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Home My WebLink About04 - Reauthorizing the City's Public, Educational and Governmental Access Fee on State Video FranchisesCITY OF NEWPORT BEACH `9L,F'P City Council Staff Report March 28, 2017 Agenda Item No. 4 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Dave Kiff, City Manager - 949-644-3001, dkiff@newportbeachca.gov PREPARED BY: Tara Finnigan, Assistant to the City Manager, tfinnigan@newportbeachca.gov PHONE: 949-644-3035 TITLE: Second Reading and Adoption of Ordinance No. 2017-5, Reauthorizing the City's Public, Educational and Governmental Access Fee on State Video Franchises ABSTRACT: The second reading and adoption of Ordinance No. 2017-5 would reauthorize the Public, Educational and Governmental (PEG) fee for all state -franchised, video service providers in Newport Beach. RECOMMENDATION: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and b) Conduct second reading and adopt Ordinance No. 2017-5, An Ordinance of the City Council of the City of Newport Beach, California, Reauthorizing the Public, Educational and Governmental (PEG) Fee on State Video Franchises Operating within the City of Newport Beach. FUNDING REQUIREMENTS: The City of Newport Beach receives approximately $265,000 each year in PEG fee revenue. PEG revenue is restricted and, per a Federal Communications Commission determination, can only be used for capital expenditures (equipment, studios, etc.) related to the City's government channel. 4-1 Adoption of Ordinance No. 2017-5, Reauthorizing the City's Public, Educational and Governmental Access Fee on State Video Franchises March 28, 2017 Page 2 DISCUSSION: On March 14, 2017, the City Council introduced and passed to second reading Ordinance No. 2017-5. The ordinance reauthorizes the PEG fee for all state -franchised, video service providers in Newport Beach. The City programs and operates a government channel called Newport Beach TV (NBTV). In May 2007, the Newport Beach City Council adopted Ordinance No. 2007-9, adding Section 5.43.030(B) to the Newport Beach Municipal Code (NBMC). This NBMC section imposes a PEG fee of 1 % of video service gross revenue on any holder of a state franchise issued pursuant to the Digital Infrastructure and Video Competition Act of 2006 (codified in the California Public Utilities Code Section 5800, et.seq.) operating within Newport Beach. The City currently receives PEG fee revenues from three video service providers — Cox Communications, Spectrum (formerly Time Warner / Charter), and AT&T. The state franchise agreements for these providers are due to expire in 2017 or 2018. As the service providers renew their franchises, staff is recommending the reauthorization of the PEG fee. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENT: Attachment A — Ordinance No. 2017-5 4-2 ATTACHMENT A ORDINANCE NO. 2017- 5 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, REAUTHORIZING THE PUBLIC, EDUCATIONAL, AND GOVERNMENT FEE ON STATE VIDEO FRANCHISES OPERATING WITHIN THE CITY OF NEWPORT BEACH WHEREAS, on May 22, 2007, the City Council for the City of Newport Beach ("City") adopted Ordinance No. 2007-9 which, among other things, added Section 5.43.030(8) to the Newport Beach Municipal Code ("NBMC"); WHEREAS, NBMC Section 5.43.030(8) imposes a fee on any holder of a state franchise issued pursuant to the Digital Infrastructure and Video Competition Act of 2006 ("DIVCA") operating within the City; the fee is one percent (1 %) of the state franchisee's "Gross Revenue," as defined in DIVCA and the NBMC, and is for the City to use for public, educational, and governmental ("PEG") purposes consistent with state and federal law; WHEREAS, California Public Utilities Code Section 5870(n) states that the City's ordinance imposing a PEG fee on state franchisees expires, and may be reauthorized, upon the expiration of the state franchise; WHEREAS, the State of California Public Utilities Commission ("CPUC") issued California Video Franchise Certificate Franchise Number 0002 to Pacific Bell Telephone Company d/b/a SBC Pacific Bell Telephone Company d/b/a AT&T California, effective March 30, 2007 ("AT&T Franchise"), which is set to expire and renew on March 30, 2017; WHEREAS, the CPUC issued California Video Franchise Certificate Franchise Number 0003 to CoxCom, Inc. d/b/a Cox Communications, effective April 27, 2007 ("Cox Franchise"), which is set to expire and renew on April 27, 2017; WHEREAS, the CPUC issued California Video Franchise Certificate Franchise Number 0020 to the entity doing business as Time Warner Cable now known as Spectrum, effective January 2, 2008 ("Time Warner Cable/Spectrum Franchise"), which is set to expire on January 2, 2018; and WHEREAS, the City Council wishes to adopt an ordinance expressly re- authorizing the PEG fee in NBMC Section 5.43.030(8) for: (1) AT&T Franchise; (2) Cox Franchise; and (3) Time Warner Cable/Spectrum Franchise. NOW THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: The City's PEG fee imposed in NBMC Section 5.43.030(8) is hereby reauthorized to the extent required by California Public Utilities Code Section 5870(n). All state franchisees operating within the City, including but not limited to the AT&T Franchise, the Cox Franchise, and the Time Warner Cable/Spectrum Franchise, shall continue to collect and remit the PEG fee as required in NBMC Section 5.43.030(8), which 4-3 Ordinance No. 2017 - Page 2 of 3 fee shall remain unchanged and in full effect as to all state franchisees. The City Council expressly intends for this ordinance to apply retroactively to the expiration and renewal of the AT&T Franchise and/or the Cox Franchise to the extent either or both such franchises expire prior to the effective date of this ordinance. Section 2: The recitals provided in this ordinance are true and correct and are incorporated into the substantive portion of this ordinance. Section 3: If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 4: The City Council finds the introduction and adoption of this ordinance is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Alternatively, the City Council finds the introduction and approval of this ordinance is not a project under CEQA Regulation Section 15061(b)(3) because it has no potential for causing a significant effect on the environment. Section 5: The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be published pursuant to City Charter Section 414. This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 14th day of March, 2017, and adopted on the 28th day of March, 2017, by the following vote, to -wit: AYES, COUNCILMEMBERS NOES, COUNCILMEMBERS ABSENT COUNCILMEMBERS Ordinance No. 2017 - KEVIN MULDOON, MAYOR ATTEST: LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE AARON C. HARP, CITY ATTORNE'3 Page 3 of 3 4-5