SUBSTITUTE
I RESOLUTION NO. 33668
2 WHEREAS the City of Tacoma, Department of Public Utilities, Light
3 Division desires to: (1) develop a ~state-of-the art fiber optic system to
4 support enhanced electric system control, reliability and efficiency; (2)
5 develop capability to meet the expanding telecommunications requirements
6 in an evolving competitive electric market, the most critical of which is real-
7 time, two-way interactive communications with individual energy consumers,
8 (3) create greater revenue diversification through new business lines (i.e.
9 ~internet transport, cable TV, etc.), (4) enhance traditional products and
10 services, and (5) maximize return on Light Division assets, and
I I WHEREAS these desired capabilities can be provided with a broad
~1 2 band telecommunications system for all of the Light Division's service area,
13 and
14 WHEREAS a broad band telecommunications system will have
1 5 available capacity for future City Light Division needs and will also have the
~1 6 capacity to provide telecommunications services for data transport, high
~1 7 speed ~internet access, full cable television service, and other uses, and
~1 8 WHEREAS the Light Division has retained consultants to review and
19 analyze the feasibility of a broad band telecommunications system for the
20 Light Division's service area, and a business plan has been prepared for
21 this purpose (copies are on file with the Clerk), and
22 WHEREAS the cost of constructing, installing and commencing to
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operate a broad band telecommunications system will be approximately $65
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million dollars, but the benefits to the Light Division, the City and the Light
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Division customers are projected to exceed and justify the initial cost, and
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2 WHEREAS the City Council and Public Utility Board will continue to be
3 involved in the future decision-making on this proposal including construction
4 contracts and debt financing approvals, quarterly reviews on-the project
~5 direction during the startup period, approval of agreements for use of City
6 ~rights-of-way for telecommunications purposes which agreements will (to the
7 extent required by law or City Council) treat the Light Division substantially
8 similar to other franchises that the City grants for similar businesses, and
9 WHEREAS the City Council hereby finds and determines that the
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Light Division's proposal for a broad band telecommunications system is in
I I
the best interests of the City, will serve a public purpose, and should be
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approved and implemented; Now, therefore,
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BE IT RESOLVED BY THE COUNCIL OF THE CITY OF TACOMA:
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That the Council hereby finds and determines that the City Light
is
Division's broad band telecommunications proposal is in the best interests
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of the City, will serve a public purpose and that the said Business Plan is
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sufficient and adequate, therefore, the Council hereby approves the Light
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Division's proposal including the Business Plan and the Department of
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Public Utilities, Light Division is hereby authorized to proceed to implement
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said proposal for a broad band telecommunications system, and
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That the proposed broad band telecommunications system shall be
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owned, operated and controlled by the City of Tacoma Department of Public
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24 Utilities Light Division with the Public Utility Board providing oversight and
25 approval of business and third party agreements, as appropriate under the
26 CityICharter, Tacoma Municipal Code and other applicable laws, and the City
27 Council shall continue to be involved in the major policy decisions including
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2 construction contracts, rate setting policies, debt financings, the public
3 ~rights-of-way use for telecommunications agreements and quarterly reviews.
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5 Adopted APR ~0 8 19~97
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Mayor
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9 ago ~, )CIL ~MA"\)94
10 Attest: City Clerk
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Approved as to form & legality:
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14 ~Ass'I'Stant City Attorney
~1 5
16 Requested by Public Utility
Board Resolution No. U-9258
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~59ft
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,.CITY CLERK USE
REQUEST FOR ~ORDINAN
St M~.
OR RESOLUT1~6N
................
Ordinance ~Olk.
~Tamm ...
Resolution
1. Date: March 20, 1997
Requesting Department/Div~ision/Program Sponsored By Phone/Extension
2. Tacoma Public ~UfflitieslLight Division
Contact Person (for questions): Phone/Extension
3. Steven J. Klein 502~-8203
4. Preparation of Resolution is requested for the City Council meeting of Tuesday April 8, 1997
5. Summary Title/Recommendation: (A concise sentence, as it will appear on the Council Agenda)
Authorize the development of a broad band telecommunications network to improve electric utility service and improve the
telecommunications infrastructure available to the community. This would include the business plan for a broad band
telecommunications system and the implementation of the telecommunications system.
6. Background Information/General Discussion: (Why is this request necessary? Are there legal requirements? What are the
viable alternatives? Who has been involved in the process?)
The Light Division has undertaken an extensive telecommunications study that includes market research, telecommunications
industry analysis, an examination of the regulatory environment and research on similar activities in other municipalities. It is
projected that the cost for the construction and installation of this system will be approximately $55 million to construct, plus
more than $1 0 million for startup operations. However, the Light Division believes that the overall benefits to the City, the Light
Division and its customers will exceed the projected costs.
In addition to the benefits to the Light Division that the system would deliver through improved communication abilities, the
system will also have the ability to transport data, provide high speed Internet access and deliver full cable television service.
7. Financial Impact: (Future impact on the budget.)
8. List all material available as backup information for the request and indicate where filed:
Source Documents/Backup Material Location of Document
Letter to the Public Utility Board and City Council from Mark Attached
~Crisson dated March 20, 19~97
9. Funding Source: (Enter amount of funding from each source)
Fund Number & State $ City $ Other $ Total Am~4nt
Name:
If an expenditure, is it budgeted? 13 Yes No Where? ~Org Ac~ct
~App to ~Avaff4ility of Funds
~10. I ~-G ~r Utilities Approval
~F\OtfSys%TernplatekREQORD DOC ~Offl- ~s5are-.9
3/20~197
Public Utility Board and City Council
March 20, 1997
Page 2
Improves electric service by enabling distribution system automation, market
access, and real-time, interactive communication with customers
Provides better telecommunications and cable television service sooner and
cheaper than other providers will deliver
Significantly enhances regional economic development and quality of life by
creating state-of-the-art telecommunications infrastructure and providing it to
all businesses and residences throughout the community
Creates opportunities for public private partnerships in the wholesale leasing
of system capacity to retail telecommunications service providers
Provides additional revenue to the Light Division and General Government
through expansion of the market for telecommunications services
SUMMARY
The proposed telecommunications system will strengthen the Light Division's
competitive position in the electric power industry through the provision of enhanced
electric and telecommunication services to ~afl Light Division customers. This system will
serve a public purpose and is in the best interests of the City.
Very truly yours,
Mark Cr~isson
Director of Utilities
~1_4
Tacoma Mark ~Crisson
Public Director
~Utiffties
3628 South 3~;th Street
P.O. Box ~1100-
Tacoma, WA 98411-0007
Divisions
Light
~W'ater
Belt Line
March 20, 1997
To the Chairman and Members of the Public Utility Board and
To the Mayor and Members of the City Council
RESOLUTION No. ~U- 9 2 5 8
RECOMMENDATION
The Light Division requests approval by the Public Utility Board and the City Council to
develop a broad band telecommunications network as described in the Light Division
Telecommunication Study. This action authorizes project implementation and the
initiation of design and contract specifications. The Light Division will bring subsequent
requests for construction contract and debt issuance approval to the Public Utility Board
and City Council as the project progresses. Both policy bodies will also be periodically
advised of project status during the development process.
BACKGROUND
In preparation for this request, the Light Division has undertaken an extensive
telecommunications study that includes market research, telecommunications industry
analysis, an examination of the regulatory environment, and research on similar
activities in other municipalities. Staff has made presentations to neighborhood
councils, chambers of commerce, local economic development groups, the Tacoma Port
Commission, and the Tacoma Public School Board. Two joint Public Utility Board/City
Council study sessions were held. A public hearing on the proposed
telecommunications system was held by the Public Utility Board on March 12, 1997, and
another public hearing was held by the City Council on March 18, 1997. Information
summarizing the Telecommunications study and our recommendations was made
available at the presentations and public hearings.
The Light Division estimates the cost of this telecommunications system will be
approximately $55 million dollars for construction and installation, plus more than $10
million dollars for startup operations. The business plan indicates excellent financial
potential even under conservative revenue and market penetration assumptions. We
recognize the plan's projections are no guarantee of success, but we think the project
risks are manageable and justified given the project benefits. These benefits include:
SUBSTITUTE
~7MF RESOLUTION NO. U-9258
2
WHEREAS the City of Tacoma, Department of Public Utilities,
3
Light Division desires to: (1) develop a state-of-the-art fiber optic
4 technology to support enhanced electric system control, reliability and
5 efficiency; (2) develop capability to meet the expanding
6 telecommunications requirements in an evolving competitive electric
7 market, the most critical of which is real-time, two-way interactive
8 communications with individual energy consumers, (3) create greater
9 revenue diversification through new business lines (i.e. ~internet transport,
~10 cable TV, etc.), (4) enhance traditional products and service, and (5)
~1 ~1 maximize return on Light Division assets, and
12 WHEREAS these desired capabilities can be provided with a broad
13 band telecommunications system for all of the Light Division's service area,
and
14
15 WHEREAS a broad band telecommunications system will have
16 available capacity for future Light Division needs and will also have the
capacity to provide Telecommunications services for data transport, high
1 7
speed ~internet access, full cable television service, and other uses, and
~1 8
19 WHEREAS the Light Division has retained consultants to review
and analyze the feasibility of a broad band telecommunications systems for
20
the Light Division's service area, and a business plan has been prepared
21 for this purpose (copies are on file with the Clerk), and
22
WHEREAS the cost of constructing, installing and commencing to
23 operate a broad band telecommunications system will be approximately
24 $65 million dollars, but the benefits to the Light Division, the City and the
25 Light Division customers are projected to exceed and justify the initial cost,
26 and
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~W WHEREAS the City Council and Public Utility Board will continue
I to be involved in the future decision-making on this proposal including
2 construction contracts, and debt financing approvals, quarterly reviews on
3 the project direction during the startup period, approval of agreements for
4 use of City ~rights-of-way for telecommunications purposes which
~5 agreements will (to the extent required by law) treat the Light Division
6 substantially similar to other franchises that the City grants for similar
businesses, and
7
8 WHEREAS the Public Utility Board hereby finds and determines
9 that the Light Division's proposal for a broad band telecommunications
~10 system is in the best interests of the City, will serve as a public purpose,
and should be approved and implemented; Now, therefore,
I ~1
12 BE IT RESOLVED BY THE PUBLIC UTILITY BOARD OF THE CITY OF TACOMA:
13 That the Board hereby approves the Light Division's proposal
14 including the Business Plan for a broad band telecommunications system,
I ~5 and the Board recommends that the City Council approve a resolution to
authorize the Light Division to proceed to implement said proposal for a
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broad band telecommunications system, and the Board recommends that
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the City Council continue to be involved in the major policy decisions
18 including construction contracts, debt financings, the public ~rights-of-way
19 use agreements for telecommunications and quarterly reviews.
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21 Approved as to form & legality:
Chairman
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24 Chief Assistant City ~Attomey Secretary
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26 Adopted
27 Clerk
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~Taconse
Public
~uttifti" MEMORANDUM
To: Rick ~Rosenbladt, City Clerk
From: Mark ~Bubenik, Chief Assistant City Attorney
Date: March 27, 1997
Subject:
Please place the following proposed ~resolution(s) ~ordinance(s)
on the agenda for the April 8, 1997 Council Meeting:
U-9258 Approve the Light Division's Telecommunications Plan
Resolution No 33668
Adopted: APR 0 8 19.97
Maker of Motion:
Seconded: ~10,t ~-
Roll Call vote:
MEMBERS AYES ~NAYS ABSTAIN ABSENT
Mr. ~Baarsma
Mr. Crowley
Mr. ~DeForrest
~Mr.Evans
Mr. Kirby
Dr. ~McGavick
Mr. Miller
Dr. Silas
Mayor Ebersole
MEMBERS AYES ~NAYS ABSTAIN ABSENT
Mr. ~Baarsma
Mr. Crowley
Mr. ~DeForrest
~Mr.Evans
Mr. Kirby
Dr. ~McGavick
Mr. Miller
Dr. Silas
Mayor Ebersole,