HomeMy WebLinkAboutItem 12e - City Facilities Use Agreement
DATE: May 3, 2022
TO: Honorable Mayor and City Council
FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director
Philip A. Wray, Deputy Director of Development Services/City Engineer
SUBJECT: MUNICIPAL RIGHT-OF-WAY FACILITIES USE AGREEMENT WITH NEW
CINGULAR WIRELESS PCS, LLC (“AT&T”), FOR USE OF CITY
FACILITIES FOR INSTALLATION, OPERATION, AND MAINTENANCE
OF CELLULAR EQUIPMENT
Recommendation: Approve
SUMMARY
Several years ago, the City Attorney prepared a Municipal Right-of-Way Facilities Use
Agreement (the “Agreement”) to allow cellular providers to use City facilities for their
equipment. The Agreement is intended to be the master contractual document for
approving installations by cell providers on City facilities, such as streetlight poles, in the
right-of-way; each location is subsequently administratively approved using the Site
License Authorization form attached to the Agreement as an exhibit. The initial
Agreement includes, among other things, an annual fee of $1,500 for use of each City
streetlight. In 2016, both Verizon Wireless and Extenet Systems Inc., entered into the
Agreement with the City.
In 2018, the Federal Communications Commission (the “FCC”) adopted a Small Cell
Order that limits local government authority to collect “fair and reasonable compensation”
for use of its facilities in the public right-of-way. Specifically, the order established a “safe
harbor” fee for use of City property such as streetlights in the amount of $270 per year.
The fee may be higher if it can be demonstrated to comply with the FCC Small Cell
Order’s requirements that it is cost-based and reasonable, and non-discriminatory. The
order was appealed and rejected by the Ninth Circuit Court of Appeals.
In 2019, during the Order appeal process, New Cingular Wireless PCS, LLC (“AT&T”), a
cellular service provider, inquired about using City facilities to install their equipment.
They requested that the annual pole fee be reduced to $270 to be consistent with the
FCC Order. Because the Order was under appeal, the City took the position that it should
not vary from its adopted rate of $1,500 at that time, but offered to reduce the fee to $270
should the appeal be denied. On November 5, 2019, the City Council approved a
Municipal Facilities Right-of-Way Agreement with
New Cingular Wireless PCS, LLC (“AT&T”)
May 3, 2022
Page 2 of 5
Municipal Right-of-Way Facilities Use Agreement with AT&T, but AT&T never executed
it.
In May 2021, the FCC rejected the appeal, and the City Attorney revised the City’s
agreement to reflect the new annual streetlight pole fee of $270. AT&T has again
requested to enter into an agreement for the use of City right-of-way facilities for the
installation, operation, and maintenance of their small cell equipment.
It is recommended that the City Council approve and authorize and direct the City
Manager to execute a Municipal Right-of-Way Facilities Use Agreement with New
Cingular Wireless PCS, LLC (“AT&T”) for use of City facilities for installation, operation,
and maintenance of cellular equipment.
BACKGROUND
Cellular service providers are regulated by the Federal Communications Commission,
and, under state law, have the right to use City public rights-of-way for their facilities,
provided that the facilities do not inconvenience the public use of the right-of-way. In order
to control these types of installations to the greatest extent, the City has developed a
Wireless Facilities in Public Right-of-Way Application permit document, which provides
requirements and guidance to cellular providers in making applications for cellular
facilities installations.
As part of the permit review process, wireless providers are asked to consider locating
their facilities on existing facilities, such as streetlights or utility poles, to minimize the
impact to the City. For the use of utility poles, the cellular provider needs the authorization
of the pole owner. For the use of City facilities, the City Attorney prepared a standard
agreement, entitled a Municipal Right-of-Way Facilities Use Agreement, to allow cellular
providers to use City facilities for the installation, operation, and maintenance of their
cellular equipment. The Agreement, which requires City Council approval, is intended to
be the master document for any and all installations on City-owned facilities by a cellular
provider. Each location is subsequently administratively approved with the issuance of
the Site License Authorization Form attached to the agreement as an exhibit.
The City currently has three (3) cellular providers under agreements for use of City
facilities. NextG Networks/Crown Castle entered into an older, different agreement in
November 2009 with an annual streetlight use fee of $500, and Verizon Wireless and
Extenet Systems entered into the initial Municipal Right-of-Way Facilities Use Agreement
in 2016, with the annual streetlight use fee of $1,500. Only Crown Castle has used the
agreement for installations on City streetlights and currently has three small cell facilities
in operation.
Municipal Facilities Right-of-Way Agreement with
New Cingular Wireless PCS, LLC (“AT&T”)
May 3, 2022
Page 3 of 5
In 2018, the Federal Communications Commission (the “FCC”) adopted an order (FCC
18-133) pertaining to the deployment of small wireless facilities, including the use of
municipal facilities by cellular providers. The Order, referred to as the Small Cell Order,
determined that failing to allow use of municipal facilities for cellular equipment could be
an “effective prohibition” of wireless service under federal law. Further, the Order limited
local government authority to collect “fair and reasonable compensation” for use and
established a “safe harbor” fee in the amount of $270 per year for use of a City facility like
a streetlight pole. The fee may be higher if it can be demonstrated to comply with the
Order’s requirements that the fee reflects a reasonable approximation of actual costs and
is non-discriminatory. Regarding existing agreements, the FCC Order did not preempt the
fees, but stated that the Order’s effect on any particular existing agreement will depend
upon all the facts and circumstances of that specific case and may or may not impact any
particular agreement entered into before the Order took effect.
In November 2019, AT&T requested to enter into an agreement with the City for the use
of City right-of-way facilities for the installation, operation, and maintenance of their small
cell equipment. They requested that the annual streetlight use fee be set at $270, per
the Small Cell Order. Because the Order was under appeal at the time, the City prepared
an agreement with the provision that the annual fee be set at $1,500, but that, in the event
that the appeal were to be denied, the amount would be reduced to $270. The City
Council approved the agreement, but AT&T never signed it.
In May 2021, the FCC rejected the appeal and by July 2021, all other appeal efforts as
high as the United States Supreme Court were rejected, leaving the Small Cell Order as
the governing directive. The Order does not allow local agencies to reject the use of City
facilities as a blanket policy. Cities must make streetlights and traffic lights available and
accept and consider applications within specific timelines set forth in the statute. Cities
may approve or deny access to street light poles or traffic signal poles on a case-by-case
based on other reasonable terms and conditions that may include, but are not limited to,
reasonable aesthetic and safety standards.
DISCUSSION
AT&T has again requested the use of City right-of-way facilities for the installation,
operation, and maintenance of their small cell equipment, with primary interest in City
streetlight poles at an annual fee of $270.
The City’s Municipal Right-of-Way Facilities Use Agreement has been revised to reflect
the Small Cell Order. The City Attorney has added language to reflect the pole use
amount of $270 but has also added alternatives based on any future changes to the FCC
Order.
Municipal Facilities Right-of-Way Agreement with
New Cingular Wireless PCS, LLC (“AT&T”)
May 3, 2022
Page 4 of 5
The Municipal Right-of-Way Facilities Use Agreement includes the following key
elements:
• The Agreement has a term of 10 years, with one 5-year extension.
• The City must approve each location with a Site License Authorization form in
advance of each installation.
• The City will receive an annual fee of $270 per street light installation, with annual
CPI adjustment.
• The Agreement allows for the use of other City facilities, like conduit, if requested.
• Additional fees for the use of other facilities are to be determined upon request and
agreed upon by both parties.
• Electricity is not provided by the City.
• Agreement requires the Facility to be relocated, if requested by the City.
• Equipment must be removed upon abandonment of service, or termination of
Agreement, or it becomes the sole property of the City.
• Carrier to post a Performance Bond in the amount of $50,000 for up to 50 locations
and $100,000 for more than 50.
AT&T concurs with this latest Agreement.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the
environment. Thus, this matter is exempt under CEQA.
FISCAL IMPACT
With the City’s standard agreement, the City would receive $270 per year for each
installation on a streetlight. It is not known at this time how many City facilities may be
utilized by AT&T under this agreement, but could reasonably number in the dozens over
time.
RECOMMENDATION
It is recommended that the City Council determine that this action does not constitute a
project and is therefore, exempt under, the California Environmental Quality Act
(“CEQA”); and approve and authorize and direct the City Manager to execute a Municipal
Right-of-Way Facilities Use Agreement with New Cingular Wireless PCS, LLC (“AT&T”)
for use of City facilities for installation, operation, and maintenance of cellular equipment.
Municipal Facilities Right-of-Way Agreement with
New Cingular Wireless PCS, LLC (“AT&T”)
May 3, 2022
Page 5 of 5
Attachment: City’s Municipal Right-of-Way Facilities Use Agreement