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HomeMy WebLinkAbout03/02/15 08 Meeting Location: Municipal Center City of W.Wiley 7100 147th Street West Apple Valley, Minnesota 55124 TELECOMMUNICATIONS ADVISORY COMMITTEE REGULAR MEETING AGENDA MARCH 2, 2015 - 7:00 P.M. 1. Called to Order 2. Approved Agenda 3. Audience—No one requested to speak. 4. Approved Minutes of December 1, 2014 Regular Meeting 5. Regular_ Agenda Items: A. Reviewed 1st Quarter Complaint Log B. Reviewed 1st Quarter Activities Report C. Presented Franchise Renewal Update D. Approved 2014 Annual Report E. Tabled Election of Officers 6. Informational Items A. No FCC Rulemaking and Other Franchise Issues B. Reviewed E-Commerce and Business Development Issues C. No Other Staff and Committee Updates 7. Adjourned NEXT REGULARLY SCHEDULED MEETING: Monday June 1, 2015 7:00 p.m. (Regular) 08 Meeting Location: Municipal Center City of W.Wiley 7100 147th Street West Apple Valley, Minnesota 55124 TELECOMMUNICATIONS ADVISORY COMMITTEE REGULAR MEETING TENTATIVE AGENDA MARCH 2, 2015 - 7:00 P.M. 1. Call to Order 2. Approval of Agenda 3. Audience - 10 Minutes Total Time Limit - For Items NOT on this Agenda 4. Approval of Minutes of December 1, 2014 Regular Meeting 5. Regular_ Agenda Items: A. 1st Quarter Complaint Log B. 1st Quarter Activities Report C. Franchise Renewal Update D. Approve 2014 Annual Report E. Elect Officers 6. Informational Items A. FCC Rulemaking and Other Franchise Issues B. E-Commerce and Business Development Issues C. Other Staff and Committee Updates 7. Adjourn NEXT REGULARLY SCHEDULED MEETING: Monday June 1, 2015 7:00 p.m. (Regular) Telecommunications Advisory Committee City of Apple Valley December 1, 2014 7:00 P.M. Municipal Center Minutes 1. Call to Order Chair Westbrook called the meeting to order at 7:00 p.m. Members Present: Rollin Bible, Jerry Brown, Scott Hugstad-Vaa, John Magnusson, Dale Rodell, David Westbrook Members Absent: Others Present: Charles Grawe, Mark Moore 2. Approval of Agenda Mr. Grawe requested the addition of a brief demonstration of the new cablecast equipment in the council chambers and control room following the franchise items. MOTION: Mr. Rodell moved, second by Mr. Brown,to approve the agenda as amended. Motion passed 6—0. 3. Audience Items There were no audience items. 4. Approval of Minutes of September 8, 2014 Regular Meeting MOTION: Mr. Hugstad-Vaa moved, second by Mr. Brown,to approve the minutes of September 8, 2014 as presented. Motion passed 5 —0 (Mr. Magnusson abstained). 5A. 4th Quarter Complaints Mr. Grawe reported that the City received a number of complaints from residents upset that they are now required to have (and to pay for extra) digital decoding boxes for each television when Charter made its transition from analog to digital signals. Mr. Brown noted that some of the smaller decoder boxes offered very limited feature options. 5B. 4th Quarter Activities Report Mr. Grawe reported that most of the quarter was dedicated to updating the control room and council chambers equipment in Apple Valley. 5C. Franchise Renewal Update Mr. Grawe reported no significant progress on the renewal of the franchise. However, he noted that Charter's focus had been on the transfer of ownership which should be largely complete in December and that Charter's attorney indicated that the company is now in a position to focus on the renewal negotiations. 5D. Franchise Transfer of Ownership Mr. Grawe reported that the City's cable attorney reviewed the documents relating to the corporate restructuring that essentially constitutes a transfer of ownership. The attorney's opinion is that the he did not find evidence that would support the City's denial of the transfer of ownership. The attorney recommends the City approve the transfer with conditions set forth in the draft resolution submitted to the Committee. The Committee briefly discussed the recommendation. MOTION: Mr. Brown moved, second by Mr. Bible,to recommend the City Council adopt a substantially similar resolution approving the transfer of ownership with conditions as recommended by the city's cable attorney. Motion passed 6-0. 5E. Extension of Franchise Agreement Mr. Grawe reported that there has been little progress on the franchise renewal negotiations as Charter has been focusing on the transfer of ownership. Charter's franchise attorney indicates that Charter is now positioned to focus on franchise renewals and requested a one-year extension. Charter's franchise attorney also indicated that she is working off the draft renewal created by the City's cable attorney, so the negotiations are in some ways already underway. The City's attorney recommends the requested extension. The Committee briefly discussed the recommendation. MOTION: Mr. Bible moved, second by Mr. Brown,to recommend the City Council adopt a resolution extending the franchise term for an additional year as recommended by the city's cable attorney. Motion passed 6-0. 5F. View Council Chambers and Control Room Equipment Upgrades The Committee briefly viewed the new equipment and a demonstration of its functionality. 5G. Annual IT Update Mr. Grawe briefly reported on ongoing IT initiatives that have organizational wide impacts, including implementation of an agenda management system, centralized video surveillance recording, and IP telephone system replacement. 5H. 2015 Meeting Schedule MOTION: Mr. Bible moved, second by Mr. Magnusson,to approve the 2015 meeting schedule of March 2nd, June 1St, September 14th, and December 7th. Motion passed 6-0. 6A. FCC Rulemaking and Other Franchise Issues Mr. Grawe reported there is renewed pressure for Congress to pass the Marketplace Fairness Act,which would allow for the collection of sales taxes from remote retailers with no physical presence in the state and even the playing field for local brick and mortar retailers. 6B. E-Commerce and Business Development Issues Mr. Grawe noted that the cities and Dakota County are nearing completion of their study on improving access to fiber throughout the County. 6C. Other Staff and Committee Updates There were no other items. 7. Adjourn MOTION: Mr. Hugstad-Vaa moved, second by Mr. Brown,to adjourn the meeting. Motion passed 6 - 0. The meeting was adjourned at 8:00 p.m. 000 G 00000 0000 000 City of Apple Valley MEMO Administration TO: Mayor, City Council, and City Administrator FROM: Telecommunications Advisory Committee DATE: March 2, 2015 SUBJECT: 2014 ACCOMPLISHMENTS The Telecommunications Advisory Committee held five meetings in 2014. The members of the Committee throughout 2014 were: Rollin Bible, Jerry Brown, John Magnusson, Dale Rodell, Scott Hugstad-Vaa, and David Westbrook. David Westbrook served as Chair and Jerry Brown served as Secretary. Major accomplishments and/or undertakings by the Telecommunications Advisory Committee during 2014 include: • Year Three of Cable Franchise Renewal Process: The City continued work with the renewal of the franchise agreement. The existing agreement took effect in 1999 and has a term of 15 years. Typically, the franchise renewal process takes three years. However, more recent renewals have taken 18 to 24 months of actual negotiation and study. The City used the legal services of Mr. Bob Vose of the firm Kennedy and Graven. The City is working jointly in the renewal process with the Cities of Farmington and Rosemount. While each city will have its own franchise ordinance, the language will be virtually identical in each, allowing for more efficient joint administration of the three franchises and cohesive partnership in the cable commission. There are three significant steps involved in the renewal process. The first step of conducting a needs assessment was completed in 2013. The three cities completed the second step of the renewal process by contracting with the firm of Moss & Barnett to conduct a franchise fee and PEG fee audit review in 2014. The final step is actual negotiations between the cities and the cable company. Typically, the cable company initiates the negotiations by proposing new language. This did not happen, possibly due to delays in the renewal of the neighboring Lakeville franchise with the same company. As a result, the three cities directed legal counsel to draft new language desired by the cities which was distributed to the cable company in 2014. Due to the cable company's internal restructuring in 2014, the company essentially placed negotiations on hold. As a result, the company requested extensions, first to the end of the year and then to the end of 2015 to finish negotiations. As 2014 came to a close, attorneys on both sides were cautiously optimistic that a deal could be reached by the end of 2015. As negotiations did not reach maturity, many of the potential issues involved in negotiations have not been fully identified. However, the company has made a number of moves in 2014 away from providing equipment necessary for the City to receive cable signals at no cost and toward a bill for service model. If this trend continues, then the value of in-kind services received by the City would decrease. • Participation in State-wide Cable Administration Association: The Committee continued its participation in the Minnesota Association of Community Telecommunications Administrators (MALTA). MACTA held several conferences during the year and has proven invaluable in keeping Committee members current with both cable television and telecommunications related trends. The Committee also monitored events pertaining to municipal wireless and broadband service provision. • Participation in Joint Powers Cable Commission: The City of Apple Valley also participated in a joint powers agreement with the Cities of Farmington and Rosemount to provide for certain cable television services. The group approved an operating budget for 2014 and operated for its thirteenth year with a joint cable coordinator serving the three cities. • Review of Cable-related Complaints. The Committee reviewed cable complaints received by Commission staff. The number of complaints in recent years has been historically low and most pertain to unburied service drops or billing issues. In 2014, there were a number of complaints pertaining to Charter's decision to require converter boxes at each television location. This is a business practice decision that is outside the scope of the City's regulatory authority in the franchise. • Franchise Fee and PEG Fee Review: Pursuant to the franchise agreement, the cable company is obligated to pay the City an annual franchise fee equivalent to 5% of their annual gross revenues. Under the renewed franchise, the Cable Company is required to make quarterly franchise fee payments, rather than annual payments. The quarterly payments were as follows: Quarter Franchise Fees PEG Fees First Quarter 2014 $162,053.13 $16,337.00 Second Quarter 2014 $163,392.99 $16,116.00 Third Quarter 2014 $164,019.47 $15,929.50 Fourth Quarter 2014 $166,803.50 $15,647.50 Total $656,269.09 $64,030.00 The franchise fee for 2013 totaled $656,269.09, up from $629,831.51 in 2013. Quarter Franchise Fees PEG Fees First Quarter 2013 $154,539.28 $17,212.00 Second Quarter 2013 $157,655.64 $16,818.00 Third Quarter 2013 $157,346.43 $16,586.00 Fourth Quarter 2013 $160,290.16 $16,515.00 Total $629,831.51 $67,131.00 Pursuant to the franchise agreement, the Cable Company is obligated to collect a PEG fee for the City. Per the franchise agreement, the City's PEG original fee was at $.25 per subscriber but can be increased at the City's discretion within limitations stated in the franchise. In addition, the Cable Company imposed an additional $.25 per subscriber fee to recover the costs of the "capital grant" given to the City in the original franchise. At the completion of the cost"recovery", the Cable Company's $.25 fee was automatically transferred to the City, raising the City's collection to $.50 per subscriber. The City received PEG fees in the amount of$64,030.00 for 2014. The PEG fee revenue for 2013 was $67,131.00, as shown above. This decrease in PEG fee revenues implies a decrease in cable subscribers during the year. The PEG fee revenues are used to finance the City's portion of the joint cable commission. • Capital Equipment Planning and Acquisition: The City continues web streaming its programs. This also allows the City to create short public service announcements and other video enhancements to the website. In 2014, the City placed implementation of a new agenda management system on hold during the election season due to staffing constraints. Related to this project was a switch in web streaming services to a new video integrator. Both projects were reinitiated at the end of 2014, with implementation scheduled for the first quarter of 2015. The new streaming system will allow viewers to link to and view agenda documents while viewing the related Council discussion on the video. In 2014, the City undertook its largest equipment upgrade and replacement project since the construction of the Municipal Center in 2000-2001. Many pieces were no longer supported or couldn't be repaired as parts are no longer available. Further, the old equipment was based on the analog and standard definition standards and many producers do not support those standards any longer, providing digital and HDTV standards with current products. As a result, when one component fails, we could no longer have the option to only replace that component, but rather must replace all of the related components based on the standards they require. The Cities of Farmington and Rosemount face the same issues. As a result, the three cities hired a firm to plan, design, and create a specification for the full replacement of the control room and related council chambers equipment. The implementation took place during the summer of 2014. As a result, the cameras, microphones, mixing, and other live program production equipment has been replaced and upgraded. The City is unable to send out HDTV signals until the cable company makes some adjustments and improvements to its head-end. Once those improvements are in place, the City will migrate its channels to the HD signal. Apple Valley also adopted a policy of diverting some franchise fee funds to a capital equipment fund to support the equipment replacement. This is a necessary step, in part, because the PEG fee rate has not changed since 1999 and PEG revenues have been falling steadily for more than a decade. • Cable-cast of Public Meetings: Cable-casting of City Council and Planning Commission meetings continued in 2014. In addition, City of Farmington and Rosemount City Council and Planning Commission meetings and Dakota County Board meetings were also televised. • Government Access Programming: With the transition to an all-digital cable system, the government channels were relocated and assigned new channel numbers. Government Access Channel 180 (formerly 16) continued to provide government access for the joint powers commission established by the Cities of Apple Valley, Farmington, and Rosemount. Programming and bulletin board materials were added for the other cities. Digitally recorded programming cable-cast on Apple Valley Government Access Channel 180 continued in 2014. In 2008, the Commission assumed all program production duties on behalf of the City for the Valley Beat and Hook & Ladder programs. The City also used City and Commission staff to produce a video of the State of the City address. The City continued to cable-cast live Planning Commission and City Council meetings. These meetings were recable-cast periodically. • Public Access Television: Under the new franchise agreement, Charter Communications is no longer required to provide the same public access television opportunities provided in the past. In 2010, Charter transferred this responsibility to the Cities in the joint powers commission. The cities provided video bulletin board messages on the channel, but not program playback. • Joint Powers Commission Summary: Since its inception, the Commission has provided staffing and support services to the Cities of Apple Valley, Farmington, and Rosemount. However, program production has always been done on an individual city basis. Staff may assist in production of meeting coverage or of a show, but as a provider to a single city client. Apple Valley has been producing two public safety shows for more than two decades. Rosemount and Farmington both expressed an interest in entering program production, but have found the cost of program production to be a barrier to entry. During 2014, Apple Valley proposed a migration to a joint program production model, in which the shows produced by the Commission staff would be targeted to the larger audience of all three cities, as opposed to Apple Valley-oriented shows. Expanding the scope to all three cities not only allows Farmington and Rosemount to enter program production at a lower price point due to shared costs, but also allows the staffing burden and program topics to be spread across the three city, potentially reducing in-kind costs to Apple Valley. This project began with joint production in 2014 for the police show. If successful, a new financial model will be implemented in 2016 with production costs spread to the other cities. Due to the complexities in coordinating with all three communities, program production will shift, at least initially, from every two month to every three months. The Telecommunications Advisory Committee welcomes direction from the City Council as well as any recommendations, questions, or concerns.