( Council Agenda Report

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1 ( Council Agenda Report City Council Meeting Item 4.A. To: Prepared by: Prepared by: Mayor Mullen and the Honorable Members of the City Council Lisa Soghor, Assistant City Manager Reva Feldman, City Manager Date prepared: March 6, 2018 Meeting date: March 12, 2018 Subject: Reauthorization of Ordinance for Collection of a Fee on State- Franchised Video Service Providers to Support Public, Educational and Governmental Channel Facilities RECOMMENDED ACTION: 1) After the City Attorney reads the title of the ordinance, adopt Ordinance No. 433U reauthorizing Ordinance No. 311 and the public, educational, and governmental (PEG) fee on state video franchise holders operating with the City of Malibu; declaring the urgency thereof; and finding the action exempt from the California Environmental Quality Act; 2) After the City Attorney reads the title of the ordinance, introduce on first reading Ordinance No. 433 reauthorizing Ordinance No. 311 and the public, educational, and governmental (PEG) fee on state video franchise holders operating within the City of Malibu and finding the action exempt from the California Environmental Quality Act; and 3) Direct staff to schedule second reading and adoption of Ordinance No. 433 for the March 26, 2018 Regular City Council meeting. FISCAL IMPACT: There is no fiscal impact associated with the recommended action, although failing to reauthorize the collection of the PEG fee would result in a loss of approximately $30,000, which is used to support the City s PEG programming. DISCUSSION: In August 2006, the California Legislature passed AB2987 The Digital Infrastructure and Video Competition Act of 2006 (DIVCA), which became effective on January 1, DIVCA authorizes cities to adopt an ordinance imposing a fee on state franchise holders to support PEG channel facilities. On June 11, 2007, the Council adopted Ordinance No. 311 establishing video franchise fees, PEG fees, penalties and other related matters for state video franchise agreements to preserve ongoing revenue from cable franchise fees. Page 1 of 2 Agenda Item # 4.A.

2 City staff was recently made aware that the CCCO SoCal I, LLC dba Charter Communications California Video Franchise certificate expired and was renewed by the State of California Public Utilities Commission on January 2, Pursuant to Public Utilities Code Section 5870(n), the City should reauthorize the PEG fee established by Ordinance No. 311 in order to avoid any argument about whether it can continue to collect the fee. Staff recommends the Council adopt Ordinance No. 433U, in addition to introducing Ordinance No. 433, to ensure the City can continue its imposition of the PEG fee without lapse. The City depends on PEG fees to support its PEG programming and these fees are essential to providing City residents with important civic programming, including emergency alerts and community and government news. Adopting an urgency ordinance will ensure the immediate preservation of the public peace, health and safety by avoiding a lapse in the collection of PEG fees and the related negative impacts on the City s PEG programming and emergency alerts. ATTACHMENTS: A. Ordinance No. 433U B. Ordinance No. 433 Page 2 of 2 Agenda Item # 4.A.

3 ORDINANCE NO. 433U AN ORDINANCE OF THE CITY OF MALIBU REAUTHORIZING ORDINANCE NO. 311 AND THE PUBLIC, EDUCATIONAL, AND GOVERNMENTAL FEE ON STATE VIDEO FRANCHISE HOLDERS OPERATING WITH THE CITY OF MALIBU; DECLARING THE URGENCY THEREOF; AND FINDING THE ACTION EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT The City Council of the City of Malibu does ordain as follows: SECTION 1. California Public Utilities Code (CPUC) Section 5870(n) was enacted as part of the Digital Infrastructure and Video Competition Act (DIVCA) of 2006 and authorized the City to adopt an ordinance establishing a fee on state-franchised video service providers to support public, educational, and governmental (PEG) channel facilities. On June 11, 2007, the City adopted Ordinance No. 311 establishing video franchise fees, PEG fees, penalties and other related matters for state video franchise agreements. The amount of the PEG Fee established by Malibu Municipal Code (MMC) Section is one percent (1%) of Gross Revenues, as defined in this MMC, the applicable City-issued franchise, or Public Utilities Code section 5860(d). Ordinance No. 311 (attached hereto as Exhibit A) has never been repealed and did not have an expiration date, but was intended to apply to and regulate all current and future franchises. However, CPUC Section 5 870(n) states that such ordinance shall expire, and may be reauthorized, upon the expiration of the state franchise. To avoid any argument that the City s ordinance has lapsed the City desires to reauthorize Ordinance No. 311 and the PEG fee imposed by MMC section SECTION 2. Reauthorization The City PEG fee imposed by MMC section , and Ordinance No. 311, are reauthorized to the extent required by CPUC Section All state-franchised video service providers operating within the City, including but not limited to those operating pursuant to Franchise Number 0007 (Charter Communications franchise) and the Frontier Communications franchise, shall continue to be subject to the PEG Fee required by MMC Section , which fee shall remain unchanged and in full effect as to all statefranchised video service providers operating within the City. SECTION 3. Automatic Reauthorization Commencing from, and after, the effective date of this Ordinance, the City s PEG fee set forth in Ordinance No. 311 and MMC Section shall continue to apply to any new or existing franchisee operating in the City and shall automatically be reauthorized upon the expiration of any existing or future state video franchise(s) held by any state-franchised video service provider operating within the City. This Ordinance shall so renew until such time that the City Council takes formal affirmative action to cease the renewals.

4 Ordinance No. 433U Page 2 of 7 SECTION 4. Compliance with CEQA Adoption of this Ordinance is exempt from the California Environmental Quality Act (CEQA) under CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment. SECTION 5. Severability. If any section, subsection, sentence, clause, phrase or portion of this Ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council of the City of Malibu hereby declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional. SECTION 6. Effective Date This Ordinance shall take effect Immediately SECTION 7. Certification The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted in the manner required by law. SECTION 8. Urgency Findings The adoption of this Urgency Ordinance is necessary for the immediate preservation of the public peace, health, and safety. Currently, the City depends upon the PEG Fee to support PEG access channel facilities, which are essential to providing City residents with important civic programming, including emergency alerts and community and government news. The City was only recently made aware that the Charter Communications franchise expired and was renewed on January 2, 2018, thus potentially requiring reauthorization of the City s PEG fee pursuant to Public Utilities Code Section 5870(n). The City will not experience a lapse in PEG funding if the City s PEG fee is reauthorized immediately, but may suffer such a lapse if the PEG fee is not immediately reauthorized. PASSED, APPROVED AND ADOPTED this 12th day of March RICK MULLEN, Mayor

5 Ordinance No. 433U Page 3 of 7 ATTEST: HEATHER GLASER, City Clerk (seal) Date: APPROVED AS TO FORM:

6 Ordinance No. 433U Page 4 of 7 Exhibit A ORDINANCE NO. 311 AN ORDINANCE OF THE CITY OF MALIBU ESTABLISHING VIDEO FRANCHISE FEES, PEG FEES, PENALTIES AND OTHER RELATED MATTERS FOR STATE VIDEO FRANCHISE AGREEMENTS The City Council of the City of Malibu does ordain as follows: SECTION 1: The following is added to Section Defined Terms and Phrases of the Malibu Municipal Code ( MMC ) to read as follows: State Franchisee means any bolder of a State-issued video franchise operating in the City, as defined in Public Utilities Code section 5830(p). SECTION 2: New Article 7 entitled State Video Franchisees is added to the Malibu Municipal Code to read as follows: PEG Fee Established. In accord with Public Utilities Code section 5870(n), any Grantee of a Franchise, or State Franchisee, must pay to the City a fee for the support of PEG channel facilities. The amount of the PEG Fee established by this section is one percent (1%) of Gross Revenues, as defmed in this Code, the applicable City-issued franchise, or Public Utilities Code section 5860(d) Franchise Fee Established. For any State Franchisee, the amount of the franchise fee imposed by Public Utilities Code section 5840(q) shall be five percent (5%) of Gross Revenues, as defined in Public Utilities Code section 5860(d). In accord with Public Utilities Code section 5860, the City Manager will prepare and provide to State Franchisees all necessary documentation supporting the percentage franchise fee paid by the incumbent cable operator serving the City Notices from State Franchisees. Any notice a State Franchisee is required to deliver to the City by 5 840(m) must be delivered to the City Manager Nothing in this Chapter is intended to limit or restrict in any way the imposition of any existing or future generally applicable, nondiscriminatory, competitively neutral tax, fee, or charge to a State Franchisee, City franchisee or the services the franchisees provide.

7 Ordinance No. 433U Page 5 of? Ordinance No, 311 Page 2 of Customer Service Provisions for State Franchisees (b) (c) (d) (e) All State Franchisees must comply with all applicable State and Federal laws and regulations regarding customer service and customer protection, The City Manager may review the performance of State Franchisees for compliance with the customer service requirements specified in Public Utilities Code section 5900 (the Customer Service Standards ). If the City believes a material breach of the Customer Service Standards has occurred, the City Manager must give the State Franchisee written notice of any alleged material breach(es). The State Franchisee must remedy the specified material breach(es) no later than thirty (30) days from receipt of the notice. If the State Franchisee fails to remedy the specified material breach(es) within 30 days, the City Manager may impose monetary penalties on the following schedule: a. Up to five hundred dollars ($500) for each day of each material breach, not to exceed one thousand five hundred dollars ($1,500) for each occurrence of a material breach. b. For a second material breach of the same nature within 12 months, up to one thousand dollars ($1,000) for each day of each material breach, not to exceed three thousand dollars ($3,000) for each occurrence of the material breach. c. For a third or further material breach of the same nature within 12 months, up to one thousand dollars ($1,000) for each day of each material breach, not to exceed three thousand dollars ($3,000) for each occurrence of the material breach. Any monetary penalty imposed under this section may be appealed by the State Franchisee to the City Council. Appeals must be received in writing by the City Clerk within sixty (60) days of imposition of the penalty. The State Franchisee may present any relevant written or oral evidence of its choice. The City Council may uphold or reverse, in whole or in part, the imposition of the monetary penalties The City Manager shall ensure PEG transmissions, content, and programming provided by the City to a State Franchisee is in a format compatible with the State Franchisee s system. In the alternative, the transmissions, content, and programming may be provided in a industry standard format, in accord with Public Utilities Code section 5870(g)(1).

8 Ordinance No. 433U Page 6 of 7 Ordinance No. 311 Page3 of For the duration of any City-issued franchise, if that Franchisee has existing unsatisfied obligations under the franchise to pay to the City any cash payments for the ongoing costs of public, educational, and government access channel facilities or institutional networks,. The fee payable by each City and State Franchisee shall be the Franchisee s pro rata per subscriber share of the cash payment required to be paid by the City franchisee to the City for the costs of PEG channel facilities. (b) Within 45 days of receipt of the notice required by Public Utilities Code section 5 840(n), each City and State Franchisee must provide to the City Manager a written statement of the number of its subscribers within the Franchisee s service area in the City. Within 45 days of receipt all Franchisee subscriber number statements, the City Manager must calculate the division of the cash payments among all City and State Franchisees, and provide written notice to each Franchisee of the Franchisee s share of the cash payment. This amount may expressed as a percentage of gross revenue or as an amount per subscriber, per month, or otherwise (1) Interconnection. To properly serve the City s interest in PEG programming, each State Franchisee and City Franchisee must comply with the PEG system interconnection requirements of Public Utility Code section The City Manager, or his or her designee, may make any interconnection determinations of the City under Public Utility Code section 5870, including requiring interconnection where the City Franchisee and State Franchisee fall to reach a mutually acceptable interconnection agreement. SECTION 3: Repeal or amendment of any provision of the MMC herein will not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before, this Ordinance s effective date. Any such repealed part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Ordinance. SECTION 4: If any part of this Ordinance or its application is deemed invalid by a court of competent jurisdiction, the city council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Ordinance are severable. SECTION 5: The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City of Malibu s book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifleen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law.

9 Ordinance No. 433U Page 7 of 7 Ordinance No. 311 Page 4 of 4 SECTION 6: This Ordinance will become effective on the thirty-first (31st) day following its passage and adoption. PASSED AND ADOPTED this 1 ATTEST: ~Clerk (seal) C STIHO IN, itya o ey I CERTIFY THAT THE FOREGOING ORDINANCE NO.311 was passed and adopted at the regular City Council meeting of June 11, 2007, by the following vote: AYES: 4 NOES: 0 ABSTAIN: 0 ABSENT: 1 Councilmembers: Couneilmembers: Barovsky, Kearsley, Stem, Jennings Conley Ulich LiSA POPE, Cit~ Clerk (seal)

10 ORDINANCE NO. 433 AN ORDINANCE OF THE CITY OF MALIBU REAUTHORIZING ORDINANCE NO. 311 AND THE PUBLIC, EDUCATIONAL, AND GOVERNMENTAL FEE ON STATE VIDEO FRANCHISE HOLDERS OPERATING WITH THE CITY OF MALIBU AND FINDING THE ACTION EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT The City Council of the City of Malibu does ordain as follows: SECTION 1. California Public Utilities Code (CPUC) Section 5870(n) was enacted as part of the Digital Infrastructure and Video Competition Act (DIVCA) of 2006 and authorized the City to adopt an ordinance establishing a fee on state-franchised video service providers to support public, educational, and governmental (PEG) channel facilities. On June 11, 2007, the City adopted Ordinance No. 311 establishing video franchise fees, PEG fees, penalties and other related matters for state video franchise agreements. The amount of the PEG Fee established by Malibu Municipal Code (MMC) Section is one percent (1%) of Gross Revenues, as defined in this MMC, the applicable City-issued franchise, or Public Utilities Code section 5860(d). Ordinance No. 311 (attached hereto as Exhibit A) has never been repealed and did not have an expiration date, but was intended to apply to and regulate all current and future franchises. However, CPUC Section 5870(n) states that such ordinance shall expire, and may be reauthorized, upon the expiration of the state franchise. To avoid any argument that the City s ordinance has lapsed the City desires to reauthorize Ordinance No. 311 and the PEG fee imposed by MMC section SECTION 2. Reauthorization The City PEG fee imposed by MMC section , and Ordinance No. 311, are reauthorized to the extent required by CPUC Section All state-franchised video service providers operating within the City, including but not limited to those operating pursuant to Franchise Number 0007 (Charter Communications franchise) and the Frontier Communications franchise, shall continue to be subject to the PEG Fee required by MMC Section , which fee shall remain unchanged and in full effect as to all statefranchised video service providers operating within the City. SECTION 3. Automatic Reauthorization Commencing from, and after, the effective date of this Ordinance, the City s PEG fee set forth in Ordinance No. 311 and MMC Section shall continue to apply to any new or existing franchisee operating in the City and shall automatically be reauthorized upon the expiration of any existing or future state video franchise(s) held by any state-franchised video service provider operating within the City. This Ordinance shall so renew until such time that the City Council takes formal affirmative action to cease the renewals.

11 OrdinanceNo. 433 Page 2 of 6. SECTION 4.. Compliancewith CEQA Adoption of this Ordinance is exempt from the California Environmental Quality Act (CEQA) under CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment. SECTIONS. Severability~ If any section, subsection, sentence, clause, phrase or portion of this Ordinance is for any reason held to be invalid 01 unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance The City Council of the City of Malibu hereby declares that it would have adopted this Ordmance and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional SECTION 7. Effective Date This Ordinance shall take effect thirty (30) days after its final passage. SECTION 8. Certification The City Clerk shall ceftit~ to the passage and adoption of this Ordinance and shall cause the same to be published or posted in the manner required by law. PASSED, APPROVED AND ADOPTED this 121h day ofmarch2018. ATTEST: RICK MULLEN, Mayor HEATHER GLASER, City Clçrk (seal) Date: APPROVED ~~~ty~ffiey

12 Ordinance No. 433 Page 3 of6 Exhibit A ORDINANCE NO, 311 AN ORDINANCE OF THE CITY OF MALIBU ESTABLISHING VIDEO FRANCHISE FEES, PEG FEES, PENALTIES AND OTHER RELATED MATTERS FOR STATE VIDEO FRANCHISE AGREEMENTS The City Council of the City of Malibu does ordain as follows: SECTION 1: The following is added to Section Defined Terms and Phrases of the Malibu Municipal Code ( MMC ) to read as follows: State Franchisee means any holder of a State-issued video franchise operating in the City, as defined in Public Utilities Code section 5830(p). SECTION 2: New Article 7 entitled State Video Franchisees is added to the Malibu Municipal Code to read as follows: PEG Fee Established. In accord with Public Utilities Code section 5 870(n), any Grantee of a Franchise, or State Franchisee, must pay to the City a fee for the support of PEG channel facilities. The amount of the PEG Fee established by this section is one percent (1%) of Gross Revenues, as defined in this Code, the applicable City-issued franchise, or Public Utilities Code section 5 860(d) Franchise Fee Established. For any State Franchisee, the amount of the franchise fee imposed by Public Utilities Code section 5840(q) shall be five percent (5%) of Gross Revenues, as defined in Public Utilities Code section 5860(d). In accord with Public Utilities Code section 5 860, the City Manager will prepare and provide to State Franchisees all necessary documentation supporting the percentage franchise fee paid by the incumbent cable operator serving the City Notices from State Franchisees. Any notice a State Franchisee is required to deliver to the City by 5 840(m) must be delivered to the City Manager Nothing in this Chapter is intended to limit or restrict in any way the imposition of any existing or future generally applicable, nondiscriminatory, competitively neutral tax, fee, or charge to a State Franchisee, City franchisee or the services the franchisees provide.

13 Ordinance No. 433 Page 4 of 6 Ordinance No. 311 Page 2 of Customer Service Provisions for State Franchisees (b) (c) (d) (e) All State Franchisees must comply with all applicable State and Federal laws and regulations regarding customer service and customer protection. The City Manager may review the performance of State Franchisees for compliance with the customer service requirements specified in Public Utilities Code section 5900 (the Customer Service Standards ). If the City believes a material breach of the Customer Service Standards has occurred, the City Manager must give the State Franchisee written notice of any alleged material breach(es). The State Franchisee must remedy the specified material breach(es) no later than thirty (30) days from receipt of the notice. If the State Franchisee fails to remedy the specified material breach(es) within 30 days, the City Manager may impose monetary penalties on the following schedule: a. Up to five hundred dollars ($500) for each day of each material breach, not to exceed one thousand five hundred dollars ($1,500) for each occurrence of a material breach. b. For a second material breach of the same nature within 12 months, up to one thousand dollars ($1,000) for each day of each material breach, not to exceed three thousand dollars ($3,000) for each occurrence of the material breach. c. For a third or further material breach of the same nature within 12 months, up to one thousand dollars ($1,000) for each day of each material breach, not to exceed three thousand dollars ($3,000) for each occurrence of the material breach. Any monetary penalty imposed under this section may be appealed by the State Franchisee to the City Council. Appeals must be received in writing by the City Clerk within sixty (60) days of imposition of the penalty. The State Franchisee may present any relevant written or oral evidence of its choice. The City Council may uphold or reverse, in whole or in part, the imposition of the monetary penalties The City Manager shall ensure PEG transmissions, content, and programming provided by the City to a State Franchisee is in a format compatible with the State Franchisee s system. In the alternative, the transmissions, content, and programming maybe provided in a industry standard format, in accord with Public Utilities Code section 5870(g)(I).

14 Ordinance No. 433 Page 5 of 6 Ordinance No. 311 Page 3 of For the duration of any City issued franchise, if that Franchisee has existing unsatisfied obligations under the franchise to pay to the City any cash payments for the ongoing costs of public, educational, and government access channel facilities or institutional networks,. The fee payable by each City and State Franchisee shall be the Franchisee s pro rata per subscriber share of the cash payment required to be paid by the City franchisee to the City for the costs of PEG channel facilities. (b) Within 45 days of receipt of the notice required by Public Utilities Code section 5 840(n), each City and State Franchisee must provide to the City Manager a written statement of the number of its subscribers within the Franchisee s service area in the City. Within 45 days of receipt all Franchisee subscriber number statements, the City Manager must calculate the division of the cash payments among all City and State Franchisees, and provide written notice to each Franchisee of the Franchisee s share of the cash payment. This amount may expressed as a percentage of gross revenue or as an amount per subscriber, per month, or otherwise. 5870(1) Interconnection. To properly serve the City s interest in PEG programming, each State Franchisee and City Franchisee must comply with the PEG system interconnection requirements of Public Utility Code section The City Manager, or his or her designee, may make any interconnection determinations of the City under Public Utility Code section 5870, including requiring interconnection where the City Franchisee and State Franchisee fall to reach a mutually acceptable interconnection agreement. SECTION 3: Repeal or amendment of any provision of the MMC herein will not affect any penalty, forfeiture, or liability incus-red before, or preclude prosecution and imposition of penalties for any violation occurring before, this Ordinance s effective date. Any such repealed part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Ordinance. SECTION 4: If any part of this Ordinance or its application is deemed invalid by a court of competent jurisdiction, the city council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Ordinance are severable. SECTION 5: The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City of Malibu s book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law.

15 Ordinance No. 433 Page 6 of 6 Ordinance No. 311 Page 4 of 4 SECTION 6: This Ordinance will become effective on the thirty-first (31st) day following its passage and adoption. PASSED AND ADOPTED this 11 th day of June, ATTEST: LISAPOPE, City Clerk (seal) C STIHO IN, itya o ey I CERTIFY THAT THE FOREGOING ORDINANCE NO.311 was passed and adopted at the regular City Council meeting of June 11, 2007, by the following vote: AYES: NOES: ABSTAIN: ABSENT: 4 Councilmembers: Barovsky, Kearsley, Stem, Jennings 0 0 I Councilrnembers: Conley Ulich ~~ LISA POPE, Cit~ Clerk (seul)