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HomeMy Public PortalAbout19820125 special SPECIAL COUNCIL MEETING, January 25, 1982 TMMM� A special Council meeting was held on January 25, 1982, at the Thomas E. Whitecotton Law Enforcement Center with Mayor Pro Tem Michael Prenger presiding. The meeting was called to order at 7: 30 p.m. with the following Councilman present : 6-, Present: Blume, Borgmeyer, Brant, Gordon, Halsey, Hequembourg Kliegel, Prenger, Scheulen and Wade. Absent: None. The purpose of this meeting was to discuss the cable tele- vision franchise and to select a new franchisee. Mayor Pro Tem Prenger read a letter from Mr. Weldon, of the News Tribune Company, dated January 15, 1982 , regarding a recent radio broadcast by KWOS. The broadcast stated that the News a: Tribune and TCI have been discussing a joint venture wherein the News Tribune would place a news channel on the local system. Mr. Weldon disputed this claim and stated that although the newspaper • did attend a TCI seminar in Denver, no one in authority at the News Tribune has ever sat down with anyone from TCI to discuss a joint venture between the two companies. Thomas Utterback, the legal consultant in this matter, gave a brief summary of the proposals submitted by TCI and CTI . In October of 1981 the Council decided to get an update of the original proposals, as the City had deleted some of the require- ments as net out in the original 1WP. A sub-committee was ap- pointed by the Council and they have held a number of negotiations with representatives of both cable companion, as well as additiona study and evaluation by the sub-committee who utilized Gary Hamburg, Mr. Utterback, and Gary Hoffman, the financial consultant and Lyndel Porterfield, the new City Counselor. TCI, the present franchisee, has proposed an updating of the III present system on a two phase method. Phase I would upgrade they present system to approximately 20 channels. Phase II would upgrade the system to 36 channels and would occur sometime within a year after completion of Phase I. TCI proposes that the com- plete rebuild would only occur after consultation with the City Council and with the understanding that the rate payers will have to pay for all, of this. TCI proposes a three phase rates increase. Upon the granting of the franchise the rates would increase to $7. 25 per month. Upon the completion of Phase I the rates would increase to $9. 95 per month, which would include the supplying of a converter. Phase II would add approximately $2 . 00 a month to that figure, although people would have the option of staying at Phase I. CTI proposes to construct a 36 channel system immediately after gaining access to the poles. Of those 36 channels, 30 would be entertainment programs. Tier I would be 12 channels for a basic rate of approximately $6. 18 per month. Tier II, which is approximately 36 channels of programming, would cost approximately $8. 20 per month. Installation charges of the two companies are comparable. Richard Harmon, the attorney representing TCI, stated that TCI was not present asking for exclusive rights. He further stated TCI does have a commitment to this community and a settle- ment proposal was made to the City several months ago. The basic terms of that proposal was outlined by Mr. Utterback in his summary. He stated that Phase I would be a rebuild to approximately 21 channels which would serve the entire City with no real i interruption of service during any aspect of the rebuild. The ! Phase I rebuild should be completed within six to twelve months iI and thereafter, with consultation with the City and upon agreement,' Phase II could begin. TCI now has upgrade kits, which were not available two years ago, enabling them to expand their channels. They will also be phasing out the amplifiers to increase channel capacity. 225 • SPECIAL COUNCIL MEETING, January 25, 1982 `' Gene Bushman, representing CPI , then spoke to the Council. CTI proposes to build a modern system capable of 54 channels. However, they will proceed with a 42 channel system. They will be bringing in everything from St. Louis, Kansas City, every- thing local and everything from the satellite. In addition to HBO CTI will be offering three other pay packages. HBO will be ' the most expensive but it will be $1. 50 cheaper than citizens are paying now. The other channels will be $2. 50 cheaper. If the home viewer, under their system, subscribes to 37 channels and HBO they will get it cheaper than they are now paying for 11 channels and HBO today. CTI ' s system will be a two-way system. People of Jefferson City will be offered a home burglar system. They will offer a channel for local origination to be used for the promotion of educational programs. In addition, CTI is i - committing itself to $200 ,000 for the development of a local origination studio, and to 2% of gross receipts per month for the support of local origination. In addition, updated material has been provided which contains a letter of commitment showing that CTI has financing available to them to do exactly as they promised in the supplement 1 report. They have authorization for Industrial Revenue Bonds and, in addition to the financing on a conventional basis, they still intend to sell their bonds. They also provided a letter from the First Chicago Bank of New York which is a letter of commitment to give CTI a letter of credit on their bonds to permit the bonds to be rated. Those bonds in turn will then have a marketability. Their municipal bond broker's letter is attached also indicating that with the adequate letter of credit from the First National Bank of Chicago, the bonds would be marketable under the present financial conditions. Regarding legal fees if CTI is awarded the franchise, Mr. Bushman stated that if CTI were awarded the franchise, he assumed CTI would be pulled into the lawsuit. CTI and the City could III utilize the same counsel and CTI would be willing to pay the attorney' s fees. However, Mr. Uttorback stated that the General Fund of the City should not pay to confer a private benefit upon a cable company. He stated that it is his understanding that the same legal counsel could not represent both (T I and d the City• 4, He stated that CTT would be hooking the City up within six months and the City will be built in approximately one year. This time frame, however, in based upon obtaining access to the poles. ; He stated that CT:i: would be willing to work with TCT pending the transition Period. i1 The floor was then opened to members of the public who wished to speak. Tim Totge, Andy Comb, 114 Boonville Road, and Terry David appeared and stated they were satisfied with the ;i 1 service of TCI. Harold Ca0d, Dave Roark, Brian Redden, 315 Meir 1 Drive, Jim flax and J. E. Howie all stated they were dissatisfied } 1 with the present service. George Foster, General Manager of KLUM 1 ! at Lincoln University, appeared and expressed interest on behalf U of the University of community access broadcasting. Others appearing were David Hoeltzle, 305 West Elm, Susan Parbo, 911 Oakwood, and Mike Davis. All persons appearing stated they had no financial interest in the matter and they were not asked by I' either cable company to attend this meeting. The City Council Sub-Committee report was then distributed and read by Mayor Pro Tem Prenger. This report recommended that 1 initial negotiations be held with Telecommunications Incorporated (TCI) with the understanding that should said negotiations not be successful, franchise negotiations be initiated with CTI. This recommendation is subject to the following conditions : 1. That TCI would agree to meet and confer so as to 1 draft the exact terms of a franchise grant. 2. That the Council Subcommittee considers the rates as set out in our Report at pp. 23 and 24 to be . Ill reasonable, just, and the rates that should be enacted in the grant of a new franchise. TCI is directed in these negotiations to respond in specific detail to ! our report in that respect. I 226 ,, o c 'INS January 2$, 1982 3. That a minimum of $175 ,000 be allotted by CTI for the initial grant to a local access channel management entity to be later selected and/or established by the City. 4. That the City desires to further explore the possibilit of developing tiers to more specifically reflect income levels and abilities to pay of citizens in the City of Jefferson. 5. TCI would agree to indemnify the City against any litigation by CTI arising out of any alleged wrongful conduct instigated by TCI or alleged to be done in joint action with the City. After discussion, Councilman Halsey moved that the Council approve Alternate E, tentative selection of CTI pending clarifi- cation of issues and negotiation of franchise documents. Motion was seconded by Councilman Blume and, by the following roll call vote, the motion failed: Aye: Blume, Brant, Halsey, Scheulen and Wade. Nay: Borgmeyer, Gordon, Hequembourg, Kliegel, and Prenger. After further discussion Councilman Hequembourg moved that Council accept Alternate F, continued negotiation with both TCI and CTI and the drafting of detailed franchise documents for both companies; that the franchise agreement be put down to the point that it is ready for signature by both companies and that a new subcommittee be created to do the final negotiations to present those franchise documents to the full Council. He also included in the motion that he would not participate in that subcommittee. Councilman Scheulen seconded the motion. However, after dia- cussion Councilman Scheulen withdrew his second. The motion was then seconded by Councilman Borgmeyer. Upon the following roll call vote, the motion failed: Aye: Borgmeyer, Hequembourg, and Kliegel. Nay: Blume, Brant, Gordon, Halsey, Prenger, Scheulen & Wade. Councilman Hequembourg moved for a recall vote on Councilman Halsey's motion to approve Alternate I , tentative selection of CTI pending clarification of issues and negotiation of franchise documents. Motion was seconded and upon the following roll call vote the motion passed: Aye: Blume, Brant, Halsey, Hequembourg, Scheulen and Wade. Nay: Borgmeyer, Gordon, Kliegel, and Prenger. Upon motion by Councilman Wade, seconded by Councilman Scheulen, Thomas Utterback, Gary Hamburg, Lyndel Porterfield and Gary Hoffman were appointed to negotiate with CTI for a franchise document. Mr. Utterback stated the committee hoped to come back to the Council within 2 to 2 1/2 weeks. Meeting was adjourned.