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8.3 Cable Franchise CATS Equip CITY OF SALINA REQUEST FOR ~OMMISSION ACTION DAZE TIME 02/22/99 4:00 P.M. AGENDA SECTION: ORIGINATING DEPARTMENT: APPROVED FOR NO. 8 City Manager AGENDA: ITEM NO. BY: Dennis M. Kissin,qer BY: Item: An Ordinance amending a section of the existing cable television franchise ordinance regarding access equipment and facilities. n April 1992, the City and Telecommunications, inc. (T.C.I.) entered into a fifteen year non-exclusive franchise agreement for cable television services. That franchise has since been transferred to Multimedia Cablevision, which is the current franchise holder. The original 1992 agreement provided ia mechanism for the initial purchase of equipment for public education and government access television !productions. The 1992 agreement also set out a provision for 5-year reviews of equipment and facility needs, and outlined a formula for financing the equipment. The 5-year review process was begun in 1997, and completed in 1998, with public hearings held as required. The City Commission then directed city staff to prepare a report and recommendation for the Commission's consideration. Staff work necessarily required discussions/negotiations with the cable television company. The transition from T.C.I. to Multimedia Cablevision delayed the staff project. The City Manager and City Attorney, having been directly involved in the 1992 franchise negotiations, led the staff effort. The staff's preliminary review led to the conclusion that the original 1992 Franchise Ordinance; Section 10.12 presented some serious uncertainties and unintended potential consequences. The 1992 language and formula for equipment replacement and additions did not appear to meet 1999 Salina circumstances. City staff has worked on redrafted franchise ordinance language which might better enable all parties to meet their goals, while simplifying the process significantly. In addition to preparing replacement franchise ordinance language, staff also analyzed the report prepared by Community Access Television of Salina (C.A.T.S.) projecting their equipment replacement/upgrade needs through the year 2003. Based on this thorough city staff review, the enclosed ordinance to address access equipment acquisition for 1999-2003 is recommended for City Commission approval. Discussions were held with Multimedia representatives; they concur with this franchise ordinance change. Summary. of Ordinance: 1. Multimedia Cablevision will provide to the City $40~000 no later than June 1, 1999. These funds will be used for replacement of the C.A.T.S. Access van and associated equipment. This was the highest priority project presented by C.A.T.S. through their 1997-98 review process. The funds will be made available to C.A.T.S. as specified i~': the existing City of Salina/C.A.T.S. contract. CITY OF SALINA REQUEST FOR COMMISSION ACTION DA_T_E TIME 02/22/99 4:OO P.M. AGENDA SECTION: ORIGINATING DEPARTMENT: APPROVED FOR NO. City Manager AGENDA: ITEM NO. BY: Dennis M. Kissin,qer BY: Page 2 2. Future funding of access equipment needs will be through establishment of an Equipment Reserve Account by the City. Revenues to that equipment reserve account are established at $30.000 per year. 3. The Equipment Reserve Account will be funded through an increase in the monthly fee passed through to cable subscribers on their bills. The access equipment pass-through amount will be 156 Der month per subscriber. The 15¢ pass-through amount will begin June 1, 1999 and end on May 31, 2003; it will not be increased during that 4-year period. This equipment pass-through will be collected in the same manner (and likely in the same line item on the bill) as the established pass- through of 70¢ per month for public, education and government access operations. 4. For the average cable customer, this equipment pass-through will increase their monthly bill by ¼ of 1%. It will provide adequate funds to replace and upgrade the 1992 equipment and allow access television services to continue, and to improve quality. 5. The 5-year review process is maintained. During the 12-month period beginning April 1, 2002, another planning and review process will occur, with the results of that review determining the equipment and financing plan for the remainder of the franchise following June 1,2003. Staff Comment: 1. City staff believes the program proposed effectively addresses priority community goals, as identified through the 1997-98 public process. The replacement of important remote services (van and its equipment) is accomplished immediately. The transition from analog format to digital format is fully funded. 2. The C.A.T.S. review process identified other goals which may not be fully funded through this recommended 1999-2003 program. In particular, C.A.T.S. expressed a desire for significant new funding for additional fiber optic transmission systems, as well as remote school studios and remote edit systems for government and school use. While these projects may be worthwhile to consider in long-range planning, city staff believes tl-~ey are premature at this point. With our U.S.D. 305 schools going through the massive building construction/reconstruction process and analyzing their own priorities for education technology, their relationship with C.A.T.S. should go through a much more thorough planning process in the next three years. The same holds true for the planning for government access services. If there are ider~tified areas of change, the various governmental units may need to participate in the financial planning and funding. Interim contracts for services may be involved if education entities and state/local agencies desire added access services. The 2002-2003 planning period may be more timely for considering those major new technology infrastructure needs. CITY OF SALINA REQUEST FOR COMMISSION ACTION DATE ~_JME 02/22/99 4:00 P.M. AGENDA SECTION: ORIGINATING DEPARTMENT: APPROVED FOR NO. City Manager AGENDA: ITEM NO. BY: Dennis M. Kissin§er BY:, Page 3 3. With a total of approximately $55,000 available annually from 2000-2002 ($30,000 from the new Equipment Reserve Fund and $25,000 from their own annual budget) C.A.T.S. should make substantial progress toward short and long-term goals, even though some major projects may not be fully funded. Other sources of revenue may be identified as they plan in coming years. 4. The program recommended by city staff is a "pay-as-you-go" plan for equipment. We believe that is a substantial improvement in predictability, equity, and ease of administration, when compared to the 1992 franchise ordinance language. Staff believes this plan is more fiscally responsible. 5. Discussions with Multimedia Cablevision have been very amicable and productive. They agree this proposed program is an improvement and wi!! cooperate fully in its implementation, if approved by the City Commission. 6. Cable Access Television officials have been briefed regarding this staff report. They have been encouraged to attend the City Commission meeting and provide you with any comments. 7. As a franchise ordinance, this requires three readings by the City Commission. (February 22; March' 1; March 15) Action: Ootion 1: Approve Ordinance No. 99-9914 on 1st Reading as recommended. ~: If the Commission believes too little equipment funding is provided, substitute 20¢ (or more) per month for the staff-recommended 15¢ per month pass-through; then consider the ordinance as amended. O~tion 3: If the Commission believes staff has eStimated too much in equipment needs, substitute 10¢ (or less) per month for the staff-recommended 15¢ per month, then consider the ordinance as amended OPtion 4: Defer action or defeat the ordinance, providing additional direction to city staff regarding how the Commission wishes to proceed. Enclosures AMENDMENTS TO SECTION 10.12 OF CABLE FRANCHISE ORDINANCE 10.12 Five-year reviews: access equipment and facilities. a. This franchise, as originally adopted, provided that during each of the years which commence on the fifth and tenth anniversaries of the effective date of the franchise, the city may commence a review to determine whether additional facilities or equipment are appropriate to meet community needs and interests in public, educational or governmental use of cable, taking into consideration the cost of providing the same. b. Based upon the review commenced by the city in 1997, the city has determined that additional equipment is required for public, educational or governmental use. In order to provide the needed equipment, grantee shall: (1) Pay to the city the amount of $40,000 no later than dune 1, 1999; and (2) Pay to the city $0.15 per basic subscriber per month commencing dune 1, 1999 and continuing through May 31, 2003, which grantee may pass through to basic subscribers either in the same manner or included as a part of the pass through for support of PEG access as provided in section 5.4 of this franchise. c. If following the review to be commenced by the city in 2002, including public hearings regarding what facilities or equipment may be necessary to meet community needs and interests, taking into consideration the costs to subscribers of such facilities or equipment, the city determines that the need for additional facilities or equipment are ~., t .... ~ ~r .......... :~;~ ;~ frmnchise) warrants the continuation beyond May 31, 2003 of a charge to be paid by grantee per basic subscriber per month, the ci~ shall not~ grantee of the charge(s), ~any, that will appC for the remainder of the term of this panchise no later than sixty (60 days prior to its effective &te. The charge, if any, determined by the ci~ may va~ from time to time, either as an amount specified by the ci~ in advance or based upon a recognized index ident~ed by the city. Grantee shall pay to the ci~ the charge,er basic subscriber per month in the amount determined by the ci~ for the remainder of the term of ~he franchise. Grantee may ~ass the charge through to basic subscribers either in the same manner or included as a part of the pass through for support of PEG access as provided in section 5.4 of this franchise.