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APPROVE MOTION TO AUTHORIZE AMENDMENT NO. 1 TO THE DARK FIBER LICENSING AGREEMENT WITH AT&T CALIFORNIA
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RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Authorize the City Manager to execute Amendment No. 1 to the Dark Fiber Licensing Agreement between the City of Stockton and Pacific Bell Telephone Company dba AT&T California.
2. Authorize the City Manager to execute all documents, including, but not limited to, modifications and amendments to the Dark Fiber Licensing Agreement.
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.
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Summary
On June 19, 2018, by Motion No. 2018-06-19-1121, Council authorized a Dark Fiber Licensing Agreement between the City of Stockton and Pacific Bell Telephone Company dba AT&T California (AT&T) (Attachment A). The fiber network establishes communication to the City’s traffic signals and provides internet connections to the Municipal Utilities Department (MUD), Public Works Operations and Maintenance (O&M), City Hall, Main Police Department, and Fire Station No. 2. The fiber network infrastructure is owned by AT&T and leased to the City for use. The current agreement will expire on July 1, 2025, and an amendment to extend the term of the service is essential to provide continued fiber communications to signals, cameras, and internet services to MUD, O&M, City Hall, Main Police Department, and Fire Station No. 2.
AT&T and the City have negotiated an amendment to the existing agreement at a monthly license fee of $38,100. This is a reduction from the previous contract amount of $42,000 per month. The amendment will allow the City to continue to use the existing AT&T dedicated fiber optic service for an additional five-year term plus two optional one-year extensions for a total of seven years. Staff assessed alternative technologies and market rates for dedicated fiber and determined that extending the existing agreement as negotiated is the best option and the price is reasonable.
It is recommended that Council authorize the City Manager to execute Amendment No. 1 to the Dark Fiber Licensing Agreement with AT&T (Attachment B).
DISCUSSION
Background
In November 1994, the Citywide Traffic Signal System Upgrade Master Plan was approved by Council. The major goal of this master plan was to create a Stockton Traffic Management System (STMS) for the City that could be used to improve traffic flow through improved traffic congestion management. The STMS is comprised of City traffic signals, a central traffic control computer and communication software, traffic monitoring cameras, and a fiber optic network serving as the communication backbone for the system. The fiber optic network would also provide communication links to transmit full motion real time video for use by the Police Department for surveillance and enable the Information Technology Department to provide internet and communications to MUD, O&M, City Hall, Main Police Department, and Fire Station No. 2.
On September 11, 1995, Council adopted Resolution No. 95-0450 authorizing the execution of an agreement with AT&T for the installation of the first phase of a Citywide fiber optic network to link City Hall, approximately 250 traffic signals, and three remote sites at Caltrans District 10, San Joaquin County, and MUD. All in all, Council subsequently authorized a total of seven contract amendments with AT&T that facilitated the completion of seven phases of fiber network installation that was completed in March 2003. Once the fiber network installation was completed for all phases, a 15-year license and maintenance agreement period began with a set expiration date of March 2018.
On June 19, 2018, Council approved Motion No. 2018-06-19-1121 authorizing a new seven-year Dark Fiber Licensing Agreement with AT&T. The monthly licensing fee for service and maintenance was $42,000. This included 560 dark fiber segments at a rate of $75 per segment. This license agreement is set to expire on July 1, 2025 (Attachment A).
In 2023, the City completed its Fiber Optic Master Plan (FOMP) The FOMP sets the framework of City-owned fiber that will reduce the dependency on leased fiber service and maintenance agreements with AT&T. As the City moves to implement segments of the FOMP, AT&T will remove those City-owned segments from AT&T’s service and maintenance contract. The City has progressed with installation of City-owned fiber segments per the FOMP, which has reduced the total AT&T fiber service segments from 560 to 508.
Present Situation
The current agreement will expire on July 1, 2025, and an amendment to extend the term of the service is essential to provide continued fiber communications to signals, cameras, and internet services to MUD, O&M, City Hall, Main Police Department, and Fire Station No. 2. AT&T and the City have negotiated an amendment to the existing agreement at a monthly license fee of $38,100. This is a reduction from the previous contract amount of $42,000 per month. The amendment will allow the City to continue to use the existing AT&T dedicated fiber optic service for an additional five-year term plus two optional one-year extensions for a total of seven years. Staff assessed alternative technologies and market rates for dedicated fiber and determined that extending the existing agreement as negotiated is the best option and the price is reasonable.
The important terms of the contract are as follows:
• The City’s monthly fiber service charge is $38,100 per month.
• The City’s monthly fiber service was reduced by $3,900 per month from the previous agreement.
• AT&T will calculate fiber service charges based on $75 per segment inclusive of maintenance.
• AT&T is responsible for all maintenance and repair costs.
• The City is responsible for fiber service interruptions not caused by AT&T.
• AT&T will remit monthly billings for Fiber Service beginning July 1, 2025.
• The City can add or terminate fiber network segments as needed.
• AT&T will adjust service as the City-owned fiber infrastructure expands.
Amendment No. 1 with AT&T will allow the continuation of the existing fiber network service while the City continues to build out City-owned fiber infrastructure per the FOMP. The full build out the FOMP is anticipated to take many years and is dependent on the availability of funding. Staff believes that competitive grant sources are available as fiber infrastructure touches on many trending transportation grants in the area of sustainability, smart city, or congestion management. Staff anticipates that additional contract amendments with AT&T will be needed in the future, but with reduced service.
It is recommended that Council authorize the City Manager to execute Amendment No. 1 to the Dark Fiber Licensing Agreement with AT&T (Attachment B).
FINANCIAL SUMMARY
The annual cost of this agreement is $457,200. The contracted costs will be split between the Police Department (57%), the Public Works Department (34%), and MUD (9%), as these departments are the primary users of the fiber optic networks. The Public Works Department has reciprocal agreements with the County and Caltrans to allow access to traffic monitoring systems, and their use of the network is minimal. The following cost allocations are based on current use of the network and the cost of providing service via other means and are subject to change. Sufficient funding is available in the Fiscal Year 2025-26 Adopted Budget for this contract as follows:
Department Funding Source Amount
Police Dept 3519-320-640005-100-000-20-35-000-000- $ 260,604
Public Works 4510-702-630006-240-242-30-45-000-000- $ 155,448
MUD 6513-000-640005-610-000-00-65-000-000- $ 41,148
Total $ 457,200
Future funding for the contract will be allocated during the annual budget process.
Attachment A - Original Dark Fiber Licensing Agreement with AT&T California
Attachment B - Amendment No. 1 to the Dark Fiber Licensing Agreement with AT&T California