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HomeMy WebLinkAboutS02-Telecommunications CIQ OF SAN BEANARD()O - AEQUOT FOR COUNCIL ~ON From: Russell Lackner Subject: Chairman, Community Cable Television Commission Administration/Telecommunications Amendment to Municipal Code increasing the amount of franchise fees collected from local cable operators from 4% to 5%. Dept: Oate: June 28, 1989 Synopsis of Previous Council action: NOOE Recommended motion: That the proposed amendment to the Municipal Code increasing the amount of franchise fees collected from local cable operators from 4% to 5% be referred to the Legislative Review Committee for review and report. ~ Jdh1U"!1f) Signature Contact person: Russell Lackner Phone: 882-6204 Supporting data attached: Yes Ward: FUNDING REQUIREMENTS: Amount: - 0 - Source: (Acct. No.) (Acct. DescriPtion) Finance: Council Notes: .."'"..."'... AQenda Item No. S -~ CI'O OF SAN BERNARDQ) - REQUIOT FOR COUNCIL AC'OoN STAFF REPORT On June 20, 1989, the Community Cable Television Commission requested that Deputy City Attorney Diane Roth draft an ordinance increasing franchise fees collected from local cable operators from 3% to 5%. (Some cable operators are currently paying 4%). Diane Roth completed the draft ordinance, which was re- viewed and revised according to input from James Robbins, Deputy City Administrator,and James Penman, City Attorney. A special meeting was called on June 27, 1989 by Commission Chairman Russell Lackner. With a quorum present, a motion was made and carried directing staff to expedite presentation of the code revision to the Legislative Committee.* Urgency was placed on bringing the motion to the attention of Mayor and Common Council prior to the Final Budget Deliberations (July 11, 1989). This revision would also provide audit procedures and authority. impair any existing contract. specific detail as to This revision will not It is estimated that the 1% franchise fee increase and the completion of cable audits would result in an additional $175,000 City revenue. Individual cable subscribers would probably be charged between sixteen to twenty cents a month, as a "pass through" charge. 75-0264 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 .-,.__.~---=---_. o o ,0 ORDINANCE AMENDING MUNICIPAL CODE SECTION 14.08.110 TO INCREASB FRANCHISE FEE TO FIVE PERCENT AND TO PROVIDE FOR THE VERIFICATION OF FRANCHISE FEES BY THE GRANTOR, THE CITY'S AUTHORITY TO AUDIT, INTEREST ON DELINQUENT PAYMENTS, PASS THROUGH OF FRANCHISE FEES TO SUBSCRIBERS, AND MEANS TO CHANGE FRANCHISE FEES. THE MAYOR AND THE COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DO ORDAIN AS FOLLOWS: SECTION 1. Municipal Code Section 14.08.110, is hereby amended to read as follows: "14.08.110 Franchise Payments A. In consideration of the granting and exercise of a franchise to use the streets, as defined in subsection I of Section 14.08.010, for the construction and operation of a cable television system, any grantee shall pay to the City during the life of the franchise, an annual franchise fee equivalent to five percent (5%) of the grantee's gross revenues from operations within the City for the period, including, but not limited to, basic service revenues, non-basic service revenues, advertising revenues, telemarketing revenues, lease revenues, and 20 all other one-way and interactive service revenues generated in 21 any manner by the grantee. 22 23 and 24 25 26 B. The percentage payments shall be made in the manner, at times directed in the franchise or by resolution of the Council. C. Not less than annually, the grantee shall provide the City with an unqualified certification of an independent certified public accountant certifying the accuracy of the 27 28 DCR:mg June 28, 1989 1 0 . 1 2 3 . 5 6 7 o o o D. Not more than once each year during the term of the franchi.e, 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 8 audit. Each grantee shall make available for inspection by 9 authorized representative of the City, its books, accounts, and 10 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. 11 12 13 14 15 16 17 18 19 amount is not made on or before the dates specified in the 20 franchise agreements, grantee shall pay as additional 21 compensation an interest charge, computed from such due date, at 22 the annual rate equal to the commercial prime interest rate in 23 effect upon the due date. 24 G. Any grantee "pass through" or itemization of franchise 25 fee costs on subscribers' bills shall be in accordance with 26 federal law. Any grantee shall pass through to subscribers the 27 amount of any decrease in a franchise fee. E. No acceptance of any payment shall be construed "as a release or as an accord and satisfaction of any claim the City may have for further or additional sums payable under this chapter or for the performance of any other obligation under this Chapter. F. In the event that any franchise payment or recomputed 28 DCR:mg June 28, 1989 -2- . 0 . 1 2 3 . 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 o o o H. The City reserves the right to change its fees if after a public hearing it determines good cause exists and such action does not conflict with federal laws, FCC rules and regulations or the laws of the State of California." I HEREBY CERTIFY that the foregoing ordinance was duly adopted by the Mayor and Common Council of the City of San Bernardino at a ______________ meeting thereof, held on the day of , 1989, by the following vote, to wit: AYES: Council Members NAYS: ABSENT: City Clerk The foregoing ordinance is hereby approved this day of , 1989. W. R. HOLCOMB, Mayor Approved as form and legal content: JAMES F. PENMAN City Attorney B~~~~~ 27 28 DCR:mg June 28, 1989 3