UTILITY COMMITTEE
The Utility Committee Meeting was held on August 28, 2006 at 5:00 p.m. with Chairman Carey presiding. Members present were Mr. Ruane, Mr. Slavin, Mr. Cregar, and Mr. Snaman. Members of Council present were Council President Williams and Mr. Hogan. Mayor Speed was also present.
AGENDA ADDITIONS/DELETIONS
Mr. Slavin moved for approval of the agenda, seconded by Mr. Snaman and unanimously carried.
Annexation Requests - 349 Acorn Lane, owned by Luis A. Liranzo and Virginia Rodriguez, and 446 Acorn Lane, owned by Thomas M. Romanowski
Members were provided the Petition to Annex and Zone Property and a Cost/Revenue Analysis Summary for properties located at 349 Acorn Lane, owned by Luis A. Liranzo and Virginia Rodriguez, and 446 Acorn Lane, owned by Thomas M. Romanowski.
Mrs. Ann Marie Townshend, Director of Planning and Inspections, advised members that the annexation was initiated by Mr. Liranzo due to a failing septic system. She noted that staff contacted all of the enclave property owners on Acorn Lane, as well as Nixon Lane, and only Mr. Romanowski expressed interest in annexation. Mrs. Townshend stated that both properties are currently receiving City of Dover electricity and trash removal. The residence at 349 Acorn Lane is currently receiving both sewer and water service. The residence at 446 Acorn Lane does not currently have City water or sewer service; however, the landowner has inquired and has been informed of the connection charges.
Mrs. Townshend advised members that the Cost-Revenue analysis showed a negative cash flow to the City of approximately $922 over ten years; however, this figure is likely misleading because these properties are developed residential properties that are enclaves of the City.
Responding to Mr. Ruane, Mrs. Townshend advised members that the proposed City zoning classification of R-10 (One Family Residence) is comparable to the County zoning classification of RS-1 (Single Family Residential). She noted that both lots exceed the minimum lot size for the proposed R-10 zone.
Mr. Slavin moved to recommend adoption of a resolution setting the annexation referendum for properties located at 349 Acorn Lane, owned by Luis A. Liranzo and Virginia Rodriguez, and 446 Acorn Lane, owned by Thomas M. Romanowski (Attachment #1). The motion was seconded by Mr. Snaman and unanimously carried.
Virchow Krause - Franchise Fee Review
Mrs. Donna Mitchell, Finance Director/Treasurer, advised members that the City’s contract with Virchow Krause & Company includes a review of the franchise fees received from Comcast for their use of the City’s right-of-ways. Virchow Krause analyzed Comcast’s 2004 (the “test year”) franchise fee remittances to the City of Dover for the purpose of determining whether Comcast has complied with the franchise fee provisions of the agreement between the City of Dover and Comcast. The analysis of the test year data was made solely to assist in evaluating whether Comcast has complied with the franchise fee requirements under the agreement.
Mrs. Mitchell reviewed the Report on Cable Television Franchise Fee Review (Attachment #2). She noted that Virchow Krause found that revenues from late fees and trip charges have been excluded from the gross revenues computation. These items are not specifically excluded from the definition of gross revenues in the franchise agreement and should be included. The exclusion amounts to approximately $3,300 in revenue to the City for fiscal year 2004. Virchow Krause recommended that the City determine if retroactive payment of this amount for 2004 is desired. They also suggested that Comcast include these amounts in future payments.
Mrs. Mitchell advised members that Virchow Krause also found that launch fees (payments received or reduced programming fees in return for costs incurred to increase the subscriber count) are being excluded from gross revenues. The franchise agreement specifically addresses the issue of non-monetary revenues for advertising services and requires that the fair value of the services be considered. Virchow Krause recommended that the City request Comcast to provide a mechanism to ensure that future advertising services in exchange for launch fee agreements are tracked and valued as aired and that it be included in the gross revenues basis for the franchise fee calculation. Comcast does not believe these transactions are barter transactions, in which case the City may wish to request documentation to support this treatment.
Mrs. Mitchell, stated that the Public Service Commission (PSC) performs a similar analysis and she has requested additional information from them regarding these findings and the feasibility of collecting the revenue. She advised members that she would report back to the committee once the PSC has responded to the request. Staff recommended acceptance of the Virchow Krause & Company Franchise Fee Review.
Mr. Cregar asked if the fees were retroactive and, if so, how many years of missed revenue could be recovered by the City. Mrs. Mitchell responded that the fees in question are subject to retroactivity and she would consult with the City Solicitor to research any statutes that may exist.
Mr. Ruane moved to recommend that the Finance Director be authorized to proceed with the recommendations of Virchow Krause, with the understanding that the degree of retroactive payments be based on the results of the consultation with the City Solicitor. The Finance Director will also continue to communicate with the PSC regarding their findings. The motion was seconded by Mr. Snaman and unanimously carried.
Comcast FCC Filing Forms 1240 and 1205
On August 1, 2006, Comcast filed FCC Form 1240 related to the cost of service for basic cable service and Form 1205 related to cost of equipment installation and service charges. As per the City’s Franchise Agreement, these forms were filed with the City on August 1, 2006, and the City has ninety (90) days to act on these forms.
Mrs. Mitchell advised members that the basic service maximum permitted rate allowed by the calculations on the form is $19.14. This is an increase from the $18.92 rate in last year’s filing. The current rate is $18.75, which is expected to be raised to $18.95. The maximum permitted rate for equipment and installation has also changed. If Comcast is under the maximum permitted rate and they wish to increase rates, they usually notify the City sixty (60) days in advance of the increase. Comcast also advertises a Public Notice of rate changes in the Delaware State News. Mrs. Mitchell advised members that the maximum permitted rates will go into effect November 1, 2006. The Operator Selected Rates are planned to be implemented on June 1, 2007 and are now being submitted along with other rate information.
Mrs. Mitchell stated that the City’s Franchise Agreement does not cover Premium Services, only Basic Cable and the Public Service Commission regulates rates on unincorporated areas. Responding to Mr. Ruane, Mrs. Mitchell stated that the City has no authority to change any of these proposed rate increases.
Mr. Slavin moved to recommend acceptance of the Comcast FCC Filing Forms 1240 and 1205 (Attachment #3), seconded by Mr. Snaman and unanimously carried.
Mr. Ruane requested staff to provide an update on any local competition and the extent of services now being offered by Comcast to ensure the City is receiving the appropriate franchise fees. Mrs. Mitchell noted that the total number of Comcast subscribers has declined due to satellite dish companies now offering service in the area.
Mr. Slavin moved for adjournment, seconded by Mr. Snaman and unanimously carried.
Meeting Adjourned at 5:38 P.M.
Respectfully submitted,
Carleton E. Carey, Sr.
Chairman
CEC/hf
S:ClerksOfficeAgendas&MinutesCommittee-Minutes20068-28-2006 UTILITY.wpd
Attachments
Attachment #1 - Annexation Resolution - Properties Located at 349 and 446 Acorn Lane
Attachment #2 - Virchow Krause & Company Report on Cable Television Franchise Fee Review (to original and file copy)
Attachment #3 - Comcast FCC Filing Forms 1240 and 1205 (to original and file copy)
ATTACHMENT #1
UTILITY minutes of 08/28/2006
A RESOLUTION PROPOSING THE INCLUSION OF AN AREA WITHIN THE LIMITS OF THE CITY OF DOVER AND CALLING FOR A SPECIAL ELECTION TO BE HELD IN THE SAID AREA.
WHEREAS, the Charter of the City of Dover authorizes Council to extend the boundaries of the said City after a special election of the qualified voters and real estate owners of the territory proposed to be annexed, and
WHEREAS, the Mayor and Council of the City of Dover deem it in the best interest of the City of Dover to include properties located at 349 and 446 Acorn Lane, which is contiguous to the present City limits, into the limits of the City of Dover and within a zoning classification as recommended by the City of Dover Planning Commission.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET:
1. That a special election be held for properties located at 349 and 446 Acorn Lane situated in West Dover Hundred, Kent County, State of Delaware.
2. That the election be held on the 12th day of October, 2006 commencing at the hours of 11:00 a.m. in the City Hall Annex, 15 E. Loockerman Street, Dover, Delaware, for the purpose of submitting the question of annexation of the above area to those persons entitled to vote thereon.
3. That the election be held and conducted pursuant to the provisions of the Charter of the City of Dover as amended.
4. That this resolution be published in accordance with the City of Dover Charter.
ADOPTED: *