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1984 01 04 I I I SPECIAL CHANHASSEN CITY COUNCIL MEETING JANUARY 4, 1984 Mayor Hamilton called the meeting to order. Members Present Councilmen Horn and Geving, Councilwomen Watson and Swenson Staff Present Don Ashworth Barb Orlowsky and Bob Haak, Cable Board PUBLIC HEARING CABLE TELEVISION PROPOSAL Mayor Hamilton - We received three bids. Are all three companies represented? You folks are from Dowden Communications. Is there anyone here from Combined Cable or from North American Communications? The pur- pose for reviewing this this evening is to give us an opportunity to ask the folks who submitted bids questions about their bids that we may have. Do you have a presentation that you would like to make or do you want us to just ask you questions? Barb Orlowsky - I basically feel that as a result the proposal that we issued that Dowden Communications has satisfied a majority of the concerns that we had for this community, as far as what they were offering. The only thing that they took exception to that we requested was 5% as opposed to 3% and I feel that probably could be negotiated. I would like to ask, based on the fact that you did receive the go ahead with the Lake Minnetonka group, how will that affect construction in this area should you be granted the franchise? Stuart Gibson - I am the Director of Engineering for Dowden Communications. I guess it is our intention that we would like to serve Chanhassen out of the Shorewood/Excelsior head ends. It fits in very good geographically and technically to serve down from that Excelsior area. Most of your homes are clustered up around the northern part of the City and that works out very well. Barb Orlowsky - I understand your construction route that you are going to ~aking, I am talking about time. Are you going to be building from both directions off of that head or are you just going to be going into the Lake Minnetonka area and then when that's completed come down into Chanhassen? Stuart Gibson - We are negotiating with several construction contractors at this time. What we will probably build the lake area in probably three or four different phases. Maybe that many different construction companies. I see construction going on in Shorewood, Excelsior, and Chanhassen, all about the same time. Shorewood might get activated this month and maybe Chanhassen this next month or" two months but certainly in the same construction time frame. Bob Haak - The 64 channel converter will be available to subscribers, if someone-decides that they want the 64 channel converter, how much does it cost? Stuart Gibson - If you do not take the remote control option then it's part of the package. If you want the remote control option then you could either buy it or rent the unit for $2.00 a month. Council Meeting January 4, 1984 Bob Haak - Can you explain to me what a negative trap is? Stuart Gibson - There are several different ways of securing a channel or I several channels such as a tier. You have a tier of nine or ten channels as option for the customer to subscribe to so we have to provide security in some way. The way that we are proposing is that we physically remove those channels at the pole or the pedestal. All that does is trap out those channels. We prefer that method for the main reason is that this not obsolete your remote control on your TV set providing your TV set is capable of receiving 54 channels. There is a lot of misconception on this cable ready TV set. A lot of people buy them and they say they are 108 channel cable ready but unless they have the specific band of frequency that, we start with channel 2 and go up to 54, it's not true cable ready for a modern day. We are in Mound operating and we get calls practically every day, customers who think they have a cable ready set and we say no, it's not capable of the number of channels that we are transmitting. A lot of people go out and buy a new TV set when cable comes along and if they know enough to make sure they get the right kind of TV set because they are available. You just have to make sure to get the model that is. -2- Bob Haak - You are saying there are different cable ready TV sets. Stuart Gibson - A lot of people advertise a set as cable ready but actually all they are saying is that there is a coax fitting on the back of the TV set. It's all in the tuner itself. Barb Orlowsky - If you put the head end in Shorewood, starting all the way from the northern boundary of Chanhassen coming all the way through, I know a bone of contention was the Lake Riley area because of the density between the pockets of population, assuming that you do at some point get down to the Lake Riley area, what kind of db's are you talking about. Stuart Gibson - This is calculated based on a trunk line to Lake Riley. We are looking at serving that area. What we are looking at doing is if the apartment complex, if that looks like a good cable project, that kind of turns that density requirement way around where it becomes a viable. I stopped in there a couple months ago and I talked with the people that were there and they seemed interested but we have to negotiate and see if we can get in there, gain access to the premises. If we can do all that and there is 40%-50% of the people sign up for it then it becomes automatically. I Councilwoman Swenson - When you speak of the Lake Riley area, how far south are you talking about? Does it go down to Pioneer Trail? Stuart Gibson - Yes. It extends to Pioneer Trail. Larry Aldrich - We have a minimum of 30 homes per mile requirement on our servicing of areas. We could not assume that we had permission to go into that apartment complex after Stu looked at it he came back and said, I found 170 or 200 units and 53 more homes that the figure came out to something like 70 homes per mile if you counted all the apartment units but I until we negotiate with the apartment owners and give them the status of the access to the apartments, we just simply could not have 100% assurance that we had access to the apartments simply by saying we would like to have it so we had to be somewhat careful. I I I ouncil Meeting January 4, 1984 -3- Councilwoman Swenson - You said that this could be extended within a reaso- nable period of time, what time frame? Larry Aldrich - We gave ourselves into the second year to extend into that area. We said we would do the major construction the first year and assure the community that we would move that area. We know the density is going to improve in the area. We asked some people along the way what their interest was in cable and they certainly want cable. Councilwoman Swenson - I notice on page 4.1 you refer to a higher installation fee and perhaps a pro-rated charge in that area. Larry Aldrich - That's based on the fact that if we don't get into the apartment complex. Another thing that I might add, if there is any way possible that that area can be wired while our construction crews are here it makes more sense for us to do it at the same time we are doing the rest of the community because we get a contract price based on so many miles. If we leave town and come back a year from now and we only have two miles to build it costs quite a bit more than it does when you are already in the area. If there is any way that it can be built, if we can tie down the apartments, then it will be built at the same time. Councilwoman Swenson - Is the fact that it's Minnesota Valley Electric Company, does it have any affect on your operation. Larry Aldrich - Not that I know of right now unless there are anti-cable and won't allow us on their poles. If they don't, we have gone underground in other areas. It does run the costs up. Councilwoman Watson - Once cable comes into a community, it starts out at one price and suddenly gets a lot higher and a lot of people who where interested are not interested any more because they don't want to pay, say $40 a month and they don't feel that they enjoy that many programs and sud- denly what we have got is offering a service is simply a lot of wires running around the City that nobody is all that fascinated with. Do we have any control over the cost? Larry Aldrich - Yes by all means you do in the ordinance. All the bidders committed to a period of time they would freeze their rates. I believe we have frozen ours for at least one year after completion of construction. Frankly, we struggled with this because many companies will commit to two years or more either after they are approved by the State Cable Board or after construction or some variation of that. We are all experiencing some pretty hefty increases from the premium services, the pay services, HBO, Show Times, so that we are having to pull back from what used to be the two year pattern. We have projected to ask rate increases as we normally do in year four and in year seven. Each cable operator will assume a certain inflation growth and we have to work that in. Some ordinances will tie a rate increase in with a consumer price index and use it as some gauge to measure. I don't know that that's as effective now for a community as it once was. It behooves us to keep the rate as reasonable as we can and one of the reasons we tiered the communities in this area, which we don't always do, is that you are interested in a kind of universal tier where you have a variety of programs to service for a good rate. We took that a little farther and put, what we consider a little more fringe benefit and gave you more channels for still a reasonable rate and that I think, while it will appeal to only 6% or 7% of the people, gives them a pretty good Council Meeting January 4, 1984 -4- value for their money. Since most subscribers will take the $11.00 a month rate, we assume, we don't think that's unduly large amount based on the rates around you. We share your concern especially in an area where your density is a little lower than some areas around you. I Roger Knutson - The ordinance will spell out the review process and when they want a rate increase they will come in and see you. You can take it to the consumer price index or you can do all sorts of things. Mayor Hamilton - We are going to tied in with the South Lake Group but we would still be allowed to have an ordinance that would regulate cable systems in Chanhassen. Larry Aldrich - Your billing will be entirely separate. We might do the billing out of our Mound computer but the billing will be separate. Roger Knutson - Under the State Regulations, the City has to grant a franchise or they can't operate. The franchise is by ordinance. Councilman Geving - I think, as responsible officials of the City, we have a need to sort out this process and to provide a service to the people of our community. A service that will be economical, effective, efficient and it's one that's certainly needed in the community. I think that we have before us a pretty good proposal. I do have some questions in terms of negotiation for the two year freeze. At least one of your competitors did provide that and it certainly would be something that I would like to pur- sue. Along with that I would like to pursue the 5% fee. I would like to continue that negotiation. I would like to also discuss the interface with I our school system. We have a very difficult situation in this community in that we have a community that's in several different school districts. The Chaska School District where our Senior High School is located at least for most of our students here, do have an opportunity to utilize the TV sta- tions and I would like to know what your interface with that system would be. Larry Aldrich - We take some pride in our company that has been working with schools and educators and in the brochure that I gave you there is a newspaper article of interest depicting our Germantown, Tennessee, system where we worked closely with the high school. The proposal that we made did not define the exact way that we will lock in or interconnect with the Chaska system nor did we put a timetable on it. We did that deliberately because we really need to sit down and talk with all the interested parties to see what interest the community has in putting a service studio here. We have experience in putting them in schools. We will do whatever is reasonable for the community. We knew about the school district overlaps. It took a while to figure that out. In Minnetonka School, you have many of your students going there and you already have cable services and facili- ties there. It poses an interesting problem. I think a responsible cable operator must encourage to look ahead both for the Minnewashta area and this area, as well as the Lake Minnetonka area and consider some sharing is going to go on eventually. For instance, in the Minnetonka area we will be interconnecting those head ends. There are two or three ways to connect to I the Chaska system. We have not pinned down the best way to do that or the most reasonable time table yet. I don't want to promise that or say that because we don't have that yet. Our attitude is very positive about it and on the other hand I want to be sure that I do state publicly that we not get into an over promise situation or overextend where we have high expec- I I I Council Meeting January 4, 1984 -5- tations with tons of facilities that won't be used. We have good experience in Germantown for instance, where they use the facilities for local origination and some access. On the other hand we have some access studios that just go begging. They just are not used very much. We want to strike kind of a reasonable meeting ground here on this point. I don't think it would behoove your community or the entire Lake Minnetonka area, for instance, to have eight or ten studios allover the place and they not be used after a reasonable period of time. Councilman Geving - I understand your statement, I guess the question that I have is what assurances will we have after agreements are signed that something like that will actually happen and that you don't more on back down to Atlanta and we don't hear from you. Larry Aldrich - I think you have plenty of assurances as your City Attorney pointed out in the ordinance. Roger Knutson - One of the things you will have in your franchise ordinance is a bond. There will be fault provisions in the franchise agreement that say they perform or they lose the franchise and they lose their bond. Councilman Geving - On page 4.1, I know Councilwoman Swenson brought this up, item four, the last sentence says,"we will discuss this before the com- mission at the appropriate time," I feel this is the appropriate time and I hope that has been answered satisfactorily to you, Pat. 4.2 then, I know this is a long shot on home security and I would be surprised if a person like Councilman Horn didn't bring this up, I guess those are the things that you talk about and security is something that you people are really not sure where we are going with it yet. I think you answered that fairly well in your response. Have you got anything you want to add to item 7? Stuart Gibson - We have had contacts with a security firm in Wayzata that's interested in talking to us. I have a meeting set up to see if we can interface some type of security system for Wayzata. We are always open to discussion. There are companies that are willing to do it and we just pro- vide the means for them to get the security system back to their headquar- ters. Councilman Geving - From a commission standpoint, did you hear anything favorable or did you have any response to that? Barb Orlowsky - Based on what I have seen at this point, it's not really economically feasible. The costs are just too high. Councilman Geving - The next question I have is 4.4. on item 8 you indi- cated that you will propose a separate institutional network initially, could you pursue that and explain it. Larry Aldrich - I believe we said we would not propose a separate one ini- tially. Councilman Geving - Then the question becomes, do you have any idea when this could be feasible? Larry Aldrich - The larger MSO's around the country that have experimented substantially with this, a few of them are making them work where they have good dense business rows or hospitals, schools, other institutions, in a Council Meeting January 4, 1984 -6- clustered arrangement so that they have a base there. I don't think the industry is clear as to what direction the institutional networks are going. I Councilman Geving - There was an indication in your proposal for a free subscription for the City Hall, is that correct, and for some educational institution, possibly the elementary school. Larry Aldrich Yes, normally that's spelled out in your ordinance as well. Stuart Gibson - Fire stations where there are full time employees. Councilman Geving - I have a question on 5.2. "Maintenance of a business office easily accessible to Chanhassen subscribers." Would you explain that. Larry Aldrich - We do not have plans at this point to put a full time office in Chanhassen. We have bid two full time offices in the lake area. It's a pretty good shot that we will put one in the Shorewood/Excelsior area. Councilman Geving - If we have citizens that want to, for some reason, send in or mail in or walk in to an office facility does that mean we are going to have to go to Lake Minnetonka? Larry Aldrich - We will work out a satisfactory arrangement for you there. We are and were in kind of a pecular situation, we had given a time table for Wayzata, then Minnetonka, then Chanhassen's time table was set up so I that all bidders had to be realistic operationally about these offices were going to go. As you can appreciate, especially in a small or medium size community you can over do staff and office even though you want to serve all the people well. That may mean that your payoff comes in the year four or five and we have to extend it another year simply because you have a requirement for an office. It simply can't be justified. Councilman Geving - I think my question is, is there going to be an appearance of a cable TV station in Chanhassen? Barb Orlowsky - Are you talking about an access studio? That's in the bid. Councilman Geving - And some appearance at least from our citizen's stand- point that this is Chanhassen cable TV. Do you have an idea yet where your Shorewood head end will be located? Stuart Gibson - Not exactly. We have an area that we have picked out and are going to attempt to look at. It's not nailed down to a certain block. Councilman Geving - We are adjacent to Shorewood on the north end of our community and I was interested if it was somewhat close to the Chanhassen border. Stuart Gibson - We are trying to do that, yes. I Councilman Geving - Again, on page 6.2, I know we have discussed it, it has to do with the education and I am very, very strongly interested in that area and I want to impress upon you our concern for that. I I I ouncil Meeting January 4, 1984 -7- Councilman Horn - The tie in to the educational system, is that going to be completed ar-the time develop our ordinance? Mayor Hamilton - We want to be more specific in the ordinance stating exactly what it is we would like to have. I would think you would have a better idea by that time just how you are going to be able to tie in. Larry Aldrich - We will take the lead from your ordinance pretty much if you can come to some general consensus of what you would like then we can respond to that. Councilwoman Swenson - When you were talking about disconnecting cables or channels to accommodate the various tiers of service, supposing that a subscriber decided to start out with say the 22 channels, is there an exorbitant reinstallation fee if they decide to go on to include other channels. Stuart Gibson - Most people start out with more than they really want just to see what the variety is. Then they will back off of that after 30 days or 60 days. That's what is happening to a great extent in Mound especially when you go out and have door to door sales people. They will come back with people signing up for the premium service. They will tell them to try it for one month to see what you like and what you don't like and then drop off. There is no charge for a disconnect. If we come out to add a service there is a $10.00 service charge. Councilman Horn - This door to door approach will just be initially won't it. After that all the advertising will be done over the cable network itself. Stuart Gibson - We try to utilize that as much as we can. There will be remarketing, I imagine, from time to time. We have learned from experience that we door to door market up front when we actually activate the cable system. Most subscribers will take the tier one, the tier two and about one and a half paid is the average. There are some people that will take everything. In Mound we have just over 900 customers on at this point and there are 30 people that are not taking the expanded basic. They are just taking the $7.00 basic service. Let's say that something special comes up that is only offered to cable companies, a football game or a boxing match, do you handle that type of thing? Stuart Gibson - Yes. You are talking pay per view. That is something that is evolving. It has not been a very big success. The way that we see it is that pay per view is still evolving. You see much more of it but not so many big titles. Instead of paying $10.00 to watch a boxing match you may watch five of them for $2.00 a piece. They are not the big blockbusters. I don't know how many cable channels or how many systems there are that you can get off the satellite but let1s assume that there is another company that goes into business and puts something on the satellite, is that going to be automatically included in these two tiers here that we are looking at? Council Meeting January 4, 1984 -8- Stuart Gibson - I wouldn't say it's automatic. If it's a new service that we think is going to be viewed it behooves up to add it to the service because it should help us out. I For the City of Chanhassen or anywhere to get another entertainment network that's not on that original system you have to get clearance from the City Council. Stuart Gibson - Generally it's that way. I know in Mound we just went through this. We have added two services since we turned that on in October and I go to the City Manager and I say, this is something we would like to try, what do you think about this? It was a simple matter, we agreed to try it and put it on. Larry Aldrich - People tell you when something is hot. The MTV music service is a prime example. We weren't sure when we first heard of MTV whether we were going to want it. When it caught on though in some of our small Iowa markets particularly, the phones ran off the hook and they weren1t just sixteen year olds either saying let us have MTV, they were from across the whole range. We started adding MTV in every market and that was a very smart move for us. Roger Knutson - Your flyer states you have already committed funds to build a Chanhassen system, how much have you committed? Larry Aldrich - I believe it's $800,000 as I recall. Roger Knutson - You talk about giving free drops to the schools, to the I fire stations and the city hall and what not, are you talking about tier one, two and paid? Larry Aldrich - One and two only. Contracts preclude our being able to do for premium service. They won't allow us to do it. Roger Knutson - What about recording City Council meetings, Planning Commission meetings and that. What are your thoughts about doing that on a regular basis? Larry Aldrich - If people request that we will work out the rest. Stuart Gibson - If there is a desire for this and there is a need for it, we are willing to do it. We have gone out on other situations and spent $50,000 for a studio and then it's parked in a room somewhere and collects dust for years. That's what I as an engineer hate to see. Larry Aldrich - I guess the thing that is watched more than anything is your local sports. We have had situations in the past where a public school would not allow us to do their cable casting live and we go to the parochial school and they would be much more in favor so we would do all their activities live and everything from the public school was delayed 24 hours. Some schools feel it hurts their gate. My personal feeling is that I don1t agree with that. I think it generates more interest. Nobody is I going to sit home and watch a local origination production when they can go and be there. People that are going to watch it at home are the ones that aren't going anyway. It might be the grandparents. Roger Knutson - What communities right in this area have you actually signed franchises with? I I I Council Meeting January 4, 1984 -9- Stuart Gibson - We have signed with Mound and Wayzata. Shorewood has not been signed. They picked us as the winning applicant. That's 14 com- munities involved in that. Mayor Hamilton - Assuming that we select your company also, how long is that negotiation going to take? Larry Aldrich - We have not begun negotiation yet with Shorewood. They made the decision on the 20th of December. They use a model ordinance and each community plugs in their differences. We knew what the framework was when we bid. I would say, at least I hope that during the winter months we can work out negotiations on the ordinance and submit it to the cable board so that by May at the latest I would hope we would be ready. Stuart Gibson - We have Gaylord, Winthrop, Arlington, Gibbon. We are making application in Young America, Norwood, Hamburg. Mayor Hamilton - If we were to reach an agreement with you and you also reached an agreement with 14 other communities around the lake, would you have people that would be able to work on ours not as a by-product of the other 14 communities but as an entity itself. I wouldn't want to have you come back and say, well, when we finish with everybody else then we will look at Chanhassen. Stuart Gibson - We will request bidding on this entire area which we will break it down into segments but I will not sit here and tell you that we are going out and hire a contractor just to build Chanhassen because we can't get the same kind of rate on say a 40 mile build as we would if it's wrapped in with a 200 mile one. It would probably be the same contractor would do Chanhassen that was doing into Shorewood/Excelsior area. We may have another one in the Mound area and one up in Wayzata. I would like to have three different contractors doing the construction. Roger Knutson - If you do not sign with Shorewood would this proposal still be on the table? Mayor Hamilton - I have seen your map and I know there is a proposed hotel in Chanhassen. I think some of the maps that I have seen do not include that area as being in the cable system. Stuart Gibson - What is the name of the hotel? Mayor Hamilton - Sunnybrook. Stuart Gibson - Generally they are. We have had very good success in the past of putting cable in hotels and motels. Mayor Hamilton - The Aboretum was not in any maps that I saw. That was not included as part of the cable system. It is affiliated with the University of Minnesota and it would be nice to include that so that you may want to have programs from there going to the schools. Councilman Horn - One of the complaints that I have heard from the northern areas is thar-5ome of the construction techniques were not followed up on too well and they trenched through yards and didn't come back and clean them up. They knocked trees down and things like that. Is this something that we can be reasonably sure would not happen in Chanhassen? Council Meeting January 4, 1984 -10- Stuart Gibson - I can not guarantee that something won't happen but it will be taken care of to the satisfaction of the homeowner. We just went through this this past fall in Mound. We put through several miles of front lot cable which we hate doing because you are boring driveways every I 100-150 feet, sidewalks, it's a nightmare. We had a lot of trouble but we cleaned them all up. Barb Orlowsky - I can attest to that because I did call Mound and I talked ~he contact there and they said they had a few problems but that they were satisfied with the way that they were resolved. Stuart Gibson - You have construction crews out there and they are hiring $4.00 an hour help. Maybe it is the guys first day on the job and he don't know what he is going to run that machine into. You can't believe some of the things that can happen. If you are going to have troubles the key is you must take care of that homeowner. It is extremely hard to notify everybody. We have left door hangers in neighborhoods. Some people come home and they just throw it in the wastebasket they think it's an adver- tisement or selling something. We have been accused of not ever hanging anything or not coming to the owners and we have tried phone calls and we have tried sending out postcards and you still will not reach everybody. You just do the best you can and see what happens. We follow the existing utility easements in practically every case. Once is a while there will be a route where you can't get through because somebody has built a garage on the easement so we have to negotiate with the owners to get through. It's always far easier for us to parallel an existing utility than strike out on our own. Councilman Geving - On page 13.2, explain to us the local access and what I that $30,600 means. Larry Aldrich - That is to be judicious about assigning a great deal of equipment in too many areas so we combine one studio area and those cameras that are there assigned and the equipment can both be used in the studio. You will notice down toward the bottom of the list of equipment, the Winsted 831 portable console, that allows it to roll in and out of a van or in a station wagon. The operation couldn't afford to put a mobile unit so this will do a nice job. Councilman Geving - Who owns that equipment? Larry Aldrich - We keep the ownership of it. Most cable companies do. We usually work out a $1.00 a year lease or whatever. Roger Knutson - This equipment would be just in Chanhassen. It wouldn't be shared by other communities. Stuart Gibson - That's right. Larry Aldrich - It may behoove you at times, you might have some big event and you might want to have access to Shorewood's cameras so I think it would be in your best interest to remain flexible. There is literally five more studios in this 16 communities that we are involved with here. I Bob Haak - There is a lot of do-it-yourselfers now days and I am one of them~at happens if somebody puts in an antenna system. You put a drop in a house and say, you put in your own antenna system and it shorted out, will you lose anybody else besides the one? I I I Council Meeting January 4, 1984 -11 - Stuart Gibson - No. The only thing that comes into your house is a televi- sion signal just like off your antenna. You are not shorting any voltage or anything like that. If there is a short in your house it messes up your own TV and that's it. Councilwoman Watson - It just comes into one television set, right? What if you wanted it to go to more than one TV set in your house. Stuart Gibson - We split off and go to as many as you wish to have. Councilwoman Watson - Do they charge you for each television set. Larry Aldrich - Yes, $3.00 per month for each set. Stuart Gibson - Usually your second and third TV sets are not cable ready anyway. Councilman Geving - What does your market surveys say in terms of how many expected homeowners would sign up for cable TV if you had 2,200 homeowners in Chanhassen. Stuart Gibson - Close to 50%. Councilman Geving - Does this tend to increase over time or decrease? Stuart Gibson - In our experience it has increased. That number depends on the quality of the picture and your quality of your service. Councilman Horn - You talked about cable ready TV's, are there also cable ready VCR'sr- Stuart Gibson - Yes. Again, I caution anybody that is buying one to make sure that it is. You have to specifically say, will it pass the hyper ban. In our proposal our pays are in the hyper ban, that's above channel 36. Within the last year they are coming out that way but still you have to make sure, always ask. Roger Knutson - Are you required to offer the same channels in every com- munity you are operating? Stuart Gibson - No, we are not required. Roger Knutson - So, in other words in Shorewood could require some channels that would not be offered to us. Stuart Gibson - Not necessarily, I think any channel that was offered in Shorewood would automatically come into play, we would probably offer it in a whole group. I think there is only one, Wayzata we offered a channel that we didn't have in Mound. Bob Haak - If we get a drop into an institution like the fire station or a scho~or example and there is 15 - 20 classrooms that they would like to have cable access in and, again, obviously the school district doesn't want to spend much money to do it but if they did, would you put that in or would we be better off hiring somebody else to do that. Council Meeting January 4, 1984 -12- Stuart Gibson charge like a money on it. reasonable. - What we normally do is charge after the first TV we will time and materials on a job and we don't try to make any From what I have seen it has always been very very I Councilwoman Swenson - If one were to go out and buy a new television set, how do we know. Stuart Gibson - When you are talking to the salesman, if it goes up to 133 channels then you are sure the hyper ban is in there. If it only goes to 108, ask and chances are probably 99% he won't have the faintest idea what you are talking about. Larry Aldrich - Or say, will it pass the hyper ban and if he doesn't know then try another salesman or get out the manual because it will tell you but you have to know hyper ban or super ban or mid ban. If it says 2 through W that does not include the hyper ban because the hyper ban starts at AA through QQ. Stuart Gibson - We have a big problem with VCR's that way. Especially since VCR's there are 14 channels you can program in when you have got 133 channel capability and you can only program in 14 channels. If you don't have the VCR hyper ban capability you can put another converter on. Councilwoman Swenson - If somebody has an ordinary remote control does the system that you are plugging in there affect the remote at all? Larry Aldrich - It does not as long as the TV will pass what we have been I saying here, this hyper ban. If it does not, then the remote control beco- mes to you as a volume control and an on/off switch. You could be a lot worse off if you were accepting a video that had a scrambled for pay services and virtually everybody that had a pay package would have to have their company supplied .converter. We went through this in the Germantown franchise and it had two things against us, one was a HRC design which we offset all the frequencies to squeeze in a few more channels and that plus a combination of scrambling for pay, you virtually cannot use a store bought remote control. That's why we try to stay away from that scrambling and the HRC concept. Don Ashworth - If I read this correctly, power failure you do stay up, it's only the origination station that goes down but we will continue power. Stuart Gibson - That will depend on what type of outage and where it is. There can be an outage in one section of town, an extended outage, it's complicated because we draw our power from the power company at different places in the community to power our amplifiers. Don Ashworth - It is possible that we would be without service if there were an electrical outage out in the Minnewashta area. Stuart Gibson - It just depends on where that is and where we are tacking into that power. I Don Ashworth - I thought you had a generator associated with this. Stuart Gibson - The generator is located at the head end location. That keeps the head end equipment operating. I I I -13- Council Meeting January 4, 1984 Don Ashworth - But you are not broadcasting. Stuart Gibson - You are but it depends where the outage is from there because you branch out on different lines. We tap into the power system every so many miles to power our boosters. From what we have seen NSP is very good. Don Ashworth - Emergency alert, is there local costs in that? Stuart Gibson - There is no local cost to the city. Don Ashworth - Is there to the Sheriff's Office? Stuart Gibson - No. Don Ashworth - If we can conclude the franchise agreement within the next ~to 90 days, will you live with a penalty clause that says that you will be in the ground by the end of 19841 Larry Aldrich - Yes, we can live with that. Stuart Gibson - It is our intention to build the whole thing from April until November. Everybody I talk to with contracts will have to tell me the same thing that you are telling me. Don Ashworth - We are going to be reasonable guaranteed that full service will be available by the end of 1984. Local studio, the term bicycled, what does that mean? Stuart Gibson - That means going from this building to the elementary school or fire station. Larry Aldrich - Rather than sending it through the air with microwave or whatever you just physically take the tape. Don Ashworth - That may be the way that you get programs from the Chaska School System is literally carry a tape up to Shorewood. Let's assume that we decide to televise City Council meetings or the library has programs, do I read this correctly, is the City paying for playback time of $1,000 per 30 minutes? Larry Aldrich - Those are commercial user rates not a public institution rates. I think I stressed here that these are based on certain private penetrations. Don Ashworth - What are playback costs then on any public generated taping? Larry Aldrich - None. Don Ashworth - I understand the Chaska system, they do charge. Larry Aldrich - If we had to hire let's say, six hours a night for five weeks to play the Ronald McDonald tape we might have to negotiate. Mayor Hamilton - We also have Mr. Donaldson here from Metropolitan Cable Communications, is there anything that you would like to say or pass on to us? Council Meeting January 4, 1984 -14- Mr. Donaldson - I want to thank you for the job that you have done. You and your committee have put this together in excellent fashion and have received three excellent bids. Bob Haak - I was looking over Lake Minnetonka's proposal by Dowden and in their access studio they have included a rectoscope and a 35mm multiplex, could you explain to me why you would use the rectoscope in Lake Minnetonka and not in Chanhassen. Larry Aldrich - That is an item that you don't need every day. There is one in Mound and one in Lake Minnetonka so that if you need to set up your cameras there is one available. Bob Haak - The reason it struck me is that I work in the business and I am curiOUS-to know what you are putting in Chanhassen. The times that I have watched cable TV, let's say I am watching a USA in Fort Dodge, Iowa, and occasionally a local automobile dealer will advertise, let's say the local cleaners wants to advertise a 2 for one sale on pants, do we receive any benefit as a community a percen- tage of that advertising fee that you might charge? Larry Aldrich - We will negotiate that area with you. Councilman Geving moved to close the public hearing. Motion seconded by Councilwoman Watson. The following voted in favor: Mayor Hamilton, Councilwomen Swenson and Watson, Councilmen Geving and Horn. No negative votes. Motion carried. Mayor Hamilton - I would like to know the recommendation of the Cable TV Committee. Bob Haak - The Cable Committee, after thoroughly studying all of the infor- mation-ln front of us and from our other sources, have decided that we would like to recommend that we go with Dowden Communications for our cable franchise. Councilwoman Swenson moved to award the CATV Franchise to Dowden Communications, Inc. subject to the City Manager's preparing and nego- tiating a franchise agreement agreeable to the City Council. Motion seconded by Councilman Geving. The following voted in favor: Mayor Hamilton, Councilwomen Swenson and Watson, Councilmen Horn and Geving. No negative votes. Motion carried. Councilman Geving - I would like to, on behalf of the Council, thank the commission members who worked so diligently to come up with this recommen- dation. Councilman Horn moved to adjourn. Motions seconded by Councilwoman Watson. The following voted in favor: Mayor Hamilton, Councilwomen Swenson and Watson, Councilmen Horn and Geving. No negative votes. Meeting adjourned. Don Ashworth City Manager I I I