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
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RESOLUTION NO. 13525
RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE THE FIRST AMENDMENT TO
THE AGREEMENT OF FORMATION OF THE MARIN TELECOMMUNICATIONS AGENCY
WHEREAS, the City of San Rafael adopted Resolution 9989 on December 1, 1997
approving an Agreement for the Formation of the Marin Telecommunications Agency (MTA) for
the purpose of creating a joint powers authority for policy-making and coordination of
telecommunication matters in Marin;
WHEREAS, at its December 12, 2012 meeting, the Board of Directors of the Marin
Telecommunications Agency ("MTA" or "Agency") approved the First Amendment to the
Agreement of Formation; and
WHEREAS, the First Amendment amends the Agreement of Formation to provide that
the distribution of net franchise fees to the members of the MTA will be based on the franchise
fee revenue reports received from each provider; and
WHEREAS, City of San Rafael desires this First Amendment to the Formation
Agreement.
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)