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HomeMy WebLinkAboutCM MTA First Amendmentciry OF Agenda Item No: 3. c Meeting Date: April 2, 2013 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: CITY MANAGER Prepared by: Nancy MackUe,City Manager y SUBJECT: Resolution Authorizing the Mayor to Execute the First Amendment to the Agreement of the Formation of the Marin Telecommunications Agency RECOMMENDATION: Adopt Resolution DISCUSSION: At its December 12. 2012 meeting. the Board of Directors of the Marin Telecommunications Agency (^MTK) approved the First Amendment tothe Agreement of Rznnadon of the MTA. The Agreement of Formation was executed in 1098 by all of the members of the MTA (Mho County and all cities and towns inMarin except Novaho). This Agreement provided that the net franchise fees received by the MTA (defined aothe total franchisee fees received bythe MTA less the operating budget ofthe Aoenoy)must badishibuhedtothe nnennbensbased oneach membe�spercentage share nf the hobs| number of subscribers of the MTA franchise, The franchise agreement between the MTA and Comcast, dated June 16. 2006. required Comcast to report its number ofsubscribers within the MTA franchise area. Therefnn*, in the past the MTA staff has received the necessary information from Comcast for calculating the distribution ofthe pro -rata share of franchise fees boeach member. Howover. AT&T was able to oonnnlenoe its video operations in Marin under state franchise granted by the CPUC pursuant to the Digital Infrastructure and Video Competition Act of2OOG (known as ^O|VCA^) Under []|VCA, state video franchisees such as AT&T. are not required to report their number of subscribers hzlocal jurisdictions. Instead they are required horeport their gross revenues for the purposes of calculating the local 596 franchise fee, Despite repeated efforts to obtain subscriber numbers from AT&T. they have refused to provide this information to the MTA. For this reason, the MTA has been unable to distribute the AT&T franchise fees to its members. At first, the MTA received a very small amount of franchise fees from AT&T. but these fees more recently have significantly grown and accumulated huover S448.O00 Comcast and Horizon now operate under state franchises also. While these video providers continue to report subscriber numbers to the MTA, at any time, each of these operators could refuse todoso. ThereKzne, in under to be able to distribute the AT&T franchise fees and to ensure that there will be no future delay in the distribution of franchise fees from Comcast and Horizon, General Counsel for the MTA prepared the First Amendment tothe Agreement ofFormation. The First Amendment amends the Agreement ofFormation to provide that the distribution ofnet franchise fees tothe members ofthe MTA will babased onthe franchise fee revenue reports received from each provider which reports one required by D|VCAto be submitted to the MTA, Under this appnoaoh, each member will receive franchise fees based on the gross revenues generated by each video provider in its jurisdiction, This method of distribution actually provides a more accurate distribution of franchise fees to each member. File No.: 3 � Council Meeting: /��/ SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paple: 2 Under Section 12ofthe Agreement ofFormation, the governing body ofeach member ofthe MTA must approve an amendment to the Agreement. Tharefona, staff recommends approval of this First Amendment by adoption of the attached resolution. Counoi|mennber McCullough is the San Rafael representative b)the MTA and has concurred with staff recommendation. FISCAL IMPACT: Franchise fees contribute hothe City's General Fund. Attachment Aisaspreadsheet that shows the difference in the amount ofthe franchise fees that each member would receive from the Cnnnoaat franchise under the existing and proposed method of ou|ou|ohon The current method of distributing franchise fees using each jurisdiction's number of subscribers as o percent of the total MTA subscribers results in allocations based on overage revenue per subscriber. The new method uses actual revenue reported by the providers for each jurisdiction and this will impact San Ratae[s Comcast franchise fee revenues (o loss of approximately $20.000 per quarter) since San Rahae[s revenue per subscriber iabelow K8TA'ooverall average, Hovvever, it is projected that the Comcast revenue decrease would be offset by the distribution of the AT&T franchise fee lump aunn. of which Son Rafael vvnu|d receive approximately $128.800 one time (of the $440,000). AT&T revenues to San Rafael going forward would be approximately $15,000 per quarter. The combination of one time and ongoing revenues from AT&T would mean San Rafael would be "made whole" for the loss of Comcast fees for a period of approximately six years. ACTION REQUIRED: Adopt Resolution ATTACHMENT A:Analysis Franchise Revenue: Current vsNew Method ofDistribution ATTACHMENT A 4 ol" 0 A 1.0 Ln 0'l, E Lf� 1p I -q: 9 WLq! Oq cCO r' CO Lo0 rO r, M M Ln -i rO 11 9 cu "T' a) �t r4 �t Ln '-1 00 -4 (14 c a 0 rl . I rq, -1 9 'ZF oq CU 2 -a 0) 4, Ln! 0) M rn rn I rH t.0 -4 c >" -c 0 r, -1 M 0) 0, r -i: M, C) Ln r- 00 = = CN — M cl0i ll:�: r"•: 0(� clyi r-4, (-4 Lr) W : cu t4 E u ru aj Ru to in, V).: VII Ln, V1. 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NOW, THEREFORE, BE IT RESOLVED that the MAYOR is authorized to execute, on behalf of the City of San Rafael, the first amendment to the Agreement of Formation of the Marin Telecommunications Agency , a copy of which is hereby attached and by this reference made a part hereof. I, Esther C. Beirne, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of the City of San Rafael, held on Tuesday, the 2nd day of April, 2013, by the following vote, to wit: AYES: Councilmembers: Colin, Connolly, Heller, McCullough & Mayor Phillips NOES: Councilmembers: None ABSENT: Councilmembers: None Esther C. Beirne, City Clerk FIRST AMENDMENT TO AGREEMENT OF FORMATION MARIN TELECOMMUNICATIONS AGENCY This First Amendment to Agreement of Formation ("First Amendment") is entered into as of _, 2013 (the "First Amendment Effective Date"), and is made by and among the County of Marin and the Cities of Belvedere, Larkspur, Mill Valley, Sausalito and San Rafael, and the Towns of Corte Madera, Fairfax, Ross, San Anselmo and Tiburon (collectively, the "Constituent Jurisdictions"), with reference to the following: RECITALS A. "The Constituent Jurisdictions entered into that certain Agreement of Formation (the "Agreement") in 1997 for the purpose of creating the Marin Telecommunications Agency, a joint powers authority existing pursuant to California Government Code 6500 et seq. (the "Agency"). All capitalized terms used herein without definition shall have the same meanings assigned to them in the Agreement. B. Due to changes in state law affecting the operation of cable franchises, certain provisions of the Agreement relating to the distribution of franchise fees among Constituent Jurisdictions are either obsolete or cannot be implemented due to legal limitations on the Agency's ability to obtain certain information about subscribers from providers. C. The Constituent Jurisdictions have agreed to revise the provisions of the Agreement with respect to such distributions, all as provided more particularly below. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Constituent Jurisdictions agree as follows: AGREEMENT 1. The Recitals above are hereby declared to be true and correct, and are hereby incorporated into this Amendment as if fully set forth below. 2. Section 6. Pates, is hereby deleted in its entirety and replaced by the following revised Section 6, Franchise Fee Payments to Constituent Jurisdictions: (a) DIVCA State Franchises. The Constituent Jurisdictions acknowledge and agree that all franchise fees payable to local jurisdictions from franchises issued by the state pursuant to the Digital Infrastructure and Video Competition Act of 2006 ("DIVCA") are being paid to the Agency. From the total amount of such fees paid to the Agency annually, the Agency shall deduct the amount of its annual operating budget and reserves, as set forth in the final budget approved by the Board of Directors pursuant to Section 2 above. The remaining amount shall be distributed to the Constituent Jurisdictions as the franchise fees are received by the Agency each quarter in accordance with the franchise fee reports for each Constituent Jurisdiction received by the Agency from each video provider. (b) Other Franchises. For any other franchises that the Agency is legally entitled to grant, franchise fees will be distributed among the Constituent Jurisdictions as may be determined by the Board of Directors in accordance with the procedure set forth in Section 2 for adopting the annual budget. (c) Agency Statements Required. Each distribution shall be accompanied by a statement describing the amounts of all franchise fees received by the Agency for each Constituent Jurisdiction during the distribution period, the dates of receipt, and the amount of revenue required to fund the Agency Budget and reserves. 3. This First Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same instrument. Except as expressly modified by this First Amendment, all other terms and conditions of the Agreement remain in full force and effect. [Signatures appear onfolloivingpages4 IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the date first written above. ATTEST: County Counsel ATTEST: City Clerk ATTEST: City Clerk ATTEST: City Clerk -'14k1 COUNTY OF MARIN BY: Name: Chairperson, Board of Supervisors CITY OF BELVEDERE, a municipal corporation By: _ Name: Mayor CITY OF LARKSPUR, a municipal corporation By: _ Name: Mayor CITY OF MILLVALLEY, a municipal corporation By: _ Name: Mayor : � ATTEST: City Clerk ATTEST: City Clerk Approv ns to forro. e ATTEST: Town Clerk CITY OF SAUSALITO, a municipal corporation By: Name: Mayor CITY OF AN RAF EL, a municipal corporation By: Name:Y:23JAZ� 4"A Mayor TOWN OF CORTE MADERA, a municipal corporation By: — Name: Mayor TOWN OF FAIRFAX, a municipal corporation By: _ Name: Mayor ATTEST: Town Clerk ATTEST: Town Clerk ATTEST: Town Clerk I '� 12441 v I TOWN OF ROSS, a municipal corporation By: _ Name: Mayor TOWN OF SAN ANSELMO, a municipal corporation By: _ Name: Mayor TOWN OF TIBURON, a municipal corporation By: _ Name: Mayor April 11, 2013 Marin Telecommunications Agency 555 Northgate Drive, Suite 230 San Rafael, CA 94903 Attention: Barbara Thornton Dear Ms. Thornton: MAYOR GARY O. PHILLIPS VICE MAYOR BARBARA HFLLER COUNCILMEMBER KATE COLIN low"' COt NCILMENIBER DAMON CONNOLLY ""N""WOmm, COUNCILMEMBERANDREW CUYUGANMCCULLOU(3H CITY CLERK'S OFFICE PHONE: 415-485-306J5 FAX: 415-485-3133 Enclosed please find Original of First Amendment to Agreement of Formation Marin Telecommunications Agency, signed by Mayor Phillips for the City of San Rafael, and attested by the City Clerk. As this document is not currently dated, I would appreciate your sending me a copy of the final executed version. If I may be of further assistance, please call me at (415) 485-3065. Sincerely, ESTHER BEIRNE City Clerk 1400 F!i:m A'F \I F Ptd F3,', -X I 160 S,t\ R.kF 14 94915- 1560 April 11, 2013 Marin Telecommunications Agency 555 Northgate Drive, Suite 230 San Rafael, CA 94903 Attention: Barbara Thornton Dear Ms. Thornton: MAYOR GARY O. PHILLIPS VICE MAYOR BARBARA HELLER COUNCILMEMBER KATE COLIN COt;,CILMEMBF'RDAMONCONNOI.LY COUNCIL.kIEMBER ANDREW CUYUGAN MCCULLOUGH CITY CLERK'S OFFICE PHONE: 415-485-30J65 FAX: 415-485-3133 Enclosed please find Original of First Amendment to Agreement of Formation Marin Telecommunications Agency, signed by Mayor Phillips for the City of San Rafael, and attested by the City Clerk. As this document is not currently dated, I would appreciate your sending me a copy of the final executed version. If I may be of further assistance, please call me at (415) 485-3065. Sincerely, ESTHER BEIRNE City Clerk 14(,�O OO >,f -V F P0 Box 1;1 4;60 S,�\ RAF V-1, CA Q41)1 i-1 W Ft OFSA,RAFAEL ORG CITY OF SAN RAFAEL INSTRUCTIONS: USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT, ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL / AGENCY, SRRA/ SRCC AGENDA ITEM No. 3.c DATE OF MEETING: April 2, 2013 FROM: Nancy M DEPARTMENT: City Manager DATE: March 25, 2013 TITLE OF DOCUMENT: RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE THE FIRST AMENDMENT TO THE AGREEMENT OF FORMATION OF THE MARIN TELECOMMUNICATIONS AGENCY Department Head (signature) (LOWER HALF OF FORM FOR APPROVALS ONLY) APPROVED AS COUNCIL / AGENCY AGENDA ITEM: City Manager (signature) APPROVED AS TO FORM: City Attorney (signature)