Ordinance 28370006.080.003
WSS/naa/srh/klt
05/23/91
R:05/29/91
ORDINANCE NO. 2817
AN ORDINANCE OF THE CITY OF EDMONDS, WASHINGTON,
EXTENDING AND RENEWING A THREE-YEAR (3) NON-
EXCLUSIVE COMMUNITY ANTENNA TELEVISION SYSTEM
FRANCHISE TO EDMONDS CABLE COMPANY; PURSUANT TO
CHAPTER 4.68 OF THE EDMONDS CITY CODE; AMENDING
ECC SECTION 3.20.040 AND 3.20.050 TO ADD
SUBPARAGRAPH (C) ADDING CABLE TELEVISION AS
OCCUPATIONS SUBJECT TO THE UTILITY BUSINESS
LICENSE AND OCCUPATION TAX IN ORDER TO EQUALIZE
THE RATES PAID BY THE CITY'S FRANCHISEES; AND
FIXING A TIME WHEN THE SAME SHALL BECOME
EFFECTIVE.
WHEREAS, in 1988 the City received notice from Edmonds
Cable Company that it desired to renew its existing franchise
with the City, and
WHEREAS, the City Council then engaged a consultant and
through his services and a series of public hearings has
determined that:
1. The qualifications of Edmonds Cable
Company meets the City's minimum criteria
relating to its experience, legal status,
character, financial stability and basic
technological proficiency;
2. The applicant franchisee's staff,
equipment and facilities available for
service are adequate to meet the basic
needs of the City;
3. The applicant is currently meeting the
minimum technological standards
established by Federal Communications
Commissions;
4. The programming available is generally
consistent with that sought by the
citizens of the City of Edmonds;
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5. In order to approve the 10-15 year
franchise sought by the applicant, the
City requires assurances that in the event
rate regulation is once again permitted by
Congress and the Federal Communication
Commission, the City will be able to
regulate rates with respect to those
services subscribed to by the average
Edmonds consumer, and that technological
developments will be incorporated in the
franchisee's system at the same time as
they are available in other systems of
comparable size in the Puget Sound region.
WHEREAS, following the period of evaluation, the parties
began negotiations in 1990 in an attempt to negotiate a franchise
which combined the long term assurances sought by the franchisee
with the protections the City Council felt necessary to protect
the subscribers within the City of Edmonds; and
WHEREAS, in October of 1990 the City Council authorized
its negotiators to notify the applicant that a franchise package
had been approved subject to their acceptance; and
WHEREAS, such package was rejected by the franchisee;
and
WHEREAS, after considerable further negotiation, the
franchisee on April 17, 1991, provided to the City its last best
offer with respect to a franchise; and
WHEREAS, this last franchise proposal limits the
definition of basic service and therefore those rates which would
be subject to regulation by the City in the event Congress again
authorized rate regulation to a minimum level that would not be
meaningful to the average Edmonds' consumer, and also reserves to
the franchisee the right to determine whether or not technological
improvements would be incorporated in the system; and
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WHEREAS, the franchisee's last best offer therefore does
not meet the minimum standards established by the City Council at
the onset of negotiation and therefore does not meet the needs of
the public of the City of Edmonds; and
WHEREAS, pursuant to Chapter 3.20 of the Edmonds City
Code the utilities of the City of Edmonds, such as the Snohomish
County Public Utility District, telephone businesses, natural gas
purveyors and other utilities which utilize the City's rights -of -
way and do business within the City, are subject to utility taxes
in the form of business and occupation taxes ranging from 5-1/4%
to 5-3/4%; and
WHEREAS, the franchisee is currently paying a franchise
tax of 3%; and
WHEREAS, the City Council in order to defray the tens of
thousand dollars which have been spent in the assessment of the
franchisee and fruitless negotiations with the franchisee, as well
as its upcoming and continued negotiations, and in order to
equalize the taxes paid by various franchisees who utilize the
City rights -of -way does hereby determine it appropriate to levy an
additional utility equalization tax under Chapter 3.20 of 2% in
order to bring the taxes paid by each utility franchisee into the
same general range; and
WHEREAS, the two critical issues of rate regulation and
technology are both in a state of change which may be subj ect to
clarification by Congress and the market place in the near term;
and
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WHEREAS, negotiations are at an impass and the Council
finds that extension and renewal of the franchise for a period of
three (3) years would allow the parties an opportunity to review
their positions in light of Congressional action, the regulatory
environment and changes in the technological capabilities
available to franchisees, NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO
ORDAIN AS FOLLOWS:
Section 1. A franchise extension and renewal is
hereby granted to Edmonds Cable Company to operate a non-exclusive
cable television franchise in accordance with provisions of
Chapter 4.68 of the Edmonds City Code for a period of three (3)
years commencing on the date of passage of this ordinance. The
City Code Chapter has been in effect during and throughout the
franchisee's prior period of operation, provided, however, that
the ordinance provides in section 4.68.040 for the regulation of
rates by the City. The rate regulation authority under section
4.68.040 has been voluntarily suspended by the City Council due to
the actions of Congress in superseding the City's rate regulation
authority. The City hereby reserves its right to again regulate
rates in accordance with the pre-existing franchise and its
current extension should Congress again authorize the City to
regulate rates.
Section 2. Section 3.20.040 "License tax year" of
Chapter 3.20 "Business License and Occupation Tax" is hereby
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amended by the addition of a new subparagraph (C) to read as
follows:
C. The occupation license levied on the
City's cable television franchisee(s)
shall include for the initial period of
franchise if less than one calendar year,
a partial tax year dating from the date of
franchise approval or extension through
December 31 of that calendar year. The
franchisee shall pay a tax for the initial
period equal to the pro -rated portion of
the annual tax determined in accordance
with the provisions of this chapter. Any
partial concluding year shall be similarly
prorated.
Section 3. Section 3.20.050 "Occupations Subject to
Tax - Amounts" is hereby amended by the addition of a new
subsection (E) relating to Communication antenna television
systems - franchisee - utilities equalization tax to read as
follows:
E. Pursuant to chapter 4.68 of the Edmonds
City Code, Community Antenna Television
Systems, commonly known as cable
television franchisees, pay a franchise
tax of 3%. In addition thereto, a tax is
hereby levied equal to 2% of the gross
receipts collected by the franchisee from
the sale of its services in the City of
Edmonds. This additional 2% is intended,
when combined with the franchise fee of
3%, to provide a total of franchise fees
and utility tax equalization amounts equal
to 5% of the gross revenues of the
franchisee derived from the sale of its
cable television services within the City
of Edmonds. Services shall include the
sale of all broadcast services to
subscribers, but shall not include
revenues derived from the sale of
advertising or other minor miscellaneous,
incidental revenue unrelated to the sale
of subscriber services or equipment
rental.
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Section 4. The Edmonds City Attorney and City's cable
television consultant are hereby directed to prepare for Council
review technical goals and consumer protection provisions. The
technical goals may be adopted pursuant to ordinance and shall
guide the City in evaluating during the next franchise term, the
service provided by the franchisee. Establishment of these goals
shall not be interpreted as an attempt to supersede the technical
standards established by the Federal Communication Commission but
rather to determine the franchisee's compliance with the
representations which it has made to the City regarding the level
of services which it can and will provide to its citizens. If in
the future the City is permitted to impose higher standards, such
standards shall control.
A separate free-standing consumer protection ordinance
shall be prepared by the City Attorney subject to the Council's
review. This ordinance shall delineate both the rights of the
subscriber and the obligations of the franchisee.
Section 5. This ordinance, being an exercise of a
power specifically delegated to the City legislative body, is not
subject to referendum, and shall take effect five (5) days after
passage and publication of the ordinance or a summary thereof
consisting of the title.
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ATTEST/AUTHENTICATED:
.u,
TY LERK, JACQUELINE G. PARRETT
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY:
BY
FILED WITH THE CITY CLERK: May 30, 1991
PASSED BY THE CITY COUNCIL: May 28, 1991
PUBLISHED: June 9, 1991
EFFECTIVE DATE: June 14, 1991
ORDINANCE NO. 2837
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STATE OF WASHINGTON,
COUNTY OF SNOHOMISH,
On Me 2M doy of Moy MI
the City Council of the 6y of
Edmonds, passed Ord Ermnce No,
2837. A summory of the [oMent
of sold Drdinance, consist" of
the tkte, Provides as follows:
A
EX
' The Alit text of tfiis OrdEnonnc
i wilt be mulled upon esl.
DATED thlS Y&th doy Dt Moy,
1994
2ACOIJELINE G. PARRETT
City Clark
Published: Suno 4, 1"..1,
ss.
Affidavit of Publication
The undersigned, being first duly sworn on oath deposes and says
that she is Principal Clerk of THE HERALD, a daily newspaper
printed and published in the City of Everett, County of Snohomish,
and State of Washington; that said newspaper is a newspaper of
general circulation in said County and State; that said newspaper
has been approved as a legal newspaper by order of the Superior
Court of Snohomish County and that the notice ......................................
Summary of Ordinance No. 2837
a printed copy of which is hereunto attached, was published in said
newspaper proper and not in supplement form, in the regular and
entire edition of said paper on the following days and times, namely:
June 9, 1991
and that said newspaper was regularly distributed to its subscribers
during all of said period.
Principal Clerk
14th
Subscribed and sworn to before me this ............................
day of......... June .... ............ 19...91.
c n f�n� for the State of Washington,
a Pug;iii
i g at Everett, Snohomish County.
8-2-1