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<br />Councilwoman Beal wondered if information could also be brought on whether costs to 1
<br />garbage haulers would be reduced if citizens separated recyclable materials into dif- '
<br />ferent containers. But Assistant Manager thought that because of the complexity and I
<br />... the time frame it would not be possible to pull that information together in the length I
<br />.... of time given to get the fee report back. 1
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<br />Vote was taken on the motion as stated~ Motion carried unanimously. .
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<br />G. Teleprompter Cable TV Rate 'Increase
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<br />!Proposed Cable TV Rate Increase - Copies of report were previously distributed to \
<br />iCouncil members from joint Eugene/Springfield corr~ittee appointed to consider and
<br />lmake recommendations with regard to Teleprompter Cable (TY, proposed increase fo~
<br />!monthly service from $5.00 to $6.95. Assistant Manager called attention to errors
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<br />[in that report - page 1, 4th paragraph, average'increase should read 8.3% rather
<br />-ithan 10.6% and over the last 4-2/3 years rather than 3~2/3 years. He also ex-
<br />iplained franchise provisions calling for ~ouncil review of rates set by Tele~
<br />:prompter with privilege of cancellation of franchise rights by the city upon six
<br />months' notice should the Council deem the proposed rates unreasonable. The
<br />;joint committee found the proposed rates reasonal)le and noted that if the proposed
<br />irates were found unreasonable findings supporting denial or disapproval would be I
<br />: the burden of the Council. I
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<br />iCouncilman McDonald, representing Eugene on the joint committee, reviewed the work
<br />~ {of the committee leading to the conclusion that the requested increase was not out
<br />,., :of line, returning only 2.4% on the $10 million investment stated in financial re-
<br />iPort of Teleprompter prepared by Kohnen, Larson & Co., accountants, copies of
<br />~which were furnished to Council members. He noted staff listing of Teleprompter i
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<br />\ investment a.E $3 million on the basis of tax assessor figures. He recognized that i
<br />! there would be opposi tion to the increase but fe,I t the ci ty could not afford to
<br />\try to prove that the proposed rate was unreasonable. He said no public hearing
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<br />fwas necessary.
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<br />~councilman Williams asked for more information with regard to Teleprompter invest-
<br />iment in view of the wide discrepancy in rate of return - 2.4% vs 12.5% - based on
<br />!the figures presented. Ralph Cobb, attorney representing -Teleprompter, explained
<br />j, the financial report prepared by Mr. Larson of the accounting firm was based on
<br />ifigures received from Teleprompter's New York office. With that information, he
<br />)said, and in consultation with the local manager, James Danielson, Mr. Larson had
<br />!Placed a value of $10 million on the business at the present time. Mr. Cobb said
<br />; the requested increase was not out of line with rates of other companies throughout
<br />! the country and was reasonable when compared to rates charge .by newspapers, the
<br />iUniversity for tuition, etc. He'said that information was not irrelevant, when
<br />that charge was made by Councilman Williams, because it would be the Council's
<br />responsibility to prove whether the increase proposed was unreasonable. He said
<br />~ the new rate would go into effect on September 1 and then it would be 'up to the
<br />~ city either to accept it or, if it was deemed unreasonable, to terminate Tele-
<br />prompter's franchise. The proposed increase, he said, would resul t i-n':a:.~return
<br />,of 3.7% for 1974-75. He added that the cable service was not a public utility, ,
<br />: that it returned to the city about $32,000 to $38,000 annually under the franchise
<br />agreement, and that the risk factor should be considered (possible invention that
<br />\ would enabl~ t~evee re~eption with~ut cable). He felt the request a reasonable, I
<br />: one, and sa~d ~f Counc~l members d~d not agree then the burden of proof would l~e
<br />i wi th them.
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<br />.i Councilman Williams wondered if it would be possible to get an explanation from I
<br />I the Assessor's office of the calculations used in arriving at the valuation placed
<br />Ion Teleprompter holdings. He commented on the normal procedure of valuation of I
<br />real and personal property and said there apparently was a substantial~difference
<br />of opinion with regard to the value of personal property reported by the company.
<br />He said he appreciated and respected Mr. Larson's opinion in response to Mr. Cobb's :
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<br />statement that the $10 million was Mr. Larson's judgment of value based on figures !
<br />from the company's New York office. However, Mr. Williams thought there was such I
<br />a wide difference that there should be further analysis. A 12.5% return on what I
<br />could almost be called a public utility was unwarranted, he said, but if the rate ,
<br />of return was figured on a different basis then it appeared to be reasonable. i
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<br />iIIf Councilman McDonald noted that question ab~ut the:investment figure had been raised I
<br />,_~_I1_ joint commi ttee consideration. SIf~rTrl:F}:o..g,!fa.c1.!. finance director anq /,!~mber of
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<br />8/26/74 - 13
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<br />"3040
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