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City of Missoula, Montana Item to be Referred to City Council Committee Committee: A & F Item: Set public hearing to consider a resolution to amend existing Cable Franchise Fee Ordinance #3237 with Bresnan Communications Date: January 22, 2010 Prepared by: Brentt Ramharter Initiated by: Brentt Ramharter Action Required: Set Public Hearing to consider a resolution to amend the existing Cable Franchise Fee Ordinance #3237 with Bresnan Communications. Recommended Motion: I move the City Council set a public hearing to consider a resolution on the proposed amendment to the existing Cable Franchise Fee Ordinance #3237 with Bresnan Communications. Timeline: Referral to committee: January 22, 2010 Committee discussion: January 27, 2010 Deadline: Have council approve ASAP. Background and Alternatives Explored: On December 1, 2003, the city council adopted Ordinance # 3237 which granted " A NON- EXCLUSIVE FRANCHISE TO BRESNAN COMMUNICATIONS, LLC, TO CONSTRUCT, OPERATE, AND MAINTAIN A CABLE SYSTEM IN THE CITY OF MISSOULA, MONTANA SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF THE FRANCHISE; PROVIDING FOR REGULATION AND USE OF THE SYSTEM AND THE PUBLIC RIGHTS-OF-WAY AND PRESCRIBING PENALTIES FOR THE VIOLATION OF THE PROVISIONS HEREIN". The city contracted with Moss & Barnett LLC (the legal firm used to negotiate the original franchise agreement with Bresnan) in FY 2009 to provide a desk review of Bresnan's compliance with the franchise agreement. The review determined a number of inconsistencies with the city's interpretation of how the PEG Access fees were to be assessed and collected by Bresnan. The city contracted with Moss & Barnett to review the most recent three years of fee collections and remittances to the city. 1. Pursuant to Exhibit B paragraph 6 of the Franchise agreement, a fee is to be collected from subscribers to support public, educational and governmental (“PEG”) access in the City (“Access Fee”); and 2. The City and Bresnan now desire to amend the Franchise to clarify the procedure for collecting the Access Fee from subscribers that reside in multiple dwelling units such as apartments, condominiums and similar structures (“MDUs”); and 3. Neither the City nor Bresnan desire any further modifications or amendments to the Franchise. ---PAGE BREAK--- 4. In the case of collecting the Access Fee from multiple dwelling units (MDU’s), the “Subscriber” means each lessee, tenant or occupant, not the building owner, calculated using the city-wide MDU occupancy rate provided by The Missoula Organization of Realtors (“MDU Data”). For the calendar year 2010, the occupancy rate shall be ninety- five percent (95%) and the occupancy rate for the following year and each subsequent year shall be established using the MDU Data from the prior year. The Grantee is not required to collect or remit the Access Fee beyond the calculation provided for in this paragraph for “unoccupied” units. 5. All other terms, conditions, and provisions of the Franchise shall remain in effect. Financial Implications: This must be approved be approved to allow Bresnan to appropriately charge those subscribers that reside in multiple dwelling units such as apartments, condominiums and similar structures. Attachments: Cable Franchise Fee Ordinance