AGENDA #14

 

MEMORANDUM

 

 

TO:                  Mayor and Town Council

 

FROM:            W. Calvin Horton, Town Manager       

Ralph D. Karpinos, Town Attorney

 

SUBJECT:       Cleland Drive BellSouth PCS Antenna

 

DATE:             December 11, 2000

 

SUMMARY OF ISSUE

 

This report addresses the issue of whether rental payments received by the Town for a BellSouth PCS antenna on Cleland Drive should be transferred to the University of North Carolina.  The University has asked for these funds on the basis of their assertion that the antenna is on University property rather than Town right of way.

 

INTRODUCTION

 

The purpose of this memorandum is to report to the Council on the staff correspondence with the University regarding the lease payments for the BellSouth PCS antenna on Cleland Drive and to seek the Council’s direction with respect to the University’s request for lease payments received by the Town.

           

The Town has received monthly payments of $1,000 from BellSouth PCS for this antenna for almost four years.  The University has asked that all the revenue collected be transferred to the University on the basis that the site of the antenna is indicated on land that certain public records indicate to be University property. 

 

Alternative resolutions for your consideration are attached.  Options the Council may wish to consider include, but are not limited to, some combination of the following:

 

a)         transferring some or all of the revenues received from BellSouth to the   University;

b)         declining to honor the University’s request;

c)         requesting formal dedication of Cleland Drive as public right of way;

d)         requesting reimbursement by the University for policing and street lighting           expenses on Cleland Drive for  the last  several years; 

e)         inviting University officials to discuss this with the Council or other Town            representatives;

f)          proposing that the resolution of this matter be handled by some type of mediation;

g)         requesting the University to honor its agreement to pay its share of the 15-501   Major Investment Study as a matter  independent of the antenna issue.

 

BACKGROUND

 

For the last few months Town and University officials have exchanged correspondence regarding the income from BellSouth PCS for rental of a site for its antenna along Cleland Drive.  Attached, in chronological order, are copies of the following correspondence:

 

1.  April 17, 2000, letter from Bruce Runberg to W. Calvin Horton (p. 12).

2.  April 28, 2000, letter from W. Calvin Horton to Bruce Runberg (p. 13).

3.  June 8, 2000, letter from Bruce Runberg to W. Calvin Horton (p. 14).

4.  June 28, 2000, letter from W. Calvin Horton to Bruce Runberg (p. 15).

5.  August 16, 2000, letter from John P. Evans to Mayor Waldorf (p. 16).

6.  October 10, 2000, letter from John P. Evans to James Baker (p. 17).

7.  October 13, 2000, letter from W. Calvin Horton to John P. Evans (p. 18).

8.  October 17, 2000, letter from W. Calvin Horton to John P. Evans (p. 20).

9.  November 9, 2000, letter from John P. Evans to W. Calvin Horton (p. 21).

 

Also attached is the August 23, 2000, letter expressing the University’s commitment to the 15-501 study.

 

DISCUSSION OF HISTORY OF ANTENNA

 

In 1995, BellSouth PCS approached the Town of Chapel Hill indicating its need for a site in the area of Fordham Boulevard and Cleland Drive for a cellular phone tower.  After working with the Town staff and considering various locations, the site along Cleland, believed to be Town right of way, was identified as meeting the needs of BellSouth PCS. 

 

This matter was considered by the Town Council in May, 1996.  A franchise was issued to BellSouth Carolinas PCS Limited Partnership to provide cellular telephone service within the Town.  In addition, the Council authorized an Encroachment and Lease Agreement for the antenna tower on Cleland Drive.  The Encroachment and Lease Agreement was signed effective November 12, 1996.  The tower replaced an existing street light at the same location.  The light was then attached to the tower base. An additional structure was sited next to the antenna pole to house necessary antenna equipment.  Notice of the meeting and proposed lease was mailed to nearby property owners, including the University of North Carolina. 

 

A copy of the agenda materials from the Council’s May 29, 1996, consideration of this matter is attached (Attachment 11).  The sketch of the proposed site, dated April 12, 1996, provided by BellSouth PCS is part of the materials considered by the Council in May at the time the Encroachment and Lease Agreement was approved. This sketch shows the antenna and supporting equipment within the Cleland Drive right of way.   

 

A copy of the Encroachment and Lease Agreement executed by the parties is also attached (Attachment 12).  The Agreement includes a survey of the site by the same firm that prepared the sketch considered by the Council.  The survey is dated April 23, 1996, and places the facilities on property of the University adjacent to “non-dedicated right-of-way.”  The plat references the University’s deed in Book 549, page 600. (We did not note or point out the differences between the two drawings at the time the agreement was signed.)

 

(Pursuant to the terms of the Encroachment and Lease Agreement, the Town has been receiving lease payments.  In response to a citizen petition, the Council, on March 24, 1997, adopted a policy stating that the rental income for this cellular telephone antenna should be reserved for  purchase of land for open space and greenway purposes.  Through November, 2000, Finance Department records show that the Town has received $45,000 in revenue under the lease.  The moneys received have been spent for the purposes designed by the Council.)

 

Tax maps in the public record show the location of the antenna and the part of Cleland Drive from 15-501 east to Hamilton Road to be University property. 

           

On June 8, 2000, Bruce Runberg, Associate Vice Chancellor for Facilities Services, wrote (Attachment 3) to Calvin Horton, Town Manager, requesting that all revenues collected by the Town under the lease with BellSouth PCS be paid to the University. 

 

In his letter of June 28, 2000, (Attachment 4) the Manager asked  Mr. Runberg for information on the legal basis for the University’s request.   Following that letter the Town Attorney received a phone call from a member of the legal staff of the University. In that conversation, in response to the request made in the letter from the Manager  for information on the legal basis for the request, the statement was made that the Town’s keeping the moneys in rent would constitute “unjust enrichment.”  The Town Attorney explained that there had to be a clear legal basis established before the Town could turn over public funds to another party.   Following that conversation, further letters were exchanged and are included as attachments,  but no further explanation was provided in the way of a legal basis for the University’s request. 

 

The Manager wrote to John P. Evans, Vice Chancellor for Finance and Administration on October 13, 2000, with the historical account regarding the Town’s maintenance of Cleland Drive (Attachment 7).  As noted in that letter, the Town has been maintaining this part of Cleland Drive since at least 1960, including paying for a street light, repair and repaving and emergency barricades when necessary due to flooding. 

 

(It should be noted that the October 10, 2000, letter from Mr. Evans to Town Finance Director James Baker regarding the 15-501 Study was already in the mail at the time the Manager sent the October 13, 2000, letter.  After receipt of the letter addressed to Mr. Baker, the Manager wrote the brief, October 17, letter noting the crossing of the letters in the mail and renewed the request for payment of the contribution for the 15-501 study, believed by both the Manager and Attorney to be unrelated to the issue of Cleland Drive.  That payment has not been made. Instead, Mr. Evans sent the November 9 letter responding to the Manager and renewing the University’s request for payment.)

 

 

COMMENT ON UNIVERSITY POSITION AND ANALYSIS

 

We offer the following comments with respect to this matter.

 

1)  We believe, as indicated in the Manager’s letter of October 17, 2000, that it is inappropriate for the University to withhold payment of the University’s contribution to the 15-501 Study in response to the Town’s receiving rental payments from BellSouth PCS.  The University’s commitment to support this study is stated in their August 23, 2000, letter (Attachment 10).  We believe that there is no connection between the 15-501 Study and the antenna lease matters. We recommend the Town request that the University honor its commitment to make the $50,000 payment toward that study. 

 

2)  The issues surrounding the Town and University with respect to the lease payments and responsibilities for Cleland Drive are more complex.  We believe that there are both principles of law and equity that arise in consideration of this matter. 

 

3)  On the one hand, the property where the antenna is sited is, at least according to some documents in the public record, owned by the University.  Arguably, BellSouth PCS is a trespasser on this property until such time as they have worked out an arrangement from the University, as purported property owner, to allow the antenna to remain.  Upon proper proof,  the University might be able to assert a claim for damages against  BellSouth PCS if this were to be determined to be a trespass. Under such a theory, if BellSouth PCS were making payments to the Town which the Town was not entitled to receive, that would be a matter for resolution between BellSouth PCS and the Town.  

 

4)  Another perspective on this situation is that the location of the antenna is within an area generally recognized, along other portions of Cleland Drive, as being public right of way.  This, combined with the Town’s maintenance of this property as a public street for at least 40 years and the other facts and circumstances, arguably establishes this property is public right of way of the Town and the Town’s right to retain the lease payments,  notwithstanding what is shown on a map on the public record.  Supporting this proposition is the fact that the University allowed the policing and street maintenance  to continue for a period of time after it took title in 1985 and took no action to stop it.  We also note that notice of the proposed leasing of the Cleland Drive site to BellSouth PCS was provided to the University prior to the Council’s  approving the lease in 1996 and that the University made no response for almost four years.  

 

5)  The recent ownership history, in particular the terms of the deed to the University, is noteworthy.   The University became the owner of this property in December, 1985.   A deed from Frank H. Kenan, Betty Kenan,  W. Clay Hamner and Ellen P. Hamner to the Board of Trustees of the Endowment Fund of the University (Book 549, Page 600),  was recorded December 19, 1985.  (This deed is referenced in the second survey included with the Encroachment and Lease Agreement.)  The deed notes that the University’s title to the property is subject to “Easements, rights of way and restrictions of record, if any, and the rights of way for Hamilton Road, Flemington Road, Hayes Road and Cleland Drive.”  The Deed further recites that the land being transferred includes “ any right, title and interest the Grantor may have in any portions of .Cleland Drive that adjoin or cross any part of the above-described property.”

As between a private land owner and the Town of Chapel Hill taking property for public street purposes, the law establishes a two year time limit for an owner to seek compensation.  Thus, it would appear that there is some significant support for the position that the Town’s assumption of right of way on Cleland Drive by providing paving, maintenance and lighting since 1960, if not earlier, was established as to the prior owners.  Therefore, arguably when the University acquired the property in 1985 Cleland Drive had already been established as public right of way.

 

6)  The University’s perspective, to the extent it has been expressed to Town staff, is that the Town is not entitled to any of the revenues from BellSouth PCS because the antenna is on University land.   Supporting their argument also is the fact that the drawings from BellSouth PCS were conflicting, with the survey actually attached to the Encroachment and Lease Agreement indicating the antenna as being on University property.  (As noted above, the University has asked that all revenues received be forwarded to them and has, a means of collecting these revenues, asked that they be credited to the amount they have agreed to pay for the 15-501 Study.) 

 

7)  Letters enclosed with this agenda item express the University’s position.  Most notable, apart from their linkage of the antenna issue to the 15-501 Study funding, is their apparent lack of willingness, as indicated in their most recent November 9, letter, to consider any of the alternative means of resolving the issue identified in the Manager’s October 13, 2000, letter short of the Town forwarding to the University all the lease payments received by the Town from BellSouth PCS. 

 

OPTIONS

 

Resolutions are attached for the Council to consider in giving direction to the Manager and Attorney.  (Please note that the resolutions are not entirely mutually exclusive.)

 

Resolution A would state a position on behalf of the Town that it is the Town’s belief that Cleland Drive has been, by virtue of the Town’s assumption of maintenance since at least 1960, a public street and that the Town should keep the revenue collected for the antenna.  The resolution also expresses the Town’s request to the University to forward to the Town its contribution to the 15-501 study previously pledged.

 

Resolution B would direct that revenues representing all moneys received from the BellSouth lease be forwarded to the University.  As part of this option, Resolution B would authorize  repayment to the University of this amount from Fund Balance.  (An alternative might be to reduce appropriations in the Capital Improvements Program).  Also included for the Council’s consideration as part of this resolution is direction to the Staff to cease maintenance of Cleland Drive from Hayes Road to Hamilton Road, to post signs indicating no Town maintenance will be provided and to request that Duke Power remove the street light at this location and cease billing the Town for the light.  The Resolution also includes language, should the Council choose to include it, asking for reimbursement from the University for the Town’s maintenance and patrolling and street lighting of Cleland Drive for the past 15 years.  The Resolution also expresses the expectation that, upon the Town’s taking this action, the University would forward to the Town its contribution to the 15-501 study previously pledged.  (If this resolution is adopted in full we would modify our upcoming listing for purposes of Powell Bill moneys to delete this portion of Cleland Drive.) 

 

Resolution C would state a position for the Town that it will transfer to the University an amount equivalent to the revenues received since April, 2000, when the University first brought this matter to the Town’s attention.  This Resolution also includes direction to the Town to  post signs indicating the limits of Town maintenance, to request that Duke Power remove the street light at this location and cease billing the Town for the light.   The Resolution also expresses the expectation that upon the Town’s taking this action the University would forward to the Town its contribution to the 15-501 study previously pledged.  ( If this resolution is adopted in full we would modify our upcoming listing for purposes of Powell Bill moneys to delete this portion of Cleland Drive.) 

 

Resolution D would request that the University take the necessary steps to formally dedicate the right of way of Cleland Drive from Fordham Boulevard to Hamilton to the Town of Chapel Hill including the area on which the antenna is sited.

 

Resolution E would invite the University to meet with Town representatives, possibly with a mediator, to seek resolution of this dispute.

 

CONCLUSION

 

We have not been provided by the University, nor have we been able to identify for ourselves, a clear legal or equitable basis under these particular facts and circumstances that would allow us to conclude without substantial reservation that the University should receive all the revenues which the Town has collected from BellSouth PCS.  We do not believe that the Town can transfer to others funds collected by the Town without such a well-established basis.  Without such a basis at this time, therefore, we are not able to recommend that the Council honor the University’s request to transfer all the revenues received from BellSouth PCS for the lease.   Moreover, notwithstanding what may be shown on the tax map records, we believe that the Town’s long term maintenance of Cleland Drive arguably established it as public right of way long before the University received title to the nearby property in 1985 and that the University’s deed excepted such right of way. 

 

RECOMMENDATION

 

That the Council adopt Resolution A authorizing the Mayor to write a letter to the Chancellor requesting the University pay its share of the 15-501 Major Investment Study and acknowledge Cleland Drive as a Town maintained public street.  Under this resolution the lease payments would be retained by the Town.

 

 

RESOLUTION A

 

A RESOLUTION STATING THE TOWN’S POSITION THAT CLELAND DRIVE IS A PUBLIC STREET AND REQUESTING PAYMENT BY THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL OF ITS SHARE OF THE 15-501 STUDY (2000-12-11/R-20a)

 

BE IT RESOLVED by the Council of the Town of Chapel Hill as follows:

 

            a)  It is the Town Council’s position and belief that Cleland Drive has been established as a public street; and

 

            b) The Town should keep the revenue from BellSouth PCS as lease payments for the antenna on Cleland Drive.

 

BE IT FURTHER RESOLVED that the Council requests that the University forward to the Town the University’s $50,000 contribution to the 15-501 Major Investment Study previously pledged and formally acknowledge the status of Cleland Drive as a town maintained public street, the right of way for which includes the site of the BellSouth PCS antenna and equipment.

 

BE IT FURTHER RESOLVED that the Mayor is requested to forward a copy of the December 11, 2000, report of the Manager and Attorney on this subject together with a copy of this resolution, to the Chancellor of the University of North Carolina of Chapel Hill.

 

This the 11th day of December, 2000.

 

RESOLUTION B

 

A RESOLUTION DIRECTING THAT FUNDS RECEIVED BY THE TOWN FOR RENTAL OF THE BELLSOUTH PCS ANTENNA ON CLELAND DRIVE BE TRANSFERRED TO THE UNIVERSITY OF NORTH CAROLINA (2000-12-11/R-20b)

 

BE IT RESOLVED by the Council of the Town of Chapel Hill as follows:

 

a)         Revenues representing all moneys received under BellSouth PCS antenna encroachment and lease agreement on Cleland Drive  shall be forwarded to the University of North Carolina at Chapel Hill; and 

 

b)         Funds for this repayment shall be made from Fund Balance; and 

 

c)         The Manager is directed to cease maintenance of Cleland Drive from Hayes Road to Hamilton Road, effective July 1, 2001; to post signs indicating no Town maintenance shall be provided and to request that Duke Power remove the street light at this location and cease billing the Town for the light; and

 

d)         The Manager is directed to determine the cost of the Town’s maintenance, policing and  other services on this portion of Cleland Drive from December 1985 to the present and to seek  reimbursement from the University for said services.

 

BE IT FURTHER RESOLVED that the Council requests that the University forward to the Town its contribution to the 15-501 Major Investment Study previously pledged.

 

This the 11th day of December, 2000.

RESOLUTION C

 

A RESOLUTION TRANSFERRING FUNDS RECEIVED UNDER THE BELLSOUTH PCS ANTENNA LEASE ON CLELAND DRIVE SINCE APRIL, 2000, TO THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL (2000-12-11/R-20c)

 

BE IT RESOLVED by the Council of the Town of Chapel Hill as follows:

 

a)         Revenues representing moneys received under BellSouth PCS antenna encroachment and lease agreement on Cleland Drive since April, 2000, when the University first formally  brought this matter to the Town’s attention,  shall be forwarded to the University of North Carolina at Chapel Hill; and 

 

b)         Funds for this repayment shall be made from fund balance; and 

 

c)         The Manager is directed to cease maintenance of Cleland Drive from Hayes Road to Hamilton Road, effective July 1, 2001; to post signs indicating no Town maintenance shall be provided and to request that Duke Power remove the street light at this location and cease billing the Town for the light; and 

 

d)         The Manager is directed to determine the cost of the Town’s maintenance, policing and  other services on this portion of Cleland Drive from December 1985 to the present and to seek  reimbursement from the University for said services.

 

BE IT FURTHER RESOLVED that the Council requests that the University forward to the Town its contribution to the 15-501 Major Investment Study previously pledged.

 

This the 11th day of December, 2000.

RESOLUTION D

 

A RESOLUTION REQUESTING THE UNIVERSITY OF NORTH CAROLINA INITIATE STEPS TO DEDICATE CLELAND DRIVE AS A PUBLIC RIGHT OF WAY (2000-12-11/R- 20d)

 

BE IT RESOLVED by the Council of the Town of Chapel Hill that the University take the necessary steps to formally dedicate the right of way of Cleland Drive from Fordham Boulevard to Hamilton Road to the Town of Chapel Hill including the area on which the Bell South PCS antenna is sited.

 

This the 11th day of December, 2000.

RESOLUTION E

 

A RESOLUTION INVITING THE UNIVERSITY TO APPOINT REPRESENTATIVES TO MEET WITH TOWN REPRESENTATIVES TO SETTLE THE ISSUES RELATED TO FUNDS RECEIVED AS RENTAL PAYMENTS FOR THE BELLSOUTH PCS ANTENNA ON CLELAND DRIVE (2000-12-11/R-20e)

 

BE IT RESOLVED by the Council of the Town of Chapel Hill that the Manager is directed to invite the University to meet with Town representatives, possibly with a mediator, to seek resolution of the legal and equitable issues related to the lease and encroachment agreement between the Town and BellSouth PCS for the antenna location on Cleland Drive.

 

This the 11th day of December, 2000.