MINUTES OF THE INFORMAL MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS:

MARCH 15, 2001

TABLE OF CONTENTS

Chairperson Lehman called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 9:30 a.m. Members present were: Pat Harney, Mike Lehman, Terrence Neuzil, Sally Stutsman, and Carol Thompson.

DISCUSSION: REQUESTS FROM QWEST CORPORATION TO PURCHASE AN EASEMENT TO PLACE AN ELECTRONICS CABINET, A CROSS CONNECT CABINET AND A POWER CLOSURE IN THE AREA OF THE SECONDARY ROADS FACILITY AT 4810 MELROSE AVENUE

Lehman: Business from the County Engineer, Mike Gardner again. Discussion and action needed from Qwest Corporation to purchase an easement to place an electronics cabinet, a cross connect cabinet and a power closer in the area of the Secondary Roads Facility at 4810 Melrose Avenue. We have Andy Chappell from the County Attorney's Office also with us this morning.

County Engineer Mike Gardner: I think all of you received a copy of the request from Qwest. Received that last month and I sent it down to Andy at the County Attorney’s Office to review it. My only involvement in this actually is that they’re talking about putting it on Secondary Roads facility out there. They had a couple different locations that they were looking at. I have told them which one we would prefer. I have talked with Kevin and so forth out there so as far as our operation would be concerned we told them what our preference would be, but also explained that this would be your decision to make. I have asked them to come today to answer any questions you might have on it, so Jim Heitzman and Julio Corillo are both here and they can answer some questions. Once Andy’s gone through the things he wants to talk about.

Assistant County Attorney Andy Chappell: There’s just a couple things I wanted to bring to the Board’s attention, just for your consideration. As you know, this property is within the City of Iowa City. The proposed location for the easement is directly adjacent to what would be the road right-of-way there. That being the case, there may be some issues as far as required screening, landscaping, that sort of thing. Your Planning and Zoning Department is talking to Iowa City’s Planning and Zoning Department to see what they would require, if anything. I think likely if this were a normal commercial business there would be required some sort of screening of the bushes or something around this type of equipment. But I don’t even know what is zoned out there to be honest. So they’re looking into it and we certainly will have an answer to that. There’s also a question as to whether they would force us to comply with that. It’s just something for you to consider as to whether you would maybe want to voluntarily comply once we find out what they would want to begin with.

Stutsman: Well for good relations yes I think we should comply. But I guess I’m thinking about the cost of screening and things. Do we have to absorb that cost or is this something that we could assess to Qwest?

Chappell: I would recommend that you request that Qwest absorb that cost obviously. But that would be a negotiating point I imagine. I can’t imagine, the amount here isn’t all that great to begin with so it’s not like you’re going to be taking a big chunk of that to buy a bunch of bushes to put around it I wouldn’t think. But I imagine it’s something they’ve dealt with before and if you have any questions I’m sure they can answer them for you.

Stutsman: Can I just clarify, is it exhibit A, the one that your prefer, is the preferred one Mike?

Gardner: Our preferred one is to put it clear over to the west end of the property there.

Stutsman: OK, all right, down at the bottom there.

Gardner: Yes.

Stutsman: All right, thank you.

Chappell: I have an issue with some of the language. I think that the easement as it’s drafted is too broad for what they say they want to put on there. I’ve spoken just briefly with Qwest representatives. I don’t think that will be a problem to get that cleared up and narrowed down to what exactly they’re saying they want on there. But the other thing I guess I should just bring up for you to consider is they’re proposing a perpetual easement. An easement essentially forever. An easement that would run with the land if you ever sold it. It would always be there. I guess I would just say you may want to consider whether that’s exactly what you want for this particular property, especially when we don’t know what the future holds for this property. It’s likely that development will continue to move out toward it and I guess I’ll just leave it at that. You should consider whether you would want to either limit the length, 10 or 20 years, I don’t know. The length of the easement or try to negotiate some sort of buy out provision if ever you wanted to be able to remove the equipment that’s there. I understand from speaking briefly to them that the equipment that’s out there would actually help development along because of the services it would be providing, but it’s just something that I thought I should bring up and let you discuss or not as you see fit. Other than that we don’t have an opinion for or against it. There’s no problem with it otherwise.

Lehman: Good. Sounds like we wait to get some feedback from Zoning and further negotiations with screening.

Chappell: I don’t see that to be a major issue. What maybe you could do is just ask Qwest if their screening would require it, if that’s something that they would be willing to pick up. It might be that simple.

Stutsman: It seems like we looked into the zoning and I’m thinking it’s zoned public out there. I don’t know what that means but…

Chappell: Well and the reason I brought it up is I believe it’s been in some instances that we typically try to voluntarily comply with something like that. I just thought you should be aware.

Thompson: Uh-huh.

Stutsman: Good point.

Lehman: I want to ask the representatives from Qwest if they wanted to help clarify it. There won’t be any action taken today.

Qwest Representative Jim Heitzman: Sure.

Lehman: There will be further discussion.

Heitzman: Great. What questions do you have?

Stutsman: I guess I want to know what is this thing that you’re wanting to put out there?

Lehman: Would you like to come up to the table so we can hear you on microphone and the public can pick you up a little better. Maybe re-identify yourself for the Auditor.

Qwest Contract Engineer Julian Corillo: My name is Julian Corillo, I’m a contract engineer doing work for Qwest.

Heitzman: I’m Jim Heitzman, I’m the engineer out of Cedar Rapids for this area.

Corillo: As far as screening, Qwest often will compensate for screening and what Qwest prefers to do is, whoever the owner is of the property to get an estimate on what screening would cost and everything. Then Qwest provides that money to the owner so that they’re responsible for the bushes themselves and everything. Because with all the different sites that Qwest has, there is no way that Qwest could go around and trim bushes and take care and be in charge of ownership of bushes and that. So we prefer to reimburse, and that can be over and above the amount for the easement itself. One thing, I guess before we get too far we want to bring up, since we first started this request, the engineer has determined that he would… We’re sure that that road is going to probably be widened sometime in the future. We’re going to be bringing, Qwest will be bringing a fiber optic cable out to it. Rather than putting it in the existing ditch, we’d like to get an easement back wherever the new right-of-way line is so that once the cable is in place it won’t have to be moved in the future. We’d like an easement from the highway, highway 218 to the site. Because the County owns the property all the way from 218 to where the site would be on the west end.

Lehman: I was going to say while we’re negotiating one project…

Corillo: Yes, make it all one. Because he just determined, it seems to me that it might only be 33 foot down at the far end. It might be wider as you get closer to one, but I think the existing fence is only like about 33 feet. So I’m sure that will be widened in doing that. Then if we put a cable in there and then have to move it. Because there’s going to be a fiber optic cable to serve part of the equipment.

Stutsman: So you’re not just asking for this rectangle here. You want an easement all the way from 218.

Corillo: To the site, yes.

Chappell: I think that since that’s something we haven’t really heard about until today…

Stutsman: Yes.

Chappell: I think they’re essentially just bringing it up and saying this is coming, I think we’d be better served to wait for a written proposal from them. We can get that on your informal agenda and you can discuss that if you want to table this until you get that so you can discuss them both together, that would be fine. But since, I think they’re just informationally saying this will be coming too and letting you consider that it is coming at the same time. But there’s nothing on the table at this point, nor is there anything on the agenda about it.

Thompson: But the only part of the project that would be visible is the structure there in the 20 x 30 area?

Corillo: Right.

Thompson: What’s that structure look like?

Corillo: I have a picture of one that we did in Cedar Rapids that I could bring up here after the meeting and hand it off to you folks. Let you get a better feel for what it really is.

Lehman: That would be good.

Stutsman: That would be good.

Thompson: Yes.

Lehman: I’m just curious. Is this something that you need to access quite frequently?

Heitzman: It would be initial site set up, there would be a lot of activity. Thereafter, it would be accessed whenever a customer requires service or requests service.

Thompson: So you’d have a driveway to it.

Heitzman: Right. And that brings up another point, that the site where we’re talking about is at the property line there to the west. That site sits rather low, so we would expect to bring that up to a level of the road bit. Just for access on days like today that we wouldn’t get people stuck in there and tear it up and also that we need to get to talk about who sees, or what do we see as that road being widened too. That would be in behind the new roadway.

Corillo: Yes, right now that would be another thing. It’s shown right at the existing right-of-way line. If there is going to be an additional 12 or 15 foot right-of-way, we’d prefer to be behind that now as opposed to having to move that entire structure in the future.

Neuzil: And that’s something we can discuss when it’s in front of us.

Corillo: Right.

Neuzil: If we chose not to do this, what are your alternatives?

Corillo: Go to private homeowners or property owners in the area to try to obtain an easement.

Neuzil: All right.

Stutsman: You talk about purchasing but I didn’t see anything about price in here. So where are we at on…

Corillo: Is there anything, I don’t know if I have… Is there anything on the very first page?

Thompson: $2000.00.

Stutsman: Oh, $2000, OK, all right.

Corillo: And that, I like to start.

Stutsman: High or low?

Corillo: Well that would be like a 20 x 30, that would be a little bit more than $3 a square foot cost-wise and everything.

Heitzman: And we have a tendency to leave that number open because everybody has a perceived different value on their property.

Stutsman: And that’s a one time cost.

Heitzman: Right. One time fee. Yes.

Stutsman: Do you ever enter into rental agreements or lease agreements?

Heitzman: No.

Stutsman: OK, it’s always outright purchase.

Thompson: So you’re making an investment in the infrastructure to put to this so you want a permanent easement so that you don’t have to do it over.

Corillo: Right. Because if the area does develop, this will be able to serve whatever happens in that area until it goes out further, and then they can extend further out and put another one further out. This would be there and would be able to… Because Qwest would be running fiber to that to provide the services and everything.

Harney: I guess one of my concerns is the long term perpetual easement. That’s an area that most likely is going to develop as Highway 965 gets extended down and I’m sure that area is going to blossom out there. I guess we would, to me we would need a way of an agreement where we could move the facility, or you could move the facility or we would have a way out somewhere down the line. If there was something we wanted to build out there that would fit in our needs in the future. It’s a long way out, but perpetual is forever so it’s…

Heitzman: What happens in the past is that we have purchased sites like this and things have changed as you say. What we usually require for that to be moved is that whoever the owner or the one that wishes to have it moved pay the cost of moving it and giving us a new home for it. So that kind of goes to whatever the day is to market rate.

Lehman: It’s quite a commitment on both parties.

Heitzman: Yes it is.

Thompson: Yes. Andy are there other forms of buyout that you know about that we could propose?

Chappell: Well we can propose essentially whatever we want. There’s no requirement that we grant an easement at all. This is certainly an arms length transaction. You can essentially propose what you’re willing to do whatever that may be. Whether it be a ten year easement and see what happens there, 20 or 30, whether it be you propose an easement that allows us to pay a certain amount back in order to get out of it at a later point. If you come up with a proposal I can write it. The question is what will happen and whether they will accept it. And any other arms length transaction like this.

Thompson: I guess I’d say I’d rather favor one where the buyout was one where we pay back the original payment to us or something like that. It seems a little more to out advantage.

Stutsman: Yes. Tell me a little bit about what this is for?

Heitzman: OK.

Stutsman: Is this phone?

Heitzman: It’s telephone, it’s high cap services. Right now in the past for those towers, cell towers and whatever out there, we’ve had problems meeting those service orders due to the out of capacity in that area. We have fiber optics cable down on Melrose Avenue, this is more the new way to doing things if you would. Take fiber optics to one of these (inaudible) cabinets that derives bandwidth out of the fiber optics. Then you go from that point with copper cable to your end user. So at the same time if somebody was as we were talking about, developed out there and they also wanted fiber optics service to their premise, this would be the spot we would come from. It is primarily growth driving this. When you had your bond issue for the jail, that brought my attention to this area. Just trying to get ahead of the game.

Stutsman: Good business plan.

Corillo: Plus the remote terminal or the electronics cabinet besides giving bandwidth, it does allow Qwest to just get additional, just normal feeder (inaudible) for regular telephone service also in the areas that grows. So we’re looking at the whole picture.

Lehman: Kind of a distribution type.

Corillo: Yes, distribute.

Lehman: Relay.

Neuzil: What is the timing on something like this?

Heitzman: I don’t see this as being a critical issue right now because we’ve pretty much got everything under control. This is for the future. I don’t necessarily, I will try to get something built this construction season if the easement is approved but more than likely it will probably go into next year.

Stutsman: Mike… Oh, I’m sorry.

Thompson: So we need to give Andy instructions about what to write in a contract that would come back to us at a future meeting?

Stutsman: Well I guess I would…

Lehman: We want to be the…

Stutsman: Yes.

Lehman: Let Andy be and Mike…

Stutsman: No I think today we just need to decide if we’re interested in pursuing this.

Lehman: Yes.

Stutsman: Then go to the next step. That would be for Andy to start working out some details of a contract. I wanted to ask Mike. Can you see any reason why this would limit what you want to do at Secondary Roads? Because I feel that our first responsibility is to the facility we have out there and don’t want to down the road say oh my goodness that really has kept us from doing something else.

Gardner: As far as our operation goes, I can’t see in the location we’re talking about that it would have any effect at all on us.

Stutsman: OK.

Gardner: The corner of the thing and it’s across a little draw there. So I don’t see that that would be anything that’s going to affect our operation.

Harney: That would be right against the property line?

Gardner: Right.

Lehman: Bob Welsh, it looked like you had a comment?

Reverend Bob Welsh: I guess my feeling is that Terrence’s question is the appropriate one. It seems to me I think Qwest should proceed with working with private owners to do that, to make this commitment could have potentially a negative impact on that property if you wanted to sell it. There’s nothing that’s going to say that Secondary Roads is always going to be located there. It’s very possible that in time that piece of property is going to be too valuable for a Secondary Roads location. For the money that you’re talking about, you’re talking about an awful lot of headaches, or potential headaches and potential disadvantages to the taxpayers of Johnson County. I realize that it sure is a benefit to Qwest but I’m not sure it’s the role of government to do that. I guess I would urge you to say it probably is best for you at this time to not do it.

Lehman: The Board’s read to ask Qwest to look elsewhere or spend our time dealing with them? They may be dealing with other entities now, but I think that as a public body…

Heitzman: I haven’t been up to this point. The only thing I would say is there’s a possibility that this could be a selling point too. Having fiber there on the site. You could look at it both ways. It could be negative, it could be a positive.

Stutsman: Yes. I guess I’m interested in pursuing this if the price is right. I think $2,000.00 is a steal for what you’re asking here. So I don’t know if I’m ready to sign off on that. When I think of the returns you’ll get for increased services and things.

Heitzman: Right.

Lehman: I think like they said that may be open for negotiation. I think Rick’s talking about cell towers and stuff, what some income generates off that. I don’t know if that’s apples to apples or anything.

Stutsman: I guess I can say I’m not into entering a permanent easement arrangement. I think… And maybe when we talk maybe you feel too that this isn’t the direction you want to go either for what you’re thinking about.

Harney: Is this for pass through service or is it for local service or both?

Corillo: It’s mostly for local services.

Heitzman: What are you referring to when you say pass through services?

Harney: Well it’s for another county or another area.

Heitzman: No.

Corillo: Oh, no it’s local. It has to do with Iowa City and the growth in that area and everything.

Heitzman: It’s for that geographic area.

Neuzil: Well I’m interested in learning more. I guess I would like to see this again on an informal part of the meeting at some point that would include your additional easement and so we can kind of continue the discussion along with some pictures of what you’ve done in the past and maybe having us go out there and look at the site.

Heitzman: OK.

Lehman: Bob, do you have some more things?

Welsh: Do the others of you agree with Sally that you would not be interested in a permanent easement? Because I gather, what I heard Qwest say, is that’s what they’re interested in. So if you all are not interested in a permanent easement, you need to tell them that now so they can decide what they want to propose.

Lehman: I guess I’m not ready to say yes or no on that, that’s something maybe Andy would come back with the ramifications of how permanent, permanent is.

Chappell: Permanent’s pretty permanent.

Stutsman: Longer than you and I, Mike.

Lehman: Well you go to the hair dresser and get permanents but you can go back and get another one. I don’t know why they don’t call them temporaries.

Stutsman: Good point.

Thompson: I’d be interested in some kind of reasonable buy back arrangement built into the contract just for the contingency that we might need to make a change later.

Lehman: What’s the consensus of the Board? Like to see maybe Andy and Mike at least get a little more information here before we make a decision or are you ready to say you don’t want to pursue it? I guess I’d like to know a little bit more about…

Stutsman: Yes.

Lehman: Little more details of what we hear from the City, I know you’re time is very valuable. Everybody. Qwest as well as our staff to spend a lot of time on something that we don’t think there’s any…

Stutsman: And this is something that the County really hasn’t done a whole lot of, you know getting into private arrangements. Maybe it’s something we should be thinking more seriously about. Because it might be a potential for generating some revenues. I guess that’s what I want to leave the door open for, to see if there couldn’t be some arrangements. Because I know we’ve been approached to put a tower on the Courthouse and things.

Lehman: It kind of reverses the role. A lot of times we’re asking for right-of-way and easements and so now we’re in a different colored uniform now. People are asking requests of us at least.

Harney: Yes, I’m the same way. I’m not ready to close the doors on it, but I think we need to take a strong look at what the future is there. I think most towers and so forth they have a 25 or 30 year agreement for possible renewal.

Heitzman: Well this won’t be a tower, there is no tower involved with this at all.

Harney: I understand. But I’m talking about the easement for the property. It would be similar. Another thing we need to look at is the distance back that it would have to be from the road and I think Secondary Roads could probably give us a good idea of what the development would be. If that was to happen, I would certainly want it out near the road and not where it would affect a possible development later. So I think there’s a lot of things that need to be addressed before we’d make a decision or even get to that point.

Lehman: OK.

Stutsman: Andy, I just have, just for my own clarification and I know this isn’t a big parcel of land… But what do you do with property taxes on something like this? Are they…

Chappell: We still own…

Stutsman: Oh, we’d still own it.

Assistant County Attorney Janet Lyness: They’d just have the easement, it’s not changing ownership of the property.

Lehman: We wouldn’t tax a piece of equipment sitting, or a building, if you want to call it a structure on their middle property.

Lyness: You would tax them for whatever equipment. It’s not going to have to do with where it’s located. That’s not going to be affected because we’re still going to own the land. It’s not going to be our structure so it’s however you would tax them on any other equipment or things that they have. So that wouldn’t really…

Chappell: Wouldn’t have any affect on the…

Lyness: On this, right.

Stutsman: All right. But basically it would be a private company that would not have to pay property taxes for their….

Lyness: Right. If they were to buy property to locate this, then they would be paying property taxes on it. That’s the tax consequence. Or they could get an easement from some other private property owner who’s going to pay taxes on it. And property where they locate it.

Stutsman: OK.

Lehman: Do I have consensus of the Board then that Andy and Mike will continue discussion with Qwest and come back with some other clarification and maybe a recommendation from Andy and Mike?

Stutsman: Have we given you enough guidance Andy about what the Board’s kind of thinking? There is mud, huh?

Gardner: I’m not sure. Are you also asking Qwest to, since they brought up this issue of negotiating for additional right-of-way for the fiber optic for along the property, along the County owner property towards 218. Are you asking them to come back with the proposal and then consider them both at the same time?

Lehman: I think that’s their…

Gardner: I heard that from one but…

Lehman: I think that’s what I’ve heard them say, is kill two birds with one stone possibly. If one is feasible, they’d like to piggyback the other one.

Heitzman: Try to make it all work together. If we can at all.

Stutsman: Sure.

Gardner: We could certainly… What I would, based on what I’ve heard, is we could explore some options, maybe see how much flexibility there is. It sounds like they would be interested in negotiating that price a little bit more and see what their feeling is as far as whether they’re only going to consider perpetual. If that’s the case I’ll bring that back to you and you can make your decision. But we can certainly explore some of those options without having to know exactly what we’re going to do.

Lehman: OK, I encourage Board members when you get a chance to go out there. I think somebody from Secondary Roads could show us where the exact location is so you get an idea in your mind. I had asked about vehicles going in and out. You’re talking about like a single service truck going in to hook up a residence as houses are built.

Heitzman: Right. The vans and the construction vehicles you see running around town.

Harney: Yes, that’s another thing that I’m concerned about, if that was going to restrict their access in the property, what they’re going to use our property for where the driveway comes in, and you’re extending that.

Stutsman: It would be a new driveway wouldn’t it?

Harney: It would be a new entrance onto IWV?

Corillo: Yes, because it would be west of their last drive, probably almost 300 feet.

Heitzman: But the driveway would have this equipment sitting at the end of the driveway so it would be useless to anybody else to use. It wouldn’t be a driveway that would be accessed to the property next to it or anything like that. It would be a driveway and then our equipment would be at the end of it. So it would be sufficient to get a vehicle off the traveled portion of the roadway is what it would be. Then if you want to drive by your site, another site here in town that has been constructed is down at Wolf’s Manufactured housing. That’s a different brand of equipment there, but that’s probably one of the nicer layouts that actually physically turned out that way. So that would be a site you could drive by also.

Lehman: Did that have some screening around it? I don’t believe it does.

Heitzman: No.

Lehman: But that would give us an idea of the size of the…

Heitzman: Size and yes.

Corillo: It might be laid out differently but it gives you an idea of the size of the boxes and everything.

Lehman: And you’ve got a small driveway into that I believe.

Heitzman: No.

Lehman: To park on the road to service that?

Heitzman: Yes, it’s on the entrance to the manufactured housing and they just park next to the curb.

Corillo: As you turn in it’s to the left.

Lehman: I think I’ve seen the structure, but it’s fairly wide access roads.

Heitzman: Yes, right.

Stutsman: I’m going to bring up something that I don’t know if this is feasible. Anyway. We farm and have property and we have granted easements to a number of fiber optic across our land. In retrospect, we often think, they got this for $200.00 and they are making a fortune off of this, going across our land. I often think why can’t we have a continual agreement so that we continue to reap the profits, or some of the benefits that private companies are getting from running these easements. I don’t know if that could be worked into some kind of agreement where there would be a yearly rent agreement based on the usability of that easement and things. Do you understand what I’m… Yes, I’m sure you’re not interested in that.

Corillo: Well at the present time, Qwest hasn’t pursued any agreements like that. Or even had homeowners or landowners pursue anything to that great extent or anything either.

Thompson: Well Andy, I do hope that when you consider the question of compensation you include the cost to the taxpayers of your time and Mike’s time to be working on this. We could eat up $2,000.00 in….

Neuzil: All those lawyer fees.

Heitzman: I think you need to keep in mind what Julian said, that is most everybody won’t look at nothing unless there’s a number on there.

Stutsman: Uh-huh.

Heitzman: Like I stated that it’s got to be adjusted to what you feel the property is valued at, and future value, today’s value. We are trying to provide service in that area.

Stutsman: Can we get free phone service or something like that? Trade off. I’m trying to look out for the County’s business.

Lehman: You ought to be on this negotiating team. OK, so I think our consensus is to continue to somewhat discussion with Andy and Mike, and they’ll report back to us if they feel they’re at an impasse or it’s not worth the County’s time and financial resources to pursue it. Or you may have the same response.

Heitzman: OK, real good, thank you very much.

Lehman: Thank you. I wasn’t commenting on your hair, it always looks nice, but the difference between permanent and temporary. The next item is from Secondary Roads, the budget submittal to the Iowa Department of Transportation. Mike Gardner, our County Engineer again.

DISCUSSION: FY 2002 SECONDARY ROAD BUDGET FOR SUBMITTAL TO THE IOWA DEPARTMENT OF TRANSPORTATION

Gardner: Yes, I have to apologize. I’ve got started putting this document together and came up with some questions I still need to have answered. So I’m going to have to come back with this in a couple of weeks. So that’s all I have on that.

Lehman: Is there a deadline for you to…

Gardner: This has to be in by April 15th. So I’ll work on it in the next couple weeks, probably put it on the agenda in two weeks.

Stutsman: Yes, because we’re not meeting next week, you knew that. OK.

Lehman: OK, thanks Mike.

Stutsman: We like those agenda items, they just move right along.

Lehman: Do you have any other items Mike?

Gardner: No, just to keep the snow away.

Stutsman: Oh, yes.

Lehman: Yes.

Stutsman: Are they still predicting a lot?

Welsh: 6 inches.

Gardner: The last I heard was 6 to 10 before it’s over.

Stutsman: All right.

(Continued in Part 2)