HomeMy WebLinkAboutPWC Agenda 2026-02-24 Packet
Prepared by: Delaney CMS
Engineer: Dr. Joseph W. Delaney PE, PgMP, CCM, LEED AP
Client: Town of Ithaca
Project: Right-of-Way (ROW) Permit Fees
Recommendation
ROW Permit Fee Structure
February 13, 2026
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Contents
Town of Ithaca ROW Permit Fee Structure Recommendation .................................. 2
A. Executive Summary ...................................................................................................... 2
B. ROW Permit Fee Development Considerations ........................................................... 2
Concepts ........................................................................................................................ 2
Regulatory Constraints ..................................................................................................... 3
C. Proposed ROW Work Permit Fees ................................................................................ 6
Standard Permit Fee ......................................................................................................... 6
Non-Standard Permit Fee ................................................................................................. 6
Administration and Inspection Standard Fees .................................................................... 6
Pavement Degradation Standard Fee ................................................................................. 7
D. Proposed ROW Use and Occupancy Permit Fees ........................................................ 9
E. ROW Permit Fee Recommendation by Entity ............................................................. 10
Franchise Utilities (Gas, Electric, Cable) .......................................................................... 10
Telecommunications & Fiber (Non-Franchised) ................................................................ 11
Wireless Infrastructure ................................................................................................... 11
Academic & Institutional ................................................................................................ 12
Private & Commercial Encroachments ............................................................................ 12
Standard ROW Fee Summary Table ................................................................................. 12
F. Technical Framework for Infrastructure Management ................................................. 13
Inflation Indexing ............................................................................................................ 13
Geographic Information System (GIS) .............................................................................. 13
Work Zone Safety & Traffic Control................................................................................... 14
Insurance, Bonding, and Warranty Obligations ................................................................. 14
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Town of Ithaca ROW Permit Fee Structure Recommendation
A. Executive Summary
This report presents the recommended Right-of-Way (ROW) Permit Fee Structure for the Town of
Ithaca. The primary objective is to establish a comprehensive and standardized approach for
compensating the Town when private entities occupy the municipal ROW. The proposed model
introduces a dual-revenue framework consisting of One-Time Street Opening Permits and Annual
Use and Occupancy (U&O) Permits.
The One-Time Permit is designed to protect Town infrastructure by recouping specific costs
associated with administrative processing, inspection, and pavement degradation.
Complementing this, the Annual U&O Permit serves as a recurring management fee for the
continuous privilege of occupying public land, compensating the Town for the long-term
administrative burden of database management and the restriction of future utility corridors.
This approach strictly differentiates between "Franchise" utilities, whose contributions are often
limited by state or federal statutes (New York State Special Franchise Tax, FCC caps), and regular
commercial occupants who are subject to standard municipal fees. This distinction allows the
Town to maximize legitimate revenue opportunities while ensuring full compliance with prevailing
regulatory constraints.
B. ROW Permit Fee Development Considerations
Concepts
To effectively manage the Town’s infrastructure and finances, Right-of-Way (ROW) fees should be
categorized into two distinct types: One-Time Construction Fees and Recurring Occupancy Fees.
• One-Time Fees (Highway ROW Work Permit Fee): A one-time fee is assessed for specific
construction events, typically administered through a "Street Opening Permit." To fully
protect the Town's interests, this permit fee should be structured to recover three distinct
costs:
− Administrative Processing: Covers the staff time required for application review, data
entry, and record management.
− Inspection & Verification: Reimburses the Town for field labor and equipment used to
monitor construction compliance and site safety.
− Pavement Degradation: This charge compensates the Town for the permanent
reduction in the road’s structural integrity and lifespan caused by utility cuts, even after
patching.
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• Recurring Fees (Use and Occupancy): In contrast, a Use and Occupancy (U&O) Fee
functions as an annual management and maintenance charge for the ongoing privilege of
occupying public land. It compensates the Town for the continuous administrative burden
of database management, locating services, and site inspections. For example, a
company such as Verizon may pay a recurring annual fee based on the linear footage of
fiber optic cable buried under a roadway. Even if the cable is unused for years, its presence
restricts the Town’s ability to repurpose the corridor for other utilities, such as a water main
or a bike lane, which justifies this annual oversight fee.
Regulatory Constraints
Highway Work Permits
The Town clearly has the right to impose one-time fees for any street disturbance caused by utility
work. These fees are grounded in the Town’s "police power" to protect public safety and
infrastructure integrity. Unlike U&O fees, which can be preempted by franchise agreements, police
power fees generally apply to all entities provided they are non-discriminatory and cost based. To
survive legal scrutiny, these fees must be segmented into three defensible "cost buckets":
• Administrative Costs: The Town is authorized to impose a permit fee that accurately
reflects the actual labor and overhead involved in the permit process. This standard
ministerial fee is designed to cover administrative activities such as reviewing permit
applications, processing approved drawings, and maintaining the permit database. By
aligning the fee with documented expenses, the Town fulfills its obligation to recover costs
in accordance with its legal authority. Additionally, pursuant to A.5608/S.4887, which
enacted New York Labor Law § 224-f (September 2023), contractors and subcontractors
performing work for utility companies on roadway excavation projects requiring a permit
are mandated to pay prevailing wages. The Town may also include, within the permit fee,
the administrative cost of verifying compliance with these wage requirements. This
includes ensuring submission of original certified payroll records and transcript
verifications by contractors to the fiscal officer, along with providing copies to the
permitting authority. Recovering these verification expenses through the permit fee enables
the Town to maintain appropriate oversight and compliance with prevailing wage laws.
Legal Note: The Act expressly prohibits issuance of a permit prior to acknowledgment of
prevailing wage requirements. Consequently, the time expended by Town personnel
collecting and verifying certified payroll documentation constitutes a reimbursable
administrative expense directly associated with both the issuance and enforcement of the
permit.
• Inspection Costs: The Town may recover verification costs, including the Deputy Highway
Superintendent's burdened hourly rate, vehicle charges (per FEMA rate), and a 10% office
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indirect fee. Fees should be determined according to either the actual hours expended or a
predetermined flat rate, rather than as a percentage of construction costs, in order to
prevent their classification as a "revenue-generating tax." Applying the 10% "Safe Harbor"
rate for office indirect costs aligns with the Federal de minimis indirect cost standard (2
CFR § 200.414), allowing recovery of administrative expenses without a detailed audit.
• Pavement Degradation Fees: Standard restoration (patching) does not return a road to its
original condition; it leaves a "weakened plane" in the infrastructure. According to the
American Public Works Association (APWA) and its landmark study on pavement
degradation, standard restoration techniques, regardless of quality, cannot return a
roadway to its original structural condition. The APWA has empirically demonstrated that
every utility cut introduces a 'weakened plane' into the infrastructure. This discontinuity
occurs because it is physically impossible to perfectly match the density and compaction
of the trench backfill with the surrounding undisturbed soil. Consequently, the saw-cut
interface becomes a permanent point of failure, allowing water infiltration and reducing the
lateral support of the adjacent pavement. Therefore, the Town of Ithaca incurs a
measurable loss in asset life (Remaining Service Life) the moment a cut is made, creating a
financial liability that a standard administrative permit fee fails to capture. To recover this
loss, the Town should implement a Pavement Degradation Fee. To justify the
implementation of a Pavement Degradation Fee for the Town of Ithaca, we can look at
established precedents like the City of Syracuse and the City of Lancaster, PA, which
demonstrate that such fees are not punitive penalties but necessary asset recovery
mechanisms. Syracuse employs a "Permanent Road Cut Maintenance Fee" (currently
indexed at $38.61/SY for asphalt), and this amount is reviewed each year according to the
Construction Cost Index (CCI) so that the fee remains aligned with inflation and actual
material costs. Similarly, the City of Lancaster utilizes a tiered "Street Opening
Degradation Fee" based on the age of the pavement, enforcing a strict moratorium on
roads under three years old and charging a premium ($52.80/SY) for cuts into recently
paved streets, with the rate decreasing as the road depreciates. Smaller municipalities,
such as White Oak Borough, PA, have adopted similar "restoration schedules" (e.g.,
$40.00/sq. yd. for roads <1 year old) to explicitly link the fee to the "consumed life" of the
infrastructure. By adopting a similar model, Ithaca would not be levying an arbitrary tax, but
rather enforcing a standard engineering calculation to recover the capital investment lost
when a utility cut prematurely ages a public roadway. Enforceability: Because this fee
compensates the Town for specific damage to a municipal asset, it is generally enforceable
even against franchise-holders who are exempt from recurring U&O fees, provided the fee
schedule is codified and mathematically applied.
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Use and Occupancy Permits
In New York, municipalities can charge recurring Use & Occupancy (U&O) fees if they reflect the
actual and reasonable costs of maintaining public right-of-way used by private property. These
fees must directly reflect the burden placed on the Town, unlike taxes. The NYSDOT PERM 75
program is often cited as a precedent for municipal U&O fees. However, under New York
Transportation Corporations Law § 7, state authorities are permitted to charge fair market value for
this use. In contrast, municipalities are limited to recovering regulatory costs only, as any charges
exceeding these amounts may be deemed an illegal tax. This was confirmed recently in Verizon v.
City of Rochester (W.D.N.Y. Case No. 6:20-cv-06866 – Key Ruling February 29, 2024), where
Rochester's U&O fees were invalidated for lacking data-backed justification. As a consequence,
the City has hired MGT Impact Solutions (Ordnance No 2025-191, June 2026 - $96,609) to rebuild
its fee rationale. To prevent similar issues, the Town of Ithaca’s U&O fees should be backed by
clear calculations and directly tied to management costs.
Locally, the Town of Ithaca’s authority to impose U&O fees is established in Town of Ithaca Code §
230-4.8, which allows for rent or fees for permanent ROW use. This authority is reinforced by New
York Town Law § 64 and the Municipal Home Rule Law. While utility companies have the right to
operate in public streets by New York Transportation Corporations Law § 27, that right is
conditional on municipal consent, which is granted via § 230-4.8 in exchange for fair
compensation. However, federal law—specifically Section 253 of the Telecommunications Act of
1996—limits local regulations, including U&O fees. The FCC’s "Small Cell Order" (FCC 18-133)
requires that such fees be a reasonable approximation of actual, objectively reasonable costs,
non-discriminatory, and non-prohibitive. The Order sets "safe harbor" fees, typically $270/year per
small wireless facility, and higher fees must be supported by detailed cost studies.
Franchise utilities (e.g., NYSEG, Spectrum) are generally exempt from municipal U&O fees. Their
franchise rights, established through state or local agreements, are considered vested property
rights. Charging a separate U&O fee is often regarded as double taxation. The protections vary
slightly for transportation corporations and cable providers, as outlined below:
• NYSEG (Gas & Electric): Their right to occupy ROW is state granted. After consent is given, it
becomes a vested right, exempting them from rent (U&O fees). Municipalities can charge
"police power" fees for permitting and inspection, and pavement degradation fees.
• Spectrum (Cable): Subject to a federal Franchise Fee cap of 5% of gross revenue, which
overrides additional U&O fees. Municipalities can charge "police power" fees for permitting
and inspection, and pavement degradation fees.
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C. Proposed ROW Work Permit Fees
To ensure a streamlined approval process, Highway Right-Of-Way Work Permits are categorized as
either Standard or Non-Standard based on the scope of work. Applicants should use the following
criteria to determine the required fee structure:
Standard Permit Fee
A permit is considered “Standard” if the total work area involves less than 40 linear feet of
disturbance. Projects meeting this criterion are subject to the standard fee schedule. These
permits do not require a professional review escrow simplifying the application process for
smaller-scale projects.
Non-Standard Permit Fee
Projects that disturb more than 40 linear feet or utilize complex construction methods, such as
directional drilling, are classified as “Non-Standard.” These types of projects demand increased
technical oversight to ensure compliance throughout the process.
• Technical Oversight: Non-Standard permits require additional technical evaluations,
including detailed quantity take-offs, GIS Mapping, and calculations for performance
bonds.
• Escrow Requirement: Applicants must establish a professional review escrow. This escrow
is used to cover the costs associated with the enhanced review process required for these
larger or more complex projects.
• Additional Guidance: Specific details, initial escrow deposit amounts, and associated
costs for Non-Standard permits will be provided directly by the Department of Public Works
Superintendent on a case-by-case basis.
Administration and Inspection Standard Fees
For 2026, it is recommended that a flat Administration and Inspection Fee of $320.00 be
implemented for each permit application, an increase from the current fee of $250.00. This fee is
determined through a comprehensive cost-recovery analysis, ensuring it accurately reflects the
average staff time and resources required to process compliant applications and complete all
necessary inspections. By adopting this approach, the Town can recover its baseline operational
costs without placing unnecessary financial strain on smaller projects.
Basis for Fee Calculation
The $320.00 fee calculation utilizes a "blended" workflow that encompasses several key
elements: the administrative intake process, a preliminary technical review, and three site
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inspections. These inspections are conducted at critical stages—prior to construction, during the
work, and upon completion. The summary of the fee calculation is provided below, with detailed
breakdowns and underlying assumptions documented in the Excel Workbook: Town of Ithaca
2026 ROW Permit Fee Calculations JWD 21326.
Pavement Degradation Standard Fee
To protect the Town’s capital investment in roadways, adopting a one-time Pavement Degradation
Fee, separate from standard permit fees, is recommended. This fee addresses the permanent
reduction in pavement life caused by utility cuts (the "scar" effect), which leads to weak points
that require premature repaving.
Basis for Fee Calculation
The Calculation Method: A "Tiered Age Multiplier" formula is proposed, consistent with the
defensible frameworks used by the City of Syracuse and the City of Lancaster. This approach is
supported by the American Public Works Association (APWA) findings that utility cuts—even when
restored to code—introduce a permanent "weakened plane" that reduces the pavement's service
life. To ensure legal viability and demonstrate a direct engineering relationship between the
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damage and the cost, this fee structure is not arbitrary; it is strictly derived from the engineering
cost-basis study provided in this report. The fee is calculated as:
Fee = (Influence Area × Rate Base) × Multiplier Age
• Influence Area: The total square footage of the cut plus a 4 foot "Influence Zone" buffer on
all sides (as saw-cutting weakens the surrounding matrix).
• Base Rate: Cost to Mill and Repave at 1.5” Depth.
• Age Multiplier (Multiplier Age): This is a step-based factor that increases fees for cutting
into freshly paved roads. The tiered fee compensates the Town for the portion of the road's
'service life' used up, not just the repair cost.
The summary of the fee calculation is provided below, with detailed breakdowns and underlying
assumptions documented in the Excel Workbook: Town of Ithaca 2026 ROW Permit Fee
Calculations JWD 21326.
Calculation Example: If NYSEG requires a 12’ x 4’ street opening on a road paved 7 years ago.:
• Cut Dimensions: 4′ × 12′ = 48 SF; Influence Area: = 12′ × 20’ = 240 SF = 26.67 SY – See
Diagram Below.
• Unit Price: $35.86/SY – Tier 2
• Total Pavement Degradation Fee: $956.39 (In addition ROW permit fee of $320.00)
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D. Proposed ROW Use and Occupancy Permit Fees
To ensure the fiscal sustainability of municipal operations and protect the public interest, the
Town will establish the following Annual Recurring Fee Schedule for the occupancy and use of the
public ROW. These U&O fees are structured to provide equitable cost recovery for the
administration, maintenance, and oversight of public assets, while ensuring fair compensation for
the exclusive use of municipal property by private and commercial entities. The fee determination
methodologies vary by infrastructure type to reflect the distinct legal frameworks and operational
impacts associated with each use:
• For Non-Franchise Fiber, annual recurring fees will be assessed on a per-linear-foot basis,
differentiating between underground and aerial installations. This structure is designed to
cover the specific costs of Right-of-Way (ROW) management, including engineering review,
construction inspection, and the ongoing administrative burden of maintaining accurate
as-built records.
• For Wireless Infrastructure, the annual recurring fees will align with established federal
standards for presumptive cost recovery, set at a recurring rate of $270 per node to cover
the municipality's management and oversight of these vertical assets.
• For Private and Commercial Encroachments, the municipality will assess, on a case-by-
case basis, an annual recurring fee based on the Fair Market Rental Value of the public
property occupied. This approach recognizes that the public Right-of-Way (ROW) is a
valuable municipal asset and ensures the taxpayer is compensated for the exclusive
Trench Area
Influence Area
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private use of public land. Fair Market Rental Value shall be determined by calculating the
square footage of the encroachment area and applying the per-square-foot assessed land
value of the immediately adjacent private parcel (the "Across the Fence" method). An
annual rate of return of 15% will be applied to this land value to establish the recurring fee.
• Recurring Use & Occupancy fees shall not apply to certificated franchise utilities,
specifically NYSEG and Spectrum. The occupancy rights of these entities are governed by
pre-existing Franchise Agreements and New York State Transportation Corporations Law,
which supersede this local fee schedule. These agreements already provide a mechanism
for municipal compensation, typically through franchise fees based on gross receipts,
which serves as the statutory equivalent to rent. Imposing additional recurring fees on
these entities would constitute double billing for rights already secured through their
franchise charters.
• Similarly, infrastructure owned and operated by major academic institutions, specifically
Cornell University and Ithaca College, is exempt from this recurring fee schedule. The
municipality recognizes that the infrastructure needs of these institutions are unique,
extensive, and frequently integrated into broader Campus Master Plans that benefit the
regional community. Rather than assessing piecemeal encroachment fees, the
municipality addresses the impact of institutional infrastructure through comprehensive
Memoranda of Understanding (MOUs) or other payment-in-lieu frameworks. These
separate agreements ensure the Town is compensated for municipal services and impact
holistically, rather than on a per-asset basis.
E. ROW Permit Fee Recommendation by Entity
The following fee schedule distinguishes between "Franchise" entities (protected by statute) and
standard occupants, ensuring federal compliance while maximizing justifiable revenue.
Franchise Utilities (Gas, Electric, Cable)
NYSEG (Gas & Electric)
• Classification: Transportation Corporation (Protected).
• Annual U&O Fee: $0.00 (Exempt by NYS Law).
• Franchise Fee: Special Franchise Tax paid to NYS, no local Franchise fee.
• Municipal Purpose Agreement: The Town should negotiate a Municipal Purpose Agreement
with NYSEG granting a limited, revocable license to use the Right-of-Way strictly for
electricity or gas distribution. The agreement must maintain municipal authority over ROW
permits, pavement degradation fees, and use priority. To prevent abandoned 'zombie
poles', it should include a $1,000 per month penalty for any pole left over 90 days after
service transfer.
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• ROW Permit Fee: $320.00 per application (Cost Recovery).
• Pavement Degradation Fee: Full Rate (See Vestal Formula above).
Spectrum (Cable/Broadband)
• Classification: Cable Provider (Federal Cap).
• Annual U&O Fee: $0.00 (Exempt by the Federal Cable Act)
• Franchise Fee: Negotiate Franchise Agreement to the federal max of 5% of Gross Revenue
(Current: 3%).
• Cable Access Oversight Committee: Since the Town and City of Ithaca (along with the
Village of Cayuga Heights) share a franchise agreement territory with Spectrum this single
committee oversees the franchise compliance for all three municipalities. The committee
will need to be involved in any negotiations for a new Franchise Agreement. Note the Town
of Lansing recently (2024) renegotiated their Franchise Agreement with Spectrum. They
may also be a good resource.
• ROW Permit Fee: $320.00 per application (Cost Recovery).
• Pavement Degradation Fee: Tiered rate.
Telecommunications & Fiber (Non-Franchised)
• Entities: Verizon (Landline/Fiber), Point Broadband, Empire Access, Southern Tier Network,
Firstlight.
• Classification: Telephone Corporations (Subject to Management Fees).
• Annual U&O Fee: While U&O fees are legally permissible, they must be strictly calculated
as a cost-recovery mechanism for "Right-of-Way Management Costs" (including
maintenance, database administration, and locating services) rather than structured as
"rent." A study will need to be conducted to determine the actual cost of managing the
ROW for telecommunication and fiber infrastructure.
• ROW Permit Fee: $320.00 per application (Cost Recovery).
• Pavement Degradation Fee: Tiered rate.
Wireless Infrastructure
• Entity: Crown Castle and Verizon (Small Cell/DAS).
• Classification: Wireless Infrastructure Provider.
• Annual U&O Fee: $270.00 per node/pole.
• Justification: Matches the FCC "Safe Harbor" limit (FCC Order 18-133). Exceeding this
requires a complex cost-study proving higher actual costs.
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Academic & Institutional
• Entities: Cornell University, Ithaca College.
• Classification: Tax-Exempt Private Entities.
• Annual U&O Fee: None, assumed covered under PILOT and MOU agreements.
• ROW Permit Fee: $320.00 per application (Cost Recovery).
• Pavement Degradation Fee: Tiered rate.
Private & Commercial Encroachments
• Entities: Private residents/businesses (e.g., non-standard driveway aprons like stamped
concrete or heated driveways, irrigation systems, private conduit, retaining walls, building
foundations, decorative lighting, fences, and awnings).
• Easement: The DPW Superintendent reserves the right to deny the easement.
• Classification: Private Encroachment (Revocable License).
• Requirement: Sign a Revocable License Agreement and provide an Insurance Certificate
that lists the Town as an additional insured party.
• Revocable License: This classification clarifies that the town retains superior rights to the
ROW and may revoke the license if the space is needed for public infrastructure.
• Private Annual U&O Fee: Appraised Value x 15%. (Minimum $100/year).
• Classification: Commercial Encroachment (Revocable License).
• Commercial Annual U&O Fee: Appraised Value x 15%. (Minimum $100/year).
• Requirement: Sign a Revocable License Agreement and provide an Insurance Certificate
that lists the Town as an additional insured party.
• Revocable License: This classification clarifies that the town retains superior rights to the
ROW and may revoke the license if the space is needed for public infrastructure.
Standard ROW Fee Summary Table
To provide clarity and streamline the application of these policies, the following Fee Schedule
Summary Table consolidates the recommended fee structures for all entities accessing the
municipal Right-of-Way (ROW). This matrix categorizes fees by entity type—differentiating
between Franchised Utilities, Academic Institutions, and Private/Commercial applicants—and
specifies the applicable charges for both initial work permit fees and recurring U&O fees.
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F. Technical Framework for Infrastructure Management
This section establishes the technical framework for managing infrastructure assets, ensuring all
work meets rigorous quality, safety, and operational benchmarks.
Inflation Indexing
All fees, penalties, and schedules established under this ordinance shall automatically adjust
annually to account for inflation.
• Adjustment Metric: Fees shall adjust effective January 1st based on the percentage change
in the Consumer Price Index (CPI-U) or ENR Construction Cost Index for the Northeast
Region.
• Implementation: Rates shall be rounded to the nearest whole dollar. If the Town does not
adjust fees in a given year, this does not waive the right to apply cumulative adjustments in
subsequent years.
Geographic Information System (GIS)
To maintain the accuracy of utility inventories, all Applicants seeking a U&O permit for permanent
installations must submit digital "As-Built" documentation adhering to specific standards.
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• Format: Deliverables must be provided in a geospatial format compatible with the Town GIS
(Thompkins County ArchGIS Hub)
• Georeferencing: All data must be referenced to the State Plane Coordinate System / NAD83
datum. CAD files without proper references will be rejected.
• Attributes: Data submissions must include DPW-defined metadata, including material
type, conduit diameter, installation date, and ownership details.
Work Zone Safety & Traffic Control
The Applicant assumes full responsibility for the safety of the work site, the public, and all
personnel.
• Regulatory Compliance: All operations must strictly adhere to OSHA (Occupational Safety
and Health Administration) and NYS Department of Labor safety standards.
• Traffic Control: Work Zone Traffic Control (WZTC) plans must be implemented in
accordance with the current Manual on Uniform Traffic Control Devices (MUTCD).
• Stop Work Authority: The DPW Superintendent or designated representative reserves the
right to immediately shut down any project deemed an imminent threat to public safety or
traffic flow until corrective measures are implemented.
Insurance, Bonding, and Warranty Obligations
To protect the municipality from financial exposure and liability, all applicants seeking access to
the public Right-of-Way (ROW) must furnish comprehensive proof of insurance and adequate
surety bonding prior to the issuance of any permit. At a minimum, applicants shall execute an
indemnification agreement holding the Town harmless from all claims, damages, or judgments
arising from their operations. The Town Risk Manager shall have the sole discretion to determine
the specific insurance coverage limits required based on the scope and potential risk of the
proposed project. This typically includes, but is not limited to, Commercial General Liability,
Workers' Compensation, and Umbrella/Excess Liability policies, all of which must name the Town
as an additional insured.
Furthermore, to ensure the physical integrity of public infrastructure, the Town Risk Manager or
Town Engineer may require the posting of a performance bond, letter of credit, or cash escrow.
This financial security guarantees that all work, including excavation, installation, and final
restoration, is completed to municipal standards. The bond amount shall be sufficient to cover
the full cost of restoration should the applicant default or fail to return the ROW to its pre-
construction condition. In specific cases involving extensive infrastructure, a maintenance bond
may also be required to warranty the workmanship for a defined period (e.g., 12 to 24 months).
Recommended
ROW Fee
Structure
Public Works Committee – 2/24/26
Presented By: Joe Delaney, Delaney CMS
Agenda
1. Goals of the Proposed ROW Permit Fee Structure
2. ROW Fee Considerations
3. Proposed ROW Work Permit Fees
4. Proposed ROW Use and Occupancy Permit Fees
5. Fee Recommendations by Entity
6. Action Items/Next Steps
7. Q&A
Goals of the Revised
ROW Fee Structure
•Compensate the Town for the use
of the ROW.
•Protect the Town’s Infrastructure.
•Provide a legally defensible fee
structure.
One-time Highway ROW Work
Permit Fee.
Where allowed, a reoccurring
(annual) Use and Occupancy
Permit Fee.
ROW Fee
Considerations
Concepts
Highway ROW Work Permit (ROW Work) Fee
One-time fee to reimburse the Town for
administrative, inspection, and pavement degradation
cost for ROW access, such as a street crossing.
Current system in use by the Town. However,
pavement degradation costs are not currently
included in the fee calculations.
Use and Occupancy Permit (U&O) Fee
Annual management and maintenance fee for the
privilege of occupying public land.
Reimburses the Town for the continuous
administrative burden of managing the ROW such as
GIS database maintenance, locating services, and
site inspections.
ROW Fee
Considerations
Regulatory
Concerns
ROW Work Fees
Legally granted as “police power” to protect public
safety and infrastructure integrity.
Unlike U&O Fees, which can be preempted by
franchise agreements, police power applies to all
entities.
Fees must be non-discriminatory and based on
actual, or a reasonable estimate, of the Town’s cost.
In addition to the standard administration and
inspection costs the Town currently includes in its
fee structure, the cost of any degradation to the
ROW can, and should, be included.
ROW Fee
Considerations
Regulatory
Concerns
U&O Permits
The Town has the authority to implement U&O fees
through Town Code § 230-4.8.
Unlike taxes, U&O fees must be mathematically
linked to the burden placed on the Town. In Verizon v.
City of Rochester (2024), the court voided "market-
based" fees, ruling that ROW charges must strictly
reflect actual maintenance and management costs.
NYSDOT PERM 75 is often cited for its solid U&O fee
structure. However, Unlike NYSDOT, the Town lacks
statutory authority (e.g., NY Transp. Corp. Law § 7) to
charge market rates for ROW access.
Federal law, including the Telecommunications Act of
1996, limits local regulations including U&O fees.
NYSEG and Spectrum (Franchise Utilities) are
exempt from U&O fees.
Proposed ROW Work Fee - Administration
Proposed ROW Work Fee - Inspection
Proposed ROW Work Fee – Pavement
Degradation
Example ROW Work Permit Fee Calculation
NYSEG requires a "transverse open cut" (trench) across the asphalt roadway to run a
new gas service line to a residential property in June 2026. The trench width is 4’ and
length is 12’. The existing roadway is 7 years old.
•This is a standard request so the administrative ($157.39) and inspection ($164.67)
fee would be the flat rate, rounded to $320.
•The tiered Pavement Degradation Fee would apply and be calculated as follows:.
The Influence Area of the trench, when the 4’ buffer is added to all sides would be 12’ x 20’
= 240 SF or 26.67 SY.
The Roadway is 7 years old, so the Tier 2 rate of $35.86/SY would apply.
The total Pavement Degradation Fee would be $35.86/SY x 26.67 SY = $956.39
•The total ROW Work Fee would be $320 + $936.39 = $1,276.39. Note this is significantly higher
than the current flat fee of $250.00.
Proposed Use and Occupancy Permit Fees
•Franchised Utilities: Exempt
•Academic Institutions: Exempt
•Non-Franchised Fiber: Subject to annual recurring maintenance fee.
Recommend a flat linear foot rate be established. Should distinguish
between aerial and underground. Fee study to determine reasonable
cost recovery required.
•Wireless Infrastructure: Federal Safe Harbor rate of $270/node.
•Private Encroachments: Fair Rental Value. Base on appraisal (“Across
the Fence” method) with an annual rate of return of 15%.
ROW Permit Fee Technical
Framework
None Standard Work
Projects that disturb more than 40 linear feet or utilize
complex construction methods are classified as non-standard.
Non-standard projects are not subject to the flat fee, but pay
actual Town costs, and require:
•Escrow Account: The escrow account is established to pay
for additional technical evaluations such as a quantity take-
offs, specialized inspections, GIS mapping, and calculations
for performance bonds. The amount of the escrow account,
and the actual cost incurred, are to be determined by the
DPW Superintendent on a case-by-case basis.
•Additional Bond and Insurance Requirements: Bonding and
insurance requirements are to be determined by the Town’s
Risk Manager.
ROW Permit Fee Technical
Framework
Annual Fee Escalation
To ensure fee revenues keep pace with real-world costs by
linking them to specific economic drivers.
•Administration and Inspection: Use the CPI-U (Northeast
Region. Source: Bureau of Labor Statistics (BLS). Rationale:
Closely tracks changes in municipal labor, benefits, and
general administrative overhead.
•Roadway Degradation: Use the Engineering News-Record
(New York). Rationale: Specifically tracks heavy construction
inputs (steel, cement, lumber, labor).Key Benefit: Protects
the Town against construction inflation, which historically
outpaces general consumer inflation (CPI).
ROW Permit Fee Technical
Framework
Geographic Information Systems
To maintain accuracy of utility inventories, all applicates
seeking a permit for permanent installation must submit digital
“as-built” documentation. Following standards apply.
•Format: Deliverables must be provided in a geospatial
format compatible with the Town’s GIS (Thompkins County
ArchGIS Hub).
•Georeferencing: All data must be referenced to the State
Plane Coordinate System / NAD83 datum. CAD files without
proper references will be rejected.
•Attributes: Data submissions must include DPW-defined
metadata, including material type, conduit diameter,
installation date, and ownership details.
ROW Permit Fee Technical
Framework
Work Zone Safety & Traffic Control
The applicate assumes full responsibility for the safety of the
work site, the public, and all personal. The following conditions
apply to the permit holder:
•Regulatory Compliance: All operations must strictly adhere
to OSHA (Occupational Safety and Health Administration)
and NYS Department of Labor safety standards.
•Traffic Control: Work Zone Traffic Control (WZTC) plans
must be implemented in accordance with the current Manual
on Uniform Traffic Control Devices (MUTCD).
•Stop Work Authority: The DPW Superintendent or
designated representative reserves the right to immediately
shut down any project deemed an imminent threat to public
safety or traffic flow until corrective measures are
implemented.
ROW Permit Fee Technical
Framework
Insurance, Bonding, and Warranty Obligations
To protect the municipality from financial exposure and
liability, all applicants seeking access to the public ROW
must furnish comprehensive proof of insurance and may
be required to submit specific surety bonding and
warrantees prior to the issuance of any permit. Standard
Insurance requirements are outlined in the permit
application form. Non-standard insurance, and specific
bonding and/or warrantee requirements will be
determined by the Town’s Risk Manager on a case-by-
case basis.
ROW Fee
Recommendation
NYSEG (Gas and Electric Franchise)
Classification: Transportation Corporation (Protected).
Annual U&O Fee: $0.00 (Exempt by NYS Law).
Franchise Fee: Special Franchise Tax paid to NYS, no
local Franchise fee.
Municipal Purpose Agreement: The Town should
negotiate a Municipal Purpose Agreement with NYSEG
granting a limited, revocable license to use the Right-of-
Way strictly for electricity or gas distribution. The
agreement must maintain municipal authority over ROW
permits, pavement degradation fees, and use priority. To
prevent abandoned 'zombie poles', it should include a
$1,000 per month penalty for any pole left over 90 days
after service transfer.
ROW Permit Fee: $320.00 per application (Cost
Recovery).
Pavement Degradation Fee: Tiered Rate.
ROW Fee
Recommendation
Spectrum (Cable Provider Franchise)
Classification: Cable Provider (Federal Cap).
Annual U&O Fee: $0.00 (Exempt by the Federal Cable
Act)
Franchise Fee: Negotiate Franchise Agreement to the
federal max of 5% of Gross Revenue (Current: 3%).
Cable Access Oversight Committee: Since the Town and
City of Ithaca (along with the Village of Cayuga Heights)
share a franchise agreement territory with Spectrum this
single committee oversees the franchise compliance for
all three municipalities. The committee will need to be
involved in any negotiations for a new Franchise
Agreement. Note the Town of Lansing recently (2024)
renegotiated their Franchise Agreement with Spectrum.
They may also be a good resource.
ROW Permit Fee: $320.00 per application (Cost
Recovery).
Pavement Degradation Fee: Tiered Rate.
ROW Fee
Recommendation
Telecommunications and Fiber
Entities: Verizon (Landline/Fiber), Point Broadband,
Empire Access, Southern Tier Network, Firstlight.
Classification: Telephone Corporations (Subject to
Management Fees).
Annual U&O Fee: While U&O fees are legally
permissible, they must be strictly calculated as a
cost-recovery mechanism for "Right-of-Way
Management Costs" (including maintenance,
database administration, and locating services)
rather than structured as "rent." A study will need to
be conducted to determine the actual cost of
managing the ROW for telecommunication and fiber
infrastructure.
ROW Permit Fee: $320.00 per application (Cost
Recovery).
Pavement Degradation Fee: Tiered Rate.
ROW Fee
Recommendation
Wireless Infrastructure
Entity: Crown Castle and Verizon (Small Cell/DAS).
Classification: Wireless Infrastructure Provider.
Annual U&O Fee: $270.00 per node/pole.
Justification: Matches the FCC "Safe Harbor" limit
(FCC Order 18-133). Exceeding this requires a
complex cost-study proving higher actual costs.
ROW Fee
Recommendation
Academic and Institutional
Entities: Cornell University and Ithaca College.
Classification: Tax-Exempt Private Entities.
Annual U&O Fee: None, assumed covered under PILOT
and MOU agreements.
ROW Permit Fee: $320.00 per application (Cost
Recovery).
Pavement Degradation Fee: Tiered Rate.
ROW Fee
Recommendation
Private and Commercial Encroachments
Entities: Private residents/businesses (e.g., non-standard
driveway aprons like stamped concrete or heated
driveways, irrigation systems, private conduit, retaining
walls, building foundations, decorative lighting, fences, and
awnings).
Easement: The DPW Superintendent reserves the right to
deny the easement.
Classification: Private Encroachment (Revocable License).
Annual U&O Fee: "Fair Rental Value" of the land occupied.
Requirement: Sign a Revocable License Agreement and
provide an Insurance Certificate that lists the Town as an
additional insured party.
Revocable License: This classification clarifies that the
town retains superior rights to the ROW and may revoke
the license if the space is needed for public infrastructure.
Proposed ROW Fee Structure - Summary
Action Items
Next Steps
Legal & Policy Actions
Officially adopt this engineering methodology into the
Town Code to legally justify pavement degradation
fees for utility cuts.
Finalize "Cost-Recovery" Documentation: To survive
legal scrutiny (as seen in Crown Castle v. Rochester),
ensure all U&O fees are mathematically linked to
actual administrative and maintenance expenses.
Update Town Code § 230-4.8: Utilize existing
authority to formalize the distinction between
Franchise and Academic entities (exempt) and
standard commercial occupants (subject to U&O
fees).
Implement Inflation Indexing: Establish an annual fee
adjustment protocol effective every January 1st
based on the CPI-U and ENR Construction Cost
Index.
Action Items
Next Steps
Negotiation & Agreements
Modernize the NYSEG Agreement: Negotiate a new
Master Road Use Agreement to replace the legacy
1916 franchise, codifying strict restoration standards
and "Double Pole" removal penalties ($1,000/month).
Maximize Spectrum Revenue: Coordinate with the
Cable Access Oversight Committee to negotiate the
franchise fee from 3% up to the 5% federal
maximum.
Formalize Revocable License Agreements: Require
all private and commercial encroachments (fences,
walls, etc.) to sign a license that includes an
insurance certificate naming the Town as an
"additional insured".
Review Institutional MOU/PILOTs: Verify that Cornell
University and Ithaca College's infrastructure costs
are appropriately accounted for within existing
agreements.
Action Items
Next Steps
Operational & Technical Updates
Complete U&O Fee Study for Non-Franchised Fiber.
Update ROW Permit Fees: Increase the flat
Administration and Inspection fee from $250.00 to
$320.00 for 2026.
Enforce Prevailing Wage Verification: Update permit
intake workflows to include the collection and
verification of certified payroll records per New York
Labor Law § 224-f.
Mandate GIS Deliverables: Require all permanent
installations to submit "As-Built" documentation in a
geospatial format compatible with the Tompkins
County ArcGIS Hub.
Define Permit Classification: Standard: Less than 40
linear feet of disturbance. Non-Standard: Greater
than 40 linear feet; requires a professional review
escrow and enhanced technical oversight