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HomeMy WebLinkAboutItem 02 Small Cell Pole Attacment AGENDA ITEM SUMMARY Meeting Date: 5/21/2018 Meeting Type: Work Session Staff Contact/Dept.: Neil Obringer/DPW Staff Phone No: 541-736-1032 Estimated Time: 20 min. S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Provide Financially Responsible and Innovative Government Services ITEM TITLE: SMALL CELL POLE ATTACHMENT ACTION REQUESTED: Provide staff with direction regarding the questions posed about potential changes to the Master Pole Attachment Agreement and pole attachment fee structure. ISSUE STATEMENT: The City Council has previously reviewed and provided feedback on a Small Cell Pole Attachment Master Agreement and has adopted a pole attachment fee for small cell fixtures. Since the last Council work session on this item staff have worked with representatives from the cellular industry in an attempt to facilitate deployment of small cell facilities in Springfield using this master agreement and adopted fee structure. However, as a result of conversations with industry a range of potential changes to the master agreement are being proposed, some by staff and some by industry. Staff is seeking guidance from Council on these proposed changes in the hope that they may lead to successful execution of an agreement and serve as a master agreement for negotiations with other providers. ATTACHMENTS: ATT1 Small Cell Pole Attachment CBM ATT2 Images of Example Small Cell Installations ATT3 Prior AIS DISCUSSION/ FINANCIAL IMPACT: See Attached Council Briefing Memo (Attachment 1) M E M O R A N D U M City of Springfield Date: 5/21/2018 To: Gino Grimaldi COUNCIL From: Tom Boyatt, Interim DPW Director Neil Obringer, Senior Management Analyst BRIEFING Subject: Small Cell Pole Attachment MEMORANDUM ISSUE: The City Council has previously reviewed and provided feedback on a Small Cell Pole Attachment Master Agreement and has adopted a pole attachment fee for small cell fixtures. Since the last Council work session on this item staff have worked with representatives from the cellular industry in an attempt to facilitate deployment of small cell facilities in Springfield using this master agreement and adopted fee structure. However, as a result of conversations with industry a range of potential changes to the master agreement are being proposed, some by staff and some by industry. Staff are seeking guidance from Council on these proposed changes in the hope that they may lead to successful execution of an agreement and serve as a master agreement for negotiations with other providers. COUNCIL GOALS/ MANDATE: Provide Financially Responsible and Innovative Government Services BACKGROUND: During Council work session on June 12, 2017 staff provided a briefing on inquiries from cellular providers regarding the potential deployment of small cell installations in the public right of way. In addition, during this meeting Council reviewed a draft Master Pole Attachment agreement and directed staff to utilize this document during negotiations with cellular providers. During the most recent update to the master fees and charges schedule Council adopted a $5,000/pole/year small cell attachment fee. These actions taken by Council were an effort to respond to inquiries from cellular providers interested in small cell deployment in Springfield and to provide a clear and equitable process for deployments. At this point in time no small cell projects have been authorized by the City of Springfield. However, staff has been contacted by AT&T who is interested in a Springfield project. AT&T has successfully executed a pole attachment agreement with the Springfield Utility Board in order to allow for attachment to SUB owned poles. They are also interested in attaching to City owned poles. In order for AT&T to move forward with their Springfield deployment they need to execute a ROW use agreement with the City in order to occupy the public ROW and pole attachment agreement in order to attach to City owned poles. Small cell deployment is a new and evolving topic in Oregon. Several communities in Oregon are working with cellular providers on potential small cell installations but few have reached final agreement. Attachment 1, Page 1 of 5 MEMORANDUM 5/16/2018 Page 2 AT&T has expressed a desire to complete a deployment in Springfield as soon as possible. Staff are looking for feedback from Council on how to proceed regarding the proposed changes to the Master Pole Attachment agreement and pole attachment fee in order to facilitate moving this project forward. About small cell technology Small cell technology is described by cellular companies as a way to enhance the level of service for customers in urban areas and to potentially pave the way for the roll-out of 5G technology. Small cell antennas can attach to utility poles, street light poles and buildings and provide cell service to a relatively small geographic area (radius of about 600-1200 ft). They are not meant to take the place of traditional macro cell towers but instead help to increase the level of service within areas already covered by macro towers. As reference, Attachment 2 to this item includes pictures of small cell installations. Council input needed regarding changes to small cell master agreement Below are the items on which staff is requesting guidance from Council. Staff has attempted to provide a range of options for Council consideration. In addition to the topics listed below, there are standard contractual terms which staff and the City Attorney’s Office are discussing with AT&T such as requirements around insurance/self-insurance, payment remittance schedule, late payment fee percentage, process for changes to equipment spec, venue and choice of law, and dispute resolution. The items described below are substantive in that they have a direct financial impact, have to do with the structure or duration of the agreement or have to do with triggers for renegotiation. a.) Adjust the Master Pole Agreement to also function as a ROW-Use agreement. Discussion: This proposed change comes from staff and the City Attorney’s Office and is the result of the fact that following the prior Council work session on this item staff learned that the City is not able to license small cell providers under the utility license section of the Springfield Municipal Code because of an exemption for mobile service. As a result, authorization to access the public ROW and to allow for fair compensation for its use should be provided for though a ROW-Use agreement. Option 1: Integrate ROW use agreement provisions into the Master Pole Attachment agreement so the City executes a single agreement with providers. Option 2: Execute a separate ROW-Use agreement. Staff recommendation: Option 1 (combined agreement). This is the recommendation of the City Attorney’s Office who has already drafted a revised version to integrate a ROW use component into the existing pole attachment agreement. b.) Amend the adopted attachment fee and adopt a small cell ROW-Use fee. Discussion: The $5,000/pole/year attachment fee which the Council had previously adopted as part of the Master Fees & Charges Schedule was based on the amount adopted by City of Portland as part of a pilot small cell program. No cellular providers have deployed installations in Portland under this pricing structure and representatives of the cellular industry have indicated to Springfield staff that this attachment price structure is not viable. Staff has been in contact with a number of other Oregon cities who are also in discussions with providers interested in deploying small cells in their communities. The Attachment 1, Page 2 of 5 MEMORANDUM 5/16/2018 Page 3 most common small cell fee structure being discussed by local jurisdictions is a pole attachment fee + ROW use fee. Pole attachment fees being discussed by other jurisdictions range from $250-$2,500/pole/year and ROW use fees from $250- $1,500/pole/year. None are likely viable at a combined amount much greater than $2,500/pole/year. Examples of executed agreements are limited. Listed below are some examples which may be used as reference: Staff understand that EWEB has approved an agreement calling for a $1,800/pole/year attachment fee (with 3.5% annual CPI) for pole top attachments or $150/year if installations are installed mid-pole. SUB has executed an agreement with AT&T for pole attachments inSpringfield. The rate structure is based on the cubic feet of pole attachments, so the per pole attachment fee will vary, but staff understand that it will be roughly $300/pole/year. The City of Salem has placed an agreement on their May 14 Council agendawhich, if adopted, would provide for a $1,250 ROW use fee (with annual 4% escalation) + $250 pole attachment fee + a $1,579/year ground facility fee for associated equipment located at ground level (if applicable). Additionally, theyare calling for a one-time $2,000 installation fee per site and a one-time $5,000 pre-agreement negotiation/administration fee. Another comparable City is looking to negotiate a $2,400/year pole attachment fee. They have not yet executed an agreement at this price. National research conducted by Next Century Cities shows that the national median pole attachment fee is about $1,200/pole/year. However, many of the states included in the survey are limited by state law in the amount of ROW use fees they can charge which makes comparison to Oregon difficult. The combined total of the ROW use fee and pole attachment fee appear to be the primary concern of AT&T. However, they have indicated that they would prefer a higher pole attachment fee and lower ROW use fee amount. City staff believes that a higher ROW use fee amount would likely be more beneficial to the City. AT&T has offered the City of Springfield a $250/pole/year ROW use fee and has suggested that an additional $1,000-$1,200/pole/year attachment fee would be workable for them. One additional thing Council may choose to consider is the possible relationship between the amount of consideration provided to the City and the duration of the contract (options for duration are described in section C, below). As the duration of the contract becomes longer the ability for the City to respond to issues that may arise as a result of these installations becomes more limited, potentially providing justification for a higher rate of compensation. Staff recommendations provided below for compensation and duration attempt to find a Attachment 1, Page 3 of 5 MEMORANDUM 5/16/2018 Page 4 middle ground that is likely workable for AT&T and provides fair compensation for the City. Option 1: Current adopted fee amount of $5,000/pole/year. Option 2: Accept AT&T offer of a $250/pole/year ROW and $1,000-$1,200/pole/year attachment fee. Option 3: $1,250 ROW use + $250 pole attachment/pole/year. Option 4: $1,550 ROW use + $250 pole attachment/pole/year. Option 5: $2,400 ROW use + $250 pole attachment/pole/year. Staff recommendation: Option 4 - $1,550 ROW use + $250 pole attachment. This puts the City near the price set by EWEB which is the highest local price and very close to the price set by the City of Salem. In addition to the annual fees charged to the provider staff recommend that Council consider following the Salem model by setting a one-time installation fee as a means of compensating the City for the engineering review and other one-time staff costs associated with deployment. c.) Adjust the duration of the Master Pole Attachment Agreement. Discussion: The duration of the agreement previously reviewed by Council was 5 years. AT&T has indicated to staff that this duration is not long enough to ensure that their capital investment in these installations can be recouped. Their counter proposal is for a 5 year term with an additional 20 year automatic renewal if neither party provides intent to withdraw after 5 years. Option 1: Maintain initial 5 year duration from original draft. Option 2: Accept AT&T proposal as described above. Option 3: Middle ground. 5 year initial term with two additional 5 year terms with option to terminate at end of each term. Staff recommendation: Option 3 (middle ground). Staff appreciates the need for AT&T’s return on investment. However, since this technology is new to the community staff are proposing a middle ground where there are more frequent options for the City to terminate/renegotiate the terms of the agreement. d.) Include integration of new laws/re opener for change of law. Discussion: AT&T has proposed the addition of language that, in effect, provides for a reopener if legislation or other federal action changes such that the new law differs in a substantial way from the terms of the Springfield agreement. Staff believe this concern is motivated by recent proposed rulemaking by the Federal Communications Commission that could preempt local requirements impacting small cell deployment, including regulations affecting the placement and appearance of small cell facilities and the amount that local jurisdictions may charge as pole attachment and ROW use fees. AT&T has indicated that their primary concern in this regard is that they be treated the same as other cellular providers and that the City does not, at some future point, provide an advantage through this agreement or a version of this agreement to AT&T’s competition. Option 1: Reject addition of any new language to the Master Agreement. Attachment 1, Page 4 of 5 MEMORANDUM 5/16/2018 Page 5 Option 2: Accept AT&T’s proposal as described above regarding integration of new law. Option 3: Add language that helps to ensure fair treatment and equity across providers but does not provide for the integration of new law. Staff recommendation: Option 3. Since it is likely in the City’s interest to be consistent in its treatment of all provider’s staff recommends amending the language to provide some guarantee of equity across providers Next Steps Staff will make note of the guidance provided by Council on the issues described above in addition to any other feedback and incorporate it into negotiations with AT&T. Unless Council wishes to continue discussion of this topic during an additional work session, staff will plan to bring back the final agreement and fee amount for Council review/approval during a future regular session. RECOMMENDED ACTION: Provide staff with direction regarding the questions posed about potential changes to the Master Pole Attachment Agreement and pole attachment fee structure. Attachment 1, Page 5 of 5 Example Small Cell Installation #1 Photo Credit: AT&T Attachment 2, Page 1 of 4 Example Small Cell Installation #2 Photo Credit: AT&T Attachment 2, Page 2 of 4 Example Small Cell Installation #3 Photo Credit: AT&T Attachment 2, Page 3 of 4 Example Small Cell Installation #4 Photo Credit: AT&T Attachment 2, Page 4 of 4 AGENDA ITEM SUMMARY Meeting Date: 6/12/2017 Meeting Type: Work Session Staff Contact/Dept.: Anette Spickard/DPW Kristina Kraaz/CAO Staff Phone No: X3753 Estimated Time: 15 minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Provide Financially Responsible and Innovative Government Services ITEM TITLE: MASTER POLE ATTACHMENT AGREEMENT ACTION REQUESTED: Review master pole attachment agreement and delegate authority to the City Manager to execute said agreements with licensed utilities that seek City approval to attach wireless telecommunication systems to City-owned utility poles in the public Right of Way. ISSUE STATEMENT: Wireless telecommunication providers have contacted the City for permission to attach devices to City-owned utility poles. A Pole Attachment Agreement is required. By establishing a Master Pole Attachment Agreement, the Council ensures all providers are treated the same and allows the City Manager to execute agreements as applications are reviewed and approved. ATTACHMENTS: 1. Master Pole Attachment Agreement DISCUSSION/ FINANCIAL IMPACT: The Springfield Development Code contains special standards and land use approval processes for the siting of wireless transmission facilities on property outside of the Right of Way (traditional cell towers). The Code exempts small cell and distributed antenna system (DAS) installations on utility poles within the Right of Way from land use approvals. For small cell and DAS installations the City has an established process for permitting the placement of these devices in the Right of Way which includes issuing a utility license to the company, granting an encroachment permit to the company to do work in the Right of Way, and executing a pole attachment agreement. The City currently does not have any of these devices attached to our utility poles; however we have received several inquiries from providers wishing to install this new technology in Springfield in order to provide the infrastructure for 5G wireless transmissions. A pole attachment agreement is now needed to allow for these devices. A Pole Attachment Agreement is essentially a lease agreement granting approval to the company to use space on our utility poles for this purpose in exchange for meeting our engineering and ROW use standards and paying an annual rent of $5,000 per pole per year as established in the Master Fees and Charges schedule. The attached Master Pole Attachment agreement will be used for this purpose. All agreements with individual companies will be reviewed by legal counsel and executed by the City Manager. Staff will give an overview of the agreement and answer any questions Council may have about this process and the deployment of this technology in the City. Attachment 3, Page 1 of 1