TO: HONORABLE MAYOR AND CITY COUNCIL

FROM: CABLE TELEVISION AD HOC COMMITTEE

DATE: MAY 6, 2003

SUBJECT: CABLE TELEVISION STUDIO LEASE AGREEMENT - PVNET

RECOMMENDATION

Approve the Agreement for Lease of the Cable Television Studio to PV on the Net.

BACKGROUND

On September 17, 2002, the City Council established a Cable Television Ad Hoc Subcommittee, consisting of (then) Mayor McTaggart and Councilman Gardiner, to explore the possibility of maximizing the City’s use of local cable access under the current Franchise Agreement with Cox Communications.

At the City Council meeting on November 5, 2002, after receiving testimony and discussing the educational access channel idea, the City Council directed staff to invite representatives of interested parties to meet with the Ad Hoc Committee to discuss various issues including how they would utilize an educational channel if it were available and what resources they might offer to support the channel.

As a result of the Workshop with educational institutions serving the Peninsula, the Ad Hoc Committee made the following recommendations to the City Council at their December 17, 2002 meeting:

1. Adopt Resolution No. 2002 - 106; directing Cox Communications to establish an educational access channel pursuant to Exhibit E, Section I(C)(1) of the October 17, 2000 Cable Television Franchise Agreement on the local cable television network.
2. Establish a start-up date of May 1, 2003 for launching the channel.
3. Approve use of the old Cable TV studio on City Hall property for filming and editing.
4. Establish a budget of $125,000 for re-furbishing the studio and purchasing of camera and editing equipment.
5. Establish an annual budget of $70,000 for operating the studio.

All five recommendations were approved.

At the City Council meeting of February 18, 2003 the City Council decided to place on hold any expenditures related to creation of a City owned and operated Cable TV studio until the budget process was completed. The Council, however, did reaffirm that the establishment of the educational access channel should proceed with or without the studio.

The City Council again reconsidered the funding of a Cable Television studio at their March 4, 2003 meeting. A proposal from PV on the Net to operate the studio at no cost to the City, as well as to provide equipment, was considered. A proposal to reduce the cost to rehabilitate the studio was also considered. Based on the PV on the Net offer and the reduced cost of studio rehabilitation, the Council approved the following expenditures:

1. Authorize the expenditure of $25,000 of Building Replacement Funds for the rehabilitation of the former Cable Television Building.
2. Authorize the expenditure of $10,000 of General Fund reserves for the purchase of television production equipment.
3. Authorize the inclusion of $10,000 in studio operating funds in the FY 2003-04 City budget.

Last week, in preparation for activating the City’s new Channel, Art Yoon of Cox Communications, advised us that Channel 33 will be the RPV Channel and the TV Guide Channel will move to Channel 67. The changes will be effective on June 10, 2003.

The Cable Television Committee has agreed that Cox should call the new channel: RPV-TV City Channel 33. Cox will likely do a new channel lineup card this fall and if the City Council wishes to revisit the matter of naming the channel, we can do so then. Cox needs to give the channel a temporary designation in order to fulfill some of their requirements for public noticing.

DISCUSSION

At their meeting of April 14, 2003 the Cable Television Ad Hoc Committee agreed to recommend that the City Council enter into an agreement with PV on the Net to provide operational and technical support for the educational access channel. The Agreement will formalize an arrangement through which PV on the Net will provide services to the City in exchange for use of the studio.

The cable studio building has been cleaned and repaired and is nearly ready to turn over to PV on the Net. There are still modifications to be made to the building to accommodate a television studio use, but funds remain in the $25,000 appropriation to accomplish these modifications. PV on the Net would like to take over the studio as soon as possible and be involved in the final building modifications.

The cable studio apparently does not have the capability of transmitting programming to the Cox network. The Ad Hoc Committee agreed that they were not yet ready to approach Cox Communications with a request to provide equipment and cable linkage that would enable the cable studio to become operational. However, they felt that the cable studio should be leased to PV on the Net as soon as possible in order that PV on the Net could install their equipment and begin producing programming for future broadcast.

FISCAL IMPACT

The Cable Franchise Agreement requires Cox Communications to provide the City with a dedicated educational access channel at no cost to the City. However, although Cox is required to provide space in its channel line-up, the Franchise Agreement may not obligate the cable operator to provide any of the equipment that will be required to transmit programming from the City cable studio. Cox has indicated that they are willing to assist the City in providing equipment, however they may be interested in some amendments to their existing cable franchise. The details of the "quid pro quo" arrangement have not yet been finalized.

Respectfully:
Les Evans
City Manager
For the Cable Television Ad Hoc Committee

Attachment: Agreement