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City of Colton <br />Agenda Report <br />Council Meeting of January 13; 1998 <br />Page 2 <br />Old Bili: $37.45 (.05) + $37.45 = $39.32 Franchise Fee = $1.87 <br />Revised Bill: $37.45 (.0526) + $37.45 = $39.42 Franchise Fee = $1.97 <br />Difference: This sample customer's monthly bill would increase by $0.10 <br />FISCAL IMPACT: <br />The following is an estimate of the fiscal impact of the revised methodology of <br />calculating franchise fees based on the franchise fee received from TCI from Calendar <br />Year 1996. <br />Franchise Fee Received for Calendar Year 1996 (5%): $111,214 <br />TCI Gross Revenue Estimate for Calendar Year 1996: $111,214 /.05 = $2,224,280 <br />Estimate for Franchise Fee Based on Revised Methodology: <br />$2,224,280 x.0526 = $116,997 <br />Difference $116,997 -$111,214 = $5,783 <br />The estimated financial impact (as a result of the .Fifth Circuit Court's reversal of the <br />FCC decision regarding franchise fees) would result in an annual increase to Franchise <br />Fee Revenues of approximately $5,783. <br />RECOMMENDATION: <br />Staff recommends that we accept the revised methodology for calculating franchise <br />fees. Unless we notify TCl in writing, the revised methodology for calculating, franchise <br />fees will become effective with ICI's February customer billing. <br />ALTERNATIVE <br />Provide written , authorization to TCI to continue billing Colton customers using its <br />existing method of franchise fee calculation. <br />Attachments: (:2) Letters from TCI Dated November 19, 1997 and December 8, 19$7 <br />