Metro Cable Commission adopts preliminary FY25-26 budgets, forms ad hoc committee as franchise revenues fall

The Sacramento Metropolitan Cable Television Commission on June 13 approved preliminary fiscal year 2025–26 general fund and public-education-and-government (PEG) fee budgets and authorized formation of a budget-priorities ad hoc committee to advise the commission on how to respond to falling franchise-fee revenues.

Commission Executive Director Sean (executive director) told members the top revenue line is falling while expenses are rising, and the preliminary plan relies in part on cash reserves to meet next year’s distribution targets. "You can see that that top line is diminishing revenue. The bottom line is you're increasing expenses," Sean said during the presentation.

Why it matters: the commission administers cable franchise and PEG funding that support Metro 14, community programming, and per‑capita distributions to JPA members across Sacramento County. Staff told commissioners the primary revenue source — the 5% cable franchise fee — is shrinking as households "cut the cord" and adopt streaming services that do not generate franchise revenue. That trend, if sustained, will reduce the amount available for local government general‑fund distributions, channel licensee support, and grants.

Details of the adopted plan and staff warnings

- The commission voted to approve the commission staff's preliminary general fund budget for FY25–26, which includes quarterly channel license funding and a set of resolutions, exhibits and agreements that comprise the budget package. Sean said the presented distribution figure relies on drawing down cash to meet a projected total of $6,314,842; without the cash draw the distribution would be smaller.

- Staff said they will hold roughly $1.5 million as an operating reserve/encumbrance to cover near‑term cash needs during a period of declining income.

- The PEG fund presentation showed high demand for capital requests and that PEG fee receipts (the 1% PEG fee) are also declining; staff noted the PEG surplus used in prior years is shrinking and future PEG requests may outstrip the 1% fee.

- Commissioners and public commenters stressed the need to set priorities now. Director Hedges said the commission should consider pausing discretionary programs such as community grants in lean years: "These are not promises we have to the community, and this is funding that is used for the good times and when we have a lot of money left to spend." Public commenter Gary Martin urged the commission to prioritize keeping cable‑system dollars in the cable system to preserve access and education channels.

Ad hoc committee and next steps

The commission agreed to form a budget priorities ad hoc committee to develop recommendations for short‑ and medium‑term priorities and to propose options for extending the commission’s financial runway. The ad hoc will be chaired by Chair Brown with members representing city and county jurisdictions; membership was capped below a quorum per Brown's request and counsel's guidance. The executive director said he expects to hold the ad hoc review and return recommendations to the full commission by the December meeting, with an initial briefing as soon as possible.

Public comment highlighted community reliance on access and PEG services for public meeting coverage, training and community journalism. Several speakers asked that the commission preserve core functions — notably live coverage of government meetings and access training — while staff and commissioners prepare options for longer‑term change.

What the vote did

The motions to close the public hearings and to approve the preliminary general fund and PEG budgets carried on voice votes; one commissioner recused from the PEG vote and one abstention was recorded on a separate budget motion earlier in the meeting. Staff said the approved budgets remain subject to later revision as the commission finalizes its fiscal year documents.

Looking ahead

Staff said it will proceed with a detailed audit of program budgets and channel licensee financials to provide the ad hoc committee a complete financial picture. Commissioners asked staff to bring legal and policy options to the ad hoc so the panel can evaluate tradeoffs among operations, licensee support and community grants.