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.
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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
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,, 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.