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Item No. 18 memorandum TO: City Council John Godwin, City Manager FROM: Gene Anderson, Finance Director SUBJECT: PUBLIC, EDUCATIONAL, & GOVERNMENTAL ACCESS CHANNEL (PEG) AND PUBLIC INFORMATION OFFICER (PIO) DATE: February 2, 2016 BACKGROUND: Historically cable franchises were granted by local governments where a fee was collected for the use of the city's right -of -way. In 2005, the state legislature allowed cable companies to bypass local control by setting up a state - issued certificate of franchise authority. In the City of Paris' case, the cable company did not invoke their right to a state issued franchise until the local franchise expired at the end of 2009. At that point, the state franchise legislation applied to the City of Paris. In addition to the 5% franchise fee allowed under the state franchise fee, the City could also collect a I% fee for the purpose providing public, educational, and governmental programming to citizens. While the State law imposed no restrictions on the type of expenditures made from PEG funds, federal law dictates that this 1% fee can only be spent for capital items. Under the state franchise, the City can require Suddenlink Communications to provide the City with up to 2 PEG channels. The City would be required to provide at least 8 hours of programming each day on a PEG channel. STATUS OF ISSUE: Beginning in 2010, the City opted to collect this I % fee for PEG purposes. Information accompanying this memo outlines potential uses of a City PEG channel. The underlying motivation for PEG channels is the transparency and easy access to local government. The Council was given a presentation on the benefits of a PEG channel at the October 12, 2015 Council meeting. BUDGET: The PEG franchise fee will more than provide all of the equipment needed for the City to develop its own programming. It would also provide funds to renovate the unused area above the Council chambers to serve as a studio and production space. Funding for one full time employee and other operational expenses would have to be provided for by the City. The staff believes that enough local interest can be generated to make the program self - sufficient in a three year period through sponsorships and advertising. RECOMMENDATION: City staff is seeking the Council's approval of a three year pilot project to see if the program can become self - sufficient. The program would be reevaluated at that time.