HomeMy WebLinkAboutAgenda Statement 1981/06/23 Item 19COUNCIL AGENDA STATEMENT
Item ° ~' _.
Meeting pate -- ~/
Public Hearing - Consideration to increase certain rates for
ITEM TITLE: ~ U S.3~Mission Cable Television, Inc.
Resolution - Amending Resolution 10087-Approving increased rates
SUBMITTED BY: Director of Finance (4/5ths Vote: Yes No X )
On March 31, 1981 Mission Cable TV, Inc. filed a letter of request with
the City Manager to increase the basic subscriber rates in the City. At
the public hearing on June 2, 1981, the City Council requested additional
financial information to justify a rate increase and continued the public
hearing to June 16, 1981. Therefore, it is my
RECOMMENDATION: 1. That Council conduct a public hearing
' 2. Approve the rate increase
BOARD AND COMMISSION RECOMMENDATION:
nTCriiccrnN•
On May 31, 1980 the City Council approved Resolution 10087 increasing the
basic monthly charge for residential and non-transient commercial subscribers
from $8.75 to $9.60 per month effective July 1, 1980.
As indicated in their letter of March 31, 1981, Mission Cable TV, Inc.
is requesting an increase from $9.60 to $10.50 per month in the basic
subscriber rate only which would now become effective August 1, 1981
due to the continuance of the public hearing.
The financial statements submitted by the Company provide a detailed break-
down of revenue and expense allocations for the period ending March 31, 1980
and March 31, 1981. The allocations are based on the ratio of Chula Vista
subscribers to the subscribers in the entire system which is 9.4%. (Schedule A)
• Although revenue increased by 18.5% from March 31, 1980 to March 31, 1981,
expenses also increased by 16.4%. It appears to me that without additional
revenue in the next year and with inflation continuing at or near current
levels, their net profit will further deteriorate without additional relief.
Their net assets have increased substantially between 1980 and 1981 which
the Company points out is due to plant expansion in new areas and upgrade
of the system.
In summary, it appears to me that with a 5.7% net profit after taxes on
March 31, 1981 and a 3.1% return on net assets, the limited rate increase
in basic subscriber rates, as requested by the Company, is justifiable.
FI'Nr1NC IAL IMPACT: Not Appl i cabl e
Form A-113 (Rev. 11/79)4
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COUNCIL AGENDA STATEMENT
• Item ° ~'
Meeting pate --~~/
Public Hearing - Consideration to increase certain rates for
ITEM TITLE: ~ v S-3~Mission Cable Television, Inc.
. Resolution - Amending Resolution 10087-Approving increased rates
SUBMITTED BY: Director of Finance
(4/5ths Vote: Yes No X )
On March 31, 1981 Mission Cable TV, Inc. filed a letter of request with
the City Manager to increase the basic subscriber rates in the City. At
. the public hearing on June 2, 1981, the City Council requested additional
financial information to justify a rate increase and continued the public
hearing to June 16, 1981. Therefore, it is my
RECOMMENDATION: 1. That Council conduct a public hearing
' 2. Approve the rate increase
BOARD AND COMMISSION RECOMMENDATION:
f1TCf IICCTf1N•
On May 31, 1980 the City Council approved Resolution 10087 increasing the
basic monthly charge for residential and non-transient commercial subscribers
from $8.75 to $9.60 per month effective July 1, 1980.
As indicated in their letter of March 31, 1981, Mission Cable TV, Inc.
is requesting an increase from $9.60 to $10.50 per month in the basic
` subscriber rate only which would now become effective August 1, 1981
-. due to the continuance of the public hearing.
The financial statements submitted by the Company provide a detailed break-
down of revenue and expense allocations for the period ending March 31, 1980
and March 31, 1981. The allocations are based on the ratio of Chula Vista
' subscribers to the subscribers in the entire system which is 9.4 %. (Schedule A)
Although revenue increased by 18.5% from March 31, 1980 to March 31, 1981,
' expenses also increased by 16.4%. It appears to me that without additional
revenue in the next year and with inflation continuing at or near current
levels, their net profit will further deteriorate without additional relief.
-. Their net assets have increased substantially between 1980 and 1981 which
the Company points out is due to plant expansion in new areas and upgrade
' of the system.
In summary, it appears to me that with a 5.7% net profit after taxes on
~' P1arch 31, 1981 and a 3.1% return on net assets, the limited rate increase
in basic subscriber rates, as requested by the Company, is justifiable.
' FI'Nr`1NC IAL IMPACT: Not Appl i cabl a ~%~1~~~~ J
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C'rbu°;a 1lisl7, Cu'~`:,r:~,ka
Form A-113 ( Rev. 11 /79), -- ~°-~-~