T-Mobile Cell phone Tower proposal July 2009
Timelines
July 18th: Informational meeting with T-Mobile to answer questions/concerns July 31st: Membership meeting to cast votes in person August 12th: Deadline for mail-in ballots to be postmarked or for Online votes to be recorded Late August: Board will report ballot results to the membership
The Deal
30 Year Term – up to 6 x 5 Year Terms Contract Auto-renews every 5 years for an additional 5-year term unless T-Mobile Terminates AFC has the right to terminate in the event of a breach of contract, non-payment, etc… T-Mobile is responsible for any taxes and utilities associated with the portion of AFC property being leased
The Deal (cont’d)
Rent:
– T-Mobile $1800/month , 4% Increase per year – Additional Carriers (up to 2 more): $600$800/month ($300-$400 per carrier)
20% of what T-Mobile collects Includes escalation clauses for these carriers
NOTE: AFC does not receive any rental income until the tower is operational. This could take 12-18 months from when the contract is signed with T-Mobile.
Financial Summary
Year 1 5 10 15 20 25 30 2 Add'l T-Mobile/Month carrier/Mth (est.) $1,800 $2,106 $2,562 $3,117 $3,792 $4,614 $5,614 $600 $702 $854 $1,039 $1,264 $1,538 $1,871 Annual $28,800 $33,692 $40,991 $49,872 $60,677 $73,823 $89,817 Cumulative Total (Pre-Tax) $28,800 $155,990 $345,776 $576,679 $857,609 $1,199,402 $1,615,246
Note: Additional revenue shown will not affect AFC’s non-profit status.
Financial Summary
Year Cumulative After Tax Revenue $24,480.00 $132,591.58 $293,909.50 $490,177.43 $728,967.36 $1,019,491.83 $1,372,959.28 Cumulative Revenue per membership $36.27 $196.43 $435.42 $726.19 $1,079.95 $1,510.36 $2,034.01 Revenue per membership per Year $36.27 $39.29 $43.54 $48.41 $54.00 $ 60.41 $67.80 1 5 10 15 20 25 30
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Revenue per membership is calculated by taking After tax revenue divided by the number of memberships (675) Revenue per membership per year: Capital improvements for the club have been funded in the past by special assessments that get added to the value of each member’s certificate, (ex. $125/year for new pool); The amounts shown represent approximate amount that any special assessments for capital improvements could be reduced by, if the cell tower is approved. This does not mean that if for example a new bathhouse is approved, that the revenue above would eliminate the need for a special assessment, but rather reduce the amount that each membership would be required to pay.
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Pros & Cons
Pros:
– Steady Stream of Income for up to 30 years ($1.3M after taxes over 30 years) – Defray the cost of new capital expenditures such as bathhouse, tennis court resurfacing, replacement playground equipment and general repairs
Cons
– Long Term commitment – 30 years – Ugliness factor, tower is proposed to be 100’ tall, neighbors may object (NIMBY) – loss of trees – 40’ x 50’ of space would not be usable by AFC (T-Mobile would re-route the existing path at no cost to AFC) – potential runoff issues – Administrative burden on the board to ensure contract compliance, dealing with 3rd party vendor.
Timelines if Cell tower is approved
Late August 2009: AFC Board would sign the TMobile contract 12-18 months: T-Mobile obtains approvals and constructs the tower. Rent starts being paid to AFC
Common Misconceptions
Cell towers are unsafe
– According to the FCC, the average cell tower emits less radiation on the ground than a baby monitor