AGENDA #4c
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Recommended Adjustment to the Public Access Fee
DATE: December 11, 2000
INTRODUCTION
The purpose of this memorandum is to review options for adjusting the public access fee billed to cable television customers.
Manager’s recommendation: That the Council adopt the attached resolution to increase the public access fee from 68 to 69 cents per month.
BACKGROUND
The cable television franchise approved by the Council and accepted by Time Warner Cable in July 1996, allows the Town to have cable customers billed a public access fee.
The fee is now 68 cents per month. The Town began charging a public access fee of 65 cents under a resolution adopted by the Council on November 11, 1996, and amended that amount to 66 cents on November 13, 1997, to 67 cents on November 25, 1998, and to 68 cents on November 22, 1999.
The Council authorized a performance agreement in February 1998 with The Peoples Channel, Inc. The Peoples Channel, Inc. has been providing public access television services since July 1, 1998. The purpose of the public access fee is to help cover wages, equipment, rent and other costs for management and operation of public access cable television services. The current 68-cent per month public access fee generated about $92,000 for the fiscal year ended June 30, 2000.
On November 27, the Council held a public forum to receive comments on whether the Council should make an annual inflation adjustment, continue at the present 68-cent rate per month, reduce, or eliminate the supplemental public access fee for cable television services.
At the forum, Mr. Robert Gwyn, chairman of The Peoples Channel Board of Directors, said that an increase in the public access fee would help The Peoples Channel increase the number of training classes that it can offer, maintain its equipment, and help fund its efforts to provide health insurance benefits to staff.
Mr. Bob Joesting, former chairman of the Public Access Advisory Committee, told the Council that The Peoples Channel would make good use of the additional access fee and was encouraged by progress the channel had made so far.
At the public forum, there were no objections to the present fee or to adjusting it.
Council Member Evans stated that she had heard some complaints about the poor audio quality on some of The Peoples Channel’s broadcasts. She also recommended that Mr. Gwyn contact the Regional Public Television Consortium to tie in with their efforts to obtain employee health care. Mr. Gwyn said that the channel’s volunteer producers would receive better training on audio capabilities and that he would encourage the Board of Directors to contact the Regional Public Television Consortium.
A Council Member asked how much revenue the increase would generate. Based on staff calculations, the 1-cent inflation increase will amount to approximately $1,353 annually. A Council Member asked if Mr. Gwyn knew how many viewers watched The Peoples Channel. Mr. Gwyn said that the channel had not been able to determine the exact number of viewers.
The Council closed the public forum and referred the comments to the Manager for a follow-up report.
OPTIONS
The cable franchise agreement with Time Warner Cable allows the Town to reduce, eliminate or increase the public access fee once per year. The increase in a given year is limited to an inflation factor, or 3%, whichever is less. The inflation factor is the increase in the most recent Gross National Product-Price Index (GNP-PI) published by the U.S. Department of Commerce, Bureau of Economic Analysis, for the year since the anniversary of the Council’s decision to establish the fee. The most recently-published 12-month inflation figure is 2.08%, or approximately 1 cent.
· Keep the fee at its present level of 68 cents per month, thus not generating increased revenue for The Peoples Channel operations.
· Reduce or eliminate the public access fee.
We recommend approval of the inflation adjustment. The public access fees are the primary source of funding for non-profit public access broadcasting, and we believe it is reasonable to have adjustments for rising costs.
When the public access fee was established originally, the Council did not apply it to Time Warner Cable of Durham customers who reside in the Town. The latter customers receive programming from the cable system based in Durham and therefore do not normally see Chapel Hill public access programming. We continue to encourage Time Warner Cable to offer Chapel Hill cable programming to customers that reside in Durham County. We recommend that the public access fee not apply to Time Warner Cable of Durham customers in Chapel Hill.
RECOMMENDATION
Manager’s Recommendation: That the Council increase the public access fee by the inflation factor permitted under the cable television franchise. We recommend the Council adopt the attached resolution to increase the public access fee from 68 to 69 cents per month.
A RESOLUTION ADOPTING AN INFLATION
ADJUSTMENT TO THE PUBLIC ACCESS FEE BILLED TO CABLE TELEVISION CUSTOMERS IN
CHAPEL HILL (2000-12-11/R-4)
WHEREAS, on November 27, 2000, the Town Council held a public forum on whether to increase the public access fee; and
WHEREAS, the inflation adjustment would not apply to Time Warner Cable of Durham customers who reside in Chapel Hill; and
WHEREAS, a one-cent increase in the public access fee would generate about $1,353 in additional annual funds;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby increases the public access fee from 68 to 69 cents per month.
This the 11th day of December, 2000.