Recommendation
Staff recommends the Mayor and Council adopt the Resolution.

Discussion
The adoption of this Resolution to revise the Department of Public Works (DPW) fees is the first of three items being presented this evening for Mayor and Council approval associated with the Verizon Fiber to the Premises (FTTP) Project. The other two items are the FTTP Project Agreement and Mayor and Council award to CTI Consultants. The Verizon FTTP project is the construction of new fiber optic telecommunication facilities by which Verizon FiOS (fiber optic service) is provided. Verizon FiOS offers telephone service, cable television service, and high speed Internet service.

Approval of this Resolution will allow the City to collect fees as established in the Verizon FTTP Agreement. The Resolution does not list the specific fees. It establishes that the Mayor and Council can adopt fees through a separate Mayor and Council agreement for projects involving the entire City. Such agreements would specifically establish alternate fees when it is determined that the alternate fees are in the best interest of the City. This Resolution precedes the FTTP Agreement so that once the FTTP Agreement is approved, the fees included therein are approved and authorized for collection.

The clean, final copy of the resolution is included in this packet (Attachment A). A copy marked to show changes also is included (Attachment B). The marked copy details the specific changes since the last Resolution was last adopted for certain DPW permit fees.

The City has been negotiating this project with Verizon since 2004. The negotiations reached a significant impasse due to our current Public Works Utility Fee structure. The current fee structure is based upon a study completed in 2000. This study developed a fee model by which DPW and Community Planning and Development Services could recover all City costs associated with their review, issuance, and inspection of construction and development permits. Current DPW Utility Fees are generally based upon the linear foot length of the project with differing rates based upon the impact to the City right-of-way specifically in three areas: aerial, excavation in the street, and excavation in the grass; however, a minimum fee applies to all utility permits. The City negotiators proposed an alternate fee structure that would recover City costs (the same goal of the current fee structure). Verizon responded by providing additional details about their operations, procedures, design process, and construction phasing.

The continued discussions produced a fee model, which is delineated in the FTTP Agreement, consisting of the following five components:

1. FTTP Plan Review Costs
Verizon will pay for all costs based upon a proposed unit price contract with CTI Consultants. This contract is for consultant engineering services to review Verizon plans to ensure compliance with City ordinance, regulations, policies, and construction requirements for work within the City rights-of-way.

2. FTTP Inspection Costs
Verizon will pay for all costs based upon a proposed unit price contract with CTI Consultants. This contract is for consultant engineering services to inspect Verizon construction activity to ensure compliance with City ordinance, regulations, policies, and construction requirements for work within the City rights-of-way.

3. Utility Locate Costs
Verizon will pay for all costs based upon a proposed unit price contract with Insight LLC. This contract is for utility locate services associated with City utilities (storm drain, water, and sewer). Insight LLC will locate and mark our utilities in advance of all Verizon underground construction in accordance with State of Maryland laws.

4. City Oversight Costs
Verizon will pay for City costs associated with the oversight of the entire Verizon FTTP project.

5. City Blanket Fees for Individual Connections
Verizon will pay fees for a blanket permit that will allow them to make individual service connections to residences from their fiber optic facilities located within the City rights-of-way. These service connections are known as FiOS Connections. These permits will not cover FiOS Connections between a public utility easement and a residence since these connections are outside of the City rights-of-way.

More detailed information on the fees and costs will be provided in the accompanying Verizon FTTP agenda items since this Resolution does not specifically establish the fees. It only establishes that alternate fees may be authorized in a separate Mayor and Council agreement for projects covering the entire City.

Mayor and Council History
This is the first time this item has been brought before the Mayor and Council.

The Mayor and Council have previously approved Resolutions Numbers 65-59, 21-88, 15-94, 9-00, and 14-03 to establish and modify fees for certain permits and approvals issued by the Department of Public Works as authorized in Section 21-42 of the Rockville City Code.

Fiscal Impact
There is no direct fiscal impact associated with the adoption of this Resolution. The fiscal impacts associated with the Verizon FTTP Project are discussed in the accompanying Agenda item.

Next Steps
Present the Verizon FTTP Project Agreement for Mayor and Council approval, including associated fees.

Attachments

Department Head:



Craig Simoneau, P.E.; , Director of Public Works
Approved on: 06/04/2008

City Manager:

Scott Ullery, City Manager
Approved on: 06/04/2008