HomeMy WebLinkAbout13 ADOPTION OF ORDINANCE NO. 1480 RE-AUTHORIZING AND RESTATING SECTION 7945 OF THE MUNICIAPL CODEMEETING DATE: APRIL_ 18, 2017
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: JOHN A. BUCHANAN, ACTING FINANCE DIRECTOR
SUBJECT: ADOPTION OF ORDINANCE NO. 1480 RE -AUTHORIZING AND RE-
STATING SECTION 7945 OF THE MUNICIPAL CODE
SUMMARY:
In 2008, the City Council adopted Ordinance No. 1355 which adopted Chapter 10 of
Article 7 of the Tustin City code pertaining to State Franchise Holder. In order to resolve
any ambiguities with the Digital Infrastructure and Video Competition Act of 2005 (DIVCA)
the City Council is re -authorizing and re -stating Section 7945 as it presently exists.
RECOMMENDATION:
It is recommended that the City Council introduce and have first reading of Ordinance No.
1480, re -authorizing and re -stating Section 7945 of the Municipal Code relating tc
collection of a public, education and government fee by State Video Franchise holder and
set a second reading for the next City Council meeting.
CORRELATION TO THE STRATEGIC PLAN:
The recommendation correlates to the City's strategic plan by implementing Goal C,
strategy #3, develop and communicate a comprehensive set of financial policies and their
purpose to strengthen financial practices.
FISCAL IMPACT:
The City receives approximately $125,000 in public, education and government (PEG)
fees from State Franchise Holders on an annual basis.
Adoption of Ordinance No. 1480
April 18, 2017
BACKGROUND:
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In 2008, the City Council adopted Ordinance No. 1355 which adopted Chapter 10 of
Article 7 of the Tustin City code pertaining to State Franchise Holder. The City directed
State Franchise Holders to start collecting the PEG fees starting in 2014. In February
2017, the City was notified by Cox Communications that Cox had renewed its State
Franchise which will take effect on April 27, 2017. The City submitted a request for Cox
Communications to continue to collect PEG fees with the latest State Franchise.
However, Cox Communications indicated that the City's ordinance enabling the PEG fee
collections expire with the expiration of Cox's original State Franchise certificate on April
27, 2017 based on Cox's interpretation of the language from the Digital Infrastructure and
Video Compliance Act of 2006 (DIVCA) (Pub. Util. Code § 5850(a)). The City Attorney's
office reviewed the language in DIVCA and disagrees with Cox's interpretation of the
language in DIVCA. In order to remove any ambiguity with DIVCA, Staff is recommending
City Council adopt Ordinance No. 1480, re -authorizing and re -stating Section 7945 of the
Municipal Code relating to the collection of PEG fees as it currently reads.
ohn . Buchanan Sean Tran
ng Finance Director Deputy Finance Director
Attachments: Ordinance No. 1480
ORDINANCE NO. 1480
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF TUSTIN RE -AUTHORIZING AND RE -STATING
SECTION 7945 OF THE MUNICIPAL CODE RELATING
TO COLLECTION OF A PUBLIC EDUCATION
GOVERNMENT FEE BY STATE VIDEO FRANCHISE
HOLDER
Whereas, in 2008 the City adopted Section 7945 of the Tustin Municipal Code
adopting a fee equal to one percent of the gross revenues of a state video franchise
holder to support the City's public, education and government ("PEG") channel facilities
(hereafter, the "PEG Ordinance"); and
Whereas, Cox Communication's existing state franchise is set to expire on April
27, 2017, and Cox Communications' new state franchise will take effect on April 28, 2017;
and
Whereas, Cox Communications has taken the position that State law requires
the City to re -authorize the PEG Ordinance in order for it to continue to collect the PEG
fee; and
Whereas, State law authorizing collection of the PEG fee is not clear as to
whether the City must re -authorize the PEG Ordinance as contended by Cox
Communications; and
Whereas, to resolve any ambiguities as to whether the City Council desires Cox
Communications to collect the PEG fee, the City Council desires to re -authorize and re-
state Section 7945 as it presently exists.
THE CITY COUNCIL OF THE CITY OF TUSTIN DOES HEREBY ORDAIN AS
FOLLOWS:
7945 PEG Fee.
In addition to the franchise fee required pursuant to section 7944, a state video franchise
holder operating in the City shall pay to the City a fee that is equal to one percent (1 %) of
the gross revenues of that state video franchise holder which fee shall be used to support
PEG channel facilities. The term "gross revenues" shall be defined as set forth in Public
Utilities Code Section 5860.
Ordinance No, 1480
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