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02-372 Resolution No. 02-372 RESOLUTION AUTHORIZING EXECUTION OF A FRANCHISE EXTENSION AGREEMENT WITH AT&T BROADBAND OF WEST VIRGINIA, LLC BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Olufemi Folarin, Interim City Manager, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute a Franchise Extension Agreement on behalf of the City of Elgin with AT&T Broadband of West Virginia, LLC for the extension of its franchise agreement to June 9, 2003 , a copy of which is attached hereto and made a part hereof by reference . s/ Ed Schock Ed Schock, Mayor Presented: December 4 , 2002 Adopted: December 4 , 2002 Omnibus Vote : Yeas : 7 Nays : 0 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk .. . FRANCHISE EXTENSION AGREEMENT The undersigned duly authorized agents of the City of Elgin, an Illinois municipal cor- poration (the "City"), and AT&T Broadband of West Virginia, LLC, including its suc- cessors and assigns (the "Franchisee"), having the authority to make the representations and agreement contained herein, do hereby stipulate and agree as follows: 1. A cable television franchise was granted by the City to Consolidated Cable Utili- ties, Inc. pursuant to Ordinance No. S-935 (the "Franchise"), as amended by Or- dinance No. S6-84, which among other things transferred the Franchise to Centel Cable Television Company of Illinois, and as further amended by Ordinance No. S5-94, providing for the construction, operation and maintenance of an institu- tional cable network in the City. By Resolution adopted 27 September 1989 (the "Resolution"), the City authorized the transfer of the Franchise to Jones Inter- cable, Inc. ("Jones") or to any affiliate of Jones, as that term is defined in the 27 September 1989 Resolution. By notice provided to the City dated 19 December 1989, Jones transferred the Franchise to Cable TV Fund 15-A, Ltd., an affiliate of Jones. The Franchise expired on or about 9 December 1999, and on 25 September 1999, the City and Cable TV Fund 15-A, Ltd. extended the term of the Franchise until 9 December 2002. The City, pursuant to Resolution No. 99-27, consented to the transfer of the Franchise by Cable TV Fund 15-A, Ltd. to TCI of West Vir- ginia, Inc. on 27 January 1999. And by notice on 31 July 2001, the City was ad- vised that TCI of West Virginia, Inc. a subsidiary of AT&T Broadband, LLC, was transferred to another subsidiary of AT&T, AT&T Broadband of West Virginia, LLC. AT&T Broadband of West Virginia, LLC is currently the Franchisee. 2. The City and Franchisee have been engaged in informal renewal negotiations in accordance with Section 626(h) of Title VI of the Communications Act of 1934, as amended (47 USC 521, et seq.). The amount of time required to conclude negotia- • tions and allow for public review will extend beyond the 9 December 2002 fran- chise expiration date and it is in the public interest to extend the current fran- chise for an additional period of time so that cable service to the public will not be interrupted. The City and Franchisee desire to and do hereby agree to extend to term of the Franchise until 9 June 2003. 3. During the extension period, the City and Franchisee shall work together in good faith and diligently continue their informal Franchise renewal negotiations pur- suant to the procedures contained in Section 626 of Title VI of the Communica- tions Act of 1934, as amended (47 USC 521, et seq.). 4. Notwithstanding the foregoing, by entering into this Agreement, the City and Franchisee continue to reserve all rights under Title VI of the Communications Act of 1934, as amended, and do not waive any rights related thereto. The undersigned hereby agree to an extension of the Franchise under the terms and subject to the stipulations as set forth above. Dated this day of , 2002. City of Elgin AT&T Broadband of West Virginia, LLC ,1W By: City ag: ATTEST: City Clerk _cy OF EtC °P1'11�'" Agenda Item No. � s City of Elgin g L ,'s1 E November 20, 2002 r . I TO: Mayor and Members of the City Council N � ` J�1� � j ' X11 FINANCIALLY STABLE CITY GOVERNMENT FROM: Olufemi Folarin, Interim City Manager EFFICIENT SERVICES, ANDOUALITY INFRASTRUCTURE SUBJECT: Extension of Franchise Agreement with AT&T Broadband PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information to consider an extension of the franchise agreement by and between the City of Elgin and AT&T Broadband, Inc. BACKGROUND rm. The City has begun preliminary discussions with AT&T Broadband regarding the renewal of the cable franchise that expires on December 9, 2002 . During this time, and over the past several years, issues relating to the renewal process have become increasingly complex due to the customer service performance of AT&T, the technical aspects of Elgin' s aging cable infrastructure, and the lack of cable internet services . Due to the aforementioned, the City retained the services of Stuart Chapman of Municipal Services Associates, Inc . , (MSA) . Along with Mr. Chapman, Assistant City Manager Stegall and Assistant Corporation Counsel Kozal have been working on the renewal process. On October 25, 2002 the City received a Renewal Agreement from AT&T after they initially indicated that a draft would be delivered in May. This delay was primarily caused by the pending merger of AT&T Broadband with Comcast, Inc . However, this delay has provided the City with the opportunity to move forward with several efforts related to the renewal process . • Needs Assessment - The needs assessment processes and activities include MSA conducting a comprehensive needs ascertainment process, public meetings, and rm. "roundtable" exchanges with community leaders regarding the performance of AT&T. . . (IP' Extension of Franchise Agreement with AT&T Broadband November 20, 2002 Page 2 • Technical Evaluation - MSA has conducted a technical evaluation of the cable system plant and signal testing, including a records review. This activity is essential in determining the safety of the system plant and the ability of the cable operator to adhere to cable system technical standards established by the FCC. A copy of the draft report will be available in the very near future. In order to move forward with the efforts as outlined above and due to AT&T' s delay in sending a proposal, a six-month (6) extension of the current agreement has been agreed to by AT&T. A series of meetings with AT&T would commence in January, 2003 . GROUPS/INTERESTED PERSONS CONTACTED The City has worked very closely with several neighborhood r groups and residents to discuss concerns regarding local programming and the customer service being provided by AT&T. Furthermore, a series of four (4) community meetings will be held to gather community input regarding the same. INANCIAL IMPACT T e 2002 Budget and the proposed 2003 Budget include $465, 000 in franchise fees from AT&T Broadband. It is estimated that the entire 2002 budget amount will be collected by the end of the year (first of two allotments equaled $232, 295) . Extending the franchise agreement for the additional six months should have no adverse effect on the franchise fees budgeted in the next year. V4))/LEGAL IMPACT A renewal agreement with AT&T extending the term an additional six (6) months will need to be prepared. ALTERNATIVES 1 . To not extend the contract and enter into AT&T' s proposed agreement which is, at this point, inadequate. em. '' Extension of Franchise Agreement with AT&T Broadband November 20, 2002 Page 3 RECOMMENDATIONS It is recommended that the City Council authorize a six (6) month extension of the current agreement by and between the City and AT&T Broadband. Respectfully submitted, Olufemi Fo arin ' Interim y a er SRS/srs rft.