Title
Consider a memorandum/resolution approving the Fourth Amendment to the Communications Facilities License Agreement with Alltel Corporation d/b/a Verizon Wireless to host telecommunications equipment on the City-owned elevated storage tank at 2906 Lake Drive for an additional 25-year term for the sum of $1,574,197.41.
Body
DATE: November 17, 2026
TO: Dr. Peoples, City Manager
FROM: Holli Clements, City Attorney
SUBJECT: Fourth Amendment to the Communications Facilities License Agreement with Alltel Corporation d/b/a Verizon Wireless to host telecommunications equipment on the City-owned elevated storage tank at 2906 Lake Drive
BACKGROUND AND FINDINGS:
The City owns and maintains an elevated storage tank located at 2906 Lake Drive. Given its size and height when compared to the surrounding area, the City has long maintained relationships with all three major telecommunications carriers to host cell-tower equipment at the site. While lacking the range and power of a full-sized monopole tower site, telecommunications carriers utilize these smaller “macro” sites to provide coverage to areas where it lacks coverage.
On June 15, 2000, the City entered the Communications Facilities License Agreement for the hosting of certain telecommunications equipment on the City-owned elevated storage tanks at 2906 Lake Drive with Verizon’s predecessor in interest, 360° Communications Company of Texas Limited Partnership d/b/a ALLTEL. This original agreement had a twenty-year term, consisting of 1 five-year initial term and 3 subsequent five-year renewal terms, which would have terminated in 2020.
On August 12, 2009, the City entered the First Amendment to the Communications Facilities License Agreement. Under this First Amendment, the subsequent renewal terms were amended from 3 five-year renewal terms to 5 five-year renewal terms. As a result, the City’s agreement with Verizon is set to expire on June 14, 2030 and has entered its final five-year renewal term. The parties executed two additional Amendments in 2009 and 2013, which made minor changes to the overall site plan.
On May 13, 2026, representatives from Verizon approached the City to discuss a Fourth Amendment to the Communications Facilities License Agreement before its expiration - to ensure no interruption of coverage. Under the proposed Fourth Amendment, starting on June 15, 2030, Verizon would pay the City rent of $3,368.00/month to continue hosting its equipment at 2906 Lake Drive. The rent would be subject to a 3.5 percent annual increase for the entire term of the Fourth Amendment. The term of the Fourth Amendment would be for a twenty-five-year term consisting of 1 five-year initial term and 4 subsequent five-year renewal terms.
The proposed initial rental rate represents a reduction from the existing agreement, which currently generates approximately $3,668.94 per month and provides for annual increases of 3.5%. Telecommunications carriers have expressed concerns regarding the limited coverage provided by smaller sites such as elevated storage tanks, making these locations less desirable than traditional telecommunications towers. The proposed amendment reflects an effort to retain Verizon as a tenant and preserve an ongoing revenue stream that could otherwise be lost upon expiration of the existing agreement.
This agreement would allow the City to continue using under-utilized space to host telecommunications equipment. In general, cell towers, and structures that host telecommunications equipment, provide significant benefits to cities by enhancing mobile communication and ensuring reliable connectivity for residents and emergency services. They improve coverage, which supports public safety and facilitates smart city initiatives, ultimately fostering a more informed and connected community. In summary, these structures are essential components of modern urban infrastructure.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
N/A
CONFORMITY TO CITY POLICY:
This item conforms with state and local policies
FINANCIAL IMPACT:
What is the amount of the revenue/expenditure in the current fiscal year? For future years?
There is no immediate financial impact in FY 2027. The existing agreement remains in effect through June 14, 2030.
Beginning June 15, 2030, the proposed Fourth Amendment establishes an initial monthly rental rate of $3,368, with annual increases of 3.5%. Under the existing agreement, monthly rental revenue is projected to reach $4,067.82 in 2029. The new rental rate represents a reduction of $699.82 per month, or approximately $8,397.84 annually.
Projected revenue over the full 25-year term is $1,574,197.41, assuming all renewal terms are exercised.
The proposed rental rate represents a reduction from the existing agreement. However, approval of the amendment would preserve an ongoing revenue stream beyond the current agreement's expiration date.
Is this a one-time or recurring revenue/expenditure?
This is recurring revenue over the term of the agreement, including any exercised renewal terms.
Is this revenue/expenditure budgeted?
Revenue from the existing agreement is recorded in the General Fund Tower Leases account 100-46712-100-100-000000. Revenue associated with the proposed Fourth Amendment will be incorporated into the applicable fiscal year budgets through the annual budget development process.
If not, where will the money come from?
N/A
Is there a sufficient amount in the budgeted line-item for this revenue/expenditure?
N/A
RECOMMENDATION:
Authorize the City Manager, or her designee, to execute the Fourth Amendment to the Communications Facilities License Agreement with Alltel Corporation d/b/a Verizon Wireless to host telecommunications equipment on the City-owned elevated storage tank at 2906 Lake Drive, and authorize the City Manager, or her designee, to execute any and all change orders within the amounts set by state and local law.
DEPARTMENTAL CLEARANCES:
Public Works
Purchasing
Finance
Legal
ATTACHED SUPPORTING DOCUMENTS:
Agreement
Presentation