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HomeMy WebLinkAbout10/15/1981� r October 15, 1981 The Board of County Commissioners of Indian River County, Florida, met in Special Session at the Sebastian Community Center, Central Avenue, Sebastian, Florida, on Thursday, October 15, 1981, at 7:30 o'clock P.M. Present were Patrick B. Lyons, Chairman; William C. Wodtke, Jr., Vice Chairman; Dick Bird; Alfred Grover Fletcher; and Don C. Scurlock, Jr. Also present were Neil A. Nelson, County Administrator; George G. Collins, Jr., Attorney to the Board of County Commissioners; and Virginia Hargreaves, Deputy Clerk. The Chairman called the meeting to order and noted that this hearing was continued from a hearing held in July because of complaints voiced by viewers and to allow Jones Intercable time to address these'complaints and supply more complete financial statements. The hour of 7:30 o'clock P.M. having passed, the Deputy Clerk read the following Notice with Proof of Publication - attached, to -wit: A' VERO BEACH PRESS -JOURNAL Published Weekly Vero Beach, Indian River County, Florida -Y OF INDIAN RIVER: OF FLORIDA Before the undersigned authority personally appeared J. J. Schumann, Jr. who on oath t he is Business Manager of the Vero Beach Press -Journal, a weekly newspaper published f•cachh in Indian River County, Florida; that the attached copy of advertisement, being in the matter of 'i 4/ in the �1 rCourt, waasypub- n said newspaper in the issues of _ ,� ��� _ -2 Z • ant further says that the said Vero Beach Press -Journal is a newspaper published at Beach, in said Indian River County, and that the said newspaper has heretofore -ontinuously published in said Indian River County, Florida, weekly and has been entered and class mail matter at the post office in Vero Beach, in said Indian River County, Florida period of one year next preceeding the first publication of the attached copy of adver- nt; and affiant further says that he has neither paid nor promised any person, firm or ation any discount, rebate, commission or refund for the purpose of securing this adver- nt for publication in the said newspaper. to and subscrib, ®� ��� 1a (Clerk of the Circuit Court, Indian River County, Florida) � I NOTICE OP NEARING' Ali interested parties are hereby' notified that the Board of County Commissionen" Indian River County will hold a public hearletg; an October 15. 1181; at 7t30 P.M- In at` 1 Sebastian Community Center located on North n Central Avenue. Sebastlan, Florida, to cat. ;.q aider the request of Jones Intercable, for— for the approval o) the following rate incressest .. . Residential basic monthly charge Irons IWI.:; Reconnectim '01 residential cable servki from $7.40 to $1 Us. All other charges to remain unchanged.' 'Beard of County Commissioners. of Indian River County By: Patrick B. Lyons, Chairman. Sept. 270 Oct. i, HCl. t BOOK 47 PAGE 751 A r OCT 15 1981 Boor 47 Fa,t E752 Kevin McLaughlin, Regional Manager for Jones Intercable, came before the Board and stated that the information he would be discussing is distressing since the fact is that Jones Intercable has become aware that they inherited major maintenance problems associated with their daily operation and now realize that they must put in more money in order to solve these problems. Mr. McLaughlin stated that he was not here to night to promise blue sky remedies, but to promise viable solutions contingent on their requested rate increase. He reported that they have committed in the area of $70,000 to tackle the maintenance problems within a time frame satisfactory to the residents , and while their financial statement does not present a pretty picture, they are proud of the accomplishments they have made since their acquisition of this system. If the increase were to be granted, Mr. McLaughlin assured those present that certain improvements will be made to their existing cable. He then gave a description of the various specific areas where improvements would be made, representing roughly 30,000' of cable. He felt this indicates Jones Intercable's recognition of the problems and their willingness to cooperate. He believed that Jones Intercable can provide good service with the goals mentioned and emphasized that it is imperative they have the rate increase for the benefit of the service and to have the continued ability to operate a cable system in Indian River County. Question arose as to any improvements made to the system up to this date, and Mr. McLaughlin stated that he had reviewed this with the chief technicians and some of the work done is as follows: Replacement of 75' of cable trunk and 500' of cable feeder, replacement of three trunk amplifiers, and reworking of some things on Power Line Road. He noted that some problems are relatively isolated and 2 again emphasized that they recognize the problems and are ready to deal with them. The Board then went into a detailed review of the financial information supplied and wished to be informed how Jones Intercable stands in regard to their commitment to expend a total of $379,366 on capital improvements to this system in 1981. Question also arose as to their figures on depreciation which jumped from $96,450 last year to $446,000 this year, or an increase of over 950. -It was noted there are methods of accelerating depreciation schedules, and it was hard to understand such a tremendous increase. Mr. McLaughlin -stated that when figuring their loss, they did take out the other income and amortization and still came up with a loss of many thousands. He asked local manager Bill Sisk to comment, and Mr. Sisk noted that the system was purchased in June of last year and some of the figures are six month figures and some eight month figures. He did not know what kind of depreciation schedule was used. Discussion continued as to how the depreciation figure was arrived at and whether it was a percentage of total revenues. It was noted that the Board had not insisted on an audited statement, but did request that an updated statement be supplied. There was a general feeling that the financial statements supplied were puzzling and not what the Board had requested of the company. Mr. McLaughlin commented that he had already reviewed the company's proposed goals and as far as their financial picture is concerned, it reflects a $97,000 loss. He felt they should have had a financial officer present to explain their situation. Commissioner Scurlock emphasized that the Board had requested much more financial information than was supplied at the first public hearing, and he did not feel the financial statements made available to the Commission only last night presented a sufficient picture to put the COmmission in any better position to reach a decision than BOOR 47 � PAGE X53 001 151981 3 0 0 CT 151991 $ooK 47 PAGE ` 5 4 they were before. He commented that at the time of transfer of this franchise, Jones Intercable had made the statement that they were able to do more than was being done presently and that their company had the resources available to accomplish this. Discussion ensued about the corporate structure involved, and Commissioner Wodtke commented that at the earlier hearing, the Board was provided with a financial statement dated March 31, 1980, which he assumed was a total corporate statement similar to the annual report, and he wished to have the financial information attributable specifically to the operation in this county broken out so he could make a meaningful comparison of figures. He further noted that based on their customer base, the $1.25 increase should provide them with an additional $42,000 a year. Mr. McLaughlin stated that he could not help but feel that the members of the audience believe that Jones Intercable is asking for this increase just to make a profit, but actually it is something they need simply to make the improvements and keep operating. Detailed discussion followed in regard to the net loss and what it included. Commissioner Wodtke referred to the projection of capital improvements made for 1981 through 1985 and asked if Jones Intercable could state that the dollars projected for 1981 were expended in the various categories projected and what assurance they would be willing to offer that their projections for the future years will be allocated as projected in this franchise area. In other words, he wished to be assured that the dollars projected would be expended to improve the system and the signal rather than to expand the territory. Mr. McLaughlin stated that most of that money will go to a rebuildment situation rather than expansion, but noted 4 that any projections are contingent on where they stand tonight in regard to the rate increase. Chairman Lyons stated that he was glad to see the improvements are recognized as needed, but he wished to have an explanation of the fact that the rate increase that is requested does not come close to paying for the improvements. Mr. McLaughlin commented that he sees them at a break even point. He further noted that because the system needs to be addressed, they have not gotten to marketing, and he suspected that they can pick up additional subscribers. Commissioner Bird discussed the..ratio of plant improvement, and Mr. McLaughlin felt that has changed because of the existing situation. Chairman Lyons felt it is a step forward that they are focusing their activities on solving problems, but he personally was not satisfied with the financial information supplied. He stated that at this time he would open the floor to the audience so the Commission could determine whether there has been any improvement in the situation. The Chairman asked if anyone present wished to be heard. Mrs. Sensabaugh, eight year resident of Shady Rest ._Mobile Home PaRK, believed that Shady Rest does have ...continuing problems and stated that it is not the increase in rates they object to, but they want to have something to ..show for their money. Robert Tanksley referred to the Letter he had written the Chairman as follows: 5 BOOK 47 PAGE 755 OCT 151981 _I OCT 151981 BOOK 47 PAGE 156 MEMORANDUM FOR: Mr. Patrick Lyons Chairman, Indian River County Commissioners DATE: 29 September 1981 SUBJECT: Jones Intercable rate increase request REFERENCE: 29 September 1981 telephone conversation with Idr. ' Robert Tanksley Following is my written complaint furnished at your request] with the expectation.that it will be brought to the -attention of the other County Commissioners and put on the agenda for.the 15 October 1981 meeting in Sebastian. As I mentioned on the telephonep I believe the proposed Jones Intercable rate increase is way out of line with the existing service available. If anything a rate decrease would be more in order. The very poor picture reception; the constant picture interruptions and other problems are never ending. One never knows what his picture reception will be from day to day. This month I had occasion to call Jones Intercable•as my picture had deteriorated badly suddenly as I was watching. I made repeated phone calls in regard to the problems but no-one came to my horae-for eleven days. Messages were left for the System Managerp Mr. Bill Sisk# but even he failed to return my calls during that period. Surely he could have found a moment during that time. Also, I indicated to Jones that I would like to call Denver (the Headquarters I•m told) in order to get some action. No one seemed to know the address or telephone number of their own company. I personally believe that at this time there is definitely no reason to reward Jones -Intercable with a rate increase of any kind. They have much work to do and much more good will to establish before thee -quality of service is equitable enough to deserve additional benefits. Yours very truly, Mr. Tanksley believed that it is becoming increasingly clear that Jones Intercable seriously underestimated the quality of the cable before they came here, but that is their mistake and their problem. Mr.Tanksley continued that if Jones Intercable would be willing to adjust his bill every month until he got his picture, perhaps he could reach an agreement with them. He noted they have already adjusted his bill this month. Mr. Sisk confirmed that Mr. Tanksley has a problem which they have trying to fix and they did adjust his bill because he was out for a long time. Ed Berg, a seven year resident of Shady Rest, noted that several years ago when Indian River Cablevision applied for an increase, he was instrumental in gathering petitions opposing an increase, but it was granted and they did make some cosmetic changes, although the quality of the picture did not get appreciably better. Mr: Berg stated the service given by Jones Intercable has not improved since last summer, but, in fact, has deteriorated badly. He agreed that business is entitled to a fair rate,of return, but the people are not getting what they are paying for. Ed Ballantine, operator of Paradise Mobile Home Park, read from a letter he had written to Jones Intercable on October 7th describing the number of calls he had made to them since his reception was lost on September 28th and not restored as of October 7th. He reported that on September 29th, he complained about an exposed cable lying across a driveway and lawn, and nothing was done about it until he finally reached a supervisor who came out and buried the cable himself. Mr. Ballantine agreed that a business should be entitled to a profit, but people are entitled to a service also, and he believed Jones Intercable should improve their service before getting an increase. Hans Dorsmer pointed out that the charges for new hook-ups are not being increased and asked why the regular subscribers should have to absorb the cost far the new hook-ups which he did not feel was fair. Mr. Sisk noted that connection charges are a one-time expense. They want to encourage as many people to get on the cable as possible,and they do have specials to attract new subscribers, but possibly they need to address this factor. Chairman Lyons commented that it seems there has been no improvement in service, and he questioned whether 7 BOOK 47 PAGE X75 7 OCT 151991 8OOK 47 FAGS 758 � possibly the Commission should cancel the franchise. The Attorney agreed that is a possible remedy. Commissioner Scurlock reiterated that he was present at the Sebastian City Council meeting when Jones Intercable was asking for the transfer of franchise, and at that time, they, admitted there were significant problems with the system, but indicated that they had the resources and ability to make the needed improvements; the transfer was allowed on that basis. Manager Bill Sisk reported that they have been checking out the situation at Shady Rest, and he believed it is "AOK." He noted that out of 1,400 customers in the County, only a small number showed up to complain, and he felt if you can satisfy 950 or so, you are doing very well. He pointed out that Jones Intercable wants to make the situation right more than anyone else present. David Lapham of Roseland reported that he had reviewed the information submitted by Jones Intercable, and according to their figures, there is no question that they need the rate increase. He asked if the Commission when authorizing the franchise had made any effort to verify the price paid by Jones Intercable and determine whether they paid too much for a broken down system. Mr. Lapham continued to question the County's system for handling franchises and felt the County is not equipped to provide fair and adequate regulation. He suggested the County relinquish the regulations and charge the company for the use of easements, etc. Mr. Lapham emphasized that those who require the service should pay for it. He made the point that people who live in this area only part of the year do not pay their proportionate share, and he believed an effort should be made to find some method to collect more from seasonal customers. Mr. Lapham felt the Commission, in establishing the basic rate, can only ask if the service was worth $7.25 two years ago, is it worth $1.25 more today based on inflation. He did not feel they had much else to go on. � � r L___� M Chairman Lyons noted that the Board members only received these figures last night and have had no time to analyze them. He again stated that he did not feel the Board has been supplied sufficient information to give an intelligent reply, and he was disappointed and a little bit insulted that this has been handled as it has. Victor Hart of Gifford did believe Jones Intercable is trying to improve the situation, but stated that he would be disturbed if the Commission granted a rate increase based on the information presented tonight. He also emphasized that it is the service that is the problem, not the amount of the rate increase, and believed that is everyone's complaint. Chairman,Lyons asked for a show of hands to indicate that the people would not object to a rate increase if the service were improved and all present raised their hands. Mrs. Verney stated that she would have to have better service before she would approve any increase, and she felt canceling their franchise would not be a bad idea. Commissioner Scurlock stated that he did not feel he was in any different position tonight than he was back in July, and he would like to see some satisfaction in the community and more financial information before he would be willing to vote for a rate increase. He wished to see a specific program outlined for improvement. Chairman Lyons felt Jones Intercable has indicated that they have a program for improvement, but he also wished to have something concrete to demonstrate this and stated he would not vote for any rate increase until he could have the people tell him they have satisfactory service. Clifford Rice commented that he had pictures on his set of varying quality, but about a month ago, they lost Channel 2, and he wished to know if this was taken away from all subscribers. If it was, he felt this is less service than they have been getting. 01 9 OCT 15 1981 MOK 47 P,,,E 759 I BOOK 7FAr,E 760 OCT 151981 Manager Bill Sisk went into a confusing dissertation about the various channels they have transferred or dumped, noting that they put Show Time on Channel 2 and scrambled the signal because they were having security problems. Chairman Lyons wished to know if the people ended up with more channels or less, and Mr. Sisk stated it would be less. Commissioner Bird felt sure that everyone would like to see the Board take some positive steps. He assumed that we are going to delay a rate increase for an indefinite period of time and stated that he really would like to see a breakdown of how the $379,000 was expended in 1981 and also would be interested in their projections for 1982. He continued that he would like to see all that tilted towards improving services rather than expansion. Commissioner Bird wished to be presented with a very definite plan of attack on how they intend to improve the quality of service in the area and also wished Jones Intercable to qualify their depreciation schedule. Commissioner Wodtke noted that very obviously there is concern about the quality of the picture. In behalf of the company, he believed they have made an effort and have expended a good deal on capital improvements, but felt possibly they have not used proper judgment as to how they have spent this money. He continued to discuss the many problems the cable company is faced with, i.e., atmospheric conditions, etc., and did not feel they are asking for a profit at this time. Commissioner Wodtke discussed the possibility of the company putting some funds in escrow for a certain period of time to guarantee improvement of service and felt all the Board can do do on behalf of the people is try to get the commitment for the service. Commissioner Fletcher agreed with Mr. Lapham's views on regulation of franchises, and noted that he does not enjoy sitting in judgment on whether a business is doing right or wrong. 10 k Motion was made by Commissioner Fletcher, seconded by Commissioner Wodtke, that no action be taken tonight, and that the public hearing on a rate increase for Jones Intercable be continued for a period of approximately ninety days to January 13, 1982, at which time the questions that have arisen tonight are to be answered and the service reevaluated; the hearing to be held at 7:30 P.M. in the Sebastian Community Center, subject to its availability. Mr. Tanksley did not feel that three months is a sufficient period of time and that six months would be more reasonable. Commissioner Scurlock felt there should be some indication about sitting down with the engineer and indicating in a precise manner what we are looking for. He also felt we must develop a liaison and have more coordination with the administrative staff. Chairman Lyons felt we had intended to refer this matter to our financial officer because we are trying to determine all the facts and we need people who understand the figures. It was agreed that a review of the financial situation was needed, and it was also suggested that a workshop be held a week ahead of the public hearing to determine that all the information requested is available and to analyze it. The Chairman called for the question. It was voted on and carried unanimously. There being no further business, on Motion made, seconded and carried, the Board of County Commissioners adjourned at 9:35 o'clock P.M. ATTEST: Clerk OCT 15 1981 11 BOOK .4 7 PAGE "61 I