Add Utility Operators Code to govern utility access and use of the City right-of-way and adopt fee schedule for utilities operating in the City right-of-way (add Code Title 12)
The City of Portland ordains:
Section 1. The Council finds:
- The Bureau of Planning & Sustainability (BPS) manages the access, fee collection, and agreements pertaining to access to and use of the rights-of-way on behalf of the City; and
- The City of Portland has constitutional and charter authority to manage its rights-of-way and receive compensation for access to and use of the rights-of-way consistent with applicable federal and state law; and
- The City has typically granted individually negotiated franchise agreements to each utility using the City’s rights-of-way to provide utility services, with each franchise agreement setting forth the terms of use and compensation to be paid for such use; and
- The City has determined that it can more effectively, efficiently, fairly, and uniformly manage the City’s rights-of-way and provide consistent standards for utility access to and use of the rights-of-way through licenses, rather than franchise agreements; and
- The new Portland City Code Chapter 12.15 will regulate access for utilities operating in the City’s rights-of-way and assist the City in exercising its authority to secure compensation to the City and its residents for utility use of the rights-of-way; and
- The Ordinance adopts a new Portland City Code 12 as shown in Exhibit A into City Code; and
- The Ordinance adopts the right-of-way fee schedule as show in Exhibit B and adds a new franchise negotiation fee for if a party requests a franchise agreement under special circumstances, if the City deems appropriate. The fee would compensate the City for the costs associated for negotiating the agreement. Per Portland City Code Section 12.15.110, the City Council shall establish a rights-of-way access fee for use of utility facilities in the City to provide utility service; and
- The Ordinance delegates authority to the BPS Director to adopt administrative rules related to PCC Chapter 12.15. The Utility Access to and Use of the Right-of-Way (PCC Chapter 12.15) administrative rule document (attached in draft format for reference as Exhibit C) will establish guidelines and examples for calculating gross revenues.
- The City Council adopted Resolution No. 37168 on November 12, 2015, which opposes the transportation and storage of fossil fuels in or through Portland or adjacent waterways. The resolution states that, prior to any further Council action related to code changes to advance the policies in the resolution, the Mayor will schedule a work session to review proposed code changes and an executive session to review the legal considerations of any proposed code changes. Although it does not appear that such directive relates to this Ordinance, the purpose
of which is to codify existing utility franchise agreements, in an abundance of caution, these requirements have been met as follows: the first reading of the Ordinance fulfills the work session requirements. The City Attorney has met with each of the Commissioners to discuss the legal considerations of the proposed code changes, so no executive session is necessary.
NOW, THEREFORE, the Council directs:
- Add Code Title 12, Utility Operators, as shown in Exhibit A.
- Adopt Annual Rights-of-Way Fee Schedule as attached in Exhibit B per Portland City Code Section 12.15.110, which will be effective as of October 1, 2023.
- Exhibit B, Annual Rights-of-Way Fees is binding City policy.
Official Record (Efiles)
Impact Statement
Purpose of Proposed Legislation and Background Information
By adopting the Right-of-Way (ROW) code and correlating fee schedule, the City will join roughly one dozen other municipalities in Oregon that have implemented a uniform ROW licensing system via code.
The purpose of this project is to replace the administratively cumbersome, resource-intensive, and outdated system of managing access to the right-of-way through franchise agreements. The proposed new code will apply to all companies that have infrastructure in the right-of-way or maintain a business using that infrastructure, whether or not they own the infrastructure.
The pertinent provisions of the Right-of-Way Ordinance include:
- Providers with existing franchise agreements are exempted until their agreements expire;
- Preserves the City’s right to enter into franchise agreements with individual providers in situations where the public interest warrants;
- Wireline cable television providers will continue to operate under franchise agreements due to protections under Federal Communications Commission (FCC) law;
- Each license with utility providers will be for a term of one (1) year with renewal upon annual registration up to five (5) years;
- Licenses are transferrable upon the written consent of the City, provided the transfers are consistent with state and federal law;
- Providers seeking license renewals must submit license applications at least thirty (30) days, but not more than ninety (90) days prior to expiration;
- Includes provides under which the City may terminate licenses; and
- Provides for fees to be established by ordinance.
Financial and Budgetary Impacts
The purpose of this code is to clarify and codify the terms and corresponding fees for utilities operating in the City’s right-of-way. Utilities who operate in the ROW pay fees to the City in two ways. The first are fee-based, and second are a percentage of gross revenue. Fee-based payees pay on a per site or per foot basis, and the fees associated with those categories are based on existing fee structures. Utility providers will experience no material changes to their annual ROW license payments to the City. Overall, the annual collection of fees is expected to not change more than one percent over the first five years of implementation.
There may be small positive budgetary impacts in future years due to more efficient administration of the program by eliminating the need for franchise negotiations and individual agreements, improved oversight of account management, and increased compliance.
Community Impacts and Community Involvement
There are no direct community impacts as a result of this ordinance. While general community involvement was not conducted, industry stakeholders were consulted and provided multiple opportunities to give comments and suggest edits over the two-year process.
100% Renewable Goal
n/a
Financial and Budget Analysis
Analysis provided by City Budget Office
No immediate financial impact. There may be small positive budgetary impacts in future years due to more efficient administration of the program by eliminating the need for franchise negotiations and individual agreements, improved oversight of account management, and increased compliance.