FROM:
Administrative Services
SUBJECT:
Approval of Amended and Restated Communications Site License Agreement with New Cingular Wireless PCS, LLC (AT&T) and Approval of License Termination Agreement for Existing Site near 14000 Philadelphia Avenue
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RECOMMENDATION:
Recommendation
1. Approve the License Termination Agreement terminating the existing 2005 Communications Site License Agreement; and
2. Approve the Amended and Restated Communications Site License Agreement with New Cingular Wireless PCS, LLC (AT&T) for continued operation of a wireless communications facility located at 14000 Philadelphia Avenue; and
3. Authorize the City Manager to enter into the agreements and any necessary related documents.
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COUNCIL GOALS:
• Operate in a businesslike manner by improving services through the effective use of technology.
• Promote economic development by being business friendly at all levels and striving to constantly improve the city's competitiveness.
DISCUSSION:
The City of Fontana currently has an existing communications site license agreement that was originally entered into in 2005 with AT&T (through its predecessor) and Southern California Edison (SCE) for a wireless facility located at 14000 Philadelphia Avenue. That agreement allowed AT&T to install and operate telecommunications equipment on SCE-owned electrical transmission facilities within an easement on City-owned property. AT&T desires to renew and extend this lease.
To modernize the contractual structure and continue uninterrupted wireless service at this location, the parties have negotiated:
• A License Termination Agreement to formally terminate the expired 2005 agreement; and
• A new Amended and Restated Communications Site License Agreement directly between the City and AT&T (with SCE no longer a party to the new agreement).
The proposed Amended and Restated License Agreement allows AT&T to continue operating its wireless communications facility on City-owned property under updated terms and conditions.
Key provisions of the new agreement include:
• Term: Initial five (5) year term with three (3) additional five-year renewal options (total potential term of 20 years).
• Use: Non-exclusive license for approximately 384 square feet of ground space for telecommunications equipment.
• Access: 24/7 access for maintenance and operation, subject to City notification requirements.
• Relocation Rights: City retains the right to require relocation (temporary or permanent) to accommodate municipal needs.
• Termination Rights: City may terminate under specified conditions, including for municipal use after the 10th year following execution with appropriate notice.
Financial Terms
• New Monthly Rent: $3,500 per month ($42,000 annually)
• Current Rent: $2,178 per month ($26,136 annually)
• Increase: Approximately $1,322/month (+61%)
• Annual Escalation: Greater of CPI or 4% annually
• One-Time Signing Bonus: $1,500 to reimburse City administrative costs
This represents a significant increase in revenue to the City while aligning the agreement with current market conditions.
CEQA: The approval of the renewed license agreement (“project”) is categorically exempt from the California Environmental Quality Act (“CEQA”) under the Class 3 exemption, which applies to the construction and location of limited numbers of new, small facilities or structures; installation of small new equipment and facilities in small structures; and the conversion of existing small structures from one use to another where only minor modifications are made in the exterior of the structure. (CEQA Guidelines, § 15303.) The project would permit a wireless communications facility on approximately 384 square feet of City-owned property, a small facility in an already developed area, that is comparable in scope and function to those structures identified in the language of CEQA Guidelines Section 15303. None of the exceptions outlined in CEQA Guidelines Section 15300.2 apply. The project will not impact an environmental resource of hazardous or critical concern where designated, precisely mapped, and officially adopted pursuant to law by federal, state, or local agencies. There will be no cumulative impact of successive projects of the same type in the same place, over time. There will be no significant environmental impact due to unusual circumstances. The project will not result in damage to scenic resources. The project site is not on any list compiled pursuant to Government Code section 65962.5, and there are no historical resources on or near the project site that would result in a substantial adverse change as a result of the project. Thus, the project falls within the Class 3 exemption.
FISCAL IMPACT:
The new agreement increases annual revenue from approximately $26,136 to $42,000, resulting in an increase of $15,864 annually, plus future annual escalations. Additionally, the City will receive a $1,500 one-time payment upon execution of the agreement.
MOTION:
Approve staff recommendation to approve the License Termination Agreement and the New License Agreement.