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HomeMy WebLinkAbout2/23/2005 - STAFF REPORTS (5) CITY COUNCIL FEBRUARY 23, 2005 CONSENT CALENDAR 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 -J�`JM , � . 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 2 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; • 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, A[4,rtt City Manager David H. Ready, Citoar,%'ger �r Attac ent: 1. Minute Order 2. Resolution 4 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 WITH TIME WARNER AND APPROVING THE AGREEMENT --------------- I HEREBY CERTIFY that this Minute Order, authorizing the City Attorney to prepare a contract ,se.r ices 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 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 Activit Account 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 Activity Account Amount 001 General Fund 29301 Fund Balance 1 $29,745, Adopted this _day of , 2005. AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By City Clerk City Manager