CCMtg07-12-10(WS)Min LONGWOOD CITY CIMMISSFSN
Longwood City Commission Chambers
175 West Warren Avenue
Longwood, Florida
WORK SESSION
MINUTES
JULY 12 2010
5 :00 P.M.
Present: Mayor John C. Maingot
Deputy Mayor Joe !1 urso
Commissioner Bob Cortes
Commissioner H.G. ":'utch" undy
Commissioner Brian Sackett
Dan Langley, City Attorney
Katrina Powell, City Administrator
John Peters, Director of Public Works /City Engineer
Sheryl 11 ower, Director of Community Development
Patrice C. Murphy, Acting Deputy City Clerk
•
1. CALL TO ORDER. Mayor Maingot cabled to order at 5:03 p.m.
2. ItISCUSS T- MOBILE CELL PHONE TOWER.
Introductions were made. Lauralee G. Westine, P.A. attorney representing
T- Mobile. Carole Bradley, Real Estate & Zoning Manager, T- Mobile for
Central Florida.
1 iscussion:
Mayor Maingot started discussion of the T- Mobile lease agreement by
providing a review of the last meeting between the Commission and T-
Mobile represented by Ms. Westine. Mayor Maingot asked T- Mobile to
give an update as to the latest agreement revisions for the Commission to
consider.
• Ms. Bradley stated T- Mobile is authorized and prepared to offer $1,950
per month or $23,400 annually for 30 years, over the life of the lease;
$1.17 million dollars. T- Mobile will pay a revenue share per co- locater of
$250 and that will provide $150,000 for the life of the lease per co- locator
with two (2) co- locators available.
Mayor Maingot stated the City would accept $25,000 annually. Ms.
Bradley stated they are not authorized to go beyond $1,950 on a monthly
basis. Mayor Maingot discussed various reasons for more money as the
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•
revenue stream will increase with emerging technologies and utilization.
The Mayor additionally stated he is not prepared to tie the City into an
agreement for $23,400 with automatic five year renewals for 30 years and
the City bearing the cost if asked to relocate.
Commissioner Cortes stated to be clear $1,950 per month in lieu of the
original $1,500 per month, but lowered the amount of the co- locator from
$500 to $250 therefore trading one amount for another on the rates. Ms.
Bradley stated there is no guarantee of co- loca.ters'or when they may come
online; further stating only the $1,950 is guaranteed monthly.
Commissioner Cortes therefore did not see any real change to the
agreement. Ms. Bradley will not commit to any amount above $1,950 per
month but is willing to discuss the co- locator amount. Commissioner
Cortes said the base rate is close and asked if T- Mobile is willing to move
on co- locator amount.
Ms. Bradley reiterated that T-Mobil&cannot move on the annual amount
as it is not within their regional ability to approve it and she cannot
commit to changes. Ms. Bradley stated that she could move the co- locator
amount to the original number ($500 per co- locator).
Deputy Mayor Durso passed on commenting.
Commissioner Bundy stated the money is close, but the problem continues
as to the teens of the 30 year agreement. Commissioner Bundy
understands construction of the tower is not cheap, and he would be more
in favor of a 10 year base lease with 5 year options to renewal as approved
by the Commission. The only option in the current agreement is T-
Mobile's option not to renew the lease. The terms of the agreement needs
to be set so the City has an option in the agreement, as well as equal say in
the agreement providing amortization over the life of the tower in the
event it may have to be moved or removed.
Ms. Bradley asked if the concern is primarily about an opportunity to re-
examine rent rate or re -use of the land for something else. Commissioner
Bundy responded both and further stated he did not want to tie the hands
of future Commissions to utilize the resources of the City.
Commissioner Sackett commented we are looking at a 30 year agreement
with a company that is nine (9) years old. $1,950 per month is livable and
agrees that the 30 year agreement is not livable for the City. He asked if
T- Mobile can at least bring the amount up to $350 per co- locator?
Commission Sackett further suggested that a ten (10) year agreement with
a five (5) year review option to discuss it again.
Deputy Mayor Durso asked how many T- Mobile towers are in Central
Florida, roughly? Ms. Bradley responded roughly about 1,000 that T-
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Mobile is on, not that they own. Deputy Mayor Durso followed up with,
how many have multiple co- locators? Ms. Bradley responded that on T-
Mobile owned towers, it varies, but would estimate about 40-50% have
multiple co- locators.
Ms. Westine expressed a concern with the 10 year renewal, emphasizing
this is anecdotal, is that T- Mobile then has no leverage. T- Mobile has a
piece of steel in the air, with customers expecting service and equipment.
10 years is not as long as it seems.
Cominissioier Bundy asked of Ms. Powell, in the City's franchise
agreement with Progress Energy, what does that pay a year?
Commissioner Bundy stated the agreement with Progress Energy is a 30
year agreement and it is a lucrative agreement, close to seven (7) figures.
Ms. Bradley noted that there is a 3% annual escalator in the agreement.
Mayor Maii got stated that was nothing..
Deputy Mayor Durso commented that T- Mobile serves over 30 million
customers in the country and made $1.4 billion last year.
Ms. Powell read from Progress Energy's franchise agreement, provided by
Ms. Murphy The Progress Energy agreement offers a clause that states if
another municipality in the area negotiates an agreement for more money
it would apply to the other municipal agreement. Ms. Powell asked if that
something T- Mobile would agree to? Ms. Bradley responded
administratively it is very difficult for T- Mobile to provide that
information and Longwood is not the first jurisdiction to ask for that type
of a teen.
Commissioner Bundy does not want to agree to something a future
Conirnissioi will have to undo. He stated if we are to sign a 30 year
agreement it would have to be a great contract.
Deputy Mayor Durso left the meeting 5 :32 p.m. and returned at 5:34 p.m.
p Y
Ms. Bradley stated T- Mobile does occasionally have to move a site but it
is a very expensive proposition and doesn't benefit T- Mobile as they were
already providing service and now they can't if the City moves the
location of the tower and this is an extra cost beyond just doing business.
Ms. Bradley has been talking about this site for three (3) or four (4) years
and it may take a year and a half to construct a new tower, that is why T-
Mobile is careful about site selection.
Mayor Maingot stated therefore you are making the City's case, by being
in a location that is not likely to have to move and it is free standing.
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Mayor Maingot further stated that as you can hear the Connnission will
not entertain a 30 year agreement, open ended.
Ms. Bradley asked if we are to proceed with renewable terms, how much
lead time can T- Mobile have for renegotiation for the next term, if T-
Mobile was to reduce the teen of the lease to, as an example, 15 years?
Mayor Maingot, stated six (6) months. Ms. Bradley stated the problem is
that it takes two (2) years to build a site and T- Mobile can't be in a
situation where the City dictates this is what we want a month monetarily,
and that if there is a problem renegotiating T- Mobile only has six (6)
months to figure out an alternative site in anything less than a 30 year
lease.
Commissioner Bundy provided more information regarding the agreement
and to address T- Mobile's concerns regarding the length of the agreement
and renewal process.
Commissioner Sackett provided comments regarding length of contract
and renewal process.
Ms. Bradley stated that this is done very rarely, however, T- Mobile can
put in place an initial term in place of three (3), five (5) year teens. And
in the third term that the City will have the right to come back to T Mobile
to renegotiate or ask to remove the tower, two (2) years before the third
term expires. The City would have to initiate the renegotiations or it will
revert automatically to the next five (5) year term and the City could
initiate renegotiations two (2) years before the next term expires. It works
better if the renegotiation is in the back of the terms. This is not
something that T- Mobile offers very often, but is willing to work with
Longwood. Ms. Bradley further stated this would have to be approved
and she- cannot absolutely promise the new terns at this time.
Ms. Westine provided further clarification of the terms of the agreement as
discussed. She stated that at year 13 the City would have the option to
provide notice to open negotiations with T- Mobile and provide for two (2)
years to negotiate.
Commissioner Bundy stated he would accept $2,000 per month lease with
$350 or $400 per month for co- locators.
Ms. Westine stated that there is a business model in place for T- Mobile.
Ms. Bradley stated that $2,000 per month cannot be promised.
Commissioner Cortes stated he could accept the $23,400 annually and we
can work with the co- locator amounts. He asked what is the maximum T-
Mobile can provide per co- locator?
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Ms. Bradley stated she came to the meeting with the instructions to offer
$250 per co- locator, but we had already offered $500 previously, and in
the spirit of not backing away from a promise, we can offer $500 no
higher.
Commissioner Cortes stated that with this arrangement it would give the
City a possible total maximum of $35,400 annually.
•
Mr. Langley asked a question regarding agreement renewal terms; were
you proposing a 30 year lease?
Ms. Westine answered, keep the 30 year lease, with the out clause and
option to renegotiate.
Commission Bundy clarified the agreement terms at year five (5) the
agreement automatically renews, year 10 automatically renews, at year 13
the City would have the opportunity to renegotiate or automatically renew.
Then in each subsequent five (5) years the City can have the option to
open the agreement for negotiations with a two (2) year notice. There is
one bite at the apple, but we have the option at each five (5) year interval
until the 30 years has expired.
Mr. Langley additionally asked what is the depreciated value of the tower
if in 20 years the City wants to relocate the tower?
Conunissioner Bundy clarified the relocation is the City's responsibility in
. the first 15 years, and if the City initiates the re- negotiations in year 13
and the agreement does not renew, then it is the responsibility of T- Mobile
to remove the tower. Ms. Westline clarified, the tower is not available for
relocation during the first 15 years, as well, that relocation expenses would
be paid by the City if after the renegotiation the City decides it wants T-
Mobile to move the tower.
Commissioner Bundy left the meeting at 6:04 and returned at 6:06 p.m.
Mayor Maingot stated the costs of replacement and relocation is escalating
year to year.
Ms. Westline responded that a cap can be placed in the agreement for
relocation costs and discussed amounts. Relocation costs can be $50,000
to $250,000 but usually closer to the $250,000 amount. T- Mobile can
supply information from an engineering firm to confirm the amount of
relocation expenses.
Additional discussion between the Commissioners and the T- Mobile
representatives regarding replacement of cell tower if the City decides to
have the tower relocated. They discussed that a relocation amount would
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be done if the City, during a possible renegotiation, can request an
amortization cost of relocating the cell tower if the desire is to move the
tower.
Mr. Langley discussed an issue about the cap, which can be beneficial
explaining the maximum exposure you will face as a City. It might be
good to place it on the front end of the agreement.
Mr. Langley stated the idea of the cap for costs not to exceed if requested
to remove or relocate tower is beneficial to the City because it states the
maximum exposure the City will have for relocation. Ms. Westline
responded that T- Mobile needs replacement costs to be made whole if
asked to relocate /remove the tower during the terms of the agreement, but
additionally stated that there could be a clause that states a licensed
engineer, through the bidding process, provide actual current costs, if the
City exercises the right to request relocationiremoval of the tower.
Mr. Langley raised a concern that the option to renegotiate would.not be
triggered unless the City were to send you a notice, perhaps the tenant
should give the City notice. Ms. Bradley stated the concern for T- Mobile
is whether they notify the right person or department, as these may change
through the course of the agreement. After discussion between Ms.
Bradley, Ms. Westline and Mr. Langley it was determined that T- Mobile,
in good faith, will contact the City by return receipt notification about the
ability to renegotiate the agreement, but it is the responsibility of the City
to act.
Ms. Bradley offered that at the 11th anniversary of the lease date that T-
Mobile would send a return receipt to the City Administrator notifying the
City that the optional renegotiation phase has been entered and that period
will end on X date, and if the City does not exercise the right of opening
negotiations the same method will be used at the additional increments of
the terms of the agreement.
After additional discussion, these options will be reviewed: original •
$1,950 per month plus $500 per co- locator, 15 year term plus potential 15
years of renewals, with a notice requirement to the City at years 11, 16,
21, and 26 respectively. Three (3) bid requirement for relocation with a
signed and sealed letter from an engineer within the first 15 years and one
option to renegotiate at year 11, 16, 21 or 26 with notification from T-
Mobile by return receipt. T- Mobile representatives will have to have
approval to bring all of these changes forward.
Deputy Mayor Durso is a no vote no matter what the agreement contains
as it is located on public. property we may to develop aside from
other issues.
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Commissioner Cortes agrees to the changes and after four (4) years of
conversations with T- Mobile the agreement should move forward.
Commissioner Bundy stated if T- Mobile brings forward the amended
agreement the Commission should not try to negotiate more terms and
stated he will not attend another Work Session with T- Mobile but agrees
to the terns worked on today.
Mayor Maingot indicated that the amount of $23,400 has to become
$25,000 to get his vote, plus the co- locators, reasoning that there is a
tremendous amount of profit to be made from the tower.
3. ADJOURN, Mayor Maingot adjourned the Work Session at 6:47,,s .m.
John , �:�t Mayor
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