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HomeMy WebLinkAbout16 - NB-1 - Adoption & First Reading of Ord - 4/18/2017CITY COUNCIL AGENDA REPORT MEETING DATE: APRIL 18, 2017 ITEM NUMBER: NB -1 SUBJECT: ADOPTION OF AN URGENCY ORDINANCE AND FIRST READING OF AN ORDINANCE REAUTHORIZING THE COLLECTION OF A FEE TO SUPPORT PUBLIC, EDUCATIONAL, AND GOVERNMENTAL ("PEG") CHANNEL FACILITIES WITHIN THE CITY DATE: APRIL 10, 2017 FROM: CITY MANAGER'S OFFICE PRESENTATION BY: DANE BORA, PUBLIC AFFAIRS MANAGER FOR FURTHER INFORMATION CONTACT: DANE BORA (714) 754-5098 RECOMMENDATION: 1. Waive full reading and adopt, by four-fifths vote, Urgency Ordinance No. 17-xx, reauthorizing the public, educational, and governmental fee on state video franchisees operating within the City. 2. Give first reading to Ordinance No. 17-xx, to be read by title only, reauthorizing the public, educational, and governmental fee on state video franchisees operating within the City. BACKGROUND: As authorized by State law, the City of Costa Mesa ("City") imposes a one percent (1 %) public, educational, and governmental access fee ("PEG Fee") on all state -franchised video service providers operating within the City to support PEG channel facilities and activities. The City's existing PEG Fee ordinance does not include any provisions stating it is to expire, but instead is intended to apply to all franchisees operating in the City. However, State law states that the City should reauthorize the PEG Fee upon the expiration of an applicable state franchise and, as a result, it could be argued that the PEG Fee would expire absent the City taking further action. There are currently two state - franchised video service providers operating within the City—AT&T California and Time Warner (now known as Spectrum). The AT&T franchise expired on March 30, 2017, requiring immediate action by the City to ensure the continued authority to collect the PEG Fee from AT&T California. 1 The City has collected the PEG Fee since the inception of the original cable television franchise in 1987. In fact, Costa Mesa was one of the few cities that collected this fee prior to the implementation of the state -franchised system. ANAI YSIS- In 2006, the California Legislature adopted the Digital Infrastructure and Video Competition Act ("DIVCA"), which changed the manner in which video services are regulated by placing local franchising within a state franchising system administered by the California Public Utilities Commission ("CPUC"). DIVCA authorizes cities to adopt an ordinance imposing a fee on state franchise holders to support PEG channel facilities. The City Council established such a fee on December 4, 2007 by adopting Ordinance No. 07-20 to require state -franchised video service providers to pay the City a PEG fee of one percent (1 %) of the video service provider's gross revenues attributable to the City. DIVCA also provides, however, that an ordinance adopting a PEG fee "shall expire, and may be reauthorized, upon the expiration of the state franchise." (Cal. Pub. Utilities Code § 5870(n)) Pacific Bell Telephone Company d/b/a SBC Pacific Bell Telephone Company d/b/a AT&T California ("AT&T") received a state video franchise to operate within the City, which became effective on March 30, 2007. Similarly, Time Warner Cable LLC d/b/a Time Warner Cable, now known as Spectrum, received a state video franchise to operate within the City, which became effective on January 2, 2008. The franchises expire after 10 years. As such, the AT&T franchise expired on March 30, 2017, and the Spectrum franchise is set to expire on January 2, 2018. Pursuant to DIVCA, the City should reauthorize the PEG Fee established by Ordinance No. 07-20 in order to avoid any argument about whether it can continue to collect the fee from AT&T and Spectrum. The proposed ordinances would reauthorize the City's PEG Fee, and therefore preserve funding available to support PEG programming facilities and activities going forward. City staff was just recently made aware of the expiration of the state video franchises for video service providers operating within the City. Because the AT&T franchise expired before staff could bring this matter before City Council, the City faces a potential lapse in collection of the PEG Fee from AT&T until such time as the City Council reauthorizes the fee as required by State law. Thus, because the City depends upon the PEG Fee for capital costs relating to PEG channel facilities, which are essential to providing City residents with important civic programming including emergency alerts and community and government news, an Urgency Ordinance is necessary for the immediate preservation of the public peace, health and safety. 2 The Urgency Ordinance will also enable the City to ensure that it can continue its imposition of the PEG Fee as it relates to AT&T without a lapse beyond the number of days that have elapsed since the expiration of the AT&T franchise. If the City were to adopt a non -urgency ordinance, such ordinance would not become effective until on or about June 2, 2017, which could result in a loss of funding that is needed to provide the capital costs to support PEG channel facilities and activities that are essential to providing Costa Mesa residents with important civic programming. In addition to the Urgency Ordinance, staff recommends that the City introduce and give first reading to Ordinance 17-xx, to be read by title only, which relates to the exact same issue. The regular Ordinance will become effective thirty (30) days after its second reading and will be in effect upon any expiration of the Urgency Ordinance. ALTERNATIVES CONSIDERED: None. FISCAL REVIEW: The ordinances will reauthorize a one percent (1%) PEG fee that the City currently imposes on state -franchised video service providers operating within the City. The City collects approximately $237,000 in PEG fees from AT&T and Spectrum annually. If the City does not reauthorize the PEG Fee, it could be argued that the City will not receive further PEG fees from state -franchised video service providers operating within the City upon the expiration of their respective state franchises. LEGAL REVIEW: The City Attorney's Office has reviewed the draft ordinances and approved them as to form. CONCLUSION: The adoption of the urgency ordinance and regular ordinance will ensure that the City continues to receive the PEG funding on a going forward basis. DANE BORA Public Affairs Manager ATTACHMENTS: 1. Urgency Ordinance No. 17-xx 2. Ordinance No. 17-xx 3 Attachment 1 ORDINANCE NO. 17 - AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, REAUTHORIZING THE PUBLIC, EDUCATIONAL, AND GOVERNMENTAL FEE ON STATE VIDEO FRANCHISEES OPERATING WITHIN THE CITY OF COSTA MESA WHEREAS, Section 5870(n) of the California Public Utilities Code ("Section 5870(n)") was enacted as part of the Digital Infrastructure and Video Competition Act of 2006 and authorized the City of Costa Mesa ("City") to adopt an ordinance establishing a fee on state -franchised video service providers to support public, educational, and governmental ("PEG") channel facilities; and WHEREAS, on December 4, 2007, the City adopted Ordinance No. 07-20, establishing a one percent (1 %) fee for the support of PEG channel facilities and activities within the City ("PEG Fee"), which is codified in Section 19-17 of the Costa Mesa Municipal Code; and WHEREAS, Ordinance No. 07-20 has never been repealed and did not include any expiration date, but was intended to apply to and regulate all current and future franchisees, through 2017 and beyond; and WHEREAS, Section 5870(n) states that such ordinance shall expire, and may be reauthorized, upon the expiration of the state franchise, and therefore it could be argued that the City's ordinance has lapsed; and WHEREAS, Pacific Telephone Company d/b/a SBC Pacific Telephone Company d/b/a AT&T California operates within the City under a state video franchise that expired on March 30, 2017 and was renewed as of the same date ("AT&T Franchise"); and WHEREAS, Time Warner Cable LLC d/b/a Time Warner Cable, now known as Spectrum, operates within the City under a state video franchise that is set to expire on or about January 2, 2018 ("Spectrum Franchise"); and WHEREAS, the City Council desires to expressly reauthorize the PEG Fee codified in Section 19-17 of the Costa Mesa Municipal Code, which fee shall remain unchanged and in full effect as to all state -franchised video service providers operating within the City, including but not limited to, the AT&T Franchise and the Spectrum Franchise, and to further provide for automatic reauthorization of the PEG Fee upon the expiration of future video franchises held by state -franchised video service providers operating within the City. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES ORDAIN AS FOLLOWS: SECTION 1. Urgency Findings. The City Council finds and declares as follows: The adoption of this Urgency Ordinance is necessary for the immediate preservation of the public peace, health, and safety. Currently, the City depends upon the PEG Fee to support PEG access channel facilities, which are essential to providing City residents with important civic programming, including emergency alerts and community and government news. The City was only recently made aware that the AT&T Franchise expired on March 30, 2017, thus potentially requiring reauthorization of the City's PEG Fee pursuant to Public Utilities Code section 5870(n). Because the expiration date for the AT&T Franchise has passed, the City arguably faces a lapse in PEG funding from the AT&T Franchise until the City reauthorizes the PEG Fee. If the City's PEG Fee is not reauthorized immediately, the City may lose funding for its PEG programming facilities. Any loss of funding would jeopardize a trustworthy, reliable and immediate means by which the City communicates with its residents. Any lapse in funding may also lead to confusion among state video franchisees operating within the City regarding the payment of the PEG Fee, leading the City to incur additional costs to recover any overdue fees. Therefore, the City Council finds and determines that the immediate preservation of the public peace, health and safety requires that this Ordinance be enacted as an urgency ordinance pursuant to Government Code section 36937(b) and take effect immediately upon adoption. If this Ordinance does not become effective immediately, but instead becomes effective thirty (30) days after its second reading, funding for City PEG facilities could lapse, causing residents who rely on PEG channels for emergency broadcasts and news updates to lose a vital source of City information. Based on the foregoing, the City Council declares this Ordinance is necessary for the immediate preservation of the public peace, health and safety. SECTION 2. Reauthorization. The City's PEG Fee imposed in Section 19-17 of the Costa Mesa Municipal Code is reauthorized to the extent required by California Public Utilities Code section 5870(n). All state -franchised video service providers operating within the City, including but not limited to those operating pursuant to the AT&T Franchise and the Spectrum Franchise, shall continue to be subject to the PEG Fee required by Section 19-17 of the Costa Mesa Municipal Code, which fee shall remain unchanged and in full effect as to all state -franchised video service providers operating within the City. SECTION 3. Automatic Reauthorization. Commencing from, and after, the effective date of this Ordinance, the City's PEG fee set forth in Section 19-17 of the Costa Mesa Municipal Code shall continue to apply to any new or existing franchisee operating in the City and shall automatically be reauthorized upon the expiration of any existing or future state video franchise(s) held by any state -franchised video service provider operating within the City. This Ordinance shall so renew until such time that the City Council takes formal affirmative action to cease the renewals. SECTION 4. Compliance with CEQA. Adoption of this Ordinance is exempt from the California Environmental Quality Act ("CEQA") under CEQA Guidelines section 15061(b)(3) because it can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment. SECTION 5. Inconsistencies. Any provision of the Costa Mesa Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 6. Severability. If any section, subsection, 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 of the City of Costa Mesa hereby declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional. SECTION 7. Effective Date. This Ordinance shall become effective immediately. SECTION 8. Certification. The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted in the manner required by law. PASSED AND ADOPTED this 18th day of April, 2017. ATTEST: Katrina Foley, Mayor APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, do hereby certify that the foregoing urgency ordinance was introduced and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 18th day of April, 2017, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this day of April, 2017. BRENDA GREEN, CITY CLERK (SEAL) Attachment 2 ORDINANCE NO. 17 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, REAUTHORIZING THE PUBLIC, EDUCATIONAL, AND GOVERNMENTAL FEE ON STATE VIDEO FRANCHISEES OPERATING WITHIN THE CITY OF COSTA MESA WHEREAS, Section 5870(n) of the California Public Utilities Code ("Section 5870(n)") was enacted as part of the Digital Infrastructure and Video Competition Act of 2006 and authorized the City of Costa Mesa ("City") to adopt an ordinance establishing a fee on state -franchised video service providers to support public, educational, and governmental ("PEG") channel facilities; and WHEREAS, on December 4, 2007, the City adopted Ordinance No. 07-20, establishing a one percent (1 %) fee for the support of PEG channel facilities and activities within the City ("PEG Fee"), which is codified in Section 19-17 of the Costa Mesa Municipal Code; and WHEREAS, Ordinance No. 07-20 has never been repealed and did not include any expiration date, but was intended to apply to and regulate all current and future franchisees, through 2017 and beyond; and WHEREAS, Section 5870(n) states that such ordinance shall expire, and may be reauthorized, upon the expiration of the state franchise, and therefore it could be argued that the City's ordinance has lapsed; and WHEREAS, Pacific Telephone Company d/b/a SBC Pacific Telephone Company d/b/a AT&T California operates within the City under a state video franchise that expired on March 30, 2017 and was renewed as of the same date ("AT&T Franchise"); and WHEREAS, Time Warner Cable LLC d/b/a Time Warner Cable, now known as Spectrum, operates within the City under a state video franchise that is set to expire on or about January 2, 2018 ("Spectrum Franchise"); and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES ORDAIN AS FOLLOWS: SECTION 1. Reauthorization. The City's PEG Fee imposed in Section 19-17 of the Costa Mesa Municipal Code is reauthorized to the extent required by California Public Utilities Code section 5870(n). All state -franchised video service providers operating within the City, including but not limited to those operating pursuant to the AT&T Franchise and the Spectrum Franchise, shall continue to be subject to the PEG Fee required by Section 19-17 of the Costa Mesa Municipal Code, which fee shall remain unchanged and in full effect as to all state -franchised video service providers operating within the City. SECTION 2. Automatic Reauthorization. Commencing from, and after, the effective date of this Ordinance, the City's PEG fee set forth in Section 19-17 of the Costa Mesa Municipal Code shall continue to apply to any new or existing franchisee operating in the City and shall automatically be reauthorized upon the expiration of any existing or future state video franchise(s) held by any state -franchised video service provider operating within the City. This Ordinance shall so renew until such time that the City Council takes formal affirmative action to cease the renewals. SECTION 3. Compliance with CEQA. Adoption of this Ordinance is exempt from the California Environmental Quality Act ("CEQA") under CEQA Guidelines section 15061(b)(3) because it can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment. SECTION 4. Inconsistencies. Any provision of the Costa Mesa Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 5. Severability. If any section, subsection, 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 of the City of Costa Mesa hereby declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional. SECTION 6. Effective Date. This Ordinance shall take effect thirty (30) days after its final passage. SECTION 7. Certification. The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted in the manner required by law. PASSED AND ADOPTED this day of , 2017. ATTEST: Katrina Foley, Mayor APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, do hereby certify that the foregoing ordinance was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the day of 2017, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this day of , 2017. BRENDA GREEN, CITY CLERK (SEAL)