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2 - KCAT Cable Casting and PEG FundingjpW N OF r "~°&° a COUNCIL AGENDA REPORT ~S GASO DATE: JULY 28, 2010 MEETING DATE: OS/02/10 ITEM NO: TO: MAYOR AND TOWN COUNCIL FROM: GREG CARSON, TOWN MANAGER SUBJECT: APPROVE AGREEMENT WITH KCAT FOR CABLE CASTING SERVICES AND DISTRIBUTION OF PUBLIC, EDUCATIONAL AND GOVERNMENT (P.E.G.) FUNDING. RECOMMENDATION: Approve agreement with KCAT for cable casting services and distribution of public, educational and government (P.E.G.) funding. BACKGROUND: Since January 2003, KCAT has had an agreement to provide the Town cable casting services. The Town pays KCAT $40,000 annually for taping and airing Town Council ($20,000) and Planning Commission meetings ($20,000). In addition, the Town provides a $31,000 grant to KCAT annually. In 2006, there was a change in video franchising laws in the State of California through the Digital Infrastruchlre Video Competition Act (DPJCA). DIVCA allows the Town to collect P.E.G. support fees of 1% of gross revenues from video services provided by Comcast and any other state video franchise holder. The P.E.G. fee generates an estimated $78,000 annually for Los Gatos and under federal law can only be used for public, educational, and government cable-related capital needs. DISCUSSION: In October 2009, the KCAT Board requested that Town staff research the distribution of P.E.G. funds allocated to the Town through the DIVCA Act. The Board expressed interest in utilizing the funds to update equipment and improve services to the PREPARED BY: Jessica von Borck, Economic Vitality Manager N:Qv1GR4AdminWorkPiles~2010 Council Reports~kcat AGREEMEN'C 2010.doc Reviewed by: ''" 1 Assistant Town Manage yl r y`yI'own Attorney Clerk Administrator Finance Co nunity Development PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: APPROVE AGREEMENT WITH KCAT FOR CABLE CASTING SERVICES AND DISTRIBUTION OF PUBLIC, EDUCATIONAL AND GOVERNMENT (P.E.G.) FUNDING. July 28, 2010 comrnunity. As a result, both Town staff and the KCAT Board worked collaboratively to modify the existing KCAT agreement to define distribution of P.E.G. funds while identifying creative ways to ultimately reduce Town costs while not impacting KCAT operations. Through the proposed five-year contract, the Town will appropriate all of the P.E.G. funds that have been collected by the Town up to June 30, 2010 to KCAT with the exception of $22,000 that will be retained by the Town. KCAT will continue to receive P.E.G. funding from the Town on a quarterly basis thereafter with the exception of the Town retaining 15% of those fixnds over the next two years of payments, or until a reserve fund of $50,000 is created for the Town. The reserve fund is intended to cover the costs of on-going maintenance and/or replacement of the Town's recording/video equipment located at Town Hall. From that point onwards, 100% of P.E.G. funds will be paid to KCAT. The Town will reduce its current payments to KCAT by $51,000 in a phased plan over the life of the contract beginning with reducing the annual grant byone-half in 2010/2011. The grant will phase out entirely in fiscal year 2011/2012. Over the remaining three years of the contract, costs to the Town for cable casting services will be incrementally reduced from $40,000 to $20,000. FISCAL IMPACT: With the proposed amendments to the KCAT agreement, the Town will be able to reduce its costs for cable casting services by $20,000 and grant funding by $31,000 for a total savings of $51,000 over afive-year period. Attachments: 1. KCAT agreement AGREEMENT FOR PUBLIC ACCESS FUNDING AND CABLECASTING SERVICES THIS AGREEMENT is dated for identification July 1, 2010 and is by and between the Town of Los Gatos, a California municipal corporation, ("Town") and KCAT-TV, a non profit public access television station ("KCAT"). This Agreement is made with re€ereneetathe following facts and agreements. I. Recitals 1.1 KCAT is anon-profit public access television station that serves the community of Los Gatos and Monte Sereno. KCAT can be seen via AT&T broadband on Channel 15 by 10,000 cable households in Los Gatos and Monte Sereno. 1.2 The Town has always supported public access television within its jurisdictional limits and seeks, in this Agreement to provide a more stable funding source to support public, educational, and govermnental cablecasting, while phasing out general fund monies formerly used to provide shorter term grants to KCAT. 1.3 Town has Ueen providing approximately $70,000 per year to KCAT out of Town's general fund and seeks to reduce the general fund support in favor of allowing PEG funding to flow to KCAT. 1.4 Agreement will also serve as a contract with Town to pay for KCAT services rendered to cabtecast meetings of the Town Council and Planning Commission 1.5 The Parties in this Agreement replace and supersede that certain AGREEMENT FOR CABLECASTING CONSULTANT SERVICES approved by Town Council on January 21, 2003 (the "Prior Agreement"). II. Pubtie Access Funding 2.1 Beginning with fiscal year 2010/2011 and in subsequent fiscal years, Town shall forward to KCAT PEG funds ~rithin thirty (30) days of receipt by Town. Said funds are to be used for public access television services in Town, provided the expenditure of PEG funds so received, shall be made in strict compliance with the law relative to PEG funding, as it maybe amended from time to time. -lut ~~tt I e u-t. €~( ,~~~ On or before August 1, 2010, Town shall forward to KCAT the accrued PEG funds received by Town prior to June 30, 2010 (the "Accrued PEG funds"), minus $22,000 which will be placed in the Equipment Reserve Account as provided in paragraph 3.5 of this Agreement. 2.2 Grant and Phase-out of General Funds - In the fiscal year prior to this Agreement, Town made a grant of $31,000 to KCAT and agreed to pay up to $40,000 to KCAT for the cablecasting of Town council and Town planning commission meetings. The Parties agree to the phase-out of the grant funding source over the term of this Agreement and reduce the payment heretofore made by Town for cablecasting the Town Council and Planning Cormnission meetings, as provided herein. 2.3 Phase-out Fundine Schedule. In addition to the provision of PEG funding to KCAT as provided in 2.1 above, the following shall be provided to KCAT on or before August ls` of each fiscal year: August 1, 2010 - $55,000 August 1, 2011 - $40,000 August 1, 2012 - $25,000 August 1, 2013 - $20,000 August 1, 2014 - $20,000 2.4 Term -This Agreement, commencing on July 1, 2010, and terminating on June 3Q 2015, unless terminated earlier pursuant to the terms hereof, or extended by the Parties If this Agreement is terminated by KCAT prior to Tune 30, 2015, the KCAT termination shall only be effective with the repayment to Town of the total amount of the accrued PEG funding paid by Town to KCAT pursuant to paragraph 3.5. III. Cablecast Services KCAT shall provide the following services listed below. 3.1 KCAT will cablecast up to twenty-eight (28) Town Council meetings per calendar year live, generally scheduled on the first and third Monday of each month from the Town Council Chambers as well as up to twenty-eight (28) Town Plauning~ Comrnission meetings per calendar year, which generally fall on the 2rd and 4 Wednesday of each month. The meetings may include special meetings, study sessions, and rescheduled or continued meetings. 3.2 KCAT will work cooperatively with Town staff regarding the live cablecast of any additional special events, meetings, as appropriate at mutually agreed upon price, date, and time. 3.3 KCAT will provide appropriate technical staff, temporary operators, and an in- chamber assistant trained in the specific aspects of meeting coverage and use of the audio and video systems. Technical staff, temporary operators, and in- chamber assistant will demonstrate proficiency with all relevant broadcasting equipment. 3.4 KCAT will provide initial system checks, 60 (sixty) minutes prior to scheduled meetings to ensure that the video and sound production equipment is performing per specifications. 3.5 As provided in paragraph 2.1, Town shall pay the Accrued PEG funds to KCAT, however, Town shall retain $22,000 of the PEG funds received by Town prior to July 1, 2010, and place said funds in an Equipment Reserve Account (the "ERA"). Town shall also retain 15% of PEG funds received from each of the 2011/12 and 2012/13 fiscal years. These fluids will be made available for repairs, replacement and maintenance of the equipment used to cablecast and broadcast Town Council and Planning Commission meetings. The ERA may also be used for other technological upgrades to the Council chambers. KCAT shall provide atI routine maintenance, repair, and parts replacement of all cablecasting equipment at the level necessary to permit the equipment to achieve its useful life. This maintenance does not include maintenance of the external cable link between Town HaII and KCAT. The cost for the parts, equipment and maintenance shall be recommended to Town by KCAT and paid, upon the approval by the Town Manager from the ERA. In entering this Agreement, both KCAT and Town believe that the ERA funded at the $50,000 level for the term of this Agreement will be sufficient to meet the needs of Town in meeting the cost of repair, maintenance and replacement of the Town equipment. If, however, said funds are not sufficient the parties agree that the needs of Town in this regard shall have first priority on PEG funds received by Town. In that event, the ERA shall be funded to meet those needs. 3.6 KCAT will provide technical consultation for the repair, modification, and upgrade of the Town-owned video production equipment. 3.7 KCAT will provide temporary use of existing KCAT cameras and other equipment in the event that the video production equipment fails to operate properly. 3.8 KCAT agrees to meet with Town representatives within five (5}business days of a request by the Town at a mutually agreeable time and location. ~~;~ 3.9 KCAT is responsible for securing the video production equipment room after cablecasting, tape duplication, or other activities. 3.10 For public meetings, KCAT will provide gauel to gavel meeting coverage. 3.11 KCAT will provide to the Town at no cost, two (2) recordings of all meetings covered by this Agreement on broadcast quality DVD discs, capable of being copied and/or reproduced by Town. Recordings of meetings shall be given to the Town for its records. 3.12 KCAT will air previously recorded meetings covered by this agreement on its Community Access Channel (Channel 15/ KCAT) based on its program/schedule availability. KCAT shall provide copies of Town meetings to any individual, group, agency, or organization requesting same on DVD discs within five (5) days of the request and for the reproduction cost authorized by the California Public Records Act (xcaT~s s~t„at~os~), not to exceed $10.00 per disc. 3.13 KCAT shall not use Town video broadcasting equipment for any other purpose other than this Agreement, unless written consent is given the Town. cablecasting and broadcasting equipment shall be operated at all tunes by the technical and temporary staff covered in this Agreement. N. General Provisions 4.1 Time of Performance. The services of the KCAT are to continue per the Prior Agreement for the period set forth in Section 2.4, unless Agreement is terminated earlier pursuant to Section 4.14. Upon mutual written agreement between the Town and the KCAT signed by the KCAT-TV Station Manager and Town Manager, this contract may be extended for an additional year. 4.2 Compliance with Laws. KCAT shall comply with all applicable laws, codes, ordinances, and regulations of governing federal, state and local laws. KCAT represents and wat~rants to Town that it has all licenses, permits, qualifications and approvals of whatsoever nature which are legally required for KCAT to practice its profession. KCAT represents and warrants to Town that KCAT shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement any licenses, permits, and approvals which are legally required for KCAT to practice its profession. KCAT shall maintain a Town of Los Gatos business license pursuant to Chapter 14 of the Code of the Town of Los Gatos. 4.3 Sole Responsibility. KCAT shall be responsible for employing or engaging all persons necessary to perform the services under this Agreement. 4.4 Pavment for Cablecastine -All payments due under this Agreement for direct cablecasting services (non-PEG funds) shall be based upon services rendered to the Town. .-~, 4.5 Audits -Availability of Records. KCAT shall maintain a general ledger and detailed books of account showing the receipt and expenditure of all funds received from Town for net less than five (5} years following completion of the work the receipt of funds and the expenditure of frurds under this Agreement. KCAT shall make these records available to authorized personnel of the Town at KCAT's offices during business hours upon written request of the Town. If an audit conducted by the Town demonstrates inappropriate expenditures of public fiords by KCAT, including PEG funds, KCAT shall reimburse said expenditures and restore the funding as may be required. If any audit by Town discloses a discrepancy in allowed expenditures of more than five percent (5%) in any one year, KCAT shall reimburse Town for the cost of the audit, including any staff time contributed to the securing or management of the audit andlor the required follow-up actions. In selecting the auditor or audit firm, To~~+n shall be guided by the rates it pays for the audit of Town functions. 4.6 PEG and Grant Funding. KCAT shall maintain detailed records and books of account showing the receipt of and expenditure of all PEG Funding and Grant Funding received from Town. KCAT acknowledges that PEG funding is strictly limited to certain expenditures for capital costs, equipment, and facilities as permitted by state and federal law. 4.6.1 Annual Report. On or before March ls` of each year, beginning with March 1, 2011, KCAT shall submit a written report and analysis of all funds received from Town in the prior calendar year and a listing of expenditures made with said funds or from the accumulation or interest/investment earnings onsaid funds. The report shall be submitted to the Town Manager. 4.7 No Self Dealing. Prue in-part to the public funding provided in this Agreement, no KCAT Board Member may be financially interested in any contract, expenditure, purchase, or grant made by KCAT. KCAT employees are likewise excluded from any financial interest in any contract, expenditure, purchase, or grant by or from KCAT. For the purpose of this section, financial interest shall be determined pursuant to Govermnent Code 1090, et: seq. 4.8 Project Manager. The Project Manager for KCAT for the work under this Agreement shall be Thomas M. Bryan, KCAT-TV Station Manager, or an appropriate KCAT-TV Board designee. Town shall designate a Town staff member to serve as a liaison to the Board and who will serve as an ex-officio board member. The ex-officio board member shall be entitled to, but not required to attend all meetings of the Board and be permitted to participate in all discussions, but not vote. The ex-officio member shall receive advance written notice of all meetings of the board. 4.9 Assignability and Subcontracting. The services to be performed render this _, -~; Agreement are unique and personal to KCAT. No portion of these services shall be assigned or subcontracted without the written consent of the Town. 4.10 Notices. Any notice required to be given shall be deemed to be duly and properly given if mailed postage prepaid, and addressed to: To Town: To KCAT: Greg Larson Thomas M. Bryan Town Manager KCAT-TV Station Manager 110 E. Main Street 20 High School Court Los Gatos, CA 95030 Los Gatos, CA 95030 or personally delivered to KCAT to such address or such other address as KCAT designates in writing to Town. 4.11 Independent Contractor. It is understood that KCAT, in the performance of the work and services agreed to be perf'orrned, shall act as and be an independent contractor and not an agent or employee of the Town. As an independent contractor, he/she shall not obtain any rights to retirement benefits or other benefits which accrue to Town employee(s). With prior written consent, the KCAT may perform some obligations under this Agreement by subcontracting, but may not delegate ultimate responsibility for performance or assign or transfer interests under this Agreement. KCAT agrees to testify in any litigation brought regarding the subject of the work to be performed under this Agreement. KCAT shall be compensated for its costs and expenses in preparing for, traveling to, and testifying in such matters at its then current rates of compensation, unless such litigation is brought by KCAT or is based on allegations of KCAT's negligent performance or wrongdoing. 4.12 Equal Employment Opportunitu. KCAT warrants that it is an equal opportuiuty employer and shall comply with applicable regulations governing equal employment opportunity. Neither KCAT nor its subcontractors do and neither shall discriminate against persons employed or seeking employment with them on the basis of age, sex, color, race, marital status, sexual orientation, ancestry, physical or mental disability, national origin, religion, or medical condition, unless based upon a bona fide occupational qualification pursuant to the California Fair Employment & Housing Act. 4.13 Indemnification. KCAT shall defend, indemnify and hold harmless the Town, its officers, agents, employees and volunteers from all damages, liabilities, penalties, costs, or expenses in law or equity that may at any time arise or be set up because of damages to property or personal inj ury received by reason of, or in the course of performing work which maybe occasioned by a willful or negligent act or omissions of KCAT, or any of KCAT's officers, employees, or agents or any subcontractors. 1 4.14 Waiver. No failure on the par[ of either party to exercise any right or remedy hereunder shall operate as a waiver of any other right or remedy that party may have hereunder, nor does waiver of a breach or default under this Agreement constitute a continuing waiver of a subsequent breach of the same or any other provision of this Agreement. Governine Law. This Agreement, regardless of where executed, shall be governed by and construed to the laws of the State of California. Venue for any action regarding this Agreement shall be in the Superior Court of the County of Santa Clara 4.15 Default. Should either party deault under this Agreement, the non-defaulting part shall demand a cure before filing any action to enforce this Agreement If the default is not cured within a reasonable tune, not to exceed thirty (30) days, the nondefaulting party may pursue whatever remedies, at law or inequity that they choose. In the event that KCAT defaults under this Agreement, Town reserves the right to recover whatever damages may lie, and shall have a separte right to recover the Accrued PEG fartds. 4.1.6 Termination of Agreement. The Town and KCAT shall have the right to terminate this agreement with or without cause by giving not less than six (6) months written notice of termination. In the event of termination by KCAT, the non-PEG funding provided by the Town under this agreement shall be pro-rated on a month-to-month basis and partial month, as may be applicable. PEG funding shall terminate on the day this Agreement terminates, payable within thirty (3Q) days thereafter. 4.17 Amendment. No modification, waiver, mutual ternination, or amendment of this Agreement is effective unless made in writing and signed by the Town and KCAT. 4.18 Disputes. In any dispute over any aspect of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, including costs of appeal. 4.19 Entire Agreement. This Agreement constitutes the complete and exclusive statement of the Agreement between the Town and KCAT. No terms, conditions, understandings or agreements purporting to modify or vary this Agreement, unless hereafter made in writing and signed by the party to be bound, shall be binding on either party. ~I:v IN WITNESS WHEREOF, the Town and KCAT have executed this Agreement as of the date indicated on page one (1). TOWN OF LOS GATOS: Greg Larson, Town Manager ob~i7~i~ Bryan, KCAT Station Manager APPROVED AS TO FORM: chael D. rtello, Interim Town Attorney ATTEST: Jackie D. Rose, Clerk Administrator