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CATS Funding Request September 27, 2006 TO: Salina City Commission CC: Jason Gage, Salina City Manager FROM: David Hawksworth, Executive Director, Community Access Television SUBJECT: Additional Information for Funding Request Introduction As per your request, the following provides additional information related to the request from Community Access Television for additional funding from the City of Salina. Community Access Television currently receives 40% of the cable franchise fee from the City (approximately $191,000), and a "pass-through" fee of 80 cents per month per subscriber from the cable company (approximately $143,000), for a total of approximately $334,000 per year from both sources. Community Access Television also raises about $25,000 annually from independent funding sources. Community Access Television's 2005 expenses include $235,868 for payroll and employee benefits, $44,568 for equipment purchases, and $70,420 for administrative expenses, for a total of$350,856. The new state video franchising law does not allow the 80-cent "pass-through" fee to continue after expiration of the current local cable franchise on February 3, 2007. Cox Communications has declined to voluntarily continue providing this fee after the expiration of the local franchise. Community Access has requested that the City provide to Community Access Television 70% of the cable franchise fee (currently about $334,000) in 2007 and beyond to continue funding Community Access Television's operations at current levels while more independent funding sources are developed. Why does the City currently fund Community Access Television? The local cable franchise (and the new state law) provides that video service providers grant the access channels on Salina's video systems to the City of Salina as owner of the public rights-of-way. The City has designated Community Access Television of Salina, Inc., as the management entity to administer the operation of these channels as well as an access facility on behalf of the City. The City of Salina provides partial funding for the operation of Community Access Television. Community Access Television has an independent contractor status with the City. What are the likely impacts on operations according to various funding levels? The City Commission has requested information on the impact of reductions in funding to Community Access Television. Listed below are probable scenarios with City funding at selected levels in 2007: 1. There would be minimal limitations of operations at 70% of the franchise fee. With funding at 70% of the franchise fee yielding approximately $334,000 annually, Community Access Television would continue serving Salina citizens much as it does presently. All major programs and initiatives would continue, such as the production of informational CiZ of Salina programming and the Afterschool Media Literacy Program for t and 8th graders. Also, with this level of funding, important new initiatives, such as purchasing a video server to make programming available via the Internet to those who do not subscribe to cable television, would be implemented. Should the City accept Community Access Television's 5-year funding proposal (see below), the staff would be restructured to place a higher priority on funding development: the Administrative Coordinator and Administrative Assistant positions would be eliminated (with tasks being reassigned to other staff or outsourced), and a Development Director would be hired to help implement development of independent sources of funding. Though this would mean a total net loss of 1,500 staff hours (out of 13,150 currently), the main work of meeting the demand for services by citizens would be largely unaffected. 2. There would be significant limitations of operation at 60% of the franchise fee. With funding at 60% of the cable franchise fee (approximately $286,000), Community Access Television would operate with several significant limitations. The staff would be restructured to reduce costs and begin independent fund development: the Administrative Coordinator, Administrative Assistant, and Production Coordinator positions would be eliminated; the part-time Production Assistant position would be cut to 1,000 hours annually from 1,250; and a Development Director would be added. This would result in a net loss of 3,830 staff hours (or about 30% of the 13,150 current staff hours), and as a result, Community Access Television would have difficulties in meeting demand for usage of the facility by its 175 volunteers. In the absence of a Production Coordinator, much programming would be lost. Except for coverage of meetings, all locally-produced government and education programming would be discontinued, and Salina citizens would no longer have an important source of information about the services provided to them by their local government and school district. Also, "Eye on Salina," a newsmagazine program overseen by the Production Coordinator, would be discontinued. This program has been extremely important over the past six years in helping new producers develop their abilities to produce programming - quite a few current producers started by working on this program. Because of the reduced staffing levels, Community Access Television would also discontinue its Summer Youth Camp, leaving Salina children without a fun, safe, and stimulating environment during the summer months. Community Access Television would also have to reduce its coverage of the Smoky Hill River Festival by about 50%. The River Festival programs are some of the most popular programs with viewers, according to a telephone survey conducted in March 2006. As current equipment wears out, it would be replaced by lower-quality components, and several equipment upgrades, such as the purchase of a video server to help increase access to programming, would need to be either delayed or eliminated. It is estimated that as a result of these reductions in service, levels of programming on the access channels could decline by as much as 10-15%, and Community Access Television may not be able to meet the demand for equipment and facility usage by citizens in the future. 3. Limitations of operation at less than 60% of the franchise fee would be devastating. After careful and considerate discussion with its Board of Directors, Community Access Television has determined that amounts of funding less than 60% of the franchise fee (approximately $286,000) would be inadequate. At this level of funding, not only would the above staff reductions take place, but the Production Assistant position would be eliminated as well, leaving Community Access Television with just three employees to administer the functions of the organization (a reduction of 6,910 staff hours, or 52.5% of current staff hours). Moreover, the remaining employees would have to take a pay cut of as much as 7%. Since evenings are the busiest time of day, all staff would work second shift, and operating hours would be reduced accordingly, from 64 per week currently to 40 per week. In addition to the reductions in service mentioned above, all youth programs would be discontinued. There would be no funding for equipment upgrades - only for replacement (at a lower quality) of non-functioning equipment. Since staff would need to focus on serving current volunteers, outreach would diminish significantly, and it is estimated that programming levels could drop as much as 25-30% or more. Community Access Television would no longer be able to innovate and create new initiatives to serve the citizens of Salina, and the center would eventually become technologically obsolete. Although a Development Director could be hired at a funding level of 50% of the franchise fee, this would be impossible at lower funding levels, leaving Community Access Television with no way of developing significant sources of independent funding. In short, with funding at less than 60% of the cable franchise fee, Community Access would have significantly reduced equipment and support available for citizens, and could no longer be able to carry out its mission of building community by giving a voice to those whose voice otherwise would not be heard, and providing a forum for communication among Salina citizens through the use of electronic media. Citizens value Community Access Television. The recent performance review and telephone survey completed by Community Access Television were very positive. In the survey (completed in March 2006): · About 60% of respondents said they watched the access channels at least once in the past month, with about 20% saying they had watched more than five times. If that data were extrapolated (based on about 16,400 cable subscribers in Salina), it is estimated that approximately 9,800 cable subscribers are tuning in to Community Access Television at least once in a given month, and about 3,300 are watching more than five times. · A clear majority said that Community Access Television does well or extremely well in providing programming that deals with local issues, providing good coverage of local government meetings and other activities, and providing valuable community information. · About 81 % of those surveyed said that it was important or very important to have cable channels that feature programs about Salina schools, government, community organizations, and residents. · When asked how much of their monthly cable bill should be set aside for Community Access Television, the average of all responses was $1.69 - approximately the amount Community Access Television receives currently (franchise fee plus "pass-through" fee). The performance review notes that Community Access Television has undertaken several unique initiatives that have dramatically increased programming hours and volunteer participation over the past several years. These initiatives include: · One-on-one training by appointment, the Afterschool Media Literacy Program, and Tuesday Night Television (a city-wide crew call for studio productions). · Community Access Television's "Strictly Salina" program, which highlights non-profit organizations; in 2005, 68 non-profits were featured in programming on Community Access Television, with many more participating by submitting community bulletin board announcements. Usage of Community Access Television appears to be on a record pace in 2006, both in terms of programming hours as well as facility usage. The City Manager has praised the work of Community Access Television, as has the Public Information Officer of USD 305. A majority of volunteer producers say that Community Access Television facilities are readily available for use, the condition of production equipment is good or excellent, and rate the quality of most services by Community Access Television staff as good or excellent. Community Access Television is the only mass media voice Salina citizens have. For a democracy to succeed there must be a free exchange of ideas. In our "mass media" society today, it is quite difficult for the average citizen to express his or her voice in a way that other citizens can hear. The cost of expressing one's opinion on commercial television or radio is normally beyond the reach of most. Newspapers, while accepting letters to the editor, may edit the letters or disregard them altogether. Community Access Television provides the free use of television production equipment, training to use such equipment at nominal rates, and free channel time for citizens to express any and all opinions in an unfettered manner. Community Access Television exercises no editorial control over programming submitted by citizens. It is the only mass medium that allows expressions of our citizenry to be made - and heard. Although there are nearly 2,000 similar access centers around the country, Community Access Television is the only one in the state of Kansas, and the City Commission should be commended for giving Salina citizens the opportunity to use this powerful communications tool. While most other access centers are content to just help CItIzens make and show programming, Community Access Television has deliberately gone beyond such a model to more effectively serve Salina citizens. This includes not only the initiatives mentioned above, but also collaborating with other organizations to bring information to the public through community forums, "Strictly Salina," and other staff-produced programming; inviting greater political dialogue by helping candidates for political office create statements concerning their candidacies; creating a better sense of community by covering the High School Graduations, the Smoky Hill River Festival, the Tri-Rivers Parade, and the Santa Fe Day Parade; and more. In short, Community Access Television has actively helped to raise community dialogue in Salina to levels unseen in other Kansas communities. To weaken this opportunity, regardless of the entertainment value, is to weaken our democratic process. Community Access Television can make improvements. Improvements to Community Access Television are needed in several areas, such as establishing more partnerships, improving community outreach, engaging more citizens in community dialogue, and improving quality of service in some areas. But to accomplish these and other improvements, it is vital that Community Access Television have adequate funding. Without it, Community Access Television will not be able to grow and develop, and simply will not be able to serve Salina citizens effectively. Community Access Television would like your support and makes this proposal. Community Access Television recognizes it is asking for a large increase in funding provided by the City; however, it is not asking for any more total funding than it is receiving under the current funding mechanisms. Indeed, had the change in state law occurred at a point where the cable franchise (and Community Access Television's contract with the City) was several years from expiration (rather than expiring in 4 If2 months), Community Access Television would not be asking for this funding. Community Access Television was not originally set up as an organization with a major fundraising function because it was anticipated by all parties at that time that the funding mechanisms put in place would serve as the primary funding vehicles and major fundraising would not be needed to provide services to effectively serve the community. We now find ourselves in a different environment - one that has changed quickly, and Community Access Television recognizes the need to develop substantial independent sources of funding. Community Access Television is in the first stages of putting such development processes in place. It is anticipated that a Development Director will be hired to start as soon after January 1, 2007 as possible. It is the goal of Community Access, by the end of 2011, to raise enough funds annually from independent sources to completely replace the "pass-through" funding that will soon disappear (approximately $143,000). Developing these revenue sources is not a quick process, though, and a "ramp-up" period of several years will be necessary. In light of this, to continue serving Salina citizens effectively Community Access Television proposes the following: 1. The City of Salina and Community Access Television will enter into a new 5- year contract (from January 1, 2007 until December 31, 2011) in which the City grants to Community Access Television a percentage of the cable franchise fee according to the following schedule: · 2007: 70% · 2008: 65% · 2009: 60% · 2010: 55% · 2011: 50% 2. During these five years, Community Access will be actively engaged in developing increased independent sources of revenue. Community Access Television will continue to provide annual financial data to the City so progress on fund development may be monitored. 3. In mid to late 2011, the City and Community Access Television will review the funding situation and decide on a future funding level for Community Access Television by the City. It is the goal of Community Access Television that enough independent funding can be secured so that funding by the City of Community Access Television's operations can return to 40% of the cable franchise fee in 2012 and beyond. It should be clearly recognized and understood that the City will need to play a continuing part in the future funding of Community Access Television's operations. There are two main reasons for this: 1. As mentioned above, the access channels are granted to the City, and the City has designated Community Access Television to manage those channels and the access facility on behalf of the City. Therefore, it seems appropriate that the City be a major funder of Community Access Television's operations. 2. It is unlikely, with many other requests for charitable dollars in Salina, there would be enough independent funding available for Community Access Television to be completely self-sustaining. There is a clear and growing demand for the services that Community Access Television offers, and in order to meet this demand, Community Access Television would like to work with the City of Salina to create a public-private funding arrangement for the continued effective operations of Community Access Television. Conclusion Community Access Television hopes this provides the information the Commission needs to make a decision concerning Community Access Television's future funding. Community Access Television would be more than happy to host a future study session to provide a tour of the facility and give more details on our operations. Please let us know if you require any further information concerning this issue. We look forward to constructive discussions, and thank you once again for your consideration of this request.