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HomeMy WebLinkAboutQWest IGA CITY OF SHLAND Council Communication TITLE: Council authorization to enter into an intergovernmental agreement to participate in a joint municipality audit of revenues received from the incumbent local exchange carrier (Qwest) as compensation for the rights and privileges to operate in the public right-of way. DEPT: Finance Department DATE: December 17, 2002 SUBMITTED BY: Lee Tuneberg, Finance Director /~. ~ APPROVED BY: Brian Almquist, Interim City Administratp(/! "~ Synopsis: This Council action authorizes the Finance Director to sign the proposed intergovernmental agreement to participate in the audit of Qwest and any other applicable local exchange carrier to verify payments made and amounts due the city in the way of franchise fees. Recommendation: Staff recommends the Council authorize the Finance Director to sign the agreement and to participate in the process to audit franchise payments made by the incumbent (and any) local exchange carrier. Fiscal Impact: The estimated cost for the audit is $12,000. This amount is unbudgeted but will be paid from the Finance Department budget. If necessary, it will be included within a transfer of appropriation later in the year. Background: Qwest is the incumbent local exchange carder for the Ashland area. Qwest pays the city franchise fees for the rights and privileges to operate in the public right-of-way. Qwest paid over $120,000 to the city in 2001-2002. At times payments have fluctuated without explanation and the city does not have the staff or expertise to audit Qwest. Over 70 agencies have expressed an interest in sharing the cost of a consultant to review and analyze (audit) Qwest and Verizon to assure the appropriateness of the payments to the local jurisdictions. Previously 24 Oregon agencies joined together to audit Portland General Electric in a similar manner and found it financially beneficial to do so. This agreement and process are structured similar to that process except for targeting two agencies. Each participant receives franchise payments from one or both companies. The cost sharing is based upon revenue and population and deemed equitable. The intent of the audit is to assure appropriateness of payments received, perhaps gaining payments not made and avoiding a situation where incorrect payments to the city become a significant liability. INTERGOVERNMENTAL AGREEMENT This Intergovernmental Agreement ("Agreement") is entered into no later than December 20, 2002 ("Effective Date") between all of the municipalities listed in Exhibit A. Each of the municipalities listed in Exhibit A may be referred to individually herein as a "Party" and collectively as the "Parties". Recitals A. The incumbent local exchange company(s) ("Franchisee"), which is the subject of this "Telecommunications Financial Review Services" for the City of Ashland is Qwest B. The Parties desire to hire a consultant ("Consultant") to review and analyze revenues received from incumbent local exchange carriers as compensation for the dghts and privileges to operate in the public right-of-way. The specific incumbent local exchange carriers, and the mechanisms under which these payments are made, may vary as between the Parties, however, the revenue base is uniform throughout and consistent with state statute. C. There are savings available to the Parties by aggregating the review and analysis, retaining a Consultant to assist them in such review and jointly providing funds to pay such Consultant. D. This Agreement is made under the provisions of Oregon Revised Statutes (ORS) 190.003 to 190.030. ORS 190.010 authorizes municipalities to enter into intergovernmental agreements for the performance of any or all functions and activities that a Party to this agreement has the authority to perform. Agreement The Parties agree to the following: 1. The Parties desire to retain a Consultant to work with the Parties in reviewing and analyzing franchise fees paid by Franchisee to the Parties, including but not limited to an evaluation of gross revenue calculations, and developing procedures to be used by member Parties in comparing customer database lists received from Franchisee with intemal databases ("Consultant Services"). In performing the services, the Consultant shall analyze franchise, utility license, permit or other fees paid to the Parties by Franchisee, pursuant to the 'Parties' respective ' telecommunications franchises, permits or licenses, for up to ten (10) calendar years. In addition, the Consultant shall obtain Franchisee customer lists to assist the Parties in the database comparison portion of the Consultant Services. Page I of 4 C:~DOCUME~I~cfmbh\LOCALS-I\Temp~OMARC IGA Final.doc 11/21/02 2:43 PM 10. The Parties acknowledge and agree that in the event a Party withdraws from this Agreement, Exhibit A, shall automatically be updated and revised to reapportion the Vadable Cost among the remaining Parties. 11. Any Party may terminate their participation in this Agreement so long as the terminating Party meet all of the following requirements (a) the terminating Party must provide seven (7) days prior written notice to both the Managing Agency and the Joint Lead Agencies; (b) such notice must actually be received by both the Managing Agency and the Joint Lead Agencies prior to the inception of any Vadable Costs; and (c) the terminating Party must submit full payment to the Managing Agency of any Fixed Costs owed to date by the terminating Party. 12. This Agreement shall terminate upon the eadier of five (5) years from the Effective Date or until completion of the Franchisee Telecommunications Financial Review. This Agreement may be terminated eadier upon mutual written consent of the majodty of the Parties. 15. The parties shall comply with all'applicable laws and regulations regarding the handling and expenditure of public funds. This Agreement shall be construed and enforced in accordance with the laws of the State of Oregon, even if Oregon's choice of law rules otherwise would require application of the law of a different jurisdiction. 16. Time is of the essence in the performance of this Agreement. 17. This Agreement is for the benefit of the Parties only. Each Party agrees to indemnify and hold harmless each other Party and its officers, officials, employees, agents and volunteers, from and against all claims, demands and causes of actions and suits of any kind or nature for personal injury, death or damage to property on account of or dsing out of services performed, the omission of services or in any way resulting from the negligent or wrongful acts or omissionS of the indemnifying Party and its officers, officials, employees, agents and volunteers. In addition, each Party shall be solely responsible for any contract claims, delay damages or similar items adsing from or caused by the action or inaction of that Party under this Agreement. 18. No waiver, consent, modification or change of terms of this Agreement shall be binding unless in wdting and signed by authorized representatives for each of the Parties. 19.Any Party may institute legal action to enforce any covenant or agreement herein, or to enjoin any threatened or attempted violation of this Agreement. All legal actions shall be initiated in Washington County Circuit Court. The Parties, by signature below of their authorized representatives, consent to the in personam jurisdiction of that court. Page 3 of 4 C:\DOCUME~I~cfmbh\LOCALS~I\Temp~OMARC IGA Final.doc 11/21/02 2:43 PM