In 2008, San Bruno adopted Chapter 10.28 to implement and enforce its local authority to regulate video service providers preserved under DIVCA. Comcast holds a state video franchise which it will ask the CPUC to amend to include the City of San Bruno. Comcast’s operations in San Bruno will be subject to city regulation under Chapter 10.28. The amendments to Chapter
10.28 proposed in this ordinance address matters that require updating due to changes in the law, and fill in some gaps in the initial regulations. These updates include:
1. Modifications to Section 10.28.020
a) PEG Fee Adjustment.
DIVCA allows local governments to establish a fee by ordinance to support public, educational and government (PEG) channel facilities, subject to certain limitations. The PEG fee may be between 1% and 3% of gross revenues, depending on the fee the local government was imposing on an incumbent cable provider under its local franchise as of December 31, 2006.
DIVCA also allows for the adoption of an interim fee that would apply until the expiration of any existing locally-issued cable franchise held by an incumbent. Given that the municipal cable system is proposed to be sold, the proposed amendment to this Section provides that all state franchise holders shall pay PEG fees in the amount of 1% of gross revenues, consistent with DIVCA.
b) Automatic Reauthorization of the PEG Fee.
DIVCA franchises have a stated term of 10 years, and DIVCA also provides that the ordinance adopting the PEG fee “shall expire, and may be reauthorized, upon the expiration of the state franchise.” (Public Util. Code, Section 5870(n)). In 2014, the CPUC adopted rules allowing renewal of state video franchises in a simple and streamlined process set forth in CPUC General Order 169. The proposed amendment to Section 10.28.020.B. reauthorizes the PEG fee every time a DIVCA franchise held by a provider that serves the City expires and is renewed by the CPUC. The reauthorization will occur automatically effective as of the same date as the relevant DIVCA franchise expires/renews, unless a later enacted ordinance of the City Council deletes or modifies the reauthorization language.
c) Notices/Payment Due Dates/Late Charges
Paragraphs C, D and E are proposed to be added to Section 10.28.020, to ensure that the city is provided notice when new state video franchise holders come to the city and that the franchise holders make timely payments of franchise fees and PEG fees, or will be subject to late charges.
2. Modification to Section 10.28.040
DIVCA preserves the authority of local governments to enforce state and federal customer service requirements and directs that local governments adopt a schedule of penalties for violations of such customer service standards. This is already addressed in Section 10.28.040.
The proposed amendment simply clarifies the city’s authority to monitor “and enforce” compliance with these customer service protections.
165 of 171
Honorable Mayor and Members of the City Council
January 28, 2025
3. New Sections 10.28.60-10.28.120
Additional sections address a variety of topics to ensure state video franchise holders work cooperatively with other utilities, to preserve other rights held by the city, and to implement DIVCA requirements such as the obligation imposed on the city by Pub. Util. Code Section 5885 to provide for an expedited review of encroachment permit applications submitted by state video franchise holders, a written explanation for denials, and an appeals process.
FISCAL IMPACT:
There is no fiscal impact from adoption of the Ordinance. Chapter 10.24 will be unnecessary with no municipal cable services and the amendments to Chapter 10.28 bring the City’s code into compliance with current law and practices.
ENVIRONMENTAL IMPACT:
The repeal of Chapter 10.24 and the amendments to Chapter 10.28 qualifies for an exemption from the requirements of the California Environmental Quality Act (CEQA) pursuant to Title 14 of the California Code of Regulations, Section 15061(b)(3) and 15378 (b)(5), because the sale does not have the potential for causing a significant effect on the environment.
RECOMMENDATION:
Introduce, read by title only and waive further reading of an Ordinance of the City Council of the City of San Bruno Repealing Chapter 10.24 (Municipal Cable Television And Communications System) and Amending Chapter 10.28 (State Video Franchises) and Finding Such Action Exempt from the California Environmental Quality Act
ALTERNATIVES:
1. There are no alternatives in the event that the City sells CityNet to Comcast.
ATTACHMENTS:
1. Ordinance
166 of 171
ORDINANCE NO. ___
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN BRUNO REPEALING CHAPTER 10.24 (MUNICIPAL CABLE TELEVISION AND COMMUNICATIONS SYSTEM) AND AMENDING CHAPTER 10.28 (STATE VIDEO FRANCHISES) AND FINDING SUCH
ACTION EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT THE CITY COUNCIL OF THE CITY OF SAN BRUNO DOES ORDAIN AS FOLLOWS:
Section 1. The City Council hereby makes the following findings in support of the proposed Municipal Code amendments:
A. The City of San Bruno (the “City”) owns and operates a municipal capable television and communications system, known as San Bruno CityNet Services (the “System”), operated pursuant to and in accordance with Chapter 10.24 of the San Bruno Municipal Code; and B. The City proposes to enter into that certain Asset Purchase Agreement (the “APA”) by and between Comcast of California IX, Inc. (“Comcast”) and the City, pursuant to which the City will sell and Comcast will purchase the System; and
C. Upon the closing of the sale to Comcast, Comcast will operate the System pursuant to its state video franchise issued by the California Public Utilities Commission, and the City will exercise its authority pursuant Chapter 10.28 to regulate Comcast as a video service provider operating within the city.
D. In the APA, the City represents that effective as of the closing of the sale to Comcast the City will repeal Chapter 10.24 regarding the creation and operation of the System, and amend Chapter 10.28 to set the PEG fee in an amount that does not exceed 1%; and E. The City desires to make additional updates to Chapter 10.28 in connection with its regulation of video service providers holding state video franchises and operating within the city pursuant to that franchise.
Section 2. Editorial guidance. The following non-substantive editorial style is used. Words that are underlined are additions and words with a line through are deleted.
In addition, the Code publisher will arrange definitions and other changes alphabetically to conform to the Code’s current style and will, as needed, re-order numbering and lettering changes caused by these amendments. The City Clerk and the City Attorney are authorized to work with the Code Publisher to effectuate non-substantive amendments to ensure consistency as to form and style of the Code.
Further, the code publisher is directed to substitute the name of an office and/or position wherever possible rather than use a gender pronoun without further or formal amendments.
Section 3. Chapter 10.24 (Municipal Cable Television and Communications System) of Title 10 (Municipal Services) of the Municipal Code is hereby deleted in its entirety.
Section 4. Section 10.28.020 (State video franchise and PEG fees) of Chapter 10.28 (State Video Franchises) of Title 10 (Municipal Services) of the Municipal Code is hereby amended to read as follows:
167 of 171
ATTACHMENT 1
A. Any state video franchise holder operating within the boundaries of the city shall pay a fee to the city equal to five percent of the “gross revenue” of that state video franchise holder. Gross revenue, for the purposes of this chapter, shall have the definition set forth in California Public Utilities Code Section 5860.
B. Any state video franchise holder operating within the boundaries of the city shall pay a PEG fee equal to one percent of the “gross revenue” of that state video franchise holder to the city or the city’s designee for support of public, educational, and/or governmental (PEG) purposes that are consistent with state and federal law. In 2008 the PEG fee shall be one dollar and twenty-five cents per subscriber per month. The PEG fee shall thereafter be adjusted effective January 1st of each year, based upon the prior December’s Consumers Price Index, All Urban Consumers (CPI-U, all items) for the San Francisco-Oakland-San Jose area, index base period: 1982-84=100. To the extent reauthorization is required by law, this chapter, including the PEG fee in the amount of one percent (1%) of the state franchise holder’s gross revenues, is automatically reauthorized as to each affected state video franchise holder upon the expiration of any state franchise. Any and all reauthorizations shall be effective for so long as such reauthorization is required by law.
C. The City Manager shall promptly send any state franchise holder that notifies the City that it intends to provide video service in the City a copy of this Ordinance and a notice designating the person to whom the state franchise fee and PEG fee payments should be made.
D. The franchise fee and the PEG fee required pursuant to this section shall each be paid to the City quarterly, in a manner consistent with California Public Utilities Code section 5860. The state franchise holder shall deliver to the City, by check or other means specified by the City, a payment for the franchise fee and a separate payment for the PEG fee not later than forty-five (45) days after the end of each calendar quarter. Each payment made shall be accompanied by a summary explaining the basis for the franchise fees, containing such information as the City Manager may require consistent with DIVCA.
E. In the event a state franchise holder fails to make payments required by this Section on or before the due dates specified in this Section, the City shall impose a late charge at the rate per year equal to the highest prime lending rate during the period of delinquency, plus one percent (1%).
Section 5. Section 10.28.040 (Customer service penalties) of Chapter 10.28 (State Video Franchises) of Title 10 (Municipal Services) of the Municipal Code is hereby amended to read as follows:
A. The holder of a state video franchise shall comply with all applicable state and federal customer service and protection standards pertaining to the provision of video service.
B. The city manager or the manager’s designee shall monitor and enforce the compliance of state video franchise holders with respect to state and federal customer service and protection standards. The city manager or the manager’s designee will provide the state video franchise holder written notice of any material breaches of applicable customer service standards, and will allow the state video franchise holder thirty days from the receipt of the
168 of 171
notice to remedy the specified material breach. Material breaches not remedied within the thirty- day time period will be subject to the following penalties to be imposed by the city:
1. For the first occurrence of a violation, a fine of up to five hundred dollars may be imposed for each day the violation remains in effect, not to exceed one thousand five hundred dollars for each violation.
2. For a second violation of the same nature within twelve months, a fine of up to one thousand dollars may be imposed for each day the violation remains in effect, not to exceed three thousand dollars for each violation.
3. For a third or further violation of the same nature within twelve months, a fine of up to two thousand five hundred dollars may be imposed for each day the violation remains in effect, not to exceed seven thousand five hundred dollars for each violation.
C. A state video franchise holder may appeal a penalty assessed by the city manager to the city council within sixty days of the initial assessment. The city council shall hear all evidence and relevant testimony and may uphold, modify or vacate the penalty. The city council’s decision on the imposition of a penalty shall be final.
Section 6. Chapter 10.28 (State Video Franchises) of Title 10 (Municipal Services) of the Municipal Code is hereby amended by adding the following Sections to read as follows:
10.28.060 Lease of City-owned network.
In the event a state franchise holder leases access to a network owned by the City, the City may set a franchise fee for access to the City-owned network separate and apart from the franchise fee charged to state franchise holders pursuant to Section 10.28.020, which fee shall otherwise be payable in accordance with the procedures established by this Chapter, unless the City specifies a different payment procedure.
10.28.070 Construction in the public rights of way.
A. Except as expressly provided in this Chapter, the provisions of Title 8 of this Code, and all City administrative rules and regulations developed pursuant to Title 8, as now existing or as hereafter amended, shall apply to all work performed by or on behalf of a state franchise holder in any public rights of way.
B. Prior to commencing any work for which a permit is required by Title 8 of this Code, a state franchise holder shall apply for and obtain a permit in accordance with the provisions of Title 8. A permit application is complete when the state franchise holder has complied with all applicable laws and regulations, including but not limited to all City administrative rules and regulations, and all applicable requirements of Division 13 of the California Public Resources Code, section 21000, and following, (the California Environmental Quality Act) and preparation of plans and specifications as required by the director of public works.
C. The director of public works shall, in the exercise of reasonable discretion as permitted by state law, either approve or deny a state franchise holder's application for any permit required under Title 8 within sixty (60) days of receiving a complete permit application from the state franchise holder.
169 of 171
D. If the director of public works denies a state franchise holder's application for a permit, the director of public works shall, at the time of notifying the applicant of denial, furnish to the applicant a detailed explanation of the reason or reasons for the denial.
E. A state franchise holder that has been denied a permit by final decision of the Director of public works may appeal to the City Council with the time frame set forth and consistent with the provisions contained in Chapter 1.32 of this Code. The director of public works shall transmit to the Council all maps, diagrams, records, papers, and files that constitute the record in the action from which the appeal was taken.
F. The issuance of a permit under Title 8 of this Code is not a franchise, and does not grant any vested rights in any location in the public rights of way, or in any particular manner of placement within the rights of way. A permit to place cabinets and similar appurtenances aboveground may be revoked and the permittee required to place facilities underground, upon reasonable notice to the permittee.
10.28.080 Participation with other utilities.
Each state franchise holder shall cooperate in the planning, locating and construction of its network in utility joint trenches or common duct banks with other telecommunications providers.
10.28.090 Underground Services Alert.
Each state franchise holder shall be a member of the regional notification center for subsurface installations (Underground Services Alert) and shall field mark, at its sole cost and expense, the locations of its underground network facilities upon notification in accordance with the requirements of Section 4216 of the California Government Code, and any other applicable law.
10.28.100 Emergency Alert Systems.
Each state franchise holder shall comply with the emergency alert system requirements of the Federal Communications Commission in order that emergency messages may be distributed over the state franchise holder's network.
10.28.110 Rights reserved.
The rights reserved to the City under this Chapter, are in addition to all other rights of the City whether reserved by this Chapter, or authorized by other applicable law, and no action, proceeding or exercise of a right shall affect any other rights which may be held by the City.
10.28.120 Compliance with Chapter.
Nothing contained in this Chapter exempts a state franchise holder from compliance with all ordinances, rules or regulations of the City now in effect or which may be hereafter adopted which are not inconsistent with this Chapter or California Public Utilities Code section 5800, and following.
Section 7. Pursuant to Title 14 of the California Code of Regulations, Section 15061(b)(3) (common-sense exemption) and 15378(b)(5) (activities excluded from the definition of “project”), consideration of this Ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA).
170 of 171
Section 8. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The City Council of the City of San Bruno hereby declares that it would have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared unconstitutional.
Section 9. This Ordinance shall take effect and be in force 30 days after its adoption; provided, however, that Section 3 shall not be effective until the “Closing Date,” as such term is defined pursuant to the APA.
Section 10. The City Clerk shall publish this Ordinance according to law. ______________________________
Rico E. Medina, Mayor
ATTEST:
______________________________
Lupita Huerta, City Clerk APPROVED AS TO FORM:
______________________________
Trisha Ortiz, City Attorney
---oOo---
I hereby certify that foregoing Ordinance No. ____
was introduced at a regular meeting of the San Bruno City Council on January 28, 2025 and adopted by the San Bruno City Council at a regular meeting on ___________, 202_, by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
______________________________
Lupita Huerta, City Clerk
171 of 171