|
CITY OF VANCOUVER ADMINISTRATIVE REPORT |
Date: |
December 18, 2003 | |
Author: |
John Evans | |
Phone No.: |
7288 | |
RTS No.: |
03871 | |
CC File No.: |
1203 | |
Meeting Date: |
January 13, 2004 |
TO: |
Vancouver City Council |
FROM: |
General Manager of Engineering Services |
SUBJECT: |
Canada Payphone Corporation - Extension of Municipal Access Agreement |
RECOMMENDATION
A. THAT the General Manager of Engineering Services and Director of Legal Services be authorized to conclude negotiations, and execute and deliver a legal agreement with Canada Payphone Corporation extending the previous Municipal Access Agreement for a further 3 years, expiring on December 31, 2006. The agreement would be extended on the previous terms and conditions, generally as described in this report, and such other terms and conditions satisfactory to the General Manager of Engineering Services and Director of Legal Services.
B. THAT no legal rights or obligations will arise or be created by Council's adoption of Recommendation A unless and until all legal documentation has been executed and delivered by all parties.
GENERAL MANAGER'S COMMENTS
The General Manager of Engineering Services RECOMMENDS approval of A and B.
COUNCIL POLICY
Where Council's pre-existing standing authority for the execution of contracts by City staff is not applicable, specific Council authorization is required.
On June 24, 1999, Council approved a recommendation from the General Manager of Engineering Services authorizing staff to conclude and sign agreements with BC Tel (now Telus) and other pay telephone companies.
PURPOSE
This report seeks Council authorization for staff to conclude negotiations and execute an agreement with Canada Payphone Corporation extending the existing Municipal Access Agreement, which expired on December 31, 2003, until December 31, 2006.
BACKGROUND
Canada Payphone Corporation (CPC) had a Municipal Access Agreement (MAA) with the City effective January 1, 1999, which expired on December 31, 2003, that permitted them to install, operate and maintain a number of public pay telephones on the streets of the City, subject to the terms of the MAA. A valid MAA is needed for the company to continue to provide public pay telephones on the streets of the City.
One other company, Telus, currently has a MAA with the City, which will expire on December 31, 2006.
A third company, Paytel, had a MAA but cancelled their agreement earlier this year and removed their payphones from the streets.
DISCUSSION
CPC is a relatively small company in the public pay telephone marketplace in Vancouver, operating only 9 phones on City streets currently. The company is providing a valuable public service in a marketplace with progressively diminishing revenues due to the growth in wireless phones. They are current with payments to the City and they have fulfilled the other obligations of the agreement adequately. Therefore, staff proposes to extend the current MAA.
The Telus payphone MAA expires in three years, on December 31, 2006. There would be an advantage to the City to have both remaining MAAs expire concurrently. The terms of the two payphone MAAs are quite similar, which is necessary to maintain to not upset the competitive balance. Therefore, we propose to extend the CPC agreement three years.
The terms would remain the same, which include an annual payment to the City of 15% of gross revenues, subject to a minimum payment of $200 for each location.
FINANCIAL IMPLICATIONS
Revenue paid to the City by CPC under the MAA for the calendar year 2002 was approximately $6000, which would be lost in future years if the agreement was not extended or renegotiated.
CONCLUSION
Staff recommends that Council approve the recommendation to authorize staff to conclude negotiations and extend the current MAA with Canada Payphone Corporation for three more years.
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