Loading...
HomeMy WebLinkAboutItem No. 18 - State Video Franchise Holder Fee and CodifyingCity Council Agenda Report City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: ID# 21-106 Agenda Date: 3/23/2021 Status: Approval FinalVersion: 1 File Type: Council Business Item In Control: City Council / Successor Agency Agenda Number: 18) Reauthorizing the City’s Continued Collection of the State Video Franchise Holder Fee and Codifying the Public, Educational, and Government Access Fee (PEG Fee) 1.Adopt by title only and waive further reading AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING SECTION 5.60 OF THE LAKE ELSINORE MUNICIPAL CODE REAUTHORIZING THE CITY’S CONTINUED COLLECTION OF THE STATE VIDEO FRANCHISE HOLDER FEE AND CODIFYING THE PUBLIC, EDUCATIONAL, AND GOVERNMENT ACCESS FEE (PEG FEE); 2.Introduce by title only and waive further reading AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING SECTION 5.60 OF THE LAKE ELSINORE MUNICIPAL CODE REAUTHORIZING THE CITY’S CONTINUED COLLECTION OF THE STATE VIDEO FRANCHISE HOLDER FEE AND CODIFYING THE PUBLIC, EDUCATIONAL, AND GOVERNMENT ACCESS FEE (PEG FEE). Page 1 City of Lake Elsinore Printed on 3/19/2021 REPORT TO CITY COUNCIL To: Honorable Mayor and Members of the City Council From: Jason Simpson, City Manager Prepared by: Barbara Leibold, City Attorney Date: March 23, 2021 Subject: ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING LAKE ELSINORE MUNICIPAL CODE SECTION 5.60.050 REAUTHORIZING THE CITY’S CONTINUED COLLECTION OF THE STATE VIDEO FRANCHISE HOLDER FEE AND CODIFYING THE PUBLIC, EDUCATIONAL, AND GOVERNMENT ACCESS FEE (PEG FEE) Recommendation 1. Adopt by title only and waive further reading An Urgency Ordinance of the City Council of the City of Lake Elsinore Amending Section 5.60.050 of the Lake Elsinore Municipal Code Reauthorizing the City’s Continued Collection of the State Video Franchise Holder Fee and Codifying the Public, Educational, and Government Access Fee (Peg Fee). 2. Introduce by title only and waive further reading An Ordinance of the City Council of the City of Lake Elsinore Amending Section 5.60.050 of the Lake Elsinore Municipal Code Reauthorizing the City’s Continued Collection of the State Video Franchise Holder Fee and Codifying the Public, Educational, and Government Access Fee (Peg Fee). Background In 2006, the State of California passed the Digital Infrastructure and Video Competition Act (DIVCA), Public Utilities Code, sections 5800, et. seq. This law preempted a local entity’s rights to franchise its cable and video TV operators by transferring cable franchising authority to the California Public Utilities Commission (CPUC). However, under DIVCA, a local entity may collect a State Video Franchise Holder Fee of 5% of gross revenues earned by the cable operator. In addition, DIVCA allows the City to collect, by ordinance, a one percent (1%) public, educational, and governmental access fee (“PEG Fee”). Chapter 5.60 of the Lake Elsinore Municipal Code provides for payment of an annual franchise fee up to five percent (5%) of the gross receipts of the franchisee as established by the City Council at the time of grating the franchise. The City also collects a PEG Fee as provided in the Franchise Agreement(s). Frontier Communications’ local video franchise with the City expires May 9, 2021 and the CPUC has approved its request to continue to provide video service within Lake Elsinore per the state - issued franchise. Ordinance Reauthorizing State Video Franchise Holder and PEG Fees March 23, 2021 Page 2 Discussion Pursuant to DIVCA, the franchising authority now lies with the CPUC . While State law does not require the City to adopt an Ordinance in order to collect the State Video Franchise Holder Fee , Section 5.60.050 provides for this fee in connection with City awarded franchises and should be revised to reflect the legislative changes c onsistent with DIVCA to apply to all state- franchised video service providers operating within the City . In addition, in order to continue to collect the PEG Fee as permitted by DIVCA, the City must adopt an authorizing Ordinance to apply to all state-franchised video service providers operating within the City . In order the City Attorney recommends immediate approval of the urgency ordinance and first reading of the non-urgency ordinance. With the exception of the urgency provisions, the ordinances are identical. The urgency ordinance requires a four -fifths vote of the council to pass and would take effect immediately to avoid any potential interruption in the payment of the State Video Franchise Holder Fee and PEG Fee in connection with the May 9, 2021 expiration of the Frontier City franchise.. The second ordinance will proceed through the standard procedure of a second reading, plus 30 days, to become effective. Fiscal Impact Adoption of the Ordinances will reauthorize and ensure that the City receives the 5% Video Franchise Holder Fee and one percent (1%) PEG fee on state -franchised video service providers operating within the City. Exhibits An Urgency Ordinance of the City Council of the City of Lake Elsinore Amending Section 5.60.050 of the Lake Elsinore Municipal Code Reauthorizing The City’s Continued Collection of The State Video Franchise Holder Fee and Codifying The Public, Educational, and Government Access Fee (PEG Fee). An Ordinance of the City Council of the City of Lake Elsinore Amending Section 5.60 .050 of the Lake Elsinore Municipal Code Reauthorizing The City’s Continued Collection of The State Video Franchise Holder Fee and Codifying The Public, Educational, and Government Access Fee (PEG Fee). ORDINANCE NO. 21-____ AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AMENDING SECTION 5.60.050 OF THE LAKE ELSINORE MUNICIPAL CODE REAUTHORIZING THE CITY’S CONTINUED COLLECTION OF THE STATE VIDEO FRANCHISE HOLDER FEE AND CODIFYING THE PUBLIC, EDUCATIONAL, AND GOVERNMENT ACCESS FEE (PEG FEE) 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 collect a State Video Franchise Holder Fee of 5% of gross revenues earned by the cable operator and to adopt an ordinance establishing a fee on state-franchised video service providers to support public, educational, and governmental access channel facilities (“PEG Fees”); and WHEREAS, the City’s video franchise regulations are set forth in Chapter 5.60 of the Lake Elsinore Municipal Code and Section 5.60.050 regulating Franchise Payments should be amended pursuant to DIVCA and the state video franchise regulations to reauthorize the City’s state video franchise fee and to establish the PEG Fee on all state-franchised video service providers operating within the City; and WHEREAS, Government Code Section 36937 expressly authorizes the City Council to adopt an urgency ordinance for the immediate preservation of the public peace, health or safety; and WHEREAS, this Ordinance will reauthorize the City’s ability to charge telecommunications companies a State Video Franchise Holder Fee and a PEG Fee. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WALNUT, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. The above recitals are true and correct and incorporated fully herein. SECTION 2. Section 5.60.050 “Franchise Payments” of the Lake Elsinore Municipal Code is hereby amended and restated in its entirety as follows: “5.60.050 Video Franchise and PEG Fees. A. Video Franchise Fee. Any video service provider, cable service or video system service provider holding a state issued franchise pursuant to the Digital Infrastructure and Video Competition Act of 2006 (the “Act,” Public Utilities Code 5 5800 et seq.) or a City of Lake Elsinore franchise operating within the boundaries of the city shall pay a fee to the city equal to five percent (5%) of the gross revenue of that state video franchise holder or local franchisee. B. PEG Fee. Any state video franchise holder or a City of Lake Elsinore franchise operating within the boundaries of the city shall also pay the city a fee equal to one percent of the gross revenue of that state video franchise holder, which fee shall be used by the city for any Public, Education, and/or Government (PEG) purposes consistent with state and federal law. Ordinance No. 21- ______ Page 2 of 3 The PEG fee required to be paid by this section shall be remitted to the city within forty-five (45) days after the end of the fiscal year for which the fee is being paid, regardless of when during the fiscal year video services commenced being offered in the city. Each payment shall be accompanied by a summary explaining the basis for the calculation of the PEG fee. If the video service provider does not pay the PEG fee when due, the video service provider shall pay a late payment charge at a rate per year equal to the highest prime lending rate during the period of delinquency, plus one (1) percent. If the video service provider has overpaid its PEG fee, it may deduct the overpayment from its next annual payment. In addition, any state franchisee that has held a locally issued franchise agreement shall, consistent with Public Utilities Code section 5870, continue to fully provide and support PEG channel facilities and institutional networks and to provide cable services to community buildings to the maximum extent permitted by law. C. Gross Revenue. “Gross revenue” for the purposes of A. and B. , (b) above, shall have the definition set forth in California Public Utilities Code section 5860. D. Audit. Not more than once annually, the city manager or the manager's designee may examine and perform an audit of the franchisee’s business records showing the gross receipts from which its franchise payments pursuant to (a) and (b) above are computed. No acceptance of any franchise fee payments shall be construed as a release or as an accord and satisfaction of any claim the City may have for further or additional sums payable under this chapter or for the performance of any other obligation hereunder.” SECTION 3. Commencing from, and after effective date of this Ordinance, the fees established by Section 5.60.050 shall remain unchanged and in full effect as to all state- franchised video service providers to the maximum permitted by applicable law and shall automatically be reauthorized upon the expiration of any existing or future Video Franchise Certificate Franchise(s) held by any state–franchised video provider operating within the City. The Ordinance shall automatically and continually renew upon the future expiration of Video Franchise Certificate Franchise(s) until such time that the City Council takes formal affirmative action to cease the renewals. SECTION 4. The City Council finds, pursuant to Title 14 of the California Code of Regulations, Section 15273, that this Ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) which provides a statutory exemption from CEQA for fees and charges imposed for the purposes of meeting agency operating expenses. SECTION 5. This Urgency Ordinance is enacted pursuant to the authority conferred upon the City by Government Code Sections 36937 and shall be in full force and effect immediately upon its adoption by a four-fifths (4/5) vote of the City Council. This Urgency Ordinance shall take effect immediately upon adoption and shall become operative on March 23, 2021. SECTION 6. The adoption of this Urgency Ordinance is necessary for the immediate preservation of the public peace, health, or safety, as those terms are defined in Government Ordinance No. 21- ______ Page 3 of 3 Code Section 36937(b), in at least the following respects: The City only recently received notice of the state-issued franchise and expiration of the city-issued franchise held by the City’s cable provider, and hence the need for reauthorization of the video franchise fee and PEG Fee, such that it is essential that the City adopt the above stated Ordinance authorization immediately. Accordingly, this Ordinance shall take effect immediately upon adoption. SECTION 7. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more section, subsection, subdivision, sentence, clause, phrase, or portion thereof be declared invalid or unconstitutional. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, on this 23rd day of March 2021. _______________________ Robert E. Magee, Mayor Attest: ____________________ Candice Alvarez, MMC City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Urgency Ordinance No. 2021-___ was adopted by the City Council of the City of Lake Elsinore, California, at the Regular meeting of March 23, 2021 by the following vote: AYES: NOES: ABSENT: ABSTAIN: __________________ Candice Alvarez, MMC City Clerk ORDINANCE NO. 21-____ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AMENDING SECTION 5.60.050 OF THE LAKE ELSINORE MUNICIPAL CODE REAUTHORIZING THE CITY’S CONTINUED COLLECTION OF THE STATE VIDEO FRANCHISE HOLDER FEE AND CODIFYING THE PUBLIC, EDUCATIONAL, AND GOVERNMENT ACCESS FEE (PEG FEE) 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 collect a State Video Franchise Holder Fee of 5% of gross revenues earned by the cable operator and to adopt an ordinance establishing a fee on state-franchised video service providers to support public, educational, and governmental access channel facilities (“PEG Fees”); and WHEREAS, the City’s video franchise regulations are set forth in Chapter 5.60 of the Lake Elsinore Municipal Code and Section 5.60.050 regulating Franchise Payments should be amended pursuant to DIVCA and the state video franchise regulations to reauthorize the City’s state video franchise fee and to establish the PEG Fee on all state-franchised video service providers operating within the City; and WHEREAS, this Ordinance will reauthorize the City’s ability to charge telecommunications companies a State Video Franchise Holder Fee and a PEG Fee. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WALNUT, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. The above recitals are true and correct and incorporated fully herein. SECTION 2. Section 5.60.050 “Franchise Payments” of the Lake Elsinore Municipal Code is hereby amended and restated in its entirety as follows: “5.60.050 Video Franchise and PEG Fees. A. Video Franchise Fee. Any video service provider, cable service or video system service provider holding a state issued franchise pursuant to the Digital Infrastructure and Video Competition Act of 2006 (the “Act,” Public Utilities Code 5 5800 et seq.) or a City of Lake Elsinore franchise operating within the boundaries of the city shall pay a fee to the city equal to five percent (5%) of the gross revenue of that state video franchise holder or local franchisee. B. PEG Fee. Any state video franchise holder or a City of Lake Elsinore franchise operating within the boundaries of the city shall also pay the city a fee equal to one percent of the gross revenue of that state video franchise holder, which fee shall be used by the city for any Public, Education, and/or Government (PEG) purposes consistent with state and federal law. The PEG fee required to be paid by this section shall be remitted to the city within forty-five (45) days after the end of the fiscal year for which the fee is being paid, regardless of when during the fiscal year video services commenced being offered in the city. Each payment shall be accompanied by a summary Ordinance No. 21- ______ Page 2 of 3 explaining the basis for the calculation of the PEG fee. If the video service provider does not pay the PEG fee when due, the video service provider shall pay a late payment charge at a rate per year equal to the highest prime lending rate during the period of delinquency, plus one (1) percent. If the video service provider has overpaid its PEG fee, it may deduct the overpayment from its next annual payment. In addition, any state franchisee that has held a locally issued franchise agreement shall, consistent with Public Utilities Code section 5870, continue to fully provide and support PEG channel facilities and institutional networks and to provide cable services to community buildings to the maximum extent permitted by law. C. Gross Revenue. “Gross revenue” for the purposes of A. and B. , (b) above, shall have the definition set forth in California Public Utilities Code section 5860. D. Audit. Not more than once annually, the city manager or the manager's designee may examine and perform an audit of the franchisee’s business records showing the gross receipts from which its franchise payments pursuant to (a) and (b) above are computed. No acceptance of any franchise fee payments shall be construed as a release or as an accord and satisfaction of any claim the City may have for further or additional sums payable under this chapter or for the performance of any other obligation hereunder.” SECTION 3. Commencing from, and after effective date of this Ordinance, the fees established by Section 5.60.050 shall remain unchanged and in full effect as to all state- franchised video service providers to the maximum permitted by applicable law and shall automatically be reauthorized upon the expiration of any existing or future Video Franchise Certificate Franchise(s) held by any state–franchised video provider operating within the City. The Ordinance shall automatically and continually renew upon the future expiration of Video Franchise Certificate Franchise(s) until such time that the City Council takes formal affirmative action to cease the renewals. SECTION 4. The City Council finds, pursuant to Title 14 of the California Code of Regulations, Section 15273, that this Ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) which provides a statutory exemption from CEQA for fees and charges imposed for the purposes of meeting agency operating expenses. SECTION 5. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more section, subsection, subdivision, sentence, clause, phrase, or portion thereof be declared invalid or unconstitutional. Ordinance No. 21- ______ Page 3 of 3 PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, on this ____ day of _____________ 2021. _______________________ Robert E. Magee, Mayor Attest: ____________________ Candice Alvarez, MMC City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Ordinance No. 2021-___ was introduced at the Regular meeting of the City Council of _________ __, 2021 and adopted by the City Council of the City of Lake Elsinore, California, at the Regular meeting of _________ __, 2021 and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: __________________ Candice Alvarez, MMC City Clerk