Appendix B

APPENDIX B. COMMUNICATIONS FRANCHISE

WRITTEN ACCEPTANCE OF ORDINANCE NO. 635

CITY OF BROWNSVILLE, OREGON

AN ORDINANCE GRANTING A NON-EXCLUSIVE FRANCHISE TO TELEPHONE UTILITIES OF OREGON, INC., DBA PTI COMMUNICATIONS, FOR THE RIGHT TO PROVIDE TELECOMMUNICATIONS SERVICES AND TO ACQUIRE, CONSTRUCT, MAINTAIN, OPERATE AND EXTEND FACILITIES REASONABLY NECESSARY TO PROVIDE SUCH SERVICES.

The City of Brownsville ordains as follows:

ARTICLE I – Definitions

For the purpose of this franchise, the following words and phrases shall have the meaning given in this Article. When not inconsistent with the text, words used in the present tense include the future tense, words in the plural number include the singular number, and words in the singular number include the plural number. The word “shall” is mandatory and “may” is permissive. Words not defined in this Article shall be given their common and ordinary meaning.

“City” refers to and is the City of Brownsville, Linn County, Oregon, and includes the territory as currently is or may in the future be included within the boundaries of the City of Brownsville.

“Communications Facilities” refer to and are those facilities reasonably necessary to provide telecommunications services within the City.

“Company” refers to and is Telephone Utilities of Oregon, Inc., dba PTI Communications and its successors and assigns.

“Council” refers to and is the legislative body of the City.

“Facilities” refer to and are all facilities reasonably necessary to provide telecommunications services into, within and through the City and include plants, works, systems, lines, equipment, underground links, switches, wires and radio links.

“Gross Revenue” refers to and is revenues derived from exchange access services, as defined in ORS 401.710, within the corporate limits of the City of Brownsville, less net uncollectibles from such revenues.

“Public Utilities Commission” refers to and is The Public Utilities Commission of the State of Oregon or other authority succeeding to the regulatory powers of The Public Utilities Commission of the State of Oregon.

“Streets” refer to and are streets, highways, alleys, viaducts, bridges, lanes, easements and other public ways in said City.

ARTICLE II – Grant of Franchise

Section 1. Grant of Franchise. The City hereby grants to the Company, for the period specified and subject to the conditions, terms and provisions contained in this Ordinance, the non-exclusive right to furnish, sell and distribute telecommunications services to the City and to all persons, businesses and industries within the City; a non-exclusive right to acquire, construct, install, locate, maintain, operate and extend into, within and through the City all facilities reasonably necessary to provide telecommunication services to the City and to all persons, businesses and industries within the City and in the territory adjacent thereto; and a non-exclusive right to make reasonable use of all streets as may be necessary to carry out the terms of this Ordinance.

Section 2. Term of Franchise. This franchise shall expire ten (10) years after the effective date of this Ordinance.

ARTICLE III – Franchise Fee

Section 1. Franchise Fee. In consideration for the grant of this franchise, the Company shall collect and remit to the City a sum equal to four per cent (4%) of the revenue derived annually from the provision of Local Exchange Service within the City.

Section 2. Payment Schedule. For the franchise fee owed on revenue received after the effective date of this Ordinance, payment shall be made in quarterly installments due on or before forty-five (45) days after the close of each calendar year quarter. Payments at the beginning and end of the term of this Ordinance shall be prorated. All payments shall be made to the City at: 255 N. Main Street, P.O. Box 188, Brownsville, OR 97327.

Section 3. Franchise Fee Payment in Lieu of Other Fees. Payment of the franchise fee by the Company is accepted by the City in lieu of any additional fee, compensation or consideration, including the free use or construction of facilities and equipment, to the City for company’s use of the streets, and in lieu of any additional tax or fee on the Company’s gross revenues. The franchise fee is not in lieu of commissions paid for siting public telephones on municipal property nor in lieu of any lawful special benefit assessment upon Company’s real property, of any sales and use taxes, or of any other tax not related to the franchise or the physical operation thereof.

ARTICLE IV – Conduct of Business

Section 1. Conduct of Business. The Company may establish, from time to time, such rules, regulations, terms and conditions governing the conduct of its business as shall be reasonably necessary to enable the Company to exercise its rights and perform its obligations under this franchise; provided, however, that such rules, regulations, terms and conditions shall not be in conflict with the laws of the State of Oregon or this franchise.

Section 2. Tariffs on File. The Company shall keep on file in its office in Lebanon, Oregon, or other location in the vicinity, copies of all tariffs currently in effect and on file with the Public Utilities Commission. Said tariffs shall be available for inspection by the public.

Section 3. Compliance with PUC Regulations. The Company shall comply with all rules and regulations adopted by the Public Utilities Commission.

Section 4. Compliance with Company Tariffs. The Company shall furnish telecommunication services within the City to the City and to all persons, businesses and industries within the City at the rates and under the terms and conditions set forth in its tariffs on file with the Public Utilities Commission.

Section 5. Applicability of Company Tariffs. The City and Company recognize that the lawful provisions of the Company’s tariffs on file and in effect with the Public Utilities Commission are controlling over any inconsistent provision in this franchise dealing with the same subject matter.

ARTICLE V – Construction, Installation & Operation of Company Facilities

Section 1. Location of Facilities. Company Facilities shall not interfere with the City’s water mains, sewer mains, gas mains or other municipal use of streets and other public places. Company Facilities shall be located consistent with City’s regulations so as to cause minimum interference with public use of streets and shall be maintained in good repair and condition.

Section 2. Excavation and Construction. All construction, excavation, maintenance and repair work done by the Company shall be done in a timely and expeditious manner which minimizes the inconvenience to the public and individuals. All such construction, excavation, maintenance and repair work done by the Company shall comply with all applicable local, state and federal laws. All public and private property whose use conforms to restrictions in easements disturbed by Company construction or excavation activities shall be restored as soon as practicable by the Company at its expense to substantially its former condition. The Company shall comply with the City’s requests for reasonable and prompt action to remedy all damage to private property adjacent to lots, streets or dedicated easements where the Company is performing construction, excavation, maintenance or repair work. The City reserves the right to restore property and remedy damages caused by Company activities at the expense of Company in the event the Company fails to perform such work within a reasonable time after Notice from the City.

Section 3. Relocation of Company Facilities. If at any time the City requests the Company to relocate any Facilities in streets in order to permit the City to change street grades and to construct, reconstruct and maintain street improvements, sewers, water mains or other City works, such relocation shall be made by the Company at its expense. Following relocation, all property shall be restored to substantially its former condition by the Company at its expense. The City will reasonably exhaust alternatives not requiring relocation in all cases.

Section 4. Service to New Areas. If during the term of this franchise the boundaries of the City are extended, the Company shall extend service to the newly incorporated areas. Service to annexed areas shall be in accordance with the terms of this franchise agreement, including payment of franchise fees and in accordance with the Rules and Regulations of the Oregon Public Utilities Commission.

Section 5. Restoration of Service. In the event the Company’s communications system, or any part thereof, is partially or wholly destroyed or incapacitated, the Company shall use due diligence to restore its system to satisfactory service within the shortest practicable time.

Section 6. Rules and Regulations. All lines and equipment constructed under this grant shall be constructed in accordance with established practices as prescribed by current REA specifications and drawings and the rules and regulations of the Public Utilities Commission; and the rights and privileges herein granted in the streets shall be subject at all times to such ordinances and reasonable regulations as are now or shall hereafter be ordained or passed by the City concerning similar uses and excavations in the care of streets.

Section 7. Safety Regulations by the City. The City retains its authority to adopt, from time to time, reasonable regulations which are necessary to ensure the health, safety and welfare of the public.

Section 8. Inspection, Audit and Quality Control. The City or its designee shall have the right to inspect, at all reasonable times, any portion of the Company’s system used to serve the City and its residents. The City or its designee shall have the right to inspect, copy and audit Company records relevant to compliance with any terms of this Ordinance at all reasonable times. The Company agrees to cooperate with the City in conducting the inspection and/or audit and to correct any discrepancies affecting the City’s interest in a prompt and efficient manner. The cost of one audit per calendar year shall be paid by the Company. The cost of any other audits shall be paid by the City unless significant irregularities are found and, in that event, the Company shall pay the cost of the audit.

Section 9. Maps. The Company shall prepare and submit to the City a map showing the location of its distribution system within the City, showing location of all appurtenances incident to the distribution system, insofar as such facilities can reasonably be determined. The map shall be revised no more frequently than annually by the addition of the information hereby required as the system is extended or revised.

ARTICLE VI – Indemnification of the City

Section 1. City Held Harmless/Insurance. The Company shall maintain its structure, apparatus and other equipment as to afford all reasonable protection against injury or damage to persons or property therefrom, and the Company shall save harmless the City, its officers, employees and agents from all liability or damage and all reasonable expenses necessarily accruing against the City, its officers, employees and agents arising out of the exercise by the Company of the rights and privileges hereby granted, provided such liability or damage was not caused by the City.

Section 2. Comparable treatment of public utilities. Except when limited by state or federal law, no public utility or cable television franchise will be issued by the City which grants fees and terms and conditions any more favorable than those granted to Company.

Section 3. Notice to Company. The City will provide notice to the Company of the pendency of any claim or action against the City arising out of the exercise by the Company of its franchise rights. The Company will be permitted, at its own expense, to appear and defend or to assist in defense of such claim.

Section 4. Payment of Expenses. The Company shall pay for all expenses relating to the publication of notice and ordinances arising out of the process for obtaining this franchise.

ARTICLE VII – Assignment

Section 1. Assignment. The Company shall not transfer or assign any rights under this franchise to a third party, excepting only corporate reorganizations of the Company not including a third party, unless the City shall first approve such transfer or assignment in writing. Approval of the transfer or assignment shall not be unreasonably withheld.

Section 2. Saving Clause. If any portion of this franchise Ordinance is declared illegal or void by a court of competent jurisdiction, the remainder of the Ordinance shall survive and not be affected thereby. In such case, the parties shall proceed with due diligence to attempt to draft provisions that will achieve the original intent.

Section 3. Amendment. This franchise agreement may be amended by ordinance adopted by the City and accepted in writing by the Company.

ARTICLE VIII – Acceptance and Effective Date

Section 1. Acceptance. The Company shall file its written acceptance of this franchise in the form attached hereto as Attachment A and tender payment of the franchise fees collected since July 1, 1994 within twenty (20) days of the enactment of this Ordinance.

Section 2. Effective Date. This ordinance shall be effective thirty-five (35) days following its adoption by the City’s Council.

Passed by the Council and approved by the Mayor this 18th day of September, 1995.

	__________________/s/____________
	Mayor
__________________/s/____________
City Administrator

ATTACHMENT A

WRITTEN ACCEPTANCE OF

CITY OF BROWNSVILLE, OREGON, ORDINANCE NO. 635

TO THE MAYOR AND COUNCIL OF THE CITY OF BROWNSVILLE:

WHEREAS, Telephone Utilities of Oregon, Inc., dba PTI Communications (Company) has been providing telecommunications services since expiration of its earlier franchise on June 30, 1994 to its customers within the City of Brownsville while the parties have been negotiating a renewal of the franchise for telecommunications;

WHEREAS, even though Company has not had an adopted franchise, Company has agreed to pay to the city $3,799.14, calculated as being equivalent to a 4% franchise fee on the revenue derived from providing Local Exchange Service during the time of negotiating this agreement;

WHEREAS, ORS 221.450 allows the City to impose upon Company a privilege tax for the use of the public ways;

WHEREAS, on September 18, 1995 City has adopted Ordinance No. 635 entitled:

WHEREAS, within 20 days of City’s adoption of Ordinance No. 635 Company must give its written acceptance of the franchise and pay to City the money it has collected since July 1, 1994 as a franchise fee;

NOW, THEREFORE, Telephone Utilities of Oregon, Inc., dba PTI Communications, hereby accepts Ordinance No. 635 and all the terms and conditions of the Ordinance and tenders herewith the revenue it has collected since July 1, 1994 as a franchise fee.

IN WITNESS WHEREOF, Telephone Utilities of Oregon, Inc., dba PTI Communications, has caused this acceptance to be duly executed this 18th day of September, 1995 by its duly authorized officer.

TELEPHONE UTILITIES OF OREGON INC. dba PTI Communications

By: ______________________________

Title: _____________________________

ATTEST: __________________________

Title: ____________________________

RECEIPT of the original of the duly executed acceptance by Telephone Utilities of Oregon, Inc., dba PTI Communications and the tender of franchise fees collected since July 1, 1994 is hereby acknowledged this 18th day of October, 1995.

____________________________________________

Diane J. Rinks, City Administrator

City of Brownsville, Oregon