The City Council is being asked to execute a new five-year agreement with Billings Community Cable Corporation (Community 7) to provide services to the City and its residents. The City entered into an agreement with Community 7 in 1998 to provide services to City residents on news, events, and activities of the City of Billings. The City continues to have an interest in Community 7 providing services to City staff and City residents through programs, meeting coverage, event notices, special event coverage, and application of new technology that may create a very useful interface with Community 7 programming and City events, meetings and activities. The City has provided financial support to Community 7 under the past agreement be using revenues from its nonexclusive franchise agreement with Charter Communications to provide cable television services to residents of the City. The franchise agreement provides that Charter must make available public, education and governmental channels for use as the City desires. This agreement provides fees to the City from Charter collected from Charter cable subscribers.

City Council may:

• Approve of the Five-Year Agreement between the City of Billings and Community 7 Television as recommended by City staff; or
• Not Approve of the Five-Year Agreement between the City of Billings and Community 7 Television; or
• Make amendments and then approve the Five-Year Agreement between the City of Billings and Community 7 Television. Making amendments may require the Agreement to be taken back to the Community 7 Board of Directors and City staff for further review.

The 1998 Agreement between the City and Community 7 was set for a one-year period and had a clause that renewed it for one year increments. A separate memorandum established by the City Council in 1994 defined a financial contribution to Community 7 of 20% of the revenue from the fees collected from the Charter franchise agreement. This payment allocation ended up at a $100,000 per year flat rate and the City has been paying this for as long as records could be determined. Today, 20% of the current 2018 Franchise Fee would be $276,000. The City has continued to pay $100,000, annually.

The new Agreement proposes an annual flat rate payment to Community 7 from the City for each of the years in the five-year agreement with an annual escalator. The City would pay $180,000 in FY2019 and gradually increase its payments to $202,590 in FY2023. This graduated funding plan reflects the City's interest in gradually utilizing more of the services described in Section 3.j. of the attached Agreement over the five-year life of the Agreement. The funding to Community 7 during the Agreement would come from the City's Franchise Fee revenue paid from Charter.

The City and Community 7 began working in February this year to develop a new agreement to replace the 1998 agreement and to move both organizations forward to deliver City information to the Billings community. City staff and Community 7 staff worked to bring a draft agreement to the Community 7 Board of Directors and then the City Council at its June 18 Work Session. The attached agreement is the result of this effort. The Community 7 Board of Directors is supportive of the draft agreement.

In review of the past Community 7 Agreement, other agreements between other community cable channels and other Montana communities, City staff’s recommendation is for a five-year agreement with a fixed annual amount to be paid to Community 7, including an annual escalator over the life of the five-year agreement. This approach is easier to track, account for, and makes the payment process very clear between Community 7 and the City. This approach is also, more importantly, in alignment with the past history of service use and a gradual increase in use of Community 7 services by the City in the next five (5) years. Specific reasons for this approach are as follows:

• Community 7 is providing services now the City has, technically, not paid full cost for. Community 7 is proposing new services, some of which the City has already seen used – City Administrator Interviews, coverage of One Big Sky District meetings, Facebook live streaming in some cases and better coverage of one-time City events – that the City expects to continue to use in the next 5 years.
• The City would likely continue to use some of these services immediately under a new agreement. However, some services proposed in the new agreement the City is expected not to begin using in the first year, but would begin to use in the 2^nd, 3^rd or 4^th years of the agreement.
• The City has not been as active in exploring new service options with Community 7 and intends to do so over the coming years in a gradual manner, as the City better defines and understands its needs and the service options and potential.
• It is the City’s position that starting at the FY19 annual payment to Community 7 as identified in the attached agreement and then increasing it annually best matches the City’s gradual increase in service demands from Community 7. It also helps Community 7 budget for delivery of these services.

Community 7 and the City of Billings, on behalf of City residents, are the stakeholders in this process. The Community 7 Board of Directors is in support of the attached agreement as drafted. No public hearing is scheduled for this item. However, the public may comment on this agreement during the public comment process at the start of this meeting.