5. Amendment to Construction Cost Sharing Agreement with Midco r
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CANDIA
Staff Report
Date of Meeting: January 4, 2023
To: Mayor and City Council
From: Anne Hurlburt, Interim City Administrator
Re: Amendment to Construction Cost Sharing Agreement with
Midcontinent Communications d/b/a/"Midco"
Action Requested:
Approve an amendment to the construction cost sharing agreement with Midcontinent
Communications d/b/a/"Midco"to extend the completion date from December 31, 2022 to July
1, 2023.
Background:
At their December 15, 2022 meeting, the Internet Action Committee discussed the status of
Midco's 2022 build, which is running behind schedule due to supply chain issues. In particular,
Midco has been having difficulty obtaining fiber splicing materials, of which they are in short
supply. The city will need to consider extending the completion deadline.
Midco has indicated that they prioritized the Oakhill project as it was partially funded by both
Scandia and the county. Their teams have been working to complete this area and have now
completed fiber splicing, certifying and activating the Oakhill project and service is now
available. They are also slightly behind on the other projects in Scandia. They expect to have the
larger area in northwest Scandia spliced, certified and activated in the first quarter of 2023, with
a smaller project on Hwy 97 to follow in the spring.
The City Attorney has reviewed the amendment and had no concerns.
Attachments:
• Amendment to Construction Cost Sharing Agreement(Midco Draft)
• Construction Cost Sharing Agreement dated August 16, 2022
AMENDMENT TO CONSTRUCTION COST SHARING AGREEMENT
THIS CONTRACTUAL AMENDMENT (the "Amendment") is made by and between the City of
Scandia, whose address is 14272 2091h Street North, Scandia, MN 55073 ("City"), and Midcontinent
Communications ("Midco"), a South Dakota partnership, whose address is 3901 North Louise Avenue, Sioux
Falls, SD 57107.
WHEREAS,the parties executed a Construction Cost Sharing Agreement effective August 16,2022("The
Agreement"), and Parties now desire to amend The Agreement.
NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:
1. Survival of Terms: This Amendment only alters the provisions stated herein. All other provisions,
terms, and conditions in The Agreement not addressed by this Amendment continue in full force and
effect.
2. Amendment: The following terms in The Agreement are amended as follows:
Paragraph 1. Construction of Cable Plant. Subject to the terms and conditions of this Agreement,Midco
will install cable and other equipment necessary to provide its video, data and telephone service to the
residences at the addresses shown in Exhibit 2. Construction must be completed by July 1, 2023.
Individual drops to the customers home will be installed when service is ordered and installation is
agreed upon by the customer and Midco.
3. Effective Date: This Amendment shall be deemed effective as of the date of last signature affixed
below.
Ngnatures on Following Pagel
Page I 1 of 2
CITY OF SCANDIA
I3�
Print name:
Title:
By:
Print name:
Title:
Date:
Midcontinent Communications d/b/a"Midco"
By: Midcontinent Communications Investor, LLC
Its Managing General Partner
By:
Print name:
Title:
Date:
Page ` 2 of 2
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CONSTRUCTION COST SHARING AGREEMENT
M 1 1 DCO
THIS CONSTRUCTION COST SHARING AGREEMENT(the"Agreement"),
dated as of 20 �. is by and between the City of
Scandia, Minnesota,knlicise address is 14272 209th Street North, Scandia, MN 55073
("City"),and Midcontinent Communications,a South Dakota general partnership,whose
address is 3901 North Louise Avenue, Sioux Falls, SD 57107 ("Midco").
RECITALS
WHEREAS,the City controls of certain Right-of-Way("ROW")within the area
depicted on Exhibit I (the"Project Areas"),which specifically includes ROW along the
following named streets: 199`'Street North,2131h Street North,230`' Street North,2321,d
Street North,2351h Street North,2361h Street North,
232"d Street North,235`h Street North,2361h Street North,238"' Street North,240'h
Street North, Meadowbrook Avenue North, Morgan Avenue North,Nolan Avenue North,
Novak Avenue North,Oakhill Road North,Olinda Trail North, Parkview Lane North,
Scandia Trail North, and St Croix Trail North.
WHEREAS,the state of Minnesota controls the ROW along Scandia Trail North,
and St Croix Trail North.
WHEREAS, the county of Washington controls Oakhill Road between Scandia
Trail North and St Croix Trail North.
WHEREAS,Midco seeks to install in the ROW Project Area cable and certain other
equipment necessary to deliver video, data and telephone service drops to the residences
named in exhibit 2;
WHEREAS,the City and Midco desire to enter into an agreement to establish the
necessary infrastructure to provide video, data and telephone service drops to the
residences named in exhibit 2;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is herby acknowledged,the City and Midco enter the following:
AGREEMENT
1. Construction of Cable Plant. Subject to the terms and conditions of this
Agreement, Midco will install cable and other equipment necessary to provide its video,
Mldeo is an Equal Opportunity/Affirmative Action Employer MJF 0/V
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CONSTRUCTION COST SHARING AGREEMENT
MIDCO
data and telephone service to the residences at the addresses shown in Exhibit 2.
Construction must be completed by December 31,2022.Individual drops to the customers
home will be installed when service is ordered and installation is agreed upon by the
custuuier and Midco.
2. Service Speed. Midco shall provide access to video, data and telephone
service for the residences named in Exhibit 2 at a speed of up to 5 gigabit per second
downloads and 5 gigabit per second uploads.
3. Right of Way Permit Re uired. Prior to engaging in any excavation,
installation, or other work which may disturb the ROW in the Project Area, Midco shall
apply to the City for a ROW permit.The City-issued ROW permit shall set forth the terms
and conditions for Midco's work within the ROW.In addition to obtaining a ROW permit,
for ROW controlled by the State of Minnesota, Midco must receive permission from the
State of Minnesota for the proposed excavation and installation of any cable infrastructure
within the ROW prior to commencing construction.Midco shall provide proof of the State
of Minnesota's consent to Midco's proposed excavation of and infrastructure installation
within the State of Minnesota controlled ROW to the City prior to commencing work
within the ROW.
4. Cost Sharing. In consideration of Midco's agreement to install facilities to
provide such services, City shall pay to Midco on the date of this Agreement TWO
HUNDRED AND NINTEEN THOUSAND DOLLARS ($219,000) (the "Cost Share
Amount"),which represents the City's share of the costs to be incurred by Midco to finish
its design, installation and construction activities to provide service to the Property.
5. Commitnent to Deliver Access to Service.As part ofthis agreement,Midco
must provide video,data and telephone service available to each of the residences named
in Exhibit 2.Midco bears responsibility for all costs necessary to provide service access to
each of the residences named in Exhibit 2 in excess of the Cost Share Amount,and the City
will incur no costs in excess of the Cost Share Amount as a part of this project.Midco shall
provide the City with plans detailing the proposed project service area, including
engineering design and diagrams for the project that support the Cost Share Amount,that
demonstrate video, data and telephone service will reach each of the residences named in
Exhibit 2,and that demonstrate the reasonable of the timeline for the project's completion.
6. Verification. The City shall contract with a third party to verify the project
is completed in accordance with the project plan. Specifically, the City will confirm that
Midco is an Egual opportunitylAfflrmatiye Action Employer MIFIDIV
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CONSTRUCTION COST SHARING AGREEMENT
MIDCO '
the number of service passings and service speeds are met.Verification of internet speeds
will be completed by sampling service taps completed with the buildout.
7. Easement Rights. City acknowledges that Midco shall be entitled to install
and construct its cable and other equipment over and under the ROW areas controlled by
the City within the Project Area. Midco acknowledges that the City cannot grant Midco
the right to install infrastructure in ROW controlled by Washington County or the State of
Minnesota.Midco acknowledges it will need to seek approval from the State of Minnesota
to excavate and install infrastructure within State-controlled ROW.The City agrees to grant
any required ROW permits to Midco for excavation and infrastructure installation within
State-controlled ROW upon Midco providing proof of the State of Minnesota's consent to
the proposed ROW work and upon compliance with all other requirements for issuance of
a ROW permit. .
8. Indemnification.Midco shall indemnify,save,and hold the City,its agents,
and employees harmless from any claims or causes of actions, including attorney's fees,
incurred by the City arising from the performance of this Agreement by Midco or Midco's
agents or employees. This clause will not be construed to bar any legal remedies Midco
may have for the City's failure to fulfill its obligations under this agreement.By entering
into this Agreement,the parties agree the City is not and will not be acting as a video,data
and telephone service provider.Midco is solely responsible for the provision of video,data
and telephone service to the residences depicted in Exhibit 2.Any contracts for video,data
and telephone service between Midco and City residents are solely between Midco and the
residents, and Midco shall indemnify, save, and hold the City harmless from any claims
arising out of video, data and telephone service contracts.
9. Financial Assistance Reporting. Midco shall cooperate with the City in
drafting and submitting any Financial Assistance Reports to the Minnesota Department of
Employment and Economic Development necessary due to this agreement.
10. Assignment. Midco shall neither assign nor transfer any rights or
obligations under this Agreement without the prior written consent of the City.
11. Severability. If any provision of this Agreement,or the application of such
provision to any party or circumstance, is found to be illegal or unenforceable for any
reason, such provision will be modified or severed from this Agreement to the extent
necessary to make such provision enforceable against such party or in such circumstance.
Neither the unenforceability of such provision nor the modification or severance of such
provision will affect the enforceability of any other provision of this Agreement.
Midco is an Equal Opportunity/Affirmative Action Em to er M F D V
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nn CONSTRUCTION COST SHARING AGREEMENT
M I DCV
12. Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of Minnesota,without regard to its conflict of laws
principles.
13. Entire A�rcement: Amendment. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof, and there are no
other representations,warranties or agreements except as herein provided. This Agreement
may be amended only by a written instrument signed by the parties.
IN WITNESS WHEREOF,the parties have entered into this Agreement effective
as of the date first written above.
CITY OF SCANDIA,MI,NNESOTA
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Print Name: ITC 10 L��►mmhlJ�f-r'3_
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Title:
MIDCO
MIDCONTINENT COMMUNICATIONS
By: MIDCONTINENT COMMUNICATIONS
INVESTOR,LLC, Its Managing Partner
By:
Name:
Title: I j,e c+o,— o-F Goyek-gypuli-f-ee(a-h(U-
Mldco is an Equal Oaoortunity/Affirmative Actlon Employer M F D V
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CONSTRUCTION COST SHARING AGREEMENT
M l DCO
EXHIBIT 1
Mldco is an Equal Opportunity/Affirmative Action Ernniover MIFIDIV
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CONSTRUCTION COST SHARING AGREEMENT
M I DCO
EXHIBIT 2
ADDRESSES PASSED
Midco is an Equal Opportunity/Affirmative Action Emplayer MIFID1y
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