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Cable franchise fee collection yields $70K surplus



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October 27, 2010 - Otonville- The cable has been tabled.

At the village council meeting Oct. 25, councilmembers voted 5-2 to postpone a decision on what to do with $70,000 in surplus cable franchise fees. The tabling of the issue followed a failed motion to approve the transfer of $60,648 in cable franchise fees from the designated cable fund to the township's general fund in 2011 and to remit $9,352 of cable franchise fees from the designated cable fund to the village in 2011.

"This should be done in January, when other cables issues are addressed," said Council President Ken Quisenberry, who voted to table the matter and was joined by Councilmembers Harold Batten, Kay Green, Melanie Nivelt, and Coleen Skornicka. Councilmembers Aileen Champion and Dan Eschmann voted no.

Combined, the Village of Ortonville and Brandon Township received roughly $140,000 in cable franchise fees from Charter this year.

Half of that is used to support the local cable access station, OTV, providing a salary for the cable coordinator and wages for Brandon High School students who assist in cable operations, as well as funds to be used for equipment and repairs. The other half is surplus.

"We're charging the residents too much if we have $70,000 extra," said Green.

"When there is excess, why aren't we cutting the fees back?" asked Champion.

The village and township just finished the first year of a 10-year uniform agreement with Charter. The sole cable provider in this area charges subscribers a fee that is 3 to 5 percent of their total cable bill, then reimburses the municipalities which have permitted Charter to keep cable equipment here, said Village Man-ager Larry Brown.

"With the new uniform franchise fees, more of the franchise fees collected by Charter come directly to the municipalities than in prior agreements," said Brown. "Before, the cable company retained some of franchise fees for internal use, now they remit more to the municipalities. Suddenly, we're taking in about $140,000 per year."

Supervisor Kathy Thurman said the fee is stipulated by Charter and the township and village have no control over the amount collected. If Charter were to lose customers, the amount of money the municipalities receive would decrease, too.

"Our goal is to operate the cable station on the amount of fees that are transferred to us through Charter," she said. "Say we negotiated with Charter and they reduced the fees and then lost half their customers. If that were to happen, then we wouldn't have enough funding to operate the cable station."

Thurman said she will recommend at the township budget workshop meeting on Nov. 4 that about $20,000 of the $60,000 surplus from cable franchise fees be used to support police services. She notes that the results of a township fiscal priorities survey this year showed that 73 percent of respondents favored using cable franchise and cell tower fees to increase revenue for basic services.

"We're looking at a huge decline in revenue to the police budget," Thurman said. "This won't bring back an officer, but it will help maintain basic police services. We'll put the surplus to good use."

Susan covers Brandon Township and Ortonville
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