ORDINANCE NO. 98-07

An ordinance of the City of Castle Rock, Washington, granting Pacific Fiber Link, L.L.C., a franchise to use certain streets and public ways within the City of Castle Rock for constructing, operating and maintaining conduits and other facilities within the City of Castle Rock and fixing the terms and conditions of the grant in connection with its business of furnishing fiber optic telecommunication services.

WHEREAS, Pacific Fiber Link, L.L.C., hereinafter “Fiber Link,” has applied to the City of Castle Rock for a non-exclusive franchise to use certain streets and public ways within the City of Castle Rock for the purpose of constructing, operating and maintaining conduits and other facilities in connection with its business of furnishing competitive fiber optic communication services, and

WHEREAS, the City has reviewed Fiber Link’s request, determined that it is appropriate to enter into a franchising agreement with Fiber Link in order to control the use of rights-of-way within the City of Castle Rock,

Now, Therefore, the City Council of the City of Castle Rock, Washington does ordain as follows:

Section 1: Nature and Term of the Contract. City of Castle Rock, hereinafter “City,” does hereby grant to Fiber Link a non-exclusive franchise to construct, operate and maintain a fiber optic telecommunication conduit under the surface of those streets and public places in the City as shown in red on the map on file in the City Clerk’s office, said map hereby incorporated herein as if fully set forth by reference. The length of the fiber optic conduit is approximately 2,839 linear feet in length.

The term “facilities” as used in this agreement means fiber optic trunk line consisting of two 2-inch SDR-11 high-density polyethylene conduit, two 1-1/2 inch SDR-11 high-density polyethylene conduit, and two 1-1/4 inch SDR-11 high-density polyethylene conduit that will contain optical fiber and insulation, together with other necessary appurtenances and equipment.

Pacific Fiber shall install in accordance with industry standards, including “takeouts” and/or appropriate access ports, an additional 2-inch SDR-11 high density polyethylene conduit, which shall be the property of the City of Castle Rock.

Section 2: Plans. Before performing any work under authority of this ordinance, Pacific Fiber shall file with the City of Castle Rock, plans for all such facilities which it proposes to construct under the authority of this ordinance in and along the street rights-of-way of said City in such form and detail as the City may require, and such plans shall first receive the approval of the City before actual work commences. Any relocation and/or change shall be indicated on an “as-built” plan. Underground conduit and cables shall be laid at such depths in and along the street rights-of-way or other public places as may be directed by the City. All facilities shall be constructed, operated and maintained in accordance with federal, state, and local construction, safety codes and standards.

Section 3: Permits. Whenever it shall be necessary for Pacific Fiber, its subcontractors and/or agents to engage in any work within the franchise area, Pacific Fiber shall apply for and procure all necessary City permits and authorizations to do such work, and shall, except where expressly provided otherwise herein, comply with all requirements and conditions of this franchise and such permits and authorizations, including but not limited to location restrictions, traffic control, and restoration, repair or other work to restore the surface of the franchise area to at least the condition existing immediately prior to such work, to the City’s satisfaction, and as further required by the City right-of-way construction permit that must be acquired prior to commencing work from the City Public Works Department. Such permits and authorizations shall also be subject to any other applicable City ordinances, resolutions, codes, policy and standards. After the work is completed, Fiber Link shall provide to the City upon request and at no cost a copy of all “as-built” plans, maps, and records of the facilities installed. Nothing provided in this ordinance shall in any way limit the City’s authority to otherwise exercise its police powers or other lawful authority over said facilities.

Section 4: Restoration. Fiber Link shall, after construction, maintenance, or repair of its facilities, promptly restore any disturbed right-of-way to at least the condition existing immediately prior to such work to the City’s satisfaction, in accordance with City standards and specifications and applicable City permits. Excess or deleterious excavated materials shall be promptly loaded and hauled to an appropriate waste disposal site by Fiber Link, its agents and/or subcontractors. All concrete-encased recorded monuments that have been disturbed or displaced by such work shall be restored to their condition existing immediately prior to such work pursuant to City standards and specifications. Fiber Link agrees to promptly complete restoration work and to promptly repair any damage to the extent caused by Fiber Link, its agents or subcontractors, work on the right-of-way at its sole cost and expense. Such restoration responsibility shall continue for a period of time to correspond to the remaining life of the payment and/or service in which the work was done as indicated in the permit. In the event that Fiber Link fails to restore the franchise area to the condition existing immediately prior to Fiber Link’s work, the City reserves the right to make such repairs or restoration to such franchise area, and bill Fiber Link for the actual, reasonable and necessary cost of such restoration, including the cost of labor and equipment repair and equipment to repair the damage caused by Fiber Link’s work. The franchise shall pay the bill for such work within thirty (30) days.

Section 5: Non-Delegable Duties/Assignment.

(a) The duties and responsibilities described in this franchise ordinance are non-delegable. All construction and maintenance of any and all facilities within the City street rights-of-way incident to Fiber Link’s provision of services shall, regardless of who performs the construction, be and remain the responsibility of Fiber Link. All conduits and other underground facilities shall be laid and maintained in such manner as to not interfere with sewers, water pipes, or other property of the City or with any other pipes, wires, conduits or other facilities which may have been laid in the street right-of-way by or under the City’s authority. The system of pipes, wires, conduits, and other facilities constructed or erected by Fiber Link shall be of good quality and workmanship and shall be maintained in good repair and efficiency.

(b) Fiber Link may assign all or any portions of its rights, benefits, and privileges, in and under this franchise, subject to and conditioned upon approval of the City, which approval will not be unreasonably withheld or delayed. Fiber Link shall, no later than thirty (30) days prior to the date of any proposed assignment, file written notice of intent to assign the franchise with the City, together with the assignee’s written acceptance of all the terms and conditions of the franchise and promise of compliance. In addition, Fiber Link shall have the right to mortgage its rights, benefits, and privileges in and under this franchise to the trustee for its bondholders and assign to any subsidiary, parent, affiliate or company having common control with Fiber Link, so long as notice of the same is provided to the City, said notice to be provided thirty (30) days prior to the incurrence of any obligation, and provided that Fiber Link remains fully liable to the City for compliance with all terms and conditions hereof.

Section 6: Common Usage. To the extent that Fiber Link makes facilities and/or services available to other governmental entities within the State of Washington, Fiber Link shall also make such facilities and services available to the City subject to similar terms and conditions unless otherwise prohibited or restricted by state or federal laws, regulations, or tariffs; provided, that Fiber Link shall only be required to make its facilities and services available to the City pursuant to this section at such times that Fiber Link makes its facilities or services available to residents of the City.

Section 7: Relocation of Facilities.

(a) When the City undertakes or causes to be undertaken at City expense the construction of any public works improvement within the franchise area, and such public works improvement necessitates the relocation of Fiber Link’s then-existing facilities within the franchise area, the City shall, as soon as possible and in no event fewer than ninety days prior to the commencement of construction of such public work:

(1) Provide Fiber Link written notice requesting such relocation;

(2) Provide Fiber Link with copies of pertinent portions of the City’s plans and specifications for such public works improvements.

(b) After receipt of such notice and such plans and specifications, Fiber Link shall relocate such facilities within the franchise area as designated by the City Engineer or the Engineer’s authorized representative, in accordance with public works standards, and any amendments existing thereto. Such relocation shall be at Fiber Link’s sole expense. The City shall exercise its best efforts to assist Fiber Link in such relocation, including priority processing of any City permits necessary.

(c) It is expressly agreed and understood that the relocation provision described herein is applicable to any area annexed to or incorporated within the City of Castle Rock during the term of this franchise.

Section 8: Reimbursement of Costs/Franchise Fees. Pursuant to RCW 35.21.860, Fiber Link shall reimburse and pay to the City of Castle Rock the amount of administrative expenses incurred by the City which are directly related to receiving and approving of permit, license, and franchise application, to inspecting plans and construction, and monitoring the same, including but not limited to the repairs and maintenance and to the preparation of any detailed statement pursuant to the State Environmental Protection policy codified at Title 43.21(c).

For the purposes of this franchise, the parties have agreed that the calculation of such administrative expenses and actual damage incurred can be burdensome and have mutually agreed that they shall be reimbursed to the City of Castle Rock in a liquidated sum in the amount of Fifty Thousand Nine Hundred Nineteen ($50,919.00).

Section 9: Telecommunications Status. Fiber Link hereby warrants that its operations as authorized under this franchise are those of a telephone business as defined in RCW 82.04.060. As a result, the City will not impose a franchise fee under the terms of this ordinance; however, the City reserves its right to impose a franchise fee on Fiber Link for purposes other than to recover its administrative expenses, if franchise operations as authorized by this franchise change so that not all uses of the franchise are those of a telephone business and/or if statutory prohibitions on the imposition of such fees are rescinded or amended.

Section 10: Indemnification. The franchisee shall indemnify and hold the City, its elected and appointed officials, employees and agents, harmless from any and all claims, actions, injuries, demands, liabilities, losses, costs and damages made against City on account of bodily injury to persons or damage to property to the extent that such damages are caused by the negligence or willful misconduct of Fiber Link or its agents, servants, independent contractors, or employees in the exercise of the rights granted Fiber Link in this franchise; provided, however, that in the event any claim for such damages be presented or filed with the City, the City shall promptly notify Fiber Link thereof, and Fiber Link shall have the right, at its election and its sole cost and expense, to settle and compromise such claim. Provided further, that in the event any suit or action is filed against the City based upon any such claim or demand, City shall likewise promptly notify Fiber Link thereof and Fiber Link shall have the right, at its election and its sole cost and expense, to settle and compromise such suit or action or defend the same at its sole cost and expense by attorneys of its own election.

Section 11: Insurance. Fiber Link shall obtain and keep in force during the term of the franchise commercial general liability insurance policies with insurance companies which shall initially have an AM Best’s rating of “A6” or better, and who are approved by the Insurance Commissioner of the State of Washington pursuant to Title 48 RCW.

Prior to the execution of the franchise, Fiber Link shall purchase a commercial general liability insurance policy meeting the requirements set forth herein. Fiber Link shall file with the City a certificate of insurance evidencing all relevant portions of its insurance policies required by this franchise, and necessary endorsements to such insurance policies as are in force and effect. At the City’s request, Fiber Link shall provide to the City a certified copy of all relevant portions of its insurance policies and endorsements required by this franchise. Fiber Link’s failure to fully comply with the requirements regarding insurance shall be considered a material breach of the franchise and shall be a cause for termination of the franchise after thirty (30) days’ written notice and reasonable opportunity to cure has been provided.

Such insurance shall name the City as an additional insured and shall provide coverage to the City, its elected and appointed officials, employees, agents and professional consultants, including its engineers and attorney.

The insurance shall be maintained in full force and effect at Fiber Link’s sole expense throughout the term of the franchise. The City shall be given at least 45 days’ written notice of cancellation, non-renewal, material reduction, or a material modification of such insurance coverage. Such notice to the City shall be by certified mail. Said insurance policy shall not contain a deductible or self-insured retentions in excess of $25,000 unless approved by the City in writing.

Fiber Link shall maintain Workmen’s Compensation insurance as required by state or federal statute.

Section 12. Safety. Fiber Link shall be responsible for safety and safety conditions on its job sites and for its work within the franchise area, including the safety of all persons and property during the performance of any work therein. Services of the City’s staff or consultant personnel in conducting construction review of Fiber Link’s work related to the franchise is not intended to include a review of the adequacy of Fiber Link’s work methods, equipment, scaffolding, or trenching, or safety measures in or on or near such franchise area or job site. Fiber Link shall provide safe access for the City and its inspectors to adequately inspect the work and its conformance with the applicable statutes, ordinances, rules, regulations and the franchise.

Section 13. Types and Limits of Insurance Required.

(1) Commercial General Liability

$2,000,000 combined single-limit bodily injury and property damage

Employees as Additional Insured

Premises and operations

Broad form property damage including underground, explosion and collapse hazard (XCU)

Products completed operations

Blanket Contractual

Subcontractors

Personal Injury

Employers liability (Stop gap)

(2) Automobile Liability

$1,000,000 per accident bodily injury and property damage liability, covering any owned automobile, hired automobiles, non-owned automobile.

(3) Umbrella Liability

$2,000,000 per occurrence

$2,000,000 aggregate

Section 14. Term. The franchise shall remain in full force and effect for a period of twenty-five (25) years from and after the effective date of this ordinance, so long as Fiber Link is in compliance with the terms and conditions of this franchise. The City may review Fiber Link’s performance and operations under this franchise every five (5) years to insure Fiber Link’s compliance with the terms and conditions of said franchise. Such periodic review shall not preclude the City from reviewing Fiber Link’s performance and operations at any time should the City have reasonable grounds to believe Fiber Link is in material breach of the terms and conditions of the franchise. In the event the City finds that Fiber Link has failed to comply with the terms and conditions of the franchise, the City shall provide Fiber Link, and/or its successors or assigns, a written notice stating the nature of the breach and demanding cure within sixty (60) days of said notice. Fiber Link, its successors and/or assigns, may apply to the City for an extension of time within which to cure such breach, which extension shall not unreasonably be withheld. In the event there is compliance with the terms and conditions of the franchise ordinance, it is understood that there will be no additional administrative costs or fees charged to Fiber Link.

Section 15: Utility tax. This franchise is granted subject to imposition of the utility tax enacted by the City of Castle Rock as now or hereafter amended for delivery of services in and to the City of Castle Rock, its citizens and/or customers.

Section 16: Arbitration. In the case of any dispute or question arising between the parties that could result in the award of monetary damages to either party, the parties shall submit the dispute or question to arbitration; provided, that this arbitration provision shall not apply to any dispute or question involving decisions by the City concerning public policy. Unless otherwise provided by law, the parties may agree on one arbitrator. If the parties cannot agree on one arbitrator, there shall be three arbitrators, one appointed in writing by each party and the third chosen by the two named arbitrators. The decision of the arbitrator(s) under this paragraph shall be final and binding on the parties.

Section 17: Attorneys’ Fees. In the event either party commences litigation or arbitration proceedings against the other party relating to performance or alleged breach of the franchise, the prevailing party shall be entitled to all costs, including reasonable attorneys’ fees incurred, relating to such litigation, including those incurred in the event of any appeal.

Section 18: Forum. Any litigation filed by either party arising out of or relating to this franchise shall be filed in the court of general jurisdiction of Cowlitz County Superior Court.

Section 19: Franchise Expiration. In the event the use of any of Fiber Link’s property is permanently discontinued or no franchise has been obtained therefor within six (6) months of expiration of this franchise, or within six (6) months after any termination of this franchise, the City may request that Fiber Link promptly remove from the franchise area all or any portion of its facilities at Fiber Link’s sole cost and expense. If Fiber Link is unable to effect removal within that six-month period due to unavoidable delays or events beyond its control (including, without limitation, Acts of God, labor strikes, or the failure or delay of a governmental jurisdiction to issue permits necessary to effect such removal), the Fiber Link may apply to the City for an extension of time to effect such removal, and the City’s approval of any extension of time is not to be unreasonably withheld.

Section 20: Security Device to Insure Performance. At least ten (10) days prior to performing any work in any of the franchise area, Fiber Link shall file with the City Planning/Public Works Department a security device or escrow account reasonably acceptable to the City securing the performance of and compliance with all provisions of this franchise, and shall maintain such security device or escrow account in full force and effect until such time as the City approves the work as complete. In the event Fiber Link shall fail to substantially comply with any one or more of the material provisions of this franchise, then there shall be recovered jointly and severally from the principal and surety of each security device or escrow account any damages suffered by the City as a result thereof, including the full amount of any compensation, indemnification, or cost of removal or abandonment of Fiber Link’s facilities, up to the full amount of said bond, said condition to be a continuing obligation for the duration of this franchise and thereafter until Fiber Link has discharged all of its obligations within the City which may have arisen from the acceptance of such franchise by Fiber Link or from its exercise of any such privilege herein granted. The security device or escrow account filed in accordance with the requirement of this Section shall be in the amount of Fifteen Thousand Dollars ($15,000.00). In the event of substantial change in volume of street space occupied by Fiber Link’s facilities, the City may permit or may require a corresponding change in the amount of such security device or escrow account.

Section 21: Miscellaneous.

A. If any term, provision, condition or portion of this franchise shall be held to be invalid, such invalidity shall not affect the validity of the remaining portions of this franchise which shall continue in full force and effect.

B. The headings of sections and paragraphs of this franchise are for convenience of reference only and are not intended to restrict, affect or be of any weight in the interpretation of construction of the provisions of such sections or paragraphs.

C. Fiber Link agrees, as a condition of the granting of this franchise, that it shall comply with all applicable laws of the State of Washington, and shall pay, in a timely manner, all taxes, fees and costs legally imposed on Fiber Link in connection with the activities, properties and operations of the franchise.

D. This franchise contains the entire agreement between the parties and, in executing it, the City and Fiber Link do not rely upon any statement, promise, or representation, whether oral or written, not expressed herein.

Section 22: Effective Date. This ordinance shall take effect thirty (30) days after publication of the ordinance summary following adoption of the ordinance, as required by law, and after having been published in summary at least five (5) days prior to its adoption, and upon receipt by the City of an executed acceptance document from Fiber Link.

Section 23: Notice. Any notice or information required or permitted to be given to the parties under this franchise agreement may be sent to the following addresses unless otherwise specified.

Ordained this 28 day of September, 1998.