HomeMy WebLinkAbout3/16/2005 - STAFF REPORTS (4) CITY COUNCIL FEBRUARY 23, 2005
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Subject: CONTRACT WITH BUSKE GROUP FOR CABLE CONSULTING
SERVICES RELATED TO THE RENEWAL OF THE CABLE
FRANCHISE WITH TIME WARNER CABLE
Initiated by: City Manager's Office
SUMMARY:
Federal law dictates the cable franchise renewal process and the City's authority to
renew or deny the cable operator's franchise renewal request. The franchise renewal
process involves various tasks including, but not limit to an examination of the past
performance of the cable operator, identification of the community's future cable needs
and interests, and a discussion of what franchise terms should be negotiated. This
process is rather complicated taking upwards of 18 months to complete. Due to the
complexities and amount of time involved in this process, Staff is recommending that a
consultant with experience in the cable franchise renewal process be retained.
RECOMMENDATION:
1. Approve Minute Order No. authorizing the City Attorney to prepare a Contract
Services Agreement with the Buske Group in an amount not-to-exceed $54,745 for
cable television consulting services related to the renewal of the cable television
franchise granted to Time Warner Cable and approving the agreement. A
2. Adopt Resolution No. "A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS, CALIFORNIA AMENDING THE BUDGET FOR THE
2004-05 FISCAL YEAR."
STAFF ANALYSIS:
The City has heretofore entered into two separate franchise agreements with Time
Warner for cable television services. These agreements, which cover different areas of
the community, have a 15 year term expiring in 2005. In January 2005, the City Council
approved two separate resolutions extending the term of both cable franchise
agreements through December 31, 2005 to enable staff to commence renewal
negotiations with the cable operator.
Federal law provides for two types of franchise renewals procedures. The first, and
more common, is an informal renewal process. In an informal process, the parties meet
and attempt to negotiate a mutually acceptable franchise. The informal process is less
structured, less confrontational, and less costly. Time Warner has expressed the intent
to engage in informal renewal negotiations. If the City and Time Warner are unable to
informally negotiate an acceptable franchise, under the federal Cable Act, either party
may seek a formal franchise renewal. In a formal franchise renewal proceeding, there is
a very structured and limited time period in which the City determines its future cable
related needs and submits that information to the cable operator, with a request for
renewal proposal. The cable operator then submits a proposed franchise. The City,
within four months of the cable operator's submission of a formal proposal, must make a
preliminary assessment of whether it will accept or deny the cable operator's offered
franchise. If the City does not accept the proposed franchise, the end result, in all
likelihood, is federal court litigation.
To successfully complete the renewal process and negotiate a new franchise
agreement requires expertise in areas as diverse as cable programming, PEG access
programming, cable regulation and law, public opinion polling and market research, rate
setting, the electrical engineering field, and telecommunications systems. Due to the
depth of the scope of services required, staff solicited a proposal from an experienced
consultant that specializes in cable television franchise issues.
The Buske Group has vast cable communications experience. Specifically, the firm has
extensive knowledge of and experience in the cable television refranchising process. It
has provided services to communities throughout the United States, including 70 cable
franchising authorities located in California. This firm has dealt with all aspects of the
cable refranchising process, including informal proceedings, formal proceedings, and
cable transfer of ownership. Sue Buske, President of The Buske Group, has served as
a consultant in franchise renewal processes, transfer of ownership matters, rate
regulation, and performance audits in California, Nevada, Oregon, Washington, Arizona,
Colorado, New Mexico, Kansas, Iowa, Illinois, Michigan, Indiana, Ohio, Maryland, New
York, and Florida. She is also an expert in conducting needs assessment; in
establishing, evaluating and assessing Public, Educational and Government Access;
and in all aspects of cable system regulation and performance monitoring. Prior to the
creation of The Buske Group, Ms. Buske served for six years as the Executive Director
of the National Federation of Local Cable Programmers (NFLCP, now known as the
Alliance for Community Media), a Washington, DC based national organization serving
cities, schools, and nonprofit Access corporations. During those years she served as
the coordinator for numerous projects undertaken by the organization. She conducted
extensive research into all types of local cable programming and published numerous
articles on PEG Access and telecommunications policy.
Under federal law, a cable operator is generally entitled to a franchise renewal if it has
complied with its prior franchise obligations, and if it offers and has the legal, technical,
and financial ability to comply with a franchise agreement that meets the future cable
related needs of the community. Most large cable companies have the legal, technical
and financial capability to comply with almost any franchise condition, so a primary
question becomes whether the cable operator will agree to a franchise document that
will meet the City's future cable related needs. Determining a community's future cable
related needs requires public input—the future cable related needs are not simply what
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the elected officials believe. This can be accomplished by informal conversations,
community feedback from public meetings, community focus groups, and/or a survey to
citizens within the community.
The consultant's proposed scope of services consists of four primary phases. The
objective of Phase One is to develop a renewal plan and timeline, and educate City
staff, elected officials, and key members of the community regarding the process,
applicable laws, and regulations. The cost of this phase is $5,050.
The objective of Phase Two is to establish the basis for negotiating a new franchise
agreement or renewal. The first part of this phase includes an overall review of Time
Warner's past performance, an evaluation of compliance with the existing franchise and
franchise Fee provisions; a review of customer service standards and consumer
complaints; a review of current PEG access resources and services; and a public
hearing on past performance. The second part of this phase is forward-looking. It uses
surveys, focus group workshops, and public meetings to identify future community
cable-related needs and interests. The estimated cost of this phase of the project is
$15,070.
Phase Three attempts to determine the community's satisfaction (or lack thereof) with
its cable providers. It also attempts to determine the kinds of cable services that our
community expects — more or less community programming, better government access,
a different menu of channels, and much more. The Community Needs Assessment—
sometimes called an Ascertainment— is a process described in federal law but not
mandated. Staff believes that the needs assessment process is especially critical. Due
to the evolving nature of the cable industry, the franchise renewal process involves
more than an examination of video programming services. Because cable now includes
the ability to deliver voice and data, as well as video communications, the franchise
renewal process provides an opportunity to examine community-wide communications
needs. These needs are identified through the needs assessment process. In turn, the
identified needs are used to develop desired outcomes, which will guide City
negotiations. The outreach process is designed to encourage the broadest and most
representative participation possible, to ensure that as many needs as possible are
collected and catalogued.
The Buske Group is proposing to use the following methods to collect information from
area organizations and residents:
• A statistically valid random telephone survey of cable television
subscribers;
• Six structured focus group workshops to be held in the City;
• Collection and analysis of strategic and long range plans,
technology plans, and communications plans that have been
prepared by government agencies, educational institutions, and
organizations that serve the City;
U Special meetings and personal interviews; and
3
• A public hearing to invite public comment on issues relevant to the
needs assessment and on the past performance of the cable
operator.
This phase of the project is perhaps the most expensive due to the significant amount of
time involved. The cost of Phase Three is $28,950.
Phase Four builds upon the information gathered in Phases Two and Three, and
includes the establishment of desired outcomes for the renewal process and actual
negotiation of a new franchise agreement or a renewed franchise agreement. Typically,
the desired outcomes fall within the following areas: cable system upgrades/rebuilds;
contributions of television channels, facilities and equipment for PEG access; and an
Institutional Network to link schools, libraries, and government buildings. The cost to
complete this phase is $14,525.
The total cost for all four phases is $54,745. Staff plans to seek reimbursement of
expenses related to the renewal of the City's cable television franchise as part of the
City's approval of a new cable franchise. Staff has obtained similar reimbursements in
the past from the cable operator for expenses incurred by the City for its review and
consent to changes of control of the City's cable franchise.
Staff plans to commence negotiations sometime this summer and anticipates being able
to reach agreement on a new franchise agreement without conducting a formal request
for renewal proposal process. However, in the event that this does not occur and the
City Council decides that a formal proposal process is necessary, staff will return to the
Council to request additional funds to complete the formal process.
FISCAL IMPACT:
The City Council has allocated $25,000 in the current fiscal year budget for contract
services related to the renewal of the cable franchise. Staff is seeking Council approval
for an additional $29,745 from Fund Balance to cover the total contract amount of
$54,745.
Tro L. utzlaff, I t City Manager David H. Ready, CitMana y ger
Attac ent:
1. Minute Order
2. Resolution
4
Mar 16 05 03: 51p Duane Rohrbaugh 17GO 416-2973 p, t
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February 1, 200
19r. Duane 6ohibau��L
General Mauat_,cr
NV'%,ntlhtml Pah'n tiprings Notel
SSIS 'I'nhquilr Canyon Way
Palm Springs. CA 92262
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Dear Mr. ItnhI'haugh:
i am in rccuipt of your letler dated JanuarV 34. 2005, re,Tarding the bLIJk c UbiC Icle�lslnn scl Vace ror
tha \Vyndhanl Palm Springs l lutel. 1 appreciate your tithe on the phone yesterday to discuss this
Ce1"lice.
As t 6t'dtell, yIIUI' Clll-1'e11t ni LC JUI cab lc tCaCl'1 titPI7 tier\"I L'C Il ;.9t) pCI'1'DOnl Yi-tP.Z,f and t37a'!i.
[upon the execution o a Dew bl.111C agreement. your rate 44,A[ bo loivercd ( Ji.`+ 32]'TOOIl1 PILIS ll:e_ i
:uld fa cs. % hick represents a 'saviugs of$16R.00 per nlnnth or f 2016.00 per year. I have enclosed
the new a;trcemcnl for your review and siLLnature. Ih'c can only offer these gr::atly discounted rates
with a five. year hulk agreement. Our retail rate in Palm Springs is S46.115, w hich would be billed on
a per unit basis in Ohc, abscnec of netiv:i;--reenlenr.
III addition to this Inver rate. Timc ",",rner Cable is your only source lbr all the local l"Ircladcast
channels in the market. Time Warner Cable Values your business and I a!n confident that we
provide a areaT entertainniclll value for bUlil `uebis. Please don't hesiuilc to call Inc at (7001 674
5642 with any questions.
tiincerel;-. „
Scol 1lncltler
C'omnlc:rcial Development
Accoum f xecutive
RESOLUTION NO.
OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA AMENDING THE BUDGET
FOR FISCAL YEAR
WHEREAS, Resolution No. 20973 approving the budget for the fiscal year 2004-05 was
adopted by the City Council on June 9, 2004; and
WHEREAS, the City Manager has recommended, and the City Council desires to
approve certain amendments to said budget;
NOW THEREFORE BE IT RESOLVED that the Director of Finance is authorized to
record inter-fund cash transfers as required in accordance with this Resolution, and that
Resolution 20973, adopting the budget for Fiscal Year 2004-05 is hereby amended as
follows:
SECTION 1: ADDITIONS
Fund Activity Account I Amount
001 General Fund 1231 PSCTV 43200 Contract Svs. 1 $29,745.
Purpose: To pay for costs to administer the March 8, 2005 Special Election.
SECTION 2: SOURCE
Fund Activit Account Amount
001 General Fund 29301 Fund Balance $29,745.
Adopted this _day of 2005.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By
City Clerk City Manager
p wr2
MINUTE ORDER NO. 76�
AUTHORIZING THE CITY ATTORNEY TO PREPARE A
CONTRACT SERVICES AGREEMENT WITH THE BUSKE
GROUP IN AN AMOUNT NOT-TO-EXCEED $54,745 FOR
CABLE TELEVISION CONSULTING SERVICES RELATED TO
THE RENEWAL OF THE CABLE TELEVISION FRANCHISE
WITH TIME WARNER AND APPROVING THE AGREEMENT
---------------
I HEREBY CERTIFY that this Minute Order, authorizing the City Attorney to prepare a contract
services agreement with the Buske Group in an amount not-to-exceed $54,745 and approving
said agreement was adopted by the City Council of the City of Palm Springs, California, in a
meeting thereof held on the 23rd day of February, 2005.
James Thompson
City Clerk
DATE: March 16, 2005
TO: City Council
FROM: Jim Dunn, SMG via City Manager
SUBJECT: Convention Center Pre-opening Marketing Program
RECOMMENDATION: That the City Council approve the Minute Order No.
approving the Pre-opening Marketing budget for the Palm Springs Convention Center.
SUMMARY:
A separate marketing budget has been established to specifically market the expansion
of the Palm Springs Convention Center. A recommended revised budget is attached for
approval. This budget creates a new line item, "Incentive Program" to establish the
ability to offer incentives to specific groups that meet certain minimum criteria with
regard to number of attendees and hotel room nights generated for the City. It is
recommended that flexibility to move funding between line items be permitted to
respond to marketing opportunities which might arise.
BACKGROUND:
SMG initiated a pre-opening marketing effort in May of 2003 to assist in the launch of the
"new" convention center. It was initially anticipated that there would be approximately
$1 million set aside for pre-opening marketing and promotion. This amount was
originally to come from the expansion project funding and a contribution from SMG. To
date SMG has contributed $400,000 and the City $447,000.
The attached budget summarizes the funds expended from May of 2003 through
January 2005 as well as the remaining budget for February through December 2005.
Based on input from stakeholders, staff is recommending that the budget be revised
and some of the funds set aside to help fund discounts to groups that meet certain
minimum booking criteria (See attached booking criteria). The amount proposed for this
incentive program is $135,000. The return on investment of the program may be
measured by the impact of the specific groups that are part of the program. Thus far
groups identified to participate in the program represent approximately 14,000 hotel
room nights, $300,000 in TOT, and total spending by attendees of$5.5 million. The
incentive provided for these groups totals $55,000 of the $135,000 budgeted.
Total marketing funds still available to fund this budget are $452,728.
Jimd) nn, Palm Springs Convention Center
City Manager
Attachments:
Budget
Booking Criteria
Palm Springs Convention Center
Pre-opening Marketing Budget
Revised January 2005
Original Budget Proposed
Category Jan 2005 - Dec 2005
Advertising Total Spent 166,033
Total Available 98,414 20,000
DC Sales Office Total Spent 88,484
Total Available 36,526 0
Preopening Events Total Spent 28,623
Total Available 186,314 180,000
Professional Services Total Spent 63,920
Total Available 14,508 25,000
Public Relations Total Spent 16,043
Total Available -593 12,000
Sales Collateral Total Spent 9,576
Total Available 43,596 40,000
Direct Mail Total Spent
Total Available 15,000 10,000
Tradeshows Total Spent
Total Available 8,500 10,000
Website Revision Total Spent 21,594
Total Available 3,606 20,000
Incentive Program Total Spent
Total Available 0 135,000
Pop-up Opportunities Total Spent
Total Available 46,856 728
Total Total Spent 394,272
Total Total Available 452,7281 452,728
F:\USERS\jmd\DEPTS\SALES\Expansion Marketing\Pre-opening Budget Proposal Revised Feb 2005.xls Page 1
Recommended Criteria for Convention Group Incentives
This incentive program is designed for groups that utilize the Convention Center for
meetings. The program would allow for all or a portion of a group's convention center
rental to be paid from marketing fiords. This would be in addition to any other
convention center discounts offered based on other revenue sources generated by the
group (i.e. food and beverage). All rental pricing for groups considered under this
program would be based on the convention center rental rate offered to non-profit groups.
Hotels may also offer a rebate to offset group expenses.
Group Profile
1) Minimum 800 Rooms Peak Night and 2,000 Room Nights Total:
Assuming the following room block commitments, groups considered for the program
would maintain room blocks beyond just the convention hotels closest to the Center:
Wyndham 350
Hilton 200
Hyatt 75
Spa 75
Courtyard 50
Total 750 commitable room nights on group's peak night
2) Meeting Dates:
Group must hold its meeting within 24 months.
3) Time to Commit:
Group must sign convention center contract within 90 days of receipt of incentive offer,
otherwise offer becomes void and finds are made available to another group.
Exceptions to the above criteria may be made based on review of the current outlook for
particular time periods, groups meeting in 2005, overall economic impact on the City,
etc. Groups recommended for incentives will be reviewed with stakeholders.
MINUTE ORDER NO. 7650
APPROVING THE PRE-OPENING MARKETING
BUDGET FOR THE CONVENTION CENTER AS
AMENDED BY NOT ALLOWING TRANSFERS OF
FUNDS INTO THE INCENTIVE PROGRAM
WITHOUT CITY COUNCIL APPROVAL.
I HEREBY CERTIFY that this Minute Order, approving the Pre-Opening
Marketing Budget for the Convention Center as amended by not allowing
transfers of funds into the Incentive Program without City Council approval,
was adopted by the City Council of the City of Palm Springs, California, in a
meeting thereof held on the 16`h day of March, 2005.
JAMES THOMPSON
City Clerk