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Council discusses Midcontinent franchise amendment, staff recommends keeping city buildings in franchise
Summary
City staff outlined two options for the Midcontinent (MidCo) cable franchise: keep in‑kind basic cable for city buildings in the franchise to retain an FCC‑mandated 30% reduction, or remove the in‑kind service and contract at market rates; staff recommended keeping city buildings in the franchise while removing school districts.
City staff told the council that East Grand Forks' cable franchise agreement with Midcontinent (MidCo) has been in place since 2015 and includes in‑kind basic cable service for city buildings and some schools.
"As part of that agreement, it includes free or in‑kind basic cable services at any city buildings, as well as the school district's buildings," Mr. Hutman said, explaining that a 2019 FCC order treats the value of in‑kind services as part of the franchise fee and that the franchise framework allows a 30% reduction benefit for in‑kind services.
Staff presented two options: keep in‑kind services in the franchise (which reduces the city's franchise revenue calculation under FCC rules) or remove in‑kind services from the franchise and ask departments or the school district to contract for service at market rates. Mr. Hutman recommended removing the school district from the franchise and keeping city buildings in the franchise to take advantage of the FCC‑mandated reduction, while accounting internally for the market value of services consumed by each department.
Staff said current active city users are primarily the fire department, police department and the civic center; other listed buildings either lack TVs or do not use the service. An illustrative market estimate in the packet showed roughly $4,300 annually in in‑kind value for the city's accounts, which could translate to about $3,000 after the 30% adjustment; staff said numbers from MidCo differed slightly and would be reconciled.
Councilmembers asked whether removing in‑kind services would raise costs and whether a department‑by‑department contract could increase rates; staff said keeping the in‑kind service in the franchise is likely the most cost‑effective approach but department charges could be allocated internally if desired.
No formal action was taken; staff will return with recommended language and any corrected cost estimates for council consideration.
