Agenda - Council - 08/23/1988 - Laserfiche WebLink

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Ur./Mr. Hartley July 8, 1988 Page Two 1) We have for over two years, proposed that the Commission or Its designee, assume responsibility for the public access/local origination function. NClV would transfer to the Commission all related equipment valued at $260,000. NClV would pay to the Commission .45 per subscriber per month, (plus an Inflation escalator). We have repeatedly submitted all of our current costs and demonstrated that, should It wish to do so, the Commission would have sufficient funds to continue devoting to these functions the same amount now being expended by NClV. (This has been successfully done in the Northwest suburbs of Minneapolis.) In effect, of the total of $189,683 per year now being expended, NClV would absorb $79,300 by transferring all the equipment and absorbing the related Interest and depreciation costs. NClV would provide an additional $25,900 by contributing .45 per month per subscriber. To the extent desired by the Commission, it could provide the balance of $84,483 by utilizing Its franchise fees, which are expected to be $84,490 in 1988. The .45! per month per subscriber has not b~en arbitrarily determined. It represents 1.53% of monthly gross subscriber revenue, which is the maximum amount the business can tolerate, without placing extraordinary pressure on the rates. I We have repeatedly submitted detailed revenue and cost models showing the feasibility of this approach. We are, once again, submitting copies of the prior submissions. (Attachment A) I 2. Alternatively, NClV has proposed that NClV remain responsible for the public access/local origination function and that required expenditures be reduced to the .45 per subscriber per month level. NClV has Indicated that an adequate service can be provided, that is sufficient to meet the demonstrated needs, but without the imposed waste inherent in the current situation. We are again, submitting a copy of the prior submission. (Attachment B) I THESE PROPOSALS ARE NOT NEGOTIATING POSITIONS. They are a sincere effort to provide maximum funding and to assure the current level of service without waste and without burdening subscribers with totally unnecessary charges. I Indeed, a recent article in Cable Television Business points out that normal cable company expenditures for this purpose are less. I "While few systems admit what they spend on community programming, estimates range from $0.015 to $0.05 per sub; or somewhere between 1 to 2 percent of annual gross revenues." BONDING We wish also to advise you, once again, that the current level of bonding required of the Company, bears no relationship to realistic needs or potential liabilities and is much higher, on a comparable basis, than anywhere else in the United States. NClV's cost to maintain this level of bonding is very burdensome and the bonds tie up NClV's credit lines, with no benefit to anyone except the insurance companies. ..- --_...~~-_._-