HomeMy WebLinkAbout1993-06-02 Finance Committee Minutes�
� _ " Finance Ccarmittee
' June 2, 1993
Minutes
� Ccarm.ittee Nl�nbers Present: C. Sullivan (for D. Soucy), Chair,
M. Frankel, J. Saxl, J. Bragg (for R. Stone)
Council N.(�nbers Present: Non,e
Staff Present: E. Barrett, J. Quartarairo, J. Ring
D. Pellegrino, T. Corbett, A. Stover,
A. Stockus, B. Shibles
Others Present: Rc�ger Hub�r, Esq. Eaton, Peabody, rep. AT&T
Bob MacS�vain, MacS�aain & Co. rep. AT&T
Meeting was called to orcler at 7:30 a.m.
M. Frankel maved to appoint C. Stii].livan as Chair for the meeting.
Seconded by J. Saxl. Passed
1. Application for Utility Location Pennit -- AT&T Ccer�m�nications, Inc.
Barr�tt presented itc�n. This i-teqn was referred to the F�nan�e Contnittee
by the City Council fzroam the last meeting when AT&T Ccermunications, Inc.
presented. an application to install underground aptical fibre cable
within the City's right of way. T'he purpose of the cable is to connect
• the US and Canada and then Europe. Staff objected to the approval on
several grounds:
1. AT&T Co�rmunications, Ina. is not a regulated utility within the
language of the Maine statutes and therefore does not have eligibility
for access to the RC7W by statutory right. '
2. Due to the th-rough tx�n��Gsion to Canada and Europe there is the
potenti.al for liability should the City break the line wheth�r
inadvertent or willfully. City requested infonnation froam AT&T about
I potential liability but were not pravided answers.
3. Because AT&T Ccar�minications, Inc. is not a Maine regulated utility
the City is suggested a licensing fee, to which .AT&T is not agreeable.
4. Questions were prepa.red. for AT&T and have not been responded to.
First is to assure who the applicant is; and seconded who the awner of
the cable is. On June 1 a list of 13 or 14 questions was prepa.red. and
delivered to Eaton, Peabody for response. Central issue is whether
AT&T has access by right without addressing liability issue?
Shibles explai.ned. that telephone cc�npanies must apply for locations
penni.t, which is what AT&T is doing. Regulated utilities hane right to
lay cable without paying other than street opening fees. 35 A M.R.S.A.
Sec. 2301 establishes the definition for a regulated utility, and AT&T
Ccarmunications, Inc. does not meet the strict language of a regulated
utility within its articles of incorporation. Alttwugh AT&T has a PUC
order entered. after incorporation, the articles of incorporation does not
establish routes to be traveled, or geographic a�G to be served.
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� M. Frankel questioned if AT&T had run cables through other ccgrmunities in
Maine? If so, when and where?
. Shibles responded. that about 5 years ago AT&T ran a cable frcan Manchester
(west of Augusta) to Portland. AT&T did not run dawn the Maine Tuznpike,
and Bruce does not ]rnaw haw irouch was run in the railroad right of way,
versus mun.icipal right of way.
Barrett rai.sed the folla�ing issues:
l. That the City should ha.�+e scane lmawledge of the potential
liability and inde�nnification f�can AT&T for 48 fibre optic cables.
5hould the City break the cable, and business operations serv+ed by the
cal�le were interrupted, what aimunt of liability might the City face?
2. If it is possible to levy a licensing fee, what is an appropri.a.te
charge for licensing the right of way? What is the benefit of ha.ving
the cable within the City streets? Can AT&T reduce the size of the
cable to acccem�odate local teleccgrmunication traffic only?
Shibles noted that iri the future the cable may carry cable television and
w�uld be subject to cable franchise fee, therefore, if the City and AT&T
negotiate the franchise fee naw, then it would be in place when cable
sezvice is carried over the AT&T cable.
Barrett stated tha.t if AT&T argues that it has a right under state law to
hav�e access to the City's right of way, then the burden of proof is on
.AT&T to prave that right. AT&T does not want to pay the City for the
right to access the ROW, nor to inderrmify the City.
. M. Frankel noted that AT&T was facing a time constraint.
AT&T responded through Bob MacSwain, MacSwain & Ccgnpany who represents
AT&T in most of its negotiations for New �gland, New York and
Pennsylvania. 'I'he City's questions were received by letter the day before
at about 3:30 p.m. (Barr�tt distributed copies of the letter with the
questions) . MacSwain responded verbally to questions in order.
1. Applicant is naw AT&T Ccnnwnications of New England., In�c.
2. Or�mers is AT&T Ccamnunications of NEw England, Inc., does not l�aw if
there is mr�re than one awner.
3. Cable will carry wice and data. 'I'he cable will carty tv to the
extent that pictures of callers are transmitted and received on a
screen, but PUC and P'CC pmhi.bit AT&T frcen c��ng cable tv signal.
4. No to carrying cable tv progranm.ing.
5. Cable operator is AT&T Ccamnunications of New England, Inc.
6. No plans to lease the cable or any portion to other corporations or
entities.
7, 9, and 10. together: Installation of cable w�uld allaw Banc,�or and
Maine to attract business to Bangor and to the State. Allaw 800
service to Canada and throughout North America. State and the City
would ha.ve state of the art ability to provide teleccgmminications
services. Current Esnplayment in Bangor is 4 emplay�s, cable would
allaw expansion to 6-10 �nploye�s.
8. Size of the cable approxiniates a little fingpx. There is no
difference in the size of the cable if it is carrying 2 or 48 fibres.
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, ' Does not ]maw the n�r of fibres needed to handle Bang�r and Maine
teleccar�minications traffic only.
M. Frankel questioned why the rnmiber of fibres was being discussed?
• Barr�tt responded that if most of the traffic is originating outside of
the City or State, then the benefits fran the cable are not accruing to
the residents of the City or State. The potential liability is accruing
to the City residents only who are npt receiving the benefits of the cable
being within the City's ROW. MacSwain responded that cable must be sized
to allaw for potential growth.
11. Not Applicable. Under federal law and tariffs business can not sue
AT&T for losses; also Bangor i.s protected frcan sui.t. Huber stated
tha.t Ma.ine 'Ibrt Claims Act protects the City k�y limiting sui.ts to
$300,000 or the value of the City's insurance, whichev+�x is greater.
M. Frankel questioned whether a cable not shawn on utility ccenpany maps
was dug up about 5 years ago? If so, what was the outccene?
Ring responded that sinae the cables did not shaw on the utility c�any
maps, no cost to the City. Z'here was another incident on Main Str�t
involving NIDC7r, and cables not unifonnl.y encased. in concrete. The claim
cost the City approximately $30,000.
Bzrr�tt observed that the AT&T cable will be run_n?ng past a n�nbe.r of
properties and chances are s�ne will break the cable,
MacSwain responded that Maine had passed a "Dig Safe Law". Continuing
#11, if City intentionally breaks the cable vs inadvPxtently AT&T will not
� relive liability and ;nd�mn;�i the City.
Shibles questioned if MacS�vain was aware of 3rd party claims against other
than AT&T. MacSwain responded he is not aware of any.
12. Could not lay frcgn Hillside Avenue, because there is a tie in with NE
Telephone.
13. Confidentiality clause in contracts prev+ents disclosure of amounts of
licensing fees paid to private ROW c�mers. Range is 1 cents to $2 or
$3 per foot. M. Frankel questioned in annual fee? MacStaain responded
that it depended upon haw the fee was n�gotiated: one time payments,
annual payment or present value paym�it.
14. Ianguage regarding �����fication in contracts are confidential.
Huber advised that there is a big difference between private parties
and City of Banqor which is protected by State law, while private
awners are not. If AT&T i.s a public utility within state law, then
AT&T has a right to access ROW upon pa.yment of ��;t fee and approval
of City Engineer. .
Huber addressed the Cc�mittee. 'Ib put into perspectiv�e, AT&T spoke with
City several we�ks ago and received a letter with questions y+esterday. If
applicant qualifies as a public utility then State law in the e�lusive
� to detennine appraval of application. AT&T proposes to change the
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' existing applicant with one that is a public utility and is subject to PUC
orders. Articles of incorporation are being requested frcan Secretary of
State.
City cited section 2301 because the articles of incorporation does not
. state the geographic location to be servcd by the utility, yet a PUC order
allays AT&T to operate without reference to geographic locations ar�ywh@re
in the Sta.te of Maine. Rxmiring AT&T to list each str�t within the
State along which it wuuld run a line is impmper. Other pravisions which
pravide authority are sections 2501 - 2508.
Regarding potential liability and ind�tm.ification: Maine Dig-Safe Act
requires excavator to notify the Dig-Safe S�rste�n, and the Systean is
required to notify avners of underground facilities. It is AT&T's
practice to mark locations and be on-site when excavating. If City
ccar�plies with Dig-Safe Act liability evaporates. Maine �ort Claims Act
also substantially protects the City.
Other jurisdictions charge fees, such as 'I�exas where City Mana.ger caan�
frcen. Texas, by statute, allays utility av+�rsight by mur�icipalities.
�,n;cipalities may requi_re licensing fees of 2� of gross revenues,
therefore utilities can plan for fees. There is not such provision in
ainP law. Chapter 25 is the exclusiv�e means; if City wants a provision
for a licensing fee or �����fication than a statutory change is needed.
Stockus responded tha.t under the new Dig-Safe law, excavator is liable
within the marked area whether or not action was willful.
M. Frankel stated that law was intended to apply for most traffic w:ithin
State, but here Bangor will merely be a conduit for traffic. Statute was
drafted incorrectly. If this ccarmittee is not going to make a
• recc�miendation to the City Counci.l, than the time spent was wasted.
J. Hragg stated that although AT&T is not able to naa run cable tv
progranming, if that is a possibility in 5 - 10 years frcan naw, there
should be a reservation of rights to revisit the subject in the future.
Barrett responded that AT&T is looking to resolve issue sooner or later.
I�egal Depart�nt and AT&T will continue to w�rk on the subject and be
prepar�d for next Council agenda.
Huber stated that he had requested the scheduled itFsn before thG Fi1L*�r'e
Cce�mittee go foiward to get the City's questions on the table, and to get
thern resolved. Would like to laeep the matter mr�ving fozward and to be
prepared. for the next Council or Ccarimittee meeting.
Barr�tt stated. that Solicitor Stw�pfe and Assistant Solicitor Shibles
will continue to review and probably prepar�d for the next Council
meeting. Barrett also advised that AT&T is looking at 46,500 feet of
cable to be run through the City's ROW.
2. Skid Steer Loader and Pav�nent Planer (Public Works)
Stockus presented request to purchase a New Holland model 785 skid steer
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� • ' loader and paven�nt planer frcgn Ingraham Ford, Corrina, Maine for quoted
price of $41,530, further that fornia.l bid process be waived.. Quotes were
also requested frcan four other vendors, and this is the law responsive
quote. Planer was appraved for purchase in FY93 and bid in August 92,
• but will not fit on the ICubota.. Pellegrirw advi.sed that he is satisfied
that quoted. prices wc�uld be the same if the City had gone to fonna.l bid.
M. Frankel questioned who would hav+e w�n the bid in August if this ite�n
was included -- Stockus responded Jordan �,;Fanent.
B��tt advised that if appraved, there wr�uld be an order for transfer of
appropriations.
M. Frankel mpved rec�ndation of staff to purchase a New Holland model
785 skid steer loader and pavement planer frcan Ingrah�n Ford, Corrina,
Maine for quoted price of $41,530, and to waive the fonnal bid process.
Seconcled by J. Saxl. Passed 4:0.
3. Price Adjust�ent for Zmree Year Bitim�inous Concrete Contract
Pellegrino pres�nted it�n. The City i.s in the second year of a three year
contract with Lane Construction. Vendor has a right to request GPI
inrreases annual, and prices w�x+� held constant for 1991 and 1992. Vendor
has requested a 4� increase for 1993. Purchasing agent rec�nds
appro�val.
M. Frankel maved �pp roval of a 4� price adjustrr�nt for bitUminous concrete
contract with Lan�./Construction Ccanpany, Meriden, CT. per letter dated May
� 24, 1993. Seconded. by J. Saxl. Passed 4:0.
4. Bids:
a. Meta1 Castings (Public Services Depart�r�nt)
J. Saxl moved award. of contract for purchase of inetal castings to law
bidder Public Works Supply Ccanpany, Lewiston, Maine for price of
$19,354.35. Seconded by M. Frankel. Passed 4:0.
b. Electric Lamp Contract (City-Wide)
M. Frankel maved award of Electric Lamp Contract to Gi]sr�an Electric,
Bangor, Ma.ine for est�mated cost of $17,280.67. . Seconded. by J. Saxl.
Passed. 4:0.
c. Sign Posts (Public Services & Police Depart�nt Parking Division)
M. Frankel mpved award of contract for purchase of sign posts to
Pernia-Line Corporation of New England, B-rockton, N� for price of $3,907.
Seconded by J. Saxl. Passed 4:0.
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„ . � ` d. Horizantal Baler (Public Service Departm�n.t)
J. Saxl moved with enonmus pleasure award of contract for purchase of a
� reconditioned. Selco HL 60 EBFID horizontal baler to BSE Recycling Works,
for price of $37,820. Seconded by M. Frankel. Passed 4:0.
e. Loader Backhoe (N1�tor Pool Depart7r�nt)
M. Frankel moved award of purchase of a loader backhoe to Heauregard
E ,i�.nt, Inc., Bangor, Me for price of $60,827.94 with a five year net
buy back $26,500. Seconded by J. Saxl. Passed 4:0.
f. Paper Cutter (Central Services)
M. Frankel maved a�ra�d. of cantract for purchase of paper cutter to A. M.
Multigraphics, West�u�od, MA for price of $5,765. Seconded by J. Bragg.
passed 4:0.
g. Wet waste container Bags (Airport Department)
Pellegrino shcxa�.�l sa�nple of bag. Due to strength requ.i.re�nts, bags are
not made frcan recycled. material. Bags are requircd by USDA for all waste
frcan international flights. The waste is then steamed by the airmrt
caterer before disposal. Bags were being sold individually, but naw the
price is included. in flight service fees for airport.
J. Saxl maved award of contract for purchase of vuet waste contai.ner bags
� frcan Stone Container Ccanpany, Montvale, NJ for price of $504.50 per
thousand. Seconded by M. Frankel. Passed 4:0.
J. Hragg maved to go into Executive Session for the pu.rpose of hearing �two
hardship tax aba.t�nent cases. Seconded by J. Saxl. Passed 4:0
Into Executive Session at 8:51 a.m.
Out of Executive Session at 9:30 a.m.
Both cases denied. First case rec�nded for long-tenn deferral, when
properi.y sells. Seconded case reccam�nd for 5 year deferral, subject to
review at end of 5 years for possible extension or payment in full.
Meeting adjourned. at 9:30 a.m.
Recording Secreta.ry
John Quartararo
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