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CC 06-10-14 Supplemental InformationMEMORANDUM TO: CITY COUNCIL FROM: STEVEN ADAMS, CITY MANAGER I SUBJECT: AGENDA ITEM 11.C.-SUPPLEMENTAL INFORMATION DATE: JUNE 10, 2014 After distribution of the proposed budget adjustments, staff learned that costs related to expiration of the cable television franchise agreement are much more than anticipated. Under the current franchise agreement, the cable operator is required to provide at no cost a dedicated fiberoptic system (known as an institutional network or "1-Net") to City facilities for connection of the City's computer network. Under new Federal law, cable operators are no longer required to obtain franchise agreements with local governments and instead can opt to operate under a State franchise. We have been notified that Charter Communications intends to do this when the existing franchise agreement expires in August. As a result, the City will be required to begin paying for use of the 1-Net, which is estimated to cost $40,000 -$60,000 annually. The City's IT Manager is evaluating options to modify the system in order to minimize the ongoing cost increase. As a result, staff does not yet know the specific cost. In the meantime, we are recommending that the funding proposed for an increase in IT consultant services be reduced from $90,000 to $75,000 and funding proposed for an increase in parks and facilities maintenance be reduced from $50,000 to $40,000. There is approximately $5,000 already recommended for the 1-Net. Therefore, this will provide $30,000 for the service. Additional costs over that will be recommended to be funded from contingency funds that have been included in the recommended adjustments. Please let me know if you have any questions. Thank you. cc. Director of Administrative Services