Loading...
HomeMy WebLinkAbout03-06-2018 Item 12 Digital Infrastructure and Video Competition Act Ordinance Re-Introduction Meeting Date: 3/6/2018 FROM: Christine Dietrick, City Attorney SUBJECT: URGENCY ORDINANCE REAUTHORIZING THE FEE TO SUPPORT THE CITY’S PUBLIC, EDUCATIONAL, AND GOVERNMENTAL (PEG) ACCESS CHANNEL FACILITIES AND DECLARING SAME TO BE AN URGENCY MEASURE TO TAKE EFFECT IMMEDIATELY RECOMMENDATION Adopt an Urgency Ordinance reauthorizing the fee to support the City’s public, educational, and governmental (PEG) access channel facilities and declaring the same to be an urgency measure to take effect immediately. REPORT-IN-BRIEF San Luis Obispo’s state licensed video provider takes the position that the PEG franchise fee must be reauthorized once a state license for the provider expires. City staff disagrees with this contention, but it is prudent to reauthorize to ensure that PEG fees are secured and potential litigation over the issue. DISCUSSION AND BACKGROUND In 2006, the state Legislature passed the Digital Infrastructure and Video Competition Act of 2006 (DIVCA). As part of DIVCA, section 5870(n) of the California Public Utilities Code 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. As such, the City adopted Ordinance 1542 establishing such a fee, which is codified in Section 5.72.010 of the Municipal Code. This fee is established at 1% of gross revenues for the video service provider. Some municipalities throughout the state have reached the conclusion that ordinances authorized under section 5870(n) of the Public Utilities Code expire, and may be reauthorized, upon the expiration of a state franchise, although a reasonable interpretation is that the 1% PEG fee does not expire and that the expiration provision contained in Section 5870(n) applies only to ordinances imposing a PEG fee at a rate greater than 1%. City staff’s interpretation of section 5870(n) of the Public Utilities Code is that the 1% fee to support PEG channel facilities authorized by that code section does not expire upon th e expiration of any particular state franchise holder. However, to the extent that Charter disagrees with that interpretation and any court or reviewing authority could find otherwise, staff recommends that the City Council reauthorize the fee on state-franchised video service providers to support PEG access channel facilities, which fee shall remain unchanged and in full effect as to all state-franchised video service providers. Packet Pg 239 12 In an abundance of caution, staff recommends that the City Council unambiguo usly reauthorize the PEG fee, although it may not be necessary. The state franchise granted to CCO SoCal I, LLC, DBA Charter Communications, expired and was reauthorized by the state in December 2017, and Charter has requested information regarding whether the City has reauthorized its PEG fee. Charter has made it clear to the City that status quo will be maintained from Charter’s perspective (the fee will continue to be paid) as long as the City PEG fee is re-enacted by the end of the first quarter. Adoption of this ordinance as an urgency ordinance, will meet that time line. This item includes an urgency ordinance that, if approved by Council, would take effect immediately. The reason an urgency ordinance is recommended, as opposed to a regular ordinance, is that a regular ordinance takes two readings and is not effective until thirty (30) days after the second reading. Following the regular adoption procedures would result in an effective date after the end of the first quarter. Adopting as an urgency ordinance therefore negates any argument with Charter about the validity of the current charge or the necessity of readopting the PEG franchise fee. Conclusion For the reasons outlined above, staff recommends that the Council find that there is an urgent need to take action to protect the City's ability to collect PEG franchise fees, and adopt an Urgency Ordinance (Attachment A) that reauthorizes the 1% fee on any state franchised video service providers that are or will be operating in the City of San Luis Obispo to support PEG access channel facilities, upon the expiration of that state franchise, which fee shall remain unchanged and in full effect. This adoption requires at least a four-fifths vote of the Council, in accordance with Government Code Section 36937. ENVIRONMENTAL REVIEW None required. FISCAL IMPACT City Finance reports show the City received $58,895. The PEG fees are deposited into the City’s PEG Fee Fund. These funds are used for capital costs such as production equipment and cameras related to governmental cable programming. Adoption of this ordinance would continue this level of PEG fee revenue into the future. Packet Pg 240 12 ALTERNATIVES 1. Do not adopt urgency ordinance; direct staff to return with a regular ordinance. 2. Do not adopt the urgency ordinance. Neither of these alternatives is recommended because Charter could take the position that it is not obligated to pay the City’s PEG fee if the ordinance is not adopted prior to the end of the first quarter. Attachments: a - DIVCA Ordinance Packet Pg 241 12 O ______ URGENCY ORDINANCE NO. _____ (2018 SERIES) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, REAUTHORIZING THE FEE TO SUPPORT THE CITY’S PUBLIC, EDUCATIONAL, AND GOVERNMENTAL (PEG) ACCESS CHANNEL FACILITIES AND DECLARING SAME TO BE AN URGENCY MEASURE TO TAKE EFFECT IMMEDIATELY WHEREAS, Section 5870(n) of the Public Utilities Code, which was enacted as part of the Digital Infrastructure and Video Competition Act (DIVCA) of 2006, 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, the City adopted Ordinance 1542 (2010 Series) establishing such a fee, which is codified in Section 5.72.010 of the Municipal Code; and WHEREAS, The City’s cable provider and some municipalities throughout the state have reached the conclusion that Section 5870(n) of the California Public Utilities Code requires reauthorization of the ordinance upon expiration of the initial state franchise of any franchise holder within the City; and WHEREAS, if this fee is not reauthorized immediately, the City could lose funding for its PEG programming facilities, which would jeopardize a trustworthy, reliable, and immediate means by which the City communicates with its residents; and WHEREAS, any lapse in funding may also lead to confusion among state video franchisees operating within the City regarding the payment of PEG fees leading the City to incur additional costs to recover any overdue fees; and WHEREAS, in an abundance of caution the City wishes to unambiguously reauthorize the PEG fee; and WHEREAS, the state franchise granted to CCO SoCal l, LLC DBA Charter Communications, expired and was renewed in December 2017, and Charter Communications has requested information regarding whether the City has reauthorized its PEG fee. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo as follows: SECTION 1. Municipal Code Section 5.72.010 is renumbered, restated, and the PEG fee is reauthorized, as follows: A. A fee paid to the city is hereby established for the support of public, educational, and governmental access facilities and activities within the city. Unless a higher percentage is authorized by applicable state or federal law, this fee shall be one percent of a state video holder’s gross revenues, as defined in California Public Utilities Code Section 5860. This fee shall be Packet Pg 242 12 Ordinance No. _____ (2018 Series) Page 2 O ______ remitted quarterly to the city treasurer and must be received not later than forty-five days after the end of the preceding quarter. The fee payment shall be accompanied by a summary that explains the basis for the calculation of the support fee for local cable usage. Municipal Code Section 5.72.010 is amended to add a new subsection B., which will read as follows: B. The City’s interpretation of Section 5870(n) of the Public Utilities Code is that the 1% fee to support PEG channel facilities authorized by that code section does not expire upon the expiration of any particular state franchise holder but shall expire and may be reauthorized upon the expiration of the legislative authorization of the state franchise. However, to the extent any court or reviewing authority finds otherwise, the City hereby reauthorizes the fee set forth in this section on state-franchised video service providers operating within the City, to support public, educational, and governmental access channel facilities, which fee shall remain unchanged and in full effect as to all state-franchised video service providers operating within the City. The City hereby reauthorizes the fee on any additional state franchised video service providers that are or will be operating in the City of San Luis Obispo to support public, educational, and governmental access channel facilities, upon the expiration of that state franchise, which fee shall remain unchanged and in full effect. Notwithstanding Public Utilities Code Section 5870(n), upon the expiration of any state video franchise, without any further action of the City Council, this section shall be deemed to have been automatically reauthorized, unless the state franchise holder has given the City Manager and the City Council written notice ninety days prior to th e expiration of its state franchise that the state franchise holder believes the section will expire concurrently with the expiration of its state franchise pursuant to the terms of Public Utilities Code Section 5870(n). SECTION 2. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance or the application therefore to any person or place, is for any reason held to be invalid or unconstitutional by the final decision of any court of competent jurisdiction, the remainder of this Ordinance shall remain in full force and effect. SECTION 3. A summary of this ordinance, shall be published at least five (5) days prior to its final passage, in The Tribune, a newspaper published and circulated in this City. This ordinance shall become effective immediately upon passage and adoption hereof, as it is an urgency ordinance intended to immediately protect the public welfare, health and safety. INTRODUCED AND ADOPTED by the Council of the City of San Luis Obispo on the ____ day of ____, 2018, on the following vote: AYES: NOES: ABSENT: ____________________________________ Mayor Heidi Harmon Packet Pg 243 12 Ordinance No. _____ (2018 Series) Page 3 O ______ ATTEST: ____________________________________ Carrie Gallagher, CMC City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ______ day of ______________, _________. ______________________________ Carrie Gallagher, CMC City Clerk Packet Pg 244 12 THE Newspaper of the Central Coast FSRECEIVED MAR CO 2 2018 LO CITY CLERK 3825 South Higuera • Post Office Box 112 • San Luis Obispo, California 93406-0112 • (805) 781-7800 In The Superior Court of The State of California In and for the County of San Luis Obispo AD #3545363 CITY OF SAN LUIS OBISPO OFFICE OF THE CITY CLERK STATE OF CALIFORNIA ss. County of San Luis Obispo I am a citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen and not interested in the above entitled matter; I am now, and at all times embraced in the publication herein mentioned was, the principal clerk of the printers and publishers of THE TRIBUNE, a newspaper of general Circulation, printed and published daily at the City of San Luis Obispo in the above named county and state; that notice at which the annexed clippings is a true copy, was published in the above-named newspaper and not in any supplement thereof — on the following dates to wit;; MARCH 1, 2018 that said newspaper was duly and regularly ascertained and established a newspaper of general circulation by Decree entered in the Superior Court of San Luis Obispo County, State of California, on June 9, 1952, Case #19139 under the Government Code of the State of California. is I certify (or declare) under the penalty of perjury that the foregoing is true and correct. (Sig re of Principal Clerk) DATE: MARCH 1, 2018 AD COST: $122.96 OCMOF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY, OF SAN LUIS OBISPO, CALIFORNIA, REAUTHORIZING THE FEE TO SUPPORT THE CITY'S PUBLIC, EDUCATIONAL, AND GOVERNMENTAL (PEG) ACCESS CHANNEL FACILITIES AND DECLARING SAME TO BE AN URGENCY MEASURE TO TAKE EFFECT IMMEDIATELY NOTICE IS HEREBY GIVEN that the City Council of 1ho City of San Luis Obispo, Cal- Ifornla, at Its Regular Meeting of March 6, 2018, wIN consider the Introduction and adoption as an urgency ordinance of the above titled ordinance. The ordinance must be adopted by the affirmative votes of tour fifths of the City Council in order to take effect immediately. A full and complete copy of the aforemen- tioned Ordinance Is available for jnspection and copy In the City Clark's Office, located M 990 Palm Street, San Luis Obispo, Cali- fornia, or you may call (805) 781-7100 for more information. NOTICE IS HEREBY FURTHER GIVEN that the City Council of the City of San Luis Obispo will consider adopting the aforementioned Ordinance at its Regular Meeting of March 6, 2018 at 6:00 p.m., which will be held in the Council Chamber, located at 990 Palm Street, San Luis Obi- spo, California. Carrie Gallagher, CMC City Clerk March 1, 2016 3545363