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CI3"Y OF SAN BERNAWINO - REQUEST FCW COUNCIL ACTION
rom"
".
'ept:
Dean Gray, Director of Telecommuni-
cations
ADMIN/Telecommunications
Subject:
Chambers CATV Franchise Fee Audit
late:
February 8, 1991
rnopsis of Previous Council action:
7/19/89 -- Ordinance MC-667 approved providing for audit
and collection of 5% franchise fee.
ecommended motion:
Adopt resolution.
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ontact person:
Dean Gray
Phone:
384-5147
upporting data attached: YES
Ward:
UNDING REQUIREMENTS:
Amount: $5,500 MAXIMUM
107-105-53150
Source: (Acct. No.!
(Acct. Descrintion\
Contract Services .I
'7~"/
Finance:
ounceotes:
5.0262
Agenda Item No. r-Jl)
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CITY OF SAN BERNA.INO - REQUEST Fee COUNCIL ACTION
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STAFF REPORT
CHAMBERS CATV FRANCHISE FEE AUDIT
As part of its regulatory authority, the City of San Bernardino may
conduct independent audits of the cable operators serving the residents
of San Bernardino.
REFERENCE: ORDINANCE NUMBER MC-667 (Section 0)
Not more than once each year during the term of the franchise, the City
or its representative shall have the right to conduct an independent
audit of grantee's records to determine if proper payments have been
made to the City, and if such audit indicates a franchise fee underpayment
of two percent (2\) or more, the grantee shall bear all reasonable costs
of such audit. Each grantee shall make available for inspection by
authorized representative of the City, its books, acounts, and all other
financial records at reasonable times and upon reasonable advance notice
for the purpose of permitting exercise of the authorities conferred
by this Section.
OVer the past several months, Chambers subscribers have addressed billing
questions to Telecommunications staff, members of the Community Cable
Television Commission and certain City Council members. The most recent
question has resulted in the City making a legal determination as to
Chambers billing procedure related to collection of City tax. (Document
attached) .
During a previous audit of another City cable franchisee, major discrepancies
were found in franchise fee payments. It is suggested that an audit
of Chambers Cablevision will continue the City's regulation of firms
serving our City and that plans will be implemented to audit the remaining
operators: Comcast and Cablevision.
As part of this ongoing audit practice, Telecommunications staff has
solicited proposals from three firms, specializing in audit of cable
operations: Municon, Telecommunications Management Corp., and Communications
Support Group. Of the three firms, which offer comparable scope of
service, Telecommunications Management Corporation offers the lowest
rate.
It is therefore our recommendation that the City enter into agreement
with Telecommunications Management Corp. for services as specified in
the attached agreement.
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~~~ BERNARDINO
300 NORTH "0" STREET. SAN BERNAROINO, CALIFORNIA 92418
February 5, 1991
JAMES F. PENMAN
CITY ATTORN&Y
"'41384.5355
Scott Chambers, Esq.,
Chambers Cable Television
P. O. Box 7009
Eugene, Oregon 97401
Dear Mr. Chambers:
We have reviewed Municioal Code Section 3.44.040, service
users tax on CATV services. We have determined that the charge
for equipment rental is subject to such tax.
Please feel free to call me if you have any further
questions.
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Very truly yours,
By:
,zI(;~' #L
~E c. ROTH',
Deputy City Attorney
DCR/kb
. cc:
Dean Gray,
Director of Telecommunications
cc:
Andrew Green,
Director of Finance
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DCR/kb[chambers.mem]
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CIWlBI!RS CABLB
08-21-61
09-05-61
11-21-67
10-01-68
. 06-09-69
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12-20-78
12-01-82
08-30-83
02-29-84
11-13-84
7-19-89
Res. 6068
Res. 6075
Ord. 2395
Ord. 2946
Ord. 2947
Res. 9867
Ord. 3793
Res. 84-459
Ord. MC-667
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BISTCRY Of' nwDIISE AGREEmNl'
Declaring intention to grant franchise
to Southern California Cab1e'Te1evision
Corporation and giving notice of hearing.
Declaring intent to grant cable TV
franchise to San Bernardino Community
Television Antenna System and notice of
hearing.
Granting cable TV franchise to San
Bernardino Community Television Antenna
System, expires 12-31-93.
Amends Ord. 2395, section 9, concerning
location of franchise property.
Amends Ord. 2395, sections 3 and 6,
extending length of franchise and
increasing tax to 4%.
Declaration of intention to amend
ordinances granting CATV franchises to
San Bernardino Community Television
Antenna System and TV Receptors, Inc., and
notice of hearing.
Amends Ord. 2395, sections 4, a and c:
and 17, providing for quarterly payments
of franchise fees.
Initial compliment in Liberty Court Case.
Transfer of assignment from Liberty
Cable to Chambers Cable.
Final judgement of Liberty Court Case.
Resolution establishing fund resulting
from court action (see Final Judgement).
Ordinance increasing franchise fee to
5%.
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RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXECUTION OF AN AGREEMENT WITH TELECOMMUNICATIONS MANAGEMENT
CORP. RELATING TO THE ANALYSIS OF METHODOLOGY AND FINANCIAL
AUDIT OF CHAMBERS COMMUNICATIONS.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO AS FOLLOWS:
6 SECTION 1. The Mayor of the city of San Bernardino is
7 hereby authorized and directed to execute on behalf of said city
an Agreement with Telecommunications Management Corp. relating
to
services
to conduct a financial
audit of
Chambers
Communications, a copy of which is attached hereto, marked
Exhibit "A" and incorporated herein by reference as fully as
though set forth at length.
SECTION 2. The authorization to execute the above-
referrenced agreement is rescinded if the parties to the
agreement fail to execute it within sixty (60) days of the
passage of this resolution.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a
meeting thereof, held on the
day of
, 1991 by the following vote, to
wit:
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CITY OF SAN BERNARDINO
AGREEMENT FOR CABLE TELEVISION CONSULTING SERVICES
THIS AGREEMENT, is made and entered into this ____ day
of , 1991, by and between The CITY OF SAN BERNARDINO,
CALIFORNIA (hereinafter "City") and TELECOMMUNICATIONS
MANAGEMENT CORP., a California corporation (hereinafter
"Consultant") .
RECITALS:
A. The City proposes to contract for expert cable television
consultant services for the purpose of conducting a financial
audit of Chambers Communications Corp.
B. Consultant is willing to perform such services for the city
and has the necessary facilities and qualified personnel.
NOW, THEREFORE, the parties agree as follows:
section 1. Consultant's Services. Consultant shall perform
the services set forth as Task 1 and Task 2 below.
Task 1-- Consultant shall perform a review and analysis of
the method of calculation of cable television franchise fees
paid to City by Chambers Communications Corp., the City's fran-
chised cable television operator. The analysis shall include,
but not be limited to, the individual revenue components includ-
ed in the calculation, any revenue components excluded, and a
determination as to whether the computation is in full
compliance with franchise requirements and cable industry
practices.
The end-product of Task 1 shall be a written report to City,
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detailing all relevant data, analysis and conclusions. The
report shall be submitted to the City within two (2) weeks after
authorization to proceed, assuming cable operator cooperation.
Task 2-- Consultant shall examine, review and audit the
pertinent books and records of Chambers Communications Corp. to
verify the revenues generated, and the franchise fees due and
paid to City for at least the last three (3) calendar years
(1988, 1989 and 1990). The review shall be performed at the
Chambers Communications head quarters offices in Eugene, Oregon.
The end-product of Task 2 shall be a written report to City,
detailing all relevant data, evaluation and conclusions, and
shall be submitted to the City within thirty (30) days after
authorization to proceed, assuming cable operator cooperation.
section 2. Compensation. City agrees to compensate Consult-
ant and Consultant agrees to accept in full satisfaction for the
services provided for hereunder the following sums:
Task 1 -- The sum of One Thousand Dollars ($1,000) upon
receipt of invoice following submission of the Task 1 report.
Task 2 -- The sum of Three Thousand Dollars ($3,000) upon re-
ceipt of invoice following submission of the Task 2 report.
In addition to the above fees, travel expenses for City-
authorized non-local travel shall be reimbursed at cost, not to
exceed a ceiling of Fifteen Hundred Dollars ($1,500).
section 3. Independent Contractor.
Consultant shall be an
independent contractor, and shall have no power to incur any
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debt or obligation on behalf of the City. Neither city, nor any
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of its officers or employees, shall have any control over the
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conduct of Consultant, or any of Consultant's employees, except
as herein set forth, and Consultant expressly warrants that it
will not, at any time or in any manner, represent that it, or
any of its agents, servants or employees are in any manner,
agents, servants or employees of the City, it being express-
ly understood that Consultant is, and shall at all times re-
main a wholly independent contractor, and Consultant's obliga-
tions to City are soley those set forth in this Agreement.
section 4. Assignment. This Agreement may not be assigned
in whole or in part, without the prior written consent of City.
Section 5. Document Ownership. City and Consultant agree
that any and all documents, studies, reports or plans prepared
as a result of this Agreement shall be the property of the
city. All reports, information, data and exhibits prepared or
assembled by Consultant in performing its services pursuant to
this Agreement are confidential until released by city to the
public, and Consultant agrees that they shall not be made
available to any individual or entity without the prior written
consent of City.
Section 6. Liaison. Consultant shall perform under the
general supervision of the City Administrator or her designee,
and all communications, instructions and directions on the part
of City shall be communicated exclusively through the City Ad-
ministrator or her designee.
Section 7. Personnel. Consultant represents that it has all
personnel required to perform Consultant's services under this
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Agreement. The principal of Consultant, Mr. Carl Pilnick, shall
be directly responsible for the scope of work, with assistance
from the TMC staff as required.
Section 8. Data and Services to be Furnished by City. All
information, data, records and reports as are in possession of
City and necessary for the performance of the services con-
templated by this Agreement shall be available to Consultant
without charge.
Section 9. Interests of Consultant. Consultant affirms that
it presently has no interest and shall not acquire any interest,
direct or indirect, which would conflict in any manner with the
performance of the services contemplated by this Agreement. No
person having any such interest shall be employed by or be
associated with Consultant.
Section 10. Insurance. without limiting Consultant's indem-
nification of City, upon execution of this Agreement, Consultant
shall provide and maintain at its own expense during the term of
this Agreement a program of insurance satisfactory to City
covering its operations as specified below:
1. Workers' Compensation Insurance covering its employees as
required by statute.
2. Comprehensive general liability insurance protecting Con-
sultant in an amount not less than $1,000,000. Such policy of
insurance shall:
(a) Be issued by an approved insurance company.
(b) Name and list as additional insured City, its
officers and employees.
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(c) Specify it acts as primary insurance.
(d) Contain a clause substantially in the following
words: "It is hereby understood and agreed that this policy
shall not be cancelled except upon thirty (30) days prior
written notice to city."
(e) Cover the operations of Consultant pursuant to the
term of this Agreement.
Section 11. Indemnification. Consultant agrees to indemnify
City, its officers, employees and agents, against, and will hold
and save them and each of them harmless from, any and all ac-
tions claims, damages to persons or property, penalties,
obligations or liabilities that may be asserted or claimed by
any person, firm, entity, corporation, political subdivision or
other organization arising out of the negligent or intentional
tortious acts, errors or omissions of Consultant, its agents,
employees, subcontractors, or invitees.
a. Consultant will defend any action or actions filed in con-
nection with any of said claims, damages, penalties, obligations
or liabilities and will pay all costs and expenses, including
attorneys' fees, incurred in connection therewith.
b. Consultant will promptly pay any judgment rendered
against City, its officers, agents or employees, for any such
claims, damages, penalties, obligations for liabilities.
c. In the event City, its officers, agents or employees, is
made a party to any action or proceeding filed or prosecuted
against Consultant for such damages or other claims arising out
of or in connection with the sole negligence of Consultant
hereunder, Consultant agrees to pay City, its officers, agents,
or employees, any and all costs and expenses incurred by City,
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its officers, agents or employees, in such action or proceeding,
including but not limited to, reasonable attorneys' fees.
section 12. Notice. Any notice required to be given to
Consultant shall be deemed duly and properly given upon
delivery, if sent to Consultant by registered or certified mail,
postage prepaid to:
Telecommunications Management Corp.
5757 Wilshire Boulevard, suite 344
Los Angeles, California 90036
or personally delivered to Consultant at said address or such
other address as may be specified in writing to city by Consult-
ant.
Any notice required to be given to City shall be deemed duly
and properly given upon delivery, if sent to City by registered
or certified mail, postage prepaid to:
City Clerk
City of San Bernardino
300 North "D" Street
San Bernardino, California 92418
or personally delivered to City at said address or such other
address as may be specified in writing to Consultant by City.
section 13. Entire Agreement. This Agreement represents the
entire integrated agreement between City and Consultant, and
supersedes all prior negotiations, representations or agreements
either written or oral. This Agreement may be amended only by a
written instrument approved by the Common Council of city and
executed by both City and Consultant.
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Section 14. Time of Essence. Time is of the essence of each
and every provision of this Agreement.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed by their respective officers thereunto
duly authorized.
CITY OF SAN BERNARDINO
TELECOMMUNICATIONS MANAGEMENT
CORPORATION
By:
By:
W.R. "Bob" Holcomb
Carl Pilnick
TITLE
TITLE
Attest
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City Clerk
Approved as to form
a legal content:
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RESOL~ OF THE CITY OF SAN BERNARDINliIjUTHORIZING THE
EXECUTION OF ~EMENT WITH TELECOMMUNICATI~GEMENT CORP.
RELATING TO THE ANALYSIS OF METHODOLOGY AND FINANCIAL AUDIT OF
CHAMBERS COMMUNICATIONS.
Council Members: AYES NAYS ABSTAIN
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ESTRADA
REILLY
FLORES
MAUDSLEY
MINOR
POPE-LUDLAM
MILLER
city Clerk
The foregoing resolution is hereby approved this
day of , 1991.
W.R. HOLCOMB, MAYOR
City of San Bernardino
Approved as to form and
legal content:
JAMES F. PENMAN
citY(fttorney /
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