4.3. ERMUSR 09-11-2012 A4h Elk River W
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Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager
John Dietz—Chair
Daryl Thompson—Vice Chair
Al Nadeau—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
September 11, 2012 4.3
SUBJECT:
Fiber Optic Network
BACKGROUND:
At the August 13, 2012, Commission Meeting approval was given for the Utilities to partner
with the City of Elk River and Sherburne County in a fiber optic network that would connect
over 90% of the government building in Elk River. The Commission authorized an investment
in 1/3 of the project for up to $99,000.
DISCUSSION:
On September 4, 2012, the City Council gave approval to move forward with this 8 mile
infrastructure shared project. The contract was awarded to Michels Corporation in the amount of
$268,721.24 and authorized the city attorney to draft a usage agreement for the City, County, and
Utilities.
FINANCIAL IMPACT:
Some of the bid amount included laterals that would be the responsibility of the City. These
laterals total $14,000. After this is deducted, the 1/3 share of the project that ERMU would be
responsible for will be approximately$85,000. This is a non-budgeted project.
ACTION REQUESTED:
Authorize the execution of the Fiber Optic Infrastructure Agreement.
ATTACHMENTS:
• Fiber Optic Infrastructure Agreement
• Map of the Fiber Optic Loop
RP PIMmEEI 81
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Reliable Public
Power Provider Pow a r o T o S r a v r
Fiber Optic Infrastructure Agreement
This Fiber Optic Infrastructure Agreement("Agreement")is entered into this day of
, 2012 by and between the City of Elk River, a Minnesota Municipal Corporation ("City") and
Elk River Municipal Utilities, a Minnesota Municipal Utility("ERMU").
WHEREAS, the City has entered into a contract to install a backbone fiber optic ring("Network
Ring"), in the location shown on Exhibit A attached hereto, for the purposes of connecting governmental
facilities located within the City, including city facilities,ERMU facilities, county facilities and Elk River
School District facilities;and
WHEREAS, ERMU has expressed a desire to install fiber optic infrastructure to connect its
facilities to the Network Ring ("Lateral Connections"), and to participate in the capital costs and the
ongoing operation and maintenance costs of the Network Ring.
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein,
and other good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. Installation.
a. Network Ring. The City shall be solely responsible for installing the Network Ring and
all infrastructure related thereto necessary for the Network Ring to serve its purposes.
b. Lateral Connections. ERMU shall be solely responsible for installing, at its cost, the
Lateral Connections, and all necessary infrastructure related thereto, between the
Network Ring and the ERMU facilities which ERMU desires to connect to the Network
Ring.
2. Ownership
a. Network Ring. The City shall have sole responsibility for installing, operating,
maintaining and repairing the Network Ring, and shall be the sole owner of the Network
Ring. ERMU's participation in the capital costs and the operation and maintenance costs
of the Network Ring will not entitle ERMU to any ownership of or interest in the
Network Ring.
b. Lateral Connections. ERMU shall be the sole owner of the Lateral Connections and all
infrastructure related thereto, and shall be solely responsible, at its cost, for the
installation,operation, maintenance and repair of the Lateral Connections.
3. Costs
a. Initial Capital Costs. The City's contract for installation of the Network Ring is in the
amount of $254,721.24. The City anticipates additional capital costs to complete
installation of the Network Ring in an amount not to exceed $ . ERMU
County agrees to reimburse the City for 33 percent of the total capital costs to install the
Network Ring, in an amount not to exceed $ . Reimbursement of ERMU
share of the City's Initial Capital Costs shall be made by ERMU within 30 days of receipt
of a statement from the City detailing the total Initial Capital Costs.
b. Future Capital Costs. It is anticipated that during the term of this Agreement it will be
necessary to replace or upgrade components of the Network Ring and related
infrastructure to ensure that the Network Ring continues to serve its purpose. City shall
be solely responsible for determining what capital improvements to make to the Network
Ring and for installing those improvements. ERMU agrees to reimburse the City for 33
percent of such future capital costs in the same manner as reimbursement for initial
capital costs.
c. Operation and Maintenance Costs. The City anticipates that annual costs for operation
and maintenance of the Network Ring will be approximately $ . ERMU
will provide and locate services, pursuant to Paragraph 4(c) of this Agreement in lieu of
contributing to the annual operation and maintenance costs.
d. Repair Costs. The City will be responsible for operation, maintenance and repair of the
Network Ring. If the Network Ring is damaged, the City shall attempt to recover the cost
of repair from the responsible party or from the City's insurance coverage. ERMU will
reimburse the City for 33 percent of all unrecoverable repair costs. Reimbursement shall
be made within 30 days of receipt of a statement for repair costs.
e. Lateral Connection Costs. ERMU shall be responsible for 100 percent of the installation,
operation, maintenance and repair costs for Lateral Connections between the Network
Ring and ERMU facilities.
4. Operation and Maintenance.
a. Network Ring. The City will be solely responsible for operating, maintaining and
repairing the Network Ring. The City will maintain and administer the Network Ring
and all connections thereto, including a central patch panel and all other infrastructure
related to the construction, operation, maintenance and repair of the Network Ring.
ERMU traffic through the fiber optic strands will transit through the Network Ring at the
physical layer only. That is, fiber optic strands transporting ERMU traffic will be
physically housed in Network Ring infrastructure owned and operated by the City, but at
no time will Ethernet frames, IP packets, ATM cells or similar upper layer protocols be
transported directly between the City and ERMU. ERMU will be responsible, at its own
cost, for its own connectivity and access to the internet or any other services. The City
will use its best efforts to keep the Network Ring operational at all times, with the
exception of scheduled down time for maintenance and repair. The City shall not be
liable to ERMU for any direct, indirect or consequential costs or damages to ERMU as a
result of planned or unplanned service outages of the Network Ring.
b. Lateral Connections. ERMU shall be solely responsible, at its cost, for installing,
operating, maintaining and repairing Lateral Connections. Lateral Connections may only
be connected to the Network Ring by the City or a contractor authorized, in writing, by
the City to make the connection. Any damage done to the Network Ring as a result of
unauthorized connection by ERMU to the Network Ring shall be the responsibility of
ERMU. ERMU shall not be liable to the City for any direct, indirect or consequential
damages to the City as a result of a planned or unplanned service outage to a Lateral
Connection.
c. Locates. ERMU shall make and be responsible for the costs of locates and relocates for
the Network Ring and all Lateral Connections serving ERMU facilities.
d. Splicing. The City shall be responsible for all splicing into and along the Network Ring,
and for the operation, maintenance, repair and connections to the patch panels and other
infrastructure along the Network Ring. ERMU shall have no access to the Network Ring
or the components thereof without the City's prior written approval.
5. Use.
a. Limited to governmental uses only. The Network Ring is being installed by the City
solely for governmental uses. ERMU agrees that its use of the Network Ring will be
solely for governmental purposes. Governmental purposes shall include federal, state,
county, city,township, school district and other governmental entities.
b. Capacity limitations. The Network Ring will include 144 fiber optic strands. ERMU will
be entitled to use a maximum of 48 of the available strands. If ERMU identifies a future
need for additional capacity, the City will have the sole discretion to determine whether
to make additional capacity available to ERMU and on what terms such additional
capacity would be made available. 50 percent of the strands used to connect City and
ERMU facilities will be counted against ERMU's 48 strands.
6. Term.
a. Initial Term and Renewal Terms. This Agreement shall be in effect for an initial term of
20 years from the date hereof, and shall automatically renew each five years thereafter,
unless earlier terminated as provided herein.
b. Termination by ERMU. ERMU may terminate this Agreement and its use of the
Network Ring for any reason, at any time, upon 30 days written notice to the City.
ERMU shall not be entitled to reimbursement of any of its contributions to the capital
costs of the Network Ring, nor for operation and maintenance costs of the Network Ring,
if it terminates the Agreement.
c. Termination by City. The City may terminate this Agreement upon one years' written
notice to ERMU. If the City terminates this Agreement prior to the end of the 20 year
Initial Term hereof, the City shall return to ERMU one per cent of ERMU's capital
contributions to the Network Ring for each year remaining on the Initial 20 year Term.
7. Assignment.
a. By ERMU. ERMU may not assign, transfer or delegate any of its rights or obligations
under this Agreement either directly or indirectly by any means, by operation of law or
otherwise without the prior written consent of the City.
b. By City. The City may assign its ownership of and/or its operation, maintenance or
repair responsibilities with respect to the Network Ring to a third party, but only if said
third party specifically agrees to be bound by the terms of this Agreement.
8. Amendments. This Agreement contains all of the terms agreed to by the parties and any promise
or communications of any type not reflected in this Agreement are null and void. Any
amendments to this Agreement shall be in writing and shall be approved by the governing board
of each party.
9. Governing Law. This Agreement shall be governed by the laws of the State of Minnesota.
10. Liability. Except as provided above, each party shall be responsible for any loss, damage or
injury to any person or property arising out its obligations under this Agreement. Each party
agrees to defend and indemnify the other party and its officers, employees and agents for any
claims arising from its performance or failure to perform its obligations under this Agreement.
Each party shall only be responsible for out of pocket costs to the other party. Each party waives
any claim for lost services, lost profits, indirect, consequential or special damages. Nothing in
this Agreement shall constitute a waiver or limitation of any immunity or limitation on liability to
which a party may be entitled under Minnesota Statutes, Chapter 466 or otherwise.
11. Insurance. Each party shall purchase liability insurance in the amount equal to or greater than the
maximum liability applicable to municipalities set forth in Minnesota Statutes,Chapter 466. This
requirement may be met through membership in a self-insurance pool. Each party shall name the
other party as an additional insured to the extent necessary to meet its obligations under this
agreement.
12. Dispute Resolution. If the parties cannot agree on any matter arising out of this Agreement, after
a reasonable period good faith negotiations, they agree to engage a qualified third party to
mediate the disagreement, and share to the cost of the mediator on an equal basis. The parties
will work in good faith with the mediator to find an acceptable solution and must reduce any
settlement to writing. Any such agreement must be incorporated into and made a part of this
agreement. If a mediated agreement cannot be reached, each party has available to it all rights in
law or equity.
13. Entire Agreement. This Agreement sets forth the entire understanding of the parties.
14. Notices.
a. Notices to City. Payments made and notices given pursuant to the terms of this
Agreement to the City shall be addressed or delivered personally to the City
Administrator, City of Elk River at 13065 Orono Parkway, Elk River, Minnesota 55330.
Technical inquiries may be made to the City IT Manager.
b. Notices to ERMU. Notices to ERMU shall be addressed to or delivered personally to the
General Manager, Elk River
Municipal Utilities, 13069 Orono Parkway
Elk River, Minnesota 55330
City of Elk River
By
John J. Dietz, its Mayor
By
Tina Allard, its Clerk
Elk River Municipal Utilities
By
John J. Dietz, its Chair
By
Troy Adams, its General Manager
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