Citing funding uncertainties, San Jose City Council members yesterday voted unanimously against a proposed agreement with Motorola Solutions to build and operate an LTE network in the San Francisco Bay Area that could jeopardize the controversial project that is slated to receive a $50.6 million federal stimulus grant.

During the past year, officials for San Jose — the largest city in the Bay area — and other governmental jurisdictions in the region have negotiated a deal with Motorola on behalf of the Bay Area Regional Interoperability Communications System (BayRICS) joint powers authority (JPA). The BayRICS JPA was formed this summer after San Jose and other entities questioned the process and legal authority used to forge the initial regional relationship with Motorola, which is the actual recipient of the federal grant.

Under the proposed build-own-operate-maintain (BOOM) agreement, the region’s LTE network would be funded with the $50.6 million federal grant, a $21 million match from Motorola and another $23 million from Motorola to pay for the remediation of sites in the network. If the project is not two-thirds complete by Aug. 1, 2012 — less than eight months away — Motorola likely will be asked to forfeit the federal grant money.

Although San Jose representatives have worked diligently to negotiate a deal with Motorola during the second half of this year, council members could not support the proposed BOOM agreement, according to San Jose Mayor Chuck Reed.

“It is not for a lack of trying that we haven’t gotten this one over the goal line,” Reed said during the meeting.

Council members expressed support for the staff recommendation on the BOOM agreement, which noted “the lack of guarantee that the funds invested will result in a system that meets public safety needs throughout the 10-years of the contract, and the fiscal risks to the [JPA] and its members. … Such a vote puts the ARRA funds at risk, but we can all cite projects where free money from federal or state sources have led to exponentially higher downstream costs.”

One of the key funding uncertainties for San Jose was associated with the cost to supply adequate backhaul for the proposed LTE network. Under the proposed deal, the JPA would have to supply backhaul from the LTE sites, and many jurisdictions are counting on a negotiated deal with the Bay Area Rapid Transit (BART) Authority to use the transit organization’s fiber network to address the backhaul issue for little or no cost.

However, the BART fiber network does not extend to San Jose, so the city would have to find another backhaul alternative to support the proposed network, according to Michelle McGurk, San Jose’s JPA representative.

Such fiscal uncertainty is particularly difficult during the current climate of tight budgets for a city like San Jose, which has made significant public-safety layoffs and salary cuts during the past year.

“This is not a time to sign on to the possibility of significant costs that we might not be able to bear,” Reed said.

Although the San Jose city council declined to approve the BOOM agreement, it did approve of the JPA using sites in the city for the LTE network and filing an amended spectrum waiver with the FCC.

“The staff recommendations allow us to help the region without committing ourselves to some of the financial uncertainties that are inherent in this project,” Reed said.

The JPA is scheduled to vote on the BOOM agreement on Jan. 19.

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