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Item 5BCity of Southlake, Texas MEMORANDUM March 7 th 2006 TO: Shana Yelverton, City Manager FROM: Robert H. Price, P.E., Director Public Works SUBJECT: Authorize the Mayor to Execute Two Lease Agreements with Metro PCS Texas, LLC. for the Placement of Wireless Communication Antennas on the Bicentennial Park and Florence Water Towers. Action Requested: Authorize the Mayor to execute two lease agreements with Metro PCS Texas, LLC. for the placement of wireless communication antennas on the Bicentennial Park and Florence Water Towers located at 400 N. White Chapel Blvd. and 635 Brewer Rd. respectively. Background Information: The Public Works staff has been negotiating with Metro PCS Texas, LLC. since August 2005 for two (2) Ground and Water Tower Lease Agreements for the placement of wireless communication antennas on City property. Metro PCS Texas, LLC. is installing approximately 450 cell sites throughout the DFW area, and Southlake is a key site in order to provide cellular service to the immediate area. Metro PCS Texas, LLC wishes to lease space on each of the water towers for six (6) 1.9GHz cellular antennas per tower for a total of twelve (12). The lease would also include a 12'x13' parcel of land on the Florence Water Tower site, and a 10'x12' parcel on the Bicentennial Park site to house the communications equipment shed. This lease agreement is the current city standard for wireless communication antennas and equipment placed on City water towers. The Public Works staff, working closely with the City Attorney, significantly updated the lease language in the Spring of 2005. This lease was approved by City Council on August 2" 2005 and Cingular executed it at that time. In addition, a provision was added to the lease requiring that all cellular antenna installations be supervised and inspected by a Contractor of the city's choice to ensure the structural integrity of the water towers is maintained. The presence of these antennas will not interfere with the daily operations of the water towers. The City Attorney has extensively reviewed the agreement and determined it is legally sound. 1 Shana Yelverton, City Manager March 7 2006 Page 2 of 2 Financial Considerations: Citizen Input/ Board Review: Legal Review: Alternatives: Supporting Documents: Staff Recommendation: Staff Contact: The current annual lease rate is thirty thousand one hundred twenty dollars ($30,120) paid as a lump sum on the commencement date. Approving these two (2) lease agreements will generate sixty thousand two hundred forty dollars ($60,240) in the first year. The lease space rate increases by 3% annually per the agreement, and is scheduled to be increased on the first day of each anniversary. The lease is for an initial five -year term with the provision for four five -year renewals (up to 25 years). After the initial five -year term, the City reserves the right to survey the rates of neighboring cities to re- evaluate fair market value. Metro PCS Texas, LLC. has already signed the agreements. Annual Revenue for the City is $60,240. None. The City Attorney has reviewed and approved the agreements. Approve or Deny. None. Authorize the Mayor to execute both lease agreements with Metro PCS Texas, LLC. for the placement of wireless communication antennas on the Bicentennial Park and Florence water towers. Robert H. Price, P.E., Director Public Works Cristina McMurray, Assistant to the Director WItem 5B.doc