96-1372 1� � Council File # �����2
��� N � � � ordinance #
1 �f y ' � (P Green Sheet # 3 � � � �
ORDINANCE
CITY OF SAINT PAUL, MINNESOTA ��
Presented By
Referred To Committee: Date •
1
2
3 An ordinance providing for the
4 grant of franchises to telecommunications
5 companies upon the terms and conditions
6 provided herein.
7
8 THE COUNCIL OF THE CITY OF SAINT PAUL DOES ORDAIN:
9
10 Section 1
11
12 (a) Grant of Franchise. Subject to the terms and conditions of this ordinance, any
13 company, hereinafter designated as "Company," which is a telecommunications company
14 providing telecommunications services within the City of Saint Paul, hereinafter designated as
15 "City," is hereby granted a franchise in accordance with the terms and conditions of this
16 ordinance and Chapter 16 of the Saint Paul Charter to use the public right-of-way located in
17 the City solely to provide telecommunications service and for no other purpose. The term of
18 this franchise shall begin on the date such Company files its acceptance of this franchise
19 under Section 6 and shall terminate on the date one day prior to five (5) years after the date
20 of such acceptance by the Company.
21 (b) No Assi�nment or Transfer of Franchise. The franchise granted herein shall not
22 be assigned or transferred.
23 Section 2
24 Definitions. The following terms are defined terms:
25 (a) Facilities are any tangible things belonging to, used by, under the control of, or in
26 the possession of the Company.
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1 (b) Reserved. ��,.:\��Z.
2
3 (c) Right-of-way means the surface and space above and below any real property in
4 which the City has an interest in law or equity, whether held in fee, or other estate or interest,
5 or as a trustee for the public, including, but not limited to any public street, boulevard, road,
6 highway, freeway, lane, alley, court, sidewalk, pazkway, river, tunnel, viaduct, bridge, pazk,
7 skyway, skyway bridge or any other place, area, or real property owned by or under the
8 control of the City, or in which the City has such an interest.
9 (d) Telecommunications company is a company which provides telecommunications
10 service.
11 (e) Telecommunications is the transmission, between or among points specified by the
12 user, of information of the user's choosing, without change in the form or content of the
13 information as sent or received.
14 (� Telecommunications service is the offering of telecommunications for a fee
15 directly to some or all members of the public, or to such classes of users as to be effectively
16 available directly to the public, regardless of the facilities used. Telecommunications service
17 includes telephone service.
18 (g) Transfer is and includes
19 (i) all the meanings and usages of the word itself, and
20
21 (ii) without intending any limitation by reason of the following
22 specifications, any: sale; assignment; lease; pledge; conveyance;
23 mortgage; encumbrance; gift; exchange; barter; permission or allowance
24 to exercise any of the power, authority, benefits or privileges granted by
25 this franchise to another person whether jointly or in common; and
26
27 (iii) any merger, reorganization, sale of assets or any other manner or means
28 of transaction with another person, the result of which is that the
29 Company does not have the power, authority, resources, assets, or legal
30 ability to discharge, perform or execute any of its obligations or duties
31 under this franchise.
32
2
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1 The definitions contained in any ordinance or amendment thereto relating to or ������'
2 regulating the public right-of-way which becomes effective after November l, 1996, shall
3 apply to this franchise ordinance.
4 Section 3
5 (a) Extent of Franchise Covera�e. Upon providing its acceptance of this franchise in
6 accordance with Section 6, the Company may apply for permits for the use of the right-of-
7 way under and in compliance with all applicable requirements of law. The franchise granted
8 herein shall permit the Company to use the right-of-way within the City of Saint Paul for the
9 provision of telecommunications service upon the condition that Company keep and perform
10 all the provisions of(i) this ordinance, (ii) any and all future modifications, amendments, or
11 additions to this ordinance which the City may adopt, and (iii) any ordinance relating to or
12 regulating the right-of-way, whether currently in effect or as may be enacted or amended from
13 time to time.
14 (b) Telecommunications Use Onlv. The Company shall use its facilities in the right-
15 of-way solely for the purpose of providing telecommunications service; provided, however,
16 that the City and Company may by separate agreement or amendment to this franchise
17 provide for the use of such Company facilities in the right-of-way for other uses.
18 (c) All EcLuipment and Facilities Covered. All of the equipment and facilities of the
19 Company are subject to all of the obligations and burdens of this franchise and of all of the
20 requirements and provisions of ordinances and regulations relating to the right-of-way, which
21 are now in effect or which may be adopted or amended by the City from time to time. The
22 reasonable regulations of the City may require the payment of appropriate permit and other
23 fees related to such regulations in addition to the franchise fees imposed herein.
24 Section 4
25 (a) Franchise Fee Imposed. During the term of the franchise hereby granted, and
26 commencing upon its acceptance by the Company under Section 6 hereof, the Company shall
3
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1 pay to the City a franchise fee as provided in this Section 4, such fee to be paid for eachab-\3ilZ
2 Company billing month on or before the last day of the first full calendar month following the
3 Company billing month. The franchise fee sha11 be in a sum equal to One Dollar ($1.00) per
4 year; provided, however, that the City may at its option provide, without further amendment
5 or modification of this franchise, at any time by ordinance or by amendment thereto for (i) a
6 greater or different franchise fee applicable to a11 franchise holders under this franchise whose
7 amount and method of determination may be provided in such ordinance or amendment
8 thereto, (ii) the dedication of Company facilities for City uses, and (iii) the reporting,
9 verification and audit of the collection and payment of such franchise fees. If in any particular
10 calendar year, the franchise fees collected under this franchise, or under any ordinance or
11 amendment thereto which provides for the payment of franchise fees, do not equal five (5)
12 percent of the said gross earnings of the Company, the Company as franchise holder is
13 specifically relieved and exempted, as required and permitted in Chapter 16 of the Charter, of
14 the obligation to make a franchise fee payment greater than what is required by this franchise
15 or by any ordinance or amendment thereto as referred to above.
16 (b) Continuation of Obligation. If the franchise granted under this ordinance expires,
17 or is terminated for any reason, the Company must pay to the City, for so long as the
18 Company continues to occupy or use the right-of-way for any purpose, either (i) an amount
19 equal to the franchise fee provided for in this section, or (ii) any fees which the City may
20 impose on the Company under an ordinance or other regulatory act of the City adopted at the
21 sole discretion of the City to raise revenue, or defray increased municipal costs accruing as a
22 result of the provision of telecommunications service, or both. The City may, at its option and
23 within its sole discretion, determine from time to time whether the Company shall pay an
24 amount equal to the franchise fee under clause (i) above or a fee under any ordinance or other
25 regulatory act under clause (ii) above. Such option may be changed by the City from time to
4 1�� �/tz(�
1 time at its election, and sha11 be binding on the Company three days following the date of
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2 mailing of written notice as required by Section 16.
3 If the franchise granted under this ordinance expires, or is terminated for any reason,
4 the Company must also continue to keep and perform all the provisions of(i) this ordinance,
5 (ii) any and all future modifications, amendments, or additions to this ordinance which the
6 City may adopt, and (iii) any ordinance relating to or regulating the right-of-way, whether
7 currently in effect or as may be enacted or amended from time to time.
8 Section 5
9 Severabilitv. Every section, provision or part of this ordinance is declared separate
10 from every other section, provision or part; and if any section, provision or part shall be held
11 invalid, it shall not affect any other section, provision or part.
12 Section 6
13 Companv Written Acceptance. In order to accept this franchise, and be entitled to its
14 benefits, the Company shall first file with the City Clerk its written acceptance thereof, in
15 form and substance to be approved by the City Attorney. Such acceptance will include the
16 name, address, telephone number, facsimile and e-mail address of a Company representative
17 who can be contacted by the City on franchise related matters. The Company may change this
18 contact person by notifying the City Clerk and the Director in writing. In such written
19 acceptance the Company shall agree to abide by, keep and perform all the provisions of(i)
20 this ordinance, (ii) any and all future modifications, amendments, or additions to this
21 ordinance which the City may adopt, and (iii) any ordinance relating to or regulating the
22 right-of-way, whether currently in effect or as may be enacted or amended from time to time.
23 Such written acceptance shall be effective as consent under Section 16.07 of the City Charter.
24 The Company shall in addition provide to the City with the foregoing written acceptance a
25 sum equal to the cost of the publication of this ordinance as required by Section 16.01 of the
26 City Charter.
5 � �O�z?.l�
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1 Section 7 ����
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2 Enforcement of This Ordinance. Upon any breach or failure to comply with any of
3 the provisions of this franchise ordinance by the Company, the City may bring an action at
4 law or in equity to seek compliance by the Company, money damages or any other
5 appropriate relief which may include, but is not limited to, termination and forfeiture of the
6 franchise granted herein.
7 Section 8
8 (a) Effective Date of This Ordinance. This ordinance shall take effect and be in force
9 after the public hearing required by chapter 16 of the City Charter, and from and after thirty
10 (30) days following its passage, approval and publication.
11 (b) Effective Date of Franchise for the Company. Upon the filing of a written
12 acceptance by any telecommunications company, as provided in Section 6 above, this
13 ordinance and the franchise granted hereunder shall be in force and effect as to that
14 telecommunications company. pIIR���ucn
ls DEC 28 �1996
16 Section 9
17
18 Existing Franchises. Any person holding a franchise granted by the City under
19 Chapter 16 of the Saint Paul City Charter shall not be required to obtain or consent to this
20 telecommunications franchise so long as such person uses the public right-of-way solely for
21 the purposes allowed by such existing franchise.
22
L
2 Yeas Navs Absent Requested by Department of:
2 B a e
Bostrom
2 arris
uerin —�'
e ar �
ettman
une � B�'�
Ado ted b Council: Date Form Appr ved by City Attorney
P Y ��. 1i. \99Ce
Adoption Certified by Council Secretary By: • � Z.� �f��(j
BY� � Approved by Mayor for Submission to
12 f� �/ Council
Approved by Mayor: Date }o
BY=
� � ��� By:
�PARTMENTlOFFICElCOUNCIL DATEINITIATED GREEN SHEET ��\�NO. �34Z
PUbIIC WOf�(S �O/��s INITIAUDATE INITIAUDATE
CONTACT PERSON 8 WaONE � pEPARTMENT DIRECTOR (t7 2 Z�- 5 CITY COUI�IL
Stacy Becker ZGG-C)OBG ��N � CITY ATTORNEY /q�2 Z �Q CITY CLERK
MU3T BE ON COUNCIL AOENDA BY(DATE) ROU71N�i g�ppET DIRECTOR FIN.b M(iT.SERV�ES DIR.
October 30, 1996 � �MAYOR(OR ASSISTAN� tv Zv
TOTAI!OF SNiNATUi�PAGES �,_ (CLIP ALL I.00ATIONS FOR SK�NATURE) ASSOCIATE DEPT.ACCOUNTANT
ACTION REOUESTED
Approval of a model Telecommunications ordinance.
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RECOMMENDATION3:Aqxo�w(N a Re�eCt(R) pERSONAL SERVICE CONTRACTS MUST ANSWER THE FOLLOWINCi QUEST S: �
_P����M�� _CIVIL SERVICE COMMISS�N 1• H���$P�B� NOe►worked under a contract for this depertment?
YE
CIB CoMMiT'fEE 2. Has thisperson/firm ever been a city employee?
— — YES NO
A sTAFF 3. Does thia person/firm possess a skill not normaily possessed by arry current city
— — employee?
OISTRICT Ca1NCIL YES NO
SUPPOR73 WHK:FI COUNCIL OBJECTNE9 �p�ain all y�s answ�rs on s�parat�shNt and attaeh to grwn shNt
INITIATINCi PROBLEM,ISSUE,OPPORTUNITY(NMO,WHAT,WHEN.WHERE,WHY):
Inadequate c�ordination of utility cuts and ma�r street work has resufted in extra costs to the city, and disruption to fts
citizens.
ADVANTA(3ES IF APPROVED:
The ordinances lay the framework to force better coordination and planning.
DISADVANTAQE3 IF APPHOVED:
Will require more effort to coordinate. Some utilities may oppose the added regulation.
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DI3ADVANTAGE3 IF NOT APPROVED:
The city will not benefit from the proposed changes, and a good deal of effort will be wasted.
TOTAL AMOUNT OF TRANSACTION= C�ST/REVENUE BUD(iETED(CIRCLE ONE) YES NO
FUNDNVG SOURCE ACITVITY NUMBER
FINANCIAL INFORMATION:(EXPLAII�
1 Section 7 Glo- �3�Z
2 Enforcement of This Ordinance. Upon any breach or failure to comply with any of
3 the provisions of this franchise ordinance by the Company, the City may bring an action at
4 law or in equity to seek compliance by the Company, money damages or an other
5 appropriate relief which may include, but is not limited to, termination d forfeiture of the
6 franchise granted herein.
'7 Section 8
8 (a) Effective Date of This Ordinance. This ordin e shall take effect and be in force
9 after the public hearing required by chapter 16 of the ty Charter, and from and after thirty
10 (30) days following its passage, approval and publi tion.
11 (b) Effective Date of Franchise for th Com an . Upon the filing of a written
12 acceptance by any telecommunications com y, as provided in Section 6 above, this
13 ordinance and the franchise granted here der shall be in force and effect as to that
14 telecommunications company.
15
16
Yeas Navs Absent Requested by Department of:
a e
ostrom
arri s
uerin
e ar
ettman
une By�
Form Appr ved by City Attorney
Adopted by Co il: Date
Adoption Cert fied by Council Secretary gy: � Q LL ��/
BY� Approv y Mayor o ubmission to
Counci
Approved by Mayor: Date
By: �
By:
42OOIDS CENTER IN DErrvER
8O SOUTH EIGHTH STREET LINDOUIST,VENNUM Ei CHRISTENSEN P.L.L.P.
MINNEAPOLIS,MINNESOTA SS4O2-PZOS BOO�7TH STREET,SUITE Z�ZS
LINDQUIST &VENNUM P.�..�..P. Fnx:612N376132071 3211 TELEPHO E�03-573 5900 401
ATTORNEYS AT LAW
Thomas L.Fabel
(612)371-3546
`�� -- ) ,� �-� �
December 4, 1996
DELIVERED BY MESSENGER
Honorable President David Thune
St. Paul City Council
310 City Hall
St. Paul, Minnesota 55102
Re: Telecommunications Franchise Ordinance
Dear Mr. Thune:
As you know, the City Council currently is considering new and revised
ordinances governing the usage of rights-of-way by various users. Many of these
changes reflect updating of existing ordinances relating to the management of rights-of-
way and have been the subject of extensive comment of various parties in meetings
held with City representatives, including a meeting last Monday morning. We
recommend for the Council's consideration and adoption the several changes that were
proposed to these ordinances by various rights-of-way users.
However, there is also a third ordinance being proposed that creates a new area
of regulation with enormous potential impact upon the businesses of St. Paul. What I
am referring to, of course, is the proposed ordinance for franchising of
telecommunications companies.
With respect to that ordinance, we recommend as a first and preferred
alt�rnative that the Council defer taking action on that ordinance until further study can
be completed. As you are probably aware, there are legal issues presented as to
whether Minnesota municipalities, including charter city's such as the City of St. Paul,
have authority under Minnesota law to franchise telecommunications companies that
are certified by the Minnesota Public Utilities Commission. There are court decisions
and legal commentators that indicate that since 1915, Minnesota municipalities do not
have such franchise authority and cannot impose franchise fees on telecommunications
companies. This is also an issue in a case that is currently pending before the
Minnesota Court of Appeals entitled U S WEST Communications, Inc. v. Citv of
Redwood Falls, No. C6-96-1765. Deferring action on this ordinance would altow for
further resolution and clarification of the City's authority in this area.
LT01:412303 1
LINDQUIST &VENNUM P.L.L.P.
cj �_ � �� �__
December 4, 1996
Page 2
As a second and clearly less preferred alternative we request that if the Council
is to consider adoption of this ordinance, it only do so after modifying the language to
clarify the limited nature of the franchise fee to be imposed.
At the Council hearing on November 20, you expressed clear preference that the
franchising of telecommunications companies should not result in the imposition of a
tax upon these companies for the purpose of city revenue enhancement. I believe that
in expressing this opinion, you were aligned with several other Council members in the
belief that ,"e Ci.y should recover al! costs associated :vith te!ecommun�catiQr.s �asage,
but that a general tax would injure the City's potential for business development.
In order to carry out this intent, changes are necessary to the ordinance
authorizing franchises for telecommunications companies. While Section 4 of that
ordinance prescribes an initial "franchise fee" of just $1 per year, the same section also
alludes to the possibility of fees up to 5% of gross company earnings and makes
specific reference to the imposition of franchise fees "to raise revenue." Obviously that
language is ominous to users of telecommunications services, and it strongly suggests
that the ordinance is a Trojan horse, from which heavy taxes will emerge in future
years.
To deter this possibility, and to increase greatly the comfort level of the St. Paul
business community with this package of legislation, we recommend an amendment for
this ordinance. The amendment, a copy of which is enclosed, would simply confirm the
Council's intent that these ordinances are not intended to impose a general tax upon
telecommunications usage.
On behalf of the Minnesota Business Utility Users Council, we urge the inclusion
of this amendment along with the other legislation on December 4.
Thank you for your consideration, and thank you for your efforts to protect the
future business environment of St. Paul.
Very tru �
/�M
Thomas L. Fabel
TLF/les
Encs.
LT01:412303 1
LINDQUIST &VENNUM P.LL.P. � � _ � � ,�-7 �-�
� �
December 4, 1996
Page 3
cc: Councilmember Jerry Blakey
Councilmember Dan Bostrum
Councilmember Dino Guerin
Councilmember Michael Harris
Councilmember Roberta Megard
Councilmember Janice Rettman
City Attorney Tim Marx
City Finance Director Martha Larson
Dia�e Sarenpa, MBlJUC Executive Director
LT01:412303 1