HomeMy WebLinkAboutAgenda - 11-04-1996 - 8p 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: November 4, 1996
Action Agenda
Item No. g_'P
SUBJECT: Cable Franchise Fee Audit
DEPARTMENT: County Manager PUBLIC HEARING: (Y/N )
BUDGET AMENDMENT: (Y/N)
ATTACHMENT(S): INFORMATION CONTACT:
Agreement Albert T. Kittrell, Assistant County Manager
ext. 2300
TELEPHONE NUMBERS:
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 227-2031
PURPOSE: To enter into an agreement with Triangle J Council of Governments for Cable TV
Franchise Fee Audit.
BACKGROUND: Triangle J Council of Governments will represents local governments who
desires cable TV franchise fee audits. TJCOG will enter into an agreement with Lewis and
Associates to determine if the County is receiving the correct amount of franchise fees from Time
Warner Cable. Franchise fees are based on five percent of the gross revenues received by Time
Warner from customers in the unincorporated areas of Orange County. Since the county is currently
negotiating a new franchise with Time Warner, an accurate accounting of customers and franchise
fees is appropriate at this time.
The agreement is based on a retainer of$1,250 and$300 of out of pocket expenses based on
receipts of actual expenses. If Lewis and Associates identify underpayments of franchise fees to the
county,the firm will receive a commission based on a percentage of underpayments not to exceed
$5,000. The minimum cost to the county for this service will be $1,550 ($1,250 +$300). The funds
will be expended from the Cable TV Franchise Renewal Budget. If the firm discovers
underpayments of franchise fees by Time Warner,the commission paid to the firm will be expended
from the underpayment fees.
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Attached is an draft agreement between TJCOG andOrange County. The attached agreement does
stipulate the services to provided during the audit. The cable audit will begin on
November 11, 1996.
RECOMMENDATION(S): The Manager recommends that the Board approve entering into an
agreement between the county and TJCOG for cable franchise fee audit contingent on the review by
the County Attorney.
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i TRIANGLE J COUNCIL OF GOVERNMENTS
W o r l d
C l a s s 100 Park Drive,P.O.Box 1 2276
Research Triangle Park,NC 27709
R e g i o n 919.549.0551 FAX:919.549.9390
MEMORANDUM OF AGREEMENT
This agreement, made by and between the Triangle J Council of
Governments (TJCOG) and Orange County is for the purpose of procuring
professional services to conduct an audit of franchise fees paid by Time Warner
Cable (or it's predecessors) to Orange County during the period January 1, 1994
through December 31, 1995. The purpose of the audit is to ascertain the
accuracy of franchise fee payments in accordance with the requirements of the
existing franchise between Time Warner Cable (or its predecessors) and Orange
County.
Orange County has entered into a consortium of local governments
directed by TJCOG for the purpose of regulating cable TV rates and franchising
cable TV service in the town. Orange County, along with four other participants
in the TJCOG Cable TV Consortium have directed TJCOG to procure the
professional services necessary to conduct the desired audit. TJCOG has, in
turn, contracted with Lewis and Associates of Hollywood, Florida to conduct the
audits for each local government.
The audit by Lewis and Associates will consist of:
a) review relevant franchise agreements to determine the extent of
each local government's audit rights, franchise fee requirements and the
franchisee's reporting requirements;
b) review relevant cable operators records pertaining to franchise
payments due for cable television franchise fees for the franchise review period
(January 1, 1994 through December 31, 1995);
c) perform a review of the franchisee's payments to verify the
accuracy of revenues reported, the basis upon which the fee calculations were
made for each reporting interval, during the franchise review period;
d) calculate the correct fees due each municipality for each quarter of
the franchise review period, plus applicable interest and penalties if any; and,
e) prepare and provide each municipality with a separate report
summarizing each of the findings.
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Orange County agrees to:
a) instruct it's employees to cooperate with Lewis and Associates and
provide information and/or documents necessary to perform the review services;
b) provide Lewis and Associates with a letter of authority appointing
Lewis and Associates as the Town's agent in this matter;
c) provide Lewis and Associates with copies of all necessary
documents such as annexation maps and data, street maps, tax/franchise fee
receipts, revenue statements, franchise agreements, and other information
relevant to the scope of this agreement; and,
d) actively pursue recovery of under payments identified by Lewis and
Associates.
Orange County agrees to pay the following compensation for the
professional services provided:
a) a $1,250 retainer upon receipt of an invoice from TJCOG to be
sent following the execution of this agreement;
b) reimbursement for out-of-pocket costs incurred by the contractor in
completing this project, not to exceed $300. Requests for payment of out-of-
pocket costs will be accompanied by appropriate receipts.
C) forty percent (40 %) of the first $10,715 of funds recovered either
as settlement, refund, credit or as an award from the franchise cable operator
resulting from the audit.
Orange County may cancel this agreement upon 30 days of prior written
notice sent by first class mail. In the event that the town exercises it's right of
cancellation the retainer will be forfeited and the town will be responsible for any
out-of-pocket expenses that have been made prior to the date of cancellation.
DATE CHARLES KRAUTLER, Executive Director
Triangle J Council of Governments
DATE ORANGE COUNTY