View Full Version : Cable fee approved

07-28-2006, 01:27 AM
GLADSTONE — The cost of cable TV in Gladstone just got a little higher.

On Monday, despite considerable public protest, Gladstone city commissioners approved — with one dissenting vote — collecting a 5 percent franchise fee from Charter Communications. This will increase residents’ cable TV bills 5 percent, said Don Gladwell, Charter representative. For an average $50 bill, residents will see a $2.50 increase, he said.

Commissioner Phil Griebel voted against the franchise fee. “I was concerned for the residents,” he said, and he feared they would view the fee as a “hidden tax.”

Cities are allowed by federal law to collect up to 5 percent of gross receipts, said Gladstone City Manager Brant Kucera. Collecting the franchise fee will bring Gladstone’s general fund approximately $56,000 more annually, with funds paid to the city on a quarterly basis, he said.

Residents spoke against the increase during a public hearing at Monday’s meeting. Higher cable bills, on top of higher utility bills, will be a burden, they said.

City officials have been “bleeding the people of Gladstone for a long time,” said Hugh Gray. “What is it going to be next? Are you going to start charging people to walk down Delta Avenue?”

Kucera factored in $56,000 from the franchise fee when balancing the 2006-07 budget, he said, so if commissioners hadn’t approved the fee, he would’ve had to make cuts. Choosing to collect the fee is a decision based on “sound fiscal principles,” said Kucera. The money will be used to balance the budget, he emphasized, not create extra savings.

Gray said making cuts is preferable to increasing rates. “What should we cut?” asked Commissioner Dave Cowen. “Garbage? ... Public Safety?” Gladstone recently cut two employees, noted Mayor Pro-Tem Carolyn Povich, a Public Safety officer and the director of parks and recreation.

This cut approximately $100,000, said Kucera, and all departments made budget reductions.

Ongoing cutbacks in state revenue sharing has forced Gladstone to maintain services with less incoming funds, said Povich.

“We are being asked to do more with less,” agreed Kucera. Often, city officials can’t avoid increasing rates, said Commissioner James McKnight, when the cost of doing business increases and when state/federal mandates are issued.

One resident questioned spending money on 10th Street renovation in light of the city’s fiscal condition. “Why do we have to get so fancy?” he asked. “Why couldn’t we just repave it?”

With the current increases, many people feel it’s getting too expensive to live in Gladstone, said residents. This has caused some to put their houses on the market, they said. Griebel said he has heard similar comments from residents. Though these complaints are not always based on a clear understanding of all facts and financial realities, they do concern him, he said, and they did influence his vote.

Collecting a franchise fee of less than 5 percent — the maximum allowed — may have been easier to support, he said.

Another resident questioned why everyone in Gladstone should benefit while only cable users will be required to pay more.

This is no different, said Povich, than a resident who waters grass extensively paying more to the city than a resident who doesn’t.

City officials’ first priority must be to control the costs of utilities residents can’t live without, such as water, said Cowen. “Cable is a luxury,” agreed Povich.

The rate increase may cause residents to drop their Charter service, with the city then collecting less than the anticipated $56,000, said Gray.

Residents will pay an extra 5 percent of cable costs only — Internet/modem rates won’t be impacted by the franchise fee, said Gladwell.

Of Charter’s 107 Upper Peninsula franchises, approximately 50 percent collect a franchise fee, including Manistique, said Gladwell, while others are considering beginning to collect the fee.

In the future, should Gladstone acquire additional income from some other source, city officials could opt to stop charging the fee, said Kucera.

There were no other significant changes to the contract between Charter and Gladstone, said Kucera.


Reigster at SatelliteGuys