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HomeMy Public PortalAbout19950713SCMeeting1 1 1 1 95- 07 -13. CITY COUNCIL MINUTES A special meeting was held at 6:30 p.m., immediately prior to the ✓ gular monthly meeting. The purpose of the meeting was to offer f r sale certain FiFa properties after having met the criteria of t e state law which requires specific notifications and a vertisements in advance of the sale. Mayor Pat Locklear p esided and the following members of Council were present: K trina Hughes, Billy Remeta, Mariann Wildi and Paul Jackson. Te City Attorney, Edward Hughes, handled the sales. The first property offered for sale was 119A Savannah Beach & R cquet Club, PIN # 4- 02- 201 -119A, in the name of Anthony P gliano. Delinquent taxes were $170.74, plus costs bringing the t tal to $203.99. David Cohen was the only bidder at $203.99. P N #4 -02 -11 -006, Captain's Row, was next offered. Taxes due in the name of Lamar Holloway were $158.14, with costs for a total of $198.39. David Cohen was the successful bidder at $2050.00. The third property was in the name of Mary F. Powers, PIN # 4 -04- 27 -001, with taxes of $101.71 for a total, with costs, of $134.96. Jason Dalla:ra was the successful bidder at $2225.00. The final piece offered for sale was owned by M -Five, Inc., PIN # 4 -08 -03 -019, with taxes of $50.38, total due of $85.63. Jason Dalarra bid it in at $150.00. The special meeting was adjourned at approximately 7:05 p.m. Mayor Locklear opened the regular July meeting of the Tybee Island City Council at 7:30 p.m. on the same date. The following Councilmembers were present: Mariann Wildi, Katrina Hughes, Paul Jackson, Billy Remeta, Jack Youmans and Phil O'Dell. City Attorney Hughes was also present. Mayor Locklear called on Carl Thompson to lead the prayer, and followed with the Pledge of Allegiance to the flag. The meeting was then opened for business legally presented. Minutes of the June meeting were unanimously approved as written on motion and second by Councilmembers Jackson and Wildi. Mayor Locklear welcomed a large audience who had come to voice concern over recent property assessments. Gary Udinsky, Chief Assessor for Chatham County, was introduced by the Mayor and spoke, explaining the methods used and the differences between "values" approved by the Board of Assessors and "taxes" levied by local governments - councils or commissions. Special guests who were present for this portion of the meeting included, in addition to Mr. Udinsky, Danny Powers, Commissioner Frank Murray, and the following members of the local delegation: Burke Day, Anne Mueller, Tom Bordeaux, Sonny Dixon and State Senator Eric Johnson. Questions from the audience occupied about an hour, 1 1 1 after which the City Council unanimously passed a Resolution concerning local taxes (copy attached to and a part of these minutes). David Godley spoke for the Fine Arts Commission outlining the local group's planned participation in the Marifest. Jim Kluttz spoke for the Tybee Island Historic Society, showing a customized wooden plaque for identification of properties by age, that will be available through their organization. He reported that the committee formed to look into military names for the Fort Screven streets will soon have a report for City Council. A Resolution concerning Cable TV (copy attached to and a part of these minutes) was read and approved on motion of Councilman O'Dell with second by Councilman Jackson. The vote was 5 - 1, with Councilman Youmans casting the dissenting vote. A Resolution endorsing the Chatham County Water Supply Management Plan of June 1995 was passed by a vote of 4 - 2 on motion of Councilman Jackson, seconded by Councilwoman Wildi. Councilmen Youmans and Remeta cast the dissenting votes. A Resolution and Contact accepting a $9500 grant for Jaycee Ballfield Improvements through the GA DNR Recreation Assistance Fund was unanimously approved. The motion to approve was made by Councilman O'Dell and seconded by Councilman Jackson. Copies of these documents are a part of these minutes. Councilwoman Hughes moved that the Zoning Ordinance read for the second time on July 12th be adopted in its entirety with the exceptions of the "NM District" and the "Official Map ", both of which will be forthcoming. The motion was seconded by Councilman Youmans, and unanimously adopted. PUBLIC HEARINGS The first public hearing concerned an extension of non - conforming use at #6 -15th Street for Timothy Hilton. The hardship involved an existing attached unit with no setback between units and with a common wall built many years before. Recent construction involved a roofed deck. No one appeared to speak pro or con. Fire Chief Jimmy Brown stated that it did not pose any additional fire hazard. Councilwoman Hughes moved to grant the variance, seconded by Councilman Youmans. The variance was granted unanimously. A minor subdivision for a duplex, 4A & 4B Seabreeze Lane in Captain's Row (PIN # 4- 21- 16 -30) was next considered. There was no input from the public. The subdivision was approved without dissent, on motion of Councilwoman Hughes, with second by Councilman Youmans. A minor subdivision for Ken Crockett for 1111 Bay Street, PIN # 1 1 1 4- 21 -16 -1F into three lots conforming with R -1 Zoning was heard next. No one spoke from the audience. Councilman O'Dell moved to approve, with second by Councilman Jackson. The vote in favor was unanimous. Tom Mahoney, attorney, introduced the site plan review for 302 Butler Avenue, PIN # 4 -04 -20 -001, for construction of a condo development in C -1 Zoning. It was noted that the Planning Commission had approved the plan. Jean Adams asked why the company chose to develop freestanding units in the commercial district and attached units in the historic district, neither of which suit the surrounding neighborhood? Jeanne Hutton asked about the proposed height of the buildings and was told that this is not required in the preliminary site plan. Jim Kluttz also spoke, after which Councilman Jackson moved to approve and Councilman O'Dell seconded. The vote to approve carried 4 - 2, with Councilwomen Hughes and Wildi casting the dissenting votes. The site plan review for condos in the R -T District, the Old Post Theater Building at #10 Van Horn Street, PIN E4 -03 -09 -006, were next heard. The Developers are Gary Gephart and Scott Rector.It was stated that the Planning Commission recommended approval unanimously. Councilman Youmans moved to approve, Councilwoman Wildi seconded and the vote was unanimous in favor of approval. A petition for a zoning change from R -T to C -1 District Zoning was brought by Alvin Davis for Desoto Beach Motel, PIN # 4- 04 -07- 001, 214 Butler Avenue. The Planning Commission recommended approval and there were no comments from the audience. Councilwoman Hughes moved in favor of approval, Councilman Remeta seconded, and the vote was unanimous in favor of the zoning change. Allen Hendrix brought a request for a major subdivision of PIN #4 -02 -05 -001, 42 through 45 Van Horn and 2 -4 -6 Waxwood. This would be called Lighthouse Landing, Phase II. There would be six lots, three fronting on each street, and would require a variance up to 20% reduction in lot area, with the largest lot at 10,500 square feet and the smallest at 9,325 square feet. It was stated that Planning Commission had recommended denial. Jean Adams spoke from the audience to berate Mr. Hendrix for the poor condition in which other properties he has subdivided are maintained. Jeanne Hutton also spoke from the floor against variances in general. Councilman Youmans moved, and Councilman Remeta seconded, for approval. The vote was tied 3 (Youmans, Remeta, O'Dell in favor) and 3 (Jackson, Hughes and Wildi against). Mayor Locklear broke the tie by voting in favor of the subdivision which was approved by a final vote of 4 to 3. Jeff Dickey's petition for a residential height variance of 6 -1/2 feet was next heard. Planning Commission recommended against. Mr. Dickey stated that his hardship is that he began a house on this property several years ago, and had about $15,000 tied up in the foundation. He has since acquired adjacent property so that 1 1 1 he now has an acre. The original permit called for a height greater than he is now requesting, and the home will be fully sprinkled. A letter of objection from Steven and Kathryn Williams was read. Speaking against the variance from the audience were Liz Sprague and Susan Delaney. Councilman Youmans moved for approval of the variance and Councilman Remeta seconded. The vote was 2 for, 4 against (O'Dell, Jackson, Wildi and Hughes). Bills for the month of June were approved. A transfer of $20,000 from Fund 3 for the construction of public restrooms at Third Street was unanimously approved on motion by Councilwoman Hughes, seconded by Councilman Youmans. Councilwoman Hughes explained that the advertised bids for 2 HVAC units for City Hall had been brought before the General Government Committee she chairs and they voted to accept the Air Temp bid of $13,360, saying that this will get the gas pilot lights, which are fire hazards, out of the attic at last. Byrd Heating and Air bid of $7,352.00. Councilman Jackson moved to approve, with a second by Councilwoman Hughes and the vote in favor was unanimous. Councilwoman Hughes then moved that the low bid from The Rug Shoppe for carpeting City Hall offices in the amount of $3,891.00 be approved, Councilman Jackson seconded, and the motion passed by a margin of 4 - 2. Vickery Carpet bid was $4,659.10. Pay for part time workers was discussed at length, resulting in a motion by Councilwoman Hughes, seconded by Councilman O'Dell to send to the General Government Committee. Councilman Youmans amended the motion to send the question to all committees to come back with a recommendation for their specific department. The amendment was accepted by a vote of 6 - 0. Councilman O'Dell offered an amendment that pay be frozen as is until Council votes on the committee recommendations at the August meeting. There was no second. The vote on the main motion was 5 - 1 with Councilman O'Dell opposing. Councilwoman Wildi said that several bids had been received for a Mohawk Hydraulic Lift System, and moved that the high bid of $5895 be accepted submitted by Mohawk south, Div. of C.J. Equipment Co., Councilman Jackson seconded. Other bids were Atlantic Air & Lube, Inc - $5,558.00; Mohawk Resources, Ltd. - $5,600.00. This had been approved by the committee after careful consideration of the alternatives. The vote in favor was unanimous. Councilman Remeta moved, and Councilman O'Dell seconded, that the Ranger Battalion be allowed to hold their picnic at North Beach on July 28th. Councilmember Hughes Moved to adopt Uniform Rules of the Road into the Code of Ordinances to be in compliance with the State of Georgia. Councilmember Remeta seconded. Vote was unanimous. 1 1 Counnilmember Youmans moved for a second reading. Councilmember Remeta seconded. Vote by Council was unanimous. Councilwoman Hughes moved that the Council go into Executive Session requested by the City Attorney, and Councilman Remeta seconded. The vote was unanimous. The City Council returned to the public auditorium where the meeting was adjourned. A Ovw-to a \..„.) Mayor James P. Locklear City Administrator, RBF 1 1 1 July 13, 1995 EXECUTIVE SESSION The City Attorney reported that he has been trying to get an easement for storm drainage across a lot on Second Avenue and the owners just aren't going to cooperate. On motion by Councilman Jackson, seconded by Councilman Youmans, Council unanimously gave the attorney the authority to begin condemnation procedures. Mr. Hughes then reported on the Bay Street sanitary sewer relocation, saying that he is waiting for the Proctors to secure a new attorney - they have fired two. The other owners, the Tsullas family, are willing to cooperate, or even to buy the adjacent property owned by Proctor. In the Marine Rescue Squadron situation, Mr. Hughes is attempting to secure a Declaratory Judgement about ownership of the small strip of land adjacent to the Old Tybee Road before proceeding any farther. There was a brief discussion of the personnel problem at TIPD concerning Officer Hogan and Dispatcher Underwood, who is a probationary employee. The attorney repeated the procedures outlined in the Code, and Councilman Youmans questioned Ms. Underwood's resignation. Chief Price said she resigned voluntarily. Officer Hogan is currently on three days' administrative leave with pay. There was a short, heated discussion of possible locations for the water tank, but no action was recommended at this time. Sam Adams was given one month to come before Council. (IAA...4Q __it) Mayor James P. Locklear City Administrator, RBF 1 R E S O L U T I 1 • O N WHEREAS, The City of Tybee Island is located on Tybee Island, a barrier island within Chatham County; and WHEREAS, The property values on all island properties - not only those with ocean, marsh or water frontage - have steadily risen in recent years to the point where a modest house on a small interior lot is assessed at many times the value for which it was purchased; and WHEREAS, Many of these small holdings are the homes of people of modest means, existing on fixed incomes; and WHEREAS, Some long -term Tybee residents are being forced from their homes by the rising cost of living, of which the equalization of property values for tax purposes is a significant part; NOW, THEREFORE, BE IT RESOLVED, AND IT IS HEREBY RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF TYBEE ISLAND IN OPEN MEETING ASSEMBLED, that no citizen of Tybee Island or any other Chatham County town should be forced to give up a home due to property reevaluations and rising taxes; AND BE IT FURTHER RESOLVED that the State of Georgia and the County of Chatham be encouraged find and implement methods of taxation of real estate that take into consideration not only the equalization of property values for purposes of taxation but also the length of the existing use of the property and the age and income of the owner. MAYOR RESOLUTION Adopting A Rate Order Regarding Cable Television Basic Service Rates and Associated Charges of U.S. Cable Corporation City of Tybee Island, Georgia WHEREAS, the City of Tybee Island (the "City ") became certified to regulate basic cable service rates and associated charges of U.S. Cable Corporation (the "Company ") as of December 12, 1993, and has followed regulations prescribed by the Federal Communications Commission ( "FCC ") for the regulation of the basic service tier and associated equipment, installation, services and charges (the "FCC Rules "); and WHEREAS, on January 30, 1995 the City notified the Company that the Company's basic service tier and associated charges for equipment and installation were subject to regulation by the City (the "initial date of regulation "); and WHEREAS, on approximately February 27, 1995, the Company submitted an FCC Form 393 to the City, and subsequently filed supplemental information; and WHEREAS, the City held a hearing on July 13, 1995and, at said hearing, any interested party and the Company were given an opportunity to comment on the Rate Filings; and WHEREAS,.the City has reviewed the financial consultant's initial report ( "Initial Report "); and WHEREAS, the Company received an advance copy of the Initial Report and had an opportunity to comment on said report in writing; and WHEREAS, the City has reviewed the Rate Filings and other evidence and information; has received and considered comments, evidence and information from interested parties, including the Company's comments on the City's proposed rate decision and the financial consultant's initial report; has reviewed and hereby adopts, as appropriate and to the extent not inconsistent with this Order, the findings, assumptions and other 1 information set forth in the financial consultant's report (attached); and • WHEREAS, the Company has the burden of showing by preponderance of evidence that its existing rates as of the date of initial regulation are reasonable under the FCC Rules, 47 C.F.R. § 76.937 (a); and WHEREAS, in calculating the number of hours the Company spent performing installations, the Company excluded time spent tside customers' homes; and WHEREAS, when calculating the amount that the Company is permitted to charge for installations on Schedule D, the Company included time spent outside customers' homes; and WHEREAS, the Company has therefore been inconsistent in its approach to calculating the maximum permitted rates for various installation types; and WHEREAS, the Company must therefore include the full time spent performing installations in its calculation of the Hourly Service Charge; and WHEREAS, the City estimates that the average installation requires approximately 1 hour to perform, based on the installation times provided by the Company in Schedule D; and WHEREAS, the Company has stated that it performed 6,487 installations in 1992, and included only 0.1667 hour per installation in its calculation of the Hourly Service Charge; and WHEREAS, 'the City has therefore determined that the Company underestimated its total hours spent performing installations and customer equipment maintenance (Part III, Line 4 of Form 393) by 5,4061; and WHEREAS, the Company based its calculation of the cost to perform installations (Form 393, Part III, Line 3) (specifically, vehicle capital costs and salary and benefit expenses) on its estimate of time required to perform installations as a percentage of employees' total available time; 1(1 hour - 0.1667 hours) x 6,487 installations. 1 1 and 4 WHEREAS, because the Company's estimate of the time required to perform installations is too low, vehicle capital costs and salary and benefit expenses must be increased to reflect the City's revised calculations; and WHEREAS, the Company imposes a monthly charge of $0.36 for additional outlets which are used to receive basic cable service; and WHEREAS, the Company states that although subscribers own the wiring inside their homes, the Company owns the following pieces of equipment in subscribers' homes: splitters, jumpers, transformers, parental control devices, A/B switches, signal boosters and house amplifiers; and WHEREAS, it is the capital cost and maintenance cost of these items, and not of the wiring itself, that the Company claims that it is recovering through its monthly additional outlet charge; and WHEREAS, the FCC rules require that cable operators unbundle significantly different pieces of equipment from each other; and WHEREAS, A/B switches, parental control devices and house amplifiers are significantly different types of equipment which should be unbundled and leased separately only to those subscribers who use them, rather than including this equipment in an additional outlet charge; and WHEREAS, the costs associated with the other items which the Company included in the additional outlet charge (i.e., transformers, splitters and jumpers) should instead be included as part of the Company's expenses necessary for the maintenance of facilities and service, and recovered through the Hourly Service Charge as a capital cost for installation of cable service (on Schedule A); and WHEREAS, the additional outlet charge should therefore be eliminated; 1 THAT: NOW, THEREFORE, BE IT RESOLVED, THE COMPANY IS ORDERED 4 1. For the period commencing September 1, 1993, and ending the date the Company became subject to the Amended Rules, the initial permitted per channel rate for basic service, certain installations and certain equipment shall be as follows, excluding franchise fees: Initial Permitted Rate Basic Service - - Per - channel rate - -Basic Tier Monthly Rate (assuming 13- channel Basic Service) Equipment & Installation: - - Hourly Service Charge - - Unwired Homes -- Prewired Homes - - Additional Connections (at initial installation) - - Additional Connections (separate trip) - -Other installation: Chancing Tiers: -- Addressable (No Truck Roll) - - Non - Addressable (Truck Roll) Lease of Remote Control Devices: - -Remote Control Lease of Converter Boxes: - - Converter Other Charges - - Service contract - - Additional outlet (monthly) $0.831 $9.97 $21.22 42.44 21.22 10.61 21.22 $ 2.00 21.22 $ 0.31 /mo. $ 1.20 /mo. $ 0.59 /mo. No Permitted Charge 2. The Company shall refund that portion of previously paid rates plus interest paid by subscribers for Hourly Service, installations, equipment and other charges described in Ordering Clause No. 1 determined to exceed the initial permitted rates approved in Ordering Clause No. 1. The refund period shall run from September 1, 1993 through the date the Company became subject to the Amended Rules. With respect to each affected subscriber entitled to a refund, the Company shall implement the rate refunds ordered in this Ordering Clause within 60 days after the effective date of this Rate Order. 3. The Company may not increase the rates for any of the above - listed items, nor may it institute new charges for other types of service, equipment or installation associated with the basic service tier which are not listed above, without first complying with applicable laws or FCC regulations. 4. Within ten (10) days after the effective date of this Rate Order, the Company shall submit a written plan to the City which, at a minimum, sets forth the Company's method of providing refunds to subscribers (plus interest) ordered in Ordering Clauses 1 and 2; identifies the basis for the calculation of the amount of the refunds; identifies the applicable interest rate and explains how it was calculated; and explains how the rate reduction ordered herein shall be implemented. Such plan is subject to the City's review and approval. The Company's obligation to submit such plan shall not affect the Company's obligation to implement rate refunds immediately, as set forth in Ordering Clauses 1 and 2. 5. The City reserves the right to modify this Order if, at any time, it determines that information the Company provided to the City is incorrect in any material manner. 6. The City Clerk is ordered to mail a copy of this Order to the Company, provide appropriate public notice of this Order, and make a copy of this Order available to any person upon request. 7. This Order shall become effective immediately upon its adoption. 1 E So resolved by the Mayor and Council of the City of Tybee Island this 13 th day of July , 1995. Approved as to Form: City Attorney 1 RATE REPORT We have reviewed the FCC Form 393 which US Cable Corporation ( "the Company ") filed with the City of Tybee Island ( "the City ") dated April 19, 1994. The purpose of our review is to assist the City in its determination of whether the rates proposed by the Company for basic service and equipment and installation services are reasonable under the regulations adopted by the Federal Communications Commission ( "FCC "). While our efforts involved analyzing accounting records which the Company provided to us, we did not perform an audit of the Company's financial statements in accordance with Generally Accepted Auditing Standards. Furthermore, our report assumes that information which the Company provided to us and representations made by the Company are true and accurate. SUMMARY OF RATES PROPOSED BY THE OPERATOR The table on the following page summarizes the rates proposed by the Company in the FCC Form 393 submitted by the Company, the rates actually charged by the Company on September 1, 1993, a possible rate decision the City could make, and the approximate amount of the refunds should the City make that decision. 1 Ms. Rowena Fripp May 24, 1995 Page 2 Company's Proposed Maximum Permitted Rate Rate as of the Date of Initial Regulation _ Possible Decision by the City Overcharge (Undercharge) Basic service tier $10.13 $10.09 $9.97 $0.12 Per channel rate 0.844 0.841 0.831 0.010 Converter 1.33 1.33 1.20 0.13 Remote control 0.43 0.43 0.33 0.10 Additional outlet 0.36 0.36 No Permitted Charge 0.36 Hourly Service Charge 35.04 35.04 21.22 13.82 Installation of unwired homes 70.07 70.07 42.44 27.63 Installation of prewired homes 35.04 35.04 21.22 13.82 Additional outlet connection at initial installation 17.52 17.52 10.61 6.91 Additional outlet connection after initial installation 35.04 17.52 21.22 (3.70) Change of service tier not requiring trip 2.00 2.00 . 2.00 0.00 Change of service tier requiring trip 35.04 35.04 21.22 13.82 Service Contract 1.00 1.00 0.59 0.41 1 1 1 Ms. Rowena Fripp May 24, 1995 Page 3 SUMMARY OF FINDINGS a This section presents a summary of the Company's approach to developing proposed rates and the results of our analysis for each of the rates proposed by the Company. L. Basic Service Tier To calculate the Maximum Permitted Rate for the Basic Service Tier one must complete Part II of Form 393. Part II consists of five separate worksheets. The major steps in the determination of the Maximum Permitted Rate are: 1. Determine the Base Rate per Channel as of the initial date of regulation. This step involves the calculation of monthly revenue (Charge Factor) from regulated services which is then weighted by the number of channels and subscribers from the regulated tiers to derive the Charge per Channel. Franchise fees are deducted from the charge per channel (if included in the previous computation) to derive the Base Rate per Channel. 2. Compare the Base Rate per Channel as of the date of initial regulation with the Benchmark Rate. The Benchmark Rate is determined by a formula which uses the total number of regulated channels, the number of regulated satellite channels, and the number of subscribers on the cable system. If the Base Rate per Channel exceeds the Benchmark rate, Step 3 is performed. Otherwise, the process proceeds to Step 4. 3. Determine the Base Rate per Channel for September 30, 1992, and reduce the September 30, 1992 Base Rate per Channel by 10% or to the September 30, 1992 Benchmark Rate, whichever is higher. 4. "Unbundle" expected revenues from equipment and installation charges. 5. Adjust for inflation and changes in the channel lineup. Analysis Our review of the FCC Form 393 submitted by the Company revealed one item that the City may wish to consider in determining the Company's Maximum Permitted Rate per Channel: 1. Because the Company is permitted to earn revenue for installation and equipment maintenance equal to its cost, the Company's cost of providing installations and equipment maintenance should equal its costs. As described below in Section II, the Company may have underestimated the costs (and, therefore, revenues) associated with installation and customer equipment maintenance. 1 Ms. Rowena Fripp May 24, 1995 Page 4 Form 393 is based on a "total revenue" concept: the mathematical principals underlying the Form permit the Company earn a certain level of total revenue for basic and expanded service plus regulated installations and equipment, called the "Base Rate per Channel". Because the Company may have underestimated permitted revenues earned from installations and equipment maintenance (called "Equipment and Installation Cost (Monthly) "), it ma y have overstated permitted revenues for the basic and expanded service tiers (called the "Base Service Rate per Channel "). In terms of the calculations on Form 393: Part II, Line 301 may be understated, as described in Sections II and IV. The maximum permitted rate per channel would fall slightly as a result. urlHoy Service charge The Hourly Service Charge ("HSC") is calculated in order to allow the Company to recover all equipment basket costs (direct and indirect costs of material and labor for installation, additional outlets and leasing and repairing of customer equipment, except for customer leased equipment) including a reasonable profit. The HSC is calculated by subtracting annual purchase costs of all customer equipment from all equipment basket costs and dividing that sum by the Company's total annual person . hours dedicated to installation and equipment repair services. si The Company is proposing a maximum permitted HSC of $35.04. Our review of the FCC Form 393 submitted by the Company revealed two items that the City may wish to consider in determining the Company's maximum permitted HSC: 1. In calculating the number of hours the Company spenfperforming installations, the Company excluded time spent outside customers' homes. For example, travel time was excluded. The Company included only 0.1667 hours for each installation which the Company performed, excluding hours spent outside the house and resulting in a higher proposed permitted Hourly Service Charge. However, when calculating the amount that the Company is permitted to charge for installations on Schedule D, the Company • eluded time spent outside customers' homes. The Company has therefore been inconsistent in its approach to calculating the maximum permitted rates for various installation types. The Company excludes time spent outside the home for purposes of calculating the Hourly Service Charge (which results in a higher permitted Hourly Service Charge), while at the same time including the time spent outside the home for purposes of calculating installation rates (which results in a higher permitted installation rates). Because this issue is related to Item 2, we further discuss the Company's response to our Draft i 1 1 Ms. Rowena Fripp May 24, 1995 Page 5 Report below in Item 2. Because of the inconsistent treatment of labor hours and for the reasons described in Item 2 below, the City might decide to require the Company to include the full time spent performing installations in its calculation of the Hourly Service Charge. GMA estimates that the average installation requires approximately 1 hour to perform, based on the installation times provided by the Company in Schedule D. The Company has stated that it performed 6,487 installations in 1992. Therefore, the Company may have underestimated its total hours spent performing installations and customer equipment maintenance (Part III, Line 4 of Form 393) by 5,406 ((1 hour - 0.1667 hours) x 6,487 installations). 2. We stated in Item 1 that the Company may have underestimated the amount of time spent performing installations. The Company based its calculation of the cost to perform installations (Form 393, Part III, Line 3) on its estimate of time required to perform installations as a percentage of employees' total available time. Therefore, if the City makes the change described in Item 1 above, it should also recalculate the expense associated with installations, resulting in $163,253 as the entry for Part III, Line 3 (because a larger percentage of vehicle capital costs and salary and benefit expenses would be included.) The Company believes that any time or cost spent by installers more than twelve inches from a customer's home should be excluded from the equipment basket, and that the Company was therefore correct in excluding the costs and time spent performing installations more than twelve inches outside customers' homes. However, if a cable operator excludes this cost from Part II, Line 301, it does not fully unbundle all installation revenue from the basic service tier rate. Installation revenue earned performing tasks more than twelve inches from a subscriber's home are not unbundled from the Company's Base Rate per Channel (Line 300), which violates mathematical principles underlying Form 393. If the City decides to require the changes described in Items 1 and 2 of this Section, the Hourly Service Charge would fall to $19.97. 3. As explained below in Section IV, Item 1 below, the City might wish to include the cost of certain miscellaneous equipment used in installations in its equipment basket, rather than permitting a separate monthly fee for this equipment. Doing so would result in an entry in Schedule A, Box 1 of $16,107, and would increase the permitted HSC to $21.22. ICI Installation Rates Installation rates are developed for the purpose of allowing the Company to recover costs based on the average time it takes to perform regulated installation services. These rates are calculated by multiplying the average hours required to complete the installation by the Hourly Service Charge. Thus, changes in either the Hourly Service Charge or the average time it 1 1 1 Ms. Rowena Fripp May 24, 1995 Page 6 takes to complete an installation will change the installation rates. ,Analysis a The Company's maximum permitted rates for installation services are listed earlier in this document. Our review of the FCC Form 393 submitted by the Company revealed one item that the City may wish to consider in determining the maximum permitted installation rates for the Company. As stated earlier, the Company may have misstated its maximum permitted HSC. If a corrected HSC is used, the maximum permitted rates for installations would fall to the levels listed in the column titled "Possible Decision by the City" on Page 2 of this Report. IV. Rates for Customer Leased Equipment The charges for customer leased equipment are designed to allow the Company to recover the costs of providing and maintaining the equipment plus a reasonable profit. Rates are developed for each significantly different type of equipment. To calculate these rates, the total capital costs are added to the total maintenance costs and divided by the number of units in service. l sis The Company's proposed maximum permitted rates for converters is $1.33 per month. The Company's proposed maximum permitted rates for remote control devices is $0.43 per month. The Company's proposed monthly rate for additional outlets is $0.36 per month. Our review of the FCC Form 393 submitted by the Company revealed two items that the City may wish to consider in determining the maximum permitted equipment rates for the Company: 1. The Company imposes a monthly charge of $0.36 for additional outlets which are used to receive basic cable service. The Company states that although subscribers own the wiring inside their homes, the Company owns the following pieces of equipment in subscribers' homes: splitters, jumpers, transformers, parental control devices, AB switches, signal boosters and house amplifiers. It is the capital cost and maintenance cost of these items, and not of the wiring itself, that the Company claims that it is recovering through its monthly additional outlet charge. In effect, then, the Company is leasing these seven types of equipment to customers in a bundled form. Certain additional outlets might contain many of these items, while others contain very few. The FCC rules require that cable operators unbundle significantly different pieces of equipment from each other. The City might decide that some of the items which the Company leases as part of the monthly additional outlet charge (specifically, the AB switches, parental 1 1 1 Ms. Rowena Fripp May 24, 1995 Page 7 control devices and house amps) are significantly different types of equipment which should be unbundled and leased separately to those subscribers who use them. In other words, the City might establish separate regulated rates for parental control devices and house amps, rather than including this equipment in an additional outlet charge'. With regard to the other items included in the additional outlet charge, the City might decide to include those costs as part of the Company's expenses necessary for the maintenance of facilities and service. The pieces of equipment which the Company has combined into an additional outlet rental charge (i.e., the transformers, splitters and jumpers2) are items that should be recovered through the Hourly Service Charge as a capital cost for installation of cable service (on Schedule A). If the City decides to require the Company to recover the cost of additional outlets through the Hourly Service Charge (for splitters, jumpers and transformers) and through separate equipment rental fees (for house amps, parental control devices and AB switches), the HSC would increase as described in Section II, Item 3 above, but the additional outlet charge would be eliminated. 2. As mentioned in Section II above, the Company may have miscalculated its maximum permitted Hourly Service Charge. One of the factors which determines equipment rental rates is the cost of maintaining the equipment. The cost of maintaining the equipment is determined in part by the Hourly Service Charge. If the City decides that the Hourly Service Charge should be lowered, the maximum permitted monthly rate for converters and remotes would fall. V. Other 1. On April 1, 1993, the FCC ordered a freeze of cable rates. Specifically, cable operators were prohibited from increasing the average monthly subscriber bill during the freeze. The freeze began on April 1, 1993 and ended on the date that franchising authorities became certified to regulate rates, or May 15, 1994, whichever came first. The Company does not appear to have violated the rate freeze. 2. The Company offers service contracts to subscribers. Subscribers pay a monthly fee for 'The FCC has ruled that AB switches are not subject to rate regulation. However, this equipment should not be included as part of a monthly additional outlet charge. Rather, this item should be leased separately at an unregulated rate. 2The Company defines a "jumper" as a piece of cable approximately three feet in length with a connector on each end typically used to connect the TV to the converter. 1 Ms. Rowena Fripp May 24, 1995 Page 8 service calls to their homes which are related to equipment which the subscriber owns, including home wiring. The subscribers' other alternatives are to pay the Company for the time required to fix the problem at the Company's Hourly Service Charge, or for the subscribers to fix the problems themselves. The Company charges $1.00 per month for the Plan. The Company believes that, on average, each subscriber to the plan will require a service call regarding customer -owned equipment approximately once every 36 months, and that the average length of such maintenance would be one hour per call. A one hour service call at an hourly rate of $35.04 once every 36 months indicates that the monthly value of the Plan is $0.97 (1 hr x $35.04 / 36 months = $0.97). However, if the City were to make a determination that the maximum permitted Hourly Service Charge is $19.97, as described in Section II, Item 2 above, the maximum permitted charge for the Plan would be $0.55 (1 hr x $21.22 / 36 months = $0.59). Sincerely, Donald W. Schanding, Rate Analyst Georgia Municipal Advisory & Technical Services • 1 1 May 24, 1995 MEMORANDUM RE: FCC Requirements Applicable to the Decision - Making Process FROM: The Georgia Municipal Association This Memorandum is optional reading for those who are interested in learning more about the rate regulation process. At the outset, we note that this Memorandum is not intended to be a complete presentation of all procedural aspects of the FCC Rules, but is a summary of some of the requirements applicable to a final rate decision. It should be noted that the FCC Rules provide only general guidance regarding procedure and many of the rules discussed below leave a number of issues open for interpretation. Thus, questions and issues will inevitably arise. 1. Refund Procedures If the Council concludes that the Company has not met its burden of proof and that it was more likely than not that the Company's rates are not reasonable as determined under the FCC Rules, the City may order a refund. Specifically, the City may order a refund of that portion of previously paid rates determined to be 1 1 1 in excess of the permitted tier charge or above the actual cost of equipment for the period September 1, 1993 through May 15, 1994. A cable operator has the option of implementing a refund by one of two methods: (a) by refunding overcharges to those subscribers that actually paid the overcharges, either through direct payment to those subscribers or as a specifically identified credit on those subscribers' bills; or (b) by a future percentage reduction in basic service tier rates or associated equipment charges. The latter method must be reflected as a specifically identified, one time credit on future billing statements to the class of current cable system subscribers. Refunds must include interest computed at the applicable published Internal Revenue Service rates for tax refunds .1 Before a franchising authority can order a refund, the franchising authority must give a cable an opportunity to comment. 2. Publication of Written Decision A franchising authority must issue a written decision if it disapproves an initial rate for basic service and associated charges in whole or in part. 1 Presumably, interest should be computed for the entire refund period going back to September 1, 1993. The FCC Rules do not expressly state the applicable time period for computation of interest. 1 1 The decision must also be written if the franchising authority disapproves a rate increase or approves a rate increase over the objections of interested parties. The purpose of the written decision is to enable the cable operator or an interested party to know why the rate was disapproved and appeal the decision if the operator or an interested party believes it is unfair or inconsistent with the Cable Act. The written decision must be made available to the public and public notice of the decision must be given. There is no obligation to issue a written decision if the franchising authority is approving an initial rate or rate increase without objection or opposition by an interested party.2 3. Appeal of Local Rate Decisions Any participant in a rate - making proceeding may appeal a local rate decision within 30 days after the public release of the text of the decision. Local rate decisions must be appealed to the FCC if the issue involves whether the franchising authority has acted 2 If there is a complaint on file with the. FCC regarding the per channel rate of the company's cable program services, and the benchmark rate is the same for both basic service and cable program service, a city should assume that it must issue a written decision that is available to the public. 3 inconsistently with the Cable Act and the FCC Rules. Appeals involving other issues may be filed in the state or local courts. The FCC Rules specify the following pleading cycles: for the Opposition to an appeal, 15 days after the appeal is filed; and for the Reply by the person filing the appeal, 7 days after the last day for filing an Opposition. In reviewing a local rate decision, the FCC will uphold the decision if it determines that there is a "reasonable basis" for the written decision. Characterizing its role as that of an appellate court, the FCC explained, "the Commission will defer to the judgment of the local franchising authority provided that there is a rational basis for the decision." If the FCC determines that there is no rational basis for the decision, it will remand the matter back to the local decision - makers with instructions on how to make the result consistent with the Cable Act and the FCC Rules. 1 As noted above, this Memorandum is not intended to be a complete presentation of all procedural aspects of the FCC Rules, but is a summary of some of the requirements applicable to a rate decision. As you proceed with your rate process, we would be happy to respond to any questions and issues that may arise that are not addressed by this Memorandum or that you may otherwise have. 1 1 1 RESOLUTION 4 WHEREAS, the Floridan aquifer serves as the primary source for drinking water in Chatham County and coastal Georgia; and WHEREAS, excessive pumping of the Floridan aquifer throughout coastal Georgia has caused saltwater encroachment into the aquifer; and WHEREAS, the effects of saltwater encroachment into the Floridan aquifer could be detrimental to all citizens of Chatham County; and WHEREAS, local governments, citizens and industries within Chatham County and the Georgia Environmental Protection Division have worked with the Chatham County- Savannah Metropolitan Planning Commission to study, develop and assist in the implementation of a water supply management plan for the entire county; and WHEREAS, this cooperative effort has produced a Comprehensive Water Supply Management Plan for Chatham County, Georgia; and WHEREAS, the City of Tybee Island is included in the Comprehensive Water Supply Management Plan; and WHEREAS, the City of Tybee Island is implementing recommendations included in the Plan; and WHEREAS, the Georgia Environmental Protection Division of the Department of Natural Resources has reviewed the Plan and accepts the Plan as an initial step toward water supply management for Tybee Island. NOW, THEREFORE, BE IT RESOLVED that the Mayor and Council of the City of Tybee Island, in open meeting assembled, do hereby officially adopt the Comprehensive Water Supply Management Plan for Chatham County," Georgia as the City't Plan; and BE IT FURTHER RESOLVED, that a copy of this resolution be transmitted along with a copy of the Plan to the Georgia Environmental Protection Division to inform EPD of this action. ADOPTED THIS 13th DAY OF JULY, 1995. 00mAr (2- Mayor James P. Locklear 1 1 STATE OF GEORGIA COUNTY OF Chatham WHEREAS, the City Council July the Mayo and Council between the Georgia Department of Natural Resources and City of Tybee Island for a grant of financial assistance to City of Tybee Island at • the regular monthly meeting of of Tybee Island , Georgia, held on 13th day of 19 95 , a motion was made and duly seconded that agree to the terms of the contract for a state grant authorize Mayor James P. Locklear to execute said contract in the amount of $9,500.00 , to be effective and retroactive to June 30. 1995. NOW, THEREFORE. BE IT RESOLVED by the Tybee Island City Council of Chatham County. Georgia. that the terms and conditions of the contract between the Georgia Department of Natural Resources and the City of Tybee Island are hereby agreed to, that the Mayor is authorized and empowered to execute said contract and any subsequent amendments thereto on behalf of the City of Tybee Island , and the grant provided for in said contract in the amount of $9,500.00 is hereby accepted to be used under the terms and conditions of said contract. and that sufficient funds have been designated to assure the acquisition and/or development, operation and maintenance of the facilities and/or delivery of services as identified in said contract. Read and unanimously adopted in the regular monthly meeting of the Tybee Island City Council held on 13th day of July , 1995, to be effective and retroactive to June 30, 1995. ATTEST: Pj1.5L-;"7.-t-71-), Clerk of Project Sponsor (Seal) City of Tybee Island Chatham Page One COUNTY. GEORGIA oG Mayor James P. Locklear Continue on Page Two With Certification of Resolution. 1 1 1 Page Two Certification I do hereby certify that the above is a true and correct copy of the Resolution duly adopted by the Tybee Island City Councithn the date so stated in the Resolution. I further certify that I am the Clerk of the Tybee Island Council and that said resolution has been entered in the official records of said city and remains in full force and effect this 26th day of July , 1995. Federal Employer's Identification # 58- 6000661 1 1 1 Ordinance # Be it ordained, and it is hereby ordained. by Mayor and Council in Open Meeting assembled that the Tybee Island Code of Ordinances, Chapter 1, Title 10, Section 1 be deleted and a new paragraph titled and numbered the same to read as follows: Adoption By Reference: Pursuant to Chapter 6 of Title 40 of the Official Code of Georgia Annotated, Code Section 40 -6 -372 through 40 -6 -376. Code Sections 40 -6 -1 through 40 -6 -395 of that chapter known as the "Uniform Rules of the Road" and the definitions contained in Code Section 40 -1 -1 are hereby adopted as and for the traffic regulations of this municipality with like affect as if recited herein and all amendments, whether previously made or now existing, or hereinafter enacted are hereby incorporated herein. ADOPTS THIS D 195. Mayor James P. Locklear Clerk of Council 1st Reading: July 13, 1995 2nd Reading: July 13, 1995 Enacted: July 13, 1995 1 1995- 08 -03. Special Called Council Meeting Mayor Locklear called the meeting to order to discuss business legally presented concerning the Site Plan Review request made by John O'Neill. The following member of Council were present: Katrina Hughes, Jack Youmans, William Remeta, Phil O'Dell,m Mariann Wildi, and Paul Jackson. City Attorney Hughes was also present. Councilmember Youmans moved to accept the site plan review from John O'Neill for 1016 Highway 80. Councilmember Hughes seconded. Councilmember O'Dell asked why not wait until the regular council meeting? Vote by Council was unanimous. Mayor James P. Locklear 1 City Administrator, RBF 1