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Home My WebLink AboutAgenda Bill 4.D 08/02/2010~~~nd.~ It~vw #4.~ August2, 2010 Honorable Mayor and Members of the City Council through City Manager ti Scott Brodhun, Assistant City Manager_~ SUBJECT: Urgency Ordinance. Amending Chapter 14:48 of the Petaluma Municipal Code Relatngto the Pro~siion.of Video S'erviices by State Video Franchise Folders within Petaluma's City Limits Increasing the Fee Supporting Public, Education and Government{PEG) Channel Facilities. RE~ONIMENI)A'TION It is recommended that the City' Council. adopt the attached Urgency Ordinance amending Chapter.14.4;8 of the Petaluma Municipal Coderegulatingthe provision of video services by State video service franchise holders within:Petaluma'sGty Limits. The amendment would increase the fee supporting PEG channel facilities from 1 % o to 1.24%. BACKGRO$JND AB 2987, the Digital Infrastructure.and Video Competition Act (DIVCA), became effective January 1, 2007 and substantal~ly.changed California law by establishing a statewide franchising procedure for video service providers to be administered by the California Public Utilities Commission (CPUC). Video service ,providers include cable providers and other providers of cable-like services. Because of"changes in technology, service providers are able to provide customers several different services at once. Previously, service was provided by separate entities, and,regulated separately. DIVCA establishes that the CPUC.is the sole authority to award franchises for the provision of video services and preempts local franchising authority. Further', it limits the authority of local entities to regulate state franchise holders and requires Local entities, to exerci e fhaf~authority by adopting certain regulations. Accordingly, the City Council approved Ordinance 23'1:1 in October; 2008, establisling regulations for Franchise Fees, PEG Access Fees,, customer service standards and enforcement penalties, audit authority, CEQA, emergency alert ,system, complaints to the CPUC for discrimination by state franchise holders and an encroachment permit process. Agenda Review: Dept. Director City Attorney Finance Director City Man DISC,iJSSTON The proposed amendment would `increase the fee supporting PEG channel .facilities from 1 % to 1.24%. Under DIVCA, local entities must set franchise and PEG fees by ordinance, or resolution. PEG fees are distributed to :Petaluma Community Access (PCA} and are used to provide community programming. The October 2008 ,action assured preservation of the franchise .fee of 5% that has been, and will continue to be distributed to'the City, and set the PEG fee at 1 of total gross revenue, effective August 20, 2010. The DIVCA scheme eliminates City control over some of the funding mechanisms that had been in place under the local franchise agreement. This is expected to result iii a loss of revenue to PCA. For example, Comcast was encouraged to continue to maintain the $2, voluritary PCA contribution program. They declined to do so, however, and.suggested instead that the City might increase the 1,% PEG fee to 1..24%. Implementing. this increase is a step that PCA has encouraged the .City to take. The 1.24% is based on the PEG fees in-effect under the City's cable franchise in'2006. DIVCA provides that agencies that on December 31, 2006 imposed a PEG fee in excess of 1% may,. by ordinance, impose a PEG fee to take effect, after the expiration of the local franchise up to the amount of the earlier PEG fee, but not to exceed 3% of the franchisee's gross .revenues. There may be some question relative to the timing required to establish the amount of'the PEG fee. To eliminate any such question, and to partially mitigate the significant impacfs of lost revenue on PCA, the issue is being presented as an urgency ordinance so that it will be effective immediately following expiration of the local franchise. agreement on August 20, 2010. FINANCIAL IMPACTS Adoption of ,Chapter 14.48 in 2008, allowed the City to impose„PEG fees, to take effect when the local franchise expires on August 20; 2010. However, beginning August 20, 2010; funding mechanisms that had been in place under the local franchise :agreement will no longer exist. A 1 % PEG fee will; probably result in less revenue fo PCA than the .former model provided. The estimated reduction in 2010-2011 revenue is approximately $72,000 annually, or $6;000 per month. DIVCA permits the. City'toincrease the 1% PEG fee adopted in Chapter 14.48 by .24% because the City's PEG fee on December 31, 2006 was 1:24%. The recommended increase raising the PEG fee from 1 % to 1.24%, reduces PCA's projected loss of revenue by $36;000 annually. ATTACHIVI~NTS Draft Ordinance AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUIVIA AMENDING ~B~#GCHAPTE'R 14.48 ~ OF TITLE 14 OF THE PETALi11VIA 1VIUNICIPAL CODE, RELATING TO REGULATIONS FOR THE PROVISION OF VIDEO SERVICE BY STATE FRANCHISE HOLDERS WI~EREAS, the Petaluma City Council has enacted Chapter 14.48 of the Petaluma Municipal Code to regulate the provision of video services within the City, pursuant to the Digital Infrastructure and Video. Competition Act of 2006, California Public Utilities Code section 5800 et seq. ("DIVCA"); and WHEREAS, subdivision (n) of section 5840 of DIVCA provides that local agencies may establish a fee of 1 % to support Public, Educational and Governmental ("PEG") channel facilities, and that local agencies that on December 31, 2006 had a PEG fee in excess of 1% may impose a PEG fee of that same amount, up to a maximum of 3%, to take effect on the expiration of the local cable franchise; and WHEREAS, paragraph (c) of section 14.48.025 of the Petaluma Municipal Code establishes a PEG fee of 1 % becoming, effective on August 20, 2010, when the local cable franchise expires; and WHEREAS, on December 31, 2006, the Petaluma PEG fee was equal to 1.24% of franchisee's gross revenues; and WHEREAS, the City Council of the City o£Petaluma hereby finds that the immediate preservation.. of .the public peace,. health, .and safety require maintaining the ongoing benefits of Public, Educational and Governmental programming for the Petaluma Community including coverage of meetings of City boards and other important benefits, and maintenance of critical revenue to fund such programming that otherwise will be .eliminated upon the expiration of the City's local cable: "franchise on August 20, 2010; and WHEREAS, Article XII, Section 76A of the Petaluma Charter provides that an urgency ,. ordinance may be .adopted, and take immediate effect upon the. unanimous vote of the Council members present at the~meeting; NOW, TIdEREFORE, THE COUNCIL OF THE CITY OF PETALUlVIA ORDAINS AS FOLLOWS: SECTION 1. Paragraph C of section 14.48.025 of the Petaluma Municipal Code entitled Public, Educational, and Government Channels is hereby amended to read as follows: C. Commencing August 20, 2010, any state franchise holder shall remit to the City a fee to support PEG channel facilities in-the amount of one percent (1--°~} 1.24% of the gross revenues of'the tate franchise holder in compliance with California Public Utilities Code section 5870. All revenue collected pursuant to this fee shall be deposited in a separate fund and shall only be expended for the purpose of `supporting PEG channel facilities. SECTION 2. Except as amended pursuant to Section 1, Chapter 14.48 of the Petaluma Municipal Code remains unchanged and in full force and effect. SEC'T'ION 3. Severability: The provisions of this .Ordinance are severable and if any provision, clause, sentence, word or part thereof is held illegal, invalid; unconstitutional, or inapplicable to any person or circumstances, such: illegality,, invalidity,. unconstitutionality, or inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences, sections, words or parts thereof of this Ordinance or their applicability to other persons or circumstances. SEC'd'ION 4. Effective Date. This Ordinance of the City of Petaluma shall be immediately effective upon a unanimous vote of the Council members present in accordance with Article XII, Section 76-A of the Petaluma Charter. SEC'T'ION 5. Publication. The City Clerk is hereby directed to post and/or publish this ordinance or a synopsis of this ordinance for the period and in the manner required by the City Charter. ADOPTED THIS day of , 2010; by the following vote: AYES: NOES.: ABSENT: ABSTAIN: ATTEST: Pamela Torliatt, Mayor APPROVED AS TO FORM: