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Home My WebLink AboutItem No. 07 - 2nd Reading Ordinance State Video Franchise Holder Fee & PEG FeeCity Council Agenda Report City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: ID# 21-113 Agenda Date: 4/13/2021 Status: Approval FinalVersion: 1 File Type: Council Consent Calendar In Control: City Council / Successor Agency Agenda Number: 7) Second Reading of Ordinance Reauthorizing the City’s Continued Collection of the State Video Franchise Holder Fee and Codifying the Public, Educational, and Government Access Fee (PEG Fee) Adopt by title only and waive further reading of 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 4/8/2021 REPORT TO CITY COUNCIL To: Honorable Mayor and Members of the City Council From: Candice Alvarez, MMC, City Clerk Date: April 13, 2021 Subject: Second Reading of Ordinance 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 Adopt by title only and waive further reading of 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). Background At its Regular meeting on March 23, 2021, the City Council introduced by title only and waived further reading of the Ordinance. Exhibit Exhibit A – Ordinance ORDINANCE NO. 2021-1450 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 explaining the basis for the calculation of the PEG fee. If the video service provider does not Ordinance No. 2021-1450 Page 2 of 3 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. 2021-1450 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 13th day of April 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. 2020-1450 was introduced by the City Council of the City of Lake Elsinore, California, at the Regular meeting of March 23, 2021 and adopted at the Regular meeting of April 13, 2021 and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: Candice Alvarez, MMC City Clerk