

NOTICE

53. LESSEE’s Network Operations Center shall be available to CITY staff 24 hours a day, 7 days a week, regarding problems or complaints resulting from the facilities installed pursuant to this Agreement and may be contacted by telephone at 800.377.6335or pager at 714.580.6300 regarding such problems or complaints. LESSEE shall designate a person in California who is authorized to accept service of process on behalf of LESSEE. LESSEE shall promptly respond to such call(s) and perform the required repair or correct any adverse impact to CITY’s use or operations or the use or operations of a third party caused by LESSEE’s Network Facilities in the Public Right(s)-of-Way or LESSEE’S use of the CONDUIT, at no cost to CITY.

54. All notices given or which may be given pursuant to this agreement shall be in writing and transmitted by United States mail or by private delivery systems or by facsimile if followed by United States mail or by private delivery systems as follows:

To CITY at:

City of Brentwood
150 City Park Way
Brentwood, CA 94513
Attn: City Engineer
FAX Number: (925) 516-5441

To LESSEE at:

PAXIO Inc.
10568 Magnolia Ave. suite 127
Anaheim, CA 92804
Attn: Phillip Clark

With a copy to:
Jeffer, Mangels, Butler & Marmaro LLP
1900 Avenue of the Stars, 7th Floor
Los Angeles, CA 90067-4308
Attn: Jim Butler

ENTIRE UNDERSTANDING OF THE PARTIES

55. This Agreement contains the entire understanding between the parties with respect to the subject matter herein. There are no representations, agreements or understanding (whether oral or written) between or among the parties relating to the subject matter of this Agreement which are not fully expressed herein. This Agreement may be not amended except pursuant to a written instruction signed by all parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate.

APPROVED AS TO CONTENT: “CITY”
CITY OF BRENTWOOD,
a California charter city and municipal corporation
Balwinder S. Grewal
City Engineer

By:___________________________
John E. Stevenson
City Manager

“LESSEE”
PAXIO, INC., a _________

APPROVED AS TO FORM: By:_______________________

Dennis Beougher
City Attorney

NOTE: All signatures must be notarized.
 

City Administration
City of Brentwood City Council
150 City Park Way
Brentwood, CA 94513
(925) 516-5440
Fax (925) 516-5441
E-mail allcouncil@brentwoodca.gov