HomeMy WebLinkAbout6A Antenna Lease ReportPhone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com
4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL AGENDA REPORT
MEETING DATE: MARCH 27, 2017
AGENDA #:
PREPARED BY:
6A
NICK ZURBEY, PUBLIC WORKS TECHNICIAN
SARAH SCHWARZHOFF, CITY ATTORNEY
PRESENTED BY: NICK ZURBEY, PUBLIC WORKS TECHNICIAN
SARAH SCHWARZHOFF, CITY ATTORNEY
AGENDA ITEM:
DISCUSSION:
CONSIDER APPROVAL OF A REPORT WITH RESPECT TO
CELLULAR ANTENNAS AND SMALL CELL ANTENNAS
Introduction
The purpose of this agenda item is to update the City Council on the status
of its antenna leases with Communication Companies (AT&T, Verizon,
Sprint, T-Mobile) on City properties and antennas within the right-of-way.
History
Traditionally, Communication Companies have sought to install substantial
large scale equipment on towers, water towers and other similar structures.
The City and various Communication Companies are currently parties to
Antenna Agreements relating to the installation of communications
equipment on the Cedarwood St water tower, Tower St water tower, Wilds
Parkway civil defense siren and the Willows Park utility pole (towers). That
includes mounting of antenna and other equipment on the towers, leased
ground space for an equipment shelter and easements for access and
underground utilities. Some of these Agreements date back to 1991.
Current Circumstances
As the attached table shows the City has 11 Antenna Agreements in total
and 2 of them have recently been renewed for up to an additional 15 years.
Six other Agreements are set to expire within the next 5 years. Due to the
number of Agreements expiring, a new standard lease form was developed
by the City Attorney and Staff. While developing the new lease, City Staff
contacted several cities in the area to inquire about their lease language
and rent structures. We have developed new rent amount goals to bring
expiring leases up to market value. The current rent projections are
attached as part of the table.
The City can expect renewals of all of the Agreements except the Clear
Wireless Agreement at the Tower St water tower. The City received notice
in 2014 that Clear Wireless was acquired by Sprint and soon after they
sent a notice stating their intention to decommission the redundant Clear
Wireless equipment. However, due to issues on Sprint’s end, they had to
rescind that order and continue to operate that equipment. That
Agreement is set to expire on December 31, 2020 so it would reasonable
2
to expect Sprint to exercise their right to terminate the Agreement early or
simply allow it to expire.
In addition, there has long been discussions of a merger between T-Mobile
and Sprint. This could have a significant impact on antenna revenue.
Small Cell
The City is also beginning to see “small cell” technology. As opposed to
the current technology which includes large installations fairly far apart,
small cell technology includes much smaller equipment installed closer
together. Due to the smaller size and increased number of installations
Communication Companies are seeking to expand the locations where
these antenna are installed.
If small cell antenna are installed on City structures (light poles, emergency
sirens) the City can treat them as it does the current installations on water
towers requiring a lease and an annual lease payment. However, the
market is expected to bear smaller annual lease payments (possibly
$1,000-$1,500 per year).
If the small cell antenna is installed on structures owned by other parties
(communication company, Xcel, private property) the City has more limited
authority.
The City can regulate antennas on private property through zoning. Staff is
working to update the City’s current zoning regulations related to antenna.
We hope to bring this to the Planning Commission for a public hearing in
the next several months.
The City can regulate antenna placement in the right-of-way through its
right-of-way management ordinance. Due to interest from at least one
Communication Company staff is working on a right-of-way ordinance
update which we hope to bring to the Council at its next meeting. The
proposed ordinance will include a right-of-way permit for work done in the
right-of-way; a registration requirement for telecommunication users who
place equipment in the right-of-way and regulations on new structures
(towers/poles) in the right-of-way. The City can charge a fee for the permit
and registration, but per State statute the fee must be related to recouping
City costs involving the work and/or installation.
Conclusion
The City Attorney and City Staff will continue to monitor new developments
and other cities actions to determine if other updates or changes in
administration should be made.
ISSUES: There is currently proposed legislation at both the State and Federal levels
to address city authority with regard to small cell installations. If any of the
proposed legislation passes the City will need to re-consider its regulations.
3
FINANCIAL
IMPACT:
The City should continue to receive annually increasing revenue from the
traditional installations. Though some of the Agreements may terminate as
Communication Companies merge and as technology changes.
The City may see a slight increase in revenue from small cell installations
on City property/equipment. However, due to the limited number of City
poles and structures this revenue is likely to be limited.
The City may see an increase in revenue from the right-of-way permits and
registrations however this revenue increase will be offset by the costs
incurred by the City in administering and working around the installations.
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