CC 2018-08-28_12a Introduce Ordinance Reauthorize PEG Fee MEMORANDUM
TO: CITY COUNCIL
FROM: JAMES BERGMAN, CITY MANAGER
BY: HEATHER WHITHAM, CITY ATTORNEY
SUBJECT: CONSIDERATION OF INTRODUCTION OF AN ORDINANCE AMENDING
SECTION 5.25.070 OF TITLE 5 OF THE ARROYO GRANDE MUNICIPAL
CODE TO REAUTHORIZE THE PUBLIC, EDUCATIONAL , AND
GOVERNMENT ACCESS FEE ON STATE CABLE FRANCHISES
OPERATING WITHIN THE CITY
DATE: AUGUST 28, 2018
SUMMARY OF ACTION:
The Ordinance will reauthorize a fee to support Public, Education, and Government (PEG)
access that will apply to Charter Communications as it provides service under its State
Video Franchise.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is no fiscal impact associated with the recommended action. Estimated annual
revenue collected from PEG fees is approximately $35,000, which is used to support the
City’s PEG channel and programming.
RECOMMENDATION:
It is recommended the City Council introduce an Ordinance amending Section 5.25.070 of
Title 5 of the Arroyo Grande Municipal Code (AGMC) to reauthorize the Public, Educational
and Government (PEG) fee on State cable franchisees operating with the City.
BACKGROUND:
On July 8, 2014, the City Council adopted Ordinance No. 664 adding Chapter 5.25 to the
Arroyo Grande Municipal Code relating to State-issued cable television franchises.
Adoption of the Ordinance was a result of the expiration of the City’s long-term franchise
agreement with Charter Communications, at which time Charter began operating under a
State cable television franchise issued in accordance with the Digital Infrastructure and
Video Competition Act of 2006 (DIVCA).
ANALYSIS OF ISSUES:
While local governments no longer have authority to grant local cable franchises, they do
have some rights and responsibilities under DIVCA, including the right to require State
video franchise holders to support public, educational, and government (PEG) access
activities by paying a PEG fee. Section 5.25.070 of the City’s Municipal Code sets forth
Item 12.a. - Page 1
CITY COUNCIL
CONSIDERATION OF INTRODUCTION OF AN ORDINANCE AMENDING SECTION
5.25.070 OF TITLE 5 OF THE ARROYO GRANDE MUNICIPAL CODE TO
REAUTHORIZE THE PUBLIC, EDUCATIONAL, AND GOVERNMENT ACCESS FEE ON
STATE CABLE FRANCHISES OPERATING WITHIN THE CITY
AUGUST 28, 2018
PAGE 2
provisions for public, educational, and government access and establishes a fee of one
percent (1%) of a franchise holder’s gross revenues to support PEG facilities, to be paid by
any franchise holder operating within the City of Arroyo Grande. The fees collected may
only be used for capital needs associated with PEG channels (Channel 20). For example,
PEG funds were recently utilized to upgrade the City’s cablecasting equipment in the
Council Chambers.
Arroyo Grande is currently served by CCO SoCal I, LLC, dba Charter Communications
(“Charter”), and is the City’s sole State video franchise holder. Based on information from
the California Public Utilities Commission (CPUC), Charter was granted a renewal of its
State video franchise effective January 2, 2018. Charter has submitted a letter to the City
requesting the City reauthorize its PEG fee in order to continue receiving PEG funds.
Public Utilities Code Section 5870(n) provides that the City may reauthorize the PEG fee
established by Ordinance No. 664 in order to continue to collect the PEG fee. The
proposed Ordinance adds a section to the Arroyo Grande Municipal Code that provides
language which will reauthorize the PEG fee and include automatic reauthorization upon
the expiration of any existing or future State video franchises held by any State-franchised
video service provider operating within the City.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Introduce the Ordinance,
2. Modify and introduce the Ordinance,
3. Do not introduce the Ordinance, or
4. Provide direction to staff.
ADVANTAGES:
Reauthorization of the PEG fee will allow the City to continue to collect PEG fees to
support its PEG programming and are essential to providing City residents with access to
important civic programming, including the broadcasting of public meetings, community
news, alerts, and announcements.
DISADVANTAGES:
No disadvantages have been identified associated with the recommended action.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
Item 12.a. - Page 2
CITY COUNCIL
CONSIDERATION OF INTRODUCTION OF AN ORDINANCE AMENDING SECTION
5.25.070 OF TITLE 5 OF THE ARROYO GRANDE MUNICIPAL CODE TO
REAUTHORIZE THE PUBLIC, EDUCATIONAL, AND GOVERNMENT ACCESS FEE ON
STATE CABLE FRANCHISES OPERATING WITHIN THE CITY
AUGUST 28, 2018
PAGE 3
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2. At the time of report publication, no comments have
been received.
Item 12.a. - Page 3
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE AMENDING SECTION 5.25.070 OF TITLE 5 OF THE ARROYO
GRANDE MUNICIPAL CODE TO REAUTHORIZE THE PUBLIC,
EDUCATIONAL, AND GOVERNMENT (PEG) FEE ON STATE CABLE
FRANCHISEES OPERATING WITHIN THE CITY
WHEREAS, the City Council previously adopted Ordinance No. 664 enacting Arroyo
Grande Municipal Code Section 5.25.070, which establishes public, educational and
governmental (“PEG”) access and imposes a PEG fee on state cable franchisees
operating with the City, as authorized in the Digital Infrastructure and Video Competition
Act of 2006 (“DIVCA”); and
WHEREAS, DIVCA established a state video franchising system that replaced local cable
franchising, but also recognized the continued need to protect local revenues and control
of public rights of way; and
WHEREAS, DIVCA provides that state video franchises are issued by the California
Public utilities Commission (“CPUC”) and have a stated term of ten (10) years; and
WHEREAS, Ordinance No. 664 has never been repealed and did not have an expiration
date, but was intended to apply to and regulate current and future franchises; however,
California Public Utilities Code Section 5870(n) states that such ordinances shall expire,
and may be reauthorized, upon the expiration of the state franchise; and
WHEREAS, the City desires at this time to reauthorize Ordinance No. 664 and the PEG
fee imposed by Arroyo Grande Municipal Code Section 5.25.070; and
WHEREAS, CCO SoCal I, LLC, dba Charter Communications, currently holds a state
franchise for services within the City of Arroyo Grande.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DOES
ORDAIN AS FOLLOWS:
SECTION 1. The above recitals and findings are true and correct and are incorporated
herein by this reference.
SECTION 2. Section 5.25.070 of the Arroyo Grande Municipal Code is hereby amended
in its entirety to read as follows:
5.25.070 - Public, educational and government access and PEG fee.
A. PEG Channel Capacity.
1. A state franchise holder shall designate a sufficient amount of capacity
on its network to allow the provision of at least three PEG channels to
satisfy the requirement of state law, within the time limits specified by state
law. This section shall serve as the request for PEG channels required by
California Public Utilities Code subsection 5870(a).
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ORDINANCE NO.
PAGE 2
2. A state franchise holder shall provide an additional PEG channel when
the standards set forth in subsection 5870(d) of the California Public
Utilities Code are satisfied by the city or any entity designated by the city
to manage one or more of the PEG channels.
B. PEG Fee. As provided in CPUC subsection 5870(n), the city hereby
establishes a fee of one percent of a franchise holder's gross revenues
to support PEG facilities, to be paid by any franchise holder operating
within the boundaries of the city of Arroyo Grande in accordance with the
following:
1. The fee shall be payable to the city quarterly, and shall be paid no later
than June 1, September 1, December 1 and March 1 for the preceding
calendar quarter for which the payment is due.
2. As permitted by CPUC subsection 5870(o), any franchise holder
operating in the city may recover the PEG fees required herein as a
separate line item on the regular bill of each subscriber.
C. The PEG fee authorized by subsection B, above, is hereby reauthorized to
the extent required by Section 5870(n) of the California Public Utilities Code.
As such, all state franchisees operating within the City whose franchise is
renewed shall continue to collect and remit the PEG channel facilities fee
as set forth in this section, and such fee shall be automatically reauthorized
as to each affected state video franchise holder upon the expiration of any
state video franchise. Any and all reauthorizations shall be effective for as
long as such reauthorization is required by law.
SECTION 3. This Ordinance is exempt from the California Environmental Quality Act
(CEQA) pursuant to CEQA Guideline 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. A summary of this Ordinance shall be published in a newspaper published
and circulated in the City of Arroyo Grande at least five (5) days prior to the City Council
meeting at which the proposed Ordinance is to be adopted. A certified copy of the full text
of the proposed Ordinance shall be posted in the office of the City Clerk. Within fifteen
(15) days after adoption of the Ordinance, the summary with the names of those City
Council members voting for and against the Ordinance shall be published again, and the
City Clerk shall post a certified copy of the full text of such adopted Ordinance. This
Ordinance shall take effect and be in full force and effect thirty (30) days after its passage.
SECTION 5. This Ordinance shall take effect and be in full force and effect thirty (30)
days after its passage.
SECTION 6. If any section, subsection, sentence, clause, or phrase of this Ordinance is
for any reason held to be invalid or unconstitutional by a decision of any court of
competent jurisdiction, such decision shall not affect the validity of the remaining portions
of this Ordinance. The City Council hereby declares that it would have passed this
Ordinance and each and every section, subsection, sentence, clause, or phrase not
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ORDINANCE NO.
PAGE 3
declared invalid or unconstitutional without regard to whether any portion of the ordinance
would be subsequently declared invalid or unconstitutional.
On motion by Council Member ______, seconded by Council Member _______, and by
the following roll call vote to wit:
AYES:
NOES:
ABSENT:
the foregoing Ordinance was adopted this ____ day of _______, 2018.
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ORDINANCE NO.
PAGE 4
___________________________________
JIM HILL, MAYOR
ATTEST:
___________________________________
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
________________________________
JAMES A. BERGMAN, CITY MANAGER
APPROVED AS TO FORM:
___________________________________
HEATHER K. WHITHAM, CITY ATTORNEY
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