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Home My WebLink AboutAGENDA REPORT 2017 1101 CCSA REG ITEM 09C ITEM 9.C. CITY OF Pk,90OrsilARK,CALIFORNIA City Councii liBppting MOORPARK CITY COUNCIL AGENDA REPORT, yy,TO: Honorable City Council FROM: Brian Chong, Administrative Services Managert DATE: October 17, 2017 (CC Meeting of 11/1/17) SUBJECT: Consider Introduction of an Ordinance Reauthorizing the City's Public, Education, and Governmental (PEG) Fee, and a Determination That This Action Is Exempt from the California Environmental Quality . Act BACKGROUND In 2006, the State of California enacted the Digital Infrastructure and Video Competition Act (DIVCA), which allowed cable television operators to enter into statewide video franchise agreements, rather than separate franchise agreements with local municipalities. DIVCA allows local municipalities to pass an ordinance requiring state video franchisees to pay a Public, Education, and Governmental Access (PEG) fee to support PEG channels, such as Moorpark's MPTV channel. In 2007, the City adopted Ordinance No. 350 to establish a PEG fee of 1% of gross revenues of a state video franchise holder. However, pursuant to state law, PEG fee ordinances expire upon expiration of a state franchise. The state franchise held by AT&T expired on March 30, 2017, and the City Council adopted Ordinance No. 445 to reauthorize the City's same 1% PEG fee on March 15, 2017. The state franchise held by Time Warner Cable Pacific West LLC (Time Warner), now owned by Charter Communications and marketed as Charter Spectrum, will expire on January 2, 2018. Time Warner has applied to extend its state franchise, and the City must again reauthorize its PEG fee via ordinance to ensure that the City's PEG fee does not lapse. 7 Honorable City Council November 1, 2017 Page 2 DISCUSSION Pursuant to California Public Utilities Code § 5870(n), local entities may adopt ordinances establishing a fee to support PEG channel facilities, up to a maximum of 1% of the franchisee's gross revenues. The City adopted Ordinance No. 350 on June 6, 2007 to establish a PEG fee of 1% of gross revenues, and reauthorized the PEG fee on March 15, 2017 through Ordinance No. 445. Time Warner's state video franchise for the Moorpark area will expire on January 2, 2018, and the City's PEG fee ordinance will expire with it. The City must therefore reauthorize its PEG fee ordinance through a new ordinance. There is no proposed change to the PEG fee, so there will be no fiscal impact to the City of Moorpark's video and television subscribers. It should be noted that Time Warner customers are not currently paying the 1% PEG fee created by the ordinance, because Time Warner had an existing 2004 franchise agreement with the City at the time DIVCA was passed. Under DIVCA, if existing local franchise agreements included a PEG fee at the time it was superceded by a state franchise, then that fee would continue until the local franchise would have expired. As such, Time Warner pays a PEG fee of $0.40 per subscriber per month through October 2019. Adoption of the ordinance will ensure that AT&T customers continue paying the same PEG fee that they already collect and that Time Warner customers will switch from $0.40 per subscriber per month to 1% of gross revenues in October 2019. CEQA • The Community Development Director has reviewed the contents of the ordinance and determined that its adoption is exempt from the provisions of the California Environmental Quality Act (CEQA) by the general rule that CEQA only applies to projects that may have a significant effect on the environment. The Director has concluded that the adoption of this ordinance to reauthorize the City's PEG fee and does not propose any construction or alteration to the physical environment. As such, the ordinance is exempt from CEQA pursuant to Title 14, Section 15061(b)(3) of the California Code of Regulations. FISCAL IMPACT Adopting the proposed ordinance would enable the City to continue collecting PEG fees from AT&T and Time Warner past January 2, 2018. Between the two television providers, the City collected approximately $46,000 in PEG fees in FY 2016-17. 8 Honorable City Council November 1, 2017 Page 3 STAFF RECOMMENDATION Introduce Ordinance No. for first reading, waive full reading, and place this ordinance on the agenda for November 15, 2017, for purposes of providing a second reading and adoption of the ordinance. Attachment 1: Draft Ordinance • 9 ATTACHMENT 1 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, REAUTHORIZING AND READOPTING THE CITY'S PUBLIC, EDUCATION, AND GOVERNMENT (PEG) FEE, AND MAKING A DETERMINATION UNDER CEQA WHEREAS, the Digital Infrastructure and Video Competition Act of 2006 (Public Utilities Code § 5800 et. seq., or DIVCA)went into effect on January 1, 2007; and WHEREAS, DIVCA allows local entities to establish Public, Education, and Governmental (PEG) fees of up to 1% of gross revenues to be paid by state video franchise holders; and WHEREAS, on June 6, 2007, the City Council adopted Ordinance No. 350, to create a PEG fee of 1% of gross revenues; 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 video franchise; and • WHEREAS, on March 15, 2017, the City Council adopted Ordinance No. 445 to reauthorize the PEG fee following the expiration of a state video franchise held by AT&T; and WHEREAS, the state video franchise held by Time Warner Cable Pacific West LLC will expire on January 2, 2018; and WHEREAS, the Community Development Director has reviewed the contents of this Ordinance and determined that adoption of this Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) by the general rule that CEQA only applies to projects that may have a significant effect on the environment, pursuant to Title 14, Section 15061(b)(3) of the California Code of Regulations. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council has reviewed the Community Development Director's determination that this ordinance is exempt from CEQA and concurs that the ordinance does not have the possibility of having a significant effect on the environment and is therefore exempt from CEQA pursuant to Title 14, Section 15061(b)(3) of the California Code of Regulations. 10 SECTION 2 . The City Council hereby reauthorizes and readopts the PEG fee on state video franchise holders to support public, education, and governmental channel facilities as codified in Section 5.07.020(c) of the Moorpark Municipal Code. SECTION 3. If any section, subsection, sentence, clause, phrase, part or portion of this ordinance is for any reason held to be invalid or unconstitutional by any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase, part or portion thereof, irrespective of the fact that any one or more section, subsections, sentences, clauses, phrases, parts or portions be declared invalid or unconstitutional. SECTION 4 . This ordinance shall become effective thirty (30) days after its passage and adoption. SECTION 5 . The City Clerk shall certify to the passage and adoption of this ordinance; shall enter the same in the book of original ordinances of said City; shall make a minute of the passage and adoption thereof in the records of the proceedings of the City Council at which the same is passed and adopted; and shall publish notice of adoption in the manner required by law. PASSED AND ADOPTED this day of , 2017. Janice S. Parvin, Mayor ATTEST: Maureen Benson, City Clerk 11