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HomeMy WebLinkAboutResolution 27-21 To: Members of Dublin City Council From: Dana L. McDaniel, City Manager Date: May 4, 2021 Initiated By: Jennifer Readler, Law Director Gregory Dunn, Special Legal Counsel, IceMiller L.L.P. Re: Resolution 27-21 – Contract Modifications with Dublink Development L.L.C. and Columbus Fibernet L.L.C. Background The Dublink Project originated with a series of contracts between the City of Dublin and Fishel Company. These contracts were initially entered into in 1998 and were expanded upon and modified over the years. For the purposes of this report, we will refer to Fishel and its subsidiary Dublink Development L.L.C., both as the Fishel Company. Dublink consists of a multi-conduit system owned and operated by the Fishel Company, with one conduit of the system dedicated for use by the City of Dublin. The City populated its conduit in the Dublink system with fiber optics. The City has used fiber optics over the years for institutional/public purposes, economic development attraction, retention and expansion, and dark fiber leasing. The City owns approximately 25 miles of fiber optics within the City of Dublin and nearly 100 miles of fiber optics outside the City of Dublin. The Fishel Company has contractually managed and maintained the City’s fiber optics since it initial deployment. The relationship with the Fishel Company has been a good one and at this time both the Fishel Company and the City of Dublin believe it is desirable to bring the Agreements up to date by consolidating phase lease pricing and memorializing certain operational understandings we have had with the Fishel Company. Resolution 27-21 with two associated Agreements, the Amendment to the Agreement and Maintenance Agreement with Columbus FiberNet, if passed by Council, will achieve this needed update. The two Agreements accompanying Resolution 27-21 do the following 1. The Fishel Company has built a conduit system inside the City of Dublin in multiple phases over time and each of the phases has a different pricing structure. With the addition of new conduit in the West Innovation District/University Boulevard, recently constructed conduit on Bridge Street, generally between Post/Franz Road and Riverside Drive, and City-owned conduit in Bridge Park, there would be seven (7) phases each with separate pricing structures. Therefore, it is in both the City and The Fishel Company’s best interests to simplify the conduit pricing structure. Accordingly, staff and the Fishel Company propose to restructure conduit pricing to three (3) phases instead of potentially seven (7) (See Exhibit C of the Amendment to the Agreement). 2. The Maintenance Agreement for the Dublin owned fiber outside of Dublin, which is contained in the Columbus FiberNet Conduit, has expired. Staff recommends renewing the Maintenance Agreement at the same costs as in the Original Agreement ($63,900.00 per Office of the City Manager 5555 Perimeter Drive • Dublin, OH 43017 Phone: 614.410.4400 Memo Memo re. Contract Modifications with Fishel May 4, 2021 Page 2 of 2 year). The new Agreement will add CPI cost of living adjustment not previously provided. Consistency in the management and maintenance of the City’s fiber optic system is critical to the system’s integrity and reliability. 3. The Fishel Company, as part of its partnership with Dublin, provided location services for the laterals, which Dublin built to serve certain Dublin K-12 Schools. The Fishel Company has been providing these services at no charge to the City. The proposed Agreement adds language that will reimburse the Fishel Company for its actual costs of providing location services for these particular laterals. The City possesses other similar laterals into privately and publicly owned buildings. Retaining the responsibility to locate these laterals is critical to maintaining the integrity of the entire system. 4. As part of the public street construction in Bridge Park, the City also constructed a multi- conduit system in which the City retains ownership. As has been accomplished with the many phases of the Dublink multi-conduit system in the public right of way over the years, it was critically important to construct a similar system in this dense urban setting in order to avoid continuous disruption by multiple service providers while accommodating and encouraging rapid service/technology deployment. Staff recommends engaging the Fishel Company to provide consistent maintenance and management of the Dublin owned conduit system for the integrity of the entire system. Staff recommends engaging the Fishel Company for Fifteen-Thousand Dollars ($15,000.00) per year to manage and maintain this part of the system. The Fishel Company will charge lessees of the conduit the rate of $10.00 per conduit foot. Upon receipt of payment, the Fishel Company will then remit the payment to the City of Dublin. Since the City owns this conduit in this phase, a lower rate will encourage the provisioning of better connectivity for businesses and citizens in the Bridge Park area while minimizing disruption and accelerated deterioration of other infrastructure. This arrangement keeps the Fishel Company as a “one stop shop” for companies wishing to access the Dublink system in this particular phase, as well as, throughout the City of Dublin and in its portion of the system outside the City of Dublin. Recommendation Staff recommends Council pass Resolution 27-21 and its associated Agreements. Passing Resolution 27-21 will help to make Dublink even more competitive, while ensuring its integrity and reliability into the future. 4849-4820-7591.4 MAINTENANCE AGREEMENT IN CONNECTION WITH THE MUTLI-DUCT UNDERGROUND CONDUIT AND RELATED FACILITIES BETWEEN COLUMBUS FIBERNET, LLC AND THE CITY OF DUBLIN This Maintenance Agreement hereinafter referred to as the “Agreement”, is made and entered into as of the ___ day of _________, 2021, by and between Columbus Fibernet, LLC, an Ohio limited liability company with offices at 1810 Arlingate Lane, Columbus, Ohio 43228 (“Seller”) and the City of Dublin, Ohio, an Ohio municipal corporation with offices at 5200 Emerald Parkway, Dublin, Ohio 43017, (“Buyer”), For the purposes of this Agreement, Seller and Buyer shall be referred to individually as a “Party” and collectively as the “Parties.” WITNESSETH: WHEREAS, Seller and Buyer entered into that certain Contract of Sale for Multi-Duct Underground Conduit and Related Facilities on November 19, 2004 (the “Contract”), in which Buyer agreed to acquire a duct within the Conduit System, as such term is defined in the Contract, complete with a specified amount of installed optical fiber and Seller agreed to maintain such duct and fiber pursuant to the terms specified therein; WHEREAS, Article IX, Section 9.1 of the Contract provides the terms under which Seller would provide Scheduled Maintenance, Repair, and Relocation of the Conduit System and the duct acquired by Buyer; WHEREAS, the term of Article IX, Section 9.1 of the Contract, including all contemplated renewals, expired; WHEREAS, Buyer desires for Seller to continue to provide such Scheduled Maintenance; and WHEREAS, Seller is willing to continue to provide such Scheduled Maintenance in accordance with the terms of the Contract and this Agreement. NOW, THEREFORE, effective as of the date hereof and in consideration of the mutual agreements set forth below and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound Buyer and Seller agree as follows: 1. Term. This Agreement shall have an Effective Date when fully executed and shall terminate ten (10) years from the anniversary of that effective date. 4849-4820-7591.4 2. Operations and Maintenance. Buyer shall continue to perform the maintenance, repair, and relocation requirements in accordance with the terms that follow and as further provided in Exhibit A of the Contract: A. Scheduled Maintenance. Buyer shall use commercially reasonable methods to maintain, manage, and operate the Property in a secure and good condition that meets or exceeds industry standards. Seller shall use commercially reasonable methods to maintain, manage, and operate the Conduit System in a secure and good condition that meets or exceeds industry standards. Maintenance of the Property and the Conduit System shall be performed by Buyer and Seller, respectively, on a regular basis as is customary in the industry and otherwise as maybe required. All routine scheduled maintenance (“Scheduled Maintenance”) shall include, but is not limited to, locating and marking duct and pumping, venting, air quality testing, and proofing the duct when necessary. Seller shall have no responsibility for maintaining the fiber within the duct or for maintaining the Dublink Fiber. 3. Compensation. Seller agrees to perform the Scheduled Maintenance pursuant to Section 2 for Buyer for an annual maintenance fee of Sixty-Three Thousand and Nine Hundred Dollars and No Cents (US$63,900.00) (the “Annual Maintenance Fee”). The Annual Maintenance Fee shall be adjusted once each calendar year for monthly or annually recurring Scheduled Maintenance services on a date Buyer selects (and of which Buyer provides notice to Seller) to reflect net increases since the Effective Date in the original data value set forth in the U.S. Consumer Price Index (specifically, Bureau of Labor Statistics “CPI - All Urban Consumers, Not Seasonally adjusted, Midwest region”) or five percent (5%), whichever is less (the “Annual Adjustment”); provided however, that in no event shall any rate subject to the Annual Adjustment be less than its initial value set forth in this Agreement. In the event that the Bureau of Labor Statistics, or its successor organization, no longer publishes this index, Seller shall designate, with Buyer’s agreement, which shall not be unreasonably withheld, a new statistical index and formula appropriate for calculations of Annual Adjustments. 4. Severability. If any term or provision of this Agreement shall be invalid or unenforceable to any extent, the remainder of this Agreement shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. 5. Modifications. Except as otherwise provided herein, no variation, modification, or change to this Agreement shall be binding upon any Party hereto unless mutually agreed to in a writing executed by a duly authorized officer or agent of each Party. 6. Prevailing Party. If any Party to this Agreement brings an action or proceeding to enforce the terms of this Agreement or to declare rights under this Agreement, the prevailing Party in any such action, proceeding, or appeal thereon, shall be entitled to reasonable attorneys’ fees and expenses from the non-prevailing Party. 4849-4820-7591.4 7. Successors and Assigns. All rights and obligations under this Agreement shall be binding upon and inure to the benefit of the Parties and their heirs, personal representatives, successors and assigns. 8. Interpretation/Definitions/Counterparts. Unless otherwise provided herein, all terms and conditions of the Contract shall remain in full force and effect and are hereby confirmed by Buyer and Seller and incorporated herein. Unless otherwise defined herein, all capitalized terms contained in this Agreement shall have the meaning ascribed to them in the Contract. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be a duplicate original, but all of which, taken together, shall constitute a single instrument. 9. Conflict. In the event of any conflict between any provisions of this Agreement and any provisions of the Contract, the provisions of this Agreement shall control. [Signature page follows] 4849-4820-7591.4 IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective duly authorized officers as of the date first written above. CITY OF DUBLIN, OHIO (Buyer) By: ________________________________ Its: ________________________________ COLUMBUS FIBERNET, LLC (Seller) By: ________________________________ Its: ________________________________ 4849-4820-7591.4 Approved As To Form: Law Director, City of Dublin, Ohio. REST OF PAGE LEFT INTENTIONALLY BLANK 4849-4820-7591.4 EXHIBIT A SCHEDULED MAINTENANCE Page 1 of 1 Scheduled Maintenance: Routine Maintenance and repair of the Conduit System described in this section (“Scheduled Maintenance”) shall be performed by or under the direction of the Seller, at Sellers reasonable discretion or at Buyers reasonable request. Scheduled Maintenance shall include the following activities: • Review of all known construction projects for any system conflicts • Membership to the Ohio Utility Protection Service (OUPS) • Review of all notifications received from OUPS • Physically mark each necessary location, as it relates to notifications from OUPS • Patrol of Conduit System route on a regular basis • Physical site surveillance when construction projects are in the location of the conduit system • Coordination and scheduling of any construction projects where the system must be relocated • General Maintenance of access points (manholes) • Pumping and venting the manholes when necessary • Proofing of conduit when necessary REST OF PAGE LEFT INTENTIONALLY BLANK 4836-8020-8615.4 AMENDMENT TO AGREEMENT THIS AMENDMENT TO AGREEMENT (the “Amendment”) is made and entered into as of the ___ day of _________, 2021, by and between the City of Dublin, Ohio, an Ohio municipal corporation (the “City”), having an office at 5200 Emerald Parkway, Dublin, Ohio 43017, and Dublink Development Company L.L.C., an Ohio limited liability company (“Operator”), having an office at 1810 Arlingate Lane, Columbus, Ohio 43228. For the purposes of this Amendment, City and Operator shall be referred to individually as a “Party” and collectively as the “Parties.” WITNESSETH: WHEREAS, City and Operator entered into that certain Agreement dated December 14, 1998 (the “Agreement”), granting Operator the exclusive right and authority to design, construct, install, own, operate, manage, repair, maintain and restore a Conduit System, as such term is defined in the Agreement, within the City at Operator’s sole cost and expense, as more particularly described in the Agreement attached hereto as Exhibit A and incorporated herein; WHEREAS, as an extension of the Agreement, but not commemorated therein, the Operator locates, builds, and maintains lateral connections to every K-12 public education institution in the City; WHEREAS, the City is willing to compensate the Operator for such construction in accordance with the terms contained in this Amendment; WHEREAS, additional changes in the phases of construction of the Conduit System have also necessitated the Parties to amend the Schedule of Charges and Fees provided for in the Agreement in order to accurately reflect such phases of the Conduit System; WHEREAS, under the Agreement, Operator may amend the Schedule of Charges and Fees applicable to an identified phase of construction by applying to the City Manager for approval of such changes, including changes in the phases of construction themselves; WHEREAS, as a part of such application, Operator shall provide documentation supporting the reasonableness of any proposed change and shall provide such additional documentation as the City Manager may require; WHEREAS, upon a determination that the proposed change is reasonable, the City Manager will approve the same by Regulation and Exhibit C of the Agreement shall be amended to reflect any such approved changes; WHEREAS, Operator has met the aforementioned requirements under the Agreement; and 2 4836-8020-8615.4 WHEREAS, the City and Operator seek to execute this Amendment in order to amend Section 9, Rights of the City, to reflect the lateral connections constructed by the Operator, and to amend Exhibit C of the Agreement to reflect the revised charges and fees in accordance with the terms of the Agreement and as further set forth and amended below. NOW, THEREFORE, effective as of the date hereof and in consideration of the mutual agreements set forth below and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound City and Operator agree as follows: 1. Section 9 of the Agreement shall be replaced with the following, with additions in boldfaced print: Rights of the City. As consideration for the right to enter and use the right-of-way, as provided in Paragraph 3.A, and for the covenants made by and other services to be provided by the City hereunder, Operator covenants and agrees to dedicate one - 1 1/4" conduit for City use within the System without charge or fee. Operator further agrees to continue to locate and maintain lateral connections (collectively “Lateral Services”) to every K-12 public education institution located within the City of Dublin and as reflected in Exhibit D. The City shall compensate Operator for the actual costs of providing Lateral Services. Actual costs shall be determined as set forth in the original agreement attached as Exhibit A. 2. Exhibit C of the Agreement shall be replaced with the following: 3 4836-8020-8615.4 EXHIBIT C PHASE 1 PRICING A. One-time lease payment for initial 25-year term per Section 2 Price Per Foot 1-1/4” Conduit $ 17.56 4” Conduit $ 42.67 B. Annual lease payment per duct foot. 1) Rate is adjusted every 5 years by 5% or 80% of CPI (whichever is higher) 2) 15-yr. initial term with extension per Section 2. 3) No subleasing Price Per Foot 2” Conduit $ 2.86 4” Conduit $ 6.94 4 4836-8020-8615.4 EXHIBIT C PHASE 2 PRICING A. One-time lease payment for initial 25-year term per Section 2 Price Per Foot 1-1/4” Conduit $ 51.00 B. Annual lease payment per duct foot. 1) Rate is adjusted every 5 years by 5% or 80% of CPI (whichever is higher) 2) 15-yr. initial term with extension per Section 2. 3) No subleasing Price Per Foot 1-1/4” Conduit $ 8.31 5 4836-8020-8615.4 EXHIBIT C PHASE 3 PRICING AND REQUIREMENTS A. One-time lease payment for initial 25-year term per Section 2 Price Per Foot 1-1/4” Conduit $ 10.00 4” Conduit $ 24.30 B. Annual lease payment per duct foot. 1) Rate is adjusted every 5 years by 5% or 80% of CPI (whichever is higher) 2) 15-yr. initial term with extension per Section 2. Price Per Foot 1-1/4” Conduit $ 1.63 4” Conduit $ 3.96 C. No subleasing D. The City shall select the Indefeasible Right to Use agreement to be executed for use of the Bridge Street conduit. Operator shall maintain a list of the third-party users of the Bridge Street Conduit. E. Payment by Phase III leasees shall be remitted directly to the City of Dublin. F. Operator shall provide maintenance and management services as determined in the original Agreement attached as Exhibit A. G. Operator shall be paid $15,000.00 per year by the City of Dublin for providing the maintenance and management services set forth above. 6 4836-8020-8615.4 EXHIBIT C PHASES I, II AND III MAP 7 4836-8020-8615.4 3. Exhibit D shall be amended into the Agreement to provide the map contemplated in revised Section 9, as follows: EXHIBIT D MAP OF K-12 LATERAL CONNECTIONS Green is School Fiber built in Phase 1 (Fishel locates and maintains) Blue is School Fiber built in Phase 2 (Fishel locates and maintains) Violet is Crown Castle Fiber (maintained by others) Red is AEP Fiber (maintained by others) [Signature page follows.] 8 4836-8020-8615.4 IN WITNESS WHEREOF, City and Operator have executed this Amendment to be effective as of the date first written above. OWNER: The City of Dublin, Ohio, an Ohio municipal corporation. By: Name: Its: Date: OPERATOR : Dublink Development Company L.L.C., an Ohio limited liability company. By: Name: Its: Date: Approved As To Form: ______________________________ Law Director, City of Dublin, Ohio 9 4836-8020-8615.4 FISCAL OFFICER’S CERTIFICATE The undersigned, Director of Finance for the City of Dublin, Ohio under the foregoing Agreement, certifies hereby that the moneys required to meet the obligations of the City under the foregoing Agreement during Fiscal Year 2021 have been appropriated lawfully for that purpose, and are in the Treasury of the City of Dublin, Ohio or in the process of collection to the credit of an appropriate fund, free from any previous encumbrances. This Certificate is given in compliance with Sections 5705.41 and 5705.44, Ohio Revised Code. Dated: ______________________, 2021 Director of Finance City of Dublin, Ohio REST OF PAGE LEFT INTENTIONALLY BLANK 10 4836-8020-8615.4 EXHIBIT A Agreement