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MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, July 8, 2013 7:00 o’clock p.m. _____________________________________________________________________________________ Page 7 of 13 CITY ATTORNEY’S REPORT 9. CABLE TELEVISION FRANCHISE ORDINANCE NO. 110 Mattick noted the City Council formed an executive committee to study the issue of directly franchising with cable providers such as Mediacom and also to study the process of working with the LMCC. Through that process the executive committee had some discussions with Mediacom regarding direct franchising. Mattick stated an update was provided at the last City Council work session, and what is before the Council tonight is the proposed final agreement regarding direct franchising between the City of Orono and Mediacom rather than continuing to use LMCC for that franchise. Mattick noted the City would need to send a withdrawal letter to the LMCC at some point if that is the direction the City Council elects to pursue. Mattick stated the agreement, if approved, would become effective the first of next year, with an initial term of ten years and a five-year renewal provision. In terms of fees, it is contemplated there will be a five percent franchise fee based on subscriber usage as well as a PEG fee, which the City can use for capital improvement or technology related upgrades. In general, between franchise fees and PEG fees, Orono residents paid to the LMCC around $90,000 to $100,000 last year. Approximately $17,000 consisted of the PEG fees and the remainder consisted of franchise fees. Mattick noted there were a number of reasons why the City Council chose to review its relationship with the LMCC and consider entering into a direct relationship with Mediacom. One of the reasons discussed was the amount of fees being paid by the City in comparison to the amount of services it received. Mattick stated basically every member city received approximately the same level of service but the amount of fees paid by the various cities varied considerably. Another reason for the change was the lack of Internet access by a number of Orono residents and the impression of the executive committee that the LMCC had not done a satisfactory job of developing a plan for when those residents would receive service. Mattick noted the agreement before the Council tonight requires that Mediacom do a complete build-out of those areas by the end of 2015. Mattick noted in a show of good faith, Mediacom has pledged to start some of the build-out in 2013 even though the agreement does not take effect until 2014. Mattick stated the last major item addressed in the agreement is a method for obtaining a permanently mounted camera system for the City of Orono council chambers versus utilizing a stand-alone camera. While the agreement does not contain a formal plan or design for that system, built into the agreement is a grant provision where Mediacom would provide up to $75,000 to the City upon request, with Mediacom being allowed to recoup that $75,000 through the City’s PEG fees. Theresa Sunde, Mediacom’s Government Relations liaison, stated she handles over 200 communities in Minnesota, and parts of Iowa, South Dakota, Arizona and California. Sunde indicated Mediacom is happy to have been able to negotiate a franchise agreement directly with Orono. Sunde noted it is a non- exclusive agreement, which means that someone else could come into the city as a cable provider. Mediacom has agreed to extend cable to 19 miles of Orono that currently does not have service within the next three years. Orono will receive a percentage of the franchise fees as well as all of the PEG fees. Item #03 - CC Agenda - 07/22/2013 Approval of Council Minutes 07/08/2013 [Page 7 of 13]