HomeMy WebLinkAbout10/20/1997 Work Session
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MINUTES OF THE JOINT MEETING OF THE
SPRINGFIELD CITY COUNCIL AND
SPRINGFIELD UTILITY BOARD HELD
MONDAY, OCTOBER 20, 1997
The city of Springfield council met in a joint session with the Springfield Utility Board (SUB) in
the Library Meeting Room, 225 Fifth Street, Springfield, Oregon, on Monday, October 20, 1997
at 6:05 p.m., with Mayor Morrisette presiding.
INTRODUCTIONS
Present were Mayor Morrisette, Councilors Ballew, Beyer, Burge, Dahlquist, Maine and Shaver.
SUB members present were Chair George Litzenberger, Vice chair Deborah Farrington, Thomas
Cochran and Theodore Johnson. Also present were SUB General Manager Steve Loveland, City
Manager Michael Kelly, Senior Management Analyst Rosie Pryor, City Recorder Julie Wilson
and members of the staff.
1. Welcome and Introductions.
Mayor Morrisette welcomed members. Each member provided a brief introduction. The
council expressed interest in meeting, from time to time, with its advisory boards and with
members of other Springfield public agencies. The last joint meeting with SUB occurred on
October 14, 1996.
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2. Telecommunications Act, Utility Deregulation.
Mr. Loveland introduced this item. Changes in the nature of the telecommunications industry
resulting from federal legislation require modifications to the city ordinances to provide for
regulation of this industry and protection of public infrastructure.
The Telecommunications Act of 1996 has made profound changes in the nature of
telecommunication industry which have significant impact on local jurisdictions. By
promoting competition and rapid development of new telecommunications technologies, the
Act creates a number of circumstances which could substantially increase the interest of
private companies using public rights of way and easements for their corporate purposes.
While the Act clearly preserves the rights of local governments to manage their rights of way,
and to receive reasonable compensation for their use by telecommunications provider, current
city ordinances are inadequate to protect the city's exercise of the powers and may create
circumstances where the city's activities would be inconsistent with the requirements of the
law, particularly as they create local barriers to entry which impede companies from entering
into the telecommunications business. The proposed ordinance seeks to harmonize city
ordinances with those laws while preserving the city's investment in its infrastructure. The
proposed ordinance is scheduled for a first reading and public hearing on November 3, 1997.
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Mr. Loveland discussed the current industry and the need to allow customers to make choices
in the area of gas, television, telephone and other utility services. He also discussed
deregulation of utility services, rate and service needs for the customer, current technology
and industry growth, fiberoptic services and standards related to rights of way and provider
competition for services.
Joint Meeting Minutes
October 20, 1997
Page 2
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Mr. Loveland said the Charter allowed SUB to offer these services. He discussed the need to
regulate and deal with franchise fees and rights of way issues. He explained there was a need
to have policy and standards clarified relative to the relationship between SUB and the city of
Springfield. The Principles of Cooperation agreement resulting from this has been approved
by SUB. He discussed other telecommunication providers that may provide service in the
city of Springfield.
Mr. Loveland discussed competition and said the intent of the law was that an equal
opportunity existed for all participants.
Mr. Loveland discussed principles and standards related to services being offered outside
local territories.
Councilor Maine asked for clarification regarding the fact that SUB has granted use of rights
of way. She said if other companies did not have barrier to rights of way, it may provide a
preference for SUB. City Manager Mike Kelly said SUB has agreed to pay all normal
telecommunication fees except in the area of licensing. Legal opinion was that this was not a
barrier to other companies. SUB could provide remote meter reading and other internal type
services. He again said advisors for both parties said there was still a.competitive playing, '
field for all competitive providers. He said the agreement did foster competition and
recognized the unique relationship between SUB and the city.
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In response to questions from Councilor Ballew regarding deregulation, Mr. Loveland
discussed the concept of stranded investments as a result of a reduced customer base.
City Manager Mike Kelly provided background regarding the need for the
telecommunications and Principles of Cooperation Agreement. He discussed the
Telecommunications Act.
Councilor Burge asked if the city was the beneficiary of many deeded easements. Mr.
Loveland said the vast majority were, in most cases, but not all. Councilor Burge asked, if the
city is the beneficiary of the easements, then SUB would historically have been using those..
public easements for their own transmissions. He asked if this was by agreement between the
two municipalities or the Charter. Mr. Kelly said this was stated in the Charter. Mr.
Loveland said this was well defined in the Charter and further discussed the enumerated
powers. He discussed the granted authority of power, and discussed the process for declaring
public rights of way. Councilor Burge discussed the difference between deeded title and
easements. Mr. Kelly discussed dedicated public utility purpose rights of way and equal
rights allowed for public municipalities. Mr. Kelly also discussed fee structures and charges
for rights of way and franchising fees.
Councilor Beyer asked if this gave SUB any powers they did not have. Mr. Kelly said it
would give them new things to do on franchises, on a day-to-day basis. It provided
clarification on issues that may not have been previously defined.
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Joint Meeting Minutes
October 20, 1997
Page 3
Mr. Kelly said SUB would pay the same as any other provider, with the minor reduction in
the licensing fee. Mr. Kelly said it was the intent that there would be no loss of revenue as a
result of the Principles of Cooperation Agreement.
Councilor Ballew asked for clarification between SUB being a provider of a services versus
authority to regulate. Mr. Loveland discussed Charter authority related to this. He also
discussed anti trust issues. If SUB started to offer a service, such as gas services, SUB would
need to decide if they wanted to get out of the regulatory business and become a provider.
Mr. Kelly discussed maintenance of utility rights of way. He said the city was responsible for
rights of way. He provided additional detail related to maintenance and policy issues. He
said the council had general powers for regulation but could not practice utility operation. He
said the general coordination of work would be set by the council.
Councilor Burge discussed public utility easements. He commented that most had a fence
across them along with landscaping. He said if new lines were placed along easements,
replacement may not be required. He discussed the impact this would have on property
owners. He said deregulation was raising many concerns and expressed concern regarding
standards related to this. He did not have a doubt that revenue would be lost but asked if there
was an opportunity to enhance revenue for the citizens. If there were revenue options, they
should be considered.
Councilor Shaver asked about operating control. Mr. Loveland discussed ORS regulations
related to SUB franchising authority. He said SUB now had an interest in natural gas
servIces.
Councilor Shaver raised the issue regarding the new federal legislation and language in
paragraph eight regarding exclusive rights for natural gas. By consensus, language needed to
be clarified in this paragraph.
3. Principles of Cooperation.
Mr. Kelly and Mr. Loveland provided information regarding this issue during the previous
discussion. The Springfield City Council is considering adoption of a telecommunications
ordinance imposing licensing, construction standards and other requirements on
telecommunications services providers. This item is scheduled for a work session on October
27, 1997 and a public hearing and first reading on November 3, 1997. This item is being
provided in advance to allow additional time to review the item.
In developing this telecommunications ordinance, it became clear the city's utility
relationship with SUB needed to be referenced in a companion agreement. This is because
the city and SUB enjoy a unique working relationship which has developed over time based in
some part only on informal understandings. These understandings and past practices needed
to be updated and blended with State and Federal law in order for SUB to feel secure in their
emerging roles oftelecommunications provider and natural gas provider. A Principles of
Cooperation Agreement was therefore developed which details our respective utility roles.
This agreement sets our respective policy level duties and responsibilities whereas the
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Joint Meeting Minutes
October 20, 1997
Page 4
telecommunications ordinance deals more with the details and is applicable to all providers
including SUB.
SUB approved the Principles of Cooperation Agreement on May 14, 1997. SUB shall
continue to pay to the city in-lieu-of tax payments as provided in the Agreement of January 1,
1995 between the parties.
SUB shall have the right to develop and operate commercial telecommunication services and
the city has the right to charge reasonable fees for all providers including SUB. SUB has the
right to control, regulate or operate Natural Gas facilities and servic~s and city shall continue
to establish and charge franchise fees to all Natural Gas providers including SUB. It is the
intent that the city shall suffer no loss of revenue as a result of this agreement.
Because of timing constraints, items four through six were not discussed.
4. Water Quality Issues (Watershed Management).
5. City Charter Update.
6. Other Business.
ADJOURNMENT
The meeting was adjourned at 6:55 p.m.
Minutes Recorder - Julie Wilson
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President Greg Shaver
Attest: (
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City Recorder