Wednesday, August 18, 2004
INDEPENDENCE -- Independence officials have agreed to extend the terms of the city's franchise agreement with Charter Communications until the two parties can hammer out the details of a new deal.
Th city has been researching a new agreement since 2002, when a 15-year contract with Falcon Cable Systems -- purchased by Charter in 1999 -- came to an end, City Manager Greg Ellis said.
A six-month extension, the third in two years, was approved at an Aug. 10 city council meeting.
Franchise agreements spell out the concessions -- including fees -- a service provider, such as a telephone company, offer cities for being able to install operating infrastructure of municipal right of ways.
Under the agreement, Charter pays the city a 5 percent fee based on revenues collected from cable service, installation charges and other sources. Independence received $27,000 in 2003 from the company.
Without an extension in place, the city could be without recourse if a service provider decided to decline fee payments, said Dave Gephart, city finance director.
"If they are paying 7 percent on an agreement that expires, they could say they paid 5 percent on a contract they had in the 1980s, and do that instead," he also said.
"If there is no agreement in place, it could be open to the interpretation of the franchise if they have to remit payment to the city."
Ellis said the city will begin official negotiations with Charter when the company finalizes its franchise agreement with Dallas, where it has an operations facility that serves nearby communities.
Charter's franchise agreements with Independence, Monmouth and Dallas all expired around the same time in 2002.
The Dallas agreement "will hopefully be signed by the end of this year," said Petra Redchuck, Charter's director of government relations.
"Dallas has to come first, as far as negotiations because what we do there will affect how we feed the other communities. It's a step-by-step process."
Gephart said part of the reason it's taken so long to complete a new agreement is because of the age of the current one -- more than 15 years.
Because the cities have grown and the cable industry has evolved, issues such as customer service, capacity to serve new development and fees will likely be revisited during the negotiation process, he said.
It's possible the city could ask for a larger franchise fee when negotiations begin, he also said. Independence charges Qwest and Brandt's Sanitary Service a 7 percent fee.
"We want to make sure the deal reflects the current operating environment and benefits the city in the best way possible," he said.
Ellis said the agreement wouldn't impact current plans to expand the MINET fiber network to Monmouth and Independence neighborhoods.
That project would allow the city -- and third-party providers like Charter -- to provide Internet, telephone and cable service to the community over the network.
In other news:
Continuing its regulations on rundown homes in the community, the council declared a residence at 460 S. 7th St., owned by Jose Escoto-Ojeda, a nuisance for repeated violations of the city's general nuisance ordinance.
Photos of the property, which has been cited 11 times in the last four years, show broken-down cars, household appliances and other junk accumulated throughout the front and back yards.
Neighbors have also complained about a makeshift dumpsite at the home, Police Chief Vern Wells said. The city will contract for immediate repairs to the home, with the cost assessed to the owner.