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Min 12/01/1970 308 Wichita Falls, Texas Memorial Auditorium Building December 1, 1970 Items 1 & 2 The Board of Aldermen of the City of Wichita Falls, Texas, met in regular session on the above date in the Council Room of the Memorial Auditorium Building at 10: o'clock A.M. , with the following members present: Kenneth Hill Mayor Don Wills X Harrison E. Taylor X Larry Lambert X Aldermen J. C. Boyd, Jr. Bill Drake X Gerald Fox City Manager H. P. Hodge, Jr. City Attorney Wilma J. Thomas City Clerk Dick Darner Absent The invocation was given by Alderman Lambert. Visitors were welcomed by the Mayor. Item 3 Moved by Alderman Wills that minutes of the meeting held November 17, 1970, be approved. Motion seconded by Alderman Taylor, and carried unanimously. Item 4 f 1 Mayor Hill requested that the City Manager brief the Council on his CATV administrative report. Before presenting his report, City Manager Gerald Fox asked City Attorney H. P. Hodge, Jr. to summarize the regulations instituted or proposed by the Federal Communications Commission regarding cable television. Mr. Hodge explained that television categories are divided into major and minor markets, and that the City of Wichita Falls fits into the lower category. Cable stations are required to carry the local broadcaster's signals, and they cannot carry a program at the same time as a local broadcaster. The FCC has promulgated a number of rules and proposed others. Some rules that would now apply are (1) carriage rules, (2) non-duplicating rule, (3) program origination by the CATV system will be required after April 1, 1971, (4) prohibition of gross orgination, (5) rules on pay cablecasting. Feature films cannot be cablecast if it has been shown less than two years ago to general audiences. He also explained that there is not yet a rule on importation of distant signals. It is proposed that the rules be left up to local regulation, with cities setting up standards. Maximum fee that the City could charge would be two percent of the gross revenue. The FCC has also pro- posed limitations on multiple ownership of CATV and regular stations. Regarding technical standards, they are considering minimum channel capacity, and requiring future systems to have two-way communication capacity. In major markets it is pro- posed to require them to pay five percent of their subscription revenue. They are also proposing to require allocation of a number of channels on CATV for local purposes, without charge. He pointed out that the copyright business has been very controversial in CATV systems, and are considering perhaps offering a fee for the use of copyright materials. City Manager Gerald Fox explained that there are approximately 2500 CATV systems serving 4300 communities. Under present rules a CATV system in Wichita Falls could carry the three local stations we now have, as well as several others. In 1965 and 1967 the Council held public hearings on cable television, and agreed to 309 Item 4, cont'd. delay action on award of a CATV franchise. Objections were primarily from local TV stations. Some petitions were also presented to the City Council. Some alternatives that the City has are as follows : a. Deny further consideration of CATV in Wichita Falls. b. Delay action pending final rules of the FCC. C. Proceed at this time with preparations necessary for a prospective franchise, and setting up specifications. d. Call a referendum vote for either approval or disapproval of CATV. Should the Council desire to proceed, certain requirements should be set up. 1. The franchise period should be for a 20-year period. 2. It should include a definite period of time in which the system would become initially operational, say two years. Also, it should contain a specific period in which the entire City would be wired with the manner in which the City is wired left to the potential operator. 3. The franchise should contain specifications and requirements for extending the system to new subscribers in newly developed areas. 4. The franchise specifications should establish procedures for re-evaluation of rates and should require the bidder to specify the initial rates to be charged subscribers. 5. At least one channel shall be made available for local public programming and one for public educational use at no cost to the City, public schools and/or university. The prospective bidder should specify the date of avail- ability of such channels. 6. The bidder shall specify the percentage of gross receipts which he will pay the City as a franchise fee. The franchise payments will be regadred to be made quarterly to the City based upon the previous quarter 's receipts. 7. The specifications would indicate the operational standards that are to be maintained by the system. This would include the strength and quality of the signal received in the home. 8. Specifications would indicate such technical standards as : a minimum channel capacity of 20 channels; the capability shall be built in for two-way communications between the subscriber and other remote locations; and there shall be a degree to compatibility with other CATV systems built into the system. 9. The prospective bidder shall show generally the plans or arrangements for pole line attachments with a public utility or a common carrier or other appropriate feasibility plans. 10. The specifications should require CATV operator to remove his equipment upon request by any subscriber and requiring the customer to surrender such equipment upon termination of the service. 11. The specifications should indicate that the operator will not engage in any discriminatory practices of any nature. 12. The specifications should include a clause indicating that if any other regulatory body assumes jurisdiction and begins to regulate any of the matters governed by the franchise, that the operator will comply with their jurisdiction and regulations. 13. The bidder will be required to spell out in advance to the greatest degree possible the amount and kind of program origination to be offered on the system. Alderman Lambert inquired if any kind of system would be authorized to extend outside the City of Wichita Falls. Would the City have any control within our extraterritorial jurisdiction. City Manager Gerald Fox stated that it would only cover operations inside the City of Wichita Falls; that we could not receive gross 1 310 Item 4, cont'd. receipts from outside the city limits. Following a question from the Mayor, City Attorney H. P. Hodge, Jr. , pointed out that the ownership rule is limited to tele- vision stations and networks, not radio and newspaper. Alderman Lambert inquired why the gross receipts tax is limited to two percent. Mr. Hodge explained that the higher the tax gross the less money they have to put back into the system; that it is a benefit both to the stations and the public. Mr. Fox stated that the National League of Cities feels that this is a matter that should be determined by a local body. It was pointed out by a question from Alderman Lambert that if the City wrote a franchise then they would have to write it by present regulations, subject to any future amendments that might be made; also, that there is no prohibition to a city owning a CATV system. Mr. Robert J. Lewis from Ardmore, Oklahoma, appeared as regional vice president of Cablecom General, Inc. He stated that Wichita Falls is served by three stations, but there are other programs which we might be missing, such as the independent channels and educational television. Automated services of weather and news is also available. This would double the viewing that Wichita Falls could have. He also explained that channels can be made available to schools and governments through CAM There would also be monetary reasons that a cable system would be good for Wichita Falls. Alderman Lambert stated that he thought one of the concerns felt by some people is that it would destroy free television. Mr. Lewis stated that there is no basis in fact for that concern. He did not think there had been any instance where a cable television station has put another station out of business. He explained that if an independent or educational channel has something to watch then a person could watch it instead of turning off the TV if they did not like another program. Alderman Lambert inquired what some of the representative costs involved are. Mr. Lewis stated that the average is between $5.00 and $6.00 per month, and that installation costs are nominal. He further stated that they would perhaps wire one section of town at a time. City Manager Gerald Fox explained that the City could approve a wiring plan in the franchise agreement. Ralph Bullington appeared as a representative of Community TV Company, stating that he had no particular statement to make at this time. Mr. Fox inquired what value he would place on partial or complete ownership by local persons. Mr. Bullington stated he did not think it would matter whether they were local or outside the city. Frank Allen appeared as a representative of H & B American, Inc. , and also Tele- prompter, due to a merger. He stated he is involved locally with Charles White and Mr. Killibrew. He stated that they operate 130 cable systems in 29 states, with a half million subscribers. He stated that the average is $5.05 for their service. In some areas all signals must be brought in by microwave. Alderman Lambert inquired what criteria they use in establishing a market value for the franchise, Mr. Allen stated that it can have no value; that some of the things that affect the value of a community are the same things that affect any business. The only thing they have to sell are other channels which they can bring in. With three channels in Wichita Falls they do not have to subscribe to CATV in order to obtain television service. He stated that acquiring an existing cable service is done on the basis of- proposed subscribers and what they can afford to pay for that investment to make a fair return on their invest- ment. He stated that this is a highly specialized business, also, that they cannot give any more advantages than any other company because of government regulations. Bill Thacker appeared for North Texas TV Cable System, stating that cable TV is growing, and can add new concepts to our community. It is also a product for sale. He further stated that it would appear now that it is adequately regulated so that it would not put anyone out of business. Local ownership would be advantageous to the City; however, it should not be a sale criteria. He explained that at the appropriate time he would have some recommendations for the specifications, and that services that the citizens get should be foremost. He further stated that they would like to get into individual concepts at the appropriate time. Dr. Clifford Burross appeared as a representative of Top of Texas Cable TV Company. He complimented the city manager and city attorney for their reports. He stated that he felt local ownership is important. He explained that we have had good coverage with the local stations, but that there are other programs which should be made available to the citizens of Wichita Falls. In commenting on the question of fees, he stated that he felt this would be determined by the items listed in Mr. Fox's report, but that we should have a first class installation in Wichita Falls. Commenting on city ownership, he stated he would hate to be sitting in the Council 's seats if they 311 Item 4, cont'd. decided to set fees for watching TV. Alderman Wills asked if the franchise did not make money, is not the Council behind the eight-ball? Dr. Burrossstated yes, but to a lesser degree. He explained that the company is responsible for presenting their facts to the Council for a profitable operation. Mr. Fox asked what type of requirement for awarding a bid should be made. Dr. Burross replied that outside consultation should be obtained. He further stated that the bidding system would be a good method for obtaining proposals from each company; that the rate is import- ant, but the service rendered is more important. Darrold Cannan appeared as a representative of Wichita Falls Communication Service, Inc. , stating that they proposed to make application for a franchise to operate a cable service if the council decides this would be a good service to the city. He commended the City Manager for his report. Mr. Fox asked what procedure should be followed in finally determining a successful cable TV operation. He stated that it would be important to employ an outside consultant service; also, that local ownership is an important factor. He stated that a cheap or expensive system can be built. He suggested that the Council set a franchise fee and take it out of the bidding system. He feels they could offer a better service if they were not strapped down by high fees to the city; that by paying a reasonable rate to the city they could offer a good service. Alderman Wills inquired if it would be a reasonable requirement for them to require them to set aside a channel for Midwestern University if and when they needed it. Mr. Cannan replied that it would. It was brought out in the discussion by Mr. Cannan that he and Mr. Fry still retain their ownership in a local TV station, but that the transfer of ownership is pending. He stated that ownership in two stations precludes them from operating the franchise, but not in owning it. He introduced Mr. Conroy. Mr. Ben Conroy, Jr. , Austin, Texas, commented on the franchise fees and rates. He suggested that the Council, on the advice of a consultant, set what they think is a fair fee and take this out of bidding, and award the franchise on other considerat- ions, and not use the level of fees as a measure of an applicant's proposal. He stated that two, three, or four percent would be reasonable. Regarding rates, he stated that he felt the best operating system at a reasonable rate would be appropriate. He suggested setting a reasonable rate fee on the advice of a consultant, but would not suggest what a reasonable fee would be. He did not think that an unreasonably low fee would necessarily by the best operating method. He suggested taking this also out of the bidding process. Mr. Fox asked what he thought the investment cost of wiring the City of Wichita Falls would be. Mr. Conroy estimated $2,000,000. He was also asked his estimation of the initial potential in Wichita Falls, and he thought about 60 percent saturation. They would hope that 18,000 customers could be ob- tained in six to eight years. Jack Britton appeared representing Bill Hobbs, who is general manager of KAUZ TV. He read a statement of policy in which it was stated that they feel it would be sour grapes to continue to oppose a CATV system. He suggested that the signals be placed on Channel 6. Elmer Parish appeared representing TV Cable of Wichita Falls, Inc. Following some brief remarks he introduced Jay O'Neal with his company. Mr. O'Neal stated that the fee should be set at what pays the city for its easements. In the area of regulation, the FCC has imposed a 30-cent fee per subscriber. He stated that a city-owned cable TV would be in competion with the local stations. He stated that local interest programs are prohibitive for commercial subscribers, but may be avail- able for cable TV. There are systems in development for the capability of placing many channels on TV. The cable system is required to carry the local network. He stated if Channel 6 is put on the cable on six, then there is a chance you would have outside interference. Mayor Hill inquired if one house is on the cable and the next house is not, would there be interference. Mr. O'Neal stated that this is not a problem in today's equipment. He stated that he agreed with Mr. Conroy in setting the rate and franchise fee; that he feels the city could come up with a better criteria for awarding the franchise. Cathy Foster, housewife, appeared in favor of CATV, stating that in talking with women, their main purpose is decent TV for their children. She stated that in Abilene they have educational television in the schools; also, that her brother is connected with a TV station there, and he says that cable TV has not hurt them. Johnny Manki.ns of LVO Cable Company of Tulsa, stated that they have 20 systems serving 14 communities in the nation. He commended Mr. Fox and Mr. Hodge on their 1 312 Item 4, cont'd. reports. He stated that he hoped that they will allow his company and others to submit bids for cable TV. He felt that it might be advantageous to the Council to obtain a good consultant. He feels the City should set out guidelines and rules and establish the service fee for the city. No one desired to be heard in opposition to cable TV. Alderman Doyd read a prepared statement to be considered suggesting that the Council secure all the information they can before granting a franchise, and posing several questions on the issue. He stated that he had no specific recommendations at this time. Moved by Alderman Lambert that the Board of Aldermen of the City of Wichita Falls go on record in approving the adoption of a CATV system in the city, and that the City Manager and his staff be directed to prepare a report to the Board of Aldermen recommending: (1) the feasibility of such CATV system's being owned by the City of Wichita Falls (2) the feasibility of such CATV system's being owned privately (3) if to be privately owned - (a) the mechanics and procedure to be followed in awarding such franchise (b) the qualifying requirements for proposed franchisees (c) the minimum specifications for such CATV service, and (d) the requirements to be met in protecting existing TV stations. That in preparing such report the City Manager be authorized to employ an independent consulting firm for assistance. Motion seconded by Alderman Boyd. Alderman Taylor questioned the feasibility of the City owning CATV. After a few more comments by Alderman Boyd, the motion was carried by the following vote: Ayes : Aldermen Wills, Taylor, Lambert, Boyd, and Drake Nays : None Item 5 A proposed ordinance was presented changing the name of Highland Street in City View Heights to Wrangler Drive. -ORDINANCE NO. 2628 AN ORDINANCE CHANGING THE NAME OF A STREET NAMED HIGHLAND IN CITY VIEW HEIGHTS ADDITION TO WRANGLER DRIVE. Moved by Alderman Wills that Ordinance No. 2628 be passed. Motion seconded by Alderman Taylor, and carried by the following vote: Ayes : Aldermen Wills, Taylor, Lambert, Boyd, and Drake Nays : None i Item 6a A proposed resolution was presented granting an easement to Texas Electric r. Service Company on Health Unit property. RESOLUTION NO. 1129 BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE CITY OF WICHITA FALLS, TEXAS, THAT: 313 Item 6a, cont'd. That certain easement from the City of Wichita Falls to Texas Electric Service Company on a stip ten (10') feet wide across the new Health Unit property is hereby approved, and the City Manager is authorized to execute and deliver the same for the City. Moved by Alderman Boyd that Resolution No. 1129 be passed. Motion seconded by Alderman Wills, and carried by the following vote: Ayes : Aldermen Wills , Taylor, Lambert, Boyd, and Drake Nays : None Item 6b A proposed resolution was presented accepting completion of contract with Boyd Curtis for demolition of hazardous buildings. f RESOLUTION NO. 1130 WHEREAS, the City of Wichita Falls, as owner, and Boyd Curtis Construction Company, as contractor, entered into a contract dated July 7, 1970, wherein said contractor agreed to demolish certain buildings as included in the attached memorandum. WHEREAS, this project has been completed in accordance with the plans and specifications; and, WHEREAS, a final estimate has been furnished on such project, which shows the total amount of work done as $6,882.50. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE CITY OF WICHITA FALLS, TEXAS, THAT: The improvements under the Demolition of Buildings and Clearing and Cleaning Lots Contract by said contractor is accepted by the City of Wichita Falls, the final estimate is approved, and the City Manager is directed to pay to said contractor the balance due as shown on such estimate. Moved by Alderman Drake that Resolution No. 1130 be passed. Motion seconded by Alderman Wills, and carried by the following vote: Ayes : Aldermen Wills, Taylor, Lambert, Boyd, and Drake Nays : None Item 7 Permission was requested to advertise for bids for 180 batteries , 8000 gallons of oil and grease, and 60,000 gallons of diesel fuel for all city departments. Moved by Alderman Wills that authority be granted to advertise for bids as requested. Motion seconded by Alderman Taylor, and carried unanimously. Item 8 r t Moved by Alderman Boyd that minutes of meetings of the Park Board held November 24, 1970, and Planning Board held November 11, 1970, be received. Motion seconded by Alderman Taylor, and carried unanimously. Item 9a Moved by Alderman Lambert that a sewer reimbursement contract payment be approved in the amount of $890.90, as follows : 1 314 Item 9a, cont 'd. Hawkeye Development Company, Sewer, Sections D-2 and E-2 of University Park Addition, from October 7, 1969 to October 7, 1970; $890.90 Motion seconded by Alderman Taylor, and carried unanimously. /Item 9b City Manager Gerald Fox gave a report on the Health Center construction project. He stated that eligible funds (for 50% federal reimbursement) total $940,000. Of this amount $918,470.68 has already been spent, leaving a balance of $21,529.32. He proposed spending the eligible funds for equipment and construction of items originally cut out of the program. With other gesources available, the total amount of resources over all expenditures amounting to $21,353.35. The balance in the fund cannot be used for any purpose other than health center use. He requested that the City be authorized to apply for additional federal funds in the amount of $20,000 to match what they now have, and to authorize change orders to the construction contract or purchase equipment which has been held back up to the extent of avail- able funds. Moved by Alderman Boyd that such authorization be given to the City Manager. Motion seconded by Alderman Drake, and carried unanimously. Moved by Alderman Wills that the meeting be adjourned. Motion seconded by Alderman Drake, and carried unanimously. The Board of Aldermen adjourned at 12 :55 P.M. PASSED AND APPROVED this /�_46day of ���,`�ce�y/ 1970. Mayor ATTEST: City Clerk