SAN IPSE CAPITAL OF SILICON VALLEY
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1 CITY OF C 3 SAN IPSE CAPITAL OF SILICON VALLEY TO: HONORABLE MAYOR AND CITY COUNCIL COUNCIL AGENDA: 10/06/15 ITEM: A.io Memorandum FROM: Kim Walesh SUBJECT: AMENDING THE MASTER DATE: October 2, 2015 AGREEMENT FOR TELECOMMUNICATIONS FACILITIES Approve,-^ / D e SUPPLEMENTAL REASON FOR SUPPLEMENTAL The purpose of this supplemental memorandum is to amend the Recommendation (Items A and B) proposed to Council during the September 22, 2015 Council Meeting regarding Agenda Item 4.3 "Master Agreement for Telecommunications Facilities," and provide and explain the amendments to the proposed Master Agreement based on Council direction and additional industry input. RECOMMENDATION Adopt a resolution: (a) Approving a Master Agreement for the Non-Exclusive Installation and Property Use of Small-Scale Telecommunications Facilities in the Right-of-Way and on City-Owned Property ("Master Agreement") for a 15 year term; (b) Approving a standard Site License Agreement for a fifteen year term; (c) Approving a standard usage fee schedule based on a site's location within the City, equipment space requirements, and effective radiated power output of the antenna facility; and (d) Authorizing the City Manager to execute the Master Agreements and Site License Agreements and all other documents necessary to complete a transaction.
2 October 2, 2015 Page 2 BACKGROUND Staff presented a proposed Master Agreement for Telecommunications Facilities to the City Council on September 22, During that presentation, Council raised questions regarding the various implications of the Master Agreement and Usage Fee Schedule. In addition, members of the telecommunications industry requested City Council to defer the item in order to have additional time to address issues of clarification and to suggest alternate terms. City Council agreed to defer the item one week, to the September 29, 2015 Agenda. During the week of September 21-25, 2015, City staff engaged with several members of the telecommunications industry, including AT&T, Verizon, Comcast and Mobilitie to discuss the proposed Master Agreement. Staff then requested to defer the item one additional week, to the October 6, 2015 City Council Agenda, in order to thoughtfully address the questions and issues raised by both City Council and the members of the telecommunications industry. ANALYSIS The proposed amendments to the Master Agreement for Telecommunications Facilities will facilitate implementation with providers and effectively support the City's goals of improving cellular service for residents, visitors and businesses and generating General Fund revenue. Below is a list of recommended amendments to the Master Agreement for Telecommunications Facilities, and the rationale for the Amendment: 1) Authorized the Director of Economic Development to approve a discount of up to 50% of the standard Usage Fee for a telecommunications facility installed in an area that is deemed by the City to be in exceptional need of cellular service. This potential discount may be offered separately from the discounted fees available in Zones 1 and 2. Currently, there are many areas within the City that have low or virtually no cellular coverage. These areas adversely affect residential neighborhoods, commercial/office buildings, research and development facilities and industrial parks. In order to incentivize providers to install cellular infrastructure in these "dead zones," staff propose that Council authorize the Director of Economic Development to approve a discount of up to 50% of the normal Usage Fee in areas deemed to be in exceptional need of cellular service. 2) Include language that prohibits a provider from collecting, storing, sharing, selling or distributing any information, data, communications or frequency that violates any State, Federal or local laws. The purpose of this Master Agreement is to allow telecommunications companies to provide services consisting of radio and wireless transmission for the use of handheld
3 Page 3. wireless telephones, tablets, mobile computers and global positioning devices. Staff has included language in the proposed amended agreement that prohibits companies from collecting, storing, sharing, selling or distributing any information, data, communications or frequency that violates any State, Federal or local laws. 3) Modify the intended use of the agreement to pertain to small-scale antenna facilities, which are defined by antenna facility configurations requiring less than 125 cubic feet and outputting less than 360 watts of effective radiated power. Large-scale or macro cell sites will be addressed through a revision of the current Multi-Site Property Use Agreement to be proposed to Council at a future date. While the initial proposed use of the Master Agreement for Telecommunications Facilities included small cells, micro cells and macro cells, staff has amended the proposed Agreement to exclude macro cells and include only small-scale sites, which include small cells and micro cells requiring less than 125 cubic feet and outputting less than 360 watts of effective radiated power. In theory, one Master Agreement for all types and sizes of cell sites may lead to administrative efficiencies. In practice, however, there are different implications between small-scale cell sites and large-scale cell sites with issues including access, relocation and termination. In order to ensure that the appropriate terms are matched with each type of site, staff has concluded that the City's interests are best served by excluding macro cells from this proposed Master Agreement. Staff will work with the telecommunications industry to revise the current Multi-Site Property Use Agreement and return to Council with a proposal at a future date. In the interim, staff will continue to use the existing Multi-Site Property Use Agreement form for any new macro cell sites. 4) Modify the term of the Master Agreement so that it will be extended on a year-to-year basis at the end of the 15-year term unless otherwise terminated by either party or extended pursuant to a mutual agreement of the parties. Staff recommends the inclusion of a provision that extends the term of the Master Agreement on a year-to-year basis at the end of the 15-year term, unless it is terminated by either the City or the telecommunications company. This will ensure that telecommunications facilities on City property continue to be subject to the terms of the Master Agreement and will facilitate the administrative tasks involved in the renewal or non-renewal of a subsequent agreement. 5) Extend the term of the individual Site License Agreement from a five-year agreement with two five-year options to a 15-year agreement, which coincides with the term of the Master Agreement. One key piece of feedback staff received from members of the telecommunications industry involved concerns regarding the term of the individual Site License Agreement, which had been set at five-years with two five-year options. In order to attract
4 Page 4 telecommunications companies to make the capital investment necessary in building a cell site, staff recommends extending the term offered to a full 15 years, which is also the term of the underlying Master Agreement. However, the Agreement does provide for circumstances in which the City may terminate the Site License Agreement early in the event that an alternative use of the property is established. 6) Eliminate a provision that causes termination to the Master Agreement in the event of default of an individual Site License Agreement. Default of a Site License Agreement and failure to cure will cause the termination of only that SLA. Previously, the proposed Master Agreement included a provision that would allow the City to terminate the underlying Master Agreement if a telecommunications company defaulted on and failed to cure an individual Site License Agreement. This action would also terminate all other Site License Agreements held by the company, which would cause an undue financial burden on the company and negatively impact cellular coverage for the City's residents, visitors and business. Staff recommends amending this term to limit termination to only the individual Site License Agreement, and not the entire underlying Master Agreement. 7) Provide certain rights to a provider with a site license in a location to notify the City of potential frequency interference in the event that a second provider desires to "co-locate" at the same location. The proposed Master Agreement allows for the non-exclusive use of City property, meaning that two or more telecommunications companies may install cell sites in the same area. In order to deal with potential frequency interferences between multiple carriers in the same area, staff recommends a provision that gives certain rights to the carrier "first in" that location. In the event that a second carrier desires to install a cell site in an area already occupied by a carrier, the City would provide notice to the first carrier and the opportunity to determine whether potential frequency interference might arise. EVALUATION AND FOLLOW-UP Because staff recommends excluding macro cell sites from this proposed Master Agreement, we will work with members of the telecommunications industry to revise the current Multi-Site Property Use Agreement and return to Council with a proposal at a future date. PUBLIC OUTREACH Between September 22, 2015 and September 25, 2015, staff conducted telephone and in-person meetings with AT&T, Verizon, Comcast and Mobilitie to discuss and contemplate adjustments to the proposed Master Agreement. Staff from the City Manager's Office, City Attorney's Office
5 Page 5 and Office of Economic Development met internally to discuss and formulate these proposed amendments to the Master Agreement. COORDINATION This supplemental memo has been prepared in coordination with the City Attorney's Office. /s/ KIM WALESH Deputy City Manager Director of Economic Development For questions, please contact Nanci Klein, Assistant Director of Economic Development, at (408)
SAN JOSE CAPITAL OF SILICON VALLEY
CITY OF C: *2 SAN JOSE CAPITAL OF SILICON VALLEY TO: HONORABLE MAYOR AND CITY COUNCIL COUNCIL AGENDA: 9/22/15 ITEM: 4.3 Memorandum FROM: Kim Walesh SUBJECT: MASTER AGREEMENT FOR TELECOMMUNICATIONS FACILITIES
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