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CR 99-89 Telecommunications Encroachment Agreement Supervalu, Inc CITY Of: ~ May 12, 1999 NaPKINS Council Report 99-089 . TELECOMMUNICATIONS ENCROACHMENT AGREEMENT SUPERVALU, INC. Proposed Action Staff recommends adoption of the following motion: Move that Council authorize the mayor and city manager, on behalf of the City, to enter into an encroachment agreement with Supervalu, Inc. This agreement sets in motion a permit process for the installation and maintenance of fiber optic telecommunications in public right-of-way by Supervalu. Overview Staff approached Council with the issue of private telecommunications installations in public right-of-way in the fall of 1997. At that time OCI (Ovation) Communications was petitioning the City for a permit that encompassed extensive use of the City's right-of-way. At the time cities were faced with managing their rights-of-way without the benefit of state-wide uniform construction standards and minimally defined scope of authority. The Minnesota Public Utilities . Commission was to have completed rule making in this matter by March 1998. Staff and the City's attorney decided that the encroachment agreement concept was a means to bridge a time gap and a permit was granted to OCI under that basis. Only recently has the PUC made its final rule making in the matter, and because the City has not yet adopted new ordinances consistent therewith, the encroachment agreement concept is still the favored means in granting permits. Supervalu has approached the City for a private fiber optic system installation in Hopkins right- of-way and has already signed an agreement similar to the one with OCI Communications. Primary Issues to Consider . Supervalu proposal . Terms of the agreement . Recommendation Supporting Infor.mation . Encroachment agreement . Ja~s~ ..~ Engineering Superintendent - .----. ----.-. Council Report 99-089 May 12, 1999 Page 2 . Analysis . Supervalu proposal Supervalu, Inc. proposes to install a new fiber optic telecommunications system in Hopkins from its current facility on 11th A venue South to its new warehouse on the former Hennepin County Public Works site and on eastward to its Washington Avenue/Milwaukee Street site. The new installation roughly follows the route of an older and similar Supervalu installation in 1989. The installation parallels the Soo Line Railroad from Supervalu's 11th Avenue facility, runs eastward to a crossing under Railroad Boulevard, and runs parallel to 3rd Street South and under the T.H. 169 bridge to Supervalu's plant on Washington Avenue. Directional boring is the preferred method of installation. Open trenching will be employed in segments of 3rd Street South where road widening takes place as part of the new warehouse development. . Terms of the agreement In this agreement Supervalu recognizes that it is subject to final regulations nearing adoption, that it will be subject to a completely revised City right-of-way ordinance in the near future. Supervalu recognizes that it may face upward adjusted permit fees and construction standards once the new ordinance is in place. . The agreement grants Supervalu an eight-year term to operate the earlier 1989 installation and the new line in Hopkins. A permit to work in the public corridor will be granted with the owners subject to current City restoration and traffic management requirements. Supervalu is required to post a $50,000.00 bond and maintenance insurance coverage in compliance with statutory requirements. . Recommendation Supervalu has signed the agreement and complied with all necessary submittals for a work permit. Staff recommends approval of the encroachment agreement . ENCROACHMENT AGREEMENT . This Encroachment Agreement (this "Agreement") is made as of the ~ day of (Y\ C\ \I , 1999, by and between the City of Hopkins, a municipal corporation under the [ws of Minnesota ("City") and SUPERV ALIJ, INC. a DeLaware corporation ("Supervalu"), and having its principal office at 11840 Valley View Road, Eden Prairie, Minnesota 55344-3691. RECITALS A. Supervalu represents that it is a corporation duly organized, and existing under the laws of the State of Delaware. B. Supervalu has installed or intends to install within Public Right-of-Way (as hereinafter defined) certain Facilities (as hereinafter defined) and has agreed to enter into this . Agreement with the City and comply with the provisions contained herein and with the provisions of Minn. Stat. Sections 237.162, 237.163 and the Rules of the Minnesota Public Utilities Commission adopted in conformity therewith. C. The City has authority to grant the right to maintain encroachments within its rights-of-way only as expressly specified in applicable law, however, the City makes no representation, guaranty or warranty with respect to its title or interest in said rights-of-way. The City and Supervalu are entering into this Agreement for the purpose of stating the rights and obligations of Supervalu regarding the installation and maintenance of the Facilities within Public Right-of-Way. . c: \fi le\hopcivi l\encroach ,sup . NOW, THEREFORE, in consideration of the foregoing Recitals A-C, other valuable consideration and the mutual undertakings and agreements contained herein, the City and Supervalu agree as follows: 1. Incorporation of Recitals. Recital Paragraphs A-C, above, are incorporated in and made a part of this Agreement in their entirety. 2. Definitions. When used in this Agreement, unless the context clearly indicates a contrary intent, the following words and phrases shall have the meanings stated below: I'City" means the City of Hopkins, Milmesota. "Supervalu" shall mean and refer to SUPERV ALU, INe., a Delaware corporation. "Fiber Optic Network Facilities" or "facilities" means telecommunications lines or cables, fiber optic cables, conduits, converters, splice boxes, cabinets, handholds, manholes, vaults, . equipment, drains, surface location markers, appurtenances and related facilities located or installed by Supervalu or to be located or installed by Supervalu in Public Right-of- Way and used or useful for the transmission of telecommunications or other voice or data information. "Law" means any local, state or federal act, statute, ordinance, mle, regulation, code, license, certificate, franchise, permit, writ, ruling, award, executive order, directive, requirement, injunction, judgment, decree or other order issued, executed, entered or deemed applicable by any governmental authority. "License" means the License granted to Supervalu under Paragraph 3 of this Agreement. "Management Costs" shall have the meaning stated in Minn. Stat. 237.162, Subd. 9. "Public Right-of-Way" shall have the meaning stated in Minn. Stat. 237.162, Subd. 3, but . shall be limited to public rights-of-way within the City. c: \fi Ie\hopcivil\cncroach ,sup 2 "Telecommunications Services" means the transmission of telecommunications or other . voice or data information by means of Facilities. CONSTRUCTION, MAINTENANCE AND OPERATION OF THE SYSTEM 3. License. Subject to the provisions of this Agreement, and all applicable Law, the City hereby grants a nonexclusive license (the 'tLicense") to Supervalu to construct, maintain and operate Facilities for the purpose of providing Telecommunications Services, in, under, over and across the following Public Right-of-Way, and no other Public Right-of-Way: a. The Public Right-of-Way in which Supervalu previously installed Facilities pursuant to a permit issued by the City, dated October 16, 1989. b. The Public Right-of-Way in which Supervalu is to install new Facilities pursuant to the License granted by this Agreement as shown on the final permit drawings for . such new Facilities approved by the City at the time of permit issuance. This Agreement, the License and Supervalu's rights hereWlder shall not be sold, transferred, leased, assigned or disposed of, in whole or in part, including but not limited to, by force or voluntary sale, merger, voluntary or involuntary bankruptcy, consolidation, receivership or other means without the prior written consent of the City, which consent shall not be unreasonably withheld but may be conditioned upon the Assignee consenting, in writing, to be bound by the terms and conditions of this Agreement. Notwithstanding the foregoing, Supervalu shall be entitled to assign the License to a third party in connection with the purchase and acquisition of SuperValu's warehouse properties located within the City, by such third party which are serviced by the Facilities, or to a mortgagee of said properties as collateral for the debt secured by such mortgage, but subject to the following conditions: (i) Supervalu shall notify the City of such permitted assignment no less . c: \fi Ic\hopciv j lIen croach, sup 3 . than 20 days prior to the effective date of the assignment; (ii) such assignment shall not release Supervalu from any of its obligations hereunder; and (iii) the assignee shall execute and deliver to the City a written assumption of all of Supervalu's obligations and responsibilities under this Agreement. 4. Term. The term of this Agreement and the License shall be eight (8) years commencing on the date stated in the first paragraph of this Agreement and ending on the eighth anniversary date of said commencement date. The parties agree that this Agreement and the License shall automatically renew for additional consecutive five (5) year periods, unless either party gives a minimum of ninety (90) days advance written notice to the other of intent to terminate prior to the end of the initial eight (8) year term of this Agreement or any renewal teon. 5. No Interference. Except as permitted by applicable Law and this Agreement, in the . performance and exercise of its rights and obligations under this Agreement, Supervalu shall not damage or interfere in any manner with the existence, condition or operation of any Public Right-of-Way or any public or private roads, streets, curbs, sidewalks, sanitary sewers, water mains, storm drains, gas mains, poles, overhead and underground electric and telephone wires, facilities, electrollers, cable television wires and other telecommunications, uti,lity, municipal or other public or private property without the prior written approval of the City and the owner(s) of the affected property or facilities. 6. No Property Interest. This Agreement is not intended to grant to Supervalu any property interest in any Public Right-of-Way and is made subject and subordinate to the prior. superior and continuing right of the City to use any Public Right-of-Way as a street and for any other . public use and for the purpose of laying, installing, maintaining, repairing, protecting, replacing and c: \ Ii I e\hopcivil\cncroach,su p 4 . removing sanitary sewers, water mains, storm drains, gas mains, poles and utility improvements, and for other municipal uses and with right of ingress and egress, along, over, across, under and in said Public Right-of-Way. 7. Application for Permits. Supervalu shall apply for a permit for all work performed and all Facilities installed within any Public Right-of-Way. Supervalu shall first furnish detailed plans of the work prepared by a registered professional engineer, and other such information as required by the City and by Law, and shall pay all Management Costs incurred by the City including, but not limited to, processing, field marking, engineering, inspection, security and any other fees in accordance with the rates in effect at the time of payment subject to Section 18 of this Agreement. Supervalu agrees to place its Facilities underground in all locations where the City requires other telecommunications providers to do the same. In those areas of the City where Supervalu's Facilities . are located on above-ground transmission or distribution facilities of a public utility or telecommunications provider, Supervalu agrees to relocate or install its Facilities underground at its own cost and within 120 days of the City's request when: a. The utility, on whose poles Supervalu has attached its Facilities, is required to relocate its facilities underground; or b. The City requires all telecommunications providers 'to relocate their above-ground facilities underground within the Right-of-Way, subject to the permit. Said improvements shall be constructed and installed in accordance with the Law and this Agreement. 8. Issuance of Permits. Upon execution of this Agreement and performance of the obligations contained in this Agreement by Supervalu and compliance by Supervalu with all . permitting requirements, the City will issue all permits necessary to the installation of Supervalu's c: \fi 1 e\hopcivi IIcncroach ,sup 5 . telecommWlications system, in accordance with the City's permitting procedures as may from time- to-time be amended in accordance with applicable law. 9. Manner of Construction. The construction, installation, operation, maintenance and removal of all Facilities shall be accomplished without cost or expense to the City and in such manner so as not to endanger persons or property, or unreasonably obstruct travel on any street, road, walk or other access thereon within any Public Right-of-Way. Supervalu shall proceed with all due diligence to complete construction of its Facilities as promptly as possible, without undue interruption or delay. Supervalu shall not excavate or disturb public streets, roads or sidewalks that have been constructed by the City within five (5) years prior to installation of the Facilities but shall, instead, use installation and construction techniques, such as directional boring, that require the least possible excavation or disturbance of public streets, roads . or sidewalks. In the event excavation or disturbance of public streets, roads or sidewalks is unavoidable, Supervalu shall notify the City Engineer or City Engineering Supervisor and shall not proceed with such excavation or disturbance until written approval therefore has been obtained from the City Engineer or City Engineering Supervisor, which approval may be conditioned upon employing construction techniques that will minimize excavation or disturbance of public streets, roads or sidewalks. Supervalu shall also use reasonable efforts to coordinate its construction schedule with the City's schedule of public improvements to minimize disruption and damage to City streets and other public improvements. The City shall keep Supervalu reasonably apprised of its schedule of public improvements at all times during the construction of the Facilities. . c: \Ii I c\hope ivi ]\encmach,sup 6 . Prior to performing any construction, installation, maintenance, repair or relocation work, Supervalu shall contact all utility companies to obtain the location of utility lines and improvements that may be affected by work performed by Supervalu. 10. Maps. Within sixty (60) days of completion of construction, Supervalu shall provide the City with accurate as-built maps or drawings certifying the location of all Facilities within Public Right-of- Way in a paper format and in a format compatible and consistent with the City's electronic mapping system and/or including all data reasonably necessary to allow the City to develop a Right-of- Way mapping system. All such maps or drawings shall be certified to the City by a registered professional engineer. Within sixty (60) days of the date of this Agreement, Supervalu shall also provide the City with accurate as~built maps or drawings conforming to the requirements of this Section 10 certifying the location of al1 Facilities previously installed by Supervalu pursuant . to the permit issued therefor by the City, dated October 16, 1989. 11. Condition of Facilities. Supervalu agrees to keep and maintain said Fiber Optic Network Facilities in good and safe condition and free from any nuisance. 12. Bond. Prior to issuance of any permit by the City for installation of any Facilties, Supervalu shall deliver to the City and maintain a performance b~nd, in favor of the City, in the amount of $50,000.00 or such other amount as shall be subsequently required by any ordinance or regulation adopted by the City, which shall remain in force until sixty (60) days after substantial completion of construction of any Facilities by Supervalu, to assure the restoration of Public Right- of-Way and any other property affected by construction of the Facilities. The bond shall be issued in a form and by a bonding company approved by the City, which approval shall not be unnecessary . withheld. c: \Ii! e\hopc iv i1\encroach,sup 7 . 13. Required Authorizations. Prior to issuance of any permit, Supervalu shall provide the City with sufficient information to establish that it has obtained all required government approvals and permits to construct and operate the Facilities. At all times during the term of this Agreement, Supervalu or an agent or consultant employed by Supervalu shall maintain membership in Gopher State One Call and shall furnish the City annually, and more frequently upon request, proof that it is maintaining such membership. 14. Relocation for City Purposes. Supervalu shall relocate, in cooperation with, and at no charge to the City, any Facility installed, used or maintained under this Agreement if and when made necessary by any change of grade, alignment or width of any street or road within any Public Right-of- Way or the construction, maintenance or operation of any underground subway or viaduct by the City and/or the construction, maintenance, repair, replacement or operation of any other City . or public utility underground or above-ground facilities or utility improvements. In such event, Supervalu agrees to relocate or install its Facilities underground at its own costs and within sixty (60) days of the City's request, if such request is made between April! and October 1, and within 120 days of the City's request, if such request is made between October 1 and April ]. 15. Removal and Abandonment. If any portiones) of the Facilities covered under this Agreement are no longer used by Supervalu, or are abandoned for a period in excess of twelve (12) months, Supervalu shall notify the City and the City shall determine, and shall notify Supervalu, that Supervalu shall either promptly vacate and remove the Facilities at Supervalu's expense or abandon some or all of the Facilities in place to the extent permitted by Law, whereupon Supervalu shall . promptly vacate or remove such Facilities. c :\file\hopci v i I\encroach ,sup 8 .___n ._.___ 16. Restoration of Public Right-of-Way. Whenever construction, installation, . maintenance, repair, removal or relocation of Facilities occurs within any Public Right-of- Way, Supervalu shall, after completion of the construction, installation, maintenance, removal or relocation of the Facilities, at its own cost, repair, restore and return the Public Right-of-Way on which the Facilities are or were located and any highway, road, sidewalk, utility or other improvements to the same or better condition existing before such construction, installation, maintenance, repair, removal or relocation. All such repair and restoration shall be done in accordance with Law, now or hereafter in effect, and such work shall be completed as promptly as the weather permits. Any repair or restoration work performed by Supervalu between November 15 and April 30 will incorporate such measures as are required, due to weather conditions or unavailability of paving materials, to assure proper permanent restoration, including temporary repair . or restoration measures which Supervalu shall replace by means of permanent restoration methods at such time as weather conditions and availability of materials permit. If Supervalu does not properly perform and complete the work, remove all dirt, rubbish, equipment and material, and restore the Public Right-of-Way to the samc or better condition, the City may restore the Public Right-of-Way and any highway, road, sidewalk, utility or other improvements to the same condition at the expense of Supervalu. Supervalu shall, upon demand, pay to the City the direct and indirect cost of the work done for or performed by the City, including but not limited to, the City's administrative costs. 17. Damage Supervalu shall be responsible for damage to city street pavements, existing utilities, curbs, gutters and sidewalks due to Supervalu's installation, maintenance, repair or removal . of its Facilities in Public Right-of-Way, and shall repair, replace and restore the damaged Public c: \file\hopciv i I\encroach ,sup 9 . Right-of-Way and such improvements at its sole expense and subject to approval by the City, which approval shall not be unreasonably withheld or delayed. 18. Other City Requirements. Supervalu shall pay all permit and user fees or any other fees to the City in accordance with applicable law. Supervalu expressly acknowledges and agrees that the City shall have the right to impose upon Supervalu additional fees and/or damages for Supervalu's occupation of the Public Right-of-Way to the extent not inconsistent with applicable law. It is intended that, subsequent to the execution of this Agreement, the City will adopt an ordinance imposing comprehensive requirements on telecommunication Right-of- Way users such as Supervalu pursuant to Minn. Stat. Chapter 237. Supervalu further acknowledges and agrees to be bound by any subsequent ordinance or regulation adopted by the City with respect to the City's lawful control over its Public Right-of-Way and hereby agrees and acknowledges that such . ordinance or regulation, induding any permit and fee requirements, will be retroactively applied to Supervalu if the same are retroactively applied to other parties maintaining Facilities in Public Right- of- Way. Any permit or user fees paid by Supervalu prior to the adoption of a subsequent ordinance shall be credited against those fees required by a subsequent ordinance. If there are any inconsistencies between the terms of this Agreement and those of any subsequent ordinance or regulation, the terms of any subsequent ordinance or regulation shall take precedence. Supervalu agrees to reimburse the City for the City's reasonable out-of-pocket consultant fees and expenses incurred to process Supervalu's request for the License and installation of the Facilities in Public Right-of-Way. The City shall provide Supervalu with copies of all invoices relating to said costs and expenses and Supervalu shall only provide reimbursement for costs and expenses actually . c: \fi le\hopciv i lIencroach, sup 10 . incurred by the City. Any amount paid by Supervalu to reimburse the City hereunder shall not be credited against other amounts payable to the City by Supervalu hereunder. 19. Nondiscriminatory Fees. With respect to the City's imposition of any fees or charges not specifically required in this Agreement, Supervalu shall only be required to pay any fee or charge to the extent permitted by law and which is imposed in a competitively neutral and nondiscriminatory manner with respect to other similarly situated telecommunications providers. GENERAL TERMS 20. Indemnification. Supervalu, jointly and severally, for itself, its successors, agents, contractors and employees, agrees to indemnify, defend (with counsel acceptable to City) and hold harmless City, its officials, representatives, employees and agents from and against any and all claims, demands, losses, damages, liabilities, fines and penalties and all costs and expenses incurred . in connection therewith, including, without limitation, reasonable attorneys' fees and costs of defense arising directly or indirectly, in whole or in part out of the construction, installation, maintenance, repair, removal or relocation of Facilities within any Public Right-of-Way or any breach by Supervalu of its obligations described in this Agreement, except to the extent arising solely from the City's willful action or negligent acts or omissions. 21. Insurance. Supervalu and/or any of its subcontractors or agents under the Agreement shall maintain throughout the term of this Agreement, Workers' Compensation Insurance complying with all statutory requirements and comprehensive general liability insurance, which latter insurance shall provide the following coverages and minimum limits: a. General Liability - public liability, including premises, products and complete operations. . c:lfi 1 elhopciv i I\encroach, sup 11 ---- -- -- . (i) Bodily injury liability: $1,000,000.00 each person $3,000,000.00 each occurrence (ii) Property damage liability $3,000,000.00 each occurrence or (iii) Bodily injury and property damage combined $3,000,000.00 single limit b. Comprehensive - automobile liability insurance, including owned, non-owned and hired vehicles. (i) Bodily injury liability $1,000,000.00 each person $3,000,000.00 each occurrence (ii) Property damage liability $3,000,000.00 each occurrence (iii) In lieu of (i) and (ii) Bodily injury and property damage combined $3,000,000.00 single limit . c. Supervalu agrees that with respect to the above-required insurance, contracts will contain the following required provisions: (i) The City and its officers, agents, employees, board members and elected officials shall be named as additional insured (as the interests of each may appear) as to all applicable coverage; and (ii) Contracts shall provide for thirty (30) days notices to the City prior to cancellation, revocation, nonrenewal or material change. d. The amount and conditions of liability and comprehensive insurance may be increased upon sixty (60) days' written notice by the City should the protection afforded by this insurance be reasonably deemed by the City to be insufficient for the risk created by this Agreement. At no time, however, will the amount of required liability and comprehensive insurance exceed that which is customarily required of others for similar situations of risk. e. Prior to issuance of any pennit, Supervalu shall furnish a Certificate of Insurance to the City confirming the above-noted coverages and naming the City as an additional Insurance. . c :\fi le\hopciv j I\en croach ,5 up 12 22. Default. If Supervalu is in default of any obligations contained in this Agreement . or in the performance of the work or occupancy authorized by this Agreement or any pennit granted pursuant to this Agreement, including, but not limited to, restoration requirements or fee payments for more than thirty (30) days after receiving written notice from the City of the default, the City may terminate and revoke the License and the rights of Superva1u under this Agreement and any permit granted hereunder, provided Supervalu shall not be entitled to prior notice in emergencies or in circumstances in which the City has the absolute right to terminate or revoke this Agreement and any permits granted to Supervalu in the exercise of the City's police powers. If Supervalu is in default of any obligation contained in this Agreement, in the perfonnance of the work or occupancy authorized by this Agreement or any permit granted hereunder, the City may, after the above notice to Supervalu, if required, and failure of Supervalu to cure the default, . take such action as may be reasonably necessary to abate or remedy the condition caused by thc default. Supervalu shall reimburse the City for the City's reasonable costs, including costs of collection and attorneys' fees, incurred as a result of Superva1u's default and the correction or abatement thereof. 23. Notices. All notices or other commtmications required or permitted to be given under this Agreement shall be in writing and shall be hand delivered or sent by certified mail, return receipt requested, to the following addresses: If to Supervalu: Supervalu, Inc. Attention: Legal Department 11840 Valley View Road Eden Prairie, Minnesota 55344-3691 lfto City: City of Hopkins Attention: Engineering Supervisor . 1010 First Street South c: I fIIelhopdv i I\encroach, sup 13 ------ -- ,-- . Hopkins, Minnesota 55343 If notice is given by certified mail, such notice shall be deemed to have been given on the next business day following the date of mailing. 24. Emergency Work. In the event of any emergency in which any of Supervalu's Facilities located in, above or under any Public Right-of-Way are or may be damaged, or if Supervalu's construction area or Facilities are otherwise in such a condition as to immediately endanger the property, life, health or safety of any individual, Supervalu shall immediately take the proper emergency measures to repair its Facilities, to cure or remedy the dangerous conditions for the protection of property, life, health or safety of individuals, and the requirements of this Agreement or any City ordinance for first obtaining a permit may be waived in appropriate emergency circumstances. However, this shall not relieve Supervalu from the requirement of . notifying the City of the emergency work and obtaining any permit necessary for this purpose upon completion of the repairs. 25. Miscellaneous. a. This Agreement is made and executed in the State of Minnesota, and shall be construed and enforced according to the laws of Minpesota. b. The invalidity or unenforceability of any provision of this Agreement shall not affect or impair the validity of any other provisions, all of which shall remain in full force and effect. c. The section titles and captions in this Agreement are for convenience of reference only and do not define, limit or construe the contents of the sections and paragraphs . of this Agreement. c; Iii J elhopcivi I Ie ncroach, sup 14 . d. This Agreement shall be binding upon and inure to the benefit of the parties hereto and, subject to the restrictions and limitations herein contained, their respective successors and assigns. e. Any modification to this Agreement shall only be effective if in writing and signed by all of the parties to this Agreement. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written. City of Hopkins, MilUlesota Dated: , 1999 By Charles D. RedepelUling, Its Mayor . Dated: , 1999 By Steven C. Mielke, Its Manager Reviewed and approved by the City Attorney. City Attorney SUPERV ALU, INC. Dated: jY\ << '/ ~- ~ , 1999 By . Its c: \fi le\hopc iv i I\c ncroach ,sup 15 -.--.- -----..--