Title
RESOLUTION NO. 2017-058 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA REAUTHORIZING CHULA VISTA MUNICIPAL CODE CHAPTER 5.53, “STATE VIDEO FRANCHISES”
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolution.
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SUMMARY
Cox Communications (“Cox”) has been providing video service within the City pursuant to a state video franchise certificate issued in accordance with the Digital Infrastructure and Video Competition Act of 2006 (“DIVCA”). Pursuant to City ordinance, Cox is required to remit to the City a one percent fee to support public, educational, and governmental (“PEG”) channels [Chula Vista Municipal Code (“CVMC”) section 5.53.040]. Cox has recently obtained a renewal of its franchise certificate from the California Public Utilities Commission. The renewed certificate allows Cox to continue providing service for another ten years and takes effect on April 27, 2017. Cox has requested that the City reauthorize its PEG fee ordinance before it continues to remit the PEG fee under its renewed certificate. Staff recommends that the City Council reauthorize Municipal Code Chapter 5.53 in order to assure the continued collection of the PEG fee.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
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Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable.
DISCUSSION
DIVCA was enacted in 2006 and transferred cable franchising authority from local agencies to the California Public Utilities Commission. DIVCA allows local governments to establish and collect and PEG fees equal to one percent of the franchisee’s gross revenues (as defined in DIVCA), by ordinance. The City adopted such an ordinance in 2012 (Ordinance No. 3230, codified as CVMC Chapter 5.53; the ordinance and accompanying staff report are included at Attachment 1). The ordinance requires, among other things, that state video franchise holders pay the City a percent PEG fee:
“Fee for Support of Local Cable Usage. A fee paid to the City is hereby established for the support of PEG channel facilities consistent with state and federal law. This fee shall be the maximum amount allowed by law, which is currently one percent of a state video franchise holder’s gross revenues, as defined in California Public Utilities Code Section 5860 (the “PEG fee”). The PEG fee shall be remitted quarterly to the City Treasurer and must be received not later than 45 days after the end of the preceding quarter. The PEG fee payment shall be accompanied by a summary that explains the basis for the calculation of the PEG fee for local cable usage. This PEG fee shall commence on July 1, 2012. The City Council may decrease or increase the amount of the PEG fee, up to the maximum amount allowed by law, by resolution.” (CVMC 5.53.050.B.)
Cox first obtained a state video franchise certificate in April 2007. The certificates are given for ten-year terms. Thus, its original certificate would expire this month, but Cox has obtained a renewed certificate from the PUC, which is valid for another ten years. Based on its interpretation of DIVCA, Cox believes that it must obtain an authorization from the City to continue remitting PEG fees to the City under its renewed franchise (see, correspondence from Cox, included at Attachment 2). CVMC 5.53 remains in full force and effect, and has been since its adoption in 2012, requiring all state video franchise holders who operate in the City, including Cox, to remit PEG fees to the City for so long as they operate in the City. However, in light of Cox’s request and in order to assure the continued collection of PEG fees, staff recommends that the City Council reauthorize CVMC 5.53.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section 18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. Reaffirming collection of the PEG Fee supports the goal of Operational Excellence - Uphold a commitment to Fiscal Health by securing the continued collection of this revenue source.
CURRENT YEAR FISCAL IMPACT
In fiscal year 2016 the City received approximately $664,000 in PEG fees. Reaffirming Municipal Code Chapter 5.53.040 PEG Channels and Fees assures the continued collection of the PEG fee.
ONGOING FISCAL IMPACT
The City has received an average of $656,000 on annual basis since fiscal year 2013. Reaffirming Municipal Code Chapter 5.53.040 PEG Channels and Fees assures the continued collection of the PEG fee.
ATTACHMENTS
1. May 22, 2012 Staff Report Amending Chula Vista Municipal Code Chapter 5.52
2. Correspondence from Cox Communications
Staff Contact: Jill Maland, City Attorney’s Office; Angelica Aguilar, Finance Department