ADMINISTRATION - Alison Bong, Deputy Finance Director
Title
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Adopt 2023 Communications Fund Budget
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Executive Summary
Pursuant to requirements to adopt annual budgets for all operating funds, Staff is bringing forward the proposed 2023 Communications Fund Budget for Council consideration and adoption.
Background
Staff presented a proposed 2023 Communications Fund Budget for discussion at the August 8, 2022, Council Workshop. Council reviewed the proposed budget and recommended that the Communications Fund cover the cost of all City meetings with the remainder of communications expenses transferred to the General Fund. A large portion of Communications Fund expenses were moved to the General Fund for the 2023 budget with additional expenses to be moved in 2024. The proposed budget has changed slightly from the August 8 meeting. Revenues have been reduced by $1,000, to $110,400, and expenditures have been reduced by $97,920, to $67,590.
Fund Overview
The City’s Communications Fund accounts for activity supported by revenue received from cable franchise fees paid by cable television customers. The current cable service provider is Comcast. Franchise and PEG fees collected from cable television subscribers are passed through to the North Metro Telecommunications Commission (NMTV), which is the regulatory body that oversees the cable franchise. The Commission uses these fees to provide to its member cities educational opportunities for children, adults, and seniors; tape and film transfer services; coverage of high school sports, local news, and local elections; municipal programming, including city meetings, and other informative and interesting programming regarding their communities. A portion of the collected fees is distributed to Blaine and the other member cities and is used to support various communications initiatives within the city.
An Uncertain Future
The cable television industry is undergoing a volatile transformation. Overall, it has experienced a decline in subscriber levels and a new court ruling will very likely negatively impact franchise fees. Additionally, NMTV is in the process of franchise negotiations, which if completed by 2022, will impact how cable providers are allowed to spend franchise fees. Per the NMTV Executive Director, recent FCC actions and subsequent court rulings are changing the way franchise and PEG fees are assessed and collected and it is certain that total fees distributed by the commission in 2022 will be $225,000. This amount is reduced to $200,000 in 2023 and Blaine’s roughly 55% share of the fees would be just under $110,000. This is a significant decrease from recent years, when fees distributed by the Commission totaled $400,000, and Blaine received roughly $222,000.
Considering the unstable outlook for the cable industry into 2023 and beyond, staff feels the best strategy is to balance the 2022 Communications Budget with a draw from reserves and by beginning to shift a large amount of operating expenditures to the General Fund.
Revenue
PEG fees shared with the member cities will equal $200,000 in 2023 and Blaine’s share is estimated to be $110,000.
Expenses
Expenditures in 2023 are scaled back in response to anticipated revenue decreases. Costs for producing and mailing the printed newsletter, a $92,000 appropriation, are shifted to the general fund, along with a $22,000 appropriation for management of the strategic plan, and $23,000 for enhancements to the city’s web site. Expenditures remaining in the Communications Fund include $30,000 for the CivicClerk legislative management system, $15,000 for the preventative maintenance contracts for A/V equipment throughout city hall, and $22,590 for facilities maintenance and improvement charges. A $5,000 capital equipment appropriation is included in the event a piece of technical equipment fails during the year and a $35,000 capital appropriation is included for upgrades to the Council Chambers and control room.
Strategic Plan Relationship
Adoption of annual budgets contributes to the overall financial stability of the City.
Board/Commission Review
N/A
Financial Impact
The proposed budget, if adopted, appropriates $107,590 in funding for the City’s 2023 communications efforts.
Public Outreach/Input
N/A
Staff Recommendation
Approve the 2023 Communications Fund Budget through the adoption of the following resolution.
Attachment List
2023 Communications Fund Budget Summary
Body
WHEREAS, the proposed Communications Fund Budget for the fiscal year commencing January 1, 2023, has been prepared by the City Manager; and
WHEREAS, the City Council has examined, studied and reviewed said proposed Communications Fund Budget; and
WHEREAS, the City Council has, after due consideration and deliberation, made such amendments and adjustments in the proposed Communications Fund Budget as they consider necessary, desirable or expedient;
NOW, THEREFORE, BE IT RESOLVED, that the Blaine City Council of the City of Blaine as follows:
1. That the proposed Budget for the Communications Fund attached hereto is approved.
2. That the 2023 appropriations attached hereto are approved.
3. That the 2023 funding sources identified and attached hereto are approved.
That the City Manager is authorized and directed to implement and to administer, within the budgetary funding limits and within adopted City policy and relevant State and City laws and regulations, said approved Communications Fund Budget.
PASSED by the City Council of the City of Blaine this 19th day of December 2022.