Agenda

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C. 16

To:	Board of Supervisors
From:	Brian M. Balbas, Public Works Director/Chief Engineer
Date:	April 4, 2023

Contra

Costa

County

Subject:

APPROVE a License Agreement with Level 3 Communications, LLC

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 04/04/2023

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Diane Burgis, District III Supervisor

ABSENT:

Ken Carlson, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

Margaret Eychner, 925.957-2463

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: April 4, 2023
Monica Nino, County Administrator

BY:	, Deputy

RECOMMENDATION(S):

As the governing body of Contra Costa County and the Contra Costa County Flood Control and Water Conservation District, APPROVE and AUTHORIZE the Chief Engineer and Public Works Director, or designee, to execute a license agreement with Level 3 Communications, LLC, to access and operate an existing telecommunications conduit system within the Iron Horse Corridor and on District-owned land, during an initial ten-year term ending December 31, 2031, for an initial annual payment of $351,423, as recommended by the Public Works Director and Chief Engineer.


DETERMINE that licensing of Contra Costa County (County) property located within the Iron Horse Corridor and Contra Costa County Flood Control District and Water Conservation District-owned land for operation and maintenance of licensee’s telecommunications conduit system will result in economic benefit to the County.

RECOMMENDATION(S): (CONT'D)

DETERMINE that granting this license is in the public interest, that the interest in land conveyed will not substantially conflict or interfere with the use of the property by the County, and that the interest in the land conveyed will not substantially conflict or interfere with the use of the property by the District for the purpose for which it was acquired.

FISCAL IMPACT:

If the Agreement remains in effect through the initial 10-year term, the County and District will receive total revenue in the amount of $4,621,775.

BACKGROUND:

The County, the District, and the Redevelopment Agency entered into a License Agreement with GST Telecom, Inc., on February 21, 1996, to construct and operate a telecommunications conduit system for their own use and future customers and/or subsequent Licensees in the Iron Horse Corridor and on Flood Control District properties. The license was amended on October 6, 1998.

GST Telecommunications, Inc. filed for bankruptcy and on September 21, 2000, the United States Bankruptcy Court for the District of Delaware approved the sale in bankruptcy of substantially all of GST’s assets, including the conduit system identified within the original license agreement, to Time Warner Telecom, Inc. The sale was consummated on January 10, 2001, and this GST asset was integrated into Time Warner Telecom Inc.’s California operations. At that time, Time Warner Telecom Inc., operated in the State of California under the name “Time Warner Telecom of California, L.P.” Level 3 Communications, LLC, sent a letter to the County, dated October 2, 2018, informing the County that they were the successor in interest to Level 3 Telecom of California, LP, formerly known as tw telecom of California, LP, formerly known as Time Warner Telecom of California, LP, and informing the County of their intent to renew the subject license agreement as per the GST license agreement as amended. Additionally, the Redevelopment Agency was dissolved, and only the County and the District now own the subject portions of the corridor.

The County, District, and Time Warner Telecom, Inc., and later Level 3 Communications, LLC have continued to operate under the terms of the amended license agreement with GST, but because a license, by its nature, is not transferrable and the Redevelopment Agency no longer exists, staff has determined the County and District should execute a new license agreement with Level 3 Communications, LLC.

The first annual payment ($351,423) for this license agreement has been prorated. Level 3 Communications, LLC paid a license fee under the terms of the prior license agreement for the fiscal year ending February 20, 2022. Therefore, the license fee for the first year of this license agreement is prorated beginning February 21, 2022, and ending December 31, 2022, to account for the payment already made covering a portion of the first year of the license term. The amounts of the remaining annual payments are reflected in the license agreement.

CONSEQUENCE OF NEGATIVE ACTION:

The license agreement would not be approved and Level 3 Communications, Inc. would have no right to continue occupying and using the Iron Horse Corridor for telecommunications purposes.