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MINUTES Eugene City Council Work Session McNutt Room--City Hall April 21, 2004 Noon COUNCILORS PRESENT: Bonny Bettman, George Poling, Nancy Nathanson, Scott Meisner, David Kelly, Betty Taylor, Gary Papd, Jennifer Solomon. His Honor Mayor James D. Torrey called the meeting of the Eugene City Council to order. A. WORK SESSION: Comcast Franchise Fee Review Franchise Manager Pam Berrian of Information Services joined the council for the item. She introduced Milo Mecham of Lane Council of Governments, Patty Boyle of Finance Services, and City Attorney Jerome Lidz, who were also present for the item. Ms. Berrian said the issue was governed by the City's franchise agreement with Comcast, a mutually negotiated contract outlining the conditions under which the cable company was permitted to make nonexclusive commercial use of public rights-of-way. The contents and enforcement of the agreement are governed by local, state, and federal law, and address things such as compensation for the private use of the public right-of-way, customer service standards, construction requirements and the like. Continuing, Ms. Berrian said the franchise fees were a percentage of revenue earned in the service territory. An unresolved dispute exists over a category of Comcast revenue earned in the local franchise service area. An independent financial review indicated Comcast underpaid franchise fees from advertising commissions and program launch revenues for a period of three years and a debt was owed to the City as well as to Lane County and Springfield because of their franchise agreements with the company. Comcast disputed the review's findings but the three jurisdictions did not accept the rationale offered by the organization. Because the dispute could not be resolved, staff was seeking authority from the council to enter into binding arbitration with Comcast in accordance with the franchise. She said the Metropolitan Policy Committee (MPC), which acts as the Cable Commission, would consider the matter in May. Ms. Berrian noted that the Lane Board of County Commissioners authorized County staff to enter into arbitration, and the City of Springfield had held an informational work session on the subject. Ms. Berrian reported that Comcast asked staff to delay initiating binding arbitration until one or more other municipal arbitration cases were resolved. She recommended against that because staff believed the review's findings were valid, a year had been spent attempting to reach resolution, and staff had yet to receive the third-party agreements Comcast had with other agencies that it requested. Additionally, other arbitration decisions could not be applicable outside the specific jurisdictions in question unless Comcast specifically agreed to abide by the decisions in those cases. There was no guarantee that would occur. Finally, the franchise agreement requires Comcast to reimburse the City for its arbitration costs if the City MINUTES--Eugene City Council April 21, 2004 Page 1 Work Session