Loading...
Exh 8EAGENDA ITEM #81; STrPTEMBER 12, 2UU5 CITY OF ATLANTIC BEACH CITY COMMISSION MEETING STAFF REPORT AGENDA ITEM: Proposed Federal Legislation that would preempt cities from franchising companies using public right-of--way for providing video services, including cable TV SUBMITTED BY: Jim Hanson, City Mana ei ' " DATE: September 6, 2005 BACKGROUND: A Bill has been submitted for consideration at the United States Senate entitled the "Broadband Investment and Consumer Choice Act". The legislation would immediately eliminate all existing local franchise agreements for companies providing video services. It would also a substantially impact the revenue received by Atlantic Beach. While cities would be allowed to receive compensation for use of the right-of--way in an amount up to 5% of gross receipts the current limit) they would be limited to what could be justified as being "reasonable" management fees for the use of the right-of--way. Under current legislation for this or any other franchise, cities are not required to calculate actual costs in the management of the right-of=way. Currently the City of Atlantic Beach ' receives over $550,000 a year from the consolidated communications tax, .. which includes revenues not only from the cable TV company, but also from Bellsouth and other telecommunication carriers. When Atlantic Beach last received a franchise fee directly from the cable company, it was in 2001 for $65,225. The Florda League of Cities in August adopted a resolution opposing any federal legislation that preempts cities from requiring local franchise agreements. Leibowitz and Associates, past cable attorneys representing both Atlantic Beach and Jacksonville, has sent out a proposed resolution for cities and counties to adopt opposing the new federal legislation. BUDGET: Atlantic Beach has not prepared any estimate of the actual cost for management of the right-of-tivay so it is impossible to estimate how much of the existing revenues from cable TV would be eliminated if this act were adopted. However, an estimate of the management cost would probably be relatively small compared to the present 5% franchise fee. RECOMMENDATION: The Mayor and Commission should determine whether it is appropriate to prepare a resolution opposing the federal legislation. ATTACHMENTS: 1) Memo from Leibowitz and Associates dated August 17, 2005 AGRNDA ITEM #8E SEPTE&IBER 12, 2005 2) Resolution from Florida League of Cities considered at the annual convention in Orlando in August 3) Article from Governmental Finance Officers of America (GFOA) newsletter dated August 12, 2005 p~ nP 1 of 1 AGENDA ITEM #SE SEPTEIVIBER 12, 2005 Hanson, Jim From: Ila L. Feld [IFeld@broadlaw.com] Sent: Thursday, August 18, 2005 12:14 PM Subject: Federal Legislation Attachments: Resolution.doc LEIBOWITZ & ASSOCIATES, P.A. ' ' JOSEPH A. BELISLE SUITE 1450 530-1322 ILA L. FELD SUNTRUST INTERNATIONAL CENTER 530-9417 THOMAS H. WILLIAMS ONE SOUTHEAST THIRD AVENUE Firm~broadlaw.com MATTHEW L. LEIBOWITZ ~ M1AItifI, FLORIDA 33131-1715 ' ELENI C. PANTARIDIS MEMORANDUM To: All Clients and Interested Parties Date: August 17, 2005 Re: Federal Legislation TELEPHONE (305) TELECOPIER (305) E-MAIL As you may be aware, a bill entitled the "Broadband Investment and Consumer Choice Act (S. 1504) has been introduced by Senators John Ensign and John McCain. As detailed in the attached Resolution, passage of the bill into law would have a significant adverse impact on local governments. We would urge you to oppose the bill and recommend that your governing body adopt a resolution, such as that attached hereto. Please do not hesitate to contact Ila Feld, Eleni Pantaridis or Matt Leibowitz for more information at 305-530-1322, by email at either IFeldna,broadlaw com or EPantaridis(cr)broadlaw com, or by mail at One SE 3rd Avenue, Suite 1450, Miami, Florida, 33177. For more information about the Law Firm of Leibowitz & Associates, visit our website at www.fltelecomlaw com. THE INFORMATION IN THIS TRANSMISSION IS INTENDED ONLY FOR THE PERSONAL AND CONFIDENTIAL USE OF THE DESIGNATED RECIPIENTS NAMED ABOVE. THIS MESSAGE MAY BEAN ATTORNEY-CLIENT COMMUNICATION AND AS SUCH IS PRIVILEGED. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT NAMED ABOVE, YOU ARE NOTIFIED THAT YOU HAVE RECEIVED THIS DOCUMENT IN ERROR, AND ANY REVIEW, DISSEMINATION, DISTRIBUTION OR COPYING OF THIS MESSAGE IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS MESSAGE IN ERROR, PLEASE NOTIFY THIS OFFICE IMMEDIATELY VIA TELEPHONE, AND DISCARD THE ORIGINAL MESSAGE. THANK YOU 8/18/2005 AGENDA ITEM #8E SEPTEMBER 12, 2005 RESOLUTION NO. ' A RESOLUTION OF THE CITY/COUNTY COUNCIL/COMMISSION OF THE CITYJCOUNTY OF ,EXPRESSING OPPOSITION TO SENATE BILL 1504 KNOWN AS THE "BROADBAND INVESTMENT AND CONSUMER CHOICE ACT" (S. 1504), URGING CONGRESSIONAL " REPRESENTATIVES TO REFRAIN FROM ANY FORM OF SUPPORT OR CO- SPONSORSHIP OF S. 1504 AND TO VOTE IN OPPOSITION TO S. '1504, AND DIRECTING THAT THIS RESOLUTION BE FORWARDED TO THE (Insert State Name Here) CONGRESSIONAL DELEGATION, OTHER MEMBERS OF CONGRESS AS DEEMED APPROPRIATE, AND THE PRESIDENT OF THE UNITED STATES; AND PROVIDING AN EFFECTIVE. DATE. . WHEREAS, on August 2, 2005, Senators John Ensign and John McCain introduced the Broadband Investment and Consumer Choice Act of 2005 {S. 1504); and WHEREAS, the City/County CouncillCommission of the , opposes the passage of S. 1504 because: • The bill would preempt all local authority over the provision of cable and " " video services within the community, including the ability of the local government to provide appropriate oversight to entities conducting business within their jurisdiction and in the local public rights-of-way; • The City/County's negotiated contract with its cable operator would be abrogated under the terms of the bill; • The bill would substitute a new compensation methodology lowering the existing franchise fee and replacing it with a fee, or in the State of Florida, ' the cable component of the Communications Services Tax, which must be justified as being "reasonable" in the eyes of the user, limited to management costs (which denies the rights of the property owner to obtain fair and reasonable compensation for the use of public property for • private gain), and not in excess of 5%; " • These requirements and restrictions would result in the creation of a . subsidy to the cable and telecommunications industries; at the expense of the CitylCounty's taxpayers; . The bill would substantially reduce the amount of capacity which may be required by local governments to meet their public, educational and government ("PEG") access needs, while stripping the City/County of the • ability to obtain capital support for the use of PEG capacity -part of the bargain contained within the City/County's negotiated franchise agreement " -with the result that the community's cable-related needs and interests would not be met; AGENDA ITEM #8E SEPTEMBER 12, 200 • The bill would deprive local citizens of the ability to address local issues locally, by removing to the state all customer service issues, and further by denying consumers any form of recourse for any actions of a communications provider; • The bill would eliminate any build-out requirements for any video service provider, thereby allowing providers to discriminate based on the wealth of the local neighborhoods they choose to serve; • The bill would preempt any state or local law that is not generally applicable to all businesses, thereby potentially preempting any law applicable to only certain classes of businesses, such as utilities and rights-of-way users (such as requiring undergrounding of facilities and ensuring electric code compliance); • The bill would prohibit the City/County from imposing any fee for issuance of rights-of--way construction permits yet would require the City/County to act on requests for permits in a timely manner as determined by the FCC, thereby insinuating inappropriate federal government involvement in the basic day-to-day management of local rights-of-way; • The bill would prohibit municipalities and their utilities from providing communications services without giving a right of first refusal to private industry, and would then grant industry unfettered access to ail municipal facilities and financing in the event private industry chooses to provide services; • The bill would deprive the City/County of the authority to establish and . maintain government owned and operated networks, known as institutional networks, that may be utilized by first responders and other government officials in the day-to-day management of the City/County's business; • The bill would permit broadened preemption of local zoning decisions relating to the placement of cell towers, depriving the City/County of the authority to ensure that such towers are safely and appropriately located in areas to provide the greatest degree of services without unnecessarily posing a hazard to the public health, safety and welfare; and • The bill would eliminate the protection the City/County currently has against liability for damages and attorneys fees in lawsuits brought by communication service providers against local governments, a type of litigation that the bill would seem to invite service providers to bring. AGENDA ITEM #8E SEPTEMBER 12, 2005 WHEREAS, for these reasons, the CitylCounty Council/Commission finds that it should appose S. 1504 and urges the Congressional Delegation and other members of Congress to oppose S. 1504; and WHEREAS, the CitylCounty Council/Commission finds that this Resolution should be forwarded to the Congressional Delegation, other members of Congress as~deemed appropriate, and to the President of the United States. NOW, THEREFORE, BE IT RESOLVED BY THE CITY/COUNTY COUNC{LICOMMISSION OF THE CITY/COUNTY OF , THAT: Section I. For the reasons stated above, the CitylCounty Council/Commission of the CitylCounty of ,declares its ` ~ opposition to S. 1504 and urges the Congressional Delegation and all other members of Congress to oppose S. 1504. Section II. The CitylCounty CouncillCommission hereby directs that this Resolution be forwarded immediately to the Congressional Delegation, other members of Congress as deemed appropriate, and to the President of the United States. Section III. This Resolution shall become effective immediately upon its passage. SIGNED this the day of , 2005. ,MAYOR ATTEST: CITYICOUNTY SECRETARY APPROVED AS TO FORM: CITY/COUNTY ATTORNEY AGENDA ITEM #8E SEPTEMBER 12, 2005 2005-09 A RESOLUTION OF THE FLORIDA LEAGUE OF CITIES, INC. URGING CONGRESS TO ENSURE MUNICIPAL AUTHORITY TO REQUIRE LOCAL FRANCHISES FOR THE PROVISION OF VIDEO ' ' SERVICES WITHIN THEIR JURISDICTION. WHEREAS, current law requires cable television operators to obtain a local ' franchise agreement from a city before they offer video services to its citizens; and WHEREAS, the obligation to obtain a local franchise to provide video services ' ' stems both from inherent local government authority over the use of rights-of--way and from the federal 1992 Cable Act, Title VI; and WHEREAS, the two' largest telephone companies, SBC and Verizon, have announced their intent to offer video services; and WHEREAS, these companies are seeking federal legislation, potentially as part of the rewrite of the federal Communications Act, that would restnicture the local franchising process and instead create a national video franchise allowing telephone companies to offer video programming in cities without obtaining a local franchise agreement; and WHEREAS, cities should leave the authority to negotiate and enforce local franchise agreements to obtain needed services, including institutional networks and the provision of Public, Educational and Government (PEG) access channels, which cities can use to provide messages and important information to their citizens; and WHEREAS, telephone companies should not be treated differently from cable operators that provide video services; and WHEREAS, H.R. 3146 has been filed by U.S. Representatives Marsha Blackburn (Tennessee) and Albert W}mn (Maryland) and S. 1349 by U.S. Senators Gordon Smith ` (Oregon) and Jay Rockefeller (West Virginia) that would create a national cablelvideo ,franchise, thus bypassing the local franchising process. NOW, THEREFORE, BE IT RESOLVED BY THE FLORIDA LEAGUE OF CITIES, INC.: Section 1. That the Florida League of Cities, Inc. opposes federal legislation that creates a national video franchising process preempting cities from requiring a local franchise agreement from telephone companies that provide video services in their cities. AGENDA ITEM #8i; SEPTEMBER 12, 2005 Section 2. That the Florida League of Cites, Inc. urges members of Florida's Congressional Delegation to oppose this legislation and protect cities' local franchising authority over video services. Section 3. That a copy of this resolution be provided to the Florida Congressional Delegation, and the National League of Cities. PASSED AND ADOPTED by the Florida League of Cities, Inc., in conference assembled at the League's 79th Annual Conference, at the World Center Marriott Resort, Orlando, Florida, this 20th Day of August 2005. Clay Ford, President ` Florida League of Cities, Inc. Mayor Pro Tem, City of Gulf Breeze ATTEST: Michael Sittig, Executive Director Florida League of Cities, Inc. Submitted by: FLC Staff ~_ ~ ~t~#e and R~~iQ ~ , august. ~a.•~~~~ltlscoi~eTrt ~~Qa. L~ ;~ros~u.l~It~ G~nt~~:t: HiuYw.uv~foa,t~t~ ,. September 1~-'15: Ohlq t3FQq._Rnrji~l ~Q ClevQlend,~ bnntact: www,phgfoa.c~r«I September '~3~1.6 WashingtAn GF~q, ~rtntil 3ea#tte, WA contact Wwint.wfoa.org. ~ ~ .~ , September'i~'1~; Illlr<ols.CFf~tA. Rnriu~t,~ .. $grirl 11~~ , f n ~rwtnt fi~fa~.ar ~ . ,~~ . ~;pnta nk ~d' fa. CIA/ f.. ~:.~:_ '~ ~ . r~e~+~r-tt~~>ly~ t~i$Jp~2 pdf .. ~ ~ '~+rA ~ ~ :: ' . w Septe~b~t` ~1, a d~h~ Clt~ Cl~r~, 71'al Aa~~~~tt~ttr. rI ~nferen~~: ' . ~ ,~ _ ~. ~l~iS~~ t~. ~~~ ctl~is~ ~ local and state governments that e fleet credit cards to purchase fuel. The fix in the SAFETEA-LU sta that governmental entities m con- tinue to use fleet credit c s to pur- chase fuel and the cr t card compa- nies may remit a collect reimburse- s nt for the f excise tax. Without this x, g ernments would have had to ap for the excise tax reimburse- m thei selves, causing costly dministrati problems for local and state governme sand the IRS. ^ President Bush S ns Energy Bill: Local Governor is Hail Deletion of MTBE Pro 'ion On August 8, President Bush sign The Energy Policy Act of 2005, a comprehensive $14.5 billion piece of legislation that Congress has been working on for more than four yea . The bill contains many provisi s of interest to GFOA and other cal and state government orga '~ ations. Most importantly, the bil oes not contain a provision pro ling MTBE manu- facturers fr legal action brought by cities a towns where the gasoline add' ' e has contaminated the drink- irtig water supply. MTBE (methyl ter- tiary butyl ether) is a gasoline addi- tive that has been known to leak ough underground storage tanks an ipelines and contaminate surface and gr nd water supplies. Originally, the House f Representatives passed the Energy with substantial pro- tective measures or MTBE producers by forcing all claim • into federal court, placing a cap on a amount cities and water utilities c ild collect from MTBE producers, and eem - ing states' ability to ban MTB he Senate would not agree tot ,se pr visions, and unlike pre ' us years, the MTBE protection vision was dropped, allows b the Act to pass in both chamb s. It is estimated that the costs to cal governments and water utili ' .s associated with extracting BE out of drinking water sources ld exceed $85 billion. The Act . so establishes a new tax- creditbon rogram for renewable energy project lean renewable energy bonds (C .Bs). The CREB program allows non rofit utilities such as electric co-ops, ublic power systems, and municipal u ' sties to issue $800 million of taxabl ax- AGENDA ITEM #8E SEPTEMBER 12, 2005 credit bonds between December 3l, 2005, and December 31, 2007. ^/ U.S. Supreme Co {Upholds Governmental se of Eminent Do ain The U.S upreme Court reaffirmed the r'b t of a city to take private land private development if it will ful- fill a "public purpose:' In the case of Kelo v. City of New London, Co~mecticut, the Supreme Court ruled in favor of the City of New London, embracing the city's argument that its roposed redevelopment plan by pri- . eparties qualifies as a "public use" wit ' the meaning of the Takings Clause. In response to he Supreme Court's decision, both th House and the Senate have introdu • d bi-parti.•• federal legislation to c tail e use of cities' eminent domain er when federal funds are inv ve~i. In the Hou ,Rep. James Sensen ginner (R-Wis.) has intro- du H.R. 3135, the Private Property fights Act of 2005, which would pre- vent states and local governments from using federal funds in any way to exercise eminent domain for eco- nomic purposes. Se for John Cornyn (R-Tex.) has intro ed similar legislation in the Senate, t Protection of Homes, Small Busin •ses and Private Property Act o~005, S. 1313. ^ Telecommunications Legislation Would Undermine Local Authority In late July, Senator John Ensign (R- Nev.) introduced his telecommunica- tions rewrite legislation, the Broadband Investment and Consumer www.gfoa.org AGENDA ITE1V1 #8E _ ~ _ ~___ __ SEPTEMBER 12, 2005 Choice Act (S. 1504), which would eliminate local franchise authority as well as interfere with local govern- ments' ability to manage the public rights-of--way and ensure that com- munications services are available to all citizens. More specifically, the legislation would immediately eliminate all existing local franchise agreements. The bill's provisions would apply to all providers of video service, both existing cable companies and new entrants. The legislation retains the current 5 percent gross revenue cap on franchise fees; however, it limits these fees to the cost of managing the rights-of way (rather than allowing a rental payment for use of the rights- of-way) and provides many excep- tions to what are considered gross revenue costs. The legislation also makes the Federal Communications Commission the arbitrator of disputes over franchise fees; thereby requiring local governments to incur consider- able travel costs associated with resolving franchise disputes. With regard to the ability of munici- palities to offer broadband services, the legislation requires the local gov- ernment to develop a detailed description of its project, and permit private entities to also bid for the provision of such services. GFOA will be working with its local government partners at the National League of Cities and the National Association of Counties to continue to express our strong opposition to this legislation. ^ New Guidance Issued by the Center for Medicare and Medicaid Services (CMS) Notice of Creditable Coverage All group health plans that provide pr : cription drug coverage must send a "N 'ce of Creditable Coverage" to their M icare-eligible active employees, etirees, and dependents stating whethc. their drug coverag ~ is creditable relati~ ~ to the subsid'~ ed prescription drug c verage t twill be available through t Nledicare Part D proor• starting January 1, 2006. A overvi of the creditable cover be regulato Ruid- ance, includi a dates of complia e, is availabl on the GFOA's Web sits L`rrr uyer Irrfurntatiort on the tree Drug Srrbsirly The 28 percent retiree drug subsidy is one of the options employers can receive under the Medicare Modernization Act to continue pro- viding prescription drug coverage to t 'r Medicare-eligible retirees at a lows, • cost. CMS offers online guid- ance o- titeps employers must take ii order to rc, eive the retiree drug s - sidy, which i ay be found on e GFOA's Web si . In addit' ~, CMS offers an online c pr ensive resource center for ~ informational and operational eds f plan spon- sors to beco participant in the retiree dry subsidy program t http://r .cros.hhs.gov. ^ IRS Issues Proposed Regulations Relating to Retirement Benefit Limits Under IRC § 4y 5 At the end of May, the IRS issued proposed regulations (REG-130241- 0.1} ralutinb to limits uii defined bzn- fit (DB) and defined contribution ( retirement plans under Irate • Reve ~e Code (IRC) § 415. M y of these li 'ts apply to gover ental plans. The oposed re ations con- solidate status c ges and IRS guidance issued 'ice the regulations were last up ed i 981 and, in some ca.• , substantia modify the prior gulations. The pro sed regu- l~ ns would generally beco e ;for plan years beginning on January 1, 2007. A copy of the regulation and an analysis of the regulation may be found on the GFOA's Web site. ^ Senate Finance Committee Approves NESTEG Legislation In late July, the Senate Financ Committee passed pension gislation 'ntroduced by chair Sen• or Charles lssley (R-Iowa) a ranking min ity member ax Baucus (D- Mont.). This 1 dislation replaces their earlier leg' ation, the National Emplo ° S• ings and Trust Equity Gua ntee (N TEG) Act (S. 219). ough the new ESTEG legisla- tion affects largely t private sector, it includes provisions i ortant to the public sector, includin • clarify- ing the ability of public emp ees to purchase service credit in their ~ ate or local defined benefit plan; perrr ' - ting after-tax contributions to be made to all tax favored retirement vehicles, and allowing after-tax rollovers between such arrangements; providing relief from minimum required distribution regulatio ;and allowing early distribution malty elief for public safety icers. It is ui /ear when the fi Senate might cons' er the le >' ation. ^ Emp e~nt Opportunities • .~crtising rates for L~r:plo}•rt:cnt Opporttmit}• list utgs in tke Newsletter ar $ISO per positivrr/inser- tion for active GFOA rnent •rs; ,$?50 per positivrt/insertion for associat members; and $500 for nonruernbers. All ads must be repaid. Order forms to pJnce nn ud are required d can be downloaded front CFOA's Web site. ease scud ads paid by check rand credit cord to G • A, Dept. 77-3076, Chicago, !L 60678-3076. To cost ~ ~ that your nd is received, please fax a copy of all c n:atcrials ro 312/977-1506. Deadlines for ads n l ull other uutterials are flee first and t/tirxl Friduy o each montJt. Please be scree any application dead- lines care at least seven drays u(ter publication is rnailed. The Newsletter is mailed first-class the sec- ond and fvurdt Friday of each month. Ads also will be posted to GFOA's Web site (wwtvg/oa,vrg). www.~Foa.or~ • _..