This agenda item proposes the approval of a Master License Agreement between the City of Sparks and Verizon to address Verizon’s construction, installation, and operation of poles or small wireless facilities, also referred to as small cells, located on City owned structures within City right-of-way.

The FCC issued an order in late 2018 requiring municipalities to allow the deployment of small wireless facilities, within certain parameters, in local rights-of-way.  The FCC order also limited municipalities’ ability to regulate certain aspects of small wireless facilities, including shortening municipal review “shot clock” deadlines and minimizing some aesthetics controls.

On May 13, 2019, in response to the FCC’s order, the City Council considered and approved Bill No. 2756, an ordinance amending Title 12 of the Sparks Municipal Code (SMC) by adding Section 12.42.020 to address the construction, installation, and operation of small wireless facilities within City right-of-way.  That bill, now codified in SMC, governs aesthetics, equipment placement, and other general requirements that any wireless communications carrier who plans to install and operate small cell equipment on poles or structures within the City right-of-way must comply with.  Of note here, SMC § 12.42.020(C)(1) requires that all carriers execute a Master License Agreement prior to the issuance of any building permits associated with small wireless facilities located within the right-of-way.  The use of a Master License Agreement is a standard practice in the industry.

In the time since the City Council approved Bill No. 2756, City staff and representatives from Verizon have met multiple times to negotiate and finalize the terms and conditions of a Master License Agreement.  The Master License Agreement defines the legal rights and responsibilities of both parties regarding the deployment of small cell structures in accordance with Federal law and the FCC’s Order, and reinforces the City’s ability to maintain safe and acceptable streetscapes.  The Master License Agreement provides Verizon with a general license to use City right-of-way to install and operate small cell equipment on City owned structures subject to the terms and conditions within the Agreement, including the requirement that Verizon must comply with all laws and obtain all necessary permits before installing any small cell equipment.  The Master License Agreement does not grant Verizon any property ownership interest in City-owned or City-controlled property.

The primary terms of the agreement include:

• The license is for an initial term of 10 years and can be renewed for four additional 10-year terms.
• A $270 annual fee is assessed for each small cell location, subject to a 2.5% annual increase for the entire term of the Agreement.
• If the City determines at a later time that its costs are greater than $270 per location, the City can perform a cost study and present the cost study to the City Council for approval to amend the annual fee amount.
• Prior to installation, Verizon must apply for and obtain all permits required by the City, such as building permits, street-cut permits, or encroachment permits.
• Each small cell location will be addressed by a “Site Supplement” which is an exhibit to this Agreement.  Each Site Supplement is essentially a supplemental agreement for each small cell location that addresses details related to that specific location.  A completed Site Supplement will be a required portion of the underlying building permit application for each location.
• A surety bond is required.
• A Commercial General Liability insurance policy with $2 million per occurrence and $4 million general aggregate coverage is required.
• Verizon is to indemnify the City pursuant to Section 11.1 of the Agreement for claims against the City in connection with Verizon’s construction or operation or use of City right-of-way, but not for claims that are the result of the City’s negligence or intentional misconduct.
• The Agreement requires camouflaging, shielding, and blending into surrounding structures to the extent technically feasible, and structures are subject to structural, engineering, noise, and aesthetics review.
• Verizon is to pay for all design, engineering, construction, and installation work and must perform and pay for any damage caused to the right-of-way or any nearby fixtures.
• The Agreement allows Verizon to assign its rights to an affiliate entity or by way of a merger, acquisition, or business reorganization.
• The Agreement requires each small cell location to comply with applicable construction, engineering, aesthetics, design specifications, and separation requirements, as well as Titles 12 and 20 of the Sparks Municipal Code, the Americans with Disabilities Act, American Association of State Highway and Transportation Officials requirements, and all other applicable laws.

City staff believes the proposed Master License Agreement addresses recent directives from the FCC while ensuring that all wireless communications equipment will be deployed in a safe and structurally sound manner and retaining as much control over equipment location and aesthetics as possible.

1. Approve the proposed Master License Agreement with Verizon.
2. Modify the proposed Master License Agreement with Verizon, subject to Verizon’s concurrence, or direct the City Manager to revise the Agreement for future City Council consideration.
3. Reject the proposed Master License Agreement with Verizon and provide direction to the City Manager.

I move to approve the Master License Agreement (AC-5630) with Verizon to address the construction, installation, and operation of Small Wireless Facilities on City owned structures within City right-of-way.