Loading...
CC - 11-15-83 - Study Session Meeting0 APPROVED CITY OF EGSE:IIEAD DATE MINUTES OF THE STUDY SESSION ROSEMEAD CITY COUNCIL NOVEMBER 15, 1983 AT 7:00 P. M. The Study Session of the Rosemead City Council was called to order by Mayor Cleveland regarding the possibility of Cable Television for the City of Rosemead at 7:05 p. m., in the Con- ference Room of City Hall, 8838 E.-Valley Boulevard, Rosemead. The Pledge to the Flag was led by Councilman Tury The Invocation was delivered by Councilman Taylor. ROLL CALL OF OFFICERS: Present: Councilmen Cichy, Imperial, Taylor, Tury and Mayor Cleveland Absent: None Frank G. Tripepi, City Manager, introduced Carol Kaiser and Roger Pease representatives of the Touche Ross & Company. Roger Pease presented a review of the economic analysis of Municipal ownership of a cable system within the City of Rosemead, and discussed the project objectives, scope, back- ground, risks & benefits, analysis, conclusions and recommend- ations. He commented that the success of municipally owned cable television would be highly dependent on basic subscriber penetration. He discussed the four options that could be de- veloped in Rosemead which are: Traditional Franchising, Municipally owned/private operation, Municipal buyout at system maturity, and Joint Venture between City. and a private operator. His conclusion was that any of the options would be financially feasible except the municipally owned at 30% or less penetration. He stated that the legality of municipal ownership maybe open to challenge, however, as far as. legal challenges there have been legal problems even with the tra- ditional franchising. Carol Kaiser summarized the risks and benefits of the four different options and explained the comparative financial results. With Traditional Franchising there are little or no risks as there is no monetary investment, there would be ap- proximately $3,000,000 investment for the municipally owned/ private operation venture, the Municipal Buyout would be ap- proximately the same and the Joint Venture would cost.approxi- mately $1,500,000 since half would be paid by the private operator. Other than at the 30% penetration level, the net cash flow of the municipally owned/private operation would have the highest yield to the City. Tim Sabo, Bond Counsel, commented on the possiblity of the financing of a Cable Television facility by the Rose- mead Redevelopment Agency and the City of Rosemead. He stated that the proposed financing could be undertaken by both the Redevelopment Agency and the City for the installation, owner- ship and maintenance of the cable television facility. The Agency could issue revenue obligations in the form of certi- ficates of participation which would show proportionate interests in an obligation by and between the City and the Agency for lease/purchase by the City of the facility. The City would enter into a lease with the Agency whereby the City would agree to make periodic lease payments to the Agency. to cover the debt.service of the certificates. He stated that this would riot_create a:debtfor the City, although it would be a City general fund lease obligation. The City would be committed to a definite lease term that would be subject to nonappropriation only. In the event that revenues did not meet expected levels the payments would be made from the general fund for this purpose. Study Session 11-15-83 Page N1 Following the presentations the Councilmembers discussed the different options and the City Attorney commented on the variables. Councilman Taylor requested that four or five different private companies be contacted to see if they would be interested in a franchise with the City for Cable Television. Frank G. Tripepi, City Manager, stated that he would con- tact several of the neighboring cities and request copies of their franchise proposals. Robert Kress, City Attorney, stated that a copy of the ordinance or agreement which embodies the final deal,would be better. Glenn Clanton, Traffic Commissioner, inquired if the City would pursue municipal ownership, would the City then have to hire additional employees to handle the operation. Councilman Tury stated that the only thing the City would own would be the physical part of the system. Robert Ritchie, Planning Commissioner, felt that the enter- tainment part would be a small portion of cable usefulness. He stated that people will be able to do banking, shopping and have home security with the cable television. He felt that Cable has a.potential of far exceeding any use for entertainment alone. Councilman Tury requested that cable companies be investi- gated that would be interested in managing the municipally owned cable system. Councilman Taylor stated that he was interested in contact- ing companies that would want to build and operate a cable system. Councilman Cichy stated that all.four options that had been presented.to the Council should be given to.the different companies and receive feedback from these companies. Roger Pease cautioned the Council in that if private companies are asked if they want to build and operate a cable system or would want to operate a municipally owned system, they would much rather build and run the system. Robert Kress, City Attorney, stated that information from surrounding communities regarding the options presented tonight could be easily attained and easily translatable without going out and requesting.proposals from the various companies. MOTION BY COUNCILMAN TURY, SECONDED BY COUNCILMAN IMPERIAL that the staff investigate with cable companies the feasibility of their operating the City's cable system. Vote resulted: AYES: Councilmen Cichy, Imperial, Tury and Mayor Cleveland NAYES: Councilman Taylor ABSENT: None ABSTAIN: None Whereupon the Mayor declared said motion duly carried and so ordered. Councilman Taylor requested that the record show that he feels that the City should have the proposals from private firms for installing their own system. Councilman Tury requested that staff gather information re- garding agreements with various cable companies from the surround- ing cities together with the projected revenue if the City should decide to have traditional franchising. The Study Session was adjourned to November 22, 1983 at 8:00 p. M. Respectfully submitted: APPROVED: City er MAYOR Study Session Page #2