TO:
Honorable Mayor and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Tony Olmos, Public Works Director
Joe Parco, City Engineer
SUBJECT:Title
Approval of Third Amendment to a License Agreement with Northrop Grumman Systems Corporation Related to an Aerial Fiber Optic Communication Line Connecting Northrop Grumman Facilities in Manhattan Beach and Redondo Beach (Public Works Director Olmos).
APPROVE
Line
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council authorize the City Manager to execute the third amendment to a license agreement with Northrop Grumman Systems Corp. related to an aerial fiber optic communication line connecting Northrop Grumman Facilities in Manhattan Beach and Redondo Beach.
Body
FISCAL IMPLICATIONS:
The original agreement with Northrop Grumman provided for payment to the City in the amount of $1,000 annually with consumer price index (CPI) adjustments. The proposed Amendment No. 3 will provide payment in the amounts indicated below through the proposed term of the agreement.
Payment Due Date |
Term Year |
Payment Amount |
July 1, 2015 |
7/1/15 - 6/30/16 |
$1,292.00 |
July 1, 2016 |
7/1/16 - 6/30/17 |
$1,318.00 |
July 1, 2017 |
7/1/17 - 6/30/18 |
$1,344.00 |
July 1, 2018 |
7/1/18 - 6/30/19 |
$1,371.00 |
July 1, 2019 |
7/1/19 - 6/30/20 |
$1,398.00 |
The proposed amendment has an option to extend the Term of the License Agreement for an additional five (5) year period (July 1, 2020 through June 30, 2025) on the same terms and conditions as set forth in this Agreement. Amendment 2 will be expiring on 6/30/2015, thus the need to either renew or cancel the agreement with Northrop Grumman.
BACKGROUND:
Northrop Grumman facilities are located on the northwest and southeast quadrants of the Aviation Boulevard/ Marine Avenue intersection in cities of Manhattan Beach and Redondo Beach respectively. The facilities are connected via underground fiber optic facilities that traverse Aviation Boulevard and Marine Avenue.
Starting in 2004, Aviation Boulevard was widened as part of the greater Aviation/Rosecrans improvement project. As a precautionary measure, Northrop Grumman installed an aerial fiber optic line crossing Marine Avenue and Aviation Boulevard to serve as a temporary back-up in case the underground line was damaged during street construction. They have found it desirable to keep this redundant improvement in place even though the original street construction project is complete. The fiber optic line is attached to utility poles in the public right-of-way owned by Southern California Edison. Northrop Grumman and Edison entered into joint pole agreements governing attachment heights and methods.
The original aerial attachment was performed under a license agreement approved by City Council on April 6, 2004. Northrop Grumman and the City subsequently amended the agreement to extend the term to September 1, 2005. Amendment 2 was approved on July 20, 2010 and extended the term from July 1, 2010 to June 30, 2015. Amendment 2 also included unpaid fees in the amount of $6,593.65 since the City did not receive any payments from the period of May 2004 to June 30, 2010.
DISCUSSION:
The terms of the original license agreement and Amendments 1 and 2 would remain in place except as modified by Amendment 3. Those modifications include:
· Paragraph 3. Termination of License - Provides that the license may be terminated by either party upon thirty day notice rather than the ten day notice of the original license agreement.
· Paragraph 4. Consideration - Revises the payment schedule to the City.
· Paragraph 5. Term - Provides for a five-year initial term and grants Northrup Grumman an option for another five-year term. The payment schedule is adjusted in the option years.
· Paragraph 7. Notice - Updates the process as well the parties to be notified.
A map illustrating the location of the line is provided in Attachment 2.
ALTERNATIVE
The City Council can decide not to renew the license agreement with Northrup Grumman.
PROS:
By not renewing the license agreement the optical aerial fiber optic communication line connecting Northrop Grumman Facilities in Manhattan Beach and Redondo Beach would be eliminated.
CONS:
By not renewing the license agreement the optical aerial fiber optic communication line connecting Northrop Grumman Facilities in Manhattan Beach and Redondo Beach would be eliminated and Northrop Grumman would not be able to retain its current communication redundancy between its facilities.
Attachments:
1. Third Amendment to License Agreement
2. Location Map