HomeMy WebLinkAbout2005-0907 Cont. Meeting Packet
AGENDA FOR THE CONTINUED MEETING
ASHLAND CITY COUNCIL
September 7, 2005, 12:00 p.m.
Civic Center Council Chamber
1175 E. Main Street
I. CALL TO ORDER
II. ROLL CALL
III. UNFINISHED BUSINESS
. 1. Designation of Voting Delegate for NLC Meeting.
IV. ORDINANCES~ RESOLUTIONS AND CONTRACTS
1. Continued discussion on Reading by Title only of" A Resolution re Authorizing a Cable Television
Rate Increase in the Telecommunications Fund and Surcharge on Electric Accounts."
V. OTHER BUSINESS FROM COUNCIL MEMBERS
1. Comments regarding Oregon Department of Transportation and the Department of Land
Conservation and Development proposed changes to State transportation goals and rules.
VI. ADJOURNMENT
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this
meeting, please contact the City Administrator's office at (541) 488-6002 (TTY phone numb9r 1-800-735-
2900). Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to
ensure accessibility to the meeting (28 CFR 35.102-35. 104 ADA Title I).
CITY OF
ASHLAND
Council Communication
Designation of Voting Delegate for NLC Meeting
Meeting Date: September 6, 20~5
Department: Administration
Contributing Departments: I/,
Submitted by: Gino Grimaldi <.c
Primary Staff Contact: Gino Grimaldi 488.6002
Qrimalda@ashland.or.us
Secondary Staff Contact:
Estimated Time: 10 minutes
Statement:
This is to inform councilors of the upcoming National League of Cities meeting in Charlotte, North Carolina and to
decide whether a council delegate will attend.
Background:
The City of Ashland is a member of the National League of Cities. The annual meeting for the National League of
Cities will be held from December 6 - 10, 2005 in Charlotte, North Carolina. Under the Bylaws of the National
League of Cities, the City of Ashland will be entitled to cast one vote at the Annual Business Meeting, held on
December 10. Voting by proxy is not permitted. During mid-November, the National League of Cities will mail a
special edition summarizing proposed National Municipal Policy amendments and proposed resolutions, which will
be voted on at the annual meeting.
Related City Policies:
There is no established policy in the Ashland Municipal Code which states that a council membHr must attend the
National League of Cities annual meeting.
Council Options:
Approve and select a delegate to attend the annual meeting.
Do not approve or select a delegate to attend the annual meeting.
Staff Recommendation:
Staff recommends that if council chooses to send a member to the meeting, one voting delegate who has. interest in
traveling to the meeting is selected, plus an alternate.
Potential Motions:
Move to approve a council member attends the annual meeting and select delegate.
Do not approve a council member to attend the annual meeting.
Background Information:
The City of Ashland has been a member of the National League of Cities for the past seven years. Cost for a
council member to attend the meeting will be registration fees, the cost of airfare, hotel room and meals for the time
spent in Charlotte, North Carolina.
Attachments:
82nd Annual National League of Cities brochure
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See what the lVEW
CORgressiJIJ' C~~ties
has to OFFER!
82nd Annual National League of Cilties
Congress of Cities and Expositi(tn
December 6-10, 2005
Charlotte, North Carolina
Charlotte, North Carolina, is the place to be in December 2005.
Municipal officials from across the country will convene in Charlotte from
December 6 through 10 for the 2005 National League of Cities Congress of Cities
and Exposition to hear from the experts, share ideas with other city officials
dealing with similar challenges, and take home practical ideas to solve problems
in your city or town.
Whether your biggest challenge is increasing affordable housing, dealing with
the media, involving citizens in productive ways, or improving your basic skills as
a local leader, the 2005 Congress of Cities will offer new ideas and practical solutions.
For more information, visit the NLC website
at www.nlc.org or call (202) 626-3J05.
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National League of Cities
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WHY ATfEND THE CONGRESS OF
CITIES? WHAT'S THE VALUE?
The 2005 Congress of Cities provides resources, ideas, examples,
peer connections, expert input, practical wisdom, and much more.You can attend
workshops to hear examples of successful programs, visit the exposition with more
than 350 booths featuring vendors who work with local governments every day,
join other city officials for practical problem-solving sessions, and attend intensive
leadership training seminars to hone your skills as an elected local policy maker.
Here's what local elected officials who have attended past Congress of Cities say
about why you should attend this conference:
"Attending the NLC Congress of Cities is an investment, not
an expense, providing excellent leadership training for
elected officials and networking opportunities to share
program and service ideas."
Michael Boehm, Mayor, Lenexa, Kansas
"The conference pmvides countless opportunities to learn
more and get ideas on how to save city resources and
improve communi~y services."
Pat Eklund, Council Member, Novato, California
"The ideas shared at the Congress of Cities have helped
save our city countless dollars and have steered our
community into new relationships between our elected
officials and citizens."
Ron Schmitt, Council Member, Sparks, Nevada
"The Congress of Cities was the best orientation / had as a
freshman council member."
Jean Quan, Council Member, Oakland, California
"The NLC Congress of Cities helps elected officials develop
a better vision for their city through workshops, networking,
and leadership development,"
James Mitchell, Council Member, Charlotte, North Carolina
"/ attended for the opportunity to talk about similar
problems and to find solutions to those problems that
would not occur in a letter, e-mail, newspaper etc."
James Taylor, Council Member, Littleton, Colorado
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"",'hen I was a newly-€lected mayor, the
National League of Cities in general and
the Congress of Cities in particular were
invaluable resources to me for practical
advice, best practices, and support from
elected officials with many more years of
experience than I had. Nearly 7 years
later, the Congress of Cities is still the best place to find
solutions to local challenges. "
Anthony A. Williams, Mayor, Washington, DC;
NLC President
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The 2005 Congress of Cities and Exposition will offer
several unique learning opportunities for city
officials over a five-day period such as:
. General Sessions featuring nationally recognized speakers
. Workshop Sessions featuring subject matter experts and
experienced city officials
· Host City Mobile Workshops
. Leadership Training Institute Seminars
. Constituency Group Events
· State League Events
· Networking Activities
· Problem Solving Clinics
· An Exposition of over 350 booths
Connecting with Charlotte
Delegates attending the 2005 NLC Congress of Cities in
Charlotte, December 6 through 10, will be treated to
southern hospitality at its best.
Known as the Queen City, Charlotte has undergone
tremendous growth during the past 10 years. It is now the
second largest banking city in the world and is a showcase
for successful private-public partnerships.
The Charlotte host committee is lining up the city's
premier attractions for NLC delegates in December. Visit
the NLC website at www.nlc.org for regular updates on
host city plans.
Host City Mobile Workshops
Learn about the exciting programs underway in Charlotte
and how you can replicate them back home to help your
city run more efficiently and save money Host city mobile
workshop sessions will take place Wednesday, December 7
through Friday, December 9, and will include:
· Neighborhood Revitalization Strategy -
Making Neighborhoods Better
· Integrating Greenways into the Community
. Innovative Solutions to Smart Growth in Small Town~~
. Transit Oriented Developmt'nt in Charlotte's South EI k.
· Leaving the Lights on in Your Downtown
. Behind tht' Checkered Flag - The Economics of NASCAR
. Commu[}ity Policing - The Impact of Neighborhood
Actiol} Teams
Visit the NLC website
at www.nlc.org
for more detailed
and up-to-date
information about
the conference
schedule, general
session speakers,
conference workshops,
and other conference
activities.
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leadership Training Institute Seminars
9:00 u.m. - 5:00 p.m.
WEDNESDAY, DECEMBER 7
NLC Board of Directors Meeting
NLC Advisory Council Meeting
"T.C Policy Committee Meetings
o a.m. - 5:00 p.m.
Host City Mobile Workshops
9:00 a.m. - 5:00 p.m.
Leadership Training Institute Seminars
9:00 a.m. - 5:00 p.m.
Orientation Session for First-Time Attendees
5:45 p.m. - 6:45 p.m.
Opening Reception with Exhibitors
6:30 p.m. - 8:00 p.m.
THURSDAY, DECEMBER 8
Opening General Session
9:00 a.m. - 11:00 a.m.
Welcoming Lunch in Exhibit Hall
11:00 a.m. - 1:00 p.m.
Exposition
11:00 a.m. - 5:00p.m.
Conference Workshops
1:00 p.m. - 2:30 p.m.
2:45 p"m. - 4:15 p.m.
Resolutions Committee Meeting
1:00 p.m.
Host City Mobile Workshops
1:30 p.m. - 5:00 p.m.
State Municipal League and Constituency Group
Receptions/Events
~ 00 p.m. - 8:00 p.m.
&. dIDAY, DECEMBER 9
General Session
.9:00 a.m. - 10:30 a.rn.
Exposition
10:30 a.m. - 3:00 p.m.
Conference Workshops
10:45 a.m. - 12:15 p.m.
2:00 p.m. - 3:30 p.m.
3:45 p.m. - 5:15 p.m.
Exhibit Hall Lunch
12:30 p.m. - 2:00 p.m.
Host City Mobile Workshops
1:30 p.m. - 5:00 p.m.
State Municipal League and Constituency Group
Receptions/Events
6:00 p.m. - 8:00 p.m.
Youth Delegates Event
7:00 p.m. - 10:00 p.rn.
SATURDAY, DECEMBER 10
Ecumenical Prayer Breakfast
7:30 a.m. - .9:00 a.m.
General Session
.9:15 a.m. - 10:45 a.m.
Conference Workshops
11:00 a.m. - 12:30 p.m.
egates Luncheon
_ _:45 p.rn. - 2:15 p.m.
Annual Business Meeting
2:30 p.m.
Host City Closing Event
7:00 {J. TTl
10 Reasons to Atte.nd the
2005 Congress of Cities
AMERICA'S CITIES A~ID TOWNS
TEAMING UP FOR TOJMORROW
1. Discover new approaches to leadership, governance, and
problem solving by attending general sessions, conference
workshops, and networking sessions.
2. Learn creative approaches to working in the current economy.
3. Hear from high profile national speakers who will offer
their perspectives on issues and challenges facing the
leaders of the nation's cities and towns.
4. Gain access to a broad network of information and
resources - experts, vendors, city leaders, youth delegates,
NLC staff, colleagues, and friends - all gathered in one
place for five days.
5. Visit and learn about successful prograrns in Charlotte that
might work in your community.
6. Observe and participate in setting National Municipal
Policy for the nation's cities and towns.
7. Hone your leadership skills by attending special
Leadership Training Institute seminars that will increase the
value of your trip to Charlotte.
8. Share experiences and net-
work with local leaders from
throughout the country.
9. Se.e old friends and make
new ones.
10. Help your city/town prepare
for a better future by talking
about emerging issues and
hearing about local solutions.
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NLC Congress of Cities Conference Registration and Housing Form
Charlotte Convention Center, Charlotte, NC, December 6'- 10, 2005
For Faster Registration and Housing Reservation, Register Online at http://www.nlc.org
No housing or registration will be processed without accompanying payment in full.
Are you a newly elected official? Size of city?
Name Gender
Tille
City/Organization
Mailing Address
City ~ State Zip
Phone Fax
Email
Registrant's Email
Spouse/Guest Name' ($60 fee)
'Spouse/Guest not eligible for a separate hotel room. Fee is NONREFUNDABLE.
Child Name (14 and under, no fee) Age_
Youth Delegate" (15-18, $75 fee) Age _
"Local o.fficials are encouraged to register youth as active participants in this conference to
contribute to NLC's youth agenda. If the youth delegate requires hotel accommodations
separate from yours, attach thei( registration form with your completed form.
Youth Chaperone Name ($75 fee)
(Local Elected City Officials are not eligible for this rate.)
Special Conference Rates
5 $355 First-Time Attendee
SG $ 60 Spouse/Guest (non-refundable)
7 $75 Youth Delegate
8 $75 Youth Chaperone (not applicable to elected officials)
$-
$-
$-
$-
Registration Fees: Early/Online AdvancelOnline
1 NLC Member City $455/$430 $495/$465 $_
2 Associate Member $455/$430 $495/$465 $_
3 SML Member City $575/$545 $620/$590 $_
4 Non-Member/Other $695/$665 $735/$705 $_
Eligible for Early Fee if Postmarked by September 15, 2005. Eligible for On-line
Advance Fee if Registered by November 28, 2005. Visit www.nlc.org and register
Online for discounted online rate.
Registration for Leadership Training Institute Seminars (Dec. 6 and Dec. 7, 2005)
To REGISTER, codes and fees are listed beside the Leadership Training Institute title in this
brochure or NLC Website. You must be registered for the conference in order to attend.
Tuesday, December 6 - Full-Day Seminar Code:_ $_
Tuesday, December 6 - Morning Seminar Code:_ $_
Tuesday, December 6 - Afternoon Seminar Code: _ $_
Wednesday, December 7 - Full-Day Seminar Code:--,--- $_
Wednesday, December 7 - Morning Seminar Code: _ $_
Wednesday, December 7 - Afternoon Seminar Code: _ $_
LTI Participant & Recognition Luncheon - $40 Code:_ $_
Special Events
P1 $50 Ecumenical PraYI~r Breakfast Code:_ $_
Constituency Group 2006 Combined Dues and Special Event Fees
To REGISTER, codes and fees are listed under the Constituency Group section of the
brochure or NLC Website. You must be registered for the conference in order to participate.
APAMO Dues/Activities Code: _ $_
GLBLO Activity Fee Code: _ $_
HELO Dues/Activities Code:_ $_
HELOActivity Fee (nonmember ::Jnly) Code:_ $_
NBC-LEO Dues/Activities Code: _ L-
NBC-LEO Membership Luncheon Event (nonmember only) Code:_ $_
UCC Membership Luncheon Roundtables Code:_ $__
WIMG Dues/Luncheon Code__ $_
WIMG Luncheon (nonmember only) Code ___ $_
WIMG Welcome Reception (members & nonmembers) Code ____ $_
TOTAL REGISTRATION FEE:
$-.-
Rate
Office Use Onlv Pavment
Check#
Amount
...
Hotel Reservations: You must be registered for the Conference to reserve a hotel room
To guarantee your room, all hotels require one night's deposit plus tax, per room 14 da"
prior to your arrival. This is required even if you plan to arrive before 6:00 p.m.
If accommodations are not guaranteed 14 days in advance, the reservation will be canceleo
U Please make my hotel reservation as indicated below.
U I do not require hotel accommodations at any of the hotels listed below.
U Please contact me regarding suite information.
Room Dates: Arrival Date: _1_/ __ Departure Date _/ _/_
Room Type: U Single (1 person/1 bed) U Smoking
U Double (2 people/1 bed) U Non-Smoking
U Double/Double (2 people/2 beds)
Room types cannot be guaranteed but Hotels will attempt to accommodate all requests.
Sharing My Room With (for Hotel Check In Purposes):
Special Request (e.g., wheelchair accessible rooms, etc.):
If you have special housing or transportation needs, please contact NLC Meeting Services.
Hotel Choices: Indicate your first-choice hotel with the number "1 ". Number the other
hotels from "2" to "16" in order of preference. The hotel listing appears in the order of the
hotel map numbers.
_ Adam's Mark Hotel
Sal/Dbl
$99
$114
$135
$119
$109
$129
$124
$89
_The Westin Charlotte
Sal/Dbl
$99
$135
_ Hilton Charlotte Executive Park $109
_ Hilton Garden Inn Charlotte Uptown $109
_Holiday Inn Charlotte Center City $125
Omni Charlotte Hotel $129
_Residence Inn Charlotte Uptown $129
$138
_ Charlotte City Center Courtyard by Marriott
_ Charlotte Marriott City Center
_ Charlotte Marriott Executive Park
_ Hampton Inn Charlotte Uptown
_ Hilton Charlotte Center City
_Doubletree Hotel Charlotte Gateway Village
_ The Dunhill Hotel Uptown
_Embassy Suites Hotel
_Four Points by Sheraton Charlotte Uptown
Hotel Deposit Information: All major credit cards with expiration date of 12/05 or
later are accepted at the conference hotels All checks, government purchase orders
vouchers or claims must be submitted to the hotel with your Reg ID number at least 4
WEEKS (November 7, 2005) prior to arrival, and are subject to hotel approval.
Registration Fee Payment Information
U Charge my REGISTRATION FEES to VISA, MasterCard or AmEx listed below
U Check for REGISTRATION FEES made payable to National League of Cities
U Purchase Order for REGISTRATION FEES - copy must be enclosed & payment must
be received by November 28, 2005.
Hotel Deposit Payment Information
U Charge my HOTEL DEPOSIT to the credit card listed below.
U Check for HOTEL DEPOSIT. Please submit to hotel address noted on NLC Meeting
Services' confirmation 4 WEEKS prior to arrival - subject to hotel approval.
U Purchase Order for HOTEL DEPOSIT. Please submit to hotel address noted on NLC
Meeting Services' confirmation 4 WEEKS prior to arrival - subject to hotel approval.
Credit Card Authorization: NLC Meeting Services is authorized to use the card below
to pay all applicable registration fees and guarantee my hotel reservation. I understand
that one night's room charge will be billed through this card if I fail to show up for my
assigned housing on the confirmed date unless I have canceled my reservation with the
hotel at least 72 hours in advance.
Visa/MasterCard/Am Ex Number Exp. Date_
Card Holder Name
Card Holder Signature
Additional Credit Card Authorization: For hotel deposit only if different than the credit
card number listed above. (Expiration date must be 12/05 or later, per hotel requirement.)
Credit Card Number Exp. Date_
Card Holder Name
Card Holder Signature
Return Conference Registration and Housing Form to:
Fax 703-631-6288 (Credit Card and Purchase Orders Only - No Checks)
Mail: NLC Meeting Services, c/o J Spargo & Associates, Inc.
11212 Waples Mill Road, Suite 104, Fairfax, VA 22030
For more information:
Phone. 888-319-3864 or 703-449-6418
Email.nlccocregandhousing@jspargo.com
"'Make a copy of this form for your records ",..
Htl
Subblk
Cate
NLC is partnering with USAirways and American Airlines to offer
discounted airfares and with Avis and ThTifty Car Rental Agencies to offer
Special car rental rates. Visit the NLC website at wwwnlc.org to learn
more about how to take advantage of these partnerships.
Photos courtesy of Visit Charlotte
CONFERENCE REGISTRATION
Whether you are registering online, downloading your registration form from the web,
or sending it to NLC Meeting Services with a check, you can find
up-to-date and detailed information about registration categories,
constituency group events, leadership training seminars, the
conference program and the city of Charlotte on the NLC website
at www.nlc.org.
Not an NLC Member?
Savings on conference fees are just one of the benefits of NLC
membership. To find out if your community is a direct member
city or to receive membership information, please call the NLC
membership office at (202) 626-3190 or visit the NLC website
at www.nlc.org.
Special Travel Discounts to Charlotte
Accommodations
All general sessions and workshop sessions as well as the exposition will
be held at the Charlotte Convention Center. For a list of conference hotels
and descriptions, visit the NLC website at wwwnlc.org.
Registration Dates
and D,eadlines
Conference Registration and
Hotel Cancellation Policies
September 15, 2005:
Early registration postmark deadline.
All requests for cancellation must be in writing, postmarked by
November 18, 2005, and are subject to a $50 processing fee. No partial
refunds will be made if you decide not to attend particular functions.
No refunds will be accepted after the cancellation deadline.
To guarantee your room, all hotels require a one night deposit plus tax,
per room, 14 days before arrival.This is required even if you plan to arrive
before 6:00 p.m.All reservations that are not guaranteed 14 days before
arrival will be canceled.
November 18, 2005:
Cancellation postmark deadline.
November 28, 2005:
Requested changes to existing hotel
accommodlJrtions deadline.
FOR QUESTIONS, CALL 1-888-319-3864 or 703-449-6418 or
Email: nlccocregandhousing@jspargo.com
November 28, 2005:
Advanced regl'stration by fax or
on-line deadline. After this date,
please plan to register on-site.
PLEASE MAKE A COPY OF THE REGISTRATION/HOUSING FORM AND
THE NLC POLICY AND PROCEDURES FOR YOUR RECORDS.
What's Included in Your Conference
Registration Fee
· Host City Mobile Workshops
· Th(' ()pellillg Receptio[l
· The Delegates Lunch
· The Host City Closing Event
· Access to the Exhibit Hall with ov('r :);)0 Exhibit Booths,
City Showcase ,lI}(\ V('[}(!or Workshop Pres('[ltatioIIS
· Four General Ses."ions with Nationally Recognizee! Speakers
· Over "10 Concurrent Workshops Aclclressillg Critical
Issues Facing Toclay's Local Leaders
· A Confen'llCe Bag
· '(wo Exhibit Ilall LlII1C!J('S
· A Prillted ('()[If(>f('[l(,(, IJrogrclll1
82nd Annual
National League of Cities
Congress of Cities
and Exposition
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December 6-10, 2005
Charlotte, North Carolina
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YOU CA
N'T AFFORD TO MISS THIS CONFERENCE!
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National League of Citil~s Institute
1301 Pennsylvania Avenure, N.W
Washington, D.C. 20004
Non-Profit Org.
U.S. Postage
PAID
Permit No. 4815
Washington, D.C.
****************** AUTO** ALL FOR AADC 970
00216174
FRAN BERTEAU
EXECUTIVE SECRET AR Y
20 E MAIN ST
ASHLAND OR 97S20-1 XSO
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CITY O-f
ASHLA.ND
Council Communication
Resolutions Authorizing a Cable Television Rate Increase in the
Telecommunications Fund and Surcharge on Electric Accounts
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Primary Staff Contact: Lee Tuneberg, 552-2003
tuneberlCWashland.or. us
Meeting Date: September 6, 2005
Department: Administrative Services
Contributing Depts: N/ A
Approval: Gino Grimaldi
Estimated Time: 30 Minutes
Statement:
This communication provides options to Council for changing cable television (CAT\T) rates and
establishing a surcharge on electric utility accounts to meet AFN financial requirements.
Background:
Better financial stability of the Telecommunications Fund was a key discussion during the FY
2005-06 budget process held in April and May of this year. Everyone's goal was to establish a
means of providing adequate fiscal support to the Ashland Fiber Network (AFN) for FY 2005-06
while Council considered what changes are needed for its telecommunications systenl that was
begun in the Electric Fund in FY 1998-99.
To date AFN has been funded by two bank loans and internal borrowings for construetion and
operational costs that were rolled together in a $15.5 million refinancing done in August of 2004.
Construction of the system, where financially practical, was considered complete in FY 2003-04.
This means that the City has only one complete year of operational history available for
-""~:r'''.c';comparison purposes. The refinancing included monies to be set aside, helping to pa:y1lrefiTst
debt service however, $200,000 was needed as a subsidy from the Electric Fund to provide
sufficient cash to meet the July 15th payment of $802,000. The $200,000 was provided in June.
The budget for FY 2005-06 was created relying on the $200,000 subsidy mentioned above to be
included in the balance carry forward with remaining bond proceeds from FY 2004-05, a
$500,000 operational transfer from the Electric Fund balance as a subsidy and additional
revenues through rates and fees of $200,000. This would result in a $70,000 ending fund
balance and a carry forward into FY 2006-07 of $21 0,000 if no contingency was spent during
this year. The long-tenn budget shows the following years requiring 10% increases in revenues
each year and subsidies increasing for several years to balance. The Electric Fund, as the
original guarantor of AFN was identified as the provider of subsidies even though th~, 2004 bond
covenants specify that any unrestricted resources could be employed as Council chooses.
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AFN's operational revenue for FY 2004-05 totaled $2.6 million. Operational expenses
(excluding bond issue costs) were about the same. Projections for FY 2005-06 are $2.835
million in operational revenues (including added revenue from rate increases and excluding the
subsidy transf(~r of $500,000) and $4.220 milliOh in expenses (including $140,000 in
Contingency but not including OOpreciation and amortizations totaling $500,000). The shortfall
is $1.395 million and the long-tenn budget reflects that amount reduced to $890,000 through the
subsidy transf(~r and the balance covered by a carry forward of $963,000. The amount needed is
$738,000 for FY 2005-06. '
In order to mec~t or exceed the target of at least $70,000 fund balance carry forward on June 30,
2006, a combination of actions must take place to provide $738,000 in the remaining 9 months.
These actions ]lnclude rate increase( s), a subsidy or subsidies and cost savings. Narratives of
these follow.
Rate Increases:
AFN has raised cable television rates twice in the last 15 months. The increases for cable
television (CATV) were 8% in June 2004 based upon a consultant study and 6.6% in February
2005 to provide revenues to offset those not generated by other initiatives. Although there have
been some changes in the CATV line-up, the overall package is relatively the same as two years
ago. AFN's CATV rates are thought to be 25 - 30% below national averages, the range
depending on how dissimilar tiers and line-ups are factored.
Charges for cable modem services were raised significantly during the same time period and are
now thought to be priced competitively and should not be raised.
Initial discussions included increasing CATV to the national average. Such a change is
significant andl may best be managed in steps or done at the least sensitive time.
The attached July 19, 2005, memo to Council addresses many of these concerns. Attached is a
chart showing connections in the prior year. The cycle of connections in the fall, with fewer
disconnections in the spring, is thought to be consistent with seasonal changes and television
viewing. Approximately two years ago the City discussed that the appropriate time for annual
rate increases should be around January to best coincide with this cycle and marketing.
Comparisons of a 15% (step approach'toward market) and 25% (at or near market in one step)
are provided, both being done effective January 2006 to allow product or line-up improvements
to minimize the advantage afforded competing systems.
Subsidy:
The first direct subsidy was the $200,000 done last June from the Electric Fund to provide cash
to pay July's dlebt service. In the budget is an additional $500,000 transfer from the Electric
Fund balance. An electric rate increase was deferred in that the fund balance is above the
targeted mininlum and the only need for the proposed rate increase was perceived as generating
funds for AThr. Additionally, an increase in electric rates would have benefited the'General
Fund through user tax and franchise fee revenue. The budget reflects that impact but the
$150,000 impact on the General Fund is offset by a projected larger carry forward from FY
2004-05.
Instead of a direct transfer a surcharge has been recommended whereas a set amount ($3 -$10 per
electric accowlt per month) could generate sufficient revenues directly to AFN without any
added fee or tax going to the General Fund, similar to existing taxes and surcharge.
2
To meet the overall needs of AFN there is a need to identify whether a surcharge is in addition to
or replaces the operational transfer. A surcharge of $5 per electric account will generate
approximately $50,000 per month, and if established effective October 1 would provide
$450,000 to AFN in this fiscal year. Six dollars would provide $540,000, seven dollars equates
. to $630,000, etc.
Cost savines:
Not having to spend all appropriation levels can be beneficial as long as important expense such
as staffing, marketing, capital refresh investments and debt. service are met. Included in the
calculations above is an amount for unidentified expenses called Contingency in budgeting. Any
of this not utilized improves the bottom line and carries forward to the subsequent year. AFN
spent 98% of the original appropriation levels for FY 2004-05 and left $57,000 in Contingency
unused. The above calculations are done assuming that all budget appropriations and
Contingency are consumed.
Fiscal action(s) needed: . __
The budget established was predicated on fiscal steps being taken in the current year. The
Electric Fund balance that is currently available for use will not be there in following years
without increased electric rates. This establishes the need to establish a surcharge to subsidize
AFN related costs as needed. The tools Council uses to balance the Telecommunications Fund
for FY 2005-06 can change for following years as operating AFN changes.
Provided in the options section of this report are a few of the things that could be done. With the
many variables and preferences that come into play, utilizing different elements of th(~ options
provided can satisfactorily meet fiscal requirements. Timing of the changes can impact the
proposed options such as implementing rate changes sooner may provide more revenues by end
of year at a smaller percentage increase.
Significant changes now will affect things that may be proposed later either by the ne'w director
or arising through the Options Committee. The City must anticipate that customers and citizens
will combine any rate increase with any surcharge to evaluate the value of the service provided
. for the total cost paid. The surcharge proposed, as with any subsidy transferred, is partially..
funded by some citizens who still cannot receive all of AFN's services.
For comparative purposes, staff is providing tables showing a 15% and a 25% increase in
January and potential impacts to the end ofFY 2005-06. This is based upon preliminary FY
2004-05 customer counts, revenues and expenses and projecting into FY 2005-06 the potential
range of impacts a significant CATV rate increase may include:
150/0 Increase in CATV Rates as of January
Imoact On:
Customer Counts 3,200 3,040 2,880 2,720 2,560
Change in Counts 0% -5% -10% -15% -20%
Revenue $ 65,855 $ 39,995 $ 14,115 $ (11,530) $ (37,430)
Expenses $ $ (18,158) $ (36,360) $ (54,342) $ (72,544)
Net Impact $ 65,855 $ 58,153 $ 50,475 $ 42,812 $ 35,114
3
The previous table shows the possible impact on AFN finances with a 15% CATV increase and a
range of percentages representing zero to 20% reductions in customer counts. It should be noted
that in FY 2004-05 the number of customers increased by 50 despite the above mentioned
increases however, it is difficult to predict sensitivity to increases as AFN's rates approach
market and it is equally difficult to accurately estimate the number of new customers that went
with competing systems or technology after comparing price and line up.
25% Increase in CATV Rates as of January
Imoact On:
Customer Counts 3,200 3,040 2,880 2,720 2,560
Change in Counts 0% -5% -10% -15% -20%
Revertue $ 109,725 $ 81,716 $ 53,605 $ 25,785 $ (2,350)
Expenses $ $ (18,158) $ (36,360) $ (54,342) $ (72,544)
Net Impact $ 109,725 $ 99,874 $ 89,965 $ 80,127 $ 70,194
A comparison of local rates for CATV tiers reflecting a 15% and 25% increase,-toAshland
customers is as follows. Discussions regarding national rates included Ashland existing rates
being 25 to 30% less so an Outside the Area column is provided.
CATV Rate Comparison*
AFN Competitor Existing Rates
Existing +15% +25% In Ashland Outside Estimate
Community $ 7.87 $ 9.06 $ 9.84 N/A N/A
Basic $ 12.96 $ 14.92 $ 16.21 $ 13.07 $ 20.00
Expanded $ 32.37 $ 37.25 $ 40.48 $ 32.40 $ 48.00
Digital Plus $ 43.88 $ 50.49 $ 54.87 $ 38.30 N/A
Premium Channels (2) $ 10.01 $ 11.52 $ 12.52 ** N/A
*Plus applicabh~ franchise and PEG access fees.
** Included in Competitor's Digital Plus
The reader should note that these comparisons are difficult as program line-ups vary from
community to community and system to system.
Rather than advertise the latest promotional programs for the competition, the table reflects
published rates in town and outside. Since marketing practices are such that private companies
publish their base charges and add on taxes and fees when billed, the comparison is before
franchise and PEG access fees.
Subsidy table:,
As you can see there are several combinations of fees, charges and subsidies to meet fiscal
requirements and the elements can be changed between years as need dictates. As shown in the
second column below, a Transfer of $420,000, a surcharge of$3 in October and a rate increase
of 15% in January will provide enough resources to meet requirements for the year.
4
FV 2005-06
CATV Rate Increase Net Impact
15% Increase with 10% fewer customers
OR
25% increase with 20% fewer customers
$ 3 $ 3 $ 4 $ 4 $ 5 $ 5 $ 6 $ 6
$ (738,000) $ (738.000) $ (738,000) $ (738,000) $ (738,000) $ (738,000) $ (7~I,ooo) $ (738.000)
$ 420,000 $ 400.000 $ 330,000 $ 310,000 $ 240,000 $ 220,000 $ 150,000 $ 130,000
$ 270,000 $ 270,000 $ 360.000 $ 360.000 $ 450,000 $ 450,000 $ 540.000 $ 540.000
$ (48,000) $ (68,000) $ (48,000) $ (68,000) $ (48,000) $ (68,000) $ (~I.ooo) $ (68,000)
$ 50,475 $ 50,475 $ 50,475 $ 50,475
$ 70.194 $ 70.194 $ 70,194 $ 70,194
Surcharge Amount/month/account
Estimated Shortfall
Transfer from Electric
Surcharge Revenue
Surplus (Shortfall)
The above table shows that not all of the budgeted transfer from the Electric Fund would be
neede<l with either rate increase in January, even if the surcharge was set at $3. The umused
amount of the transfer and any surplus in revenue generated by the surcharge could bl~ held in
reserve to address capital refresh or costs related to operational changes identified later.
A table showing all comparisons from $3 - $10 is attached;
However, the following table presents the need in FY 2006-07 that must be addressed in time for
the budget process, all things remaining constant. A higher surcharge set in FY 2005-06 will
reduce the amount of the surcharge needed in the following year.
FV 2006-07
CATV Rate Increase Net Impact
$
7 $
7 $
8 $
8 $
9 $
9 $
9 $
9
Estimated Shortfall
$~~$~~$~~$~~$~~$~~$~~$~~
Transfer from Electric
Surcharge Revenue
$ 840,000 $ 840,000 $ 960,000 $ 960,000 $ 1,080,000 $ 1,080,000 $ 1,200,000 $ 1,200,000
Surplus (Shortfall)
$ (60,000) $ (60,000) $ 60,000 $ 60,000 $ 180,000 $ 180.000 $ 300,000 $ 300,000
CATV Rate Increase Net Impact
15% increase with 10% fewer customers $ 50,676
$ 50,676
$ 50,676
$ !iO,676
5% increase no change in customers
$ 24,710
$ 24.710
$ 24,710
$ 24,710
The above table shows that a $7 surcharge would generate $840,000 revenue in FY 2006-07
which approximates the debt service payment for that year. A $5 surcharge for nine months in
FY 2005-06 will provide $450,000 that year and $600,000 in FY 2006-07. If all of the Electric
Fund transfer is used in FY 2005-06, the surcharge could be set at $5 and not be changed for FY
2006-07, estimating that all requirements are met through June 30, 2007.
Related City Policies
In June, 2005, Council accepted a policy to fund cash shortfalls in AFN through the Electric
Fund. Staff requested and Council authorized a $200,000 subsidy from the Electric Fund in June
2005 to assist in paying for debt service.
The FY 2005-06 budget also includes a $500,000 subsidy to AFN in the form of a transfer from
the Electric Fund. On July 19,2005, Council accepted staffs recommendation to d~~fer an
5
electric rate inGrease in favor of more information on wholesale power costs. The possibility of a
surcharge for j~' s benefit was also discussed.
With a rate adjustment and a surcharge being approved, no other subsidy or transfer between
funds would be done for AFN without prior Council approval.
Council Options:
To meet finan(~ial obligations a combination of changes are needed but the timing and size of
changes are optional. The following represent options currently available:
1. Do not change rates or establish a surcharge until January 1, 2006, allowing the:
a. Options Committee to complete its work.
b. Selection of a new AFN director.
c. ". AFN staff to develop sufficient changes to CATV services to balance the increase.
The impact of taking this option requires transferring some portion of the budgeted $500.000
transfer. minimized bv a larger surcharge (approximatelv $11/account/month) and the 25%
rate increase to meet the $738.000 need.
2. Establish a surcharge effective October 1 on electric accounts of $3 per month to generate
$270,000 in FY 05-06 with the $500,000 and a $7 charge per month in FY 06-07 to generate
$840,000 the next year, or set the surcharge at $5 for both years with the $500,000 transfer. This
option does not include a rate increase.
3. Raise AFN CATV rates for existing tiers an intermediate amount (15%) with the $5 surcharge
(generating $450,000) to:
a. Generate $35,114 -$65,855 in CATV revenue depending on timing and customer reaction
toward the increases.
b. Reduc,e subsidy from Electric transfer to $222,145 - $252,886 based upon the $738,000
need.
c. Move toward a policy that the city does not subsidize cable television.
4. Raise AFNr CATV rates for existing tiers 250/0 to "market" with the $5 surcharge (generating
$450,000) to:
a. Generate $70,194 - $109,725 in CATV revenue depending on timing and customer
reaction toward the increases.
b. Chargt~ more closely what it costs to provide the service.
c. Reduce subsidy from Electric transfer to $178,275 - $217,806 based upon the $738,000
need.
d. Employ a policy that the city does not subsidize cable television.
Staff Recolnmendation:
Staff believes an argument can be made for any of the four options above for fiscal reasons but
remain cautious about too many changes and processes occurring at the same time. Making
changes to ensure fiscal stability of AFN during FY 2005-06 is necessary, especially as
operational changes are considered.
Staff recommends Option #3 including a surcharge of $5 effective October 1, a rate increase
effective January set at the necessary level and balanced with a change in services and.a subsidy
6
transfer from the Electric Fund as needed (estimated at $210,000 - $500,000) for the following
reasons:
1. The community then contributes to the fiscal well-being of AFN and retirement of the
City's debt.
11. The surcharge is set once for almost two years but can be amended if needed..
111. The City moves toward charging for the cost of service of cable television.
IV. Electric reserves are used to soften the impact on customers in the first two years.
Potential Motions:
Council moves to:
EITHER
a. Adopt the attached resolution to establish a surcharge on electric accounts for the benefit
of AFN in the amount of $ (from $3 - $10), or
b. Adopt both attached resolutions establishing a surcharge on electric accounts for the
benefit of AFN of $ (from $3 - $10) AND raising CATV rates __ % (10% -
30%) or
c. Adopt the attached resolution to increase cable television rates _ % (1 O~) - 30%) but
do not establish a surcharge at this time.
OR
No motion, Council prefers to defer the surcharge and cable television rate increases for more
information from staff, the new director or information from the Options Committee, etc.
Attachments:
Resolutions authorizing rate increase and/or subsidy.
Memo to Council dated July 19, 2005
FY 2004-05 Cable Customer Count report
AFN Funding Comparison Table
7
..
RESOLUTION NO. 2005-
A RESOLUTION ESTABLISHING CABLE TELEVISION
AND INTERNET RATES FOR THE ASHLAND FIBER
NETWORK, READOPTING ALL OTHER RATES WITHC~UT
CHANGE & REPEALING RESOLUTION NO 2004-40
THE CITY OF ASHLAND RESOLVES AS FOLLOWS:
SECTION 1. The Attached rate schedule is adopted as the rates and fees fOIr AFN
Internet and AFN Cable Television provided by the City of Ashland Information
Technology department, Ashland Fiber Network Division. These rates are effective with
the Cycle 8 Billing in , 200_.
SECTION 2. ..Installation charges, equipment rental, bulk rates, and other chclrges m,ay
be set administratively. To the- extent practicable, such fees shall be set to re!cover,
over a fiscally prudent period, the incremental cost of providing such service by taking
into account all costs actually incurred.
SECTION 3. Nothing in Section 1 or Section 2 shall preclude AFN staff temporarily
reducing or waiving rates or charges in conjunction with promotional campaigns, 2)
establishing different and nondiscriminatory rates an charges for commercial
customers, as allowed by federal law' and regulations, or 3) establishing different and
nondiscriminatory rates and charges for AFN high speed data and wholesale high
speed data commercial customers, as allowed by federal law and regulations.
SECTION 4. Resolution 2004-40 is repealed.
SECTION 5. This resolution takes effect upon signing by the Mayor.
. This resolution was read by title only in accordance with Ashland Municipal CQd~.< 'C'.
'92.04.090 duly PASSED and ADOPTED this _ day of ','2005.
Barbara Christensen, City Recorder
SIGNED and APPROVED this _ day of
, 2005.
John W. Morrison, Mayor
Reviewed as to form:
Michael W. Franell, City Attorney
RESOLUTION NO. 05-
A FtESOLUTION ADDING A SURCHARGE TO ELECTRIC UTILITY
~~TES FOR THE PURPOSE OF SUBSIDIZING ASHLAND FIBER
NETWORK
Recitals:
A. The City of Ashland operates Ashland Electric Utility to provide electricity to
customers wiithin the City limits of Ashland.
B. y The City of Ashland also operates Ashland Fiber Network (AFN) which uses a
fiber optic backbone to provide cable television and internet services to customers
within the City of Ashland.
C. The Ashland Electric Utility utilizes the AFN fiber optic backbone to transmit data
important to the operation of the electric utility andJherefore_ finds it. beneficial to
subsidize the: operation of AFN.
D. The City finds it beneficial to establish a surcharge on electric utility customer
rates for the purpose of subsidizing AFN.
THE CITY OIF ASHLAND RESOLVES AS FOllOWS:
SECTION 1. .The City of Ashland adopts a $ surcharge on billings for
electric usage to provide a subsidy to Ashland Fiber Network, said surcharge to
begin with Cycle 1 billings prepared on or after October 1, 2005.
SECTION 2. _The surcharge revenue is not subject to the Electric Utility Tax or
included in the franchise fee calculation for General Fund Revenues.
SECTION 3. This resolution takes effect upon signing by the Mayor.
This resolution was read by title only in accordance_ with Ashland Municipal Code
~2.04.090 duly PASSED and ADOPTED this day of , 2005.
Barbara Christensen, City Recorder
SIGNED and APPROVED this
day of
, 2005.
Reviewed as to form:
John W. Morrison, Mayor
Michael W. Franell, City Attorney
1- . HResolution- AFN Surcharge on Electric Accounts 2005-9-6G:\legal\PAUL\FORMS\resolution form.wpd
Resolution NO. 2005
Rate Schedule
{Effective on Cycle 9 Billing ·
(150/o increase)
, 200_)
AFN Television Rates Base Fee Franchise Fee Peg Increment Total
Tier Rates Per Month
Community (Tier I) 9.06 0.48 0.75 9.54 10.29
Basic (Tier II) 5.86 0.31 6.17 16.46
-Increment added to Tier I
Expanded (Tier III) 22.33 1.18 ~~3.51 39.97
- Increment added to Tier I & II.
Digital Plus (Tier IV) 13.24 0.70 113.94 53.91
- Increment added to Tier I, II & III.
Premium Rates Per Month
StarzlEncore 11.52 0.61 12.13
HBO 15.87 0.84 16.71
Showtime 15.87 0.84 16.71
Pay Per VIew Per Event
Price Varies From $0 to $250
Charge/Additional
Customer Premise
AFN Residential Internet Rates Base Fee Franchise Fee Equipment (CPE) Total
Residential Internet
(wholesale rate to certified ISP)
Monthly Rates (Includes 1 CPE) 26.45 N/A 5.00 Each 26.45
Residential Internet Direct Connect
(no ISP) **
Monthly Rates (Includes 1 CPE) 32.90 ' N/A 5.00 Each 32.90
** For existing customers only. New customers
must choose a certified ISP.
Charge/Additional
Customer Premise
AFN Advanced Residential Internet Rates Base Fee Franchise Fee Equipment (CPE) Total
Residential Internet with Fixed IP OR 1mb Upload
Speed (wholesale rate to certified ISP)
Monthly Rates (Includes 1 CPE) 51.03 N/A 5.00 Each 51.03
Residential Internet with Fixed IP and 1 mb Upload Same Price and Provisions of Business Internet -
Speed (wholesale rate to certified ISP) 1 Fixed Address
AFN Business Internet Rates Base Fee Franchise Fee Fixed Address Total
Business Internet (wholosale rate to certified ISP)
Monthly Rates 76.32 N/A 1 . 76.32
81.58 2 -81.58
86.84 3 86.84
92.10 4 92.10
97.36 5 97.36
102.62 6 102.62
107.88 7 107.88
113.14 8 113.14
AFN High Speed Pricing
Bundled High Speed Internet Services
.5 mbit access 400.00 per month
1 mbit access 500.00 per month
1.5 mbit access 600.00 per month
2 mbit access 700.00 per month
Installation Fee 1,000.00 One time charge
These services assume 1that the customer will not use all of the available bandwidth, they will be upgraded to the unbundled services.
The local loop connection is 100mbit.
These prices replace the existing service prices. These are designed to allow a business to use a high speed service at a very low rate,
but assume that sustaineld bandwidth to the internet is not needed. For these services the maximum number of IP addresses
that will be abilable per service are 32, and they will be given out in blocks of 16.
If a customer needs sustained bandwidth, or other types of services such as a local loop to connect two locations together
then the following rate slchedule will be used.
Unbundled High Speed Access
Price per mbit for Inteme!t Access 615.00 per month
Local Loop Fee 390.00 per month
Installation Fee 1,000.00 One time charge
All Services are 100 mbit local loop.
Example: 2 mbit service = 390 + (2*615) 1,620.00 per month
1.000.00 Installation
Example: 1.5 mbit service - 390+( 1.5*615) 1,312.50 per month
T1 Equivalent Service 1,000.00 Installation
For Services 3 mbit and above, no local loop fees will be charged
For these services any number of IP addresses can be requested,butthey must be justified via
the American Registry for Internet Numbers (ARIN) regulations.
Resolution NO. 2005
Rate Schedule
(Effective on Cycle 9 Billing ·
(250/0 increase)
,200_)
AFN Television Rates Base Fee Franchise Fee Peg Increment Total
Tier Rates Per Month
Community (Tier I) 9.84 0.52 0.75 '10.36 11.11
Basic (Tier II) 6.37 0.34 6.71 17.82
- Increment added to Tier I
Expanded (Tier III) 24.27 1.28 :25.55 43.37
-Increment added to Tier I & II.
Digital Plus (Tier IV) 14.39 0.76 15.15 58.52
-Increment added to Tier I. II & III.
Premium Rates Per Month
StarzlEncore 11.52 0.66 12.18
HBO 17.25 0.91 18.16
Showtime 17.25 0.91 18.16
Pay Per View Per Event
Price Varies From $0 to $250
Charge/Additional
Customer Premise
AFN Residential Internet Rates Base Fee Franchise Fee Equipment (CPE) Total
Residentiallntemet
(wholesale rate to certified ISP)
Monthly Rates (Includes 1 CPE) 26.45 N/A 5.00 Each 26.45
Residentiallntemet Direct Connect
(no ISP) **
Monthly Rates (Includes 1 CPE) 32.90 N/A 5.00 Each 32.90
** For existing customers only. New customers
must choose a certified ISP.
Charge/Additional
Customer Premise
AFN Advanced Residential Internet Rates Base Fee Franchise Fee Equipment (CPE) Total
Residentiallntemet with Fixed IP OR 1 mb Upload
Speed (wholesale rate to certified ISP)
Monthly Rates (Includes 1 CPE) 51.03 N/A 5.00 Each 51.03
Residentiallntemet with Fixed IP and 1 mb Upload Same Price and Provisions of Business Intemet -
Speed (wholesale rate to certified ISP) 1 Fixed Address
AFN Business Internet Rates Base Fee Franchise Fee Fixed Address Total
Business Internet (whol,esale rate to certified ISP)
Monthly Rates 76.32 N/A 1 76.32
81.58 2 - 81.58
86.84 3 86.84
92.10 4 92.10
97.36 5 97.36
102.62 6 102.62
107.88 7 107.88
113.14 8 113.14
.
AFN High Speed Pricing
Bundled High Speed Internet Services
.5 mbit access 400.00 per month
1 mbit access 500.00 per month
. 1.5 mbit access 600.00 per month
2 mbit access 700.00 per month
Installation Fee 1,000.00 One time charge
These services assume that the customer will not use all of the available bandwidth, they will be upgraded to the unbundled services.
The local loop connection is 1oombit.
These prices replace thE! existing service prices. These are designed to allow a business to use a high speed service at a very low rate,
but assume that sustainEKt bandwidth to the internet is not needed. For these services the maximum number of IP addresses
that will be abilable per service are 32, and they will be given out in blocks of 16.
If a customer needs sustained bandwidth, or other types of services such as a local loop to connect two locations together
then the following rate schedule will be used.
Unbundled High Speed Access
Price per mbit for InternE!t Access 615.00 per month
Local Loop Fee 390.00 per month
Installation Fee 1,000.00 One time charge
All Services are 100 mbit local loop.
Example: 2 mbit service = 390 + (2*615) 1,620.00 per month
1,000.00 Installation
Example: 1.5 mbit service - 390+(1.5*615) 1,312.50 per month
T1 Equivalent Service 1,000.00 Installation
For Services 3 mbit and above, no local loop fees will be charged
For these services any number of IP addresses can be requested, but they must be justified via
the American Registry for Internet Numbers (ARIN) regulations.
CITY OF
ASHLj~ND
Memo
DATE:
TO:
FROM: ~
RE:
July 19, 2005
Mayor and City Council
Lee Tuneberg, Administrative Services & Finance Director
AFN Cable TV Rate Increase
Staff continues to review AFN operations evaluating the potential to change rates and services, primarily
on the cable television (CATV) side of business. We intended to have a proposal to Couneil in July but
"~fe-eririfuportant to defer a significant change until other important decisions are-made-and.to,"allaW;;.$taff
adequate time to identify potential changes, their timing and balancing charges with service levels.
We recognize that Council and the Budget Committee raised concem~ regarding overall A.FN financial
health and specifically the amount being charged and the cost of CATV operations however there are
enough unknowns about all the changes occurring and the appropriate size and timing of changes to
compel us to defer these changes.
The major issues are as follows:
A. Multiple increases in a short time: Although it would have been ideal to charge market rates and
better cover AFN's operating costs from the very beginning, multiple significant increases in a
short period have a risk of alienating customers and may be less effective than anticipated. The
history for AFN operations and the impacts or rate increases is not sufficient enough to predict
the sensitivity customers have to rate increases. Thus, staff can only estimate the impact
increases will have on customer counts.
B. Not value added: In modeling the financial impact and speculating the effect on subscriber
counts, it is possible that much of the benefit of raising rates a significant amount are minimized
by customers terminating service or not connecting at all. This would be the third increase in
CATV rates in 14 months with no significant product change The end result could be a smaller
increase in the bottom line than hoped. AFN's Marketing and Operations managers recommend
strategic changes in line-up, partnerships and tier structure. Such changes are being formulated
but may need to be deferred until input is provided by others, possibly through the: Options
Committee or the new manager.
C. Benefit to the competitor: Even though there are some positive perspectives to moving to
significantly higher rates the potential for the competition to wait on their increas(;~s to garner as
ADMISTRATIVE SERVICES DEPARTMENT
D. L. Tuneberg, Director Tel: 541-488-5300
20 East Main Street Fax: 541-488-5311
Ashland, Oregon 97520 TTY: 800-735-2900
www.ashland.or.us
[FA ~II
...~
CITY OF
ASHLAND
Memo
many of Ashland's customers as possible based upon price alone is high and the impact could be
devastating to some options being considered. Due to that risk, a smaller increase or series of
increases combined with other changes could be proposed and may be better for retaining
c\lstomers.
D. Conflicting processes: The city is in the midst of two processes that could be negatively affected
by dramatic changes in mechanisms to fund operations. The city is recruiting for a new director
with more telecommunications and cable television experience to head-up AFN and for a team to
consider options for AFN's future. Significantehanges at this time may impact what is or can be
done through both processes.
Additionally, the impact of the City considering a surcharge as the means to provide a subsidy rather
than the operational transfer included in the budget must be viewed in relation to any proposed rate
change, whether there are value-added adjustments to product lines or not.
Staff has been evaluating costs, projecting impacts of rate increases, calculating surcharge amounts and
identifying potential changes in services provided but such reviews are not complete enough to propose
changes in July.
However, staff has also been diligently working on:
1. implementing technology to enable innovative and improved services
2. constructing new subdivisions to obtain customers
3. providing unrivaled services and service to Ashland customers
4. resolving construction issues in the system
5. implementing required satellite and line-up changes
6. assisting eity administration to ensure a smooth management transition
An AFN quarterly report recapping FY 2004-05 and speaking to the activities above will be provided in
August. At that time options will be identified for potential changes in services, charges and their
timing.
Please contact me if you have any questions or comments.
ADMISTRATIVE SERVICES DEPARTMENT
D. L. Tuneberg, Director Tel: 541-488-5300
20 East Main Street Fax: 541-488-5311
Ashland, Oregon 97520 TTY: 800-735-2900
www.ashland.or.us
r~'
City of Ashland
Recap of Cable Customers
By Tiers
Jul Aug Sep Oct Nov Dee Jan Feb Mar Apr May Jun
T1
Connects 19 12 20 11 4 10 11 7 9 7 6 13
Disconnects -11 -7 -13 -5 -4 -6 -9 -7 -11 -5 -9 -17
T1 Total 267 272 279 285 285 289 291 291 289 291 288 284
T2
Connects 22 20 42 30 22 23 33 20 23 21 39 51
Disconnects -22 -32 -28 -20 -16 -17 -19 -17 -27 -18 -30 -41
T2 Total ~ 689 677 691 701 707 713 727 730 726 729 738 748
T3
Connects 75 89 127 59 49 51 46 50 68 45 53 63
Disconnects -107 -90 -71 -52 -63 -56 -54 -72 -44 -66 -59 -110
T3 Total 1799 1798 1854 ' 1861 1847 1'842 1834 1812 1836 1815 1809 1762
T4
Connects 21 3 17 12 10 13 5 4 12 9 12 17
Disconnects -4 -9 -11 -7 -10 -11 -12 -2 -9 -7 -5 -13
T4 Total 358 352 358 363 363 365 358 360 363 365 372 376
TOTAL 3113 3099 3182 3210 3202 3209 3210 3193 3214 ~,200 3207 3170
.5connect
Reason Codes
1. Not Watching TV 5 7 10 8 8 4 6 5 11 9 11 7
2. Dish 5 2 1 6 4 5 2 2 3 4 0 1
3. Moving -out of Tm 53 77 49 22 30 26 32 31 28 41 32 77
4. Upgrade 27 11 17 7 6 6 5 4 17 8 11 22
5. Charter 4 3 7 4 4 4 3 8 4 1 7 3
6. Financial 1 1 0 0 4 2 4 8 1 2 3 2
7. Downgrade 10 8 12 9 4 8 13 10 3 6 8 9
8. Transfer 26 17 19 11 13 9 12 16 7 10 16 22
9. Other 12 5 5 5 0 5 0 0 4 2 3 10
10. Moving - AFN N. 0 4 6 3 7 5 1 1 1 4 1 1
11. Non Pay 4 2 1 3 2 2 0 3 2 0 1 4
147 137 127 78 82 76 78 88 81 87 93 158
G:\finance\utilities\Cable Counts FY 2005 Cable Counts FY 2005 Summary
9/1/2005 11 :26 AM
AFN Funding Comparison Table
Fiscal Year 2005-06 and 2006-07
FY 2005-06
Surcharge Amountlmcmth/account $ 3 $ 3 $ 4 $ 4 $ 5 $ 5 $ 6 $ 6
Estimated Shortfall $ (738.000) $ (738,000) $ (738,000) $ (738,000) $ (738.000) $ (738,000) $ (738,000) $ (738,000)
Transfer from Electric $ 420,000 $ 400.000 $ 330,000 $ 310,000 $ 240,000 $ 220,000 $ 150.000 $ 130,000
Surcharge Revenue $ 270,000 $ 270,000 $ 360,000 $ 360.000 $ 450,000 $ 450,000 $ 540,000 $ 540,000
Surplus (Shortfall) $ (48,000) $ (68,000) $ (48,000) $ (68.000) $ (48,000) $ (68,000) $ (48.000) $ (68.000)
CATV Rllte Increase Net Impact
15% increase with 10% fewer customers $ 50.475 $ 50,475 $ 50.475 $ 50,475
OR
25% increase with 20% fewer customers $ 70,194 $ 70,194 $ 70,194 $ 70,194
FY 2005-06
Surcharge Amountlmctnth/account $ 7 $ 7 $ 8 $ 8 $ 9 $ 9 $ 10 $ 10
Estimated Shortfall $ (738,000) $ (738,000) $ (738,000) $ (738,000) $ (738,000) $ (738,000) $ (738,000) $ (738,000)
Transfer from Electric $ 60.000 $ 40,000 $ $
Surcharge Revenue $ 630.000 $ 630,000 $ 720,000 $ 720,000 $ 810,000 $ 810,000 $ 900,000 $ 900,000
Surplus (Shortfall) $ (48.000) $ (68.000) $ (18.000) $ (18,000) $ 72,000 $ 72,000 $ 162,000 $ 162.000
.CA 1V Rate Increased R:evenue
15% increase with 11)% fewer customers $ 50,475 $ 50,475 None None
OR
25% increase with 21)% fewer customers $ 70,194 $ 70.194 None None
FY 2006-07
CATV Rate Increase NI9t Impact $ 7 $ 7 $ 8 $ 8 $ 9 $ 9 $ 9 $ 9
Estimated Shortfall $ (900,000) $ (900,000) $ (900,000) $ (900,000) $ (900,000) $ (900,000) $ (900.000) $ (900,000)
Transfer from Electric
Surcharge Revenue $ 840,000 $ 840,000 $ 960,000 $ 960,000 $ 1,080.000 $ 1,080,000 $ 1,200,000 $ 1,200,000
Surplus (Shortfall) $ (60,000) $ (60,000) $ 60,000 $ 60,000 $ 180,000 $ 180.000 $ 300,000 $ 300,000
CATV Rate Increase NI9t Impact
15% increase with 10% fewer customers $ 50,676 $ 50,676 $ 50,676 $ 50,676
5% increase no ch;ange in customers $ 24.710 $ 24,710 $ 24,710 $ 24,710
Summary of Rate and Surchange Option Comparison
subsidy
Defers negative impact on
marketing to January
9f7/2005,
$3 surcharge
approach
1
:34 AM
minimum
no room for error
Rates reasonably match
programming costs
High negative impact on
marketing
Can Reduce Transfer
in ish
Reduces CATV direct
Allows Option Committee to
marketing
Requires higher surcharge 7/1/06
Points of Interest
Lower negative impact on
marketing but at 2 points
Reduces Transfer
Fund changes trom options committee work
** Any excess generated can be used to:
Increase capital refresh
Reduce surcharge later
Points of Interest
Can Reduce Transfer
Points of Intarest
Low negative impact on
Points of Interest
Reduces CATV direct subsidy
Above(Below) needed amount
$
31,725
$
2,000
$
$
2,443
Amount Needed
$
738,000
$
738,000
$
738,000
$
738,000
T otai Revenue Generated
$
769,725
$
740,000
$
738,000
$
740,443
Transfer
Surcharge Amount Per Month
Amount Generated from surcharge
rom
the Electric Fund
11.00
660,000
500,000
3.00
240,000
272,145
5.00
400,000
7.50
600,000
Net impact of Revenue Generated
* Assumes no loss in customers*
$
09,725
$
$
65,855
$
40,443
T1
T2
T3
T4
11.1
17.82
43.37
58.52
9.04
14.40
34.83
46.95
0.29
6.46
39.97
53.91
9.95
17.96
41.95
51.95
Cable TV Rates:
25% Rate increase 1/1/06;
Surcharae at 1/1/06
Option #2
Existing Rates
No Rate Increase in FY 05-06;
Surcharae at 10/1/05
Option #3
Staff Proposal
15% Rate Increase 1/1/06;
SurcharQe at 10/1/05
Market
Surchar
Option #4
Council Proposal
Rate Increase 10/1/05;
e at 10/1/05
Option #1
City of Ashland
AFN Rate Surcharge Option Comparisons
As of 9n 105
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