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HomeMy WebLinkAboutItem J,Of 5E4( BF C� AGENDA STAFF REPORT tU 9=t DATE: March 12, 2018 TO: Honorable Mayor and City Council THRU: Jill R. Ingram, City Manager FROM: Robin L Roberts, City Clerk SUBJECT: Re -authorization and Continuation of Public, Educational and Government Access (PEG) Fees for State Franchised Video Services SUMMARY OF REQUEST: That the City Council introduce for first reading an Ordinance of the City Council of the City of Seal Beach Reauthorizing and Continuing Public Education and Government Access (PEG) Fees for State Franchised Video Services. BACKGROUND AND ANALYSIS: State -franchised video service providers pay the City a fee of 1.2% of gross revenues to support Public Education and Government Access ('PEG') programming. Providers may collect these fees, and other franchise fees, from their subscribers. Pursuant to Assembly Bill 2987, known as the Digital Infrastructure and Video Competition Act of 2006 (DIVCA), on November 5, 2007 the City Council adopted Ordinance 1563 to impose this fee. Ordinance 1563 codified Seal Beach Municipal Code Section 6.10.085 "Special Provisions Applicable to Holders of State Video Franchises", which provides fees that support of public, educational and government (PEG) programming and access facilities and activities. Public Utilities Code Section 5870(n), PEG fees may be reauthorized upon the expiration of the applicable State Franchise. With state video franchises expiring and being re -authorized over the past several months, the City should act to re -authorize the PEG fee. This ordinance also would add to the Municipal Code a late payment fee to be applied when a provider does not timely pay the amount of PEG fees due. A late fee is already in effect for franchise fees. This ordinance does not raise any fee currently being paid by subscribers. ENVIRONMENTAL IMPACT: There is no environmental impact related to this item. Agenda Item J LEGAL ANALYSIS: The City Attorney has reviewed and approved as to the proposed Ordinance. No legal analysis is required for this item. FINANCIAL IMPACT: If the proposed ordinance is not adopted, the City loses the ability to require PEG fees of 1.2% of a video franchise holder's gross revenues. RECOMMENDATION: That the City Council introduce for first reading of an Ordinance of the City of Seal Beach Reauthorizing and Continuing Public Education and Government Access (PEG) Fees for Sate Franchised Video Services. SUBMITTED BY: NOTED AND APPROVED: JC&&n .L' `J2aB A6 Robin L Roberts, City Clerk ATTACHMENTS: A - Proposed Ordinance B - Legislative Draft C - Ordinance 1563 Page 2 PU 9L JH#W n Jill R. Ingram, City Manager Attachment "A" ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH REAUTHORIZING AND CONTINUING THE CITY'S PUBLIC, EDUCATIONAL, AND GOVERNMENTAL ("PEG") ACCESS SUPPORT FEE. WHEREAS, Section 5870(n) of the Public Utilities Code, which was enacted as part of the Digital Infrastructure and Video Competition Act of 2006 ("DIVCA"), authorized the City to adopt an ordinance establishing a fee on state -franchised video service providers to support public, educational, and governmental ("PEG") access channel facilities; and WHEREAS, on November 5, 2007 the City adopted Ordinance No. 1563 establishing such a fee, which is codified in Section 6.10.085.A of the Seal Beach Municipal Code; and WHEREAS, Section 5870(n) of the Public Utilities Code states that such an ordinance upon expiration, may be reauthorized, upon the expiration of a state franchise, and that a fee may be adopted at any time; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES ORDAIN AS FOLLOWS: Section 1. The City Council hereby reauthorizes and continues the fee on state -franchised video service providers to support public, educational, and governmental channel facilities currently codified in Section 6.10.085. A of the Seal Beach Municipal Code, to remain unchanged and in full effect for all state -franchised video service providers. Section 2. The City Council hereby adds Seal Beach Municipal Code Section 6.10.085 A 4 (e) to read as follows: "A 4 (e) A late payment charge equal to the highest prime lending rate during the period of delinquency plus one percent (1%) of the amount due and delinquent shall be applied to any amount due from a state -franchised video service provider for PEG Support Fees not received by the when due pursuant to this Chapter." Section 3. The City Clerk shall certify to the adoption of this Ordinance and cause the same to be published as required by law. PASSED, APPROVED, AND ADOPTED this 26th day of March, 2018. Mike Varipapa, Mayor ATTEST: 5229600111 N242M. a Robin L. Roberts, City Clerk -2- s�zvsaorouazazm�.a Attachment 'B" 6. 10.085 Special Provisions Applicable to Holders of State Video Franchises. A. Fee for Support of PEG Access Facilities and Activities. 1. The city council has determined that the public interest will best be served by imposing, to the extent authorized by applicable law, comparable financial obligations upon similarly -situated multi- channel video programming providers that are franchised to provide video services within the city. Consistent with the city's policy of requiring franchisees to provide financial support for public, educational, and governmental (PEG) access channel facilities and activities, a fee is establisbed as set forth below in paragraph 3 of this subsection. 2. On December 31, 2006, the city's incumbent cable operator was contractually obligated to pay an annual fee of $75,000 to support PEG channel facilities and activities. This fee is in excess of 1% of the cable operator's reported gross revenues, and it is approximately equivalent to 1.20% of the reported gross revenues. The term "gross revenues" shall be defined as set forth in California Public Utilities Code Section 5860. 3. The city hereby establishes and imposes upon any state video franchise holder operating in the city a fee, separate from the 5% franchise fee, to support PEG access channel facilities and activities. This separate fee is in the amount of 1.20% of a video service provider's gross revenues. The restrictions and limitations set forth below in paragraph 4 of this subsection apply to this PEG access support fee. 4. The fee in support of PEG access channel facilities and activities specified above in paragraph 3 of this subsection, as applied to a state video franchise holder, is subject to the following provisions: a. The fee most not exceed 3% of the holder's gross revenues, as the term "gross revenues" is defined in the Public Utilities Code Section 5860. b. The fee will remain in effect for env active asisainate Won expiesuien ef the state video franchise, unless otherwise acted upon by the City Council adopted by the eity same . c. If the imposition of this fee, or any componeat thereof, is determined lobe contrary to or inconsistent with the provisions of Public Utilities Code Section 5870 by subsequent legislative action, judicial decision, or administrative interpretation, then an alternative fee for PEG support obligations may be imposed by ordinance adopted by the city council. d. The fee established by this subsection A shall be remitted quarterly to the city treasurer and most be received not later then 45 days after the end of the preceding calendar quarter. The fee payment shall be accompanied by a summary that describes all sources of the gross revenues upon which the fee is based, which summary must be verified by a responsible financial officer or employee of the video service provider. C. A late payment charge equal to the highest prime leading rate during the period of delinauencv plus one percent it%) will be applied to any payment pude by a state video franchise holder for PEG Support Fees not received when due. Attachment "C" ORDINANCE NUMBER 1563 AN ORDINANCE OF THE CITY OF SEAL BEACH AMENDING CHAPTER 6.10 OF TITLE 6 OF THE SEAL BEACH MUNICIPAL CODE BY ADDING A NEW SECTION 6.10.08.5 THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES ORDAIN AS ' FOLLOWS: Section 1. Chapter 6.10 of Title 6 of the Seul Beach Municipal Code, which is titled "Cable, Video and Telecommunications." is amended by adding a new Section 6.10D85 to read as follows: 6,10,085. Sy,,jai Provisions Applicable to Hot f State Video Evillichises A. Fee for Support of PEG Access Facilities d Act 'ti . 1. The City Council has determined that the public interest will best be served by imposing. to the extent authmi ed by applicable law, comparable Financial obligations upon similarly -situated multichannel video programming providers that ere franchised to provide video services within the City. Consistent with the City's policy of requiring hunchiscee to provide financial support for public, educational, and governmental (PEG) access chancel facilities and activities, a fear is established as set forth below in subparagraph (3). 2. On December 31, 2006, the City's incumbent cable operator was contractually obligated an pay an annual fee of $75,000 to support PEG channel facilities and activities. This fee is in excess of one percent (1%) of the cable operator's reported ' gross revenues, and it is approximately equivalent to 1.20% of the reported gross revenues. The term "gross revenues" shall be defined as set forth in California Public Utilities Code Section 5860. 3. The City hereby establishes and imposes upon any state video franchise holder operating in the City a fee, separate from the five percent (5%) franchise fce, m support PEG access channel facilities and activities. This separate fee is in the atnglnt of one and twenty-eight hundredths percent (1.20%) of a video service providers gross revenues. The restrictions and limitations set forth below in subparagraph (4) apply to this PEG access support fee. 4. The fee in support of PEG access channel facilities and activities specified shove in subparagraph (3), as applied to a state video franchise holder, is subject to the following previsions: a The Fee must not exceed three percent (3%) of the holder's gross revenues, as the term "gross revenues" is defined in the Public Utilities Cade section 5860. b. The fee will antminate upon expiration of the state video franchise, but it may be reauthnriud by ordinance adopted by the City Council. ' c. If the imposition of this fee, w any component thereof, is be determined to contrary to or inconsistent with the provisions of Public Utilities Code section 5870 by subsequent legislative action, judicial decision, or administrative interpretation, then an alternative fee for PEG support obligations may be imposed by ordinance adopted by the City Council. d. The fee established by this paragraph (A) shall be remitted quarterly to the City Treasurer and most be received not later than 45 days after the end of the preceding calendar quarter. The fee payment shall be accompanied by a summary that describes all sources of the gross revenues upon which the fee is based, which Ordinance Number 1563 summary must be verified by a responsible financial officer or employee of the video service provider. B. Franchise Fxe. A state video franchise holder operating in the City shall pay to the City a franchise fee that is equal to five percent (5%) of the gmss revenues of that state video franchise holder. The term "gross revenues" shall he defined na set forth in Public Utilities Code section 5860. ' C. Audit Authority. Not more than once annually, the City may examine and perform an audit of the business records of a holder of a state video franchise to ensure compliance with all applicable statutes and regulations related to the computation and payment of franchise fees. D, Customer Service Penalties Under Stale Video Franchises. L The holder of a state video franchise shall comply with all applicable state and federal customer service and protection standards pertaining to the provision of video service. 2. The City shall monitor a state video franchise holder's compliarice with state and federal customer service and protection standards. The City will provide to the state video franchise holder written notice of any material breaches of applicable customer service and protection standards, and will allow the state video franchise holder 30 days from receipt of the notice to remedy the specified material breach. Material bleaches not remedied within the 30 -day rime period will be subject to the following monetary penalties to be imposed by the City in accordance with state law: a. For the first oceunence of a violation, a monetary penalty of $500 ' shall be imposed for each day the violation remains in effect. not to exceed $1,500 fm each violation. b. For a second violation of the some nature within 12 months, a monetary penalty of $1,000 shall be imposed for each day the violation remains in effect, not to exceed $3,000 for each violation. C. For a third or further violation of the same nature within 12 months, a monetary penalty of $2,500 shall be imposed for each day the violation remains in effect, not to exceed $7,500 for each violimmn. 3. A some video franchise holder may appeal a monetary penalty assessed by the City within lA days. After relevant evidence and testimony is received, end staff reports are submitted, the City Council will vole to either uphold or vacate the monetary penalty. The City Council's decision on the imposhim of a monetary penalty shall be final. E. City Besoonse to Stare Video Franchise Applications. 1. Applicants for some video franchises within the boundaries of the City must concmrently provide to the City complete copies of any application or amendments , to applications filed with the California Public Utilities Commission. One complete copy must be provided to the City Manager. 2. The City will pmvide any appropriate commend to the California Public Utilities Commission regarding an application or an amendment to an application for a state video franchise. Ordinance Number 1563 F. PEG Access Channel Comity. 1. A state video franchise holder that uses the public rights-of-way shall designate sufficient capacity on its network to enable the carriage of at ken those public, educational, or governmental (PFA) access channels. Additional requirements relating to PEG access channels are as follows: ' a. A state video franchise holder is subject to payment of the PEG support fee specified above in paragraph (A). b. PEG areas channels shall be for the exclusive use of the City or its designees to provide public, educational, or govemmmtal programming. C. Advertising, underwriting, or sponsorship recognition may be carried on the PEG aceta channels for the purpose of funding PEG -related activities. d. The PEG access chammla shall be carried on the basic service der. e. To the extent feasible, the PEG access channels shall not be separated numerically from other channels carried on the basic service tier, and the channel numbers for the PEG access channels shall be the same channel numbers used by the incumbent cable operator unless prohibited by federal law. f Atter the initial designation of PEG scans channel numbers, the channel numbers shall not be changed without the prior written consent of the City, unless the change is required by federal law. g. Each PBG access channel shall be capable of carrying a National Television System Committee (NTSC) television signal. ' G. interconnection. Where technically feasible, a state video franchise holder and incumbent cable operator shall negodate, in good faith to interconnect their networks for the purpose of providing PFA access channel programming. Interconnection may be accomplished by direct cable, microwave link, satellite, or Other reasonable method of connection. Some video frenchise holders andira umbent cable opermon shall provide interconnection of the PEG access, channels on reasonable tams and conditions and may not withhold the interconnection. If a state video franchise holder and an incumbent cable operator cannot reach a mutually acceptable inmmonnection agreement, the City may require the incumbent cable operito.to allow the stet video franchise holder to interconnect its network with the incumbent's network at a technically feasible point on the holder's network asidentified by the holder. If no technically feasible point for interconnection is available, the state video franchise holder shall make an interconnection available to the channel originator and shall provide the facilities neceactry for the interconnection. The cost of any interconnection shall be borne by the since video franchise holder requesting the interconnection unless otherwise agreed to by the parties. H. Ememencv Alen S tem aid E O 'des. A state video franchise holder must comply with the Emergency Alert System requirements of the Federal Communications Commiasion in order that enwrgeney ' messages may be distributed over the holder's network. Provisions in City-isaued franchisee authorizing the City m provide local emergency notifications shall remain in effect, and shall apply to all state video franchise holders in the City for the duration of the City -issued franchise, or until the term of the franchise would have expired had it not ban terminated pursuant to subdivision (m) of Section 5800 of the California Public Utilities Code, or until January 1, 2109, whichever is later. Ordinance Number 1563 Encroachment Permit Applications. I. As used in this section, the term "encroachment pemdt" means any permit issued by the City relating to construction or operation of facilities by the holder of a state video hanchise. 2. The City shall either approve or deny an application from a holder of a some video franchise for an encroachment permit within 60 days of receiving a completed application. , 3. If the City denies an application for an encroachment permit, the City shall, at the time of notifying the applicant of the denial, furnish to the applicant a detailed explanation of the reason for the denial. An applicant may appeal the City's denial of an encroachment permit application m the City Council. A written notice of appeal abating the facts of the matter and the grounds for appeal shall be filed with the City Clerk within ten days of the denial. The City Clerk shall act the matter for hearing at a regular meeting of the City Council and shall give the appellant written notice of the time and place of hearing at least five days before the Haring. The decision of the City Council taken after the appellant has had an opportunity to be heard will be final. Section 2. This ordinance shall become effective 30 days after its adoption. Section 3. The City Clerk is directed to certify to the adoption of this ordinance and to cause this ordinance to be published or posted as required by law. PASSED, APPROVED AND ADOPTED by the City Council of the City of Seal Beach at a meaning thereof held on the 5th day of November , 2007. 1, Linda Devine, City Clark of the City of Sul Beach, California, do hereby certify that the foregoing ordinance is an original copy of Ordinance Number 1563 on file in the office of the City Clerk, introduced a a meeting held on the 22nd day of October , 2007, and passed, approved and adopted by the City Council of the City of Seal Beach at a meeting held on the 5th day of November , 2007 by the following vote: AYES: Councilmemben &fj,tr —)ON 22,40 7 NOES: Councilmemberl �12107ry ABSENT: Councilmembere lyx-7v 1 ABSTAIN: Councilmembers /tkk211 and do hereby further certify that Ordinaries Number 1563 has been published pursuant to the Seal Beach City Charter and Resolution Number 2836. Ci y Clerk 1PRI klmmf Mayor ' A T: ' E Cir Clerk STATE OF CALIFORNIA I COUNTY OF ORANGE I SS CITY OF SEAL BEACH I 1, Linda Devine, City Clark of the City of Sul Beach, California, do hereby certify that the foregoing ordinance is an original copy of Ordinance Number 1563 on file in the office of the City Clerk, introduced a a meeting held on the 22nd day of October , 2007, and passed, approved and adopted by the City Council of the City of Seal Beach at a meeting held on the 5th day of November , 2007 by the following vote: AYES: Councilmemben &fj,tr —)ON 22,40 7 NOES: Councilmemberl �12107ry ABSENT: Councilmembere lyx-7v 1 ABSTAIN: Councilmembers /tkk211 and do hereby further certify that Ordinaries Number 1563 has been published pursuant to the Seal Beach City Charter and Resolution Number 2836. Ci y Clerk ' "PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF CALIFORNIA, County of Orange I am a citizen of the United Stales and a resident of the county afore- said; I am over the age of eighteen years, and.not a party to or inter- ested in the above -entitled matter. I am the principal clerk of the printer of the SEAL REACH SUN a newspaper of general circulation, printed and published jaeekly in the City of Seal Beach, County of Orange and which newspaper has been adjudged a newspaper of general circulation by the Superior 'Court of the County of Orange, State of California, under the date of yz�¢5. Case Number A825gf; that the notice of which the annexed is a printed copy (set in type not smaller than nonpareil), has been published in each regular and enure issue of said newspaper and not in any supplement thereof on the following dates, to -wit: all in the year 2007. I certity (or declare) under penally of perjury that the foregoing is true and correct. Dated atSmi CA, Beach. k7day of 007. l)pmml d- fi& — Signature PUBLICATION PROCESSED BY: THE SEAL BEACH SUN 216 Main Street Seal Beach, CA 90740 (562)430-7555 Ordinance Number 1563 This space is for the County Clerk's Filing Stamp Proof of Publication of Ordinance Number 1563 PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF CALIFORNIA, County of Orange I am a citizen of the United States and a resident of the county afore- said; I am over the age of eighteen years, and not a parry to or inter- ested in the above -entitled matter. I am the principal clerk of the printer of the SEAL BEACH SUN a newspaper of general circulation, printed and published waskly in the City of Seal Beach, County of Orange and which newspaper has been adjudged a newspaper of general circulation by the Superior Court of the County of Orange, State of California, under the date of 2124175. Case Number A62593; that the notice of which the annexed is a printed copy (set In type not smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to all in the year 2007 I certify (or declare) under penalty of perjury that the foregoing is two and correct. Dated a ch, C is day of I� , 2007. Signature PUBLICATION PROCESSED BY. THE SEAL BEACH SUN 216 Mein Street Seal Beach, CA 90740 (562) 430-7555 This space is for the County Clerk's Filing Stamp Proof of Publication of 1 1