2023-05-09 City Council Special Packet1.
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Edmonds City Council
tnl. }nyo SPECIAL MEETING
CITY COUNCIL CONFERENCE ROOM
121 - 5TH AVENUE N, EDMONDS, WA 98020
MAY 9, 2023, 6:30 PM
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CALL TO ORDER
ROLL CALL
CONVENE IN EXECUTIVE SESSION TO DISCUSS POTENTIAL LITIGATION PER RCW 42.30.110(1)(1)
RECONVENE IN OPEN SESSION
COUNCIL BUSINESS
1. Tolling Agreement Extending the Period of Limitations for Recovery of Fees and Possible
Authorization of Lawsuit to Preserve Franchise Rights (15 min)
ADJOURN
Edmonds City Council Agenda
May 9, 2023
Page 1
5.1
City Council Agenda Item
Meeting Date: 05/9/2023
Tolling Agreement Extending the Period of Limitations for Recovery of Fees and Possible Authorization
of Lawsuit to Preserve Franchise Rights
Staff Lead: City Attorney
Department: City Clerk's Office
Preparer: Scott Passey
Background/History
N/A
Staff Recommendation
That the City Council authorize the Mayor to execute a tolling agreement substantially in the attached
form; additionally and alternatively authorizing a lawsuit to protect the City's rights in the event that the
tolling agreement cannot be finalized before the limitations period runs.
Narrative
Ziply Fiber Northwest, LLC, ("Ziply") conducts cable television operations within the City's jurisdictional
boundaries and pays fees and other sums to the city related thereto. The City is currently conducting an
audit of franchise fees and other sums paid by Ziply to the City to ensure Ziply properly paid all amounts
owed the City for the period January 1, 2019, through December 31, 2021. The City has not yet received
from Ziply all the requested documents needed to perform the audit.
A period of limitations for recovery of franchise fees arguably applies to a portion of the fees under
audit and arguably runs later this month. In order to avoid both the situation where the City would file
suit to preserve all claims and the expense of litigation, the City Attorney recommends execution of the
attached tolling agreement. Ziply has indicated it is willing to sign the attached tolling agreement;
however, as of the drafting of this memo, it had not yet returned an executed copy. Therefore, because
time is of the essence, and because special meeting agendas are somewhat inflexible, the City Attorney
is providing notice that it may also need to request, additionally and alternatively, authorization to file
suit if the tolling agreement cannot be finalized before the limitations period runs.
Attachments:
2023-05-08 Resolution -tolling agreement
2023-05-08 TOLLING AGREEMENT -Final
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5.1.a
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
EDMONDS, WASHINGTON, AUTHORIZING THE MAYOR
TO ENTER INTO A TOLLING AGREEMENT WITH ZIPLY
FIBER NORTHWEST, LLC, A LIMITED LIABILITY
COMPANY.
WHEREAS, Ziply Fiber Northwest, LLC, conducts cable television operations in the
City of Edmonds and pays franchise fees and other sums to the City related to its operations
within city jurisdictional boundaries; and
WHEREAS, the City is currently conducting an audit of franchise fees and other sums
paid by Ziply to the City to ensure Ziply properly paid all amounts owed to the City for the
period from January 1, 2019, through December 31, 2021 (the "Audit"); and
WHEREAS, the City has not yet received all requested documents related to the Audit
from Ziply; and
WHEREAS, a period of limitation for recovery of franchise fees arguably applies to a
portion of the fees that are the subject of the Audit, and arguably runs later in May; and
WHEREAS, in order to avoid the situation where the City would file suit to preserve its
claims, and in order to avoid the expense of litigation to both parties, if possible, both Ziply and
the City wish to toll any and all limitation periods; and
WHEREAS, the City and Ziply each believe that a tolling agreement is in their mutual
best interest to preserve claims related to the Audit and avoid litigation costs;
NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, HEREBY
RESOLVES AS FOLLOWS:
Section 1. The Mayor is authorized to execute a tolling agreement in substantially the
same form as the agreement attached as Exhibit A.
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5.1.a
RESOLVED this day of , 2023.
MAYOR, MIKE NELSON
ATTEST:
CITY CLERK, SCOTT PASSEY
FILED WITH THE CITY CLERK:
PASSED BY THE CITY COUNCIL:
RESOLUTION NO.
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5.1.a
EXHIBIT A
TOLLING AGREEMENT
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5.1.b
TOLLING AGREEMENT
This Tolling Agreement is entered into by and between Ziply Fiber Northwest, LLC, a limited
liability company organized under the laws of the state of Delaware-(Ziply) and the City of
Edmonds, a municipal corporation of the State of Washington (City), collectively referenced
herein as the Parties.
RECITALS
WHEREAS, a cable franchise (Franchise) governs Ziply's cable operations within the City's
jurisdictional boundaries, and
WHEREAS, the Franchise addresses franchise fees, payments, and audits; and
WHEREAS, the City is currently conducting an audit of franchise fees and other sums paid by
Ziply to the City to ensure Ziply properly paid all amounts owed to the City for the period from
January 1, 2019, through December 31, 2021 (the Audit); and
WHEREAS, the City has not yet received all requested documents related to the Audit from
Ziply, and
WHEREAS, the City has issued Ziply notice of breach of contract for failure to provide
requested documents and the Franchise provides Ziply a thirty -day period (until May 8, 2023) to
cure or otherwise respond to the contended breach as provided in the Franchise; and
WHEREAS, the Franchise mentions a period of limitation for recovery of franchise fees that
arguably is applicable to a portion of the fees that are the subject of the Audit, and arguably runs
later in May; and
WHEREAS, in order to avoid the situation where the City would file suit to preserve all claims,
and in order to avoid the expense of litigation to both parties, if possible, both Ziply and the City
wish to toll any and all limitation periods, under the franchise or as otherwise provided in
contract or law; and
WHEREAS, nothing in this Tolling Agreement is intended to extend Ziply's thirty -day period to
cure or otherwise respond to City's notice of breach of contract as provided in the Franchise; and
WHEREAS, the City and Ziply each believe that this Tolling Agreement is in their mutual best
interest to preserve claims related to the Audit.
ACCORDINGLY, the sufficiency of consideration hereby acknowledged, the Parties agree as
follows:
1. All periods of limitation are tolled through April 28, 2024, including contractual,
statutory, or otherwise, in favor of either the City or Ziply, in connection with any claims,
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5.1.b
defenses, and/or counterclaims related to unpaid franchise fees or any other sums due the
City.
2. Nothing is this Tolling Agreement shall operate to relieve Ziply of its obligations under
the Franchise, including its obligations to cure or otherwise respond under the Franchise,
and nothing in this Tolling Agreement shall prevent the City from filing suit before April
28, 2024, if it determines it to be in the City's best interests. If the City determines to file
suit on or prior to April 28, 2024, it will provide Ziply with notice ten (10) business days
prior to filing the complaint.
3. The execution of this Tolling Agreement is not and shall not be construed as evidence of
or an admission of liability for any claim or cause of action.
4. This Tolling Agreement is the product of joint negotiation between the Parties and their
respective attorneys and shall not be construed against either of the Parties.
5. This Tolling Agreement contains the entire agreement of the Parties and supersedes any
prior written or oral agreements between them concerning the subject matters contained
herein. No supplement, modification, or amendment to this Tolling Agreement shall be
binding unless executed in writing.
6. This Tolling Agreement may be executed in counterparts, each of which shall be deemed
an original, but all of which taken together shall constitute one and the same instrument.
This Tolling Agreement may be delivered by facsimile transmission or electronic
transmission in PDF format of signed counterparts. Facsimile or electronic signatures will
be treated in all respects as having the same effect as an original signature.
7. The persons signing below represent they are authorized to act to bind each party and
their signature does bind the party on whose behalf they sign.
8. All notices, requests, demands, and communications hereunder will be given by email
addressed to the parties as follows:
CITY:
City of Edmonds
Oscar Antillon, Director of Public Works
Oscar. antillongedmondswa. _ og_v
With copies to:
Jeff Taraday
j eff kli ghthous elawgroup. com
and Angela Tinker
angela(d), li ghthouselawgroup. com
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5.1.b
Z,TPT ,Y
legal&ziply.com
With copies to:
Jessica Epley (iessica.epleykziply.com) and;
George Thomson(george.thomson(c�r�,ziply.com)
9. Effective Date. This Tolling Agreement is effective on the date signed by Ziply.
ZIPLY FIBER
By: _
Name:
Title:
CITY OF EDMONDS
By:
Name:
Title:
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