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Agenda Item 15.

City Council Meeting

Meeting Date:

11/21/2017

Subject:

Adopt Ordinance No. 1199, Reauthorizing and Readopting a Public, Educational, and Governmental Access Support Fee

RECOMMENDATION

Adopt an ordinance entitled “Ordinance of the City of Brea Reauthorizing and Readopting the City’s Public, Educational, and Governmental Access Support Fee” by four-fifths vote by title only - second reading

BACKGROUND/DISCUSSION

In 2006, the California Legislature adopted the Digital Infrastructure and Video Competition Act (“DIVCA”), which changed the manner in which video services are regulated by replacing local franchising with a state franchising system administered by the Public Utilities Commission. DIVCA requires state franchise holders to offer at least three PEG channels to each community in which they operate. DIVCA also authorizes cities to adopt an ordinance imposing a fee on state franchise holders to support PEG programming facilities.

The City Council established such a fee on April 17, 2007 by adopting Ordinance No. 1099 to require video service providers who have been issued state franchises to pay the City a PEG access fee of 1% of the video service provider’s gross revenues.
DIVCA also provides, however, that any ordinance adopting a PEG access fee “shall expire, and may be reauthorized, upon the expiration of the state franchise.” Public Utilities Code section 5870.

California Video Franchise Certificate Franchise No. 0020 granted to Time Warner Cable Pacific West LLC d/b/a Charter Communications will expire on January 1, 2018. The City’s PEG fee will therefore expire on January 1, 2018 unless the City Council reauthorizes the fee.

The proposed Ordinance would reauthorize the City’s PEG fee and therefore preserve funding available to support PEG programming facilities. If approved this Ordinance will become effective on December 21, 2018.

If this Ordinance does not become effective by January 2, 2018, funding for City PEG facilities could lapse causing residents who rely on PEG channels for emergency broadcasts and news updates to lose a vital source of City information. Any lapse in funding may also lead to confusion among state video franchisees operating within the City regarding the payment of PEG access fee leading the City to incur additional costs to recover any overdue fees.

FISCAL IMPACT/SUMMARY

The City's General Fund receives approximately $97,000 annually from PEG fees which offsets a portion of the cost of providing important civic programming including emergency alerts; community and governmental news as well as the broadcasting of City Council meetings.

In accordance with state law, the City imposes a 1% Public, Educational and Governmental (“PEG”) access fee on all state franchised video service providers operating within the City to support PEG programming facilities. The Ordinances will reauthorize a 1% PEG access support fee that the City currently receives. If the City Council does not reauthorize the PEG access support fee, the City will not receive further PEG access fees from video service providers operating under state franchises within the City. This would result in a loss of General Fund revenues of approximately $97,000 annually.The City's General Fund receives approximately $97,000 annually from PEG fees which offsets a portion of the cost of providing important civic programming including emergency alerts; community and governmental news as well as the broadcasting of City Council meetings.

In accordance with state law, the City imposes a 1% Public, Educational and Governmental (“PEG”) access fee on all state franchised video service providers operating within the City to support PEG programming facilities. The Ordinances will reauthorize a 1% PEG access support fee that the City currently receives. If the City Council does not reauthorize the PEG access support fee, the City will not receive further PEG access fees from video service providers operating under state franchises within the City. This would result in a loss of General Fund revenues of approximately $97,000 annually.

RESPECTFULLY SUBMITTED:

James L. Markman, City Attorney
Prepared by: Cindy Russell, Administrative Services Director

Attachments
Ordinance 1199