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HomeMy WebLinkAboutR-1991-D5967 Cable TV Consulting Agreement with R. Craig Ackerson59 67 RESOLUTION NO. A RESOLUTION authorizing execution of a Second Cable Televi- sion Consulting Service Agreement with R. Craig Ackerson. WHEREAS, the City of Yakima operates Yakima Community Television, a public access cable television station, in addi- tion to franchising a private cable television operator within the City of Yakima; and WHEREAS, the City of Yakima lacks such expertise on its staff and needs consultant services to plan for the intermedi- ate and final steps of renewal of the Cable Television Fran- chise Agreement; and WHEREAS, the City of Yakima also needs consultant ser- vices to plan new services and the integration of new technol- ogies with respect to Yakima Community Television; and WHEREAS, R. Craig Ackerson, dba R. Craig Ackerson, Con- sulting, is knowledgeable and experienced in cable television consulting, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager and the City Clerk are hereby authorized and directed to execute the attached and incorporated "Cable Television Consulting Service Agreement." ADOPTED BY THE CITY COUNCIL this 42!,?,./,tday of 1991. c?,0_10- Mayor ATTEST: City Clerk (Res\Cable.TV) THIRD CABLE TELEVISION CONSUJLTING SERVICE AGREEMENT WHEREAS, City of Yakima operates Yakima Community Television, a public access cable television station in addition to franchising a private cable television operator within the City of Yakima; and WHEREAS, the City of Yakima needs consultant services to plan for the intermediate and final steps of franchise renewal for the franchised cable television system; and WHEREAS, the City of Yakima also needs consultant services to plan for long range cable access; and WHEREAS, R. hereafter called consulting work issues facing the the City currently Craig Ackerson, dba R. Craig Ackerson Consulting, "Ackerson" is experienced in cable television and knowledgeable in cable television planning City of Yakima and has heretofore contracted with to provide consulting services and the City does not possess such expertise on its staff, now, therefore, The City of Yakima, "City" and R. Craig Ackerson, dba R. Craig Ackerson Consulting, "Ackerson" mutually agree as follows: 1. Work Product. Ackerson shall write for the City two comprehensive reports on the following subjects: A. Franchise Renewal. This report will cover the intermediate and concluding steps of franchise renewal with emphasis on compliance with the formal renewal process out- lined by federal law. This report will be a comprehensive assessment of the refranchising process utilized in Yakima, and include a summary of information gathered in community surveys and meetings. This report will also discuss future trends in the cable industry and ways of assuring local re- sponsiveness to emerging technologies and changing federal regulations. The report will include a comprehensive outline of resources used in preparing the report. B. Long Range Cable Access Planning. This report will cover continued exploration of long-range cable television planning with emphasis on updating and expanding pub- lic/education/government (PEG) access services in Yakima, especially in the area of local government programming and training applications. The information in the report will include an assessment of new technologies and their applica- tions in our are based on community and municipal needs. The report will contain a comprehensive outline of resources used in preparing it. 2. Time. Ackerson shall finish the work product within one (1) year of execution of this agreement as written below. Ackerson Page 1 (Agr\Cable.TV) shall deliver such work products to the Director of Community and Economic Development, hereafter "Director," at City Hall, Yakima, Washington, before the expiration of said one year. Ackerson shall make monthly written reports to the Director on the progress of the work product before each payment. 3. Independent Contractor. The parties agree that Ackerson is an independent contractor and not an employee of the City. Ackerson shall make no claim of City employment or claim any relat- ed employment benefits from the City including but not limited to medical benefits. Ackerson shall not be subject to control and direction of City officers and employees. Ackerson shall have access, at all reason- able times, to City files and records related to the work product. Ackerson shall use his own word processing equipment, paper, and other materials to write the work product. Except for consulting with City officers and employees regarding the work product and the research of City records concerning such work product, this con- tract shall not be performed by Ackerson on City property or with any City facilities whatsoever. 4. Taxes and Assessments. Ackerson shall pay all taxes and assessments, including but not limited to, federal income with- holding tax and social security tax (including any penalties), which may be assessed either party as a result of this agreement. In the event the City is assessed a tax, penalty, or assessment as a result of this agreement, Ackerson shall pay the same before it shall become due. 5. Consideration. The City shall pay Ackerson Twenty -Five Thousand Two Hundred Dollars ($25,200.00) for the work product payable at the rate of Two Thousand One Hundred Dollars ($2,100.00) per month, due on the monthly anniversary date of the agreement. 6. Termination. This agreement shall terminate one (1) year after its execution unless otherwise terminated earlier by either party. Either party may terminate this agreement by serving upon the other party a written notice of such termination thirty (30) days prior to the termination. The Director shall receive notice for the City. Upon such early termination Ackerson shall give to the Direc- tor, upon termination, all notes, drafts, and materials related to the work product together with any materials belonging to the City of Yakima related to the work product. Upon early termination the City shall pro -rate final payment to the date of termination. 7. Entire Agreement. This writing constitutes the entire agreement between the parties. Page 2 (Agr\Cable.TV) 8. Assignment. Ackerson shall not assign any of the work product to be performed under this agreement without the consent of the Director. EXECUTED this CITY OF YAKIMA: City Manage ATTEST: day of City Clerk CITY CONTRACT NO. 9/-79b /67 (Agr\Cable.TV) , 1991. R. Craig Aceson, dba R. Craig Ackerson Consulting 3208 W. Yakima Avenue Yakima, Washington 98902 Page 3 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT ITEM NO. 10 FOR MEETING OF: July 23, 1991 ITEM TITLE: Renewal of Cable Consulting Services Contract SUBMITTED BY: Glenn K. Rice, Director of Community and Economic Development CONTACT PERSON / TELEPHONE: Wendy Warren, Cable Communications Manager -- 575-6092 SUMMARY EXPLANATION: This report summarizes the activities and accomplishments of the cable television consultant over the past year and requests a one-year renewal of the Cable Television Consulting Services contract. Attachments: A) Section 626, Cable Act of 1984. B) Third Cable Consulting Services Contract C) Resolution Authorizing Execution of Cable Television Consulting Services Agreement EXHIBITS X Resolutions Ordinance Map/plan Notif APPROVAL FOR SUBMITTAL: Contract Minutes ion List Other: STAFF RECOMMENDATION: Accept report and authorize execution of the Cable Consulting Services Agreement BOARD RECOMMENDATION: COUNCIL ACTION: 6/25/91-, Def erred for three weeks 7/23/91: Resolution adopted. Resolution No. D-5967. Memorandum TO: Honorable Members of Council and Richard Zais, City Manager FROM: Glenn K. Rice, Director of Community and Economic Development and Wendy Warren, Cable Communications Manager DATE: June 17, 1991. RE: Cable Consulting Services During the past year, the City of Yakima has engaged the professional consulting services of R. Craig Ackerson for assistance on a number of cable television regulatory issues. During that time, Mr. Ackerson has compiled information regarding customer service policies, community needs assessment surveys, model franchise documents from other communities, and identified several "historical" issues for further research. This report provides a summary of his activities and requests approval of a third one-year contract for his consulting services as we move into the most active phase of the franchise renewal process. Overview of Consultant's Activities The current contract with Mr. Ackerson specified two areas in which his expertise would be used: continued research on long-range cable television planning, and a comprehensive overview of the franchise renewal process and key renewal issues. Long range planning Cable television continues to change rapidly in a several ways: the number and variety of services offered, technological advances, consolidation of cable systems, and the "vertical integration" of cable companies with programming services. In addition, Congress as well as state and local governments are exploring several aspects of cable re -regulation. Effective long-range planning requires broad awareness of these issues. Mr. Ackerson has researched these topics at cable regulatory offices in the Northwest, through other professional contacts, and trade and technical journals. Today cable television services range from the simple -- a broader array of channels -- to the complex -- interactive information systems, for example. This information is being compiled into Mr. Ackerson's year-end report and will be incorporated into community surveys as well as forming one key area for discussion with the cable company during the franchise renewal. The rapid changes in cable television technology -- most importantly, fiber optics and compressed digital video -- will be important considerations in upgrading the Yakima system. The cost of installing fiber optic cable has dropped well below the cost of copper cable, but fiber's fragility may make it impractical as a total system option. However, fiber could be used with copper and combined with advances in compressed digital video -- a means of "squeezing" more channels into the existing electronic band -- to create an economically feasible upgrade of Yakima's fifteen year old system. Another development to watch is direct broadcast satellite (DBS). DBS would place a small receiving dish on each home with no cables required. While DBS may offer advantages for television consumers, for local jurisdictions the question becomes how to regulate DBS and ensure the rights of the customer. The federal regulation guidelines on it could have serious implications for local government. Other concerns which will impact long-range planning are based on the consolidation of cable systems into fewer and fewer major corporations. TCI is the largest cable operator in the U.S. and the world, and serves more than 20% of all American cable customers. Many of these same corporations own several primary cable programming sources, a situation called "vertical integration." TCI either owns outright or has controlling interest in American Movie Classics, Turner Network Television, CNN, Headline News, and Black Entertainment Network , to name a few. These corporations are also looking to enter the personal communications market through the introduction of "micro" cellular systems. Congress and the FCC are attempting to address these future technologies and local governments will have to implement federal rule changes. Franchise renewal Issues related to the franchise renewal process have occupied the bulk of Mr. Ackerson's time over the past year and that will be the case throughout this next year. In November, 1990, TCI formally requested the franchise renewal process be opened. This is in accord with Section 626 of the 1984 Cable Act. (See Attachment A.) The City is required by the Act to begin proceedings which will gather public input on future cable needs and the past performance of the cable operator. That process has been initiated within the timeframe mandated in the Act. This division, working with a subcommittee of the Community Programming Advisory Committee, has developed a survey based on information Mr. Ackerson and I gathered from the Association of Washington Cities and several individual communities. The survey will be distributed in August. We have identified several issues and concerns which will need to be addressed during the renewal process. Mr. Ackerson has provided background and research on the following: > Updating and expanding cable access services including the future addition of a local government channel. Also suggestions on improved cooperation with the educational access channels operated by the Yakima Valley Vocational Skills Center. > Municipal ownership yielding a determination that this is not a suitable alternative for Yakima at this time. > Model cable television ordinances and franchise agreements, including addition of periodic performance reviews of the cable operator and language which is flexible enough to accommodate changes in federal or state statutes. > Customer service policies. > Records auditing provisions, and procedures for notifying the City of changes in cable services or rates. > Historical issues which may impact renewal discussions including leased access provisions, educational access channel usage, and definitions of "gross revenues." > Review of technical compliance requirements including condition of the current system's hardware, signal standards and signal leakage. > Review of communications with other local governments and their franchises. > Review of communications with schools, colleges, and community organizations regarding cable television issues. -2 - Cable Consultant Contract Renewal Cable Communications Division June 20, 1991. As a condition of his current contract, Mr. Ackerson is finalizing a comprehensive report covering these issues and his activities of the past year. That report will be formally presented to Council in the near future. Request for Renewal of the Professional Services Contract Mr. Ackerson has completed the requirements of the current contract including filing monthly reports with the Cable Communications Office and authoring two written reports on long-range planning and franchise renewal. His expertise in cable system operation has been instrumental in posing critical questions regarding cable issues. His assistance has enhanced staffs effectiveness in identifying compliance and technology issues as well understanding the many kinds of cable company reports we have received. In addition, Mr. Ackerson's "insider's" viewpoint has given us a clearer understanding of the business constraints the cable industry works with, constraints which sometimes cause friction with local governments. The City and the cable company share the goal of offering quality service to consumers. Mutual understanding of business and government constraints furthers our ability to work together toward that goal. The City is now moving into the heart of the franchise renewal process. The information gathered to date will be used to evaluate citizen surveys, develop an agenda for public meetings, and identify the critical discussion points for the negotiations. The outcome of the negotiations -- a new franchise agreement -- will affect the citizens of Yakima for ten to twenty years. As we have said in the past, city staff has considerable knowledge in the area of routine cable regulatory duties. However, franchise renewal is a complex process which only occurs once every fifteen years and will benefit from a level of expertise not required in daily regulatory oversight. Therefore we are recommending a one-year renewal of Mr. Ackerson's Cable Television Consulting Services Agreement to deal with the continuing issues of franchise re -negotiation. The contract covers the same two areas as before, franchise renewal and long-range planning. There is now even more emphasis on the renewal aspects; in fact, we anticipate that Mr. Ackerson will spend 95% of his time on renewal issues. The work program for the coming year includes: > working with the Cable Communications Manager and cable operator to assure compliance with the Cable Act of 1984. > assisting in evaluating community surveys and information gathered at public meetings. > working with the Cable Communications Manager and a citizen committee to develop a long-range plan for cable services in general and access television in particular for the City of Yakima. > working with the Cable Communications Manager and the Legal Department in developing a standard cable television ordinance for the City and a separate franchise agreement for the specific company or companies the City awards the franchise to. > advising on technical aspects of cable television. The consultant's work will be summarized in monthly reports to the Director of Community and Economic Development and the Cable Communications Manager. The consultant will also submit a final detailed report to Council at the end of the contract year. -3 - Cable Consultant Contract Renewal Cable Communications Division June 20, 1991. Financial Impact The proposed contract renewal calls for compensating the consultant through progress payments not to exceed $2100 per month for a maximum of $25,200 over the one year term (July 1, 1991, through June 30, 1992). This is equal to the previous contract terms. There are sufficient funds in the current budget to cover the contract renewal. The 1991 budget contains an appropriation of $ 29,700 for Professional Services of which $12,600 was planned for the current cable consulting contract. The additional funds were budgeted in anticipation of a possible cable consulting contract renewal and outside legal services on issues of cable regulatory law. It is important to remember that we are now in the renewal period outlined in the Cable Act. The Act makes clear that reasonable expenses incurred by the City in that process -- including costs of a consultant -- may be recovered from the cable operator without impairing regular franchise fees. Recommendation We propose renewing the Consulting Services Contract with R. Craig Ackerson Consulting for a period of one year. (See Attachment B.) As stated in the original proposal to engage Mr. Ackerson's services, he has more than 15 years experience within the cable industry, including five years as regional manager for McCaw Cablevision in Yakima. He has been a cable consultant for four years and has clients in both Washington and Oregon. He has established a sound working relationship with city staff and the cable operator as well. His expertise has translated into cost -savings for the City and revenue - enhancements. Therefore, we recommend utilizing $12,600 of the remaining Professional Services line item in the Cable Communications 1991 budget in order to contract Craig Ackerson to perform specific services as noted above. He is not a City employee and performs his services away from City facilities. Thank you. -4 Cable Consultant Contract Renewal Cable Communications Division June 20, 1991. Attachment A IV -A-13 PUBLIC LAW 98-549—OCT. 30, 1984 98 STAT. 2791 services required by the franchise at the time it was granted will be maintained after such modification. "(2) Any final decision by a franchising authority under this subsection shall be made in a public proceeding. Such decision shall be made within 120 days after receipt of such request by the franchising authority, unless such 120 day period is extended by mutual agreement of the cable operator and the franchising authority. "(bX1) Any cable operator whose request for modification under Courts. U.S. subsection (a) has been denied by a final decision of a franchising authority may obtain modification of such franchise requirements pursuant to the provisions of section 635. "(2) In the case of any proposed modification of a requirement for facilities or equipment, the court shall grant such modification only if the cable operator demonstrates to the court that— "(A) it is commercially impracticable for the operator to comply with such requirement; and "(B) the terms of the modification requested are appropriate because of commercial impracticability. "(3) In the case of any proposed modification of a requirement for services, the court shall grant such modification only if the cable operator demonstrates to the court that the mix, quality, and level of services required by the franchise at the time it was granted will be maintained after such modification. "(c) Notwithstanding subsections (a) and (b). a cable operator may, upon 30 days' advance notice to the franchising authority, rear- range, replace, or remove a particular cable service required by the franchise if— "(1) such service is no longer available to the operator; or "(2) such service is available to the operator only upon the payment of a royalty required under section 801(bX2) of title 17, United States Code, which the cable operator can document— "(A) is substantially in excess of the amount of such payment required on the date of the operator's offer to provide such service. and "(B) has not been specifically compensated for through a rate increase or other adjustment. "(d) Notwithstanding subsections (a) and (b). a cable operator may take such actions to rearrange a particular service from one service tier to another, or otherwise offer the service, if the rates for all of the service tiers involved in such actions are not subject to regula- tion under section 623. "(e) A cable operator may not obtain modification under this section of any requirement for services relating to public, educa- tional. or governmental access. "(0 For purposes of this section, the term 'commercially impracti- cable' means, with respect to any requirement applicable to a cable operator, that it is commercially impracticable for the operator to comply with such requirement as a result of a change in conditions which is beyond the control of the operator and the nonoccurrence of which was a basic assumption on which the requirement was based. "RENEWAL "SEc. 626. (a) During the 6 -month period which begins with the 47 USC 546. 36th month before the franchise expiration. the franchising author- ity may on its own initiative, and shall at the request of the cable IV -A-14 98 STAT. 2792 PUBLIC LAW 98-549—OCT. 30, 1984 operator, commence proceedings which afford the public in the franchise area appropriate notice and participation for the purpose of— "(1) identifying the future cable -related community needs and interests; and "(2) reviewing the performance of the cable operator under the franchise during the then current franchise term. "(bXl) Upon completion of a proceeding under subsection (a), a cable operator seeking renewal of a franchise may, on its own initiative or at the request of a franchising authority, submit a proposal for renewal. "(2) Subject to section 624. any such proposal shall contain such material as the franchising authority may require, including propos- als for an upgrade of the cable system. "(3) The franchising authority may establish a date by which such proposal shall be submitted. "(cX1) Upon submittal by a cable operator of a proposal to the franchising authority for the renewal of a franchise, the franchising authority shall provide prompt public notice of such proposal and. during the 4 -month period which begins on the completion of any proceedings under subsection (a), renew the franchise or, issue a preliminary assessment that the franchise should not be renewed and, at the request of the operator or on its own initiative, com- mence an administrative proceeding, after providing prompt public notice of such proceeding, in accordance with paragraph (2) to consider whether— "(A) the cable operator has substantially complied with the material terms of the existing franchise and with applicable law; "(B) the quality of the operator's service. including signal quality, response to consumer complaints, and billing practices, but without regard to the mix, quality, or level of cable services or other services provided over the system, has been reasonable in light of community needs; "(C) the operator has the financial. Iegal, and technical ability to provide the services, facilities, and equipment as set forth in the operator's proposal; and "(D) the operator's proposal is reasonable to meet the future cable -related community needs and interests, taking into ac- count the cost of meeting such needs and interests. "(2) In any proceeding under paragraph (1), the cable operator shall be afforded adequate notice and the cable operator and the franchise authority, or its designee, shall be afforded fair opportu- nity for full participation, including the right to introduce evidence (including evidence related to issues raised in the proceeding under subsection (a)), to require the production of evidence, and to question witnesses. A transcript shall be made of any such proceeding. "(3) At the completion of a proceeding under this subsection. the franchising authority shall issue a written decision granting or denying the proposal for renewal based upon the record of such proceeding, and transmit a copy of such decision to the cable operator. Such decision shall state the reasons therefor. "(d) Any denial of a proposal for renewal shall be based on one or more adverse findings made with respect to the factors described in subparagraphs (A) through (D) of subsection (cX1), pursuant to the record of the proceeding under subsection (c). A franchising author- ity may not base a denial of renewal on a failure to substantially IV -A-15 PUBLIC LAW 98-549—OCT. 30, 1984 98 STAT. 2793 comply with the material terms of the franchise under subsection (cx1XA) or on events considered under subsection (cX1XB) in any case in which a violation of the franchise or the events considered under subsection (cX1XB) occur after the effective date of this title unless the franchising authority has provided the operator with notice and the opportunity to cure, or in any case in which it is documented that the franchising authority has waived its right to object, or has effectively acquiesced. "(eX1) Any cable operator whose proposal for renewal has been Courts, u.s. denied by a final decision of a franchising authority made pursuant to this section, or has been adversely affected by a failure of the franchising authority to act in accordance with the procedural requirements of this section, may appeal such final decision or failure pursuant to the provisions of section 635. "(2) The court shall grant appropriate relief if the court finds that— "(A) any action of the franchising authority is not in compli- ance with the procedural requirements of this section; or "(B) in the event of a final decision of the franchising author- ity denying the renewal proposal, the operator has demon- strated that the adverse finding of the franchising authority with respect to each of the factors described in subparagraphs (A) through (D) of subsection (cXl) on which the denial is based is not supported by a preponderance of the evidence, based on the record of the proceeding conducted under subsection (c). "(f) Any decision of a franchising authority on a proposal for renewal shall not be considered final unless all administrative review by the State has occurred or the opportunity therefor has lapsed "(g) For purposes of this section, the term 'franchise expiration' means the date of the expiration of the term of the franchise, as provided under the franchise, as it was in effect on the date of the enactment of this title. "(h) Notwithstanding the provisions of subsections (a) through (g) of this section, a cable operator may submit a proposal for the renewal of a franchise pursuant to this subsection at any time, and a franchising authority may, after affording the public adequate notice and opportunity for comment, grant or deny such proposal at any time (including after proceedings pursuant to this section have commenced). The provisions of subsections (a) through (g) of this section shall not apply to a decision to grant or deny a proposal under this subsection. The denial of a renewal pursuant to this subsection shall not affect action on a renewal proposal that is submitted in accordance with subsections (a) through (g). "CONDITIONS OF SALE "SEc. 627. (a) If a renewal of a franchise held by a cable operator is 47 USC 547 denied and the franchising authority acquires ownership of; the cable system or effects a transfer of ownership of the system to another person, any such acquisition or transfer shall be— "(1) at fair market value, determined on the basis of the cable system valued as a going concern but with no value allocated to the franchise itself. or "(2) in the case of any franchise existing on the effective date of this title, at a price determined in accordance with the