Report to: General Committee Date Report Authored: April/2010
SUBJECT: Authorization
to Execute Municipal Access Agreements
PREPARED BY: Alan
Laver- Manager, Utilities and Contracts x 3400
RECOMMENDATION:
1)
That the Mayor and Clerk be authorized and directed to
execute Municipal Access Agreements and any renewals of Municipal Access
Agreements with utility companies in a form satisfactory to the Commissioner of
Community and Fire Services and the Town Solicitor
2)
And that the proposed fees within the Municipal Access
Agreements (Attachment A) be approved;
3)
And that Council approve the increase of fees annually
based on the change in the Consumer Price Index (CPI) (Toronto All-Items
September to September) with such increases effective January 1 and rounded to
the nearest dollar;
4)
And that Staff be authorized and directed to do all
things necessary to give effect to this resolution.
EXECUTIVE SUMMARY:
N/A
The purpose
of the report is to obtain Council’s authorization to execute new Municipal
Access Agreements with telecommunications companies who may apply for access to
the Town’s right of ways and also to renew existing agreements as they come due.
In late 2003
Council authorized the Commissioner of Fire and Community Services, CAO and the
Town solicitor to negotiate Municipal Access Agreements with utility companies
for an initial term of 5 years and directed the Mayor and Clerk to execute such
agreements.
The Town
along with members of York Durham Utility Coordinating Group (YDUCG) negotiated
with telecommunication industry representatives to prepare a standard agreement
template and a fee structure to be used by members of the group. Markham has used this as
our base document for the original agreement term of 5 years.
The standard
agreement outlines terms and conditions for telecommunication providers to work
within the Town’s road system. The terms of the agreement cover the following
main issues; rights and processes required to work with Town roads, permitting
requirements, plant location procedures, relocation requirements and cost
sharing, indemnification, liability, payments of fees, and securities.
This
agreement does not give authorization for utilities to work on other Town owned
lands, outside the road allowances, such as parks, valley lands, or facilities.
Subsequently
the Town executed agreements with Rogers, Bell Canada, Telus, Allstream, Atria,
and Cogeco.
The terms of
the executed agreements have functioned well for the last 5 year period for
both the Town and the utilities. Subject to some minor updates that may be
required with regards to items like insurance requirements the existing
standard agreement is proposed to be used for new agreements and renewals. The Legal Department has also advised that
the renewals could be implemented by amendments to existing agreements. The
format is to be finalized.
The original
agreement includes a condition that allows the Town to negotiate the fee
structure. The fee structure is governed
by conditions outlined in the Telecommunications Act which allow municipalities
to recover causal costs for processing approvals and inspection of works
constructed within the rights of ways.
The original
fee structure was negotiated with the YDUCG, the Town, and the major
telecommunication providers as a fair recovery practice for the Town’s causal
costs.
Staff has
reviewed the fee structure for inflationary values over the time frame of the
original agreements and has proposed to use the Consumer Price Increase (CPI) published
by Statistics Canada for Toronto for an increase.
This was also
recommended for the term of new agreements and provisions will be added to the
agreements to facilitate this increase based on a yearly adjustment rather than
at the end of the term.
The Region of
York and other regional municipalities are now using, or proposing to use, similar
agreements and fee structures (see Attachment ‘B’). The Region has also implemented a similar fee
increase based on CPI as a term of their agreements.
The increase
over the original 5 year term is approximately 8.5 % which will result in the
go forward fee structure as attached (see Attachment ‘A’) which is proposed to
be adjusted annually.
The proposed
revisions will provide the Town with an estimated total fee increase of $9000 annually
over the original fee structure. Once the agreements are executed the fee
increase will be reflected in future budgets.
Preliminary
discussions with some of the utilities have suggested this is a fair option to
increase the fee structure. Additional discussion will take place during the
execution of extensions.
Under the Telecommunications
Act the utilities have the right to challenge the Town should they feel the
Town is accessing fees beyond their Causal Costs. As the original fee structure was negotiated
as part of the previously executed agreement, staff does not expect a challenge
would be forthcoming.
Future
renewals at the expiry of the next five year term should be delegated to the Commissioner
of Community and Fire Services, subject to the approval of the Town Solicitor
as to form, as a routine administrative renewal.
Recently the
Federation of Canadian Municipalities (FCM) has provided Municipalities with “Right
of Way Outreach” materials that outline proposed practices and rights that
Municipalities have with regards to negotiating agreements for Telecom
providers to do work in Municipal Rights of Ways. Their “Hand Book for
Municipal Officials” goes into details of areas that should be addressed under the
terms of Municipal Access Agreements (MAA) or other such agreements. The Legal
Department, along with the Asset Management Department, reviewed the
documentation and determined that these requirements have already been included
in the Town’s standard MAA document.
With specific
regard to cost recoveries, the Handbook talks about four specific areas that
Municipalities are able to negotiate with the Telecom providers;
l. Plan Review and Inspection Costs – this is covered
under our existing and proposed fee schedules. The Handbook also recommends it
to be appropriate to use CPI indexing for fees for longer term contracts as
proposed in this report.
2. Pavement Degradation Costs- this is also covered under
the existing and proposed fee schedules and is indexed. The Town also controls
road cuts to the point very few are allowed for utility purposes.
3. Lost Productivity Costs- this relates to recovering additional
construction costs related to finding unidentified telecom infrastructure
during municipal construction projects. These costs have been negotiated within
the terms of the existing agreements and are inline with the Handbook
recommendations.
4. Relocation Costs- this relates to cost sharing for
relocating existing telecom infrastructure, installed in Town approved
locations, that is required due to the design/construction of new Town infrastructure
such as road widening and sewer/watermain projects. Similar to above these
costs have been negotiated in the standard agreements and are in line with the
Handbook discussions.
The revised
fee structure should provide additional yearly revenue of approximately $9000
from utility permitting.
Below is the calculation of the new fees based on the Toronto all-items CPI
increase for the 5-year period from January 2005 to January 2010 of
approximately 8.5%.
Not
Applicable
Not
Applicable
Finance Department- to review and
recommend fee structure increases and also future budgeting.
Legal
Department- review and update existing agreement template. Facilitation of new and renewed
agreements. Review and provide input with regards to FCM information as it may
relate to agreements.
RECOMMENDED
BY: ________________________ ________________________
Steve Andrews, P Eng. Brenda Libercz, Director,
Asset Management Commissioner,
Community &
Fire Services
Attachment ‘A’-
Proposed Fee Structure
Attachment
‘B’- York Region Municipality
Comparison
Attachment
‘C’- York Durham Utility
Coordinating Group- Standard Fee Structure
O:\Commission Share\Operations and Asset
Management\Reports\2010\Asset Mgmt\Report MAA.doc