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HomeMy WebLinkAbout10-Council Office CI"" ~ OF SAN BERNARU iU - REQUr iT FOR COUNCIL At 'ION From: Councilman Steve Marks Subject: Ways & Means Corruni t tee Report Dept: Council Office One: January 29, 1986 Synopsis of Previous Council action: Recommended motion: 1. That minutes of Ways & Means Corrunittee meeting held January 27, 1986 be received and filed. 2. That Corrunittee recorrunended actions be approved and appropriate departments implement these actions as necessary and as soon as possible. Signature Contact person: Phil Arvizo Phone: 383-5188 Supporting data attached: Yes Ward: N/A FUNDING REOUIREMENTS: Amount: N/A Source: Finance: Council Notes: 75-0262 Agenda Item No. /0 WAYS & MEANS COMMITTEE January 27, 1986 ATTENDEES: Councilman Steve Marks Chairman1 Councilwoman Esther Estrada1 Councilman Dan Frazier1 Mayor Evlyn WilcoX1 Deputy City Administrator - Ray Schweitzer1 Assistant City Attorney William Sabourin1 Planning Director Frank Schuma1 Public Buildings Superintendent - Wayne Overstreet1 City Librarian - Steve Whitney - Risk Management Director- Ronald Solheim1 Community Services Superintendent - Anne Rhodes 1 Council Executive Assistant - Phil Arvizo1 Special Assistant to Mayor - Gregory Garcia1 Mr. Bob Smith1 Mr. Bob Neves1 Ms. Stephanie Congdon1 Mr. Larry Priest1 Dr. Robert Senour. ITEM OFF AGENDA - EXPANSION JOINTS IN 3-LEVEL PARKING STRUCTURE AT CENTRAL CITY MALL - The Committee unanimously concurred that a liability to the City exists and recommends that the problem be addressed immediately and the City Administrator engage an appropriate contractor to complete the job as soon as possible using non-appropriated reserve funds. The City Attorney is to prepare the necessary documents to present to Council on Monday, February 3rd to correct the problem immediately. I. APPLICATION OF UTILITY TAX REGULATIONS - A) TELEPHONE - Item continued. Telephone com- panies are taxing City users for State and Federal taxes and special government imposed surcharges listed on the bills1 the practice is in violation of City law. Staff directed to evaluate extent of problem (fiscal impact), coordinate with phone companies and prepare ordinance amendment clairifying conclusions to taxing user phone services. B) CABLE TV - Item continued. It appears Chambers Cable TV Company is overtaxing its customers via the utility tax imposition and passing through a $1.00 franchise fee tax. With respect to the franchise fee tax, it appears Chambers included the tax in its general service charge before, raised the service charge and added a $1.00 franchise fee tax without reducing the general service charge appropriately, thus, in effect, double taxing its customers. The Finance Director and Chambers Cable TV will evaluate the before and after surcharge to determine whether tax is being imposed twice. The City Attorney will determine if Chambers Cable TV can unilaterally raise the rates with a $1.00 surcharge or add the $1.OO and say it is the cost of doing business. A total review and options available to the City will be prepared for next meeting. 2.(A) HIRING OF SPECIAL CONSULTANT - GROUP W SALE AND TRANSFER OF FRANCHISE - Committee recommended Council approve the hiring of consultant firm, Cable Television Information Center headed by Mr. Harold Horn, to review current franchise (legal and policy options) and recommend appropriate actions which Council could and should take in granting approval for proposed franchise transfers. Firm is recognized leader in this field with successfully demonstrated performance for City in the past. Staff directed to prepare a contract services and cost scenario for full Council review and action on Monday, February 3, 1986. (B) STAFFING NEEDS FOR CATV FUNCTION - The City has made a firm commitment to develop a public access channel and to successfully manage all CATV related service needs and complaints. The City Administrator's office is responsible for the Cable TV function and for providing staff liaison to the volunteer Cable TV Commission. The overall office workload is overloaded to the extent that additional help is needed. The City, by virtue of previous cable TV related litigation and changes in State/Federal Law, has been collec- ting money from the cable companies for the enhancement of cable services in San Bernardino. The money needed to fund staff assistance would not have to be allocated from the City's general fund. The Cable TV Commission feels that a part-time consultant would be better to perform the tasks discussed above. The City Administrator has recommended that the hiring of a full-time staff member would be significantly more cost-effective. Staff was directed to further refine the pros and cons of each recommendation and the relative costs involved and be prepared to discuss the same with the full Council at 2:00 p.m. on Monday, February 3rd. 3. R-3 MULTI-FAMILY ORDINANCE AMENDMENT - Item contin- ued to a special meeting on February 3rd at noon. 4. ARCHITECTURAL REVIEW BOARD - Item continued to a special meeting on February 3rd at noon. 5. SOCIAL SERVICE CONTRACT ANALYSIS REPORT Item continued to a special meeting on February 3rd at noon. 6. HANDICAPPED QUALITY OF LIFE PROGRAM ENHANCEMENTS Item continued to a special meeting on February 3rd at noon. 7. LIBRARY CONSTRUCTION FUNDS - AUTOMATION CONVERSION - Item continued. Referred to the City Administrator for review and analysis within the context of funding con- straints. Item to be returned to the Committee with recom- mendation. -2- 8. RDA PERSONNEL POLICIES - Item continued to a special meeting on February 3rd at noon. 9. MID-YEAR BUDGET REVIEW - The Deputy City Administra- tor and Finance Director reported that Appropriation Reports had been distributed. The Committee requested that a budget review workshop with the full Council be arranged as soon as possible to discuss alternatives and impacts from Gramm- Rudman legislation. A tentative date of February 8 was suggested. 10. ANIMAL CONTROL SERVICES ALTERNATIVE REPORT - Item continued. The Committee and Council will hear this report at the budget review workshop. The Deputy City Administrator will assure that the report is of substance and contains all the viable alternatives. II. DIAL-A-RIDE/DIAL-A-LIFT - Item discussed at Council Transportation Committee meeting(See Transportation Committee Minutes dated January 27, 1986). Meeting adjourned to 12:00 noon, Monday, February 3, 1986. Respectfully submitted, ~rm~ Councilman Steve Marks Chairman Ways & Means Committee SM:ej CflC Associates Affiliated With The Coble Telev.sl(n Information Center January 30, 1986 Mr. Raymond D. Schweitzer Deputy City Administrator City of San Bernardino City Hall 300 North "0" Street San Bernardino, CA 92401 Dear Ray: I appreciated receiving your call regarding the possible use of our services as you consider the pending request for transfer of one of your cable television franchises from Group W Cable to Comcast. Before you start the formal consideration of a request for transfer the City should satisfy itself that Group W Cable has ful- filled its current commitments required under the present franchise and if the system is being operated and maintained in compliance with the City's requirements. While you still have some leverage with Group W you may want to require that corrective action, if any, be taken before considering any request for transfer. Alter- natively you may want to require, as a condition of the transfer, that Comcast, or whoever has controlling interest, reach compliance with your franchise requirements within a specific time period. In considering a transfer the City will want to require the transferee or assignee to present aatisfactory evidence of its tech- nical ability, financial capability, legal qualifications and gen- eral character qualifications and further agree to comply with all provisions of the franchise including whatever reasonable changes the Council might wish to require. Some of the details of this purchase of Group W by a "Consor- tium" of cable companies is only gradually becoming clear. It is our current understanding that the transfer of control of Group W Cable may actually be to the "Consortium" and that Comcast, as a member company of the consortium will operate and maintain the sys- tem for and on behalf of the Consortium. It appears the Consortium, not Comcast, may actually own and control your franchise if you agree to the transfer. For this reason it will be important to seek out the technical, financial, legal and general character qualifications of the Consortium. This will especially require 1500 I\O~ BEAUREGARD SlREET SUllE 205. ALEXANOOI" VA 22311 (703) 845~1700 1k,o Mr. Raymond D. Schweitzer January 30, 1986 Page 2 considerably more information about how the "Consortium" is organ- ized, how it is financed, who can legally be reaponsible for the San Bernardino operations, what are the details aurrounding the management contract that Comcaat will apparently be receiving from the Conaortium; what was the purchase price of the San Bernardino system? Was it reasonable? Will it cause any upward pressure on rates? This will also require Group W to provide the most current financial information regarding the San Bernardino system and for the Consortium to present its financial pro forma for the future operation of the system. To obtain the above information, analyze it, and provide you with a report and recommendation will require the following pro- fessional services: TASK 1: Examine and evaluate Group W's present system for technical quality, consumer relations, operating policies, line extension policies, the type and status of subscriber complaints, and the extent of legal compliance with the existing franchise. This on-scene study is important in order to establish a fac- tual basis for considering under what circumstances the City will agree to a transfer of the franchise. This study will result in a documentation of any technical and/or service-related problems with the system. Developing this information can lead to informed negotiations both with Group Wand the transferee regarding any corrective action that needs to be made as a consideration in any agreement to transfer. This study would also identify the extent to which there has been compliance with existing City regulations and general industry standards. Specifically our Director of Technical Services will perform a brief engineering appraisal of the current system design, quality of received television signals, whether off-air or by microwave, the possible excessive deterioration of amplifiers, construction practices, maintenance procedures, line extension policies, com- plaint procedures, and most importantly, the quality of signals as currently delivered to subscribers. At the conclusion of this on-scene visit we would recommend a policy workshop with the appropriate council committee, administra- tion and legal staff at which time our preliminary findings and observations can be discussed and policy options presented for Mr. Raymond D. Schweitzer January 30, 1986 Page 3 conaideration by the City. This workshop would also assist us in gaining a better understanding of the specific municipal prob- lems and issues that are of concern to the City regarding Group W's operations. The City may also want to discuss their desire for certain types of information regarding the transferee. This meet- ing will also serve to examine negotiation strategies and identify what leverage the City has in the transfer process. , TASK 2: Prepare detailed information request forms to ascertain the technical, financial, legal and character qualifications of the "Consortium" and Comcast. This task would be done simultaneously with Task 1. The types of information requested parallel the information normally required in developing a familiarity with any ownership situation in cable and have precedence in the original FCC requirements and most City franchising procedures. This is a method to get appro- priate information from the "owner" and/or "operator" of the pro- posed "new system" from which to begin to make a judgement as to their qualifications and commitment to the "needs" of the community. Of particular importance will be a review of the sale agreement between Group W, the Consortium, and Comcast. TASK 3: Study, review and comment on the adequacy of the City's present cable television franchise agree- ments, and City's regulatory requirements. Suggestions will be made, where appropriate, that would up- grade the franchise documents and regulations to meet today's fran- chising requirements and compliance with the Cable Communications Policy Act of 1984. Special attention will be given to suggestions for enforcement provisions since the City through State and Federal legislation has been preempted from using rate regulation to achieve improved service commitments. The cable company's potential abil- ity to reward itself for bad service, bad management, and subscriber indifference needs a corresponding ability on the part of a City to encourage service improvements and public responsiveness. We propose as part of this task to include recommendations as to the City's administrative procedures and possible administrative and staffing suggestions that may be needed to successfully monitor the various cable franchises within the City. Mr. Raymond D. Schweitzer January 30, 1986 Page 4 TASK 4: Upon receipt of information from the "Consortium" and/or Comcast, a report will be prepared detail- ing the results of the on-scene compliance study, describing the results of the analysis of informa- tion provided by the transferee (in Task 2), and presenting our recommendations. As part of this task CTIC will also do a limited "track record" check in which we will interrogate the performance of Comcast in other franchised communities. TASK 5: Present report and assist City in developing its negotiation strategy to accomplish a transfer agree- ment that is mutually acceptable to Comcast and the City (or the Consortium and the City depending upon how this question is resolved). TASK 6: Provide direct negotiation assistance to City on an "as-needed" basis. ESTIMATE OF COST TASK 1: On-scene system evaluation and policy workshop Director of Technical Services: 24 hrs. @ $80/hr. $ 1,920 Project Director: 40 hrs. @ $90/hr. 3,600 Est. Trip Expense:* 2,590 SUBTOTAL TASK 1: $ 8,110 TASK 2: Prepare information requests to ascertain the technical, financial, legal and character quali- fications of the Consortium and Comcast. Project Director: Forms preparation: 8 hrs. @ $90/hr. SUBTOTAL TASK 2: $ 720 200 920 * May be less if trip can be shared with other Calif. work in progress. Mr. Raymond D. Schweitzer January 30, 1986 Page 5 TASK 3: Review, comment, and make recommendations on adequacy of City's regulatory requirements, administrative, system monitoring, and com- pliance procedures. Project Director: 24 hrs. @ $90/hr. $ 2,160 Report production: 500 SUBTOTAL TASK 3: $ 2,660 TASK 4: Prepare Report detailing results of on-scene technical/compliance study, examination of financial, character, and legal qualifica- tions, and "track record" examination. Technical Director: 32 hrs. @ $80/hr. $ 2,560 Financial Analyst: 32 hrs. @ $80/hr. 2,560 Project Director: 40 hrs. @ $90/hr. 3,600 SUBTOTAL TASK 4: $ 8,720 TASK 5: Present report and assist City in developing negotiation strategy to accomplish transfer agreement. Project Director: Estimated trip expenses: 12 hrs. @ $90/hr. 1,080 1,110 SUBTOTAL TASK 5: $ 2,190 TASK 6: Provide direct negotiation assistsnce to the City as it proceeds to negotiate the condi- tions of the transfer with the Consortium or Comcast. Project Director: $90/hr. plus actual expenses Estimate 1 day (Trip expense might not be necessary if this Task could be consolidated with Task 5.) 720 Estimate 1 day (if trip needed) 1,110 ESTIMATED TOTAL - TASKS 1-6: $ 24,430 Mr. Raymond D. Schweitzer January 30, 1986 Page 6 Based on the above calculations, the possible savings on trips if they can be combined with other clients, or if scheduling permits supersaver air fares, the estimated cost is likely to range from $20,000-$25,000. * * * If you or the City Council have any questions or you wish to modify the suggested approach or level of effort indicated, please give me a call. Best regards, /~ Harold E. Horn President