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HomeMy WebLinkAboutAGENDA REPORT 2020 1216 CCSA REG ITEM 09C SUPPLEMENTAL MOORPARK CITY COUNCIL SUPPLEMENTAL AGENDA REPORT TO: Honorable City Council FROM: Brian Chong, Assistant to the City Manager DATE: 12/16/2020 Regular Meeting SUBJECT: Consider a Resolution Adopting Fees for Small Wireless Facility Permits within the City’s Right-of-Way CORRESPONDENCE RECEIVED Subsequent to the preparation of the staff report, the attached correspondence was received from AT&T (Attachment 1). City staff and the City Attorney have reviewed the correspondence and now recommend an amended Draft Resolution (Attachment 2) for the City Council’s consideration. Attachment 1: Correspondence from AT&T dated December 16, 2020 Attachment 2: Amended Draft Resolution No. 2020-____ Item: 9.C. SUPPLEMENTAL Gregory B. Mouroux Assistant Vice President - Senior Legal Counsel AT&T 430 Bush Street, Room 6062 San Francisco, CA 94108 T 415.216.2610 gregory.mouroux@att.com December 16, 2020 VIA E-MAIL Moorpark City Council (citycouncil@moorparkca.gov) 799 Moorpark Avenue Moorpark, CA 93021 Re: AT&T’s Comments on the City of Moorpark’s Proposed Resolution Adopting Fees for Small Wireless Facility Permits within the City’s Right-of-Way Dear Mayor Parvin, Mayor Pro Tem Enegren, and Councilmembers Castro, Groff, and Pollock: I write on behalf of New Cingular Wireless PCS, LLC d/b/a AT&T Mobility (“AT&T”), to object to the City of Moorpark’s proposed fees for small cell applications. The proposed fees are excessive and unlawful. They are well above the Federal Communications Commission’s safe harbor fees and they do not represent a reasonable approximation of actual costs. AT&T needs to deploy small wireless facilities in Moorpark in order to provide and improve critical wireless services. But the City’s proposed excessive fees will stand in the way of these necessary deployments that will greatly benefit the City’s residents, businesses and visitors. State and federal laws require application fees for wireless telecommunications facilities to be reasonable, nondiscriminatory and based on actual costs. California law limits permit fees for telecommunications installations to reasonable cost-based fees.1 The Federal Telecommunications Act of 1996 requires fees for right-of-way wireless deployments to be fair, reasonable, and nondiscriminatory.2 The FCC implements this standard for small cells,3 and the FCC established a safe harbor for presumptively reasonable fees: $500 for the total of all non-recurring fees for an application including up to five small cells, plus $100 for each small cell beyond five, or $1,000 for the total of all non-recurring fees for a new pole to support small cells.4 And the FCC explained “there should be only very limited circumstances in which localities can charge higher fees.”5 1 California Government Code § 50030. 2 47 C.F.R. § 253(c). 3 See Small Cell Order at ¶ 50 (to ensure municipalities impose only fair and reasonable costs, the FCC established a standard for lawful fees, which requires that: “(1) the fees are a reasonable approximation of the state or local government’s costs, (2) only objectively reasonable costs are factored into those fees, and (3) the fees are no higher than the fees charged to similarly-situated competitors in similar situations”). 4 Id. at ¶ 79. 5 Id. at ¶ 80. ATTACHMENT 1 2 Importantly, the FCC ruled that unreasonably high application fees may not be imposed even if they are actual costs because they effectively prohibit service under Sections 253 and 332 of the Act.6 Indeed, the FCC specifically cautioned municipalities that excessive fees cannot be passed on to applicants.7 Earlier this year, the Ninth Circuit U.S. Court of Appeals upheld the FCC’s fee standard and safe harbor for fees.8 With respect to applications for new poles to attach small cells, the City plans to charge the presumptive maximum rate of $1,000 per application even though the City has provided a justification for a much lower cost. While this result may satisfy the FCC safe harbor, it does not comply with state law that requires cost-based application fees. Thus, the City needs to decrease the application fee for a new pole to attach a small cell to its cost basis. With respect to applications for attaching small cells to existing structures, the City proposes to charge $910 for the first five small cells in an application, and $260 for each additional small cell. The Agenda Report for this item at tonight’s City Council meeting states that these fees are based on the billable rates of the estimated times for the City Engineer and an Administrative Assistant II to review such applications. The billing rates for these tasks are derived from the rate sheet adopted by the City earlier this year. There are several problems with the cost estimate for the proposed fees for collocating small cells on existing structures. First, it does not make sense from a cost perspective to assume that the City Engineer will spend the same amount of time reviewing an application whether it includes one small cell or five small cells. Nor it not evident why the City applies efficiencies of scale only to additional small cells beyond five in an application. In addition, the City has not explained why a portion of application reviews cannot be shifted to lower-rate employees. For example, the City’s rate sheet lists other engineers with much lower rates. The City assumes, however, that the City Engineer will perform the entire review rather than delegating most or all of the functions to assistants with lower hourly rates. This assumption is inefficient and unrealistic, and it results in improperly skewing up the cost estimate. Further inflating the City’s cost estimate, the City’s billable hourly rate is rounded- up from the calculated productive hourly rate, which improperly inflates the rates in a way that clearly does not reflect actual cost. Plus, that productive hourly rate assumes the “top step in salary range,” which often is not the case. It is also unclear how the City included overhead and indirect costs without double counting the components of the hourly rates. For all these reasons, the City’s proposed small cell application fees do not reflect a reasonable approximation of the City’s actual costs. This clearly violates the FCC’s standard for small cell application fees, and it runs afoul of state laws requiring cost-based application fees. I urge the City to take a step back from the Proposed Resolution to 6 Id. at ¶ 74. 7 Id. at ¶ 70 (“If a locality opts to incur unreasonable costs, Section 253 and 332(c)(7) do not permit it to pass those costs on to providers.”). 8 City of Portland v. United States, 969 F.3d 1020, 1037-39 (9th Cir. 2020), reh’g denied, 2020 U.S. App. LEXIS 33355 (9th Cir. Oct. 22, 2020). 3 reconsider the estimated cost components of its proposed small cell application fees. AT&T would be happy to meet and confer with City officials in an effort to ensure the City’s small cell applications fees comport with applicable laws. Sincerely, Gregory B. Mouroux AVP – Senior Legal Counsel AT&T cc: Brian Chong, Assistant to the City Manager RESOLUTION NO. 2020-____ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, ADOPTING FEES FOR SMALL WIRELESS FACILITY PERMITS WITHIN THE CITY’S RIGHT-OF-WAY WHEREAS, on September 26, 2018, the Federal Communications Commission (“FCC”) adopted a Declaratory Ruling and Third Report and Order (“Report and Order”) relating to placement of small wireless facilities in public rights-of-way; and WHEREAS, the Report and Order gave providers of wireless services rights to utilize public rights-of-way and to attach small wireless facilities to public infrastructure, subject to payment of “presumed reasonable” non-recurring and recurring fees; and WHEREAS, on April 17, 2019, the City Council adopted Resolution No. 2019- 3800 to adopt a Citywide policy regarding permitting requirements and development standards for small wireless facilities; and WHEREAS, Resolution No. 2019-3800 stated that an application fee shall be established by City Council resolution and that, if no permit application fee had been established, an applicant must submit a signed written statement that acknowledges that the applicant will be required to reimburse the City for its reasonable costs incurred in connection with the application within 10 days after the City issues a written demand for reimbursement; and WHEREAS, the City concurs with the “presumed reasonable” fees for non- recurring fees for new poles to support small wireless facilities and for recurring fees, including any right-of-way encroachment permit fee for attachment to a City-owned structure in the public right-of-way; and WHEREAS, the FCC allows jurisdictions to adopt higher fees than those “presumed reasonable” if the jurisdiction can justify the fee; and WHEREAS, the City has completed a study of the non-recurring staff time required to process applications for Small Wireless Facility Permits within the City’s right-of-way, finding that the non-recurring staff costs incurred by the City for review of such permits are higher than those “presumed reasonable” in the FCC’s Report and Order; and WHEREAS, the City Council desires to recover the costs of review Small Wireless Facility Permit applications to those applying for such permits. ATTACHMENT 2 Resolution No. 2020-____ Page 2 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The fees for Small Wireless Facility Permits shall be as follows: • $910.00 for non-recurring fees for applications for up to five small wireless facility sites, with an additional $260.00 for each additional site on the same application. • $270.00 per year for all recurring fees, including any right-of-way encroachment permit fees for attachment to a City-owned structure in the public right-of-way. SECTION 2. The non-recurring fees for a new pole to support one or more small wireless facilities shall be as described in City Council Resolution No. 2019-3800. SECTION 3. These fees shall become effective upon adoption by the City Council. SECTION 4. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions. PASSED AND ADOPTED this 16th day of December, 2020. ________________________________ Janice S. Parvin, Mayor ATTEST: ___________________________________ Ky Spangler, City Clerk