Discussion and possible action on any and all matters regarding Resolution No. 2251. A resolution of the Mayor and City Council of the City of San Luis, Arizona, establishing and adopting fees for video service providers; repealing any conflicting provisions; and providing for severability.    (Kay Marion Macuil, City Attorney)

Legal Definition
Under A.R.S. § 9-1404(28) as amended in 2022, “Video service”:

1. Means the provision by a video service provider of multichannel video programming generally considered comparable to video programming delivered by a television broadcast station, video service or other digital television service, whether provided as part of a tier, on demand or on a per-channel basis, without regard to the technology used to deliver the video service, including internet protocol technology or any successor technology.
2. Includes cable service.
3. Does not include any of the following:

1. Video programming accessed through a service that enables users to access content, information, email, messaging or other services that are offered via the internet, including streaming content
2. Direct-to-home satellite services as defined in 47 United States Code section 303(v).
3. Wireless multichannel video programming that is provided by a commercial mobile service provider.

  Timeline 

Federal and State laws require that cities impose a uniform fee for video service providers (commonly known as cable companies).

On May 5, 2019, before the July 1, 2019, deadline, City Council adopted a uniform license agreement required by law.
By 2022, grant money has been secured to bring fiber optic cable to San Luis. In anticipation of video service providers coming in, staff prepared proposed regulations and followed notice requirements to propose a fee.
On August 24, 2022, City Council adopted Ordinance No. 428, amending the City Code. The new code is not required, but it serves as a guide to staff in carrying out their responsibilities under State and Federal law for video service provider licensing.
Notice
On August 22, 2022, a Notice of Intent to establish and adopt fees for Video Service Providers was posted on the city’s home page at https://www.sanluisaz.gov under the heading “Public Notices.” Paper notices were posted on the city’s bulletin boards at City Hall, the Police Station, and Fernando Padilla Community Center. (The notices are attached). The notice was available through the Clerks office. The 60-day notice period required under A.R.S. § 9-499.15 ended Monday, October 24, 2022. The notice was for the October 26, 2022, Council Meeting. However, the October 26, 2022, Council Meeting was canceled due to Council participation in a welcoming reception for the dignitaries to the U.S. State Department's Regional Meeting of the Binational Bridges and Border Crossing Group being held in San Luis. (Please see attached Federal Register notice).
 
On November 3, 2022, a second Notice of Intent to establish and adopt fees for Video Service Providers was posted following the above procedures for the January 11, 2023, Council Meeting. (The bulletin board notices are attached and here is the link to the August website posting https://www.sanluisaz.gov/CivicAlerts.aspx?AID=607, and the link to the November website posting https://www.sanluisaz.gov/CivicAlerts.aspx?AID=617).

The above notices meet the 60-day notice period required under A.R.S. § 9-499.15 for the January 11, 2023, Council Meeting. Any video service providers have had ample notice of the fee because it has been noticed since August 22, 2022, 142 days. If the fee is approved, it will become effective on February 10, 2023.
 
The Fee
The fee is intended to defray the costs of managing the public right-of-way. Under A.R.S. Title 9, Chapter 13 (A.R.S. § 9-1401 et seq.), local governments must adopt a license fee equally and uniformly for all video service providers. Historically, cities and towns entered into individual franchise license agreements with video service providers (cable companies). The law allows fees for applications, construction permits, and inspection charges. But, such charges must be deducted from the license fee. The city may require that video service providers bear reasonable costs associated with the repair and restoration of streets. The city may still charge a license fee of up to five percent (5%) of the gross revenue of the video service provider charged no more often than quarterly per A.R.S. § 9-1443(A)(2) and 47 United States Code § 542(g). Staff checked several cities in Arizona, and all charge the five percent (5%) fee. Staff recommends the same 5% fee.