LAKEPORT, Calif. – At the end of an hourlong discussion last week the Board of Supervisors decided to ask the state Attorney General's Office for a decision on whether or not a proposed fee to support the county's cable access station is in fact a tax.
The discussion on Tuesday, Sept. 11, centered on a fee to support the Public, Education and Government (PEG) station, TV8, based in Clearlake City Hall.
The board had delayed a decision from its meeting two weeks earlier after questions arose regarding whether the 1-percent pass-through fee on Mediacom subscribers would be considered a tax under Proposition 26, passed in November 2010.
That law considers any fee a tax unless it meets one of seven exemptions, according to County Counsel Anita Grant, who conducted a legal analysis of the pass-through.
One of the ways that the fee could fit the Proposition 26 exemptions was if it was treated as a franchise fee on Mediacom for the use of county property, said Grant. The board could make that finding, she suggested; if not, the fee needed to go before voters.
Supervisor Denise Rushing said that when franchise fees used to be managed by local jurisdictions, part of the deal was to provide public access. She felt that the board could make the franchise fee finding.
“You're also imposing a charge on the public without their permission,” Grant said. “This is largely a factual determination. It's untested.”
Despite its suspect origins – being a way for some big oil and gas companies to avoid environmental cleanup expenses – Grant said Proposition 26 was supported by voters, who want to have a voice about when they must pay a fee.
If the board believed it could tie the fee to the franchise, Grant said they could proceed.
Rushing said Mediacom isn't the only cable company with fees for its users, so it had been tested in that way. Grant pointed out, however, that it hadn't been tested with respect to Proposition 26.
Board Chair Rob Brown said he was sure if they could stretch it hard enough they could get around the law.
“This is for generating revenue for PEG,” he said.
Grant said the board could choose to adopt a rationale put forward by the League of California Cities, which she said had gaps.
Rushing said it was not about getting around the law. Brown said it was, that she was trying to now say the fee was not a revenue generator for the station. He said every presentation about the fee has focused on revenue generation.
“I feel it's a tax,” said Supervisor Jim Comstock.
The station's funding goals expect the pass-through fee to generate $55,000 annually. He said the funding goals are to tax people.
“It's really so gray at this point,” said Supervisor Jeff Smith, who also sits on the PEG Board. He said they needed a conclusion about the fee that was more black and white.
Grant said she could ask the California Attorney General's Office for an opinion. She also put it out for opinions from county counsels around the state and received a limited response. The main one she got referred to the League of California Cities' position, but didn't necessarily support it.
She said the government has in the past called taxes fees. “You can call it a fee or a charge, but that doesn't make it so.”
Grant said if the purpose was to simply raise revenue, it's a tax, based on the California Supreme Court's findings. She added that Proposition 26 has made everything a tax.
Board members agreed that it would be helpful for Grant to seek an opinion from the attorney general, which Brown said it would prove especially beneficial if the attorney general had all of the background information that has been presented to the board about the fee being a revenue generator.
Supervisor Anthony Farrington, who also supported getting the attorney general's perspective, said, “It does get murky.”
Grant said many similar issues were being challenged by taxpayer groups. She noted that Mediacom's legal counsel also held the fee was a tax, which Farrington said he didn't find surprising since the company would consider that the fee would make them less competitive in the cable market.
“There are valid views on both sides of the aisle here,” said Grant.
She said the law hasn't been tested. “All of us in the legal community are expecting a lot of litigation on this proposition.”
Rushing said they needed to separate the pass-through fee issue from the station itself. Over the last several years the station has been the center of controversy over programming, and has seen clashes between the PEG Board and volunteers, even leading to a brief station lockdown by city management.
The issues, according to Rushing, were whether PEG TV is worthy of funding versus the collection of the franchise fee, which once upon a time had been the county's responsibility to negotiate. That the fee negotiation is outside of the county's hands is “a real problem,” Rushing said.
If it's a franchise fee, the county has a decision to make about how to apply the fee. Rushing said the separate decision is if PEG is worth it.
Clearlake City Council member Joyce Overton, who chairs the PEG Board, told the board that the pass-through was a fee, not a tax. “There is no question here, it is a user fee.”
Brown asked Overton if PEG was available online. Overton said no, and if the station got the fee, they can't put it online – contradicting comments she’d made to the Lakeport City Council on July 17. As such, if someone wanted to view programming, they would have to watch it on television, she said.
Overton said the user fee would pay for a manager, equipment and accounting. If the station somehow came by other funding, she said they would drop the fee, but she said that wasn't going to happen.
During public comment, several community members – including past volunteers – spoke on the pass-through fee, with the majority of them raising questions about it and opposing it.
Phil Mathewson – attired as a pirate and reading from a scroll, his comments peppered with “arg” – said the channel could be run by volunteers, and that the board shouldn't burden subscribers with more fees.
Dante DeAmicis said there was a much clearer problem with the pass-through; he said while the county and city of Lakeport are on a state franchise agreement, Clearlake is on a local franchise agreement until November 2012.
As such, DeAmicis suggested that the ordinance would have no authority over the city of Clearlake until late next year, and Clearlake subscribers would be able to seek a summary judgment from the courts to set the fee aside.
Eileen Gieser said she didn't feel the fee was appropriate, and she knew many people who didn't watch it.
“We already have a lot of channels we don't like. We don't want to have another one added,” she said.
With it not being put online, Gieser said it wasn't really public access, but was for a small private audience. Meanwhile, the fee would continue to go up.
Allen Markowski, who was the station's volunteer manager for three years, said the pass-through absolves all governments and the PEG Board from responsibility over the station.
Markowski said he had been given authorization to purchase a $10,000 piece of equipment for the station that still isn't being fully used. He compared it to using shovels when a backhoe is available.
“They're not using the equipment that they have. Funding is not the problem. They don't know how to use what they already have,” said Markowski, adding that the station's true assets are its volunteers.
Beth Kaiman, a station volunteer, said the pass-through is the last ditch effort to get funding. She accused the Board of Supervisors of ignoring the station.
Lakeport resident Marilyn Johnson raised concerns with the franchise agreement, and the fact that she already pays nearly $4 a month for a franchise fee. She said she doesn't wish to pay another tax or fee, especially at a time when Lakeport is seeking sewer and water rate increases.
Overton said the pass-through doesn't have anything to do with franchise fees. She said the station wanted to hire professional staff and buy better equipment.
She said many of the people who have issues with the stations are volunteers who were taken out due to “inappropriate behavior.”
“This is going to be a wonderful station,” she said.
Overton said the station is running on $5,000 a year and its equipment is starting to fail. “We need to just move with this. We need to get this going.”
A budget document from the city of Clearlake showing PEG’s revenues and expenditures indicated that the station’s revenues have been two to three times Overton’s estimate over the last few years.
She said the board had agreed to institute the pass-through fee if the two cities did so, and she said the board needed to fulfill its obligation.
Farrington asked her how much the fee would be on average for customers. She estimated 35 cents on each bill.
Overton said the big need is for equipment, but the station also needs a professional manager. The volunteers “don't know what they're doing,” she said.
Farrington said the cities' support weighs heavily with him, but he wanted the attorney general's opinion before moving forward, adding that he thought it was better to err on the side of caution.
Rushing said she also had previously asked for a plan to be in place to show community support for the station. “I haven't seen the plan.”
Overton said it was hard to make a specific plan when there is no specific agreement yet.
Smith said there would be a huge difference if a paid staffer was running the station. He said he was amazed that the volunteers had hung in as long as they had.
In response to Overton's comments about a board obligation to support the station, Brown said that the majority of the board had decided that they would support the fee if the cities did, too.
However, he said he was concerned after two Lakeport City Council members contacted him, telling him that the council was told that they were the final link, as the county had already approved the pass-through.
At the Lakeport City Council’s July 17 meeting, Overton had stated that both the city and county had offered “general consensus” to support the pass-through if Lakeport did.
Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. .