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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