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HomeMy WebLinkAboutR84-692RESOLUTION NO. R84-692 !© A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLAINVIEW, TEXAS C.~T,T,ING A PUBLIC HEARING TO BE ~RT.D ON APRIL 10, 1984, AT 7:30 P.M. FOR THE DISCUSSION OF AMENDING THE FRANCHISE AGREEMENT AND IA]CREASING THE BASIC TRT.RVISION SERVICE RATES FROM $8.00 PER MONTH TO $8.75, AND INCREASING EACH ADDITIONAL OUTLST FROM $1.25 to $1.75, A REQUEST OF TRT.F. SERVTCE CORPORATION OF AMERICA d/b/a CABLE TRT.EVISION OF PIA!NVIEW. WHEREAS, by Council action in J~ with Cable Television of Plainview wa~, ¥~tEREAS, in this franchise agre~ modification authority over basic se~ WHEREAS, Article 3, Section 4 of procedures whiCh must be followed by ] Television Co~pany to initiate change which are follows: Luary, 1982, a franchise agreement amended and adopted; and rant, the City maintained rate rices provided to subscribers; and this franchise outlines the )oth the City and the Cable ~, rates and charges to subscribers 1) The Company submits to the City the proposed rate schedule including justification for the proposed rate adjustment at least 90 days prior to the requested implementation, date of the rate change. 2) Within 60 days, the filing of a petition for rate change, the City Council should hold a public hearing to consider the proposed rate change at which all person desiring to be heard including the Company shall be heard on any matter including but not limited to the performance of the franchise, company service, and proposed new rates. 3) The Company shall provide notice to its subscribers by placing the announcement on one of its systems channels between 7:00 p.m. and 9:00 p.m. for at least five consecutive days prior to the hearing and notice to be published in the newspaper at two times before the public hearing. 4) Within 30 days after the public hearing, the City sb~ll render a written decision on the company's petition eithering accepting, rejecting, modifying, or deferring the same and reciting basis for this decision. NOW, THEREFORE BE IT RESOLVED by the Mayor and City Council of the City of Plainview, Texas that a public hearing be called for the purpose of discussing the rate increase request of the Cable Television and that proper notices be given. RESOLUTION NO. R84-692 PASSED AND APPROVED this the 27th day of March, 1984. E.V. R/DT.~qUBER, Mayor A%~EST: WALTER S. DODSON, City Clerk HOME: Offl¢£ $027 $.E. LOOP 323 TYLER. TEXAS ?E~?01 214 ~3-E~500 ~S~3-9390 Robert M. Rogers, Pres~ent Plainview city Council Plainview, TX February 28, 1984 Cable Television Service Rates Gentlemen: 'In accordance with Section IV of our franchise for service in the City of Plainview, we are hereby filing with you notification of our request to implement a rate change effective June.l, 1984. We respectfully request that you review this increase in accordance with the terms of our franchise agreement. Enclosed .please find financial reports required by Sub-section IV(g) of our franchise. It is with regret that we have to ask for this increase as it is our goal to have our cable television service "the best entertainment bargain in town~. We.are requesting an increase in the basic service rate. of 75 cents (2.1/2 cents per day) and an increase in th~ extra outlet rate of 50 cents. We are also requesting that installation charges be set at an amount not to exceed the actual cost of materials and labor. The reasons for this'increase are: 1. The number of subscribers in our system have decreased since the time of our last rate increase, causing basic revenues to decline. Our projections for the next three years do not make us optimistic that they will increase enough to offset efficiently controlled operating expenses. 2. Our cost of securing programming has increased. Cable News Network (CNN) is increasing its cost to us, effective July 1, 1984,. by 10 cents per subscriber (see attached letter). 3. During the last fiscal year our operating profit decreased 5% even though we added additional services and equipment which are not subject to your review. Without the addition of these services, our operating profit would have declined even more. In summary, our rate for cable service after the increase will be less than 29 cents per day for one outlet, which is less than the cost of a cup of coffee. We feel that for 24 hours of viewing pleasure, we are still the "best entertainment bargain in town". We appreciate your review of our request. /~0e McKinnig / ~District Mana~r RATES (A) The base rate for a minimum 12-channel service supplied by Grantee to its customers shall be as hereinafter set forth. Premium services and non-entertainment services'furnished by Grantee shall be at rates established by private agreement between Grantee and its customers. The rate schedule for the minimum .or basic service is as follows: (1) $8.75 basic monthly service charge to · residential customers. (2) $1.75 for each additional outlet to residential customers. (3) Commercial rates for each outlet will not exceed the basic residential rates, and said commercial rates shall be established by.the filing of a commercial rate schedule with the City Secretary of Plainview and shall be effective thirty (30)-days after filing. (4) Charges for the installation, relocation or moving of cable service to a subscriber shall not exceed the actual cost of materials and labor, and provided that an additional amount equal to the expense of ditching shall be charged where underground services are requested, and extra labor charge-may be made if a customer requests wiring on inside walls or other unusual, locations. HOME OFFICE $027 $.E. LOOP $23 TYLER, TEXAS 75701 ~:14 Robert M. Rogers, Presiclent February 29, 1984 City of Plainview Plainview, TX Gentlemen: Submitted herewith are the balance sheets of Plainview Cable 'TV as of October' 31, 1983 and 1982, and the related income statements for the years ended October 31, 1983 and 1982,' prepared in conformity - with generally acCepted accounting principles applied on a .basis consistent with that of the preceding year. Since the undersigned is an officer of Teleservice-Corporation of America, the owner Of Plainview Cable TV, the expression of an opinion on the attached statements as an-independent Certified Public Accountant is precluded by law, and the report is submitted · as a Financial officer's Report only. . All of the assets of the System shown-on the ba~anc-e sheet are expressed at cost to the Company with the exception of the fixed~- assets covering land, plant, and equipment,, which~are expressed at an estimated replacement cost of $2,436,059-~56 and $2.,079.,650.00 at October 31, 1983 and 1982, respectively., since the cost to the Company of the total System is substantially below the current' replacement cost, this change was made in order to present a more realistic picture of the assets of the System.' The System has been valued based on a conservative estimate of the replacement cost of the plant. The use of this replacement cost 'for the' fixed assets gives rise to an adjustment to replacement cos.t of $1,715,678.16 and $1,806,741.91 under the liability section of the balance sheet for October 31, 1983 and 1983, respectively. Respectfully submitted, Barbara J .P A. Controller Teleservice Corporation of America PLAINVIEW CABLE TV BALANCE SHEET OCTOBER 31, 1983 AND 1982 1983 1982 ASSETS Cash Accounts Receivable - Subscribers Land, Plant and Equipment Less Accumulated Depreciation Adjustment to Replacement Cost LIABILITIES Accounts Payable - Affiliates Subscriber Advance Payments Accrued Expenses Income Tax Payable AdjUstment to Replacement Cost $ 1,800.03 22,726.17 1,405,325~07 (684,943.67) 720,381.40 1,715,678.16 2,436,059'.56 $2,460,585.76 507,266.80 39,418.38 31,649.57 166,572.85 1,715,678.16 $2,460,585.~6 (6,487°26) 17,178.18 845,085.98 (572,177.89) 272,908...09 1,806,741.91 2;079,650.00 $2,090,340.92 $ 45,322.14 34,665.39 27,949.50 175,661.98 1,806,741.91 $2,090,340.92 PLAINVIEW CABLE TV INCOME STATEMENT FOR THE YEARS ENDED OCTOBER 31, 1983 and 1982 Basic Revenue Pay TV Revenue Installation Charges and Other 1983 $ 654,781.51 $ 213,916~22 78,592.63 947,290.36 1982 659,879.92 154,083.44 40,386.97 854,350.33 Operating Expenses: Salaries and Wages Other Operating Expenses, Excluding Depreciation and Amortization Selling, General and Administrative Operating Income Before Depreciation an~Amortization Depreciation and Amortization Operating Income Income Tax NET INCOME 174,411.84 176,430.57 121,567.27 472,409.68 474,880.68 112,765.78 362,114.90 166,572.85 .127,035.22 155,958.40 96,850.39 379,844.01 474,506.32 92,632.44 381,873.88 .175,661.98 $ 195,542.05 $ 206,211.90 PLAINVIEW CABLE TV SCHEDULE OF OPERATING EXPENSES FOR THE YEARS ENDED OCTOBER 31, 1983 AND 1982 Salaries and Wages 1983 $ 174,411.84 1982 $ 127,035.22 Other Operating Expenses: Employee Benefits Payroll Taxes Maintenance Satellite Fees Vehicle Expense Rentals Program Origination Contract Services Selling, General and Administrative: Utilities- T~avel Taxes Postage Billing Expense offic~ Supplies Telephone- Dues and Subscriptions Advertising Accounting and Legal Insurance Overhead 15,013.82 13,925.95 10,276.27 13,582.54 14,457.17 2,587.75 88,099.02 18,488.05 176,430.-57 13~235.12 3,348.67 .27,616.84 3,169.14 18,996.09 2,232.66 4,490.61 1,342.21 10,201.35 10,384.83 4,217.45 22,332.30 121,567.27 8,846.39 9,654.58 18,174.85 20,083.86 15,950.10 899.44 70,879.36 11,469.82 155,958.40 11,224.92 1,842.78 27,665.90 3.049.75 18,070.42 839.74 2,985.74 1,347.30 606.96 9,907.01 2,068.70 17,241.17 96,850.39 $ 379,844.01 TOTAL OPERATING EXPENSES $ 472,409.68 PLAINVIEW CABLE TV STATEMENT OF CURRENT AND PROJECTED SUBSCRIBERS Actual 10-31-81 Actual 10-31-82 Actual 10-31-83 Actual 2-29-84 Projected 10-31-84 Projected 10-31-85 Projected 10-31-86 Basic Basic Total In City' Outside city Subscribers 5,798 340 5,911 392 5,848 379 5,842 393 5,880 420 5,900 450 5,920 480 6,138 6,303 6,227 6,235 6,300 6,350 6,400 December 19, 1983 Fred Nichols Vice President TCA Gro.up 3027 East SE Loop 323 Tyler, TX 75711 Dear Fred: Attached is the formal notification of the Cable News Network rate increase. Please know that I Value your friendship and loyalty-and I hope that I can continue to serve you with CNN. I know this is a very difficult time for both cable operator and programmer, but frankly, if we do not have the revenues from these new rates, CNN is not a viable business. If we are going to wire the country and achieve 70% penetratign, we must have meaningful programming and this increase puts CNN on sound financial footing again. As you know, I held a breakfast meeting at the Western Show to listen to cable operator suggestions about our new CNN rates.. While I have noted the difficulties ~and exceptions to our rates, the overall structure is a fair one that I must put into effect to continue providing you with .the same quality service. Nory LeBrun and his staff will be contacting you soon to work out the details of this rate increase. My best to you and your family during the Holiday Season. R. E. Turner TL-R"~ER (~ABLE SALES SI;~ER~E'-ITION ~VTBS · CNN · CNN tfEAD£LST NEI, VS 1050 Te&woocl Dz., ~qzg · Atlanta, gA SOS18 · (404) 898-8500 TURA~_.R BROADCASTLYG SYSTEM, INC. December 19, 1983 TCA Group 3027 East SE Loop 323 Tyler, TX 75711 RE: NOTICE OF RATE INCREASE FOR CNN AND CNN HEADLINE NEWS Pursuant to Paragraph five (5) of your affiliation agreement with Cable News Network, Inco for CNN AND CNN HEADLINE NEWS, dated April 19, 1982, this letter will serve as formal legal notification that CNN will raise the rates referred to in Paragraph five (5) effective July 1, 1984. The following rates will become effective on that date for all of your systems carrying C~I~: Charge A: $.15 per month per Subscriber to that level of service for which the System has the largest number of subscribers, provided said system cablecasts WTBS-TV (Atlanta, Channel 17) in its entirety without any delay, addition, alteration, deletion or editing, as part-of a basic level of service; and CNN Headline News as 'authoriZed in writing by CNN, ms part of any level of service. Charge B: $.18 per month per~subscriber to that level of service for which the System has the largest number of subscribers, provided said system cablecasts WTBSvTV (Atlanta, Channel 17) in its entirety without any delay, addition, alteration, deletion or editing, as part'of a basic level of service. With respect to both Charge A and Charge B please note that WTBS is available for purchase .only from a resale cdmmon carrier and that neither CNN nor WTBS purport to license or authorize you to cablecast or otherwise carry WTBS. Charge C: $.22 per month per subscriber to that level of service for which the System has the largest number of subscribers in all other instances. In addition the following rates will become effective July 1~ 1984 for all of your systems tarrying Cl~N~eadltne ~ews: Charge A: NO CHARGE PER SUBSCRIBER to tha~ level of service for which the System has the largest number of subscribers, provided said system cablecasts CNN's television news service known as Cable News Network, as authorized in writing by CNN, as part of any level of service. Charge B: $.20.per month per subscriber to that level of'service for which the System has the largest number of subscribers, provided said system cablecasts WTBS-TV (Atlanta, Channel 17) in its entirety without any delay, addition, alteration, deletion or editing, as part of a basic level of service. Please note that WTBS is available for purchase only from a resale common carrier and that neither CNN, nor W~BS purport to license or authorize you to cablecast or otherwise carry WTBS. Charge C: $.22 per month per subscriber to that level of service for which the System has the largest number of subscribers in all other instances. Very truly yours, CABLE NEWS NETWORK, INC. By: Nory LeBrun Vice President Sales and Marketing TURNER BROADCASTING SYSTEM, INC.