Staff Report. Jeff Lewis, Director of Information Technology

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1 7.b Staff Report Date: March 28, 2017 To: From: Reviewed by: Prepared by: Subject: City Council Valerie J. Barone, City Manager Jeff Lewis, Director of Information Technology Scott Conn, Principal Consultant (925) Considering introduction of Ordinance No reauthorizing the City s Public, Educational, and Governmental (PEG) Fees by amending Concord Municipal Code Title 5 (Business Licenses and Regulations), Chapter 5.30 (Cable Communications Systems), Section (State video franchise and PEG fees), by adding Sec (d) (Reauthorization), by reading of the title only and waiving further reading. The Ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Code of Regulations CEQA Guidelines Section 15061(b)(3) in that it is no possibility it may have significant effect on the environment. Report in Brief The City has the current ability to collect Public, Educational, and Governmental (PEG) fees from state video franchise holders operating within the City of Concord. A provision of State law addressing franchise expirations makes it unclear whether PEG fee collection ordinances expire with the franchises. In order to preserve the City s rights to PEG fees, the Council is being asked to reauthorize their collection. Recommended Action Staff recommends that City Council introduce Ordinance No reauthorizing the City s PEG fees by reading of the title only and waiving further reading. Page 1 of 6

2 City Council Agenda Report Considering introduction of Ordinance No reauthorizing the City s Public, Educational, and Governmental (PEG) Fees March 28, 2017 Background The Digital Infrastructure and Video Competition Act of 2006 (DIVCA) went into effect on January 1, DIVCA established the California Public Utilities Commission (CPUC) as the sole franchising authority for video service providers preempting a local entity s right to franchise its cable and video TV operators. DIVCA allows local governments to establish and collect Public, Educational, and Governmental (PEG) access fees from the cable and video TV operators providing services in a city. On October 9, 2007, the City Council approved adopted Ordinance No adding Concord Municipal Code Section (State video franchise and PEG fees) which, among other things, authorized the collection of a 5% franchise fee and 3% PEG fee from state video franchise holders operating within the City. The maximum amount of the franchise and PEG fee is set by State law. Analysis DIVCA states that state video franchises issued by the CPUC are given a term of 10 years. AT&T s franchise will expire in 2017 and Astound s franchise will expire in AT&T is currently renewing its state-issued franchise, and Astound will likely renew its franchise prior to expiration. Comcast remains on a City franchise which expires in The section of DIVCA that authorized the City to create the PEG fee ordinance also states that the ordinance shall expire, and may be reauthorized, upon the expiration of the state franchise. At this time, the law is unclear as to whether the expiration clause applies when a state franchisee is renewing its franchise. Given that uncertainty, it is possible that funding used to support access to the City s government channel could be lost. As a precautionary measure, many local agencies are reauthorizing their ordinances in order to continue to collect the PEG fees when a state franchisee renews its franchise. Financial Impact None if this action is taken. The City currently receives approximately $612,000 annually in PEG fees, the bulk of which comes from AT&T and Astound. Should this action not be approved, the city could be at risk to lose over $500,000 annually should the City s existing PEG Ordinance be deemed to expire with the expiration of the local franchise agreements with AT&T and Astound. The money collected from PEG fees supports the infrastructure that allows the City to broadcast its government meetings and distribute them throughout the City. Page 2 of 6

3 City Council Agenda Report Considering introduction of Ordinance No reauthorizing the City s Public, Educational, and Governmental (PEG) Fees March 28, 2017 Environmental Determination The Ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Code of Regulations CEQA Guidelines Section 15061(b)(3) in that it is no possibility it may have significant effect on the environment. Public Contact The City Council Agenda was posted. Attachment 1. Ordinance No Page 3 of 6

4 Attachment ORDINANCE NO AN ORDINANCE REAUTHORIZING THE CITY S PUBLIC EDUCATIONAL AND GOVERNMENT (PEG) FEES BY AMENDING CONCORD MUNICIPAL CODE TITLE 5 (BUSINESS LICENSES AND REGULATIONS), CHAPTER 5.30 (CABLE COMMUNICATIONS SYSTEMS), SECTION (STATE VIDEO FRANCHISE AND PEG FEES) BY ADDING SECTION (d) (REAUTHORIZATION). WHEREAS, Public Utilities Code Section 5870(n), enacted as part of the Digital Infrastructure and Video Competition Act of 2006, authorized the City to adopt an ordinance establishing a fee on state-franchised video service providers to support public, educational, and governmental access channel facilities; and WHEREAS, on October 9, 2007, the City Council adopted Ordinance No (An Ordinance of the City Council of the City of Concord Amending Chapter 102 (Telecommunications), Article II (Cable Communications Systems), Division 3 (Customer Service), and Division 6 (Rate Regulation) of the Concord Municipal Code Establishing Franchise Fees; Public Educational and Government (PEG) Fees; and Customer Service Penalties for State Franchise Holders Providing Video Service Within the City of Concord to establish such a fee; and WHEREAS, the Concord Municipal Code has since been renumbered, so that, among other things, Section (State video franchise and PEG fees) is now Section (State video franchise and PEG fees; and WHEREAS, Section 5870(n) of the Public Utilities Code states that such an ordinance shall expire, and may be reauthorized, upon the expiration of a state franchise; and WHEREAS, California Video Franchise Certificate Franchise No granted to Pacific Bell Telephone Co. d/b/a SBC Pacific Bell Telephone Co. d/b/a AT&T California, the first state franchise to include the City of Concord, will expire on March 30, 2017; California Video Franchise Certificate Franchise No granted to Astound Broadband, LLC d/b/a Astound Broadband will expire October 28 th, 2018; and Comcast remains on a City franchise which expires in WHEREAS, the City Council, after giving all public notices required by State Law and the Concord Municipal Code, held a duly noticed public hearing on March 7, 2017, on the proposed Ordinance and declared their intent to approve and adopt the Ordinance. Ord. No Page 4 of 6

5 Attachment THE CITY COUNCIL OF THE CITY OF CONCORD DOES ORDAIN AS FOLLOWS: Section 1. The City Council finds that the Ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Code of Regulations CEQA Guidelines Section 15061(b)(3) in that it is no possibility it may have significant effect on the environment. Section 2. Concord Municipal Code Title 5 (Business Licenses and Regulations), Chapter 5.30 (Cable Communications Systems), Section (State video franchise and PEG fees), is hereby amended by adding a new Section (d) as follows: Reauthorization. The City Council of the City of Concord hereby reauthorizes the PEG fees adopted by Ordinance The fees shall remain unchanged and in full effect as to all state video franchise holders operating within the boundaries of the City of Concord. Section 3. This Ordinance shall become effective thirty (30) days following passage and adoption. In the event a summary of said Ordinance is published in lieu of the entire Ordinance, a certified copy of the full text of this Ordinance shall be posted in the office of the City Clerk at least five (5) days prior to its adoption and within fifteen (15) days after its adoption, including the vote of the Councilmembers. Additionally, a summary prepared by the City Attorney s Office shall be published once at least five (5) days prior to the date of adoption of this Ordinance and once within fifteen (15) days after its passage and adoption, including the vote of the Councilmembers, in the East Bay Times, a newspaper of general circulation in the City of Concord ATTEST: Laura M. Hoffmeister Mayor By: Joelle Fockler, MMC City Clerk (Seal) // // Ord. No Page 5 of 6

6 Attachment Ordinance No was duly and regularly introduced at a regular meeting of the City Council of the City of Concord held on March 28, 2017, and was thereafter duly and regularly passed and adopted at a regular meeting of the City Council held on April 11, 2017, by the following vote: AYES: Councilmembers - NOES: Councilmembers - ABSTAIN: Councilmembers - ABSENT: Councilmembers - I HEREBY CERTIFY that the foregoing is a true and correct copy of an ordinance duly and regularly introduced, passed, and adopted by the City Council of the City of Concord, California By: Joelle Fockler, MMC City Clerk Ord. No Page 6 of 6