APPENDIX I.
GENERAL COMMUNICATION FRANCHISE

WRITTEN ACCEPTANCE OF ORDINANCE NO. 2738

CITY OF COTTAGE GROVE, OREGON

TO THE MAYOR AND COUNCIL OF THE CITY OF COTTAGE GROVE:

WHEREAS, on the 13 day of December, 1993 the Council of the City of Cottage Grove, Oregon, passed Ordinance No. 2738 entitled:

AN ORDINANCE GRANTING TO U S WEST COMMUNICATIONS, INCORPORATED, THE NONEXCLUSIVE RIGHT AND PRIVILEGE TO DO A GENERAL COMMUNICATIONS BUSINESS WITHIN THE CITY OF COTTAGE GROVE AND REPEALING ORDINANCE NO. 1961.

WHEREAS, said ordinance was duly signed and approved on the 13 day of December, 1993 by the Mayor of said City, and attested by the City Recorder:

WHEREAS, said ordinance was granted upon the condition that the said grantee shall, within thirty (30) days of the passage and approval of said ordinance, file with the City Manager of the City of Cottage Grove its written acceptance of all the terms and conditions of said ordinance.

NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that U S WEST Communications, Inc., does hereby accept Ordinance No. 2738 and all the terms and conditions of said ordinance.

IN WITNESS WHEREOF, U S WEST Communications, Inc., has caused this acceptance to be duly executed this 22 day of December, 1993.

U S WEST COMMUNICATIONS, INC.

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Vice President - Oregon

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Manager of the City of Cottage Grove

ORDINANCE NO. 2738

AN ORDINANCE granting to U S WEST Communications, Incorporated, the nonexclusive right and privilege to do a general communication business within the City of Cottage Grove and repealing Ordinance No. 1961.

THE CITY OF COTTAGE GROVE ORDAINS AS FOLLOWS:

Section 1. Nature of Grant. There is hereby granted by the City of Cottage Grove (City) to U S WEST Communications, Incorporated (Grantee), its successors and assigns, the right and privilege to do a general communication business within the City of Cottage Grove and to place, erect, lay, maintain and operate in, upon, over and under the streets, alleys, avenues, thoroughfares and public highways, places and grounds within the City, poles, wires and other appliances and conductors for all telephone and other communication purposes. Unless a variance from the provisions of the Cottage Grove Municipal Code and Resolutions is first obtained, all new installations of cable for subdivisions, as that term is defined by the Cottage Grove Municipal Code and Resolutions, shall be placed underground. All other new installations or major replacements of cable shall be placed underground if economically and physically feasible, as reasonably determined by the City and grantee.

Section 2. Location of Existing Property. All poles, wires, fixtures, equipment, underground circuits and other property owned or in possession of the grantee now located within the corporate limits of the City shall be deemed to be covered by the terms of this franchise and to be located in accordance therewith, and the location and placement thereof is hereby approved, subject however to the provisions of Section 3 of this ordinance.

Section 3. Reserved Rights. All rights and privileges granted hereunder shall be subject to such reasonable regulations as now or in the future may be prescribed by the City Council.

Section 4. Forfeiture. In the event of the failure, neglect or refusal of grantee to substantially perform any of its obligations under the franchise, the City, after a hearing of which grantee shall be given thirty (30) days written notice, may determine such substantial failure, neglect or refusal; and, after written notice given to grantee of such determination, the City may prescribe a reasonable time period for Grantee to remedy the conditions set forth in said notice. If grantee fails substantially to remedy such conditions within the prescribed time, the City may declare this franchise forfeited.

Section 5. Construction and Operation. It shall be lawful for grantee to make all needful excavations in any streets, alleys, avenues, thoroughfares and public highways, places and grounds in the City for the purpose of placing, erecting, laying and maintaining poles, or other supports or placing or maintaining conduits, pipes or buried communication facilities for said wires and appliances and auxiliary apparatus or repairing, renewing or replacing the same, under the following terms and conditions:

(a)    The City reserves the right to reasonably determine the location of any such excavation and construction and the grantee shall not proceed with any excavation or construction without a written permit from the City.

(b)    All such activities shall be done in compliance with current and future laws of the State of Oregon, and rules, policies, regulations, resolutions, ordinances and orders of the City.

(c)    All costs of such operations shall be paid by grantee.

(d)    Whenever grantee shall disturb any street, alley, sidewalk or other public property for the purpose aforesaid, it shall restore the same to good order and condition as soon as practicable without unnecessary delay, and if grantee fails to do so the City shall have the right to fix a reasonable time within which such repairs and restoration shall be completed, and upon failure of such repairs being made by grantee the said City shall cause such repairs to be made at the expense of grantee. Damage to any publicly owned utility facilities (e.g., water, sewer, storm drainage) shall be immediately reported to City. The City shall complete restoration of such facilities at the expense of Grantee.

Section 6. Relocation of Communication Facilities. Nothing in this ordinance shall be construed in any way to prevent the proper authorities of the City from constructing, reconstructing, repairing or otherwise altering its public facilities within any public right of way, places and grounds within the City in or upon which the poles, wires, conductors and other facilities shall be placed, but all such work or improvements shall be done, if possible, so as not to obstruct or prevent the free use of said poles, wires, conductors and other facilities, and the moving of grantee’s facilities, where reasonably required due to such work by the City, will be done by the grantee without cost to the City. Such work by grantee shall be performed within a reasonable period of time. If the grantee fails to comply with any request of the City made pursuant to this section, within a reasonable time designated by the City, the City may remove or relocate the facilities at the expense of the grantee.

The City shall not require Grantee to remove or relocate its facilities or vacate any street, alley or other public way incidental to any public housing or renewal project under ORS Chapters 456 or 457 without reserving Grantee’s right therein or without requiring Grantee to be compensated for the costs thereof. The cost of relocating or removing Grantee’s facilities for the convenience or benefit of a private entity may be borne by such private entity.

Section 7. Passage of Building and Machinery. Whenever it becomes necessary to temporarily rearrange, remove, lower or raise the aerial cables or wires or other apparatus of the grantee to permit the passage of any building, machinery or other object moved over the roads, streets, alleys, avenues, thoroughfares, and public highways within the City, the grantee will perform such rearrangement within a reasonable period after written notice from the owner or contractor-mover desiring to move said building, machinery or other objects. Said notice shall bear the approval of the director of Public Works or his designee, shall detail the route of movement of the building, machinery or other objects, shall provide that the costs incurred by the grantee in making such rearrangement of its aerial facilities will be borne by the person or persons giving said notice, and shall further provide that the person or persons giving said notice will indemnify and save grantee harmless of and from any and all damages or claims of whatsoever kind or nature, caused directly or indirectly from such temporary rearrangement of the aerial plant of the grantee, and, if required by grantee, shall be accompanied by a cash deposit or a good and sufficient bond to pay any and all such costs as estimated by grantee.

Section 8. City Occupancy of Grantee’s Innerduct. Where space is available, as determined by grantee, the City shall be permitted to occupy grantee’s underground innerduct for traffic signal interconnection circuits and other lawful municipal purposes. Such occupancy by the City shall be subject to standard U S WEST innerduct rates as well as all terms and conditions outlined in grantee’s General License Agreement for Innerduct Occupancy.

Section 9. Indemnification: Defense of Suits Against the City. Grantee shall indemnify, defend, and save the City, its officers, employees and agents, harmless against and from any and all damage, claims and any and all loss, liability, cost or expense, occasioned by any act or omission of grantee in the construction, maintenance, operation or repair of grantee’s property, any use thereof or any activity or condition done or created in connection with this franchise by grantee or grantee’s agents; and grantee shall at all times comply with any lawful present or future charter provisions, ordinances, resolutions, policies, rules or regulations of the City relating to the manner of occupation or use of publicly owned facilities within all public rights of way and easements.

Section 10. Franchise Fee.

(a)    In consideration of the rights, privileges, and franchise hereby granted, the grantee shall pay to the City from and after the date of the acceptance of this franchise, on a calendar quarterly basis, a sum equal to seven percent (7%) per annum of its gross revenues derived from exchange access service as defined in ORS 401.710 within the corporate limits of the City less net uncollectibles. Such payment shall be made on a calendar quarterly basis on or before April 30, July 31, October 31 and January 31.

(b)    Except as provided in subsection (c) of this section, such payment made by the grantee shall be accepted by the City in payment of any license, privilege or occupation tax or fee for revenue or regulation or for any other purpose now or hereafter to be imposed by the City upon the grantee during the term of this franchise.

(c)    The payments made by grantee pursuant to this section shall not be accepted in lieu of payment of any of the following:

1.    Ad valorem property tax now or hereafter levied against real or personal property of the grantee situated within the city.

2.    Local improvement assessments.

3.    Building permits or permits related thereto imposed pursuant to building electrical or similar regulatory codes of general application in the City; provided however, no fee or charge shall be made for any permit inspection or other service relating to the opening or use of a public street, bridge or public place.

4.    Reimbursement or indemnity paid to the City.

5.    City income tax hereafter adopted to the extent that such tax is generally applicable within the City and where not inconsistent with state or federal law. Grantee shall not be subject to any such tax on that portion of its gross revenue that is subject to the franchise fee described in this Section nor on any net income earned on such gross revenue.

6.    City sales tax hereafter adopted to the extent that such tax is generally applicable within the City and where not inconsistent with state and federal law.

(d)    Grantee shall upon written request file with the City’s director of finance a quarterly payments report showing the grantee’s gross revenues subject to the franchise fee, setting forth said revenues according to the type of and source and any deductions claimed for the period which said report covers. Within 30 days from the filing of such report, or such additional time as the director of finance may allow, the director of finance may investigate the report to determine the accuracy of the amounts reported. However, neither said payment or failure to make such investigation shall be deemed to estop the City in any way, or prevent subsequent investigation by any official or agent of the City in collection of any amount due.

Section 11. Duration. The rights, privileges and franchise herein granted shall continue and be in force for the period of ten (10) years from and after the date this ordinance becomes effective, except that is understood and agreed that either party may terminate or renegotiate this Agreement after 180 days advance written notice to the other party of their intent to do so.

Section 12. Successors and Assigns. This franchise, and the terms and conditions herein stated applicable to U S WEST Communications, Incorporated shall extend and apply to said company, its successors and assigns. Upon any assignment or transfer of this franchise or change in control in grantee, grantee shall within thirty (30) days of any assignment or transfer provide written notice to City of the change and such assignment or transfer shall not be effective, as to the City, until such written notice is received by the City.

Section 13. Reservation of Statutory Authority: Incorporation of Charter Provisions. The City reserves the right to exercise, with regard to this franchise and the grantee, all authority now or hereafter granted to the City by state statutes. All rights of the City under the City Charter are reserved to the City and provisions of the City Charter applicable hereto are hereby incorporated by reference and made a part of this franchise.

Section 14. Rights and Obligations After Expiration or Termination of Franchise. Grantee shall upon expiration or termination of the franchise remove its property and equipment in accordance with ORS 221.470.

Section 15. Remedies not Exclusive; When Requirement Waived. All remedies and penalties under this ordinance, including termination of the franchise, are cumulative, and the recovery or enforcement of one penalty or remedy is not a bar to the recovery or enforcement of any other such remedy or penalty. The remedies and penalties contained in this ordinance, including termination of the franchise, are not exclusive, and the City reserves the right to enforce the penal provisions of any ordinance or resolution and to avail itself of any and all remedies available at law or in equity. Failure to enforce shall not be construed as a waiver or a breach of any term, condition or obligation imposed upon the grantee by or pursuant to this ordinance. A specific waiver of a particular breach of any term, condition or obligation imposed upon the Grantee by or pursuant to this ordinance shall not be a waiver of any other or subsequent or future breach of the same or of any other term, condition or obligation, or as a waiver of the term, condition or obligation itself.

Section 16. Effective Date. Inasmuch as the provisions of this ordinance are necessary for the immediate preservation of the peace, health, and safety of the citizens of the City, an emergency is hereby declared to exist and this ordinance shall be in full force and effect immediately upon its passage by the City Council and its approval by the mayor. Grantee shall, within 30 days of the passage and approval of this ordinance, file with the City Manager its written acceptance of all the terms and conditions of this ordinance, and if such written acceptance is not so filed within said period then this ordinance shall be null and void and no right, privilege, or franchise herein granted shall inure to grantee.

Section 17. Repeal of Prior Franchise. Upon the effective date of this ordinance, Ordinance No. 1961 shall be repealed.

PASSED AND ADOPTED by the City Council this 13TH day of December, 1993.

APPROVED by the Mayor the 13th day of December, 1993.

Jean Sinclair

Mayor

ATTEST: Joan Hoehn

     City Recorder