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· CI9t OF SAN BERNARDQO - REQuOsT FOR COUNCIL ~ION
From:
Russell Lackner Subject:
Chairman, Conmmity Cable Television Comnission
Administration/Telecommunications
Amendment to Municipal Code increasing
the amount of franchise fees
collected from local cable operators
from 4% to 5%.
[)ept:
0Bte: 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 Comnittee for review and report.
~,wJ1 Adhtl( (1)
Signature
Contact person: RusSell Lackner
Phone:
882-6204
Supporting data attached:
FUNDING REQUIREMENTS:
Yes
Ward:
Amount: - 0 -
Source: (Acct. No.)
(Acct. DescriDtionl
Finance:
Council Notes:
11....e....N!:I ''''orn I\In .59_
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. CIA' OF SAN BERNARDQO - RI!QU~T FOR COUNCIL ~ON
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 ll, 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
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ORDINANCE AMENDING MUNICIPAL CODE SECTION l4.0S.ll0 TO
INCREASE 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 l. Municipal Code Section l4.08.ll0, is hereby
amended to read as follows:
"l4.0S.ll0 Franchise Payments
A. In consideration of the granting and exercise of a
franchise to use the streets, as defined in subsection I of
12 Section l4.0S.0l0, for the construction and operation of a cable
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television system, any grantee shall pay to the City during the
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16 operations within the City for the period, including, but not
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life of the franchise,
an annual franchise fee equivalent to
five percent (5%) of the grantee's gross revenues from
11mi ted to,
basic service revenues, non-basic service revenues,
18 advertising revenues, telemarketing revenues, lease revenues, and
19 all other one-way and interactive service revenues generated in
20 any manner by the grantee.
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22 and
B. The percentage payments shall be made in the manner,
at times directed in the franchise or by resolution of the
23 Council.
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C~ Not less than annually, the grantee shall provide the
25 City with an unqualified certification of an independent
26 certified public accountant certifying the accuracy of the
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franchise fee paid within the preceding twelve (l2) months.
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June 2S, 1989
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13 reasonable advance notice for the purpose of permitting exercise
14 of the authorities conferred by this Section.
15 E. No acceptance of any payment shall be construed as a
16 release or as an accord and satisfaction of any claim the City
17 may have for further or additional sums payable under this
18 chapter or for the performance of any other obligation under
19 this Chapter.
20 F. In the event that any franchise payment or recomputed
21 amount is not made on or before the dates specified in the
22 franchise agreements, grantee shall pay as additional
23 compensation an interest charge, computed from such due date, at
24 the annual rate equal to the commercial prime interest rate in
25 effect upon the due date.
26 G. Any grantee "pass through" or itemization of franchise
27 fee costs on subscribers' bills shall be in accordance with
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Said certification shall be prepared in accordance with
generally accepted accounting standards.
D. Not more than once each year during the te~ 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, accounts, and
all other financial records at reasonable times and upon
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June 28, 1989
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2 federal law. Any grantee shall pass through to subscribers the
3 amount of any decrease in a franchise fee.
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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
, 1989.
day
19 of
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W. R. HOLCOMB, Mayor
Approved as form
22 and legal content:
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JAMES F. PENMAN
City Attorney
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BY~~~
DCR:mg
June 28, 1989
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